/raid1/www/Hosts/bankrupt/TCR_Public/130702.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, July 2, 2013, Vol. 17, No. 181
Headlines
1555 WABASH: Court Allows Evans' Contractor Claim for $79,282
A.M. CASTLE: Metal Distributor Downgraded to B Corporate
A123 SYSTEMS: Committee Seeks Approval of Deal to Settle Claims
AGY HOLDING: Enters Into New Financing & Debt Restructuring Deals
ALLIED IRISH: Publishes Pillar 3 Disclosure 2012
ALLY FINANCIAL: Files Updated Copy of Demand Notes Program
AMERICAN AIRLINES: Judge Green-Lights Airport Leases, New Aircraft
AMERICAN AIRLINES: Begins Tender Offer to Avoid Make-Whole Appeal
AMERICAN APPAREL: Stockholders Elect Two Directors
AMERICAN INT'L: BofA Rebuffs Mediation Bid on $8.5 Billion Accord
AMERICAN PETRO-HUNTER: Inks $5MM Stock Purchase Pact with Hanover
AMERISTAR CASINOS: S&P Retains 'BB-' CCR on CreditWatch Negative
ANACOR PHARMACEUTICALS: Form S-3 Filed for Bill & Melinda Shares
ANCHOR BANCORP: Amends Fiscal 2013 Annual Report
APPVION INC: $300.7 Million Senior Notes Validly Tendered
AS SEEN ON TV: Swings $3.4 Million Net Income in Fiscal 2013
ATP OIL: Becomes Test Case on Appeal Over Abandonment Issue
AVANTAIR INC: To Restructure Affairs to Resume to Profitability
BANYON 1030-32: Victims Want $72MM TD Bank Deal in District Court
BERING EXPLORATION: Delays Form 10-K for Fiscal 2013
BERNARD L. MADOFF: Trustee to Expunge 73+ Feeder-Fund Claims
BERNARD L. MADOFF: 2nd Cir. Says Trustee Can't Assert Bank Claims
BIOVEST INTERNATIONAL: Approved for Debt-Swap Sale With Lenders
BONDS.COM GROUP: Trimarc Capital Had 15% Equity Stake at June 25
BROOKE CORP: Founder Pleads Guilty to Deceiving SEC
BROWN PUBLISHING: Court Dismisses Trust's Clawback Suit v. AXA
CAPITOL BANCORP: Creditors Pressing to Sue Officers
CASH STORE: Appoints Eugene Davis as Director and Chairman
CASPIAN ENERGY: Gets Notice of Default on Debentures From Firebird
CEDAR BAY: S&P Assigns 'BB' Rating on $250MM Sr. 1st-Lien Loan
CELOTEX CORP: Claims v. Integrity Insurance Barred by Estoppel
CENTRAL EUROPEAN: Had $79.4 Million Net Loss in First Quarter
CENTRIX FINANCIAL: Court Allows Deposition in Suit v. Insurers
CENVEO INC: S&P Lowers CCR to 'B-'; Outlook Stable
CHINA NATURAL: Pipeline Consents to Chapter 11 in New York
CHRYSLER LLC: SDNY Court Trims Class Suit Over Defective Cars
CIRCLE STAR: OKs Issue of 4.2 Million Common Shares
COLONIAL BROKERAGE: PBGC Claims to Be Treated as Timely Filed
COOPER-BOOTH: U.S. Trustee Appoints 3-Member Creditors Committee
COMPETITIVE TECHNOLOGIES: To Issue 200,000 Shares to Advisors
COMPETITIVE TECHNOLOGIES: Shareholders Elect Five Directors
COMSTOCK MINING: Stockholders Elect Five Directors
COOPER TIRE: S&P Puts 'BB-' CCR on CreditWatch Negative
CREDITCORP: Moody's Rates New $165MM Senior Notes 'B3'
CREDITCORP: S&P Assigns 'B' ICR & Rates $165MM Sr. Sec. Notes 'B'
DELTA AGGRIGATE: Involuntary Chapter 11 Case Summary
DEWEY & LEBOEUF: US Bank Urges Judge to Allow $8MM Equipment Claim
DIAGNOSTIC VENTURES: Former Exec, Deloitte Cleared From Fraud Suit
DIALOGIC INC: Lenders OK Patents Sale and Delayed Form 10-Q
DIGITAL ANGEL: Incurs $6.4 Million Net Loss in 2012
DUNE ENERGY: Obtains $10 Million From Securities Sale
EASTMAN KODAK: Posts $279 Million Net Earnings in First Quarter
EDISON MISSION: May Sell Rather Than Reorganize
ELPIDA MEMORY: Japanese Bankruptcy Plan Enforced in U.S.
FIRST QUANTUM: S&P Affirms B+ Corp. Credit Rating, Outlook Stable
FLUX POWER: Plans to Acquire KleenSpeed Technologies
FLY LEASING: Moody's Changes Outlook to Positive; Keeps B2 CFR
FNB UNITED: Now Known as CommunityOne Bancorp
GFI GROUP: Downgraded to B+ Corporate by S&P
GFI GROUP: Fitch Affirms 'B' Short-Term Issuer Default Rating
HAMPTON ROADS: To Be Added to Russell 2000(R) Index
HARRISBURG, PA: Reaches Deal with Covanta Over $22Mm Loan Default
HIGHWAY TECHNOLOGIES: Auction Brings Higher Price
HIGHWAY TECHNOLOGIES: 7-Member Creditors Committee Named
IDERA PHARMACEUTICALS: Investors to Sell 2 Million Shares
IGPS CO: Committee Opposes Quick Sale of Pallet Business
IN THE PLAY: Files Schedules of Assets and Liabilities
INDEPENDENCE TAX II: Posts $12.5MM Net Income in Fiscal 2013
INDEPENDENCE TAX III: Terminates Registration of Certificates
INOVA TECHNOLOGY: Trading of Securities Resumes
INTERFAITH MEDICAL: Keeps Chapter 11 Control
INTEGRATED HEALTHCARE: Withdraws Unsold Shares Under 2006 Plan
INTEGRATED HEALTHCARE: Swings to $15.8 Million Net Loss in 2013
IPC STRATEGIC: Fund Files Ch. 15 in New York for Investigation
ISC8 INC: Reports Change in Fiscal Year
J. HOWARD MARSHALL III: Judge Not Biased by Anna Nicole Smith Case
JAMESTOWN LLC: Files Schedules of Assets & Liabilities
JEFFERSON COUNTY, AL: Makes Another Deal Ahead of Final Plan
JEFFERSON COUNTY: Judge Rules on Paying Lawyers From Sewer Fees
JMC STEEL: Pipe Producer Downgraded to 'B' Corporate From S&P
K-V PHARMACEUTICAL: Hearing on 6th Amended Plan Yet to Be Set
KARAM INC: Dist. Court Rejects Appeal Over Ch.11 Case Dismissal
KICKAPOO KENNELS: Judge Dismisses Bankruptcy, Citing 'Bad Faith'
KIDSPEACE CORP: U.S. Trustee Appoints 5-Member Creditors Committee
KIT DIGITAL: Reaches $6MM Deal to End Securities Class Actions
LEHMAN BROTHERS: Trustee Settles Luxembourg Affiliates' Claims
LOCATION BASED TECHNOLOGIES: Sees $755,000 Revenues for Q3 2012
LONGVIEW POWER: S&P Lowers Rating on Sr. Sec. Facilities to 'CCC-'
LUKEN COMMUNICATIONS: Section 341(a) Meeting Set on July 25
