/raid1/www/Hosts/bankrupt/TCR_Public/130405.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, April 5, 2013, Vol. 17, No. 93
Headlines
41-55 PINE: Case Summary & 5 Unsecured Creditors
A123 SYSTEMS: Accord Cuts Fisker Claim by 89 Percent
A123 SYSTEMS: Creditors Oppose Claims to Increase Recovery
ABC DENTISTRY: Case Summary & 10 Unsecured Creditors
ADS TACTICAL: S&P Lowers CCR to 'B' on Deteriorated Credit Metrics
AFFINIA GROUP: S&P Affirms 'B' CCR & Rates $200MM Loan 'B'
AHERN RENTALS: Work Letters Approved
ALETHEIA RESEARCH: Money Manager Being Liquidated in Chapter 7
AMERICAN AIRLINES: USAPA, Ex-Am West Pilots Postpone Seniority Row
AMERICAN AIRLINES: 2nd Circ. Takes Up Fight Over $1.5B Financing
AMERICAN BUILDERS: S&P Assigns Prelim. 'BB-' Corp. Credit Rating
AMERICAN REALTY: Hearing on Case Transfer Set for April 11
AMF BOWLING: Committee Seeks Slower Disclosure Approval Process
AMPAL-AMERICAN: Judge in Middle of Fight for Corporate Control
APRIA HEALTHCARE: S&P Lowers Sr. Secured Debt Rating to 'BB-'
ATP OIL: Macquarie, Keba Say ATP Still Owes Them $3M In Royalties
ATP OIL: Parties Balk at Gomez Shut-in Bid; Debtor Talks Back
ATP OIL: Final Hearing on Harris Lift Stay Motion Moved to May
ATP OIL: Hearing on Panel Bid for Ch. 11 Trustee Moved to May
AVENUE J8: Case Summary & 4 Unsecured Creditors
AVIS BUDGET: S&P Affirms 'B+' CCR & Revises Outlook To Positive
AZIMI ENTERPRISES: Voluntary Chapter 11 Case Summary
BEALL CORP: Court Approves Eide Bailly as Accountants
BEAR STEARNS: JPMorgan Wins Round in Dexia SA Mortgage-Bond Suit
BEAZER HOMES: Brigade Capital Holds 5% Equity Stake at March 15
BETHEL HEALTHCARE: Updated Case Summary & Creditors' Lists
BIRDSALL SERVICES: NJ Claims No Intent to Put Firm Out of Business
CAPITAL BANCORP: Sells One Bank to Keep Others Solvent
CARRICK TRUCKING: Case Summary & 6 Unsecured Creditors
CASCADE BANCORP: Reports $5.9 Million Net Income in 2012
CDW CORP: Debt Repayments Prompt Moody's to Lift Ratings to 'Ba3'
CHARTER COMMUNICATIONS: S&P Rates $1.5-Bil. Loan Due 2020 'BB+'
CNH CAPITAL: Moody's Rates $500 Million Notes 'Ba2'
CLUB AT SHENANDOAH: Has OK to Use Cash Collateral Until April 30
CLUB AT SHENANDOAH: Court Extends Plan Filing Period Until July 31
CLUB AT SHENANDOAH: Has OK to Hire Venturi as Financial Advisor
COLLECTIVE AT BALDWIN: Voluntary Chapter 11 Case Summary
COMMUNITY SHORES: Terminates $5-Mil. Term Loan with Fifth Third
CONEXANT SYSTEMS: Creditors' Committee Hiring Approvals Sought
CONTINENTAL RESOURCES: S&P Rates $1BB Sr. Unsecured Notes 'BB+'
CONQUEST SANTA: Has Court OK to Use Cash Collateral Until Aug. 1
CONVERGEX: S&P Assigns Prelim. 'B+' Rating to $175MM Facility
COURTS OF AMARILLO: Case Summary & 2 Largest Unsecured Creditors
DAFFY'S INC: Confirms Liquidating Plan Without Creditor Vote
DBK INVESTMENTS: Involuntary Chapter 11 Case Summary
DEX ONE CORP: Proposes Pachulski as Co-Counsel
DEX ONE CORP: Taps Kirkland & Ellis as Bankruptcy Counsel
DEX ONE CORP: Wins OK for Epiq as Claims and Noticing Agent
DETRIOT, MI: Emergency Manager Disavows Letter on Union Contracts
DFC GLOBAL: S&P Revises Outlook to Negative & Affirms 'B+' ICR
DHILLON HOSPITALITY: Voluntary Chapter 11 Case Summary
DISH NETWORK: S&P Affirms 'BB-' CCR & Revises Outlook to Stable
DOLE FOOD: Moody's Confirms 'B1' CFR Following Food Biz Sale
DOLE FOOD: S&P Affirms 'B' CCR & Rates $775MM Facilities 'B+'
DOUG WILSON: Case Summary & Unsecured Creditor
DYNEGY INC: S&P Assigns 'B' CCR & Rates Credit Facilities 'BB-'
ELECTRICAL COMPONENTS: S&P Withdraws 'B' Corporate Credit Rating
ELECTRONICS EXPO: Case Summary & 20 Largest Unsecured Creditors
ELPIDA MEMORY: Nanya Infringed DRAM Patents, ITC Judge Finds
ENRON CORP: Ex-CEO Skilling May Exit Colorado Prison Earlier
FERRO CORP: S&P Raises Rating on $250MM & $34MM Notes to 'B'
GENESIS HEALTHCARE: S&P Assigns 'BB+' Rating to $293-Mil. Bonds
GLADYS SMITH: Case Summary & 20 Largest Unsecured Creditors
HAMPTON CAPITAL: BDO Consulting Ok'd as Committee's Advisor
HAMPTON CAPITAL: Lowenstein, Wilson OK'd as Committee's Attorneys
HAMPTON ROADS: Incurs $25.1 Million Net Loss in 2012
HIGHLAND PARK: Case Summary & 20 Largest Unsecured Creditors
HOWREY LLP: Haynes And Boone Wants Court To Hear Profit Row
HUNTER DEFENSE: S&P Lowers CCR to 'B'; Outlook Negative
HWE REAL ESTATE: Voluntary Chapter 11 Case Summary
ISAACSON STEEL: Court Sets Case Conversion Hearing for April 30
J & J DEVELOPMENT: Confirms Modified Liquidating Plan
J AND Y INVESTMENT: Wins Approval to Hire Bush Strout as Counsel
J AND Y INVESTMENT: Court OKs Kidder Mathews as Valuation Advisor
J.C. PENNEY: Slashes Pay of Its Chief
JAIPUR HOTELS: Case Summary & 8 Unsecured Creditors
JHCI ACQUISITION: S&P Lowers CCR to 'CCC+'; Outlook Negative
JHK INVESTMENTS: Can Continue Cash Collateral Use Until April 23
K-V PHARMACEUTICAL: Bankr. Court Should Decide on Extending Stay
LANTHEUS MEDICAL: S&P Lowers Corp. Credit Rating to 'B'
LA PAZ COMMUNITY: Case Summary & 20 Largest Unsecured Creditors
LEHMAN BROTHERS: Settles Swiss Unit's $59.3-Billion Claim
LIBERTY INTERACTIVE: Moody's Rates Exchangeable Sr. Debentures B2
LIBERTY INTERACTIVE: S&P Rates $550MM Debentures Due 2043 'BB'
LIBERTY MEDICAL: Hires Grant Thornton as Tax Advisors
LIBERTY MEDICAL: Hires Williams & Connolly as Special Counsel
LIBERTY MEDICAL: Committee Hires Mesirow Financial as Advisor
LIFECARE HOLDINGS: Gov't Fails to Nix $320M Hospital Group Buy
LIGHTSQUARED INC: Sound Point Said to Be Buying Debts
LOWER FAYETTEVILLE: Case Summary & 8 Largest Unsecured Creditors
LUCIEN PICCARD: Firm Hit With $5M Suit Over Bad Ch. 11 Advice
MAKENA GREAT: Has Nod to Hire Marcus & Millichap as Broker
MAKENA GREAT: Asks for OK of Settlement Agreement with Amerco
MARTIN MIDSTREAM: S&P Lowers Sr. Unsecured Notes Rating to 'B-'
MERGE HEALTHCARE: Moody's Rates New $250MM 1st Lien Term Loan 'B2'
MERGE HEALTHCARE: S&P Assigns 'B+' Rating to $270MM Facilities
MF GLOBAL: Blasts 'Meritless' Ch. 11 Plan Objections
MF GLOBAL: Nearly All Creditors Support Repayment Plan
MF GLOBAL: 'Negligent' Corzine Sank MF Global, Trustee Freeh Says
MGIC INVESTMENT: S&P Raises Rating on Debentures to 'CCC-'
MINERALS CONTINENTAL: Appellate Standing Rules Strictly Enforced
MODESTO SELF STORAGE: Voluntary Chapter 11 Case Summary
MUNICIPAL CORRECTIONS: Can Use Cash Collateral Until April 15
MUNICIPAL CORRECTIONS: Plan Filing Period Extended Until April 15
NLF HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
NORTEL NETWORKS: Wins Approval for $67M Retiree Benefit Deal
NORTEL NETWORKS: Judge Approves $66.9-Mil. Retiree Settlement
ORCHARD SUPPLY: S&P Lowers Corp. Credit Rating to 'CCC-'
OZBURN-HESSEY: S&P Revises Outlook to Stable & Affirms 'B-' CCR
P.M. MIDWAY: Case Summary & Largest Unsecured Creditor
PACIFIC JET: Ex-Shearman Client Loses Bid to Revive Suit
PATRIOT COAL: May Copy Unsuccessful Idearc Spinoff Theory
PATRIOT COAL: Wants to Modify/Terminate Non-Union Retiree Benefits
PATRIOT COAL: Wants E&Y to Provide Retirement Plan Audit Services
PATRIOT COAL: Wants Plan Filing Period Further Extended to July 4
PHH CORP: S&P Revises Outlook to Stable & Affirms 'BB-' Rating
PINNACLE AIRLINES: Seeks Additional Time to File Chapter 11 Plan
PINNACLE AIRLINES: To Sell Hamilton Parts for $1.05 Million
PINNACLE FOODS: S&P Puts 'B' CCR on CreditWatch Positive
POINT BLANK: Seeks Approval of Settlement with Former Director
POTLATCH CORP: S&P Raises Corporate Credit Rating to 'BB+'
POWELL STEEL: Court Approves Ciardi as Chapter 11 Counsel
PT BERLIAN LAJU: Involuntary Chapter 11 to be Dismissed
PURIFIED RENEWABLE: Minn. Ethanol Plan Shuts Down, Files Ch. 11
READER'S DIGEST: Wants to Reject 5 Executory Contracts & Leases
READER'S DIGEST: Dickstein Approved as Co-Counsel to DEMG
RENTECH NITROGEN: Moody's Gives 'B1' CFR; Rates $320MM Notes 'B1'
REVEL AC: Wins OK for Epiq as Claims and Noticing Agent
RESIDENTIAL CAPITAL: Employee Plan Objection Filed
REVSTONE INDUSTRIES: To Propose Sale of Operating Subsidiaries
REVSTONE INDUSTRIES: Wants Plan Filing Extended Until July 31
REVSTONE INDUSTRIES: Rust OK'd as Claims Agent & Administrator
REVSTONE INDUSTRIES: Has OK to Tap Huron Consulting to Provide CRO
REVSTONE INDUSTRIES: Has OK to Hire Pachulski Stang as Counsel
RG STEEL: Panel Sues to Use Preference Proceeds for Rennert Suit
RIDGE MOUNTAIN: Hearing on Trustee's Dismissal Motion on April 18
ROTHSTEIN ROSENFELDT: Plan Too Sweet to TD Bank, Feds Say
SAINT VINCENT: 2nd Cir. Won't Reinstate Suit v. Morgan Stanley
SAN DIEGO HOSPICE: Pachulski Approved as Committee Counsel
SAN DIEGO HOSPICE: Won't Have Patient Care Ombudsman
SAVE MOST: Has Nod to Continue Cash Collateral Use Until May 31
SAVE MOST: Court Extends Plan Filing Period Until June 15
SAVE MOST: Lee R. Goldberg OK'd to Negotiate Settlement with SDCCU
SCHOOL SPECIALTY: Disclosure Statement Hearing on April 11
SCHOOL SPECIALTY: Committee Sues Bayside Over Early Payment Fee
SCHOOL SPECIALTY: Wants to Pay Fees of Potential Exit Lenders
SECURUS HOLDINGS: S&P Affirms 'B' CCR; Outlook Stable
SHANGRI-LA BISTRO: Case Summary & 20 Largest Unsecured Creditors
SPECTRE PERFORMANCE: Court Dismisses Chapter 11 Case
SOUTHERN ONE: Has Nod to Hire DFW Lee & Associates as Broker
SPRINGMORE II: Involuntary Chapter 11 Case Summary
SPRINT NEXTEL: S&P Retains 'B+' Corp. Credit Rating on CreditWatch
STOCKTON, CA: Eligible for Chapter 9 But Roadblocks Loom
SUNTECH POWER: Unit Bankruptcy Had Roots in Deadbeat Customers
SUPERMEDIA INC: Proposes Cleary Gottlieb as Counsel
SUPERMEDIA INC: Taps Young Conaway as Co-Counsel
SUPERMEDIA INC: Taps Fulbright & Jaworski as Special Counsel
TCAST COMMUNICATIONS: Voluntary Chapter 11 Case Summary
TOLL BROTHERS: Moody's Assigns Ba1 Rating to $300MM Notes Issue
TOWER AUTOMOTIVE: New $275MM Term Loan Gets Moody's 'B1' Rating
TWIN DEVELOPMENT: Hinds & Shankman Wants to Withdraw as Counsel
UPH HOLDINGS: Telecom Owner Files Chapter 11 in Texas
VITRO SAB: NY High Court Won't Revive Suit Against Hedge Funds
WESTFORD PROPERTIES: Case Summary & 6 Unsecured Creditors
WINDSOR HOLDINGS: Case Summary & 3 Unsecured Creditors
WOODCREST COUNTRY CLUB: Set for May 20 Auction
* $25 Bankruptcy Claims Transfer Fee to Take Effect May 1
* New PBGC Proposal to Cut Companies' Reporting Requirements
* U.S. Trustee Program Suspends Debtor Audits
* Fitch Says Credit Card Delinquencies Still Stable in March
* Fitch Says Government Rate Reversal Favorable for Health Insurer
* US Homebuilder Bond Ratings Remain Below Pre-Crisis Levels
* March Bankruptcy Filings in U.S. Still Bottoming Out
* Bond Sales Alleviate Liquidity Pressures on Junk Companies
* GAO Cites Regulators' Flaws in Foreclosure Review
* MBIA Wins Ruling on Loan Buybacks in Bank of America Suit
* Regulators Closer to Supervising Nonbank Financial Companies
* Report Faults "At All Costs" Attitude at Barclays
* Standard & Poor's Says U.S. Hid Role with States in Court
* Big Profits at Fannie and Freddie Reignite Debate on Supports
* Argentina Creditors Must Reply to Payment Plan: 2nd Circ.
* Judge's Ruling Does Not Slow States' Libor Probe
* BOOK REVIEW: The Oil Business in Latin America: The Early Years
*********
41-55 PINE: Case Summary & 5 Unsecured Creditors
------------------------------------------------
Debtor: 41-55 Pine, L.L.C.
600 Fulton Street
Elizabethport, NJ 07206
Bankruptcy Case No.: 13-16996
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Rosemary Gambardella
Debtor's Counsel: Gary S. Jacobson, Esq.
HEROLD LAW, P.A.
25 Independence Boulevard
Warren, NJ 07059-6747
Tel: (908) 647-1022, x117
Fax: (908) 647-7721
E-mail: gjacobson@heroldlaw.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's five largest unsecured creditors, filed
together with the petition, is available for free at
http://bankrupt.com/misc/njb13-16996.pdf
The petition was signed by Luis Rodriguez, sole and managing
member.
A123 SYSTEMS: Accord Cuts Fisker Claim by 89 Percent
----------------------------------------------------
Michael Bathon & Dawn McCarty, writing for Bloomberg News,
reported that the bankrupt electric-car battery maker formerly
called A123 Systems Inc. (AONEQ), now renamed B456 Systems Inc.,
reached a settlement in which Fisker Automotive Inc. reduced its
claims by 89 percent to $15 million.
The Bloomberg report related that the accord with the bankruptcy's
unsecured-creditors' committee will substantially cut Fisker's
$140 million in claims stemming from a rejection of its supply
agreement and alleged breach of warranty obligations, according to
court documents filed April 2 in Wilmington, Delaware. The
agreement will benefit all unsecured creditors, the committee's
lawyers said.
"This reduction will have a substantial positive effect on the
value of other unsecured claims," lawyers for the committee said
in a court filing, Bloomberg cited. The committee "analyzed the
Fisker proofs of claim, and the committee believes that the
settlement embodied in the stipulation represents a compromise
that is the best possible outcome" for B456's estate.
Bloomberg, citing court documents, related that Fisker's breach-
of-warranty claim will be reduced from $48.7 million to a $15
million unsecured claim and its $91.2 million claim for damages
from the rejection of its supply agreement will be disallowed.
U.S. Bankruptcy Judge Kevin Carey approved A123's disclosure
statement, an outline of its liquidation plan used by creditors to
decide how to vote on the plan, according to court documents filed
March 14, the report said. The company will seek court approval
of the plan, which includes distributing the proceeds from selling
substantially all of its assets, at a hearing scheduled for April
30.
About A123 Systems
Based in Waltham, Massachusetts, A123 Systems Inc. designed,
developed, manufactured and sold advanced rechargeable lithium-ion
batteries and battery systems and provided research and
development services to government agencies and commercial
customers. A123 was the recipient of a $249 million federal grant
from the Obama administration.
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.
A123 disclosed assets of $459.8 million and liabilities totaling
$376 million. 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. Brown Rudnick
LLP and Saul Ewing LLP serve as counsel to the Official Committee
of Unsecured Creditors.
Prior to the bankruptcy filing, A123 had an agreement to sell an
80% stake in the business 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.
When it filed for bankruptcy, the Debtors presented a deal to sell
all assets to Johnson Controls Inc., subject to higher and better
offers. At the auction in December 2012, most of the assets ended
up being sold for $256.6 million to Wanxiang.
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.
A123 has filed a liquidating Chapter 11 plan designed to give
holders of $143.75 million in subordinated notes a recovery of
about 65%. General unsecured creditors with $124 million in
claims are to have the same recovery. The plan provides for
holders of $35.7 million in senior note claims to be paid in full.
A123 SYSTEMS: Creditors Oppose Claims to Increase Recovery
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the A123 Systems Inc. creditors' committee filed
papers to knock out more than $35 million in claims from vehicle
makers Smith Electric Vehicles Corp. and Daimler AG. Reducing
claims will enhance the recovery by other creditors under the
liquidating Chapter 11 plan up for approval late this month.
According to the report, Daimler had a contract with A123 to buy
batteries for use in electric-powered busses. The Chinese buyer
of A123's business didn't take over the contract, so it was
terminated with permission from the bankruptcy court. Daimler
filed a claim for more than $25 million resulting from what's
known technically as rejection of the contract. The German
vehicle maker contends the damages represent the increased cost of
buying batteries from another supplier, known in legal jargon as
the cost of "cover."
The committee arranged an April 30 hearing where it will ask the
bankruptcy judge in Delaware to disallow, or throw out the claim
because Daimler hasn't documented its damages. The committee
filed a separate objection to the $10 million sought by Smith for
warranty claims if batteries it purchased eventually fail. The
committee says there is no reason to believe the batteries will
fail or that Smith will have warranty claims.
A123 sold its automotive lithium-ion batteries business to China's
Wanxiang Group Corp. for $256.6 million. Creditors are now voting
on A123's liquidating Chapter 11 plan in anticipation of an
April 30 confirmation hearing for approval of the plan.
The plan is intended to give holders of $143.8 million in
subordinated notes a recovery of 36.3%. If A123 succeeds in
reducing claims to levels the company believes correct, the
recovery on the subordinated notes will rise to 62.9%, according
to the disclosure statement. General unsecured creditors, who
previously were said to have $124 million in claims, are to have
roughly the same recovery.
About A123 Systems
Based in Waltham, Massachusetts, A123 Systems Inc. designed,
developed, manufactured and sold advanced rechargeable lithium-ion
batteries and battery systems and provided research and
development services to government agencies and commercial
customers. A123 was the recipient of a $249 million federal grant
from the Obama administration.
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.
A123 disclosed assets of $459.8 million and liabilities totaling
$376 million. 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. Brown Rudnick
LLP and Saul Ewing LLP serve as counsel to the Official Committee
of Unsecured Creditors.
Prior to the bankruptcy filing, A123 had an agreement to sell an
80% stake in the business 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.
When it filed for bankruptcy, the Debtors presented a deal to sell
all assets to Johnson Controls Inc., subject to higher and better
offers. At the auction in December 2012, most of the assets ended
up being sold for $256.6 million to Wanxiang.
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.
ABC DENTISTRY: Case Summary & 10 Unsecured Creditors
----------------------------------------------------
Debtor: ABC Dentistry Holdings, P.C.
fka Robert C. Scheele D.D.S. & Associates, P.C.
10729 Coldwater Road, #200
Fort Wayne, IN 46845
Bankruptcy Case No.: 13-10896
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Northern District of Indiana (Fort Wayne Division)
Judge: Robert E. Grant
Debtor's Counsel: Adam L. Hand, Esq.
BECKMAN LAWSON, LLP
201 W. Wayne Street
Fort Wayne, IN 46802
Tel: (260) 422-0800
Fax: (260) 420-1013
E-mail: alh@beckmanlawson.com
Scheduled Assets: $43,781
Scheduled Liabilities: $531,446
A copy of the Company's list of its 10 largest unsecured creditors
is available for free at http://bankrupt.com/misc/innb13-10896.pdf
The petition was signed by Robert C. Scheele, president.
ADS TACTICAL: S&P Lowers CCR to 'B' on Deteriorated Credit Metrics
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
ratings on ADS Tactical Inc., including its corporate credit
rating to 'B' from 'B+'. The outlook is stable.
S&P also lowered its rating on the company's senior notes to 'B-'
from 'B'. The recovery rating on the notes is unchanged at '5',
which reflects S&P's expectation that lenders would receive a
modest (10%-30%) recovery in the event of a payment default.
"The downgrade reflects the impact of revenue mix changes and
business development costs on the company's credit profile and our
expectation that these factors, coupled with the more uncertain
outlook for defense spending, will prevent the company from
restoring credit metrics to previous levels," said Standard &
Poor's credit analyst Lisa Jenkins.
The ratings on Virginia Beach, Va.-based ADS reflect its
substantial debt burden, limited track record operating with a
leveraged capital structure, and current weak credit metrics.
Offsetting these risks to some extent is the company's unique
market position and the potential for increased outsourcing
of logistics requirements by the Department of Defense (DoD).
Standard & Poor's characterizes the company's business risk
profile as "weak" and financial risk profile as "highly
leveraged."
The outlook is stable. S&P believes that DoD budget pressures and
the ending of a highly profitable contract in 2012 will result in
weaker credit metrics over the coming two years. Given the
uncertain industry environment and the likelihood of margin
compression over the coming year, S&P do not expect the company to
restore credit metrics to previous levels. If operating
performance ends up being stronger than S&P expects, such that
debt to EBITDA improves to 4.5x, it could raise the ratings.
Although less likely, should greater-than-expected working capital
investment or operating problems result in pressure on cash flow,
and debt to EBITDA increases above 7x, S&P could lower the
ratings.
AFFINIA GROUP: S&P Affirms 'B' CCR & Rates $200MM Loan 'B'
----------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its 'B'
corporate credit rating on Ann Arbor, Mich.-based auto parts
manufacturer Affinia Group Intermediate Holdings (the parent of
Affinia Group Inc.). The outlook is stable. The transaction will
add roughly $200 million of additional adjusted debt. S&P also
assigned its 'B' issue level rating and '4' recovery rating to
Affinia Group Inc.'s proposed $200 million senior secured term
loan B-1 due April 2016 and $470 million term loan B-2 due April
2020. The '4' recovery rating indicates S&P's expectation of
average (30%-50%) recovery in a payment default scenario. The
company also plans to amend its asset-based loan (ABL) facility,
reducing the commitment to $175 million from $315 million and
extending the maturity to 2018.
Affinia plans to use proceeds from the various debt issuances
(including the planned $250 million of unsecured debt) to pay a
$161 million dividend to equity holders; redeem existing
$225 million senior secured notes; redeem existing $367 million
senior subordinated notes; redeem about $34 million of the
$130 million senior unsecured pay-in-kind (PIK) notes issued by
Affinia Group Holdings Inc. (the ultimate parent of Affinia Group
Intermediate Holdings Inc.); and redeem $155 million of redeemable
preferred stock at the ultimate parent. S&P plans to withdraw the
ratings on the company's $225 million senior secured notes and its
$367 million senior subordinated notes once they are redeemed in
full.
"We are affirming our corporate credit rating on Affinia Group
Intermediate Holdings Inc. because its ability to generate cash
should help it sustain debt reduction following the proposed
transaction," said Standard & Poor's credit analyst Nancy Messer.
Liquidity will be reduced because of the smaller revolver, but
debt maturities will be moved out. S&P believes Affinia can keep
debt leverage at or below 6x by year-end 2013, and the smaller
revolver should not impair its ability to operate and meet its
cash obligations in the next two years.
S&P's ratings on Affinia partly reflect its "highly leveraged"
financial risk profile. Affinia's participation in the
competitive auto aftermarket components industry contributes to
what S&P believes is its "weak" business risk profile. These
factors more than offset Affinia's fair geographic diversity,
solid market positions, and improving profitability. Private-
equity firm The Cypress Group LLC controls the company.
S&P estimates Affinia's lease-and pension-adjusted total debt to
EBITDA can reach about 5.6x by Dec. 31, 2013, in line with S&P's
target of 6x or less. This assumes EBITDA margin of 13.8% on 4%
revenue growth in 2013.
S&P's rating outlook on Affinia is stable. S&P believes the
company's restructuring has improved the cost base and that the
current product portfolio (following the 2012 divestiture of the
brake business) will lead to improved EBITDA margin that can be
sustained. S&P estimates that the company can generate
$60 million in annual free operating cash flow in 2013 and 2014
and S&P believes EBITDA margin should remain at about 13% and
leverage should remain below 6.0x. Alternatively, if FOCF to
total debt falls below 4%, S&P could lower the rating.
S&P could lower its ratings if Affinia cannot generate a material
amount of free operating cash flow in the year ahead to use for
debt reduction because the proposed debt-financed dividend payout
to shareholders will strain its liquidity in the first year. S&P
could also lower the rating if it finances acquisitions in the
year ahead with debt, which could lead to higher leverage and
lower financial flexibility to deal with potential cyclical
downturns in the economy. For example, if the company generates
2013 EBITDA of 10% below S&P's estimate of about $210 million,
with no reduction in debt, leverage would exceed 6.0x.
S&P could raise its ratings on Affinia if leverage improves
significantly to 4.5x or better and FOCF improves on a sustainable
basis, allowing the company to permanently reduce debt. Still,
S&P believes it is unlikely it would raise the rating in the year
ahead, because it expects the economic recovery in the U.S. to be
measured.
AHERN RENTALS: Work Letters Approved
------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court approved
Ahern Rentals' motion to enter into a work letter regarding exit
financing and pay certain fees and expenses of Barclays Bank PLC
and Jefferies Finance.
The report related that the Company explains that this work letter
was necessary to "obtain exit financing within the timeframe for
emergence that the Debtor has targeted, and ensure that the exit
financing it obtains is on the best possible terms."
On March 15, 2013, the Court approved the separate Disclosure
Statements filed by Ahern Rentals and certain holders of Ahern
Rentals' 9 1/4% Senior Secured Second Lien Notes due 2013 and
scheduled a June 3, 2013 confirmation hearing to consider both
Plans, the report said.
About Ahern Rentals
Founded in 1953 with one location in Las Vegas, Nevada, Ahern
Rentals Inc. -- http://www.ahern.com/-- offers rental equipment
to customers through its 74 locations in Arizona, Arkansas,
California, Colorado, Georgia, Kansas, Maryland, Nebraska, Nevada,
New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma,
Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah,
Virginia and Washington.
Privately held Ahern Rentals filed a voluntary Chapter 11 petition
(Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing
to obtain an extension of the Aug. 21, 2011 maturity of its
revolving credit facility. In its schedules, the Debtor disclosed
$485.8 million in assets and $649.9 million in liabilities.
Judge Bruce T. Beesley presides over the case. Lawyers
at Gordon Silver and DLA Piper LLP (US) serve as the Debtor's
counsel. The Debtor's financial advisors are Oppenheimer & Co.
and The Seaport Group. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
The Official Committee of Unsecured Creditors has tapped Covington
& Burling LLP as counsel, Downey Brand LLP as local counsel, and
FTI Consulting as financial advisor.
Counsel to Bank of America, as the DIP Agent and First Lien Agent,
are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye
Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer.
Attorneys for the Majority Term Lenders are Paul Aronzon, Esq.,
and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy
LLP. Counsel for the Majority Second Lienholder are Paul V.
Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq.,
at Willkie Farr & Gallagher LLP.
Attorney for GE Capital is James E. Van Horn, Esq., at
McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M.
Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.
Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert
LLP argue for certain revolving lenders.
Attorneys for U.S. Bank National Association, as successor to
Wells Fargo Bank, as collateral agent and trustee for the benefit
of holders of the 9-1/4% Senior Secured Notes Due 2013 under the
Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard,
Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland
& Hart.
In December 2012, the Court terminated Ahern's exclusive right to
propose a plan, saying the company failed to negotiate in good
faith after a year in Chapter 11. Certain holders of the Debtor's
9-1/4% senior secured second lien notes due 2013 proposed in
February their own Plan to complete with Ahern's proposal. The
Noteholder Group consists of Del Mar Master Fund Ltd.; Feingold
O'Keeffe Capital, LLC; Nomura Corporate Research & Asset
Management Inc.; Och-Ziff Capital Management Group; Sphere
Capital, LLC - Series B; and Wazee Street Capital Management, LLC.
They are represented by Laurel E. Davis, Esq. of Fennemore Craig
Jones Vargas; and Kurt A. Mayr, Esq. and Daniel S. Connolly, Esq.
of Bracewell & Giuliani LLP.
In March 2013, the Court approved disclosure materials explaining
both plans. Ahern and the lenders both propose paying unsecured
claims in full. The lenders' plan fully pays unsecured creditors
when the plan is implemented. The Ahern plan pays them over a
year, thus giving unsecured creditors the right to vote only on
the Debtor's plan.
Ahern's Plan offers the junior lenders $160 million cash and new
debt if they accept the plan. Otherwise, they are slated to
receive all new debt, for eventual full payment. The lenders'
plan pays all creditors in full other than the $267.7 million in
second-lien debt that converts to equity.
Plan confirmation hearing has been set for June 3 to 5, 2013. A
copy of the Court-approved scheduling order with respect to the
Plan confirmation hearing is available at http://is.gd/DU27CF
ALETHEIA RESEARCH: Money Manager Being Liquidated in Chapter 7
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Aletheia Research & Management Inc., a money manager
for institutions and high net-worth individuals, will be
liquidated in Chapter 7. The U.S. Bankruptcy Judge in Los Angeles
granted the request of the Chapter 11 trustee and converted the
case to liquidation in Chapter 7 at the end of last week.
About Aletheia Research
Aletheia Research and Management, Inc., filed a bare-bones
Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-47718) on
Nov. 11, 2012. Attorneys at Greenberg Glusker represent the
Debtor. Avant Advisory Group, LLC, is the financial advisor. 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. The Debtor disclosed $6,492,105
in assets and $17,457,458 in liabilities as of the Chapter 11
filing.
An official committee of unsecured creditors was appointed in
December 2012. The Committee is represented by Pachulski Stang
Ziehl & Jones LLP while Brandlin & Associates provides financial
advisory services.
Jeffrey I. Golden was appointed as Chapter 11 Trustee in January
2013. Baker & Hostetler LLP is the Trustee's special counsel and
Ernst & Young LLP is his advisory services provider.
AMERICAN AIRLINES: USAPA, Ex-Am West Pilots Postpone Seniority Row
------------------------------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that the US Airline
Pilots Association on Wednesday agreed to delay its suit in New
York bankruptcy court against former America West Airlines Inc.
pilots until underlying litigation in Arizona surrounding pilot
seniority in US Airways Group Inc.'s $11 billion merger with AMR
Corp. is resolved.
The report related that USAPA sued the America West pilots group,
known as Leonidas LLC, last month in response to the group's
alleged threat to challenge the merger, which was approved by U.S.
Bankruptcy Judge Sean H. Lane last week.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements. AMR, previously the world's largest airline prior to
mergers by other airlines, is the last of the so-called U.S.
legacy airlines to seek court protection from creditors.
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.
AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a
definitive merger agreement under which the companies will combine
to create a premier global carrier, which will have an implied
combined equity value of approximately $11 billion. The deal is
subject to clearance by U.S. and foreign regulators and by the
bankruptcy judge overseeing AMR's bankruptcy case.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: 2nd Circ. Takes Up Fight Over $1.5B Financing
----------------------------------------------------------------
Sindhu Sundar of BankruptcyLaw360 reported that the Second Circuit
on Wednesday approved bankrupt AMR Corp.'s bid to send U.S. Bank
NA's challenge to the airline's $1.5 billion financing deal to the
appeals court, allowing it to bypass the federal district court.
The report related that the Second Circuit's authorization for the
direct appeal followed U.S. Bankruptcy Judge Sean H. Lane's Feb.
22 ruling that the issue was a matter of public importance, so
American Airlines Inc. parent AMR could seek to circumvent the
federal district courts that would normally hear such appeals.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that AMR Corp., parent of American Airlines Inc., isn't
obliged to provide more collateral or make additional payments to
holders of $1 billion in bonds secured by rights to fly
international routes. That's the effect of the ruling on an
appeal decided April 3 by U.S. District Judge Robert W. Sweet in
New York.
According to the report, AMR sold $1 billion in 7.5% senior
secured notes in 2011, nine months before bankruptcy. Once in
Chapter 11, the noteholders' indenture trustee sought what's known
as "adequate protection payments" to insure against the drop in
value of the collateral, including rights to fly to London, Japan
and China. AMR and the indenture trustee agreed the routes were
worth not less than 20% more than the bond debt. In February
2012, the bankruptcy judge refused to allow noteholders to
foreclose on the routes, and he also ruled they weren't entitled
to payments or additional collateral to protect against a decline
in value.
The report relates that in the April 3 opinion, Judge Sweet said
that the so-called equity cushion by itself was all the protection
the noteholders are entitled to receive. Judge Sweet said there
was no reason for the bankruptcy judge to have held a trial with
witnesses when it was admitted the routes were worth substantially
more than the debt. He also said the indenture trustee didn't
lodge a proper request for a trial with witnesses.
Judge Sweet, the report relates, ruled against AMR by saying that
the bankruptcy judge made a mistake by shouldering noteholders
with responsibility for proving the insufficiency in the
collateral on the request for adequate protection. Judge Sweet
said the mistake was "harmless error" because undisputed facts
show a sizeable equity cushion for the noteholders to support the
ultimate ruling.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements. AMR, previously the world's largest airline prior to
mergers by other airlines, is the last of the so-called U.S.
legacy airlines to seek court protection from creditors.
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.
AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a
definitive merger agreement under which the companies will combine
to create a premier global carrier, which will have an implied
combined equity value of approximately $11 billion.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN BUILDERS: S&P Assigns Prelim. 'BB-' Corp. Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its
preliminary 'BB-' corporate credit rating to Beloit, Wis.-based
American Builders & Contractors Supply Co. Inc. (ABC Supply Co.).
The outlook is stable.
At the same time, S&P assigned its preliminary 'BB+' (two notches
higher than the corporate credit rating) issue rating to ABC
Supply Co.'s proposed $1.15 billion senior secured bank term loan
B due 2020. The preliminary recovery rating is '1', indicating
S&P's expectation of very high (90% to 100%) recovery for lenders
under its default scenario.
In addition, S&P assigned its preliminary 'B' (two notches lower
than the corporate credit rating) issue rating to ABC Supply
Co.'s proposed $600 million senior unsecured notes due 2021. The
preliminary recovery rating is '6', indicating S&P's expectation
of negligible (0% to 10%) recovery for note holders under its
default scenario in.
The company intends to use proceeds of the transaction to fund the
buyout of the minority shareholders pursuant to the redemption
agreement, fund the payment of the stock appreciation rights
(SAR), repay existing debt, and pay transaction fees and expenses.
"The rating on ABC Supply Co. reflects what we consider to be the
combination of its 'fair' business risk profile and 'aggressive'
financial risk profile," said Standard & Poor's credit analyst
Maurice Austin. "Our view of the company's fair business risk
assessment incorporates its leading position in a very attractive
roofing market, a relatively large size and scale of operations,
significant business diversification, and some exposure to
volatile construction cycles and unpredictable weather patterns."
Standard & Poor's views ABC Supply Co.'s financial risk profile as
aggressive given its expectation that leverage will approximate
4.5x by the end of 2013 due to its assumption that ABC Supply Co.
will continue to generate free cash flow and pay down debt. The
company has historically been a generator of free cash flow and
has allocated capital to de-lever its balance sheet in the past.
The stable rating outlook reflects S&P's expectation that the
company will continue to generate positive free cash flow and
maintain strong liquidity while reducing total leverage (including
lease obligations) from 5.5x, pro forma for the transaction, to
about 4.5x by year-end 2013.
A downgrade is less likely in the near term, given S&P's favorable
outlook for home construction and remodeling spending. However,
S&P could take a negative rating action if the increase in
remodeling spending fails to materialize as it expected, resulting
in ABC Supply Co.'s sales growth under 4%, relative to its
expectation of 10% growth. Consequently, leverage would remain
above 5x, which S&P considers weak based on its aggressive
financial risk assessment.
A higher rating is unlikely in the near term given S&P's view that
credit measures will initially be weak relative to the 'BB-'
rating and are likely to only improve to the midpoint of ranges
S&P considers consistent with an aggressive financial profile and
the current corporate credit rating.
AMERICAN REALTY: Hearing on Case Transfer Set for April 11
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
Dallas Division will convene a hearing on April 11, 2013, at 9:00
a.m., to consider creditors David M. Clapper, Atlantic XIII, LLC
and Atlantic Midwest, LLC's motion to transfer American Realty
Trust, Inc.'s Chapter 11 case to Fort Worth and reassign it to
Judge Russell Nelms.
The Atlantic Parties sought the transfer of the case to Judge
Nelms, saying that presided over the ART Midwest, Inc. bankruptcy,
Judge Nelms has experience with the parties and the issues raised
by the pending motion to dismiss filed by the Atlantic Parties
The Atlantic Parties stated, "This bankruptcy case is the latest
battleground in a 13+ year litigation between the Atlantic
Parties, Debtor and Debtor's affiliates. The Atlantic Parties
have a judgment that exceeds $72,000,000 against the Debtor, and
the Debtor is trying not only to evade paying that judgment, but
also to use the automatic stay to block claims pending in the
District Court for the Northern District of Texas against the
Debtor's affiliates. The Debtor has attempted to forum shop this
case, first filing in Nevada, and then, after that case was
dismissed for improper venue, filing again in Georgia. The case
has now been transferred to this Court."
At an earlier stage of this litigation, the Debtor and its
affiliates caused ART Midwest to file a Chapter 11 before this
Court in 2004. That case was assigned to Judge Nelms, and was
ultimately dismissed as a bad-faith filing. As a "creditor", the
Debtor was involved in that case, and the Debtor's counsel even
took the lead position to argue against portions of the motion to
dismiss ART Midwest's bankruptcy. After three days of trial over
more than two months, and after taking the case under advisement,
Judge Nelms found that the Debtor, ART Midwest and other
affiliates, including an entity called One Realco were using ART
Midwest's bankruptcy to engage in litigation tactics to attempt to
defeat the substantive rights of the Atlantic Parties. Judge
Nelms denied ART Midwest's motion for reconsideration, and on
March 22, 2007, the District Court denied ART Midwest's appeal.
The Atlantic Parties claimed that the Debtor is engaged in the
same tactics, involving the same parties. The Atlantic Parties
have a new motion to dismiss pending. Because the Atlantic
Parties spent significant time and resources disputing critical
issues in front of Judge Nelms, they believe that judicial economy
would be best served if this case was transferred to Judge Nelms.
Over the last 13 years, the Debtor and its affiliates have been
stripped of assets and rendered uncollectible in an effort to
frustrate the collection efforts of the Atlantic Parties.
The Atlantic Parties said that nothing substantive has occurred
since the transfer of this bankruptcy case.
The Atlantic Parties are represented by:
BUTZEL LONG
Max J. Newman, Esq.
Stoneridge West Building
41000 Woodward Avenue
Bloomfield Hills, Michigan 48304
Tel: (248) 258-2907
Fax: (248) 258-1439
E-mail: newman@butzel.com
and
SICILIANO MYCHALWOYCH & VAAN DUSEN, PLC
Andrew W. Mychalwoych, Esq.
Meghan W. Cassidy, Esq.
37000 Grand River Avenue, Suite 350
Farmington Hills, Michigan 48335
and
DYKEMA GOSSETT PLLC
Jeffrey R. Fine, Esq.
Amber T. Welock, Esq.
Alison R. Ashmore, Esq.
1717 Main Street, Suite 4000
Dallas, Texas 75201
E-mail: jfine@dykema.com
awelock@dykema.com
aashmore@dykema.com
About American Realty Trust
Dallas, Texas-based American Realty Trust, Inc., is a subsidiary
of the real estate giant American Realty Investors Inc. Coping
with a $73 million legal judgment from an apartment purchase that
collapsed more than a decade ago, American Realty Trust, Inc.,
filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-10883)
in Las Vegas on Jan. 26, 2012. The case was later dismissed on
Aug. 1 by Judge Mike K. Nakagawa. Creditors David M. Clapper,
Atlantic XIII, LLC, and Atlantic Midwest, LLC, sought the
dismissal, citing, among other things, the Debtor has been
stripped of assets prepetition and its ownership structure changed
10 days before the bankruptcy filing in an admitted effort to
avoid disclosures to the Securities and Exchange Commission.
American Realty Trust then filed for Chapter 11 protection (Bankr.
N.D. Ga. Case No. 12-71453) on Aug. 29, 2012. Bankruptcy Judge
Barbara Ellis-Monro presides over the case. Bryan E. Bates, Esq.,
and Gary W. Marsh, Esq. at McKenna Long & Aldridge, LLP represent
the Debtor in its restructuring effort. The petition was signed
by Steven A. Shelley, vice president.
The Debtor has scheduled assets totaling $79,954,551, comprised
of: (i) real property valued at $87,884; (ii) equity interests in
affiliated entities of an unknown value; and (iii) litigation
claims valued at $79,866,667. The Debtor has scheduled
liabilities totaling $85,347,587.95, comprised of: (i) $10,437.73
in unsecured priority tax claims; and (ii) unsecured non-priority
claims of $85,336,886.61 (of which at least $77,164,701.14 are
contested litigation claims against the Debtor).
AMF BOWLING: Committee Seeks Slower Disclosure Approval Process
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the bankruptcy judge will decide at a hearing April 5
if AMF Bowling Worldwide Inc. will be permitted to seek approval
of disclosure materials before revealing how much the bowling
alley operator intends to pay unsecured creditors under the
Chapter 11 reorganization plan filed last week.
According to the report, the plan is designed to sell the business
to senior secured lenders in exchange for about $215 million in
first-lien debt, under an agreement worked out before the Chapter
11 petition was filed in November. The plan and disclosure
materials contain blanks where the distribution to unsecured
creditors ordinarily would appear. AMF wants the judge to approve
disclosure materials at an April 23 hearing so the plan can return
to court for approval at a June 6 confirmation hearing.
However, the report relates that in addition to opposing a rapid
confirmation process, the unsecured creditors' committee sued the
lenders' agent, contending security interests in some collateral
is defective. The committee says there are "serious deficiencies"
in the draft disclosure statement for lack of an explanation about
how much creditors will receive and why. The disclosure is also
defective for lack of a liquidation analysis, the committee
argues.
In the lawsuit filed March 29, the committee contends the lenders
don't have enforceable liens on some foreign subsidiaries, some
real property, and bank accounts not in the lenders' possession.
About AMF Bowling Worldwide
AMF Bowling Worldwide Inc. is the largest operator of bowling
centers in the world. The Company and several affiliates sought
Chapter 11 protection (Bankr. E.D. Va. Case Nos. 12-36493 to
12-36508) on Nov. 12 and 13, 2012, after reaching an agreement
with a majority of its secured first lien lenders and the landlord
of a majority of its bowling centers to restructure through a
first lien lender-led debt-for-equity conversion, subject to
higher and better offers through a marketing process. At the time
of the bankruptcy filing, AMF operated 262 bowling centers across
the United States and, through its non-Debtor facilities, and 8
bowling centers in Mexico -- more than three times the number of
bowling centers of its closest competitor.
Debt for borrowed money totals $296 million, including
$216 million on a first-lien term loan and revolving credit,
and $80 million on a second-lien term loan.
Mechanicsville, Virginia-based AMF first filed for bankruptcy
reorganization in July 2001 and emerged with a confirmed Chapter
11 plan in February 2002 by giving unsecured creditors 7.5% of the
new stock. The bank lenders, owed $625 million, received a
combination of cash, 92.5% of the stock, and $150 million in new
debt. At the time, AMF had over 500 bowling centers.
Judge Kevin R. Huennekens oversees the 2012 case, taking over from
Judge Douglas O. Tice, Jr. Patrick J. Nash, Jr., Esq., Jeffrey D.
Pawlitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis
LLP; and Dion W. Hayes, Esq., John H. Maddock III, Esq., and Sarah
B. Boehm, Esq., at McGuirewoods LLP, serve as the Debtors'
counsel. Moelis & Company LLC serves as the Debtors' investment
banker and financial advisor. McKinsey Recovery & Transformation
Services U.S., LLC, serves as the Debtors' restructuring advisor.
Kurtzman Carson Consultants LLC serves as the Debtors' claims and
noticing agent.
Kristopher M. Hansen, Esq., Sayan Bhattacharyya, Esq., and
Marianne S. Mortimer, Esq., at Stroock & Stroock & Lavan LLP; and
Peter J. Barrett, Esq., and Michael A. Condyles, Esq., at Kutak
Rock LLP, represent the first lien lenders.
An ad hoc group of second lien lenders is represented by Lynn L.
Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran,
PLC; and Ben H. Logan, Esq., Suzzanne S. Uhland, Esq., and
Jennifer M. Taylor, Esq., at O'Melveny & Myers LLP.
The Official Committee of Unsecured Creditors retained Pachulski
Stang Ziehl & Jones LLP as its lead counsel; Christian & Barton,
LLP as its local counsel; and Mesirow Financial Consulting, LLC as
its financial advisors.
AMPAL-AMERICAN: Judge in Middle of Fight for Corporate Control
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that in the Chapter 11 case of Ampal-American Israel
Corp., U.S. Bankruptcy Judge Stuart M. Bernstein in New York will
assume a role more often played by judges in Delaware Chancery
Court. He will decide at the hearing novel questions governing
corporate control.
According to the report, the creditors' committee was having less
than amicable relations with Yousef Maiman, a director who
controls 61.5% of the stock. According to the committee, he and
the remainder of the board refused to pay fees authorized by
Judge Bernstein.
The report relates that after the committee threatened lawsuits
against board members, they all agreed to resign, except
Mr. Maiman. As part of a compromise, the resigning directors
agreed to appoint two replacements, along with a chief
restructuring officer who would report to lawyers for the debtor
and the committee. The deal represented a compromise with less
than universal support.
According to Mr. Rochelle, for starters, Judge Bernstein had asked
whether the best answer was the appointment of a Chapter 11
trustee who would supplant the board. He nonetheless called for
tomorrow's hearing to decide on approving the CRO and a reduced
board, where Mr. Maiman would be outvoted. Both Mr. Maiman and
the U.S. Trustee object.
Mr. Maiman, the report relates, argues that outgoing board members
have no right to usurp shareholders' right to elect a board. In
addition to saying Judge Bernstein should turn down the
settlement, Mr. Maiman vows to call for a shareholders' meeting
within 10 days to oust the new board and elect one he controls.
Meanwhile, the U.S. Trustee takes a slightly different tack by
telling Judge Bernstein that the proper procedure demands
appointing a Chapter 11 trustee. The U.S. Trustee also argues
that a CRO can't be under the thumb of lawyers for the company and
the committee.
In February, Judge Bernstein approved disclosure materials
explaining the reorganization plan promulgated by the committee.
