/raid1/www/Hosts/bankrupt/TCR_Public/130423.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, April 23, 2013, Vol. 17, No. 111
Headlines
AEMETIS INC: Incurs $4.3 Million Net Loss in 2012
AETNA INC: Needn't Pay $13-Mil, Rules Texas High Court
AMARU INC: Won't be Able to File 2012 Annual Report for Audit
AMERICAN AIRLINES: NOLs Are $10-Bil.; Plan May Be Uncontested
AMERICAN AIRLINES: Seeks More Time to Reject 11 Contracts
AMERICAN AIRLINES: Amends Form 10-K for 2012
AMERICAN POWER: Amends Form S-1 Registration Statement with SEC
AMERICAN POWER: Gregory Ho Held 34.2% Equity Stake at March 31
AMPAL-AMERICAN: Trustee Wants to Convert Bankruptcy to Ch. 7
AMR CORP: Shareholders Could Get Nearly $1.4 Billion in Merger
ANLOC LLC: 5th Cir. Should Decide on Discretionary Appeal
ARRIS GROUP: S&P Assigns 'BB-' Corp. Credit Rating; Outlook Stable
ARTEL LLC: S&P Cuts Corp. Credit Rating to 'B-'; Outlook Negative
ATKINS NUTRITIONALS: S&P Assigns 'B-' CCR; Outlook Stable
ATLANTIC COAST: Director Told to Consider Shareholders' Interests
AURORA DIAGNOSTICS: Revenue Slide Cues Moody's to Cut CFR to B3
BERRY PLASTICS: Expects $1.1 Billion Net Sales for March 30 Qtr.
BERRY PLASTICS: Amends 16.5 Million Common Shares Prospectus
BIRDSALL SERVICES: Bankruptcy Judge Clears Cash Lifeline
BUENA VISTA: S&P Assigns Preliminary 'CCC+' Issuer Credit Rating
CATASYS INC: Inks $1.5MM Investment Agreement with Crede, et al.
CATASYS INC: David Smith Ownership Lowered to 38.5% at April 10
CEREPLAST INC: Incurs $30.2 Million Net Loss in 2012
CHARTER COMMUNICATIONS: Fitch Rates US$1.2-Bil. Term Loan 'BB+'
CHARTER COMMUNICATIONS: Moody's Rates Proposed $1-Bil. Bond 'B1'
CHARTER COMMUNICATIONS: S&P Rates $3.25-Bil. Facilities 'BB+'
CHINA DU KANG: Reports $925,000 Net Income in 2012
CHINA GREEN: Swings to $635,800 Profit in 2012
CHIPOLA COMMUNITY BANK: Closed; First Federal Assumes Deposits
CHRIST HOSPITAL: Resolution Consulting Objects to Liquidation Plan
CIRTRAN CORP: Incurs $1.7 Million Net Loss in 2012
CITIZENS CORP: Fi-Data Has Liquidating Plan
CLEAR CHANNEL: 2016 Loan Trades at 11% Off in Secondary Market
COATES INTERNATIONAL: Incurs $4.5 Million Net Loss in 2012
COLLEGE BOOK: Trustee Has Until May 8 to Use Cash Collateral
CONEXANT SYSTEMS: Gets OK for Ch. 11 Disclosure Statement
CONSOLIDATED MERIDIAN: Moss Adams Sanctioned for Contempt
COOPER GAY: S&P Assigns 'CCC+' Rating to $120MM 2nd-Lien Term Loan
CST BRANDS: Moody's Gives 'Ba2' CFR & Rate New $550MM Notes 'Ba3'
CST BRANDS: S&P Assigns 'BB' Corp. Credit Rating; Outlook Stable
CYCLONE POWER: Incurs $3 Million Net Loss in 2012
DATA JACK: Incurs $6.7 Million Net Loss in 2012
DEX MEDIA EAST: 2014 Loan Trades at 28% Off in Secondary Market
DEX MEDIA WEST: 2014 Loan Trades at 23% Off in Secondary Market
DIALOGIC INC: Common Stock Moved to OTCQB from NASDAQ
DIGITAL ANGEL: MGT to Buy Mobile Game Application Business
DTS8 COFFEE: Taps Atlanta Capital as IR Consultant
E-DEBIT GLOBAL: Incurs $831,000 Net Loss in 2012
EAST COAST DIVERSIFIED: Incurs $4.3 Million Net Loss in 2012
EASTMAN KODAK: Seeks Bidding Process for Document Imaging Biz
EASTMAN KODAK: Seeks Extension to Object to Sec. 503(b)(9) Claims
EASTMAN KODAK: Manufacturing & Supply Deal with UniPixel Announced
EAGLE RECYCLING: Files for Ch.11 Bankruptcy in New Jersey
ELBIT IMAGING: Faces Yet Another NIS82 Million Suit in Israel
ELBIT IMAGING: Rejects Restructuring Proposal From Bondholders
ELO TOUCH: Cash Flow Reduction Cues Moody's to Cut CFR to 'Caa1'
EUROFRESH INC: Southwest Gas to Get Adequate Assurance Payment
FIRST DATA: Issues $815 Million of Senior Notes
FIRST FEDERAL BANK: Closed; Your Community Bank Assumes Deposits
FIRST SECURITY: GF Financial Owned 9.7% Equity Stake at April 12
FISKER AUTOMOTIVE: Energy Dept Took $21MM From Reserve Account
FLAT OUT: Committee Taps CBIZ Accounting as Financial Advisor
FLAT OUT: Creditors Committee Taps Kelley Drye as Counsel
FLAT OUT: Files Schedules of Assets and Liabilities
FLAT OUT: Taps J.H. Chapman to Aid in Stir Crazy Restaurants Sale
FLORIDA GAMING: Incurs $22.7 Million Net Loss in 2012
FOREVERGREEN WORLDWIDE: Incurs $884,800 Net Loss in 2012
FUELSTREAM INC: Incurs $19.7 Million Net Loss in 2012
GATEWAY CASINOS: Cash Injection and Amendment No Impact on B2 CFR
GFI GROUP: Fitch Cuts Long-Term Issuer Default Rating to 'BB'
GIM CHANNELVIEW: S&P Assigns Prelim. 'BB-' Rating to Secured Debt
GLOBAL ARENA: Incurs $2.4 Million Net Loss in 2012
GLOBALSTAR INC: Forbearance May Have Expired Yesterday
GLYECO INC: Incurs $1.86 Million Net Loss in 2012
GREEN ENERGY: Incurs $2.1 Million Net Loss in 2012
GSC GROUP: Kaye Scholer Agrees to Waive $1.5 Million in Fees
GUILDMASTER INC: Gets 120-Day Extension to File Payment Plan
HD SUPPLY: Incurs $1.1 Billion Net Loss in Fiscal 2013
HERITAGE BANK: Shut Down; FirstAtlantic Bank Assumes Deposits
HERON LAKE: Signs Fourth Amended Forbearance with AgStar
HORIYOSHI WORLDWIDE: Incurs $3 Million Net Loss in 2012
HOWREY LLP: Creditors Say Haynes and Boone 'Forum Shopping'
ICEWEB INC: Copy of Convertible Debenture with Sand Hill Finance
ICEWEB INC: Cuts Exercise Price of Warrants to $0.028 Apiece
IDO SECURITY: Incurs $5.2 Million Net Loss in 2012
IMH FINANCIAL: Plans to Expand Real-Estate Assets in 2013
IMPLANT SCIENCES: Revenues Doubled in First Half of Fiscal 2013
IOWA FERTILIZER: S&P Rates $1.194BB Tax-Exempt Financing 'BB-'
IOWORLDMEDIA INC: Incurs $746,600 Net Loss in 2012
IZEA INC: Borrows $500,000 from Director
JM HUBER: S&P Raises Corp. Credit Rating to 'BB'; Outlook Stable
KRATOS DEFENSE: Moody's Changes Outlook to Stable & Keeps B3 CFR
LANGUAGE LINE: S&P Lowers CCR to 'B-'; Outlook Stable
LINEAGE LOGISTICS: Moody's Rates New $220-Mil. Sr. Term Loan 'B3'
LIQUIDNET HOLDINGS: Moody's Gives B3 CFR & Rates $150MM Loan B3
LOCAL INSIGHT: S&P Cuts Rating on 3 Notes to D on Missed Payments
LOCATION BASED TECHNOLOGIES: Incurs $1.4MM Loss in Feb. 28 Qtr.
LPATH INC: Post-Effective Amendment to 912,526 Warrants Offering
LPATH INC: Post-Effective Amendment to 1MM A Shares Offering
LUXEYARD INC: Court Dismisses Involuntary Case
LYFE COMMUNICATIONS: Incurs $1.7 Million Net Loss in 2012
LYONDELL CHEMICAL: Skadden Attys to Testify in $1-Bil. Suit
MANAGED HEALTHCARE: Roper Deal No Impact on Moody's B3 Ratings
MEDYTOX SOLUTIONS: Reports $2.7 Million Net Income in 2012
MOSS FAMILY: Can Use Fifth Third Cash Collateral Until May
MTS LAND: Can Use U.S. Bank Cash Collaterla Until May 1
NATIONAL HERITAGE: Dist. Ct. Affirms Rejection of Plan Releases
NCL CORP: S&P Assigns 'BB+' Rating to $1.1BB Sr. Sec. Facilities
NEXTAG INC: S&P Lowers Corp. Credit Rating to 'B-'; Outlook Stable
NGPL PIPECO: Fitch Lowers Issuer Default Rating to 'B'
NORCRAFT COS: S&P Revises Outlook to Stable & Affirms 'B' CCR
OCALA SHOPPES: Shopping Center Auction on May 14
OTELCO INC: Has Final Cash Use Before May 6 Confirmation
PAC-WEST TELECOMM: Sec. 341 Meeting of Creditors Today
PATRIOT COAL: Former Peabody CEO Aims to Avoid Grilling Over Deal
PENSON WORLDWIDE: Wants Sec. 345 Guidelines Waived Until May 13
PENSON WORLDWIDE: Ex-Exec. Seeks Advancement of Defense Costs
PENSON WORLDWIDE: Files Bid to Reject NYSE Deal; Disallow Claims
PGA FLYOVER: Files for Chapter 11 With 100% Liquidating Plan
PGA FLYOVER: Proposes Shraiberg Ferrara as Counsel
PGA FLYOVER: Commences Adversary Proceeding to Stop BBX Suits
PITT PENN: April 25 Hearing on Employment of Becker CPA
POSITIVEID CORP: Incurs $7.9 Million Net Loss in 2012
POSITRON CORP: Incurs $7.9 Million Comprehensive Loss in 2012
PROVIDENT FUNDING: S&P Raises Rating on $200MM Notes to 'B+'
QUALTEQ INC: Midwest Gets Bid Protections for Katrine Property
QUICK-MED TECHNOLOGIES: Taps Match Point as Financial Advisor
REAL ESTATE ASSOCIATES: Reports $13 Million Net Income in 2012
REALOGY CORP: Closes Secondary Offering of 40.2MM Shares
RESIDENTIAL CAPITAL: Removal Period Extended to July 8
RESIDENTIAL CAPITAL: Court Approves People's Choice Settlement
RESIDENTIAL CAPITAL: April 30 Hearing on Hudson, PwC & Pepper Fees
RESIDENTIAL CAPITAL: Kimbers Lawsuit Dismissed
RESIDENTIAL CAPITAL: Wilmington Trust Seeks Judge's OK to Sue Ally
REVEL AC: Committee Objects to DIP Financing Motion
RG STEEL: Seeks Approval to Employ Gellert as Special Counsel
RIVER CANYON: United Water to Pay $6,810 Sanction
RODEO CREEK: Gets Final OK to Incur $9MM Loan from Credit Suisse
ROSSCO HOLDINGS: Court Enters Final Decree Closing Ch. 11 Cases
ROTHSTEIN ROSENFELDT: TD Bank Argues Against Investor Case Remand
RYYZ LLC: Fannie Mae Gets Chance to Pursue Foreclosure Proceeding
SALESFORCE.COM: S&P Assigns 'BB' Unsolicited Corp. Credit Rating
SAMUELS FURNITURE: Liquidator APJL Consulting Begins GOB Sales
SCHLOTZKY'S DELI: Ex-Brass Can't Sue Haynes and Boone
SCHOOL SPECIALTY: Decides to Reorganize, Not Sell
SCIENTIFIC LEARNING: Steven Simon Owned 27.4% Stake at April 5
SCIENTIFIC LEARNING: Armanino Succeeds E&Y LLP as Accountants
SCOOTER STORE: Judge Doubts Chance for Chapter 11 Success
SENSATA TECHNOLOGIES: S&P Raises Rating on $700 Notes to 'BB'
SIONIX CORP: Henry Sullivan Named CEO and Chairman
SNO MOUNTAIN: Assets Sold to Montage Mountain for $5.1MM
SNO MOUNTAIN: Has Continued Access to DIP Loans & Cash Collateral
SOUTH LAKES: Files Chap. 11 Plan, To Continue to Operate Business
SPECIALTY PRODUCTS: Seeks to Further Extend DIP Financing Maturity
SPENDSMART PAYMENTS: Effects 1-for-15 Reverse Stock Split
SPIRIT FINANCE: Urges Stockholders to Approve Merger with Cole
STAMP FARMS: Court OKs Modification of Order, Transfer of Title
STANFORD GROUP: SEC's Appeal Opposed by Small Brokerages
STG-FAIRWAY: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable
STONE ROSE: Files Chapter 11 Petition in Chicago
STRATUS MEDIA: Incurs $6.8 Million Net Loss in 2012
SUNVALLEY SOLAR: Incurs $1.7 Million Net Loss in 2012
SUPERMEDIA INC: Publisher Breached License, Photo Agency Says
T3 MOTION: Incurs $21.5 Million Net Loss in 2012
TANGLEWOOD FARMS: C.A. Perry Won Dismissal of Turnover Suit
TARGETED MEDICAL: Amends 25.7MM Common Shares Resale Prospectus
TELETOUCH COMMUNICATIONS: Posts $10,000 Income in Feb. 28 Qtr.
TELETOUCH COMMUNICATIONS: Appoints Directors to Board Committees
TERCON INVESTMENT: Canadian Proceedings Recognized in U.S. Courts
THERMOENERGY CORP: David Keller Replaces Cary Bullock as Director
THQ INC: Completes Bidding & Sale Process of IP Assets
TN-K ENERGY: Reports $3.9 Million Net Income in 2012
TOLL ROAD INVESTORS: Fitch Cuts Rating on $1BB Revenue Bond to BB+
TOUSA INC: Cash Collateral Use Extended Until Aug. 31
TRANS ENERGY: Incurs $21.2 Million Net Loss in 2012
TRANS ENERGY: To Restate Q2 and Q3 Quarterly Reports
TRIBUNE CO: Bond Trustee Fires Back at Reimbursement Objections
TRUCEPT INC: Incurs $7.8 Million Net Loss in 2012
TRUVEN HEALTH: S&P Assigns 'B+' Rating to New $535MM Term Loan
UNI-PIXEL INC: Inks Manufacturing Agreement with Eastman Kodak
UNILAVA CORP: Incurs $1.6 Million Net Loss in 2012
UNITEK GLOBAL: Earnings Revision Cues Moody's to Cut CFR to Caa1
UNIGENE LABORATORIES: BDO Replaces Grant Thornton as Accountants
UNIVERSAL BIOENERGY: Incurs $3.6 Million Net Loss in 2012
UNIVERSAL HEALTH: Chapter 11 Trustee Appointed
UNIVERSITY GENERAL: Further Delays Filing of 2012 Form 10-K
UNIVERSAL HEALTH: Court Authorizes Appointment of Ch. 11 Trustee
USA BROADMOOR: Initial Status Conference on May 8
USA BROADMOOR: Sec. 341 Meeting of Creditors on May 16
USA BROADMOOR: Proposes Stichter Riedel as Counsel
VICTORY ENERGY: Delays Form 10-K for 2012
VANITY EVENTS: Incurs $16 Million Net Loss in 2012
VERTICAL COMPUTER: Incurs $1.3 Million Net Loss in 2012
VIGGLE INC: Chairman and CEO Held 73.9% Equity Stake at April 4
VISION INDUSTRIES: Incurs $5.3 Million Net Loss in 2012
VITESSE SEMICONDUCTOR: Amends Fiscal 2012 Annual Report
VUZIX CORP: LC Capital Held 14.8% Equity Stake at March 29
WARREN'S CORNER: Building Owner Files Ch.11 in San Antonio, Texas
WASTE INDUSTRIES: S&P Revises Outlook to Neg. & Affirms 'B+' CCR
WEST 380: NTCH Now Owned by Wise Regional
WIZARD WORLD: Amends Fiscal 2012 Annual Report
WOUND MANAGEMENT: Incurs $1.8 Million Net Loss in 2012
XERIUM TECHNOLOGIES: New $200MM Term Loan Gets Moody's Ba3 Rating
XERIUM TECHNOLOGIES: S&P Rates $200MM 1st-Lien Term Loan 'BB-'
* Liquidity Stress Index Hits New Low of 3% as of Mid-April
* 'Extremely Accommodating' Credit Markets Aid Junk Liquidity
* United Operating Rule Defined More in Fifth Circuit
* Wilbur Ross Wants Committees, Atty. Hikes Probed
* Jason Brookner Joins Looper Reed as Bankruptcy Section Leader
* Large Companies With Insolvent Balance Sheets
*********
AEMETIS INC: Incurs $4.3 Million Net Loss in 2012
-------------------------------------------------
Aemetis, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$4.28 million on $189.04 million of revenue for the year ended
Dec. 31, 2012, as compared with a net loss of $18.29 million on
$141.85 million of revenue for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $96.87
million in total assets, $93.35 million in total liabilities and a
$3.51 million in total stockholders' equity.
McGladrey LLP, in Des Moines, Iowa, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that
the Company has suffered recurring losses from operations and its
cash flows from operations are not sufficient to cover debt
service requirements. This raises substantial doubt about the
Company's ability to continue as a going concern.
Bankruptcy Warning
"The construction, repairs, and upgrades of our ethanol and
biodiesel plants, along with working capital, were financed in
part through debt facilities. We may need to seek additional
financing to continue or grow our operations. However, our recent
financial performance and generally unfavorable credit market
conditions may make it difficult to obtain necessary capital or
additional debt financing on commercially viable terms or at all.
If we are unable to pay our debt we may be forced to delay or
cancel capital expenditures, sell assets, restructure our
indebtedness, seek additional financing, or file for bankruptcy.
Debt levels or debt service requirements may limit our ability to
borrow additional capital, make us vulnerable to increases in
prevailing interest rates, subject our assets to liens, limit our
ability to adjust to changing market conditions, or place us at a
competitive disadvantage to our competitors because of our
leverage. Should we be unable to generate enough cash from our
operations or secure additional financing to fund our operations
and debt service requirements, we may be required to postpone or
cancel growth projects, reduce our operations, or may be unable to
meet our debt repayment schedules. Any one of these events may
have a material adverse effect on our operations and financial
position."
A copy of the Form 10-K is available for free at:
http://is.gd/TOKgvA
On April 15, 2013, the Company, Aemetis Advanced Fuels Keyes,
Inc., a wholly-owned subsidiary of the Company, and Aemetis
Facilities Keyes, Inc., entered into a Limited Waiver and
Amendment No. 3 to Amended and Restated Note Purchase Agreement
with Third Eye Capital Corporation, as agent, for the noteholders
who are a party thereto and the Lenders.
Pursuant to the Amendment No. 3, the Administrative Agent on
behalf of the Lenders agreed to waive the following covenants of
the Borrower in their entirety:
(i) Borrowers' obligation to obtain an NASDAQ listing by
April 1, 2013;
(ii) Borrower's obligation to cause the Chairman to enter into
certain agreements; and
(iii) the Company's obligation to deliver an auditor opinion as
of and for the period ended Dec. 31, 2012, without a going
concern qualification.
In addition, the Administrative Agent agreed to (i) extend the
completion date of the conversion of the Keyes Plant to
accommodate an 80:20 corn-to-milo ratio to May 31, 2013, (ii)amend
the redemption provision in the event of an equity offering of
Capital Stock up to $7,000,000, and (iii) increase the balance of
the Revolving Notes by an amount equal to the February 2013
Special Advance and the waiver fee.
In consideration for the Limited Waiver and Amendment, the
Borrowers, among other things, agreed to: (i) pay the Lenders a
waiver fee comprised of $500,000 (which is added to the
outstanding principal balance of the Revolving Notes) and (ii)
require McAfee Capital, LLC to pledge an additional 6,231,159
Common Shares of the Parent to Agent, together with the delivery
of stock certificates for such shares and stock powers.
Special Bridge Advance
On April 15, 2013, the Borrowers entered into a Special Bridge
Advance with the Administrative Agent, pursuant to which the
Administrative Agent provided a Special Advance in the amount of
$2,000,000 as a non-revolving portion of the Revolving Note. In
consideration for the Special Bridge Advance, the Borrowers agreed
to (i) pay the Lender a placement fee of $300,000 and (ii) issue
the Lender 1,000,000 shares of common stock of Aemetis, Inc. The
Special Bridge Advance is secured by a blanket lien on the assets
of Eric A. McAfee, the Company's CEO and Chairman of the Board.
On April 15, 2013, the Company, Aemetis Advanced Fuels Keyes,
Inc., a wholly-owned subsidiary of the Company, and Aemetis, Inc.
entered into an Special Bridge Advance with Third Eye Capital
Corporation, as agent, pursuant to which the Administrative Agent
provided certain limited waivers and amendments to the Credit
Agreement, pursuant to which the Company issued to the Holders an
aggregate of 1,000,000 shares of common stock in payment for fees
outstanding under the Special Bridge Advance.
A copy of the Limited Waiver is available for free at:
http://is.gd/16bbjx
A copy of the Special Bridge Advance is available for free at:
http://is.gd/kFhqzA
About Aemetis
Headquartered in Cupertino, California, Aemetis, formerly AE
Biofuels Inc., is an advanced fuels and renewable chemicals
company. Aemetis -- http://www.aemetis.com/-- owns and operates
a 55 million gallon renewable fuels plant in California; and owns
and operates a 50 million gallon capacity renewable chemicals and
advanced fuels production facility on the east coast of India.
Aemetis operates a research and development laboratory at the
Maryland Biotech Center, and holds four granted patents and ten
pending patents on its Z-microbe and related technology for the
production of renewable fuels and chemicals.
AETNA INC: Needn't Pay $13-Mil, Rules Texas High Court
------------------------------------------------------
Jeremy Heallen of BankruptcyLaw360 reported that Texas' highest
court on Friday ruled that Aetna Inc. is not responsible for $13
million owed to a state hospital system after the insurer's third-
party claims administrator went bankrupt, because the hospital did
not have a contractual relationship directly with Aetna.
According to the report, the high court held that the Christus
Health Gulf Coast hospital system cannot seek penalties against
Aetna under the Texas Prompt Pay Statute over some 6,000 unpaid
claims, because its contracts were with the insurer's bankrupt
claims administrator, North American Medical Management of Texas.
AMARU INC: Won't be Able to File 2012 Annual Report for Audit
-------------------------------------------------------------
Amaru, Inc., will not be filing with the U.S. Securities and
Exchange Commission its annual report on Form 10-K, as planned,
because it is unable to obtain the consent of its previous
independent registered public accounting firm, Wilson Morgan, LLP,
with respect to the inclusion of their opinion and audited
financial statements for the fiscal year 2011. Wilson Morgan
informed the Company that it cannot locate its back up files and
records supporting its 2011 audit, and thus the new audit will
have to be done for the fiscal year 2011, the costs of which
Wilson Morgan agreed to cover. The audit of the fiscal year 2012
has been performed by Wei Wei & Co., LLP., the Company's new
auditors, however, the report could not have been completed and
filed.
About Amaru Inc.
Singapore-based Amaru, Inc., a Nevada corporation, is in the
business of broadband entertainment-on-demand, streaming via
computers, television sets, PDAs (Personal Digital Assistant) and
the provision of broadband services. The Company's business
includes channel and program sponsorship (advertising and
branding); online subscriptions, channel/portal development
(digital programming services); content aggregation and
syndication, broadband consulting services, broadband hosting and
streaming services and E-commerce.
After auditing the 2011 results, Wilson Morgan, LLP, in Irvine,
California, noted that the Company has sustained accumulated
losses from operations totalling $40.7 million at Dec. 31, 2011.
This condition and the Company's lack of significant revenue,
raise substantial doubt about the Company's ability to continue as
going concern, the auditors said.
Amaru reported a net loss from operations of $1.37 million in
2011, compared with a net loss from operations of $1.50 million in
2010. The Company's balance sheet at Sept. 30, 2012, showed $3.28
million in total assets, $3.08 million in total liabilities and
$195,261 in total stockholders' equity.
AMERICAN AIRLINES: NOLs Are $10-Bil.; Plan May Be Uncontested
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that according to CRT Capital analyst Kevin Starke,
scheduling an August 15 hearing for AMR Corp. to gain approval of
the newly-filed reorganization plan may be "a bit disappointing to
some" who were hoping for quicker confirmation but could allow for
an uncontested plan confirmation process.
Mr. Starke on Dec. 14 was the first to predict that the stock of
the parent of American Airlines Inc. was poised to increase
substantially in price. Mr. Starke is a managing director with
CRT Capital Group LLC in Stamford, Connecticut.
Mr. Starke said that stretching out the plan-approval process
"could allow for an uncontested confirmation hearing, something of
considerable value in a case of such high profile as this."
Combing through details in the 489-page disclosure statement, he
said that AMR's net operating loss carryforwards are likely to be
about $9.7 billion to $10 billion. He also mentioned that the
company has sought a ruling from the Internal Revenue Service that
could "mean that none of the NOLs would be subject to an annual
use limitation."
AMR's plan will carry out a merger with US Airways Group Inc. The
hearing for disclosure statement approval is set for May 30. By
distributing stock in the merged airlines, the plan is designed to
pay all creditors in full, with interest. Shareholders of US
Airways will receive 28% of the stock of the combined airlines,
with the other 72% for AMR's creditors and shareholders. Existing
AMR shareholders are in line for a minimum of 3.5% of AMR's share
of the stock, with more depending on the price of the stock in
weeks following emergence from bankruptcy.
AMR's existing stock was unchanged April 19 at $3.86 in over-the-
counter trading. Since bankruptcy, AMR's stock traded as high as
$4.38 on March 21. The stock was 40 cents in October, below 80
cents when Stark published his report in December, and rose to
$1.30 before the merger was announced.
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: Seeks More Time to Reject 11 Contracts
---------------------------------------------------------
AMR Corp. seeks additional time to decide on whether to assume or
reject 11 contracts. The contracts are leases of non-residential
real properties located at the Chicago O'Hare International
Airport. The contracts are listed at http://is.gd/OImewD
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: Amends Form 10-K for 2012
--------------------------------------------
AMR Corporation filed an amendment to its annual report on
Form 10-K for the fiscal year ended Dec. 31, 2012, which the
Company originally filed with the Securities and Exchange
Commission on Feb. 20, 2013. Since the Company does not
anticipate filing its proxy statement for the Company's 2013
Annual Meeting prior to 120 days after the fiscal year ended
Dec. 31, 2012, the Company filed the Amendment No. 1 to provide
the information required pursuant to instruction G(3) to Form 10-K
for Part III, Items 10, 11, 12, 13, and 14 of the Original Filing.
Part IV of the Original Filing has been amended to contain
currently dated certifications as required by Rules 12b-15, 15d-
14(a), and 15d-14(b) under the Securities Exchange Act of 1934
(the Exchange Act) with respect to this Amendment No. 1.
Additionally, this Amendment No. 1 corrects certain technical and
formatting errors within its Interactive Data File included in the
Original Filing as Exhibit 101.
A copy of the Amended Form 10-K is available for free at:
http://is.gd/0bhfjP
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 POWER: Amends Form S-1 Registration Statement with SEC
---------------------------------------------------------------
American Power Group Corporation filed a post-effective amendment
to its Form S-1 registration statement to update and supplement
the information contained in that Registration Statement, as
originally declared effective by the Securities and Exchange
Commission on July 25, 2012, to include the information contained
in the Company's annual report on Form 10-K for the fiscal year
ended Sept. 30, 2012, to include the information contained in the
Company's quarterly report on Form 10-Q for the fiscal quarter
ended Dec. 31, 2012, that was filed with the SEC on Feb. 13, 2013,
and to update certain other information in the Registration
Statement.
The prospectus relates to the possible resale, from time to time,
by Next View Capital LP, Associated Private Equity LLC, Ronald H.
Muhlenkamp, et al., of up to: (1)9,908,591 shares that have been,
or may be, acquired upon the conversion of shares of the Company's
10% Convertible Preferred Stock, which preferred stock was issued
to 15 investors in a private placement completed on April 30,
2012; (2) 824,624 shares issued between June 30, 2012, and
March 31, 2013, in lieu of the payment of cash dividends on the
preferred stock in accordance with the terms of the Certificate of
Designation governing the preferred stock; and (3) 820,067
additional shares issuable within six months after March 31, 2013,
in lieu of the payment of cash dividends on the preferred stock.
The Company is not selling any shares of its common stock in this
offering and, as a result, the Company will not receive any
proceeds from the sale of the Common Stock covered by this
prospectus. All of the net proceeds from the sale of the
Company's Common Stock will go to the selling security holders.
A copy of the amended prospectus is available at:
http://is.gd/jbcZ4R
About American Power Group
American Power Group's alternative energy subsidiary, American
Power Group, Inc., provides a cost-effective patented Turbocharged
Natural GasTM conversion technology for vehicular, stationary and
off-road mobile diesel engines. American Power Group's dual fuel
technology is a unique non-invasive energy enhancement system that
converts existing diesel engines into more efficient and
environmentally friendly engines that have the flexibility to run
on: (1) diesel fuel and liquefied natural gas; (2) diesel fuel and
compressed natural gas; (3) diesel fuel and pipeline or well-head
gas; and (4) diesel fuel and bio-methane, with the flexibility to
return to 100% diesel fuel operation at any time. The proprietary
technology seamlessly displaces up to 80% of the normal diesel
fuel consumption with the average displacement ranging from 40% to
65%. The energized fuel balance is maintained with a proprietary
read-only electronic controller system ensuring the engines
operate at original equipment manufacturers' specified
temperatures and pressures. Installation on a wide variety of
engine models and end-market applications require no engine
modifications unlike the more expensive invasive fuel-injected
systems in the market. See additional information at:
www.americanpowergroupinc.com.
American Power incurred a net loss available to common
shareholders of $14.66 million for the year ended Sept. 30, 2012,
compared with a net loss available to common shareholders of $6.81
million during the prior year. The Company's balance sheet at
Dec. 31, 2012, showed $8.82 million in total assets, $4.41 million
in total liabilities and $4.41 million in total stockholders'
equity.
AMERICAN POWER: Gregory Ho Held 34.2% Equity Stake at March 31
--------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Gregory P. Ho and his affiliates disclosed
that, as of March 31, 2013, they beneficially owned 23,805,146
shares of common stock of American Power Group Corporation
representing 34.2% of the shares outstanding. A copy of the
regulatory filing is available for free at http://is.gd/48ipbq
About American Power Group
American Power Group's alternative energy subsidiary, American
Power Group, Inc., provides a cost-effective patented Turbocharged
Natural GasTM conversion technology for vehicular, stationary and
off-road mobile diesel engines. American Power Group's dual fuel
technology is a unique non-invasive energy enhancement system that
converts existing diesel engines into more efficient and
environmentally friendly engines that have the flexibility to run
on: (1) diesel fuel and liquefied natural gas; (2) diesel fuel and
compressed natural gas; (3) diesel fuel and pipeline or well-head
gas; and (4) diesel fuel and bio-methane, with the flexibility to
return to 100% diesel fuel operation at any time. The proprietary
technology seamlessly displaces up to 80% of the normal diesel
fuel consumption with the average displacement ranging from 40% to
65%. The energized fuel balance is maintained with a proprietary
read-only electronic controller system ensuring the engines
operate at original equipment manufacturers' specified
temperatures and pressures. Installation on a wide variety of
engine models and end-market applications require no engine
modifications unlike the more expensive invasive fuel-injected
systems in the market. See additional information at:
www.americanpowergroupinc.com.
American Power incurred a net loss available to common
shareholders of $14.66 million for the year ended Sept. 30, 2012,
compared with a net loss available to common shareholders of $6.81
million during the prior year. The Company's balance sheet at
Dec. 31, 2012, showed $8.82 million in total assets, $4.41 million
in total liabilities and $4.41 million in total stockholders'
equity.
AMPAL-AMERICAN: Trustee Wants to Convert Bankruptcy to Ch. 7
------------------------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that the Chapter 11
trustee for Ampal-American Israel Corp., which invests in energy
and other industries, said Friday that the company's bankruptcy
should either be converted into a Chapter 7 liquidation or be
dismissed because it doesn't have enough cash to see a
reorganization through.
According to the report, Trustee Michael Luskin of Luskin Stern &
Eisler LLP said in a court filing that Ampal has accrued about
$4.5 million in administrative expenses, most of which are
professionals' fees, and no feasible prospects for raising enough
exit financing to complete the reorganization is in sight.
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.
AMR CORP: Shareholders Could Get Nearly $1.4 Billion in Merger
--------------------------------------------------------------
Patrick Fitzgerald at Daily Bankruptcy Review reports that AMR
Corp., the parent company of American Airlines, said its
shareholders can expect to recover about $1.36 billion under its
plan to exit bankruptcy and merge with US Airways Group Inc., in
one of the rare major Chapter 11 airline restructuring where
equity holders won't be wiped out.
ANLOC LLC: 5th Cir. Should Decide on Discretionary Appeal
---------------------------------------------------------
Bankruptcy Judge Marvin Isgur opined that the Court of Appeals
should be the forum to determine whether a discretionary appeal
should be allowed on the orders appealed in the bankruptcy case of
Anloc LLC.
Anloc is a Texas Railroad Commission Operator which has been
approved to operate crude oil and natural gas leases in Texas. An
involuntary Chapter 11 bankruptcy petition was filed against
Anloc LLC (Bankr. S.D. Tex. Case No. 12-31267) on Feb. 16, 2012.
The involuntary case was converted to a chapter 11 on April 20,
2012.
Anloc hired Edward Talone to perform services in connection with
its oil and gas operations. Mr. Talone and Edward Talone Trust
No. 1 filed claims in the Anloc bankruptcy case, alleging that
Anloc failed to compensate them pursuant to various employment
agreements. On Jan. 22, 2013, the Bankruptcy Court denied the
Talone claims, noting that the Talone parties' violations of the
Texas Engineering Practices Act (TEPA) necessitated the denial of
their claims. In reaching its decision, the Bankruptcy Court
reviewed various questions of law related to the TEPA. The Talone
parties appealed the claims denial.
In an April 5, 2013 Memorandum Opinion, Judge Isgur certified that
the orders appealed in the Anloc case involve questions of law as
to which there is no controlling decision from the Court of
Appeals for the Fifth Circuit or of the U.S. Supreme Court. The
District Court, however, does not recommend that a direct appeal
be granted. Rather, it leaves to the Fifth Circuit the decision
of whether a discretionary appeal is warranted.
A copy of Judge Isgur's April 5, 2013 Memorandum Opinion is
available at http://is.gd/Nd9bX6from Leagle.com.
ARRIS GROUP: S&P Assigns 'BB-' Corp. Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'BB-' corporate
credit rating to Suwanee, Ga.- based Arris Group Inc. The outlook
is stable. Concurrently, S&P assigned a 'BB-' issue-level rating
to Arris' proposed $2.175 billion credit facility, which consists
of a term loan A due 2018, term loan B facility due 2020, and a
$250 million revolving credit facility due 2018. The recovery
rating is '3', reflecting S&P's expectation for meaningful (50% to
70%) recovery of principal in the event of default. S&P also
assigned a 'B+' issue-level rating and '5' recovery rating to
existing senior convertible notes due 2026, reflecting its
expectation for modest (10% to 30%) recovery of principal in the
event of default.
"The ratings on Arris reflect the company's leading position in
the global customer premise equipment [CPE] industry and our
expectation that the company will meet with at least moderate
success in integrating Motorola Home, despite the challenges to
integrate Motorola Home's much larger business and reverse its
revenue declines, resulting in our assessment of its business risk
profile as 'fair'," said Standard & Poor's credit analyst John
Moore. The ratings also reflect the company's pro forma leverage,
which we expect to increase to about 4.4x over the coming year,
resulting in our assessment of its financial risk profile as
"aggressive". The company's liquidity is "adequate" and we assess
its management and governance as "fair".
With the Motorola Home acquisition, Arris' pro forma revenues and
employees more than triple, representing about $4.7 billion in
revenues and 7,000 employees for 12 months ended December 2012.
S&P expects the acquisition will provide ARRIS with a leading set
top box systems business, representing about 50% of pro forma
revenues, and enhance its position in global CPE and home
networking markets. Pro forma client concentration is
significant, with Arris/Motorola Home's five largest clients
representing about 51% of pro forma 2012 revenues. S&P expects
this concentration to moderate to less than 50% over the coming
year, however, due to higher demand in international markets.
The stable outlook reflects S&P's expectation that Arris will meet
with at least moderate success in integrating Motorola Home's
relatively much larger business, considering favorable industry
dynamics and the combined company's market position, despite the
challenges to integrate Motorola Home, which has recently
experienced revenue declines. Should operating performance
improve such that leverage subsides to the mid-3x level on a
sustained basis, S&P could raise the rating. Conversely, should
the company adopt more aggressive financial policies or Motorola
Home's operating performance or integration weaken such that
leverage were to exceed the high-4x area on a sustained basis, S&P
could lower the rating.
ARTEL LLC: S&P Cuts Corp. Credit Rating to 'B-'; Outlook Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Reston, Va.-based Artel LLC to 'B-' from 'B'. The
outlook is negative.
At the same time, S&P lowered its issue-level rating to 'B' from
'B+' on the company's first lien senior secured credit facilities,
which include a $100 million term loan and a $15 million
revolving credit facility, both due 2017. The recovery rating
remains at '2' and reflects S&P's expectation of substantial
recovery (70% to 90%) in the event of payment default.
"The downgrade reflects our expectation for low covenant headroom
over the near term due to delays in task order awards under the
company's Future COMSATCOM Services Acquisition (FCSA) contract,"
said Standard & Poor's credit analyst Christian Frank.
"The negative outlook indicates that we could lower the rating if
the company does not win enough new business to be positioned to
remain compliant with its interest coverage covenant in the
December 2013 quarter," added Mr. Frank.
The ratings on Artel reflect its "highly leveraged" financial risk
profile with expected diminishing covenant headroom over the
coming quarters and leverage in the low-6x area, when treating as
debt preferred equity, which accounts for more than 2.5x of
adjusted leverage. The ratings also incorporate the company's
"vulnerable" business risk profile, reflecting its contract and
customer concentrations, competition from larger satellite
services peers, and exposure to U.S. defense budget pressure.
Artel provides satellite network services to Department of Defense
(DoD) clients.
ATKINS NUTRITIONALS: S&P Assigns 'B-' CCR; Outlook Stable
----------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B-' corporate
credit rating to Denver, Colo.-based Atkins Nutritionals Holdings
II Inc. The outlook is stable.
At the same time, S&P assigned a 'B-' issue rating to the
$20 million first-lien revolving credit facility due 2018 and
$255 million first-lien term loan due 2019, and a 'CCC' issue
rating to the $100 million second-lien term loan due 2019. The
recovery rating on the first-lien credit facilities is '3', which
indicates S&P's expectation of meaningful recovery (50% to 70%)
for first-lien creditors in the event of a payment default. The
recovery rating on the second-lien term loan is '6', which
indicates S&P's expectation for negligible recovery (0% to 10%)
for lenders in the event of a payment default.
S&P estimates the company will have about $355 million in reported
debt outstanding following the transaction.
The ratings on Atkins Nutritionals Holdings II Inc. reflect
Standard & Poor's assessment of the company's very aggressive
financial policy, given the large debt-financed dividend, and
S&P's forecast for credit ratios to remain weak for at least the
next two years. Pro forma for the transaction, S&P expects
Atkins' total debt to EBITDA ratio to be above 5x and its funds
from operations to total debt ratio to be below 12%.
The ratings also reflect S&P's view of the company's narrow
business focus in the highly fragmented and intensely competitive
weight-management industry, and its continuing to face significant
customer concentration.
"Atkins' product focus is currently limited to weight management
nutritional bars and shakes," said Standard & Poor's credit
analyst Mark Salierno. "The company is adding frozen meal
products to its mix, but we expect it to take several years for
them to become a meaningful part of its product mix."
The outlook is stable. Standard & Poor's expects Atkins'
profitability to be pressured as the company incorporates lower-
margin frozen meals into its product line, but S&P expects credit
ratios will remain close to current levels.
ATLANTIC COAST: Director Told to Consider Shareholders' Interests
-----------------------------------------------------------------
Atlantic Coast Financial Corporation, on April 16, 2013, sent a
letter to director Jay Sidhu questioning whether his objectives
relate to the best interests of all the Company's shareholders or
a mere limited group Mr. Sidhu appear to represent.
"[W]e want to make clear to you that the Board of Directors will
not allow the best interests of all shareholders of Atlantic Coast
Financial Corporation to be subverted so you may pursue an agenda
to benefit a limited group with whom you may be acting in
concert," the Company said.
As previously reported by the TCR on April 18, 2013, Messrs. Jay
Sidhu and Bhanu Choudhrie, two of the Company's directors, opposed
the Company's proposed merger with Bond Street Holdings, Inc.
They asserted that the consideration being offered to stockholders
is inadequate and the process undertaken by the Board of Directors
in considering and approving the Merger and Merger Agreement,
including its failure to adequately consider a recapitalization
alternative, was fundamentally flawed.
The Company contended that the proposed transaction is in the best
interests of all shareholders, the Company's banking organization
and the communities Atlantic Coast Bank serves.
"While you dissented to the proposed merger, your alternative
recapitalization proposal was not considered a viable alternative.
After thorough review of your proposal by the Board and its
financial and legal advisors, the Board concluded that it had
significant execution risk that, if pursued, could put
shareholders' entire investment in jeopardy," the Company
concluded.
About Atlantic Coast
Jacksonville, Florida-based Atlantic Coast Financial Corporation
is the holding company for Atlantic Coast Bank, a federally
chartered and insured stock savings bank. It is a community-
oriented financial institution serving northeastern Florida and
southeastern Georgia markets through 12 locations, with a focus on
the Jacksonville metropolitan area.
Atlantic Coast disclosed a net loss of $6.66 million in 2012, as
compared with a net loss of $10.28 million in 2011. The Company's
balance sheet at Dec. 31, 2012, showed $772.61 million in total
assets, $732.35 million in total liabilities and $40.26 million in
total stockholders' equity.
McGladrey LLP, in Jacksonville, Florida, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that the
Company has suffered recurring losses from operations that have
adversely impacted capital at Atlantic Coast Bank. The failure to
comply with the regulatory consent order may result in Atlantic
Coast Bank being deemed undercapitalized for purposes of the
consent order and additional corrective actions being imposed that
could adversely impact the Company's operations. This raises
substantial doubt about the Company's ability to continue as a
going concern.
AURORA DIAGNOSTICS: Revenue Slide Cues Moody's to Cut CFR to B3
---------------------------------------------------------------
Moody's Investors Service downgraded Aurora Diagnostics Holdings,
LLC's Corporate Family Rating to B3 from B2 and Probability of
Default Rating to B3-PD from B2-PD. Moody's also lowered the debt
ratings of Aurora Diagnostics Holdings, LLC's and Aurora
Diagnostics, LLC. Concurrently, Moody's affirmed Aurora's
Speculative Grade Liquidity Rating at SGL-3. The outlook for the
ratings remains negative.
The downgrade of the ratings reflects Moody's expectation that the
company will see a significant decline in revenue and EBITDA
related to a reduction in Medicare reimbursement that took effect
in January 2013, the impact of lower Medicare reimbursement from
the beginning of sequestration in April 2013 and continued
challenging volume growth trends. This will negatively impact the
company's credit metrics and the resulting reduction in free cash
flow will constrain Aurora's ability to repay debt.
Following is a summary of Moody's rating actions.
Ratings downgraded:
Aurora Diagnostics Holdings, LLC:
Corporate Family Rating to B3 from B2
Probability of Default Rating to B3-PD from B2-PD
Senior unsecured notes due 2018 to Caa1 (LGD 5, 73%) from B3 to
(LGD 5, 74%)
Aurora Diagnostics, LLC:
Senior secured revolving credit facility expiring 2015 to Ba3 (LGD
2, 17%) from Ba2 (LGD 2, 18%)
Senior secured term loan due 2016 to Ba3 (LGD 2, 17%) from Ba2
(LGD 2, 18%)
Ratings affirmed:
Speculative Grade Liquidity Rating, at SGL-3
Ratings Rationale:
Aurora's B3 Corporate Family Rating reflects Moody's expectation
that the company will continue to operate with considerable
financial leverage and that adjusted debt to EBITDA is likely to
remain above 7.0 times through 2014. Moody's expects that all of
the company's credit metrics will weaken considerably from current
levels as the company absorbs reductions in reimbursement. Moody's
also anticipates that the difficult operating environment,
characterized by considerable competition for pathology services
and slow growth in physician visits, will continue in the near
term. However, the rating also reflects the company's adequate
liquidity and the absence of any near term debt maturities.
The negative outlook reflects Moody's expectation that the company
will see declines in revenue and EBITDA related to reductions in
reimbursement and the continuation of a challenging operating
environment. This will have a significant negative impact on the
company's credit metrics and constrain free cash flow.
Given the pressures facing the company in the next year, Moody's
does not foresee an upgrade of the rating in the near term.
However, Moody's could upgrade the rating if Aurora is able to
sustain debt to EBITDA below 5.0 times and improve the
availability of free cash flow after funding future obligations
related to contingent payments.
Moody's could downgrade the rating if the company's operating
results decline in excess of expectations so that the
sustainability of the capital structure comes into doubt given the
considerable interest burden. Moody's could also downgrade the
rating if liquidity is expected to deteriorate. Specifically, if
free cash flow is expected to be negative for an extended period
or if compliance with covenant requirements becomes less certain
Moody's could downgrade the rating.
The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Headquartered in Palm Beach Gardens, Florida, Aurora, through its
subsidiaries, provides physician-based general anatomic and
clinical pathology, dermatopathology, molecular diagnostic
services and other esoteric testing services to physicians,
hospitals, clinical laboratories and surgery centers. The company
recognized approximately $278 million in revenue for the year
ended December 31, 2012.
* * *
Bill Rochelle, the bankruptcy columnist for Bloomberg News, notes
Moody's downgrade matched the action taken in November by Standard
& Poor's. S&P downgraded as a result of a "surprisingly large
reduction" in reimbursement rates by Medicare and Medicaid.
BERRY PLASTICS: Expects $1.1 Billion Net Sales for March 30 Qtr.
----------------------------------------------------------------
Berry Plastics Group, Inc., disclosed certain estimated financial
information related to its results of operations for the quarter
ending on March 30, 2013.
For the March 2013 quarter, the Company estimates that net sales
declined to approximately $1,145 to $1,155 million from $1,183
million in the March 2012 quarter. This decrease of 2% to 3%
is primarily related to a 3% reduction in the number of
shipping days as a result of the timing of holidays versus
the prior year's quarter, the year-over- year adverse change
in weather, and light-weighting partially offset by volume
gains in certain of our product lines. Also, the Company estimate
that Adjusted EBITDA will be $199 to $204 million for the March
2013 quarter compared to $198 million in the March 2012
quarter. This increase of 1% to 3% is primarily related to
cost reduction efforts partially offset by additional costs
associated with new product innovation. Estimated net debt
at March 30, 2013, was $3,991 million.
Assuming the Company's initial public offering and 2013 debt
refinancing occurred at the beginning of the period, the Company's
interest expense for the four quarter period ended March 30, 2013,
would be approximately $63 million lower.
At March 30, 2013, the Company estimates the cash payout in the
next 12 months under the tax receivable agreement to be $68
million. This is a reduction from the end of the last fiscal
quarter primarily as a result of the debt extinguishment costs
from the 2013 refinancing and bonus depreciation on capital
expenditures.
Amends Common Stock Prospectus
Berry Plastics has amended its Form S-1 registration statement
relating to the public offering of shares of common stock by
Apollo Funds, Graham Berry Holdings, L.P., James M. Kratochvil, et
al., of up to 16,500,000 shares. Berry Plastics will not receive
any of the proceeds from the sale of shares in this offering.
The Company's common stock is listed on the New York Stock
Exchange under the symbol "BERY." The last reported closing sale
price of the Company's common stock on April 15, 2013 was $17.95
per share.
A copy of the amended prospectus is available for free at:
http://is.gd/2pNf1m
About Berry Plastics
Berry Plastics Corporation manufactures and markets plastic
packaging products, plastic film products, specialty adhesives and
coated products. At Jan. 2, 2010, the Company had more than 80
production and manufacturing facilities, primarily located in the
United States. Berry is a wholly-owned subsidiary of Berry
Plastics Group, Inc. Berry Group is primarily owned by affiliates
of Apollo Management, L.P., and Graham Partners. Berry, through
its wholly owned subsidiaries operates five reporting segments:
Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings
and Specialty Films. The Company's customers are located
principally throughout the United States, without significant
concentration in any one region or with any one customer.
On Dec. 3, 2009, Berry Plastics obtained control of 100% of the
capital stock of Pliant upon Pliant's emergence from
reorganization pursuant to a proceeding under Chapter 11 for a
purchase price of $602.7 million. Pliant is a leading
manufacturer of value-added films and flexible packaging for food,
personal care, medical, agricultural and industrial applications.
The acquired business is primarily operated in Berry's Specialty
Films reporting segment.
The Company's balance sheet at Dec. 29, 2012, showed $5.05 billion
in total assets, $5.36 billion in total liabilities and a $313
million total stockholders' deficit.
* * *
As reported by the TCR on Feb. 1, 2013, Moody's Investors Service
upgraded the corporate family rating of Berry Plastics to B2 from
B3 and the probability of default rating to B2-PD from B3-PD. The
upgrade of the corporate family rating to B2 from B3 reflects
the improvement in pro-forma credit metrics and management's
publicly stated goal to pursue a less aggressive, more balanced
financial profile.
In November 2011, Standard & Poor's Ratings Services affirmed the
'B-' corporate credit rating on Berry and its holding company
parent, Berry Plastics Group Inc. "The ratings on Berry reflect
the risks associated with the company's highly leveraged financial
profile and acquisition- driven growth strategy as well as its
fair business risk profile," said Standard & Poor's credit analyst
Cynthia Werneth.
In November 2011, Standard & Poor's Ratings Services affirmed the
'B-' corporate credit rating on Berry and its holding company
parent, Berry Plastics Group Inc. "The ratings on Berry reflect
the risks associated with the company's highly leveraged financial
profile and acquisition- driven growth strategy as well as its
fair business risk profile," said Standard & Poor's credit analyst
Cynthia Werneth.
BERRY PLASTICS: Amends 16.5 Million Common Shares Prospectus
------------------------------------------------------------
Berry Plastics Group, Inc., has amended its Form S-1 registration
statement relating to a public offering of 16,500,000 shares of
common stock of the Company by Apollo Funds and Graham Berry
Holdings, L.P. Berry Plastics will not receive any of the
proceeds from the sale of shares in this offering. The Company's
common stock is listed on the New York Stock Exchange under the
symbol "BERY." The last reported closing sale price of the
Company's common stock on April 10, 2013, was $18.65 per share. A
copy of the amended prospectus is available at http://is.gd/VegX8z
About Berry Plastics
Berry Plastics Corporation manufactures and markets plastic
packaging products, plastic film products, specialty adhesives and
coated products. At Jan. 2, 2010, the Company had more than 80
production and manufacturing facilities, primarily located in the
United States. Berry is a wholly-owned subsidiary of Berry
Plastics Group, Inc. Berry Group is primarily owned by affiliates
of Apollo Management, L.P., and Graham Partners. Berry, through
its wholly owned subsidiaries operates five reporting segments:
Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings
and Specialty Films. The Company's customers are located
principally throughout the United States, without significant
concentration in any one region or with any one customer.
On Dec. 3, 2009, Berry Plastics obtained control of 100% of the
capital stock of Pliant upon Pliant's emergence from
reorganization pursuant to a proceeding under Chapter 11 for a
purchase price of $602.7 million. Pliant is a leading
manufacturer of value-added films and flexible packaging for food,
personal care, medical, agricultural and industrial applications.
The acquired business is primarily operated in Berry's Specialty
Films reporting segment.
The Company's balance sheet at Dec. 29, 2012, showed $5.05 billion
in total assets, $5.36 billion in total liabilities and a $313
million total stockholders' deficit.
* * *
As reported by the TCR on Feb. 1, 2013, Moody's Investors Service
upgraded the corporate family rating of Berry Plastics to B2 from
B3 and the probability of default rating to B2-PD from B3-PD. The
upgrade of the corporate family rating to B2 from B3 reflects
the improvement in pro-forma credit metrics and management's
publicly stated goal to pursue a less aggressive, more balanced
financial profile.
In November 2011, Standard & Poor's Ratings Services affirmed the
'B-' corporate credit rating on Berry and its holding company
parent, Berry Plastics Group Inc. "The ratings on Berry reflect
the risks associated with the company's highly leveraged financial
profile and acquisition- driven growth strategy as well as its
fair business risk profile," said Standard & Poor's credit analyst
Cynthia Werneth.
In November 2011, Standard & Poor's Ratings Services affirmed the
'B-' corporate credit rating on Berry and its holding company
parent, Berry Plastics Group Inc. "The ratings on Berry reflect
the risks associated with the company's highly leveraged financial
profile and acquisition- driven growth strategy as well as its
fair business risk profile," said Standard & Poor's credit analyst
Cynthia Werneth.
BIRDSALL SERVICES: Bankruptcy Judge Clears Cash Lifeline
--------------------------------------------------------
Katy Stech at Dow Jones' DBR Small Cap reports a bankruptcy judge
approved a deal that will restart the flow of money to indicted
New Jersey engineering firm Birdsall Services Group Inc., enabling
a new company leader to look for buyers and rehire roughly 300
workers who are managing projects along the state's hurricane-
battered coastline.
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.
BUENA VISTA: S&P Assigns Preliminary 'CCC+' Issuer Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned Ione, Calif.-based
Buena Vista Gaming Authority (the Authority) its 'CCC+'
preliminary issuer credit rating. The rating outlook is stable.
The Authority is a wholly owned unincorporated instrumentality of
the Buena Vista Rancheria of Me-Wuk Indians (the Tribe).
At the same time, S&P assigned the Authority's proposed
$220 million senior secured notes due 2021 its 'CCC+' preliminary
issue-level rating (the same as S&P's preliminary issuer credit
rating). The Authority also intends to raise up to $25 million of
furniture, furnishings, and equipment financing (FF&E), which S&P
will not rate.
Additionally, the authority has already incurred $94.4 million in
development costs that were funded by a Developer Note. The
Developer Note (which S&P has not been asked to rate) will remain
in the capital structure and its terms will be amended
concurrently with the close of the proposed transaction such
that its maturity date is extended beyond the maturity of the
proposed notes.
S&P do not assign recovery ratings to Native American debt issues,
because there are sufficient uncertainties surrounding the
exercise of creditor rights against a sovereign nation, including
whether the Bankruptcy Code would apply, whether a U.S. court
would ultimately be the appropriate venue to settle such a matter,
and to what extent a creditor would be able to enforce any
judgment against the sovereign nation.
S&P's preliminary ratings are subject to its review of final
documentation.
The Authority plans to use proceeds from the proposed transaction
to:
-- Fund the development and construction of the Buenavue Casino
(the casino);
-- Establish an interest reserve to fund debt service during
the construction period and the first several months
following the opening of the casino;
-- Fund previous settlement payments;
-- Fund tribal distributions; and
-- Fund transaction fees and expenses.
S&P's preliminary 'CCC+' issuer credit rating on the Authority
reflects its assessment of its business risk profile as
"vulnerable" and its assessment of its financial risk profile as
"highly leveraged."
"Our business risk profile assessment of vulnerable reflects the
construction and execution risks associated with developing a new
gaming property, as well as the Authority's reliance on a single
asset in a highly competitive market to meet fixed charges. In
addition, given that the Authority Board, which oversees the
gaming operations of the Authority, is appointed by the sole
member of the Tribal Council and has limited experience in the
gaming industry, we currently view management and governance as
"weak." However, we do incorporate into our analysis that Warner
Gaming, the proposed manager of the Buenavue Casino, has extensive
experience running casino properties. The business risk
assessment also reflects ongoing litigation challenging the
validity of the gaming compact and the eligibility of land for
gaming operations," S&P said.
"Our assessment of the Authority's financial risk profile as
highly leveraged reflects our belief that new gaming projects are
often somewhat slow to ramp up operations because of uncertain
demand and challenges in managing initial costs effectively, which
can lead to poor profitability, particularly in the first few
months. The Authority relies on a single property for cash flow
generation, and we estimate that the interest reserve will provide
a limited cushion after the 12-month construction period has
ended. While the rating incorporates a scenario in which the
property ramps up to the point that EBITDA meets total fixed
charges under the proposed capital structure, this scenario relies
not only on strong execution by the management team, but also on
no significant changes to the competitive landscape," S&P added.
CATASYS INC: Inks $1.5MM Investment Agreement with Crede, et al.
----------------------------------------------------------------
Catasys, Inc., on April 10, 2013, entered into Securities Purchase
Agreements with several investors, including Crede CG II, Ltd.,
an affiliate of Terren S. Peizer, chairman and chief executive
officer of the Company, and David E. Smith, an affiliate of the
Company, relating to the sale and issuance of an aggregate of
21,928,571 shares of the Company's common stock, par value $0.0001
per share and warrants to purchase an aggregate of 21,928,571
shares of Common Stock, at an exercise price of $0.07 per share,
for an aggregate gross proceed to the Company of approximately
$1.5 million. The Company anticipates based on its current cash
burn rate, anticipated future enrollment and its business plan
that this financing will provide the Company with sufficient
capital to become cash flow positive.