LUXLAS FUND: S&P Affirms 'B+' CCR and Senior Secured Debt Rating
M/V ENDEAVOUR: Court Tosses Chapter 11 Case
MADISON INSURANCE: A.M. Best Cuts Finc'l. Strength Rating to 'B-'
MARVIN-WAXHAW ASSOCIATES: Court Grants Surcharge Exemption Motion
MERCANTILE BANCORP: Files Ch.11 to Sell Biz, Avoid Takeover
MERCED FALLS RANCH: Cappello & Noel Allowed $24,000 in Fees
MERIT LIFE: A.M. Best Affirms 'B' Financial Strength Rating
MF GLOBAL: Suit Designed to Bar Corzine From Securities Industry
MF GLOBAL: Judge Rips $40MM Defense Cap Request
MILLENNIUM INORGANIC: S&P Raises Rating on 2nd-Lien Debt to 'BB+'
MOBIVITY HOLDINGS: John Lemak Held 6.7% Equity Stake at June 17
MOUNTAIN PROVINCE: Joint Venture and GNWT Sign Economic Pact
MPF HOLDING: Litigation Trustee Lacks Standing to Sue InOcean
NATIONAL HERITAGE: Behrmanns Face Sanctions for Filing Class Suit
NEW LEAF: Incurs $1.3 Million Net Loss in Sept. 30 Quarter
NEXEO SOLUTIONS: Poor Performance Cues Moody's to Cut CFR to B2
NORD RESOURCES: Extends Copper Sales Agreement with Red Kite
ONE ALLY: S&P Corrects Rating on Sr. Unsecured Notes to 'B+'
OP-TECH ENVIRONMENTAL: NRC Offers to Pay Holders $0.116 Apiece
ORCHARD SUPPLY: Can Hold Liquidation Sales
OXFORD BUILDING: CMC Suit Remanded to Marion Superior Court
PARROTT BROADCASTING: Court Tosses Former Manager's Claim
PLEASE TOUCH: S&P Lowers Rating on 2006 Revenue Bonds to 'BB-'
PLUG POWER: Files Copy of Presentation to Stockholders
PONCE DE LEON: July 3 Hearing to Confirm Amended Plan
POWER BALANCE: Conference in Class Suit Moved to October
POWER BALANCE: July 10 Hearing to Approve Plan Outline
PRIVATE MEDIA GROUP: Incurs $485,000 Net Loss in First Quarter
PUGET ENERGY: Moody's Affirms 'Ba1' Rating; Outlook Positive
QUANTUM FUEL: Amends 6.1 Million Shares Resale Prospectus
QUANTUM FUEL: Executives OK Base Salaries Cut
QUIGLEY CO: Pfizer Unit to Emerge From Asbestos Bankruptcy
READER'S DIGEST: Bankruptcy Court Confirms Plan of Reorganization
RENO-SPARKS INDIAN: Fitch Upgrades Issuer Default Rating to 'BB+'
RESIDENTIAL CAPITAL: $2.1BB Ally Plan Support Agreement Okayed
RESIDENTIAL CAPITAL: Chapter 11 Examiner's Report Unsealed
RESIDENTIAL CAPITAL: Noteholders Object to FGIC Settlement
RESIDENTIAL CAPITAL: To Escrow $450,000 for NJ Class Suit Fees
REVSTONE INDUSTRIES: Schoeller Arca Systems Resigns From Committee
RITE AID: Jean Coutu Lowers Equity Stake to 7.2% at June 26
RIVIERA HOLDINGS: Has Resort Management Agreement with Paragon
ROTECH HEALTHCARE: Seeks Disbandment of Equity Committee
ROTECH HEALTHCARE: Equity Holders Lose Bid to Hire Valuation Firm
ROTECH HEALTHCARE: Iota Medical Files Schedules
ROTECH HEALTHCARE: Medcorp International Files Schedules
ROTECH HEALTHCARE: Vitalcare Health Files Schedules
ROTECH HEALTHCARE: Whites Medical Files Schedules
SAFENET INC: S&P Revises Outlook to Stable & Affirms 'B' CCR
SALON MEDIA: Incurs $696,000 Net Loss in Fourth Quarter
SBM CERTIFICATE: Files Schedules of Assets and Liabilities
SELECTOS WHOLE FOODS: Injunction Recommended in Supplier's Suit
SK FOODS: Four In One et al. to Seek Class Status
SOLERA HOLDINGS: S&P Retains 'BB-' Rating on New Sr. Unsec. Notes
SOPHIE NG: 9th Cir. Affirms Disallowance of Regulo Sierra's Claim
STANCORP FINANCIAL: Fitch Affirms 'BB+' Rating on $300MM Sub. Debt
SPA CHAKRA: Judge Won't Sanction Neiger Firm
SUN BANCORP: To Issue 200,000 Common Shares to Directors
TMT USA: U.S. Judge Permits Use of Cash
TRANSDIGM INC: S&P Cuts Rating on $3.4BB 1st-Lien Facility to 'B'
TRINITY COAL: Seeks to Auction Assets Without Lead Bidder
UNI-PIXEL INC: To Join Russell 3000 Index & Russell Global Index
UNITEK GLOBAL: John Waterfield Held 6.2% Equity Stake at June 19
UNIVERSAL SETTLEMENTS: Mich. Court Dismisses Nat'l Viatical Suit
UPH HOLDINGS: Files Schedules of Assets and Liabilities
VALENCE TECHNOLOGY: Storage Battery Maker Has Offer From Lender
VAUGHAN COMPANY: Court Won't Dismiss Suit Against Lacys
VELATEL GLOBAL: Cures $600,000 Default Under Promissory Note
VILLAGE AT NIPOMO: Files Schedules of Assets and Liabilities
VITESSE SEMICONDUCTOR: Kopp Held 7% Equity Stake at June 26
VISUALANT INC: Unit Renews Facility with BFI Until Dec. 31
WALNUT CREEK STORAGE: Texas Judge Confirms Plan
WESTERN CAPITAL: Creditors Have Until July 5 to File Claims
WESTINGHOUSE AIR: S&P Raises Corp. Credit Rating From 'BB+'
WILTON HOLDINGS: S&P Revises Outlook to Neg. & Affirms 'B' CCR
WORLDCOM INC: Must Return to Mediation Over K&A Claim Dispute
ZOGENIX INC: Has Exclusive Right Promote Migranal(R) in U.S.
* Bad Faith Is 'Cause' to Dismiss Individual Chapter 7
* Delaware Cases Get New Judge Following Fitzgerald's Retirement
* U.S. Regulators Strike Agreement on Capital Rule
* Finance Committee Asks Senators to Start Tax Reform Process
* Fed Officials Intensify Effort to Curb Surge in Interest Rates
* Moody's Shows Wider Pension Gap for States
* Outlook Remains Dim for Bankruptcy Professionals
* Weil Layoffs Show New Market Pressures Cut Deep
* Bankruptcy Pro David W. Carickhoff Joins Archer & Greiner
* Large Companies With Insolvent Balance Sheets
*********
1555 WABASH: Court Allows Evans' Contractor Claim for $79,282
-------------------------------------------------------------
Judge Jacqueline P. Cox sustained, in part, and overruled, in
part, the objection of lender AmT CADC Venture, LLC, successor in
interest to AmTrust Bank, to Evans Construction Company's Claim
No. 3 in the bankruptcy case of 1555 Wabash LLC.