The judge had ended Ampal's exclusive plan-filing rights in
January. There can't be a creditors' vote followed by a
confirmation hearing until Israeli securities regulators approve
solicitation materials.
About Ampal-American
Ampal-American Israel Corporation -- http://www.ampal.com/--
acquired interests primarily in businesses located in Israel or
that are Israel-related. Ampal-American filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-13689) on Aug. 29, 2012, to
restructure the Company's Series A, Series B and Series C
debentures. Bankruptcy Judge Stuart M. Bernstein presides over
the case. Ampal-American sought bankruptcy protection in the U.S.
because bankruptcy laws in Israel would lead to the Company's
liquidation.
Michelle McMahon, Esq., at Bryan Cave LLP, serves as the Debtor's
counsel. Houlihan Lokey serves as investment banker.
The petition was signed by Irit Eluz, chief financial officer,
senior vice president. The Company scheduled $290,664,095 in
total assets and $349,413,858 in total liabilities.
A three-member official committee of unsecured creditors is
represented by Brown Rudnick as counsel.
APRIA HEALTHCARE: S&P Lowers Sr. Secured Debt Rating to 'BB-'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issue-level rating
on Apria Healthcare Group Inc.'s senior secured debt to 'BB-' (one
notch higher than S&P's 'B+' corporate credit rating on the
company) from 'BB'. S&P revised the recovery rating on this debt
to '2', indicating its expectation of substantial (70% to 90%)
recovery for lenders in the event of a payment default, from '1'
(90% to 100% recovery expectation). The rating actions follow
Apria's pending increase of its proposed term loan due 2020 by
$150 million, bringing the aggregate amount to $900 million.
S&P's view is that the larger size of this debt class reduces
recovery prospects in the event of a default. All other existing
ratings on the company are unaffected.
The 'B+' corporate credit rating and negative outlook on Apria
reflect the company's "weak" business risk profile and
"aggressive" financial risk profile, according to S&P's criteria.
Apria's weak business risk profile reflects the company's exposure
to third-party reimbursement. Apria's diverse payor and revenue
mix somewhat mitigates the exposure of a lost contract or rate
cut. Apria has no significant concentration with any single
commercial payor. S&P assess Apria's financial risk profile as
"aggressive," reflecting its expectation that adjusted leverage
will remain between 4.0x and 5.0x over the near term.
RATING LIST
Apria Healthcare Group Inc.
Corporate Credit Rating B+/Negative/--
Downgraded; Recovery Rating Revised
To From
Apria Healthcare Group Inc.
$900 Mil. Term Loan B Due 2020 BB- BB
Recovery Rating 2 1
ATP OIL: Macquarie, Keba Say ATP Still Owes Them $3M In Royalties
-----------------------------------------------------------------
Jeremy Heallen of BankruptcyLaw360 reported that Macquarie
Investments LLC and Keba Energy LLC asked a Texas bankruptcy court
Wednesday to hold ATP Oil & Gas Corp. in contempt for refusing to
hand over nearly $3 million in royalty payments.
The report related that Macquarie and Keba argued in an emergency
motion that ATP is using for its own operating expenses $2.9
million in royalty payments the pair of interest holders were
supposed to receive last month, violating an August order that the
funds be disbursed.
About ATP Oil
Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.
ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is
the conflicts counsel. Opportune LLP is the financial advisor,
and Jefferies & Company is the investment banker. Kurtzman
Carson Consultants LLC is the claims and notice agent.
ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012. Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent. There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent. ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue. Trade suppliers have claims
for $147 million, ATP said in a court filing.
An official committee of unsecured creditors has been appointed in
the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel.
A 7-member panel of equity security holders has also been
appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio,
Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel
to the Equity Committee.
ATP OIL: Parties Balk at Gomez Shut-in Bid; Debtor Talks Back
-------------------------------------------------------------
Various parties filed objections and reservation of rights with
respect the Debtor's emergency motion for entry of an order
approving the shut-in of its Gomez Properties. These parties
include (i) HBK Main Street Investments, L.P., and Sankaty ATP
LLC, Sankaty Credit Opportunities IV, L.P. and Sankaty Managed
Account (UCAL), L.P.; (ii) Gomez Hub Pipeline Partners, LP (c/o
ArcLight Capital Partners, LLC); and (iii) ATP Infrastructure
Partners, L.P.
In summary, the Objectors raise four principal arguments: (1) the
the Debtor has not established a valid business justification for
the shut-in; (2) the Debtor seeks to shut-in Gomez for the
benefit of a single constituency: the DIP Lenders; (3) a shut-in
violates the Debtor's implied duties to operate its offshore
leases and that such a violation would lead to substantial
administrative expenses against the estate; and (4) the Debtor did
not act in good faith when moving to shut-in the Gomez Properties.
HBK and Sankaty complained that shutting-in the Gomez Properties
will destroy the value of Debtor's assets in advance of the sale
of its Deepwater Assets and cause potential bidders not to submit
their bids. Similarly, rejecting certain contracts with respect to
pipeline and platform agreements will also destroy the value of
the assets in advance of the sale, they pointed out.
Gomez Hub, which previously filed a limited objection to the on
the grounds that it was not provided adequate time to properly
evaluate the Debtor's decision, and ATP IP, asked that any order
granting the relief sought in the Motion contain language
sufficient to protect and preserve their rights.
In response, the Debtor argued that sound business reasons support
its determination that a shut-in of the Gomez Properties is in
the best interests of its estate. Specifically, the Debtors said a
shut-in will reduce its monthly operating costs and expenses with
respect to the Gomez Properties, will minimize the operational
risks inherent in operating the Gomez Properties, and will
preserve the Gomez hydrocarbons for the benefit of the estate and
other stakeholders, including, notably, the U.S. government with
respect to potential decommissioning costs. Shutting in the Gomez
Properties also benefits all constituencies of the estate while
continuing operations benefits only one group: the Objectors,
notes the Debtor. It added that the DIP Lenders have in no way
directed the shut-in, but instead, acting as any prudent lender
would, have asked the Debtor to consider whether such continued
operation is economical. In addition, the Debtor said it owes no
cognizable legal duty to anyone to operate its offshore properties
at a substantial loss -- as it has been doing for the past several
months -- and any claims arising from the shut-in would not meet
the "actual" and "necessary" standard required for administrative
expense status under 11 U.S.C. Section 503(b)(1)(A). Lastly, the
Debtor contended that it has acted in good faith at all times when
evaluating the appropriate course of action with respect to the
Gomez Properties, including filing its Shut-in Motion, and the
Objectors have not --and cannot -- assert any facts suggesting
otherwise.
About ATP Oil
Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.
ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is
the conflicts counsel. Opportune LLP is the financial advisor
and Jefferies & Company is the investment banker. Kurtzman
Carson Consultants LLC is the claims and notice agent.
ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012. Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent. There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent. ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue. Trade suppliers have claims
for $147 million, ATP said in a court filing.
An official committee of unsecured creditors has been appointed in
the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel.
A 7-member panel of equity security holders has also been
appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio,
Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel
to the Equity Committee.
ATP OIL: Final Hearing on Harris Lift Stay Motion Moved to May
--------------------------------------------------------------
Harris CapRock Communications Inc. and ATP Oil & Gas Corporation,
in an agreed order signed by District Judge Marvin Isgur, agreed
to extend the deadline by which the Debtor and the Official
Committee of Unsecured Creditors may respond to a lift stay motion
filed by Harris CapRock, up through May 9, 2013, and to reschedule
the final hearing on the motion to May 16, 2013, at 1:30 p.m.
As widely reported, the Debtor is in the process of marketing its
assets for sale through court-approved sales and bidding
procedures. A hearing to approve the sale of the Debtor's
Deepwater Assets was previously scheduled for March 28, 2013. On
February 24, 2013, the Debtor filed an emergency motion for entry
of an order approving the shut-in of its Gomez Properties.
On March 1, 2013, Harris CapRock -- who leases out certain
equipment to ATP Oil pursuant to a Master Services Agreement --
filed a lift stay motion, in part, to allow it to retrieve its
equipment from any well site that may be shut-in or sold to a
third party, in the event the Debtor exercised its rights to
reject the MSA.
On March 18, 2013, the Debtor filed a notice of (i) First-
Production for Oil from Clipper Well and (ii) Setting (a) Bid
Deadline, (b) General Objection Deadline, (c) Auction Date, and
(d) Sale Hearing with respect to the Debtor's Deepwater Assets.
Pursuant to the Bid Procedures Order and Bidding Deadlines, if the
Debtor receives more than one Qualified Bid, an auction will occur
on April 23, 2013. A hearing to consider approval of the sale of
substantially all of the Deepwater Assets is presently scheduled
to occur on April 25, 2013.
Considering the Bidding Deadlines and currently scheduled auction
and hearing date, both parties agreed to further extend the
Response Deadline and to reschedule the Final Hearing on the
motion. The Response Deadline was previously extended through
March 26, 2013.
About ATP Oil
Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.
ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is
the conflicts counsel. Opportune LLP is the financial advisor
and Jefferies & Company is the investment banker. Kurtzman
Carson Consultants LLC is the claims and notice agent.
ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012. Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent. There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent. ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue. Trade suppliers have claims
for $147 million, ATP said in a court filing.
An official committee of unsecured creditors has been appointed in
the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel.
A 7-member panel of equity security holders has also been
appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio,
Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel
to the Equity Committee.
ATP OIL: Hearing on Panel Bid for Ch. 11 Trustee Moved to May
-------------------------------------------------------------
ATP Oil & Gas Corporation and the Official Committee of Unsecured
Creditors have agreed to reschedule the hearing on the Committee's
motion for an order appointing a Chapter 11 Trustee or, in the
alternative, an order converting the Debtor's Chapter 11 case to a
Chapter 7 liquidation, to the week of May 20, 2013.
The Debtor said subsequent notice will be provided upon
confirmation of the Court's availability.
In its Motion filed in February, the Committee told the Court the
gross mismanagement of the Debtor and the Chapter 11 Case provides
cause for the appointment of the trustee and renders the
appointment in the best interests of creditors and the estate.
If a trustee is not appointed, the Committee continued, the Motion
for conversion to a case under chapter 7 should be granted because
conversion is appropriate where there is a "substantial or
continuing loss to or diminution of the estate and the absence of
a reasonable likelihood of rehabilitation" or "gross mismanagement
of the estate."
About ATP Oil
Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.
ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is
the conflicts counsel. Opportune LLP is the financial advisor
and Jefferies & Company is the investment banker. Kurtzman
Carson Consultants LLC is the claims and notice agent.
ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012. Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent. There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent. ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue. Trade suppliers have claims
for $147 million, ATP said in a court filing.
An official committee of unsecured creditors has been appointed in
the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel.
A 7-member panel of equity security holders has also been
appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio,
Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel
to the Equity Committee.
AVENUE J8: Case Summary & 4 Unsecured Creditors
-----------------------------------------------
Debtor: Avenue J8, LLC
P.O. Box 16323
Beverly Hills, CA 90209
Bankruptcy Case No.: 13-18502
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Julia W. Brand
Debtor's Counsel: Richard E. Dwyer, Esq.
LAW OFFICE OF RICHARD DWYER
2828 Cochran St., #350
Simi Valley, CA 93065
Tel: (747) 224-7956
Fax: (888) 370-4593
E-mail: attorneyricharddwyer@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 four largest unsecured
creditors, filed together with the petition, is available for free
at http://bankrupt.com/misc/cacb13-18502.pdf
The petition was signed by Menashi Cohen, managing member.
AVIS BUDGET: S&P Affirms 'B+' CCR & Revises Outlook To Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its
ratings, including its 'B+' corporate credit rating, on
Parsippany, N.J.-based car and truck renter Avis Budget Group Inc.
At the same time, S&P revised its outlook on the rating to
positive from stable.
The outlook revision on Avis Budget (parent of the Avis and Budget
car rental brands, the Budget consumer truck rental brand, and the
Zipcar car sharing brand) is based on the company's improved
financial profile over the past year due to stronger operating
performance, which S&P expects to be maintained, as the company
continues to benefit from its integration of Avis Europe PLC,
acquired in October 2011, and Zipcar Inc., acquired in March 2013.
"The ratings on Avis Budget reflect the company's aggressive
financial profile, the price competitive and cyclical nature of
on-airport car rentals, and a significant amount of secured
assets," said Standard & Poor's credit analyst Betsy Snyder. The
ratings also incorporate the company's position as one of the
largest global car rental companies, the relatively stable cash
flow the business generates, and S&P's expectation that Avis
Budget's operating performance will continue to improve. Standard
& Poor's characterizes the company's business profile as "fair,"
its financial profile as "aggressive," and its liquidity as
"adequate" under its criteria.
The aggressive financial profile is primarily due to the capital
intensity of the car rental business, which in large part is debt
financed through asset-backed financings. However, the company's
cash flow, similar to its competitors, tends to be relatively
stable, even during periods of earnings weakness, due to the large
noncash depreciation component of expenses, which aids cash flow
measures. On Oct. 3, 2011, Avis Budget acquired U.K. car renter
Avis Europe for $1 billion cash and the assumption of its debt,
which increased Avis Budget's global presence. This resulted in
somewhat weaker credit metrics until the end of 2012, when the
company was able to realize synergy benefits and a full year of
earnings and cash flow to offset the incremental debt.
In 2012, EBITDA interest coverage rose to 4.1x from 3.3x in 2011,
funds from operations (FFO) to debt increased to 22% from 17%, and
debt to EBITDA declined to 4.4x from 5.6x. On March 14, 2013,
Avis Budget acquired car sharer Zipcar for approximately
$500 million, primarily debt financed. However, S&P don't expect
the incremental debt to affect the improvement that it expects in
Avis Budget's credit metrics over the next year. While S&P
expects continued pressure on demand and pricing in the eurozone
due to an ongoing weak economy, it expects stable to modestly
increased demand and pricing in the U.S., assuming the U.S.
economy continues to grow at about 3%. S&P expects ongoing cost
reductions; synergies from the Avis Europe and Zipcar
acquisitions; higher vehicle costs, with strong used car prices
partly offsetting rising new vehicle costs; and lower funding
costs (the company has been quite successful in refinancing higher
coupon debt at lower rates) to result in steadily improving credit
metrics. If demand is weaker than S&P anticipates, Avis Budget
can curtail capital spending on fleet growth by keeping vehicles
for longer periods of time, buying fewer new vehicles, and
disposing of vehicles.
The outlook is positive. S&P expects Avis Budget to maintain most
of its credit metrics but for EBITDA interest coverage to improve
due to lower interest expense related to the refinancing of a
substantial portion of its debt at lower rates. S&P also expects
the company to continue to realize synergies from the Avis Europe
and Zipcar acquisitions. Over the next year, S&P expects EBITDA
interest coverage to increase from 4.1x in 2012, and FFO to debt
and debt to EBITDA to remain relatively consistent in the low-20%
area and mid-4x area, respectively. S&P could raise the ratings
if benefits from the integrations exceed its expectations or
operating performance in Europe is stronger than its expects,
resulting in EBITDA interest coverage exceeding 4.5x or FFO to
debt exceeding 25% over a sustained period. S&P could revise the
outlook to stable if industry conditions weaken and integration
benefits are not realized or economic conditions in Europe are
weaker than S&P expects, causing FFO to debt to fall below 20% on
a sustained basis.
AZIMI ENTERPRISES: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Azimi Enterprises, LLC
148 Pittsburg Street
Dallas, TX 75207
Bankruptcy Case No.: 13-31688
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Harlin DeWayne
Debtor's Counsel: Joyce W. Lindauer, Esq.
8140 Walnut Hill Ln., Suite 301
Dallas, TX 75231
Tel: (972) 503-4033
Fax: (972) 503-4034
E-mail: courts@joycelindauer.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Masoud Azimi, president.
BEALL CORP: Court Approves Eide Bailly as Accountants
-----------------------------------------------------
Beall Corporation sought and obtained approval from the U.S.
Bankruptcy Court for the District of Oregon to employ Eide Bailly
LLP as its accountants to assist the Debtor with the preparation
of its federal and state tax returns and supporting schedules,
prepare any bookkeeping entries necessary in connection with
preparation of Debtor's tax returns, and prepare and post any
adjusting entries.
The Eide Bailly professionals who will be primarily responsible
for providing services to the Debtor and their current billing
rates are:
John W. Jacobsen Partner $325
Maria J. Christiaens Partner $275
Janel Keenan Manager $240
Edie Hansen Manager $225
Nicole Rittierodt Senior Associate $175
Cedric Snelling Associate $150
Bill Schrock Associate $150
To the best of the Debtor's knowledge, the partners and associates
of Eide Bailly do not have any connection with the Debtor, its
creditors, any other party in interest, or their attorneys or
accountants.
About Beall Corporation
Portland, Oregon-based Beall Corporation, a manufacturer of
lightweight, efficient, and durable tanker trucks, trailers and
related products, filed a Chapter 11 bankruptcy petition (Bankr.
D. Ore. Case No. 12-37291) on Sept. 24, 2012, estimating at least
$10 million in assets and liabilities. Founded in 1905, Beall has
four factories and nine sale branches across the U.S. The Debtor
has 285 employees, with an average weekly payroll of $300,000.
Judge Elizabeth L. Perris presides over the case. The Debtor has
tapped Tonkon Torp LLP as counsel. The Debtor disclosed
$14,015,232 in assets and $28,791,683 in liabilities as of the
Chapter 11 filing.
Wabash National Corporation on Feb. 4 successfully closed on its
acquisition of certain assets of Beall's tank and trailer business
for $15 million.
Robert D. Miller Jr., the U.S. Trustee for Region 18, appointed
six members to the official committee of unsecured creditors.
Ball Janik LLP represents the Committee.
BEAR STEARNS: JPMorgan Wins Round in Dexia SA Mortgage-Bond Suit
----------------------------------------------------------------
David McLaughlin, writing for Bloomberg News, reported that
JPMorgan Chase & Co. (JPM), the biggest U.S. bank, defeated most
of a lawsuit brought by Dexia SA over about $1.6 billion in
mortgage-backed securities it bought before the financial crisis.
U.S. District Judge Jed Rakoff in Manhattan narrowed the case to
five securitization deals from 65 at issue in a complaint brought
by Dexia, according to an order filed on April 4, Bloomberg
related. Rakoff said he would issue an opinion later explaining
his reasoning.
Bloomberg further related that Dexia, based in Brussels, sued
JPMorgan in 2012 along with the Bear Stearns and Washington Mutual
businesses JPMorgan acquired, accusing the lender of "egregious
fraud" in the sale of mortgage bonds. Dexia claimed loans backing
securities purchased between 2005 and 2007 were riskier than
promised.
Dexia (DEXB) unit FSA Asset Management LLC said in court papers
that JPMorgan received reports from independent mortgage-loan
underwriters showing that 20 percent to 80 percent of the loans in
samples used for testing didn't meet the underwriting guidelines,
including fraudulent home appraisals or missing documentation,
according to Bloomberg.
"Rather than disclose these known defects to FSAM, defendants
bought and sold massive quantities of defective loans," FSAM said,
Bloomberg cited. "Defendants secretly overrode the independent
loan underwriters' determinations, creating a final, sanitized
version."
Rakoff, Bloomberg added, granted part of JPMorgan's motion for a
pre-trial ruling known as summary judgment. The judge dismissed
claims brought by Dexia and said FSAM can pursue claims related to
five securitizations.
The case is Dexia SA v. Bear Stearns & Co., 12-cv-04761. U.S.
District Court, Southern District of New York (Manhattan).
About Bear Stearns
New York City-based The Bear Stearns Companies Inc. (NYSE: BSC)
-- http://www.bearstearns.com/-- was a leading financial services
firm serving governments, corporations, institutions and
individuals worldwide. The investment bank collapsed in 2008 and
was sold in a distressed sale to JPMorgan Chase in a transaction
backed by the U.S. government.
Grand Cayman, Cayman Islands-based Bear Stearns High-Grade
Structured Credit Strategies Enhanced Leverage Master Fund Ltd.
and Bear Stearns High-Grade Structured Credit Strategies Master
Fund Ltd. were open-ended investment companies, which sought high
income and capital appreciation relative to the London Interbank
Offered Rate, and designed for long-term investors. On July 30,
2007, the Funds filed winding up petitions under the Companies Law
of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen
Beighton at KPMG were appointed joint provisional liquidators.
BEAZER HOMES: Brigade Capital Holds 5% Equity Stake at March 15
---------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Brigade Capital Management, LLC, Brigade Leveraged
Capital Structures Fund Ltd., and Donald E. Morgan, III, disclosed
that, as of March 15, 2013, they beneficially own 1,266,600
shares of common stock of Beazer Homes USA, Inc., representing 5%
of the shares outstanding. A copy of the regulatory filing is
available for free at http://is.gd/nWAcPF
About Beazer Homes
Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/--
headquartered in Atlanta, is one of the country's 10 largest
single-family homebuilders with continuing operations in Arizona,
California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada,
New Jersey, New Mexico, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed
on the New York Stock Exchange under the ticker symbol "BZH."
The Company's balance sheet at Dec. 31, 2012, showed $1.92 billion
in total assets, $1.67 billion in total liabilities and $242.61
million in total stockholders' equity.
Beazer Homes incurred a net loss of $145.32 million for the fiscal
year ended Sept. 30, 2012, a net loss of $204.85 million for the
fiscal year ended Sept. 30, 2011, and a net loss of $34.04 million
for the fiscal year ended Sept. 30, 2010.
* * *
Beazer carries a 'B-' issuer credit rating, with "negative"
outlook, from Standard & Poor's.
In the Jan. 30, 2013, edition of the TCR, Moody's Investors
Service raised Beazer Homes USA, Inc.'s corporate family rating to
Caa1 from Caa2 and probability of default rating to Caa1-PD from
Caa2-PD. The ratings upgrade reflects Moody's increasing
confidence that Beazer's credit metrics, buoyed by a stregthening
housing market, will gradually improve for at least the next two
years and that the company may be able to return to a modestly
profitable position as early as fiscal 2014.
As reported by the TCR on Sept. 10, 2012, Fitch Ratings has
upgraded the Issuer Default Rating (IDR) of Beazer Homes USA, Inc.
(NYSE: BZH) to 'B-' from 'CCC'. The upgrade and the Stable
Outlook reflect Beazer's operating performance so far this year,
its robust cash position, and moderately better prospects for the
housing sector during the remainder of this year and in 2013. The
rating is also supported by the company's execution of its
business model, land policies, and geographic diversity.
BETHEL HEALTHCARE: Updated Case Summary & Creditors' Lists
----------------------------------------------------------
Lead Debtor: Bethel Healthcare, Inc.
dba West Valley Convalescent Hospital
21800 Oxnard St Ste 220
Woodland Hills, CA 91367
Bankruptcy Case No.: 13-12220
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Alan M. Ahart
Debtors' Counsel: Hamid R. Rafatjoo, Esq.
VENABLE LLP
2049 Century Pk East, Ste.2100
Los Angeles, CA 90067
Tel: (310) 229-9900
Fax: (310) 229-9901
E-mail: hrafatjoo@venable.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
Affiliate that simultaneously filed separate Chapter 11 petition:
Debtor Case No.
------ --------
Corinthian Sub-Acute &
Rehabilitation Center, Inc. 13-12221
Assets: $1,000,001 to $10,000,000
Debts: $1,000,001 to $10,000,000
The petitions were signed by Richard Brenner, chief financial
officer.
A. A copy of Bethel Healthcare's list of its 20 largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/cacb13-12220.pdf
B. A copy of Corinthian Sub-Acute & Rehabilitation's list of its
19 largest unsecured creditors filed together with the petition is
available for free at http://bankrupt.com/misc/cacb13-12221.pdf
BIRDSALL SERVICES: NJ Claims No Intent to Put Firm Out of Business
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that New Jersey's attorney general says he doesn't intend
to put Birdsall Services Group Inc. out of business, with the loss
of 325 jobs.
The report relates that Birdsall filed for Chapter 11 protection
in Trenton after the firm was indicted and the state seized the
assets with permission from a state court. The first order of
business for Birdsall was to free the bank account to cover
payroll. The company won in bankruptcy court, at least initially.
According to the report, U.S. Bankruptcy Judge Michael B. Kaplan,
rejecting opposition from the state, allowed interim use of cash
on April 1, including permission to pay as much as $1.7 million in
payroll. The judge isn't allowing payments to any senior
officers, regardless of whether they were indicted. Judge Kaplan
will hold another hearing on April 8 on the continued use of cash.
The state immediately filed an appeal. The state unsuccessfully
negotiated with Birdsall for the appointment of a "neutral
monitor" who would put safeguards in place on how to use assets,
Peter Aseltine, a spokesman for New Jersey Attorney General
Jeffrey Chiesa, said in an interview with Bloomberg News. If
there were a monitor, the state would have agreed to allow the use
of cash to cover payroll, Mr. Aseltine said.
The bankruptcy judge already denied the state a stay pending
appeal. The judge said in his order that the state hadn't proven
"irreparable harm apart from financial injury."
The state is being represented in bankruptcy court by Sills Cummis
& Gross PC, a New Jersey firm experienced in bankruptcy law.
About Birdsall Services
Birdsall Services Group Inc., an engineering firm from Eatontown,
New Jersey, filed for Chapter 11 protection (Bankr. D.N.J. Case
No. 13-16743) on March 29, 2013, when the state attorney general
indicted the business and obtained a court order
seizing the assets.
Birdsall was accused by the state of violating laws prohibiting
so-called pay-to-play, where businesses make political
contributions in return for government contracts. The state
charged that the company arranged for individuals to make
contributions and then reimbursed the employees. A company
officer pleaded guilty last year to making political contributions
disguised to appear as though made by individuals.
The Chapter 11 petition filed in Trenton, New Jersey, disclosed
assets of $41.6 million and liabilities totaling $27 million.
Debt includes $3.6 million owing to a bank on a secured claim and
$2.4 million in payables to trade suppliers.
CAPITAL BANCORP: Sells One Bank to Keep Others Solvent
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Capitol Bancorp Ltd., the owner of small banks in
10 states, received expedited court approval to sell its remaining
interest in Capital National Bank to generate $1.5 million. The
proceeds will be used as additional capital for another bank
subsidiary so regulators don't take it over.
The report recounts that before bankruptcy, Capital contracted to
sell about 25 bank subsidiaries in compliance with regulators'
demands for improving the banks' capital adequacy. The Capitol
holding company retained 19.4% of Capital National. The remaining
stock was sold for $17 a share, or a total of about $1.5 million.
About Capitol Bancorp
Capitol Bancorp Ltd. and Financial Commerce Corporation filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case
Nos. 12-58409 and 12-58406) on Aug. 9, 2012.
Capitol Bancorp -- http://www.capitolbancorp.com/-- is a
community banking company with a network of individual banks and
bank operations in 10 states and total consolidated assets of
roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of
FCC, with a number of CBC affiliates owning the remainder. FCC,
in turn, is the holding company for five of the banks in CBC's
network. CBC is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841,
et seq., and trades on the OTCQB under the symbol "CBCR."
Lawyers at Honigman Miller Schwartz and Cohn LLP represent the
Debtors as counsel. John A. Simon, Esq., of Foley & Lardner LLP
represents the Official Committee of Unsecured Creditors as
counsel.
In its petition, Capitol Bancorp scheduled $112,634,112 in total
assets and $195,644,527 in total liabilities. The petitions were
signed by Cristin K. Reid, corporate president.
The Company's balance sheet at Sept. 30, 2012, showed
$1.749 billion in total assets, $1.891 billion in total
liabilities, and a stockholders' deficit of $141.8 million.
Prepetition, the Debtor arranged a reorganization plan that was
accepted by the requisite majorities of creditors and equity
holders in all classes. Problems arose when affiliates of
Valstone Partners LLC declined to proceed with a tentative
agreement to fund the reorganization by paying $50 million for
common and preferred stock while buying $207 million in face
amount of defaulted commercial and residential mortgages.
CARRICK TRUCKING: Case Summary & 6 Unsecured Creditors
------------------------------------------------------
Debtor: Carrick Trucking, Inc.
7535 W. Emery Road
Houghton Lake, MI 48629
Bankruptcy Case No.: 13-20904
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Eastern District of Michigan (Bay City)
Judge: Daniel S. Opperman
Debtor's Counsel: Rozanne M. Giunta, Esq.
916 Washington Ave.
Suite 309
Bay City, MI 48708
Tel: (989) 893-3518
Fax: (989) 894-2232
E-mail: rmgiunta@lambertleser.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 six largest unsecured
creditors is available for free at
http://bankrupt.com/misc/mieb13-20904.pdf
The petition was signed by Gail K. Carrick, secretary/treasurer.
CASCADE BANCORP: Reports $5.9 Million Net Income in 2012
--------------------------------------------------------
Cascade Bancorp filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing net income of
$5.95 million on $54.87 million of total interest and dividend
income for the year ended Dec. 31, 2012, as compared with a net
loss of $47.27 million on $67.10 million of total interest and
dividend income during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $1.30 billion
in total assets, $1.16 billion in total liabilities and $140.77
million in total stockholders' equity.
A copy of the Form 10-K is available for free at:
http://is.gd/uI37mg
About Cascade Bancorp
Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its
wholly-owned subsidiary, Bank of the Cascades, offers full-service
community banking through 32 branches in Central Oregon, Southern
Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho.
Cascade Bancorp has no significant assets or operations other than
the Bank.
Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank
of The Cascades. The rating company says that the institution
currently demonstrates what it considers to be significant
weaknesses and has also failed some of the basic tests it uses to
identify fiscal stability. "Even in a favorable economic
environment," Weiss says, "it is our opinion that depositors or
creditors could incur significant risks."
As reported by the TCR on March 14, 2013, the Bank of the
Cascades's regulators have terminated the cease-and-desist order
put in place in August of 2009. The Federal Deposit Insurance
Corporation and the Oregon Division of Finance and Corporate
Securities are the Bank's primary regulators. In connection with
the termination of the Order, the Bank has entered into a
memorandum of understanding with its regulators.
* * *
This concludes the Troubled Company Reporter's coverage of Cascade
Bancorp until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at
a level sufficient to warrant renewed coverage.
CDW CORP: Debt Repayments Prompt Moody's to Lift Ratings to 'Ba3'
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings on CDW
Corporation's senior secured bank credit facilities due 2014 &
2017 and its senior secured notes due 2018 to Ba3 from B1.
The instrument ratings' upgrade reflects the significant debt pay
down of the senior secured term loans over the past year, which
now occupies a smaller proportion of the company's capital
structure.
The corporate family rating was affirmed at B2 while the
probability of default rating was also affirmed at B2-PD. The
rating outlook is stable.
Ratings Rationale:
CDW's B2 Corporate Family Rating incorporates high financial
leverage, thin (albeit improving) interest coverage ratios as well
as limited financial covenants. Significant vendor concentration
to Hewlett-Packard and exposure to the volatile small and medium-
sized business segments also constrain the rating.
CDW recently filed its intention to issue $500 million through an
Initial Public Offering (IPO) of stock. Proceeds from the primary
shares issued will likely be used to pay down debt. As well, with
a public currency from the IPO, there would be a path which will
enable the private equity owners to eventually exit their stake in
CDW. Coupled with the $50 million debt redemption earlier in 2013
and possible future debt paydowns, CDW would take a big step in
reducing its high debt balances. However, given the fluid timing
of the IPO, the volatility of the equity markets, especially for
technology related issuers, a successful IPO is not certain.
In addition, the anticipated debt reduction pro-forma for the
stock offering would still put the company's adjusted debt/EBITDA
leverage ratio at about 4.8 times. Therefore, the significant debt
burden will still need to be addressed with EBITDA and cash flow
growth to be in a position for an upgrade. Should the IPO proceed
as planned and CDW continues its path to operating improvement,
Moody's will take appropriate ratings actions at the time.
Rating Outlook
The stable rating outlook reflects CDW's relatively consistent
revenue stream from the public sector, which counteracts greater
fluctuations in corporate sector revenue, as well as Moody's
expectation for continued execution of its business strategy,
stable vendor/customer relationships and market share gains.
What Could Change the Rating - Up?
Ratings could be upgraded if CDW's revenue and operating margins
improve to a higher sustainable range (operating margins in mid to
upper single digits) implying increased market share, continued
favorable shift in product mix and/or a lower cost structure. An
upgrade could also occur upon a successful IPO or other debt
reduction, such that total adjusted debt to EBITDA leverage is
expected to be sustained below 4.5x.
What Could Change the Rating - Down?
Ratings could be downgraded if CDW experienced loss of
customers/market share or pricing pressures due to increasing
competition or a weak economic environment led to margin erosion
and impaired interest coverage, reduced free cash flow generation
and financial leverage sustained above 7x total adjusted debt to
EBITDA.
The principal methodology used in this rating was Global
Distribution & Supply Chain Services published in November 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.
CHARTER COMMUNICATIONS: S&P Rates $1.5-Bil. Loan Due 2020 'BB+'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Charter Communications Operating LLC's $1.5 billion term loan E
due 2020. The recovery rating is '1' and indicates S&P's
expectation for very high (90% to 100%) recovery of principal in
the event of payment default.
The borrower is a subsidiary of Stamford, Conn.-based cable
operator Charter Communications Inc. (Charter). S&P's ratings on
Charter and subsidiaries, including the 'BB-' corporate credit
rating and the stable outlook, are not affected by the
transaction.
The company will use proceeds of this delayed draw, first-lien
loan to fund the bulk of the $1.625 billion acquisition of Bresnan
Broadband Holdings LLC from Cablevision Systems Corp. in a
transaction that is expected to close in the third quarter. The
Bresnan cable properties serve about 366,000 customer
relationships, including around 300,000 basic video customers in
Colorado, Montana, Wyoming, and Utah. The small increase in debt
leverage is not material.
S&P views Charter as having a satisfactory business risk profile
that benefits from cable's subscription-based business model and
from the scale economies and geographic diversity of its 4 million
video subscriber base as of Dec. 31, 2012. The robust bandwidth
of Charter's hybrid fiber optic/coaxial cable architecture should
support what S&P expects to be demand for increasing bandwidth.
Charter's legacy low video penetration is likely to continue and
the eventual effectiveness of recent customer service and
investments may not be apparent immediately. Debt leverage of
around 5x, pro forma for the Bresnan acquisition, is at the upper
end of, but still consistent with, S&P's view of an aggressive
financial risk profile.
RATINGS LIST
Charter Communications Inc.
Corporate Credit Rating BB-/Stable/--
New Rating
Charter Communications Operating LLC
$1.5 Bil. Term Loan E Due 2020 BB+
Recovery Rating 1
CNH CAPITAL: Moody's Rates $500 Million Notes 'Ba2'
---------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to the $500
million note issue of CNH Capital LLC. The rating reflects the
strategic importance of CNH Capital to its parent, CNH Global NV,
and a support agreement between the parent and the finance
operation. The Corporate Family Rating and Probability of Default
Rating of CNH Global are affirmed at Ba2 and Ba2-PD respectively,
and its Speculative Grade Liquidity rating remains at SGL-3. The
rating outlook for both CNH Global and CNH Capital is stable.
Ratings Rationale:
CNH Capital is a captive finance operation of CNH. It provides
retail and wholesale financing in support of CNH's farm and
construction equipment sales in North America. At December 2012,
CNH Capital had total assets of $13.3 billion. CNH Capital
represents a significant portion of CNH's global Financial
Services Operations that had $20 billion of total assets at
December 2012.
A support agreement between CNH and CNH Capital requires the
parent to: 1) own at least 51% of CNH Capital; 2) maintain CNH
Capital's tangible net worth of at least $50 million; and 3)
insure that CNH Capital maintains fixed charge coverage of no less
than 1.05x. Beyond this support agreement CNH provides
considerable financial support to its finance operations in the
form of intercompany loans. At December 2012 CNH had advanced
approximately $1.9 billion to CNHFS in order to support the
financing of the operation's global portfolio.
Both CNH Capital and CNHFS maintain prudent underwriting
standards, competitive return levels, and adequate capitalization
relative to other captive finance operations in the heavy
equipment manufacturing sector. Nevertheless, the heavy reliance
of CNH Capital and CNHFS on the wholesale funding market to
support their portfolios and the need to regularly access that
market to fund new originations contribute to a Ba stand-alone
credit profile. The support agreement from CNH and the strategic
importance of these operations to the parent support the Ba2
rating assigned to the new note issuance.
The Ba2 rating of the notes also recognizes CNH's long-term
initiative to broaden the funding base of the financial service
operations away from its very heavy reliance on the securitization
market for its external funding requirements. CNH Capital's
current issuance of $500 million in unsecured notes is the third
such issuance by the company. The company previously completed a
$750 million offering in October 2012, and a $500 million offering
during November 2011. These financings are a constructive move in
CNH Capital's effort to strengthen its funding structure. Proceeds
of the new issuance will be used for general corporate purposes
that include funding portfolio growth and repaying maturing
obligations.
CNH benefits from the favorable long-term demand fundamentals in
the global farm equipment market, a competitive position in this
sector, and a broad geographic footprint. Moreover, CNH has made
considerable progress in improving the operating efficiencies and
return measures of its farm equipment business, and in
strengthening its dealer network. As a result of these factors,
CNH is well-positioned to generate steady improvement in its
credit metrics. Moody's also notes that CNH's construction
equipment markets have bottomed out following the unprecedented
downturn of 2009/2010. The company has significantly reduced
construction equipment production capacity, only a modest loss was
recorded during 2012, and Moody's expects that demand will
gradually improve. Consequently, the construction equipment
operations, which currently represent approximately 20% of total
sales, will represent a much less significant drag on overall
performance.
CNH's current credit metrics (particularly leverage and interest
coverage) are strongly supportive of the Ba2 rating level. For
2012, CNH's key metrics were the following: debt/EBITDA was 3.1x,
EBIT/interest was 3.7x, and EBITA margin was 7.6%. (All metrics
reflect Moody's standard adjustments).
At year end 2012 CNH had an adequate liquidity profile. Total
liquidity sources approximated $8.6 billion and included: $6.2
billion in cash, about $1.9 in availability under committed credit
facilities with maturities of greater than a year, and
approximately $500 million in free cash flow generated by the
industrial operations. The company's major liquidity requirements
include the $7.9 billion in debt and ABS obligations that will
mature during the coming twelve months, and the $500 million in
minimum levels of cash that Moody's estimates the company needs to
run its industrial operations. Moody's notes, however, that the
highly seasonal nature of CNH's operations can result in
considerable variance in the company's quarterly cash position
and, consequently, in the liquidity cushion it maintains. Despite
this quarterly variability, the company's current liquidity
profile is adequate and represents an improvement over previous
years.
The stable outlook balances Moody's expectation that CNH will
maintain solid credit metrics for the Ba2 rating level against the
shortfall in its liquidity profile.
There could be upward movement in CNH's rating if EBIT/interest
was on track to approach 4x and debt/EBITDA was likely to remain
below 3x. An essential consideration in any further upward
movement in CNH's rating would also be the degree to which the
company can maintain a sound liquidity profile.
CNH is currently 87%-owned by Fiat Industrial S.p.A (Fiat
Industrial). CNH's board has approved a merger plan under which
holders of CNH shares would receive shares in Fiat Industrial. The
merger is subject to a number of conditions, including approval by
CNH's public shareholders. Any upward movement in CNH's ratings
would be contingent upon the proposed merger preserving adequate
structural and priority of claim protections for the company's
existing debt holders.
CNH's rating could come under pressure if softness in key
agricultural equipment or construction equipment markets resulted
in EBIT/Interest failing to exceed 2x and debt/EBITDA remaining
above 5x.
The principal methodology used in this rating was the Global Heavy
Manufacturing Industry Methodology published in November 2009, The
Rating Relationship Between Industrial Companies And Their Captive
Finance Subsidiaries Industry Methodology published in May 2012,
and the Finance Company Global Rating Methodology published in
March 2012. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
CLUB AT SHENANDOAH: Has OK to Use Cash Collateral Until April 30
----------------------------------------------------------------
The Hon. Mark Houle of the U.S. Bankruptcy Court for the Central
District of California has approved Club at Shenandoah Springs
Village, Inc.'s stipulation with General Electric Capital
Corporation, continuing the Debtor's cash collateral use until the
final hearing.
The final hearing on the Debtor's request for authorization to use
cash collateral is continued to April 30, 2013, at 2:00 p.m.
As reported by the Troubled Company Reporter on March 28, 2013,
the Debtor previously entered into a stipulation with General
Electric for (i) further continuance of final hearing on cash
collateral use; (ii) continued consent of the Debtor's interim use
of cash collateral which General Electric asserts an interest.
The stipulation provided that the final hearing on the cash
collateral motion was to be continued from Feb. 26, 2013, to March
26 or such other date and time that is convenient to the Court's
calendar before March 31.
About The Club At Shenandoah Springs Village, Inc.
The Club At Shenandoah Springs Village, Inc., owns The Club At
Shenandoah Springs Village, a golf and leisure resort in Thousand
Palms, a desert region of central California. It filed for
Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-36723) on
Dec. 3, 2012. The Debtor estimated both assets and liabilities of
between $10 million and $50 million. Judge Mark D. Houle presides
over thee case. Daniel A. Lev, Esq., at Sulmeyerkupetz,
represents the Debtor.
CLUB AT SHENANDOAH: Court Extends Plan Filing Period Until July 31
------------------------------------------------------------------
The Hon. Mark Houle of the U.S. Bankruptcy Court for the Central
District of California granted The Club at Shenandoah Springs
Village, Inc., an extension of the exclusivity periods for the
filing of the plan of reorganization until July 31, 2013, and for
soliciting and securing acceptances of that plan until Sept. 30,
2013.
As reported by the Troubled Company Reporter on March 26, 2013,
the Debtor said that it has been focused on stabilizing its
business operations and tending to administrative matters, while
at the same time responding to objections to motions and requests
interposed by the U.S. Trustee and the property owners association
or TPUOA, a group formed by senior property owners to interface
with management at the club. According to the Debtor, the size
and complexity of its case justifies an extension of the
Exclusivity Periods, as the Property is a unique asset, with
significant secured debt. The Debtor said that the Property has
remained fairly constant for the past several years. Total
revenue for the calendar years 2009, 2012, and 2011 was
approximately $4,291,396, $4,278,957, and $4,406,540,
respectively. The Debtor believes that 2012 will result in
relatively the same total revenue as prior years.
About The Club At Shenandoah Springs Village, Inc.
The Club At Shenandoah Springs Village, Inc., owns The Club At
Shenandoah Springs Village, a golf and leisure resort in Thousand
Palms, a desert region of central California. It filed for
Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-36723) on
Dec. 3, 2012. The Debtor estimated both assets and liabilities of
between $10 million and $50 million. Judge Mark D. Houle presides
over thee case. Daniel A. Lev, Esq., at Sulmeyerkupetz,
represents the Debtor.
CLUB AT SHENANDOAH: Has OK to Hire Venturi as Financial Advisor
---------------------------------------------------------------
The Club At Shenandoah Springs Village, Inc., obtained permission
from the Hon. Mark Houle of the U.S. Bankruptcy Court for the
Central District of California to employ Venturi & Company LLC as
its financial advisor.
As reported by the Troubled Company Reporter on March 27, 2013,
Venturi is expected to, among others, review the business,
operations, financial condition, historical performance,
projections and forecasts of the Debtor; and review and analyze
the Debtor's financial options relating to one or a series of
transactions.
Venturi's compensation will consist of a $15,000 monthly advisory
fee and a success fee upon the closing or consummation of a
transaction. The Success Fee will be equal to:
(1) if the aggregate Transaction Value is less than
$18,000,000, four percent (4%) of the aggregate Transaction
Value;
(2) if the aggregate Transaction Value is between $18,000,000
and less than $20,000,000, four and one-quarter percent
(4.25%) of the aggregate Transaction Value;
(3) if the aggregate Transaction Value is between $20,000,000
and less than $22,000,000, four and three-quarters percent
(4.75%) of the aggregate Transaction Value; and
(4) if the aggregate Transaction Value is equal to or greater
than $22,000,000, five percent (5%) of the aggregate
Transaction Value.
About The Club At Shenandoah Springs Village, Inc.
The Club At Shenandoah Springs Village, Inc., owns The Club At
Shenandoah Springs Village, a golf and leisure resort in Thousand
Palms, a desert region of central California. It filed for
Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-36723) on
Dec. 3, 2012. The Debtor estimated both assets and liabilities of
between $10 million and $50 million. Judge Mark D. Houle presides
over thee case. Daniel A. Lev, Esq., at Sulmeyerkupetz,
represents the Debtor.
COLLECTIVE AT BALDWIN: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: The Collective at Baldwin Park Condominiums, L.P.
410 Pierce, Suite 332
Houston, TX 77002
Bankruptcy Case No.: 13-31966
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Jeff Bohm
Debtor's Counsel: Jermaine Savoy Thomas, Esq.
BARNES AND TURNER
440 Louisiana
1880 Lyric Center
Houston, TX 77002
Tel: (713) 650-3688
Fax: (713) 650-0308
E-mail: jthomas@barnesturner.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Thomas Noons, president of general
partner.
COMMUNITY SHORES: Terminates $5-Mil. Term Loan with Fifth Third
---------------------------------------------------------------
Community Shores Bank Corporation entered into a Settlement
Agreement and Release with Fifth Third Bank on March 20, 2013,
pursuant to which Fifth Third agreed to accept the sum of $500,000
in full satisfaction of the indebtedness which was approximately
$5,828,000 as of the date of the Settlement Agreement. In return
for the settlement payment, Fifth Third has released the Company
from further liability for the indebtedness and delivered to the
Company the original Community Shores Bank stock certificate that
was pledged as collateral.
In connection with the execution of the Settlement Agreement, the
Company's $5,000,000 term loan with Fifth Third dated Dec. 18,
2009, was terminated.
A copy of the Settlement Agreement is available for free at:
http://is.gd/HO8egj
The Company entered into Convertible Secured Note Purchase
Agreement with 1030 Norton LLC. 1030 Norton LLC is a Michigan
limited liability company owned by nine individuals; three
directors of the Company, one former director and five local
businessmen.
In connection with the Note Purchase Agreement, the Company issued
a Convertible Secured Promissory Note to 1030 Norton LLC in a
principal amount of $1,280,000. The Note bears interest at 8% per
annum until paid in full. Interest is payable quarterly in
arrears. The Note matures on March 31, 2015. The Note is secured
by all of the issued and outstanding shares of Community Shores
Bank as evidenced by a Pledge Agreement between the Company and
1030 Norton LLC dated March 20, 2013. This transaction was
reviewed, approved and recommended by a special committee of
disinterested directors and approved by the Company's full board
of directors. Both the special committee and the full board found
the transaction to be fair to, and in the best interest of, the
Company and its shareholders.
If the Company makes an offering of its common stock to repay the
Note, the holder of the Note may elect to convert any portion of
the total principal amount and accrued and unpaid interest of the
Note into fully paid and non-assessable shares of the Company's
common stock at a per share price equal to 75% of the per share
price at which the shares of common stock are offered.
The Company used a portion of the proceeds of the Note to settle
its indebtedness with Fifth Third. It plans to use the remaining
proceeds for debt service and other general operating expenses and
to contribute capital to its subsidiary, Community Shores Bank, as
may be required to ensure the bank achieves an adequately
capitalized regulatory capital position by March 31, 2013.
A copy of the Note, Purchase Agreement and Pledge Agreement is
available for free at http://is.gd/EPaxkK
About Community Shores
Muskegon, Mich.-based Community Shores Bank Corporation, organized
in 1998, is a Michigan corporation and a bank holding company.
The Company owns all of the common stock of Community Shores Bank.
The Bank was organized and commenced operations in January 1999 as
a Michigan chartered bank with depository accounts insured by the
FDIC to the extent permitted by law. The Bank provides a full
range of commercial and consumer banking services primarily in the
communities of Muskegon County and Northern Ottawa County.
The Company reported a net loss of $2.46 million in 2011, compared
with a net loss of $8.88 million in 2010. The Company's balance
sheet at Sept. 30, 2012, showed $207.72 million in total assets,
$208.87 million in total liabilities and a $1.14 million in total
shareholders' deficit.
After auditing the 2011 results, Crowe Horwath LLP, in Grand
Rapids, Michigan, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant recurring
operating losses, is in default of its notes payable
collateralized by the stock of its wholly-owned bank subsidiary,
and the subsidiary bank is undercapitalized and is not in
compliance with revised minimum regulatory capital requirements
under a formal regulatory agreement which has imposed limitations
on certain operations.