Among other things, the Agreements provide that in the event that
the Company effectuates a reverse stock split of its Common Stock
within 24 months of the closing date of the Offering and the
volume weighted average price of the Common Stock during the 20
trading days following the effective date of the Reverse Split
declines from the closing price on the trading date immediately
prior to the effective date of the Reverse Split, that the Company
issue additional shares of Common Stock. The number of Adjustment
Shares will be calculated as the lesser of (a) 20% of the number
of shares of Common Stock originally purchased by such Investor
and still held by the Investor as of the last day of the VWAP
Period, and (b) the number of shares originally purchased by that
Investor and still held by that Investor as of the last day of the
VWAP Period multiplied by the percentage decline in the VWAP
during the VWAP Period. All prices and number of shares of Common
Stock will be adjusted for the Reverse Split and any other stock
splits or stock dividends.
The Warrants are exercisable immediately and expire on the fifth
anniversary of the date of issuance. The Warrants are
exercisable, at the option of each holder, in whole or in part by
delivering to the Company a duly executed exercise notice
accompanied by payment in full for the number of shares of Common
Stock purchased upon such exercise. The exercise price and the
number of shares of Common Stock purchasable upon the exercise of
each Warrant are subject to adjustment in the event of stock
dividends, distributions, and splits. The exercise price of the
Warrants will be adjusted downwards in the event that Common Stock
or Common Stock Equivalents are issued by the Company at a price
below the exercise price of the Warrants, with certain exceptions.
In the event that Adjustment Shares are issued, the number of
shares that may be purchased under the Warrants will be increased
by an amount equal to the Adjustment Shares. In addition, the
exercise price is subject to adjustment in the event that the VWAP
during the VWAP Period is less than the exercise price prior to
the VWAP Period.
In the aggregate, Crede invested approximately $1.2 million in the
Offering. After giving effect to the Offering, Mr. Peizer
beneficially owns approximately 74.9% of the Common Stock of the
Company, including shares underlying options and warrants. Mr.
Smith invested $228,000 in the Offering and after giving effect to
the Offering, Mr. Smith beneficially owns approximately 38.4% of
the Common Stock of the Company, including shares underlying
warrants (or approximately 24.0% on a fully diluted basis).
About Catasys Inc.
Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys,
Inc., is a healthcare services management company, providing
through its Catasys(R) subsidiary specialized behavioral health
management services for substance abuse to health plans.
Catasys disclosed a net loss of $11.64 million for the 12 months
ended Dec. 31, 2012, as compared with a net loss of $8.12 million
on $267,000 of total revenues in 2011.
The Company's balance sheet at Dec. 31, 2012, showed $4.93 million
in total assets, $18.69 million in total liabilities and a $13.75
million total stockholders' deficit.
Rose, Snyder & Jacobs LLP, in Encino, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has incurred significant operating losses and
negative cash flows from operations during the year ended Dec. 31,
2012, which raise substantial doubt about the Company's ability to
continue as a going concern.
Bankruptcy Warning
"As of March 28, 2013, we had a balance of approximately $1.6
million cash on hand. We had working capital deficit of
approximately $376,000 at December 31, 2012 and have continued to
deplete our cash position subsequent to December 31, 2012. We
have incurred significant net losses and negative operating cash
flows since our inception. We could continue to incur negative
cash flows and net losses for the next twelve months. Our current
cash burn rate is approximately $450,000 per month, excluding non-
current accrued liability payments. We expect our current cash
resources to cover expenses into July 2013, however delays in cash
collections, revenue, or unforeseen expenditures could impact this
estimate. We are in need to obtain additional capital and while
we are currently in discussions with our existing shareholders
regarding additional financing there is no assurance that
additional capital can be raised in an amount which is sufficient
for us or on terms favorable to our stockholders, if at all. If
we do not obtain additional capital, there is a significant doubt
as to whether we can continue to operate as a going concern and we
will need to curtail or cease operations or seek bankruptcy
relief. If we discontinue operations, we may not have sufficient
funds to pay any amounts to stockholders."
CATASYS INC: David Smith Ownership Lowered to 38.5% at April 10
---------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, David E. Smith and his affiliates disclosed
that, as of April 10, 2013, they beneficially owned 67,546,853
shares of common stock of Catasys, Inc., representing 38.5% of the
shares outstanding. Mr. Smith previously reported beneficial
ownership of 61,032,567 common shares or 40.8% equity stake as of
Dec. 4, 2012. A copy of the amended regulatory filing is
available for free at http://is.gd/IilGIF
About Catasys Inc.
Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys,
Inc., is a healthcare services management company, providing
through its Catasys(R) subsidiary specialized behavioral health
management services for substance abuse to health plans.
Catasys disclosed a net loss of $11.64 million on $541,000 of
total revenues for the 12 months ended Dec. 31, 2012, as compared
with a net loss of $8.12 million on $267,000 of total revenues in
2011.
The Company's balance sheet at Dec. 31, 2012, showed $4.93 million
in total assets, $18.69 million in total liabilities and a $13.75
million total stockholders' deficit.
Rose, Snyder & Jacobs LLP, in Encino, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has incurred significant operating losses and
negative cash flows from operations during the year ended Dec. 31,
2012, which raise substantial doubt about the Company's ability to
continue as a going concern.
Bankruptcy Warning
"As of March 28, 2013, we had a balance of approximately $1.6
million cash on hand. We had working capital deficit of
approximately $376,000 at December 31, 2012 and have continued to
deplete our cash position subsequent to December 31, 2012. We
have incurred significant net losses and negative operating cash
flows since our inception. We could continue to incur negative
cash flows and net losses for the next twelve months. Our current
cash burn rate is approximately $450,000 per month, excluding non-
current accrued liability payments. We expect our current cash
resources to cover expenses into July 2013, however delays in cash
collections, revenue, or unforeseen expenditures could impact this
estimate. We are in need to obtain additional capital and while
we are currently in discussions with our existing shareholders
regarding additional financing there is no assurance that
additional capital can be raised in an amount which is sufficient
for us or on terms favorable to our stockholders, if at all. If
we do not obtain additional capital, there is a significant doubt
as to whether we can continue to operate as a going concern and we
will need to curtail or cease operations or seek bankruptcy
relief. If we discontinue operations, we may not have sufficient
funds to pay any amounts to stockholders."
CEREPLAST INC: Incurs $30.2 Million Net Loss in 2012
----------------------------------------------------
Cereplast, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$30.16 million on $894,000 of net sales for the year ended
Dec. 31, 2012, as compared with a net loss of $14 million on
$20.25 million of net sales for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $16.18
million in total assets, $26.20 million in total liabilities and a
$10.02 million total shareholders' deficit.
HJ Associates & Consultants, LLP, in Salt Lake City, Utah, issued
a "going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has suffered significant recurring
losses, has a significant accumulated deficit, and has
insufficient working capital to fund planned operations. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
Bankruptcy Warning
"Our plan to address the shortfall of working capital is to
generate additional financing through a combination of refinancing
existing credit facilities, incremental product sales and raising
additional debt and equity financing. We are confident that we
will be able to deliver on our plans, however, there are no
assurances that we will be able to obtain any sources of financing
on acceptable terms, or at all.
If we cannot obtain sufficient additional financing in the short-
term, we may be forced to curtail or cease operations or file for
bankruptcy."
A copy of the Form 10-K is available for free at:
http://is.gd/cSKl0W
About Cereplast
El Segundo, Calif.-based Cereplast, Inc., has developed and is
commercializing proprietary bio-based resins through two
complementary product families: Cereplast Compostables(R) resins
which are compostable, renewable, ecologically sound substitutes
for petroleum-based plastics, and Cereplast Sustainables(TM)
resins (including the Cereplast Hybrid Resins product line), which
replaces up to 90% of the petroleum-based content of traditional
plastics with materials from renewable resources.
CHARTER COMMUNICATIONS: Fitch Rates US$1.2-Bil. Term Loan 'BB+'
---------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' senior secured rating to
Charter Communications Operating, LLC's (CCO) proposed seven-year,
$1.2 billion term loan F. In addition Fitch has assigned a 'BB-'
rating to CCO Holdings, LLC's (CCOH) $1 billion issuance of senior
unsecured notes due 2024.
Proceeds from the term loan, along with a draw from CCO's revolver
are expected to be used for general corporate purposes including
repayment of a portion of CCO's existing bank debt. Fitch
anticipates proceeds from the CCOH issuance will be used to fund
the redemption of CCOH's 7.875% senior notes due 2018. CCO and
CCOH are indirect wholly owned subsidiaries of Charter
Communications, Inc. (Charter). As of Dec. 31, 2012, Charter had
approximately $12.9 billion of debt (principal value) outstanding
including $3.3 billion of senior secured debt.
KEY RATING DRIVERS:
-- The terms and conditions of term loan F are substantially
similar to the existing senior secured credit facility.
-- The issuance is in line with Charter's strategy to simplify its
debt structure and extend its maturity profile while reducing
leverage to its target range of 4x to 4.5x.
-- Acquisition of Bresnan is neutral to Charter's ratings and will
not generate meaningful cost synergies or present integration
risks.
-- Expected improvement in Charter's credit profile likely to be
delayed by Bresnan acquisition.
The issuance is in line with Charter's strategy to simplify its
debt structure and extend its maturity profile while reducing
leverage to its target range of 4x to 4.5x. The issuance will not
result in any material improvement of the company's credit
profile, however, but reduces refinancing risk related to 2016
scheduled maturities. Pro forma for term loan F and prior capital
market transactions, Charter's 2016 scheduled maturities are
expected to be reduced to approximately $75 million from $1.6
billion as of Dec. 31, 2012. The near-term maturity schedule is
very manageable as only 5.9% of outstanding debt as of Dec. 31,
2012 is scheduled to mature before 2016, including $260 million
and $411 million during 2013 and 2014, respectively.
Fitch's ratings incorporate Charter's pending acquisition of
Bresnan Broadband Holdings, LLC for $1.625 billion in cash. Fitch
anticipates the debt-funded acquisition will modestly increase
Charter's leverage; however, leverage will remain within Fitch's
expectations for the rating. Charter's leverage will increase to
approximately 5.1x on a pro forma basis as of the latest 12-month
(LTM) period ending Dec. 31, 2012, after giving consideration for
the incremental debt associated with the proposed transaction and
Bresnan's EBITDA generation. Actual leverage as of Dec. 31, 2012
was 4.75x.
The incremental debt associated with the acquisition will slow the
pace of expected improvement in Charter's credit profile during
2013. Fitch now anticipates Charter's leverage will remain close
to 5x at the end of 2013 before declining somewhat to 4.6x by the
end of 2014.
Fitch believes that Charter has sufficient capacity within the
current ratings to accommodate changes to the company's operating
strategy and plans to maintain a higher level of capital
expenditures (relative to historical norms and peer comparisons).
In Fitch's opinion, the strategy shift along with higher level of
capital expenditures will lead to a stronger overall competitive
position. The changes to Charter's operating strategy support the
company's overall strategic objectives, setting the foundation for
sustainable growth while creating a more efficient operating
profile. However, Fitch expects the strategy will hinder free cash
flow generation and strain EBITDA margins during 2013, limiting
overall financial flexibility and slowing the company's progress
to achieving its leverage target. During the short term, Fitch
believes that customer connections, revenue and expense metrics
will be negatively impacted.
Charter generated approximately $131 million of free cash flow
during the year-ended 2012, down markedly from the $426 million of
free cash flow produced during the year-ended 2011. Charter's more
viable capital structure has positioned the company to generate
positive free cash flow. However Fitch expects free cash flow
generation during 2013 will suffer from the effects of lower
operating margin and higher capital intensity. Capital
expenditures during 2012 increased 33% relative to last year to
approximately $1.8 billion, representing 23% of revenues. Fitch
believes capital intensity will remain elevated during 2013 and
2014. Fitch anticipates Charter will generate between $250 million
and $300 million of free cash flow during 2013 and produce between
$450 million to $500 million during 2014 when stronger margins
return.
Rating concerns center on Charter's elevated financial leverage
(relative to other large cable MSOs), a comparatively weaker
subscriber clustering, and operating profile. Moreover, Charter's
ability to adapt to the evolving operating environment while
maintaining its relative competitive position given the
challenging competitive environment and weak housing and
employment trends remains a key consideration.
Charter's liquidity position is adequate given the current rating
and is supported by cash on hand, borrowing capacity from CCO's
$1.15 billion revolver (approximately $960 million was available
as of Dec. 31, 2012 and $835 million adjusted for the Bresnan
acquisition) and expected free cash flow generation. Charter's
revolver commitment expires on April 11, 2017. Fitch notes that
Charter is in the process of increasing the size of its revolver
to $1.3 billion and extending the maturity date into 2018.
Charter has successfully extended its maturity profile, as only
5.9% of outstanding debt as of Dec. 31, 2012 is scheduled to
mature before 2016, including $260 million and $411 million during
2013 and 2014, respectively. Previous capital market activity
addressed the refinancing risk related to 2016 scheduled
maturities. Pro forma for CCO Holdings, LLC issuance in February
2013, 2016 scheduled maturity is reduced to approximately $591
million from $1.6 billion as of Dec. 31, 2012.
RATING SENSITIVITIES:
Positive rating actions would be contemplated:
-- As leverage declines below 4.5x;
-- The company demonstrates progress in closing gaps relative to
its industry peers on service penetration rates and strategic
bandwidth initiatives;
-- Operating profile strengthens as the company captures
sustainable revenue and cash flow growth envisioned when
implementing the current operating strategy.
Fitch believes negative rating actions would likely coincide with:
-- A leveraging transaction that increases leverage beyond 5.5x
in the absence of a credible deleveraging plan;
-- Adoption of a more aggressive financial strategy;
-- A perceived weakening of Charter's competitive position or
failure of the current operating strategy to produce
sustainable revenue and cash flow growth along with
strengthening operating margins.
CHARTER COMMUNICATIONS: Moody's Rates Proposed $1-Bil. Bond 'B1'
----------------------------------------------------------------
Moody's Investors Service assigned a Baa3 rating to the proposed
first lien credit facility of Charter Communications Operating
LLC. The company expects to use proceeds of the proposed $1.2
billion term loan to repay existing first lien CCO term loans.
Moody's also assigned a B1 rating to the proposed $1 billion bond
issuance of CCO Holdings, LLC. The company expects to use proceeds
to finance a tender offer or redemption of the 7.875% senior notes
due 2018 of CCO Holdings, LLC ($900 million outstanding).
The transaction represents a favorable extension of maturities and
will likely modestly reduce interest expense. It does not
materially impact the mix of first lien debt and bonds or the
company's credit profile. As such, all other ratings are
unchanged.
Charter Communications Operating, LLC
Senior Secured Bank Credit Facility, Assigned Baa3, LGD2, 11%
CCO Holdings, LLC
Senior Unsecured Bonds, Assigned B1, LGD4, 68%
Ratings Rationale:
Charter's Ba3 corporate family rating reflects its moderately high
financial risk, with leverage of 4.9 times debt-to-EBITDA and
likely to increase slightly with the Bresnan acquisition. This
leverage poses risk considering the pressure on revenue from its
increasingly mature core video offering (which represents about
half of total revenue) and the intensely competitive environment
in which it operates. Moody's expects Charter's initiatives to
enhance its product set, especially the video offering, and to
implement changes to its selling strategy and organizational
structure will keep operating and capital expenditures elevated,
pressuring both EBITDA and free cash flow over the next several
quarters, but greater penetration of all products and continued
expansion of the commercial business should yield more EBITDA.
Also, capital intensity will likely moderate, albeit at a level
higher than peers, facilitating growing free cash flow. The
company's substantial scale and Moody's expectations for
operational improvements and growth in high speed data and
commercial phone customers, along with the meaningful perceived
asset value associated with its sizeable (over 5 million) customer
base, support the rating, as does the company's good liquidity.
The principal methodology used in this rating was the Global Cable
Television Industry Methodology published in July 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.
CHARTER COMMUNICATIONS: S&P Rates $3.25-Bil. Facilities 'BB+'
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned Charter Communications
Operating LLC's aggregate $3.25 billion amended and new secured
credit facilities an issue-level rating of 'BB+', with a recovery
rating of '1', indicating S&P's expectation for very high (90% to
100%) recovery of principal in the event of a payment default. At
the same time, S&P assigned a 'BB-' issue-level rating to
co-issuers CCO Holdings LLC and CCO Holdings Capital Corp.'s
$1 billion senior notes due 2024. The recovery rating on this
unsecured debt is '3', indicating S&P's expectation of meaningful
(50% to 70%) recovery. All borrowers are subsidiaries of
Stamford, Conn.-based cable operator Charter Communications Inc.
(Charter).
The amended credit facilities consist of a $750 million term loan
A due 2018 and a $1.3 billion revolving credit facility due 2018.
Amendments include a one-year maturity extension of both the term
loan A and the revolver as well as a $150 million upsize of the
revolver. S&P do not consider the $150 million increase in the
revolver material relative to the approximately $13 billion of
reported debt as of Dec. 31, 2012. Further, because proceeds of
the two new debt issues--the $1.2 billion secured term loan F due
2021 and the $1 billion of unsecured notes--will refinance
essentially equal amounts of like classes of debt, recovery
ratings, as detailed in S&P's recent recovery report, are not
affected. Accordingly, S&P's ratings on Charter and subsidiaries,
including the 'BB-' corporate credit rating and the stable
outlook, are not affected by the amended facilities.
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 relative to cable peers is
likely to continue, and the eventual effectiveness of recent
customer service and investments may not be apparent immediately.
Charter recently priced a $1.5 billion delayed draw term loan to
finance the bulk of it $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 will add about 366,000 customer
relationships, including about 300,000 basic video customers in
Colorado, Montana, Wyoming, and Utah. Debt leverage of about 5x,
pro forma for a small increase in leverage from the Bresnan
acquisition, is at the upper end of 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
$750 Mil. Secured Term Loan A due 2018 BB+
Recovery Rating 1
$1.3 Bil. Secured Revolver Due 2018 BB+
Recovery Rating 1
$1.2 Bil. Secured Term Loan F Due 2021 BB+
CCO Holdings LLC
CCO Holdings Capital Corp.
$1 Bil. Senior Unsecured Notes Due 2024 BB-
Recovery Rating 3
CHINA DU KANG: Reports $925,000 Net Income in 2012
--------------------------------------------------
China Du Kang Co., Ltd., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing net
income of $924,661 on $5.07 million of gross revenues for the year
ended Dec. 31, 2012, as compared with a net loss of $696,001 on
$3.09 million of gross revenues for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $17.60
million in total assets, $7.24 million in total liabilities and
$10.36 million in total equity.
Keith K. Zhen, CPA, in Brooklyn, New York, did not issue a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012.
After auditing the 2011 financial statements, Keith K. Zhen, CPA,
in Brooklyn, New York, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the company incurred an operating loss for
each of the years in the two-year period ended Dec. 31, 2011, and
as of Dec. 31, 2011, had an accumulated deficit.
A copy of the Form 10-K is available for free at:
http://is.gd/WaTtri
About China Du Kang
Headquartered in Xi'an, Shaanxi, in the PRC, China Du Kang Co.,
Ltd., was incorporated as U.S. Power Systems, Inc., in the State
of Nevada on Jan. 16, 1987. The Company is principally engaged in
the business of production and distribution of distilled spirit
with the brand name of "Baishui Dukang". The Company also
licenses the brand name to other liquor manufactures and liquor
stores.
* * *
This concludes the Troubled Company Reporter's coverage of
China Du Kang until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at
a level sufficient to warrant renewed coverage.
CHINA GREEN: Swings to $635,800 Profit in 2012
----------------------------------------------
China Green Creative, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing net
income of $635,873 on $6.87 million of revenues for the year ended
Dec. 31, 2012, as compared with a net loss of $344,901 on $1.92
million of revenue during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $6.35 million
in total assets, $8.06 million in total liabilities and a $1.71
million total stockholders' deficit.
Madsen & Associates CPA's, Inc., in Salt Lake City, Utah, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company does not have the necessary
working capital to service its debt and for its planned activity,
which raises substantial doubt about its ability to continue as a
going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/ALUuEo
About China Green
China Green Creative, Inc., located in Shenzhen, Guangdong
Province, People's Republic of China, is principally engaged in
the distribution of consumer goods and electronic products in the
PRC.
CHIPOLA COMMUNITY BANK: Closed; First Federal Assumes Deposits
--------------------------------------------------------------
Chipola Community Bank of Marianna, Florida, was closed on Friday,
April 19, 2013, by the Florida Office of Financial Regulation,
which appointed the Federal Deposit Insurance Corporation (FDIC)
as receiver. To protect the depositors, the FDIC entered into a
purchase and assumption agreement with First Federal Bank of
Florida, Lake City, Florida, to assume all of the deposits of
Chipola Community Bank.
The sole branch of Chipola Community Bank will reopen on Monday as
a branch of First Federal Bank of Florida. Depositors of Chipola
Community Bank will automatically become depositors of First
Federal Bank of Florida.
As of December 31, 2012, Chipola Community Bank had approximately
$39.2 million in total assets and $37.6 million in total deposits.
In addition to assuming all of the deposits of the failed bank,
First Federal Bank of Florida agreed to purchase essentially all
of the assets.
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-331-6306. The phone number will be
operational from 9:00 a.m. to 5:00 p.m., CDT. Interested parties
also can visit the FDIC's Web site
at http://www.fdic.gov/bank/individual/failed/chipola.html
The FDIC estimates that the cost to the Deposit Insurance Fund
(DIF) will be $10.3 million. Compared to other alternatives,
First Federal Bank of Florida's acquisition was the least costly
resolution for the FDIC's DIF. Chipola Community Bank is the
eighth FDIC-insured institution to fail in the nation this year,
and the second in Florida. The last FDIC-insured institution
closed in the state was Heritage Bank of North Florida, Orange
Park.
CHRIST HOSPITAL: Resolution Consulting Objects to Liquidation Plan
------------------------------------------------------------------
Resolution Consulting, Inc., objects to the Joint Plan of Orderly
Liquidation proposed by Christ Hospital and the Official Committee
of Unsecured Creditors complaining that the Debtor's Schedules of
Assets and Liabilities erroneously indicated that it was already
paid $27,298 in satisfaction of a mortgage.
Under the Plan, on the Effective Date, the PBGC will be paid $4
million and the Debtor's assets will be transferred to the
Liquidating Trust for the benefit of creditors. Thereafter, the
Liquidating Trustee will be responsible for liquidating the assets
and making distributions to creditors in accordance with the terms
of the Plan.
Allowed General Unsecured Claims will receive, in full and final
satisfaction of its Allowed Class 4 Claim, a Pro Rata share of the
monies to be distributed from the GUC Account on account of
Allowed Class 4 Claims by the Liquidating Trust (subject to
appropriate reserves described in the Plan).
About Christ Hospital
Christ Hospital filed for Chapter 11 bankruptcy (Bankr. D.N.J.
Case No. 12-12906) on Feb. 6, 2012. Christ Hospital, founded in
1872 by an Episcopalian priest, is a 367-bed acute care hospital
located in Jersey City, New Jersey at 176 Palisade Avenue, serving
the community of Hudson County. The Debtor is well-known for its
broad range of services from primary angioplasty for cardiac
patients to intensity modulated radiation therapy for those
battling cancer. Christ Hospital is the only facility in Hudson
County to offer IMRT therapy, which is the most significant
breakthrough in cancer treatment in recent years.
Christ Hospital filed for Chapter 11 after an attempt to sell the
assets fell through. Judge Morris Stern presides over the case.
Lawyers at Porzio, Bromberg & Newman, P.C., serve as the Debtor's
counsel. Alvarez & Marsal North America LLC serves as financial
advisor. Logan & Company Inc. serves as the Debtor's claim and
noticing agent.
The Health Professional and Allied Employees AFT/AFI-CIO is
represented in the case by Mitchell Malzberg, Esq., at Mitnick &
Malzberg P.C.
Attorneys at Sills, Cummis & Gross, P.C., represent the Official
Committee of Unsecured Creditors.
On March 27, 202, Judge Stern approved the sale of the Hospital's
assets to Hudson Hospital Holdo, LLC. Hudson bid $45,271,000 for
the Hospital's assets. The sale of the Debtor's assets to Hudson
closed on July 13, 2012.
CIRTRAN CORP: Incurs $1.7 Million Net Loss in 2012
--------------------------------------------------
Cirtran Corporation filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$1.78 million on $4.26 million of net sales for the year ended
Dec. 31, 2012, as compared with a net loss of $7.04 million on
$3.06 million of net sales for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $887,082 in
total assets, $26.73 million in total liabilities and a $25.84
million total stockholders' deficit.
Sadler, Gibb & Associates, LLC, in Salt Lake City, UT, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company had accumulated losses of
$48,514,796 as of Dec. 31, 2012, which raises substantial doubt
about its ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/nJeORN
West Valley City, Utah-based CirTran Corporation manufactures,
markets, and distributes internationally an energy drink under a
license, now in dispute, with Playboy Enterprises, Inc., or
Playboy, and in the U.S., the Company provides a mix of high- and
medium-volume turnkey manufacturing services and products using
various high-tech applications for leading electronics OEMs
(original equipment manufacturers) in the communications,
networking, peripherals, gaming, law enforcement, consumer
products, telecommunications, automotive, medical, and
semiconductor industries. Its services include pre-manufacturing,
manufacturing, and post-manufacturing services.
CITIZENS CORP: Fi-Data Has Liquidating Plan
-------------------------------------------
Financial Data Technology Corporation's Plan of Liquidation dated
Feb. 1, 2013, proposes a liquidation of all of the Debtor's
assets, and the remaining cash distributed to creditors. The
Debtor proposes paying all administrative, secured, and priority
claims in full, that all general Unsecured Creditors -- not
including the claims of Community South Bank and Decatur County
Bank -- receive a pro rata amount of remaining cash. A copy of
the Disclosure Statement is available for free at
http://bankrupt.com/misc/CITIZENS_CORPORATION_ds.pdf
About Citizens Corp.
Franklin, Tennessee-based Citizens Corp. operates a mortgage
brokerage business. Citizens Corp. filed for Chapter 11
bankruptcy (Bankr. M.D. Tenn. Case No. 11-11792) on Nov. 28, 2011.
Judge George C. Paine, II, presides over the case. The Debtor
employed Robert J. Mendes, Esq., at MGLAW, PLLC, as its counsel.
Citizens, in its amended schedules disclosed $53,971,951 in assets
and $17,885,280 in liabilities as of the Chapter 11 filing.
Lenders Tennessee Commerce Bank is represented by David W.
Houston, IV, Esq., at Burr & Forman LLP.
Citizens filed a reorganization plan offering to pay all
creditors in full over time, including Tennessee Commerce Bank and
other secured lenders owed $17.3 million. Unsecured creditors,
owed a combined $81,000, would be paid off in equal installments
over five years.
On Feb. 27, 2012, the Court granted the request of lender Legends
Bank for appointment of a Chapter 11 trustee. The Court held that
an independent person must review many of the transactions
involving CEO Ed Lowery, and its wholly owned subsidiary,
Financial Data Technology Corporation. Gary M. Murphey, the
Chapter 11 trustee is represented by Harwell, Howard, Hyne,
Gabbert & Manner, P.C.
Marion Ed Lowery, a former owner of Peoples State Bank of Commerce
of Nolensville and various other entities, is the subject of
federal investigation and his ventures have ties throughout the
Middle Tennessee banking community. He signed the Chapter 11
petition.
CLEAR CHANNEL: 2016 Loan Trades at 11% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Clear Channel
Communications, Inc., is a borrower traded in the secondary market
at 89.21 cents-on-the-dollar during the week ended Friday, April
19, 2013, an increase of 0.46 percentage points from the previous
week according to data compiled by LSTA/Thomson Reuters MTM
Pricing and reported in The Wall Street Journal. The Company pays
365 basis points above LIBOR to borrow under the facility. The
bank loan matures on Jan. 30, 2016, and carries Moody's 'Caa1'
rating and Standard & Poor's 'CCC+' rating. The loan is one of
the biggest gainers and losers for the week ended April 19 among
225 widely quoted syndicated loans with five or more bids in
secondary trading.
About Clear Channel
San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) --
http://www.ccmediaholdings.com/-- is the parent company of Clear
Channel Communications, Inc. CC Media Holdings is a global media
and entertainment company specializing in mobile and on-demand
entertainment and information services for local communities and
premier opportunities for advertisers. The Company's businesses
include radio and outdoor displays.
Clear Channel reported a net loss of $302.09 million on $6.16
billion of revenue in 2011, compared with a net loss of $479.08
million on $5.86 billion of revenue in 2010. The Company had a
net loss of $4.03 billion on $5.55 billion of revenue in 2009.
The Company's balance sheet at June 30, 2012, showed
$16.45 billion in total assets, $24.31 billion in total
liabilities, and a $7.86 billion total shareholders deficit.
Bankruptcy Warning
At March 31, 2012, the Company had $20.7 billion of total
indebtedness outstanding.
The Company said in its quarterly report for the period ended
March 31, 2012, that its ability to restructure or refinance the
debt will depend on the condition of the capital markets and the
Company's financial condition at that time. Any refinancing of
the Company's debt could be at higher interest rates and increase
debt service obligations and may require the Company and its
subsidiaries to comply with more onerous covenants, which could
further restrict the Company's business operations. The terms of
existing or future debt instruments may restrict the Company from
adopting some of these alternatives. These alternative measures
may not be successful and may not permit the Company or its
subsidiaries to meet scheduled debt service obligations. If the
Company and its subsidiaries cannot make scheduled payments on
indebtedness, the Company or its subsidiaries, as applicable, will
be in default under one or more of the debt agreements and, as a
result the Company could be forced into bankruptcy or liquidation.
* * *
The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings
has affirmed the 'CCC' Issuer Default Rating of Clear Channel
Communications, Inc., and the 'B' IDR of Clear Channel Worldwide
Holdings, Inc., an indirect wholly owned subsidiary of Clear
Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor
advertising subsidiary. The Rating Outlook is Stable.
Fitch's concerns center on the company's highly leveraged capital
structure, with significant maturities in 2014 and 2016; the
considerable and growing interest burden that pressures free cash
flow; technological threats and secular pressures in radio
broadcasting; and the company's exposure to cyclical advertising
revenue. The ratings are supported by the company's leading
position in both the outdoor and radio industries, as well as the
positive fundamentals and digital opportunities in the outdoor
advertising space.
As reported by the TCR on Feb. 25, 2013, Standard & Poor's Ratings
Services affirmed its 'CCC+' corporate credit rating on Texas-
based Clear Channel Communications Inc. and CC Media Holdings.
Standard & Poor's Ratings Services' rating on CC Media Holdings
Inc. reflects the risks surrounding the long-term viability of its
capital structure--in particular, refinancing risk relating to
significant 2016 debt maturities of about $10 billion.
Participations in a syndicated loan under which Longview Power LLC
is a borrower traded in the secondary market at 73.45 cents-on-
the-dollar during the week ended Friday, March 31, 2013, according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents a drop of 0.17
percentage points from the previous week, the Journal relates.
The loan matures on February 28, 2014. The Company pays 225 basis
points above LIBOR to borrow under the facility.
Longview is a special purpose entity created to construct, own,
and operate a 695 MW supercritical pulverized coal-fired power
plant located in Maidsville, West Virginia, just south of the
Pennsylvania border and approximately 70 miles south of
Pittsburgh. The project is owned 92% by First Reserve Corporation
(First Reserve or sponsor), a private equity firm specializing in
energy industry investments, through its affiliate GenPower
Holdings (Delaware), L.P., and 8% by minority interests.
COATES INTERNATIONAL: Incurs $4.5 Million Net Loss in 2012
----------------------------------------------------------
Coates International, Ltd., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $4.53 million on $0 of sales for the year ended
Dec. 31, 2012, as compared with a net loss of $2.99 million on
$125,000 of sales for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $2.43 million
in total assets, $6.37 million in total liabilities and a $3.93
million total stockholders' deficiency.
Cowan, Gunteski & Co., P.A.
, in Tinton Falls, New Jersey, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012, citing negative cash flows from
operations, recurring losses from operations, and a stockholders'
deficiency that raise substantial doubt about the Company's
ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/1fs4L9
About Coates International
Based in Wall Township, N.J., Coates International, Ltd.
(OTC BB: COTE) -- http://www.coatesengine.com/-- was incorporated
on August 31, 1988, for the purpose of researching, patenting and
manufacturing technology associated with a spherical rotary valve
system for internal combustion engines. This technology was
developed over a period of 15 years by Mr. George J. Coates, who
is the President and Chairman of the Board of the Company.
The Coates Spherical Rotary Valve System (CSRV) represents a
revolutionary departure from the conventional poppet valve. It
changes the means of delivering the air and fuel mixture to the
firing chamber of an internal combustion engine and of expelling
the exhaust produced when the mixture ignites.
COLLEGE BOOK: Trustee Has Until May 8 to Use Cash Collateral
------------------------------------------------------------
The Hon. Marian F. Harrison of the U.S. Bankruptcy Court for the
Middle District of Tennessee signed a fourth agreed order allowing
the Debtor to use cash collateral until May 8, 2013. All carve
out language and other provisions of said order relating to the
use of cash collateral are extended until May 8.
About College Book
Four creditors filed an involuntary Chapter 11 bankruptcy petition
against Murray, Kentucky-based College Book Rental Company, LLC
(Bankr. M.D. Ky. Case No. 12-09130) in Nashville on Oct. 4, 2012.
Bankruptcy Judge Marian F. Harrison oversees the case. The
petitioning creditors are represented by Joseph A. Kelly, Esq., at
Frost Brown Todd LLC. The petitioning creditors are David
Griffin, allegedly owed $15 million for money loaned; Commonwealth
Economics, allegedly owed $15,000 for unpaid services provided;
John Wittman, allegedly owed $158 for unpaid services provided;
and CTI Communications, allegedly owed $21,793 for unpaid services
provided.
The owners of College Book Rental consented to the Chapter 11 case
and the appointment of a Chapter 11 trustee to run CBR. CBR is
co-owned by Chuck Jones of Murray and David Griffin of Nashville,
Tenn.
An agreed order for relief under Chapter 11 was entered on
Oct. 15, 2012. Robert H. Waldschmidt was appointed as trustee the
next day.
CONEXANT SYSTEMS: Gets OK for Ch. 11 Disclosure Statement
---------------------------------------------------------
Jamie Santo of BankruptcyLaw360 reported that a Delaware
bankruptcy judge signed off on Conexant Systems Inc.'s Chapter 11
amended disclosure statement Friday, allowing the private equity-
owned microchip developer to begin soliciting votes for its
prepackaged reorganization plan.
According to the report, the revised document incorporates a
global settlement between Conexant, secured lender QP SFM Capital
Holdings Ltd. and the official committee of unsecured creditors
that resolves all objections to the disclosure statement, ensuring
that the company can meet the milestones for its expedited
reorganization, debtors' counsel Joshua A. Sussberg of Kirkland &
Ellis LLP told the court.
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.
CONSOLIDATED MERIDIAN: Moss Adams Sanctioned for Contempt
---------------------------------------------------------
In an April 5, 2013 Memorandum Opinion, Bankruptcy Judge Karen A.
Overstreet found Moss Adams LLP in contempt in the bankruptcy case
of Consolidated Meridian Funds and held that civil sanctions are
warranted in the matter.
Late last year, the Court orally ruled that Moss Adams failed with
comply with a subpoena served in related to In Re CONSOLIDATED
MERIDIAN FUNDS, aka MERIDIAN INVESTORS, et al. (Bankr. D. Wash.,
Case No. 10-17952).
After conducting an evidentiary hearing in February 2013, Judge
Overstreet ruled that the appropriate sanction for Moss Adam's
failure to use reasonable efforts to comply with the subpoena is
to compensate the liquidating trustee for his fees and costs
incurred in gaining that compliance.
The Meridian case began in July 2010, when involuntary Chapter 11
petitions were filed by creditors of four funds managed by
Frederick Darren Berg. Mark Calvert was appointed liquidating
trustee in the Meridian case.
A copy of Judge Overstreet's April 5, 2013 Memorandum Decision is
available at http://is.gd/jiRHSufrom Leagle.com.
About Meridian Mortgage and
Frederick Darren Berg
In November 2010, a federal grand jury in Seattle indicted
Frederick Darren Berg on 12 counts of wire fraud, money laundering
and bankruptcy fraud in connection with the demise of his Meridian
Group of investment funds. Prosecutors believe Mr. Berg took in
more than $280 million, with the losses attributed to the ponzi
scheme estimated to be roughly $100 million. Hundreds of victims
have lost money in the scheme between 2001 and 2010.
Mr. Berg commenced a personal Chapter 11 case on July 27, 2010
(Bankr. W.D. Wash. Case No. 10-18668), estimating assets of
more than $10 million and liabilities between $1 million and
$10 million. The filing came after lawyers for one group of
investors, armed with a court order and accompanied by sheriff's
deputies, began seizing personal possessions at Mr. Berg's Mercer
Island home and downtown Seattle condo.
Diana K. Carey, trustee for Mr. Berg's estate, filed on Jan. 27,
2011, voluntary Chapter 11 petitions for Mortgage Investors Fund I
LLC (Bankr. W.D. Wash. Case No. 11-10830) estimating assets of up
to $50,000 and debts of up to $50 million and Meridian Mortgage
Investors Fund III LLC (Case No. 11-10833), estimating up to
$50,000 in assets and up to $100 million in liabilities. Michael
J. Gearin, Esq., at K&L Gates LLP, in Seattle, served as counsel
to the Debtors.
Creditors filed an involuntary Chapter 11 petition for Meridian
Mortgage Investors Fund II LLC (Bankr. W.D. Wash. Case No.
10-17976) on July 9, 2010. The petitioners were represented by
Jane E. Pearson, Esq., at Foster Pepper PLLC, in Seattle.
Creditors filed involuntary Chapter 11 petitions for Meridian
Mortgage Investors Fund VIII, LLC (Bankr. W.D. Was. Case No.
10-17958) and Meridian Mortgage Investors Fund V, LLC (Bankr. W.D.
Wash. Case No. 10-17952) on July 9, 2010. The petitioners were
represented by John T. Mellen, Esq., at Keller Rohrback LLP, in
Seattle, and Cynthia A. Kuno, Esq., at Hanson Baker Ludlow
Drumheller PS, in Bellevue, represent the petitioners.
On June 22, 2011, the Bankruptcy Court entered an order confirming
a consensual Chapter 11 plan in the Meridian bankruptcy. The Plan
provides for the creation of the Liquidating Trust for the
Substantively Consolidated Meridian Funds, a/k/a/ The Meridian
Investors Trust. Mr. Calvert was named Liquidating Trustee.
On Feb. 9, 2012, Mr. Berg was sentenced to 18 years of
imprisonment, three years of supervised release, and restitution.
COOPER GAY: S&P Assigns 'CCC+' Rating to $120MM 2nd-Lien Term Loan
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
'B' debt rating and '3' recovery rating (indicating S&P's
expectation for meaningful [50%-70%] recovery of principal in the
event of a default) to Cooper Gay Swett & Crawford Ltd. 's (CGSC)
$305 million first-lien term loan B due 2020 and $75 million
first-lien revolving credit facility (undrawn at closing) due
2018. S&P also assigned its 'CCC+' debt rating and '6' recovery
rating (indicating S&P's expectation for negligible [0%-10%]
recovery of principal in the event of a default) to the company's
$120 million second-lien term loan C due 2020.
At the same time, S&P withdrew all ratings on HMSC Corp., since
the company has repaid this debt as part of the transaction.
"We assigned these ratings following CGSC's announcement that it
has completed its transaction to refinance its capital structure
in conjunction with the company's purchase by private equity firm
Lightyear Capital and co-investors," said Standard & Poor's credit
analyst Ying Chan. "Under the recapitalization, CGSC paid down
all existing debt at HMSC Corp. and Cooper Gay (Holdings) Ltd.,
both wholly owned subsidiaries of the company, and refinanced at
the group level: CGSC with respect to the revolver; and CGSC of
Delaware Holdings Corp., a wholly owned subsidiary, with respect
to the term loans."
CST BRANDS: Moody's Gives 'Ba2' CFR & Rate New $550MM Notes 'Ba3'
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba2 corporate family rating
and a Ba2-PD probability of default rating to CST Brands, Inc.
Additionally, Moody's assigned a Ba3 rating to the company's
proposed $550 million senior unsecured notes. Moody's also
assigned CST an SGL-1 Speculative Grade Liquidity rating. The
rating outlook is stable. The proceeds of the financing will be
used to fund CST's spin-off from Valero Energy Corporation.
"Although CST lacks an established track record operating as an
independent company, its pro forma debt protection metrics are
relatively good and we expect them to remain appropriate for its
Ba2 rating category in the near to medium term", said Mickey
Chadha, Senior Analyst at Moody's Investors Service.
Ratings Rationale:
The Ba2 Corporate Family Rating reflects CST's relatively good
debt protection measures, very good liquidity, meaningful scale,
relatively diverse profit stream and Moody's opinion that consumer
demand for motor fuel and value priced convenience items will
retain some degree of stability regardless of economic conditions.
The ratings are constrained by CST's lack of an established track
record operating as an independent company, the high sales and
earnings volatility related to motor fuel sales which account for
a substantial majority of the company's revenue, and some regional
concentration.
The following ratings are assigned:
Corporate Family Rating at Ba2
Probability of Default Rating at Ba2-PD
Proposed $550 million Senior Unsecured Notes maturing 2023 at Ba3
(LGD5, 84%)
The stable outlook reflects Moody's expectation that CST's
liquidity will remain good, credit metrics will not deteriorate
and business conditions will remain fairly stable in the next 12-
18 months.
An upgrade would require an established track record of operating
as an independent company and a balanced growth strategy that
supports the credit profile required of a higher rating. An
upgrade would also require at least good liquidity, a sustained
improvement in credit metrics driven in part by increasing higher
margin merchandise revenues and stronger operating performance of
its fuel business. Quantitatively an upgrade would require
debt/EBITDA sustained below 3.0 times and EBITA/interest sustained
near 5.0 times.
Deterioration in operating performance resulting in weakening of
liquidity or credit metrics could result in a downgrade. Growth
strategy that negatively impacts liquidity or metrics could also
pressure ratings. Specifically ratings could be downgraded if
debt/EBITDA is sustained above 4.0 times and EBITA/interest is
sustained below 3.0 times.
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.
CST is one of the largest independent retailers of motor fuel and
convenience merchandise items in the U.S. and eastern Canada. The
company has two operating segments, Retail--U.S. which has 1,032
convenience stores located in Arizona, Arkansas, California,
Colorado, Louisiana, New Mexico, Oklahoma, Texas and Wyoming, and
Retail--Canada which has 848 retail sites located in New
Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince
Edward Island and Quebec. The company sells motor fuel under the
Valero and Diamond Shamrock brands in the U.S. and Ultramar brand
in Canada.
CST BRANDS: S&P Assigns 'BB' Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned fuel retailer
and convenience store operator CST Brands Inc. its 'BB' corporate
credit rating. The outlook is stable.
At the same time, S&P assigned a 'BBB-' issue-level rating (two
notches higher than the corporate credit rating) and a '1'
recovery rating to CST's proposed $800 million first-lien senior
secured credit facilities. The proposed first-lien secured credit
facilities consist of a $300 million revolving and a $500 million
term loan. S&P is also assigning its 'BB-' issue-level rating to
CST's proposed $550 million unsecured notes, with a '5' recovery
rating.
"CST is currently a subsidiary of Valero Energy Corp. and
currently represents its retail fuel and convenience merchandise
operations," said credit analyst Andy Sookram. "Valero is
spinning off CST through a distribution of about 80% of CST's
common stock to shareholders in a transaction it expects to
complete in 2013. The transaction is subject to the U.S. Internal
Revenue Service's ruling that the distribution is tax-free."
The outlook is stable. S&P believes credit protection metrics
will remain consistent for the company's significant financial
risk profile with leverage of about 2.8x and FFO-to-debt of about
26%. S&P forecasts fuel margins of about 18 cents a gallon and a
slight growth in fuel volumes. S&P expects CST will maintain
adequate liquidity and will use cash flows to fund store
initiatives, without incurring sizeable dividends or acquisitions
in the next year.
S&P could lower the rating if operating performance weakens, which
could occur because of persistently rising fuel prices that
squeeze fuel margins or intensified competitive pressures. In
such scenario, fuel margins will decline to 16 cents and leverage
is 3.2x or higher. In addition, S&P could take negative rating
action if the company pursues sizable debt-financed acquisition or
shareholder initiatives.
S&P do not anticipate an upgrade in the next year, given its
forecast for leverage of around 2.8x and expectation that the
business risk profile will remain weak. Still, S&P could raise
the rating if for instance, leverage declines to under 2.5x and
merchandise margins improve to levels consistent with peer
averages. In the latter scenario, S&P would likely revise the
business risk profile to fair from weak.
CYCLONE POWER: Incurs $3 Million Net Loss in 2012
-------------------------------------------------
Cyclone Power Technologies, Inc., filed with the U.S. Securities
and Exchange Commission its annual report on Form 10-K disclosing
a net loss of $3 million on $1.13 million of revenue for the year
ended Dec. 31, 2012, as compared with a net loss of $23.70 million
on $250,000 of revenue in 2011.
The Company's balance sheet at Dec. 31, 2012, showed $1.50 million
in total assets, $4.09 million in total liabilities and a $2.59
million total stockholders' deficit.
Mallah Furman, in Mallah Furman, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that the
Company's dependence on outside financing, lack of sufficient
working capital, and recurring losses raises substantial doubt
about its ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/8e6Zky
The Company has released a progress report to its shareholders.
"Overall, we are pleased with our operational and technological
growth and milestones achieved in 2012, and determined to show
even stronger results moving forward," the Company said in the
Report. "Although there is more work to do to complete the
development of our engines, move products into production and
commence consistent revenue, we believe that the steps taken in
2012 have put us into a strong and favorable position to
accomplish this plan."
A copy of the Progress Report is available for free at:
http://is.gd/OQb3jU
About Cyclone Power
Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink
Sheets: CYPW) is a clean-tech engineering company, whose business
is to develop, commercialize and license its patented Rankine
cycle engine technology for applications ranging from renewable
power generation to transportation. The Company is the successor
entity to the business of Cyclone Technologies LLLP, a limited
liability limited partnership formed in Florida in June 2004.
Cyclone Technologies LLLP was the original developer and
intellectual property holder of the Cyclone engine technology.
DATA JACK: Incurs $6.7 Million Net Loss in 2012
-----------------------------------------------
Data Jack, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$6.71 million on $2.52 million of revenues for the year ended Dec.
31, 2012, as compared with a net loss of $4.49 million on $1.92
million of revenues for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $2.12 million
in total assets, $4.82 million in total liabilities and a $2.69
million total shareholders' deficit.
RBSM LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2012. The independent auditors noted that the Company has
incurred significant recurring net loss in the current year and
also in the past. These factors, among others, raise substantial
doubt about the Company's ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/lKGAjN
About Data Jack
Data Jack, Inc. (formerly Quamtel, Inc.), incorporated in 1999
under the laws of Nevada, is a communications company offering,
through its subsidiaries, a comprehensive range of mobile
broadband and communications products and services that are
designed to meet the needs of individual consumers, businesses,
government subscribers and resellers. The Company's operations
are organized to meet the needs of its targeted subscriber groups
through focused communications solutions that incorporate the
capabilities of the Company's mobile broadband and communications
services. The Company's common stock trades on the OTC Bulletin
Board (OTCBB) under the symbol "DJAK".
DEX MEDIA EAST: 2014 Loan Trades at 28% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Dex Media
East LLC is a borrower traded in the secondary market at 71.54
cents-on-the-dollar during the week ended Friday, April 19, 2013,
an increase of 0.29 percentage points from the previous week
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. The Company pays 250 basis
points above LIBOR to borrow under the facility. The bank loan
matures on Oct. 24, 2014. The loan is one of the biggest gainers
and losers for the week ended April 9, among 225 widely quoted
syndicated loans with five or more bids in secondary trading.
About R.H. Donnelley & Dex Media East
Dex One, headquartered in Cary, North Carolina, is a local
business marketing services company that includes print
directories and online voice and mobile search.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex
Media East LLC, Dex Media West LLC and Dex Media Inc., filed for
Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09-
11852) on May 28, 2009. They emerged from bankruptcy on Jan. 29,
2010. On the Effective Date and in connection with its emergence
from Chapter 11, RHD was renamed Dex One Corporation.
Dex One reported a net loss of $518.96 million in 2011 compared
with a net loss of $923.59 million for the eleven months ended
DEX MEDIA WEST: 2014 Loan Trades at 23% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Dex Media West LLC
is a borrower traded in the secondary market at 76.58 cents-on-
the-dollar during the week ended Friday, April 19, 2013, an
increase of 0.58 percentage points from the previous week
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. The Company pays 450 basis
points above LIBOR to borrow under the facility. The bank loan
matures on Oct. 24, 2014. The loan is one of the biggest gainers
and losers for the week ended April 19, among 225 widely quoted
syndicated loans with five or more bids in secondary trading.
About R.H. Donnelley & Dex Media East
Dex One, headquartered in Cary, North Carolina, is a local
business marketing services company that includes print
directories and online voice and mobile search.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media
East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter
11 protection (Bank. D. Del. Case No. 09-11833 through 09-11852)
on May 28, 2009. They emerged from bankruptcy on Jan. 29, 2010.
On the Effective Date and in connection with its emergence from
Chapter 11, RHD was renamed Dex One Corporation.
Dex One reported a net loss of $518.96 million in 2011 compared
with a net loss of $923.59 million for the eleven months ended
Dec. 31, 2010.
DIALOGIC INC: Common Stock Moved to OTCQB from NASDAQ
-----------------------------------------------------
Dialogic Inc., on April 15, 2013, received a Staff Determination
Letter from the Listing Qualifications Department of The NASDAQ
Stock Market that the NASDAQ Hearings Panel had determined to
delist the Company's shares from the NASDAQ Stock Market, and that
trading in the Company's shares would be suspended effective at
the open of business on Wednesday, April 17, 2013. The Company
was also notified that The NASDAQ Stock Market will complete the
delisting of the Company's shares by filing a Form 25-NSE
Notification of Delisting with the Securities Exchange Commission
after applicable appeal periods have lapsed. The Company does not
intend to further appeal NASDAQ's delisting determination.
The Company received a deficiency notice on Dec. 26, 2012,
notifying the Company that it had not regained compliance with
NASDAQ Listing Rule 5810(c)(3)(D) and that the Company's
securities would be scheduled for delisting from The NASDAQ Global
Market and would be suspended at the opening of business on
Jan. 4, 2013, unless the Company requested an appeal of Staff's
decision to the Panel. Accordingly, the Company requested a
hearing before the Panel; and appeared before the Panel at a
hearing on March 7, 2013.
On March 15, 2013, the Panel rendered its decision and allowed the
Company to continue to be listed on The NASDAQ Global Market,
subject to the condition that, on or before April 15, 2013, the
Company would demonstrate to the Panel that it had regained
compliance with the Market Value Rule. As the Company did not
regain compliance with the Market Value Rule, the Staff has
determined to delist the Company's shares from the Nasdaq Stock
Market.
Beginning with the opening of trading on Wednesday, April 17,
2013, the Company's common stock trades on the OTCQB. The
Company's common stock will continue to trade under the symbol
"DLGC."
About Dialogic
Milpitas, Cal.-based Dialogic Inc. provides communications
platforms and technology that enable developers and service
providers to build and deploy innovative applications without
concern for the complexities of the communication medium or
network.
Dialogic disclosed a net loss of $37.77 million in 2012, as
compared with a net loss of $54.81 million in 2011. The Company's
balance sheet at Dec. 31, 2012, showed $123.38 million in total
assets, $141.22 million in total liabilities and a $17.84 million
total stockholders' deficit.
Bankruptcy Warning
"If future covenant or other defaults occur under the Term Loan
Agreement or under the Revolving Credit Agreement (the "Revolving
Credit Agreement") with Wells Fargo Foothill Canada ULC (the
"Revolving Credit Lender"), the Company does not anticipate having
sufficient cash and cash equivalents to repay the debt under these
agreements should it be accelerated and would be forced to
restructure these agreements and/or seek alternative sources of
financing. There can be no assurances that restructuring of the
debt or alternative financing will be available on acceptable
terms or at all. In the event of an acceleration of the Company's
obligations under the Revolving Credit Agreement or Term Loan
Agreement and the Company's failure to pay the amounts that would
then become due, the Revolving Credit Lender and Term Loan Lenders
could seek to foreclose on the Company's assets, as a result of
which the Company would likely need to seek protection under the
provisions of the U.S. Bankruptcy Code and/or its affiliates might
be required to seek protection under the provisions of applicable
bankruptcy codes," according to the Company's annual report for
the period ended Dec. 31, 2012.
DIGITAL ANGEL: MGT to Buy Mobile Game Application Business
----------------------------------------------------------
Digital Angel Corporation entered into an Asset Purchase Agreement
with MGT Capital Investments, Inc., pursuant to which MGT will
acquire the Company's mobile game application business assets,
including the rights to the two mobile game applications currently
under development.
The purchase price consists of a cash payment in the amount of
$136,630 and the receipt of 50,000 shares of MGT's common stock
valued at $212,500, based on the closing price of MGT's common
stock on April 15, 2013. The common stock will bear a restrictive
legend until that time as the shares are registered or can be sold
pursuant to an exemption from registration. MGT will also assume
the obligations under an office sublease and a joint development
agreement.
The parties anticipate closing the transaction on or before
April 30, 2013. There are termination provisions in the
agreement, including by mutual consent of the parties or if the
closing does not occur by April 30, 2013, among other reasons.
A copy of the Asset Purchase Agreement is available at:
http://is.gd/6WWL0w
Meanwhile, effective April 11, 2013, Mr. Joseph Grillo, a
director and former chief executive officer of the Company,
entered into a letter agreement with the Company wherein Mr.
Grillo waived his rights to receive a third year non-compete
payment under the terms of his employment agreement with the
Company. The Letter Agreement also amended the existing
consulting agreement between the Company and Mr. Grillo to provide
for an additional two months of consulting payments at $25,000
each month (through March 31, 2013) in recognition of Mr. Grillo's
continued involvement in the sale and liquidation of the Company's
United Kingdom operations, and terminated Mr. Grillo's previous
employment agreement with the Company. As a result, all
obligations to Mr. Grillo have been satisfied in full. Mr. Grillo
remains a director of the Company.
As previously disclosed, under the terms of the Stock Purchase
Agreement related to the sale of 100% of the outstanding capital
stock of Destron Fearing Corporation between Allflex USA, Inc.,
and the Company, $2.5 million of the purchase price payable to the
Company was placed in an escrow fund, from which $59,275 was
previously released to Allflex to cover certain agreed expenses,
leaving a balance of approximately $2.44 million remaining in
escrow. The escrow agreement provided for a Jan. 22, 2013,
release of funds, however each party had made claims against the
escrow and the Company had filed a lawsuit in connection with its
claim. On March 22, 2013, the Company and Allflex entered into a
Settlement Agreement and Mutual Release under which the parties
agreed to split equally the initial escrow balance of $2.5 million
as well as the interest earned on the funds while held in escrow
and, accordingly, the Company received $1,250,572 of the escrow
funds on March 26, 2013. The settlement agreement also provided
for a full mutual release of all claims, obligations, and
liabilities of the parties as well as a dismissal of the Company's
lawsuit against Allflex.
About Digital Angel
Headquartered in New London, Connecticut, Digital Angel
Corporation has two business segments, Digital Games and Signature
Communications. Digital Games designs, develops and plans to
publish consumer applications and mobile games for tablets,
smartphones and other mobile devices. Signature Communications is
a distributor of two-way communications equipment in the U.K.
Products offered range from conventional radio systems used by the
majority of SigComm's customers, for example, for safety and
security uses and construction and manufacturing site monitoring,
to trunked radio systems for large scale users, such as local
authorities and public utilities.
The Company's balance sheet at Sept. 30, 2012, showed $5.7 million
in total assets, $7.5 million in total liabilities, and a
stockholders' deficit of $1.8 million.
The Company said in its quarterly report for the period ended
Sept. 30, 2012, "Our historical sources of liquidity have included
proceeds from the sale of businesses, the sale of common stock and
preferred shares and proceeds from the issuance of debt. In
addition to these sources, other sources of liquidity may include
the raising of capital through additional private placements or
public offerings of debt or equity securities, as well as joint
ventures. However, going forward some of these sources may not be
available, or if available, they may not be on favorable terms.
In addition, our factoring line may also be amended or terminated
at any time by the lender with six months' notice. These
conditions indicate that there is substantial doubt about our
ability to continue operations as a going concern, as we may be
unable to generate the funds necessary to pay our obligations in
the ordinary course of business."
DTS8 COFFEE: Taps Atlanta Capital as IR Consultant
--------------------------------------------------
DTS8 Coffee Company, Ltd., entered into an agreement with Atlanta
Capital Partners, LLC, to provide investor relation services. The
engagement commences on the April 15, 2013, and will continue on a
year-to-year basis until terminated by either party upon 30 days
prior written notice to the other party. The Company will pay to
Consultant, in advance, 300,000 restricted shares for the
engagement.
A copy of the Agreement is available for free at:
http://is.gd/k4JndY
About DTS8 Coffee
DTS8 Coffee Company, Ltd. (previously Berkeley Coffee & Tea, Inc.)
was incorporated in the State of Nevada on March 27, 2009.
Effective Jan. 22, 2013, the Company changed its name from
Berkeley Coffee & Tea, Inc., to DTS8 Coffee Company, Ltd. On
April 30, 2012, the Company acquired 100% of the issued and
outstanding capital stock of DTS8 Holdings Co., Ltd., a
corporation organized and existing since June 2008 under the laws
of Hong Kong and which owns DTS8 Coffee (Shanghai) Co., Ltd.