Evan's Claim was filed on Oct. 16, 2012, with secured status for
$398,937 -- the amount it asserted was due to subcontractors for
construction services.
The Court sustains the Lender's objection, in part, and will allow
Evans' Disputed Claim in the reduced amount of $79,282.31 which
reflects the amount of the originally filed proof of claim of
$398,937, less payments made directly to Evans' subcontractors
($279,654.69), and the cost to construct the parapet walls
($40,000).
A copy of Judge Cox's June 19, 2013 Memorandum Opinion is
available at http://is.gd/T8GpKffrom Leagle.com.
About 1555 Wabash
1555 Wabash LLC owns and operates a 14-story mixed use building
located at 1555 South Wabash, in Chicago, Illinois. The property
is comprised of 176 residential units plus 11,000 square feet of
commercial space located on the first floor of the building. The
property was originally developed as condominium units to be sold
at designated sale prices to qualified buyers. Construction was
generally completed as of the middle of 2009. Only 36 of the 100
sale contracts closed. As of the Petition Date, 1555 Wabash
leased 115 of the remaining 140 residential apartment units --
roughly 82% -- to qualified tenants, while the commercial space is
presently vacant.
1555 Wabash LLC filed for Chapter 11 protection (Bankr. N.D. Ill.
Case No. 11-51502) on Dec. 27, 2011, to halt foreclosure of the
property. Judge Jacqueline P. Cox oversees the case. David K.
Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the
Debtor's counsel. The Debtor scheduled $90,055 in personal
property and said the current value if its condo building is
unknown. The Debtor disclosed $51.6 million in liabilities. The
petition was signed by Theodore Mazola, president of New West
Realty Development Corp., sole member and manager of the Debtor.
A.M. CASTLE: Metal Distributor Downgraded to B Corporate
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that A.M. Castle & Co., a distributor of specialty metals
for the aerospace and oil and gas industries, experienced a one
level downgrade on its corporate rating when Standard & Poor's
lowered the rating June 26 to B.
S&P expects liquidity for the Oak Brook, Illinois, company "should
remain adequate." The shares declined 42 cents June 26 to $15.76
on the New York Stock Exchange. In the last three years, the high
was $19.06 on Dec. 29, 2010. The low in the period was $7.10 on
Aug. 1, 2012.
A123 SYSTEMS: Committee Seeks Approval of Deal to Settle Claims
---------------------------------------------------------------
BankruptcyData reported that A123 Systems' official committee of
unsecured creditors filed with the U.S. Bankruptcy Court a motion
to enter into a settlement agreement by and among the Debtor, the
official committee of unsecured creditors, A123 Systems (China)
Materials, A123 Systems (Zhenjiang), A123 Systems Hong Kong, A123
Systems GmBH, A123 Systems LLC and Wanxiang America Corporation.
Under this agreement, China Materials Claim, the 2008 tax
liability and the inter-Company claims will pay to A123 Systems
LLC the total aggregate sum of $8.8 million in cash. The parties
agree that no portion of the settlement payment will be deemed to
constitute damages with respect to indemnification claims and that
no portion thereof will count towards the $1 million minimum
required under Section 9.2 of the asset purchase agreement.
The Xinpeng claim will be allowed as a general unsecured claim
against the Debtor in the aggregate amount of $604,927, the Boston
plastics claim will be allowed as a general unsecured claim
against the Debtor in the aggregate amount of $956,953, the report
added. The allowed claims will be treated as allowed general
unsecured claims in accordance with Section 5.04 of the Plan.
About A123 Systems
Based in Waltham, Massachusetts, A123 Systems Inc. designed,
developed, manufactured and sold advanced rechargeable lithium-ion
batteries and battery systems and provided research and
development services to government agencies and commercial
customers. A123 was the recipient of a $249 million federal grant
from the Obama administration.
A123 and U.S. affiliates, A123 Securities Corporation and Grid
Storage Holdings LLC, sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012.
A123 disclosed assets of $459.8 million and liabilities totaling
$376 million. Lawyers at Richards, Layton & Finger, P.A., and
Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres
& Co. LLC acts as the Debtors' financial advisors, while Alvarez &
Marsal serves as restructuring advisors. Logan & Company Inc.
serves as the Debtors' claims and noticing agent. Brown Rudnick
LLP and Saul Ewing LLP serve as counsel to the Official Committee
of Unsecured Creditors.
Prior to the bankruptcy filing, A123 had an agreement to sell an
80% stake in the business to Chinese auto-parts maker Wanxiang
Group Corp. U.S. lawmakers opposed the deal over concerns on the
transfer of American taxpayer dollars and technology to China.
When it filed for bankruptcy, the Debtors presented a deal to sell
all assets to Johnson Controls Inc., subject to higher and better
offers. At the auction in December 2012, most of the assets ended
up being sold for $256.6 million to Wanxiang. The deal received
approval from the Committee on Foreign Investment in the U.S. on
Jan. 29, 2013.
A123 Systems was renamed B456 Systems Inc., following the sale.
Wanxiang America Corporation and Wanxiang Clean Energy USA Corp.
are represented in the case by lawyers at Young Conaway Stargatt &
Taylor, LLP, and Sidley Austin LLP. JCI is represented in the
case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP.
In May 2013, the Delaware bankruptcy court confirmed the
liquidation plan for A123 Systems Inc. The Plan repays all
secured creditors in full with some money left over for unsecured
creditors. Holders of $143.8 million in subordinated notes are
projected to recoup 36.3 percent. If B456 Systems Inc., the
company's new name, reduces claims to amounts the company believes
correct, the recovery on the subordinated notes could increase to
62.9 percent, according to the disclosure statement. General
unsecured creditors, who previously were said to have $124 million
in claims, would have roughly the same recovery.
AGY HOLDING: Enters Into New Financing & Debt Restructuring Deals
-----------------------------------------------------------------
AGY Holding Corp. and parent KAGY Holding Company, Inc., on June
28 disclosed that they have entered into a series of agreements
for the restructuring of the Companies' business and exchange of
certain of AGY's outstanding 11% senior second lien notes due
2014.
As provided in the Company's Form 8-K, the transactions are as
follows:
1. Exchange Transaction -- Approximately 93% in aggregate
principal amount of the holders of Old Notes exchanged their
outstanding Old Notes for the following consideration: (A) shares
of convertible participating preferred stock of KAGY having an
initial liquidation preference amount equal to 50% of the
principal amount of Old Notes exchanged plus 50% of the accrued
and unpaid interest through May 15, 2013 on the Old Notes
exchanged and (B) new 11% Senior Second Lien Notes of AGY with an
extended maturity of December 15, 2016 having a principal amount
equal to 50% of the principal amount of Old Notes exchanged. The
New Notes will be "144A-for-life" and neither the New Notes nor
the Series A Preferred Stock have been or will be registered under
the Securities Act of 1933.