CONEXANT SYSTEMS: Creditors' Committee Hiring Approvals Sought
--------------------------------------------------------------
BankruptcyData reported that Conexant Systems' official committee
of unsecured creditors filed with the U.S. Bankruptcy Court
motions to retain:
-- Womble Carlyle Sandridge & Rice (Contact: Kevin J. Mangan)
as co counsel at the following hourly rates: partner at $290 to
700, of counsel at 290 to 685, associate at 190 to 440, senior
counsel at 260 to 390, counsel at 260 to 470 and paralegal at 65
to 295; and
-- Kelley Drye & Warren (Contact: James Carr) as counsel at the
following hourly rates: partner at $550 to 875, counsel at 415 to
645, associate at 325 to 575 and paraprofessional at 200 to 275.
About Conexant
Newport Beach, California-based Conexant Systems, Inc. (NASDAQ:
CNXT) -- http://www.conexant.com/-- is a fabless semiconductor
company. Conexant's comprehensive portfolio of innovative
semiconductor solutions includes products for imaging, audio,
embedded-modem, and video applications. Outside the United
States, the Company has subsidiaries in Northern Ireland, China,
Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United
Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore,
and Israel.
Conexant Systems, Inc. filed a Chapter 11 petition (Bankr. D. Del.
Case No. 13-10367) on Feb. 28, 2013, with an agreement for a
balance sheet restructuring with equity sponsors and sole secured
lender, QP SFM Capital Holdings Limited, an entity managed by
Soros Fund Management LLC.
Kirkland & Ellis LLP and Klehr Harrison Harvey Branzburg LLP serve
as legal counsel and Alvarez & Marsal acts as restructuring
advisor to Conexant. Akin Gump Strauss Hauer & Feld LLP and
Pepper Hamilton LLP serve as legal counsel and Blackstone Advisory
Partners L.P. as restructuring advisor to the secured lender. BMC
Group Inc. is the claims and notice agent.
CONTINENTAL RESOURCES: S&P Rates $1BB Sr. Unsecured Notes 'BB+'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' issue-level
rating (same as the corporate credit rating) and '3' recovery
rating to Oklahoma City, Okla.-based Continental Resources Inc.'s
$1 billion senior unsecured notes due 2023. The '3' recovery
rating indicates S&P's expectation of meaningful (50% to 70%)
recovery in the event of default. Although S&P's recovery
analysis suggests the potential for a greater than 70% recovery on
the unsecured debt claims, it caps the recovery rating at '3' on
unsecured debt of issuers in the 'BB' corporate credit rating
category. This reflects the heightened risk that the post-default
recovery prospects for the unsecured creditors could be impaired
prior to default through the incurrence of additional priority or
pari passu debt, the potential for asset sales that are not
accompanied by a commensurate reduction in debt, or the
possibility of material non-debt unsecured claims.
The 'BB+' corporate credit rating and positive outlook on
Continental are unaffected. The exploration and production
company intends to use proceeds to repay outstanding amounts under
its revolving credit facility and for general corporate purposes.
The ratings on Continental reflect S&P's assessment of the
company's "fair" business risk and "significant" financial risk.
The ratings on Continental incorporate its strong reserve
replacement performance, solid production growth, and the
expectation that Continental will continue to grow its reserve
base, which totaled 785 million barrels of oil equivalent as of
year-end 2012. In addition, given the current price of
hydrocarbons, it is highly favorable that the company's reserves
are focused on oil and its gas assets are generally liquids rich.
The ratings on the company also reflect its participation in the
competitive and highly cyclical oil and gas industry, its
aggressive capital spending program, and its geographically
concentrated reserve base.
RATINGS LIST
Continental Resources Inc.'s
Corporate credit rating BB+/Positive/--
New Rating
$1 bil sr unsecd notes due 2023 BB+
Recovery rating 3
CONQUEST SANTA: Has Court OK to Use Cash Collateral Until Aug. 1
----------------------------------------------------------------
The Hon. Eileen W. Hollowell of the U.S. Bankruptcy Court for the
District of Arizona entered a stipulated fourth interim order
allowing Conquest Santa Fe, L.L.C., to continue using cash
collateral until Aug. 1, 2013.
The Debtor doesn't have sufficient available sources of working
capital and financing to carry on the operation of its businesses
without the use of Cash Collateral. The Debtor is authorized to
pay ordinary and necessary, postpetition expenses in the ordinary
course of operating its business.
As reported by the Troubled Company Reporter on March 27, 2013,
the Court previously entered a stipulated third interim order
authorizing use of cash collateral of LPP Mortgage, Ltd., until
April 1, to pay ordinary and necessary, postpetition expenses in
the ordinary course of operating its business.
The Debtor will deposit all of the Cash Collateral into debtor-in-
possession accounts. The liens and security interests held by
Lender in the Cash Collateral will continue notwithstanding
deposit in the accounts or any other accounts.
As adequate protection for the cash collateral use, the Lender is
granted replacement liens in all property acquired and owned by
the Debtor on and after the Petition Date.
A continued hearing on the Cash Collateral use will be held on
June 4, 2013, at 2:00 p.m.
About Conquest Santa Fe
Conquest Santa Fe, LLC, filed a Chapter 11 petition (Bankr. D.
Ariz. Case No. 12-24937) in Tucson, Arizona, Nov. 16, 2012,
estimating at least $10 million in assets and liabilities. Judge
Eileen W. Hollowell presides over the case. Frederick J.
Petersen, Esq., and Lowell E. Rothschild, Esq., at Mesch, Clark &
Rothschild, P.C., serve as counsel to the Debtor.
CONVERGEX: S&P Assigns Prelim. 'B+' Rating to $175MM Facility
-------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned a preliminary
issue-level rating of 'B+' to ConvergEx Group's proposed
$175 million credit facility, which will consist of a $150 million
first-lien term loan and a $25 million revolver.
S&P's existing ratings on ConvergEx Group LLC, including the 'B'
issuer credit rating, will remain on CreditWatch with developing
implications until the sale of its software platform is completed.
ConvergEx Holdings LLC announced the sale of Eze Software Group to
an affiliate of TPG Capital on Jan. 23, 2013, and S&P expects the
transaction to close in early April. ConvergEx will use proceeds
from the new term loan, along with proceeds from the sale of its
software platform business, to pay down existing debt and satisfy
other company obligations.
"Upon the sale of the software platform business, we believe that
the surviving business will be less diversified and more
concentrated and that its revenue model will be mostly
transactional and depend on market activity," said Standard &
Poor's credit analyst Sebnem Caglayan. "We also believe that
the company will have less financial flexibility upon the sale of
Eze Software Group, one of the company's more valuable assets, and
we are wary of the smaller revenue base to cover fixed costs,
which will likely increase earnings and cash-flow volatility."
Nevertheless, S&P expects total debt to decrease to $150 million
from $706 million at the close of the transaction, resulting in a
substantially improved financial profile, with total debt to
EBITDA decreasing to 3.0x from 4.8x. In S&P's view, this
improvement to the financial profile would outweigh the weakening
of the business profile to the extent that a one-notch higher
rating would be warranted.
In addition to the improvement to the leverage profile, S&P
expects the transaction to add liquidity to the balance sheet,
with $101 million expected cash at the holding company upon the
close of the transaction. However, S&P do not view all of this
cash as excess because the company may continue to incur costs
related to its SEC/Department of Justice investigation, and it
needs cash to continue to support its regulated broker-dealer
subsidiaries. That said, S&P believes ConvergEx carries adequate
net capital to support the rating.
"We expect to resolve the CreditWatch once ConvergEx completes the
sale of the Eze Software Group," said Ms. Caglayan. At that time,
we expect to raise the issuer credit rating on ConvergEx to 'B+'
from 'B', reflecting significant anticipated reduction in total
debt and improved balance-sheet liquidity.
COURTS OF AMARILLO: Case Summary & 2 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: The Courts of Amarillo, LLC
26999 S. US HWY 87
Canyon, TX 79015
Bankruptcy Case No.: 13-20130
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Northern District of Texas (Amarillo)
Judge: Robert L. Jones
Debtor's Counsel: Patrick Alan Swindell, Esq.
SWINDELL & ASSOCIATES, PC
1105 S. Taylor
Amarillo, TX 79101
Tel: (806) 374-7979
Fax: (806) 374-1991
E-mail: amacourt@borenswindell.com
Scheduled Assets: $1,643,428
Scheduled Liabilities: $2,297,370
A copy of the Company's list of its two largest unsecured
creditors, filed together with the petition, is available for free
at http://bankrupt.com/misc/txnb13-20130.pdf
The petition was signed by Todd Prekker, manager.
DAFFY'S INC: Confirms Liquidating Plan Without Creditor Vote
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Daffy's Inc., the liquidated 19-store discount
retailer, won approval of a Chapter 11 plan without soliciting a
single creditor vote and without publishing disclosure materials
explaining the plan.
Daffy's liquidation paid every creditor in full, leaving about
$18.1 million left for distribution to the owners, according to a
court filing. The bankruptcy judge in New York signed a
confirmation order April 2 approving the plan.
Following the Chapter 11 filing on Aug. 1, Hilco Merchant
Resources LLC and Gordon Brothers Retail Partners LLC sold the
merchandise in going-out-of-business sales. They guaranteed
Secaucus, New Jersey-based Daffy's 99.5% of the cost of inventory
estimated to range between $17.2 million and $18 million. Daffy's
sold store leases separately.
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 struck 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 hired Gordon Brothers Retail Partners, LLC and Hilco
Merchant Resources LLC to liquidate inventory. The Debtor
estimated 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, Gotwill & 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.
DBK INVESTMENTS: Involuntary Chapter 11 Case Summary
----------------------------------------------------
Alleged Debtor: DBK Investments & Development Corporation
dba Americas Best Value Inn
fka Best Western
1939 Harper Road
Beckley, WV 25801
Case Number: 13-50063
Involuntary Chapter 11 Petition Date: April 1, 2013
Court: Southern District of West Virginia (Beckley)
Judge: Ronald G. Pearson
Petitioner's Counsel: Joe M. Supple, Esq.
SUPPLE LAW OFFICE, PLLC
801 Viand Street
Point Pleasant, WV 25550
Tel: (304) 675-6249
Fax: (304) 675-4372
E-mail: supplelawoffice@yahoo.com
DBK Investments & Development Corporation's petitioners:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Bettye J. Morehead Management Fees $27,000
Box 3 Suite 1B
Bluefield, WV 24701
Brown, Edwards & Co. Accounting $3,700
P. O. Box 1697
Bluefield, WV 24701
Smith & Co. Accounting $1,600
P.O. Box 248
Beaver, WV 25813
DEX ONE CORP: Proposes Pachulski as Co-Counsel
----------------------------------------------
Dex One Corp. and its affiliates will seek approval from the
Bankruptcy Court at a hearing on April 12 of their application to
employ Pachulski Stang Ziehl & Jones LLP as co-counsel, nunc pro
tunc to the Petition Date. Objections are due April 5.
Compensation will be payable to Pachulski Stang on an hourly
basis, plus reimbursement of actual, necessary expenses and other
charges incurred by Pachulski Stang. The principal attorneys and
paralegals presently designated to represent the Debtors and their
current standard hourly rates are:
Laura Davis Jones $975
Peter J. Keane $425
Karina Yee $295
Other attorneys and paralegals may serve the Debtors from time to
time.
Pachulski Stang has received payments from the Debtors during the
year prior to the Petition Date in the amount of $88,343 including
the Debtors' aggregate filing fees for the Chapter 11 cases, in
connection with its prepetition representation of the Debtors.
DEX ONE CORP: Taps Kirkland & Ellis as Bankruptcy Counsel
---------------------------------------------------------
Dex One Corp. and its affiliates will seek approval from the
Bankruptcy Court at a hearing on April 12 of their application to
employ Kirkland & Ellis LLP as their attorneys, nunc pro tunc to
the Petition Date. Objections are due April 5.
K&E's current hourly rates range from:
Billing Category Hourly Rate
---------------- -----------
Partners $655 to $1,150
Of Counsel $450 to $1,150
Associates $430 to $790
Paraprofessionals $150 to $335
The following professionals presently are expected to have primary
responsibility for providing services to the Debtors: Marc
Kieselstein, P.C. ($1,025 per hour), Christopher J. Marcus, P.C.
($895), and Noah J. Ornstein ($715). In addition, as necessary,
other K&E professionals and paraprofessionals will provide
services to the Debtors.
On Jan. 31, 2013, the Debtors paid $500,000 to K&E as a classic
retainer.
To the best of the Debtors' knowledge, K&E is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Dex One
Dex One Corp., headquartered in Cary, North Carolina, is a local
business marketing services company that includes print
directories and online voice and mobile search. The company
employs 2,200 people across the United States. Dex One provides
print yellow pages directors, which it co-brands with other
recognizable brands in the industry, including Century Link and
AT&T. It also provides the yellow pages websites DexKnows.com and
DexPages.com, as well as mobile apps Dex Mobile, Dex CityCentral.
Dex One and 11 affiliates sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 13-10534) on March 17 and 18, 2013, with a
prepackaged plan of reorganization designed to effectuate a merger
with SuperMedia Inc. Dex One disclosed total assets of $2.84
billion and total liabilities of $2.79 billion as of Dec. 31,
2012.
Houlihan Lokey is acting as financial advisor to Dex One, and
Kirkland & Ellis LLP is acting as its legal counsel. Pachulski
Stang Ziehl & Jones LLP is co-counsel. Epiq Systems serves as
claims agent.
This is Dex One's second stint in Chapter 11. Its predecessor,
R.H. Donnelley Corp., sought Chapter 11 protection in May 2009
(Bankr. Bank. D. Del. Case No. 09-11833 through 09-11852) and
changed its name to Dex One Corp. after emerging from bankruptcy
in January 2010.
As of Dec. 31, 2012, persons or entities directly or indirectly
own, control, or hold 5% or more of the voting securities of Dex
One are Franklin Advisers, Inc., Hayman Capital Management LP,
Robert E. Mead, Restructuring Capital Associates LP, Paulson &
Co., Inc., and Mittleman Investment Management LLC.
DEX ONE CORP: Wins OK for Epiq as Claims and Noticing Agent
-----------------------------------------------------------
Dex One Corp. and its affiliates sought and obtained approval to
employ Epiq Bankruptcy Solutions LLC as claims and noticing agent,
nunc pro tunc to the Petition Date.
Dex One expects there will be more than 200 entities to be
noticed. Dex One stated that by appointing Epiq as claims and
noticing agent in the Chapter 11 cases, the distribution of
notices and the processing of claims will be expedited, and the
Clerk's office will be relieved of the administrative burden of
processing such claims.
Prepetition, the Debtors provided Epiq a $25,000 retainer.
As claims agent, Epiq will charge the Debtors at discounted rates:
Position Hourly Rate
-------- -----------
Clerical $30 to $45
Case Manager $60 to $95
IT/ Programming $70 to $135
Senior Case Manager / Consultant $100 to $140
Senior Consultant $160 to $195
Vice President, Director of Solicitation $250
Exec. VP-Solicitation $290
For its noticing services, Epiq will charge $50 per 1,000 e-mails,
and $0.10 per page for facsimile noticing. For database
maintenance, the firm will charge $0.10 per record per month, with
fees for the first three months waived. For-online claim filing
services, Epiq will charge $600 per 100 claims filed. For its
communication and call center services, Epiq's communication
counselor will charge $250 per hour.
The Debtors filed a separate application to employ Epiq as
administrative advisor, nunc pro tunc to the Petition Date. As
administrative advisor, Epiq will assist in the solicitation and
calculation of votes, as well as preparing any appropriate
reports. A hearing on the application is scheduled for April 12.
Objections are due April 5.
About Dex One
Dex One Corp., headquartered in Cary, North Carolina, is a local
business marketing services company that includes print
directories and online voice and mobile search. The company
employs 2,200 people across the United States. Dex One provides
print yellow pages directors, which it co-brands with other
recognizable brands in the industry, including Century Link and
AT&T. It also provides the yellow pages websites DexKnows.com and
DexPages.com, as well as mobile apps Dex Mobile, Dex CityCentral.
Dex One and 11 affiliates sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 13-10534) on March 17 and 18, 2013, with a
prepackaged plan of reorganization designed to effectuate a merger
with SuperMedia Inc. Dex One disclosed total assets of $2.84
billion and total liabilities of $2.79 billion as of Dec. 31,
2012.
Houlihan Lokey is acting as financial advisor to Dex One, and
Kirkland & Ellis LLP is acting as its legal counsel. Pachulski
Stang Ziehl & Jones LLP is co-counsel. Epiq Systems serves as
claims agent.
This is Dex One's second stint in Chapter 11. Its predecessor,
R.H. Donnelley Corp., sought Chapter 11 protection in May 2009
(Bankr. Bank. D. Del. Case No. 09-11833 through 09-11852) and
changed its name to Dex One Corp. after emerging from bankruptcy
in January 2010.
As of Dec. 31, 2012, persons or entities directly or indirectly
own, control, or hold 5% or more of the voting securities of Dex
One are Franklin Advisers, Inc., Hayman Capital Management LP,
Robert E. Mead, Restructuring Capital Associates LP, Paulson &
Co., Inc., and Mittleman Investment Management LLC.
DETRIOT, MI: Emergency Manager Disavows Letter on Union Contracts
-----------------------------------------------------------------
Steve Neavling, writing for Reuters, reported that Detroit's new
state-appointed emergency manager on Wednesday disavowed letters
sent by the mayor's office saying that the city would stop
honoring contracts with its police, fire and paramedics' labor
unions.
The Reuters report related that the apparent miscommunication
between Mayor Dave Bing and Kevyn Orr, the former bankruptcy
lawyer brought in to clean up Detroit's finances, highlights the
challenges Orr may face as he assumes increasing power in the
biggest state takeover of an American city in more than two
decades.
Written to Michigan's five commissioners of employment relations,
the letters declared that as of March 28, the destitute city
considered itself in receivership status and no longer bound by
its union contracts, according to Reuters. March 28 is the date
when a Michigan law went into effect giving the emergency manager
wide powers including to abrogate union contracts.
Orr's spokesman, Bill Nowling, said the emergency manager had no
warning that the letters would be sent, according to Reuters.
"That letter was not authorized by the emergency manager and we
are looking into it," Nowling told Reuters. "Any action of that
sort has to be authorized by the emergency manager and this was
not."
DFC GLOBAL: S&P Revises Outlook to Negative & Affirms 'B+' ICR
--------------------------------------------------------------
Standard & Poor's Ratings Services said it revised the rating
outlook on Berwyn, Pa.-based DFC Global Corp. (DFC) to negative
from stable. At the same time, S&P affirmed the 'B+' issuer
credit rating and issue-level ratings on the company.
"The outlook revision follows our belief that new regulations in
the U.K. -- where DFC generates approximately one-third of total
revenues from payday lending -- will result in lower-than-expected
earnings over the next 12 months," said Standard & Poor's credit
analyst Igor Koyfman. Lower earnings will inflate leverage
(measured by debt to EBITDA) and reduce interest expense
coverage. (S&P adjusts debt for operating leases and EBITDA for
nonrecurring items.) Specifically, U.K. regulations have required
the company to implement a three loan rollover (extending a loan
term for a fee) limit per customer, and DFC generates a material
percentage of revenues from rolled-over loans in the U.K. The
U.K. regulator has not forced all payday lenders to implement
this limitation simultaneously. This creates a temporary
disadvantage for DFC, but S&P believes that the regulator will
extend this requirement to all lenders over the next several
months. In S&P's view, the rollover limitation will result in
reduced revenues and temporarily inflated loan losses because a
portion of DFC's borrowers can't repay their loans.
"We believe that DFC's leverage has been high but appropriate for
the current rating," said Mr. Koyfman. "The firm's interest
coverage has also been tight, in our view."
S&P believes that, over the next 12 months, leverage will
temporarily approach or exceed 5.0x, and EBITDA to interest
expense will temporarily approach or fall below 2.0x, on an
annualized basis. Nevertheless, S&P expects that these coverage
metrics will improve as the company's revenues and provisions
stabilizes. Leverage and EBITDA to interest expense were 4.0x and
2.4x, respectively, for the 12 months ended Dec. 31, 2012.
The negative outlook reflects uncertainties over the next 12 month
in terms of DFC's earnings and market share in the U.K., a country
in which approximately one-third of the company's total revenue is
generated from payday lending.
S&P could lower the rating if DFC's debt to EBITDA approaches or
exceeds 5.0x, without a credible plan to reduce leverage. (S&P
adjusts debt for operating leases and EBITDA for nonrecurring
items.) S&P would likely lower the rating if DFC breaches any of
its covenants under its global revolving credit facility.
Alternatively, S&P could revise the outlook to stable if earnings
stabilize, or raise the rating if the company reduces debt to
EBITDA to below 3.5x on a sustained basis, increases EBITDA
interest coverage to above 4.0x on a sustained basis, and, at the
same time, maintains adequate profitability and credit-quality
metrics.
DHILLON HOSPITALITY: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Dhillon Hospitality, LLC
dba Holiday Inn Express
8000 Warren Parkway
Suite 206
Frisco, TX 75034
Bankruptcy Case No.: 13-40845
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Eastern District of Texas (Sherman)
Debtor's Counsel: Arthur I. Ungerman, Esq.
8140 Walnut Hill Lane
Suite 301
Dallas, TX 75231
Tel: (972) 239-9055
Fax: (972) 239-9886
E-mail: arthur@arthurungerman.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Jagmohan Dhillon, attorney in fact.
DISH NETWORK: S&P Affirms 'BB-' CCR & Revises Outlook to Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB-' corporate credit rating, on Englewood, Colo.-based
satellite TV provider, DISH Network Corp., and revised the ratings
outlook to stable from positive.
At the same time, S&P assigned its 'BB-' issue-level rating and
'4' recovery rating to DISH's proposed senior unsecured notes,
being issued by subsidiary DISH DBS Corp. The '4' recovery rating
indicates S&P's expectation for average (30% to 50%) recovery in
the event of a payment default.
In addition, S&P affirmed the existing issue-level ratings on the
company's unsecured notes, and revised the existing recovery
ratings to '4' from '3.'
"The outlook revision reflects a continued rise in debt leverage,
in combination with ongoing uncertainty regarding the company's
strategy with regard to its wireless investments," said Standard &
Poor's credit analyst Michael Altberg.
DISH's ratio of debt to EBITDA rises to 4.5x as of Dec. 31, 2012,
pro forma for the proposed transaction, up from 2.2x in the
previous year. Standard & Poor's had previously communicated that
upgrade potential hinged on the company's ability to execute on a
wireless strategy in such a manner that leverage would remain
under 4x. While S&P believes this is still possible in the longer
term, there is a lack of clarity regarding any potential
partnerships or network build-out costs, and what impact this
might have on leverage and operating metrics.
S&P could raise the rating if it believed leverage could decline
and remain under 4x on a sustained basis, including the potential
for initial network build-out and operating costs associated with
a wireless rollout. An upgrade would also be based on S&P's
expectation that operating results in the core video business
would remain relatively stable.
Conversely, S&P could lower the rating if leverage rises above 5x
on a sustained basis. S&P believes such a scenario would entail
deterioration in its core video business or costs associated with
its wireless strategy that S&P viewed as having uncertain longer-
term success - for example, if the company decided to build a
wireless business on its own.
DOLE FOOD: Moody's Confirms 'B1' CFR Following Food Biz Sale
------------------------------------------------------------
Moody's confirmed Dole, Inc.'s B1 Corporate Family Rating and B1-
PD Probability of Default Rating following the closing of its sale
of its Asia Fresh and Global Packaged Foods Businesses to Itochu
of Japan for $1.685 billion. The rating outlook is stable. Moody's
also assigned ratings of Ba3 (LGD 3, 31%) to the company's new
senior secured bank facilities. This action concludes the review
for possible upgrade that was initiated on September 18, 2012,
when the sale was first announced.
Ratings assigned to the proposed facilities:
Dole Food Company, Inc.:
$150 million 5-year senior secured revolving credit facility at
Ba3 (LGD 3, 31%)
$500 million 7-year term loan B at Ba3 (LGD 3, 31%)
$125 million 7-year senior secured delayed draw term loan at
Ba3 (LGD 3, 31%)
Ratings confirmed:
Dole Food Company, Inc.:
Corporate Family Rating of B1
Probability of Default Rating B1-PD
Outlook stable.
The following ratings will be withdrawn:
Term loan B due 2018 at Ba2 (LGD 2, 25%)
13.875% Sr. secured notes due 2014 and 8% Sr. secured notes due
2016 at B2 (LGD 4, 62%)
8.75% Sr. unsecured notes due 2013 at B3 (LGD 5, 87%)
Solvest Ltd.
Term loan C due 2018 at Ba2 (LGD 2, 25%)
The Speculative Grade Liquidity Rating is SGL-2.
Ratings Rationale:
Dole's B1 CFR reflects the earnings and cash flow volatility
inherent in its smaller and more commodity-oriented business post
the Itochu sale, as well as the impact of uncontrollable factors
such as weather and regulations on key products in the remaining
business. Despite the sale of businesses that accounted for 38% of
total revenues, Dole still benefits from sizeable scale, with over
$4.2 billion in proforma 2012 revenues, leading market positions
in a number of categories, and good, though diminished geographic
diversity. Dole will be more concentrated geographically with 61%
of its revenues from North America and 32% from Europe on a pro
forma 2012 basis. The sale of the global packaged foods business
in particular, eliminates the potentially more profitable,
innovative and fastest growing products from the company's
business mix, while the sale of the Asia Fresh business reduces
growth opportunities in one of the fastest growing regions of the
world.
Dole recapitalized its balance sheet by repaying its existing debt
and replaced its previous bank facilities with a new, five-year
$150 million revolving credit facility, a 7-year $500 million term
loan B and a 7-year $125 million delayed draw term loan. Moody's
assumes the delayed draw term loan will be drawn within the next
six months. The revolving credit facility will contain leverage
and coverage covenants. Moody's expects that the leverage covenant
may be somewhat tight (low double digits) in the 3rd quarter if
the delayed draw term loan is utilized, but that both covenants
will have healthy cushions in the next 12 to 18 months otherwise.
Moody's expects internal liquidity to cover the company's cash
needs over the next 12 to 18 months in most quarters, although
some use of the revolver for seasonal borrowing and/or special
capital projects is expected. The new capital structure is
simpler, and will result in some leverage reduction, but leverage
will remain relatively high, especially given the lower margined
and more volatile nature of the remaining businesses, with debt to
EBITDA potentially remaining above 5 times for the next 12 to 18
months, using Moody's adjustments. In addition, the company plans
significant capital investment in 2013, and there remains
uncertainty around financial policy concerning the possibility of
debt funded shareholder returns or debt financed acquisitions
which could further increase leverage.
The stable outlook reflects Moody's view that Dole will maintain
healthy liquidity and that its recent initiatives to cut costs and
simplify the business will begin to improve profitability in the
next few years.
Ratings could be upgraded if Dole achieves material and sustained
improvement in operating margins and is able to reduce leverage
such that debt to EBITDA is sustained below 4 times, using Moody's
adjustments. Management's willingness to commit to such lower
leverage levels would be an important consideration. Upward rating
momentum would also require maintenance of a strong liquidity
profile. A downgrade could be considered if leverage is sustained
above 5.5 times, if operating profits deteriorate or if the
company engages in large debt funded acquisitions or shareholder
returns.
The principal methodology used in this rating was the Global Food
- Protein and Agriculture Industry Methodology published in
September 2009. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Headquartered in Westlake Village, California, Dole Food Company,
Inc. produces fresh fruit and vegetables. 2012 sales, proforma for
the sale of businesses to Itochu were approximately $4.2 billion.
Dole's chairman, David Murdock, and his affiliates beneficially
own approximately 40% of the company's common stock.
DOLE FOOD: S&P Affirms 'B' CCR & Rates $775MM Facilities 'B+'
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its corporate credit
rating on Dole Food Co. Inc. at 'B', and revised its rating
outlook to stable from positive. S&P also assigned its 'B+'
issue-level ratings to Dole's proposed $775 million senior secured
credit facilities. The recovery rating on the senior secured
credit facilities is '2', indicating S&P's expectation for
substantial (70% to 90%) recovery in the event of a payment
default.
Pro forma for the refinancing transaction, S&P estimates that the
company will have about $525 million in reported outstanding debt,
excluding the $125 million delayed draw term loan. However, S&P
expects the delayed draw loan will be fully drawn in 2013.
The outlook change follows Dole's recent announcement that it has
completed its transaction with ITOCHU Corp. (A-/Stable/A-2) for
the sale of its worldwide packaged foods and Asia fresh produce
businesses for $1.685 billion in cash. Separately, Dole announced
a proposed $775 million refinancing transaction. Dole has
indicated that it will apply cash proceeds from these transactions
to repay existing debt, to pay deal-related expenses, and for
other corporate purposes.
"It is our opinion that Dole's business risk profile has weakened
following the divestiture of the worldwide packaged food and Asia
fresh produce businesses," said Standard & Poor's credit analyst
Jeff Burian. "We believe the divestiture reduces Dole's product
diversity and profitability as the surviving commodity-like
produce business will be characterized by more-volatile earnings."
Standard & Poor's could consider an upgrade if Dole is able to
achieve and sustain credit metrics representative of the stronger
end of the range for an "aggressive" financial profile, including
adjusted leverage approaching 4x. S&P believes this could occur
in a scenario whereby revenues increase about 10% and EBITDA
margin increases about 1%.
S&P would consider lowering the ratings if adjusted leverage
increases to well over 6x, pressuring the company's covenant
cushion to decline below 15%. S&P believes this could occur if
EBITDA margin declined by 50 basis points.
DOUG WILSON: Case Summary & Unsecured Creditor
----------------------------------------------
Debtor: Doug Wilson Insurance Agency, Inc.
1011 N. Second Street, Suite A
Cabot, AR 72032
Bankruptcy Case No.: 13-11937
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Eastern District of Arkansas (Little Rock)
Debtor's Counsel: James H. Penick, III, Esq.
EICHENBAUM LAW FIRM
124 W. Capitol Ave., Ste. 1900
Little Rock, AR 72201-3736
Tel: (501) 376-4531
E-mail: jpenick@elhlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
In its list of 20 largest unsecured creditors, the Company placed
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Capitol One Bank Credit Card Debt $11,897
P.O. Box 60599
City of Industry,
CA 91716
The petition was signed by Douglas Wayne Wilson, president.
DYNEGY INC: S&P Assigns 'B' CCR & Rates Credit Facilities 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B' corporate credit
rating to Dynegy Inc. and a 'BB-' issue-level rating and '1'
recovery rating to Dynegy's proposed senior secured credit
facilities. The facilities consist of a $500 million senior
secured term loan B-1 due 2015, a $800 million senior secured term
loan B-2 due 2020, and a $500 million senior secured revolving
credit facility due 2018. All ratings are subject to final
documentation.
The stable outlook reflects S&P's conclusions that Dynegy's
business profile score will not change over the forecast period
and financial performance will remain within the highly leveraged
bands. Also, maturities are minimal and liquidity sources well
exceed needs over the next 12 months.
"Factors that could lead to a downgrade would include FFO to debt
measures dropping to the 4% to 5% range or debt to EBITDA creeping
up to 10x area. A loss of liquidity could also bring the rating
down. An upgrade, given a weak business profile, would require
financial performance in the aggressive area, FFO to debt of at
least 12%, and debt to EBITDA of less than 4x on a forward-looking
basis," said Standard & Poor's credit analyst Terry Pratt.
ELECTRICAL COMPONENTS: S&P Withdraws 'B' Corporate Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it withdrew all its
ratings on U.S. electrical wire harness manufacturer Electrical
Components International Inc., including the 'B' corporate credit
rating on the company, and the 'B+' issue-level rating and '2'
recovery rating on ECI's prior senior secured credit facilities.
S&P withdrew the ratings at the request of the company. The 'B'
corporate credit rating reflected S&P's assessment of the
company's business risk profile as "weak" and its financial risk
profile as "highly leveraged." The outlook was negative at the
time of withdrawal.
ELECTRONICS EXPO: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Electronics Expo, LLC
70 Demarest Drive
Wayne, NJ 07470
Bankruptcy Case No.: 13-16921
Chapter 11 Petition Date: March 31, 2013
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Novalyn L. Winfield
Debtor's Counsel: Michael D. Sirota, Esq.
COLE, SCHOTZ, MEISEL, FORMAN & LEONARD
25 Main St.
Hackensack, NJ 07601
Tel: (201) 489-3000
E-mail: msirota@coleschotz.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 20 largest unsecured
creditors, filed together with the petition, is available for free
at http://bankrupt.com/misc/njb13-16921.pdf
The petition was signed by Levent Temiz, managing member.
ELPIDA MEMORY: Nanya Infringed DRAM Patents, ITC Judge Finds
------------------------------------------------------------
Stewart Bishop of BankruptcyLaw360 reported that a U.S.
International Trade Commission judge has found that Nanya
Technology Corp. infringed several of bankrupt Elpida Memory
Inc.'s dynamic random access memory patents by importing
semiconductor chips with DRAM circuits and modules.
The report related that Administrative Law Judge E. James Gildea
found in an initial determination March 26 that Taiwan-based Nanya
and its U.S. unit violated Section 337 of the Tariff Act of 1930
by infringing various claims of U.S. Patent Numbers 6,150,689;
6,635,918; 7,713,828; 7,495,453; and 7,906,809.
About Elpida Memory
Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is
a Japan-based company principally engaged in the development,
design, manufacture and sale of semiconductor products, with a
focus on dynamic random access memory (DRAM) silicon chips. The
main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM,
Mobile RAM and XDR DRAM, among others. The Company distributes
its products to both domestic and overseas markets, including the
United States, Europe, Singapore, Taiwan, Hong Kong and others.
The company has eight subsidiaries and two associated companies.
After semiconductor prices plunged, Japan's largest maker of DRAM
chips filed for bankruptcy in February with liabilities of 448
billion yen ($5.6 billion) after losing money for five quarters.
Elpida Memory and its subsidiary, Akita Elpida Memory, Inc.,
filed for corporate reorganization proceedings in Tokyo District
Court on Feb. 27, 2012. The Tokyo District Court immediately
rendered a temporary restraining order to restrain creditors from
demanding repayment of debt or exercising their rights with
respect to the company's assets absent prior court order.
Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo
Court as Supervisor and Examiner in the case.
Elpida Memory Inc. sought the U.S. bankruptcy court's recognition
of its reorganization proceedings currently pending in Tokyo
District Court, Eight Civil Division. Yuko Sakamoto, as foreign
representative, filed a Chapter 15 petition (Bankr. D. Del. Case
No. 12-10947) for Elpida on March 19, 2012.
Micron Technology, Inc. on Feb. 28 announced the Tokyo District
Court's issuance of an order approving Elpida Memory Inc.'s plan
of reorganization. Elpida's plan of reorganization calls for
Micron to sponsor Elpida's reorganization under which Elpida will
become a wholly owned subsidiary of Micron. The Tokyo District
Court's approval follows an Elpida creditor vote, concluded on
Feb. 26, in which the creditors voted to approve the
reorganization plan.
ENRON CORP: Ex-CEO Skilling May Exit Colorado Prison Earlier
------------------------------------------------------------
Chad Bray and Tom Fowler, writing for The Wall Street Journal,
report that the U.S. Department of Justice on Thursday sent a
notice to former Enron employees, shareholders and other victims
saying it was considering entering into an agreement with former
Enron Corp. chief executive Jeffrey Skilling, who is waiting for a
court-ordered resentencing, "to resolve certain disputed matters
concerning sentencing." It didn't specify those issues.
"In 2009, the U.S. Court of Appeals for the Fifth Circuit ordered
that Mr. Skilling be resentenced, and that his sentencing
guidelines range should be reduced," a Justice Department official
said, according to WSJ, adding that the agency's goal is "to
ensure that Mr. Skilling be appropriately punished for his crimes,
and that victims finally receive the restitution they deserve."
Mr. Skilling, 59, was convicted in 2006 of lying to investors
about the financial health of Enron. The scandal, which destroyed
Enron, became an emblem of the corporate-fraud epidemic last
decade, rocked financial markets and led to increased corporate
governance and reporting requirements. Mr. Skilling was sentenced
to 24 years in prison.
The report recounts the 2009 federal appeals court ruling found
that U.S. sentencing guidelines were improperly applied in his
case and ordered a resentencing that legal experts said could
result in a minimum sentence of 15 years?down nine years from what
he originally faced. But that resentencing hasn't taken place.
The report also relates Mr. Skilling repeatedly has challenged his
conviction, most recently filing a request to file a motion for a
new trial based on "newly discovered evidence" and arguing that
prosecutors improperly withheld notes of interviews with a
cooperating witness.
WSJ says a lawyer for Mr. Skilling didn't respond to requests for
comment. WSJ notes a new sentence could only be determined by
U.S. District Judge Sim Lake in Houston, who is overseeing the
case. But any joint agreement on a recommended sentencing range
between the two sides could influence the judge's decision, which
also would take into account other factors, such as the amount the
victims lost and any leadership role Mr. Skilling played in the
crime.
About Enron Corp.
Based in Houston, Texas, Enron Corporation filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 01-16033) on Dec. 2, 2001,
following controversy over accounting procedures that caused its
stock price and credit rating to drop sharply.
Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal &
Manges LLP; Venable; Cadwalader, Wickersham & Taft, LLP for its
bankruptcy case. The Official Committee of Unsecured Creditors in
the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP.
The Debtors won confirmation of their Plan in July 2004, and the
Plan was declared effective on Nov. 17, 2004. After approval of
the Plan, the new board of directors decided to change the name of
Enron Corp. to Enron Creditors Recovery Corp. to reflect the
current corporate purpose. ECRC's sole mission is to reorganize
and liquidate certain of the operations and assets of the "pre-
bankruptcy" Enron for the benefit of creditors.
ECRC has been involved in the MegaClaims Litigation, an action
against 11 major banks and financial institutions that ECRC
believes contributed to Enron's collapse; the Commercial Paper
Litigation, an action involving the recovery of payments made to
commercial paper dealers; and the Equity Transactions Litigation,
which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG,
Credit Suisse and Bear Stearns to recover payments made to the
four banks on transactions involving Enron's stock while the
company was insolvent.
FERRO CORP: S&P Raises Rating on $250MM & $34MM Notes to 'B'
------------------------------------------------------------
Standard & Poor's Ratings Services raised its issue-level rating
on Ohio-based chemical company Ferro Corp.'s $250 million senior
unsecured notes and $34 million senior convertible notes to 'B'
from 'B-' and revised the recovery rating to '5' from '6'. The
ratings remain on CreditWatch with developing implications, where
S&P placed them on March 5, 2013.
The rating action reflects Ferro's recently announced reduction in
the size of its revolving credit facility to $250 million from
$350 million, which results in improved recovery prospects for its
senior unsecured debt. The '5' recovery rating indicates its
expectation for modest (10% to 30%) recovery in the event
of a payment default.
The amendment to the revolver will also modify covenants,
temporarily increasing the maximum total leverage covenant through
the third quarter of 2014, when it will step back down to 3.5x.
S&P believes that the amendment provides the company with near-
term covenant relief, although covenants could be tight in the
latter part of 2013 if earnings fail to improve from current
subdued levels. S&P continues to view Ferro's liquidity as
"adequate."
The CreditWatch listing followed the announcement that A. Schulman
(unrated) had made an unsolicited offer to acquire Ferro at a
purchase price of $6.50 a share. S&P will monitor developments
relating to this potential transaction and expect to resolve the
CreditWatch in the next few months if a revised offer leads to a
definitive acquisition agreement, or if it appears that Ferro will
not be acquired. S&P could lower the ratings in the near term if
Ferro's credit quality deteriorates in the absence of a
transaction or while a transaction is pending.
The ratings on Ferro reflect S&P's assessment of the company's
business risk profile as "weak" and financial risk profile as
"aggressive." The company produces a variety of performance
materials and chemicals for use primarily in the electronics,
construction, appliances, automotive, and household furnishings
end markets.
For the latest corporate credit rating rationale, see Standard &
Poor's research update on Ferro, published March 5, 2013, on
RatingsDirect.
RATINGS LIST
Ferro Corp.
Corporate Credit Rating B+/Watch Dev/--
Ratings Upgrade/Recovery Rating Revised
Ferro Corp. To From
34 mil. sr. conver. notes due 2013
$250 mil. sr. notes due 2018
Senior Unsecured B/Watch Dev B-
Watch Dev
Recovery Rating 5 6
GENESIS HEALTHCARE: S&P Assigns 'BB+' Rating to $293-Mil. Bonds
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' long-term
rating to Muskingum County, Ohio's $293.585 million series 2013
fixed rate revenue bonds issued for Genesis HealthCare System
Obligated Group (Genesis). The outlook is stable.
"The rating reflects our view of Genesis' generally improved
operating results, stable unrestricted liquidity, and solid
business position in Muskingum County," said Standard & Poor's
credit analyst Kevin Holloran.
Bond proceeds of approximately $294 million will fund construction
and renovation of Genesis' Bethesda campus as part of a campus
consolidation, fund construction of an integrated cancer center,
refinance existing debt, provide for a debt service reserve fund,
set up a capitalized interest fund, and provide for cost of
issuance.
The stable outlook reflects S&P's view of Genesis' improved
operating margins in recent fiscal years combined with gains in
its balance sheet, which provide some financial stability to the
organization, combined with the successful recruitment of
physicians and assembly of an organization that is well prepared
for health care reform.
GLADYS SMITH: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Gladys Smith, Inc.
dba Webb Plaza Development Enterpises
101 W 143rd Street, Apt 3
New York, NY 10037
Bankruptcy Case No.: 13-10989
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Shelley C. Chapman
Debtor's Counsel: Bruce Rothenberg, Esq.
ROTHENBERG LAW OFFICES, PLLC
80 Orville Drive, Suite 100
Bohemia, NY 11716
Tel: (631) 363-8749
Fax: (631) 714-6049
E-mail: nybc@rothenberglegal.com
Scheduled Assets: $3,703,000
Scheduled Liabilities: $2,541,809
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/nysb13-10989.pdf
The petition was signed by Gladys Smith, president.
HAMPTON CAPITAL: BDO Consulting Ok'd as Committee's Advisor
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of North
Carolina has authorized the Official Committee of Unsecured
Creditors in Hampton Capital Partners, LLC's bankruptcy case to
retain BDO Consulting, a division of BDO USA LLP, as financial
advisor.
As reported by the TCR on April 4, 2013, BDO is expected to, among
other things, analyze the financial operations of the Debtor, and
analyze the financial ramifications of any proposed transactions
for which the Debtor seeks Bankruptcy Court approval including,
but not limited to, post-petition financing, sale of all or a
portion of the Debtor's assets, or rejection of leases and/or
executor contracts.
About Hampton Capital Partners
Hampton Capital Partners, LLC, an Aberdeen, N.C.-based
manufacturer of residential and commercial tufted carpets under
the Gulistan name, filed a Chapter 11 petition (Bankr. M.D.N.C.
Case No. 13-bk-80015) on Jan. 7, 2013.
The Company has been producing carpet under the Gulistan name
since 1924, although it traces its roots back to 1818, when an
Armenian textile importer established a business in Turkey. The
company began manufacturing carpet in Aberdeen in 1957, and was
acquired by J.P. Stevens & Co. Inc. in 1964. Over the last 25
years, Gulistan Carpet has undergone several ownership changes.
In addition to its headquarters and manufacturing operations in
Aberdeen, the company has a plant in Wagram, N.C.
Northen Blue, LLP, serves as counsel to the Debtor. Getzler
Henrich & Associates LLC is the financial consultant.
Five creditors have been appointed to serve on the Official
Committee of Unsecured Creditors of Hampton Capital Partners LLC.
Lowenstein Sandler LLP serves as the Committee's counsel.
HAMPTON CAPITAL: Lowenstein, Wilson OK'd as Committee's Attorneys
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Hampton
Capital Partners, LLC bankruptcy case obtained permission from the
U.S. Bankruptcy Court for the Middle District of North Carolina to
retain Lowenstein Sandler LLP as its counsel and Wilson and
Ratledge PLLC as its North Carolina counsel.
As reported by the Troubled Company Reporter on April 4, 2013,
both firms are expected to, among other things, assist the
Committee in negotiating favorable terms for unsecured creditors
with respect to any proposed asset purchase agreement for the sale
of some or all of the Debtor's assets; and provide legal advice as
necessary with respect to any disclosure statement and plan filed
and with respect to the process for approving or disapproving that
disclosure statement and confirming or denying confirmation of
that plan.
About Hampton Capital Partners
Hampton Capital Partners, LLC, an Aberdeen, N.C.-based
manufacturer of residential and commercial tufted carpets under
the Gulistan name, filed a Chapter 11 petition (Bankr. M.D.N.C.
Case No. 13-bk-80015) on Jan. 7, 2013.
The Company has been producing carpet under the Gulistan name
since 1924, although it traces its roots back to 1818, when an
Armenian textile importer established a business in Turkey. The
company began manufacturing carpet in Aberdeen in 1957, and was
acquired by J.P. Stevens & Co. Inc. in 1964. Over the last 25
years, Gulistan Carpet has undergone several ownership changes.
In addition to its headquarters and manufacturing operations in
Aberdeen, the company has a plant in Wagram, N.C.
Northen Blue, LLP, serves as counsel to the Debtor. Getzler
Henrich & Associates LLC is the financial consultant.
Five creditors have been appointed to serve on the Official
Committee of Unsecured Creditors of Hampton Capital Partners LLC.
HAMPTON ROADS: Incurs $25.1 Million Net Loss in 2012
----------------------------------------------------
Hampton Roads Bankshares, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss available to common shareholders of $25.09 million on
$82.30 million of total interest income for the year ended
Dec. 31, 2012, as compared with a net loss available to common
shareholders of $98.61 million on $100.79 million of total
interest income in 2011. The Company incurred a $99.22 million
net loss available to common shareholders in 2010.
The Company's balance sheet at Dec. 31, 2012, showed $2.05 billion
in total assets, $1.86 billion in total liabilities and $184.72
million in total shareholders' equity.
A copy of the Form 10-K is available for free at:
http://is.gd/ANeczs
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and 15 ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
HIGHLAND PARK: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Highland Park Assets, LLC
107 Preston Court
Macon, GA 31210
Bankruptcy Case No.: 13-50856
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Middle District of Georgia (Macon)
Debtor's Counsel: Matthew S. Cathey, Esq.
STONE & BAXTER, LLP
577 Mulberry Street
Suite 800
Macon, GA 31201
Tel: (478) 750-9898
Fax: (478) 750-9899
E-mail: mcathey@stoneandbaxter.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 20 largest unsecured
creditors, filed together with the petition, is available for free
at http://bankrupt.com/misc/gamb13-50856.pdf
The petition was signed by Jerry L. Stephens.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Rosewood at Providence 10-50418 02/10/10
Spring Hill Mobile Partners, LLC 12-51767 07/02/12
HOWREY LLP: Haynes And Boone Wants Court To Hear Profit Row
-----------------------------------------------------------
Linda Chiem of BankruptcyLaw360 reported that Haynes and Boone LLP
on Tuesday sought permission from the California bankruptcy judge
overseeing Howrey LLP's liquidation to file suit in Washington
court to determine whether a former Howrey partner who joined it
had to account for unfinished hourly work upon Howrey's collapse.
According to the report, Haynes and Boone filed a motion for
relief from the automatic stay on Howrey's ongoing bankruptcy,
asserting that it wants to seek a declaratory judgment from a
Washington court as it prepares to respond to threats by Howrey's
bankruptcy trustee to sue all former Howrey partners.
About Howrey LLP
Three creditors filed an involuntary Chapter 7 petition (Bankr.
N.D. Cal. Case No. 11-31376) on April 11, 2011, against the
remnants of the Washington-based law firm Howrey LLP. The filing
was in San Francisco, where the firm had an office. The firm
previously was known as Howrey & Simon and Howrey Simon Arnold &
White LLP. The firm at one time had more than 700 lawyers in 17
offices. The partners voted to dissolve in March 2011.
The firm specialized in antitrust and intellectual-property
matters. The three creditors filing the involuntary petition
together have $36,600 in claims, according to their petition.
The involuntary chapter 7 petition was converted to a chapter 11
case in June 2011 at the request of the firm. In its schedules
filed in July, the Debtor disclosed assets of $138.7 million and
liabilities of $107.0 million.
Representing Citibank, the firm's largest creditor, is Kelley
Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton &
Garrison. Representing Howrey is H. Jason Gold, Esq., a partner
at Wiley Rein.
The Official Committee of Unsecured Creditors is represented in
the case by Bradford F. Englander, Esq., at Whiteford, Taylor And
Preston LLP.
In September 2011, Citibank sought conversion of the Debtor's case
to Chapter 7 or, in the alternative, appointment of a Chapter 11
Trustee. The Court entered an order appointing a Chapter 11
Trustee. In October 2011, Allan B. Diamond was named as Trustee.