DTS8 Holdings, through its subsidiary DTS8 Coffee, is a gourmet
coffee roasting company established in June 2008. DTS8 Coffee's
office and roasting factory is located in Shanghai, China. DTS8
Coffee is in the business of roasting, marketing and selling
gourmet roasted coffee to its customers in Shanghai, and other
parts of China. It sells gourmet roasted coffee under the "DTS8
Coffee" label through distribution channels that reach consumers
at restaurants, multi-location coffee shops, and offices.
As reported in the TCR on Aug. 14, 2012, MaloneBailey, LLP, in
Houston, Texas, expressed substantial doubt about Berkeley Coffee
& Tea Inc.'s ability to continue as a going concern, following
the Company's results for the fiscal year ended April 30, 2012.
The independent auditors noted that the Company has suffered
recurring losses from operations.
The Company's balance sheet at Jan. 31, 2013, showed $4.62 million
in total assets, $661,274 in total liabilities and $3.96 million
in total shareholders' equity.
E-DEBIT GLOBAL: Incurs $831,000 Net Loss in 2012
------------------------------------------------
E-Debit Global Corporation filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $831,276 on $2.33 million of total revenue for the
year ended Dec. 31, 2012, as compared with a net loss of $1.09
million on $3.34 million of total revenue in 2011.
The Company's balance sheet at Dec. 31, 2012, showed $636,246 in
total assets, $2.59 million in total liabilities and a $1.95
million total stockholders' deficit.
Schumacher & Associates, Inc., in Littleton, Colorado, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has incurred net losses for the
years ended Dec. 31, 2012, and 2011, and had a working capital
deficit and a stockholders' deficit at Dec. 31, 2012, and 2011,
which raise substantial doubt about its ability to continue as a
going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/Rqvjro
About E-Debit Global Corporation
E-Debit Global Corporation (WSHE) is a financial holding company
in Canada at the forefront of debit, credit and online computer
banking. Currently, the Company has established a strong presence
in the privately owned Canadian banking sector including Automated
Banking Machines (ABM), Point of Sale Machines (POS), Online
Computer Banking (OCB) and E-Commerce Transaction security and
payment. E-Debit maintains and services a national ABM network
across Canada and is a full participating member of the Canadian
INTERAC Banking System.
EAST COAST DIVERSIFIED: Incurs $4.3 Million Net Loss in 2012
------------------------------------------------------------
East Coast Diversified Corporation filed with the U.S. Securities
and Exchange Commission its annual report on Form 10-K disclosing
a net loss of $4.28 million on $715,986 of total revenues for the
year ended Dec. 31, 2012, as compared with a net loss of $2.34
million on $517,661 of total revenues for the year ended Dec. 31,
2011.
The Company's balance sheet at Dec. 31, 2012, showed $746,807 in
total assets, $3.47 million in total liabilities, $1.10 million in
contingent acquisition liabilities, $294,955 in amounts payable in
common stock, $158,822 in derivative liability and a $4.28 million
total stockholders' deficit.
DKM Certified Public Accountants, in Clearwater, Florida, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has significant net losses and
cash flow deficiencies which conditions raise substantial doubt
about the Company's ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/jfizjS
About East Coast Diversified
East Coast Diversified Corporation, headquartered in Marietta,
Georgia, through its majority owned subsidiary, EarthSearch
Communications International, Inc., offers a portfolio of GPS
devices, RFID interrogators, integrated GPS/RFID technologies and
Tag designs.
EASTMAN KODAK: Seeks Bidding Process for Document Imaging Biz
-------------------------------------------------------------
Eastman Kodak Co. is seeking approval from U.S. Bankruptcy Judge
Allan Gropper to hold bidding for its document imaging business.
The bidding process will allow other potential buyers to match the
offer by Brother Industries Ltd. to purchase some of Kodak's
document imaging business.
Kodak earlier announced an agreement o sell the assets for $210
million in cash under a "stalking horse" bid by Brother
Industries. Brother Industries will also be assuming liability
for deferred service revenue from the document imaging business
totaling about $67 million as of Dec. 31, 2012.
In a bankruptcy auction, a "stalking horse" typically sets the
floor for bidding and makes the lead bid at the auction.
Under the proposed bidding process, interested buyers are required
to submit their bids by June 5. If it receives offers from other
bidders, Kodak will hold an auction on June 12, at the offices of
Sullivan & Cromwell LLP, in New York.
Kodak will file a notice identifying the winning bidder within one
day after its formal announcement of the conclusion of the
auction. The company will pay Brother Industries a break-up fee
of $8.31 million in case their agreement is terminated.
A copy of the document detailing the proposed bidding process is
available for free at http://is.gd/iv1Om7
"This proposed sale is another key step in Kodak's path to
emergence -? it moves us closer to realizing our strategic vision
for Kodak's future," Kodak CEO Antonio Perez said in a statement.
Meanwhile, Toshikazu Koike, president of Brother Industries, said
the document imaging business will help strengthen the company's
global position in document imaging solutions. "Kodak document
imaging has a long history of innovation in the scanning and
document field and is a natural fit for Brother," he said.
A court hearing to consider approval of the bidding process is
scheduled for May 1. Objections are due by April 29.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.
Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras. Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.
In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies. Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent.
The Official Committee of Unsecured Creditors has tapped Milbank,
Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
Unofficial Second Lien Noteholders Committee.
The Retirees Committee has hired Haskell Slaughter Young &
Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC,
as Bankruptcy Consultants and Financial Advisors; and the Segal
Company, as Actuarial Advisors.
Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato,
Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners
II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth
S. Grossman; and Paul Martin.
Kodak completed the $527 million sale of digital-imaging
technology on Feb. 1, 2013. Kodak intends to reorganize by
focusing on the commercial printing business.
EASTMAN KODAK: Seeks Extension to Object to Sec. 503(b)(9) Claims
-----------------------------------------------------------------
Eastman Kodak Co. is seeking a four-month extension to file
objections to claims asserted under Section 503(b)(9) of the
Bankruptcy Code.
In an April 19 filing, Kodak asked U.S. Bankruptcy Judge Allan
Gropper to extend the deadline to Sept. 11 from May 14.
As of April 19, Kodak has already received about 500 claims. The
company has already filed eight omnibus objections to those claims
as of Nov. 16, 2012.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.
Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras. Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.
In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies. Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent.
The Official Committee of Unsecured Creditors has tapped Milbank,
Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
Unofficial Second Lien Noteholders Committee.
The Retirees Committee has hired Haskell Slaughter Young &
Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC,
as Bankruptcy Consultants and Financial Advisors; and the Segal
Company, as Actuarial Advisors.
Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato,
Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners
II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth
S. Grossman; and Paul Martin.
Kodak completed the $527 million sale of digital-imaging
technology on Feb. 1, 2013. Kodak intends to reorganize by
focusing on the commercial printing business.
EASTMAN KODAK: Manufacturing & Supply Deal with UniPixel Announced
------------------------------------------------------------------
BankruptcyData reported that Eastman Kodak announced that it has
entered into a manufacturing and supply agreement with UniPixel,
Inc., to produce next-generation touch sensors based on UniPixel's
UniBoss? multi-touch sensor film.
Under the agreement, Kodak and UniPixel will open a new
manufacturing facility within Eastman Business Park in Rochester
later in 2013 to produce touch screen sensors for the touch module
market that is predicted to more than double to $32 billion by
2018, the report related.
Antonio M. Perez, Kodak's chairman and chief executive officer,
said, "This agreement with UniPixel is a major advance for Kodak's
functional printing initiative... Functional printing is a key
growth area for Commercial Imaging... and Commercial Imaging is
Kodak's future. In UniPixel, we have linked-up with an innovative
and effective partner, and Kodak brings to the relationship
proprietary technologies that enable printing systems to deposit
materials on a wide variety of substrates with a high degree of
accuracy, precision, repeatability and speed. With this agreement,
we continue to execute on our strategy to develop a roadmap of
offerings that answers the growing market need for alternative
touch sensor solutions," the report added.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.
Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras. Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.
In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies. Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent.
The Official Committee of Unsecured Creditors has tapped Milbank,
Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
Unofficial Second Lien Noteholders Committee.
The Retirees Committee has hired Haskell Slaughter Young &
Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC,
as Bankruptcy Consultants and Financial Advisors; and the Segal
Company, as Actuarial Advisors.
Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato,
Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners
II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth
S. Grossman; and Paul Martin.
Kodak completed the $527 million sale of digital-imaging
technology on Feb. 1, 2013. Kodak intends to reorganize by
focusing on the commercial printing business.
EAGLE RECYCLING: Files for Ch.11 Bankruptcy in New Jersey
---------------------------------------------------------
Hugh R. Morley, writing for The (N.J.) Record, reports that Lieze
Associates, which does business as Eagle Recycling of New Jersey,
filed for Chapter 11 bankruptcy Friday in U.S. District Court in
Newark, with combined assets of $10.5 million and liabilities of
$13.6 million.
The report relates Lieze Associates, a North Bergen, N.J.,
recycling company, has pleaded guilty to illegal dumping and
amassed fines of more than $700,000 over safety issues.
The report also notes a parent company, Eagle Recycling Systems, a
Florida business which also has an address in North Bergen, filed
for bankruptcy at the same time.
The report notes Jeffrey Marangi, an officer of both companies,
did not return a request for comment, nor did the two companies'
attorney, Vincent F. Papalia of Florham Park.
The report relates that according to an affidavit filed in Court,
part of the companies' problems stemmed from the refusal of their
lender, Comerica Bank, to extend their credit to help address
their financial difficulties. The companies also faced "various
operational and other difficulties" stemming from a series of
brushes with authorities.
ELBIT IMAGING: Faces Yet Another NIS82 Million Suit in Israel
-------------------------------------------------------------
Elbit Imaging Ltd. received a purported class action lawsuit filed
against the Company in the District Court of Tel Aviv on April 11,
2013, by a holder of Series B Notes, in connection with
allegations, mainly that the Company failed to pay Series A and B
Notes on February 2013. The plaintiff argues that the failure to
pay results from the Company's failure to timely identify and
react to the decline in its business. The total amount claimed,
if the lawsuit is certified as a class action, is estimated by the
plaintiff to be approximately NIS 82 million. The personal amount
claimed by the plaintiff is approximately NIS 622,000. At this
preliminary stage, the Company is unable to assess the lawsuit's
chances of success and intends to vigorously defend against it.
As reported by the TCR on March 11, 2013, Elbit Imaging disclosed
it was informed that a purported class action lawsuit was filed on
Feb. 25, 2013, by Yuki Shemesh Ltd., one of the Company's note
holders, in the Israeli Tel-Aviv Jaffa District Court, against the
Company, its controlling shareholders, officers and others. The
lawsuit seeks damages in the amount of NIS240 million
(approximately $64.5 million).
About Elbit Imaging
Tel-Aviv, Israel-based Elbit Imaging Ltd. (TASE, NASDAQ: EMITF)
hold investments in real estate and medical companies. The
Company, through its subsidiaries, also develops shopping and
entertainment centers in Central Europe and invests in and manages
hotels.
Brightman Almagor Zohar & Co., in Tel-Aviv, Israel, expressed
substantial doubt about Elbit Imaging's ability to continue as a
going concern following the financial results for the year ended
Dec. 31, 2012.
The Certified Public Accountants noted that in the period
commencing Feb. 1, 2013, through Feb. 1, 2014, the Company is to
repay its debenture holders NIS 599 million (principal and
interest). "Said amount includes NIS 82 million originally
payable on Feb. 21, 2013, that its repayment was suspended
following a resolution of the Company's Board of Directors. The
Company's Board also resolved to suspend any interest payments
relating to all the Company's debentures. In addition, as of
Dec. 31, 2012, the Company failed to comply with certain financial
covenants relating to bank loans in the total amount as of such
date of NIS 290 million.
"These matters raise substantial doubt about the Company's ability
to continue as a going concern."
ELBIT IMAGING: Rejects Restructuring Proposal From Bondholders
--------------------------------------------------------------
Elbit Imaging Ltd. has placed a free English-language translation
of the "Position of the Representatives of Series C-G and Series 1
Bondholders Presentation" as presented by the Representatives at
the Bondholder's Meeting dated March 18, 2013. The Alternative
Proposal differs from the Company's proposed debt restructuring
terms as agreed between the Company and two of its major
noteholders, York Capital Management Global Advisors, LLC, and
Davidson Kempner Capital Management LLC, which was announced by
the Company on Feb. 27, 2013.
The Company did not solicit the Alternative Proposal and does not
concur with it.
Company Proposal
Pursuant to the proposed debt restructuring, all of the unsecured
debt of the Company will be converted into:
* Ordinary Shares, representing immediately following that
conversion 86% of the total share capital of the Company on a
fully diluted basis.
* New Notes with an aggregate face amount of NIS 300
million bearing interest at the rate of 8% per year
payable on a semi-annual basis, with principal repayable in a
single payment at the end of five years. The New Notes would
be secured by a negative pledge at the corporate level and
would include mandatory prepayment provisions in the event
the Company secures corporate-level financing and may be
prepaid at any time without penalty.
* The Ordinary Shares and New Notes to be issued would be
allocated among the various series of the Notes in proportion
to the outstanding balance (pari) under each series.
York Capital and DK Capital intend offer to purchase Notes from
those Note holders who wish to sell, immediately prior to the
closing of the Restructuring, for an aggregate amount of
$75 million in cash. The structure, terms and conditions of the
Cash-out have yet to be determined and would be conditioned on the
satisfactory outcome of a due diligence review of the Company by
York Capital and DK Capital, as well as other conditions
precedent.
A copy of the Company proposal is available at:
http://is.gd/udKwfq
Alternative Proposal
Pursuant to the Alernative Proposal, unsecured debt for a par
value of NIS 1.1 billion would be exchanged for 95% of Elbit's
shares and all of Elbit's rights in Elbit Medical.
A portion of the shares received would be allocated to the current
controlling shareholder/Bank Hapoalim, subject to negotiations and
receiving their contribution to the arrangement.
A tender would be conducted for the sale of the controlling shares
in the Company and to the extent the controlling shareholder/Bank
Hapoalim participate in the arrangement they will be allowed to
participate in the sale. The cash that will be received and the
remaining shares would be distributed among the creditors.
The remaining shares in the Company would be exchanged for two new
series of notes linked to the CPI, Series H and I, with an
estimated value of NIS 400 million and NIS 1 billion,
respectively.
A copy of the Alternative Proposal is available at:
http://is.gd/gfcq8e
Tel-Aviv, Israel-based Elbit Imaging Ltd. (TASE, NASDAQ: EMITF)
hold investments in real estate and medical companies. The
Company, through its subsidiaries, also develops shopping and
entertainment centers in Central Europe and invests in and manages
hotels.
Brightman Almagor Zohar & Co., in Tel-Aviv, Israel, expressed
substantial doubt about Elbit Imaging's ability to continue as a
going concern following the financial results for the year ended
Dec. 31, 2012.
The Certified Public Accountants noted that in the period
commencing Feb. 1, 2013, through Feb. 1, 2014, the Company is to
repay its debenture holders NIS 599 million (principal and
interest). "Said amount includes NIS 82 million originally
payable on Feb. 21, 2013, that its repayment was suspended
following a resolution of the Company's Board of Directors. The
Company's Board also resolved to suspend any interest payments
relating to all the Company's debentures. In addition, as of
Dec. 31, 2012, the Company failed to comply with certain financial
covenants relating to bank loans in the total amount as of such
date of NIS 290 million.
"These matters raise substantial doubt about the Company's ability
to continue as a going concern."
ELO TOUCH: Cash Flow Reduction Cues Moody's to Cut CFR to 'Caa1'
----------------------------------------------------------------
Moody's Investors Service downgraded ELO Touch Solutions, Inc.'s
ratings, including Corporate Family Rating to Caa1 from B2, Senior
Secured First Lien Bank Credit Facility to B3 from B1, and Senior
Secured Second Lien Bank Credit Facility to Caa2 from Caa1. The
rating actions were based on reduced expectations for cash flow.
The rating outlook is stable.
Ratings Rationale:
"Moody's expects negative free cash flow and declining liquidity
as we believe revenues and profitability will remain below
historical performance, reflecting challenged product demand. This
is compounded by cash outflows to operate as a standalone entity,"
noted Terry Dennehy, Senior Analyst at Moody's Investors Service.
Moody's believes that ELO's liquidity is weak at a time when the
company could be facing a lower level of demand for its products.
Although debt levels have been flat, financial leverage as
measured by debt to EBITDA (Moody's adjusted) has increased
significantly and is very high given ELO's small scale, the
ongoing costs related to the separation from TE Connectivity, and
the cyclical demand for ELO's products. The ratings on the
instruments reflect their relative priority of claim, with the
First Lien one notch above the CFR and the Second Lien one notch
below.
The stable outlook reflects Moody's expectation that over the next
year ELO will generate revenue of at least $360 million and
negative free cash flow (FCF) of at least several million dollars.
Due to this weak FCF, Moody's does not expect debt reduction
beyond that required by the credit agreement. Moreover, Moody's
expects that EBITDA will be weak, such that debt to EBITDA
(Moody's adjusted) will remain above 7x over the next year.
Moody's also expects that ELO will use any FCF that it generates
to reduce debt or build liquidity rather than for equity
distributions.
The rating could be upgraded if ELO sustains quarterly revenue
above $100 million and improves profitability and FCF, and that
FCF to debt (Moody's adjusted) will be at least at the mid-single
digits percent. The rating could be downgraded if Moody's believes
that FCF will remain negative, or that ELO's available liquidity
weakens further such that Moody's expects the majority of the
revolver to be drawn.
Downgrades:
ELO Touch Solutions, Inc.
Probability of Default Rating, Downgraded to Caa1-PD from B2-PD
Corporate Family Rating, Downgraded to Caa1 from B2
Senior Secured Revolver due 2017, Downgraded to B3 (LGD3, 32%)
from B1 (LGD3, 35%)
Senior Secured First Lien Term Loan due 2018, Downgraded to B3
(LGD3, 32%) from B1 (LGD3, 35%)
Senior Secured Second Lien Term Loan due 2018, Downgraded to Caa2
(LGD5, 82%) from Caa1 (LGD5, 85%)
The principal methodology used in this rating was the Global
Technology Hardware Industry Rating Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative Grade Issuers in the US, Canada, and EMEA,
published in June 2009.
ELO, based in Milpitas, California, produces touchscreen panels
used in point-of-sale devices, industrial automation, and airport
ticketing kiosks, among other uses.
EUROFRESH INC: Southwest Gas to Get Adequate Assurance Payment
--------------------------------------------------------------
The Hon. Eileen W. Hollowell of the U.S. Bankruptcy Court for the
District of Arizona in February signed an agreed order presented
by EuroFresh Inc. and Southwest Gas Corporation and Southwest Gas
Corporation providing for adequate assurance of payment to SWG.
The Debtor and SWG are parties to three agreements: (1) a Special
Gas Procurement Agreement dated June 18, 2007, pursuant to which
SWG purchases and delivers natural gas to the Debtor's facility
located at 26050 Eurofresh Avenue, Willcox, Arizona; (2) an
Incremental Facilities Agreement dated Aug. 31, 2004, that
requires Debtor to schedule and use an agreed upon minimum volume
of natural gas each year; and (3) a Memorandum of Understanding
dated Sept. 23, 2009, relating to and governing the operative
provisions of the Supply Agreement and the IFA1.
Pursuant to a previous interim order, SWG received payments
totaling $1,480,000 on Feb. 21, 2013. However, SWG believes and
asserts these payments and the proposed payments are and will be
insufficient to provide it adequate assurance of payment for on-
going and future supply and transportation of natural gas.
The parties have agreed that, among other things:
a. the Debtor will pay to SWG a sum sufficient to pay for all
gas usage through Feb. 28, 2013, and to fund an additional
$1,000,000 which will be held as a deposit to secure Debtor's
payments for on-going and future supply of natural gas;
b. SWG will provide to the Debtor via e-mail an invoice for
natural gas previously provided; and
c. in the event Debtor completes a sale of substantially all of
its assets, upon closing of such sale, SWG will terminate its
services to the Debtor and the contracts will be deemed rejected
unless the Contracts are assumed by the Debtor and assigned to a
buyer or unless otherwise agreed. SWG will provide to the Debtor
via e-mail an invoice for natural gas previously provided to the
date of closing.
Southwest Gas is represented by:
Carolyn J. Johnsen
Kami M. Hoskins
JENNINGS, STROUSS & SALMON, P.L.C.
A Professional Limited Liability Company
One East Washington Street, Suite 1900
Phoenix, AR 85004-2554
Tel: (602) 262-5911
Fax: (602) 495-2696
E-mail: cjjohnsen@jsslaw.com
khoskins@jsslaw.com
About EuroFresh Inc.
EuroFresh , Inc., is America's largest greenhouse grower spanning
318 aces of glass covered facilities. EuroFresh grows premium
quality, great tasting, certified pesticide residue free
greenhouse tomatoes and cucumbers year-round. The 274-acre
flagship facility in Willcox, Arizona, is the world's largest.
There's also a second 44-acre acre property in Snowflake, Arizona.
EuroFresh has 964 employees.
EuroFresh filed a Chapter 11 petition (Bankr. D. Ariz. Case No.
13-01125) on Jan. 27, 2013, to complete a sale of the business to
NatureSweet Limited, absent higher and better offers.
NatureSweet and EuroFresh Farms are two of the leading producers
of high-quality tomatoes in North America.
EuroFresh first filed for Chapter 11 protection (Bankr. D. Ariz.
Lead Case No. 09-07970) on April 21, 2009. Eurofresh exited
bankruptcy in November 2009 following a deal with majority of
their existing debt holders to convert more than $200 million of
debt into equity.
In the new Chapter 11 case, Frederick J. Petersen, Esq., and Isaac
D. Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., serve as
counsel to the Debtors.
The Official Committee of Unsecured Creditors appointed in the
case has retained Lowenstein Sandler LLP; and Jennings, Strouss &
Salmon, P.L.C., as bankruptcy counsel.
FIRST DATA: Issues $815 Million of Senior Notes
-----------------------------------------------
First Data Corporation, on April 10, 2013, issued $815 million
aggregate principal amount of 10.625% Senior Notes due 2021, which
mature on June 15, 2021, pursuant to an indenture, dated as of
April 10, 2013, among the Company, the guarantors party thereto
and Wells Fargo Bank, National Association, as trustee.
Interest on the Notes will be payable in cash on February 15 and
August 15 of each year, commencing on Aug. 15, 2013. Interest on
the Notes will accrue from April 10, 2013.
On April 10, 2013, the net proceeds of the issuance of the Notes
were used to (1) repurchase approximately $253.6 million of the
Company's $783.5 million aggregate principal amount of 9.875%
Senior Unsecured Notes due 2015 tendered pursuant to a tender
offer launched by the Company on March 26, 2013, and (2) pay
related fees and expenses, including premiums. The Company has
opted to use the remaining proceeds of the issuance of the Notes
and cash on hand to (1) repurchase any 2015 Notes tendered prior
to the expiration of the Tender Offer at 12:00 midnight, New York
City time, on April 23, 2013, and (2) optionally redeem on
April 25, 2013, the amount of 2015 Notes that remain outstanding
after the completion of the Tender Offer. A copy of the Indenture
is available for free at http://is.gd/ZhkHMI
On April 10, 2013, the Company, the guarantors of the Notes and
the initial purchasers entered into a registration rights
agreement with respect to the Notes. In the Registration Rights
Agreement, the Company and the guarantors of the Notes have agreed
that they will (1) file a registration statements on an
appropriate registration form with respect to a registered offer
to exchange the Notes for new notes guaranteed by the guarantors
on a senior unsecured basis, with terms substantially identical in
all material respects to the Notes and (2) use their reasonable
best efforts to cause the exchange offer registration statement to
be declared effective under the Securities Act of 1933, as
amended. A copy of the Registration Rights Agreement is available
at http://is.gd/Xd5jqE
On April 10, 2013, the Company entered into a 2013 April Repricing
Amendment to its Credit Agreement, dated as of Sept. 24, 2007, as
amended and restated as of Sept. 28, 2007, as further amended as
of Aug. 10, 2010, March 24, 2011, March 13, 2012 and Aug. 16,
2012, and as modified as of Sept. 27, 2012, and Feb. 13, 2013,
respectively, among the Company, the several lenders from time to
time parties thereto and Credit Suisse AG, Cayman Islands Branch,
as administrative agent. Pursuant to the Repricing Amendment, the
Company replaced the aggregate outstanding principal amount of its
existing dollar and euro denominated term loans maturing on March
24, 2017, with new dollar and euro denominated term loans in an
equal aggregate principal amount and with the same maturity. The
interest rate applicable to the 2017 New Term Loans is a rate
equal to, at the Company's option, either (a) LIBOR plus 400 basis
points or (b), in the case of 2017 New Term Loans denominated in
dollars, a base rate plus 300 basis points. A copy of the
Repricing Agreement is available at http://is.gd/cfhBcy
On April 15, 2013, the Company entered into a 2013 Second April
Repricing Amendment to its Credit Agreement, dated as of Sept. 24,
2007, as amended and restated as of Sept. 28, 2007, as further
amended as of Aug. 10, 2010, March 24, 2011, March 13, 2012,
August 16, 2012 and April 10, 2013, and as modified as of
Sept. 27, 2012, and Feb. 13, 2013, respectively, among the
Company, the several lenders from time to time parties thereto and
Credit Suisse AG, Cayman Islands Branch, as administrative agent.
Pursuant to the Second Repricing Amendment, the Company replaced
the aggregate outstanding principal amount of its existing dollar
denominated term loans maturing on Sept. 24, 2018, with new dollar
denominated term loans in an equal aggregate principal amount and
with the same maturity. The interest rate applicable to the 2018B
New Term Loans is a rate equal to, at the Company's option, either
(a) LIBOR plus 400 basis points or (b) a base rate plus 300 basis
points. A copy of the Second Repricing Agreement is available at
no charge at http://is.gd/e1UbOc
About First Data
Based in Atlanta, Georgia, First Data Corporation provides
commerce and payment solutions for financial institutions,
merchants, and other organizations worldwide.
For the 12 months ended Dec. 31, 2012, the Company incurred a net
loss attributable to the Company of $700.9 million, compared with
a net loss attributable to the Company of $516.1 million during
the prior year. The Company's balance sheet at Dec. 31, 2012,
showed $37.89 billion in total assets, $35.20 billion in total
liabilities, $67.4 million in redeemable noncontrolling interest,
and $2.62 billion in total equity.
* * *
The Company's carries a 'B3' corporate family rating, with a
stable outlook, from Moody's Investors Service, a 'B' corporate
credit rating, with stable outlook, from Standard & Poor's, and
a 'B' long-term issuer default rating from Fitch Ratings.
FIRST FEDERAL BANK: Closed; Your Community Bank Assumes Deposits
----------------------------------------------------------------
First Federal Bank, of Lexington, Kentucky, was closed on Friday,
April 19, 2013, by the Office of the Comptroller of the Currency,
which appointed the Federal Deposit Insurance Corporation (FDIC)
as receiver. To protect the depositors, the FDIC entered into a
purchase and assumption agreement with Your Community Bank, of New
Albany, Indiana, to assume all of the deposits of First Federal
Bank.
The five branches of First Federal Bank will reopen during their
normal business hours beginning Saturday as branches of Your
Community Bank. Depositors of First Federal Bank will
automatically become depositors of Your Community Bank.
As of December 31, 2012, First Federal Bank had approximately
$100.1 million in total assets and $93.9 million in total
deposits. In addition to assuming all of the deposits of the
failed bank, Your Community Bank agreed to purchase essentially
all of the assets.
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-355-0650. The phone number will be
operational from 9:00 a.m. to 5:00 p.m., EDT. Interested parties
also can visit the FDIC's Web site
at http://www.fdic.gov/bank/individual/failed/firstfederal-
ky.html.
The FDIC estimates that the cost to the Deposit Insurance Fund
(DIF) will be $9.7 million. Compared to other alternatives, Your
Community Bank's acquisition was the least costly resolution for
the FDIC's DIF. First Federal Bank is the sixth FDIC-insured
institution to fail in the nation this year, and the first in
Kentucky. The last FDIC-insured institution closed in the state
was Irwin Union Bank, FSB, Louisville, on September 18, 2009.
About First Federal Bank
First Federal Bank has been serving the Central Kentucky area
since 1935. It is a full service bank specializing in home
lending located in both Lexington and Georgetown, Kentucky, with
convenient ATM locations available throughout the area.
FIRST SECURITY: GF Financial Owned 9.7% Equity Stake at April 12
----------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, GF Financial II, LLC, and its affiliates disclosed
that, as of April 12, 2013, they beneficially owned 6,080,000
shares of common stock of First Security Group, Inc., representing
9.7% of the shares outstanding. A copy of the filing is available
for free at http://is.gd/7ePjFm
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee, with $1.2 billion in
assets as of Sept. 30, 2010. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Joseph Decosimo and Company, PLLC, in
Chattanooga, Tennessee, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has recently incurred substantial
losses. The Company is also operating under formal supervisory
agreements with the Federal Reserve Bank of Atlanta and the Office
of the Comptroller of the Currency and is not in compliance with
all provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
The Company reported a net loss of $23.06 million in 2011, a net
loss of $44.34 million in 2010, and a net loss of $33.45 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed $1.11
billion in total assets, $1.07 billion in total liabilities and
$44.72 million in total shareholders' equity.
FISKER AUTOMOTIVE: Energy Dept Took $21MM From Reserve Account
--------------------------------------------------------------
Yuliya Chernova and Mike Ramsey, writing for The Wall Street
Journal, report that the U.S. Department of Energy said Monday
that it has taken $21 million out of a reserve account set up as
part of a loan to Fisker Automotive Inc. in anticipation of a
default on a payment the company owes on a federal loan. The
Energy Department said it took the money 12 days ago.
"Given the obvious difficulties the company is facing, we are
taking strong and appropriate action on behalf of taxpayers," the
Energy Department said in a statement, according to WSJ. The
department "recouped the company's approximately $21 million
reserve account -- funds that came from the company's sales and
investors, not our loan -- and will apply those funds to the
loan."
The report notes Fisker's chief executive, Tony Posawatz, said in
March the payment on the $192 million the company borrowed under a
federal advanced technology vehicle program was due April 22.
The report also notes a GOP-controlled House subcommittee has
scheduled hearings on the Fisker situation later this week.
According to WSJ, Fisker has hired bankruptcy attorneys Kirkland &
Ellis LLP. Investors and company leaders continued efforts to
find new investors or buyers, though a deal hasn't yet been
reached.
WSJ says Fisker's outside public relations firm had no comment on
the situation Monday evening.
Earlier this month, Fisker dismissed 150 of its remaining 200
employees to conserve cash after sale discussions with two Chinese
auto makers faltered. Fisker remains in discussions with those
companies, Zhejiang Geely Holding Group and Dongfeng Motor Group
Co., and others ahead of the expected bankruptcy filing, a person
familiar with the situation said, WSJ says.
Meanwhile, according to Bloomberg News' Angela Greiling Keane, a
research report indicates Fisker spent more than six times as much
U.S. taxpayer and investor money to produce each luxury plug-in
car it sold than the company received from customers. Fisker made
about 2,500 of its $103,000 Karmas before halting production last
year, disrupting its plans to use a $529 million U.S. loan to
restart a shuttered Delaware factory owned by the predecessor of
General Motors Co. The Karma was assembled in Finland.
According to Bloomberg, a report released April 17 by PrivCo, a
New York-based researcher specializing in closely held companies,
said Fisker was allowed to keep using money from its Energy
Department loan after violating its terms multiple times. PrivCo
said it based its report on documents, including the loan
agreement, obtained through the U.S. Freedom of Information Act.
Bloomberg also reports that Bill Gibbons, a department spokesman,
said in an e-mail PrivCo's report contains errors, particularly in
asserting the Energy Department knew by December 2010 that the
carmaker wasn't meeting milestones required to keep drawing
taxpayer funds. The department cut off Fisker's funding in June
2011, after the company drew down about $193 million.
"PrivCo's assertion that Fisker defaulted in December 2010 is
simply false," Mr. Gibbons said, according to Bloomberg. "The
milestones that PrivCo includes in its report are also wrong. The
fact is, the department stopped disbursements on the loan after
the company stopped meeting its milestones."
Bloomberg says Tony Knight of Sitrick & Co., an outside public
relations agency representing Fisker, declined to comment.
FLAT OUT: Committee Taps CBIZ Accounting as Financial Advisor
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Flat Out Crazy, LLC, et al., asks the U.S. Bankruptcy
Court for the Southern District of New York for permission to
retain CBIZ Accounting, Tax and Advisory of New York, LLC, as its
financial advisor, nunc pro tunc to Feb. 21, 2013.
CBIZ will, among other things:
a) assist the Committee in its evaluation of the Debtors'
postpetition cash flow and other projections and budgets
prepared by the Debtors or their financial advisor;
b) monitor the Debtors' activities regarding cash expenditures
and general business operations subsequent to the filing of
the petitions under chapter 11; and
c) assist the Committee in its review of monthly operating
reports submitted by the Debtors or their financial
advisor.
Charles M. Berk, managing director of CBIZ NY, tells the Court
that the hourly rates of CBIZ NY's personnel are:
Directors and Managing Directors $395 - $595
Managers and Senior Managers $310 - $410
Senior Associates and Staff $130 - $310
Mr. Berk assures the Court that CBIZ NY is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Flat Out Crazy
Flat Out Crazy LLC and its affiliates operate two Asian-inspired
restaurant chains that began in Chicago. Flat Top Grill, which
currently has 15 locations, is a full-service fast-casual create-
your-own stir-fry concept. Stir Crazy Fresh Asian Grill, which
has 11 locations, is a full-service casual Asian restaurant
offering the flavors of Chinese, Japanese, Thai and Vietnamese
food. The Debtors have 1,200 employees.
Flat Out Crazy and 13 affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 13-22094) in White Plains, New York
on Jan. 25, 2013. The Debtors have tapped Squire Sanders (US) LLP
as counsel; Kurtzman Carson Consultants, LLC, as claims, noticing
and administrative agent; William H. Henrich and Mark Samson from
Getzler Henrich as their co-chief restructuring officers; and J.H.
Chapman Group, L.L.C, as their investment bankers.
The Debtor disclosed $24,339,542 in assets and $15,899,166 in
liabilities as of the Chapter 11 filing.
An official committee of unsecured creditors has been appointed in
the Debtors' cases. The Committee tapped to retain Kelley Drye &
Warren LLP as its counsel and CBIZ Accounting, Tax and Advisory of
New York, LLC as financial advisor.
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed Alan
Chapell, as the consumer privacy ombudsman in the Debtors' cases.
FLAT OUT: Creditors Committee Taps Kelley Drye as Counsel
---------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Flat Out Crazy, LLC, et al., asks the U.S. Bankruptcy
Court for the Southern District of New York for permission to
retain Kelley Drye & Warren LLP as its counsel.
Kelley Drye's standard hourly rates for 2013 are:
Partners $500 - $800
Counsel $400 - $650
Associates $300 - $570
Paraprofessionals $150 - $300
The primary attorneys and paralegals in Kelley Drye's Bankruptcy
and Restructuring Practice Group designated to represent the
Committee and their standard hourly rates are:
Eric R. Wilson, partner $670
Robert L. LeHane, partner $610
Benjamin D. Feder, special
counsel $645
Casey B. Boyle, associate $480
Catherine L. Thompson,
associate $345
Marie Vicinanza, paralegal $240
Eric R. Wilson, partner, assures the Court that Kelley Drye is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Flat Out Crazy
Flat Out Crazy LLC and its affiliates operate two Asian-inspired
restaurant chains that began in Chicago. Flat Top Grill, which
currently has 15 locations, is a full-service fast-casual create-
your-own stir-fry concept. Stir Crazy Fresh Asian Grill, which
has 11 locations, is a full-service casual Asian restaurant
offering the flavors of Chinese, Japanese, Thai and Vietnamese
food. The Debtors have 1,200 employees.
Flat Out Crazy and 13 affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 13-22094) in White Plains, New York
on Jan. 25, 2013. The Debtors have tapped Squire Sanders (US) LLP
as counsel; Kurtzman Carson Consultants, LLC, as claims, noticing
and administrative agent; William H. Henrich and Mark Samson from
Getzler Henrich as their co-chief restructuring officers; and J.H.
Chapman Group, L.L.C, as their investment bankers.
The Debtor disclosed $24,339,542 in assets and $15,899,166 in
liabilities as of the Chapter 11 filing.
An official committee of unsecured creditors has been appointed in
the Debtors' cases. The Committee tapped to retain Kelley Drye &
Warren LLP as its counsel and CBIZ Accounting, Tax and Advisory of
New York, LLC as financial advisor.
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed Alan
Chapell, as the consumer privacy ombudsman in the Debtors' cases.
FLAT OUT: Files Schedules of Assets and Liabilities
---------------------------------------------------
Flat Out Crazy, LLC, last month filed with the U.S. Bankruptcy
Court for the Southern District of New York its schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $24,339,542
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $6,250,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $9,649,166
----------- -----------
TOTAL $24,339,542 $15,899,166
A copy of the schedules is available for free at
http://bankrupt.com/misc/FLAT_OUT_sal.pdf
About Flat Out Crazy
Flat Out Crazy LLC and its affiliates operate two Asian-inspired
restaurant chains that began in Chicago. Flat Top Grill, which
currently has 15 locations, is a full-service fast-casual create-
your-own stir-fry concept. Stir Crazy Fresh Asian Grill, which
has 11 locations, is a full-service casual Asian restaurant
offering the flavors of Chinese, Japanese, Thai and Vietnamese
food. The Debtors have 1,200 employees.
Flat Out Crazy and 13 affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 13-22094) in White Plains, New York
on Jan. 25, 2013. The Debtors have tapped Squire Sanders (US) LLP
as counsel; Kurtzman Carson Consultants, LLC, as claims, noticing
and administrative agent; William H. Henrich and Mark Samson from
Getzler Henrich as their co-chief restructuring officers; and J.H.
Chapman Group, L.L.C, as their investment bankers.
The Debtor disclosed $24,339,542 in assets and $15,899,166 in
liabilities as of the Chapter 11 filing.
An official committee of unsecured creditors has been appointed in
the Debtors' cases. The Committee tapped to retain Kelley Drye &
Warren LLP as its counsel and CBIZ Accounting, Tax and Advisory of
New York, LLC as financial advisor.
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed Alan
Chapell, as the consumer privacy ombudsman in the Debtors' cases.
FLAT OUT: Taps J.H. Chapman to Aid in Stir Crazy Restaurants Sale
-----------------------------------------------------------------
Flat Out Crazy, LLC, et al., ask the U.S. Bankruptcy Court for the
Southern District of New York for permission to employ J.H.
Chapman Group, L.L.C., to do additional work as their investment
banker.
On March 1, 2013, the Court approved the initial application to
employ Chapman as an investment banker for the purpose of selling
the Flat Top Grill branded restructured operations.
Chapman has agreed to perform services related to the sale of Stir
Crazy Restaurants assets, pursuant to the March 4, 2013,
engagement letter between Chapman and the Debtors.
Chapman will receive compensation (in addition to that already
approved by the Court for the sale of the Flat Top Assets) in two
forms:
1. a monthly fee and an incentive-based fee.
2. upon the closing of a sale of part or all of the Stir Crazy
Assets, a transaction fee of $150,000, plus 1% of Proceeds
in excess of $3 million.
To the best of the Debtors' knowledge, Chapman does not hold nor
represent any interest adverse to the Debtors or the Debtors'
estates on matters for which it is to be retained.
About Flat Out Crazy
Flat Out Crazy LLC and its affiliates operate two Asian-inspired
restaurant chains that began in Chicago. Flat Top Grill, which
currently has 15 locations, is a full-service fast-casual create-
your-own stir-fry concept. Stir Crazy Fresh Asian Grill, which
has 11 locations, is a full-service casual Asian restaurant
offering the flavors of Chinese, Japanese, Thai and Vietnamese
food. The Debtors have 1,200 employees.
Flat Out Crazy and 13 affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 13-22094) in White Plains, New York
on Jan. 25, 2013. The Debtors have tapped Squire Sanders (US) LLP
as counsel; Kurtzman Carson Consultants, LLC, as claims, noticing
and administrative agent; William H. Henrich and Mark Samson from
Getzler Henrich as their co-chief restructuring officers; and J.H.
Chapman Group, L.L.C, as their investment bankers.
The Debtor disclosed $24,339,542 in assets and $15,899,166 in
liabilities as of the Chapter 11 filing.
An official committee of unsecured creditors has been appointed in
the Debtors' cases. The Committee tapped to retain Kelley Drye &
Warren LLP as its counsel and CBIZ Accounting, Tax and Advisory of
New York, LLC as financial advisor.
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed Alan
Chapell, as the consumer privacy ombudsman in the Debtors' cases.
FLORIDA GAMING: Incurs $22.7 Million Net Loss in 2012
-----------------------------------------------------
Florida Gaming Corporation filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $22.69 million on $45.45 million of total operating
revenue for the year ended Dec. 31, 2012, as compared with a net
loss of $21.76 million on $7.75 million of total operating revenue
for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $75.09
million in total assets, $125.48 million in total liabilities and
a $50.39 million total stockholders' deficiency.
Morrison, Brown, Argiz & Farra, LLC, in Miami, Florida, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has experienced recurring losses
from operations, cash flow deficiencies, and is in default of
certain credit facilities, all of which raise substantial doubt
about its ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/66ribR
About Florida Gaming
Florida Gaming Corporation operates live Jai Alai games at
frontons in Ft. Pierce, and Miami, Florida through its Florida
Gaming Centers, Inc. subsidiary. The Company also conducts
intertrack wagering (ITW) on jai alai, horse racing and dog racing
from its facilities. Poker is played at the Miami and Ft. Pierce
Jai-Alai, and dominoes are played at the Miami Jai-Alai. In
addition, the Company operates Tara Club Estates, Inc., a
residential real estate development located near Atlanta in Walton
County, Georgia. Approximately 46.2% of the Company's common
stock is controlled by the Company's Chairman and CEO either
directly or beneficially through his ownership of Freedom Holding,
Inc. The Company is based in Miami, Florida.
FOREVERGREEN WORLDWIDE: Incurs $884,800 Net Loss in 2012
--------------------------------------------------------
Forevergreen Worldwide Corporation filed with the U.S. Securities
and Exchange Commission its annual report on Form 10-K disclosing
a net loss of $884,858 on $12.48 million of net revenues for the
year ended Dec. 31, 2012, as compared with a net loss of $1.45
million on $13.70 million of net revenues for the year ended
Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $1.39 million
in total assets, $5.90 million in total liabilities, and a
$4.51 million total stockholders' deficit.
Sadler, Gibb & Associates, LLC, in Salt Lake City, UT, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has suffered accumulated net
losses of $35,458,353 and has had negative cash flows from
operating activities during the year ended Dec. 31, 2012, of
$8,860. These matters raise substantial doubt about the Company's
ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/SjTSrk
About ForeverGreen Worldwide
Orem, Utah-based ForeverGreen Worldwide Corporation is a holding
company that operates through its wholly owned subsidiary,
ForeverGreen International, LLC. The Company's product philosophy
is to develop, manufacture and market the best of science and
nature through innovative formulations as it produces and
manufactures a wide array of whole foods, nutritional supplements,
personal care products and essential oils.
FUELSTREAM INC: Incurs $19.7 Million Net Loss in 2012
-----------------------------------------------------
Fuelstream, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$19.73 million on $1.05 million of net sales for the year ended
Dec. 31, 2012, as compared with a net loss of $2.46 million on $0
of net sales for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $223,159 in
total assets, $5.65 million in total liabilities and a $5.42
million total stockholders' deficit.
RBSM LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2012. The independent auditors noted that the Company has
sustained substantial net losses and stockholders' deficit. These
conditions raise substantial doubt about its ability to continue
as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/dlAQ39
About Fuelstream
Draper, Utah-based Fuelstream, Inc., is an in-wing and on-location
supplier and distributor of aviation fuel to corporate,
commercial, military, and privately-owned aircraft throughout the
world. The Company also provides a variety of ground services
either directly or through its affiliates, including concierge
services, passenger andbaggage handling, landing rights,
coordination with local aviation authorities, aircraft maintenance
services, catering, cabin cleaning, customsapprovals, and third-
party invoice reconciliation. The Company's personnel assist
customers in flight planning and aircraft routing aircraft,
obtaining permits, arranging overflies, and flight follow
services.
GATEWAY CASINOS: Cash Injection and Amendment No Impact on B2 CFR
-----------------------------------------------------------------
Moody's Investors Service commented that Gateway Casinos &
Entertainment Limited's cash injection by its owners and amendment
to its credit agreement covenants are credit positive but have no
impact on the company's B2 corporate family and stable outlook.
Gateway Casinos and Entertainment Limited owns and operates casino
properties throughout Canada including three casinos and three
community gaming centers in the Greater Vancouver Regional
District, four casinos in Thompson-Okanagan region of British
Columbia, and two casinos in Edmonton, Alberta. The company is
headquartered in Burnaby, British Columbia, Canada and is owned by
funds managed by The Catalyst Capital Group Inc. and Tennenbaum
Capital Partners. Gateway has annual revenues of approximately
$260 million.
GFI GROUP: Fitch Cuts Long-Term Issuer Default Rating to 'BB'
-------------------------------------------------------------
Fitch Ratings has downgraded GFI Group Inc.'s long-term Issuer
Default Rating (IDR) and senior unsecured debt rating to 'BB' from
'BBB-'. The short-term IDR is also downgraded to 'B' from 'F3'.
The Rating Outlook is revised to Negative.
KEY RATING DRIVERS - IDRs AND SENIOR DEBT
The downgrade of GFI's rating reflects a sustained decline in
profitability, increasing leverage, deteriorating interest
coverage, and a weaker liquidity profile. Ratings are supported by
GFI's attractive technology platform and recurring revenue
contribution, albeit to a smaller extent, from its Trayport and
Fenics subsidiaries, which are subscription-based businesses with
predictable revenues and high operating margins.
Fitch believes that the regulatory changes in the OTC markets, the
ongoing restructuring and deleveraging in the banking sector,
along with a flat yield curve and lower overall market volatility
have profoundly lowered GFI's trading volumes. As a result,
profitability and margins continue to be pressured in the inter-
dealer brokerage (IDB) industry. As the smallest of the top five
IDBs, GFI has been more susceptible to margin pressures, due to
its relatively smaller scale, lower revenue/product diversity and
higher fixed-cost base, compared to its larger IDB peers.
GFI experienced sharp declines in earnings and EBITDA,
particularly in the second half of 2012. Its GAAP net loss widened
to $10.0m for 2012, from $3.2 million in 2011. Fitch-calculated
EBITDA, which excludes amortization of sign-on bonuses, declined
19% to $94.6 million in 2012, from $117 million in 2011.
Subsequently, leverage measured as gross debt to adjusted EBITDA,
increased to 2.6x in 2012, from 2.1x in 2011. Interest coverage,
measured as adjusted EBITDA to interest expense, declined to 3.5x
in 2012 from 4.5x in 2011. Absent an increase in EBITDA levels,
interest coverage ratio is expected to further deteriorate as the
coupon on GFI's $250 million 8.375% senior notes stepped up to
9.625%, based on interest-rate step-ups.
In addition, decline in EBITDA levels had impacted the amount GFI
could borrow under its $129.5 million bank credit facility due to
a maximum leverage covenant of 2.5x. In March 2013, GFI amended
and extended the bank credit facility to relax certain financial
covenants, including increasing the maximum leverage to 3.0x.
(Leverage as per the bank covenant measured 2.1x at Dec. 31,
2012). However, the amendment also resulted in reducing the total
capacity from $129.5 million to $75 million effective immediately
and further declining to $56.3 million in December 2013, with a
final maturity in December 2015. Fitch recognizes that the
increase in leverage covenant gives the company additional
flexibility but views the absolute reduction in total capacity
negatively, particularly when operating cash flows continue to be
stressed.
GFI's management has responded to declining margin pressures by
aggressively rationalizing its fixed-cost base, largely through
headcount reductions, restructuring compensation agreements and
reducing sign-on bonuses/guarantees. These measures are estimated
by the company to reduce costs by $50 million compared to the 2011
expense base. Fitch believes that this is achievable considering
the company has already achieved expense reduction of $31 million
in 2012, and needs to reduce an incremental $19 million in
expenses for 2013 to achieve its target. However, Fitch is
concerned about the impact these actions may have on GFI's
competiveness in attracting and retaining brokers, considering the
company's smaller scale compared to its larger peers.
Despite the above mentioned challenges, the company continued to
pay approximately $6 million in quarterly dividend to its
shareholders ($24 million annually). Continuation of the current
dividend policy, without a commensurate increase in earnings or
cash flows, particularly in light of the firm's reduced contingent
liquidity is viewed as a credit negative.
RATING SENSITIVITIES - IDRS AND SENIOR DEBT
The revision of the Rating Outlook to Negative reflects industry-
wide pressures facing inter-dealer brokers and, in particular,
GFI's sensitivity to market conditions given its smaller scale and
lack of revenue diversity. While all IDBs face challenges with the
reduced trading volume and regulatory uncertainty, GFI's
profitability is particularly challenged under these conditions,
as demonstrated by recent results. Fitch expects potentially
further profitability erosion if such conditions persist.
Ratings could be downgraded further if low trading volumes persist
and the firm is unable to stabilize earnings or regulatory changes
materially impact the profitability or viability of certain
business lines. Continued deterioration in earnings as measured by
profitability and EBITDA, reduction in interest coverage and
liquidity, as well as increased leverage would also lead to
further negative ratings actions.
The Outlook could be revised to Stable if GFI is able to
demonstrate a sustained improvement to its earnings profile,
reduce its cost base, and increase liquidity, while maintaining or
improving its leverage and interest coverage metrics.
Fitch has downgraded GFI's ratings as follows:
-- Long-term IDR to 'BB' from 'BBB-';
-- Short-term IDR to 'B' from 'F3';
-- Senior unsecured debt to 'BB' from 'BBB-'.
The Rating Outlook is Negative.
GIM CHANNELVIEW: S&P Assigns Prelim. 'BB-' Rating to Secured Debt
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BB-'
rating to GIM Channelview Cogeneration LLC's (Channelview)
proposed senior secured seven-year $375 million term loan B and
five-year $45 million revolving credit facility. S&P also
assigned a preliminary recovery rating of '1' to this debt.
GIM Channelview Cogeneration LLC (Channelview) is a limited
purpose entity issuing project finance debt that owns an 856
megawatt (MW) natural-gas-fired power plant in southeast Texas.
The company will use a portion of the debt financing proceeds to
pay off existing debt. The remaining funds of about $240 million
will be distributed to the owners, Global Infrastructure Partners
and Fortistar. The ratings are preliminary, subject to final
documentation and a transaction structure review under Standard &
Poor's project finance criteria.
The stable outlook reflects S&P's expectations of moderate debt
repayment over the loan tenor due to improving, albeit likely
volatile, power market conditions in ERCOT.
"We would consider a negative ratings action if we expected debt
service coverage to fall sustainably below 1.5x or if forecasted
refinancing risk increased to more than $200/kw. Such a scenario
would most likely happen due to lower merchant power revenues or
unanticipated operational difficulties," said Standard & Poor's
credit analyst Manish Consul.
A positive outlook would require superior financial performance
than S&P currently expects on a sustained basis with debt service
coverage consistently more than 3.5x and higher confidence that
refinancing risk will likely be minimal in 2019.
GLOBAL ARENA: Incurs $2.4 Million Net Loss in 2012
--------------------------------------------------
Global Arena Holding, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss attributable to common stockholders of $2.44 million on
$9.46 million of total revenues for the year ended Dec. 31, 2012,
as compared with a net loss attributable to common stockholders of
$2.75 million on $8.69 million of total revenues during the prior
year.
The Company's balance sheet at Dec. 31, 2012, showed $1.28 million
in total assets, $3.14 million in total liabilities and a $1.86
million total stockholders' deficiency.
Wei, Wei & Co., LLP, in New York, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that
the Company has suffered recurring losses since inception,
experiences a deficiency of cash flow from operations and has a
stockholders' deficiency. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
A copy of the Form 10-K, as amended for the purposes of correcting
certain information in the Company's interactive data file, is
available for free at http://is.gd/4sVLgL
About Global Arena
New York, N.Y.-based Global Arena Holding, Inc., formerly Global
Arena Holding Subsidiary Corp., was formed in February 2009, in
the state of Delaware. The Company is a financial services firm
that services the financial community through its subsidiaries as
follows:
Global Arena Investment Management LLC provides investment
advisory services to its clients. GAIM is registered with the
Securities and Exchange Commission as an investment advisor and
clears all of its business through Fidelity Advisors, its
correspondent broker. Global Arena Commodities Corp. provides
commodities brokerage services and earns commissions. Global
Arena Trading Advisors, LLC provides futures advisory services and
earns fees. GATA is registered with the National Futures
Association (NFA) as a commodities trading advisor. Lillybell
Entertainment, LLC provides finance services to the entertainment
industry.
GLOBALSTAR INC: Forbearance May Have Expired Yesterday
------------------------------------------------------
Globalstar, Inc.'s forbearance agreement with noteholders expired
yesterday, unless the company arranged another extension. No new
agreement has been announced as of 9 p.m. Eastern time on April
22.
Globalstar announced last week that the forbearance agreement with
respect to the Company's 5.75% Convertible Senior Notes due 2028
has been extended through April 22, 2013. The extension will
provide additional time for the Company to continue negotiations
and documentation with the forbearing noteholders with respect to
the terms of a restructuring transaction and to obtain consents
from the Company's senior secured lenders to the transaction.
The Company said in the April 16 regulatory filing that to the
extent this process is not complete by April 22, the forbearance
agreement may be extended further by agreement of the parties;
however, there is no assurance any further extension will be
provided. Since the initial execution of the forbearance
agreement, additional holders of the Existing Notes have joined in
the agreement, increasing the percentage of forbearing holders
from 78% to 85% of the principal amount of the Existing Notes
outstanding.
Any restructuring arrangement for the Existing Notes is subject to
final negotiation and execution of definitive agreements.
Globalstar is seeking the consent of the lenders under its senior
secured credit facility to the restructuring; however, there is no
assurance that consent will be obtained. Until definitive
agreements are negotiated in their entirety and executed, and the
transactions contemplated thereby are consummated, there can be no
assurance that any debt restructuring will be completed by the end
of the forbearance period or at all.
About Globalstar
Covington, Louisiana-based Globalstar Inc. provides mobile
satellite voice and data services. Globalstar offers these
services to commercial and recreational users in more than 120
countries around the world. The Company's products include mobile
and fixed satellite telephones, simplex and duplex satellite data
modems and flexible service packages.
* * *
As reported by the Troubled Company Reporter on June 13, 2012,
Globalstar Inc. announced on May 16, 2012, the decision of the
arbitrators in the commercial arbitration concerning its 2009
satellite manufacturing contract with Thales Alenia Space France.
Although the Company and Thales may agree to other terms,
the arbitrators' ruling requires Globalstar to pay Thales
approximately EUR53 million in Phase 3 termination charges by
June 9, 2012. The Company disputes the merits of the Award and is
currently considering its options to oppose, seek to vacate, or
otherwise challenge the Award.
On June 11, Globalstar said it did not make payment of the Award
to Thales on or prior to June 9. As a result, among other things,
the Award has begun to accrue simple interest. The Company
continues to engage in discussions with Thales in an effort to
reach a consensual resolution.
On May 23, 2012, Thales commenced an action in the District Court
for the Southern District of New York by filing a petition to
affirm the Award. The Company is currently in negotiations with
Thales in an effort to reach an amicable resolution of their
disputes. In the event the parties fail to reach such an
agreement, the Company currently intends to move to vacate the
Award.
On the same date that Thales commenced the New York Proceeding,
Thales sent a notice to the agent under the Company's secured bank
facility, pursuant to section 2.3 of a Direct Agreement between
Thales, Globalstar, and the Agent, dated June 5, 2009, notifying
the Agent, among other things, of the Award, that it deems the
failure to pay the Award a default under the Construction
Agreement, and that it is reserving all of its rights under the
Direct Agreement and the Construction Agreement, including the
right to suspend performance under the Direct Agreement, if the
Company's default is not cured within 30 days of receipt of the
Notice.
Pursuant to section 2.3 of the Direct Agreement, Thales must wait
30 days from the date of notice to the Agent before suspending
performance under the Construction Agreement and, if the default
is not cured 30 days after the date of suspension of performance,
Thales may terminate the Construction Agreement in accordance with
its terms. There can be no assurance that Thales will not seek to
terminate the Construction Agreement before the requisite periods
expire. Should Thales seek to terminate the Construction
Agreement prematurely, the Company would pursue all of its rights
and remedies, but there can be no assurance that the Company's
interpretation would prevail.
Globalstar and Thales have initiated post-ruling discussions to
seek mutually agreeable solutions on all aspects of the
Construction Agreement and the Award. No assurance can be given
that the Company will be successful in reaching agreement with
Thales as to the Construction Agreement or the Award.
If the parties are not able to reach a mutually agreeable
resolution, if the Award is confirmed, final, and non-appealable
and thereafter remains unpaid without resolution, or if Thales
terminates the Construction Agreement, there are likely to be
materially negative consequences to Globalstar, including with
respect to its debt agreements, ongoing work with Thales, and
business operations, and Globalstar may be required to consider
strategic alternatives, including, without limitation, seeking
protection under Chapter 11 of the U.S. Bankruptcy Code.
GLYECO INC: Incurs $1.86 Million Net Loss in 2012
-------------------------------------------------
Glyeco, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$1.86 million on $1.26 million of net sales for the year ended
Dec. 31, 2012, as compared with a net loss of $592,171 on $824,289
of net sales for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $5.68 million
in total assets, $2.27 million in total liabilities and $3.41
million in total stockholders' equity.
Jorgensen & Co., in Lehi, UT, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that the
Company has not yet achieved profitable operations and is
dependent on its ability to raise capital from stockholders or
other sources and other factors to sustain operations. These
factors, among other matters, raise substantial doubt that the
Company will be able to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/CG9vHT
About GlyEco, Inc.