2. Amendment of Old Notes Indenture -- The indenture governing the
Old Notes was amended to eliminate substantially all of the
covenants and collateral provisions and certain events of default
applicable to the Old Notes in connection with the closing of the
exchange transaction.
3. Amendment of Master Lease Agreement -- The Companies entered
into a Second Amended and Restated Master Lease Agreement with DB
Energy Trading LLC, to be syndicated to a group of participants
arranged by DB. The Amended Metals Facility extends the term of
the lease agreement through June 15, 2016 and, among other things,
permits AGY to lease up to 51,057 Troy ounces of platinum and
3,308 Troy ounces of rhodium, two of the alloy metals used in
AGY's manufacturing operations.
4. Amendment of ABL Facility -- AGY entered into a Second
Amendment to Amended and Restated Loan and Security Agreement with
UBS AG, Stamford Branch and UBS Securities LLC. Among other
things, the ABL Amendment provides that the maturity of the
facility shall be no earlier than June 15, 2016 and provides for a
reduction of 25 basis points in the applicable margin. The
amended facility is a $60 million senior secured revolving credit
facility.
5. Term Loan Agreement -- The Companies entered into a term loan
credit agreement with certain participants in the exchange
transaction and Wells Fargo Bank, National Association NA, as
agent, providing for borrowings by AGY of an aggregate principal
amount of $20 million, the full amount of which was drawn in
connection with the closing of the exchange transaction. The New
Term Loan will bear interest at a rate of 12% per annum and will
mature on September 15, 2016.
Promptly following the closing of the Restructuring, AGY commenced
an exchange offer for the remaining outstanding Old Notes. The
economic terms of the exchange offer are equivalent to those of
the exchange transaction (subject to certain limited exceptions
and subject to certain limitations on participation arising under
applicable securities laws). Unless extended by AGY, the exchange
offer will expire on July 29, 2013.
"AGY is pleased to successfully complete the restructuring
described above. We believe that this milestone is the
culmination of 18 months of effort to improve our operational
capabilities, refine our strategy and create a sound financial
platform," said Richard Jenkins, Interim CEO. "We are proud of
the vote of confidence that has been demonstrated by our financial
partners through the extension of these long-term financing
arrangements, which we anticipate will fund the execution of our
strategic plans."
Drew Walker, President added, "[Fri]day marks the rebirth of a
more than 50-year-old American manufacturing business with a
globally recognized brand. AGY makes our customers' products
lighter, faster and stronger, and we believe that this
restructuring creates a strong platform for growth in our key
Aerospace and Defense, Specialty Electronics and Industrial
markets."
Mr. Jenkins concluded by adding, "I would like to thank our
employees for their enthusiasm, hard-work and know-how, as well as
our suppliers and customers for their continued support of AGY
through the years. It is through these partnerships that AGY will
be successful as we launch into the next 50 years."
About AGY Holding
AGY Holding Corp. -- http://www.agy.com/-- produces fiberglass
yarns and high-strength fiberglass reinforcements used in
composites applications. AGY serves a range of markets including
aerospace, defense, electronics, construction and industrial.
Headquartered in Aiken, South Carolina, AGY has a European office
in Lyon, France and manufacturing facilities in the U.S. in Aiken,
South Carolina and Huntingdon, Pennsylvania and a controlling
interest in a manufacturing facility in Shanghai, China.
The Company's balance sheet at March 31, 2013, showed $210.32
million in total assets, $300.38 million in total liabilities and
a $90.05 million total shareholders' deficit.
* * *
In the May 21, 2013, edition of the TCR, Standard & Poor's Ratings
Services said it lowered, among other ratings, its corporate
credit rating on AGY Holding Corp. to 'D' from 'CCC-'.
"The rating actions follow the company's announcement that it has
not made approximately $10 million in interest payments due
May 15, 2013 on its 11% second-lien notes maturing 2014," said
Standard & Poor's credit analyst Paul Kurias.
ALLIED IRISH: Publishes Pillar 3 Disclosure 2012
------------------------------------------------
Allied Irish Banks, p.l.c., said it has published its Pillar 3
Disclosures 2012 on the Company's Web site at
http://www.aibgroup.com/investorrelations
For further information, please contact:
Enda Johnson
Head of Corporate Affairs & Strategy
AIB Bankcentre
Dublin
Tel: +353-1- 7726010
Email: enda.m.johnson@aib.ie
Niamh Hennessy
Media Relations Manager
AIB Bankcentre
Dublin
Tel: +353-1-7721382
E-mail: niamh.n.hennessy@aib.ie
About Allied Irish Banks
Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a
major commercial bank based in Ireland. It has an extensive
branch network across the country, a head office in Dublin and a
capital markets operation based in the International Financial
Services Centre in Dublin. AIB also has retail and corporate
businesses in the UK, offices in Europe and a subsidiary company
in the Isle of Man and Jersey (Channel Islands).
Since the onset of the global and Irish financial crisis, AIB's
relationship with the Irish Government has changed significantly.
As at Dec. 31, 2010, the Government, through the National Pension
Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary
shares of the Company (the share of the voting rights at
shareholders' general meetings), 10,489,899,564 convertible non-
voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On
April 8, 2011, the NPRFC converted the total outstanding amount of
CNV shares into 10,489,899,564 ordinary shares of AIB, thereby
increasing its holding to 92.8% of the ordinary share capital.
In addition to its shareholders' interests, the Government's
relationship with AIB is reflected through formal and informal
oversight by the Minister and the Department of Finance and the
Central Bank of Ireland, representation on the Board of Directors
(three non-executive directors are Government nominees),
participation in NAMA, and otherwise.
The Company reported a loss of EUR2.29 billion in 2011, a loss of
EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009.
Allied Irish's consolidated statement of financial position for
the year ended Dec. 31, 2011, showed EUR136.65 billion in total
assets, EUR122.18 billion in total liabilities and EUR14.46
billion in shareholders' equity.
Allied Irish's balance sheet at June 30, 2012, showed EUR129.85
billion in total assets, EUR116.59 billion in total liabilities
and EUR13.26 billion in total shareholders' equity.
ALLY FINANCIAL: Files Updated Copy of Demand Notes Program
----------------------------------------------------------
Ally Financial Inc. has updated the complete text of its Demand
Notes Program. The Ally Demand Notes Program has been established
by Ally Financial Inc. (formerly GMAC Inc.) to provide investors
with a convenient means of investing funds directly with the
Company in Ally Demand Notes. Information concerning the Program
may be obtained by calling toll free 1-800-684-8823 or by visiting
the Ally Demand Notes Web site at http://www.demandnotes.com/
A complete text of the Ally Demand Notes Program is available at:
http://is.gd/lwmQqZ
About Ally Financial
Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/--
is one of the world's largest automotive financial services
companies. The company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake. Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.
The Company's balance sheet at Dec. 31, 2012, showed
$182.34 billion in total assets, $162.44 billion in total
liabilities, and $19.89 billion in total equity. Ally Financial
Inc. reported net income of $1.19 billion for the year ended
Dec. 31, 2012, as compared with a net loss of $157 million during
the prior year.