HUNTER DEFENSE: S&P Lowers CCR to 'B'; Outlook Negative
-------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Hunter Defense Technologies Inc. to 'B'
from 'B+'. The outlook is negative. At the same time, S&P
lowered its issue-level ratings on the company's first-lien debt
to 'B+' from 'BB-' with a recovery rating of '2' (indicating S&P's
expectation for substantial [70%-90%] recovery in the event of
payment default) and lowered the ratings on its second-lien debt
to 'CCC+' from 'B-' with a recovery rating of '6' (indicating
S&P's expectation of negligible [0-10%] recovery).
"The downgrade reflects a lack of expected credit metric
improvement over the past year and very tight covenant compliance
despite significant debt reduction, as order delays and reduced
funding for Hunter's products resulted in lower-than-expected
earnings," said Standard & Poor's credit analyst Chris Mooney.
Debt to EBITDA rose slightly to 5.2x for the past 12 months ended
Dec. 31, 2012, from 4.9x a year earlier. Funds from operations
(FFO) to debt has remained relatively stable between 10% and 12%
over the past year. This compares with previous expectations of
between 4x and 4.5x and 15%, respectively, by now. Covenant
headroom has deteriorated somewhat and remains below 10% as of
Dec. 31, 2012.
S&P assess the company's financial risk profile as "highly
leveraged" because of its "less than adequate" liquidity and
relatively weak credit metrics. S&P expects debt to EBITDA to
remain about 5x and FFO to debt between 10% and 15% over the next
12-18 months, as the company continues to use free cash to reduce
debt in an attempt to maintain covenant compliance. These levels
are appropriate for the rating, but there is likely to be some
volatility around S&P's base forecast due to the potential for
further delays in orders. S&P considers the company's business
risk profile "weak" because of its modest revenue base and
somewhat limited product diversity, combined with reductions to
U.S. defense spending.
"Although we expect earnings to stabilize at current levels over
the next year, we believe a significant amount of uncertainty
still surrounds the U.S. defense budget. In particular, the
sequestration process recently triggered $500 billion of
additional cuts over the next decade on top of the $487 billion
reduction to previously planned levels (roughly 9%) that the
Budget Control Act of 2011 had laid out. We believe that
sequestration will have the biggest and quickest effect on
companies that receive a large portion of their funding from the
operations and maintenance (O&M) portion of the budget, like
Hunter, because these funds are more fungible and tend to be spent
faster (within a year) than procurement funds (up to three years).
Some orders could be delayed as the Department of Defense (DoD)
shifts funds to higher-priority areas of the budget, such as
supporting war-related activity, and away from routine repairs and
upgrades to equipment returning from war, such as tents. However,
the fiscal 2013 (ending Sept. 30, 2013) spending measure that
Congress recently passed allocates some additional money to O&M
accounts, which should soften the negative impact of sequestration
to some degree over the next six months," S&P said.
The outlook is negative. Demand for Hunter's products remains
uncertain because of U.S. defense budget pressures, but S&P
expects revenue and earnings to stabilize over the next year. S&P
could lower the rating if challenging market conditions result in
difficulty refinancing maturing debt over the next year, causing
S&P to revise its liquidity assessment to "weak." Conversely, S&P
could revise the outlook to stable if the company is able to
successfully extend near-term maturities and loosen its financial
covenants.
HWE REAL ESTATE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: HWE Real Estate LLC
6203 Long Drive
Houston, TX 77087
Bankruptcy Case No.: 13-41503
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Northern District of Texas (Ft. Worth)
Judge: D. Michael Lynn
Debtor's Counsel: Holland N. ONeil, Esq.
Virgil Ochoa, Esq.
GARDERE WYNNE SEWELL LLP
1601 Elm St., Suite 3000
Dallas, TX 75201
Tel: (214) 999-4961
Fax: (214) 999-4667
E-mail: honeil@gardere.com
vochoa@gardere.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Charles W. Reeves, Jr., chief
restructuring officer.
ISAACSON STEEL: Court Sets Case Conversion Hearing for April 30
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Hampshire has
set for April 30, 2013, at 1:30 p.m., the hearing on the motion of
William K. Harrington, the U.S. Trustee for Region 1, to convert
the Chapter 11 cases of Isaacson Steel, Inc., and Isaacson
Structural Steel, Inc., to Chapter 7.
The U.S. Trustee sought for the conversion of the cases so that a
disinterested trustee may promptly investigate claims against
third parties, including insiders or affiliates of the Debtors, or
parties related to insiders or affiliates of the Debtors.
According to the U.S. Trustee, a disinterested trustee is needed
to review the Debtors' conduct as recent pleadings filed with the
Court disclose the existence of a federal Grand Jury and other
fraud investigation underway by the U.S. Attorney for the District
of Vermont.
The U.S. Trustee said that after negotiating the terms of the sale
of substantially all of the tangible assets of the companies, the
Debtors' officers and directors have essentially abandoned their
responsibilities as fiduciaries and a void exists in the
management of the Debtors' estates.
"Although these cases have been pending for almost two years, the
Debtors have failed to file a plan or disclosure statement, and
have failed to demonstrate any meaningful progress towards the
successful completion of this case. Since the sale approximately
a year ago, the Debtors' operating reports have been filed and
executed by an estate professional, not by an officer of the
Debtor as required, and furthermore, the reports that have been
filed lack sufficient information to permit the Court or the
United States Trustee to determine whether the Debtors' estates
are administratively insolvent," the Trustee stated.
About Isaacson Structural Steel
Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc.,
filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416)
on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over
the case.
Isaacson Structural Steel estimated both assets and debts of
$10 million to $50 million. The petition was signed by Arnold P.
Hanson, Jr., president.
An official committee of unsecured creditors has been appointed in
Isaacson Structural Steel's case. Nixon Peabody LLP, and Mesirow
Financial Consultants represents the Committee.
A bankruptcy petition was also filed for Isaacson Steel, Inc.
(Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating
assets and debts of $1 million to $10 million. The petition was
signed by Arnold P. Hanson, Jr., president. William S. Gannon,
Esq., also represents Isaacson Steel.
The cases are now being jointly administered.
No trustee or examiner has been appointed in this case.
J & J DEVELOPMENT: Confirms Modified Liquidating Plan
-----------------------------------------------------
J & J Developments, Inc. won confirmation of its Chapter 11
Liquidation Plan dated Nov. 30, 2012.
The objection filed by Taney County Missouri Collector was
withdrawn based on the Debtor's intent to surrender secured
collateral to the secured creditors for disposition through state
law foreclosure matters.
Kansas Department of Health and Environment has requested that the
Plan be modified to include the language pertaining to the
underground storage tanks. The Debtor has not objected to the
modifications. At the request of the KDHE, the Plan was revised
to include the following language pertaining to the underground
storage tanks:
Purchaser agrees to maintain any underground storage tank(s)
acquired in the sale and/or auction in a temporary closure
status, consistent with and pursuant to 40 CFR 280.70, as
adopted by K.A.R. 28-44-26, specifically including continuing
operation and maintenance of corrosion protection, until such
time as the purchaser of the property either:
1) Elects to permanently close said underground storage tank(s)
pursuant to 40 CFR 280.71, as adopted by K.A.R. 28-44-26;
or
2) Bring said underground storage tank(s) back in to use
consistent with Kansas law.
In the event contaminated soils, contaminated ground water or free
product as a liquid or vapor is discovered, purchaser of the
subject property may apply to the underground storage tank release
fund pursuant to K.S.A. 65-34- 119.
About J & J Developments
J & J Developments Inc. is a real estate holding company holding
title to real estate in more than 20 locations in Kansas. Many of
those locations contain convenience stores.
J & J Developments filed a Chapter 11 petition (Bankr. D.
Kan. Case No. 12-11881) in Wichita, Kansas, on July 12, 2012.
John E. Brown signed the petition as president and chief executive
officer. The Debtor is represented by Edward J. Nazar, Esq., at
Redmond & Nazar, LLP, in Wichita, Kansas. Judge Robert E. Nugent
presides over the case. According to the petition, the Debtor has
scheduled assets of $18.7 million and scheduled liabilities of
$34,933.
J AND Y INVESTMENT: Wins Approval to Hire Bush Strout as Counsel
----------------------------------------------------------------
J and Y Investment LLC sought and obtained approval from the U.S.
Bankruptcy Court to employ Bush Strout & Kornfeld, LLP, as
bankruptcy counsel.
The Debtor also has filed an application to employ Leslie Clay
Terry III as special counsel. The Debtor selected Clay Terry as
special counsel because of the firm's knowledge and expertise in
handling issues relating to commercial leases. The Debtor will
employ Clay Terry under a general retainer based on time and
billable charges at the firm's ordinary billable rates.
J and Y Investment, LLC, sought Chapter 11 protection (Bankr. W.D.
Wash. Case No. 13-10218) in Seattle on Jan. 10, 2013. The Debtor
is a Single Asset Real Estate as defined in 11 U.S.C. Sec.
101(51B) and owns the Federal Way Center Building in 2505 S
320th Street, Federal Way, Washington. The property is valued at
$11.43 million and secures an $8.56 million debt to BACM 2004-1.
The Debtor disclosed total assets of $13.05 million against total
liabilities of $8.65 million in its schedules. New Castle,
Washington-based East of Cascade, Inc., has a 100% membership
interest in the Debtor.
J AND Y INVESTMENT: Court OKs Kidder Mathews as Valuation Advisor
-----------------------------------------------------------------
J and Y Investment, LLC sought and obtained approval from the
Bankruptcy Court to employ Kidder Mathews as its valuation
consultant with respect to the Debtor's real property and office
building located at 2505 S. 320th Street, Federal Way, Washington.
KM's services include consultation and analysis with respect to
the value of the property, and testimony as necessary.
The Debtor employed KM to facilitate its ability to formulate a
plan of reorganization and support its liquidation analysis, and
to respond to any motion for relief from the automatic stay that
may be filed.
J and Y Investment also sought and obtained Court approval to
employ Kidder Mathews as exclusive leasing agent for the Federal
Way property, together with all related improvements.
The Property comprises approximately 75,071 square feet of gross
rentable commercial office space, and is currently 71.8% occupied
with a total of approximately 19 tenants. Office spaces in the
Property are listed for lease at a starting rent of $15.00 per
square foot plus triple net.
For triple net leases the commission is 6% of the total rental for
the first five years or any fraction thereof, plus 3% of the total
rental for the remaining term. If a licensed real estate broker
other than KM is effective in procuring a new tenant for the
Property, KM agrees to use its best efforts to reach agreement
with the broker regarding commissions. To the extent agreement is
reached, KM would be paid an 1.5%, for a total of 7.5%, from which
KM would pay the cooperating broker 5%, and would retain the
remaining 2.5%. Any lease of commercial space at the Property
commissions would be subject to further Court order.
J and Y Investment, LLC, sought Chapter 11 protection (Bankr. W.D.
Wash. Case No. 13-10218) in Seattle on Jan. 10, 2013. The Debtor
is a Single Asset Real Estate as defined in 11 U.S.C. Sec.
101(51B) and owns the Federal Way Center Building in 2505 S
320th Street, Federal Way, Washington. The property is valued at
$11.43 million and secures an $8.56 million debt to BACM 2004-1.
The Debtor disclosed total assets of $13.05 million against total
liabilities of $8.65 million in its schedules. New Castle,
Washington-based East of Cascade, Inc., has a 100% membership
interest in the Debtor.
J.C. PENNEY: Slashes Pay of Its Chief
-------------------------------------
Cheryl K. Chumley, writing for The Washington Times, reported that
J. C. Penney's chief executive officer, Ron Johnson, saw his 2012
salary cut by nearly 97 percent, to $1.9 million. Meanwhile, not
one executive received a bonus, The Daily Beast reported.
Business analysts, according to The Washington Times, say Mr.
Johnson, who took the helm at the flailing company in 2011, is on
his way out. He likely only has one or two quarters to bolster
the company's revenues.
The Washington Times related that Mr. Johnson had been given a
total compensation package -- salary plus stock -- valued at $53.3
million in 2011.
About J.C. Penney
Plano, Texas-based J.C. Penney Company, Inc. is one of the U.S.'s
largest department store operators with about 1,100 locations in
the United States and Puerto Rico. Revenues are about $14 billion.
The Company carries Moody's Investors Service's B3 Corporate
Family Rating with negative outlook.
Early in March 2013, Standard & Poor's Ratings Services lowered
its corporate credit rating on Penney to 'CCC+' from 'B-'. The
outlook is negative. At the same time, S&P lowered the issue-
level rating on the company's unsecured debt to 'CCC+' from 'B-'
and maintained its '3' recovery rating on this debt, indicating
S&P's expectation of meaningful (50% to 70%) recovery for
debtholders in the event of a payment default.
"The downgrade reflects the performance erosion that has
accelerated throughout the previous year and seems likely to
persist over the next 12 months," explained Standard & Poor's
credit analyst David Kuntz.
At the same time, Fitch Ratings downgraded the Company's Issuer
Default Ratings to 'B-' from 'B'. The Rating Outlook is Negative.
The rating downgrades reflect Fitch's concerns that there is a
lack of visibility in terms of the Company's ability to stabilize
its business in 2013 and beyond after a precipitous decline in
revenues leading to negative EBITDA of $270 million in 2012.
Penney, Fitch said, will need to tap into additional funding to
cover a projected FCF shortfall of $1.3 billion to $1.5 billion in
2013, which could begin to strain its existing sources of
liquidity.
In February 2013, Penney received a notice of default from a law
firm representing more than 50% of its 7.4% Debentures due 2037.
The Company has filed a lawsuit in Delaware Chancery Court seeking
to block efforts by the bondholder group to declare a default on
the 2037 bonds. Penney also asked lawyers at Brown Rudnick LLP to
identify the investors they represent.
JAIPUR HOTELS: Case Summary & 8 Unsecured Creditors
---------------------------------------------------
Debtor: Jaipur Hotels, LLC
3702 Inverness Way
Augusta, GA 30907
Bankruptcy Case No.: 13-10601
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Southern District of Georgia (Augusta)
Judge: Susan D. Barrett
Debtor's Counsel: James B. Trotter, Esq.
TROTTER JONES LLP
3527 Walton Way Extension
Augusta, GA 30909
Tel: (706) 737-3138
Fax: (706) 738-3973
E-mail: jim@trotterjones.com
Scheduled Assets: $2,478,600
Scheduled Liabilities: $4,509,000
A list of the Company's eight largest unsecured creditors, filed
together with the petition, is available for free at
http://bankrupt.com/misc/gasb13-10601.pdf
The petition was signed by Jugal Purohit, manager.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
August Center, LLC 13-10026 01/04/13
Madison Hotels, LLC 12-11637 09/12/12
JHCI ACQUISITION: S&P Lowers CCR to 'CCC+'; Outlook Negative
------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on JHCI Acquisition Inc. to 'CCC+' from
'B-'. The outlook is negative.
S&P also lowered the rating on the company's first-lien debt to
'CCC+' from 'B' and revised the recovery rating to '3' from '2',
indicating its expectation that lenders would receive meaningful
(50%-70%) recovery in the event of a payment default. S&P also
lowered the rating on the second-lien debt to 'CCC-' from 'CCC'.
The recovery rating remains unchanged at '6', indicating S&P's
expectation that lenders would receive negligible recovery (0%-
10%) in the event of a payment default.
"The downgrade reflects our increased concerns over the company's
ability to refinance debt coming due in June and December 2014,
given recent operating challenges," said Standard & Poor's credit
analyst Lisa Jenkins. New managers joined existing management
last fall to help implement various initiatives to improve
operating efficiency and business prospects. However, S&P
believes it will take time for the company to establish a track
record of improved performance, which S&P believes will be an
important factor in the success of the company's refinancing
efforts. The revision of the recovery rating on the first-lien
debt reflects an increase in priority debt over the past year,
which has reduced recovery prospects for first-lien debtholders.
The ratings on Des Moines, Iowa-based JHCI reflect its high debt
leverage, competitive end markets, and upcoming refinancing
requirements. Favorable long-term growth trends for outsourced
logistics services, the company's nationwide presence, and diverse
service offerings partly offset these risks. JHCI offers various
third-party logistics services, including warehousing (accounting
for a majority of revenues), freight management, and
transportation and brokerage services. Standard & Poor's
characterizes JHCI's business risk profile as "weak" and its
financial risk profile as "highly leveraged," as S&P's criteria
define the terms.
The company's weak business risk profile reflects the fragmented
and competitive nature of the third-party logistics industry and
JHCI's relatively small market share within that industry. Many
of the companies competing with JHCI are financially stronger and
offer logistics services as part of a broader portfolio of freight
services (for example, Ryder System Inc., Con-way Inc., and United
Parcel Service Inc.). JHCI also competes with other smaller
logistics providers (for example, Ozburn-Hessey Holding Co. LLC).
S&P believes that JHCI will benefit over the longer term from
increased reliance on outsourced logistics by companies trying to
reduce costs, lower their capital expenditure requirements, and
enhance their operating flexibility. However, S&P also believes
the near-term outlook is less favorable, given the uncertain
economic outlook and the potential loss of business related to
mergers among its customer base. JHCI experienced weaker-than-
expected operating performance in 2012. Management is in the
process of implementing various initiatives to improve operating
efficiency and business prospects, and these are beginning to bear
fruit. However, it will take time for the full benefit of these
efforts to be reflected in financial results.
In addition to improving operating performance, management must
address upcoming debt maturities. JHCI is highly leveraged, with
total debt to EBITDA currently about 9x and funds from operations
(FFO) to total debt is 10%. JHCI's high debt leverage reflects
its acquisitive history and recent operating challenges. S&P
expects the company to focus on improving operations and
refinancing its debt and do not expect acquisitions over the near
term.
The outlook is negative. If, over the next few quarters, JHCI
fails to refinance its debt coming due in 2014 or S&P comes to
believe that the company will engage in a debt exchange that S&P
would classify as a distressed exchange (and thus a selective
default), S&P is likely to lower the ratings. Because refinancing
risk is such an important factor, S&P do not envision a
circumstance in which it would revise the outlook to stable in
advance of a refinancing of the debt coming due in 2014. If the
company does successfully refinance the debt and maintains
liquidity of at least $25 million, S&P could raise the rating to
'B-'.
JHK INVESTMENTS: Can Continue Cash Collateral Use Until April 23
----------------------------------------------------------------
The Hon. Alan H. Shiff of the U.S. Bankruptcy Court for the
District of Connecticut has authorized JHK Investments, LLC, to
continue using cash collateral of Bay City Capital Fund V, L.P.,
and Bay City Capital Fund L.P. until April 23, 2013.
The Debtor said that it is essential to its business and
operations, and the preservation of the value of its assets, that
it obtain preliminary order authorizing it to use cash receipts to
pay business expenses necessary to avoid irreparable harm to the
estate. The Debtor alleged that without the use of its cash
collateral, it will suffer irreparable harm and the value of its
assets will greatly diminish or be destroyed.
As adequate protection, Bay City is granted replacement liens in
all of the Debtor's post-petition assets.
About JHK Investments
JHK Investments, LLC, filed a Chapter 11 petition (Bankr. D. Conn.
Case No. 12-51608) in Bridgeport, Conn., on Aug. 29, estimating
under $100 million in assets and more than $10 million in
liabilities. Craig I. Lifland, Esq., at Zeisler & Zeisler, P.C.,
represents the Debtor.
Westport, Connecticut-based JHK is an investment company founded
by the former senior management team of United States Surgical
Corporation. Founded by Leon C. Hirsch in 1963, USSC became a
global medical device manufacturer with sales exceeding
$1.2 billion and employing $4,000 Connecticut residents.
Following the success of USSC, Mr. Hirsch and two other senior
USSC executives created JHK in order to produce and develop new
markets and penetrate established markets throughout the world for
high-tech medical devices. JHK owns equity in several start-up
medical subsidiaries. The start-ups include Interventional
Therapies, LLC, Auditory Licensing Company, LLC, Biowave
Corporation, Gorham Enterprises, LLC, and American Bicycle Group,
LLC.
Bay City claims to be owed $31 million for funding provided to the
Debtor since January 2011. The principals at JHK -- Mr. Hirsch,
Turi Josefsen, and Robert A. Knarr -- guaranteed JHK's
obligations, pledged the property in Wilton, Connecticut to secure
obligations under the guaranty, and pledged all equity interests
of JHK.
In March 2012, Eleuthera, in its capacity as administrative agent
for Bay City, declared an event of default as a result of the
passage of the maturity date and the failure to pay the entire
amount outstanding. On Aug. 28, 2012, Bay City and Eleuthera
purported to exercise the pledge agreements insofar as they
purported to register the Principals' interest in JHK in the name
of Eleuthera, as nominee for Bay City, and purported to reserve
their right to exercise voting rights in JHK.
K-V PHARMACEUTICAL: Bankr. Court Should Decide on Extending Stay
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals for the Eighth Circuit in
St. Louis hasn't prescribed the proper procedure for extending the
automatic stay halting a lawsuit against a bankrupt company so
that it covers non-bankrupt officers and directors.
Answering the question by referring to how other courts handle the
issue, U.S. District Judge Carol E. Jackson in St. Louis said it's
incumbent upon the bankrupt company to apply in bankruptcy court
for an order extending the stay to cover nonbankrupt officers and
directors, according to the report.
Consequently, Judge Jackson vacated an order she earlier entered
halting a previously pending securities lawsuit against both a
company that subsequently filed for bankruptcy and an officer.
She modified the order to permit the suit to proceed against the
individual officer.
The case is Public Pension Fund Group v. K-V Pharmaceutical Co.,
08-1859, U.S. District Court, Eastern District of Missouri (St.
Louis).
About K-V Pharmaceutical
K-V Pharmaceutical Company (NYSE: KVa/KVb) --
http://www.kvpharmaceutical.com/-- is a fully integrated
specialty pharmaceutical company that develops, manufactures,
markets, and acquires technology-distinguished branded and
generic/non-branded prescription pharmaceutical products. The
Company markets its technology distinguished products through
ETHEX Corporation, a subsidiary that competes with branded
products, and Ther-Rx Corporation, the company's branded drug
subsidiary.
K-V Pharmaceutical Company and certain domestic subsidiaries on
Aug. 4, 2012, filed voluntary Chapter 11 petitions (Bankr.
S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions
Inc.) to restructure their financial obligations.
K-V employed Willkie Farr & Gallagher LLP as bankruptcy counsel,
Williams & Connolly LLP as special litigation counsel, and SNR
Denton as special litigation counsel. In addition, K-V tapped
Jefferies & Co., Inc., as financial advisor and investment banker.
Epiq Bankruptcy Solutions LLC is the claims and notice agent.
The U.S. Trustee appointed five members to serve in the Official
Committee of Unsecured Creditors. Kristopher M. Hansen, Esq.,
Erez E. Gilad, Esq., and Matthew G. Garofalo, Esq., at Stroock &
Stroock & Lavan LLP, represent the Creditors Committee.
Weil, Gotshal & Manges LLP's Robert J. Lemons, Esq., and Lori R.
Fife, Esq., represent an Ad Hoc Senior Noteholders Group.
LANTHEUS MEDICAL: S&P Lowers Corp. Credit Rating to 'B'
-------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on North Billerica, Mass.-based Lantheus Medical Imaging
Inc. to 'B' from 'B+'. The outlook is stable. The downgrade also
results in the issue-level rating on the company's $400 million
9.75% notes due May 2017 being lowered to 'B' from 'B+'. The
recovery rating of '4' is unchanged.
Despite a return to production and the rebuilding of inventory,
the downgrade follows weak EBITDA generation that will keep
leverage higher than S&P initially expected at the end of 2013;
moreover, S&P now expects leverage to remain high through 2014.
The continued increase in leverage, and expectations that it will
remain high, required the company to amend covenants for the third
time in 15 months.
The ratings continue to reflect a "weak" business risk profile
characterized by a dependence on third-party contract
manufacturers, product concentration, lower demand for Technelite
generators, and a narrow business focus. S&P still views
Lantheus' financial risk profile as "highly leveraged," but weaker
in the category than previously. The residual effects from the
outage and supply constraints in 2012 continue to compress
margins, despite cost-reduction efforts. S&P expects leverage of
more than 6x by the end of 2013.
"Shipments of product resumed in the second half of 2012, but
Lantheus' revenues declined about 20% for the year ended Dec. 31,
2012. We expect 2013 revenue to be, at best, flat to 1% higher
than 2012. Although DEFINITY is regaining market share, recent
challenges with TechneLite due to competition, and radiopharmacy
purchasing habits (Technelite was not affected by the Ben Venue
Labs (BVL) shutdown), as well as lower market share for Cardiolite
because of generic competition and product shortages in 2012 will
impact 2013 revenues. Our base case scenario has EBITDA margins
of about 17%--lower than historical levels of more than 20%
because of the lower organic sales. We expect leverage to be 6x-
7x by the end of 2013. Cost-reduction efforts have not been
sufficient to offset the lower margin, although we believe R&D
cuts in 2013 could return margins to historical levels in 2014, at
which time we would expect leverage to decline to the high-5x to
low-6x range. In our opinion, the lower margins will result in
only very modest levels of free cash flow after Lantheus pays its
fixed interest expense and less than $8 million of capital
expenditures," S&P said.
Lantheus' "highly leveraged" financial risk profile reflects
leverage that S&P expects will be in the 6x-7x range by the end of
2013. During this time, S&P expects funds from operations to
total debt of less than 12%. Apart from any improvement in
operating trends, however, S&P believes the reduction in R&D
expense will help to improve leverage beginning in 2014.
S&P continues to assess business risk as "weak," rather than
"vulnerable," because of the resumption of production and build of
inventory that began in the second half of 2012. Also, DEFINITY
has regained a significant amount of market share over the past
two quarters despite the stockout in the first half of 2012.
Lantheus has minimal near-term patent exposure and its products
have limited competition given the niche market and high barriers
to entry because of the stringent regulatory requirements
associated with producing imaging products. Despite those
strengths, S&P do not expect any change to its assessment of
business risk over the next year.
LA PAZ COMMUNITY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: La Paz Community Health Care Center Inc.
530 San Pedro
San Antonio, TX 78212
Bankruptcy Case No.: 13-50876
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Western District of Texas (San Antonio)
Judge: Ronald B. King
Debtor's Counsel: Dean William Greer, Esq.
2929 Mossrock, Suite 117
San Antonio, TX 78230
Tel: (210) 342-7100
Fax: (210) 342-3633
E-mail: dwgreer@sbcglobal.net
Scheduled Assets: $2,264,495
Scheduled Liabilities: $3,452,032
A list of the Company's 20 largest unsecured creditors, filed
together with the petition, is available for free at
http://bankrupt.com/misc/txwb13-50876.pdf
The petition was signed by Modupeola Adedeji, president.
LEHMAN BROTHERS: Settles Swiss Unit's $59.3-Billion Claim
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that reorganized Lehman Brothers Holdings Inc. settled
what once was a $59.3 billion claim from Swiss affiliate Lehman
Brothers Finance AG by giving the subsidiary's liquidators an
unsecured claim for $942 million.
According to the report, although the claim was previously reduced
to $15.4 billion, it was still among the largest in the case that
culminated with approval of a Chapter 11 plan in late 2011. The
Lehman brokerage subsidiary settled last year with the liquidators
for the Swiss affiliate.
The report recounts that not long before bankruptcy, the Lehman
parent granted guarantees on behalf of subsidiaries like the Swiss
affiliate. Once in bankruptcy, the Lehman parent challenged the
enforceability of the guarantee, which was among the grounds for
the Swiss liquidators' large claim. The Lehman parent filed a
$14.2 billion claim in the Swiss liquidation, based on
intercompany loans. The Swiss liquidators took the position that
the parent's claim should be treated as though it were stock.
According to the report, the settlement calls for the Swiss
affiliate to have an approved unsecured claim for $942 million
against the U.S. parent on account of the guarantee. The Lehman
parent will have a claim of about 9.55 billion Swiss francs
($10.11 billion). The claim will be partly subordinated so non-
affiliated creditors recover $1.275 billion before the parent
begins receiving payment on its claim.
The settlement comes up for approval at a hearing on April 24.
Without giving details at the time, Lehman announced there was a
settlement in late March. The trustee for Lehman's brokerage
subsidiary Lehman Brothers Inc. settled with the Swiss liquidators
in November.
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.
LIBERTY INTERACTIVE: Moody's Rates Exchangeable Sr. Debentures B2
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 Rating to Liberty
Interactive Corporation's proposed Exchangeable Senior Debentures.
Moody's also affirmed the Corporate Family Rating at Ba3. The
ratings assigned to the proposed notes are subject to receipt and
review of final documentation. The outlook remains stable. The SGL
rating was affirmed at SGL-1.
The following ratings were affirmed [and LGD assessments amended]:
Liberty Interactive:
Corporate Family Rating at Ba3
Probability of Default Rating at Ba3-PD
Senior unsecured notes at B2 (LGD5 85%) from (LGD5 83%)
Senior unsecured exchangeable notes at B2 (LGD5 85%) from (LGD5
83%)
QVC Inc.
QVC Inc. senior secured notes (various) at Ba2 (LGD 3 33%) from
(LGD 3 31%)
The following ratings were assigned:
Liberty Interactive:
Senior unsecured exchangeable notes due 2043 at B2 (LGD 5 85%)
Ratings Rationale:
Proceeds from the proposed notes will be used to partially retire
the company's existing 3.125% Exchangeable Senior Debentures due
2023.Should the transactions conclude as anticipated, the result
will be modestly de-leveraging moving LINTA's debt/EBITDA to
around four times.
The affirmation of the Ba3 rating of LINTA reflects the solid
revenue trends and high operating margins at QVC as well as the
company's strong overall liquidity profile and expectations that
the company will maintain leverage near its current levels taking
into consideration the redemption of the 3.25% exchangeable
debentures earlier this month and expected settlement of the 5.7%
senior notes in May of 2013 with cash on the balance sheet.
LINTA's Ba3 CFR reflects the good operating margins and cash flow
generated from its portfolio of operating assets led by QVC, its
moderate leverage with debt/EBITDA in the low four times range,
and risk that its assets will be utilized in a manner that
benefits shareholders more than bondholders. The rating also
recognizes QVC's sizable position in the television shopping
industry, its international expansion and strong capabilities in
online shopping. The ratings also take into account the company's
solid overall liquidity profile with its high cash balances and
long term debt maturity profile.
The stable rating outlook reflects Moody's expectation that LINTA
will consider opportunistic transactions including share
repurchases. Moody's also expects Liberty to retain a solid
liquidity position and that the QVC business will continue to show
stable performance, notwithstanding economic pressures in Europe
where the company has a meaningful exposure. The stable rating
outlook also reflects Moody's expectations that QVC will maintain
debt/EBITDA within its target range of 2.0-2.5 times.
In view of the company's history of aggressive financial policies,
there is limited upward rating momentum in the near term. Over
time, maintaining balanced financial policies and continued
meaningful debt reductions could lead to an upgrade.
The ratings could be downgraded if liquidity weakens, the asset
composition or risk profile meaningfully changes, QVC's operating
performance deteriorates meaningfully, or debt-to-EBITDA is
sustained above 5.25x.
The principal methodology used in this rating was the Global
Retail Industry Methodology published in June 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Liberty Interactive Corporation, headquartered in Englewood,
Colorado, is a holding company that owns and operates QVC, and a
portfolio of e-commerce companies. It also holds significant
equity positions in Expedia (Ba1/stable), HSN, Trip Advisor and
other smaller issuers. QVC was founded in 1986 and has operations
in the U.S., United Kingdom, Germany, Japan and Italy.
LIBERTY INTERACTIVE: S&P Rates $550MM Debentures Due 2043 'BB'
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned Liberty Interactive
LLC's proposed $550 million exchangeable debentures due 2043 a
'BB' (the same as S&P's corporate credit rating on Liberty
Interactive Corp.) issue-level rating with a recovery rating of
'4', indicating S&P's expectation for average (30% to 50%)
recovery in the event of a payment default.
Liberty Interactive LLC is a subsidiary of Liberty Interactive
Corp. Our 'BB' corporate credit rating on Liberty Interactive
Corp. reflects S&P's view on the consolidated entity, including
QVC Inc., Liberty Interactive LLC, and other subsidiaries. The
rating outlook is stable.
Each debenture is exchangeable into a combination of Time Warner
Inc. and Time Warner Cable Inc. shares or cash having a value
equal to the shares. The company will use proceeds from the
proposed offering to repurchase or redeem existing 3.125%
exchangeable debenture due 2023 and for other general
corporate purposes.
For 2013, S&P is expecting mid-single-digit percent revenue and
EBITDA growth at Liberty Interactive Corp. S&P assumes moderate
growth across most of QVC's markets, with some continuing softness
in Germany. S&P expects that debt leverage will decrease modestly
to about 3.5x at the end of 2013, benefiting from a combination of
debt reduction and EBITDA growth. S&P's discretionary cash flow
expectation in 2013 is more than $1 billion.
RATINGS LIST
Liberty Interactive Corp.
Corporate Credit Rating BB/Stable/--
New Ratings
Liberty Interactive LLC
$550M exchangeable debentures due 2043 BB
Recovery Rating 4
LIBERTY MEDICAL: Hires Grant Thornton as Tax Advisors
-----------------------------------------------------
ATLS Acquisition, LLC, et al., ask the U.S. Bankruptcy Court for
the District of Delaware for permission to employ Grant Thornton
LLP as accounting and tax advisors to provide various services,
including:
a. sales and tax returns preparations,
b. consulting on various state tax issues,
c. property tax returns preparation,
d. federal and state income compliance, and
e. tax provision preparation.
Grant Thornton provided accounting and tax services to the Debtors
prepetition.
The firm's current hourly rates are:
Professional Rates
------------ -----
US Partners and Managing Directors $525 to $745
US Seniors Managers and Managers $310 to $500
US Senior Associates and Associates $185 to $350
US Interns $120 to $200
To the best of the Debtors' knowledge, the firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About Liberty Medical
Entities that own diabetics supply provider Liberty Medical led by
ATLS Acquisition, LLC, sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 13-10262) on Feb. 15, 2013, just less than
three months after a management buy-out and amid a notice by the
lender who financed the transaction that it's exercising an option
to acquire the business.
Liberty has been in business for 22 years serving the needs of
both type 1 and type 2 diabetic patients. Liberty is a mail order
provider of diabetes testing supplies. In addition to diabetes
testing supplies, the Debtors also sell insulin pumps and insulin
pump supplies, ostomy, catheter and CPAP supplies and operate a
large mail order pharmacy. Liberty operates in seven different
locations and has 1,684 employees.
The Debtors have tapped Greenberg Traurig, LLP as counsel; Ernst &
Young LLP to provide investment banking advice; and Epiq
Bankruptcy Solutions, LLC, as claims and noticing agent for the
Clerk of the Bankruptcy Court.
LIBERTY MEDICAL: Hires Williams & Connolly as Special Counsel
-------------------------------------------------------------
ATLS Acquisition, LLC, et al., ask the Bankruptcy Court for
permission to employ Williams & Connolly LLP as special counsel,
nunc pro tunc to the Petition Date.
The Debtors request that Williams & Connolly LLP continue to
render service in connection with the litigation captioned as,
U.S. ex rel. Matheny, et. al. v. Medco Health Solutions, Inc., et
al., currently pending in the U.S. District Court for the Southern
District of Florida with Case Number 08-14201-CIV-GRAHAM/Lynch,
including any appeal. The Debtors selected Williams & Connolly as
counsel in the lawsuit because of the firm's familiarity with the
Debtors' business and extensive experience in connection with
litigation of False Claims Act matters.
Hourly rates of attorneys at the firm range from $640 to $725 per
hour for partners and $335 to $560 per hour for associates. The
hourly rates of the firm's attorneys, paralegals and professionals
proposed to represent the Debtors are:
Professional Rates
------------ -----
Enu Mainigi $725
Jennifer Wicht $640
Dan Dockery $560
Ashley Hardin $560
Diana Cieslak $395
Kathryn Dalzell $335
Peter Shanz $260
Sanam Piramoun $245
Kelly Turner $190
Shannon Johnson $245
About Liberty Medical
Entities that own diabetics supply provider Liberty Medical led by
ATLS Acquisition, LLC, sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 13-10262) on Feb. 15, 2013, just less than
three months after a management buy-out and amid a notice by the
lender who financed the transaction that it's exercising an option
to acquire the business.
Liberty has been in business for 22 years serving the needs of
both type 1 and type 2 diabetic patients. Liberty is a mail order
provider of diabetes testing supplies. In addition to diabetes
testing supplies, the Debtors also sell insulin pumps and insulin
pump supplies, ostomy, catheter and CPAP supplies and operate a
large mail order pharmacy. Liberty operates in seven different
locations and has 1,684 employees.
The Debtors have tapped Greenberg Traurig, LLP as counsel; Ernst &
Young LLP to provide investment banking advice; and Epiq
Bankruptcy Solutions, LLC, as claims and noticing agent for the
Clerk of the Bankruptcy Court.
LIBERTY MEDICAL: Committee Hires Mesirow Financial as Advisor
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of ATLS Acquisition,
LLC et al., asks the Bankruptcy Court for permission to retain
Mesirow Financial Consulting, LLC, as financial advisors,
effective as of March 5, 2013.
The Committee needs assistance in collecting and analyzing
financial and other information in relation to the Chapter 11
cases. The firm will provide various services, including:
a. assistance in the review of reports or filings as required
by the Bankruptcy Court or the Office of the U.S. Trustee,
including, but not limited to, schedules of assets and
liabilities, statements of financial affairs and monthly
operating reports;
b. evaluation of potential employee incentive and/or severance
plan; and
c. assistance with identifying and implementing potential cost
containment opportunities.
Mesirow's compensation will be based upon the hours actually
expended by each assigned staff member. The current hourly rates
are:
Professional Rates
------------ -----
Senior Managing Director, Managing Director,
and Director $895-$950
Senior Vice President $725-$795
Vice President $625-$695
Senior Associate $495-$595
Associate $295-$445
Paraprofessional $160-$250
Mesirow will also seek reimbursement for necessary expenses
incurred.
Stephen B. Darr attests that his firm is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
About Liberty Medical
Entities that own diabetics supply provider Liberty Medical led by
ATLS Acquisition, LLC, sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 13-10262) on Feb. 15, 2013, just less than
three months after a management buy-out and amid a notice by the
lender who financed the transaction that it's exercising an option
to acquire the business.
Liberty has been in business for 22 years serving the needs of
both type 1 and type 2 diabetic patients. Liberty is a mail order
provider of diabetes testing supplies. In addition to diabetes
testing supplies, the Debtors also sell insulin pumps and insulin
pump supplies, ostomy, catheter and CPAP supplies and operate a
large mail order pharmacy. Liberty operates in seven different
locations and has 1,684 employees.
The Debtors have tapped Greenberg Traurig, LLP as counsel; Ernst &
Young LLP to provide investment banking advice; and Epiq
Bankruptcy Solutions, LLC, as claims and noticing agent for the
Clerk of the Bankruptcy Court.
LIFECARE HOLDINGS: Gov't Fails to Nix $320M Hospital Group Buy
--------------------------------------------------------------
Jamie Santo of BankruptcyLaw360 reported that a Delaware
bankruptcy judge approved the $320 million sale of LifeCare
Holdings Inc. to private equity owner Carlyle Group LP Tuesday,
overruling the U.S. government's move to nix the deal because the
firm's credit bid didn't account for paying the tax bill generated
by the deal.
The report related that the government objected to Carlyle's
proposed asset acquisition on the ground that the cashless
transaction would leave LifeCare unable to pay an estimated $24
million in capital gains taxes, rendering the estate
administratively insolvent.
About LifeCare Hospitals
LCI Holding Company, 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% of the stock following a $570 million
acquisition in August 2005.
LCI Holding Company, Inc., 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. Huron Management
Services LLC will provide the Debtors an interim chief financial
officer and certain additional personnel; and (ii) designate
Stuart Walker as interim chief financial officer.
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. LifeCare
Hospitals of Pittsburgh, LLC, a debtor-affiliate disclosed
$24,028,730 in assets and $484,372,539 in liabilities as of the
Chapter 11 filing.
The Official Committee of Unsecured Creditors is represented by
Pachulski Stang Ziehl & Jones LLP. FTI Consulting, Inc., serves
as its financial advisor.
LIGHTSQUARED INC: Sound Point Said to Be Buying Debts
-----------------------------------------------------
Emily Glazer and Mike Spector, writing for The Wall Street
Journal, report that Sound Point Capital Management LP, a hedge-
fund firm run by one of satellite mogul Charlie Ergen's former
bankers, has been buying up LightSquared debt and now holds more
than $600 million of the wireless company's roughly $1.7 billion
bank loan, said people familiar with the trades. Sources told WSJ
that Sound Point purchased:
-- roughly $250 million of the debt from activist investor
Carl Icahn almost a year ago and has started buying more
of the bank debt since the start of this year.
-- bought up a significant chunk of LightSquared's preferred
stock.
-- bought all of Fortress Investment Group's $160 million
in LightSquared debt holdings, as well as some preferred
stock.
WSJ notes it is unclear whether Mr. Ergen or his company, Dish
Network Corp., has played a role in Sound Point's trading. Mr.
Ergen hasn't addressed the trades, and the company declined to
comment.
According to WSJ, the position gives Sound Point, which holds
roughly $1.8 billion in assets, greater influence over
LightSquared's bankruptcy proceedings and the potential to try to
wrest control of the case from Philip Falcone, LightSquared's main
backer through his hedge-fund firm, Harbinger Capital Partners.
According to WSJ, the trades, some occurring as recently as last
week, have piqued the interest of those involved with Mr.
Falcone's efforts to rework LightSquared's finances, as they try
to determine Sound Point's motives.
The report says Sound Point's founder, Stephen Ketchum, is a
former banker at Bank of America Corp. and UBS AG who has a long-
standing relationship with Mr. Ergen, the co-founder and chairman
of Dish. The report also notes LightSquared's loan agreement
forbids competitors, including Dish, from buying up the debt.
WSJ also reports that LightSquared's lenders, predominantly hedge
funds holding the company's debt, have grown impatient as the
wireless firm continues to spend cash while it awaits word from
regulators on its future. The lenders, including Appaloosa
Management LP, Knighthead Capital Management LLC and Silver Point
Capital LP, among others, argued earlier this year that Mr.
Falcone's strategy to get clearance from regulators was a risky
plan to reap the upside in a successful LightSquared while putting
lenders at risk of losing money if the company's gambit failed.
According to the report, Mr. Falcone and his advisers maintain
that LightSquared will be valuable once it has permission to build
out its next-generation broadband network and that lenders are
attempting to seize control of the company to reap a possible
windfall exceeding debts they are owed. LightSquared negotiated a
recent deal with lenders that allows it to keep control of its
bankruptcy case until the July 15 date. In exchange, LightSquared
pledged to negotiate in "good faith" with lenders and propose a
reorganization plan with their backing or fully repay them debts
they are owed.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
LOWER FAYETTEVILLE: Case Summary & 8 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Lower Fayetteville Ventures, Inc.
P.O. Box 1832
Newnan, GA 30264
Bankruptcy Case No.: 13-10835
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Northern District of Georgia (Newnan)
Judge: W. Homer Drake
Debtor's Counsel: Anna Mari Humnicky, Esq.
Garrett H. Nye, Esq.
Karen Fagin White, Esq.
COHEN POLLOCK MERLIN & SMALL, P.C.
Suite 1600
3350 Riverwood Parkway
Atlanta, GA 30339
Tel: (770) 857-4770
E-mail: ahumnicky@cpmas.com
gnye@cpmas.com
kfwhite@cpmas.com
Scheduled Assets: $7,088,184
Scheduled Liabilities: $3,494,938
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/ganb13-10835.pdf
The petition was signed by James Van S. Mottola, secretary.
LUCIEN PICCARD: Firm Hit With $5M Suit Over Bad Ch. 11 Advice
-------------------------------------------------------------
Carolina Bolado of BankuptcyLaw360 reported that a group of Miami-
based luxury watch brand owners on Friday filed a $5 million
malpractice suit against former counsel Arnstein & Lehr LLP,
claiming the bad advice they received both before and during
Chapter 11 bankruptcy proceedings forced a liquidation of the
companies' assets.
The report related that in a suit filed in Florida state court,
the three entities that had owned the "Lucien Piccard" watch brand
accused the law firm of failing to advise them on how to avoid
bankruptcy, and once in bankruptcy, failed to explain how they can
successfully reorganize.
About Lucien Piccard
Lucien Piccard Inc. and two of its affiliates, LP Watch Group and
Charles Winston Luxury Group, operates a watch and jewelry
company, filed for bankruptcy under Chapter 11, listing assets of
$10.57 million and debts of $11.96 million. Lucien Piccard has
$2.71 million in outstanding accounts receivable. The Company
owes $5.69 million to Comerica Bank; $3.69 million, Sol Friedman;
$604,606, F & K LLC; and $6,002, LAU International. Peter
Shapiro, Esq., at Arnstein & Lehr, represents the Company.
Swiss Watch International acquired Lucien Piccard for $3.6
million. The price included assuming bank debt of $3 million,
which was later discounted, Swiss Watch attorney Linda Jackson of
Miami-based Infante Zumpano Salazar & Miloch LLC, said. The sale
included about $5 million of inventory at retail prices, she said.
MAKENA GREAT: Has Nod to Hire Marcus & Millichap as Broker
----------------------------------------------------------
The Makena Great American Anza Company LLC, et al., sought and
obtained permission from the U.S. Bankruptcy Court for the
Northern District of Illinois to employ the real estate brokerage
firm of Marcus & Millichap Real Estate Investment Services of
Chicago to provide real estate brokerage services relating to the
sale of the Debtor's self-storage facility and related assets in
Lansing, Illinois.
In order to maximize recoveries for creditors and in resolution of
a dispute with its prepetition lender, Branch Banking & Trust
Company, the Debtor has decided to market the Property for sale.
The Debtor has agreed to compensate Marcus & Millichap in
accordance with the Representation Agreement, which provides for
payment of a commission based on 5% of the purchase price for the
Property in cash directly from the title company at closing.
Marcus & Millichap's commission is expressly contingent upon
obtaining a purchase price for the Property in excess of
$2,605,000.
To the best of the Debtor's knowledge, Marcus & Millichap is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About GAC Storage & Makena Great American Anza Co.
GAC Storage Lansing LLC -- which owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois -- filed for Chapter 11 bankruptcy
(Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011. Jay S.
Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure, Esq.,
at Bernstein, Shur, Sawyer & Nelson, P.A., represents the Debtor
as counsel. Robert M, Fishman, Esq., and Gordon E. Gouveia, Esq.,
at Shaw Gussis Fishman Glantz Wolfson, & Towbin LLC, in Chicago,
represents the Debtor as local counsel. It estimated $1 million
to $10 million in assets and debts. The petition was signed by
Noam Schwartz, secretary and treasurer of EBM Mgmt Servs, Inc.,
manager of GAC Storage, LLC.
The Makena Great American Anza Company LLC --
http://www.makenacapital.net/-- a commercial shopping center
developers in Southern California, filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 11-48549) on Dec. 1, 2011, in Chicago.
Anza leads the way in the acquisition and development of
"A-Location" small commercial shopping centers and corner
properties in Southern California. Lawyers at Shaw Gussis Fishman
Glantz Wolfson & Towbin, LLC, in Chicago, and Bernstein, Shur,
Sawyer & Nelson, P.A., in Portland, Maine, serve as counsel to the
Debtor. Makena disclosed $13,938,161 in assets and $17,723,488 in
liabilities.
Other affiliates that sought bankruptcy protection are GAC Storage
Copley Place LLC, GAC Storage El Monte LLC, and San Tan Plaza LLC.
The cases are being jointly administered under lead case no.
11-40944.
At the behest of lender Bank of America, N.A., the Bankruptcy
Court dismissed the Chapter 11 case of San Tan Plaza, as reported
by the Troubled Company Reporter on July 17, 2012.
MAKENA GREAT: Asks for OK of Settlement Agreement with Amerco
-------------------------------------------------------------
The Makena Great American Anza Company LLC, et al., have sought
the U.S. Bankruptcy Court for the Northern District of Illinois'
approval of the Debtor's the settlement agreement with Amerco Real
Estate Company. The Debtors also asked the Court to dismiss GAC
Copley's Chapter 11 case.
Amerco is the successor to GAC Copley's prepetition lender, Bank
of America, N.A., and current owner of the Debtor's former storage
facility pursuant to a non-judicial foreclosure sale that occurred
on March 28, 2013.
The Settlement Agreement resolves all claims between GAC Copley
and Amerco, provides for the payment of U.S. Trustee statutory
fees and a portion of the Debtor's attorneys' fees from cash
collateral, and contemplates dismissal of the bankruptcy Case.