Phoenix, Ariz.-based GlyEco, Inc., is a green chemistry company
formed to roll-out its proprietary and patent pending glycol
recycling technology that transforms waste glycols, a hazardous
material, into profitable green products.
GREEN ENERGY: Incurs $2.1 Million Net Loss in 2012
--------------------------------------------------
Green Energy Management Services Holdings, Inc., filed with the
U.S. Securities and Exchange Commission its annual report on Form
10-K disclosing a net loss of $2.12 million on $277,457 of
contract revenue earned for the year ended Dec. 31, 2012, as
compared with a net loss of $19.25 million on $116,550 of contract
revenue earned for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $813,433 in
total assets, $5.11 million in total liabilities, all current, and
a $4.30 million total stockholders' deficit.
MaloneBailey, LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that
the Company has suffered recurring losses from operations, which
raises substantial doubt about its ability to continue as a going
concern.
A copy of the Form 10-K is available for free at:
http://is.gd/OvvUAu
About Green Energy
Baton Rouge, Louisiana-based Green Energy Management Services
Holdings, Inc., is a full service energy management company. GEM
provides its clients all forms of energy efficiency solutions
mainly based in two functional areas: energy efficient lighting
upgrades and efficient water utilization. GEM is currently
primarily involved in the distribution of energy efficient light
emitting diode ("LED") units (the "Units") to end users who
utilize substantial quantities of electricity. GEM is also
currently involved in the initial stages of customer installation
of its Water Management System. GEM structures its contracts
with no upfront or maintenance costs to its customers and shares
in the achieved energy, water utilization and maintenance
savings.
GSC GROUP: Kaye Scholer Agrees to Waive $1.5 Million in Fees
------------------------------------------------------------
Sara Randazzo, writing for The Am Law Daily, reports that law firm
Kaye Scholer has finalized a settlement with the U.S. Trustee's
Office that requires the firm to repay $1.15 million to the estate
of GSC Group, where it served as the investment firm's bankruptcy
counsel. The amount is nearly a third of the $5 million fee Kaye
Scholer earned from the assignment. Kaye Scholer also agreed to
forgo a pending application for an additional $352,000 in fees.
The law firm must repay the money within 30 days, Judge Shelley
Chapman ordered from the bench. It also agreed to revamp its
procedures for applying for bankruptcy assignments.
The report says the settlement was announced in U.S. bankruptcy
court in lower Manhattan on Monday. It resolves claims brought by
the trustee's office in January that accused Kaye Scholer of
failing to disclose key details when it applied -- and was chosen
-- to represent GSC as debtor's counsel in 2010.
Am Law Daily recounts that the U.S. trustee's office argued that
both Kaye Scholer and GSC financial adviser Capstone Advisory
Group neglected to say that a key employee listed on Capstone's
application was actually a contractor who used a type of fee-
sharing agreement barred by the bankruptcy code. The trustee also
faulted the firm for failing to mention that it had been employed
previously by other entities owned by the contractor, Robert
Manzo, creating a potential conflict of interest. According to
the U.S. trustee's filing in January, Mr. Manzo, who served as
GSC's chief restructuring officer, has known Kaye Scholer managing
partner Michael Solow personally and professionally for more than
20 years.
The report relates hedge fund Black Diamond Capital Management,
which bought GSC's assets for $235.7 million at a 2010 auction,
filed an objection to the settlement March 15, arguing that its
approval would unfairly prevent Black Diamond and others from
suing Kaye Scholer for actions related to its GSC work.
The report notes financial adviser Capstone's settlement was still
being finalized in court as of press time Monday.
About GSC Group
Florham Park, New Jersey-based GSC Group, Inc. --
http://www.gsc.com/-- was a private equity firm that specialized
in mezzanine and fund of fund investments. Originally named
Greenwich Street Capital Partners Inc. when it was a subsidiary of
Travelers Group Inc., GSC became independent in 1998 and at one
time had $28 billion of assets under management. Market reverses,
termination of some funds, and withdrawal of customers'
investments reduced funds under management at the time of
bankruptcy to $8.4 billion.
GSC Group, Inc., filed for Chapter 11 bankruptcy protection
(Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010, estimating
assets at $1 million to $10 million and debts at $100 million
to $500 million as of the Chapter 11 filing.
Effective Jan. 7, 2011, James L. Garrity Jr., was named Chapter 11
trustee for the Debtors. The Chapter 11 trustee completed the
sale of business in July 2011 and filed a liquidating Chapter 11
plan and explanatory disclosure statement in late August. The
bankruptcy court authorized the trustee to sell the business to
Black Diamond Capital Finance LLC, as agent for the secured
lenders. Proceeds were used to pay secured claims. The price
paid by the lenders' agent was designed for full payment on
$256.8 million in secured claims, with $18.6 million cash left
over. Black Diamond bought most assets with a $224 million credit
bid, a $6.7 million note, $5 million cash, and debt assumption. A
minority group of secured lenders filed an appeal from the order
allowing the sale. Through a suit in state court, the minority
lenders failed to halt Black Diamond from completing the sale.
The Chapter 11 Trustee and Black Diamond filed rival repayment
plans for GSC Group. The Chapter 11 trustee reached a handshake
deal on Dec. 13, 2011, ending the dispute with Black
Diamond that delayed a $235 million asset sale.
Michael B. Solow, Esq., at Kaye Scholer LLP, served as the
Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, was
the Debtor's notice and claims agent. Capstone Advisory Group LLC
served as the Debtor's financial advisor.
The Chapter 11 trustee tapped Shearman & Sterling LLP as his
counsel, and Togut, Segal & Segal LLP as his conflicts counsel.
Black Diamond Capital Management, LLC, is represented by attorneys
at Latham & Watkins and Kirkland & Ellis LLP.
GUILDMASTER INC: Gets 120-Day Extension to File Payment Plan
------------------------------------------------------------
Marie Beaudette at Dow Jones' DBR Small Cap reports a bankruptcy
judge granted lamp maker GuildMaster Inc. a 120-day extension to
file a creditor-payment plan as it works to find a path out of
Chapter 11 after its lawsuit over the seizure of thousands of its
lamps by the U.S. government was thrown out.
GuildMaster, Inc., also known as Decorize, Inc., filed a Chapter
11 petition (Bankr. W.D. Mo. Case No. 12-62234) on Dec. 13, 2012.
Attorneys at Stinson Morrison Hecker serve as counsel to the
Debtor. The Debtor disclosed $3,426,296 in assets and $3,556,713
in liabilities.
HD SUPPLY: Incurs $1.1 Billion Net Loss in Fiscal 2013
------------------------------------------------------
HD Supply, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$1.17 billion on $8.03 billion of net sales for the fiscal year
ended Feb. 3, 2013, as compared with a net loss of $543 million on
$7.02 billion of net sales for the fiscal year ended Jan. 29,
2012. The Company incurred a net loss of $619 million for the
fiscal year ended Jan. 30, 2011.
The Company's balance sheet at Feb. 3, 2013, showed $7.33 billion
in total assets, $8.92 billion in total liabilities and a $1.59
billion total stockholders' deficit.
A copy of the Form 10-K is available for free at:
http://is.gd/jyImT6
About HD Supply
HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the
largest North American wholesale distributors supporting
residential and non-residential construction and to a lesser
extent electrical consumption and repair and remodeling. HDS also
provides maintenance, repair and operations services. Its
businesses are organized around three segments: Infrastructure and
Energy; Maintenance, Repair & Improvement; and, Specialty
Construction. HDS operates through approximately 800 locations
throughout the U.S. and Canada serving contractors, government
entities, maintenance professionals, home builders and
professional businesses.
* * *
As reported by the TCR on Jan. 11, 2013, Moody's Investors Service
upgraded HD Supply, Inc.'s ("HDS") corporate family rating to B3
from Caa1 and its probability of default rating to B3 from Caa1.
This rating action results from our expectations that HDS will
refinance a significant portion of its senior subordinated notes
due 2015, effectively extending the remainder of its maturities by
at least two years to 2017.
HD Supply carries a 'B' corporate credit rating, with
negative outlook, from Standard & Poor's Ratings Services.
HERITAGE BANK: Shut Down; FirstAtlantic Bank Assumes Deposits
-------------------------------------------------------------
Heritage Bank of North Florida in Orange Park, Florida, was closed
on Friday, April 22, 2013, by the Florida Office of Financial
Regulation, which appointed the Federal Deposit Insurance
Corporation (FDIC) as receiver. To protect the depositors, the
FDIC entered into a purchase and assumption agreement with
FirstAtlantic Bank of Jacksonville, Florida, to assume all of the
deposits of Heritage Bank of North Florida.
The two branches of Heritage Bank of North Florida will reopen on
Monday as branches of FirstAtlantic Bank. Depositors of Heritage
Bank of North Florida will automatically become depositors of
FirstAtlantic Bank.
As of December 31, 2012, Heritage Bank of North Florida had
approximately $110.9 million in total assets and $108.5 million in
total deposits. In addition to assuming all of the deposits of
the failed bank, FirstAtlantic Bank agreed to purchase essentially
all of the assets.
Customers with questions about today's transaction should call the
FDIC toll-free at 1-800-357-7599. The phone number will be
operational from 9:00 a.m. to 5:00 p.m., EDT. Interested parties
also can visit the FDIC's Web site
at http://www.fdic.gov/bank/individual/failed/heritagebank-fl.html
The FDIC estimates that the cost to the Deposit Insurance Fund
(DIF) will be $30.2 million. Compared to other alternatives,
FirstAtlantic Bank's acquisition was the least costly resolution
for the FDIC's DIF. Heritage Bank of North Florida is the seventh
FDIC-insured institution to fail in the nation this year, and the
first in Florida. The last FDIC-insured institution closed in the
state was Heritage Bank of Florida, Lutz, on November 2, 2012.
HERON LAKE: Signs Fourth Amended Forbearance with AgStar
--------------------------------------------------------
Heron Lake BioEnergy, LLC, on April 12, 2013, entered into a
Fourth Amended and Restated Forbearance Agreement with AgStar
Financial Services, PCA, that extended the forbearance period
relating to certain covenant defaults and required monthly
principal instalment payments.
The Company is indebted to AgStar under an Amended and Restated
Term Note dated Sept. 1, 2011, in the principal amount of
$40,000,000, and an Amended and Restated Term Revolving Note dated
Sept. 1, 2011, in the principal amount of $8,008,689. The
Company's obligations to AgStar are further evidenced by a Fifth
Amended and Restated Master Loan Agreement dated Sept. 1, 2011.
The loans extended to the Company and evidenced by the Notes were
made by AgStar to the Company for the purpose of constructing and
operating an ethanol production facility in Heron Lake, Minnesota.
The Company and AgStar previously entered into a Forbearance
Agreement dated Dec. 21, 2012, which was subsequently amended and
restated on Jan. 22, 2013, Feb. 12, 2013, and March 29, 2013, in
order to permit the Company to close on the transactions
contemplated by the asset purchase agreement dated Jan. 22, 2013,
between the Company and Guardian Energy Heron Lake, LLC. The
Ethanol Plant APA was terminated by the Company on April 4, 2013.
Under the Fourth Amended and Restated Forbearance Agreement,
AgStar agreed to forbear from exercising its legal and contractual
rights and remedies provided by the Notes, MLA, and related loan
documents, including, but not limited to, the right to foreclose
the real estate mortgages and security agreements and to obtain
the appointment of a receiver pursuant to applicable law, in order
to permit the Company to provide AgStar with a written management
and governance improvement plan as delineated by Section 6 of the
Fourth Amended and Restated Forbearance Agreement.
The Company also agreed to permit an engineer or consultant
selected by AgStar to inspect the Company's ethanol plant, at the
Company's expense, and agreed to execute and deliver an amended
and restated mortgage, acceptable to AgStar, covering certain real
property of approximately 6-acres previously omitted from the
Sept. 1, 2011, mortgage.
The Company and AgStar also agreed that advances under the
Revolving Note may only be advanced to the Company for the purpose
of funding normal operating expenses, including the payment of
interest to AgStar, during the forbearance period. Any requests
for advances on the Revolving Note are subject to the terms and
conditions set forth in the MLA. The Fourth Amended and Restated
Forbearance Agreement extended the date for those advances to be
made by AgStar.
Upon the occurrence of any one or more Events of Default, as
defined under the Fourth Amended and Restated Forbearance
Agreement, the entire unpaid balance of the Loans, including all
unpaid principal, accrued interest, default charges and costs and
expenses incurred by AgStar in connection with the Loans, will be
immediately due and payable by the Company and AgStar may, in its
sole discretion, and without further demand or notice to the
Company, protect and enforce all of its legal, contractual and
equitable rights and remedies under the Loan Documents and Fourth
Amended and Restated Forbearance Agreement. Under the Fourth
Amended and Restated Forbearance Agreement, the Company's failure
to close on the transactions contemplated by the Ethanol Plant APA
was removed as an Event of Default.
Concurrently with execution of the Fourth Amended and Restated
Forbearance Agreement, the Company made a cash payment to AgStar
to reduce the outstanding principal balance of the Term Note and
pay AgStar a fee for extending the forbearance period.
A copy of the Amended Forbearance Agreement is available at:
http://is.gd/9ObYcE
About Heron Lake
Heron Lake BioEnergy, LLC, operated a dry mill, coal fired ethanol
plant in Heron Lake, Minnesota. After completing a conversion in
November 2011, the Company is now a natural gas fired ethanol
plant. Its subsidiary, HLBE Pipeline Company, LLC, owns 73% of
Agrinatural Gas, LLC, the pipeline company formed to construct,
own, and operate a natural gas pipeline that provides natural gas
to the Company's ethanol production facility through a connection
with the natural gas pipeline facilities of Northern Border
Pipeline Company in Cottonwood County, Minnesota. Its subsidiary,
Lakefield Farmers Elevator, LLC, has grain facilities at Lakefield
and Wilder, Minnesota. At nameplate, the Company's ethanol plant
has the capacity to process approximately 18.0 million bushels of
corn each year, producing approximately 50 million gallons per
year of fuel-grade ethanol and approximately 160,000 tons of
distillers' grains with soluble.
In its report on the Company's financial statements for the fiscal
year ended Oct. 31, 2012, Boulay, Heutmaker, Zibell & Co.
P.L.L.P., in Minneapolis, Minnesota, expressed substantial doubt
about Heron Lake BioEnergy's ability to continue as a going
concern. The independent auditors noted that the Company has
incurred losses due to difficult market conditions and the
impairment of long-lived assets. "The Company is out of
compliance with its master loan agreement and is operating under a
forbearance agreement whereby the Company agreed to sell
substantially all of its assets."
The Company reported a net loss of $32.35 million on
$168.66 million of revenues for the year ended Oct. 31, 2012,
compared with net income of $543,017 on $164.12 million of
revenues for the year ended Oct. 31, 2011.
The Company's balance sheet at Oct. 31, 2012, showed
$66.58 million in total assets, $49.03 million in total
liabilities, and members' equity of $17.55 million.
HORIYOSHI WORLDWIDE: Incurs $3 Million Net Loss in 2012
-------------------------------------------------------
Horiyoshi Worldwide Inc. filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $3 million on $1.01 million of net revenue for the
year ended Dec. 31, 2012, as compared with a net loss of $2.89
million on $684,500 of net revenue for the year ended Dec. 31,
2011.
The Company's balance sheet at Dec. 31, 2012, showed $1 million in
total assets, $2.16 million in total liabilities and a $1.16
million total stockholders' deficit.
EFP Rotenberg, LLP, in Rochester, New York, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that as of Dec. 31, 2012, the Company has accumulated losses of
$6,747,446 since inception. The company intends to fund
operations through equity financing arrangements, which may be
insufficient to fund its capital expenditures, working capital and
other cash requirements for the year ending Dec. 31, 2013. In
response to these problems, management intends to raise additional
funds through public or private placement offerings. These
factors, among others, raise substantial doubt about the company's
ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/3X7nYz
About Horiyoshi Worldwide
Los Angeles, Calif.-based Horiyoshi Worldwide, Inc., is a clothing
and accessories design and distribution company whose products are
inspired by the artwork of Japanese master tattoo artist Yoshihito
Nakano -- better known as Horiyoshi III.
HOWREY LLP: Creditors Say Haynes and Boone 'Forum Shopping'
-----------------------------------------------------------
Matt Chiappardi of BankruptcyLaw360 reported that the creditors
committee for bankrupt Washington-based law firm Howrey LLP
objected Thursday to Haynes and Boone LLP's attempt to get a judge
in D.C. to rule on whether it can keep profits brought in by a
former Howrey partner, calling their plan an effort to "forum
shop."
According to the report, Haynes and Boone had asked the bankruptcy
judge overseeing the liquidation earlier this month to relieve it
from an automatic stay in order to seek a declaratory judgment
from a Washington court over the issue.
About Howrey LLP
Three creditors filed an involuntary Chapter 7 petition (Bankr.
N.D. Calif. Case No. 11-31376) on April 11, 2011, against the
remnants of the Washington-based law firm Howrey LLP. The filing
was in San Francisco, where the firm had an office. The firm
previously was known as Howrey & Simon and Howrey Simon Arnold &
White LLP. The firm at one time had more than 700 lawyers in 17
offices. The partners voted to dissolve in March 2011.
The firm specialized in antitrust and intellectual-property
matters. The three creditors filing the involuntary petition
together have $36,600 in claims, according to their petition.
The involuntary chapter 7 petition was converted to a chapter 11
case in June 2011 at the request of the firm. In its schedules
filed in July, the Debtor disclosed assets of $138.7 million and
liabilities of $107.0 million.
Representing Citibank, the firm's largest creditor, is Kelley
Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton &
Garrison. Representing Howrey is H. Jason Gold, Esq., a partner
at Wiley Rein.
The Official Committee of Unsecured Creditors is represented in
the case by Bradford F. Englander, Esq., at Whiteford, Taylor And
Preston LLP.
In September 2011, Citibank sought conversion of the Debtor's case
to Chapter 7 or, in the alternative, appointment of a Chapter 11
Trustee. The Court entered an order appointing a Chapter 11
Trustee. In October 2011, Allan B. Diamond was named as Trustee.
ICEWEB INC: Copy of Convertible Debenture with Sand Hill Finance
----------------------------------------------------------------
IceWEB, Inc., announced that on April 12, 2013, the Company
entered into an agreement with Sand Hill Finance, LLC, to amend
their existing Financing Agreement by issuing a convertible
debenture to replace IceWEB's existing note payable, in the amount
of $2,139,235. The debenture is convertible into common stock at
a fixed price of $0.075 per share, bears interest at 12% annually,
and has a two year term. In addition, the terms of the note call
for monthly payments of $15,000, which increases to $25,000 in the
event that IceWEB raises $3,000,000 or more in an equity
financing.
"Sand Hill Finance has demonstrated their faith in IceWEB's future
success by restructuring our debt in a way that allows us to no
longer be in default under our financing agreement, improves our
cash flow, and gives us the flexibility to successfully complete
our pending merger between IceWEB and Computers and Tele-Comm,
Inc.," said IceWEB CFO, Mark Lucky.
"We are pleased to have been able to reach such a positive
arrangement with IceWEB, particularly as we believe the company is
so undervalued. We're very excited about their strategy and their
future prospects," said Mark Cameron, president of Sand Hill
Finance.
A copy of the Secured Convertible Debenture is available at:
http://is.gd/EZwmkq
About IceWEB
Sterling, Va.-based IceWEB, Inc., manufactures and markets
purpose-built appliances, network and cloud-attached storage
solutions and delivers on-line cloud computing application
services. The Company's customer base includes U.S. government
agencies, enterprise companies, and small to medium sized
businesses (SMB).
D'Arelli Pruzansky, P.A., in Boca Raton, Florida, expressed
substantial doubt about IceWEB's ability to continue as a going
concern. The independent auditors noted that the Company had net
losses of $6,485,048 for the year ended Sept. 30, 2012.
The Company reported a net loss of $6.5 million on $2.6 million of
sales in fiscal 2012, compared with a net loss of $4.7 million on
$2.7 million of sales in fiscal 2011.
ICEWEB INC: Cuts Exercise Price of Warrants to $0.028 Apiece
------------------------------------------------------------
As previously disclosed, in November 2011, IceWEB, Inc., entered
into a Securities Purchase Agreement with accredited investors
pursuant to which the Company sold $2,012,500 in principal amount
of senior convertible notes and issued the investors Series O,
Series P and Series Q warrants to purchase up to an aggregate of
35,514,789 shares of the Company's common stock for an aggregate
purchase price of $1,750,000 in a private transaction exempt from
registration under the Securities Act of 1933.
The Company issued Rodman & Renshaw, LLC, a broker-dealer and
member of FINRA who acted as the exclusive placement agent for the
Company in this offering, warrants to purchase an aggregate of
911,765 shares of the Company's common stock which are identical
to the Series O warrants as partial compensation for their
services to the Company. Rodman & Renshaw, LLC, subsequently
transferred those warrants to third parties.
The terms of these warrants provided that the exercise price of
the warrants was initially $0.17 per share, subject to adjustment.
The Series O warrants and Series P warrants were each immediately
exercisable. The Series Q warrants became exercisable at any time
that any portion of the Series P warrants held by that
warrantholder were exercised.
The registration statement covering the resale of the shares of
common stock underlying each series of these warrants was declared
effective by the SEC on Feb. 8, 2012. Presently, there are a
total of 29,290,605 Series O warrants and 3,108,115 Series Q
warrants outstanding, net of exercises and expirations.
On April 10, 2013, the Company entered into an agreement with the
holders of the Series O warrants and Series Q warrants whereby in
exchange for their agreement to waive any right to an adjustment
in the exercise price of these warrants in accordance with the
foregoing "full ratchet" provisions, and their agreement to sell
no more than 10% of the daily volume of the Company's common stock
in the market on any given trading day, the Company reduced the
exercise price of each of the Series O warrants and Series Q
warrants to $0.028 per share. The Company expects to file a post-
effective amendment to the aforedescribed registration statement
as soon as practicable to reflect the reduction in the warrant
exercise prices and the terms of these agreements, as well as to
provide current financial and other information on the Company's
company and to remove the shares underlying the expired Series P
and Series Q warrants.
About IceWEB
Sterling, Va.-based IceWEB, Inc., manufactures and markets
purpose-built appliances, network and cloud-attached storage
solutions and delivers on-line cloud computing application
services. The Company's customer base includes U.S. government
agencies, enterprise companies, and small to medium sized
businesses (SMB).
D'Arelli Pruzansky, P.A., in Boca Raton, Florida, expressed
substantial doubt about IceWEB's ability to continue as a going
concern. The independent auditors noted that the Company had net
losses of $6,485,048 for the year ended Sept. 30, 2012.
The Company reported a net loss of $6.5 million on $2.6 million of
sales in fiscal 2012, compared with a net loss of $4.7 million on
$2.7 million of sales in fiscal 2011.
The Company's balance sheet at Dec. 31, 2012, showed $1.78 million
in total assets, $3.46 million in total liabilities and a $1.68
million total stockholders' deficit.
IDO SECURITY: Incurs $5.2 Million Net Loss in 2012
--------------------------------------------------
IDO Security Inc. filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$5.20 million on $318,643 of revenue for the year ended Dec. 31,
2012, as compared with a net loss of $7.36 million on $202,787 of
revenue for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $389,836 in
total assets, $23.33 million in total liabilities and a $22.94
million total stockholders' deficiency.
Rotenberg Meril Solomon Bertiger & Guttilla, P.C., issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has not achieved profitable operations, has
incurred recurring losses, has a working capital deficiency and
expects to incur further losses in the development of the business
that raise substantial doubt about the Company's ability to
continue as a going concern.
Bankruptcy Warning
"Under the terms of the agreements with the holders of our secured
promissory notes that we issued in December 2007 through December
2012, the note holders have a first priority lien on substantially
all of our assets, including our cash balances. If we default
under the notes, the note holders would be entitled to, among
other things, foreclose on our assets (whether inside or outside a
bankruptcy proceeding) in order to satisfy our obligations under
the credit facility."
A copy of the Form 10-K is available for free at:
http://is.gd/Fsmslr
About IDO Security
IDO Security Inc. is engaged in the design, development and
marketing of devices for the homeland security and loss prevention
markets that are intended for use in security screening procedures
to detect metallic objects concealed on or in footwear, ankles and
feet through the use of electro-magnetic fields. The Company's
common stock trades on the OTC Bulletin Board under the symbol
IDOI. The Company is headquartered in New York City.
IMH FINANCIAL: Plans to Expand Real-Estate Assets in 2013
---------------------------------------------------------
IMH Financial Corporation sent a letter to its shareholders
containing, among other things, information regarding the
company's recent events and initiatives being undertaken.
"In 2013 and beyond, assuming sufficient liquidity to do so, we
expect to invest in and acquire multiple operating and other real
estate-based assets that will both increase our asset base and
have the opportunity to substantially supplement our earnings.
Certainly the undertakings described below are but some of the
many pieces of what is a much bigger picture," the Company wrote.
A copy of the Letter is available for free at http://is.gd/SdZ8yw
About IMH Financial
Scottsdale, Ariz.-based IMH Financial Corporation was formed from
the conversion of IMH Secured Loan Fund, LLC, or the Fund, a
Delaware limited liability company, on June 18, 2010. The
conversion was effected following a consent solicitation process
pursuant to which approval was obtained from a majority of the
members of the Fund to effect the Conversion Transactions and
involved (i) the conversion of the Fund from a Delaware limited
liability company into a Delaware corporation named IMH Financial
Corporation, and (ii) the acquisition by the Company of all of the
outstanding shares of the manager of the Fund Investors Mortgage
Holdings Inc., or the Manager, as well as all of the outstanding
membership interests of a related entity, IMH Holdings LLC, or
Holdings on June 18, 2010.
The Company is a commercial real estate lender based in the
southwest United States with over 12 years of experience in many
facets of the real estate investment process, including
origination, underwriting, documentation, servicing, construction,
enforcement, development, marketing, and disposition. The Company
focuses on a niche segment of the real estate market that it
believes is underserved by community, regional and national banks:
high yield, short-term, senior secured real estate mortgage loans.
The intense level of underwriting analysis required in this
segment necessitates personnel and expertise that many community
banks lack, yet the requisite localized market knowledge of the
underwriting process and the size of the loans the Company seeks
often precludes the regional and community banks from efficiently
entering this market.
The Company reported a net loss of $35.19 million in 2011, a net
loss of $117.04 million in 2010, and a net loss of $74.47 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed $228.93
million in total assets, $86.63 million in total liabilities and
$142.30 million in total stockholders' equity.
IMPLANT SCIENCES: Revenues Doubled in First Half of Fiscal 2013
---------------------------------------------------------------
Implant Sciences Corporation held a telephonic conference call on
April 12, 2013, to provide an update on the Company to investors.
"In the first half of fiscal 2013, we have already achieved our
best year ever for explosive detection products, recording
revenues more than twice those for all of fiscal 2012," said Glenn
D. Bolduc, president and chief executive officer of the Company.
"Sales of our H150 product are strong, and interest in the product
remains very high, especially in areas with challenging
environmental obligation - environmental conditions such as dust
and humidity. We believed all along that success with the B220
would require TSA approval, which we have been working diligently
towards for some time, and had expected to receive in the late
summer of 2012," he added.
A transcript to that conference call is available at:
http://is.gd/oiVvPa
About Implant Sciences
Implant Sciences Corporation (OBB: IMSC.OB) --
http://www.implantsciences.com/-- develops, manufactures and
sells sensors and systems for the security, safety and defense
(SS&D) industries.
Marcum LLP, in Boston, Massachusetts, issued a "going concern"
qualification on the consolidated financial statements for the
year ended June 30, 2012. The independent auditors noted that the
Company has had recurring net losses and continues to experience
negative cash flows from operations. As of Sept. 25, 2012, the
Company's principal obligation to its primary lender was
$33,429,000 with accrued interest of $3,146,000. The Company is
required to repay all borrowings and accrued interest to this
lender on March 31, 2013. These conditions raise substantial
doubt about its ability to continue as a going concern.
The Company's balance sheet at Dec. 31, 2012, showed $4.67 million
in total assets, $42.17 million in total liabilities and a $37.50
million total stockholders' deficit.
Bankruptcy Warning
"Despite our current sales, expense and cash flow projections and
$3,562,000 in cash available from our line of credit with DMRJ at
December 31, 2012, we will require additional capital in the third
quarter of fiscal 2013 to fund operations and continue the
development, commercialization and marketing of our products. Our
failure to achieve our projections and/or obtain sufficient
additional capital on acceptable terms would have a material
adverse effect on our liquidity and operations and could require
us to file for protection under bankruptcy laws," the Company said
in its quarterly report for the period ended Dec. 31, 2012.
IOWA FERTILIZER: S&P Rates $1.194BB Tax-Exempt Financing 'BB-'
--------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its
preliminary 'BB-' rating to $1.194 billion tax-exempt financing by
issuer Iowa Finance Authority. The secured bonds consist of three
tranches maturing between 2019 and 2025. The bonds will be
serviced by project revenues of the obligor, Iowa Fertilizer Co.
LLC (IFCo). Almost $600 million in equity will be cash-funded at
the transaction's close (but the project may also use a 'BBB+' or
higher rated letter of credit). S&P has also assigned a
preliminary '1' recovery rating to the bonds, indicating very high
(90% to 100%) recovery under a default scenario. Ratings
finalization is subject to legal document review.
OCI N.V. plans to develop, build, own, and operate a new nitrogen-
based production facility. The project will be undertaken by
IFCo, a wholly owned indirect project subsidiary of OCI N.V. The
plant's final sellable nitrogen products will include a total of
1.7 million to 2.2 million short tons of ammonia, urea, urea
ammonium nitrate, and diesel exhaust fluid . Orascom E&C USA Inc.
has been awarded the engineering, procurement, and construction
(EPC) contract to build the facility within 39 months of EPC
notice to proceed, which took place in November 2012. Plant
operations are expected to begin by November 2015. Kellogg Brown
& Root (KBR), Stamicarbon, and ThyssenKrupp Uhde have been
selected to supply the process technologies for the plant.
"The outlook is stable and will likely remain at the current level
as the project proceeds through the construction phase, said
Standard & Poor's credit analyst Aneesh Prabhu.
Near-term downside risks can emerge if the project experiences
delays in construction that extend beyond six months. Given the
current economics for fertilizers, S&P expects that ratings will
likely increase as the project goes into commercial operations.
S&P's base-case estimates that trend an average of about 2.4x and
minimum levels of about 1.75x suggest that ratings can be as high
as 'BB+' during the operations phase. However, expected high
volatility in future cash flows and the single-asset nature of the
project preclude investment-grade ratings.
IOWORLDMEDIA INC: Incurs $746,600 Net Loss in 2012
--------------------------------------------------
ioWorldMedia, Incorporated, filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $746,619 on $1.60 million of sales for the year ended
Dec. 31, 2012, as compared with a net loss of $954,652 on $1.64
million of sales during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $1.88 million
in total assets, $1.58 million in total liabilities, $5.77 million
in preferred stock, and a $5.47 million total stockholders'
deficit.
Patrick Rodgers, CPA, PA, in Altamonte Springs, FL, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the company has a minimum cash balance
available for payment of ongoing expenses, a negative working
capital balance, has incurred losses and negative cash flow from
operations for the past two years, and it does not have a source
of revenue sufficient to cover its operating costs. These factors
raise substantial doubt about the Company's ability to continue as
a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/glrV6Z
About ioWorldMedia
Tampa, Fla.-based ioWorldMedia, Incorporated, operates three
primary internet media subsidiaries: Radioio, ioBusinessMusic, and
RadioioLive.
IZEA INC: Borrows $500,000 from Director
----------------------------------------
IZEA, Inc., entered into an unsecured loan agreement with Brian W.
Brady, a director of the Company. Pursuant to this agreement, the
Company received a short term loan of $500,000 due on May 31,
2013. The note bears interest at 7% per annum with a default rate
of interest at 12% based on a 360 day year.
A copy of the loan agreement and promissory note is available for
free at http://is.gd/D4cpXn
About IZEA, Inc.
IZEA, Inc., headquartered in Orlando, Fla., believes it is a world
leader in social media sponsorships ("SMS"), a rapidly growing
segment within social media where a company compensates a social
media publisher to share sponsored content within their social
network. The Company accomplishes this by operating multiple
marketplaces that include its platforms SocialSpark,
SponsoredTweets and WeReward, as well as its legacy platforms
PayPerPost and InPostLinks.
The Company has incurred significant losses from operations since
inception and has an accumulated deficit of $20.9 million as of
June 30, 2012.
Cross, Fernandez & Riley, LLP, in Orlando, Florida, expressed
substantial doubt about IZEA's ability to continue as a going
concern, following the Company's results for the fiscal year ended
Dec. 31, 2011. The independent auditors noted that the Company
has incurred recurring operating losses and had an accumulated
deficit at Dec. 31, 2011, of $18.1 million.
JM HUBER: S&P Raises Corp. Credit Rating to 'BB'; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on J.M. Huber Corp. to 'BB' from 'BB-'. The outlook
is stable.
At the same time, S&P raised its senior unsecured debt rating on
the company's $225 million of senior unsecured notes due 2019 to
'BB' from 'BB-' and revised the recovery rating to '3' from '4'.
The '3' recovery rating indicates S&P's expectation of meaningful
(50%-70%) recovery in the event of a payment default.
"The upgrade reflects stronger earnings and cash flow from
strengthening U.S. housing markets and our expectation for
continued debt reduction, which should result in permanent
improvement in the financial risk profile," said Standard
& Poor's credit analyst Henry Fukuchi.
As a result, S&P is revising its assessment of Huber's financial
risk profile to "significant" from "aggressive." Correspondingly,
S&P expects funds from operations (FFO) to adjusted debt to be in
the 25% to 30% range the next few years. S&P adjusts debt by
about $220 million to include capitalized operating leases as well
as tax-effected postretirement benefit and other liabilities. S&P
continues to regard the company's business risk profile as "fair."
S&P's stable outlook on Huber factors in its expectation for
continued earnings stability at CP Kelco and HEM, as well as
further strengthening of U.S. residential construction markets
during the next few years. S&P expects Huber to use cash on hand
to repay $110 million of debt due in 2014. Thereafter, S&P
expects Huber to balance its growth initiatives with its aim to
continue to strengthen its financial profile. At the current
ratings, S&P expects Huber to generate FFO to debt of 25% to 30%
during the next few years.
S&P could lower the ratings if FFO to debt dropped below 20% with
no immediate prospects for recovery. Assuming the planned debt
reduction takes place, S&P believes this could occur if 2014
revenue is flat (after nearly 10% expected growth in 2013) and
EBITDA margins drop to about 12% compared with S&P's expectation
of about 16%.
In order to consider a further upgrade with Huber's current
business mix, FFO to debt would have to exceed 30% on a
sustainable basis, and financial policies would have to support
the low debt level that would make this possible. S&P views this
as unlikely during the next year.
KRATOS DEFENSE: Moody's Changes Outlook to Stable & Keeps B3 CFR
----------------------------------------------------------------
Moody's Investors Service has raised the Speculative Grade
Liquidity rating of Kratos Defense & Security Solutions to SGL-2
from SGL-3 and affirmed the Corporate Family Rating of B3.
Concurrently, the rating outlook has been restored to stable from
positive due to a less favorable U.S. defense budgetary
environment.
Ratings Upgraded:
Speculative Grade Liquidity, to SGL-2 from SGL-3
Ratings Affirmed:
Corporate Family, B3
Probability of Default, B3-PD
$625 million 10% Senior Secured Notes Due 2017, B3, LGD-4, to 52%
from 56%
Rating Outlook:
To Stable from Positive
Ratings Rationale:
The rating outlook has been changed to stable from positive as the
U.S. defense spending environment will limit the extent of revenue
opportunities. When the positive outlook was assigned in March of
2011, a steadier defense procurement setting was anticipated. With
ongoing U.S. budgetary uncertainty, Kratos' credit metrics have
not achieved the levels that would have supported a higher rating
(debt to EBITDA 5x, EBIT to Interest 1.5x) and will likely not
over the near term with the sequestration funding caps in place.
The stable outlook also heavily recognizes Kratos' goal of
accumulating a +$100 million cash balance by mid-2014, with the
cash balance earmarked for a debt refinancing transaction. The
plan includes a debt reduction of up to $75 million (a note call
premium of approximately $30 million would be required). In step
with this debt reduction target, Kratos has stated that
acquisition spending will be deferred as well. Although the stable
rating outlook anticipates a more modest rate of free cash flow
generation than the company projects, expectation of cash building
across 2013 nonetheless helps rating stability, particularly as
the May 19th debt ceiling date approaches. If the debt ceiling is
not raised, federal contractors will experience operational
disruptions and higher working capital requirements.
The B3 Corporate Family Rating has been affirmed. The rating
considers high financial leverage and a declining U.S. defense
spending environment, but also recognizes that Kratos' defense
product portfolio is positioned within areas where funding levels
will likely be less vulnerable-- such as equipment used in
unmanned aerial systems, missile systems, satellite
communications, radar and signals processing. Further, the
company's infrastructure security related businesses, which derive
demand from commercial end markets, should experience a firmer
demand setting. Although competitive pressure within the defense
services contracting environment has escalated markedly over the
past year and pressured margins, Kratos' service businesses now
represent a less meaningful portion of the revenue mix (about a
tenth). As of Q4-2012 debt to EBITDA was 6.2x (Moody's adjusted
basis, which added back goodwill impairment expense), EBIT to
interest was 0.7x, and EBITDA to interest was 1.7x, levels on par
with the rating. Free cash flow to debt will probably be in the
low single digit percentage range, which should prevent worsening
credit statistics as the sequestration budget caps begins more
broadly affecting the sector across 2014.
The Speculative Grade Liquidity rating upgrade to SGL-2 from SGL-3
denotes good, rather than just adequate, liquidity. Improved
financial ratio covenant headroom since Q3-2012, low near-term
debt maturities and expectation of a rising cash balance have
improved the liquidity view. With acquisition spending unlikely
near-term and with stabilization of the organic revenue decline
that took hold in Q4-2012, the company's cash balance should
gradually rise across 2013 as free cash flow accumulates.
The rating would likely be upgraded with expectation of debt to
EBITDA sustained in the low 5x range with EBIT to interest
approaching 1.5x. Achievement of substantial progress toward
meeting the mid-2014 debt reduction target of $75 million could,
in turn, raise the rating. A rating downgrade would likely follow
expectation of debt to EBITDA rising toward the 7x level and/or a
weak liquidity profile.
The principal methodology used in this rating was the Global
Aerospace and Defense Industry Methodology published in June 2010.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Kratos Defense & Solutions, Inc., headquartered in San Diego, CA,
operates in two sectors; Kratos Government Solutions (81% of 2012
revenues) and Public Safety and Security (19%). Revenues in 2012
were approximately $970 million.
LANGUAGE LINE: S&P Lowers CCR to 'B-'; Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Language Line Holdings LLC to 'B-' from 'B'. The
outlook is stable.
At the same time, S&P lowered its ratings on Language Line's
first-lien credit facilities to 'B-' from 'B'. The recovery
rating on this debt remains '3', indicating S&P's expectation for
meaningful (50% to 70%) recovery for lenders in the event of a
payment default.
In addition, S&P lowered its ratings on the company's second-lien
credit facilities to 'CCC' from 'CCC+'. The recovery rating on
this debt remains '6', indicating S&P's expectation for negligible
(0% to 10%) recovery for lenders in the event of a payment
default.
The corporate credit rating reflects Standard & Poor's expectation
that Language Line's financial policy will remain very aggressive
and leverage will remain high, which underpins S&P's assessment of
the financial risk profile as "highly leveraged" (based on S&P's
criteria). S&P estimates that leverage adjusted for leases and
preferred stock was roughly 6.8x, and S&P expects it to remain
high throughout 2013. The rating also reflects the company's
vulnerability to clients moving their translation services in-
house, and continued pricing pressure in the over-the-phone
interpretation (OPI) market. The company is also vulnerable to
economic cyclicality. While S&P expects reported revenue will
rise because of the company's December acquisition of Pacific
Interpreters Inc., S&P believes the existing base business will
continue to face top-line weakness over the near term. These
factors contribute to S&P's view of Language Line's business
profile as "weak."
Clients typically use Language Line as a supplement to in-house,
multilingual capabilities. Although Language Line is the leading
outsourced OPI provider, the company's clients could move more of
their interpretation services in-house. Spanish-language OPI
accounts for about 65% of Language Line's total billed minutes.
As the volume of Spanish-English translation demand grows and
Spanish language ability becomes more prevalent, it can become
more economical for a client to reduce outsourcing. Furthermore,
competition is intense, contributing to pricing pressure. The
company's customer base is reasonably diversified, with its
largest customer accounting for less than 5% of its sales.
However, four industries--insurance, financial services, health
care, and government--have historically accounted for more than
70% of revenue. Consolidation or weakness in these industries
could affect Language Line's operating performance.
LINEAGE LOGISTICS: Moody's Rates New $220-Mil. Sr. Term Loan 'B3'
-----------------------------------------------------------------
Moody's Investors Service has assigned a B3 rating to Lineage
Logistics, LLC's proposed $220 million senior secured term loan
due 2019. At the same time, Moody's has assigned a first time
Corporate Family Rating of B3 to Lineage and a Probability of
Default Rating of B3-PD. Proceeds of the financing will be used
primarily to refinance existing debt, as well as to fund certain
of the company's acquisitions. The ratings outlook is stable.
Ratings Rationale:
The B3 CFR reflects the high leverage and sizeable amount of debt
that the company carries compared to its revenue base. The ratings
also take into account Lineage's modest size and scope of
operations, as well as its short track record as a stand-alone
owner and operator of cold storage facilities. This suggests
substantial risks associated with the integration of recent
acquisitions and implementation of near term growth initiatives.
However, the ratings also consider the substantial value provided
by the cold storage businesses it has acquired, whose individual
operating history and long standing relationships with key
customers should help to mitigate growth risks associated with
Lineage's roll-up strategy. Moreover, despite heavy leverage,
Moody's believes that the company carries adequate liquidity to
endure operating setbacks or an unexpected decline in business
activity over the near term.
On close of the planned refinancing transaction, Lineage will
carry over $600 million of total debt (including Moody's standard
adjustments, primarily for operating leases), which represents
almost twice the company's current pro forma annual revenue.
However, it should be noted that this debt figure is heavily
affected by a sizeable lease adjustment owing to the company's
substantial amount of operating lease exposure. Funded debt, at
less than $400 million (much of which is non-recourse to Lineage),
is still quite high relative to the size of the company, but is
more moderate. Moody's estimates pro forma 2012 metrics at the
following levels: Debt to EBITDA at almost 7 times; EBIT to
Interest of approximately 1.5 times; and Funds from Operations to
Debt of less than 10%. These metrics map appropriately to the B3
rating. Moody's expects that the company will maintain margins as
it increases its operating base, which will generate operating
cash flow to cover its growth capital spending plan. However, it
is expected that free cash flow after these investments will be
modest, limiting opportunities to reduce debt over the near term.
As such, Moody's expects credit metrics to remain close to current
levels over the next few years.
The $220 million senior secured term loan is rated B3, which is
the same as the CFR, as the term loan comprises a substantial
majority of the company's liabilities considered under Moody's
Loss Given Default methodology. The $30 million secured revolver
(not rated by Moody's) is ranked equal to the term loan.
Moody's believes that Lineage will maintain an adequate liquidity
position in the near term, characterized by robust operating cash
generation that will cover a large portion of growth investments.
Moody's estimates that the company will generate operating cash
flow in excess of $40 million in 2013, which should allow the
company to cover its capital spending needs on close of the
proposed transaction, the company will have a $30 million
revolving credit facility in place, due 2018, which Moody's
assesses to be appropriate to the size of the company. It is
expected that this facility will be undrawn on close, with about
$25 million available after letters of credit usage. Moody's
expects the company to be compliant with financial covenants
prescribed under the revolving credit facility over the near term.
The stable ratings outlook reflects expectations that Lineage will
be able to maintain margins as it integrates its recent
acquisitions and undertakes other growth initiatives, while
generating a substantial level of cash from its operations. This
should allow the company to sustain credit metrics at current pro
forma levels over the near term, and to cover its planned
investment program over this period.
Ratings or their outlook could be adjusted downward if revenue
levels decline materially due to weakness in any of its business
units, or if the company were to face difficulty in implementing
its growth strategy, reducing margins and operating cash flow.
Lower ratings could also result if the company were to implement
more aggressive shareholder return policies, such as a debt-funded
distribution initiative. Rating pressure could also occur with
metrics of the following levels: operating margins below 9%; Debt
to EBITDA on track to remain above of 7.0 times; EBIT to Interest
of less than 1.0 time; or Funds from Operations to Debt of less
than 8%. Ratings could also be lowered if the companies were to
accelerate its acquisition growth strategy, possibly resulting in
a reduction in available liquidity.
Upward rating consideration could be warranted if the company
demonstrates steady revenue growth at improving operating margins,
without a material increase in debt. The company would also need
to demonstrate smooth integration of acquired companies other
growth initiatives, while growing its revenue base and geographic
footprint without a material increase in debt. In particular,
sustained Debt to EBITDA below 5.5 times or EBIT to Interest above
2.0 times could warrant a ratings upgrade.
Assignments:
Issuer: Lineage Logistics, LLC
Probability of Default Rating, Assigned B3-PD
Corporate Family Rating, Assigned B3
Senior Secured Bank Credit Facility, Assigned B3 (LGD3, 45%)
The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Lineage Logistics, LLC, headquartered in Colton, CA, provides cold
storage services in the U.S.
LIQUIDNET HOLDINGS: Moody's Gives B3 CFR & Rates $150MM Loan B3
---------------------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating to
Liquidnet Holdings Inc. and a B3 rating to a $150 million
4-year senior secured first lien term loan. The outlook on the
rating is stable.
Ratings Rationale:
The B3 rating reflects Liquidnet's core franchise -- an electronic
dark pool allowing institutional investors to access deeper
trading liquidity than many equity execution venues. Since its
establishment 11 years ago, Liquidnet's has steadily built up its
membership to now include many of the world's largest investment
managers. The rating also reflects the limited credit and market
risk entailed in Liquidnet's business model and the simplicity of
its balance sheet.
The B3 rating also incorporates Liquidnet's limited business
diversification, the firm's revenue erosion since 2009 and its
weak financial performance in 2012. The weak performance in 2012
reflects both subdued market activity levels and firm-specific
factors relating to an SEC investigation. During 2012, operating
leverage worked against Liquidnet as trading volumes in many of
Liquidnet's regions dried up, commissions fell and EBITDA
generation declined sharply. The firm enjoyed a sequential rebound
in EBITDA generation in Q1 2013 (from a very weak fourth quarter)
although EBITDA generation in Q1 2013 was still weaker than Q1
2012.
Liquidnet's financial performance remains highly geared to trading
volumes and volatility -- factors outside its control. In Moody's
view, an extended period of weakness -- such as occurred in 2H
2012 -- would force a substantial reengineering of Liquidnet's
cost base. The feasibility of such a reengineering is uncertain,
but without it the debt burden resulting from the current
recapitalization of the company could prove unsustainable.
Liquidnet Holdings Inc. is an unregulated holding company that
operates its dark pool through several regulated subsidiaries for
the benefit of its members, who are large institutional investors.
Liquidnet's platform allows its members to buy and sell large
blocks of equity securities directly and anonymously amongst
themselves using a variety of execution order strategies.
Liquidnet is not a high-frequency trading environment. Each day,
Liquidnet's software "scrapes" the order management systems of
each member and then searches for potential matches -- based on
minimum order criteria. Members can enter into block negotiations
on securities listed in over 40 different jurisdictions around the
globe. By confidentially locating natural "contras" from other
institutional investment managers, Liquidnet achieves average
trade sizes that are often one of the largest trades in a given
symbol each day, and at the same time minimizes implementation
shortfall -- a key objective of each of its members.
Liquidnet management has proactively addressed with its members
the issues surrounding the SEC investigation. Many members who
initially ceased trading with Liquidnet have returned, even though
the investigation is not complete -- a testament to the depth of
liquidity offered by Liquidnet's platform. Nonetheless the initial
departure of the clients in response to the SEC investigation is
another reminder of the confidence-sensitivity of customers and
fragility of franchise value for many firms operating in wholesale
financial markets.
Liquidnet is an institutional electronic trading platform
headquartered in New York.
The principal methodology used in this rating was Global
Securities Industry Methodology published in December 2006.
LOCAL INSIGHT: S&P Cuts Rating on 3 Notes to D on Missed Payments
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of notes from Local Insight Media Finance LLC's Series
2007-1 and 2008-1 to 'D'.
The downgrades reflect a partial payment of insurer premiums,
which the indenture defines as an event of default. Full interest
was paid on the notes this quarter (April 2013). However, the
interest reserve account has been completely depleted, and full
interest is not expected to be paid next quarter.
S&P has observed that these Local Insight Media whole-business
securitizations have experienced generally declining revenue
collections in all their respective markets for several years and
have taken a series of rating actions on them. Local Insight
Regatta Holdings Inc., an entity related to the manager, and
several other affiliated entities filed for Chapter 11 bankruptcy
protection on Nov. 18, 2010.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Reports
included in this credit rating report are available at:
http://standardandpoorsdisclosure-17g7.com
RATING ACTIONS
Local Insight Media Finance LLC
$672.6 million fixed-rate senior and subordinated notes Sseries
2007-1
Rating
Class To From
A-2 D (sf) CC (sf)
Local Insight Media Finance LLC
$313.4 million Local Insight Media Finance Series 2008-1
Rating
Class To From
A-2 D (sf) CC (sf)
B D (sf) CC (sf)
LOCATION BASED TECHNOLOGIES: Incurs $1.4MM Loss in Feb. 28 Qtr.
---------------------------------------------------------------
Location Based Technologies, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $1.42 million on $591,157 of total net
revenue for the three months ended Feb. 28, 2013, as compared with
a net loss of $1.27 million on $190,608 of total net revenue for
the three months ended Feb. 29, 2012.
For the six months ended Feb. 28, 2013, the Company incurred a net
loss of $4.85 million on $799,712 of total net revenue, as
compared with a net loss of $3.24 million on $234,724 of total net
revenue for the six months ended Feb. 29, 2012.
The Company's balance sheet at Feb. 28, 2013, showed $4.87 million
in total assets, $8.31 million in total liabilities and a $3.43
million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/IpYRkG
About Location Based Technologies
Irvine, Calif.-based Location Based Technologies, Inc., designs,
develops, and sells leading-edge personal locator devices and
services.
Comiskey & Company, the Company's independent registered public
accounting firm, included an explanatory paragraph in its report
on the Company's financial statements for the fiscal year ended
Aug. 31, 2012, which expresses substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred recurring losses
since inception and has an accumulated deficit in excess of
$45,000,000. There is minimal sales history for the Company's
products, which are new to the marketplace.
LPATH INC: Post-Effective Amendment to 912,526 Warrants Offering
----------------------------------------------------------------
Lpath Inc. filed a post-effective amendment to its Form s-1
registration statement offering 912,526 warrants to purchase
shares of Class A common stock issuable upon exercise of
outstanding warrants which the Company issued in a registered
offering on March 9, 2012.
About 882,776 of the warrants have an exercise price of $7.70 per
share; and 29,750 warrants have an exercise price of $5.25 per
share, which were issued to the Company's placement agents and
advisors. Any proceeds received by the Company from the exercise
of the warrants will be used for general corporate purposes.
The Company's common stock is traded on the NASDAQ Capital Market
under the symbol "LPTN." On April 11, 2013, the closing sale
price of the Company's common stock on the Nasdaq was $5.01 per
share.
A copy of the amended prospectus is available for free at:
http://is.gd/pqSmzw
About Lpath, Inc.
San Diego, Calif.-based Lpath, Inc. is a biotechnology company
focused on the discovery and development of lipidomic-based
therapeutics, an emerging field of medical science whereby
bioactive lipids are targeted to treat human diseases.
Lpath disclosed a net loss of $2.75 million on $6.68 million of
total revenues for the year ended Dec. 31, 2012, as compared with
a net loss of $3.11 million on $9.38 million of total revenues
during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $27.18
million in total assets, $12.23 million in total liabilities and
$14.94 million in total stockholders' equity.
LPATH INC: Post-Effective Amendment to 1MM A Shares Offering
------------------------------------------------------------
Lpath, Inc., on Sept. 25, 2008, filed a registration statement
with the Securities and Exchange Commission on Form S-1. The
Registration Statement was declared effective by the SEC on
Sept. 29, 2008, to register for resale by the selling security
holders of up to 1,013,000 shares of the Company's Class A common
stock, par value $0.001 per share, including up to 330,775 shares
of the Company's Class A common stock that may be issued upon
exercise of warrants acquired by selling security holders in the
Company's August 2008 private placement.
The Company filed a Post-Effective Amendment No. 5 to the
Registration Statement to include information from the Company's
annual report on Form 10-K for the fiscal year ended Dec. 31,
2012, filed on March 15, 2013, and to convert the Form S-1 into a
registration statement on Form S-3.
The Company will not receive proceeds from the sale of shares by
the selling security holders. Any proceeds received by the
Company from the exercise of warrants by the selling security
holders will be used for general corporate purposes.
The Company's common stock is traded on the NASDAQ Capital Market
under the symbol "LPTN." On April 11, 2013, the closing sale
price of the Company's common stock on the Nasdaq was $5.01 per
share.
A copy of the amended prospectus is available at:
http://is.gd/R70uat
About Lpath, Inc.
San Diego, Calif.-based Lpath, Inc. is a biotechnology company
focused on the discovery and development of lipidomic-based
therapeutics, an emerging field of medical science whereby
bioactive lipids are targeted to treat human diseases.
Lpath disclosed a net loss of $2.75 million on $6.68 million of
total revenues for the year ended Dec. 31, 2012, as compared with
a net loss of $3.11 million on $9.38 million of total revenues
during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $27.18
million in total assets, $12.23 million in total liabilities and
$14.94 million in total stockholders' equity.
LUXEYARD INC: Court Dismisses Involuntary Case
----------------------------------------------
LuxeYard, Inc., announced that the United States Bankruptcy Court
for the Central District of California summarily dismissed the
involuntary bankruptcy petition filed against it.
Responding to Bankruptcy Judge Barry Russell's inquiry, LuxeYard,
Inc.'s attorney, Steven Fox, Esq., advised that LuxeYard, Inc.,
will be seeking actual, compensatory, and punitive damages against
the parties that filed and joined in the involuntary petition,
pursuant to 11 U.S.C. Sec. 303(i) and all other applicable law.
About Luxeyard, Inc.
Los Angeles, California-based Luxeyard, Inc., a Delaware
Corporation, is an internet company selling luxury goods on a
flash Web site. Luxeyard, Inc., is the parent company of the
wholly owned subsidiaries, LY Retail, LLC, incorporated under the
laws of the State of Texas on April 20, 2011, and LY Retail, LLC,
incorporated in the State of California on Nov. 8, 2011.
The Company's balance sheet at Sept. 30, 2012, showed $1.5 million
in total assets, $5.8 million in total liabilities, and a
stockholders' deficit of $4.3 million.
"As of Sept. 30, 2012, we have generated minimal revenues since
inception. We expect to finance our operations primarily through
our existing cash, our operations and any future financing.
However, there exists substantial doubt about our ability to
continue as a going concern because we will be required to obtain
additional capital in the future to continue our operations and
there is no assurance that we will be able to obtain such capital,
through equity or debt financing, or any combination thereof, or
on satisfactory terms or at all. Additionally, no assurance can
be given that any such financing, if obtained, will be adequate to
meet our capital needs. If adequate capital cannot be obtained on
a timely basis and on satisfactory terms, our operations would be
materially negatively impacted. Therefore, there is substantial
doubt as to our ability to continue as a going concern."
An Involuntary Petition for bankruptcy, entitled In re Luxeyard,
Inc. (Case No. 12-bk-51986-BR), was filed against LuxeYard, Inc.,
by three creditors of the Company. The petition was filed in the
United States Bankruptcy Court, Central District of California.
The date that jurisdiction was assumed was Dec. 27, 2012. The
Petitioners have claimed that they have debts totaling $66,220.
LYFE COMMUNICATIONS: Incurs $1.7 Million Net Loss in 2012
---------------------------------------------------------
LYFE Communications Inc. filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $1.74 million on $531,531 of revenue for the year
ended Dec. 31, 2012, as compared with a net loss of $3.88 million
on $621,830 of revenue for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $1.07 million
in total assets, $3.30 million in total liabilities and a $2.23
million total stockholders' deficit.
HJ & Associates, LLC, in Salt Lake City, Utah, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has suffered losses since inception. The Company
has not established operations with consistent revenue streams and
has a working capital deficit. These factors raise substantial
doubt about the Company's ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/1GWAov
About LYFE Communications
South Jordan, Utah-based LYFE Communications, Inc.'s business is
to develop, deploy, and operate next generation media and
communications network based services to single-family, multi-
family, high-rise resort and hospitality properties.
LYONDELL CHEMICAL: Skadden Attys to Testify in $1-Bil. Suit
-----------------------------------------------------------
Eric Hornbeck of BankruptcyLaw360 reported that the co-head of
Skadden Arps Slate Meagher & Flom LLP's corporate finance practice
and two former Skadden attorneys can testify in a $1 billion suit
over the Bank of New York Mellon Corp.'s role in the leveraged
buyout that created and then bankrupted LyondellBasell, a New York
judge said Friday.
According to the report, Skadden represented Basell AF SCA during
the leveraged buyout of Lyondell Chemical Co., a deal that was
green-lit by by BNY Mellon as the trustee for Basell bonds held by
a group of hedge funds.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. Luxembourg-based Basell AF
and Lyondell Chemical Company merged operations in 2007 to form
LyondellBasell Industries, the world's third largest independent
chemical company. LyondellBasell became saddled with debt as
part of the US$12.7 billion merger. Len Blavatnik's Access
Industries owned the Company prior to its bankruptcy filing.