* * *
As reported by the TCR on Feb. 27, 2013, Moody's Investors Service
confirmed the B1 corporate family and senior unsecured ratings of
Ally Financial, Inc. and supported subsidiaries and assigned a
positive rating outlook.
In February 2012, Fitch Ratings downgraded the long-term Issuer
Default Rating (IDR) and the senior unsecured debt rating of Ally
Financial and its subsidiaries to 'BB-' from 'BB'. The Rating
Outlook is Negative. The downgrade primarily reflects
deteriorating operating trends in ResCap, which has continued to
be a drag on Ally's consolidated credit profile, as well as
exposure to contingent mortgage-related rep and warranty and
litigation issues tied to ResCap, which could potentially impact
Ally's capital and liquidity levels. In the Feb. 13, 2013,
edition of the TCR, Fitch Ratings has maintained the Rating Watch
Negative on Ally Financial Inc. including the Long-term IDR 'BB-'.
As reported by the Troubled Company Reporter on May 22, 2012,
Standard & Poor's Ratings Services revised its outlook on Ally
Financial Inc. to positive from stable. At the same time,
Standard & Poor's affirmed its ratings, including its 'B+' long-
term counterparty credit and 'C' short-term ratings, on Ally.
"The outlook revision reflects our view of potentially favorable
implications for Ally's credit profile arising from measures the
company announced May 14, 2012, designed to resolve issues
relating to Residential Capital LLC, Ally's troubled mortgage
subsidiary," said Standard & Poor's credit analyst Tom Connell.
In the May 28, 2012 edition of the TCR, DBRS, Inc., has placed the
ratings of Ally and certain related subsidiaries, including its
Issuer and Long-Term Debt rating of BB (low), Under Review
Developing. This rating action follows the decision by Ally's
wholly owned mortgage subsidiary, Residential Capital to file a
pre-packaged bankruptcy plan under Chapter 11 of the U.S.
Bankruptcy Code.
AMERICAN AIRLINES: Judge Green-Lights Airport Leases, New Aircraft
------------------------------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that a New York
bankruptcy judge gave AMR Corp. the go-ahead to sign two key lease
deals with airport authorities in Nashville, Tenn., and San
Francisco and pay for eight new Boeing 737 aircraft for its fleet.
According to the report, AMR attorney Alfredo Perez of Weil
Gotshal & Manges LLP told U.S. Bankruptcy Judge Sean H. Lane that
the Nashville and San Francisco leases are among the last airport
leases being assumed before the airline emerges from bankruptcy
and joins forces with US Airways Group Inc.
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.
The Retiree Committee is represented by Jenner & Block LLP's
Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B.
Hankin, Esq.
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.
In April 2013, AMR filed a Chapter 11 plan of reorganization that
will carry out the merger. By distributing stock in the merged
airlines, the plan is designed to pay all creditors in full, with
interest. The hearing before the Court to consider confirmation of
the Plan is scheduled for Aug. 15, 2013.
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: Begins Tender Offer to Avoid Make-Whole Appeal
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that AMR Corp., the parent of American Airlines Inc., has
begun a tender offer that amounts to a settlement proposal for
holders of $1.245 billion in bonds secured by aircraft.
According to the report, the bankruptcy court ruled in January
that AMR could pay off the bonds without giving the holders a
make-whole premium for early repayment of the debt. The indenture
trustees' appeal was argued in June in the U.S. Court of Appeals.
Although the bankruptcy court order wasn't stayed during appeal,
AMR couldn't pay off the bonds because the appeals court might
reverse and require paying the make-whole premium.
The report notes that without buying back the bonds now, AMR might
never be able to take advantage of the January ruling even if it
wins on appeal because it can only pay off the bonds without the
make whole premium when implementing the pending Chapter 11
reorganization plan. If the appeals court doesn't rule until
after the plan is consummated, AMR wouldn't be able to repay the
bonds despite winning on appeal. The bankruptcy court authorized
AMR last week to go ahead with the tender offer to the holders of
the bonds subject to the make-whole appeal.
The report relates that for bondholders who accept by July 10, AMR
will buy back the bonds for the full principal amount, plus
accrued interest and $65 for each $1000 bond. If more than 50
percent of an issue accepts the offer, there will be an extra $5
per $1,000. For the offers to be implemented there must be
acceptance by at least 40 percent of the bonds in each series. By
purchasing the bonds, AMR may have the right if it owns enough of
the issues to instruct the indenture trustees to drop the appeal.
The report says that the offer expires Aug. 2. Holders who tender
after July 10 don't receive the extra $65 or $70. AMR's offer is
in the range where the bonds have been trading recently.
For the $660.4 million in 2011-2 bonds, the last trade was on
June 20 for 107 cents on the dollar, according to Trace, the bond-
price reporting system of the Financial Industry Regulatory
Authority. For the $425.1 million in the 2009-1A issue, they sold
for 107.125 cents on June 20. The price declined to 86.40 cents
in trades on June 26.
AMR plans on purchasing the bonds using cash on hand and could
then issue new debt at today's lower interest rates, saving $200
million by selling a new issue of $1.5 billion in so-called
enhanced equipment trust certificates. The loans subject to the
tender offer call for interest at rates between 8.6 percent and
13 percent. AMR said new debt will bear interest comparable to
the 4 percent to 4.75 percent rates other major airlines recently
negotiated.
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.
The Retiree Committee is represented by Jenner & Block LLP's
Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B.
Hankin, Esq.
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.
In April 2013, AMR filed a Chapter 11 plan of reorganization that
will carry out the merger. By distributing stock in the merged
airlines, the plan is designed to pay all creditors in full, with
interest. The hearing before the Court to consider confirmation
of the Plan is scheduled for Aug. 15, 2013.
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 APPAREL: Stockholders Elect Two Directors
--------------------------------------------------
American Apparel, Inc., held its 2013 annual meeting of
stockholders on June 25, 2013, at which the stockholders:
(1) elected Dov Charney and Marvin Igelman to the Board of
Directors, each to serve for a term of three years and
until his successor is duly elected and qualified, or that
director's earlier death, resignation or removal;
(2) ratified the appointment of Marcum LLP as the Company's
independent auditors for the fiscal year ending Dec. 31,
2013;
(3) approved an amendment to the Charney Purchase Agreement to
(i) extend the measurement periods under the Charney Anti-
Dilution Provision by one year and (ii) reduce the number
of consecutive trading days for the volume-weighted average
price measurements under the Charney Anti-Dilution
Provision from 60 to 30 days; and
(4) approved the Amended and Restated 2011 Omnibus Stock
Incentive Plan, which (i) increases the number of shares
available under the plan from 10,000,000 to 17,500,000 and
(ii) increases the maximum number of shares that may be
awarded to any one participant in a given year from
1,500,000 to 3,000,000.
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of September 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being. Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece. The deal allows the investors to purchase additional
27.4 million shares at the same price.
The Company incurred a net loss of $37.27 million in 2012, as
compared with a net loss of $39.31 million in 2011. The Company's
balance sheet at March 31, 2013, showed $326.95 million in total
assets, $349.33 million in total liabilities, and a $22.38 million
total stockholders' deficit.
* * *
American Apparel, Inc., carries a Caa1 Corporate Family Rating
from Moody's Investors Service and a 'B-' corporate credit rating
from Standard & Poor's Ratings Services.