GAC Copley submits that dismissal is appropriate and in the best
interests of creditors because there is no likelihood of
rehabilitation and no remaining assets to administer in the
Debtor's estate.
Under the Settlement Agreement, the Debtor, its principals, and
the guarantors of the prepetition loan agreements must cooperate
with William J. Hoffman, the receiver in the transfer of
possession of the Debtor's storage facility in San Diego,
California, and turnover of any rents. Provided no settlement
default exists by GAC Copley or the Copley Guarantors under the
Settlement Agreement, Amerco will dismiss with prejudice Amerco's
claims in the foreclosure litigation in the California state court
with respect to GAC Copley and in certain Nevada litigation with
respect to the Copley Guarantors.
GAC Copley is required to file a request for an order authorizing
the Debtor to use Amerco's cash collateral as follows in
connection with dismissal of the bankruptcy case: (1) payment of
U.S. Trustee statutory fees not to exceed $4,000, (2) payment of
Debtor's counsel in an amount not to exceed $10,000 for fees and
expenses incurred in connection with the Motion and dismissal of
the bankruptcy case, and (3) turnover the balance of cash
collateral in the DIP account to Amerco.
About GAC Storage & Makena Great American Anza Co.
GAC Storage Lansing LLC -- which owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois -- filed for Chapter 11 bankruptcy
(Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011. Jay S.
Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure, Esq.,
at Bernstein, Shur, Sawyer & Nelson, P.A., represents the Debtor
as counsel. Robert M, Fishman, Esq., and Gordon E. Gouveia, Esq.,
at Shaw Gussis Fishman Glantz Wolfson, & Towbin LLC, in Chicago,
represents the Debtor as local counsel. It estimated $1 million
to $10 million in assets and debts. The petition was signed by
Noam Schwartz, secretary and treasurer of EBM Mgmt Servs, Inc.,
manager of GAC Storage, LLC.
The Makena Great American Anza Company LLC --
http://www.makenacapital.net/-- a commercial shopping center
developers in Southern California, filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 11-48549) on Dec. 1, 2011, in Chicago.
Anza leads the way in the acquisition and development of
"A-Location" small commercial shopping centers and corner
properties in Southern California. Lawyers at Shaw Gussis Fishman
Glantz Wolfson & Towbin, LLC, in Chicago, and Bernstein, Shur,
Sawyer & Nelson, P.A., in Portland, Maine, serve as counsel to the
Debtor. Makena disclosed $13,938,161 in assets and $17,723,488 in
liabilities.
Other affiliates that sought bankruptcy protection are GAC Storage
Copley Place LLC, GAC Storage El Monte LLC, and San Tan Plaza LLC.
The cases are being jointly administered under lead case no.
11-40944.
At the behest of lender Bank of America, N.A., the Bankruptcy
Court dismissed the Chapter 11 case of San Tan Plaza, as reported
by the Troubled Company Reporter on July 17, 2012.
MARTIN MIDSTREAM: S&P Lowers Sr. Unsecured Notes Rating to 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its rating on
U.S. midstream energy master limited partnership Martin Midstream
Partners L.P.'s senior unsecured notes to 'B-' from 'B'.
The partnership recently upsized its senior secured revolving
credit facility to $600 million from $400 million. S&P has
revised its recovery rating on the partnership's senior unsecured
notes to '6', indicating its expectation for negligible (0% to
10%) recovery for notetholders in the event of a payment default,
from '5' (10% to 30% recovery expectation), because of S&P's view
that the upsizing of the higher-priority debt will result in lower
recovery prospects for the unsecured claimants. In accordance
with S&P's notching criteria for a recovery rating of '6', it have
lowered our issue-level rating on the senior unsecured notes to
'B-' (two notches below the corporate credit rating) from 'B'.
RATINGS LIST
Midstream Partners L.P.
Corporate Credit Rating B+/Negative/--
Ratings Lowered
To From
Martin Midstream Partners L.P.
Martin Midstream Finance Corp.
$450 mil sr unsecured nts B- B
Recovery rating 6 5
MERGE HEALTHCARE: Moody's Rates New $250MM 1st Lien Term Loan 'B2'
------------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Merge Healthcare
Inc.'s proposed $250 million Senior Secured 1st Lien Term Loan due
2019 and $20 million Senior Secured Revolving Credit Facility due
2018 while it affirmed the B2 Corporate Family, B2-PD Probability
of Default, B2 Senior Secured Notes due 2015 instrument and the
SGL-3 Speculative Grade Liquidity ratings. The ratings outlook
remains stable.
The proceeds of the term loan and balance sheet cash will repay in
full Merge's Senior Secured Notes and pay associated accrued
interest, tender costs, original issue discount, fees and
expenses. The B2 rating on the Senior Secured Notes will be
withdrawn when they are repaid.
Ratings Rationale:
The B2 CFR reflects Merge's small scale and weak profitability
following several years of acquisitions and recent operating
restructuring efforts. Debt to EBITDA (Moody's adjusted) of 5.8
times as of December 31, 2012 is higher than Moody's expected it
would be after the July 2011 acquisition of OIS. The proposed
refinancing is a credit positive event. Free cash flow has been
negative due to disappointing operating results and restructuring
costs, but was positive pro forma for the proposed debt
refinancing due to the lower expected interest expense. The
refinancing also pushes out amortization by 4 years to 2019 and
provides an external source of liquidity.
The stable outlook reflects Moody's expectations for at least $15
million of free cash flow in 2013 on low single digit revenue
growth and improving profit margins and adequate liquidity. The
ratings could be lowered if revenues or profit margins do not
improve due to competitive factors, including customer losses,
pricing, or if Merge pursues debt-financed acquisitions, resulting
in Moody's expecting debt to EBITDA to be sustained above 5 times
and low free cash flow. An upgrade could occur if Merge grows
revenue size and market breadth substantially, while maintaining
high customer retention, and Moody's anticipates free cash flow to
debt over 10%.
Ratings (assessments) Assigned:
Senior Secured Revolving Credit Facility due 2018, B2
(LGD3, 47 %)
Senior Secured 1st Lien Term Loan due 2019, B2 (LGD3, 47 %)
Ratings Affirmed (assessment revised):
Corporate Family Rating, B2
Probability of Default Rating, B2-PD
Senior Secured Notes due 2015, B2 (LGD3, 47 %)
Speculative Grade Liquidity Rating, SGL-3
The principal methodology used in this rating was Global Software
Industry published in October 2012. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Merge develops hardware-agnostic healthcare information technology
solutions focused on the incorporation of medical images and
diagnostic information into electronic health records and the
interoperability of healthcare software solutions. Merrick
Ventures and affiliates own about 31% of Merge's common stock.
Moody's expects 2013 revenues of over $250 million.
MERGE HEALTHCARE: S&P Assigns 'B+' Rating to $270MM Facilities
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issue-level
credit rating and '2' recovery rating to Merge Healthcare Inc.'s
$270 million senior secured credit facilities, consisting of a
$250 million first-lien term loan and a $20 million revolving
credit facility. The '2' recovery rating indicates S&P's
expectation for substantial (70% to 90%) recovery of principle in
the event of payment default.
S&P also affirmed its 'B' corporate credit rating on the company.
"The rating on Chicago-based Merge reflects our view of the
company's 'weak' business risk profile and 'highly leveraged'
financial risk profile, primarily reflecting its declining
profitability in fiscal 2012 and continued weak cash flow," said
Standard & Poor's credit analyst Andrew Chang. However, we expect
modest revenue and EBITDA expansion in 2013 because of growth in
adoption of Merge's imaging solutions. S&P believes that lower
interest expenses resulting from the proposed transaction will
lead to modestly positive free operating cash flow (FOCF). S&P
considers Merge's liquidity "adequate".
Merge is a health care information technology imaging solutions
provider that develops software solutions to automate health care
data and diagnostic workflow. Its key products include radiology-
and cardiology-related imaging solutions, computer-aided detection
for original equipment manufacturers, as well as solutions to
create interoperability between images and electronic health care
records.
The stable outlook incorporates S&P's expectation that industry
fundamentals will support positive revenue growth and that the
proposed refinancing will improve cash flow generation. An
upgrade would be predicated on sustained positive operating trends
resulting in more significant cash flow generation amid
maintenance of leverage below 5x.
S&P could lower the ratings if competitive dynamics cause EBITDA
levels to deteriorate, resulting in negative FOCF or liquidity of
less than $30 million.
MF GLOBAL: Blasts 'Meritless' Ch. 11 Plan Objections
----------------------------------------------------
David McAfee of BankruptcyLaw360 reported that MF Global Holdings
Ltd. on Tuesday hit back against recent objections to its Chapter
11 bankruptcy plan confirmation, saying challenges brought by
Sapere Wealth Management LLC, the U.S. Trustee, Occidental Energy
Marketing Inc. and the federal government are "meritless" and
"entirely misplaced."
The report related that the memorandum of law in support of plan
confirmation, filed by the Chapter 11 trustee and creditor co-
proponents on Tuesday, comes less than a week after the U.S.
government threw its weight behind the U.S. Trustee's objections
to an "overly broad" provision.
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was 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 also was 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.
On Oct. 31, 2011, 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), 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.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S.
Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the
Bankruptcy Court entered an order approving the appointment of
Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC,
as Chapter 11 trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11
petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-
15810). On Dec. 27, the Court entered an order installing Mr.
Freeh as Chapter 11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
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 Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan
LLP, as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained
Capstone Advisory Group LLC as financial advisor, while lawyers at
Proskauer Rose LLP serve as counsel.
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.
MF GLOBAL: Nearly All Creditors Support Repayment Plan
------------------------------------------------------
Joseph Checkler, writing for Dow Jones Newswires, reported that
the creditors of MF Global Holdings Ltd. overwhelmingly approved
the failed brokerage firm's liquidation plan, as the company moves
closer to a judge's final approval of that proposal.
According to the Dow Jones report, in a Monday filing with the
U.S. Bankruptcy Court in Manhattan, MF Global said that in all but
two of the classes allowed to vote on the proposal, 100% said yes.
The only two classes of voters that didn't accept it at 100%
ratified it at 99.97% and 86.92%, respectively.
"The fact that Holders of Allowed Claims--the parties most
affected by the Plan and the Revised Interco Settlement--
overwhelmingly support the Plan is the best evidence that the
Revised Interco Settlement is in the paramount interests of
creditors," MF Global said in a separate filing made Tuesday
supporting its proposal, Dow Jones cited. "Interco" refers to the
intercompany settlements that were made in the months leading up
to the proposal being filed by a group of hedge funds.
Those hedge funds hold more than $1 billion in MF Global debt and
plan to ask Judge Martin Glenn to approve their proposal at a
hearing this coming Friday, the report said. The plan proposes to
repay creditors of MF Global's general estate within a year and
could restore the accounts of brokerage customers to 100% within
months. Unlike customers of MF Global's brokerage, however, the
holding company's creditors aren't expected to recover every cent
of their money.
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was 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 also was 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.
On Oct. 31, 2011, 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), 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.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S.
Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the
Bankruptcy Court entered an order approving the appointment of
Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC,
as Chapter 11 trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11
petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-
15810). On Dec. 27, the Court entered an order installing Mr.
Freeh as Chapter 11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
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 Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan
LLP, as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained
Capstone Advisory Group LLC as financial advisor, while lawyers at
Proskauer Rose LLP serve as counsel.
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.
MF GLOBAL: 'Negligent' Corzine Sank MF Global, Trustee Freeh Says
-----------------------------------------------------------------
Max Stendahl of BankruptcyLaw360 reported that former MF Global
Holdings Ltd. CEO Jon Corzine's aggressive trading strategy and
"negligent conduct" in policing the brokerage firm's risk led to
its collapse, bankruptcy trustee Louis Freeh said in a blistering
report Thursday.
According to BLaw360, the 124-page report, based on interviews
with former MF Global employees and a review of hundreds of
thousands of documents, concluded that Corzine and other
executives knew about but failed to correct firmwide lapses in
risk management. That made it "almost impossible" to monitor
Corzine's aggressive trades in European sovereign debt, according
to the report.
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was 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 also was 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.
On Oct. 31, 2011, 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), 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.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S.
Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the
Bankruptcy Court entered an order approving the appointment of
Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC,
as Chapter 11 trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11
petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and
11-15810). On Dec. 27, the Court entered an order installing Mr.
Freeh as Chapter 11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
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 Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan
LLP, as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained
Capstone Advisory Group LLC as financial advisor, while lawyers at
Proskauer Rose LLP serve as counsel.
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.
MGIC INVESTMENT: S&P Raises Rating on Debentures to 'CCC-'
----------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
subordinated debt rating on MGIC Investment Corp.'s 9% convertible
junior subordinated debentures due in 2063 to 'CCC-' from 'C'.
The issuer ratings on MGIC Investment Corp. (MGIC), Mortgage
Guaranty Insurance Corp., its other operating companies, and the
ratings on outstanding 2015, 2017, and 2020 debentures are
unaffected by this rating action.
On March 14, 2013, MGIC sent notice to the holders of the
debentures that it terminated the optional deferral of interest on
the junior subordinated debentures that was scheduled to be paid
on Oct. 1, 2012. On April 1, MGIC paid the deferred interest,
including compounded interest, and the regularly scheduled
interest payment on the debentures.
RATINGS LIST
MGIC Investment Corp. (Unsolicited Ratings)
Counterparty Credit Rating B-/Stable/--
Ratings Raised To From
MGIC Investment Corp. (Unsolicited Ratings)
Jr. Subordinated Debt CCC- C
This unsolicited rating(s) was initiated by Standard & Poor's. It
may be based solely on publicly available information and may or
may not involve the participation of the issuer. Standard &
Poor's has used information from sources believed to be reliable
based on standards established in its Credit Ratings Information
and Data Policy but does not guarantee the accuracy, adequacy, or
completeness of any information used.
MINERALS CONTINENTAL: Appellate Standing Rules Strictly Enforced
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that even when a bankrupt company in Chapter 7 might
receive a surplus if a lawsuit were to succeed against a third
party, the bankrupt doesn't have standing to appeal unless the
challenged order would affect the debtor's pecuniary interests.
That was the holding by U.S. District Judge Gray H. Miller in an
opinion on April 2 in Houston.
The report recounts that before filing in Chapter 7, a company
owned a drilling lease and filed suit in Texas state court against
the drilling contractor and the operator of the lease. After
bankruptcy, the defendants withdrew the suit to bankruptcy court
in Texas. The bankruptcy judge remanded the suit to state court,
and the bankrupt company appealed.
Judge Miller dismissed the appeal, saying the bankrupt company
didn't have standing. He pointed out how standing requirements
for appeals are stricter than those for being a party because
appellate standing requires being a "person aggrieved." To be
aggrieved, the appellant must be "directly and adversely affected
pecuniarily by the order of the bankruptcy court," Judge Miller
said. The bankrupt company contended it had appellate standing
because success in the suit would result in a surplus after paying
creditors in full.
Although potential success in the suit might confer standing to be
a party, it didn't confer standing to appeal, Judge Miller said.
Only the bankruptcy trustee has standing, because remanding to
state court doesn't affect whether there will be a surplus. Judge
Miller said the bankrupt could have standing only if the trustee
were to appeal, and she didn't.
The case is Minerals Continental Inc. v. LaCampana Inc. (In
re Minerals Continental Inc.), 12-cv-03099, U.S. District Court,
Southern District of Texas (Houston).
MODESTO SELF STORAGE: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Modesto Self Storage Investors, LLC
1305 10th Street
Modesto, CA 95354
Bankruptcy Case No.: 13-90608
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Eastern District of California (Modesto)
Judge: Ronald H. Sargis
Debtor's Counsel: David C. Johnston, Esq.
JOHNSTON & JOHNSTON LAW CORP.
627 13th Street, Suite E
Modesto, CA 95354
Tel: (209) 579-1150
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by James R. Daniels, managing member.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
James R Daniels and Salli F Daniels 09-94177 12/22/09
Richard Lesley Rasmussen 12-31357 06/15/12
MUNICIPAL CORRECTIONS: Can Use Cash Collateral Until April 15
-------------------------------------------------------------
The Hon. Paul W. Bonapfel of the U.S. Bankruptcy Court for the
Northern District of Georgia has approved a stipulation allowing
Municipal Corrections, LLC, to continue using cash collateral
until April 15, 2013.
The Stipulation is entered into by and between the Debtor and UMB
Bank, N.A., as successor Trustee with respect to the $49.5 million
Irwin County, Georgia Participation Certificates, issued pursuant
to that indenture, dated Aug. 1, 2007, between the Debtor and Bank
of Oklahoma, N.A., Trustee.
The proceeds from the sale of the Certificates were used to pay
previously issued certificates, and to fund the expansion of the
prison in Ocilla, Georgia, for the use and benefit of Irwin
County, Georgia. UMB has a valid interest in the rents and all
other revenues arising from or generated by Debtor's real
property.
As adequate protection for the use of cash collateral, UMB is
granted liens and security interests upon the cash collateral and
all property of the bankruptcy estate that the bank doesn't
already have a continuing first-priority lien post-petition.
A copy of the Stipulation is available for free at:
http://is.gd/2zQhDw
About Municipal Corrections
Hamlin Capital Management, LLC, Oppenheimer Rochester National
Municipals, and UMB, N.A., as indenture trustee -- owed an
aggregate $90 million on a bond debt -- filed an involuntary
Chapter 11 petition for Municipal Corrections, LLC (Bankr. D. Nev.
Case No. 12-12253) on Feb. 29, 2012. Jon T. Pearson, Esq., at
Ballard Spahr LLP, in Las Vegas, Nevada, serves as counsel to the
petitioners. In August, the bankruptcy judge ruled that the
prison is properly in Chapter 11 to reorganize.
Austin E. Carter, Esq., at Stone & Baxter LLP, in Macon, Ga.; and
Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, in
Las Vegas, Nev., represent the Debtor as counsel.
The Debtor disclosed $656,378 in assets and $61,769,528 in
liabilities as of the Chapter 11 filing.
As reported in the TCR on Jan. 3, 2013, Bankruptcy Judge Thad J.
Collins granted the request of creditor Irwin County to transfer
the venue of the Debtor's Chapter 11 bankruptcy case to the U.S.
Bankruptcy Court for the Northern District of Georgia.
MUNICIPAL CORRECTIONS: Plan Filing Period Extended Until April 15
-----------------------------------------------------------------
The Hon. Paul W. Bonapfel of the U.S. Bankruptcy Court for the
Northern District of Georgia has extended, at the behest of
Municipal Corrections, LLC, the exclusive periods within which the
Debtor may file a plan and obtain acceptances of that plan until
April 15, 2013, and June 14, 2013, respectively.
In a court filing dated Dec. 12, 2012, the Debtor said that the
extensions will allow the Debtor to focus its energy on the
operations of its detention center, and maximize revenues which
will allow for a better return to creditors in this case. The
extensions, the Debtor stated, are essential to permit the Debtor
to propose a plan of reorganization with meaningful repayment
terms to its creditors.
As reported by the TCR on Dec. 19, 2012, Bloomberg News columnist
Bill Rochelle reported that the Debtor sought an expansion of the
exclusive right to propose a plan. The Debror raised the prisoner
census from 712 when the involuntary bankruptcy was filed in
February to a record high of 864 in November. "While these
figures are encouraging and will aid the Debtor's restructuring
efforts, additional time is needed for the Debtor to see through
its efforts to increase revenues, and thereby alter its financial
fortune," the Debtor stated in the December 2012 court filing.
The primary suppliers of the detainees for the Debtor's facility
are the U.S. Marshall's Service and the U.S. Department of
Homeland Security, U.S. Immigrations and Customs Enforcement.
The Debtor has several active projects which may significantly
increase the detainee population housed at the Debtor's facility.
In September 2012, the Debtor's operating affiliate, Irwin County
Detention Center, LLC, responded to a request for proposal issued
by the Federal Bureau of Prisons. This RFP is for a contract to
house a minimum of 1,000 prisoners for up to 10 years. The Bureau
of Prisons projected that the selected detention center will
receive $25 million in annual revenues from this project. This
level of revenue would allow the Debtor to meet all of its
financial obligations to the bondholders under the trust
indenture, with which the Debtor has struggled in recent years, as
well as its property tax obligations and all other operating
expenses. The RFP materials provide that the award will be made
no later than Sept. 1, 2013. On Nov. 29, 2012, the Debtor
received notification that an inspection of its facility would be
scheduled.
Aside from these avenues for potential revenue increases, current
issues must be resolved before the Debtor can develop and propose
a plan. The management company at the Debtor's facility,
Detention Management, LLC, on Dec. 3, 2012, initiated an adversary
proceeding in this case to determine whether, and to what extent,
the indenture trustee holds a perfected security interest in the
Debtor's real property. "The resolution of this issue is
necessary to determine the treatment that the bondholders' claims
must be given under the Bankruptcy Code in any plan. Indeed, with
this critical issue unsettled, the Debtor can hardly even begin
meaningful negotiations with the bondholders for plan terms," the
Debtor said.
The Debtor also filed a motion disputing the priority ad valorem
real property tax claims asserted by Irwin County, Georgia. Irwin
County asserts priority tax claims of approximately $1.6 million,
but the Debtor suggested that the appropriate figure is half of
that amount or less.
About Municipal Corrections
Hamlin Capital Management, LLC, Oppenheimer Rochester National
Municipals, and UMB, N.A., as indenture trustee -- owed an
aggregate $90 million on a bond debt -- filed an involuntary
Chapter 11 petition for Municipal Corrections, LLC (Bankr. D. Nev.
Case No. 12-12253) on Feb. 29, 2012. Jon T. Pearson, Esq., at
Ballard Spahr LLP, in Las Vegas, Nevada, serves as counsel to the
petitioners. In August, the bankruptcy judge ruled that the
prison is properly in Chapter 11 to reorganize.
Austin E. Carter, Esq., at Stone & Baxter LLP, in Macon, Ga.; and
Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, in
Las Vegas, Nev., represent the Debtor as counsel.
The Debtor disclosed $656,378 in assets and $61,769,528 in
liabilities as of the Chapter 11 filing.
As reported in the TCR on Jan. 3, 2013, Bankruptcy Judge Thad J.
Collins granted the request of creditor Irwin County to transfer
the venue of the Debtor's Chapter 11 bankruptcy case to the U.S.
Bankruptcy Court for the Northern District of Georgia.
NLF HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: NLF Holdings, LLC
dba FunTime America
c/o Luigi Falco, Registered Agent
329 W. Clay Avenue
Roselle Park, NJ 07204
Bankruptcy Case No.: 13-16992
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Rosemary Gambardella
Debtor's Counsel: Melinda D. Middlebrooks, Esq.
MIDDLEBROOKS SHAPIRO, P.C.
841 Mountain Avenue
First Floor
Springfield, NJ 07081
Tel: (973) 218-6877
Fax: (973) 218-6878
E-mail: middlebrooks@middlebrooksshapiro.com
Scheduled Assets: $566,277
Scheduled Liabilities: $2,035,733
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/njb13-16992.pdf
The petition was signed by Nathan Franco, president.
NORTEL NETWORKS: Wins Approval for $67M Retiree Benefit Deal
------------------------------------------------------------
Jamie Santo of BankruptcyLaw360 reported that a Delaware
bankruptcy judge on Tuesday signed off on a settlement between
Nortel Networks Inc. and thousands of its retired employees that
allows the defunct telecommunications giant to terminate their
benefits in exchange for a one-time payment of nearly $67 million.
The report said the U.S. Bankruptcy Judge Kevin Gross commended
the parties for the deal, which not only removes the real and
substantial risks of litigation but provides additional benefits
as well.
"I think it's an outstanding result and worthy of the court's
approval," Judge Gross said at the hearing, according to the
BLaw360 report.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation and
its various affiliated entities provided next-generation
technologies, for both service provider and enterprise networks,
support multimedia and business-critical applications. Nortel did
business in more than 150 countries around the world. Nortel
Networks Limited was the principal direct operating subsidiary of
Nortel Networks Corporation.
On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent
Nortel Networks Corporation, NNI's direct corporate parent Nortel
Networks Limited and certain of their Canadian affiliates
commenced a proceeding with the Ontario Superior Court of Justice
under the Companies' Creditors Arrangement Act (Canada) seeking
relief from their creditors. Ernst & Young was appointed to serve
as monitor and foreign representative of the Canadian Nortel
Group. That same day, the Monitor sought recognition of the CCAA
Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No.
09-10164) under Chapter 15 of the U.S. Bankruptcy Code.
That same day, NNI and certain of its affiliated U.S. entities
filed voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10138).
In addition, the High Court of England and Wales placed 19 of
NNI's European affiliates into administration under the control of
individuals from Ernst & Young LLP. Other Nortel affiliates have
commenced and in the future may commence additional creditor
protection, insolvency and dissolution proceedings around the
world.
On May 28, 2009, at the request of administrators, the Commercial
Court of Versailles, France, ordered the commencement of secondary
proceedings in respect of Nortel Networks S.A. On June 8, 2009,
Nortel Networks UK Limited filed petitions in U.S. Bankruptcy
Court for recognition of the English Proceedings as foreign main
proceedings under Chapter 15.
U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and
15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at
Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as
Chapter 15 petitioner's counsel.
In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb
Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors'
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The United States Trustee appointed an Official Committee of
Unsecured Creditors in respect of the U.S. Debtors. An ad hoc
group of bondholders also was organized.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, and Christopher M. Samis, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, represent the Official
Committee of Unsecured Creditors.
An Official Committee of Retired Employees and the Official
Committee of Long-Term Disability Participants tapped Alvarez &
Marsal Healthcare Industry Group as financial advisor. The
Retiree Committee is represented by McCarter & English LLP as
Delaware counsel, and Togut Segal & Segal serves as the Retiree
Committee. The Committee retained Alvarez & Marsal Healthcare
Industry Group as financial advisor, and Kurtzman Carson
Consultants LLC as its communications agent.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated
assets of $11.6 billion and consolidated liabilities of $11.8
billion. The Nortel Companies' U.S. businesses are primarily
conducted through Nortel Networks Inc., which is the parent of
majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI
had assets of about $9 billion and liabilities of $3.2 billion,
which do not include NNI's guarantee of some or all of the Nortel
Companies' about $4.2 billion of unsecured public debt.
Since the commencement of the various insolvency proceedings,
Nortel has sold its business units and other assets to various
purchasers. Nortel has collected roughly $9 billion for
distribution to creditors. Of the total, $4.5 billion came from
the sale of Nortel's patent portfolio to Rockstar Bidco, a
consortium consisting of Apple Inc., EMC Corporation,
Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In
Motion Limited, and Sony Corporation. The consortium defeated a
$900 million stalking horse bid by Google Inc. at an auction. The
deal closed in July 2011.
Nortel has filed a proposed plan of liquidation in the U.S.
Bankruptcy Court. The Plan generally provides for full payment on
secured claims with other distributions going in accordance with
the priorities in bankruptcy law.
NORTEL NETWORKS: Judge Approves $66.9-Mil. Retiree Settlement
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Nortel Networks Inc. and the official committee
representing retirees on April 2 won final approval from the
bankruptcy court of a settlement ending retirees' medical and life
insurance benefits.
According to the report, the payment will be used to purchase
replacement insurance for the retirees. Nortel receives a release
of all claims related to post-employment welfare plans. Welfare
plans for Nortel's 4,400 retirees have been costing as much as
$1 million a month.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation and
its various affiliated entities provided next-generation
technologies, for both service provider and enterprise networks,
support multimedia and business-critical applications. Nortel did
business in more than 150 countries around the world. Nortel
Networks Limited was the principal direct operating subsidiary of
Nortel Networks Corporation.
On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent
Nortel Networks Corporation, NNI's direct corporate parent Nortel
Networks Limited and certain of their Canadian affiliates
commenced a proceeding with the Ontario Superior Court of Justice
under the Companies' Creditors Arrangement Act (Canada) seeking
relief from their creditors. Ernst & Young was appointed to serve
as monitor and foreign representative of the Canadian Nortel
Group. That same day, the Monitor sought recognition of the CCAA
Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No.
09-10164) under Chapter 15 of the U.S. Bankruptcy Code.
That same day, NNI and certain of its affiliated U.S. entities
filed voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10138).
In addition, the High Court of England and Wales placed 19 of
NNI's European affiliates into administration under the control of
individuals from Ernst & Young LLP. Other Nortel affiliates have
commenced and in the future may commence additional creditor
protection, insolvency and dissolution proceedings around the
world.
On May 28, 2009, at the request of administrators, the Commercial
Court of Versailles, France, ordered the commencement of secondary
proceedings in respect of Nortel Networks S.A. On June 8, 2009,
Nortel Networks UK Limited filed petitions in U.S. Bankruptcy
Court for recognition of the English Proceedings as foreign main
proceedings under Chapter 15.
U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11
and 15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at
Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as
Chapter 15 petitioner's counsel.
In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb
Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors'
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The United States Trustee appointed an Official Committee of
Unsecured Creditors in respect of the U.S. Debtors. An ad hoc
group of bondholders also was organized.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, and Christopher M. Samis, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, represent the Official
Committee of Unsecured Creditors.
An Official Committee of Retired Employees and the Official
Committee of Long-Term Disability Participants tapped Alvarez &
Marsal Healthcare Industry Group as financial advisor. The
Retiree Committee is represented by McCarter & English LLP as
Delaware counsel, and Togut Segal & Segal serves as the Retiree
Committee. The Committee retained Alvarez & Marsal Healthcare
Industry Group as financial advisor, and Kurtzman Carson
Consultants LLC as its communications agent.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated
assets of $11.6 billion and consolidated liabilities of $11.8
billion. The Nortel Companies' U.S. businesses are primarily
conducted through Nortel Networks Inc., which is the parent of
majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI
had assets of about $9 billion and liabilities of $3.2 billion,
which do not include NNI's guarantee of some or all of the Nortel
Companies' about $4.2 billion of unsecured public debt.
Since the commencement of the various insolvency proceedings,
Nortel has sold its business units and other assets to various
purchasers. Nortel has collected roughly $9 billion for
distribution to creditors. Of the total, $4.5 billion came from
the sale of Nortel's patent portfolio to Rockstar Bidco, a
consortium consisting of Apple Inc., EMC Corporation,
Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In
Motion Limited, and Sony Corporation. The consortium defeated a
$900 million stalking horse bid by Google Inc. at an auction. The
deal closed in July 2011.
Nortel has filed a proposed plan of liquidation in the U.S.
Bankruptcy Court. The Plan generally provides for full payment on
secured claims with other distributions going in accordance with
the priorities in bankruptcy law.
U.S., U.K. and Canada creditors of Nortel Networks were engaged in
mediation. Mediation, however, failed, leaving courts in the U.S.
and Canada with the chore of deciding how to divide $9 billion
generated from the liquidation of assets among creditors in the
U.S., Canada and Europe.
ORCHARD SUPPLY: S&P Lowers Corp. Credit Rating to 'CCC-'
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on San Jose, Calif.-based Orchard Supply Hardware LLC to
'CCC-' from 'CCC'. The outlook is negative.
At the same time, S&P is revising its recovery rating on the
company's credit facilities to '5', indicating its expectation for
modest (10% to 30%) recovery in the event of a payment default,
from '4' (30% to 50% recovery expectation). This results in S&P's
lowering the corresponding issue-level rating on this debt to 'CC'
(one notch lower than the corporate credit rating) from 'CCC'.
The downgrade reflects Standard & Poor's Ratings Services' view
that the likelihood of a default by year-end has increased. While
S&P understands that the company is seeking to avoid a covenant
violation in the fiscal second quarter of 2013, S&P currently
believes that a default, distressed exchange, or redemption could
be inevitable within six months, without unanticipated
significantly favorable changes in the company's circumstances.
Per the current credit agreement, absent achievement of new terms
and conditions in a timely fashion, the December 2013 maturity
date on $55.2 million of the term loan will accelerate to October
2013. In S&P's opinion, Orchard has "less than adequate"
liquidity to address both covenant compliance and upcoming debt
maturities. Even if the company secures temporary relief of the
Aug. 3 maximum leverage test, S&P believes the sizable debt
maturities will be difficult to meet.
The rating reflects S&P's assessment of the company's financial
risk profile as "highly leveraged" based on credit measures, a
very aggressive financial policy, and limited asset protection.
It also reflects S&P's assessment of Orchard's business risk
profile as "vulnerable" despite S&P's belief that operating
performance will experience modest improvements in 2013. Orchard
remains exposed to both competitive incursions from big box
retailers in the home improvement sector and the sluggish economic
and housing recovery in California.
OZBURN-HESSEY: S&P Revises Outlook to Stable & Affirms 'B-' CCR
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its
outlook on Ozburn-Hessey Holding Co. LLC to stable from negative.
S&P also affirmed its ratings on the company, including the 'B-'
corporate credit rating.
"The outlook revision reflects Ozburn-Hessey's improved operating
performance in 2012 and our expectation that the company will
continue to benefit from efficiency improvement and business
development initiatives over the next few years," said Standard &
Poor's credit analyst Lisa Jenkins. However, S&P also believes
that it will take time for the company to achieve all of its
expected benefits, especially in the current economy.
Standard & Poor's ratings on U.S.-based Ozburn-Hessey reflect the
logistics company's still weak, albeit improving, earnings; high
debt leverage; and competitive end markets. Offsetting these
factors somewhat is management's ongoing efforts to improve
operating efficiency, which have begun to bear fruit; the
contractual nature of its business; and increased outsourcing of
logistics by manufacturing companies trying to reduce costs and
lower working capital requirements. Ozburn-Hessey's management
has been taking steps to improve the operating performance of the
company, including reducing overhead costs, making changes to its
information technology systems, and implementing new business
development initiatives. This led to improved operating
performance in 2012, and S&P expects further gains, although it
believes the improvement will be gradual. S&P characterizes the
company's business risk profile as "weak" and its financial risk
profile as "highly leveraged."
Ozburn-Hessey offers various third-party logistics services,
including warehousing and freight forwarding. The company
developed its current suite of logistics services through a series
of acquisitions. Because of its acquisition history and private
ownership, Ozburn-Hessey has significant debt and limited
financing sources. Late last year, Ozburn-Hessey divested its
brokerage business unit and used proceeds to repay debt. While
the debt reduction was a credit positive, the company also lost
earnings from what was one of its higher margin businesses.
Credit metrics remain weak, and S&P believes it will take time for
the company to achieve a material improvement in these metrics.
S&P estimates funds from operations (FFO) to debt at about 10%.
(S&P treats the company's preferred stock as debt in its
analysis.). Ozburn-Hessey does not publicly disclose its
financials.
The outlook is stable. Ozburn-Hessey's credit metrics have
strengthened somewhat as a result of debt repayment and
management's efforts to improve operating efficiency. S&P expects
further improvement, but it does not expect enough improvement to
warrant an upgrade over the next year. If credit metrics
strengthen more than S&P expects, such that FFO to debt improves
to the mid-teen percentage area and S&P thinks it will stay there,
it could raise the ratings. S&P could lower the ratings if the
company experiences renewed operating pressures and FFO to debt
falls below 8%.
P.M. MIDWAY: Case Summary & Largest Unsecured Creditor
------------------------------------------------------
Debtor: P.M. Midway Realty, II, LLC
6099 Shinn Road
Port Saint Lucie, FL 34987
Bankruptcy Case No.: 13-17396
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Southern District of Florida (West Palm Beach)
Judge: Paul G. Hyman Jr.
Debtor's Counsel: Brad Culverhouse, Esq.
320 S Indian River Dr # 100
Ft Pierce, FL 34950
Tel: (772) 465-7572
E-mail: bradculverhouselaw@gmail.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
In its list of 20 largest unsecured creditors, the Company placed
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Florida Federal Land Bank $4,100,000
Association*
FLCAa Federally Charterd
Instrumentality
fka So Fla Federal Land
Bank Assic FLCA
POB 213069
West Palm Beach, FL
33411-7644
The petition was signed by Bruce D. Kimble, managing member.
PACIFIC JET: Ex-Shearman Client Loses Bid to Revive Suit
--------------------------------------------------------
Brian Mahoney of BankruptcyLaw360 reported that New York's highest
court Tuesday declined to hear a former Shearman & Sterling LLP
client's bid to revive his claims that the firm was responsible
for a $750,000 investment he lost after his friend's company,
Pacific Jet Inc., went bankrupt.
The report related that the New York state's Court of Appeals
denied former Shearman & Sterling client James Garten leave to
appeal a January decision from the the First Department of New
York's Supreme Court, Appellate Division.
PATRIOT COAL: May Copy Unsuccessful Idearc Spinoff Theory
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that creditors of coal producer Patriot Coal Corp. are
following in the footsteps of Idearc Inc. creditors, who so far
have been unsuccessful in proving that the company's spinoff was
a fraudulent transfer.
As reported in yesterday's edition of the TCR, Patriot Coal and
the Official Committee of Unsecured Creditors of the Debtors filed
on Tuesday a joint motion for leave to conduct discovery of
Peabody Energy Corporation pursuant to Rule 2004. According to
Patriot and the Committee, no party is as central to a full
understanding of the path leading from the creation of Patriot
Coal Corporation in 2007 to its current bankruptcy than its former
parent Peabody Energy Corporation. "Patriot is a Peabody
creation. Peabody selected which of its mines would become
Patriot's. Peabody determined what projections would underlie
Patriot's business plan. Peabody decided which liabilities it
would retain and which it would unload onto Patriot. And Peabody
dictated the contractual terms that govern Patriot's ongoing
obligations to Peabody after the Spinoff.
Mr. Rochelle notes that Patriot and the committee are
investigating whether the October 2007 spinoff "constituted an
actual or constructive fraudulent transfer." Creditors of Idearc
made the same allegations in a lawsuit now pending in federal
district court in Dallas.
Mr. Rochelle recounts that Idearc was the yellow pages subsidiary
of Verizon Communications Inc. The creditors sued on a theory
that the spinoff in 2006 was a fraudulent transfer because Idearc
was insolvent immediately. The district judge held a trial,
rejected the theory, and ruled that Idearc was solvent and worth
$12 billion at the time of the spinoff. The judge is now in the
process of deciding whether to dismiss the entire suit.
The papers say that Peabody, based in St. Louis like Patriot,
decided what mines would be included in the spinoff and what
liabilities "it would unload onto Patriot." The purpose of the
spinoff, according to Patriot, was to shed mines where the workers
were union members and where there was $600 million in retiree
health-care liabilities.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The U.S. Trustee appointed a seven-member creditors committee.
Kramer Levin Naftalis & Frankel LLP serves as its counsel.
Houlihan Lokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed December 19 by the
bankruptcy judge. The New York Judge in a Jan. 23, 2013 order
denied motions to transfer the venue to the U.S. Bankruptcy Court
for the Southern District of West Virginia.
PATRIOT COAL: Wants to Modify/Terminate Non-Union Retiree Benefits
------------------------------------------------------------------
Patriot Coal Corporation, et al., ask the U.S. Bankruptcy Court
for the Eastern District of Missouri for authorization, pursuant
to Sections 105(a) and 363(b) of title 11 of the United States
Code, to (i) modify the Non-Union Retiree Life Insurance Benefits
by capping such benefits at $30,000 for the Non-Union Retirees and
terminating such benefits for current active non-union employees
and (ii) terminate the Non-Union Retiree Medical Benefits,
effective as of the date that is 60 days after approval of the
termination.
The Debtors said that unlike the Union Retiree Benefits, the Non-
Union Retiree Benefits may be modified or terminated without
resort to the Section 1114 process. They added that the plain
terms of the Plan Documents for the relevant Plans clearly and
unequivocally reserve the Debtors rights to unilaterally modify or
terminate the non-union retiree benefits, thus precluding any
claim that the non-union retirees have a vested right to such
benefits.
The Debtors estimate that their consolidated balance sheet
liability for the Non-Union Retiree Benefits is approximately
$51.3 million. The Debtors believe that these benefits must be
modified and terminated, as applicable, so that the Debtors may
realize cost savings that are critical to their survival.
According to Patriot, in February, the Debtors consented to the
formation of an official Non-Union Retiree Committee, and agreed
to fund its counsel, so that the Non-Union Retirees were provided
with an estate-paid advocate to confirm whether the Debtors'
determination that the benefits at issue are amendable is correct.
"That process is underway, and the time has come for the Debtors
to seek to realize the savings associated with the modification
and termination of these benefits, a critical step on the Debtors'
difficult path to survival," Patriot related.
To the extent that this motion is granted, in an effort to
mitigate the hardship on the non-union retirees, the Debtors have
agreed to to grant each affected non-union retiree a non-priority
unsecured claim for their non-union retiree benefits that accrue
during the entire pendency of the cases.
The motion is scheduled for hearing on April 23, 2013, at
10:00 a.m. Any response or objection to the motion must be filed
with the Court by 4:00 p.m. on April 16, 2013.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The U.S. Trustee appointed a seven-member creditors committee.
Kramer Levin Naftalis & Frankel LLP serves as its counsel.
Houlihan Lokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed December 19 by the
bankruptcy judge. The New York Judge in a Jan. 23, 2013 order
denied motions to transfer the venue to the U.S. Bankruptcy Court
for the Southern District of West Virginia.
PATRIOT COAL: Wants E&Y to Provide Retirement Plan Audit Services
-----------------------------------------------------------------
Patriot Coal Corporation filed Tuesday a second supplemental
application for authority to expand the scope of employment and
retention of Ernst & Young LLP as independent auditor to the
Debtors, to provide, in addition to the previously authorized plan
audit services, the following retirement plan audit services
pursuant to the terms and conditions of the additional engagement
letter dated as of March 18, 2013:
* Auditing and reporting on the financial statements and
supplemental schedules of the Patriot Coal Corporation 401(k)
Retirement Plan for the year ended Dec. 31, 2012, which are to be
included in the Plan's Form 5500 filing with the Employee Benefits
Security Administration of the Department of Labor (the "Plan
Audit Services"); and
* Any special audit-related projects that are integral to and
necessary for the performance of the Plan Audit Services, such as
research and/or consultation on special Plan business or financial
issues (i.e., plan amendments, plan suspensions, etc.) (the
"Special Plan Audit-Related Services").
To the best of the Debtors' knowledge, EY LLP is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code.
The Debtors have agreed to pay EY LLP a fixed fee of $25,000 for
the Plan Audit Services.
The fees for the Special Plan Audit-Related Services will be
billed on an hourly basis. The hourly rates are:
National Partner/Principal $600
Partner/Principal/Executive Director $525
Senior Manager $430
Manager $375
Senior $275
Staff $190
This application is scheduled for hearing on April 23, 2013, at
10:00 a.m. (prevailing Central Time), in Bankruptcy Courtroom
Seventh Floor. Any response or objection to the motion must be
filed with the Court by 4:00 p.m. on April 16, 2013.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The U.S. Trustee appointed a seven-member creditors committee.
Kramer Levin Naftalis & Frankel LLP serves as its counsel.
Houlihan Lokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed December 19 by the
bankruptcy judge. The New York Judge in a Jan. 23, 2013 order
denied motions to transfer the venue to the U.S. Bankruptcy Court
for the Southern District of West Virginia.
PATRIOT COAL: Wants Plan Filing Period Further Extended to July 4
-----------------------------------------------------------------
Patriot Coal Corporation, et al., filed Tuesday a second motion
for an order extending the Debtors' exclusive periods which which
to file and solicit acceptances of a plan of reorganization by 120
days, from May 5, 2013, and July 4, 2013, respectively, to
Sept. 2, 2013, and Nov. 1, 2013, respectively.
According to papers filed with the Court, additional work still
needs to be done in connection with the development of a plan of
reorganization that will receive support from their various
constituencies, and that the resolution of the Debtors' labor
contracts and legacy labor liabilities is also necessary before a
plan of reorganization can be filed.
Specifically, an extension of the Debtors' exclusive periods will
be required to enable the Debtors to:
(a) deliver both a more efficient cost structure and future
revenue growth so that the Debtors can compete effectively in the
coal mining industry;
(b) further implement specific restructuring initiatives;
(c) address the Debtors' labor and retiree obligations;
(d) complete their work with various potential liquidity providers
to secure adequate liquidity upon emergence from Chapter 11; and
(e) develop a plan of reorganization reflecting the specific
restructuring initiatives set forth above and numerous others that
are underway.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The U.S. Trustee appointed a seven-member creditors committee.
Kramer Levin Naftalis & Frankel LLP serves as its counsel.
Houlihan Lokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed December 19 by the
bankruptcy judge. The New York Judge in a Jan. 23, 2013 order
denied motions to transfer the venue to the U.S. Bankruptcy Court
for the Southern District of West Virginia.
PHH CORP: S&P Revises Outlook to Stable & Affirms 'BB-' Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its outlook on
PHH Corp. to stable from negative. At the same time, S&P affirmed
its 'BB-' long-term issuer credit and senior unsecured ratings on
the company. S&P also affirmed its 'B' subordinated debt rating,
'B-' preferred stock rating, and 'B' short-term issuer credit
rating on PHH.
"The outlook revision to stable acknowledges that management has
stabilized PHH's funding profile and has established a strong
liquidity position," said Standard & Poor's credit analyst Jeff
Zaun. "Dependence on wholesale funding for its mortgage servicing
business remains a limit to the rating, but management has
progressed toward establishing a long-term, laddered funding
profile that enables it to operate profitably."
PHH retains strong market positions in its two businesses
(residential mortgage origination/servicing and vehicle fleet-
management services). The ratings on PHH also reflect favorable
industry trends in mortgage servicing and the firm's appropriate
leverage. Its exposure to the uncertain U.S. residential mortgage
market, limited flexibility in its mortgage servicing asset
funding, government officials' heightened attention to mortgage
origination and servicing practices, and weak recent GAAP earnings
limit the rating.
Risks remain, particularly in PHH's mortgage-origination business.
Increased foreclosure and compliance costs, as well as the
possibility of a downturn in mortgage originations, could limit
earnings in 2013. Nevertheless, overall industry trends may work
to PHH's advantage. Regulatory changes and concerns about
concentrating on core businesses could push more banks to
outsource originations and servicing. Specifically, new
regulation of the government-sponsored entities (GSEs), higher
guarantee fees on Federal Housing Authority and GSE loans, and the
emerging requirements for banks to hold a certain share of the
home loans they originate may lead some banks to scale back or
cease mortgage lending. Likewise, the prospect of higher capital
requirements against mortgage servicing rights (MSRs) should
encourage growth in the servicing portfolios of finance companies
such as PHH.
S&P's outlook incorporates its expectation that management's
strategy to improve liquidity and funding may continue to limit
earnings in 2013.
S&P could lower the rating if management is unable to put in place
adequate, laddered, long-term sources of liquidity. Although
liquidity is strong as of March 2013, S&P remains concerned about
management's ability to fund its MSRs and business operations
during periods of credit market disruption. Specifically, S&P
expects the firm to maintain a credible plan for keeping
contingent liquidity, comprising cash and available revolver
capacity, in excess of $200 million and above debt coming due over
the next year. S&P will also monitor the firm's coverage of
unsecured debt by unencumbered assets. S&P could raise the rating
if management demonstrates its ability to establish a long-term
funding profile that enables the firm to operate profitably over
the coming quarters.
PINNACLE AIRLINES: Seeks Additional Time to File Chapter 11 Plan
----------------------------------------------------------------
Pinnacle Airlines Corp. asked U.S. Bankruptcy Judge Robert Gerber
for additional time to file a Chapter 11 plan and solicit votes
for that plan.
The company proposed to move the deadline for filing the plan to
June 24, and the deadline for soliciting votes from creditors to
August 26.
The extension bars creditors and other parties from filing rival
plans and maintains Pinnacle Airlines' control over its
restructuring.
A court hearing is scheduled for April 17. Objections are due by
April 10.
About Pinnacle Airlines
Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/--
a $1 billion airline holding company with 7,800 employees, is the
parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.;
and Colgan Air, Inc. Flying as Delta Connection, United Express
and US Airways Express, Pinnacle Airlines Corp. operating
subsidiaries operate 199 regional jets and 80 turboprops on more
than 1,540 daily flights to 188 cities and towns in the United
States, Canada, Mexico and Belize. Corporate offices are located
in Memphis, Tenn., and hub operations are located at 11 major U.S.
airports.
Pinnacle Airlines Inc. and its affiliates, including Colgan Air,
Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East
Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012.
Judge Robert E. Gerber presides over the case. Lawyers at Davis
Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve
as the Debtors' counsel. Barclays Capital and Seabury Group LLC
serve as the Debtors' financial advisors. Epiq Systems Bankruptcy
Solutions serves as the claims and noticing agent. The petition
was signed by John Spanjers, executive vice president and chief
operating officer.
As of Oct. 31, 2012, the Company had total assets of
$800.33 million, total liabilities of $912.77 million, and total
stockholders' deficit of $112.44 million.