On Jan. 6, 2009, LyondellBasell Industries' U.S. operations,
led by Lyondell Chemical Co., and one of its European holding
companies -- Basell Germany Holdings GmbH -- filed voluntary
petitions to reorganize under Chapter 11 of the U.S. Bankruptcy
Code to facilitate a restructuring of the company's debts. The
case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y.
Lead Case No. 09-10023). Seventy-nine Lyondell entities filed
for Chapter 11. Luxembourg-based LyondellBasell Industries AF
S.C.A. and another affiliate were voluntarily added to Lyondell
Chemical's reorganization filing under Chapter 11 protection on
April 24, 2009.
Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, served as the Debtors' bankruptcy counsel. Evercore
Partners served as financial advisors, and Alix Partners and its
subsidiary AP Services LLC, served as restructuring advisors.
AlixPartners' Kevin M. McShea acted as the Debtors' Chief
Restructuring Officer. Clifford Chance LLP served as
restructuring advisors to the European entities.
LyondellBasell emerged from Chapter 11 bankruptcy protection in
May 2010, with a plan that provides the Company with US$3 billion
of opening liquidity. A new parent company, LyondellBasell
Industries N.V., incorporated in the Netherlands, is the
successor of the former parent company, LyondellBasell Industries
AF S.C.A., a Luxembourg company that is no longer part of
LyondellBasell. LyondellBasell Industries N.V. owns and operates
substantially the same businesses as the previous parent company,
including subsidiaries that were not involved in the bankruptcy
cases. LyondellBasell's corporate seat is Rotterdam,
Netherlands, with administrative offices in Houston and
Rotterdam.
MANAGED HEALTHCARE: Roper Deal No Impact on Moody's B3 Ratings
--------------------------------------------------------------
Moody's Investors Service said that Managed Health Care
Associates, Inc.'s ratings are unaffected following the
announcement that the company is to be acquired by Roper
Industries (Baa2/stable). The announcement is credit positive for
MHA as it will become part of a larger and more diversified
company.
Headquartered in Florham Park, New Jersey, Managed Health Care
Associates is a group purchasing organization for long-term care
pharmacies and other classes of trade. The company also offers a
variety of services to pharmaceutical manufacturers selling to the
LTC industry, including contract administration, marketing, and
continuing education. For the fiscal year ended December 31, 2012,
MHA generated revenues of approximately $154 million.
On August 8, 2012, Moody's affirmed Managed Health's B2 corporate
family and probability of default ratings and raised the
instrument ratings on the company's $202 million first lien credit
facilities to Ba2 and $95 million second lien term loan to B2. At
the same time, the ratings outlook was changed to negative from
stable.
MEDYTOX SOLUTIONS: Reports $2.7 Million Net Income in 2012
----------------------------------------------------------
Medytox Solutions, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing
net income of $2.74 million on $21.07 million of revenue for the
year ended Dec. 31, 2012, as compared with net income of $586,795
on $3.99 million of revenue for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $10.84
million in total assets, $9.01 million in total liabilities and
$1.83 million in total stockholders' equity.
Peter Messineo, CPA, in Palm Harbor, Florida, did not issue a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012.
In its report on the consolidated financial statements for the
year ended Dec. 31, 2011, Peter Messineo expressed substantial
doubt about Medytox Solutions' ability to continue as a going
concern following the 2011 financial results. The independent
auditor noted that the Company has an accumulated deficit and
negative cash flows from operations, and additionally, there is
certain litigation involving a consolidated entity which
is unresolved.
A copy of the Form 10-K is available for free at:
http://is.gd/UXEq8Z
About Medytox Solutions
West Palm Beach, Florida-based Medytox Solutions, Inc., formerly
Casino Players, Inc., is a provider of laboratory services
specializing in providing blood and urine drug toxicology to
physicians, clinics and rehabilitation facilities in the United
States.
* * *
This concludes the Troubled Company Reporter's coverage of
Medytox Solutions until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at
a level sufficient to warrant renewed coverage.
MOSS FAMILY: Can Use Fifth Third Cash Collateral Until May
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Indiana
signed an agreed order extending the interim authorization of Moss
Family Limited Partnership and Beachwalk, L.P. to use Fifth Third
Bank's cash collateral.
Previous interim cash collateral orders have been signed by the
bankruptcy judge.
By agreement of the Debtor and the lender, the term of the second
interim order is extended until May 31, 2013, at 11:59 p.m., with
the understanding that the lender has not approved the proposed
2013 budget presented by the Debtor, but has allowed the Debtors
to operate under the 2013 budget while the parties discuss their
issues.
All other terms of the second interim order remain in full force
and effect and are unaltered by the agreed order. A May 21,
hearing at 10:30 a.m. has been set.
About Moss Family
Moss Family Limited Partnership and Beachwalk, L.P., filed Chapter
11 petitions (Bankr. N.D. Ind. Case Nos. 12-32540 and 12-32541) on
July 17, 2012. Judge Harry C. Dees, Jr., presides over the case.
Daniel Freeland, Esq., at Daniel L. Freeland & Associates, P.C.,
represents the Debtors. Moss Family disclosed $6,609,576 in
assets and $6,299,851 in liabilities as of the Chapter 11 filing.
MTS LAND: Can Use U.S. Bank Cash Collaterla Until May 1
-------------------------------------------------------
The Hon. Eileen W. Hollowell of the U.S. Bankruptcy Court for the
District of Arizona signed a third stipulation authorizing MTS
Land, LLC, MTS Golf, LLC's continued use of cash collateral of
secured creditor U.S. Bank N.A. until May 1, 2013. U.S. Bank is
owed not less than $27.4 million in principal plus interest and
fees.
About MTS Land
MTS Land, LLC, and MTS Golf, LLC, own and operate the now dormant
Mountain Shadows Golf Club. They filed separate Chapter 11
petitions (Bankr. D. Ariz. Case Nos. 12-16257 and 12-16257) in
Phoenix on July 19, 2012. Mountain Shadows Golf Club --
http://www.mountainshadowsgolfclub.com/-- is an 18 hole, par 56
course located at Paradise Valley. Nestled in the foothills of
Camelback Mountain, the 3,081-yard Executive course claims to be
one of the most scenic golf courses in Arizona. MTS Land and MTS
Golf are affiliates of Irvine, Cal.-based Crown Realty &
Development Inc. MTS Land and MTS Golf each estimated assets and
debts of $10 million to $50 million.
Judge Charles G. Case II oversees the Debtors' cases. Lawyers at
Gordon Silver serve as the Debtors' counsel. The petition was
signed by Robert A. Flaxman, administrative agent.
Lender U.S. Bank is represented by Steven D. Jerome, Esq., and
Evans O'Brien, Esq., at Snell & Wilmer L.L.P.
The Plan provides that all creditors with allowed claims will be
paid the amount of their allowed claims in full through the Plan.
Holders of equity securities of Debtors will retain all of their
legal interests.
The U.S. Trustee for Region 14 advised the Court that an official
committee of unsecured creditors has not been appointed because an
insufficient number of persons holding unsecured claims against
the Debtors have expressed interest in serving on a committee.
The U.S. Trustee reserves the right to appoint a committee if
interest develop among the creditors.
NATIONAL HERITAGE: Dist. Ct. Affirms Rejection of Plan Releases
---------------------------------------------------------------
District Judge Anthony J. Trenga upheld a Virginia bankruptcy
court order affirming the reorganization plan of National Heritage
Foundation Inc. while rejecting the release provisions under the
plan.
NHF appealed the Aug. 27, 2012 decision of the U.S. Bankruptcy
Court for the Eastern District of Virginia where it held that
certain non-debtor release provisions of NHF's Fourth Amended Plan
of Reorganization were not warranted and severed those provisions
from NHF's Reorganization Plan.
On appeal, the District Court finds and concludes that (1) the
Bankruptcy Court did not exceed the Fourth Circuit's mandate on
remand; (2) the findings of fact that formed the factual basis for
the Bankruptcy Court's decision were not clearly erroneous and
are, in fact, fully supported by the record; and (3) applying the
applicable law de novo to the factual findings of the Bankruptcy
Court, the Release Provisions were not warranted as part of the
Reorganization Plan.
The appeals case is National Heritage Foundation Inc, Appellant v.
John Behrmann, et al., Appellees, Case No. 1:12-cv-1329 (ATJ/JFA)
(E.D. Va.). A copy of the District Court's April 3, 2013
Memorandum Opinion is available at http://is.gd/saadVffrom
Leagle.com.
Falls Church, Virginia-based National Heritage Foundation, Inc. --
http://www.nhf.org/-- is a non-profit tax-exempt charitable
institution. The Company filed for Chapter 11 bankruptcy
protection (Bankr. E.D. Va. Case No. 09-10525) on Jan. 24, 2009.
Alan Michael Noskow, Esq., at Patton Boggs LLP, assisted the
Company in its restructuring effort. The Company estimated more
than $100 million in assets and $1 million to $100 million in
debts.
NCL CORP: S&P Assigns 'BB+' Rating to $1.1BB Sr. Sec. Facilities
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned NCL Corp. Ltd.'s
proposed $1.1 billion senior secured credit facilities (consisting
of a five-year $600 million term loan and a five-year $500 million
revolving credit facility) its 'BB+' issue-level rating, with a
recovery rating of '1', indicating its expectation for very high
(90% to 100%) recovery for lenders in the event of a payment
default. NCL plans to use the proceeds to repay outstanding
amounts under existing credit facilities. All other ratings on
the company, including the 'BB-' corporate credit rating, are
unchanged.
The 'BB-' corporate credit rating on Miami, Fla.-based NCL Corp.
Ltd. reflects Standard & Poor's Ratings Services' assessment of
the company's financial risk profile as "aggressive" and S&P's
assessment of its business risk profile as "fair," according to
its criteria.
S&P's assessment of NCL's business risk profile as fair is based
on its position as the third largest cruise operator in the North
American market (behind Carnival Corp. and Royal Caribbean Cruises
Ltd.), significant capital requirements to fund new ship building,
an inability to pull back spending once a ship order is committed,
and the cruise industry's sensitivity to the economic cycle.
Management's success in executing operating improvements over
the past few years partly offsets these risk factors.
"Our assessment of NCL's financial risk profile as aggressive
reflects our expectation that lease and port commitment-adjusted
debt to EBITDA will improve to the high-4x area, that funds from
operation (FFO) to total adjusted debt will improve to about 16%,
and EBITDA coverage of interest expense will improve to the low-4x
area in 2013. We believe these improvements will be driven by
debt repayment from $478 million in net proceeds from the ompany's
recent IPO (including the underwriters' overallotment and after
deducting discounts and expenses), the anticipated reduction in
interest costs from the company recent notes refinancing, and
EBITDA growth in 2013. These credit measures represent a good
cushion compared with the 5.5x threshold for debt to EBITDA and
the 15% threshold for FFO to total debt that we believe are in
line with the 'BB-' rating on NCL," S&P said.
"We believe wave season bookings and pricing overall are running
slightly higher than prior-year levels. This, along with our
economists' expectation for a moderate consumer spending
improvement in 2013, lead us to expect that the cruise industry
will experience low-single-digit yield increases in 2013. Given
the size of the Carnival brand, we expect there has been some
impact on bookings in the contemporary cruise space as a result of
ship-related incidents and increased pricing pressure as the
Carnival brand increases promotional offers. However, we believe
the negative effect on other operators will be muted," S&P added.
NEXTAG INC: S&P Lowers Corp. Credit Rating to 'B-'; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on San Mateo, Calif.-based NexTag Inc. to 'B-' from 'B+'.
The outlook is stable.
At the same time, S&P lowered its issue-level rating on the senior
secured debt to 'B-' (the same as the corporate credit rating)
from 'B+'. The recovery rating on this debt remains '3',
indicating S&P's expectation for meaningful (50%-70%) recovery for
debtholders in the event of a payment default.
"The downgrade is based on our view that 2013 will be a more
difficult year for NexTag as competitive pressure in its
comparison shopping niche intensifies both domestically and
internationally," said Standard & Poor's credit analyst Andy Liu.
At the same time, the company is trying to establish itself in
online consumer search traffic acquisition and monetization
services, in which it helps other e-commerce companies to acquire
Internet traffic and monetize that traffic. S&P believes that
profitability and cash flow generation are unlikely to return to
historical levels as algorithm changes by Google Inc. have
significantly reduced the amount of organic search traffic going
to NexTag. In an effort to maintain Internet traffic volume going
to its merchant customers, NexTag has increased its spending on
search advertising, which decreases profitability. Additionally,
Google Shopping, a competing product, continues to pressure
results. S&P presently do not expect these trends to reverse,
although ongoing cost reduction efforts and newly launched
shopping sites by NexTag may offset some of the margin pressure.
Standard & Poor's Ratings Services' rating on NexTag reflects the
difficulty of maintaining its competitive position in comparison
shopping while attempting to establish itself in traffic
acquisition and monetization services. S&P's expectation is that
debt leverage will remain relatively low over the intermediate
term and that the company will continue to generate good
discretionary cash flow and maintain a satisfactory cushion of
compliance with financial covenants. S&P views NexTag's business
risk profile as "vulnerable," according on S&P's criteria, based
on its wide set of competitors (especially Google), sensitivity to
search algorithm changes, and low barriers to entry. S&P views
its financial risk as "significant," given its expectations for
higher debt leverage from operational declines. Good cash flow
only partly offsets these risks. We assess the company's
management and governance as "fair."
NexTag owns and operates comparison shopping Web sites, connecting
about 40 million monthly unique visitors and more than 25,000
merchants. It has operations in 15 countries, including the U.S.,
Australia, Canada, France, Germany, Italy, Japan, Spain, and the
U.K. A significant majority of NexTag's revenues are from the
U.S., with the remainder from international markets.
NGPL PIPECO: Fitch Lowers Issuer Default Rating to 'B'
------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Rating (IDR) for
NGPL PipeCo LLC (NGPL) to 'B' from 'BB-'. Fitch has also
downgraded to 'B/RR4' from 'BB-' NGPL's senior notes and Term Loan
B. The Rating Outlook is revised to Stable from Negative.
A total of $2.975 billion of outstanding senior debt is affected
by the rating downgrade.
NGPL's senior notes together with its Term Loan B and $75 million
revolving credit facility (the credit facilities) are secured
equally and ratably by a first priority lien on the capital stock
of NGPL's two direct operating subsidiaries, Natural Gas Pipeline
Company of America LLC (NGPCA) and Kinder Morgan Illinois Pipeline
LLC (the shared collateral). The subsidiaries have no indebtedness
and at Dec. 31, 2012 had $75 million of trade payables and other
liabilities. The lenders under the credit facilities also have a
lien on all current and future assets of NGPL not constituting
shared collateral. Currently there is no material non-shared
collateral.
Under the terms of the indenture for the senior notes, at such
time the credit facilities are repaid in full, or the liens for
the shared collateral cease to secure the credit facilities, the
liens in the shared collateral granted for the benefit of the
senior notes will terminate. The senior note indenture has
restrictions on asset sales, restricted payments, and debt
incurrence. Should the notes be rated investment grade, indenture
covenants restricting certain NGPL activities would no longer
apply. Covenants that would be affected include restricted
payments, incurrence of debt, and transactions with affiliates.
KEY RATING DRIVERS
The rating downgrade reflects NGPL's weakening credit metrics
which are primarily the result of 2010 Federal Energy Regulatory
Commission (FERC) mandated phased-in decreases in NGPCA's base
recourse rates and fuel retention factors and unfavorable market
conditions. Current gas market conditions characterized by low
commodity prices, reduced basis spreads, and low volatility will
likely further negatively impact near-to-intermediate term
operating results. Furthermore, growing natural gas production
from the Marcellus basin is displacing historical supplies shipped
on certain west-to-east transport paths, particularly on NGPCA's
Louisiana Line. Fitch expects NGPL's calendar 2013 debt/EBITDA to
approximate 8.4x but could approach 7.5x in the 2015 - 2016 time
frame as the Term Loan balance is reduced through the credit
facilities' debt amortization and excess cash flow sweep
provisions.
Other credit concerns include: The relatively short average term
of NGPCA's transportation contracts (approximately two years) and
storage contracts (three years) and the related re-contracting
risk; the limiting effect the reduced cash flows has on the
company's operating flexibility and strategies; and the
refinancing of maturing $1.25 billion senior notes and the Term
Loan B (currently $675 million) in 2017.
Favorable considerations include: NGPL's strong Chicago/Midwest
market franchise which accounts for a significant portion of total
EBITDA, its high-quality and reliable utility customer base, a
strong demand for storage services, limited liquidity needs, and
its long record of successfully managing market area contract
rollovers. Also the interconnection between NGPL's Louisiana Line
with the Sabine Pas LNG facility could result in increased
throughput in the 2016 - 2017 time frame when the facility is
expected to begin exporting LNG.
Liquidity Adequate: NGPL's $75 million secured revolver matures in
September 2017. In March 2013, NGPL and its lenders entered into a
First Amendment to the credit agreement by which two financial
covenants were loosened. As amended, interest coverage must not be
less than 1.35x through March 31, 2013; 1.20x thereafter through
Sept. 30, 2015; and 1.30x thereafter. Leverage must not exceed
9.75x through Sept. 30, 2015; 9.50x thereafter through Sept. 30,
2016; 9.25x thereafter through March 31, 2017; and 9.00x
thereafter. At Dec. 31, 2012, the interest coverage ratio was
1.66x and the leverage ratio was 7.92x. In addition, the excess
cash flow sweep was increased from 60% of excess cash flow to 100%
of excess cash flow if the leverage ratio is over 7.0x. NGPL had
$53 million of cash on its balance sheet at Dec. 31, 2012.
Recovery Rating Analysis: Fitch projects a distressed enterprise
valuation of $1.65 billion, using a 5.5x multiple and an EBITDA of
approximately $300 million, which is 20% lower than 2012 EBITDA of
$375.6 million. After deducting Fitch's standard 10%
administrative claim, Fitch estimates recovery of the senior notes
and Term Loan B of 49% which is near the high end of the 31-50%
'RR4' range. Debt reduction through the credit facilities' debt
amortization and excess cash flow sweep provisions could result in
a one notch upgrade of the issue ratings.
RATING SENSITIVITIES
Positive: future developments that may, individually or
collectively, lead to a positive rating action include:
-- Improving credit metrics through some combination of revenue
growth and or debt reduction with sustained leverage below
7.0x;
-- Successfully refinancing of debt which is maturing in 2017.
Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:
-- Operating results that are weaker than current expectations;
-- A breach of the credit facilities' financial covenants;
-- The inability to refinance debt maturing in 2017.
NGPL is 80% owned by Myria Acquisition Inc. (Myria), a consortium
of investors including Brookfield Infrastructure Partners,
SteelRiver Infrastructure Fund North America, a Canadian pension
fund and a Netherlands pension fund and 20% owned by Kinder
Morgan, Inc. (IDR 'BB+'/Outlook Stable).
Fitch downgrades these ratings with a Stable Outlook:
NGPL PipeCo LLC
-- IDR to 'B' from 'BB-';
-- Senior secured notes to 'B/RR4' from 'BB-';
-- Term Loan B to 'B/RR4' from 'BB-'.
NORCRAFT COS: S&P Revises Outlook to Stable & Affirms 'B' CCR
-------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its rating
outlook on Eagan, Minn.-based Norcraft Cos. L.P. to stable from
negative. At the same time, S&P affirmed its ratings on the
company, including the 'B' corporate credit rating.
"The rating outlook revision reflects our view that operating
performance during 2013 is likely to improve meaningfully over
2012 levels due to our expectations that industry fundamentals
will continue to recover from cyclical lows," said Standard &
Poor's credit analyst Maurice Austin. As a result, S&P expects to
see higher top line growth and increased margins, causing improved
credit metrics as leverage will strengthen to about 6x in 2013
from about 7.5x as of Dec. 31, 2012. In addition, S&P's previous
profitability concerns over the financial difficulties of its
largest customer, Directbuy, have abated as Directbuy has new
ownership and has restructured its balance sheet.
The corporate credit rating on Norcraft reflects S&P's view of the
company's "weak" business risk profile, which includes
participation in the highly cyclical and competitive kitchen
installation and remodeling markets, its exposure to new
residential housing starts, its relatively small size and asset
base, and its "highly leveraged" financial risk profile.
The rating outlook is stable and reflects S&P's view that industry
fundamentals are recovering, resulting in its expectation of
better operating performance and consequently improved credit
metrics. S&P expects leverage of 7.5x at the end of 2012 to
improve to about 6x by the end of 2013. This reflects S&P's
expectation that sales and EBITDA will grow over the next year as
housing starts increase--but growth in sales from the remodeling
sector, which accounts for most of Norcraft's sales and profits,
will lag new construction sales until a broader economic recovery
takes place. The outlook also reflects S&P's expectation that
liquidity will remain adequate to meet all of the company's
financial obligations and availability under the ABL will be
sufficient to fund working capital requirements.
S&P could lower the ratings on Norcraft if its financial condition
were to deteriorate due to renewed recessionary pressures that
compelled it to use cash and revolver borrowings to fund operating
losses--resulting in a liquidity deteriorating to less than $25
million of combined revolving credit availability and cash.
S&P could raise the rating if construction end markets and repair
and remodeling spending recover more quickly than it currently
expects, resulting in Norcraft's credit measures improving to
about 5x or below, in line with an aggressive financial profile.
This could occur if Norcraft rolls back its promotional activity
much faster than expected, resulting in gross margins improving to
more than 34%.
Norcraft manufactures kitchen and bathroom cabinets, and is
smaller than its main competitors. This highly fragmented and
cyclical industry depends almost exclusively on residential
remodeling and new construction.
OCALA SHOPPES: Shopping Center Auction on May 14
------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
approved in March the bidding procedures to govern the sale of The
Ocala Shoppes LLC's assets -- a shopping center and office complex
known as the Market Street at Heath Brook located at 4414
Southwest College Road, Ocala, Florida.
Pursuant to the bidding procedures, the Debtor and its primary
secured creditor Bank of America, N.A. will determine if any
proposed stalking horse bid is acceptable or negotiate a final
purchase and sale agreement reflecting the mutually agreeable
terms with the submitting part(ies). If no prospective bidder
elects to become a stalking horse or if all stalking horse bids
are considered unacceptable, BOA may, but is not required to,
elect to submit as a stalking horse bid a credit bid under Section
363(k) of the Bankruptcy Code for the property by the deadline for
the stalking horse bid.
The Court overruled an objection filed by The Higbee Company.
The bidding procedures provide for this timeline:
April 3: deadline for any prospective bidder
to submit a non-contingent purchase
agreement that clearly describes the
specific "stalking horse"
protections
April 8: deadline for filing a motion (a)
identifying any stalking horse bid
(or the submission of a credit bid
by BOA as the stalking horse bid)
and (b) requesting that the Court
schedule a hearing, on an expedited
basis, to consider approval of the
stalking horse bidder and the
requested stalking horse protections
April 17: deadline for filing of any counter-
party to an unexpired lease or
executory contract who disagrees
with the cure amount stated in the
cure notice.
April 24: deadline for non-stalking horse
prospective bidders will submit a
fully executed indicative bid term
sheet clearly describing the
proposed terms and conditions of
their initial bid for the property
May 10: deadline for all qualifying bidders
to submit a fully executed purchase
agreement and the bid deposit
May 14: auction at the offices of Bush Ross,
P.A. located at 1801 North Highland
Avenue, Tampa, Florida
A copy of the bidding procedures is available for free at
http://bankrupt.com/misc/OCALASHOPPES_sale_order.pdf
About The Ocala Shoppes
The Ocala Shoppes LLC, owner and operator of the Market Street at
Heath Brook shopping center on Southwest College Road in Ocala,
Florida, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No.
13-00125) on Jan. 7, 2012, in Tampa.
The open-air shopping center has 560,000 square feet of retail
space and 70,000 square feet of offices. Tenants are Dillard's
Inc., Dick's Sporting Goods Inc., and Barnes & Noble Inc. Ocala
is about 100 miles (160 kilometers) north northeast of Tampa.
Secured lender Bank of America NA obtained an order from state
court in August directing tenants to send rent checks to the bank.
Judge Michael G. Williamson presides over the case. David S.
Jennis, Esq., Chad Bowen, Esq., and Suzy Tate, Esq., at
Jennis & Bowen, P.L., serve as counsel. The Debtor disclosed
$60,735 in assets and $106,382,452 in liabilities as of the
Chapter 11 filing.
OTELCO INC: Has Final Cash Use Before May 6 Confirmation
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports Otelco Inc. received final approval to use secured
lender's cash. The company is predicting cash will grow by about
$500,000 from April 1 through June, ending at $33.1 million. Cash
is projected to increase despite paying $1.8 million of interest
on the senior credit facility and $3 million in Chapter 11 costs.
The hearing for approval of the plan is set for May 6. The plan
calls for exchanging $107.7 million in senior subordinated notes
for 92.5% of the new equity. The disclosure statement explaining
the plan includes a projection where the recovery on the
subordinated notes will be 40.5%. The plan was accepted already
by all senior secured lenders and holders of 96% of the
subordinated notes. The plan will reduce debt by about $135
million to $135 million. Unsecured creditors will be paid in
full.
The $162 million secured term loan will be modified by extending
maturity from 2013 to 2016. When the plan becomes effective, the
lenders will receive no less than $20 million cash and 7.5% of the
equity. General Electric Capital Corp. is agent for the senior
lenders.
Hiring of Professionals
BankruptcyData reported that the U.S. Bankruptcy Court approved
Otelco's motions to retain Young Conaway Stargatt & Taylor as
Bankruptcy co-counsel, Willkie Farr & Gallagher as Bankruptcy co-
counsel, Kurtzman Carson Consultants to provide administrative
services, Dorsey & Whitney as special corporate counsel, and
Evercore Group as investment banker and financial advisor.
About Otelco Inc.
Otelco Inc. and 16 affiliated Debtors filed for Chapter 11
protection (Bankr. D. Del. Case No. 13-10593) on March 24, 2013.
Otelco filed for chapter 11 in order to implement its "pre-
packaged" financial restructuring plan -- a plan that already has
been accepted by 100% of the Company's senior lenders, as well as
holders of over 96% in dollar amount of Otelco's senior
subordinated notes who cast ballots. Otelco's restructuring plan
will strengthen the Company by deleveraging its balance sheet and
reducing its overall indebtedness by approximately $135 million.
Because of the overwhelming support Otelco's plan has received
from both its secured and unsecured creditors (including holders
of the Company's IDS units), Otelco anticipates that the Company
will be able to complete its financial restructuring at the end of
the second quarter of 2013.
The Company's restructuring counsel is Willkie Farr & Gallagher
LLP and its financial advisor is Evercore Partners. The
restructuring counsel for the administrative agent for the senior
lenders is King & Spalding LLP and its financial advisor is FTI
Consulting.
Otelco Inc. is a wireline telecommunication services provider in
Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont
and West Virginia.
PAC-WEST TELECOMM: Sec. 341 Meeting of Creditors Today
------------------------------------------------------
A meeting of creditors in the bankruptcy cases of Pac-West
Telecomm, Inc. and UPH Holdings Inc. will be held on April 23,
2013, at 1:00 p.m. at Austin Room 118. Creditors have until
July 22, 2013, to submit their proofs of claim.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
UPH Holdings and Pac-West Telecomm filed Chapter 11 petitions
(Bankr. W.D. Tex. Case No. 13-10570 and 13-10571) on March 28,
2013. Jennifer Francine Wertz, Esq., and Patricia Baron Tomasco,
Esq., at Jackson Walker, L.L.P., serve as counsel. The Debtors
each estimated assets and debts of at least $10 million.
PATRIOT COAL: Former Peabody CEO Aims to Avoid Grilling Over Deal
-----------------------------------------------------------------
Jacqueline Palank at Daily Bankruptcy Review reports that Peabody
Energy Corp.'s former chief executive is hoping to duck a grilling
by the miners' union that has accused Peabody of dumping hundreds
of millions of dollars in retiree liabilities on Patriot Coal
Corp. when it was spun off from Peabody in 2007.
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.
PENSON WORLDWIDE: Wants Sec. 345 Guidelines Waived Until May 13
---------------------------------------------------------------
Penson Worldwide, Inc. and its affiliated debtors ask the court
enter an order waiving the requirements of Section 345(b) of the
Bankruptcy Code on a further interim basis with respect to their
bank accounts and deposit practices through and including May 13,
2013.
Penson and its affiliates explained that at this time, they have
not yet completed the transition of bank accounts to JP Morgan
Chase.
The Debtors said they have only recently obtained check stock for
their JP Morgan Chase checking account. While they are using
their JP Morgan Chase checking account on a go-forward basis, they
still have approximately $600,000 of outstanding checks issued
from one BBVA Compass account, the substantial majority of which
were issued on or after April 1, 2013, to pay cure costs in
connection with the sale of their Nexa business.
Moreover, while they have made alternate arrangements to directly
fund their payroll to Paychex, their third-party payroll
administrator, and have transitioned their FSA accounts to JP
Morgan Chase, they have not completed the transition of their TPA
functions to JP Morgan Chase. As of April 12, 2013, the Debtors
have requested that BMO Harris wire most of the funds from
their bank accounts to the JP Morgan Chase operating account. The
Debtors expect that, after giving effect to these wires, their
accounts with BMO Harris will hold approximately $88,000 in
the aggregate -- an amount within the FDIC insurance limit.
About Penson Worldwide
Plano, Texas-based Penson Worldwide Inc. and its affiliates filed
for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061)
on Jan. 11, 2013.
Founded in 1995, Penson Worldwide is provider of a range of
critical securities and futures processing infrastructure products
and services to the global financial services industry. The
company's products and services include securities and futures
clearing and execution, financing and cash management technology
and other related offerings, and it provides tools and services to
support trading in multiple markets, asset classes and currencies.
Penson was one of the top two clearing brokers overall in the
United States. Its foreign-based subsidiaries were some of the
largest independent clearing brokers in Canada and Australia and
the second largest independent clearing broker in the United
Kingdom as of Dec. 31, 2010.
In 2012, the company sold its futures division to Knight Capital
Group Inc. and its broker-deal subsidiary to Apex Clearing Corp.
But the company was unable to successfully streamline is business
after the asset sales.
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and
Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors.
Kurtzman Carson Consultants LLC is the claims and notice agent.
The U.S. Trustee for Region 3 appointed three members to the
Official Committee of Unsecured Creditors: (i) Schonfeld Group
Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells
Fargo Bank, N.A., as Indenture Trustee. The Committee selected
Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its
co-counsel, and Capstone Advisory Group, LLC, as its financial
advisor. Kurtzman Carson Consultants LLC serves as its
information agent.
The company estimated $100 million to $500 million in assets and
liabilities in its Chapter 11 petition. The last publicly filed
financial statements as of June 30 showed assets of $1.17 billion
and liabilities totaling $1.227 billion.
PENSON WORLDWIDE: Ex-Exec. Seeks Advancement of Defense Costs
-------------------------------------------------------------
Christopher K. Hehmeyer, the former Chief Executive Officer
of Penson GHCO n/k/a Penson Futures, asks the Court to enter an
order authorizing him to seek reimbursement and advancement of
defense costs to the extent permitted by the terms of the
directors and officers liability insurance policies maintained by
Penson Worldwide, Inc. and its affiliated debtor subsidiaries.
Mr. Hehmeyer served as Chief Executive Officer of Penson Futures
from its formation in or about December, 2006 until early 2011. As
of August 31, 2011, all of the assets of Penson Futures were
transferred to Penson Financial Services, Inc.
On July 23, 2012, Alaron Trading Corp. filed a lawsuit against Mr.
Hehmeyer in the Circuit Court of Cook County, Illinois, Case No.
2012 L 008217, alleging that Mr. Hehmeyer, as the Chief Executive
Officer of Penson Futures, engaged in misconduct in connection
with Penson Futures' dealings with Alaron, including negligence,
fraudulent misrepresentation, tortious interference with Alaron's
business relationships and aiding and abetting a breach of
fiduciary duty by certain former employees of Alaron and its
affiliates. In its complaint in the Alaron Action, Alaron has
asserted claims against Mr. Hehmeyer for compensatory damages of
$2 to $4 million and claims for punitive damages of $8 to $12
million.
On September 7, 2012, PWI executed an engagement letter with
Drinker Biddle & Reath LLP by which PWI agreed to retain DBR to
represent Mr. Hehmeyer in the Alaron Action. PWI acknowledged in
the DBR retention letter that PWI was obligated to indemnify
Mr. Hehmeyer for his defense costs in the Alaron Action. In
addition, pursuant to the retention letter, PWI paid DBR a
retainer of $25,000.
As of the Petition Date, DBR had incurred fees and expenses
defending Mr. Hehmeyer in the Alaron Action totaling $32,784.63.
Mr. Hehmeyer has incurred additional fees defending the Alaron
Action since the Petition Date. If the Chapter 7 Trustee for
Alaron elects to move forward with Alaron's motion to reconsider,
or appeals the Illinois Circuit Court's order dismissing the
Alaron Action, Mr. Hehmeyer will incur thousands of dollars more
in additional fees. To the extent this Motion is granted, Mr.
Hehmeyer believes that XL or the other D&O Insurers are required
to fund the costs he has incurred for legal representation in the
Alaron Action subject to the terms of the Primary Policy.
Mr. Hehmeyer's motion filed in court states that in accordance
with the indemnities provided by the Debtors' organizational
documents, the Debtors are obligated to indemnify any current or
former officer for any costs incurred by such officer to the
extent the officer has been sued or made a party to any civil
litigation by reason of service to the Debtors as an officer.
About Penson Worldwide
Plano, Texas-based Penson Worldwide Inc. and its affiliates filed
for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061)
on Jan. 11, 2013.
Founded in 1995, Penson Worldwide is provider of a range of
critical securities and futures processing infrastructure products
and services to the global financial services industry. The
company's products and services include securities and futures
clearing and execution, financing and cash management technology
and other related offerings, and it provides tools and services to
support trading in multiple markets, asset classes and currencies.
Penson was one of the top two clearing brokers overall in the
United States. Its foreign-based subsidiaries were some of the
largest independent clearing brokers in Canada and Australia and
the second largest independent clearing broker in the United
Kingdom as of Dec. 31, 2010.
In 2012, the company sold its futures division to Knight Capital
Group Inc. and its broker-deal subsidiary to Apex Clearing Corp.
But the company was unable to successfully streamline is business
after the asset sales.
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and
Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors.
Kurtzman Carson Consultants LLC is the claims and notice agent.
The U.S. Trustee for Region 3 appointed three members to the
Official Committee of Unsecured Creditors: (i) Schonfeld Group
Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells
Fargo Bank, N.A., as Indenture Trustee. The Committee selected
Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its
co-counsel, and Capstone Advisory Group, LLC, as its financial
advisor. Kurtzman Carson Consultants LLC serves as its
information agent.
The company estimated $100 million to $500 million in assets and
liabilities in its Chapter 11 petition. The last publicly filed
financial statements as of June 30 showed assets of $1.17 billion
and liabilities totaling $1.227 billion.
PENSON WORLDWIDE: Files Bid to Reject NYSE Deal; Disallow Claims
----------------------------------------------------------------
In separate papers filed in Court, Penson Worldwide, Inc. and its
affiliated debtors seek:
* Court authority to reject a market data devices and services
contract between Penson Financial Services, Inc. and NYSE
Market, Inc., nunc pro tunc to April 16, 2013; and
* disallowance of:
-- 19 equity interest claims
-- 12 duplicate claims
-- 22 late filed claims
-- 2 amended and superseded claims
-- 15 no supporting documentation claims
The Debtors said they are currently in the process of winding down
their business operations and liquidating their remaining assets.
As a part of this process, they have reviewed and analyzed their
contractual obligations and have concluded that the Contract with
NYSE no longer serves any business purpose and is burdensome to
their estates.
With respect the Disputed Claims, Penson contends that these are
unenforceable because they are either (a) based solely on
ownership of stock in a Debtor and not on account of damages or a
claim against the Debtors, (b) duplicative of previously-filed
proofs of claim, (c) untimely as a result of a failure to file the
claim by the applicable Bar Date, (d) amended and superseded by
claims subsequently filed by the creditor asserting the claim; or
(e) asserted without documentation sufficient to establish a prima
facie liability of the Debtors to the creditor asserting the
claim.
Meanwhile, SunGard Financial Systems LLC, through its counsel,
issued on April 16, 2013, a Subpoena Duces Tecum directed to
Participating Holders in the RSA Agreement attached to the
Debtors' Disclosure Statement, commanding the Participating
Holders to appear and testify at the taking of a deposition in
Penson's Chapter 11 case on:
Date/Time: Friday, May 3, 2013, commencing at 10:00 a.m.
Location: Offices of HAhn & Hessen LLP
488 Madison Avenue
New York, New York 10022
Pursuant to the Subpoena, the Participating Holders are directed
to produce requested documents no later than Tuesday, April 30,
2013, at 10:00 a.m.
About Penson Worldwide
Plano, Texas-based Penson Worldwide Inc. and its affiliates filed
for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061)
on Jan. 11, 2013.
Founded in 1995, Penson Worldwide is provider of a range of
critical securities and futures processing infrastructure products
and services to the global financial services industry. The
company's products and services include securities and futures
clearing and execution, financing and cash management technology
and other related offerings, and it provides tools and services to
support trading in multiple markets, asset classes and currencies.
Penson was one of the top two clearing brokers overall in the
United States. Its foreign-based subsidiaries were some of the
largest independent clearing brokers in Canada and Australia and
the second largest independent clearing broker in the United
Kingdom as of Dec. 31, 2010.
In 2012, the company sold its futures division to Knight Capital
Group Inc. and its broker-deal subsidiary to Apex Clearing Corp.
But the company was unable to successfully streamline is business
after the asset sales.
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and
Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors.
Kurtzman Carson Consultants LLC is the claims and notice agent.
The U.S. Trustee for Region 3 appointed three members to the
Official Committee of Unsecured Creditors: (i) Schonfeld Group
Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells
Fargo Bank, N.A., as Indenture Trustee. The Committee selected
Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its
co-counsel, and Capstone Advisory Group, LLC, as its financial
advisor. Kurtzman Carson Consultants LLC serves as its
information agent.
The company estimated $100 million to $500 million in assets and
liabilities in its Chapter 11 petition. The last publicly filed
financial statements as of June 30 showed assets of $1.17 billion
and liabilities totaling $1.227 billion.
PGA FLYOVER: Files for Chapter 11 With 100% Liquidating Plan
------------------------------------------------------------
PGA Flyover Corporate Park LLC, owner of the mixed use development
known as the PGA Professional and Design Center in Florida, filed
for Chapter 11 protection last week and immediately filed a
liquidating plan that would satisfy 100% of its liabilities.
PGA Flyover, which is an entity managed and owned by Florida
developer Daniel S. Catalfumo, says it has commenced the
bankruptcy case to resolve the "wasteful scorched earth litigation
tactics" engaged in by BBX Capital Asset Management, LLC, the
current owner of a final judgment of $40.9 million. The Debtor
says that confirmation of its 100% plan will make all pending
litigation moot. Mr. Catalfumo, as the plan sponsor, will
contribute the cash payments necessary to pay BBX in full.
All creditors will be paid in full, 100% of the allowed amount of
their claims. Certain creditor classes, however, are "impaired"
as they would be paid in installments.
The PGA Professional and Design Center is located on the Southeast
quadrant of PGA Boulevard and RCA Boulevard in Palm Beach Gardens,
an attractive location with strong development potential. The
property consists of (a) Pod A, which is owned by PGA Flyover, a
10.194 acre property that includes 432-space parking garage and
33.082 square feet of commercial office space, and (b) Pod C,
which is owned by non-debtor PGA Transportation Oriented
Development LLC, an irregularly shaped, 6.96-acre parcel of land
planned for development with 110,000 square feet of office space.
Specifically, according to the disclosure statement, the Plan
provides for these terms:
* Unclassified Claims. Holders of administrative claims of
$25,000 and priority tax claims of $23,800 will be paid in full on
the effective date. Holders of these claims are unimpaired. They
are not entitled to vote on the Plan as they're deemed to accept
the Plan. Recovery: 100%.
* Priority Non-Tax Claims. Holders of these claims, to the
extent there are any, will be paid in full in cash in accordance
with 11 U.S.C. Sec. 507. They are unimpaired. They are not
entitled to vote on the Plan as they're deemed to accept the Plan.
Recovery: 100%.
* Secured Tax Claims. Holders of secured tax claims estimated
to total $180,000 will be paid in full. These claim holders are
impaired though as payment will be made in monthly installments of
cash until they are paid not later than 5 years after the Petition
Date. They're entitled to vote on the Plan. Recovery: 100%.
* BBX Secured Claim. BBX is impaired and is entitled to vote
on the Plan. On The effective date of the Plan, the Debtor and the
plan sponsor will convey the PGA Flyover Property to BBX, along
with the PGA Transportation Property, additional property and
additional cash to BBX. BBX is impaired and entitled to vote on
the Plan. Recovery: 100%.
* Tenant Claims. Holders of allowed tenant claims with respect
to lease agreements will retain their claims relating to any
security deposits and last month's rent due under any tenant lease
agreements, however, the assignee of the tenant lease agreements
will not be required to maintain any separate or segregated
accounts relating to the claims, and no interest will accrue on
the claims. Tenants are impaired and are entitled to vote on the
Plan. Recovery: 100%.
* General Unsecured Claims. Unsecured creditors will receive
payment from one of two options: (i) payment in full in cash,
without interest, 365 days after the effective date of the Plan,
or (ii) payment of 50% of the allowed amount of the claims on the
effective date. They are impaired and entitled to vote on the
Plan. Recovery: 100%.
* Interests. Holders of allowed interests will not receive any
distributions. Recovery: 0%.
A copy of the disclosure statement explaining the terms of the
Liquidating Plan dated April 17, 2013, is available for free at:
http://bankrupt.com/misc/PGA_Liquidating_Plan_Outline.pdf
The Debtor intends to move to confirmation of its 100% Plan as
expeditiously as possible. The Debtor filed a motion asking the
Court to enter an order (a) conditionally approving the Disclosure
Statement, (b) authorizing PGA Flyover to distribute the
Disclosure Statement and solicit the Plan for votes, and (c)
scheduling a combined hearing to consider approval of the
Disclosure Statement and confirmation of the Plan on or around
June 10, 2013.
First Day Motions
The Debtor filed a motion to use cash collateral on an emergency
basis in order to, among other things, (i) satisfy working capital
and (ii) maintain its relationships with tenants and certain
vendors and suppliers. The Debtor does not intend to seek
postpetition financial such that cash collateral is the sole
source of funding for its operations. As adequate protection, the
Debtor proposes to preserve and continue the prepetition
arrangement with BBX, allowing BBX to collect all of rents and
deposit such amounts in the blocked rents account. The Debtor
also claims that the BBX is adequately protected by the Debtor's
property, which continues to appreciate in value during the court
of the case in light of the continued improvement in the Florida
real estate market.
The Debtor also filed a motion for the Bankruptcy Court's
determination of the value of the Debtor's properties and the
secured portion of BBX's claim. To confirm the Plan, PGA Flyover
must establish for the PGA Flyover Property and the PGA
Transportation Property, as well as other additional properties,
which will be contributed to the Plan at the direction of Mr.
Catalfumo. The Debtor says it needs to know the value of its
properties in order to determine the amount of additional cash
Mr. Catalfumo will contribute under the Plan.
Moreover, the Debtor seeks to fix the claims bar date to a date
that is at least 30 days before the confirmation hearing.
The Debtor wants an expedited hearing on the first day motions.
About PGA Flyover Corporate
PGA Flyover Corporate Park LLC filed a Chapter 11 petition (Bankr.
S.D. Fla. Case No. 13-18701) in West Palm Beach, Florida, on
April 17, 2013. Bradley S. Shraiberg, Esq., at Shraiberg, Ferrara
& Landau, P.A., in Boca Raton, Florida, serves as counsel to the
Debtor. The Debtor disclosed $10 million to $50 million in assets
and liabilities.
PGA FLYOVER: Proposes Shraiberg Ferrara as Counsel
--------------------------------------------------
PGA Flyover Corporate Park LLC asks the Bankruptcy Court for
permission to employ Bradley S. Shraiberg, Esq., and the law firm
of Shraiberg, Ferrara & Landau, P.A., as counsel, nunc pro tunc to
April 17, 2013.
SFL has agreed to provide services at these hourly rates: $110 for
legal assistants and $220 to $450 for attorneys. The hourly rate
of Mr. Shraiberg is $450.
Prior to the bankruptcy filing, SFL received a total retainer of
$43,500 from Danie S. Catalfumo, the owner of the Debtor.
About PGA Flyover Corporate
PGA Flyover Corporate Park LLC filed a Chapter 11 petition (Bankr.
S.D. Fla. Case No. 13-18701) in West Palm Beach, Florida on
April 17, 2013. Bradley S. Shraiberg, Esq., at Shraiberg, Ferrara
& Landau, P.A., in Boca Raton, Florida, serves as counsel to the
Debtor. The Debtor disclosed $10 million to $50 million in assets
and liabilities.
The Debtor, owner of the mixed use development known as the PGA
Professional and Design Center in Florida, filed a liquidating
plan that would satisfy 100% of its liabilities.
PGA Flyover, which is an entity managed and owned by Florida
developer Daniel S. Catalfumo, says it has commenced the
bankruptcy case to resolve the wasteful scorched earth litigation
tactics engaged in by BBX Capital Asset Management, LLC, the
current owner of a final judgment of $40.9 million.
The PGA Professional and Design Center is located on the Southeast
quadrant of PGA Boulevard and RCA Boulevard in Palm Beach Gardens,
an attractive location with strong development potential.
PGA FLYOVER: Commences Adversary Proceeding to Stop BBX Suits
-------------------------------------------------------------
Debtor PGA Flyover Corporate Park LLC has commenced an adversary
proceeding against BBX Capital Asset Management, LLC to enjoin
prosecution of the lawsuit styled as BBX Capital Asset Management,
LLC v. Catalfumo, et al., Case No. CACE 10-01711 (08) pending in
the Circuit Court of the 17th Judicial Circuit in and for Broward
County, Florida and all related litigation, including those
pending in the Cayman Islands, New Jersey, and South Carolina, to
enforce a final judgment of $40.9 million.
The Debtor commenced the Bankruptcy Case in order to satisfy all
of its liabilities in full, on an expedited basis, with payments
to BBX on the effective date of the Chapter 11 Plan in both cash
and property (including the mortgaged property and other property
BBX has sued to recover), and to resolve the wasteful scorched
earth litigation tactics perpetuated by BBX.
Daniel S. Catalfumo estimates that, as plan sponsor, the amount of
cash that will be contributed on the Effective Date to pay the
allowed claim of BBX in full will be in excess of $20 million.
The Debtor said that it is imperative that the wasteful, time-
consuming and expensive lawsuits be stayed so that as sponsor of
the 100% plan, Mr. Catalfumo can focus on managing these
proceedings, implementing the plan and orchestrating the transfer
of the several properties and over $20 million in cash that will
be necessary to obtain confirmation.
About PGA Flyover Corporate
PGA Flyover Corporate Park LLC filed a Chapter 11 petition (Bankr.
S.D. Fla. Case No. 13-18701) in West Palm Beach, Florida on
April 17, 2013. Bradley S. Shraiberg, Esq., at Shraiberg, Ferrara
& Landau, P.A., in Boca Raton, Florida, serves as counsel to the
Debtor. The Debtor disclosed $10 million to $50 million in assets
and liabilities.
The Debtor, owner of the mixed use development known as the PGA
Professional and Design Center in Florida, filed a liquidating
plan that would satisfy 100% of its liabilities.
PGA Flyover, which is an entity managed and owned by Florida
developer Daniel S. Catalfumo, says it has commenced the
bankruptcy case to resolve the wasteful scorched earth litigation
tactics engaged in by BBX Capital Asset Management, LLC, the
current owner of a final judgment of $40.9 million.
The PGA Professional and Design Center is located on the Southeast
quadrant of PGA Boulevard and RCA Boulevard in Palm Beach Gardens,
an attractive location with strong development potential.
PITT PENN: April 25 Hearing on Employment of Becker CPA
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
convene a hearing on April 25, 2013, at 9 a.m. to consider Pitt
Penn Holding Co., Inc., et al.'s motion to employ Becker CPA, LLC
as accountant/NOL expert. Objections, if any, were due April 22.
Becker CPA will assist the Debtors in their effort to realize
value for approximately $200 million of gross net operating
losses.
Secured lender Omtammot, LLC has objected to Becker's retention.
About Pitt Penn and Industrial Enterprises
Pitt Penn Holding Co., Inc., and Pitt Penn Oil Co., LLC, each
filed voluntary petitions for Chapter 11 relief (Bankr. D. Del.
Case Nos. 09-11475 and 09-11476) on April 30, 2009. Industrial
Enterprises of America, Inc., f/k/a Advanced Bio/Chem, Inc., filed
for Chapter 11 protection (Bankr. D. Del. Case No. 09-11508) on
May 1, 2009. EMC Packaging, Inc., filed a voluntary petition for
Chapter 11 relief (Bankr. D. Del. Case No. 09-11524) on May 4,
2009. Unifide Industries, LLC, and Today's Way Manufacturing LLC,
each filed a voluntary petition for Chapter 11 relief (Bankr. D.
Del. Case Nos. 09-11587 and 09-11586) on May 6, 2009.
PPH, PPO, EMC, Unifide, and Today's Way are each subsidiaries of
IEAM. The cases are jointly administered under Case No. 09-11475.
Christopher D. Loizides, Esq., at Loizides, P.A., in Wilmington,
Del., represents the Debtors as counsel. In its petition,
Industrial Enterprises disclosed total assets of $50,476,697 and
total debts of $17,853,997.
Industrial Enterprises originally operated as a holding company
with four wholly owned subsidiaries, PPH, EMC, Unifide, and
Today's Way. PPH, through its wholly owned subsidiary, PPO, was a
leading manufacturer, marketer and seller of automotive chemicals
and additives.
EMC's original business consisted of converting hydrofluorocarbon
gases R134a and R152a into branded private label refrigerant and
propellant products. Unifide was a leading marketer and seller of
automotive chemicals and additives. Today's Way manufactured and
packaged the products which were sold by Unifide.
POSITIVEID CORP: Incurs $7.9 Million Net Loss in 2012
-----------------------------------------------------
PositiveID Corporation filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$7.99 million on $0 of revenue for the year ended Dec. 31, 2012,
as compared with a net loss of $16.48 million on $0 of revenue for
the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $2.41 million
in total assets, $6.17 million in total liabilities and a $3.76
million total stockholders' deficit.
EisnerAmper LLP, in New York, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that
at Dec. 31, 2012, the Company has a working capital deficiency and
an accumulated deficit. Additionally, the Company has incurred
operating losses since its inception and expects operating losses
to continue during 2013. These conditions raise substantial doubt
about its ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/IsFEJY
About PositiveID
Delray Beach, Fla.-based PositiveID Corporation has historically
developed, marketed and sold RFID systems used for the
identification of people in the healthcare market. Beginning in
early 2011, the Company has focused its strategy on the growth of
its HealthID business, including the continued development of its
GlucoChip, its Easy Check breath glucose detection device, its
iglucose wireless communication system, and potential strategic
acquisition opportunities of businesses that are complementary to
its HealthID business.
POSITRON CORP: Incurs $7.9 Million Comprehensive Loss in 2012
-------------------------------------------------------------
Positron Corporation filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss
and comprehensive loss of $7.95 million on $2.80 million of
revenue for the year ended Dec. 31, 2012, as compared with a net
loss and comprehensive loss of $6.12 million on $6.66 million of
revenue in 2011.
The Company's balance sheet at Dec. 31, 2012, showed $2.68 million
in total assets, $8.87 million in total liabilities and a $6.19
million total stockholders' deficit.
Sassetti LLC, in Oak Park, Illinois, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that
the Company has a significant accumulated deficit which raises
substantial doubt about the Company's ability to continue as a
going concern.
Bankruptcy Warning
"The Company had cash and cash equivalents of approximately
$243,000 at December 31, 2012. The Company utilized $2,210,000
proceeds from issuance of convertible debt, $305,000 borrowings on
notes payable of $65,000, proceeds from non-interest bearing
advances, and $383,000 proceeds from issuance of common stock for
cash to fund operating activities during the year ended
December 31, 2012. The Company had accounts payable and accrued
liabilities of approx. $1,634,000 and a negative working capital
of approx. $7,006,000. The Company believes that it may continue
to experience operating losses and accumulate deficits in the
foreseeable future. If we are unable to obtain financing to meet
our cash needs we may have to severely limit or cease our business
activities or may seek protection from our creditors under the
bankruptcy laws."
A copy of the Form 10-K is available for free at:
http://is.gd/dN9sXV
About Positron Corporation
Headquartered in Fishers, Indiana, Positron Corporation is a
molecular imaging company focused on nuclear cardiology.
PROVIDENT FUNDING: S&P Raises Rating on $200MM Notes to 'B+'
------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its recovery
rating on Provident Funding Associates L.P.'s $200 million 10.125%
senior unsecured notes due in 2019 to '4' from '5'. At the same
time, S&P raised its issue-level rating on the notes to 'B+' from
'B' in accordance with its notching criteria for a recovery rating
of '4'. In addition, S&P's recovery rating on Provident's
$400 million 10.25% senior secured notes due in 2017 remains
unchanged at '1'. S&P affirmed its 'BB' issue-level rating on the
senior secured notes.
S&P revised the recovery rating on the senior unsecured notes
based on an increase in the collateralization of the senior
secured notes. The senior secured notes are collateralized
against Provident's mortgage servicing rights, which increased in
value in 2012.
S&P's analysis indicates that in its simulated default scenario,
first-lien senior secured creditors would recover principal and
six months of prepetition interest at the high end of the 90%-100%
range, resulting in a '1' recovery rating and an issue rating two
notches higher than the issuer credit rating. This leaves
recovery of 30%-50% for holders of the senior unsecured notes,
resulting in a recovery rating of '4' and an issue rating of 'B+'
for the firm's $200 million senior unsecured notes.
RATINGS LIST
Provident Funding Associates L.P.
Issuer Credit Rating B+/Stable/--
Upgraded; Recovery Rating Revised
To From
Provident Funding Associates L.P.
Senior Unsecured
$200 mil. 10.125% notes due 2019 B+ B
Recovery Rating 4 5
Affirmed; Recovery Rating Unchanged
Provident Funding Associates L.P.
Senior Secured BB
Recovery Rating 1
QUALTEQ INC: Midwest Gets Bid Protections for Katrine Property
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
approved the bid protections for Midwest Industrial Funds, Inc., a
the stalking horse bidder for a property owned by a unit of
Qualteq, Inc.
Pursuant to the agreement dated March 1, 2013, the Debtor has
agreed to sell the real property located at 5300 Katrine Ave.,
Downers Grove, Illinois on these terms:
Seller: 5300 Katrine LLC
Purchaser: Midwest Industrial Funds, Inc.
Purchase Price: $3,100,000.
Bid Protection Break-up Fee: 2% of the purchase price
Expense Reimbursement: None
Previously, the trustee obtained authority to enter into stalking
horse purchase agreements with respect to certain of the Debtors'
owned real property and grant customary bid protections in
connection with the agreements, including a break up fee of up to
2% of the aggregate purchase price, in accordance with the
stalking horse. However, due to prolonged negotiations between
Midwest, the trustee, and their respective advisors, the trustee
was unable to execute an asset purchase agreement with Midwest and
file a stalking horse notice by the deadline set forth in the
original stalking horse procedures.
A copy of the terms of the APA is available for free at
http://bankrupt.com/misc/QualteInc_SaleMotion.pdf
About QualTeq Inc.
South Plainfield, New Jersey-based QualTeq, Inc., engages in the
design, manufacture, and personalization of plastic cards in the
United States. The company manufactures magnetic, contact, and
dual interface smart cards.
Qualteq Inc. and 17 affiliated companies filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on
Aug. 14, 2011. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf,
Esq., at Fox Rothschild LLP, serve as local counsel to the
Debtors. K&L Gates LLP is the general bankruptcy counsel.
Eisneramper LLP is the accountants and financial advisors.
Scouler & Company is the restructuring advisors. Lowenstein
Sandler PC is counsel to the Committee. Avadamma LLC disclosed
$38,491,767 in assets and $36,190,943 in liabilities as of the
Petition Date.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four
unsecured creditors to serve on the Official Committee of
Unsecured Creditors. Lowenstein Sandler PC represents the
Committee. Eisneramper LLP serves as its accountants and
financial advisors.
In November 2012, the Qualteq trustee completed the sale of the
business for $51.2 million to Valid USA Inc. The price included
$46.1 million in cash plus the assumption of liabilities.
At the request of Bank of America NA, the bankruptcy judge
appointed a Chapter 11 trustee in May 2012. The case was
transferred to Chicago from Delaware in February 2012.
Fred C. Caruso, the Chapter 11 Trustee, tapped Hilco Real Estate,
LLC, as real estate advisors.
The Debtors' Third Amended Joint Plan of Reorganization provides
that on or after the Confirmation Date, the applicable Debtors or
Reorganized Debtors may enter into Restructuring Transactions and
may take actions as the Debtors or the Reorganized Debtors
determine to be necessary or appropriate to (i) effect a corporate
restructuring of their respective businesses; (ii) to simplify the
overall corporate structure of the Reorganized Debtors; or (iii)
to preserve the value of any available net operating losses and
other favorable tax attributes; or (iv) to maximize the value of
the Reorganized Debtors, all to the extent not inconsistent with
any other terms of the Plan or existing law.
QUICK-MED TECHNOLOGIES: Taps Match Point as Financial Advisor
-------------------------------------------------------------
Quick-Med Technologies, Inc., has retained Match Point Partners to
manage its investor and public relations programs. Match Point
Partners is a New York based strategy and financial advisory firm
that helps healthcare and technology companies manage and grow
through inflection points and maximize long-term value.
"We are continuing the commercial expansion of our NIMBUS(R) and
Stay Fresh(R) product lines with our US and international
partners," said Quick-Med CFO Paul Jenssen. "We are excited to
have the help of Match Point Partners to communicate our growth
and increase our visibility with our partners and supporters."