AMERICAN INT'L: BofA Rebuffs Mediation Bid on $8.5 Billion Accord
-----------------------------------------------------------------
David McLaughlin, writing for Bloomberg News, reported that Bank
of America Corp. said it won't renegotiate its $8.5 billion
mortgage-bond settlement with investors after American
International Group Inc. (AIG), which opposes the deal, sought
mediation.
According to the report, Bank of America won't participate in
mediation proposed by AIG and other opponents and "will not
otherwise engage in any renegotiation," Elaine Golin, an attorney
for the lender, said in a June 25 letter filed in New York state
court.
"The settlement agreement reflects the result of lengthy, hard and
arms-length negotiation," Golin wrote, the report cited. "It does
not permit any of the economic terms to be renegotiated."
A hearing to approve the settlement began in early June before
Justice Barbara Kapnick in Manhattan, the report said. The
agreement has the backing of an investor group that includes
BlackRock Inc. (BLK) The hearing is scheduled to resume July 8.
Kapnick on June 14 requested parties consider mediation to resolve
objections, according to a June 21 letter by Daniel Reilly, an
attorney for New York-based AIG, the report said. In the letter,
Reilly asked Bank of New York Mellon Corp., the trustee for
investors, to participate in settlement talks.
The case is In the matter of the application of the Bank of New
York Mellon, 651786-2011, New York State Supreme Court, New York
County (Manhattan).
AMERICAN PETRO-HUNTER: Inks $5MM Stock Purchase Pact with Hanover
-----------------------------------------------------------------
American Petro-Hunter Inc. entered into a common stock purchase
agreement dated as of June 24, 2013, with Hanover Holdings I, LLC.
The Purchase Agreement provides that Hanover is committed to
purchase up to $5,000,000 worth of the Company's common stock,
$0.001 par value, over the 24-month term.
The Company also agreed to pay up to $15,000 of reasonable
attorneys' fees and expenses incurred by Hanover in connection
with the preparation, negotiation, execution and delivery of the
June Purchase Agreement and related transaction documentation.
In connection with the execution of the Purchase Agreement, on the
Closing Date, the Company and Hanover also entered into a
registration rights agreement dated as of the Closing Date.
pursuant to which the Company has agreed to file an initial
registration statement with the Commission to register an agreed
upon number of Shares, which will not exceed 1/3 of the number of
shares of the Company's common stock held by non-affiliates of the
Company, on or prior to July 13, 2013, and have it declared
effective at the earlier of (A) the 90th calendar day after the
Closing Date and (B) the fifth business day after the date the
Company is notified by the Commission that that Registration
Statement will not be reviewed or will not be subject to further
review.
On June 24, 2013, the Company entered into an agreement with
Hanover whereby the Company and Hanover mutually agreed to
terminate the Purchase Agreement dated as of March 22, 2013,
pursuant to which, among other things, the Company had the right
to sell to Hanover, at its sole discretion, up to $5,000,000 of
the Company's common stock, par value $0.001 per share, upon the
terms and subject to the conditions of the Prior Purchase
Agreement. The Termination Agreement was entered into by Hanover
and the Company in response to comments received from the
Commission on May 31, 2013, regarding the transactions
contemplated by the Prior Purchase Agreement. Hanover and the
Company entered into the Termination Agreement in contemplation of
the execution of the June Purchase Agreement and the June
Registration Rights Agreement.
A copy of the Form 8-K is available for free at:
http://is.gd/deD9Sw
About American Petro-Hunter
Wichita, Kansas-based American Petro-Hunter, Inc., is an oil and
natural gas exploration and production (E&P) company with current
projects in Payne and Lincoln Counties in Oklahoma.
American Petro-Hunter disclosed a net loss of $3.30 million on
$308,770 of revenue for the year ended Dec. 31, 2012, as compared
with a net loss of $2.73 million on $317,931 of revenue during the
prior year. The Company's balance sheet at March 31, 2013, showed
$1.78 million in total assets, $1.67 million in total liabilities
and $107,336 in total stockholders' equity.
Weaver Martin & Samyn, LLC, in Kansas City, Missouri, 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 is dependent upon the continued sale of its
securities or obtaining debt financing for funds to meet its cash
requirements. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
AMERISTAR CASINOS: S&P Retains 'BB-' CCR on CreditWatch Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on U.S.
gaming operator Ameristar Casinos Inc., including the 'BB-'
corporate credit rating, remain on CreditWatch, where S&P placed
them with negative implications on Dec. 21, 2012.
The continued CreditWatch listing reflects Pinnacle's planned
acquisition of Ameristar. Based on the announced terms, the
transaction values Ameristar at $2.8 billion and will add roughly
$1 billion in additional debt, which translates into an additional
1.5x of leverage based on Pinnacle and Ameristar's combined 2012
EBITDA, and excluding synergies that Pinnacle expects to achieve.
Pinnacle recently reached an agreement in principle with the
Bureau of Competition of the Federal Trade Commission (FTC) that
would address the FTC's complaint regarding Pinnacle's proposed
acquisition of Ameristar. Under the agreement, Pinnacle intends
to sells one of its casinos in St. Louis and Ameristar's Lake
Charles, La., casino development. These asset sales would likely
reduce the amount of incremental debt incurred as part of the
transaction, improve the combined company's free cash flow
generation (as the company would be divesting a large development
project that S&P expected to lead to negative free cash flow
generation through 2014), and increase the pace of deleveraging.
The company's agreement is subject to negotiation of a consent
order. S&P will monitor the company's progress towards obtaining
an approved consent order, as well as selling the identified
assets.
In addition to an increase in leverage, an acquisition of this
size creates some degree of integration risk. S&P believes these
risks are partially mitigated by the fact that the acquisition
will improve the overall business risk profile of Pinnacle by
substantially growing its asset base and adding additional high-
quality assets to its portfolio, expand its geographic diversity,
and strengthen margins, given Ameristar's EBITDA margins compare
favorably with other U.S. commercial gaming operators.
In resolving the CreditWatch listing, S&P will monitor the
companies' ability to address various closing conditions and
receive required regulatory approvals; update S&P's performance
expectations for the combined company; and analyze management's
financing plans, integration plans and potential synergies, near-
and longer-term growth objectives, and financial policy. If a
downgrade for the combined entity is the outcome of our analysis,
it would be limited to one notch.
ANACOR PHARMACEUTICALS: Form S-3 Filed for Bill & Melinda Shares
----------------------------------------------------------------
Anacor Pharmaceuticals, Inc., registered with the U.S. Securities
and Exchange Commission up to 809,061 shares of its outstanding
common stock, which are held by Bill & Melinda Gates Foundation.
Bill & Melinda acquired the common stock from the Company in a
private placement that closed in April 2013.
The Company is not selling any common stock under this prospectus
and will not receive any of the proceeds from the sale of shares
by the selling stockholder.
Bill & Melinda may sell the shares of common stock described in
this prospectus in a number of different ways and at varying
prices.
The Company's common stock is listed on the NASDAQ Global Market
under the symbol "ANAC." On June 27, 2013, the last reported sale
price of the Company's common stock on the NASDAQ Global Market
was $5.53 per share.