Delta Air Lines, Inc., the Debtors' major customer and post-
petition lender, is represented by David R. Seligman, Esq., at
Kirkland & Ellis LLP.
The official committee of unsecured creditors tapped Morrison &
Foerster LLP as its counsel, and Imperial Capital, LLC, as
financial advisors.
The U.S. Bankruptcy Court in New York will hold a hearing March 7
for approval of the explanatory disclosure statement in connection
with the reorganization plan of Pinnacle Airlines Corp.
PINNACLE AIRLINES: To Sell Hamilton Parts for $1.05 Million
-----------------------------------------------------------
Pinnacle Airlines Corp. said it plans to sell aircraft parts
including Hamilton propellers, airframe and engines for $1.05
million. A list of the assets is available for free at
http://is.gd/abiEJz Unless an objection is filed by April 13, the
assets will be sold free and clear of liens, claims, encumbrances
or interests.
About Pinnacle Airlines
Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/--
a $1 billion airline holding company with 7,800 employees, is the
parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.;
and Colgan Air, Inc. Flying as Delta Connection, United Express
and US Airways Express, Pinnacle Airlines Corp. operating
subsidiaries operate 199 regional jets and 80 turboprops on more
than 1,540 daily flights to 188 cities and towns in the United
States, Canada, Mexico and Belize. Corporate offices are located
in Memphis, Tenn., and hub operations are located at 11 major U.S.
airports.
Pinnacle Airlines Inc. and its affiliates, including Colgan Air,
Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East
Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012.
Judge Robert E. Gerber presides over the case. Lawyers at Davis
Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve
as the Debtors' counsel. Barclays Capital and Seabury Group LLC
serve as the Debtors' financial advisors. Epiq Systems Bankruptcy
Solutions serves as the claims and noticing agent. The petition
was signed by John Spanjers, executive vice president and chief
operating officer.
As of Oct. 31, 2012, the Company had total assets of
$800.33 million, total liabilities of $912.77 million, and total
stockholders' deficit of $112.44 million.
Delta Air Lines, Inc., the Debtors' major customer and post-
petition lender, is represented by David R. Seligman, Esq., at
Kirkland & Ellis LLP.
The official committee of unsecured creditors tapped Morrison &
Foerster LLP as its counsel, and Imperial Capital, LLC, as
financial advisors.
The U.S. Bankruptcy Court in New York will hold a hearing March 7
for approval of the explanatory disclosure statement in connection
with the reorganization plan of Pinnacle Airlines Corp.
PINNACLE FOODS: S&P Puts 'B' CCR on CreditWatch Positive
--------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on
Parsippany, N.J.-based Pinnacle Foods Finance LLC, including its
'B' corporate credit rating, on CreditWatch with positive
implications. The CreditWatch positive listing means that S&P
could either raise or affirm the ratings following the completion
of its review.
"The rating action follows the pricing of the company's IPO and
its announced intention to reduce debt with the proceeds," said
Standard & Poor's credit analyst Bea Chiem.
The CreditWatch placement follows the company's announcement that
it intends to use its IPO proceeds to repay at least $584 million
of its debt. As of Dec. 30, 2012, the company had reported debt
outstanding of approximately $2.6 billion. S&P estimates the
company's pro forma debt would decline to roughly $2 billion
following the repayment.
POINT BLANK: Seeks Approval of Settlement with Former Director
--------------------------------------------------------------
BankruptcyData reported that Point Blank Solutions filed with the
U.S. Bankruptcy Court a motion for approval of a settlement with
Wayne B. Kolbeck.
According to the report, Mr. Kolbeck, the Debtors' former director
of quality assurance and engineering, previously filed $3 billion
in claims against the Debtors with respect to (i) an asserted
"whistleblower" claim, pursuant to Section3729(a)(2) of the False
Claims Act and (ii) an alleged claim for retaliatory firing due to
Kolbeck's activity as a whistleblower.
The BankruptcyData report related that under the proposed
settlement, Kolbeck would have an allowed non priority general
unsecured claim in the amount of $3.5 million against Debtor SS
Body Armor I in full and final settlement of all of Kolbeck's
claims against the Debtors.
The Court scheduled a May 4, 2013 hearing on the matter.
About Point Blank
Headquartered in Pompano Beach, Florida, Point Blank Solutions,
Inc. -- http://www.pointblanksolutionsinc.com/-- designs and
produces body armor systems for the U.S. Military, Government and
law enforcement agencies, as well as select international markets.
The Company maintains facilities in Pompano Beach, Florida, and
Jacksboro, Tennessee.
The Company's former chief executive officer and chief operating
officer were convicted in September 2010 of orchestrating a
$185 million fraud.
Point Blank Solutions, formerly DHB Industries, filed for
Chapter 11 protection (Bankr. D. Del. Case No. 10-11255) on
April 14, 2010. Laura Davis Jones, Esq., Alan J. Kornfeld, Esq.,
David M. Bertenthal, Esq., and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to
the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves
as corporate counsel. Epiq Bankruptcy Solutions serves as claims
and notice agent.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Equity Security
Holders in the case. Ian Connor Bifferato, Esq., and Thomas F.
Driscoll III, Esq., at Bifferato LLC; and Carmen H. Lonstein,
Esq., Andrew P.R. McDermott, Esq., and Lawrence P. Vonckx, Esq.,
at Baker & McKenzie LLP, serve as counsel for the Official
Committee of Equity Security Holders. Robert M. Hirsh, Esq., and
George P. Angelich, Esq., at Arent Fox LLP, serve as counsel to
the Creditors Committee, and Frederick B. Rosner, Esq., and
Brian L. Arban, Esq., at the Rosner Law Group LLC, serve as
co-counsel.
POTLATCH CORP: S&P Raises Corporate Credit Rating to 'BB+'
----------------------------------------------------------
Standard & Poor's Ratings Services said it raised its ratings,
including its corporate credit rating, on Spokane, Wash.-based
Potlatch Corp. to 'BB+' from 'BB'. S&P removed all the ratings
from CreditWatch where they were placed with positive implications
on March 4, 2013. The outlook is stable.
"The ratings actions follow our upwardly revised expectations for
Potlatch's earnings in 2013 and 2014," said Standard & Poor's
credit analyst Tobias Crabtree. "We expect the ongoing housing
recovery to result in a favorable pricing environment for sawlogs
and wood products and a sustained improvement in credit metrics
for Potlatch over this time."
The ratings on Potlatch reflect Standard & Poor's assessment of
the company's "fair" business risk and "significant" financial
risk. Potlatch is a midsize forest products company with modest
geographic diversity as its timberlands holdings are concentrated
in three states. S&P expects the company's earnings to experience
some degree of volatility due to changes in the level of U.S.
housing construction, which influences sawlog and lumber prices,
and real estate selling prices.
Potlatch is a U.S. timber REIT that owns and manages approximately
1.4 million acres of timberlands in Arkansas, Idaho, and
Minnesota. It is S&P's view that the carrying value of these
timberlands (about $660 per acre) materially understates their
economic value. For example, Potlatch's debt to capital ratio is
76% on a book value basis. However, debt to capital is closer to
22% if S&P adjusts these holdings closer to market value, using an
estimated market value of approximately $1,400 per acre. S&P
derived this estimate by reviewing a range of recent timberland
transactions, as reported by publicly traded timber REITs, and by
considering the appraised value of Potlatch's timberlands as
required by its new credit agreement. The values ranged from
about $1,500 per acre in Idaho to $750 per acre in the Lake States
and $1,550 per acre in the U.S. South. S&P's analysis does not
ascribe additional value to the 210,000 to 220,000 acres of
property held for higher or better uses than timberlands.
The company is committed to expanding its land holdings where it
currently has a geographic footprint and regional expertise (Idaho
and the central South). S&P's ratings and outlook do not
incorporate significant debt-financed timberland acquisitions in
the next several quarters.
The stable rating outlook reflects S&P's expectation that
favorable demand and pricing for logs and lumber results in the
company sustaining free operating cash flow to debt at 15% and
debt to EBITDA of 3x to 3.5x in 2013-2014.
An upgrade is more likely to arise from a revision in S&P's
assessment of Potlatch's business risk to satisfactory from fair
rather than from an improved financial risk profile. The
geographic concentration in the company's timberlands holdings and
the earnings volatility arising from the highly cyclical wood
products segment are, in S&P's view, constraints to a satisfactory
business risk profile at this time.
S&P could lower the ratings if Potlatch's leverage were to be
sustained at about 4x and FFO to debt in the mid-teens area on a
sustained basis. For this to occur, 2013 EBITDA would have to
decline more than 30% from S&P's current forecast or the company's
financial policy becomes more aggressive with respect to
dividends, share repurchases, or debt-financed timberland
purchases.
POWELL STEEL: Court Approves Ciardi as Chapter 11 Counsel
---------------------------------------------------------
Powell Steel Corporation sought and obtained approval from the
U.S. Bankruptcy Court for the Eastern District of Pennsylvania to
employ Ciardi Ciardi & Astin, P.C., as counsel. The Debtor said
it is not sufficiently familiar with its rights and duties as to
be able to plan and conduct proceedings without the aid of
competent counsel.
Albert A. Ciardi, III, a partner at the firm, attests that the
firm is "disinterested" as defined in 11 U.S.C. Sec. 101.
Ciardi received a $35,000 retainer on the day of the bankruptcy
filing.
Professionals at the firm who are most likely to work on the case
and their hourly rates are:
Professional Hourly Rate
------------ -----------
Albert A. Ciardi, III $485
Nicole M. Nigrelli $430
Alex Giuliano (Paralegal) $120
About Powell Steel
Powell Steel Corporation, located in Lancaster, Pennsylvania, is a
progressive structural steel fabricator and erector equipped with
state-of-the-art fabrication and welding equipment. Powell has a
67,000 square foot facility capable of fabricating in excess of
300 tons of steel per week.
Powell Steel filed a Chapter 11 petition (Bankr. E.D. Pa. Case No.
13-11275) in Philadelphia on Feb. 13, 2013, estimating at least
$10 million in assets and liabilities.
PT BERLIAN LAJU: Involuntary Chapter 11 to be Dismissed
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that PT Berlian Laju Tanker Tbk settled disputes with U.S.
investors, clarifying that the foreign court will control the
bankruptcy reorganization of the Indonesian operator of about
70 tankers.
The report recounts that in December investor Gramercy Distressed
Opportunity Fund II along with two sister funds filed an
involuntary Chapter 11 petition in New York against the PT Berlian
parent. The investors agreed to support the Chapter 15 petition
the PT Berlian parent filed in New York in March to implement the
Indonesian reorganization in the U.S. Once there is permanent
relief in Chapter 15, the investors agreed to dismiss the
involuntary Chapter 11 petition.
About PT Berlian
PT Berlian Laju Tanker Tbk is the largest Indonesian shipping
company, focusing on liquid bulk cargo, with operations primarily
in Asia with some expansion into the Middle East and Europe.
It has about 70 tankers.
Beginning in the latter half of 2008, the financial crisis in the
United States and Europe led to dramatic decreases in various
industrial production capabilities. As a result BLT suffered
significant financial difficulties. In January 2012, BLT breached
a covenant to maintain certain cash ratios and some of its
subsidiaries had failed to pay certain charter hires.
In March 2012, PT Berlian put 15 subsidiaries into Chapter
15 proceedings in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-
11007) to complement a bankruptcy reorganization in Singapore,
where the subsidiaries are based, and to prevent creditors from
seizing the company's vessels when they call on U.S. ports. In
April 2012 the U.S. judge ruled that Singapore is home to the so-
called foreign main proceeding for the operating subsidiaries.
In June 2012, Indonesian bank PT Bank Mandiri (Persero) Tbk began
involuntary bankruptcy proceedings in Indonesia against the PT
Berlian parent, followed by the involuntary petition the Gramercy
funds filed in New York in December.
PT Berlian was the subject of an involuntary Chapter 11 bankruptcy
filed in New York (Bankr. S.D.N.Y. Case No. 12-14874) on Dec. 13,
2012, by investor Gramercy Distressed Opportunity Fund II along
with two sister funds. The funds, all located in Greenwhich,
Conn., are allegedly owed $125.5 million.
In addition, more than a dozen subsidiaries have been under
Chapter 11 protection in New York since 2012.
PT Berlian Laju filed a Chapter 15 cross-border bankruptcy (Bankr.
S.D.N.Y. Case No. 13-10901) on March 26, 2013, in New York to
enforce its restructuring in Indonesia.
PURIFIED RENEWABLE: Minn. Ethanol Plan Shuts Down, Files Ch. 11
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Purified Renewable Energy LLC, the owner of a non-
operating ethanol plant in Buffalo Lake, Minnesota, filed a
petition for Chapter 11 reorganization on March 25, three days
after the plant shut down.
The report relates that the current owners exercised an option in
November to buy the facility from a cooperative named Minnesota
Energy. The seller provided $5.5 million in second-lien
financing. The secured lender with a $17.8 million first-lien is
West Ventures LLC.
Although processing already had ceased, the operator Tenaska
BioFuels LLC shut off the supply of natural gas, causing the plant
to shut down on a Friday before the Chapter 11 filing the
following Monday.
Purified Renewable Energy filed a Chapter 11 petition (Bankr. D.
Minn. Case No. 13-41446) on March 25, 2013. Clinton E. Cutler,
Esq., at Fredrikson & Byron, P.A., in Minneapolis, serves as
counsel. The Debtor estimated at least $1 million in assets and
at least $10 million in liabilities.
READER'S DIGEST: Wants to Reject 5 Executory Contracts & Leases
---------------------------------------------------------------
RDA Holding Co. and its affiliates request authority to reject
certain executory contracts and unexpired leases effective as of
March 28, 2013. The Debtors also request that the deadline to
file a proof of claim with respect to any claim for damages
arising from the rejection of a Contract or Lease be 5:00 p.m.
(Eastern Time) on the date that is 30 days after the date of the
order approving the Motion.
As an ongoing component of the chapter 11 process, the Debtors
have targeted potential areas of cost savings and will continue to
seek different methods and initiatives to reach their goals. In
an effort to prevent the accumulation of unnecessary
administrative expenses associated with the Debtors' continued
performance under agreements that are no longer of any benefit to
the Debtors' estates, the Debtors have decided, in the exercise of
their business judgment, that rejection of the Contracts and
Leases is necessary, appropriate and in the best interests of the
Debtors and their estates.
The Agreements to be rejected include:
A. Employment Agreement with Daniel P. Meehan, the majority
member of Haven Home Media LLC. Mr. Meehan is no longer
an employee of the Debtors, and the Debtors receive no
benefit from the restrictive covenants in the Meehan deal
because Mr. Meehan is party to a separate non-compete
agreement with the Debtors that remains in full force and
effect and is not affected by the Debtors' rejection of
the Employment Agreement.
B. McPheters Agreement pursuant to which the Debtors receive
access to McPheters' iMonitor service, which identifies
and rates media applications. The McPheters Agreement is
for a term of one year ending January 14, 2014, at an
annual cost to the Debtors of $15,000. The Debtors no
longer require use of these services.
C. Millennium Lease is a management and support services
agreement and equipment lease, dated May 26, 2010, with
The Millennium Group of Delaware, Inc. Under the Lease,
the Debtors leased an x-Ray from Millennium to screen
inbound mail for potential explosive devices and a bio-
contaminant cabinet to ensure safety from biocontaminants
such as Anthrax. In addition, Millennium also performed
certain facilities management and support services for the
Debtors pursuant to the Millennium Lease. The Millennium
Lease runs through May 31, 2013, at a cost of $3,000 per
Month, result in $17,000 savings to the Debtors' estates.
D. Morgan Stanley Agreement dated November 15, 2011, between
the Debtors and Morgan Stanley & Co., LLC, under which
Morgan Stanley will serve as a financial advisor in
connection with a proposed sale of the equity, business or
assets of the Debtors or a sale of one or more business
segments of the Debtors. The Debtors' primary contact is
no longer employed by Morgan Stanley, and Morgan Stanley
is not currently providing services to the Debtors under
the Morgan Stanley Agreement.
E. Adobe Agreement under which Adobe provides the Debtors
with a multi-variate testing solution, which allows the
Debtors to test various items and processes on its
websites. The Adobe Agreement runs for a term ending May
31, 2013 at a cost to the Debtors of $134,250 per quarter.
The Debtors believe that lower price alternatives to the
Adobe Agreement exist, which would result in savings for
the Debtors and their estates.
About Reader's Digest
Reader's Digest is a global media and direct marketing company
that educates, entertains and connects consumers around the world
with products and services from trusted brands. For more than 90
years, the flagship brand and the world's most read magazine,
Reader's Digest, has simplified and enriched consumers' lives by
discovering and expertly selecting the most interesting ideas,
stories, experiences and products in health, home, family,
food, finance and humor.
RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No.
13-22233) filed for Chapter 11 protection on Feb. 17, 2013 with an
agreement with major stakeholders for a pre-negotiated chapter 11
restructuring. Under the plan, the Debtor will issue the new stock
to holders of senior secured notes.
RDA Holding Co. listed total assets of $1,118,400,000 and total
liabilities of $1,184,500,000 as of the Petition Date.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Evercore Group LLC is the investment banker. Epiq
Bankruptcy Solutions LLC is the claims and notice agent.
Reader's Digest, together with its 47 affiliates, first sought
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24,
2009 and exited bankruptcy Feb. 19, 2010.
READER'S DIGEST: Dickstein Approved as Co-Counsel to DEMG
---------------------------------------------------------
The Bankruptcy Court has authorized Reader's Digest affiliate,
Direct Entertainment Media Group, Inc., to employ Dickstein
Shapiro LLP as co-counsel nunc pro tunc to the Petition Date.
DEMG concluded that it required separate counsel from Weil Gotshal
to address all matters arising in the restructuring process where
DEMG's interest might conflict with the interests of the other
Debtors.
Dickstein will represent DEMG in connection with:
a) all matters as to which DEMG's interests are or may be
adverse to the interests of its corporate affiliates,
b) the negotiation, drafting, and prosecution of a chapter 11
plan for DEMG, and
c) such other matters as Weil is unable, or otherwise
declines, to represent DEMG, or as to which DEMG may
request the Firm's representation.
Dickstein received a retainer for all services to be performed in
the amount of $100,000 from which it applied $3,500 as payment in
full for all prepetition services Dickstein rendered.
Dickstein intends to charge DEMG its regularly established hourly
rates for attorneys and paraprofessionals. Dickstein's hourly
rates as charged to bankruptcy and nonbankruptcy clients are:
Partners $590 to $1,250
Counsel $315 to $1,000
Associates $310 to $600
Paralegals $185 to $325
To the best of the Debtors' knowledge, Dickstein is a
"disinterested person," as that phrase is defined in Bankruptcy
Code Sec. 101(14), as modified by Bankruptcy Code Sec. 1107(b),
and does not hold or represent an interest adverse to the
estates.
About Reader's Digest
Reader's Digest is a global media and direct marketing company
that educates, entertains and connects consumers around the world
with products and services from trusted brands. For more than 90
years, the flagship brand and the world's most read magazine,
Reader's Digest, has simplified and enriched consumers' lives by
discovering and expertly selecting the most interesting ideas,
stories, experiences and products in health, home, family,
food, finance and humor.
RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No.
13-22233) filed for Chapter 11 protection on Feb. 17, 2013 with an
agreement with major stakeholders for a pre-negotiated chapter 11
restructuring. Under the plan, the Debtor will issue the new stock
to holders of senior secured notes.
RDA Holding Co. listed total assets of $1,118,400,000 and total
liabilities of $1,184,500,000 as of the Petition Date.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Evercore Group LLC is the investment banker. Epiq
Bankruptcy Solutions LLC is the claims and notice agent.
Reader's Digest, together with its 47 affiliates, first sought
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24,
2009 and exited bankruptcy Feb. 19, 2010.
RENTECH NITROGEN: Moody's Gives 'B1' CFR; Rates $320MM Notes 'B1'
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 Corporate Family Rating to
Rentech Nitrogen Partners LP. Moody's also rated the partnership's
new $320 million guaranteed second lien senior secured notes due
2021 at B1. Proceeds from the transaction are expected to be used
to repay the outstanding balances on an existing credit agreement
and term loan totaling over $200 million and to prefund a number
of capital expenditures totaling just under $100 million. The
balance of the proceeds will be used for fees, interest rate swaps
and for general partnership purposes.
These are first time ratings for the partnership and are dependent
upon completion of the transaction with terms that are
substantially similar to those provided to Moody's. Moody's also
assigned an SGL-3 Speculative Grade Liquidity Rating reflecting
the firm's adequate liquidity. The outlook is stable.
"Nitrogen fertilizer prices are expected to remain high in this
pro-agribusiness environment and North American natural gas
feedstock costs are anticipated to remain low for some time, the
combination of these factors augers well for Rentech Nitrogen's
credit metrics, " stated Bill Reed, Vice President at Moody's.
"However, the lack of product and geographic diversity, as well as
the reliance on a single plant site for 85% of EBITDA along with
customer concentration will limit the rating, despite the
prospects for strong earnings."
Ratings assigned:
Rentech Nitrogen Partners, LP
Corporate Family Rating -- B1
Probability of Default Rating -- B1-PD
Speculative Grade Liquidity Rating - SGL-3
$320 million Second Lien Senior Secured Notes due 2012 -- B1
(LGD4, 55%)
Outlook -- Stable
Ratings Rationale:
Rentech Nitrogen's B1 CFR reflects its strong financial metrics,
the current favorable North American natural gas feedstock
pricing, and the expectation that the market for its nitrogen
fertilizer products will remain strong over the next three to five
years. Within the five year horizon time significant industry
capacity expansions have been announced and currently under
construction, including a 1.5 to 2.0 million ton capacity plant
planned to be built in Rentech Nitrogen's East Dubuque market.
Over time these projects could begin to depress nitrogen pricing
during periods of weak demand. However, the US is still expected
to remain a net importer of ammonia and nitrogen fertilizers
throughout this period.
The partnership's reasonable pro-forma credit metrics are offset
by its small revenue size (the debt issue of $320 million exceeds
2012 revenue of $262 million but is less than pro forma 2012
revenue of $388 million which includes a full year of revenue from
the partnership's Pasadena facility which was acquired on November
1, 2012), EBITDA concentration in one production facility, and the
partnership's distribution policy which distributes excess cash
generated (not including proceeds from this debt offering
earmarked for capital projects and debt repayment) to unit
holders.
The combination of small size, EBITDA concentration from one site
location, and the financial constraints imposed by the
distribution policy will limit the rating at its current level,
despite the expected generation of investment grade financial
metrics over the next several years. Favorable geographic location
with the East Dubuque plant located in the US central farm belt,
some fertilizer/crop diversification, and a long operating history
at the Illinois plant are also viewed as credit positives.
The stable outlook reflects the expected generation of strong
financial metrics prior to distributions. After distributions,
Retained Cash Flow/Debt is expected to be commensurate with the
rating and Free Cash Flow is expected to be negative. To obtain a
higher rating, the partnership will need to increase its size and
obtain greater operational/geographic diversity. There is limited
downward pressure on the ratings at this time. Should the natural
gas feedstock advantage be significantly reduced or if the supply-
demand dynamics in the US agricultural sector deteriorate, Moody's
would re-evaluate the rating.
Rentech Nitrogen's liquidity during 2013 is likely to be adequate,
due to its undrawn $35 million revolver and cash from the
refinancing. The vast majority of the cash balance is pre-funded
capex, and is expected to be used to complete five major capital
projects over the next 18 months which will cause its cash balance
to decline to relatively low levels by mid-2014. Following
completion of the capital projects, Moody's expects that the
partnership will maintain a very small cash balance. Subject to
ongoing negotiations, the revolving credit facility may have a
secured leverage ratio of 3.75x, subject to an availability test.
Moody's expects the partnership will remain well in compliance
with the revolver's covenants.
The methodologies used in this rating were Global Chemical
Industry published in December 2009, and Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009. Other Factors used in this rating are
described in Speculative Grade Liquidity Ratings published in
September 2002.
Rentech Nitrogen Partners, LP, a Delaware Limited Partnership has
operations in East Dubuque, IL and Pasadena, TX for the production
of nitrogen fertilizer products and granulated ammonia sulfate,
respectively. The partnership is 60% owned by Rentech, Inc. and
revenues and Adjusted EBITDA for the twelve months ending December
31, 2012 (assuming a full year of 2012 operations from the
partnership's Pasadena facility acquired on November 1, 2012) were
$388 million and $140 million, respectively.
REVEL AC: Wins OK for Epiq as Claims and Noticing Agent
-------------------------------------------------------
Revel AC, Inc., and its affiliates sought and obtained approval to
hire Epiq Bankruptcy Solutions LLC as claims and noticing agent.
The Debtors believe they may have at least a few thousand
potential creditors and parties-in-interest that must be given
notice of developments related to the Chapter 11 cases.
As claims agent, Epiq will charge the Debtors at discounted rates:
Position Hourly Rate
-------- -----------
Clerical $30 to $45
Case Manager $60 to $95
IT/ Programming $70 to $135
Senior Case Manager / Consultant $100 to $140
Senior Consultant $160 to $195
Director / Exec. Vice President $250 to $290
For its noticing services, Epiq will charge $50 per 1,000 e-mails,
and $0.10 per page for facsimile noticing. For solicitation,
balloting and tabulation services, standard professional hourly
rates and noticing fees will apply, with the $2,500 surcharge for
late voting waived. For database maintenance, the firm will
charge $0.10 per record per month, with fees for the first three
months waived. For online claim filing services, Epiq will charge
$600 per 100 claims filed. For its communication and call center
services, Epiq's communication counselor will charge $250 per
hour.
About Revel AC
Revel AC, Inc. -- http://www.revelresorts.com/-- owns and
operates Revel, a Las Vegas-style, beachfront entertainment resort
and casino located on the Boardwalk in the south inlet of Atlantic
City, New Jersey.
Revel AC Inc. along with four affiliates sought bankruptcy
protection (Bankr. D.N.J. Lead Case No. 13-16253) on March 25,
2013, in Camden, New Jersey, with a prepackaged plan that reduces
debt by $1.25 billion.
Revel's legal advisor in connection with the restructuring is
Kirkland & Ellis LLP. Alvarez & Marsal serves as its restructuring
advisor and Moelis & Company serves as its investment banker for
the restructuring. Epiq Bankruptcy Solutions is the claims and
notice agent.
Already accepted by creditors, Revel's reorganization plan is
designed to reduce debt for borrowed money by 82 percent, from
$1.52 billion to $272 million. For a projected 19 percent
recovery, holders of an $896 million secured term loan are to
receive all the new equity. General unsecured creditors are to
be paid in full.
RESIDENTIAL CAPITAL: Employee Plan Objection Filed
--------------------------------------------------
BankruptcyData reported that the U.S. Trustee assigned to the
Residential Capital case filed with the U.S. Bankruptcy Court an
objection to the Debtors' motion to implement a key employee
retention plan for certain non-insiders and key employee incentive
plans for certain insiders.
The Trustee states, "The Debtors seek an order from this Court
permitting them to pay bonuses of approximately $7.8 million to
163 employees, with, on an annualized basis, 14.34% being paid to
two insiders and 32.25% being paid to 6 other insiders. The
Debtors have failed to satisfy their burden to prove that the
proposed Estate KEIP and Executive KEIP payments are not
primarily retentive and therefore not subject to the restrictions
imposed by Section 503(c)(1)," the BankruptcyData report related.
The Court scheduled an April 11, 2013 hearing on the motion.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
The Bankruptcy Court in November 2012 approved ResCap's sale of
its mortgage servicing and origination platform assets to Ocwen
Loan Servicing, LLC and Walter Investment Management Corporation
for $3 billion; and its portfolio of roughly 50,000 whole loans to
Berkshire Hathaway for $1.5 billion. The sale of the assets,
subject to satisfaction of customary closing conditions including
certain third party consents, is expected to close in the first
quarter of 2013.
The partnership of Ocwen and Walter defeated the last bid of $2.91
billion from Fortress Investment Group's Nationstar Mortgage
Holdings Inc., which acted as stalking horse bidder, at an auction
that began Oct. 23, 2012. The $1.5 billion offer from Warren
Buffett's Berkshire Hathaway Inc. was declared the winning bid for
a portfolio of loans at the auction on Oct. 25.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
REVSTONE INDUSTRIES: To Propose Sale of Operating Subsidiaries
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that while creditors of Revstone Industries LLC are
clamoring for the appointment of a Chapter 11 trustee to oust
management, the maker of truck-engine parts says it's working on a
"comprehensive process" to sell or reorganize the operating
subsidiaries.
The report relates that Revstone filed for Chapter 11 protection
in December, to be met in early February with a motion by the
official creditors' committee for appointment of a trustee. The
trustee dispute is currently scheduled for trial on May 14 and 15,
if there isn't settlement in the meantime.
According to the report, the company filed papers this week
seeking a first expansion of the exclusive right to propose a
Chapter 11 plan. If granted by the bankruptcy judge in Delaware
at a May 16 hearing, the new deadline will be July 31. The
reasons why the committee seeks a trustee are unknown publicly
because the papers were filed under seal. The desire for a
trustee is supported by the Pension Benefit Guaranty Corp.,
General Motors Co., and the U.S. Labor Department. The government
sued Revstone Chairman George Hofmeister in August for causing
company pension funds to make improper loans to support the
business.
About Revstone Industries, Greenwood Forgings,
& US Tool & Engineering
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. In its petition, Revstone estimated under
$50 million in assets and debts.
Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del.
Case No. 12-13263) on Dec. 3, 2012.
Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No.
13-10027) and US Tool & Engineering LLC (Case No. 13-10028) filed
separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also
oversees the cases.
A motion for joint administration of the cases has been filed.
Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy
counsel to Greenwood and US Tool. Greenwood estimated $1 million
to $10 million in assets and $10 million to $50 million in debts.
US Tool & Engineering estimated under $1 million in assets and $1
million to $10 million in debts. The petitions were signed by
George S. Homeister, chairman.
REVSTONE INDUSTRIES: Wants Plan Filing Extended Until July 31
-------------------------------------------------------------
Revstone Industries, LLC, et al., ask the U.S. Bankruptcy Court
for the District of Delaware to extend the the period during which
the Debtors have the exclusive right to file a Chapter 11 plan and
solicit acceptances of that plan.
The Debtors seek to extend the Exclusive Filing Periods from the
current April 2, 2013 deadline for Revstone and Spara, and the
current May 7, 2013 deadline for Greenwood and US Tool, through
and including July 31, 2013, for all of the jointly administered
Debtors. The Debtors further seek to extend the Exclusive
Solicitation Period from the current June 1, 2013 deadline for
Revstone and Spara, and the current July 8, 2013 deadline in
Greenwood and US Tool, through and including Sept. 30, 2013 for
all of the jointly administered Debtors.
The Debtors said that they have made significant progress in the
Chapter 11 cases; however, significant tasks lie ahead and certain
contingencies remain, warranting an extension of the Exclusive
Periods. The Debtors are developing a comprehensive process for
the sale and restructuring of the assets of the Debtors and the
Debtors' interest in their subsidiary companies. In the near
term, the Debtors will continue to devote substantial time to
developing and completing the process for sale and restructuring
of their assets, and intend to move expeditiously to prepare and
file a plan in the Chapter 11 cases.
Since the commencement of the Chapter 11 cases, the Debtors have,
among other things:
a. appointed two independent managers to the boards of each
of the Debtors and created an independent restructuring
committee consisting the independent managers to address
all decisions regarding the Debtors' Chapter 11 cases and
the restructuring efforts of Revstone, Spara, and their
subsidiaries, including asset sales;
b. investigated several sources of debtor in possession
financing for these Chapter 11 cases and conducted
discussions with potential DIP financiers;
c. developed alternatives for the auction of assets of US
Tool, negotiated the retention of an auctioneer for the
assets, litigated Boston Finance Group's relief from stay
motion seeking to foreclose on US Tool assets and
cooperated with BFG to support the auction of the US Tool
assets;
d. engaged in settlement discussions and prepared a strategy
for response to the Committee of Unsecured Creditor's
pending motion to appoint a Chapter 11 trustee in these
cases; and
e. developed detailed financial projections and scenarios
for the Debtors' business operations, and conducted
weekly calls with Committee advisers on budget.
About Revstone Industries, Greenwood Forgings,
& US Tool & Engineering
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. In its petition, Revstone estimated under
$50 million in assets and debts.
Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del.
Case No. 12-13263) on Dec. 3, 2012.
Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No.
13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No.
13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013.
Judge Shannon also oversees the cases.
A motion for joint administration of the cases has been filed.
Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy
counsel to Greenwood and US Tool. Greenwood estimated $1 million
to $10 million in assets and $10 million to $50 million in debts.
US Tool & Engineering estimated under $1 million in assets and
$1 million to $10 million in debts. The petitions were signed by
George S. Homeister, chairman.
REVSTONE INDUSTRIES: Rust OK'd as Claims Agent & Administrator
--------------------------------------------------------------
The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware has granted Revstone Industries LLC, et al.,
authorization to retain Rust Consulting/Omni Bankruptcy (a) to
provide certain administrative services; and (b) as noticing and
claims agent.
As reported by the Troubled Company Reporter on March 26, 2013,
the Debtors expect Rust Omni to, among others, assist the Debtors
in analyzing claims filed against its estate, and assume full
responsibility for the distribution of notices and the
maintenance, processing and docketing of proofs of claim filed in
the Debtors' cases.
About Revstone Industries, Greenwood Forgings,
& US Tool & Engineering
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. In its petition, Revstone estimated under
$50 million in assets and debts.
Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del.
Case No. 12-13263) on Dec. 3, 2012.
Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No.
13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No.
13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013.
Judge Shannon also oversees the cases.
A motion for joint administration of the cases has been filed.
Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy
counsel to Greenwood and US Tool. Greenwood estimated $1 million
to $10 million in assets and $10 million to $50 million in debts.
US Tool & Engineering estimated under $1 million in assets and
$1 million to $10 million in debts. The petitions were signed by
George S. Homeister, chairman.
REVSTONE INDUSTRIES: Has OK to Tap Huron Consulting to Provide CRO
------------------------------------------------------------------
The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware has granted Revstone Industries LLC, et al.,
permission to employ Huron Consulting Services LLC to provide a
chief restructuring officer and additional personnel for the
Debtor.
As reported by the Troubled Company Reporter on March 22, 2013,
Lance Duroni of BankruptcyLaw360 reported that at a hearing in the
Delaware bankruptcy court, Revstone attorney Laura Davis Jones
said the official committee of unsecured creditors would withdraw
its objection to the retention of Huron's John C. DiDinato, whose
connections to Revstone's embattled chairman had prompted the
protest.
In a court filing dated Feb. 13, 2013, the Debtor sought court
authorization allowing Huron to provide Mr. DiDonato as CRO of the
Debtors, Laura Marcero as Deputy CRO, John Owens as Executive Vice
President, James M. Lukenda as Deputy CRO, Brian Linscott as Chief
Financial Officer, Geoffrey Frankel as Vice President, John A.
Hemingway as Assistant Treasurer and the additional personnel.
Huron will be paid at these hourly fees:
John C. DiDonato, CR0 $750
Laura Marcero, Deputy CR0 $700
John Owens, EVP $565
Jason Kirshner $350
Managing Director $675-$750
Sr. Director and Director $535-$620
Manager $420-$450
Associate $350
Analyst $250
About Revstone Industries, Greenwood Forgings,
& US Tool & Engineering
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. In its petition, Revstone estimated under
$50 million in assets and debts.
Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del.
Case No. 12-13263) on Dec. 3, 2012.
Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No.
13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No.
13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013.
Judge Shannon also oversees the cases.
A motion for joint administration of the cases has been filed.
Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy
counsel to Greenwood and US Tool. Greenwood estimated $1 million
to $10 million in assets and $10 million to $50 million in debts.
US Tool & Engineering estimated under $1 million in assets and
$1 million to $10 million in debts. The petitions were signed by
George S. Homeister, chairman.
REVSTONE INDUSTRIES: Has OK to Hire Pachulski Stang as Counsel
--------------------------------------------------------------
Revstone Industries LLC, et al., obtained authorization from the
Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware to employ Pachulski Stang Ziehl & Jones LLP
as counsel.
As reported by the Troubled Company Reporter on March 27, 2013,
the Firm will, among other things, provide legal advice with
respect to the Debtors' powers and duties as debtors in possession
in the continued operation of the businesses and management of its
property.
About Revstone Industries, Greenwood Forgings,
& US Tool & Engineering
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. In its petition, Revstone estimated under
$50 million in assets and debts.
Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del.
Case No. 12-13263) on Dec. 3, 2012.
Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No.
13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No.
13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013.
Judge Shannon also oversees the cases.
A motion for joint administration of the cases has been filed.
Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy
counsel to Greenwood and US Tool. Greenwood estimated $1 million
to $10 million in assets and $10 million to $50 million in debts.
US Tool & Engineering estimated under $1 million in assets and
$1 million to $10 million in debts. The petitions were signed by
George S. Homeister, chairman.
RG STEEL: Panel Sues to Use Preference Proceeds for Rennert Suit
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the official creditors' committee of RG Steel LLC,
which does not have consent from the secured lenders to use cash
for litigation costs, filed a lawsuit on March 29 asking the U.S.
bankruptcy judge in Delaware to rule that anything collected from
hundreds of preference suits represents assets not belonging to
secured lenders and can be used to pay for the Rennert lawsuit.
Rennert is the chief executive officer and founder of Renco, which
controls 75.5% of RG. Renco is agent for third-lien lenders
claiming the preference suits as part of the collateral package.
Preferences are late payments received by creditors within 90 days
of bankruptcy. The company's special counsel from ASK LLP
previously told Bloomberg News they were filing perhaps 800
lawsuits to recover $100 million from creditors who received
preferences.
According to the report, the second- and third-lien lenders
believe proceeds from preference suits were given to them as
so-called adequate protection to compensate for the loss of value
in their collateral during bankruptcy. In the new suit, the
committee takes the position the lenders' collateral never
declined in value, meaning preferences proceeds are unencumbered
assets that can be used to fund litigation against Rennert.
Bloomberg also reports that the company filed papers this week
asking for an extension until July 25 of the exclusive right to
propose a Chapter 11 plan. Although RG says there have been
"preliminary discussions" on a plan, "the committee will need
greater visibility into the results of the debtors' pending asset
monetization efforts before moving forward with a plan." The
so-called exclusivity motion is on the court's calendar for
April 23.
In the Rennert suit, the committee argues that his violation of
duties to the company cost $238 million. The committee is also
seeking to sue Vincent J. Goodwin, a senior executive in the
company that controlled RG.
Rennert's lawyer previously said the committee suit is "frivolous
and without merit."
About RG Steel
RG Steel LLC -- http://www.rg-steel.com/-- is the United States'
fourth-largest flat-rolled steel producer with annual steelmaking
capacity of 7.5 million tons. It was formed in March 2011
following the purchase of three steel facilities located in
Sparrows Point, Maryland; Wheeling, West Virginia and Warren,
Ohio, from entities related to Severstal US Holdings LLC. RG
Steel also owns finishing facilities in Yorkville and Martins
Ferry, Ohio. It also owns Wheeling Corrugating Company and has a
50% ownership in Mountain State Carbon and Ohio Coatings Company.
RG Steel along with affiliates, including WP Steel Venture LLC,
sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12-
11661) on May 31, 2012, to pursue a sale of the business. The
bankruptcy was precipitated by liquidity shortfall and a dispute
with Mountain State Carbon, LLC, and a Severstal affiliate, that
restricted the shipment of coke used in the steel production
process.
The Debtors estimated assets and debts in excess of $1 billion as
of the Chapter 11 filing. The Debtors owe (i) $440 million,
including $16.9 million in outstanding letters of credit, to
senior lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent, (ii) $218.7 million to junior lenders, led
by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million
on account of a subordinated promissory note issued by majority
owner The Renco Group, Inc., and (iv) $100 million on a secured
promissory note issued by Severstal.
Judge Kevin J. Carey presides over the case.
The Debtors are represented in the case by Robert J. Dehney, Esq.,
and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T.
Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the
Debtors.
Conway MacKenzie, Inc., serves as the Debtors' financial advisor
and The Seaport Group serves as lead investment banker. Donald
MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson
Consultants LLC is the claims and notice agent.
Wells Fargo Capital Finance LLC, as Administrative Agent, is
represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo,
Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura
Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang
Ziehi & Jones LLP.
Renco Group is represented by lawyers at Cadwalader, Wickersham &
Taft LLP.
An official committee of unsecured creditors has been appointed in
the case. Kramer Levin Naftalis & Frankel LLP represents the
Committee. Huron Consulting Services LLC serves as its financial
advisor.
The Debtor has sold off the principal plants. The sale of the
Wheeling Corrugating division to Nucor Corp. brought in $7
million. That plant in Sparrows Point, Maryland, fetched the
highest price, $72.5 million.
RIDGE MOUNTAIN: Hearing on Trustee's Dismissal Motion on April 18
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
has set for April 18, 2013, at 11:30 a.m., the hearing on the
motion of the U.S. Trustee for Region 2 for a court order
dismissing, or in the alternative, converting the Chapter 11 case
of Ridge Mountain, LLC, to Chapter 7.
The U.S. Trustee said in a court filing dated March 4, 2013, that
there is nothing to reorganize, and that the continuance of this
case only serves to increase the loss to the estate as it will
continue to accrue interest, property taxes, legal costs and U.S.
Trustee fees.
Since case inception, the Debtor has filed six operating reports.
During the time covered by those reports, June 2012 to November
2012, the Debtor has shown no revenue at all.
The Debtor, during the periods reported, has incurred liabilities
in the form of continuing legal bills. The Debtor's legal fees
and retainer were advanced by a non-debtor third party. Upon
information and belief, this retainer has been depleted.
A review of the financial statements provided by the receiver show
that no judgment interest and real estate taxes have been paid by
the receiver through the 11 months ended Nov. 30, 2012. Although
the U.S. Trustee has confirmed that the 2012 taxes have been
assessed and remain unpaid, she notes that they do not become
delinquent until March 1, 2013.
The Court has lifted the automatic stay with regard to the
mortgages held by secured lender U.S. Bank, N.A. These mortgages
are one of several liens against the Debtor's primary assets which
are the two separate residential apartment complexes in the State
of Tennessee. The next largest lien is the Wingfield judgment
lien in the amount of $1,197,000. Interest continues to accrue
against these mortgages and also on the Wingfield judgment.
Interest on the judgment is accruing at the rate of 5.25%. The
U.S. Trustee stated that post-petition judgment interest in at
least the amount of $41,493 has accrued since the case was filed.
Upon information and belief, this interest remains unpaid.
Due to multiple defaults under the mortgage, the Bank had a
receiver appointed and assumed all business operations. Since the
Court has affirmed the Bank's motion to keep the receiver in
place, the Debtor will continue to have no access to the bank
accounts or the cash flow of the Complexes.
The Debtor is delinquent in filing monthly operating reports. The
last monthly operating report was filed for the period, ending
Nov. 30, 2012.
About Ridge Mountain
Ridge Mountain LLC filed a Chapter 11 petition (Bankr. N.D.N.Y.
Case No. 12-31090) in Syracuse on June 4, 2012. Ridge Mountain
operates that Mountain Brook Apartments in Chattanooga, Tennessee,
and the Ridgemont Apartments in Red Bank, Tennessee. Ridge
Mountain disclosed $16.5 million in assets and $23.6 million in
liabilities. The apartment secures a $22 million debt to U.S.
Bank, N.A.
Judge Margaret M. Cangilos-Ruiz presides over the case. Lee E.
Woodard, Esq., at Harris Beach PLLC, serves as the Debtor's
counsel. The petition was signed by Patrick Phelan, president of
First Salina Prop., managing member.
ROTHSTEIN ROSENFELDT: Plan Too Sweet to TD Bank, Feds Say
---------------------------------------------------------
Matt Chiappardi of BankruptcyLaw360 reported that the U.S.
Trustee's Office has objected to $72 million earmarked for TD Bank
in the Chapter 11 liquidation plan for convicted Ponzi schemer
Scott Rothstein's law firm, saying the settlement gives the bank,
which allegedly had a role in the scam, more than it's entitled
under the Bankruptcy Code.
The report related that the objection, filed Monday by Acting U.S.
Trustee Guy G. Gebhardt in U.S. Bankruptcy Court for the Southern
District of Florida, maintains that TD Bank is only entitled to
get $10.3 million.
About Rothstein Rosenfeldt
Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler
PA -- http://www.rra-law.com/-- has been suspected of running a
$1.2 billion Ponzi scheme. U.S. authorities claimed in a civil
forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the
firm's former chief executive officer, sold investments in non-
existent legal settlements. Mr. Rothstein pleaded guilty to five
counts of conspiracy and wire fraud on January 27, 2010.
Creditors of Rothstein Rosenfeldt Adler signed a petition sending
the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No.
09-34791). The petitioners include Bonnie Barnett, who says she
lost $500,000 in legal settlement investments; Aran Development,
Inc., which said it lost $345,000 in investments; and trade
creditor Universal Legal, identified as a recruitment firm, which
said it is owed $7,800. The creditors alleged being owed money
invested in lawsuit settlements.
Herbert M. Stettin, the state-court appointed receiver for
Rothstein Rosenfeldt, was officially carried over as the
Chapter 11 trustee in the involuntary bankruptcy case.
On June 10, 2010, Mr. Rothstein was sentenced to 50 years in
prison.
The official committee of unsecured creditors appointed in the
case filed a bankruptcy plan and disclosure statement on Aug. 17.
The plan was filed and signed by the Committee attorney, Michael
Goldberg of Akerman Senterfitt, and not by the court-appointed
trustee Herbert Stettin. The plan calls for the creation of a
liquidating trust and four classes of claimants. A date for
confirmation of the plan was left blank.
SAINT VINCENT: 2nd Cir. Won't Reinstate Suit v. Morgan Stanley
--------------------------------------------------------------
A three-judge panel of the U.S. Court of Appeals for the Second
Circuit on Tuesday were divided on whether dismissal of the
lawsuit filed by the Pension Benefit Guaranty Corp., and Saint
Vincent Catholic Medical Centers against Morgan Stanley Investment
Management Inc., was proper.
PENSION BENEFIT GUARANTY CORP., on behalf of Saint Vincent
Catholic Medical Centers Retirement Plan, SAINT VINCENT CATHOLIC
MEDICAL CENTERS, QUEENSBROOK INSURANCE LTD., Plaintiffs-
Appellants, v. MORGAN STANLEY INVESTMENT MANAGEMENT INC.,
Defendant-Appellee, Docket No. 10-4497-cv (2nd Cir.), stems from
the real-estate bubble and subsequent financial crisis that
unfolded over the past decade. Saint Vincent Catholic Medical
Centers, Pension Benefit Guaranty Corp., and Queensbrook Insurance
Ltd., allege that Morgan Stanley Investment Management Inc. -- the
fiduciary manager of the fixed-income portfolio of the Saint
Vincent Catholic Medical Centers Retirement Plan -- violated its
fiduciary duties under the Employee Retirement Income Security Act
of 1974. In particular, Saint Vincent's alleges that Morgan
Stanley disproportionately invested the portfolio's assets in
mortgage-backed securities, including the purportedly riskier
subcategory of "nonagency" mortgage-backed securities, despite
warning signs that these investments were unsound.
Saint Vincent's hired Morgan Stanley to manage the Plan's fixed-
income portfolio, which comprised about 35% of the Plan's assets.
The U.S. District Court for the Southern District of New York (P.
Kevin Castel, Judge) dismissed the suit under Rule 12(b)(6) of the
Federal Rules of Civil Procedure, concluding that the Amended
Complaint fails to allege facts supporting a plausible inference
that Morgan Stanley knew, or should have known, that securities
held in the Plan's portfolio were imprudent investments. In
particular, the District Court explained that the Amended
Complaint relies too heavily on facts known only in hindsight, and
that its general allegations about warning signs relating to
indistinct classes of securities do not give rise to a plausible
inference that Morgan Stanley violated its fiduciary duty.
The Second Circuit held that, although Saint Vincent's, as the
fiduciary administrator of an ERISA-governed plan, was in a
position to plead its claims with greater factual detail than is
typically accessible to plaintiffs prior to discovery, and
although it received two opportunities to amend its complaint, the
Amended Complaint fails to plead sufficient, nonconclusory factual
allegations to show that Morgan Stanley failed to meet its
fiduciary responsibilities under ERISA. Accordingly, the Second
Circuit affirmed the District Court's judgment dismissing the
Amended Complaint.
The three-judge panel consists of Judge Jose A. Cabranes, who
penned the majority's opinion; Judge Debra A. Livingston; and
Judge Chester J. Straub.