"QMT is a highly innovative health care company that is bringing
very exciting antimicrobial technologies to market," said J.D.
Friedland, Founder and Senior Managing Director of Match Point.
"Their products address the major public health concerns of drug-
resistant bacteria in our communities, institutions, and even in
our food industries... - Match Point will be able to help
communicate the value of these technologies better to the
healthcare, consumer goods, and financial communities to improve
public understanding of Quick-Med's value."
"Our work with Quick-Med reflects Match Point's approach to
partner closely with our clients in a broad manner to help them
achieve their financial and strategic objectives." "We follow
through on our commitment by working side-by-side with our clients
at every step. This depth of collaboration helps to align client
goals with our efforts and enhance company value."
About Quick-Med
Gainesville, Fla.-based Quick-Med Technologies, Inc., is a life
sciences company focused on developing proprietary, broad-based
technologies in the consumer and healthcare markets. Its four
core technologies are: (1) Novel Intrinsically Micro-Bonded
Utility Substrate (NIMBUS(R)), a family of advanced polymers bio-
engineered to have antimicrobial, hemostatic, and other properties
that can be used in a wide range of applications, including wound
care, catheters, tubing, films, and coatings; (2) Stay Fresh(R), a
novel antimicrobial based on sequestered hydrogen peroxide, that
can provide durable antimicrobial protection to items such as
textiles through numerous laundering cycles; (3) NimbuDerm(TM), a
novel copolymer for application as a persistent hand sanitizer
with long lasting protection against germs; and (4) MultiStat(R),
a family of advanced patented methods and compounds shown to be
effective in skin therapy applications.
The Company's balance sheet at Sept. 30, 2012, showed $1.4 million
in total assets, $9.8 million in total liabilities, and a
stockholders' deficit of $8.4 million.
Daszkal Bolton LLP, in Boca Raton, Florida, expressed substantial
doubt about Quick-Med's ability to continue as a going concern.
The independent auditors noted the the Company has experienced
recurring losses and negative cash flows from operations for the
years ended June 30, 2012, and 2011, and has a net capital
deficiency.
REAL ESTATE ASSOCIATES: Reports $13 Million Net Income in 2012
--------------------------------------------------------------
Real Estate Associates Limited VII filed with the U.S. Securities
and Exchange Commission its annual report on Form 10-K disclosing
net income of $13.01 million on $0 of revenue for the year ended
Dec. 31, 2012, as compared with a net loss of $861,000 on $0 of
revenue during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $1.04 million
in total assets, $8.17 million in total liabilities, and a
$7.12 million total partners' deficit.
Ernst & Young LLP, in Greenville, South Carolina, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Partnership continues to generate recurring operating
losses. In addition, notes payable and related accrued interest
totalling $8.09 million are in default due to non-payment. These
conditions raise substantial doubt about the Partnership's ability
to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/fIw3NT
About Real Estate Associates
Real Estate Associates Limited VII is a limited partnership which
was formed under the laws of the State of California on May 24,
1983. On Feb. 1, 1984, the Partnership offered 2,600 units
consisting of 5,200 limited partnership interests and warrants to
purchase a maximum of 10,400 additional limited partnership
interests through a public offering managed by E.F. Hutton Inc.
The Partnership received $39,000,000 in subscriptions for units of
limited partnership interests (at $5,000 per unit) during the
period from March 7, 1984 to June 11, 1985.
The general partners of the Partnership are National Partnership
Investments Corp., a California Corporation, and National
Partnership Investments Associates II. The business of the
Partnership is conducted primarily by NAPICO, a subsidiary of
Apartment Investment and Management Company, a publicly traded
real estate investment trust.
As of Sept. 30, 2012, and Dec. 31, 2011, the Partnership holds
limited partnership interests in 1 and 11 Local Limited
Partnerships, respectively, and a general partner interest in REA
IV which, in turn, holds limited partnership interests in 3 and 8
additional Local Limited Partnerships, respectively; therefore,
the Partnership holds interests, either directly or indirectly
through REA IV, in 4 and 19 Local Limited Partnerships,
respectively. The other general partner of REA IV is NAPICO. The
Local Limited Partnerships own residential low income rental
projects consisting of 403 and 1,237 apartment units at Sept. 30,
2012, and Dec. 31, 2011, respectively. The mortgage loans of
these projects are payable to or insured by various governmental
agencies.
The Partnership reported a net loss of $861,000 on $0 of revenue
in 2011, compared with net income of $171,000 on $0 of revenue in
2010.
REALOGY CORP: Closes Secondary Offering of 40.2MM Shares
--------------------------------------------------------
Realogy Holdings Corp. has closed its previously announced public
offering of 40.25 million shares of its common stock by certain
funds affiliated with Apollo Global Management, LLC, at $44.00 per
share, which included 5.25 million shares of common stock issued
upon the exercise in full of the underwriters' option to purchase
additional shares. Giving effect to this transaction, funds
affiliated with Apollo will continue to hold approximately 25.2
million shares of Realogy's common stock, representing
approximately 17% of shares of common stock outstanding.
Goldman, Sachs & Co., J.P. Morgan Securities LLC, Barclays Capital
Inc., Citigroup Global Markets Inc. and Credit Suisse Securities
(USA) LLC acted as joint book-running managers and Goldman, Sachs
& Co. and J.P. Morgan Securities LLC served as representatives of
the underwriters. Credit Agricole Securities (USA) Inc., Wells
Fargo Securities, LLC, CRT Capital Group LLC and Apollo Global
Securities, LLC acted as co-managers. The offering of shares may
be made only by means of a written prospectus and related
prospectus supplement forming a part of the automatically
effective registration statement filed by Realogy with the
Securities and Exchange Commission. Copies of the prospectus and
prospectus supplement relating to this offering may be obtained
from Goldman, Sachs & Co., Attention: Prospectus Department, 200
West Street, New York, New York 10282, or by calling toll-free
866-471-2526, by faxing a request to 212-902-9316 or by emailing a
request to prospectus-ny@ny.email.gs.com or from J.P. Morgan
Securities LLC, c/o Broadridge Financial Solutions, 1155 Long
Island Ave., Edgewood, New York 11717 or by calling toll-free 866-
803-9204.
On April 16, 2013, Realogy Group LLC (formerly known as Realogy
Corporation) redeemed the remaining $190 million aggregate
principal amount of outstanding 12.375% Senior Subordinated Notes
due 2015 in accordance with the terms and provisions of the
indenture governing the 12.375% Senior Subordinated Notes, dated
as of April 10, 2007, among Realogy Group, Realogy Holdings Corp.,
the subsidiary guarantors party thereto, and The Bank of New York
Mellon Trust Company, N.A. as trustee, at a redemption price of
100.000%. In connection with the redemption of the 12.375% Senior
Subordinated Notes, Realogy Group paid total consideration of
approximately $190 million, which included accrued and unpaid
interest. Immediately following such redemption, Realogy Group
cancelled the 12.375% Senior Subordinated Notes and discharged the
12.375% Senior Subordinated Notes Indenture in accordance with its
terms.
On April 16, 2013, Realogy Group also redeemed the remaining $10
million aggregate principal amount of outstanding 13.375% Senior
Subordinated Notes due 2018 in accordance with the terms and
provisions of the indenture governing the 13.375% Senior
Subordinated Notes, dated as of Jan. 5, 2011, among Realogy Group,
the Company, the subsidiary guarantors party thereto, and the
Trustee, at a redemption price of 106.688%. In connection with
the redemption of the 13.375% Senior Subordinated Notes, Realogy
Group paid total consideration of approximately $11 million, which
included the applicable premium and accrued and unpaid interest.
Immediately following such redemption, Realogy Group cancelled the
13.375% Senior Subordinated Notes and discharged the 13.375%
Senior Subordinated Notes Indenture in accordance with its terms.
The 12.375% Senior Subordinated Notes and the 13.375% Senior
Subordinated Notes were redeemed using substantially all of the
remaining net proceeds from the Company's October 2012 initial
public offering.
About Realogy Corp.
Realogy Corp. -- http://www.realogy.com/-- a global provider of
real estate and relocation services with a diversified business
model that includes real estate franchising, brokerage, relocation
and title services. Realogy's world-renowned brands and business
units include Better Homes and Gardens Real Estate, CENTURY 21,
Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group,
ERA, Sotheby's International Realty, NRT LLC, Cartus and Title
Resource Group. Collectively, Realogy's franchise systems have
around 15,000 offices and 270,000 sales associates doing business
in 92 countries around the world.
Headquartered in Parsippany, N.J., Realogy is owned by affiliates
of Apollo Management, L.P., a leading private equity and capital
markets investor. Realogy fully supports the principles of the
Fair Housing Act.
Realogy Holdings Corp. and Realogy Group LLC reported a net loss
attributable to the Companies of $543 million on $4.67 billion of
net revenues for the year ended Dec. 31, 2012.
Realogy Holdings and Realogy Group incurred a net loss of
$441 million on $4.09 billion of net revenues in 2011, following a
net loss of $99 million on $4.09 billion of net revenues for 2010.
The Company's consolidated balance sheets at Dec. 31, 2012, showed
$7.44 billion in total assets, $5.92 billion in total liabilities
and $1.51 billion in total equity.
Bankruptcy Warning
"Our ability to make scheduled payments or to refinance our debt
obligations depends on our financial and operating performance,
which is subject to prevailing economic and competitive conditions
and to certain financial, business and other factors beyond our
control. We cannot assure you that we will maintain a level of
cash flows from operating activities and from drawings on our
revolving credit facilities sufficient to permit us to pay the
principal, premium, if any, and interest on our indebtedness or
meet our operating expenses.
If our cash flows and capital resources are insufficient to fund
our debt service obligations, we may be forced to reduce or delay
capital expenditures, sell assets or operations, seek additional
debt or equity capital or restructure or refinance our
indebtedness. We cannot assure you that we would be able to take
any of these actions, that these actions would be successful and
permit us to meet our scheduled debt service obligations or that
these actions would be permitted under the terms of our existing
or future debt agreements.
If we cannot make scheduled payments on our debt, we will be in
default and, as a result:
* our debt holders could declare all outstanding principal and
interest to be due and payable;
* the lenders under our senior secured credit facility could
terminate their commitments to lend us money and foreclose
against the assets securing their borrowings; and
* we could be forced into bankruptcy or liquidation," the
Company said in its annual report for the period ended
Dec. 31, 2012.
* * *
In the Dec. 12, 2012, edition of the TCR, Moody's Investors
Service upgraded Realogy Group LLC's Corporate Family and
Probability of Default ratings to B3. The B3 Corporate Family
rating (CFR) incorporates Moody's view that Realogy's capital
structure has made meaningful progress towards being stabilized
following the issuance of primary equity, and is therefore more
sustainable although still highly leveraged.
As reported by the TCR on Feb. 18, 2013, Standard & Poor's Ratings
Services raised its corporate credit rating on Realogy Corp. to
'B+' from 'B'.
"The one notch upgrade in the corporate credit rating to 'B+'
reflects an increase in our expectation for operating performance
at Realogy in 2013, and S&P's expectation that total lease
adjusted debt to EBITDA will improve to the low-6x area and funds
from operations (FFO) to total adjusted debt will be improve to
the high-single-digits percentage area in 2013, mostly due to
EBITDA growth in the low- to mid-teens percentage area in 2013,"
S&P said.
RESIDENTIAL CAPITAL: Removal Period Extended to July 8
------------------------------------------------------
Judge Martin Glenn further extended the time provided by Rule 9027
of the Federal Rules of Bankruptcy Procedure for Residential
Capital LLC and its affiliates to file notices of removal of civil
actions, and thereby remove those civil actions to the appropriate
bankruptcy or district court, until the later of (a) July 8, 2013,
or (b) should the Court enter an order terminating the automatic
stay as to a particular civil action, for that civil action, 30
days after the entry of the order terminating the automatic stay.
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.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Court Approves People's Choice Settlement
--------------------------------------------------------------
Judge Martin Glenn approved the settlement agreements entered into
by and between Residential Funding Company, LLC, and Ronald F.
Greenspan, in his representative capacity as the Trustee of the
Liquidating Trusts of People's Choice Home Loan, Inc., People's
Choice Funding, Inc., and People's Choice Financial Corporation,
and (ii) the Settlement Agreement entered into by and between
Debtor Homecomings Financial, LLC and the PC Liquidating Trustee.
The agreements settle claims filed by the ResCap Debtors against
the PC estates for obligations due and outstanding under several
prepetition contracts among the parties. The agreements provide
that:
-- RFC's claim relating to its prepetition warehousing credit
agreement with PCHLI and People's Choice Funding, Inc.,
will be allowed for $44,082,558, less $725,000 for the
settlement payment RFC received in April 2008, and
postpetition interest in the amount of $3,279,320;
-- RFC's claim for alleged breaches under prepetition mortgage
purchase agreements and for additional costs in connection
with mortgage loan sales is allowed as a general, unsecure,
non-priority claim for $21,321,618; and
-- Homecomings' claim for repurchase or cure obligations under
its prepetition loan purchase agreement is allowed as a
general, unsecured, non-priority claim for $157,644.
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.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: April 30 Hearing on Hudson, PwC & Pepper Fees
------------------------------------------------------------------
The Bankruptcy Court entered a fifth interim order authorizing
Residential Capital LLC and its affiliates to compensate
PricewaterhouseCoopers LLP for services it rendered in connection
with the FRB foreclosure review. A final hearing on the Debtors'
motion to compensate PwC is set for April 30, 2013.
The Court also entered a fourth interim order authorizing the
Debtors to employ Hudson Cook, LLP, as their special counsel, and
a fifth interim order authorizing the Debtors to employ Pepper
Hamilton LLP as special foreclosure review counsel. A final
hearing to consider the applications is also set for April 30.
As reported in the Oct. 2 edition of the TCR, the Official
Committee of Unsecured Creditors opposed the Debtors' request to
pay $250 million in fees to PricewaterhouseCoopers for mortgage
foreclosure review services raises serious questions regarding the
best interests of the estates, not the least of which is why the
Debtors -- or federal regulators, for that matter -- should prefer
to continue these vast expenditures rather than to devise a more
streamlined method to redirect more money to pay borrowers.
The Creditors Committee has agreed for GMAC Mortgage LLC to pay
PwC, and two other firms during the 90 days following entry of
interim orders.
The TCR reported in September 2012 that in connection with the
agreement with Residential Capital, Ally Financial Inc. and Ally
Bank to develop and implement risk management and corporate
governance procedures in order to ensure prospective compliance
with applicable foreclosure-related regulations and laws, Debtor
GMAC Mortgage LLC agreed to pay for an extensive, independent file
review regarding certain residential foreclosure actions and
foreclosure sales prosecuted by the Debtors.
Pepper Hamilton partner Gary Apfel, Esq., began representing
Debtor GMAC Mortgage, LLC, and Ally Financial Inc. in connection
with the Foreclosure Review in October 2011. Since that time,
Mr. Apfel has been instrumental in providing legal advice and
assistance to the independent consultant with respect to the
bankruptcy workstream, the Debtors tell the Court.
Pursuant to the FRB Foreclosure Review requirement, the Debtors
hired PricewaterhouseCoopers, LLP, as independent consultant.
PwC has been tasked with (i) working to plan and develop
procedures for conducting the FRB Foreclosure Review; (ii)
identifying loan populations for review; (iii) monitoring a
borrower outreach complaint process; (iv) reviewing a sample of
more than 5,000 loan files, as well as more than 12,000 borrower
outreach complaints, for missing documentation or other issues;
and (v) developing a recommended remediation in the event that
PwC identifies errors.
Hudson Cook began representing Debtor GMAC Mortgage, LLC, and Ally
Financial in connection with a review of foreclosure and loan
files in June 2011, focusing on four operational Foreclosure
Review "workstreams." Since that time, Hudson Cook has been
instrumental in providing legal advice and assistance to
PricewaterhouseCoopers LLP with respect to the Foreclosure Review,
the Debtors tell the Court. In the course of that work, the
Debtors note, Hudson Cook has developed significant familiarity
with the issues specific to the Foreclosure Review.
The Debtors agreed to pay PwC according to the firm's hourly
rates:
Partner $630
Managing Director $610
Senior Manager/Director $470
Manager $370
Senior Associate $300
Associate $235
The Debtors estimated that the cost of the FRB Foreclosure Review
could reach approximately $180 million, although based on
subsequent events, it has become apparent that the costs of
compliance with the FRB Foreclosure Review could increase well
above that amount, perhaps reaching $250 million.
The Debtors have sought the Court's authority to employ Hudson
Cook, nunc pro tunc to May 14, 2012, for the firm to continue its
Foreclosure Review services. Hudson Cook is providing legal
assistance in connection with PwC's review of loan files. Hudson
Cook will be paid a monthly pay of the greater of $50,000 and the
dollar value of the time billed at the firm's rates.
Hudson Cook's hourly rates range from $400 to $665 for partners;
$240 to $375 for associates; and $185 to $230 for legal
assistants. The firm will also be reimbursed for any out-of-
pocket expenses it incurs.
Pepper Hamilton will work with PwC to continue developing and
refining the processes for the Foreclosure Review, and provide
legal advice and assistance to PwC in connection with bankruptcy
issues related to the Foreclosure Review. Pepper Hamilton will
be paid according to its hourly rates of $675 to $850 for
partners, $235 to $500 for associates, and $210 to $220 for
paraprofessionals. Pepper Hamilton will also be reimbursed for
any out-of-pocket expenses it incurs.
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.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Kimbers Lawsuit Dismissed
----------------------------------------------
In an April 8, 2013, memorandum opinion and order, Judge Martin
Glenn of the U.S. Bankruptcy Court for the Southern District of
New York dismissed with prejudice the adversary complaint filed by
Brian and Malinda Kimber against GMAC Mortgage, LLC, and its
debtor affiliates.
On May 2, 2009, Amerigroup Mortgage Corporation originated the
Plaintiffs' mortgage loan in the amount of $175,950, with the loan
being secured by real property located in Texas. In June 2012,
Amerigroup assigned the Deed of Trust to GMACM. The Plaintiffs
defaulted on the Note and, after GMACM initiated a non-judicial
foreclosure proceeding, the Property was sold at a foreclosure
sale in August 2012.
On the same day as the foreclosure sale, Mr. Kimber filed a
Chapter 13 petition in the Bankruptcy Court for the Western
District of Texas. The Texas Bankruptcy Court entered an order
for summary dismissal of the case for failure to timely file a
plan and/or schedules. The Case was closed on November 29, 2012.
In October 2012, the Plaintiffs filed a joint Chapter 13 petition,
again in the Texas Bankruptcy Court, and the following month
initiated an adversary proceeding in the Texas Bankruptcy Court
against, among other defendants, GMACM and Amerigroup.
The Texas AP complaint asserts claims for: (a) violation of the
automatic stay in Mr. Kimber's first bankruptcy case; (b)
avoidance of defective deed of trust; (c) declaratory relief; and
(d) turnover. The Texas Adversary Proceeding was dismissed by the
Texas Bankruptcy Court.
The Plaintiffs filed the Adversary Proceeding against the same
Defendants asserting claims that are identical to those previously
asserted in the Texas AP. The Defendants filed motions to dismiss
the Complaint for insufficient service of process, for failure to
state a claim upon which relief may be granted, and the judicial
doctrines of collateral estoppels and res judicata. The
Plaintiffs did not respond to the Motions or appear at the hearing
on the Motions.
In his decision, Judge Glenn held that the doctrine of res
judicata requires that the action be dismissed. Each of the
conditions enumerated in Corbett v. MacDonald Moving Services,
Inc., 124 F.3d 82, 88 (2d Cir. 1997), for the determination on
whether a prior order bar plaintiffs from asserting the same
claims against the same defendants exist in the case.
Accordingly, the action is barred by res judicata.
Judge Glenn pointed out that the Texas AP and the instant
Adversary Proceeding involve identical parties; the Texas
Bankruptcy Court and the New York Bankruptcy Court are both courts
of competent -- indeed identical -- subject matter jurisdiction;
and the Plaintiffs alleged identical claims in both proceedings.
In addition, the Texas Orders amount to a final judgment on the
merits, Judge Glenn held.
The Adversary Proceeding is Brian F. Kimber and Malinda D. Kimber,
Plaintiffs, v. GMAC Mortgage, LLC, et al., Defendants, Adv. Proc.
12-02045 (MG).
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.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Wilmington Trust Seeks Judge's OK to Sue Ally
------------------------------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that the trustee for
$1 billion in senior unsecured bonds issued by Residential Capital
LLC sought a New York bankruptcy judge's permission Friday to sue
the firm's former parent, Ally Financial Inc., adding to the
growing pressure on Ally to pay up for ResCap's collapse.
According to the report, Wilmington Trust NA's court filing came a
week after the official committee of unsecured creditors sought
the judge's authorization to sue the auto lender. The unsecured
creditors said at the time that Ally could be responsible for up
to $25 billion, the report recalled.
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.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
REVEL AC: Committee Objects to DIP Financing Motion
---------------------------------------------------
BankruptcyData reported that Revel AC's official committee of
unsecured creditors filed with the U.S. Bankruptcy Court an
objection to the Debtors' motion for approval to obtain $250
million in D.I.P. financing from its lenders.
The Committee asserts, "After several conversations between
counsel to the Committee and counsel to the Debtors, most of which
was focused on the Debtors' general abhorrence to the existence of
a Committee in this case, the Debtors refused to adjourn the April
18 hearing, largely on the pretext of having to make payroll at
the end of this week. With no other alternative, the Committee
proceeded to prepare this Objection. While the Committee believes
that most, if not all, of the issues raised by this Objection can
be consensually resolved, the Committee was not able to address
any of these issues with the Debtors prior to filing this
Objection," the BData report related.
Wayne Perry, writing for The Associated Press, reported that,
despite the Committee's objection, Judge Judith Wizmur gave Revel
final approval of its $250 million temporary financing that lets
the casino pay employees, buy supplies, continue player loyalty
programs and pay taxes and utility bills, among other things.
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.
RG STEEL: Seeks Approval to Employ Gellert as Special Counsel
-------------------------------------------------------------
RG Steel LLC asked for approval from U.S. Bankruptcy Judge Kevin
Carey to hire Gellert Scali Busenkell & Brown, LLC as its special
Delaware counsel.
Gellert will assist ASK LLP in the prosecution of avoidance
actions, and the litigation and collection of accounts receivable
claims. ASK was hired as RG Steel's special counsel late last
year.
Gellert will be paid directly by ASK, separate and apart from any
collections recovered by ASK on behalf of the estates.
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 owned 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. 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 bankruptcy 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.
Kramer Levin Naftalis & Frankel LLP represents the Official
Committee of Unsecured Creditors. Huron Consulting Services LLC
serves as the Committee's 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. CJ Betters Enterprises Inc. paid
$16 million for the Ohio plant.
RIVER CANYON: United Water to Pay $6,810 Sanction
-------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado granted
River Canyon Real Estate Investments, LLC's request for sanctions
pursuant to March 4, 2013, minute order.
The Court determined that, among other things:
1. the motion by United Water & Sanitation District to value
security was filed in violation of Bankruptcy Rule 9011 and that
sanctions are appropriate;
2. these sanctions are appropriate:
-- an award of the Debtor's attorneys' fees incurred in
connection with the motion by United to value security, which fees
total $6,810; and,
-- an order deeming that United's failure to file a
valuation motion with a valuation figure specified in it to be a
waiver of United's right to make an election pursuant to Section
1111(b); and
3. the total amount requested includes an additional $525 for
the fees incurred in preparing the within request (1.5 hrs at
$350/hr).
About River Canyon Real Estate
River Canyon Real Estate Investments, LLC, is the developer of the
Ravenna residential real estate project in Douglas County,
Colorado and the owner of The Golf Club at Ravenna, among other
assets.
River Canyon filed a Chapter 11 petition (Bankr. D. Colo. Case No.
12-20763) on May 23, 2012, in Denver as part of its settlement
negotiations with lender Beal Bank Nevada, and to preserve the
value of its assets.
At Beal Bank's behest, Cordes & Company was named, effective
Oct. 15, 2010, as receiver for the 643-acre real estate
development with golf course in Douglas County, Colorado.
The Debtor disclosed assets of $19.7 million and liabilities of
$45.3 million in its schedules. The property and golf course are
estimated to be worth $11 million, and secures a $45 million debt.
Judge Elizabeth E. Brown presides over the case. The Debtor is
represented by Sender & Wasserman, P.C., as its Chapter 11
counsel.
Alan Klein, Glenn Jacks, Dan Hudick, and Bill Hudick own most of
the Debtor. Mr. Jacks, which has a 12.8% membership interest,
signed the Chapter 11 petition.
Richard A. Wieland, the U.S. Trustee for Region 19, was unable to
form an official committee of unsecured creditors because an
insufficient number of persons holding unsecured claims against
the Debtor have expressed interest in serving on a committee. The
U.S. Trustee reserves the right to appoint such a committee should
interest develop among the creditors.
RODEO CREEK: Gets Final OK to Incur $9MM Loan from Credit Suisse
----------------------------------------------------------------
The Hon. Mike H. Nakagawa of the U.S. Bankruptcy Court for the
District of Nevada, in a final order, authorized Rodeo Creek Gold
Inc., et al., to:
1. to incur a debtor-in-possession credit in the aggregate
principal amount of up to $9 million outstanding at any time from
Credit Suisse AG, as administrative agent and collateral agent for
the lending institutions party thereto; and
2. use cash collateral.
As adequate protection from any diminution value of the lenders'
collateral certain security interests and liens on their
respective assets, and superpriority administrative expense claim
status subject and subordinate only to the carve out.
Previously, the Court signed a stipulation extending until
April 8, the deadline by which a final order approving the
facility must be entered under the terms of the DIP agreement.
A copy of the stipulation is available for free at
http://bankrupt.com/misc/RODEOCREEK_dipfinancing_stipulationb.pdf
Revised Sale Timeline
Rodeo Creek at the end of March filed a motion to extend certain
relevant dates and deadlines established in connection with the
sale of the Debtors' assets.
The Debtors relate that the proposed amendment reflects the
cooperation efforts among the Debtors, Credit Suisse AG, the agent
on the Existing Hollister Facility, the Canadian DIP Facility and
the Debtors post-petition financing facility, and the Official
Committee of Unsecured Creditors.
The proposed changes to the documents also address certain issues
raised by the Committee. The relevant sale-related deadlines are
amended to allow for value maximization.
The Debtors proposed this modified schedule:
Event Previous Deadline Extended Deadline
----- ---------------- -----------------
Bid Deadline: April 1, at 12 p.m. April 19, at 12 p.m.
Auction: April 3, at 9 a.m. April 23, at 9 a.m.
Sale Order Objection
Deadline: April 8, at 4 p.m. April 26, at 4 p.m.
Qualified Bidders
Must Identify Contracts
and Leases to be
Assumed: April 9, two business days prior
to sale hearing
Adequate Assurance
Objection
Deadline: April 10, one business day prior to
sale hearing
Sale Hearing: April 11, at May 2, at 1:30 p.m.
9:30 a.m. or Other date as may be
ordered by the Court
A copy of the amended bidding procedures is available for free at
http://bankrupt.com/misc/RODEOCREEK_sale_amended.pdf
About Rodeo Creek and Great Basin
Canada-based The Great Basin Gold Ltd and its subsidiaries are
engaged in the exploration, development, and operation of high-
quality gold properties. The GBG Group's primary projects are a
trial mine and a recently constructed start-up mine, both of which
are located in rich gold-producing regions: the Hollister trial
mine in Nevada and the Burnstone start-up mine in South Africa.
The GBG Group also holds interests in early-stage mineral
prospects located in Canada and Mozambique.
On Sept. 18, 2012, the GBG Group's primary South African operating
subsidiary and owner of the Burnstone Start-up Mine, Southgold
Exploration (Pty) Ltd., commenced business rescue proceedings
under chapter 6 of the South African Companies Act, 2008.
On Sept. 19, 2012, Great Basin Gold Ltd., the ultimate parent
company, applied for protection from its creditors in Canada
pursuant to the Companies' Creditors Arrangement Act, R.S.C. 1985,
c. C-36 in the Supreme Court of British Columbia Vancouver
Registry. GBG arranged -- and the U.S. debtors cross-guaranteed
-- DIP financing from Credit Suisse and Standard Chartered Bank in
the amount of $51 million, of which $10 million was made available
to the U.S. subsidiaries and $25 million for South Africa.
On Feb. 25, 2013, Rodeo Creek Gold Inc., which operates and owns
the Hollister Trial-Mine, along with other U.S. subsidiaries of
Great Basin, filed petitions for Chapter 11 protection (Bankr. D.
Nev. Case No. 13-50301), in Reno, Nevada, as cash ran out before
they could complete the sale of the mine.
Rodeo Creek estimated assets worth less than $100 million and debt
in excess of $100 million. Credit Suisse is the agent under the
Debtors' secured prepetition credit facilities: (i) the Existing
Hollister Credit Facility, under which the Debtors had $52.5
million outstanding at the end of 2012 and (ii) the Canadian DIP
Facility, under which the Debtors had guaranteed $35 million
outstanding as of the Petition Date. The Debtors also had
$13.5 million in outstanding trade debt, in addition to certain
intercompany obligations.
ROSSCO HOLDINGS: Court Enters Final Decree Closing Ch. 11 Cases
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
in March entered a final decree closing the Chapter 11 cases of
Rossco Holdings, Inc., et al.
The Court has confirmed the Modified First Amended Joint Plan of
Reorganization which included the settlement agreement.
College Station, Texas-based Rossco Holdings, Inc., filed for
Chapter 11 protection (Bankr. W.D. Tex. Case No. 10-60953) on
Aug. 2, 2010. The new California Case No. of Rossco Holdings is
LA10-55951BB. David J Richardson, Esq., and Laura L Buchanan,
Esq., at The Creditors' Law Group, represent the Debtor. The
Debtor disclosed $28,415,681 in assets and $10,567,302 in
liabilities as of the Petition Date.
Affiliates Monte Nido Estates, LLC; LJR Properties, Ltd.; WM
Properties, Ltd.; Colony Lodging, Inc.; and Rossco Plaza, Inc.,
filed separate Chapter 11 petitions.
ROTHSTEIN ROSENFELDT: TD Bank Argues Against Investor Case Remand
-----------------------------------------------------------------
Nathan Hale of BankruptcyLaw360 reported that TD Bank NA urged a
Florida bankruptcy judge on Thursday not to remand an investor
suit claiming the bank aided attorney Scott Rothstein in his $1.2
billion Ponzi scheme, saying a magistrate erred in his findings
that the case belongs in state court.
According to the report, the bank argues in an objection that the
magistrate judge was wrong to say that there has been significant
activity in the action, filed in November by a group of 38
Rothstein investors led by lead plaintiff Don Beverly.
About Rothstein Rosenfeldt
Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler
PA -- http://www.rra-law.com/-- was suspected of running a
$1.2 billion Ponzi scheme. U.S. authorities claimed in a civil
forfeiture lawsuit filed Nov. 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 Jan. 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 is represented by Michael Goldberg, Esq., at Akerman
Senterfitt.
RYYZ LLC: Fannie Mae Gets Chance to Pursue Foreclosure Proceeding
-----------------------------------------------------------------
Fannie Mae now has the option to pursue its foreclosure
proceedings as Judge Jerome Feller modified the automatic stay in
the jointly administered bankruptcy cases of RYYZ LLC and RYYZ 2
Corp. dba Westbrook Apartments, Case Nos. 12-47383 and 12-47384
(Bankr. E.D.N.Y.).
The RYYZ entities own a portion of a 500-unit rental apartment
complex in Lake County, Gary, Indiana, called Westbrook
Apartments. They filed for Chapter 11 protection on Oct. 18,
2012, and filed a plan of reorganization and disclosure statement
on Dec. 19, 2012, as amended on March 11, 2013.
Fannie Mae is a secured creditor of the Debtors by virtue of
certain notes and loan instruments, aggregating about $13.5
million. In July 2012, however, the Debtors defaulted failed to
pay due amounts under the loan documents. Fannie Mae thus
accelerated the debt and commenced a foreclosure proceeding in
Lake County Superior Court. The action, however, was stayed when
the Debtors filed for bankruptcy.
Fannie Mae filed a motion for relief from the automatic stay on
Jan. 31, 2013.
Judge Feller found that the Debtors did not demonstrate that their
Chapter 11 plan has a reasonable prospect of being confirmed
within a reasonable time as required by Section 362(d)(3)(A) of
the Bankruptcy Code. This conclusion, Judge Feller opined, is
premised on the Debtors' inability to establish (i) they can
obtain acceptance of their plan by at least one validly impaired
class of claims and/or (ii) their plan does not violate the
absolute priority rule. As the Debtors also failed to make the
payments required by Section 362(d)(3)(B), relief from the stay
must be granted, the judge said.
Accordingly, Judge Feller granted Fannie Mae's motion for relief
from the automatic stay. He, however, denied Fannie Mae's request
for waiver of the 14-day stay provided by Fed. R. Bankr. P.
4001(a)(3) for lack of cause shown. A copy of the Bankruptcy
Court's April 4, 2013 Decision is available at http://is.gd/Gu9EIX
from Leagle.com.
Counsel for Fannie Mae is:
Gary F. Eisenberg, Esq.
PERKINS COIE LLP
22/F, 30 Rockefeller Plaza
New York, NY 10112-0015
Tel: 212-262-6902
Fax: 212-977-1632
Email: GEisenberg@perkinscoie.com
Counsel for the RYYZ Entities are:
Albert A. Ciardi, III, Esq.
Jennifer E. Cranston, Esq.
Daniel S. Siedman, Esq.
CIARDI CIARDI & ASTIN
One Commerce Square
2005 Market Street, Suit 1930
Philadelphia, PA 19103
Tel: (215)557-3550
Fax: (215)557-3551
Email: aciardi@ciardilaw.com
jcranston@ciardilaw.com
dsiedman@ciardilaw.com
SALESFORCE.COM: S&P Assigns 'BB' Unsolicited Corp. Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' unsolicited
corporate credit rating to Salesforce.com Inc. The rating outlook
is stable. S&P also assigned a 'BB' unsolicited issue-level
rating to the company's $1.15 billion convertible senior unsecured
notes due 2018. The unsolicited recovery rating on these notes is
'3', indicating S&P's expectation of meaningful recovery (50% to
70%) for noteholders in the event of a payment default.
"The rating on Salesforce.com Inc. reflects our assessment of the
company's business risk profile as 'satisfactory' and our view of
its financial risk as 'significant'," said Standard & Poor's
credit analyst Philip Schrank. The company possesses a meaningful
recurring revenue stream, and generates strong free cash flow.
However, its narrow focus and an acquisitive growth strategy
temper our view of its business risk profile.
With fiscal 2013 revenues exceeding $3 billion, Salesforce has a
leading market share in CRM and Platform as a service, but also
faces significant competition from much larger, broader-based and
well capitalized software competitors (Oracle Corp. [A+/Stable/A-
1+], SAP [unrated], and Microsoft Corp. [AAA/Stable/--]).
The stable outlook reflects S&P's view that Salesforce.com will
maintain its leading market position, continued profitability, and
strong cash flow generation. The outlook incorporates S&P's view
that the company will pursue its growth strategy, and manage debt
to EBITDA at 4x or below over the near term, limiting upside
ratings potential.
S&P could lower the rating if the company's competitive position
diminishs and affects profitability, or if its financial policy
becomes more aggressive whereby it sustains leverage above 4.0x.
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 S&P's Credit Ratings Information
and Data Policy but does not guarantee the accuracy, adequacy, or
completeness of any information used.
SAMUELS FURNITURE: Liquidator APJL Consulting Begins GOB Sales
--------------------------------------------------------------
Furniture Today reports that the U.S. Bankruptcy Court in west
Tennessee approved the sale of high-end retailer Samuels
Furniture's assets to liquidator APJL Consulting, which began a
going-out-of-business sale April 11 with a private letter to
Samuels' customers. The public sale began April 18 and is
expected to run for 90 to 120 days, according to an APJL release.
The report notes Samuels once had several stores in the area, but
had since consolidated to one 25,000-square-foot store on White
Station Road in Memphis.
Samuels Furniture Co., Inc., based in Memphis, Tenn., filed for
Chapter 11 bankruptcy (Bankr. W.D. Tenn. Case No. 13-21365) on
Feb. 7, 2013. Judge Jennie D. Latta oversees the case. Steven N.
Douglass, Esq., at Harris Shelton Hanover Walsh, PLLC, serves as
counsel to the Debtor. It listed under $50,000 in assets and
$1 million to $10 million in debts. A list of the Company's 20
largest unsecured creditors, filed together with the petition, is
available for free at http://bankrupt.com/misc/tnwb13-21365.pdf
The petition was signed by Harry D. Samuels, president.
SCHLOTZKY'S DELI: Ex-Brass Can't Sue Haynes and Boone
-----------------------------------------------------
Matt Chiappardi of BankruptcyLaw360 reported that the Fifth
Circuit on Thursday affirmed a lower court's decision that the
former executives at Schlotzsky's Deli can't pursue claims that
attorneys at Haynes and Boone LLP secretly met with the deli
chain's outside directors to discuss bankruptcy plans, saying it
should have sought an accommodation for the suit in its Chapter 11
plan.
According to the report, a three-judge panel ruled that John C.
and Joseph J. Wooley, Schlotzsky's former CEO and vice president,
respectively, should have had specific reservations written into
its bankrupcty plan.
SCHOOL SPECIALTY: Decides to Reorganize, Not Sell
-------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that School Specialty Inc. decided to reorganize rather
than sell. The Debtor was slated in bankruptcy court on April 22
for a hearing on approval of disclosure materials so creditors may
commence voting on the Chapter 11 plan.
The company filed a so-called dual track plan that called for
selling the business at auction on May 8 or reorganizing while
giving stock to lenders and unsecured creditors. The company
filed formal notice on April 19 that the auction was canceled and
the plan would proceed by swapping debt for stock to be owned by
lenders, noteholders, and unsecured creditors.
The bankruptcy court is deciding whether Bayside Financial LLC is
entitled to $25 million as a so-called make-whole premium in
compensation for early repayment of a $70 million secured loan.
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.
SCIENTIFIC LEARNING: Steven Simon Owned 27.4% Stake at April 5
--------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Steven G. Simon and his affiliates disclosed
that, as of April 5, 2013, they beneficially owned 6,690,242
shares of common stock of Scientific Learning Corporation
representing 27.4% of the shares outstanding. A copy of the
filing is available for free at http://is.gd/4EmN8a
About Scientific Learning Corporation
Scientific Learning is an education company. The Company
accelerates learning by applying proven research on how the brain
learns in online and on-premise software solutions. The Company
provides its learning solutions primarily to United States K-12
schools in traditional brick-and-mortar, virtual or blended
learning settings and also to parents and learning centers, in
more than 40 countries around the world. The Company's sales are
concentrated in K-12 schools in the U.S., which in during the year
ended December 31, 2011 were estimated to total over 116,000
schools serving approximately 55 million students in almost 14,000
school districts. During the year ended Dec. 31, 2011, the K-12
sector accounted for 87% of the sales of the Company.
The Company reported a net loss of $9.65 million in 2012, as
compared with a net loss of $6.47 million in 2011. The Company's
balance sheet at Dec. 31, 2012, showed $13.05 million in total
assets, $18.28 million in total liabilities and a $5.22 million
net capital deficiency.
In its report on the Company's consolidated financial statemetns
for the year ended Dec. 31, 2012, Ernst & Young, LLP, in San Jose,
Cal., expressed substantial doubt Scienfic Learning's ability to
continue as a going concern, citing the Company's recurring losses
from operations, deficiency in working capital and its need to
raise additional capital.
SCIENTIFIC LEARNING: Armanino Succeeds E&Y LLP as Accountants
-------------------------------------------------------------
The Board of Directors of Scientific Learning Corporation approved
Armanino LLP as the Company's independent registered public
accounting firm for the year ending Dec. 31, 2013.
At the same meeting, the Board of Directors approved the dismissal
of Ernst & Young LLP as the Company's independent registered
public accounting firm effective April 11, 2013.
With the exception of a going concern uncertainty paragraph
following the Company's fiscal year ended Dec. 31, 2012, the
reports of Ernst & Young LLP on the consolidated financial
statements of the Company for the fiscal years ended Dec. 31,
2012, and 2011, did not contain an adverse opinion or a disclaimer
of opinion, and were not qualified or modified as to uncertainty,
audit scope or accounting principles.
In connection with the audits of the Company's financial
statements for each of the two years ended Dec. 31, 2012, and
subsequent interim period through April 11, 2013, there were no
disagreements with Ernst & Young LLP on any matters of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedures, which, if not resolved to the
satisfaction of Ernst & Young LLP, would have caused Ernst & Young
LLP to make reference to the matter in their report.
During the years ended Dec. 31, 2012, and Dec. 31, 2011, and
through April 11, 2013, neither the Company nor anyone on its
behalf has consulted with Armanino with respect to either (i) the
application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that
might be rendered on the Company's consolidated financial
statements, and neither a written report nor oral advice was
provided to the Company that Armanino concluded was an important
factor considered by the Company in reaching a decision as to any
accounting, auditing or financial reporting issue; or (ii) any
matter that was either the subject of a disagreement (as defined
in Item 304(a)(1)(iv) of Regulation S-K and the related
instructions to Item 304 of Regulation S-K) or a reportable event
(as defined in Item 304(a)(1)(v) of Regulation S-K).
About Scientific Learning
Oakland, Cal.-based Scientific Learning Corporation is an
education company that accelerates learning by applying proven
research on how the brain learns in online and on-premise software
solutions.
Ernst & Young, LLP, in San Jose, Cal., expressesed substantial
doubt about Scienfic Learning's ability to continue as a going
concern, citing the Company's recurring losses from operations,
deficiency in working capital and its need to raise additional
capital.
The Company reported a net loss of $9.7 million on 28.1 million of
revenues in 2012, compared with a net loss of $6.5 million on
$41.1 million of revenues in 2011.
The Company's balance sheet at Dec. 31, 2012, showed $13.1 million
in total assets, $18.3 million in total liabilities, and
stockholders' deficit of $5.2 million.
SCOOTER STORE: Judge Doubts Chance for Chapter 11 Success
---------------------------------------------------------
Rachel Feintzeig at Dow Jones' DBR Small Cap reports a judge
cleared Scooter Store Holdings Inc. to tap a bankruptcy loan but
expressed doubt that a stay in Chapter 11 could reinvigorate the
besieged motorized-wheelchair business.
About The Scooter Store
The Scooter Store is a supplier of power mobility solutions,
including power wheelchairs, scooters, lifts, ramps, and
accessories. The Scooter Store's products and services provide
today's seniors and disabled persons potential alternatives to
living in nursing homes or other care facilities. Headquartered
in New Braunfels, Texas, the Scooter Store has a nationwide
network of distribution centers that service products owned or
leased by the Company's customers. It has 57 distribution
centers in 41 states.
Scooter Store Holdings Inc., and 71 affiliates filed for Chapter
11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10904) in
Wilmington. The closely held company listed assets of less than
$10 million and debt of more than $50 million.
Affiliates of private equity firm Sun Capital Partners, based in
Boca Raton, Florida, purchased a majority voting interest in the
debtors in 2011.
The company is 66.8 percent owned by Sun Capital Partners Inc.,
owed $40 million on a third lien. In addition to Sun's debt and
$25 million on a second lien owing to Crystal Financial LLC, there
is a $25 million first-lien revolving credit owing to CIT
Healthcare LLC as agent. Crystal is providing $10 million in
financing for bankruptcy.
SENSATA TECHNOLOGIES: S&P Raises Rating on $700 Notes to 'BB'
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its issue-
level rating on Netherlands-based manufacturer Sensata
Technologies B.V.'s $700 senior unsecured notes due 2019 to 'BB'
(the same level as the corporate credit rating) from 'B+' and
removed the rating from CreditWatch with positive implications
where it had been placed on April 10, 2013. At the same time, S&P
revised the recovery rating on these notes to '4' from '6'. The
'4' recovery rating indicates S&P's expectation for average (30%
to 50%) recovery in the event of a payment default.
The higher issue-level rating on the notes reflects the completion
of a $500 million 10 1/2-year notes offering. Sensata used the
proceeds, along with $200 million of cash, to repay priority
secured term debt. This transaction resulted in improved recovery
prospects for the noteholders under S&P's simulated default
scenario.
RATINGS LIST
Sensata Technologies B.V.
Corporate credit rating BB/Stable/--
Senior secured BBB-
Recovery rating 1
Issue ratings raised; recovery rating revised
To From
Sensata Technologies B.V.
Senior unsecured BB B+/Watch Pos
Recovery rating 4 6
SIONIX CORP: Henry Sullivan Named CEO and Chairman
--------------------------------------------------
The Board of Directors of Sionix Corporation appointed Dr. Henry
Sullivan, in addition to his role as a director of the Company, as
the Company's Chief Executive Officer and Chairman of the Board.
Dr. Sullivan, 73, began working for North American Technologies
Group, Inc., the parent company of TieTek LLC, in 1996, and served
in a variety of roles before his departure in September 2009,
including as President and Chairman of NATK from January 1999
until February 2004. During his time there, Dr. Sullivan was the
principal architect of a composite railroad crosstie made from
recycled composite materials, which was sold under the TieTek
brand. The composite tie is a direct substitute for a wood
crosstie and has a longer expected life and significant
environmental advantages. From September 2009 through the
Effective Date, Dr. Sullivan served as sole manager and principal
of Composite Tie Consulting Company LLC. Prior to joining
NATK/TieTek, Dr. Sullivan was employed by Huntsman Chemical
Corporation and Shell Oil Company, where he spent twenty-six years
in various senior management and technical roles. Dr. Sullivan
holds both a Master's degree and Ph.D. in chemical engineering
from New York University.
There is no family relationship between Dr. Sullivan and any of
the Company's directors or executive officers and Dr. Sullivan has
not had any transaction with the Company during the past fiscal
year through the present that would require reporting pursuant to
Item 404(a) of Regulation S-K.
Dr. Sullivan will accrue a salary of $80,000 per year for his
services as Chief Executive Officer. Dr. Sullivan will also
receive a grant of 5,000,000 shares of the Company's restricted
common stock, of which 2,500,000 shares will be issued immediately
and 2,500,000 shares will be issued after Jan. 1, 2014. The
shares will be issued regardless of the status of Dr. Sullivan's
position with the Company at that time.
As of April 8, 2013, the Board also accepted the resignations of
Ken Calligar as Interim Chief Executive Officer and James W.
Alexander as the Interim Chairman of the Board. Both Mr.
Alexander and Mr. Calligar will continue to serve on the Board.
About Sionix Corp.
Los Angeles, Calif.-based Sionix Corporation designs, develops,
markets and sells cost-effective water management and treatment
solutions intended for use in the oil and gas, agriculture,
disaster relief, and municipal (both potable and wastewater)
markets.
Sionix incurred a net loss of $5.76 million for the year ended
Sept. 30, 2012, compared with a net loss of $6.30 million during
the prior year.
The Company's balance sheet at Sept. 30, 2012, showed $2.90
million in total assets, $4.02 million in total liabilities, all
current, and a $1.11 million total stockholders' deficit.
Kabani & Company, Inc., in Los Angeles, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Sept. 30, 2012. The independent
auditors noted that the Company has incurred cumulative losses of
$37,560,000. In addition, the company has had negative cash flow
from operations for the years ended Sept. 30, 2012, of $2,568,383.
These factors raise substantial doubt about the Company's ability
to continue as a going concern.
SNO MOUNTAIN: Assets Sold to Montage Mountain for $5.1MM
--------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
authorized Sno Mountain, LP, to sell substantially all of its
assets free and clear of liens, claims and encumbrances to Montage
Mountain Resorts, L.P., for $5.125 million.
To recall, an auction was held in February 2013 to determine the
winning bid for the Debtor's assets. Gary F. Seitz, the trustee
for the Debtor, received bids from CBH20, LP, Montage Mountain,
and DFM Realty, Inc. At the conclusion of the auction, DFM was
selected the successful bidder at a purchase price of $4.6 million
and Montage was selected as back-up bidder at a purchase price of
$4.5 million. The Court approved the sale to DFM on April 6,
2013. According to papers filed in court, subsequent to the entry
of the DFM Sale Order, the Trustee, DFM and Montage continued to
negotiate towards an agreement by which Montage, rather than DFM,
would acquire the Debtor's assets. Those negotiations resulted in
the execution by the Trustee and Montage of a revised agreement
pursuant to which Montage will, among other things, acquire the
assets. The Trustee, with the consent of DFM, has determined to
ask the Court to re-open the sale hearing and seek approval of the
revised agreement with Montage.
The Court re-opened the sale hearing and approved the revised
agreement with Montage. According to Bill Rochelle, the
bankruptcy columnist for Bloomberg News, Montage, after entry of
the DFM Sale Order approached the Trustee and offered $5.125
million, coupled with a promise to continue operations. DFM, the
holder of an $8.6 million mortgage, didn't intend to run the
business, the Trustee said, Mr. Rochelle noted.
Prior to the entry of the order, New Cingular Wireless PCS, LLC,
a/k/a AT&T, objected to the revised agreement with Montage to the
extent that the Debtor intends to sell the Debtor's assets free
and clear of all liens, claims or interests and elects to retain
its right under a Feb. 10, 2004, lease pursuant to Section
365(h)(1)(A)(ii) of the Bankruptcy Code. AT&T's objection was
overruled by the Court on the merits.
About Sno Mountain
Various parties -- predominated by various limited partners of Sno
Mountan LP, including Richard Ford, Charles Hertzog, Edward
Reitmeyer, who are each guarantors of certain obligations owing by
Sno Mountain -- filed an involuntary Chapter 11 petition against
Sno Mountain (Bankr. E.D. Pa. Case No. 12-19726) on Oct. 15, 2012.
The other petitioning parties include Wynnewood Capital Partners,
L.L.C., t/a WCP Snow Mountain Partners, L.P., and Kathleen
Hertzog.
The Alleged Debtor is the owner and operator of a popular ski
mountain resort and water park known as "Sno Mountain," located at
1000 Montage Mountain Road in Scranton, Pennsylvania. The
Debtor's bankruptcy case is a "single asset real estate" case
within the meaning of 11 U.S.C. Sec. 101(51)(B).
Judge Jean K. FitzSimon oversees the case. Brian Joseph Smith,
Esq., at Brian J. Smith & Associates PC, represents the
petitioning creditors.
Gary Seitz has been appointed as trustee overseeing the bankruptcy
of the Sno Mountain recreation complex. Maschmeyer Karalis PC
serves as counsel to the trustee.
SNO MOUNTAIN: Has Continued Access to DIP Loans & Cash Collateral
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
authorized Gary F. Seitz, trustee for Sno Mountain, LP's Chapter
11 case, to modify the final order authorizing the Debtor to
obtain up to $497,585 of postpetition financing from Wynnewood
Capital Partners, LLC.
The Final DIP Order is amended to provide that the "Contract
Period" as the term is defined in the DIP Documents is extended
from April 1, 2013, to the earlier of (i) the closing of the sale
of the Debtor's assets, or (ii) May 10, 2013.
In a separate order, the Trustee is also authorized to further use
the cash collateral securing the Debtor's prepetition secured
loans from DFM Realty, Inc., from April 1, 2013, until the earlier
of (a) May 17, 2013, or (b) the date upon which an event of
default occurs. Prior to entry of the financing orders, Denis
Carlson, an unsecured creditor, objected that he was prejudiced
with the orders because the Trustee failed to serve him the DIP
and Cash Collateral documents.
A full-text copy of the second interim cash collateral order with
budget is available for free at:
http://bankrupt.com/misc/SNOMOUNTAINcashcollord.pdf
About Sno Mountain
Various parties -- predominated by various limited partners of Sno
Mountan LP, including Richard Ford, Charles Hertzog, Edward
Reitmeyer, who are each guarantors of certain obligations owing by
Sno Mountain -- filed an involuntary Chapter 11 petition against
Sno Mountain (Bankr. E.D. Pa. Case No. 12-19726) on Oct. 15, 2012.
The other petitioning parties include Wynnewood Capital Partners,
L.L.C., t/a WCP Snow Mountain Partners, L.P., and Kathleen
Hertzog.
The Alleged Debtor is the owner and operator of a popular ski
mountain resort and water park known as "Sno Mountain," located at
1000 Montage Mountain Road in Scranton, Pennsylvania. The
Debtor's bankruptcy case is a "single asset real estate" case
within the meaning of 11 U.S.C. Sec. 101(51)(B).
Judge Jean K. FitzSimon oversees the case. Brian Joseph Smith,
Esq., at Brian J. Smith & Associates PC, represents the
petitioning creditors.
Gary Seitz has been appointed as trustee overseeing the bankruptcy
of the Sno Mountain recreation complex. Maschmeyer Karalis PC
serves as counsel to the trustee.
The Trustee has received Court authority to sell substantially all
of the Debtor's assets to Montage Mountain Resorts, L.P., for
$5.125 million.
SOUTH LAKES: Files Chap. 11 Plan, To Continue to Operate Business
-----------------------------------------------------------------
South Lakes Dairy Farm plan of reorganization dated March 21,
2013, contemplates that the Debtor will continue to operate its
dairy business after confirmation. A hearing on the adequacy of
the Disclosure Statement will be held on May 8, 2013, at 9:00 a.m.
According to the Disclosure Statement, the Debtor will make
payments to its secured claimants, allowed convenience claims,
which consist of allowed general unsecured claims of $3,500 or
less, and general unsecured claims in excess of $3,500 under the
Plan from its operating income. Bar VP Dairy and Mendes Calf
Ranch were paid from proceeds received from the sale of their
collateral in October 2012.
Wells Fargo Bank's secured claim, which totals $16,536, 307, will
be paid $238,003 per month. Wells Fargo's claim will accrue
interest at the rate of prime, plus 2% per annum, and will be
amortized over 84 months. Golden State and J.D. Heiskell will
retain their liens, but the value of their secured claims will be
zero. The claims held by Seley and Cargill will be reconveyed or
avoided or that the Debtor will seek to value the creditors'
interest in its collateral at $0 based on the senior debt held by
Wells Fargo. Volvo Financial Services' secured claim, which total
$134,888, will be paid $4,100 per month, and will accrue interest
at the rate of 4% per annum and will be amortized and paid over
three years.
The Debtor believes that the income received from current
operations will be sufficient to repay about 14% of its unsecured
claims. Payments on the convenience class of general unsecured
claims will be paid a pro rata share of $4,000 within 30 days of
the effective date of the Plan. The general unsecured claims in
excess of $3,500 will be paid $1.2 million pro-rata over a period
of five years through a pro-rata disbursement of $20,000 per
month. The general unsecured claims in excess of $3,500 will
receive net proceeds, if any, of any preference or fraudulent
conveyance recoveries in addition to the $1.2 million.
A full-text copy of the Disclosure Statement dated March 21, 2013,
is available for free at:
http://bankrupt.com/misc/SOUTHLAKESds0321.pdf
About South Lakes Dairy
South Lakes Dairy Farm is a California partnership engaged in the
dairy cattle4 and milking business. The partnership filed a bare-
bones Chapter 11 petition (Bankr. E.D. Calif. Case No. 12-17458)
in Fresno, California on Aug. 30, 2012, disclosing $19.5 million
in assets and $25.4 million in liabilities in its schedules. The
Debtor said it has $1.97 million in accounts receivable charged to
Dairy Farmers of America on account of milk proceeds, and that it
has cattle worth $12.06 million. The farm owes $12.7 million to
Wells Fargo Bank on a secured note.
Bankruptcy Judge W. Richard Lee presides over the case. Jacob L.
Eaton, Esq., at Klein, DeNatale, Goldner, Cooper, Rosenlieb
& Kimball, LLP, in Bakersfield, Calif., represents the Debtor as
counsel. The Debtor tapped A&M Livestock Auction, Inc., to
auction livestock.
August B. Landis, the Acting U.S. Trustee for Region 17, appointed
seven creditors to serve in the Official Committee of Unsecured
Creditors. The Official Committee of Unsecured Creditors tapped
Blakeley & Blakeley LLP as its counsel.
SPECIALTY PRODUCTS: Seeks to Further Extend DIP Financing Maturity
------------------------------------------------------------------
Specialty Products Holding Corp. and its debtor affiliates seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to enter into the fourth amendment to the $40 million
postpetition credit agreement with Wells Fargo Capital Finance,
LLC, as agent on behalf of a consortium of lenders, and pay
related extension fee.
The Credit Agreement is due to mature on June 2, 2013.
Cognizant of the upcoming maturity of the Credit Agreement, the
Debtors engaged in discussions with the Agent and the Lenders to
extend the term of the Credit Agreement. The Debtors assert that
the availability of sufficient postpetition financing beyond the
current expiration of the Credit Agreement is important to ensure
that they can continue to pay the cost of their Chapter 11 cases
and certain other expenses.
The Fourth Amendment provides that the maturity date of the Credit
Agreement is extended until the earlier of (i) June 2, 2016, (ii)
the effective date of any plan of reorganization or liquidation
for any Debtor in the Chapter 11 cases, (iii) the confirmation of
a plan of reorganization or liquidation and the entry of a
confirmation order that does not (a) contemplate the payment in
full in immediately available funds of all Obligations in
accordance with the terms of the Credit Agreement and the Final
Financing Order and (b) contain customary provisions providing
exculpation from liability for, and a release of claims against,
the Agent and the Lenders.
The Fourth Amendment also provides that an extension fee of
$200,000 is payable within two business days of the date that the
Court enters an order granting the relief sought.
RPM WFG FinishWork Holdings, Inc., FinishWorks, L.L.C.,
FinishWorks, Inc., FinishWorks PA. Inc. and Shieldcoate, Inc.,
which are guarantors under the Credit Agreement, are now
borrowers.
Certain financial covenants and other provisions contained in the
Credit Agreement are also modified or updated to ensure compliance
with applicable financial regulations.
A hearing on the Debtors' request will be held on May 20, 2013, at
9:00 a.m. (EDT). Objections are due May 3.