A copy of the Form S-3 is available for free at:
http://is.gd/0ZBZMc
About Anacor
Palo Alto, Calif.-based Anacor Pharmaceuticals (NASDAQ: ANAC) is a
biopharmaceutical company focused on discovering, developing and
commercializing novel small-molecule therapeutics derived from its
boron chemistry platform. Anacor has discovered eight compounds
that are currently in development. Its two lead product
candidates are topically administered dermatologic compounds-
tavaborole, an antifungal for the treatment of onychomycosis, and
AN2728, an anti-inflammatory PDE-4 inhibitor for the treatment of
atopic dermatitis and psoriasis.
The Company's balance sheet at March 31, 2013, showed
$37.4 million in total assets, $45.4 million in total liabilities,
and a stockholders' deficit of $8.0 million.
"Since inception, the Company has generated an accumulated deficit
as of March 31, 2013, of approximately $230.3 million, and will
require substantial additional capital to fund research and
development activities, including clinical trials for its
development programs and preclinical activities for its product
candidates."
As reported in the TCR on March 2, 2013, Ernst & Young LLP, in
Redwood City, California, expressed substantial doubt about
Anacor's ability to continue as a going concern, citing the
Company's recurring losses from operations and its need for
additional capital.
ANCHOR BANCORP: Amends Fiscal 2013 Annual Report
------------------------------------------------
Anchor Bancorp Wisconsin Inc. amended its annual report on Form
10-K for the fiscal year ended March 31, 2013, originally filed
with the Securities and Exchange Commission on May 24, 2013,
solely for the purpose of including the information required by
Part III of Form 10-K. The Company no longer anticipates filing
its definitive proxy statement within 120 days of its fiscal year
ended March 31, 2013, therefore, that information will not be
incorporated by reference to the Company's definitive proxy
statement for the 2013 Annual Meeting of Shareholders. Thus, Part
III, Items 10-14, of the Company's Original 10-K are amended and
restated in their entirety. A copy of the amended Form 10-K is
available for free at http://is.gd/emFKqk
About Anchor Bancorp
Madison, Wisconsin-based Anchor BanCorp Wisconsin Inc. is a
registered savings and loan holding company incorporated under the
laws of the State of Wisconsin. The Company is engaged in the
savings and loan business through its wholly owned banking
subsidiary, AnchorBank, fsb.
Anchor BanCorp and its wholly-owned subsidiaries, AnchorBank fsb,
each consented to the issuance of an Order to Cease and Desist by
the Office of Thrift Supervision. The Corporation and the Bank
continue to diligently work with their financial and professional
advisors in seeking qualified sources of outside capital, and in
achieving compliance with the requirements of the Orders.
Anchor Bancorp reported a net loss available to common equity of
$48.14 million for the year ended March 31, 2013, a net loss
available to common equity of $50.42 million and a net loss
available to common equity of $54.52 million for the year ended
March 31, 2011. The Company's balance sheet at March 31, 2013,
showed $2.36 billion in total assets, $2.42 billion in total
liabilities, and a $59.86 million total stockholders' deficit.
McGladrey LLP, in Madison, Wisconsin, issued a "going concern"
qualification on the consolidated financial statements for the
year ended March 31, 2013. The independent auditors noted that
at March 31, 2013, all of the subsidiary bank's regulatory capital
amounts and ratios are below the capital levels required by the
cease and desist order. The subsidiary bank has also suffered
recurring losses from operations. Failure to meet the capital
requirements exposes the Corporation to regulatory sanctions that
may include restrictions on operations and growth, mandatory asset
dispositions, and seizure of the subsidiary bank. In addition,
the Corporation's outstanding balance under the Amended and
Restated Credit Agreement is currently in default. These matters
raise substantial doubt about the ability of the Corporation to
continue as a going concern.
APPVION INC: $300.7 Million Senior Notes Validly Tendered
---------------------------------------------------------
Appvion, Inc., formerly Appleton Papers Inc., has settled its
tender offer to purchase any and all of its outstanding 10.50
percent Senior Secured Notes due 2015 and consent solicitation to
effect certain proposed amendments to the indenture governing the
First Lien Notes.
The Tender Offer and Consent Solicitation expired at 12:00
midnight, New York City time, on June 27, 2013. At the Expiration
Time, Appvion had received the requisite consents from holders of
the First Lien Notes in connection with the Consent Solicitation
to amend the First Lien Notes Indenture, and valid tenders had
been received with respect to $300.71 million of the $305 million
aggregate principal amount of First Lien Notes outstanding.
Appvion has accepted all such First Lien Notes for payment, and
the tendering noteholders received $1,059.68 per $1,000 in
principal amount of First Lien Notes, including a consent payment
of $50.00 per $1,000 principal amount of First Lien Notes, plus
accrued and unpaid interest from the last interest payment date
to, but not including, the settlement date. A supplemental
indenture to the First Lien Notes Indenture reflecting the
Proposed Amendments also became operative on June 28, 2013.
Appvion also has entered into a $435 million senior secured credit
facility, which includes a $335 million 6-year first lien term
loan facility and a $100 million 5-year revolving credit facility.
The senior secured credit facility has been established pursuant
to a first lien credit agreement by and among Appvion, Paperweight
Development Corp. and other Guarantor parties thereto, Jefferies
Finance LLC, as Joint Lead Arranger, Joint Book Runner and
Administrative Agent, Fifth Third Bank, as Joint Lead Arranger,
Joint Book Runner, Revolver Agent and Swing Line Lender and L/C
Lender, KeyBank National Association, as Joint Lead Arranger,
Joint Book Runner and Documentation Agent and the other Lenders.
Appvion also issued a redemption notice to redeem on July 31,
2013, all of the $4.29 million aggregate principal amount of First
Lien Notes outstanding after the consummation of the Tender Offer
and Consent Solicitation, at a redemption price equal to $1,052.50
per $1,000 principal amount of First Lien Notes, plus accrued and
unpaid interest from the last interest payment date to, but not
including, the date of redemption, in accordance with the terms of
the First Lien Notes Indenture.
Appvion used a portion of the Term Loan proceeds to fund amounts
payable under the Tender Offer and Consent Solicitation and to pay
related fees and expenses. Going forward, the proceeds of the
Revolving Credit Facility will be used to provide ongoing working
capital and for other general corporate purposes of Appvion and
its subsidiaries.
Jefferies LLC has acted as the dealer manager for the Tender Offer
and solicitation agent for the Consent Solicitation and i-Deal LLC
has acted as the information agent for the Tender Offer and
Consent Solicitation.
About Appvion, Inc.
Appleton, Wisconsin-based Appvion -- http://www.appvion.com/--
creates product solutions through its development and use of
coating formulations, coating applications and Encapsys(R)
microencapsulation technology. The Company produces thermal,
carbonless and security papers and Encapsys products. Appvion has
manufacturing operations in Wisconsin, Ohio and Pennsylvania,
employs approximately 1,700 people and is 100 percent employee-
owned.
The Company's balance sheet at March 31, 2013, showed $557 million
in total assets, $906.9 million in total liabilities, and a
$349.87 million total deficit. For the nine months ended
Sept. 30, 2012, the Company reported a net loss of $115.64 million
on $644.27 million of net sales, in comparison with net income of
$9.54 million on $651.70 million of net sales for the nine months
ended Oct. 2, 2011.