Judge Straub, dissenting in part, held that, "While I agree with
the majority that the District Court was correct to dismiss
Plaintiffs' claims for breach of the fiduciary duty to diversify
and breach of the duty to act in accordance with the documents and
instruments governing the Plan, I would find that Plaintiffs have
adequately stated a claim for a breach of the fiduciary duty of
prudence."
According to Circuit Judge Straub, "I agree with the majority to
the extent it holds that ERISA plaintiffs may state a claim for
breach of the duty of prudence by alleging facts that 'if proved,
would show that an adequate investigation would have revealed to a
reasonable fiduciary that the investment at issue was
improvident.'"
"But in my view, Plaintiffs have met this burden, and cannot be
expected to further allege facts 'showing that a prudent fiduciary
in like circumstances would have acted differently.'"
"I would vacate the District Court's dismissal of Plaintiffs'
Prudence Claim, and remand for further proceedings. Because I
agree that Plaintiffs' remaining claims were properly dismissed, I
join the majority in affirming the dismissal of those claims."
A copy of the Second Circuit's April 2, 2013 decision is available
at http://is.gd/p6z3aJfrom Leagle.com.
Eric B. Fisher, Esq., at Dickstein Shapiro LLP, in New York;
represents the Pension Benefit Guaranty Corporation.
Richard A. Rosen, Esq., and Andrew W. Amend, Esq., at Paul, Weiss,
Rifkind, Wharton & Garrison LLP, in New York, represent Morgan
Stanley.
About Saint Vincents
Saint Vincents Catholic Medical Centers of New York, doing
business as St. Vincent Catholic Medical Centers --
http://www.svcmc.org/-- was anchored by St. Vincent's Hospital
Manhattan, an academic medical center located in Greenwich Village
and the only emergency room on the Westside of Manhattan from
Midtown to Tribeca, St. Vincent's Westchester, a behavioral health
hospital in Westchester County, and continuing care services that
include two skilled nursing facilities in Brooklyn, another on
Staten Island, a hospice, and a home health agency serving the
Metropolitan New York area.
Saint Vincent Catholic Medical Centers of New York and six of its
affiliates first filed for Chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case Nos. 05-14945 through 05-14951).
St. Vincents Catholic Medical Centers returned to bankruptcy by
filing another Chapter 11 petition (Bankr. S.D.N.Y. Case No.
10-11963) on April 14, 2010. The Debtor estimated assets of
$348 million against debts totaling $1.09 billion in the new
petition.
Although the hospitals emerged from the prior reorganization in
July 2007 with a Chapter 11 plan said to have "a realistic chance"
of paying all creditors in full, the bankruptcy left the medical
center with more than $1 billion in debt. The new filing occurred
after a $64 million operating loss in 2009 and the last potential
buyer terminated discussions for taking over the flagship
hospital.
On June 29, 2012, the Bankruptcy Court entered an order confirming
Saint Vincents' Second Amended Chapter 11 Plan. The plan was
declared effective on the same day. Saint Vincents shed off
assets during the bankruptcy.
SAN DIEGO HOSPICE: Pachulski Approved as Committee Counsel
----------------------------------------------------------
The Official Committee of Unsecured Creditors of San Diego Hospice
& Palliative Care Corporation sought and obtained approval from
the Bankruptcy Court to retain Pachulski Stang Ziehl & Jones LLP
as bankruptcy counsel effective as of Feb. 15, 2013.
Samuel R. Maizel attests the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
The current hourly rates of Pachulski attorneys and paralegals
likely to work on the case are:
Professional Rates
------------ -----
Samuel R. Maizel $775
Teddy M. Kapur $525
Felice Harrison (Paralegal) $295
The firm will not seek compensation for services related to non-
working travel time to or from the San Diego area, nor
reimbursement for expenses related to such travel (travel to other
locations, if required, would remain compensable and
reimbursable).
About San Diego Hospice
San Diego Hospice & Palliative Care Corporation filed a Chapter 11
petition (Bankr. S.D. Calif. Case No. 13-01179) in San Diego on
Feb. 4, 2013. The Debtor is the operator of the San Diego Hospice
and The Institute for Palliative Medicine, one of the largest
community-owned, not-for-profit hospices in the country.
The Debtor scheduled $20,369,007 in total assets and $14,888,058
in total liabilities.
Even before the bankruptcy filing, the Debtor has been under a
federal investigation, focusing whether it allowed patients to
stay in the program even when their diagnosis changed. The Debtor
said that it will meet with government agencies to address their
concerns, explore partnerships with other health care
organizations, and work to restructure and resize San Diego
Hospice. The Debtor said it has encouraged Scripps Health, the
region's largest provider of health care services, to enter the
hospice business.
Procopio, Cory, Hargreaves & Savitch LLP serves as counsel to the
Debtor.
SAN DIEGO HOSPICE: Won't Have Patient Care Ombudsman
----------------------------------------------------
The U.S. Bankruptcy Court convened a hearing on March 6 to
consider a motion by debtor San Diego Hospice & Palliative Care
Corporation seeking a finding that "appointment of a patient care
ombudsman is not necessary for the protection of the Debtor's
patients."
The Court ruled that appointment of an Ombudsman is not necessary
for the protection of the Patients under the specific
circumstances of the case after an analysis and examination of the
operations of the Debtor in light of the non-exclusive factors
applied in similar cases (See, e.g., In re Valley Health System,
381 B.R. 756, 761 (Bankr. C.D. Calif. 2008)), and because:
(a) the Debtor already has in place extensive internal quality
management procedures, and is subject to extended oversight from
numerous government agencies and professional associations;
(b) the appointment of an Ombudsman would duplicate the
Debtor's existing Patient care quality management procedures at
substantial cost and without increasing the quality of care for
the Patients; and
(c) any input by an Ombudsman would likely be rendered moot
before it could have any meaningful impact since the Debtor has
entered into agreements with Scripps subject to approval by the
Court concerning the lease and use of certain personal property
assets, the purchase of the Debtor's real property subject to
overbid, and the extension of post-petition financing to
facilitate the transition of the Patients to Scripps or to other
health care providers as designated by the particular Patient.
Jeffrey Isaacs of Procopio, Cory, Hargreaves & Savitch LLP
appeared at the hearing on the Ombudsman Motion on behalf of the
Debtor. Samuel R. Maizel of Pachulski Stang Ziehl & Jones LLP
appeared on behalf of the Official Committee of Unsecured
Creditors. Haeji Hong appeared on behalf of the Office of the
United States Trustee. Matthew J. Troy appeared on behalf of the
United States of America on behalf of the U.S. Department of
Health and Human Services, acting through its designated
component, the Centers for Medicare and Medicaid Services.
Jeffrey Cawdrey of Gordon & Rees LLP appeared on behalf of Scripps
Health. Gary Marsh of McKenna Long & Aldridge LLP appeared on
behalf of interested party Gentiva Health Services, Inc.
About San Diego Hospice
San Diego Hospice & Palliative Care Corporation filed a Chapter 11
petition (Bankr. S.D. Calif. Case No. 13-01179) in San Diego on
Feb. 4, 2013. The Debtor is the operator of the San Diego Hospice
and The Institute for Palliative Medicine, one of the largest
community-owned, not-for-profit hospices in the country.
The Debtor scheduled $20,369,007 in total assets and $14,888,058
in total liabilities.
Even before the bankruptcy filing, the Debtor has been under a
federal investigation, focusing whether it allowed patients to
stay in the program even when their diagnosis changed. The Debtor
said that it will meet with government agencies to address their
concerns, explore partnerships with other health care
organizations, and work to restructure and resize San Diego
Hospice. The Debtor said it has encouraged Scripps Health, the
region's largest provider of health care services, to enter the
hospice business.
Procopio, Cory, Hargreaves & Savitch LLP serves as counsel to the
Debtor.
SAVE MOST: Has Nod to Continue Cash Collateral Use Until May 31
---------------------------------------------------------------
The Hon. Catherine Bauer of the U.S. Bankruptcy Court for the
Central District of California has approved a stipulation allowing
Save Most Desert Rancho, Ltd., to use cash collateral of secured
creditor San Diego County Credit Union, through May 31, 2013.
As reported by the TCR on Feb. 7, 2013, SDCCU asserted that the
Note issued by the Debtor in the original principal amount of
$9,730,000 is secured by a Deed of Trust on the Debtor's real and
personal property in Riverside County, commonly known as 200 South
Main Street, Corona, California, as well as an assignment of Rents
on the Property. SDCCU consents to the use of its cash collateral
provided:
* Use of its cash collateral will be limited to the payment of
cash operating expenses approved by the Lender.
* As adequate protection, Lender will be granted replacement
liens in all of the Debtor's postpetition revenue collected
form the Property.
* Should the protections granted to the Lender be inadequate,
the Lender may seek allowance of claims against the Debtor's
estate with the priority described in Section 507(b) of the
Bankruptcy Code.
About Save Most Desert Rancho
Save Most Desert Rancho, Ltd., filed a Chapter 11 petition (Bankr.
C.D. Cal. Case No. 12-23173) in Santa Ana, California on
Nov. 15, 2012. The Laguna Hills-based company disclosed
$10,134,997 in assets and $14,874,770 in liabilities as of the
Chapter 11 filing. The petition was signed by Charles Kaminskas
for Brighton Park, LP, general partner. The Law Offices of
Michael G. Spector serves as Chapter 11 insolvency counsel.
SAVE MOST: Court Extends Plan Filing Period Until June 15
---------------------------------------------------------
The Hon. Catherine Bauer of the U.S. Bankruptcy Court for the
Central District of California has granted Save Most Desert
Rancho, Ltd.'s request to extend the exclusive periods for the
Debtor to file a plan of reorganization until June 15, 2013, and
for the Debtor to solicit acceptances of that plan until Sept. 11,
2013.
The Debtor said in a Feb. 15, 2013, court filing that extensions
of the Exclusivity Periods will allow the active issues and
disputes in this case to be resolved and eliminate the chance of
the Debtor being subject to a chaotic environment where there are
competing plans of reorganization. The extensions will also allow
the Debtor's estate to preserve and maintain the opportunity for
an orderly, efficient and cost-effective resolution of this case.
Since the Petition Date, the Debtor has worked diligently towards
negotiating and formulating a plan of reorganization.
By stipulation signed on Jan. 7, 2013, the Debtor and San Diego
County Credit Union agreed on terms for the Debtor's use of cash
collateral generated by the Debtor's Laguna Hills Property. An
order approving this stipulation has been lodged. In addition, by
court order entered on Jan. 29, 2013, the Court approved a
stipulation between the Debtor and JP Morgan Chase Bank regarding
use of cash collateral generated by the Debtor's Corona property.
The Debtor is engaged in settlement discussions with SDCCU to
resolve the SDCCU Litigation and obtain the consent of SDCCU for
the sale of the Corona Property, subject to court approval. In
addition, the Debtor has received three offers for the purchase of
the Corona Property. It is anticipated that the Debtor will be in
a position to to accept a prevailing offer and one back-up offer
as soon as the settlement with SDCCU is consummated. A draft sale
agreement has been distributed to the potential buyers. The
Debtor needs additional time to complete these negotiations and
finalize the sale.
The Riverside County Transportation Commission is in the process
of acquiring, by eminent domain, a portion of the land associated
with the Corona Property. The Debtor is continuing communications
with the RCTC representative. The Debtor intends to negotiate the
"taking" price as soon as a settlement is reached with SDCCU.
The Debtor assured the Court that it is paying its post-petition
obligations as they come due, and that it has remained in constant
communication with its creditors to keep them properly advised of
the pendency of the Chapter 11 case and of major developments.
About Save Most Desert Rancho
Save Most Desert Rancho, Ltd., filed a Chapter 11 petition (Bankr.
C.D. Cal. Case No. 12-23173) in Santa Ana, California on
Nov. 15, 2012. The Laguna Hills-based company disclosed
$10,134,997 in assets and $14,874,770 in liabilities as of the
Chapter 11 filing. The petition was signed by Charles Kaminskas
for Brighton Park, LP, general partner. The Law Offices of
Michael G. Spector serves as Chapter 11 insolvency counsel.
SAVE MOST: Lee R. Goldberg OK'd to Negotiate Settlement with SDCCU
------------------------------------------------------------------
Save Most Desert Rancho, Ltd., has obtained permission from the
Hon. Catherine Bauer of the U.S. Bankruptcy Court for the Central
District of California to employ the Law Offices of Lee R.
Goldberg, as special counsel.
As reported by the Troubled Company Reporter on March 15, 2013,
the Firm will (i) negotiate and document a settlement of the San
Diego County Credit Union (SDCCU) Litigation; (ii) negotiate,
document and close the proposed transaction for the sale of the
Debtor's real property located 200 South Main Street, Corona,
California; and (iii) negotiate, document and close the proposed
condemnation proceeding with the Riverside County Transportation
Corridor agency.
About Save Most Desert Rancho
Save Most Desert Rancho, Ltd., filed a Chapter 11 petition (Bankr.
C.D. Cal. Case No. 12-23173) in Santa Ana, California on
Nov. 15, 2012. The Laguna Hills-based company disclosed
$10,134,997 in assets and $14,874,770 in liabilities as of the
Chapter 11 filing. The petition was signed by Charles Kaminskas
for Brighton Park, LP, general partner. The Law Offices of
Michael G. Spector serves as Chapter 11 insolvency counsel.
SCHOOL SPECIALTY: Disclosure Statement Hearing on April 11
----------------------------------------------------------
School Specialty, Inc. and its affiliated debtors will return to
the Bankruptcy Court on April 11, 2013, at 10:00 a.m. to seek
approval of the disclosure statement explaining the Debtors'
Chapter 11 plan of reorganization.
The Debtors filed the Joint Plan on March 19. Objections to the
disclosure statement as containing adequate information are due
April 8.
The Plan contemplates a dual track process by which the Debtors
will simultaneously pursue a plan of reorganization and market
their Assets for sale. Pursuant to this process, the Plan will be
implemented through either (a) a reorganization of the Debtors, by
which the Debtors will emerge from chapter 11 as a going concern,
or, depending on the outcome of the Sale Process, (b) the Sale
Transaction, through which the Debtors will sell their Assets and
distribute the proceeds of such sale to their creditors.
The Debtors propose to sell the business at auction on May 8.
The Plan also contemplates the payment of Cash in an amount
sufficient for the Payment in Full of the ABL DIP Financing
Claims.
School Specialty sought Chapter 11 bankruptcy initially to sell
the business to lenders led by Bayside Financial LLC, absent
higher and better offers. To facilitate an orderly sale process,
Bayside, the agent for the prepetition term loan lenders, agreed
to provide postpetition loans consisting of (i) $50 million of new
money funding from Bayside, (ii) a conversion or roll-up of the
$94.7 pre-bankruptcy term loan owed to Bayside into a post-
bankruptcy secured facility, and (iii) a $175 million revolving
credit to subsume the pre-bankruptcy revolver -- ABL Roll-Up.
Prior to the bankruptcy, the Debtors owed $92 million under a term
loan with Bayside as agent. The Debtors also owe $47.6 million on
a secured revolving credit with Wells Fargo Capital Finance LLC as
agent.
The Bayside DIP facility required a fast-tracked sale process that
would have seen the Debtor closing a deal by mid-April.
On March 5, however, the Debtor and Bayside agreed to terminate
purchase agreement, with the Debtor paying off the Bayside DIP
facility and the remaining balance under the prepetition loans. To
pay for the Bayside loans, the Debtor obtained $155 million in
replacement DIP financing from a syndicate of financial
institutions -- called Ad Hoc DIP Lenders -- led by U.S. Bank,
N.A., as agent. The lending consortium consists of some holders
of School Specialty Inc.'s 3.75% Convertible Subordinated Notes
Due 2026.
On March 14, the Court entered a final order approving the
replacement DIP financing. A copy of the Final DIP Order is
available at:
http://bankrupt.com/misc/SCHOOLSPECIALTYFinalDIPOrder.pdf
About School Specialty
Based in Greenville, Wisconsin, School Specialty is a supplier of
educational products for kindergarten through 12th grade. Revenue
in 2012 was $731.9 million through sales to 70% of the
country's 130,000 schools.
School Specialty and certain of its subsidiaries filed voluntary
petitions for reorganization under Chapter 11 (Bankr. D. Del.
Lead Case No. 13-10125) on Jan. 28, 2013. The petition estimated
assets of $494.5 million and debt of $394.6 million.
The Debtors are represented by:
Jeffrey D. Saferstein, Esq.
Lauren Shumejda, Esq.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 Avenue of the Americas
New York, NY 10019
E-mail: jsaferstein@paulweiss.com
lshumejda@paulweiss.com
- and -
Pauline K. Morgan, Esq.
Maris J. Kandestin, Esq.
YOUNG, CONAWAY, STARGATT & TAYLOR, LLP
Rodney Square, 1000 North King Street
Wilmington, DE 19801
E-mail: mkandestin@ycst.com
Alvarez & Marsal North America LLC is the restructuring advisor
and Perella Weinberg Partners LP is the investment banker.
Kurtzman Carson Consultants LLC is the claims and notice agent.
The ABL Lenders are represented by:
Randall Klein, Esq.
Jeremy Downs, Esq.
GOLDBERG KOHN
55 East Monroe Street, Suite 3300
Chicago, IL 60603
E-mail: randall.klein@goldbergkohn.com
jeremy.downs@goldbergkohn.com
- and
Paul Heath, Esq.
RICHARDS, LAYTON AND FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, DE 19801
The Ad Hoc DIP Lenders led by U.S. Bank are represented by:
Kristopher M. Hansen, Esq.
STROOCK & STROOCK & LAVAN LLP
Jonathan D. Canfield, Esq.
180 Maiden Lane
New York, NY 10038
E-mail: khansen@stroock.com
jcanfield@stroock.com
- and -
Christopher M. Winter
DUANE MORRIS LLP
222 Delaware Avenue, Suite 1600
Wilmington, DE 19801
E-mail: cmwinter@duanemorris.com
The Official Committee of Unsecured Creditors appointed in the
case is represented by:
Robert J. Stark, Esq.
BROWN RUDNICK LLP
7 Times Square
New York, NY 10036
E-mail: rstark@brownrudnick.com
- and -
Steven D. Pohl, Esq.
BROWN RUDNICK LLP
One Financial Center
Boston, MA 02111
E-mail: SPohl@brownrudnick.com
- and -
Jamie L. Edmonson, Esq.
VENABLE LLP
1201 North Market Street, Suite 1400
Wilmington, DE 19801
E-mail: jledmonson@Venable.com
Bayside is represented by:
PEPPER HAMILTON LLP
David B. Stratton, Esq.
David M. Fournier, Esq.
James C. Carignan, Esq.
Michael J. Custer, Esq.
Hercules Plaza, Suite 5100
1313 N. Market Street
P.O. Box 1709
Wilmington, DE 19899-1709
Tel: (302) 777-6500
- and -
Michael S. Stamer, Esq.
Abid Qureshi, Esq.
Meredith A. Lahaie, Esq.
Brian T. Carney, Esq.
AKIN GUMP STRAUSS HAUER & FELD LLP
One Bryant Park
New York, NY 10036
Tel: (212) 872-1000
SCHOOL SPECIALTY: Committee Sues Bayside Over Early Payment Fee
---------------------------------------------------------------
The dispute between the Official Committee of Unsecured Creditors
of School Specialty Inc. and the Debtor's one time proposed buyer
and lender, Bayside Finance LLC, over Bayside's demand for make
whole payment from the bankruptcy estate has become a full blown
litigation.
On April 3, the Committee launched an adversary proceeding in
bankruptcy court against Bayside Finance LLC, H.I.G. Bayside
Capital, and H.I.G. Bayside Debt & LBO Fund II L.P. to avoid and
recover, pursuant to 11 U.S.C. sections 544, 548 and 550, a
fraudulent transfer in the amount of $1,193,717 made by School
Specialty to Bayside on Oct. 25, 2012. According to papers filed
by the Committee, the payment represents an "Early Payment Fee"
which Bayside alleges was due under its Term Loan Credit Agreement
with the Debtor in connection with a $3 million prepayment of the
Term Loan.
The Committee contends the provision of the Term Loan Credit
Agreement pursuant to which the Fraudulent Transfer was made --
the Make Whole Provision -- constitutes an unenforceable provision
under New York law. Because the $1.2 million Fraudulent Transfer
was not a payment on account of a valid and legally enforceable
antecedent debt, School Specialty did not receive reasonably
equivalent value or fair consideration in exchange for it, the
Committee contends. In addition, the Committee points out School
Specialty (i) was insolvent at the time of the Fraudulent
Transfer, or became insolvent as a result of it; (ii) was engaged
in a business or a transaction, or was about to engage in a
business or a transaction, for which its remaining assets were
unreasonably small in relation to the business or transaction;
and/or (iii) intended to incur, or believed or reasonably should
have believed it would incur, debts beyond its ability to pay as
they became due. Thus, the Fraudulent Transfer may be avoided
under 11 U.S.C. sections 544 and 548 (and applicable state
fraudulent transfer law) and may be recovered from Bayside under
11 U.S.C. Sec. 550.
The Committee also said because the Fraudulent Transfer was made
pursuant to an unenforceable provision of the Term Loan Credit
Agreement, (i) Bayside would be unjustly enriched if permitted to
retain the payment or (ii) a failure of consideration occurred
with respect to the Term Loan Credit Agreement. Accordingly,
Bayside must disgorge the amount of the Fraudulent Transfer to the
Debtors.
On March 6, 2013, the Committee filed with the Bankruptcy Court an
amended motion to disallow the "Early Payment Fee" in the amount
of approximately $25 million -- Make Whole Payment -- asserted by
Bayside to be due pursuant to the Make Whole Provision of the Term
Loan Credit Agreement. The Committee argues that the facts and
circumstances surrounding the Make Whole Payment make clear that
it is plainly disproportionate to any actual damages that Bayside
could have reasonably expected to incur from the early payment of
the Term Loan. These include: (i) that it amounts to
more than 37% of the $67 million outstanding principal balance
under the Term Loan; (ii) that the formula employed to calculate
it differs from virtually every other make whole premium in the
market in that it is based upon the full amount of interest which
will accrue for the entire three-and-one-half-year stated term
(based on a December 2015 maturity), even though School Specialty
is permitted to prepay the Loan with only a substantially stepped-
down fixed fee after 18 months; (iii) that it assumes that
interest would accrue during the 14-month period after the likely
maturity (October 2014) of the Term Loan, and (iv) that it assumes
Bayside can only reinvest the funds it receives at a 0.78% return.
Similarly, the Fraudulent Transfer, also arising under the Make
Whole Provision, amounts to more than 39.8% of the $3 million
prepaid Term Loan mount and is plainly disproportionate to any
actual damages that Bayside could have reasonably expected to
incur from such early payment.
On April 2, 2013, the Committee filed a reply to Bayside's
objection to the Amended Motion to Disallow. Notably, the
Committee asked Bayside to stipulate that the approximately $1.2
million payment subject to the adversary proceeding be resolved as
part of the contested matter concerning the Make Whole Payment.
Bayside refused to so stipulate, forcing the Committee to file the
complaint.
The Committee and Bayside have filed redacted responses to the
other's filings to protect confidential information.
There's an April 5 hearing on the Committee's Motion to Disallow.
About School Specialty
Based in Greenville, Wisconsin, School Specialty is a supplier of
educational products for kindergarten through 12th grade. Revenue
in 2012 was $731.9 million through sales to 70% of the
country's 130,000 schools.
School Specialty and certain of its subsidiaries filed voluntary
petitions for reorganization under Chapter 11 (Bankr. D. Del.
Lead Case No. 13-10125) on Jan. 28, 2013. The petition estimated
assets of $494.5 million and debt of $394.6 million.
The Debtors are represented by lawyers at Paul, Weiss, Rifkind,
Wharton & Garrison LLP and Young, Conaway, Stargatt & Taylor, LLP.
Alvarez & Marsal North America LLC is the restructuring advisor
and Perella Weinberg Partners LP is the investment banker.
Kurtzman Carson Consultants LLC is the claims and notice agent.
The ABL Lenders are represented by lawyers at Goldberg Kohn and
Richards, Layton and Finger, P.A. The Ad Hoc DIP Lenders led by
U.S. Bank are represented by lawyers at Stroock & Stroock & Lavan
LLP, and Duane Morris LLP. The lending consortium consists of
some of the holders of School Specialty Inc.'s 3.75% Convertible
Subordinated Notes Due 2026.
The Official Committee of Unsecured Creditors appointed in the
case is represented by lawyers at Brown Rudnick LLP and Venable
LLP.
Bayside is represented by Pepper Hamilton LLP and Akin Gump
Strauss Hauer & Feld LLP.
SCHOOL SPECIALTY: Wants to Pay Fees of Potential Exit Lenders
-------------------------------------------------------------
School Specialty Inc., which is trying to exit bankruptcy under a
dual-track plan, will appear before the Bankruptcy Court in
Wilmington, Delaware, on April 11 to seek the Court's blessing to
enter into expense letters with certain potential lenders or
potential lending syndicate members to provide expense deposits to
reimburse the lenders for costs and expenses incurred in
evaluating, preparing and submitting an exit financing commitment.
In separate court filings, the Debtors seek permission to keep the
expenses cap related to the exit financing facility under seal.
The Debtors are currently pursuing a dual-track process by which
they are seeking to sell substantially all of their assets
pursuant to certain bid procedures and to reorganize pursuant to a
Chapter 11 plan. To comply with the milestones set forth in the
DIP facilities, the Debtors must, among other things, received
executed financing commitment letters by May 6, in amounts
sufficient to meet the Debtors' cash obligations under any
confirmed plan, including payment of outstanding obligations owed
under the DIP facilities as of May 31. The Debtors' failure to
comply with those milestones may trigger an event of default under
the DIP facilities.
April 11 is also the hearing date on the disclosure statement
explaining the Debtors' Chapter 11 Plan.
According to the Debtors, since February 2013, they and their
advisors, Perella Weinberg Partners have contacted 20 different
financial institutions to procure exit financing. On March 26,
the Debtors held a webcast of a management presentation to provide
a review of the reorganized business strategic and financial
projections. Over the course of March 27 and 28, the Debtors and
representatives of Perella and Alvarez & Marsal conducted
management meetings in New York with 17 different financial
institutions. The Debtors and Perella have set this week as the
deadline for interested potential lenders to submit proposals.
About School Specialty
Based in Greenville, Wisconsin, School Specialty is a supplier of
educational products for kindergarten through 12th grade. Revenue
in 2012 was $731.9 million through sales to 70% of the
country's 130,000 schools.
School Specialty and certain of its subsidiaries filed voluntary
petitions for reorganization under Chapter 11 (Bankr. D. Del.
Lead Case No. 13-10125) on Jan. 28, 2013. The petition estimated
assets of $494.5 million and debt of $394.6 million.
The Debtors are represented by lawyers at Paul, Weiss, Rifkind,
Wharton & Garrison LLP and Young, Conaway, Stargatt & Taylor, LLP.
Alvarez & Marsal North America LLC is the restructuring advisor
and Perella Weinberg Partners LP is the investment banker.
Kurtzman Carson Consultants LLC is the claims and notice agent.
The ABL Lenders are represented by lawyers at Goldberg Kohn and
Richards, Layton and Finger, P.A. The Ad Hoc DIP Lenders led by
U.S. Bank are represented by lawyers at Stroock & Stroock & Lavan
LLP, and Duane Morris LLP. The lending consortium consists of
some of the holders of School Specialty Inc.'s 3.75% Convertible
Subordinated Notes Due 2026.
The Official Committee of Unsecured Creditors appointed in the
case is represented by lawyers at Brown Rudnick LLP and Venable
LLP.
Bayside is represented by Pepper Hamilton LLP and Akin Gump
Strauss Hauer & Feld LLP.
SECURUS HOLDINGS: S&P Affirms 'B' CCR; Outlook Stable
-----------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Securus Holdings Inc. The outlook is stable. At
the same time, S&P assigned a 'B' issue-level rating and '3'
recovery rating to subsidiary Securus Technologies Holdings Inc.'s
first-lien term loan and $50 million revolving credit, and
assigned its 'CCC+' issue-level rating and '6' recovery rating to
its second-lien term loan.
"Our ratings on Securus Holdings Inc. reflect the company's niche
focus on a mature prison phone market, which results in our
assessment of a 'weak' business risk profile," said Standard &
Poor's credit analyst Catherine Cosentino. S&P also considers the
financial risk profile as "highly leveraged," with debt to EBITDA
pro forma for the acquisition and refinancing of about 7.2x.
These risks overshadow the company's contracted recurring revenue
stream, high barriers to competitive entry, relatively low but
improving EBITDA margins, and positive free operating cash flow
(FOCF).
The stable outlook incorporates S&P's expectation that Securus
will continue to increase revenue and EBITDA in the low- to mid-
single digit range, resulting in EBITDA margins remaining steady
at just over 20%. However, S&P's outlook also takes into
consideration the limited industry growth potential and the
likelihood that debt levels will remain high.
For an upgrade to occur, leverage would have to improve to 4.5x or
lower, on a sustained basis, which S&P views as unlikely, given
its assessment of the company's financial policy as aggressive,
with debt-financed dividends or acquisitions likely.
Conversely, S&P could lower the rating over the next year if
inmate call volumes drop, either because of contract losses to
competitors without offsetting wins or because of unanticipated
adverse macroeconomic trends. A drop in call volumes or an
unforeseen, dramatic rise in commission rates could result in
EBITDA margins declining. If EBITDA margins were to decline to
the midteens as a result of these factors, S&P believes the
company would be unable to generate positive FOCF, and could
result in a downgrade.
SHANGRI-LA BISTRO: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Shangri-la Bistro Restaurant & Bar, LLC
8030 Gateway Blvd. East
El Paso, TX 79907
Bankruptcy Case No.: 13-30535
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Western District of Texas (El Paso)
Judge: H. Christopher Mott
Debtor's Counsel: Sidney J. Diamond, Esq.
DIAMOND LAW
3800 N Mesa B-3
El Paso, TX 79902
Tel: (915) 532-3327
Fax: (915) 532-3355
E-mail: usbc@sidneydiamond.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 20 largest unsecured
creditors, filed together with the petition, is available for free
at http://bankrupt.com/misc/txwb13-30535.pdf
The petition was signed by Graciela Cisneros de Wong, president.
SPECTRE PERFORMANCE: Court Dismisses Chapter 11 Case
----------------------------------------------------
The Hon. Mark Houle of the U.S. Bankruptcy Court for the Central
District of California has dismissed Spectre Performance, Inc.'s
Chapter 11 case.
On Dec. 21, 2012, the Debtor sought the dismissal of its case,
saying that it will sell substantially all of its assets and there
is no further benefit to administration of the Debtor's estate.
The Debtor said in a court filing dated Dec. 21, 2012, that K&N
Engineering, Inc., will acquire substantially all of the assets of
the Debtor. At closing, K&N will be deemed to have released any
claims, liens, and causes of action, among other things, against
the Debtor's bankruptcy estate. The closing of the sale to K&N
was scheduled for Jan. 2, 2013.
The Debtor stated that upon receipt of the $8 million purchase
from K&N1, the escrow holder will immediately pay Comerica Bank in
full based on the outstanding loans to the Debtor and secured by
assets of the Debtor. Although the balance due to Comerica on the
secured line of credit changes each business day, the Debtor
projected that the amount that will be paid to Comerica from
escrow will be $2,793,080. The Debtor estimated that the Debtor
will have no secured creditors and will have approximately
$5,206,920 available to pay allowed creditor claims. According to
the Debtor, the distribution of the Available Funds will enable
the Debtor to pay post-petition vendors, employees, administrative
creditors, and others much faster than proposing a liquidating
chapter 11 plan.
The Debtor has no business operations and there are no jobs that
would be preserved by a continuation of the bankruptcy proceeding.
The Debtor has no employees and only Patricia Schaefer has
remained to assist the Debtor with the wind down of its affairs
such as preparation of final monthly operating reports.
On Feb. 1, 2013, the Court entered an order (1) approving the
distribution procedures; (2) authorizing assumption of unexpired
leases and executory contracts; and (3) approving procedure for
dismissal of voluntary Chapter 11 Petition.
About Spectre Performance
Spectre Performance, formerly known as Spectre Industries, filed a
Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-21890) in
Riverside, California, on May 14, 2012. The Company incurred
significant legal costs in defending against lawsuits alleging
false advertising in connection with the marketing and sale of the
Company's performance automotive air filters and air intake
systems.
Ontario, California-based Spectre disclosed $10.2 million in
assets and $17.7 million in liabilities. Secured claims total
$3.7 million.
Amir Rosenbaum founded the company in 1983 by selling hose
covering NylaBraid. Now the company is a manufacturer of
performance racing autoparts. Spectre Performance --
http://www.spectreperformance.com/-- makes air and fuel
accessories, including cold air intake systems to pack cool
air to the engine, fuel lines and hoses for plumbing the
engine, and chrome hardware and valve covers for dressing
the bay.
Judge Mark D. Houle presides over the case. The petition was
signed by Amir Rosenbaum, president.
According to court filings, the Debtor expects that funds will be
available for distribution to unsecured creditors.
Prepetition lender Comerica Bank is represented in the case by
Reed Waddell, Esq., at Frandzel, Robins, Bloom & Csato LLC.
The U.S. Trustee for Region 16 appointed three persons to serve on
the Official Committee of Unsecured Creditors in the Debtor's
bankruptcy case.
SOUTHERN ONE: Has Nod to Hire DFW Lee & Associates as Broker
------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas has
granted Southern One Twenty One Investments, Ltd., authorization
to employ George Tanghongs, CCIM, of DFW Lee & Associates, L.P. as
broker of record for the Debtor.
As reported by the Troubled Company Reporter on April 3, 2013, the
Debtor said that it is necessary to retain a broker immediately
for the purpose of closing on a pending offer to purchase a parcel
of the Debtor's property -- a tract of raw land consisting of
approximately 80 acres in the City of Allen, Collin County, Texas,
and situated on Highway 121 and Chelsea Road -- and performing
other brokerage services as may be necessary and appropriate in
the Debtor's bankruptcy case.
About Southern One
Southern One Twenty One Investments, Ltd., filed a Chapter 11
petition (Bankr. E.D. Tex. Case No. 12-43311) in Sherman, Texas,
on Dec. 3, 2012. Nicole L. Hay, Esq., at Hiersche Hayward
Drakeley & Urbach P.C., in Addison, Texas, serves as counsel to
the Debtor. The Debtor, a Single Asset Real Estate as defined in
11 U.S.C. Sec. 101(51B), estimated assets and liabilities of at
least $10 million.
The Dallas-based company said in a filing that its principal asset
comprises almost 81 acres near Highway 121 and Chelsea Boulevard
in Allen, Texas. The property is close to a shopping mall.
SPRINGMORE II: Involuntary Chapter 11 Case Summary
--------------------------------------------------
Alleged Debtor: Springmore II, LLC
aka Travel Lodge
140 Lithia Road
Wytheville, VA 24382
Case Number: 13-50064
Involuntary Chapter 11 Petition Date: April 1, 2013
Court: Southern District of West Virginia (Beckley)
Judge: Ronald G. Pearson
Petitioner's Counsel: Joe M. Supple, Esq.
SUPPLE LAW OFFICE, PLLC
801 Viand Street
Point Pleasant, WV 25550
Tel: (304) 675-6249
Fax: (304) 675-4372
E-mail: supplelawoffice@yahoo.com
Springmore II, LLC's petitioners:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Bettye J. Morehead Operating Loan $65,000
Box 3 Suite 1B
Bluefield, WV 24701
Brown, Edwards & Co. Accounting $32,515
P. O. Box 1697
Bluefield, WV 24701-1697
DBK Investments & Operating Loan $145,000
Development Corporation
1939 Harper Road
Beckley, WV 25801
SPRINT NEXTEL: S&P Retains 'B+' Corp. Credit Rating on CreditWatch
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'B+' corporate
credit and other ratings on Overland Park, Kan.-based wireless
carrier Sprint Nextel remain on CreditWatch, where they were
placed with positive implications on Oct. 11, 2013. The company
signed an agreement to sell a 70% stake to Japan-based SoftBank
Corp. for about $20.1 billion, which would include an $8 billion
cash infusion. The companies expect the transaction to close in
the second quarter of 2013.
The ultimate corporate credit rating on Sprint Nextel will depend
on several factors, including:
-- S&P's assessment of its stand-alone credit profile under
SoftBank ownership;
-- S&P's view of the strategic relationship between Sprint
Nextel and SoftBank;
-- Sprint Nextel's proposed acquisition of the remaining stake
in wireless services provider Clearwire Corp. that it does
not already own; and
-- The corporate credit rating on SoftBank, which Standard &
Poor's expects to lower to 'BB+' from 'BBB' upon completion
of the proposed acquisition, based on what S&P would
consider SoftBank's "satisfactory" business risk profile and
a "significant" financial risk profile.
"We expect to resolve the CreditWatch listing when the transaction
closes, although we also expect to provide more clarity on the
ultimate ratings outcome as the companies make available more
information on financial policy and strategic direction," said
Standard & Poor's credit Allyn Arden.
An important factor in S&P's analysis would be the degree of
extraordinary financial support it would expect from the higher-
rated SoftBank in a stress scenario at Sprint Nextel. While S&P
do not expect to equalize the ratings of the two companies, it
could impute some degree of extraordinary support, which could
lead to a higher rating on Sprint Nextel than it would receive on
a stand-alone basis.
STOCKTON, CA: Eligible for Chapter 9 But Roadblocks Loom
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the bankruptcy judge needed two hours April 1 to
deliver his opinion explaining why the city of Stockton,
California, is eligible for municipal bankruptcy in Chapter 9.
The report relates that creditors and bondholders objected,
alleging the city hadn't negotiated in good faith before
bankruptcy. U.S. Bankruptcy Judge Christopher M. Klein in
Sacramento, California, rejected the argument, noting that some
bondholders walked out of talks. The judge also said there was no
requirement that the city demand concessions before bankruptcy
from California Public Employees' Retirement System.
The report notes that although Stockton now has the green light to
pursue creditor and court approval of a Chapter 9 plan, the judge
pointed out how the city may meet a roadblock if bondholders argue
successfully that a plan is fatally flawed on the ground of unfair
discrimination absent concessions on pensions. The bankruptcy
judge held a trial last week where he took testimony on objections
to the Chapter 9 petition.
Unlike Chapter 11 for companies, Chapter 9 requires the judge to
make a threshold determination on good faith before a municipality
can proceed to the stage of proposing a plan.
Test Case
Maria Chutchian of BankruptcyLaw360 reported that now that
Stockton, Cal., has a bankruptcy judge's blessing to move forward
with its Chapter 9 proceedings, experts say the city's daunting
task of drafting a confirmable restructuring plan will put to test
an insolvent municipality's ability to puncture the California
pension system.
The report related that Stockton, in what is the largest municipal
bankruptcy the country has ever seen, is trying to avoid reducing
its $900 million liability to the California Public Employees'
Retirement System, its largest creditor.
About Stockton, Calif.
The City of Stockton, California, filed a Chapter 9 petition
(Bankr. E.D. Cal. 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., and John
W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The
petition was signed by Robert Deis, city manager.
Mr. Levinson also represented the city of Vallejo, Cal. in its
2008 bankruptcy. Vallejo filed for protection under Chapter 9
(Bankr. E.D. Cal. 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.
SUNTECH POWER: Unit Bankruptcy Had Roots in Deadbeat Customers
--------------------------------------------------------------
Linda Sandler, writing for Bloomberg News, reported that Suntech
Power Holdings Co. (STP), forced to put its Chinese solar unit
into bankruptcy last month, began that slide into insolvency in
2009 when customers linked to the founder couldn't pay their bills
and the company booked the sales as revenue anyway, regulatory
filings show.
The Bloomberg report said seven buyers backed by an investment
firm funded by Suntech and its founder, Shi Zhengrong, accounted
for 29 percent of Suntech's uncollected bills as 2009 ended,
according to correspondence between the solar company and the U.S.
Securities and Exchange Commission. Those customers hadn't yet
received enough money to proceed with their projects and Suntech
(STP), once the world's largest solar-panel maker gave them more
time to pay, the letters show.
According to Bloomberg, the SEC correspondence provides clues to
Suntech's prospects and a road map to business practices that left
the company vulnerable to a 560 million-euro ($720 million) fraud
and a $541 million bond default. Anyone with Internet access could
have learned that Suntech was booking revenue from sales to
related companies with unbuilt projects in the fledgling solar
industry, while also guaranteeing loans to those related
companies. It relied on a former sales agent to secure one
guarantee with bonds it never saw.
"Digging through SEC correspondence is one of the most important
things an investor should do before investing in any company --
especially in companies that are higher risk or more opaque,"
short seller Carson Block of Muddy Waters LLC, whose analyst
reports starting in November 2010 triggered $7 billion in losses
for Chinese stocks in two years, told Bloomberg.
About Suntech
Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP)
produces solar products for residential, commercial, industrial,
and utility applications. With regional headquarters in China,
Switzerland, and the United States, and gigawatt-scale
manufacturing worldwide, Suntech has delivered more than
25,000,000 photovoltaic panels to over a thousand customers in
more than 80 countries.
As reported by the TCR on March 20, 2013, Suntech Power Holdings
Co., Ltd., has received from the trustee of its 3% Convertible
Notes a notice of default and acceleration relating to Suntech's
non-payment of the principal amount of US$541 million that was due
to holders of the Notes on March 15, 2013. That event of default
has also triggered cross-defaults under Suntech's other
outstanding debt, including its loans from International Finance
Corporation and Chinese domestic lenders.
SUPERMEDIA INC: Proposes Cleary Gottlieb as Counsel
---------------------------------------------------
At a hearing on April 12, SuperMedia Inc. and its affiliates will
seek bankruptcy court approval of their application to employ
Cleary Gottlieb Steen & Hamilton LLP as counsel, nunc pro tunc to
the Petition Date.
Cleary Gottlieb has represented and advised the Debtors regarding
various matters including corporate law, mergers and acquisitions,
restructuring and bankruptcy since September 2011. Cleary
Gottlieb was involved, on behalf of SuperMedia, in the negotiation
of the transactions contemplated by the proposed Chapter 11 plan
with Dex One Corp. and the steering committee of the Debtors'
senior secured lenders, among others. Since the engagement, the
Debtors have paid the firm $2.24 million in fees and $8,300 in
disbursement in the aggregate.
Sean A. O'Neal will be the lead partner in the engagement.
Cleary Gottlieb's hourly rates, subject to periodic adjustments,
are:
Partners $790 to $1,050
Counsel $705 to $870
Senior Attorneys $690 to $805
Associates $395 to $680
International Lawyers $355
Law Clerks $320
Summer Associates $320
Paralegals $220 to $305
The firm received an evergreen retainer in the amount of $500,000
from the Debtors for services to be rendered in connection with
the Chapter 11 cases. Objections to the application are due
April 5.
About SuperMedia
Headquartered in D/FW Airport, Texas, SuperMedia Inc., formerly
known as Idearc, Inc., is a yellow pages directory publisher in
the United States. Its portfolio includes the Superpages
directories, Superpages.com, digital local search resource on both
desktop and mobile devices, the Superpages.com network, which is a
digital syndication network, and its Superpages direct mailers.
SuperMedia is the official publisher of Verizon, FairPoint and
Frontier print directories in the markets in which these companies
are the incumbent local telephone exchange carriers. Idearc was
spun off from Verizon Communications, Inc., in 2006.
At Dec. 31, 2012, SuperMedia had approximately 3,200 employees, of
which approximately 950 or 30% were represented by unions.
SuperMedia and three affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 13-10545) on March 18, 2013, to
effectuate a merger of equals with Dex One Corp. SuperMedia
disclosed total assets of $1.4 billion and total debt of $1.9
billion.
Morgan Stanley & Co. LLC is acting as financial advisors to
SuperMedia, and Cleary Gottlieb Steen & Hamilton LLP and Young
Conaway Stargatt & Taylor, LLP are acting as its legal counsel.
Fulbright & Jaworski L.L.P is special counsel. Chilmark Partners
Is acting as financial advisor to SuperMedia's board of directors.
Epiq Systems serves as claims agent.
This is also SuperMedia's second stint in Chapter 11. Idearc and
its affiliates filed for Chapter 11 protection (Bankr. N.D. Tex.
Lead Case No. 09-31828) in March 2009 and emerged from bankruptcy
in December 2009, reducing debt from more than $9 billion to $2.75
billion.
SUPERMEDIA INC: Taps Young Conaway as Co-Counsel
---------------------------------------------------
At a hearing on April 12, SuperMedia Inc. and its affiliates will
seek approval of their application to employ Young Conaway
Stargatt & Taylor LLP as bankruptcy co-counsel, nunc pro tunc to
the Petition Date.
The principal attorneys and paralegal presently designated to
represent the Debtors are:
Hourly Rate
-----------
Pauline K. Morgan $730
Patrick A. Jackson $400
Ashle E. Markow $285
Dennis Mason (Paralegal) $235
Young Conaway was retained to represent the Debtors in connection
with the Chapter 11 cases pursuant to an engagement agreement
dated Dec. 6, 2012. Young Conaway received a $50,000 retainer.
Objections are due April 5.
About SuperMedia
Headquartered in D/FW Airport, Texas, SuperMedia Inc., formerly
known as Idearc, Inc., is a yellow pages directory publisher in
the United States. Its portfolio includes the Superpages
directories, Superpages.com, digital local search resource on both
desktop and mobile devices, the Superpages.com network, which is a
digital syndication network, and its Superpages direct mailers.
SuperMedia is the official publisher of Verizon, FairPoint and
Frontier print directories in the markets in which these companies
are the incumbent local telephone exchange carriers. Idearc was
spun off from Verizon Communications, Inc., in 2006.
At Dec. 31, 2012, SuperMedia had approximately 3,200 employees, of
which approximately 950 or 30% were represented by unions.
SuperMedia and three affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 13-10545) on March 18, 2013, to
effectuate a merger of equals with Dex One Corp. SuperMedia
disclosed total assets of $1.4 billion and total debt of $1.9
billion.
Morgan Stanley & Co. LLC is acting as financial advisors to
SuperMedia, and Cleary Gottlieb Steen & Hamilton LLP and Young
Conaway Stargatt & Taylor, LLP are acting as its legal counsel.
Fulbright & Jaworski L.L.P is special counsel. Chilmark Partners
Is acting as financial advisor to SuperMedia's board of directors.
Epiq Systems serves as claims agent.
This is also SuperMedia's second stint in Chapter 11. Idearc and
its affiliates filed for Chapter 11 protection (Bankr. N.D. Tex.
Lead Case No. 09-31828) in March 2009 and emerged from bankruptcy
in December 2009, reducing debt from more than $9 billion to $2.75
billion.
SUPERMEDIA INC: Taps Fulbright & Jaworski as Special Counsel
------------------------------------------------------------
SuperMedia Inc. and its affiliates seek approval of their
application to hire Fulbright & Jaworski L.L.P. as special
counsel, nunc pro tunc to the Petition Date.
Fulbright has a long-standing relationship with the Debtors and
has substantial institutional knowledge about their businesses and
financial affairs. Over the last six years, Fulbright has served
as the Debtors' corporate, securities, finance, benefits, tax and
litigation counsel -- and also served as their bankruptcy counsel
in their successful 2009 chapter 11 proceedings. During the past
year, the firm received payments totaling $4.56 million from the
Debtors.
As such, the Debtors seek authority to retain Fulbright as their
special counsel for general corporate, finance, tax, litigation,
intellectual property, benefits and employment matters.
Although "disinterestedness" is not required of professionals
employed under 11 U.S.C. Sec. 327(e), the Debtors believe that
Fulbright and each of its attorneys are "disinterested persons" as
the term is defined in Sec. 101(14).
The Debtors advanced $500,000 Fulbright as retainer.
About SuperMedia
Headquartered in D/FW Airport, Texas, SuperMedia Inc., formerly
known as Idearc, Inc., is a yellow pages directory publisher in
the United States. Its portfolio includes the Superpages
directories, Superpages.com, digital local search resource on both
desktop and mobile devices, the Superpages.com network, which is a
digital syndication network, and its Superpages direct mailers.
SuperMedia is the official publisher of Verizon, FairPoint and
Frontier print directories in the markets in which these companies
are the incumbent local telephone exchange carriers. Idearc was
spun off from Verizon Communications, Inc., in 2006.
At Dec. 31, 2012, SuperMedia had approximately 3,200 employees, of
which approximately 950 or 30% were represented by unions.
SuperMedia and three affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 13-10545) on March 18, 2013, to
effectuate a merger of equals with Dex One Corp. SuperMedia
disclosed total assets of $1.4 billion and total debt of $1.9
billion.