About Specialty Products
Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM,
Inc., is a wholly owned subsidiary of RPM International Inc. The
Company is the holding company parent of Bondex International,
Inc., and the direct or indirect parent of certain additional
domestic and foreign subsidiaries. The Company claims to be a
leading manufacturer, distributor and seller of various specialty
chemical product lines, including exterior insulating finishing
systems, powder coatings, fluorescent colorants and pigments,
cleaning and protection products, fuel additives, wood treatments
and coatings and sealants, in both the industrial and consumer
markets.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 10-11780) on May 31, 2010. Gregory M. Gordon, Esq.,
Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve
as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary
I. Shapiro, Esq., at Richards Layton & Finger, serve as co-
counsel. Logan and Company is the Company's claims and notice
agent. The Company estimated its assets and debts at $100 million
to $500 million.
The Company's affiliate, Bondex International, Inc., filed a
separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779),
estimating its assets and debts at $100 million to $500 million.
SPENDSMART PAYMENTS: Effects 1-for-15 Reverse Stock Split
---------------------------------------------------------
The stockholders of The SpendSmart Payments Company voted to
approve the filing of a Second Amended and Restated Articles of
Incorporation to effect a reverse stock split of the capital stock
of the Company.
On March 13, 2013, the Company's Board of Directors authorized a
reverse stock split of the Company's capital stock at a ratio of
one-for-fifteen. The Company's Board of Directors authorized the
Reverse Stock Split to take effect on April 12, 2013.
On April 12, 2013, the Company filed the Amended and Restated
Articles with the Secretary of State of the State of Colorado to
effect the Reverse Stock Split. The Amended and Restated Articles
provide that the Reverse Stock Split became effective on April 12,
2013, at which time every 15 shares of the Company's issued and
outstanding capital stock were automatically combined into one
issued and outstanding share of the Company's capital stock.
About The SpendSmart Payments Company
The SpendSmart Payments Company, Inc. (OTCQB: SSPC) -- Making
Money Smarter -- is developing a number of payment solution
options to serve the specific needs of a range of demographic
groups both in the U.S. and internationally. The Company's
payment card products include a card solution for parents who want
to help their teens develop smart spending habits. This card is
an instantly trackable, reloadable MasterCard prepaid card that
lets parents and teens track spending in real time. Features
include the ability to instantly lock, unlock and reload the card
at any time; text alerts to parents and teens showing real-time
transaction details with each purchase; and the freedom and
security of a MasterCard prepaid card without the risk of
overdrafts, accruing debt or affecting credit scores. The
SpendSmart Payments Company provides parents with a modern way to
help teach their teens financial responsibility, when it counts.
BillMyParents incurred a net loss and comprehensive net loss of
$25.71 million for the year ended Sept. 30, 2012, compared with a
net loss and comprehensive net loss of $14.21 million during the
prior year.
BDO USA, LLP, in La Jolla, California, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Sept. 30, 2012. The independent auditors noted that
the Company has incurred net losses since inception and has an
accumulated deficit at Sept. 30, 2012.
The Company's balance sheet at Dec. 31, 2012, showed $6.80 million
in total assets, $18.13 million in total liabilities, all current,
$8.36 million in redeemable series B convertible preferred stock,
$1.03 million in redeemable common stock, and a $20.73 million
total stockholders' deficit.
SPIRIT FINANCE: Urges Stockholders to Approve Merger with Cole
--------------------------------------------------------------
Tom Nolan, chairman and chief executive officer of Spirit Realty
Capital, Inc., sent a letter to stockholders of record as of
April 1, 2013, requesting them to review the recently mailed proxy
materials and encourage stockholders to submit a proxy to vote
their shares on the proposal to approve the merger between Spirit
and Cole Credit Property Trust II, Inc., among other matters. A
copy of the letter is available at http://is.gd/DrezAc
About Spirit Finance
Spirit Finance Corporation, headquartered in Phoenix, Arizona, is
a REIT that acquires single-tenant, operationally essential real
estate throughout United States to be leased on a long-term,
triple-net basis to retail, distribution and service-oriented
companies.
The Company's balance sheet at Sept. 30, 2012, showed $3.20
billion in total assets, $1.98 billion in total liabilities and
$1.22 billion in total stockholders' equity.
* * *
As reported by the TCR on Oct. 9, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Spirit Realty
Capital Inc. (Spirit) to 'B' from 'CCC+' and revised our outlook
on the company to stable from developing. "The upgrade reflects
Spirit Realty Capital Inc.'s successful completion of an IPO of
its common stock, which raised $465 million of net proceeds," said
credit analyst Elizabeth Campbell.
In the Sept. 15, 2011, edition of the TCR, Moody's Investors
Service affirmed the corporate family rating of Spirit Finance
Corporation at Caa1.
"This rating action reflects Spirit's consistent compliance with
its term loan covenants throughout the downturn (despite
relatively thin cushion at certain times), as well as the recent
debt paydown which, in Moody's view, will help Spirit remain in
compliance within the stated covenant limits going forward."
STAMP FARMS: Court OKs Modification of Order, Transfer of Title
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Michigan
entered an order implementing and clarifying order approving bulk
sale of Stamp Farms, L.L.C., et al.'s assets.
Boersen Farms AG, LLC has requested to supplement the Court's
amended order approving bulk sale, and to clarify the transfer of
certain titled vehicles referenced in the purchase agreement
approved by the sale order.
As reported in the Troubled Company Reporter on March 12, 2013,
Stamp Farms was sold to Boersen Farms, Inc., early in February.
According to an AgWeb.com report, a Feb. 5 auction failed to
attract other bidders and, consequently, the bankruptcy judge in
Grand Rapids, Michigan, approved the sale to Boersen Farms for
$22.8 million.
Northstar Grains, which is also owned by Stamp Farm owner Mike
Stamp, was not a part of the purchase and continues to operate
independently of Stamp Farms at this time, according to Ben
Potter, Farm Journal Technology Editor for AgWeb.com.
About Stamp Farms
Stamp Farms, L.L.C., and three affiliates sought Chapter 11
protection (Bankr. W.D. Mich. Lead Case No. 12-10410) on Nov. 30,
2012, in Grand Rapids, Michigan. Stamp Farms began in 1968 with
its purchase of 168 acres of farmland in Decatur, Michigan. The
family was also heavily involved in the swine industry, operating
a 500 sow swine operation until 1995. In 1997, Mike Stamp took
over operations of Stamp Farms' 1500 acres and has grown the farm
operation to cover 20,000+ acres across six southwestern Michigan
counties.
Stamp Farms sells its grain to Northstar Grain, L.L.C., solely
owned by Mike Stamp, which conducts a grain elevator business on
land it owns and leases and upon which buildings, grain storage
bins, grain loading and related equipment and rail spurs are
located.
Stamp Farms estimated at least $10 million in assets and at least
$50 million in liabilities in its bare-bones petition.
Mr. Stamp also filed a Chapter 11 petition (Case No. 12-10430).
Judge Scott W. Dales oversees the case. Stamp Farms has hired the
law firm of Varnum LLP as counsel. O'Keefe & Associates
Consulting, L.L.C. serves as financial restructuring advisors .
The Official Committee of Unsecured Creditors tapped to retain
Robbins, Salomon & Patt, Ltd., as its counsel, and Emerald
Agriculture, LLC, as its financial consultant.
STANFORD GROUP: SEC's Appeal Opposed by Small Brokerages
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that forcing the Securities Investor Protection Corp. to
cover losses by investors in the R. Allen Stanford Ponzi scheme
isn't a merely theoretical discussion, according to papers filed
in the U.S. Court of Appeals in Washington by the Financial
Services Institute Inc.
If the district court ruling is reversed and SIPC is required to
cover Stanford's losses of as much as $500,000 for each customer,
the result "would obviously exhaust SIPC's reserve fund" which
totaled $1.4 billion at the end of 2011, the institute said its
friend-of-the-court brief filed in support of SIPC, according to
the report.
The report recounts that the Securities and Exchange Commission
sued SIPC in December 2011 in U.S. District Court in Washington,
asking the court to force SIPC into taking over the liquidation of
Stanford's brokerage firm, Stanford Group Co. The district judge
ruled against the SEC, concluding that investors in the $7 billion
fraud must be content with being paid from whatever recoveries are
realized from a receivership pending in U.S. District Court in
Texas.
The SEC appealed to the Circuit Court of Appeals in Washington.
The briefs are in aside from the SEC's final papers on May 31.
The institute pointed out in its April 19 brief that SIPC isn't
funded by the federal government. Rather, the money SIPC pays to
customers of failed brokers comes from assessments on the
brokerage industry.
As a representative of more than 100 brokers, the institute said
that assessments "would soar" if SIPC were required "to provide a
general remedy for investment fraud." The institute said that
small brokers "simply do not have the resources to absorb large
and unexpected increases in SIPC fees."
The question before the circuit court is whether the Stanford
victims qualify as "customers" of a broker covered by the
Securities Investor Protection Act. The SEC believes SIPC is
taking too narrow an interpretation of who is a "customer."
SIPC takes the position that investors were customers of an
offshore Stanford bank, not customers of the Stanford brokerage.
Only brokerage customers are covered by the SIPC fund, SIPC
contends.
The appeal is Securities and Exchange Commission v. Securities
Investor Protection Corp., 12-5286, U.S. Court of Appeals for the
District of Columbia Circuit (Washington).
About Stanford Group
The Stanford Financial Group was a privately held international
group of financial services companies controlled by Allen
Stanford, until it was seized by United States (U.S.) authorities
in early 2009.
Domiciled in Antigua, Stanford International Bank Limited --
http://www.stanfordinternationalbank.com/-- is a member of
Stanford Private Wealth Management, a global financial services
network with US$51 billion in deposits and assets under
management or advisement. Stanford Private Wealth Management
served more than 70,000 clients in 140 countries.
On Feb. 16, 2009, the United States District Court for the
Northern District of Texas, Dallas Division, signed an order
appointing Ralph Janvey as receiver for all the assets and
records of Stanford International Bank, Ltd., Stanford Group
Company, Stanford Capital Management, LLC, Robert Allen Stanford,
James M. Davis and Laura Pendergest-Holt and of all entities they
own or control. The February 16 order, as amended March 12,
2009, directs the Receiver to, among other things, take control
and possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
The case in district court was Securities and Exchange Commission
v. Securities Investor Protection Corp., 11-mc-00678, U.S.
District Court, District of Columbia (Washington).
The U.S. Securities and Exchange Commission, on Feb. 17, charged
before the U.S. District Court in Dallas, Texas, Mr. Stanford and
three of his companies for orchestrating a fraudulent, multi-
billion dollar investment scheme centering on an US$8 billion
Certificate of Deposit program.
A criminal case was pursued against him in June before the U.S.
District Court in Houston, Texas. Mr. Stanford pleaded not
guilty to 21 charges of multi-billion dollar fraud, money-
laundering and obstruction of justice. Assistant Attorney
General Lanny Breuer, as cited by Agence France-Presse News, said
in a 57-page indictment that Mr. Stanford could face up to 250
years in prison if convicted on all charges. Mr. Stanford
surrendered to U.S. authorities after a warrant was issued for
his arrest on the criminal charges.
STG-FAIRWAY: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B' corporate credit
rating to St. Petersburg, Fla.-based STG-Fairway Acquisitions Inc.
(doing business as First Advantage Corp.). The outlook is stable.
At the same time, S&P assigned a 'B' issue rating to the first
lien credit facility, which includes a $25 million revolver due
2018 and a $315 million term loan due 2019. The recovery rating
is '3', which indicates S&P's expectation of meaningful recovery
(50% to 70%) for first lien creditors in the event of a payment
default or bankruptcy. S&P also assigned a 'CCC+' issue rating to
the $125 million second lien credit facility due 2019. The
recovery rating is '6', which indicates S&P's expectation of
negligible recovery (0% to 10%) for second lien creditors in the
event of a payment default or bankruptcy.
The ratings on First Advantage reflect Standard & Poor's
assessment of the company's narrow business focus in a highly
fragmented industry with intense pricing pressure. In addition,
integration risks exist with an acquisition of this size, and
future growth opportunities are limited without the pursuit of
additional acquisitions. The ratings also reflect S&P's forecast
for credit ratios to remain weak, and its opinion that financial
policy is "aggressive," given the financial sponsor ownership.
"LexisNexis has achieved many operating efficiency enhancements
since 2009, as seen in its reduction of operating expenses since
then," said Standard & Poor's credit analyst Brian Milligan. "It
is unclear how efficiently the migration will occur given the
large size of both companies."
STONE ROSE: Files Chapter 11 Petition in Chicago
------------------------------------------------
Aurora, Illinois-based Stone Rose, LP, filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 13-16410) in Chicago, Illinois, on
April 19, 2013.
Stone Rose disclosed $16.5 million in total assets and
$6.93 million in total liabilities in its schedules.
The Debtor owns 82 acres of vacant land at 123rd St and Parallel
Pky, in Kansas City, Missouri, which is valued at $4 million, and
serves as collateral for a $2 million debt to Metcalf Bank.
The Debtor also has a 75% interest as a member of Big House
Investments, LLC, which owns 17 acres of vacant land at 110th St.
and I-70 in Edwardsville, Kansas. The land is subject to a
contract for sale for $6 million and is subject to a $4.0 million
mortgage in favor of Metcalf Bank.
A copy of the schedules is available for free at
http://bankrupt.com/misc/ilnb1-13-bk-16410.pdf
The Debtor is represented by G. Alexander McTavish, Esq., at
Myler, Ruddy & McTavish, in Aurora.
STRATUS MEDIA: Incurs $6.8 Million Net Loss in 2012
---------------------------------------------------
Stratus Media Group, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $6.84 million on $374,542 of total revenues for the
year ended Dec. 31, 2012, as compared with a net loss of $23.63
million on $570,476 of total revenues for the year ended Dec. 31,
2011.
The Company's balance sheet at Dec. 31, 2012, showed $2.44 million
in total assets, $20.85 million in total liabilities, all current,
and a $18.40 million total shareholders' deficit.
Goldman Kurland and Mohidin LLP, in Encino, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that Stratus Media has suffered recurring losses
and has negative cash flow from operations which conditions raise
substantial doubt as to the ability of the Company to continue as
a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/eziNKc
About Stratus Media
Santa Barbara, Calif.-based Stratus Media Group, Inc., is an
owner, operator and marketer of live sports and entertainment
events. Subject to the availability of capital, the Company
intends to aggregate a large number of complementary live sports
and entertainment events across North America and internationally.
SUNVALLEY SOLAR: Incurs $1.7 Million Net Loss in 2012
-----------------------------------------------------
Sunvalley Solar, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$1.76 million on $3.74 million of revenue for the year ended
Dec. 31, 2012, as compared with a net loss of $398,866 on
$5.82 million of revenue for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $6.13 million
in total assets, $5.51 million in total liabilities and $622,253
in total stockholders' equity.
Sadler, Gibb & Associates, LLC, in Salt Lake City, UT, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company had losses from operations of
$1,767,902 and accumulated deficit of $3,125,692, which raises
substantial doubt about its ability to continue as a going
concern.
A copy of the Form 10-K is available for free at:
http://is.gd/IXejoT
About Sunvalley Solar
Sunvalley Solar, Inc., is a California-based solar power
technology and system integration company. Since the inception of
its business in 2007, the company has focused on developing its
expertise and proprietary technology to install residential,
commercial and governmental solar power systems.
SUPERMEDIA INC: Publisher Breached License, Photo Agency Says
-------------------------------------------------------------
Stewart Bishop of BankruptcyLaw360 reported that Yellow Pages
Photos Inc. on Thursday asked a Delaware bankruptcy judge to allow
the photo licensing agency to subpoena documents from bankrupt
yellow pages publisher SuperMedia LLC, saying it is seeking
evidence of a purported breach of its licensing agreement with the
debtor.
According to the report, Florida-based Yellow Pages Photo contends
that SuperMedia has broken the accord granting it leave to use the
photo agency's copyrighted pictures by allowing more than 600
authorized users access to the images and allowing the transfer of
the pictures to third-party subcontractors.
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.
T3 MOTION: Incurs $21.5 Million Net Loss in 2012
------------------------------------------------
T3 Motion, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$21.52 million on $4.51 million of net revenues for the year ended
Dec. 31, 2012, as compared with a net loss of $5.50 million on
$5.29 million of net revenues during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $3.75 million
in total assets, $20.01 million in total liabilities and a $16.26
million total stockholders' deficit.
KMJ Corbin & Company LLP, in Costa Mesa, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has incurred significant operating
losses and has had negative cash flows from operations since
inception, and at Dec. 31, 2012, has an accumulated deficit of
$76,414,771. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/GFgOPg
About T3 Motion
Costa Mesa, Calif.-based T3 Motion, Inc., develops and
manufactures T3 Series vehicles, which are electric three-wheel
stand-up vehicles that are directly targeted to the public safety
and private security markets.
TANGLEWOOD FARMS: C.A. Perry Won Dismissal of Turnover Suit
-----------------------------------------------------------
Bankruptcy Judge J. Rich Leonard has dismissed the adversary
complaint captioned JAMES B. ANGELL, CHAPTER 7, TRUSTEE, Plaintiff
v. C.A. PERRY & SON, INC., Defendant, Adv. No. 12-00189-8-JRL
(Bankr. E.D.N.C.).
Plaintiff James B. Angell serves as Chapter 7 trustee of
Tanglewood Farms, Inc. of Elizabeth City, which filed for
bankruptcy protection in 2010. The Debtor's case was converted
into a Chapter 7 proceeding in July 2011. The Debtor had granary
operations in Pasquotank County, North Carolina. Defendant C.A.
Perry & Sons, Inc. is a grain dealer and sells fertilizer. For
years, C.A. Perry sold fertilizer, lime and rock to the Debtor
while the Debtor regularly sold to and stored grain for C.A.
Perry.
The parties' dispute stemmed from C.A. Perry's discovery in 2010
that a substantial portion of the grain it stored with the Debtor
was sold to various third parties without its knowledge or
consent. Due to this, C.A. Perry removed its grains from the
Debtor's facility.
The 4-count complaint was filed by the Trustee in August 2012,
seeking turnover of property of the estate and avoidance of
alleged preferential and fraudulent transfers -- all in relation
to the removal of C.A. Perry's grains from the Debtor's granary.
C.A. Perry moved for dismissal of the action in October 2012.
On review, Judge Leonard opined, "The trustee's complaint does not
allege nor state any facts to support the reasonable inference
that the defendant was in possession or retained control of the
grain it seized from the debtor's granary facility after August
20, 2010, the date of the debtor's bankruptcy filing.
Accordingly, the portion of the defendant's grain seized from the
debtor's granary facility between February and April 2010, is not
subject to turnover, and the defendant, not having possessed it
during the bankruptcy proceedings need not account for the grain
nor its value."
The Bankruptcy Court also held that it is not plausible that the
defendant was an insider and thus, the trustee's claim seeking
avoidance of a preferential transfer under Sec. 547 of the
Bankruptcy Code must be dismissed for failure to state a claim
upon which relief can be granted.
Moreover, the Court found it implausible that C.A. Perry's taking
back of its grain was a fraudulent act. "There are no allegations
of how much of the debtor's grain remained in the silos that the
defendant 'cleaned out.' The trustee has failed to plead this
with particularity," Judge Leonard said.
Accordingly, C.A. Perry's motion to dismiss is granted, the Court
ruled.
A copy of Judge Leonard's Arpil 4, 2013 Order is available at
http://is.gd/tczCWwfrom Leagle.com.
About Tanglewood Farms, and
James Howard and Billie Reid Winslow
Based in Elizabeth City, North Carolina, Tanglewood Farms, Inc.
of Elizabeth City filed for Chapter 11 bankruptcy protection on
August 20, 2010 (Bankr. E.D.N.C. Case No.10-06719). Trawick H.
Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., represents the
Debtor. The Debtor estimated assets between $1 million and
$10 million, and debts between $10 million and $50 million.
The debtor, a granary operation in Pasquotank County, North
Carolina, was operated by its president and sole shareholder,
James Howard Winslow. In that capacity, Mr. Winslow oversaw and
made operational decisions regarding the granary and facilitated
the exchange of corn, wheat, and soybeans between the debtor,
Winslow Farms, Mr. Winslow's personal farming operation, and other
local farmers.
James H. Winslow and his wife, Billie Reid Winslow, filed for
Chapter 11 (Bankr. E.D.N.C. Case No. 10-06745) on Aug. 23, 2010.
The Court denied a request to consolidate the Winslows' individual
case with the debtor's case on Feb. 18, 2011.
The Tanglewood Farms case was converted to one under chapter 7 on
July 12, 2011. James B. Angell serves as Chapter 7 trustee.
TARGETED MEDICAL: Amends 25.7MM Common Shares Resale Prospectus
---------------------------------------------------------------
Targeted Medical Pharma, Inc., filed with the U.S. Securities and
Exchange Commission an amendment to its Form S-1 prospectus
relating to the offer for sale of 25,723,395 shares of common
stock, par value $0.001 per share, by the existing holders of the
securities. The Company will not receive any proceeds from the
sale of the common shares by the selling stockholders. A copy of
the amended prospectus is available at http://is.gd/uSSKrj
About Targeted Medical
Los Angeles, Calif.-based Targeted Medical Pharma, Inc., is a
specialty pharmaceutical company that develops and commercializes
nutrient- and pharmaceutical-based therapeutic systems.
Targeted Medical disclosed a comprehensive loss of $9.58 million
on $7.29 million of total revenue for the year ended Dec. 31,
2012, as compared with a comprehensive loss of $4.18 million on
$8.81 million of total revenue during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed
$11.77 million in total assets, $13.77 million in total
liabilities, and a $2 million total shareholders' deficit.
EFP Rotenberg, LLP, in Rochester, New York, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has losses for the year ended Dec. 31, 2012,
totaling $9,586,182 as well as accumulated deficit amounting to
$13,684,789. Further the Company does not have adequate cash and
cash equivalents as of Dec. 31, 2012, to cover projected operating
costs for the next 12 months. As a result, the Company is
dependent upon further financing, related party loans, development
of revenue streams with shorter collection times and accelerating
collections on the Company's physician managed and hybrid revenue
streams.
TELETOUCH COMMUNICATIONS: Posts $10,000 Income in Feb. 28 Qtr.
--------------------------------------------------------------
Teletouch Communications, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $10,000 on $4.71 million of total operating revenues
for the three months ended Feb. 28, 2013, as compared with a net
loss of $3 million on $5.26 million of total operating revenues
for the three months ended Feb. 29, 2012.
For the nine months ended Feb. 28, 2013, the Company incurred a
net loss of $622,000 on $14.94 million of total operating
revenues, as compared with net income of $4 million on $19.02
million of total operating revenues for the nine months ended
Feb. 29, 2012.
The Company's balance sheet at Feb. 28, 2013, showed $10.38
million in total assets, $16.91 million in total liabilities and a
$6.53 million total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/slAxeN
About Teletouch
Teletouch Communications, Inc., offers a comprehensive suite of
wireless telecommunications solutions, including cellular, two-way
radio, GPS-telemetry and wireless messaging. Teletouch is an
authorized provider of AT&T (NYSE: T) products and services
(voice, data and entertainment) to consumers, businesses and
government agencies, as well as an operator of its own two-way
radio network in Texas. Recently, Teletouch entered into national
agency and distribution agreements with Sprint (NYSE: S) and
Clearwire (NASDAQ: CLWR), providers of advanced 4G cellular
network services. Teletouch operates a chain of 26 retail and
agent stores under the "Teletouch" and "Hawk Electronics" brands,
in conjunction with its direct sales force, customer care (call)
centers and various retail eCommerce Web sites including:
http://www.hawkelectronics.com/and http://www.hawkexpress.com/
Through its wholly-owned subsidiary, Progressive Concepts, Inc.,
Teletouch operates a national distribution business, PCI
Wholesale, primarily serving large cellular carrier agents and
rural carriers, as well as auto dealers and smaller consumer
electronics retailers, with product sales and support available
through http://www.pciwholesale.com/and
http://www.pcidropship.com/among other B2B oriented Web sites.
BDO USA, LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statement for the year
ended May 31, 2012. The independent auditors noted that the
Company has increasing working capital deficits, significant
current debt service obligations, a net capital deficiency along
with current and predicted net operating losses and negative cash
flows which raise substantial doubt about its ability to continue
as a going concern.
TELETOUCH COMMUNICATIONS: Appoints Directors to Board Committees
----------------------------------------------------------------
On March 28, 2013, Teletouch Communications, Inc., disclosed that
it received a written communication on behalf of Stratford Capital
Partners, L.P., and Retail & Restaurant Growth Capital, L.P.,
submitting written consents of certain shareholders of the Company
relating to certain shareholder proposals. The shareholder
proposals included, among other things, appointment of Joseph L.
Harberg, Raymond C. Hemmig, Scott M. Kleberg, David W. Knickel and
Charles Daniel Yost to serve as directors of the Company.
Stratford/RRGC voted 17,610,000 and 11,740,000 shares of the
Company's common stock each entity beneficially owns on each of
the shareholder proposals, respectively, and Lazarus Investment
Capital Partners LLLP voted 5,285,397 shares of the Company's
common stock on the same proposals, which, in toto, represent
approximately 70.3% of the Company's outstanding common stock as
of March 22, 2013; as of the same date, the Company had 49,272,733
shares of common stock outstanding.
In the process of verifying common stock record ownership of each
of the shareholders that executed the Consent of Shareholders and,
specifically, of reconciling Lazarus's share ownership set forth
in its Consent of Shareholders with its public filings with the
SEC and with the Company's list of record holders, it came to the
Company's attention that the consent of Lazarus was not executed
by the broker listed as the record holder of the shares of the
Company's outstanding common stock purported to be beneficially
owned by Lazarus as of the time of the execution of its Consent of
Shareholders, which called into question whether, as of March 22,
2013, the Board Appointees had been properly appointed to the
Board under Delaware law.
On April 8, 2013, the foregoing deficiency was remedied by the
delivery by Stratford/RRGC (as re-executed by Lazarus and executed
by the record holder of the shares beneficially owned by Lazarus)
of a shareholder consent representing the Lazarus Shares dated as
of April 8, 2013.
On April 11, 2013, the Board, including the Board Appointees,
convened a special meeting to approve, authorize and ratify all of
the actions that had been taken by them during the time period
from March 22, 2013, to April 8, 2013.
The Board has appointed directors to Board committees and
designated the chairman of each committee as follows:
(i) Audit Committee membership:
Scott M. Kleberg (Chairman), Charles Daniel Yost.
(ii) Compensation Committee membership:
Charles Daniel Yost (Chairman), David W. Knickel and Joseph
L. Harberg.
(iii) Nominating and Corporate Governance
Committee Membership:
Raymond C. Hemmig (Chairman), Scott M. Kleberg and David W.
Knickel.
Also, Raymond C. Hemmig was designated as the Lead Independent
Director of the Board. The Board designated this new position to
serve in a lead capacity to coordinate the activities of the other
non-employee, independent directors and to perform such other
duties and responsibilities as the Board may determine. The
duties and responsibilities of the Lead Independent Director will
be governed by a written charter to be adopted by the Bord.
The Board also established a fully empowered Special Committee to
investigate alleged violations of Section 16(b) of the Securities
Exchange Act of 1934, as amended, in connection with certain
transactions in August 2011 and following that date involving
certain affiliated persons and entities. The committee is
comprised of Scott M. Kleberg and Charles Daniel Yost. The
Special Committee is delegated the unlimited authority, without
further authorization from the Board, to consider any and all
matters that it may consider relevant or related to the foregoing
Section 16(b) related matters.
CFO Severance Related
In order to encourage Douglas E. Sloan's (the Chief Financial
Officer of the Company) retention and continued employment at the
Company, the Board determined that in the event of a not for cause
termination of his employment by the Company, he will be entitled
to receive and the Company will be obligated to pay him a
severance amount equal to one half (1/2) of his base salary in
effect immediately prior to the date of that termination. The
Board also instructed the Compensation Committee to consider and
recommend terms for Mr. Sloan's employment at the Company going
forward.
Non-Renewal of Executive Employment Agreements
On Dec. 31, 2008, the Board of Directors of Teletouch
Communications approved an executive employment agreement with an
effective date of June 1, 2008, by and between the Company and
Robert M. McMurrey, as the Company's Chairman and Chief Executive
Officer. The McMurrey Agreement had an initial term commencing on
June 1, 2008, and ending May 31, 2011, and by its terms
automatically renewed for successive additional one year terms,
unless either the Company or Mr. McMurrey gave the other party an
advance written notice not to renew the McMurrey Agreement. By
its terms, on May 31, 2012, the McMurrey Agreement automatically
renewed for an additional one year term ending May 31, 2013.
Also, on Dec. 31, 2008, the Board of the Company approved an
executive employment agreement with an effective date of June 1,
2008, by and between the Company and Thomas A. "Kip" Hyde, Jr., as
the Company's President and Chief Operating Officer. The Hyde
Agreement provided for an initial term commencing on June 1, 2008,
and ending May 31, 2011, and automatically renewed for successive
additional one year terms, unless either the Company or Mr. Hyde
gave the other party an advance written notice not to renew the
Hyde Agreement. By its terms, on May 31, 2012, the Hyde Agreement
automatically renewed for an additional one year term ending
May 31, 2013.
On April 1, 2013, the Board Appointees gave written notices to
each of Messrs. McMurrey and Hyde that the McMurrey Agreement and
the Hyde Agreement would not be renewed and would therefore expire
on May 31, 2013. Said notices were notices of non-renewal of
those employment agreements, and did not terminate Messrs.
McMurrey's or Hyde's respective employment with the Company. The
notices stated, in respective parts, that the Board desires that
Messrs. McMurrey and Hyde remain employed by the Company, with the
future terms of such employment to be determined after the
Company's Compensation Committee recommends and the Board adopts
policies for the employment of executives of the Company. Messrs.
McMurrey and Hyde have notified the Company that they dispute the
legal effect of the above-described notices, and they believe that
their respective employment agreements have automatically renewed
for an additional one year term ending May 31, 2014.
Bylaw Amendment
Effective as of April 11, 2013, the Board, by the affirmative vote
of at least a majority of its members, voted to amend Article II,
Section 2.5. Special Meetings of the Company's Bylaws, as amended
to date to read in its entirety as follows:
"Section 2.5. Special Meeting. Special meetings of the Board for
any purpose or purposes may be called at any time by the Chairman
of the Board, the chief executive officer, the secretary or any
two directors then in office.
The same provision, prior to the foregoing amendment, read, in its
entirety, as follows:
"Section 2.5. Special Meeting. Special meetings of the board of
directors shall be held whenever called by direction of the
chairman or vice-chairman of the board, the president, an
executive vice president or two-thirds of the directors then in
office.
A complete copy of the Form 8-K is available for free at:
http://is.gd/6LcDvr
About Teletouch
Teletouch Communications, Inc., offers a comprehensive suite of
wireless telecommunications solutions, including cellular, two-way
radio, GPS-telemetry and wireless messaging. Teletouch is an
authorized provider of AT&T (NYSE: T) products and services
(voice, data and entertainment) to consumers, businesses and
government agencies, as well as an operator of its own two-way
radio network in Texas. Recently, Teletouch entered into national
agency and distribution agreements with Sprint (NYSE: S) and
Clearwire (NASDAQ: CLWR), providers of advanced 4G cellular
network services. Teletouch operates a chain of 26 retail and
agent stores under the "Teletouch" and "Hawk Electronics" brands,
in conjunction with its direct sales force, customer care (call)
centers and various retail eCommerce Web sites including:
http://www.hawkelectronics.com/and http://www.hawkexpress.com/
Through its wholly-owned subsidiary, Progressive Concepts, Inc.,
Teletouch operates a national distribution business, PCI
Wholesale, primarily serving large cellular carrier agents and
rural carriers, as well as auto dealers and smaller consumer
electronics retailers, with product sales and support available
through http://www.pciwholesale.com/and
http://www.pcidropship.com/among other B2B oriented Web sites.
BDO USA, LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statement for the year
ended May 31, 2012. The independent auditors noted that the
Company has increasing working capital deficits, significant
current debt service obligations, a net capital deficiency along
with current and predicted net operating losses and negative cash
flows which raise substantial doubt about its ability to continue
as a going concern.
The Company's balance sheet at Nov. 30, 2012, showed $11.35
million in total assets, $18.11 million in total liabilities and a
$6.75 million total shareholders' deficit.
TERCON INVESTMENT: Canadian Proceedings Recognized in U.S. Courts
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Alaska recognized
the Canadian Proceedings of Tercon Investments Ltd. as foreign
main proceedings pursuant to Section 1517 of the Bankruptcy Code.
The order acknowledged that the Chapter 15 cases were properly
commenced pursuant to Sections 1504 and 1515 of the Bankruptcy
Code. The Canadian Proceedings are pending in Canada, which is
the location of each Debtor's center of main interests and as
such, constitute foreign main proceedings pursuant to Section
101(24) of the Code.
About Tercon Investment
The receiver of Kamloops, British Columbia-based Tercon
Investments Ltd. filed a Chapter 15 petition recognition of a
foreign main proceeding for Tercon on Jan. 11, 2013 (Bankr. D.
Alaska Case No. 13-00015) in Anchorage. The receiver, as foreign
representative, is represented in the Chapter 15 case by Cabot C.
Christianson, Esq., at Christianson & Spraker, in Anchorage,
Alaska. On Dec. 14, 2012, FTI Consulting Canada Inc. was
appointed as receiver pursuant to an Order of the Supreme Court of
British Columbia of all the assets, undertakings and properties of
Tercon Investments and its subsidiaries.
THERMOENERGY CORP: David Keller Replaces Cary Bullock as Director
-----------------------------------------------------------------
Cary G. Bullock resigned as a member of ThermoEnergy Corporation's
Board of Directors on April 15, 2013. On the same date, Mr.
Bullock also resigned as a director, officer or manager of each of
the Company's subsidiaries or affiliates in which he held office,
including, without limitation, as a member of the Board of
Directors of the Company's subsidiary, CASTion Corporation.
Mr. Bullock had been a member of the Company's Board of Directors
since January 2010 and, until his retirement in December 2012, he
was the Company's Chief Executive Officer. Mr. Bullock served as
one of the three directors elected by the holders of the Company's
Common Stock and Series A Convertible Preferred Stock (voting
together as a single class).
Mr. Bullock's resignation is not due to a disagreement with the
Company's Board of Directors or the Company's management on any
matter relating to the Company's operations, policies or
practices.
Also on April 15, 2013, the Company's Board of Directors elected
David L. Keller as a director to fill the vacancy created by the
resignation of Mr. Bullock. Mr. Keller will serve as a member of
the Audit and Nominating Committees of the Company's Board of
Directors. In connection with his election to the Company's Board
of Directors, Mr. Keller was also elected as a director of the
Company's subsidiary, CASTion Corporation.
Mr. Keller, who is 59 years old, served as President, Chief
Executive Officer and Director of Global Power Equipment Group
Inc., a comprehensive provider of power generation equipment and
modification and maintenance services for customers in the
domestic and international energy, power infrastructure and
service industries, from September 2009 until his retirement in
June 2012 and, following his retirement, continued to serve Global
Power Equipment Group Inc. as a consultant until March 2013.
Mr. Keller served as the President and Chief Operating Officer of
The Babcock & Wilcox Company, a wholly owned subsidiary of
McDermott International, Inc., from March 2001 until his
retirement in June 2007. Mr. Keller's prior position was
President of Diamond Power International, Inc., a wholly owned
subsidiary of B&W, from March 1998 to February 2001. During his
tenure with B&W, Mr. Keller served as a Board Chairman or Director
of subsidiaries and joint ventures in the People's Republic of
China, Denmark, the United Kingdom, Australia and South Africa.
Mr. Keller holds a Bachelor of Science degree in Mathematics from
the University of Akron. He brings to the Board of Directors a
comprehensive knowledge of the power generation industry. In
addition to his experience and understanding in the industry, Mr.
Keller also has significant executive management experience,
having directly overseen sales, manufacturing, accounting, legal,
supply chain and personnel functions of a business whose revenues
reached approximately $2 billion under his management.
Mr. Keller will be paid a quarterly director's fee of $5,000 and
will be reimbursed for his reasonable travel and business expenses
incurred in connection with his service as a member of the
Company's Board of Directors. Pursuant to the Company's 2008
Incentive Stock Plan, Mr. Keller, as a non-employee director, was
automatically granted an option to purchase 100,000 shares of our
Common Stock at an exercise price of $0.0468 per share (the
closing price of the Company's Common Stock in the over-the-
counter market on April 12, 2013, the trading day immediately
preceding his election). This option vests and becomes
exercisable on the date of the Company's 2013 Annual Meeting of
Stockholders and has a term of ten years.
There is no arrangement or understanding between Mr. Keller and
any other person pursuant to which he was elected as member of the
Company's Board of Directors and there are no family relationships
between Mr. Keller and any of the Company's executive officers or
any other members of the Company's Board of Directors.
About ThermoEnergy Corporation
Little Rock, Ark.-based ThermoEnergy Corporation is a clean
technologies company engaged in the worldwide development of
advanced municipal and industrial wastewater treatment systems and
carbon reducing clean energy technologies.
The Company incurred a net loss of $7.38 million for the year
ended Dec. 31, 2012, as compared with a net loss of $17.38 million
on $5.58 million of revenue in 2011.
The Company's balance sheet at Dec. 31, 2012, showed $9.03 million
in total assets, $19.64 million in total liabilities and a $10.61
million total stockholders' deficiency.
Grant Thornton LLP, in Westborough, Massachusetts, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company incurred a net loss of $7,382,000 during the year
ended Dec. 31, 2012, and, as of that date, the Company's current
liabilities exceeded its current assets by $7,094,000 and its
total liabilities exceeded its total assets by $10,611,000. These
conditions, among other factors, raise substantial doubt about the
Company's ability to continue as a going concern.
THQ INC: Completes Bidding & Sale Process of IP Assets
------------------------------------------------------
THQ Inc. on April 22 disclosed that it has completed the bidding
and sale process on certain of its intellectual properties (IP)
with three buyers emerging to pay $6.55 million for the six
available lots, subject to Bankruptcy Court approval. The company
was set to file its motions on April 22 with the Bankruptcy Court
to obtain approval of these proposed sales.
The $6.55 million sale of the IP assets breaks down as follows:
-- $4.9 million from Nordic Games Licensing AB, a Swedish-based
video games publisher, for Darksiders, Red Faction, MX vs ATV,
Other Owned Software (includes Destroy all Humans!, Summoner and
more), and Other Licensed Software (includes Marvel Super Hero
Squad, Supreme Commander and more);
-- $1.35 million from Gearbox Software, LLC, a Plano, Tex.-based
developer of interactive entertainment, for Homeworld; and
-- $.3 million from 505 Games Srl, an Italian video game
publisher, for Drawn to Life and Drawn to Life: The Next Chapter.
The company expects the Bankruptcy Court to hear the sales motions
on May 13, 2013 and to finalize the sale transactions thereafter.
On April 18, the company filed its Chapter 11 Plan of Liquidation
and Disclosure Statement with the Court. The Plan outlines how
certain classes of claims will be satisfied. Once the Court
approves the Disclosure Statement, voting on the Plan by certain
impaired classes will commence. Both documents are available for
review online at http://www.kccllc.net/thq
THQ and its domestic business units filed voluntary petitions
under Chapter 11 of the U.S. Bankruptcy Court for the District of
Delaware on Dec. 19, 2012.
About THQ Inc.
THQ Inc. (NASDAQ: THQI) -- http://www.thq.com/-- is a worldwide
developer and publisher of interactive entertainment software.
The Company develops its products for all popular game systems,
personal computers, wireless devices and the Internet.
Headquartered in Los Angeles County, California, THQ sells product
through its network of offices located throughout North America
and Europe.
THQ Inc. and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 12-13398) on Dec. 19, 2012.
Attorneys at Young Conaway Stargatt & Taylor, LLP and Gibson, Dunn
& Crutcher LLP serve as counsel to the Debtors. FTI Consulting
and Centerview Partners LLC are the financial advisors. Kurtzman
Carson Consultants is the claims and notice agent.
Before bankruptcy, Clearlake signed a contract to buy Agoura THQ
for a price said to be worth $60 million. After a 22-hour auction
with 10 bidders, the top offers brought a combined $72 million
from several buyers who will split up the company. Judge Walrath
approved the sales in January. Some of the assets didn't sell,
including properties the company said could be worth about $29
million.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five
persons to serve in the Official Committee of Unsecured Creditors.
The Committee tapped Houlihan Lokey Capital as its financial
advisor and investment banker, Landis Rath & Cobb as co-counsel
and Andrews Kurth as counsel.
TN-K ENERGY: Reports $3.9 Million Net Income in 2012
----------------------------------------------------
TN-K Energy Inc. filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing net income of
$3.97 million on $1.88 million of total revenue for the year ended
Dec. 31, 2012, as compared with net income of $1.25 million on
$1.88 million of total revenue in 2011.
The Company's balance sheet at Dec. 31, 2012, showed $2.59 million
in total assets, $3.96 million in total liabilities and a $1.37
million total stockholders' deficit.
Liggett, Vogt & Webb, P.A., in New York, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that
the Company has incurred recurring operating losses and will have
to obtain additional financing to sustain operations. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/IsOLbc
About TN-K Energy
Crossville, Tenn.-based TN-K Energy Group, Inc., an independent
oil exploration and production company, engaged in acquiring oil
leases and exploring and developing crude oil reserves and
production in the Appalachian basin.
TOLL ROAD INVESTORS: Fitch Cuts Rating on $1BB Revenue Bond to BB+
------------------------------------------------------------------
Fitch Ratings has downgraded the Toll Road Investors Partnership
II's rating on approximately $1 billion in outstanding revenue
bonds, series 1999 and 2005 to 'BB+' from 'BBB-'.
The Rating Outlook is Stable.
The downgrade to 'BB+' reflects the Dulles Greenway's relatively
high leverage combined with expected thin coverage and dependence
on future toll increases despite already above average toll rates.
Despite the presence of cash trapping and a flexible amortization
profile, Fitch views these combined factors as inconsistent with
'BBB' category risk.
KEY RATING DRIVERS:
-- Commuter Base From Strong Service Area, Though Alternatives
Exist: Fitch believes the Greenway's metro DC service area
supports strong inherent demand and has long term growth
potential despite housing induced weakness experienced during
the recent economic downturn. Greenway traffic, which is
primarily commuter in nature and has exhibited declines back
to 2005, has in part been affected by improvements in
alternative routes and a series of significant toll increases.
-- Moderate Ratemaking Flexibility: Congestion management and base
toll rates per mile of $0.35 and $0.29, respectively, are among
the highest relative to peers and perceived rates are likely
considered to be higher among those who take shorter trips.
While toll rates are considered high, the Greenway is expected
to have the flexibility to implement inflationary annual toll
increases to meet growing debt service obligations. Scheduled
annual increases through 2020, with the first being recently
implemented in January 2013, have already been approved by the
Virginia State Corporation Commission (SCC).
-- Fully Amortizing, Back Loaded Debt With Flexible Structure: The
debt service profile steadily increases to maximum annual debt
service of $84.7 million at final maturity in 2056, reflecting
mandatory redemptions. The Greenway's debt structure provides
flexibility to mitigate potential shortfalls in revenue to meet
planned debt service payments in the form of lower required
principal prepayments on the series 2005 debt (without which
debt service balloons in 2036) and two triggers for cash
trapping.
-- High Leverage With Thin Debt Service Coverage: Leverage is high
at over 16 times (x). The facility is dependent on continued
toll rate increases and traffic and revenue growth through
maturity to maintain minimum coverage levels at or above 1.25x.
While the minimum debt service coverage threshold has been
violated in recent years and is likely to continue to be in the
near-to-medium term, the requirement to annually trap excess
revenues when violations occur somewhat mitigates this factor.
RATING SENSITIVITIES:
-- Stagnation in the traffic profile with weak revenue growth that
results in debt service coverage levels consistently below 1.1x
could pressure the rating.
-- Further capacity enhancements on competing free routes, or
significant diversions resulting from the Dulles Metrorail
project that reduces the Greenway's value of time advantage
would likely weaken credit quality.
SECURITY:
The bonds are secured by a pledge of net revenues.
CREDIT UPDATE:
Traffic on the Dulles Greenway has declined annually between 2005
and 2011, reflecting the combined effects of the economic
downturn, the impact of improvements along competing Route 28 that
enhance the attractiveness of the toll free alternative, and a
series of significant toll rate increases. The 2.6% decline for
2011 was slightly lower than that seen in 2010 during which the
peak toll rate increased 12.5% mid-year and traffic performance in
2012 was relatively flat. Data through mid-April 2013 indicates
that traffic is down slightly by 0.6% when compared with the same
period in 2012, with some of this underperformance likely due to
the falling of the Easter holiday in March of this year versus
April of last. As traffic on the Dulles Greenway is primarily
driven by commuters, revenue performance will largely be dependent
on elasticity of demand and the economic performance of the
region. The unemployment rate in Loudoun County is currently below
4%, much lower than the national average.
The impact of the traffic declines has been more than offset by
the impact of toll increases, resulting in growing toll revenues.
In 2011, toll revenues grew by 2.6% to $66.6 million and 2012 saw
continued growth of just over 8% to $72 million, a rate of growth
consistent with the peak toll increase that took effect in January
2012. Year over year toll revenues through mid-April 2013 are up
by approximately 1.2% following a 2.5% toll increase effective in
mid-January. This increase was the first of those which will occur
annually through January 2020 pursuant to an SCC approved formula
equal to the greater of the consumer price index plus 1%, real GDP
growth, or 2.8%. The SCC may allow a greater increase if the
following three criteria are met: an independent traffic and
revenue study finds that tolls will be insufficient to meet
minimum coverage ratios, proposed tolls will not materially
discourage use of the roadway, and the proposed tolls provide the
operator no more than a reasonable rate of return. Fitch views
favorably the scheduled toll hikes given the certainty they
provide, though Fitch does note that a member of the state
legislature earlier this year has called for the SCC to review the
Greenway's tolling practices with a request that they be lowered.
Fitch will monitor events on this front.
Debt service coverage for fiscal 2012 was 1.15x (based on the
mandatory redemption schedule). In years where debt service
coverage falls below the minimum coverage ratio of 1.25x, excess
cashflows must be trapped in the early redemption reserve fund for
one year. In the event debt service coverage falls below 1.15x,
excess cashflows are required to be trapped for three years. An
early redemption reserve is required to be maintained at a minimum
of $42.35 million and given cash trapping in prior years, the
reserve grew to hold approximately $32.8 million above that total
by fiscal 2011. Between late fiscal 2011 and early fiscal 2012,
the partnership used the excess balance to redeem $63.5 million in
face value maturing between 2018 and 2021. Additionally, a senior
debt service reserve fund (DSRF) is present, funded at $84.7
million with $39.7 million in cash and the balance represented by
an MBIA surety. Together, the DSRF and early redemption reserve
provide adequate liquidity to support any shortfalls in the medium
term. Total Greenway liquidity at the end of March 2013, inclusive
of the reserves noted above, was approximately $100 million which
serves as an added mitigant to near term risk.
Fitch's base case assumes traffic growth of less than 1% from
2013, and in this scenario actual debt service coverage based on
the mandatory redemption schedule should remain below the minimum
coverage level requiring continued trapping of cash in the near
term but then grows to over 1.45x in 2018 reflecting early debt
redemptions effected in 2011 and 2012. Despite the fact that
actual coverage is projected to be above the minimum coverage
level, the Greenway will not be able to make distributions to
investors as, pursuant to the Seventh Supplemental Trust
Agreement, the test must be calculated without regard to the
effects of the early redemptions and per that calculation
projected coverage in 2018 is 1.22x. Fitch notes that the
flexibility of the debt structure allows for lower scheduled debt
service payments, which provides some relief in the near term but
only increases the burden in the back end. Under a rating case
with traffic declining longer term, coverage ratios drop to just
over 1.0x. Should this traffic profile play out and be viewed as
more permanent, negative rating action would be likely.
TOUSA INC: Cash Collateral Use Extended Until Aug. 31
-----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, entered a 13th interim order authorizing
TOUSA, Inc., et al., to further access the cash collateral
securing their prepetition indebtedness from May 1 through Aug.
31, 2013, subject to the compliance of certain financial
covenants.
A hearing to consider entry of the Interim Cash Collateral Order
on a final basis is scheduled for May 16, 2013 at 1:30 p.m. (ET).
Any party-in-interest objecting to the entry of the Final Order
must file a written objection with the Court no later than May 11.
A full-text copy of the 13th Interim Cash Collateral Order with
Budget is available for free at:
http://bankrupt.com/misc/TOUSAcashcollord0405.pdf
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA, Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate
Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case
No. 08-10928). Richard M. Cieri, Esq., M. Natasha Labovitz,
Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in
New York, N.Y.; and Paul S. Singerman, Esq., at Berger Singerman,
in Miami, Fla., represent the Debtors in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and
debts of $1 million to $10 million in its Chapter 11 petition.
The official committee of unsecured creditors has filed a proposed
chapter 11 liquidating plan for Tousa. However, the committee
said it would no longer pursue approval of its liquidation plan
because of the pending appeal of its fraudulent transfer case in
the U.S. Court of Appeals for the Eleventh Circuit. A district
court in February 2011 held that the bankruptcy judge was wrong in
ruling that lenders who were paid off received fraudulent
transfers when Tousa gave liens on subsidiaries' properties to
bail out and refinance a joint venture. Daniel H. Golden, Esq.,
and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, N.Y., represent the creditors committee.
The Tousa committee filed a Chapter 11 plan in July 2010 based on
an assumption it would win the appeal.
TRANS ENERGY: Incurs $21.2 Million Net Loss in 2012
---------------------------------------------------
Trans Energy, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$21.20 million on $11.75 million of revenue for the year ended
Dec. 31, 2012, as compared with net income of $8.92 million on
$14.72 million of revenue during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed
$62.43 million in total assets, $54.36 million in total
liabilities and $8.07 million in total stockholders' equity.
Maloney + Novotny LLC, in Cleveland, Ohio, did not issue a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012.
In its audit report on the Company's 2011 results, Maloney +
Novotny noted that the Company has generated significant losses
from operations and has a working capital deficit of $18.37
million at Dec. 31, 2011, which together raises substantial doubt
about the Company's ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/JMBp81
About Trans Energy
St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG)
-- http://www.transenergyinc.com/-- is an independent energy
company engaged in the acquisition, exploration, development,
exploitation and production of oil and natural gas. Its
operations are presently focused in the State of West Virginia.
TRANS ENERGY: To Restate Q2 and Q3 Quarterly Reports
----------------------------------------------------
The Audit Committee of Trans Energy, Inc.'s Board of Directors
concluded that due to the error and failure of recognizing certain
puttable warrants as derivative liabilities, the Company's
previously issued unaudited consolidated financial statements as
of, and the periods ended June 30, 2012, and Sept. 30, 2012,
should no longer be relied upon.
The Company has identified a historical accounting error related
to certain puttable warrants issued in conjunction with a credit
agreement that the Company's wholly owned subsidiary, American
Shale Development, Inc., entered into, on Feb. 29, 2012. The ASD
Credit Agreement includes financing from several banks and other
financial institutions, and Chambers Energy Management, LP, as
administrative agent.
For participation in the ASD Credit Agreement, American Shale, for
and in consideration of $2 million, entered into a Warrant
Agreement with Chambers. The Warrant provides Chambers the option
to purchase up to 19.5% of the common shares of ASD at an exercise
price of $5,137,000 for a period of three years ending on Feb. 28,
2015. The Warrant also includes a feature under which Chambers
has the option, at its sole discretion, to put the Warrant back to
the Company at the three year anniversary date (if not earlier due
to other factors), in return for a cash payment equal to the
excess of i) the fair market value of an ASD common share over ii)
the Warrant strike price of $263.44. In addition, the Warrant
strike price will be reduced to equal the offering price of any
common shares subsequently sold below $263.44.
The Company initially reported the cash consideration of $2
million received for issuing the Warrant as Additional Paid in
Capital within Stockholders' Equity in the Quarterly Reports on
Form 10-Q previously filed for the periods ended June 30, 2012 and
Sept. 30, 2012, respectively.
However, upon further analysis, the Company has determined that
the Put Option and Down-Round Provision result in the Warrants
qualifying as derivative liabilities, rather than equity
instruments. As such, the Company should have recorded the $2
million in cash consideration paid by Chambers, which represents
the fair value of the Warrant on the issuance date, as a warrant
derivative liability (rather than APIC). Subsequent to the
issuance, the warrant liability should be recorded at fair value
at each reporting date, with changes in such fair value being
recorded through other income (expense) on the Company's Statement
of Operations.
The aforementioned accounting error represents non-cash item which
resulted in the understatement of warrant derivative liabilities
of $1.2 million and the overstatement of stockholders' equity of
$2 million as of, and for both periods ended June 30, 2012, and
Sept. 30, 2012. In addition, it resulted in the understatement of
other income of $0.8 million for both three and six months ended
June 30, 2012, and for six and nine months ended Sept. 30, 2012.
The Company will include such corrections in its restated
financial statements.
Management has determined that, as a result of the error described
above, management's previous conclusions regarding the
effectiveness of the Company's disclosure controls and procedures
as of June 30, 2012, and Sept. 30, 2012, need to be modified. The
Company will provide management's modified conclusions in the
restated interim financial statements.
The Company intends to correct the effect of the accounting errors
described above by amending the previously filed the Form 10-Q for
the periods ended June 30, 2012, and Sept. 30, 2012.
As part of the consideration of the accounting errors, the Company
has and will continue to assess the underlying internal control
deficiency or deficiencies that allowed these errors go
undetected. As a result of its ongoing review of its controls and
procedures, the Company has determined that the accounting errors
resulted from a material weakness in its internal control over
financial reporting related to the controls and procedures for
derivative accounting. The Company has instituted and will
continue to institute steps to remediate the material weakness and
will continue to implement additional procedures with respect to
the review of derivative accounting.
About Trans Energy
St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG)
-- http://www.transenergyinc.com/-- is an independent energy
company engaged in the acquisition, exploration, development,
exploitation and production of oil and natural gas. Its
operations are presently focused in the State of West Virginia.
In its audit report on the Company's 2011 results, Maloney +
Novotny, LLC, in Cleveland, Ohio, noted that the Company has
generated significant losses from operations and has a working
capital deficit of $18.37 million at Dec. 31, 2011, which together
raises substantial doubt about the Company's ability to continue
as a going concern.
The Company's balance sheet at Sept. 30, 2012, showed $73.78
million in total assets, $50.52 million in total liabilities and
$23.26 million in total stockholders' equity.
TRIBUNE CO: Bond Trustee Fires Back at Reimbursement Objections
---------------------------------------------------------------
Jamie Santo of BankruptcyLaw360 reported that a trustee for
Tribune Co. bondholders reduced its administrative claim against
the reorganized media giant by $1.5 million Friday but slammed
opposition to the reimbursement request, saying that without its
efforts creditors would have lost out on claims valued at more
than $358 million.
According to the report, in a response filed in Delaware
bankruptcy court, indenture trustee Wilmington Trust Co. blasted
Tribune and the U.S. trustee for objecting to its fee application,
saying they attempted to unfairly diminish its key role in the
investigation of the Chicago-based conglomerate.
As previously reported by The Troubled Company Reporter, the U.S.
Trustee Roberta A. DeAngelis objected to more than $13 million in
requests for administrative fees from two bondholders' trustees in
Tribune's bankruptcy case, saying the companies' efforts did not
make a substantial contribution to the case. The U.S. Trustee
argued that the investigative work of both Wilmington Trust and
Law Debenture Trust Co. instead merely doubled up on contributions
from other parties involved in the case, and the two bondholders,
which together represent a $933 million claim against Tribune.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Protracted negotiations and mediation efforts and numerous
proposed plans of reorganization filed by Tribune Co. and
competing creditor groups have delayed Tribune's emergence from
bankruptcy. Many of the disputes among creditors center on the
2007 leveraged buyout fraudulence conveyance claims, the
resolution of which is a key issue in the bankruptcy case. The
bankruptcy court has scheduled a May 16 hearing on Tribune's plan.
Judge Kevin J. Carey issued an order dated July 13, 2012,
overruling objections to the confirmation of Tribune Co. and its
debtor affiliates' Plan of Reorganization. In November 2012,
Tribune received approval from the Federal Communications
Commission to transfer media licenses, one of the hurdles to
implementing the reorganization plan. Aurelius Capital Management
LP failed in halting implementation of the plan pending appeal.
Tribune Co. exited Chapter 11 protection Dec. 31, 2012, ending
four years of reorganization. The reorganization allowed a group
of banks and hedge funds, including Oaktree Capital Management and
JPMorgan Chase & Co., to take over the media company.
TRUCEPT INC: Incurs $7.8 Million Net Loss in 2012
-------------------------------------------------
Trucept Inc. filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$7.85 million on $27.72 million of revenue for the year ended
Dec. 31, 2012, as compared with a net loss of $8.12 million on
$21.74 million of revenue in 2011.
The Company's balance sheet at Dec. 31, 2012, showed $8.17 million
in total assets, $22.93 million in total liabilities and a $14.75
million total stockholders' deficit.
PMB Helin Donovan, LLP, in Dallas, Texas, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that
the Company has sustained recurring losses from operations and has
an accumulated deficit of approximately $22 million at Dec. 31,
2012. These factors raise substantial doubt about the Company's
ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/KzJsi8
About Trucept Inc.
Trucept Inc. provides staffing and employment services, relieving
its clients from many of the day-to-day tasks that may detract
their core business operations , such as payroll processing, human
resources support, workers' compensation insurance, safety
programs, employee benefits, and other administrative and
aftermarket services predominantly related to staffing. The
company also operates the Solvis brand of nurse staffing in both
Michigan and California.
TRUVEN HEALTH: S&P Assigns 'B+' Rating to New $535MM Term Loan
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned Truven Health
Analytics Inc.'s proposed $535 million term loan a 'B+' issue-
level rating and '2' recovery rating, indicating S&P's expectation
of substantial (70% - 90%) recovery in the event of payment
default. S&P's other ratings on Truven, including the 'B'
corporate credit rating and 'CCC+' rating on the company's senior
unsecured notes, are unchanged. The outlook is stable.
The company intends to use the proceeds from the new term loan to
refinance its existing term loan, which carries a higher coupon.
We rate the existing term loan 'B+'.
The ratings on Ann Arbor, Mich.-based Truven reflect the company's
"weak" business risk profile, evidenced by its narrow focus on
health care analytical services. While Truven is a large player
in this market, its competitors include larger entities with more
substantial financial resources. This is despite Truven's
business model, which provides significant sources of recurring
revenue. S&P considers Truven to have a "highly leveraged"
financial risk profile because adjusted leverage continues to
remain above 6x and annualized funds from operations-to-total debt
is low at about 9%.
RATINGS LIST
Truven Health Analytics Inc.
Corporate Credit Rating B/Stable/--
New Rating
Truven Health Analytics Inc.
U.S. $535 million term loan B+
Recovery Rating 2
UNI-PIXEL INC: Inks Manufacturing Agreement with Eastman Kodak
--------------------------------------------------------------
Uni-Pixel, Inc., entered into a manufacturing and supply agreement
with Eastman Kodak Company to produce next-generation touch
sensors based on the Company's UniBossTM multi-touch sensor film.
Under the agreement, the Company expects to open a new
manufacturing facility with Eastman Kodak prior to the end of 2013
within Eastman Business Park in Rochester to produce touch screen
sensors for the touch module market.
The Company has already begun to construct a manufacturing and
testing facility with nearly 100,000 square feet of manufacturing
space for the UniBoss roll-to-roll printing and plating lines. In
2013, the Company expects that $24 million will be allocated to
improve and equip the facility, which includes the installation of
two printing lines and 15 plating lines. Located in Bldg. 326 of
Kodak's Eastman Business Park, a more than 1,000 acre technology
center and industrial complex, the site provides an established
infrastructure for roll-to-roll manufacturing and the Company
believes offers significant space for capacity expansion.
About Uni-Pixel Inc.
The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.
Uni-Pixel incurred a net loss of $9.01 million in 2012, as
compared with a net loss of $8.56 million in 2011. The Company's
balance sheet at Dec. 31, 2012, showed $14.71 million in total
assets, $348,683 in total liabilities and $14.36 million in total
shareholders' equity.
UNILAVA CORP: Incurs $1.6 Million Net Loss in 2012
--------------------------------------------------
Unilava Corporation filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$1.58 million on $3.10 million of revenue for the year ended
Dec. 31, 2012, as compared with a net loss of $2.98 million on
$3.52 million of revenue for the year ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $2.66 million
in total assets, $8.20 million in total liabilities and a $5.54
million total stockholders' deficit.
Shelley International CPA, in Mesa, AZ, issued a " going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that
the Company has suffered losses from operations, which raises
substantial doubt about its ability to continue as a going
concern.
A copy of the Form 10-K is available for free at:
http://is.gd/KNuZse
About Unilava Corporation
Unilava Corporation (OTC BB: UNLA) -- http://www.unilava.com/--
is a diversified communications holding company incorporated under
the laws of the State of Wyoming in 2009. Unilava and its
subsidiary brands provide a variety of communications services,
products, and equipment that address the needs of corporations,
small businesses and consumers. The Company is licensed to
provide long distance services in 41 states throughout the U.S.
and local phone services across 11 states. Through its carrier-
grade microwave wireless broadband infrastructure and broadband
Internet access partners, the Company also offers mobile and high-
definition IP-hosted voice services to residential customers and
corporate clients. Additionally, Unilava delivers a comprehensive
and integrated suite of fee-based online and mobile advertising
and web services to a broad array of business enterprises.
Headquartered in San Francisco, the Company has regional offices
in Chicago, Seoul, Hong Kong, and Beijing.
UNITEK GLOBAL: Earnings Revision Cues Moody's to Cut CFR to Caa1
----------------------------------------------------------------
Moody's Investors Service lowered all of Unitek Global Services,
Inc.'s credit ratings by two notches including its Corporate
Family Rating to Caa1 from B2. Moody's also placed all credit
ratings under review for further downgrade. Unitek's Speculative
Grade Liquidity Rating was lowered to SGL-4 from SGL-3.
These actions follow the company's announcement that as a result
of revenue recognition issues at its Pinnacle Wireless division,
Unitek's previously issued consolidated financial statements
dating back to the interim period ended October 1, 2011 should no
longer be relied upon, including with regards to the effectiveness
of internal control over financial reporting.
The company publicly disclosed that certain employees of Unitek's
Pinnacle Wireless subsidiary engaged in fraudulent activities that
resulted in improper revenue recognition. In addition, it was also
disclosed that in connection with the company's Audit Committee
investigation, certain employees at Unitek including the former
CFO, Controller and President of the Pinnacle Wireless Division
were terminated.
Moody's notes that the ratings are based on limited data and the
company's announcement that financials dating back to October 1,
2011 should no longer be relied upon.
Moody's has lowered the following ratings and placed the ratings
under review for further downgrade:
Corporate Family Rating, downgraded to Caa1 from B2
Probability of Default Rating, downgraded to Caa1-PD from B2-PD
$75 million senior secured revolver due 2016, downgraded to B1
(LGD-2, 18%) from Ba2 (LGD-2, 15%)
$135 million term loan due 2018, downgraded to Caa2 (LGD-4, 66%)
from B3 (LGD-4, 65%)
Outlook Actions:
Outlook, Changed To Ratings under Review from Stable
Additional Ratings lowered:
Speculative Grade Liquidity Rating, to SGL-4 from SGL-3
Ratings Rationale:
The downgrade of the CFR two notches to Caa1 reflects (i)
uncertainty as to the company's financial performance given the
proposed restatement (ii) increased default risk due to the
possibility that the company will be unable to file its financial
statements within the time period allowed by its lenders (iii)
weak liquidity and potential for covenant violations absent
waivers from lenders (iv) significant management turnover and
apparently weak oversight of financial performance and (v)
potential for legal, regulatory and business risks stemming from
recent events at the company.
Unitek's Caa1 CFR also reflects its relatively small scale,
significant customer concentration, exposure to cyclical spending
by its customer base and the extent to which acquisition activity
has driven its historical results. Moody's notes that the recent
announcement regarding the restatement pertains to the company's
Pinnacle Wireless business that was acquired in 2011. The ratings
also reflect the company's established market position and
expansive capabilities, blue-chip customer base, and good backlog.
While revenue is concentrated with a few customers and the top
three account for more than 70%, these customers are large media
and telecommunication companies that continue to invest in growth.
Longer term, outsourcing trends should expand Unitek's market
opportunities, however relatively low entry barriers and execution
risks are factors that have also been considered in the ratings
from a market share perspective.
The review for possible downgrade will focus on whether Unitek is
able to file its restated financials within a relatively short
time frame and its ability to obtain a waiver from lenders with
regards to the timely submission of financial statements. In
addition, the company's prospective ability to maintain compliance
with covenants either by obtaining a waiver or amending covenants
will also be assessed. The company had limited headroom under both
its leverage and fixed charge coverage ratios prior to any
restatement of its financials. Moody's will also evaluate the
magnitude of any restatements to the financial statements as well
as any legal/regulatory exposures and their impact on credit
metrics. The review will also focus on the company's business
operations and its ability to permanently fill vacant financial
management positions.
The SGL rating was lowered to SGL-4 from SGL-3, denoting a weak
liquidity profile. The SGL-4 rating reflects the potential loss of
access to the $75 million asset-backed revolver and acceleration
of the term loan if the company fails to file its financial
statements within the time period prescribed by its lenders (April
30, 2013 based on the latest revolver amendment). The SGL-4 also
reflects concerns regarding the company's ability to maintain
compliance with financial covenants, in particular due to
uncertainty regarding the magnitude of the restatement.
The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
UniTek Global Services, Inc., based in Blue Bell, Pennsylvania,
provides fulfillment and infrastructure services to media and
telecommunication companies in the United States and Canada. Total
annual revenues exceed $400 million.
UNIGENE LABORATORIES: BDO Replaces Grant Thornton as Accountants
----------------------------------------------------------------
Unigene Laboratories, Inc., dismissed Grant Thornton LLP as
independent auditors for the Company on April 11, 2013. The
change in independent auditors was approved by the Company's Audit
Committee.
The reports of Grant Thornton LLP on the consolidated financial
statements of the Company as of and for the fiscal years ended
Dec. 31, 2011, and Dec. 31, 2012, contained no adverse opinion or
disclaimer of opinion and included a going concern qualification
due to the Company's financial position. During the Company's
fiscal years ended Dec. 31, 2011, and 2012 and any subsequent
interim period preceding the Company's dismissal of Grant Thornton
LLP, there were no disagreements with Grant Thornton LLP on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements,
if not resolved to the satisfaction of Grant Thornton LLP, would
have caused Grant Thornton LLP to make reference to those
disagreements in its report on the consolidated financial
statement for those years.
On April 11, 2013, the Company engaged BDO USA, LLP, as the
Company's independent auditors. The Company has not consulted
with BDO during the two fiscal years ended Dec. 31, 2012, and
2011, and the subsequent interim period through April 11, 2013.
About Unigene
Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/
-- is a biopharmaceutical company focusing on the oral and nasal
delivery of large-market peptide drugs.
Unigene disclosed a net loss of $34.28 million on $9.43 million of
total revenue for the year ended Dec. 31, 2012, as compared with a
net loss of $7.09 million on $20.50 million of total revenue
during the prior year. The Company incurred a $32.53 million net
loss in 2010.
The Company's balance sheet at Dec. 31, 2012, showed $11.31
million in total assets, $110.05 million in total liabilities and
a $98.73 million total stockholders' deficit.
Grant Thornton LLP, in New York, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that
the Company has incurred a net loss of $34,286,000 during the year
ended Dec. 31, 2012, and, as of that date, has an accumulated
deficit of approximately $216,627,000 and the Company's total
liabilities exceeded total assets by $98,740,000. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
Bankruptcy Warning
"We had cash flow deficits from operations of $3,177,000 for the
year ended December 31, 2012, $6,766,000 for the year ended
December 31, 2011 and $1,669,000 for the year ended December 31,
2010. Our cash and cash equivalents totaled approximately
$3,813,000 on December 31, 2012. Based upon management's
projections, we believe our current cash will only be sufficient
to support our current operations through approximately March 31,
2013. Therefore, we need additional sources of cash in order to
maintain all or a portion of our operations. We may be unable to
raise, on acceptable terms, if at all, the substantial capital
resources necessary to conduct our operations. If we are unable
to raise the required capital, we may be forced to close our
facilities and cease our operations. If we are unable to resolve
outstanding creditor claims, we may have no other alternative than
to seek protection under available bankruptcy laws. Even if we
are able to raise additional capital, we will likely be required
to limit some or all of our research and development programs and
related operations, curtail development of our product candidates
and our corporate function responsible for reviewing license
opportunities for our technologies."
UNIVERSAL BIOENERGY: Incurs $3.6 Million Net Loss in 2012
---------------------------------------------------------
Universal Bioenergy, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $3.65 million on $50.51 million of revenues for the
year ended Dec. 31, 2012, as compared with a net loss of $2.23
million on $71.74 million of revenues during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $7.99 million
in total assets, $9.44 million in total liabilities, and a
$1.46 million total stockholders' deficit.
Bongiovanni & Associates, CPA'S, in Cornelius, North Carolina,
issued a "going concern" qualification on the consolidated
financial statements for the year ended Dec. 31, 2012. The
independent auditors noted that the Company has suffered recurring
operating losses, has an accumulated deficit, has negative working
capital, and has yet to generate an internal cash flow that raises
substantial doubt about its ability to continue as a going
concern.
A copy of the Form 10-K is available for free at:
http://is.gd/vQv6ps
About Universal Bioenergy
Headquartered in Irvine, California, Universal Bioenergy Inc.
develops markets alternative and natural energy products
including, natural gas, solar, biofuels, wind, wave, tidal, and
green technology products.
UNIVERSAL HEALTH: Chapter 11 Trustee Appointed
----------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the bankruptcy judge ordered the appointment of a
trustee in Chapter 11 for Universal Health Care Group Inc. The
U.S. Trustee alleged in papers that some company executives made
agreements with suppliers for their "personal benefit in exchange
for the vendor conducting business with the debtor."
The Debtor wasn't scheduled to face the bankruptcy judge at a
hearing for appointment of a Chapter 11 trustee until May 17.
That was before the FBI executed a warrant and searched
Universal's office on March 28. The U.S. Trustee responded by
filing a request for an accelerated hearing that was held last
week.
The Justice Department's bankruptcy watchdog said there were
"substantial transfers to insider and related entities."
About Universal Health Care
Universal Health Care Group, Inc., owns an insurance company and
three health-maintenance organizations that provide managed care
services for government sponsored health care programs, focusing
on Medicare and Medicaid.
Universal Health was founded in 2002 by Dr. A.K. Desai and grew
its operations of offering Medicare plans to more than 37,000
members to over 20 states.
Universal Health filed a Chapter 11 bankruptcy protection (Bankr.
M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida
regulators moved to put two of the company's subsidiaries in
receivership.
Universal Health Care estimated assets of up to $100 million and
debt of less than $50 million in court filings in Tampa, Florida.
Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in
Tampa, serves as counsel to the Debtor.
UNIVERSITY GENERAL: Further Delays Filing of 2012 Form 10-K
-----------------------------------------------------------
University General Health System, Inc., notified the Securities
and Exchange Commission regarding the delay of the filing of its
annual report on Form 10-K for the year ended Dec. 31, 2012. The
Company previously filed a Form 12b-25 with the SEC that extended
the filing date for its Form 10-K Annual Report. The Company
anticipates filing the Form 10-K as soon as possible.
University General stated that the delay if filing the Form 10-K
was associated with an earlier change in auditors; completion of
the accounting treatment of certain non-operating items related to
2012 acquisitions, including the acquisition of University General
Hospital - Dallas in December 2012; the calculation of derivative
liabilities associated with the Company's Series C preferred
stock; and federal income tax calculations. The Company requires
additional time to complete the Form 10-K and to announce fourth
quarter and full year 2012 financial and operating results.
About University General
University General Health System, Inc., located in Houston, Texas,
is a diversified, integrated multi-specialty health care provider
that delivers concierge physician- and patient-oriented services.
UGHS currently operates one hospital and two ambulatory surgical
centers in the Houston area. It also owns a revenue management
company, a hospitality service provider and facility management
company, three senior living facilities and manages six senior
living facilities.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Moss, Krusick &
Associates, LLC, in Winter Park, Florida, expressed substantial
doubt about University General's ability to continue as a going
concern. The independent auditors noted that the Company has
suffered recurring losses and negative operating cash flows, and
has negative working capital.
University General reported a net loss of $2.38 million in 2011,
following a net loss of $1.71 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$140.67 million in total assets, $128.38 million in total
liabilities and $3.79 million in series C, convertible redeemable
preferred stock, and $8.49 million in total equity.
UNIVERSAL HEALTH: Court Authorizes Appointment of Ch. 11 Trustee
----------------------------------------------------------------
Linda Chiem of BankruptcyLaw360 reported that a Florida bankruptcy
judge on Friday authorized the appointment of a trustee to oversee
the Chapter 11 reorganization of Universal Health Care Group Inc.,
the health-maintenance organization forced into state receivership
and currently under investigation for fraud and mismanagement.
According to the report, U.S. Bankruptcy Judge K. Rodney May
granted an amended motion filed by a U.S. Department of Justice
official asking for the appointment of a trustee, who has yet to
be named, to protect creditors' interests as Universal's
proceedings move forward amid concerns on trustworthiness.
About Universal Health Care
Universal Health Care Group, Inc., owns an insurance company and
three health-maintenance organizations that provide managed care
services for government sponsored health care programs, focusing
on Medicare and Medicaid.
Universal Health was founded in 2002 by Dr. A.K. Desai and grew
its operations of offering Medicare plans to more than 37,000
members to over 20 states.
Universal Health filed a Chapter 11 bankruptcy protection (Bankr.
M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida
regulators moved to put two of the company's subsidiaries in
receivership.
Universal Health Care estimated assets of up to $100 million and
debt of less than $50 million in court filings in Tampa, Florida.
Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in
Tampa, serves as counsel to the Debtor.
USA BROADMOOR: Initial Status Conference on May 8
-------------------------------------------------
An initial status conference before Judge Michael G. Williamson in
Tampa, Florida, for the Chapter 11 case of USA Broadmoor, LLC, is
scheduled for May 8, 2013 at 10:30 a.m.
USA Broadmoor, LLC, owns an apartment complex known as the
Broadmoor Apartments located at 4939 East Busch. Blvd., in Tampa
Florida. The complex itself consists of 16 three-story walk-up
structures, with 384 apartment units ranging in size from one to
two bedroom units. Amenities include the clubhouse and pool area,
tennis courts, laundry facilities, car wash center and a private
lake. Equity contributions of $3.95 million and a $12.36 million
loan provided by Anchor Financial, L.P., and assigned to Wells
Fargo Bank Minnesota N.A., were used to fund the acquisition costs
of the complex.
USA Broadmoor, LLC, filed a Chapter 11 petition (Bankr. M.D. Fla.
Case No. 13-bk-04880) in Tampa, Florida, on April 16, 2013. The
Debtor estimated assets and liabilities of at least $10 million.
The Debtor believes that $10.3 million is owed to Wells Fargo as
of the Petition Date.
On the Petition Date, the Debtor filed a variety of first day
motions, including requests to return tenant security deposits in
the ordinary course of business, provide adequate assurance of
payment to utilities, and use cash collateral. The Debtor also
filed a motion for approval of a property management agreement
with, and for authority to make payments to, Internacional Realty
Management, LLC.
The Debtor said that it would use cash collateral for the purposes
of preserving its assets and paying necessary business expenses.
The Debtor proposes to grant to Wells Fargo a replacement lien on
assets acquired after the Petition Date.
USA BROADMOOR: Sec. 341 Meeting of Creditors on May 16
------------------------------------------------------
A meeting of creditors of USA Broadmoor, LLC, will be held on
May 16, 2013 at 2:00 p.m. at Tampa, FL (861) - Room 100-B,
Timberlake Annex, 501 E. Polk Street.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Proofs of claim are due July 1, 2013.
About USA Broadmoor
USA Broadmoor, LLC, owns an apartment complex known as the
Broadmoor Apartments located at 4939 East Busch. Blvd., in Tampa
Florida. The complex itself consists of 16 three-story walk-up
structures, with 384 apartment units ranging in size from one to
two bedroom units.
USA Broadmoor, LLC, filed a Chapter 11 petition (Bankr. M.D. Fla.
Case No. 13-bk-04880) in Tampa, Florida, on April 16, 2013. The
Debtor estimated assets and liabilities of at least $10 million.
The Debtor believes that $10.3 million is owed to Wells Fargo.
USA BROADMOOR: Proposes Stichter Riedel as Counsel
--------------------------------------------------
USA Broadmoor, LLC, asks the bankruptcy court for approval to hire
Stichter, Riedel, Blain & Prosser, P.A., as counsel.
The Debtor has selected Stichter Riedel because the firm and its
attorneys have considerable experience in bankruptcy/insolvency
law and specialize in representing debtors in Chapter 11 cases.
The Debtor has agreed to compensate the firm on an hourly basis in
accordance with its ordinary and customary rates. The Debtor has
also agreed to reimburse the firm for actual and necessary
expenses.
The firm has received the aggregate sum of $75,000 from the Debtor
as retainer.
Amy Denton Harris, an attorney at Stichter Riedel, avers that the
firm represents no interest adverse to the Debtor or the estate in
the matters which it is to be employed.
About USA Broadmoor
USA Broadmoor, LLC, owns an apartment complex known as the
Broadmoor Apartments located at 4939 East Busch. Blvd., in Tampa
Florida. The complex itself consists of 16 three-story walk-up
structures, with 384 apartment units ranging in size from one to
two bedroom units.
USA Broadmoor, LLC, filed a Chapter 11 petition (Bankr. M.D. Fla.
Case No. 13-bk-04880) in Tampa, Florida, on April 16, 2013. The
Debtor estimated assets and liabilities of at least $10 million.
The Debtor believes that $10.3 million is owed to Wells Fargo.
VICTORY ENERGY: Delays Form 10-K for 2012
-----------------------------------------
Victory Energy Corporation filed a Form 12b-25 with the Securities
and Exchange Commission disclosing that it was unable to timely
file with the SEC its annual report on Form 10-K for the year
ended Dec. 31, 2012, and that it anticipated it would be able to
file its Form 10-K within the prescribed fifteen-day period under
Rule 12b-25.
The Company has been working with great diligence to complete the
filing but will require additional time due to the requirements to
restate financial statements associated with the proper
presentation of the noncontrolling interest in Aurora Energy
Partners, which are discussed in further detail in the Form 12b-
25. The Company is working diligently on this matter and intends
to file its Form 10-K as soon as practicable.
About Victory Energy
Austin, Texas-based Victory Energy Corporation is engaged in the
exploration, acquisition, development and exploitation of domestic
oil and gas properties. Current operations are primarily located
onshore in Texas, New Mexico and Oklahoma.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, WilsonMorgan LLP, in Irvine, California,
expressed substantial doubt about Victory Energy's ability to
continue as a going concern. The independent auditors noted that
the Company has experienced recurring losses since inception and
has an accumulated deficit.
The Company reported a net loss of $3.95 million on $305,180 of
revenues for 2011, compared with a net loss of $432,713 on
$385,889 of revenues for 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$1.69 million in total assets, $259,886 in total liabilities and
$1.43 million in total stockholders' equity.
VANITY EVENTS: Incurs $16 Million Net Loss in 2012
--------------------------------------------------
Vanity Events Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $16.03 million on $424,000 of revenue for the year
ended Dec. 31, 2012, as compared with net income of $330,705 on
$95,039 of revenue during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $547,230 in
total assets, $16.71 million in total liabilities, all current,
and a $16.16 million total stockholders' deficit.
Kabani & Company, Inc., in Los Angeles, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has incurred losses since its
inception, and the Company may not have sufficient working capital
or outside financing available to meet its planned operating
activities over the next twelve months. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
Bankruptcy Warning
"Our ability to implement our current business plan and continue
as a going concern ultimately is dependent upon our ability to
obtain additional equity or debt financing, attain further
operating efficiencies and to achieve profitable operations.
"There can be no assurances that funds will be available to the
Company when needed or, if available, that such funds would be
available under favorable terms. In the event that the Company is
unable to generate adequate revenues to cover expenses and cannot
obtain additional funds in the near future, the Company may seek
protection under bankruptcy laws."
A copy of the Form 10-K is available for free at:
http://is.gd/RPabRG
About Vanity Events
Based in New York, Vanity Events Holding, Inc. (OTC BB: VAEV)
-- http://www.vanityeventsholding.com/-- is a holding company
with two primary subsidiary companies. The subsidiaries are
Vanity Events, Inc. and America's Cleaning Company. America's
Cleaning Company(TM) is the Company's flagship division which
provides cleaning services to residential and commercial clients.
Vanity Events, Inc. seeks out, Licenses, develops, promotes, and
brings to market various innovative consumer and commercial
products.
VERTICAL COMPUTER: Incurs $1.3 Million Net Loss in 2012
-------------------------------------------------------
Vertical Computer Systems Inc. filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $1.31 million on $5.47 million of total revenues for
the year ended Dec. 31, 2012, as compared with a net loss of
$167,588 on $6.27 million of total revenues for the year ended
Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $1.58 million
in total assets, $14.55 million in total liabilities and $9.90
million in convertible cumulative preferred stock, and a $22.87
million total stockholders' deficit.
MaloneBailey, LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012, citing net losses and a working capital
deficiency, which raises substantial doubt about the Company's
ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/LqxzVo
About Vertical Computer
Richardson, Tex.-based Vertical Computer Systems, Inc., is a
multinational provider of Internet core technologies, application
software, and software services through its distribution network
with operations or sales in the United States, Canada and Brazil.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, MaloneBailey, LLP, in
Houston, Texas, noted that the Company suffered net losses and has
a working capital deficiency, which raises substantial doubt about
its ability to continue as a going concern.
VIGGLE INC: Chairman and CEO Held 73.9% Equity Stake at April 4
---------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Robert F.X. Sillerman disclosed that, as of
April 4, 2013, he beneficially owned 99,745,006 shares of common
stock of Viggle Inc. representing 73.9% of the shares outstanding.
Mr. Sillerman is the Executive Chairman and Chief Executive
Officer of the Company.
Mr. Sillerman previously reported beneficial ownership of
97,245,006 shares of common of the Company or 73.4% equity stake
as of March 11, 2013
A copy of the filing is available at http://is.gd/TcAH8v
About Viggle
New York City-based Viggle Inc. is a loyalty marketing company.
The Company has developed a loyalty program for television that
gives people real rewards for checking into the television shows
they are watching on most mobile operating system. Viggle users
can redeem their points in the app's rewards catalog for items
such as movie tickets, music, or gift cards.
The Company's balance sheet at Sept. 30, 2012, showed
$17.3 million in total assets, $22.2 million in total liabilities,
and a stockholders' deficit of $4.9 million.
As reported in the TCR on Oct. 22, 2012, BDO USA, LLP, in New York
City, expressed substantial doubt about Viggle's ability to
continue as a going concern. The independent auditors noted that
the Company has suffered recurring losses from operations and at
June 30, 2012, has deficiencies in working capital and equity.
VISION INDUSTRIES: Incurs $5.3 Million Net Loss in 2012
-------------------------------------------------------
Vision Industries Corp. filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing
a net loss of $5.28 million on $26,545 of total revenue for the
year ended Dec. 31, 2012, as compared with a net loss of $6.44
million on $764,157 of total revenue for the year ended Dec. 31,
2011.
The Company's balance sheet at Dec. 31, 2012, showed $820,951 in
total assets, $1.54 million in total liabilities and a $720,420
total stockholders' deficit.
DKM Certified Public Accountants, in Clearwater, Florida, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company's cash and available credit are
not sufficient to support its operations for the next year.
Accordingly, management needs to seek additional financing that
raises substantial doubt about its ability to continue as a going
concern.
A copy of the Form 10-K is available for free at:
http://is.gd/MWEPxG
About Vision Industries
Torrance, Calif.-based Vision Industries Corp. is focused on
marketing zero-emission vehicles to a variety of alternative
energy and green-minded individuals, OEM dealer networks, as well
as for sale to end-user consumers.
VITESSE SEMICONDUCTOR: Amends Fiscal 2012 Annual Report
-------------------------------------------------------
Vitesse Semiconductor Corporation filed an amendment to its annual
report for the period ended Sept. 30, 2012, to re-file the
certifications included as exhibits 31.1, 31.2 and 32.1 of the
previously filed Annual Report to identify the correct periodic
report in the Exhibits. The Amendment also provides an updated
list of exhibits in Part IV of the Original Filing. A copy of the
Amended Form 10-K is available at http://is.gd/EP6uLD
About Vitesse
Based in Camarillo, California, Vitesse Semiconductor Corporation
(Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs,
develops and markets a diverse portfolio of semiconductor
solutions for Carrier and Enterprise networks worldwide.
In October 2009, Vitesse completed a debt restructuring
transaction that resulted in the conversion of 96.7% of the
Company's 2024 Debentures into a combination of cash, common
stock, Series B Preferred Stock and 2014 Debentures. With respect
to the remaining 3.3% of the 2024 Debentures, Vitesse settled its
obligations in cash. Additionally, Vitesse repaid $5.0 million of
its $30.0 million Senior Term Loan, the terms of which were
amended as part of the debt restructuring transactions.
Vitesse incurred a net loss of $1.11 million in 2012, a net loss
of $14.81 million in 2011, and a net loss of $20.05 million in
2010.
The Company's balance sheet at Dec. 31, 2012, showed
$70.73 million in total assets, $79.69 million in total
liabilities and a $8.96 million total stockholders' deficit.
VUZIX CORP: LC Capital Held 14.8% Equity Stake at March 29
----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, LC Capital Master Fund, Ltd., and its
affiliates disclosed that, as of March 29, 2013, they beneficially
owned 615,883 shares of common stock of Vuzix Corporation
representing 14.83% of the shares outstanding. LC Capital
previously reported beneficial ownership of 46,191,220 common
shares or a 14.83% equity stake as of June 29, 2012.
On March 29, 2013, the Master Fund entered into a
conversion/exchange agreement with the Company, pursuant to which
the Master Fund agreed, subject to the closing of the Company's
proposed public stock offering, to convert their outstanding
convertible note, in the principal amount of $619,122, together
with accrued interest thereon (equal to $22,907 as of March 29,
2013), into shares of the Company's common stock, at a conversion
price equal to, in the Master Fund's option, the public offering
price of the Company'sproposed public stock offering, or pursuant
to the terms of the convertible note. The Master Fund also
agreed, subject to the closing of the Company's proposed public
stock offering, to exchange outstanding warrants to purchase
533,333 shares of the Company's common stock into the greater of
(a) 200,000 shares of the Company's common stock, or (B) the Black
Scholes value of the warrants as of the date of the pricing of the
Company's proposed public stock offering based upon the per share
offering price of the common stock in the Company's proposed
public stock offering. The Company agreed to prepare and file
with the SEC, within 45 days of that conversion and exchange, a
registration statement for the resale of the shares of common
stock issuable upon such conversion and exchange, and to cause
such registration statement to be declared effective by the SEC
within 90 days of such conversion and exchange. The Master Fund
may terminate the Exchange Agreement if the closing of such
conversion and exchange does not occur by June 30, 2013, or if the
Issuer?s board of directors does not approve such conversion and
exchange by April 12, 2013, or withdraws such approval.
A copy of the regulatory filing is available for free at:
http://is.gd/zj6ufa
About Vuzix Corp.
Rochester, New York-based Vuzix Corporation (TSX-V: VZX)
OTC BB: VUZI) -- http://www.vuzix.com/-- is a supplier of Video
Eyewear products in the defense, consumer and media &
entertainment markets.
Vuzix reported net income of $322,840 on $3.22 million of total
sales for the year ended Dec. 31, 2012, as compared with a net
loss of $3.87 million on $4.82 million of total sales during the
prior year.
The Company's balance sheet at Dec. 31, 2012, showed $2.42 million
in total assets, $8.63 million in total liabilities, and a
$6.20 million total stockholders' deficit.
EFP Rotenberg, LLP, in Rochester, New York, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has incurred substantial losses from operations
in recent years. In addition, the Company is dependent on its
various debt and compensation agreements to fund its working
capital needs. The Company was not in compliance with its
financial covenants under a senior secured debt holder and had
other debts past due in some cases. These conditions raise
substantial doubt about its ability to continue as a going
concern.
Bankruptcy Warning
"We have engaged an investment banking firm to assist us with
respect to a planned public stock offering of up to $15,000,000.
Our future viability is dependent on our ability to execute these
plans successfully. If we fail to do so for any reason, we would
not have adequate liquidity to fund our operations, would not be
able to continue as a going concern and could be forced to seek
relief through a filing under U.S. Bankruptcy Code."
WARREN'S CORNER: Building Owner Files Ch.11 in San Antonio, Texas
-----------------------------------------------------------------
Patrick Danner, writing for San Antonio Express News, reports that
Warren's Corner LP, headed by developer David W. Monnich, filed
for Chapter 11 last week in U.S. Bankruptcy Court in San Antonio,
Texas, listing $5 million in assets and almost $10.8 million in
debts in its petition. The partnership owns the office and retail
building at 8522 Broadway St.
The report says First National Bank of Edinburg is listed as the
largest creditor, owed almost $8.6 million.
The report relates Mr. Monnich, in an interview, said the
partnership is negotiating with the bank to restructure the debt.
WASTE INDUSTRIES: S&P Revises Outlook to Neg. & Affirms 'B+' CCR
----------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its outlook on
Raleigh, N.C.-based regional solid waste hauler Waste Industries
U.S.A. Inc. to negative from stable. At the same time, S&P
affirmed its 'B+' corporate credit rating on the company as well
as its'B+' issue ratings and '4' recovery rating on the company's
senior secured credit facility. The '4' recovery rating indicates
S&P's expectation for an average (30% to 50%) recovery in the
event of payment default.
"The negative outlook reflects the increase in Waste Industries'
leverage to 4.9x at Dec. 31, 2012 from 4.2x at Dec. 31, 2011, the
limited headroom under its financial covenants following
$96 million in acquisitions, and the weak pricing environment in
2012 that reduced EBITDA margins to 26.4% from the 27%-28% range
of recent years," said Standard & Poor's credit analyst Pranay
Sonalkar.
S&P believes that continued weak pricing over the next few
quarters combined with heavy capital expenditure and acquisitions
will reduce covenant headroom to under 10% and limit debt to
EBITDA to about 5x and funds from operations (FFO) to debt to the
low end of the 12%-15% range required for the rating.
The ratings on Waste Industries reflect the company's modest scale
of operations, its geographic concentration in the Southeastern
U.S., its leveraged capital structure, and an acquisition-oriented
growth strategy. These characteristics are partially offset by
the company's participation in a recession-resistant industry, its
fair degree of vertical integration, its operating efficiency, and
its solid and consistent profitability.
The outlook is negative. S&P's base-case scenario indicates that
EBITDA margins will remain at current levels and free operating
cash flow will decline because of higher capital spending, but
should remain positive. However, S&P could lower the ratings in
the next 12 months if pricing continues to worsen, covenant
headroom decreases further, or the company undertakes larger than
anticipated acquisitions or shareholder rewards that would result
in FFO to total debt dropping below the 12%-15% range that S&P
deems appropriate for the ratings. Such a decline could occur in
the next year if the company reduced debt only by the scheduled
amortization payment, organic sales were to decline 2%, and EBITDA
margins declined by 250 basis points to 24%.
To consider an outlook revision to stable, S&P would need to see
pricing stabilize, covenant headroom at least in the 15%-20%
range, and FFO to debt within the 12%-15% range.
WEST 380: NTCH Now Owned by Wise Regional
-----------------------------------------
West 380 Family Care Facility sold the North Texas Community
Hospital to Decatur Hospital Authority doing business as Wise
Regional Health System. The Hon. D. Michael Lynn of the U.S.
Bankruptcy Court for the Northern District of Texas in February
authorized the sale after Decatur submitted the highest bid for
the purchased assets pursuant to Section 363 of the Bankruptcy
Code. The sale process was conducted with the help of Navigant
Capital Advisors. A copy of the sale order is available for free
at http://bankrupt.com/misc/WEST380_sale_order.pdf
According to a Wise County Messenger report at the end of March,
executives at Wise Regional Health System in Decatur, Texas, and
North Texas Community Hospital in Bridgeport have formally signed
transfer of ownership documents, meaning Wise Regional is now the
owner of 35-bed NTCH.
About West 380
Bridgeport, Texas-based West 380 Family Care Facility, doing
business as North Texas Community Hospital, opened in August 2008
and operates in a 99,000 square-feet two-story building on 19
acres of land. The hospital has 36 beds and 57 doctors on staff.
There are 200 employees constituting 130 full time equivalent
employees.
West 380 filed a Chapter 11 petition (Bankr. N.D. Tex. Case No.
12-46274) on Nov. 8, 2012. Andrew G. Edson, Esq., Duane J.
Brescia, Esq., and Stephen A. Roberts, Esq., at Strasburger &
Price LLP serve as its counsel. The Debtor disclosed $38,220,048
in assets and $82,873,548 in liabilities as of the Chapter 11
filing. Judge D. Michael Lynn presides over the case.
WIZARD WORLD: Amends Fiscal 2012 Annual Report
----------------------------------------------
Wizard World, Inc., has amended its annual report on Form 10-K for
the fiscal year ended Dec. 31, 2012, filed with the Securities and
Exchange Commission on April 1, 2013, for a limited purpose of
amending certain earnings per share disclosures for the years
ended Dec. 31, 2012, and 2011 located on pages 23 and F-4. A copy
of the Amended Form 10-K is available at http://is.gd/UpzXjp
About Wizard World
Based in New York, N.Y., Wizard World, Inc., is a producer of pop
culture and multimedia conventions ("Comic Cons") across North
America that markets movies, TV shows, video games, technology,
toys, social networking/gaming platforms, comic books and graphic
novels. These Comic Cons provide sales, marketing, promotions,
public relations, advertising and sponsorship opportunities for
entertainment companies, toy companies, gaming companies,
publishing companies, marketers, corporate sponsors and retailers.
Wizard World disclosed a net loss of $1.02 million on $6.74
million of convention revenue for the year ended Dec. 31, 2012, as
compared with a net loss of $2.01 million on $3.78 million of
convention revenue during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $2.27 million
in total assets, $6.03 million in total liabilities and a
$3.75 million total stockholders' deficit.
WOUND MANAGEMENT: Incurs $1.8 Million Net Loss in 2012
------------------------------------------------------
Wound Management TEchnologies, Inc., filed with the U.S.
Securities and Exchange Commission its annual report on Form 10-K
disclosing a net loss of $1.84 million on $1.17 million of revenue
for the year ended Dec. 31, 2012, as compared with a net loss of
$12.74 million on $2.21 million of revenue during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $1.39 million
in total assets, $5.19 million in total liabilities and a $3.80
million total stockholders' deficit.
Pritchett, Siler & Hardy, P.C., in Salt Lake City, Utah, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has incurred substantial losses
and has a working capital deficit which factors raise substantial
doubt about the ability of the Company to continue as a going
concern.
A copy of the Form 10-K is available for free at:
http://is.gd/GPW7zw
About Wound Management
Fort Worth, Texas-based Wound Management Technologies, Inc.,
markets and sells the patented CellerateRX(R) product in the
expanding advanced wound care market; particularly with respect to
diabetic wound applications.
XERIUM TECHNOLOGIES: New $200MM Term Loan Gets Moody's Ba3 Rating
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Xerium
Technologies, Inc.'s proposed $200 million senior secured term
loan due 2019. The net proceeds of this offering, together with
cash on hand, are expected to be used to refinance the company's
existing credit facility, with the transaction expected to be
leverage-neutral. All other ratings remain unchanged. The rating
outlook is stable.
Ratings Rationale:
Xerium's B2 corporate family rating continues to reflect Xerium's
sizable market position and good geographic diversity. The ratings
are constrained by the company's small revenue base, vulnerability
of earnings to highly cyclical paper demand, input costs and
currency translation effects, as well as reduced European market
demand. The B2 corporate family rating also reflects Xerium's high
leverage with adjusted debt/ EBITDA expected to be in excess of 5x
over the next 12-18 months, mitigated by good financial
flexibility with its solid liquidity profile. While Xerium's
adjusted Debt/ EBITDA was in excess of 8x as of December 31, 2012,
Moody's expects the company's metrics to show improvement over the
next 12-18 months, as a result of the company's cost-cutting
initiatives as well as recovery expected in the North American
paper and packaging industry.
The senior secured term loan is expected to be secured by
substantially all assets of the company and its US subsidiaries,
subject to a collateral carveout for the $40 million asset-based
revolving credit facility. The Ba3 rating on senior secured term
loan reflects expected collateral value, as well as its seniority
relative to the company's $240 million senior notes.
The stable outlook reflects Moody's expectation that Xerium will
reduce financial leverage through modest revenue and earnings
growth.
The ratings or outlook could be raised over time if additional
debt is retired and financial leverage and interest coverage
approach 4.5x and 2.5x, respectively. The ratings or outlook could
be lowered if Xerium loses market share, margins erode materially,
or if financial leverage is sustained above 6x over the next 12-18
months.
The principal methodology used in this rating was the Global Paper
and Forest Products Industry 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.
Xerium Technologies, Inc., headquartered in Raleigh, NC, is a
manufacturer and supplier of consumable products used primarily in
the production of paper such as paper machine clothing and roll
covers. Xerium generated revenues of $544 million for the twelve
months ended March 31, 2013.
XERIUM TECHNOLOGIES: S&P Rates $200MM 1st-Lien Term Loan 'BB-'
--------------------------------------------------------------
Standard & Poor's Rating Services said that it assigned its 'BB-'
issue rating to Raleigh, N.C.-based paper product manufacturer
Xerium Technologies Inc.'s proposed $200 million first-lien term
loan. The recovery rating is '1', indicating S&P's expectation of
a very high (90%-100%) recovery in the event of a payment default.
At the same time, S&P affirmed the 'B' corporate credit rating and
the 'B' issue rating on the company's $240 million notes due 2018.
The recovery rating on the notes is '4', indicating S&P's
expectation of an average (30%-50%) recovery. The outlook is
negative.
The company expects to use proceeds from its new term loan to
redeem its existing $278 million credit facility. The company
will also have an unrated $40 million asset-based revolving credit
facility. S&P expects to withdraw the issue rating on the
existing debt when the transaction closes.
"The affirmation of the corporate credit rating reflects moderate
improvement and some stabilization in Xerium's end markets," said
Standard & Poor's credit analyst Carol Hom. S&P believes volumes
are generally tied to GDP growth. The negative outlook reflects
S&P's concerns regarding limited covenant headroom on Xerium's
financial covenants under its existing credit facility and until
it successfully refinances its proposed transaction with covenant
lite terms. S&P's base-case forecast assumes the following in
2013:
-- GDP growth in the U.S. of 2.7%;
-- Flat growth in Europe;
-- GDP growth in China of about 6%;
-- GDP growth in South America of 3.5%;
-- Topline for 2013 remaining flat;
-- High-teens EBITDA margin; and
-- Annual capital expenditures of roughly $30 million.
The ratings also reflect S&P's view of Xerium's "weak" business
risk profile and "highly leveraged" financial risk profile. The
business risk profile takes into account the company's continued
presence in the cyclical and competitive market for papermaking
products, limited end-user industry diversification, and S&P's
expectation that structurally weak medium-term demand in mature
markets will likely continue to pressure prices for the company's
products. In S&P's view, Xerium's relatively variable cost
structure, sound margins, and fair geographic diversification
partly offset these weaknesses. Xerium's geographic
diversification should enable it to benefit from more positive
industry fundamentals in emerging markets. S&P views the
company's management and governance profile as "fair."
The company generated revenues of $538 million in the fiscal year
ended 2012. Xerium operates in two business segments: clothing,
in the form of synthetic textile belts that transport paper
through papermaking machines, and roll covers, which provide
covering surface for large steel cylinders between which paper
travels. Clothing represents roughly 65% of revenue, and roll
covers make up the remainder. These consumables will continue to
play key roles in converting raw material into paper, and S&P
expects customers to continue to prefer local, long-standing
suppliers that they believe are reliable. The company has
indicated that it derives about two-thirds of its sales from
products customers use in the production of high-growth paper
grades such as tissue, containerboard, and specialty paper.
Newsprint and printing paper grades represent the remaining sales,
and these are experiencing low growth or contraction.
The outlook is negative. S&P could lower the ratings if EBITDA
declines and the company does not reduce its debt, causing
leverage to increase and remain above 6x. Factors that could
contribute to such a scenario would be continued global economic
weakness, increased pricing pressures, and adverse foreign
exchange movements. S&P could revise the outlook to stable if the
company successfully refinances its proposed credit facility or if
it contained covenants that had adequate headroom of at least 15%.
* Liquidity Stress Index Hits New Low of 3% as of Mid-April
-----------------------------------------------------------
Moody's Liquidity Stress Index returned to its record low of 3.0%
as of mid-April, down from 3.2% at the end of March, Moody's
Investors Service says in its latest edition of SGL Monitor. The
LSI has bounced around the low-to-mid 3% range for several months
now.
Moody's Liquidity-Stress Index rises when corporate liquidity
appears to weaken and falls when it appears to improve.
"The improved reading is a sign that most US speculative-grade
companies continue to avoid liquidity problems, despite slow
economic growth and other potential stresses," says Vice President
-- Senior Credit Officer John Puchalla. "Modest corporate earnings
growth and extremely accommodating credit markets remain key
supports for liquidity."
Although speculative-grade liquidity has been solid, it could
weaken if cash flows or access to the credit markets were to come
under pressure, Puchalla says. "A pullback in US corporate
earnings, slowdown in China, a worsening of Europe's economy and
the impact of US fiscal policy choices are all things that could
give investors and consumers pause and undermine the advantageous
credit environment."
Despite the strong liquidity readings, liquidity rating downgrades
continue to outnumber upgrades. In the first half of April rating
activity has been modest, with two downgrades and one upgrade,
while in the first quarter there were 22 downgrades and 18
upgrades.
"Downgrades continue to reflect company-specific issues with debt
maturities and cash flow, rather than any broader inflection in
liquidity conditions," Puchalla says. "Despite the modest
prevalence of downgrades, our Liquidity-Stress Index has been a
better indicator of historically low default rates and continues
to give very benign readings."
Moody's Covenant Stress Index, which measures the extent to which
speculative-grade companies are at risk of violating their debt
covenants, hit a record low of 1.7% in March, down from 1.9% in
February. The low reading indicates a low risk of covenant
violations over the next 12-15 months for most companies.
* 'Extremely Accommodating' Credit Markets Aid Junk Liquidity
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that credit markets that Moody's Investors Service calls
"extremely accommodating" are allowing junk-rated companies to
improve their liquidity. Sales of junk bonds in the U.S. are up
almost 8% this year compared with the same period last year,
Moody's said.
Perhaps more important for low-rated companies, the markets
loosened up even more recently. Junk bond sales were up 27.5% in
March compared with last year and are tracking 36.8% ahead over
the first two weeks of April, Moody's said.
As a consequence, the liquidity of junk-rate companies improves.
Moody's liquidity-stress index returned to a record-low 3% in mid-
April from 3.2% when March closed. The index is less than half
the average 7.3%. The liquidity-stress index measures the
percentage of junk-rated companies with the weakest liquidity.
Forgiving bond markets prompted Moody's to predict that the junk
default rate will decline to 2.6% at the year's end and 2.4% one
year from now, compared with 2.9% in March. Earlier, Moody's was
predicting a 3% junk default rate when 2013 comes to a close.
* United Operating Rule Defined More in Fifth Circuit
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in New Orleans wrote an
opinion last week further fleshing out what constitutes a
"specific and unequivocal" reservation of rights required for
filing a lawsuit after a Chapter 11 reorganization is completed.
Although it's sufficient for a plan to reserve the right to bring
"avoidance actions," those terms won't cover a post-bankruptcy
suit for state-law claims, fraud, or breach of fiduciary duty,
according to an April 18 opinion by Circuit Judge Edward C. Prado.
The Fifth Circuit in New Orleans is the most stringent when it
comes to requiring notice before confirming a Chapter 11 plan
about the intention to file suits after emerging from bankruptcy.
The two leading cases in the Fifth Circuit are United Operating
from 2008 and Texas Wyoming Drilling from 2011.
According to the report, Judge Prado said that suits for
fraudulent transfer or preference are sufficiently describe if the
plan reserves the right to bring "any claims" based on "causes of
action arising under Chapter 5 of the U.S. Bankruptcy Code."
Chapter 5 lays out bankruptcy-related claims like fraudulent
transfer and preference.
Those words, although unequivocal, weren't sufficiently specific
to cover a suit against directors and pre-bankruptcy company
lawyers for breach of fiduciary duty, according to Judge Prado's
opinion.
Judge Prado said a "blanket reservation of rights is not
sufficient" by referring "to all causes of action, known or
unknown."
The case is Wooley v. Haynes & Boone LLP (In re SI Restructuring
Inc.), 11-51106, Fifth U.S. Circuit Court of Appeals (New
Orleans).
* Wilbur Ross Wants Committees, Atty. Hikes Probed
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Wilbur Ross said in a prepared testimony to the
commission studying bankruptcy reform the "proliferation of
committees" in bankruptcy reorganizations and "billing rate
increases that greatly outpaced inflation" should be addressed by
Congress.
Katy Stech, writing for Dow Jones Newswires, reports that Mr. Ross
told an audience of hundreds of bankruptcy professionals gathered
for an American Bankruptcy Institute conference Friday near
Washington, D.C., that the hourly billing system that they use to
get paid is "primitive" and encourages frivolous legal actions.
"Frequently excessive" professional fees, Mr. Ross said, result
from "committees whose claims are at or near the cusp of
worthlessness." They have "every reason to delay the case" and
employ "terrorist tactics" that sometimes "lead to concessions
from economically superior claimants."
"You need an independent fiduciary to serve in every sizeable
case," lawyer Robert Feinstein said referring to creditors'
committees, "because inside management can't be expected to
investigate itself."
Mr. Ross, chief executive and co-founder of W.L. Ross & Co., said
the "real flaw" is a compensation system that "is essentially
time-based rather than results-based." When lawyers are paid for
every hour worked, there is an incentive, Mr. Ross said, "to
explore even the most outlandish theories."
"Until you're sure they're really, really out of the money, the
committee should have some baseline amount to function,"
Mr. Feinstein said in an interview.
Mr. Feinstein believes that creditors' committees are also
necessary because sometimes there is an agreement for lenders to
take over ownership. Those situations, he said, "at least create
the appearance that there has been a compromise of management's
independence." A partner in New York with Pachulski Stang Ziehl &
Jones LLP, Feinstein often represents creditors' committees.
Mr. Ross identified "overstaffing" as another cause of excessive
fees. He said that "the business models of firms" can "encourage
overstaffing because that maximizes revenues."
To remedy the problem of excessive professional expense, Mr. Ross
proposes that Congress impose a cap on fees equal to a percentage
of the recovery by those the professionals represent. He would
make exceptions for complicated cases, like Lehman Brothers
Holdings Inc.
Dow Jones notes more than 1,000 people had registered to attend
the conference.
* Jason Brookner Joins Looper Reed as Bankruptcy Section Leader
---------------------------------------------------------------
The law firm of Looper Reed & McGraw welcomes Jason Brookner as a
Member and Section Leader to the firm's Bankruptcy Section. With
over 18 years of experience, Brookner has substantial experience
representing and advising companies, boards, buyers, creditors,
trustees, committees, lenders and other constituents in all
aspects of distressed, insolvency and restructuring scenarios.
Brookner will be based in the firm's Dallas office.
Praised by clients and peers in Chambers & Partners USA as "an
exceptional bankruptcy attorney," "easy to work with and great
with people," and recommended for his "practical and diligent
approach," Mr. Brookner has been selected by Chambers as one of
the leading lawyers in bankruptcy/restructuring in Texas every
year since 2005. He is also recognized by Best Lawyers in America
for Bankruptcy and Creditor Debtor Rights/Insolvency and
Reorganization Law in 2013, and profiled as one of "Texas' Top
Rated Lawyers" by ALM in Bankruptcy in 2012.
Mr. Brookner graduated with his J.D. from Hofstra University
School of Law in 1994 and his B.A. from The State University of
New York at Binghamton in 1991. Upon graduation from law school,
he clerked for The Honorable Charles N. Clevert, Jr., Chief United
States Bankruptcy Judge for the Eastern District of Wisconsin. He
is licensed in Texas, New York and Wisconsin.
About Looper Reed & McGraw
Founded in 1985, Looper Reed & McGraw -- http://www.lrmlaw.com--
is a full-service, Texas based law firm with more than 120 lawyers
practicing in Dallas, Houston and Tyler. Looper Reed & McGraw
offers a wide range of legal services including business
litigation, corporate transactions, oil & gas, tax planning and
litigation, real estate, healthcare, trusts and estates,
employment law, family law, intellectual property, and bankruptcy.
For more information, visit www.lrmlaw.com.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share- Total
Total Holders' Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ -------- -------
ABSOLUTE SOFTWRE ABT CN 121.1 (13.9) (11.2)
AIR CANADA-CL B AC/B CN 9,060.0 (3,342.0) (212.0)
AMC NETWORKS-A AMCX US 2,618.9 (882.4) 524.0
AMER AXLE & MFG AXL US 2,866.0 (120.8) 271.3
AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2)
AMERISTAR CASINO ASCA US 2,074.3 (22.3) (57.4)
AMR CORP AAMRQ US 23,852.0 (8,376.0) (2,465.0)
AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0
ARRAY BIOPHARMA ARRY US 128.4 (31.7) 64.0
ARTISAN PARTNERS APAM US 287.6 (315.5) -
AUTOZONE INC AZO US 6,662.2 (1,550.1) (1,108.4)
BERRY PLASTICS G BERY US 5,050.0 (313.0) 482.0
CABLEVISION SY-A CVC US 7,246.2 (5,626.0) (319.5)
CAESARS ENTERTAI CZR US 27,998.1 (331.6) 905.3
CAPMARK FINANCIA CPMK US 20,085.1 (933.1) -
CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1)
CIENA CORP CIEN US 1,885.2 (78.6) 741.2
CINCINNATI BELL CBB US 2,872.4 (698.2) (51.9)
COMVERSE INC CNSI US 823.2 (28.4) (48.9)
DELTA AIR LI DAL US 44,550.0 (2,131.0) (4,998.0)
DENNY'S CORP DENN US 324.9 (4.5) (27.2)
DIRECTV DTV US 20,555.0 (5,031.0) 13.0
DOMINO'S PIZZA DPZ US 478.2 (1,335.5) 76.8
DUN & BRADSTREET DNB US 1,991.8 (1,014.3) (129.3)
DYAX CORP DYAX US 55.5 (51.6) 24.4
FAIRPOINT COMMUN FRP US 1,798.0 (220.7) 31.1
FERRELLGAS-LP FGP US 1,503.0 (42.3) (22.2)
FIFTH & PACIFIC FNP US 902.5 (126.9) 36.4
FOREST OIL CORP FST US 2,201.9 (42.8) (101.2)
FREESCALE SEMICO FSL US 3,171.0 (4,531.0) 1,186.0
GENCORP INC GY US 1,385.2 (379.1) 32.0
GLG PARTNERS INC GLG US 400.0 (285.6) 156.9
GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9
GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5
GRAMERCY PROPERT GPT US 2,168.8 (251.8) -
HCA HOLDINGS INC HCA US 28,075.0 (8,341.0) 1,591.0
HOVNANIAN ENT-A HOV US 1,580.3 (481.2) 935.2
HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8)
HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8)
INCYTE CORP INCY US 330.4 (175.0) 173.4
INFOR US INC LWSN US 5,846.1 (480.0) (306.6)
INVIVO THERAPEUT NVIV US 16.1 (2.3) (3.2)
IPCS INC IPCS US 559.2 (33.0) 72.1
ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2
JUST ENERGY GROU JE US 1,510.8 (273.1) (287.1)
JUST ENERGY GROU JE CN 1,510.8 (273.1) (287.1)
L BRANDS INC LTD US 6,019.0 (1,014.0) 667.0
LIN TV CORP-CL A TVL US 1,241.4 (88.3) (182.6)
LORILLARD INC LO US 3,396.0 (1,777.0) 1,176.0
MANNKIND CORP MNKD US 251.3 (110.7) (78.0)
MARRIOTT INTL-A MAR US 6,342.0 (1,285.0) (1,298.0)
MEDIA GENERAL-A MEG US 773.4 (176.2) 38.0
MERITOR INC MTOR US 2,341.0 (1,011.0) 224.0
MERRIMACK PHARMA MACK US 149.0 (6.4) 89.8
MODEL N INC MODN US 42.2 (11.1) (14.5)
MONEYGRAM INTERN MGI US 5,150.6 (161.4) (35.5)
MORGANS HOTEL GR MHGC US 591.2 (137.3) 9.0
NATIONAL CINEMED NCMI US 810.5 (356.4) 129.6
NAVISTAR INTL NAV US 8,531.0 (3,309.0) 1,517.0
NPS PHARM INC NPSP US 151.1 (54.6) 107.5
NYMOX PHARMACEUT NYMX US 1.8 (7.4) (1.9)
ORBITZ WORLDWIDE OWW US 834.3 (142.7) (247.7)
ORGANOVO HOLDING ONVO US 9.0 (27.4) 7.3
PALM INC PALM US 1,007.2 (6.2) 141.7
PDL BIOPHARMA IN PDLI US 280.0 (68.1) 172.5
PHILIP MORRIS IN PM US 37,418.0 (2,732.0) 2,152.0
PHILIP MRS-BDR PHMO11B BZ 37,418.0 (2,732.0) 2,152.0
PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9)
PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9)
PRIMEDIA INC PRM US 208.0 (91.7) 3.6
PROTECTION ONE PONE US 562.9 (61.8) (7.6)
QUALITY DISTRIBU QLTY US 513.6 (18.4) 77.6
RALLY SOFTWARE D RALY US 35.8 (1.1) 1.3
REGAL ENTERTAI-A RGC US 2,209.5 (698.6) (129.7)
REGULUS THERAPEU RGLS US 40.7 (8.5) 21.0
RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4)
REVLON INC-A REV US 1,236.6 (649.3) 88.1
RURAL/METRO CORP RURL US 303.7 (92.1) 72.4
SALLY BEAUTY HOL SBH US 1,969.9 (157.2) 637.4
SILVER SPRING NE SSNI US 417.7 (228.8) 43.3
SINCLAIR BROAD-A SBGI US 2,729.7 (100.1) (3.2)
TAUBMAN CENTERS TCO US 3,268.5 (344.9) -
TESORO LOGISTICS TLLP US 363.2 (18.1) 11.1
TETRAPHASE PHARM TTPH US 14.1 (3.2) 3.7
THRESHOLD PHARMA THLD US 89.5 (13.9) 70.2
TOWN SPORTS INTE CLUB US 403.9 (55.5) (7.8)
ULTRA PETROLEUM UPL US 2,007.3 (577.9) (388.2)
UNISYS CORP UIS US 2,420.4 (1,588.7) 482.1
VECTOR GROUP LTD VGR US 1,086.7 (79.3) 443.9
VERISIGN INC VRSN US 2,062.5 (9.3) 948.4
VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3)
VISKASE COS I VKSC US 334.7 (3.4) 113.5
WEIGHT WATCHERS WTW US 1,218.6 (1,665.5) (229.9)
WEST CORP WSTC US 3,448.2 (1,249.7) 303.4
WESTMORELAND COA WLB US 936.1 (286.2) (11.6)
*********
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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related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
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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.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
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Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
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Editors.
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