Morgan Stanley & Co. LLC is acting as financial advisors to
SuperMedia, and Cleary Gottlieb Steen & Hamilton LLP and Young
Conaway Stargatt & Taylor, LLP are acting as its legal counsel.
Fulbright & Jaworski L.L.P is special counsel. Chilmark Partners
Is acting as financial advisor to SuperMedia's board of directors.
Epiq Systems serves as claims agent.
This is also SuperMedia's second stint in Chapter 11. Idearc and
its affiliates filed for Chapter 11 protection (Bankr. N.D. Tex.
Lead Case No. 09-31828) in March 2009 and emerged from bankruptcy
in December 2009, reducing debt from more than $9 billion to $2.75
billion.
TCAST COMMUNICATIONS: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: TCAST Communications, Inc.
25115 Avenue Stanford
Suite B-210
Valencia, CA 91355
Bankruptcy Case No.: 13-18508
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Neil W. Bason
Debtor's Counsel: Joseph A. Eisenberg, Esq.
JEFFER MANGELS BUTLER & MITCHELL LLP
1900 Ave of The Stars, 7th Flr.
Los Angeles, CA 90067
Tel: (310) 785-5375
Fax: (310) 785-5357
E-mail: jae@jmbm.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Lee J. Howard, president.
TOLL BROTHERS: Moody's Assigns Ba1 Rating to $300MM Notes Issue
---------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Toll Brothers
Finance Corp.'s proposed $300 million senior unsecured notes due
2023, proceeds of which will be used for general corporate
purposes, including possible repayment of outstanding debt. In the
same rating action, Moody's affirmed the Ba1 corporate family
rating, Ba1-PD probability of default rating, Ba1 rating for the
company's existing senior unsecured notes, and SGL-1 speculative
grade liquidity assessment. The rating outlook is stable.
The following rating actions were taken:
Issuer: Toll Brothers Finance Corp.:
Proposed $300 million senior unsecured notes due 2023, assigned
Ba1, LGD-4, 53%;
Existing senior unsecured notes, affirmed at Ba1, LGD-4, 53%;
Rating outlook is stable.
Issuer: Toll Brothers, Inc.:
Corporate family rating, affirmed Ba1;
Probability of default rating, affirmed Ba1-PD;
Speculative grade liquidity assessment, affirmed SGL-1;
Rating outlook is stable.
Toll Brothers Finance Corp. is the issuing entity for the senior
unsecured notes of Toll Brothers, Inc. The proposed new senior
unsecured notes as well as the existing issues of senior unsecured
notes are guaranteed both by Toll Brothers, Inc. and by the
latter's principal operating subsidiaries. The proposed new notes
are pari passu with the existing senior unsecured notes. The
company's adjusted homebuilding debt to capitalization ratio is
expected to increase to 44.1% from 41% at January 31, 2013, pro
forma for the proposed note offering.
Ratings Rationale:
The affirmation of Toll Brothers' ratings reflects the company's
improving operating results and credit metrics, supported by
positive industry fundamentals. Over the past three years, the
company has delivered increasing gross margins, and during nine of
the last 11 quarters, it generated positive net income. In the
fiscal year ended October 31, 2012, the company was able to
reverse $395 million of its deferred tax valuation allowance,
which expanded its net worth. Going forward, Moody's expects Toll
Brothers to continue growing its net worth through increasing
earnings retention, and to continue generating improvement in many
of its operating and credit metrics.
The Ba1 corporate family rating incorporates the company's solid
liquidity profile, as captured in its SGL-1 rating and its
performance in its high-density, mid- and high-rise tower
business, which has exceeded Moody's previous expectations. The
rating is also supported by Toll Brothers' leadership position in
its upper-end homebuilding niche, and an ability to greatly
restrict, or even shut off entirely, its land spend for relatively
long periods of time without incurring the need to race to catch
up when the market turns. This latter characteristic permits the
company generally to control how much cash flow it wishes to
generate or even whether it wishes the figure to be positive or
not.
However, Moody's also recognizes the additional risk in the
company's business profile associated with the more volatile and
capital intensive high-rise and high-density mid-rise business,
the Gibraltar Capital business, and with its new investments in
the apartment management business. Additionally, the company is
likely to continue generating negative cash flow from operations
due to land investments.
The stable rating outlook reflects Moody's expectation that Toll
Brothers will continue to maintain a conservative capital
structure, an unrestricted cash and investments balance of at
least $500 million, and tight fiscal discipline with regard to its
high-rise and high-density mid-rise business, to Gibraltar
Capital, and to its investments in the apartment management
business. Additionally, Moody's expects that the company will
continue generating positive net income and continue improving its
operating and credit metrics.
Toll Brothers carries a speculative-grade liquidity rating of SGL-
1, indicating that its liquidity position for the next 12-18
months is expected to be very good. The SGL rating takes into
consideration internal and external liquidity, covenant
compliance, and the availability of alternate liquidity sources,
and tends to be more volatile than long-term ratings. As of
January 31, 2013, the company had about $1.6 billion of available
liquidity, consisting of $794 million of unrestricted cash and
investments and $819 million available under its $885 million
senior unsecured revolving credit facility due in October 2014.
Headroom under its principal bank covenants is comfortable to
substantial.
The ratings could benefit if Moody's were to project that the
company's credit metrics will begin to resemble those of an
investment-grade homebuilder. Specifically, Moody's would need to
see debt leverage remaining below 40%, and strong trends toward
interest coverage rising to the mid-single-digit range, gross
margins improving to above 23%, and total revenue and net income
migrating steadily toward pre-recession levels.
Because the company, like its peers, is highly dependent on
consumer confidence and employment levels, the outlook could be
lowered if the economy were to enter into a double-dip downturn,
leading to a weakening in Toll Brothers' gross margins and net
income generation. Beyond that, the company is essentially its own
master of whether or not it wishes to improve, maintain, or
sacrifice its ratings. If it chooses to invest significant amounts
of cash on lots, the tower business, Gibraltar Capital, the
apartment management business, and/or share repurchases, and its
homebuilding debt leverage moves above 50% on a sustained basis,
then the ratings will likely come under pressure.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Based in Horsham, Pennsylvania, Toll Brothers, Inc. is the
nation's leading builder of luxury homes, serving move-up, empty-
nester, and active adult buyers in 19 states and four regions
around the country. Total revenues and pretax income for the
trailing twelve month period ending January 31, 2013 were $2.0
billion and $128 million, respectively.
TOWER AUTOMOTIVE: New $275MM Term Loan Gets Moody's 'B1' Rating
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Tower Automotive
Holdings USA, LLC's new $275 million senior secured term loan.
Holdings USA is a wholly-owned indirect subsidiary of Tower
international, Inc. In a related action Moody's affirmed Holdings
USA's Corporate Family and Probability of Default Ratings, at B2
and B2-PD, respectively.
The proceeds from the new senior secured term loan are expected to
be used to fund Tower's recently announced partial tender offer
and subsequent redemption totaling $215.6 million of Holdings
USA's outstanding 10.625% Senior Secured Notes due 2017, reduce
$25 million of foreign indebtedness, and pay related premiums and
transaction expenses. The Speculative Grade Liquidity Rating is
SGL-3. The rating outlook is stable.
The following ratings were assigned:
Tower Automotive Holdings USA, LLC
B1 (LGD3, 43%), to the new $275 million senior secured term
loan B;
SGL-3, Speculative Grade Liquidity Rating
The following ratings were affirmed:
Tower Automotive Holdings USA, LLC
Corporate Family Rating, at B2;
Probability of Default Rating, at B2-PD;
$362 million (current amount) of 10.625% Senior Secured Notes
due 2017, at B1 (LGD3, 43%)
The $150 million asset based revolving credit facility is not
rated by Moody's.
Rating Rationale
The B2 Corporate Family Rating incorporates Tower's profitability
and credit metrics which are consistent with the B rating category
under Moody's Global Auto Supplier Methodology combined with the
company's strong competitive position within the auto parts
supplier industry. For 2012 Tower's EBIT margin was about 4.5%
(including Moody's standard adjustments) and EBIT/Interest was
about 1.3x. Following the partial tender and redemption of the
10.625% notes, pro forma EBIT/interest for 2012 is expected to
improve to about 1.6x.
Tower's competitive position is anticipated to continue to benefit
from a diversified customer base, both geographically and across
platforms. While the company's largest customer in 2012 was VW at
23% of revenue, followed by Ford at 19%, no other customer was
above 9% of revenues. The company's revenues in 2012 also were
balanced between small cars at 40% of revenues, large cars at 19%,
and other-light trucks/North American framed vehicles at 41%.
However, Tower's exposure to European markets (37% of 2012
revenues), where automotive demand is expected to continue to
weaken in 2013, is expected to limit the company's earnings growth
prospects.
The stable outlook reflects Moody's belief that Tower's credit
metrics should continue to migrate to higher levels within the
assigned rating range. Management is anticipating that increased
volume through newly added manufacturing capacity and operational
efficiencies to more than offset contractual price downs. In
addition management has announced that about $30 million of
customer tooling reimbursements are expected in the fourth quarter
of 2013, which along with operating efficiencies, should return
the company to positive free cash flow generation.
Tower is anticipated to have an adequate liquidity profile over
the next twelve months supported by cash on hand and modest
expected free cash flow generation. Cash balances as of December
31, 2012 were $113.9 million. Liquidity also is supported by a
$150 million asset based revolving credit facility which matures
in June 2016. Availability under the revolving credit facility at
December 31, 2012 was $85.6 million after $39 million of
borrowings. The primary financial covenant under the asset based
revolver is a springing fixed charge covenant of 1.0 to 1 when
availability falls below the greater of 10% of the total facility
commitment and $12.5 million. The senior secured term loan is
expected to have maximum net leverage coverage ratio test.
Alternate liquidity is expected to be limited as essentially all
of the company's domestic assets will secure the asset based
revolver and the senior secured term loan. As of year-end 2012,
Tower maintained about $74 million in short-term foreign financing
and factoring facilities. While these lines have been largely
refinanced in the past, their short-term maturity profile poses
refinancing risk under Moody's Speculative Grade Liquidity
analysis.
Future events that have the potential to drive Tower's outlook or
rating higher include: consistent free cash flow generation,
improvement in operating performance resulting in Debt/EBITDA
maintained below 4.0x, and EBIT/Interest coverage inclusive of
restructuring charges approximating 2.0x.
Future events that have the potential to drive Tower's outlook or
rating lower include regional weaknesses in global automotive
production which are not offset by successful restructuring
actions resulting in Debt/EBITDA above 4.5x, EBIT/Interest being
maintained at 1.0x, or deterioration in the company's liquidity
position.
The principal methodology used in this rating 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.
Tower International, Inc. headquartered in Livonia, Michigan,
manufactures engineered structural metal components and assemblies
primarily serving automotive original equipment manufacturers. The
company also manufactures body-structure stampings, frame and
other chassis structures, as well as complex welded assemblies,
for small and large cars, crossovers, pickups and SUVs. Revenues
in 2012 approximated $2.1 billion.
TWIN DEVELOPMENT: Hinds & Shankman Wants to Withdraw as Counsel
---------------------------------------------------------------
Hinds & Shankman, LLP, counsel of record for Twin Development,
LLC, has asked the U.S. Bankruptcy Court for the Southern District
of California to allow the Firm to withdraw as counsel of the
Debtor, saying that the Debtor failed to cooperate reasonably
regarding the administration of the case.
Hinds claims that the Debtor (i) breached the terms of the signed
engagement letter by failing to pay the required retainer and
security deposit for the engagement, even though the Firm already
performed a substantial amount of work in connection with the
Chapter 11 filing and stabilizing the case; (ii) failed to supply
the Firm with data and financial records suitable for use to
prepare the final schedules, statement of financial affairs, to
meet the requirements of the Code, Rules, and Guidelines of the
Office of the U.S. Trustee; (iii) failed to retain consultants to
assist in the prosecution of the case; and (iv) failed to retain
required vendors.
The Debtor, according to the Firm, has been given the opportunity
to execute a substitution of attorney form and has refused to do
so.
Twin Development, LLC, filed a Chapter 11 petition (Bankr. S.D.
Cal. Case No. 13-02719) on March 19, 2013. The petition was
signed by Wallace Benwart as manager. The Debtor scheduled assets
of $55,800,000 and scheduled liabilities $38,027,600.
UPH HOLDINGS: Telecom Owner Files Chapter 11 in Texas
-----------------------------------------------------
UPH Holdings Inc., the owner of several telecommunications
providers, has sought bankruptcy protection in Austin, Texas.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that bankruptcy in part resulted from debt predating the
merger with Pac-West Telecomm Inc., a competitive local exchange
carrier with operations in 31 states. Pac-West is also in
bankruptcy as are other UPH operating subsidiaries.
Assets and debt are both $17 million. The largest secured
creditor is Hercules Technology II LP, owed $10.5 million.
Bankruptcy was the result of what court papers called "increasing
downward price pressure."
UPH Holdings filed a Chapter 11 petition (Bankr. W.D. Tex. Case
No. 13-bk-10570) on March 28, 2013. Jennifer Francine Wertz,
Esq., and Patricia Baron Tomasco, Esq., at Jackson Walker, L.L.P.,
serve as counsel.
The case summary was reported in the April 2, 2013 edition of the
TCR.
VITRO SAB: NY High Court Won't Revive Suit Against Hedge Funds
--------------------------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that the highest
court in New York on Tuesday denied Mexican glassmaker Vitro SAB
de CV's bid to revive its breach of contract suit accusing
Aurelius Capital Management LP and other bondholders of divulging
confidential information shortly before its restructuring.
The report related that the Court of Appeals of the State of New
York gave no explanation for its denial. However, Vitro might have
a chance to amend its original complaint before a lower court.
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 2012, 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.
In early March 2013, Vitro announce a settlement that will end all
litigation between Vitro and certain creditors in Mexico and the
United States over the past two years.
WESTFORD PROPERTIES: Case Summary & 6 Unsecured Creditors
---------------------------------------------------------
Debtor: Westford Properties LLC
998 NE 167th Street
North Miami Beach, FL 33162
Bankruptcy Case No.: 13-17460
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Judge: Laurel M. Isicoff
Debtor's Counsel: David C. Rubin, Esq.
6800 SW 40th St., #352
Miami, FL 33155
Tel: (305) 804-1898
E-mail: david3051@aol.com
Scheduled Assets: $721,898
Scheduled Liabilities: $1,371,381
A copy of the Company's list of its six largest unsecured
creditors, filed together with the petition, is available for free
at http://bankrupt.com/misc/flsb13-17460.pdf
The petition was signed by Emilie Kalam, managing member.
WINDSOR HOLDINGS: Case Summary & 3 Unsecured Creditors
------------------------------------------------------
Debtor: Windsor Holdings, LLC
2621 Green River Road, #105-232
Corona, CA 92882
Bankruptcy Case No.: 13-15883
Chapter 11 Petition Date: April 1, 2013
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Wayne E. Johnson
Debtor's Counsel: Thomas C. Corcovelos, Esq.
CORCOVELOS LAW GROUP
1001 Sixth St., Ste. 150
Manhattan Beach, CA 90266
Tel: (310) 374-0116
Fax: (310) 318-3832
E-mail: corforlaw@corforlaw.com
Scheduled Assets: $7,000,000
Scheduled Liabilities: $3,088,378
A copy of the Company's list of its three largest unsecured
creditors, filed together with the petition, is available for free
at http://bankrupt.com/misc/cacb13-15883.pdf
The petition was signed by Larry Williams, manager.
WOODCREST COUNTRY CLUB: Set for May 20 Auction
----------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Woodcrest Country Club, a member-owned golf club in
Cherry Hill, New Jersey, will be sold at auction on May 20, with
the $6.25 million initial offer coming from a group of investors
named Cherry Hill Land Associates LLC.
The historic Union League Club in Philadelphia intends to bid for
the club, according to a report by the Philadelphia Inquirer.
Bloomberg News reports that competing bids are due initially on
May 20, under auction and sale procedures approved by the
bankruptcy court April 2. The sale will be approved as part of
approval of a Chapter 11 reorganization plan yet to be filed.
The trustee, Bonnie Glantz Fatell, said in a court filing she
hopes the plan will be filed "shortly." It is to include a
settlement with Sun where the lender will allow some sale proceeds
for use in paying claims and costs that must be paid in full for
approval of a plan, along with some distribution for unsecured
creditors. The trustee said she believes the $6.25 million offer
represents market value.
About Woodcrest Country Club
Woodcrest Country Club, a member-owned golf club in Cherry Hill,
New Jersey, filed for Chapter 11 protection (Bankr. D.N.J. Case
No. 12-22055) on May 9 in Camden, New Jersey.
The Debtor estimated up to $10 million in assets and liabilities
in excess of $10 million.
The golf course, which opened in the early 1930s, has $10.7
million in secured debt mostly owed on mortgages to Sun National
Bank of Vineland, New Jersey. About $6.37 million of those claims
are unsecured. There is another $1.5 million owing to trade
suppliers.
* $25 Bankruptcy Claims Transfer Fee to Take Effect May 1
---------------------------------------------------------
Federal bankruptcy courts will institute a new $25 fee for filing
evidence of claims transfers, transactions in which bankruptcy
claims are sold by one creditor to another, usually as part of a
speculative investment. The fee, approved in September by the
Judicial Conference of the United States, will take effect May 1.
Bankruptcy claim transfers are a thriving, if little-known, part
of the bankruptcy process, and constitute a multi-billion-dollar
industry.
Although bankruptcy claims can be purchased by individuals, they
are more commonly purchased by commercial entities, which
routinely buy large numbers of claims, often at a significant
discount. The claims are purchased from creditors who are willing
to take a reduced price to have cash in hand or are concerned
about how their claims will fare in the bankruptcy process.
The entities purchasing the bankruptcy claims typically seek to
make a profit when the bankruptcy case is ultimately settled, or
by selling the claims to other buyers. These entities may also
purchase claims in order to obtain a large stake in a company.
Bankruptcy claim transfers have existed since the earliest days of
the Republic, according to a 2010 article in the University of
Pennsylvania Journal of Business Law.
The fee will be assessed by bankruptcy courts on each individual
claim or partial claim that is transferred, and it must be paid by
the creditor that files evidence of the transfer (typically the
claim transfer form) with the courts. Debtors filing bankruptcy
will not be affected by the fee.
The fee must be paid by credit card, using Pay.gov, when the
claims transfer is filed with the courts' Case
Management/Electronic Case Files system, or by whatever means is
designated by the court if the claim transfer is not filed
electronically.
In considering this fee, the Judicial Conference Committees with
jurisdiction over bankruptcy fees recognized the impact a transfer
of a claim has on the workload of the bankruptcy courts, including
impact on court time and resources. Bankruptcy Rule 3001(e)
requires the clerk of court to provide notice on a transferred
claim, and there are additional notice and hearing requirements if
an objection is made to a transfer.
In the event that multiple claims transfers are filed at one time
by one entity (batch filing), the $25 fee will be charged for each
individual transaction. The fee applies to any transfer of a claim
that is filed, whether it is a partial transfer of the claim or a
transfer of the entire amount of the claim.
Companies that buy and sell claims should ensure that the
individual filing the claim has the authority to pay the fee by
credit card. Entities that transfer claims also should be aware
that courts are reviewing user accounts, account access, and the
number of accounts authorized for a particular entity in
anticipation of this fee.
For questions regarding the claim transfer fee, please contact
Mary Fritsche, Bankruptcy Court Administration Division at
202-502-1540.
* New PBGC Proposal to Cut Companies' Reporting Requirements
------------------------------------------------------------
The Pension Benefit Guaranty Corporation on April 3 unveiled a new
proposal that will reverse its 2009 proposal and thereby reform
and reduce reporting requirements for more than 90% of companies
and pension plans.
The move will exempt from many requirements all small plans and
the more than 70% of pension plans whose sponsors are financially
sound. Some reporting requirements like bankruptcy filings will
be eliminated entirely because PBGC can get the information from
other sources without burdening companies or plans.
"One way we encourage companies to keep their pensions is by
cutting unnecessary red tape," said PBGC Director Josh Gotbaum.
"That's what we're doing here. Not only is it better for
businesses and plans, it will let us focus our efforts where
they're really needed."
PBGC's change on reportable events is the latest in a continuing
effort to preserve plans by making it easier for employers to
offer them. Last fall, the agency announced similar changes in its
enforcement policy for companies that downsized or engaged in
other transactions that might affect plans. By reversing
agreements already negotiated under ERISA's section 4062(e) and
ceasing requiring financial contributions from companies unlikely
to default on their pensions, almost $1 billion is now available
for job creation and other needs.
These changes are in response to a directive from the President to
review regulatory requirements. In response to earlier proposals,
companies that sponsor plans said that PBGC imposed requirements
even when there was little risk of defaulting on their pension
obligations. After the review, PBGC agreed. The new proposal would
eliminate roughly half of the reporting requirements for all
financially sound companies. It also responds to many other plan
sponsor proposals.
Plan Sponsors Support PBGC Reforms
The U.S. Chamber of Commerce praised the new proposal for
addressing the needs of company sponsors.
"We appreciate the efforts of the PBGC in withdrawing the original
proposal and working toward a rule that is less burdensome and
more efficient," said Randy Johnson, the chamber's senior vice
president of Labor, Immigration, and Employee Benefits. "Although
we are still reviewing the proposed regulation in detail, we
believe that it is a significant step in the right direction and
an important indication from the PBGC that they are listening to
plan sponsors."
And the American Society of Pension Professionals and Actuaries
(ASPPA) embraced the initiative for its common-sense approach on
reporting requirements.
"It is clear that PBGC gave serious consideration to the comments
that we and others submitted," said Judy A. Miller, ASPPA's
director of retirement policy. "The agency is to be commended for
not just re-proposing this rule, but consciously taking a
different approach, and focusing on minimizing the burdens placed
on sponsors of low-risk plans while still achieving the goal of
the rule."
Targeting Reporting Requirements to Pension Risks
Under ERISA's section 4043, companies are required to report to
PBGC a wide variety of corporate and/or plan events such as
mergers, extraordinary dividends, and unpaid plan contributions,
among others. PBGC concluded that reporting requirements could be
reduced for most companies and plans and is proposing revised
regulations to do so.
PBGC found in its analysis that pension funding levels were a poor
measure of actual default risk, and that the financial soundness
of the company sponsoring the plan was much more important.
Financially sound companies almost never defaulted on their
pensions, even if their plans were underfunded. By comparison,
companies that defaulted on their other obligations were much
likelier also to default on their pensions, and pensions that had
earlier been reported as fully funded turned out not to be when
terminated.
Under the new proposal, many reporting requirements would be
eliminated where:
Either a company or a plan is financially sound. Some three-
fourths of all companies and plans will be exempted on this basis.
A plan is small. Since two-thirds of all plans are sponsored
by small businesses, this effort will dramatically expand relief
from reporting requirements.
PBGC can get information from other sources. Through public
SEC or bankruptcy filings or filings with other agencies, PBGC can
learn about many events without requiring direct reports from the
company.
By limiting reporting requirements to circumstances where plans
are at risk and reporting is actually useful, PBGC will be able to
focus its resources and avoid reports that don't call for PBGC
action. The proposed financial soundness tests rely entirely on
existing measures that are already widely used within the business
community.
PBGC Responds to Other Suggestions by Plan Sponsors
The agency also addressed other concerns raised by company
sponsors, such as plan waivers, maintaining the same level of
events, and reducing the burden of tracking whether an event has
occurred.
PBGC, in its proposal, has asked for comments and suggestions to
provide for more effective targeting and to avoid unnecessary
reporting. Breaking with past practice, the agency will hold a
public hearing on the proposal on June 18. For more information,
see the full proposal in the Federal Register, and view the
Reportable Events frequently asked questions at PBGC.gov.
PBGC protects more than 40 million Americans in private-sector
pension plans by paying benefits when companies cannot. PBGC
receives no taxpayer dollars and never has. Its operations are
financed by insurance premiums and with assets and recoveries from
failed plans.
* U.S. Trustee Program Suspends Debtor Audits
---------------------------------------------
Jacqueline Palank, writing for The Wall Street Journal, reported
that when Congress overhauled the Bankruptcy Code in 2005, it
directed bankruptcy watchdogs to ferret out fraud by auditing
consumer debtors -- audits those watchdogs can no longer afford.
According to the WSJ report, the U.S. Trustee Program -- the arm
of the Justice Department that monitors corporate and consumer
bankruptcy filings -- last month said it has "indefinitely
suspended" the auditing process "due to budgetary constraints." A
USTP spokeswoman declined to elaborate, but this isn't the first
time that a tight budget has interfered with or halted the audits.
WSJ related that the Bankruptcy Code amendments of 2005 authorized
U.S. trustees to randomly designate for audit one out of every 250
consumer bankruptcy cases per federal judicial district. The Code
also authorized audits of any cases in which debtors posted
statistically unusual income or expenditures. Trustees select the
cases but don't perform the audits; instead, that job falls to
independent accountants.
WSJ said the 2007 fiscal year saw random audits of "at least one
out of every 250 consumer cases" per judicial district, according
to a USTP report but the following three fiscal years saw that
rate reduced to one out every 1,000 consumer cases per district
due to "budgetary constraints." The auditing rate was reduced even
further in the 2011 fiscal year to one of every 1,700 cases, but
the audits were suspended for the last few months of that year and
through the first three months of the 2012 fiscal year. While USTP
resumed random audits between January and October 2012, it did so
for one out of every 1,450 consumer case per district.
WSJ noted that the audits -- which review a variety of financial
documents like bank statements, paychecks, tax returns, divorce
settlements and child support obligations -- were among the new
Bankruptcy Code provisions that the consumer credit industry
lobbied for in a bid to address what its members saw as rampant
fraud in the bankruptcy system.
Trade groups such as the Financial Services Roundtable, a group of
executives of consumer-focused financial companies, have
previously urged Congress to boost USTP's funding to ensure the
audits continue, according to WSJ. Reached Friday, FSR's Scott
Talbot expressed concern about the current suspension.
* Fitch Says Credit Card Delinquencies Still Stable in March
------------------------------------------------------------
The long-talked about normalization of U.S. credit card ABS
performance trends has yet to emerge as both delinquencies and
chargeoffs remain at or near record lows, according to the latest
index results from Fitch Ratings.
The record lows in chargeoffs and delinquencies remained stable
for the March 2013 reporting period while gross yield rebounded
from last month. Meanwhile, monthly payment rates sustained an
outsized decline due to seasonal factors and should normalize next
month.
After dropping to a six-year low last month, Fitch's Prime Credit
Card Chargeoff Index rose only three bps to 3.91%. Despite the
slight increase, chargeoffs are down 24.52% since the same period
in 2012 and have come down 66% since the peak in 2009. Fitch's 60+
Day Delinquency Index moved up two bps up to 2.10%. With
delinquency and bankruptcy levels still low, credit card
chargeoffs are expected to remain low in the coming months before
slowly trending higher later this year. Despite the expectation,
credit card ABS ratings are expected to remain stable throughout
2013 given the high levels of protection afforded investors
through available credit enhancement and excess spread.
Gross yield bounced back to 18% after dipping to 17.35% last
month. The increase in gross yield boosted excess spread which
increased by 5.91% from 10.82% to 11.46%. Despite the weaker
performance in the February distribution period, three-month
average excess spread has remained stable, dropping only three bps
to 11.37% after peaking in the January distribution period at
11.64%.
Fitch's MPR index was affected by seasonal trends this month given
the short February collection period. MPR declined 234 bps or
9.42% from the historical peak of 24.83% last month. Since the
inception of the Prime Credit Card Index, MPR has declined by an
average of 6.91% during the March distribution periods and
typically rebounds in the April period when collection days
normalize. Despite the drop, MPR is 7.92% higher than the same
period last year.
Fitch's Prime Credit Card Index was established in 1991 and tracks
over $115 billion of prime credit card ABS backed by approximately
$254 billion of principal receivables. The index is primarily
comprised of general purpose portfolios originated by institutions
such as Bank of America, Citibank, Chase, Capital One, Discover,
etc.
Retail trusts exhibited an across the board increase in gross
yield this month, causing the Fitch Retail Credit Card Index gross
yield to shoot to 28.59% from 25.14%. This is the second highest
level of gross yield over the life of the Retail Credit Card
Index, surpassed only by 29.06% in July 2003. The increase in
gross yield caused almost a 20% increase in one month excess
spread to 17.69% and buoyed three-month average excess spread to a
historic high of 15.97%.
Chargeoffs increased this month by 12.56% to 6.81% after dropping
to 6.05% last month. This level is still 16.13% lower year-over-
year. Despite the increase in chargeoffs, delinquencies remained
stable. 60+ day delinquencies increased only one bp to 2.70%.
Fitch's Retail Credit Card Index tracks more than $26 billion of
retail or private label credit card ABS backed by approximately
$49 billion of principal receivables. The index is primarily
comprised of private label portfolios originated and serviced by
Citibank (South Dakota) N.A., GE Money Bank and World Financial
Network National Bank. More than 165 retailers are incorporated
including Wal-Mart, Sears, Home Depot, Federated, Loews, J.C.
Penney, Limited Brands, Best Buy, Lane Bryant and Dillard's, among
others.
ABS ratings on both prime and retail credit card trusts are
expected to remain stable given available credit enhancement, loss
coverage multiples, and structural protections afforded investors.
* Fitch Says Government Rate Reversal Favorable for Health Insurer
------------------------------------------------------------------
The outlook for Medicare Advantage payment rates improved
significantly this week after the U.S. government said it would
reverse a February decision to cut payments by 2.3%. Fitch Ratings
believes that while this event is a credit positive and favorable
from a margin perspective, it does not have immediate rating
implications. On April 1, the Centers for Medicare & Medicaid
Services (CMS) said it will increase the payment rate for health
insurers by 3.3% in 2014.
"We believe the 5.6% point swing in the benchmark premium is
significant, given comparatively thin margins in the sector. The
health insurance space is highly regulated by the government and
has notoriously been more vulnerable to moves in margins versus
other areas. While life and property and casualty insurers are
also subject to intense government regulation, health insurers'
margins are simply more vulnerable to government imposed
challenges," Fitch says.
Members of Congress and health insurer lobbyists including
America's Health Insurance Plans (AHIP) said the proposed cuts
were unfair and needed to be reconsidered. Lawmakers argued that
Medicare Advantage participants would be subject to higher
premiums and fewer services as health insurers would be forced to
pass the cuts on to consumers. CMS said the change was made after
"careful consideration of public comments. "
"We believe among the large publicly traded health insurers and
managed care companies, this probably affects Humana (issuer
default rating [IDR] of 'BBB+') and Health Net, Inc. (IDR of
'BB+') most directly as a relatively large portion of their
revenues is derived from Medicare Advantage business. United
Healthcare, Cigna, Aetna, and WellPoint stand to be less affected
as their revenues are more heavily influenced by commercial
business," Fitch states.
While the reprieve in payment cuts relieves some pressure, we note
there are a slew of Patient Protection and Affordable Care Act-
related challenges coming on line in 2014 that have the potential
to impact profitability including Medicare Advantage minimum loss
ratio requirements, coverage expansions, underwriting
restrictions, and competition from mandated insurance exchanges.
* US Homebuilder Bond Ratings Remain Below Pre-Crisis Levels
------------------------------------------------------------
Prices on U.S. homebuilder bonds are trading at or near the same
levels they were in 2006, but ratings remain below pre-crisis
levels. Debt prices have raced ahead of credit fundamentals,
according to Fitch Ratings. "We believe it may be realistic for
some issuers to eventually regain their pre-crisis ratings while
others may have more of an uphill battle. In order for ratings to
migrate higher, issuers would have to continue to grow the
business, increase profitability, and improve credit metrics,
which may mean that companies largely maintain their current debt
profile," Fitch says.
"For the most part, the credit metrics of the builders are perhaps
still weak relative to their rating categories, and we believe
meaningful improvement from current levels would be pivotal prior
to an upward migration in ratings. The scale of the companies
needs to meaningfully increase, and with that, the generation of
considerably greater profitability and FFO, in order to support
higher ratings. Substantial liquidity has been a buffer in recent
years, and although spending on land and development will further
accelerate, healthy liquidity levels (cash and equivalents,
revolving credit facilities) will need to be maintained. Ratings
and the Stable Rating Outlook for the sector are supported by
strong liquidity, manageable debt maturities, and the expected
growth in housing activity this year and beyond.
"The environment that prevailed during the last upcycle was not
typical and we believe it may be difficult to replicate that kind
of very robust environment, which ultimately drove homebuilder
ratings. Conversely, the nature of the downturn (depth and length)
was unique and unlikely to be duplicated.
"Additionally, given pressures seen during the previous downturn
and the significant deterioration in credit metrics, issuers will
have to demonstrate that they can sustain the improvement in
credit metrics and, at the same time, remain disciplined in their
land strategies in order for rating upgrades to occur. This would
be particularly challenging regarding high-yield rated companies
migrating to investment grade.
"We think it would be very difficult to gauge a time parameter in
terms of if and when homebuilders can or will return to pre-crisis
ratings, as specific variables are anything but certain. The
operating environment would weigh heavily as well as individual
strategies and their capacity to withstand another downturn."
* March Bankruptcy Filings in U.S. Still Bottoming Out
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that bankruptcy filings in the U.S. continue showing signs
of bottoming out. The 102,600 bankruptcies of all types in March
were a scant 3% more on a daily basis than February and were down
almost 20% from March last year.
According to the report, for the first three months of the year,
total bankruptcies were 16% lower than the first quarter of 2012,
according to data compiled from court records by Epiq Systems Inc.
The almost 600 commercial Chapter 11 filings in March also show a
bottoming trend. The month's Chapter 11s, where larger companies
reorganize or sell assets, were down 13.1% from March 2012.
Commercial bankruptcies of all types are showing the same trend.
With almost 4,100 filings during March, commercial filings were
down 31.7% from the same month in 2012, Epiq reported.
States with the most bankruptcies in March per capita were
Tennessee, Georgia and Alabama. Last month Georgia nosed out
Alabama to take second place.
Bankruptcies throughout the U.S. declined 14.1% last year,
totaling 1,185,000. In 2011, there were 1,380,000. The 2011
bankruptcies represented an 11.7% decline from the 1.56 million in
2010, the most bankruptcies since the all-time record of
2.1 million set in 2005. In the last two weeks before the
bankruptcy laws tightened in 2005, 630,000 American sought
bankruptcy protection.
* Bond Sales Alleviate Liquidity Pressures on Junk Companies
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that with the bond market still hungry to buy high-yield
junk debt, low-rated companies continue to experience few
liquidity problems.
For the first three months of this year, sales of junk bonds were
5.4% higher than in the same period last year, according to a
report from Moody's Investors Service. As a result of the ability
to sell new bonds or refinance maturing debt, Moody's liquidity-
stress index is less than half the average during the past 10
years.
The Moody's stress index inched up to 3.2% from 3.0% the month
before. The index measures junk-rated companies with the weakest
liquidity. Going back to 2002, the average for the index has been
7.4%. The high was 20.9% in March 2009.
* GAO Cites Regulators' Flaws in Foreclosure Review
---------------------------------------------------
Alan Zibel and Dan Fitzpatrick, writing for The Wall Street
Journal, reported that a federal watchdog is faulting U.S. bank
regulators for a flawed review of foreclosure documents, saying
the agencies didn't establish consistent procedures or adequately
monitor the consulting firms performing the work.
The Government Accountability Office, in a draft of a report
viewed by The Wall Street Journal, criticized the Office of the
Comptroller of the Currency and Federal Reserve for not ensuring
banks were using consistent methods to determine which foreclosure
files to scrutinize for possible errors, the report related.
WSJ related that the regulators ordered an independent review of
banks' foreclosure files in April 2011 to determine how many
borrowers should be compensated for foreclosure-processing and
other mistakes. Earlier this year, the regulators reached a $9.3
billion settlement with banks, saying the review threatened to
drag out into 2014, delaying compensation to borrowers. So far, 13
of 16 banks have signed the agreement.
The settlement has come under increasing scrutiny amid disclosures
that some banks made more mistakes than regulators previously
disclosed, WSJ said. The GAO report, requested by Democratic
lawmakers, is the latest fallout from the reviews.
The reviews, according to WSJ, resulted in wide discrepancies in
how banks performed, with J.P. Morgan Chase & Co. reporting
compensation-worthy errors in just 0.6% of cases while Wells Fargo
WFC & Co. reported flaws in 11%. As the Journal reported last
month, some of the country's biggest banks were on pace to find a
higher rate of past foreclosure mistakes when regulators halted
the review.
WSJ added that the GAO report didn't fault particular banks or the
consultants they employed, but focused on the bank regulators'
management of the process. In a letter sent to the GAO last month,
Comptroller of the Currency Thomas Curry didn't dispute the
report's conclusions, saying the regulator "appreciates your
understanding of the complexity" of the review process. A Federal
Reserve spokesman declined to comment.
* MBIA Wins Ruling on Loan Buybacks in Bank of America Suit
-----------------------------------------------------------
David McLaughlin & Chris Dolmetsch, writing for Bloomberg News,
reported that MBIA Inc. (MBI), the bond insurer suing Bank of
America Corp. to recover losses tied to mortgage loans, won an
appeals court ruling that the lender could be required to
repurchase securitized loans even if they aren't in default.
MBIA is entitled to have Bank of America buy back a performing
loan that it can prove "materially and adversely" affected its
interest, the New York state appeals panel said in a decision,
reversing part of a ruling by a lower court, the Bloomberg report
related. The panel also reversed a decision that MBIA could seek
so-called rescissory damages.
"Plaintiff is entitled to a finding that the loan need not be in
default to trigger defendants' obligation to repurchase it," the
court said, Bloomberg cited. "There is simply nothing in the
contractual language which limits defendants' repurchase
obligations in such a manner."
The decision, according to Bloomberg, stems from MBIA's lawsuit
against Bank of America and its Countrywide Financial unit. MBIA,
which sued Countrywide in 2008, guarantees payments to investors
that bought securities backed by pools of the lender's loans. The
insurer says the loans were riskier than represented by
Countrywide, and as the loans went into default, the Armonk, New
York-based company was forced to pay investors.
New York State Supreme Court Justice Eileen Bransten denied a pre-
trial ruling in MBIA's favor last year on the repurchase issue
saying there were varying interpretations of contract language at
issue in the case, Bloomberg said.
The case is MBIA Insurance Corp. v. Countrywide Home Loans Inc.,
602825-2008, New York State Supreme Court, New York County
(Manhattan).
* Regulators Closer to Supervising Nonbank Financial Companies
--------------------------------------------------------------
Danielle Douglas and Jia Lynn Yang, writing for The Washington
Post, reported that the Federal Reserve approved a final rule
Wednesday that brings the government closer to placing large
nonbank companies that were at the heart of the financial crisis
under stricter supervision.
According to the Post, the rule leaves a strikingly wide swath of
companies on the table as potentially falling under tougher
oversight, including private-equity firms and hedge funds. Yet
industry officials and others following the process say it's
unlikely that officials will ultimately single out more than a
handful of firms.
Jaret Seiberg, a managing director at Guggenheim Securities, said
in a report Wednesday that the most likely firms to be designated
are GE Capital, American International Group, Prudential and
MetLife, the Post related.
Any final decision by officials will be closely watched by Wall
Street, since a company designated by the government as
"systemically important" would face tougher capital standards,
among other restrictions, that could eat into the firm's
profitability, the Post noted.
"The Fed has taken a very broad view of the types of activities
covered in the definition, which gives [regulators] a good deal of
discretion," Karen Shaw Petrou, managing partner of Federal
Financial Analytics, a consulting firm, told the Post.
* Report Faults "At All Costs" Attitude at Barclays
---------------------------------------------------
Mark Scott, writing for The New York Times' DealBook, reported
that the push to change Barclays from a predominantly British
retail bank to a global financial giant over the last two decades
created a culture that put profit before customers, according to
an independent report released on Wednesday.
That review, which was ordered by the bank's top management after
a rate-rigging scandal last year, highlighted an "at all costs"
attitude, particularly in the company's investment bank, that was
reinforced by a bonus system that encouraged taking risks over
serving clients, the DealBook related.
"Barclays became complex to manage," said the report, which was
overseen by Anthony Salz, former head of the law firm Freshfields
Bruckhaus Deringer, the DealBook further related. "The culture
that emerged tended to favor transactions over relationships, the
short term over sustainability and financial over other business
purposes."
The conclusions represent a criticism of the strategy of a former
chief executive of Barclays, Robert E. Diamond Jr., who helped
transform the British company into one of the world's largest
investment banks, the DealBook said. Mr. Diamond, who stepped
down last year after the scandal involving manipulation of the
London interbank offered rate, or Libor, ran the bank's investment
banking operations until he became chief executive in 2011.
The DealBook said the report released on Wednesday said the push
to increase profit across the bank's operations led to potentially
risky behavior that had a direct effect on the company's
reputation.
* Standard & Poor's Says U.S. Hid Role with States in Court
-----------------------------------------------------------
Chris Dolmetsch & David McLaughlin, writing for Bloomberg News,
reported that McGraw-Hill Cos. (MHP) accused the U.S. Justice
Department of failing to disclose in court its collaboration with
17 states suing its Standard & Poor's unit over alleged consumer-
protection and unfair-trade violations.
The Bloomberg report related that McGraw-Hill raised the issue in
a letter to a federal judge in Connecticut as it fought to
consolidate the state lawsuits in U.S. court while the Justice
Department pushes to keep the cases under state jurisdiction. The
New York-based company has filed papers in several federal courts
seeking to move the cases.
The Justice Department and state attorneys general sued S&P in
February, Bloomberg related. The U.S. accused the company of
falsely representing that its ratings were objective and
independent, claiming Standard & Poor's weakened ratings criteria
to maintain and increase market share.
In the filing on April 3, McGraw-Hill said the Justice Department
should have disclosed in a March 29 filing opposing the move to
federal court that it's a "publicly declared ally of and
collaborator" with Connecticut, according to the report.
"From the start, federal and state authorities have worked
together in planning and preparing federal and state cases against
S&P," McGraw-Hill said in the filing, Bloomberg cited.
The Connecticut case is Connecticut v. McGraw-Hill Cos., 13-00311,
U.S. District Court, District of Connecticut (New Haven). The
Justice Department case is U.S. v. McGraw-Hill Cos., 13-cv-00779,
U.S. District Court, Central District of California (Los Angeles).
* Big Profits at Fannie and Freddie Reignite Debate on Supports
---------------------------------------------------------------
Peter Eavis, writing for The New York Times' DealBook, reported
that the huge profits rolling in at Fannie Mae, the government-
backed company that insures mortgages against default, and its
corporate sibling, Freddie Mac, will intensify the debate over the
amount of involvement that government should have in housing.
According to the DealBook report, Fannie made $17.2 billion last
year, versus Berkshire Hathaway's $14.8 billion. Fannie was the
third-most profitable financial firm in 2012, after JPMorgan Chase
and Wells Fargo. But this year, Fannie's earnings could exceed
even those of JPMorgan and Wells Fargo, if it decides to book a
large tax-related gain, the report said.
The DealBook related that Fannie and Freddie charge fees in return
for a guarantee that they will pay back mortgages that default. In
the first years after the crisis, that fee revenue was overwhelmed
by losses. As those have abated, profits have returned for the two
mortgage giants. The big question looming over the housing market
is how quickly to remove the support provided by Fannie and
Freddie, the DealBook said.
* Argentina Creditors Must Reply to Payment Plan: 2nd Circ.
-----------------------------------------------------------
Kurt Orzeck of BankruptcyLaw360 reported that the Second Circuit
on Tuesday ordered Argentinean bondholders who claim the country
owes them nearly $1.4 billion to respond by mid-April to a
proposed payment plan in which Argentina would give the holdouts
restructured bonds worth only a fraction of the money allegedly
owed.
The report related that in a one-page order, the appellate court
told the bondholders -- to whom the Republic of Argentina has
referred as "vultures" -- to file a response no later than April
22 to the proposed alternative payment plan.
* Judge's Ruling Does Not Slow States' Libor Probe
--------------------------------------------------
Jean Eaglesham, writing for The Wall Street Journal, reported that
30 state attorneys general are investigating alleged interest-rate
rigging by banks that set Libor, and the probe isn't slowing
despite a U.S. judge's ruling last week in favor of the banks in
private lawsuits.
The WSJ report related that number of states involved in the
coordinated probe has grown substantially in recent months and
could result in enforcement actions seeking billions of dollars in
damages, according to people close to the investigation. New York
and Connecticut are leading the investigation, which has widened
to include Arizona, Delaware, Iowa and Maryland, according to a
list reviewed by The Wall Street Journal.
It isn't clear when the probe will be completed or which banks
could be most vulnerable but state officials are plowing ahead,
said the people close to the probe, even though the judge threw
out proposed class-action lawsuits and suits filed by Charles
Schwab Corp. alleging wrongdoing by banks related to the London
interbank offered rate and other interest-rate benchmarks,
according to WSJ.
WSJ related that U.S. District Judge Naomi Reice Buchwald in
Manhattan last Friday said she dismissed a "substantial portion"
of those claims, in which plaintiffs alleged they should get tens
of billions of dollars in damages from banks. In her ruling, the
judge tossed out antitrust and racketeering claims that can result
in triple damages against a defendant.
The continuing investigation by state attorneys general includes
similar scrutiny of whether banks breached antitrust laws by
colluding to nudge rates lower or higher, WSJ said. State
officials believe their potential antitrust claims wouldn't be
threatened by the judge's ruling, which carefully drew a line
between enforcement actions and private lawsuits, said the people
close to the probe.
There are "many requirements that private plaintiffs must satisfy,
but which government agencies need not," Judge Buchwald wrote in
Friday's ruling, WSJ quoted.
* BOOK REVIEW: The Oil Business in Latin America: The Early Years
-----------------------------------------------------------------
Author: John D. Wirth Ed.
Publisher: Beard Books
Softcover: 282 pages
List price: $34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at
http://www.beardbooks.com/beardbooks/oil_business_in_latin_america.html
This book grew out of a 1981 meeting of the American Historical
Society. It highlights the origin and evolution of the state-
owned petroleum companies in Argentina, Mexico, Brazil, and
Venezuela.
Argentina was the first country ever to nationalize its
petroleum industry, and soon it was the norm worldwide, with the
notable exception of the United States. John Wirth calls this
phenomenon "perhaps in our century the oldest and most
celebrated of confrontations between powerful private entities
and the state."
The book consists of five case studies and a conclusion, as
follows:
* Jersey Standard and the Politics of Latin American Oil
Production, 1911-30 (Jonathan C. Brown)
* YPF: The Formative Years of Latin America's Pioneer State
Oil Company, 1922-39 (Carl E. Solberg)
* Setting the Brazilian Agenda, 1936-39 (John Wirth)
* Pemex: The Trajectory of National Oil Policy (Esperanza
Duran)
* The Politics of Energy in Venezuela (Edwin Lieuwen)
* The State Companies: A Public Policy Perspective (Alfred
H. Saulniers)
The authors assess the conditions at the time they were writing,
and relate them back to the critical formative years for each of
the companies under review. They also examine the four
interconnecting roles of a state-run oil industry and
distinguish them from those of a private company. First, is the
entrepreneurial role of control, management, and exploitation of
a nation's oil resources. Second, is production for the private
industrial sector at attractive prices. Third, is the
integration of plans for military, financial, and development
programs into the overall industrial policy planning process.
Finally, in some countries is the promotion of social
development by subsidizing energy for consumers and by promoting
the government's ideas of social and labor policy and labor
relations.
The author's approach is "conceptual and policy oriented rather
than narrative," but they provide a fascinating look at the
politics and development of the region. Mr. Brown provides a
concise history of the early years of the Standard Oil group and
the effects of its 1911 dissolution on its Latin American
operations, as well as power struggles with competitors and
governments that eventually nationalized most of its activities.
Mr. Solberg covers the many years of internal conflict over oil
policy in Argentina and YPF's lack of monopoly control over all
sectors of the oil industry. Mr. Wirth describes the politics
and individuals behind the privatization of Brazil's oil
industry leading to the creation of Petrobras in 1953. Mr. Duran
notes the wrangling between provinces and central government in
the evolution of Pemex, and in other Latin American countries.
Mr. Lieuwin discusses the mixed blessing that oil has proven for
Venezuela., creating a lopsided economy dependent on the ups and
downs of international markets. Mr. Saunders concludes that many
of the then-current problems of the state oil companies were
rooted in their early and checkered histories." Indeed, he says,
"the problems of the past have endured not because the public
petroleum companies behaved like the public enterprises they
are; they have endured because governments, as public owners,
have abdicated their responsibilities to the companies."
Jonh D. Wirth is Gildred Professor of Latin American Studies at
Standford University.
*********
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
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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
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available at your local bookstore or through Amazon.com. Go to
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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.
*********
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