* * *
Appleton Papers carries a 'B' corporate credit rating, with stable
outlook, from Standard & Poor's. IT has a 'B2/LD' probability of
default rating from Moody's.
AS SEEN ON TV: Swings $3.4 Million Net Income in Fiscal 2013
------------------------------------------------------------
As Seen On TV, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing net income of
$3.69 million on $10.10 million of revenues for the year ended
March 31, 2013, as compared with a net loss of $8.07 million on
$8.16 million of revenues during the prior year.
As of March 31, 2013, the Company had $27.09 million in total
assets, $16.36 million in total liabilities and a $10.72 million
in total stockholders' equity.
EisnerAmper LLP, in Edison, New Jersey, issued a "going concern"
qualification on the consolidated financial statements for the
year ended March 31, 2013. The independent auditors noted that
the Company's recurring losses from operations and negative cash
flows from operations 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/hsfG4C
About As Seen on TV
Clearwater, Fla.-based As Seen On TV, Inc., is a direct response
marketing company. It identifies, develops, and markets consumer
products.
As reported by the TCR on Nov. 6, 2012, As Seen On TV entered into
an Agreement and Plan of Merger with eDiets Acquisition Company
("Merger Sub"), eDiets.com, Inc., and certain other individuals.
Pursuant to the Merger Agreement, Merger Sub will merge with and
into eDiets.com, and eDiets.com will continue as the surviving
corporation and a wholly-owned subsidiary of the Company.
ATP OIL: Becomes Test Case on Appeal Over Abandonment Issue
-----------------------------------------------------------
Judge Marvin Isgur of the United States Bankruptcy Court for the
Southern District of Texas issued a memorandum opinion detailing
the basis for the ruling issued by the Court on June 13, 2013,
approving ATP Oil and Gas Corporation's proposed termination of
its nongovernmental obligations related to the Gomez Properties.
The June 13 ruling approved the abandonment of the Gomez
Properties, the rejection of related executory leases and
contracts, as well as the breach of related nonexecutory
contracts.
With respect the multiple parties that have objected to ATP's
motion, all but one objection -- filed by Anadarko E & P Onshore
LLC -- were resolved by agreement. Anadarko's objection focuses
on the Supreme Court's decision in Midlantic Nat'l. Bank v. New
Jersey Dep't of Environmental Protection, 474 U.S. 494 (1986). In
the course of the evidentiary hearing on its objection, Anadarko
presented evidence that abandonment of the Gomez Properties will
pose a serious, imminent threat both to navigation and to the
environment. Anadarko argued that Midlantic prevents the Court
from allowing ATP to abandon the Gomez Properties, an act which
Anadarko believes would be in derogation of public health and
safety.
In its Memorandum Opinion, Judge Isgur held that as operator, ATP
has an obligation to the United States to plug and abandon the
Gomez Properties via a decommissioning process mandated by federal
regulations. The United States issued an order requiring ATP to
terminate hydrocarbon production at the Gomez Properties. Expenses
continue to accumulate enough though hydrocarbon production has
ceased. ATP presently receives no income from, but incurs
substantial expenses on, the Gomez Properties. Accordingly, the
Court approved ATP's motion to terminate its continued obligations
to nongovernmental entities regarding the Gomez Properties. The
consequences of that termination will be the subject of future
hearings, Judge Isgur added.
Judge Isgur also overruled on Anadarko's Midlantic objection.
"The Court is not unsympathetic to Anadarko," Judge Isgur said.
"It may be forced to bear a substantial cost as a result of ATP's
financial woes. Nevertheless, like many things in a bankruptcy
case, the cost that Anadarko may bear is a reflection of the
credit risk it took. Anadarko sold a portion of the Gomez
Properties to ATP, and required ATP to bear the financial burden
of plugging and abandonment in accordance with applicable federal
law. This unfortunate position is no different from that of any
other creditor that relies on the promise of performance from an
eventually failed entity."
Judge Isgur added that Anadarko may be entitled to enforce an
administrative claim for the costs of the cleanup but as to
whether Anadarko can prevail on such a claim is well beyond the
purview of the present dispute.
A copy of the Bankruptcy Court's June 19, 2013 Memorandum Opinion
is available at http://is.gd/4RYfxvfrom Leagle.com.
Test Case
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that ATP Oil has become a test case on appeal over the
issue of whether a bankrupt offshore oil and gas producer can use
a process known as abandonment to avoid the expense of maintaining
a non-producing offshore platform and shed the cost of plugging
wells no longer in production.
The report explains that the controversy arose because ATP
persuaded the bankruptcy court earlier in the Chapter 11
reorganization to allow termination of production from a group of
wells known as the Gomez properties. ATP was losing millions of
dollars a month because income from production wouldn't cover the
cost of maintaining the platform and related under-water
infrastructure. The problem was compounded because plugging and
decommissioning the wells in compliance with environmental
regulations could cost $100 million.
The report notes that in mid-June U.S. Bankruptcy Judge Marvin
Isgur in Houston authorized ATP to abandon the Gomez properties
under an arrangement where the federal government would take
possession and pursue third parties who might be liable for
decommissioning expenses, such as an affiliate of Anadarko
Petroleum Corp., a former owner of the Gomez properties. In
addition, the government would have a claim for its costs with
status as an expense of the Chapter 11 case to be paid ahead of
unsecured creditors. Judge Isgur said ATP likely would be unable
to pay the government. Consequently, abandonment authorization
included allowing the government to pursue third parties, like
Anadarko. Other than Anadarko, no one including the government
objected to abandonment. Anadarko wanted Judge Isgur to force ATP
to retain the properties, causing a stalemate until ATP's secured
lenders shouldered the cost of shutting down the wells. Judge
Isgur refused and allowed abandonment.
The report relays that at the end of last week, Judge Isgur took
procedural actions to insure Anadarko's ability to appeal isn't
lost on technicalities. He gave Anadarko a stay pending appeal,
meaning abandonment technically won't go into effect. However,
Judge Isgur required Anadarko to perform during appeal as though
the wells had been abandoned. Anadarko agreed the government
could enforce its rights.
According to Mr. Rochelle, the appeal will decide whether federal
environmental laws and a 1986 U.S. Supreme Court case called
Midlantic National Bank preclude a bankrupt company from walking
away from potential pollution. It's possible the appeal may also
shed light on whether secured lenders must first bear the cost
before a former owner like Anadarko. The parties to the ATP case
are awaiting Judge Isgur's formal ruling on selling the assets to
secured lenders largely in exchange for debt, because there were
no other bidders. The sale may be accomplished in two steps, with
approval first being granted on an interim basis until the court
rules about third party creditors the lenders must pay in full
when taking ownership.
About ATP Oil
Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.
ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is
the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt,
APC serve as special counsel. Opportune LLP is the financial
advisor and Jefferies & Company is the investment banker.
Kurtzman Carson Consultants LLC is the claims and notice agent.
ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012. Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent. There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent. ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue. Trade suppliers have claims
for $147 million, ATP said in a court filing.
An official committee of unsecured creditors has been appointed in
the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel.
A 7-member panel of equity security holders has also been
appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio,
Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel
to the Equity Committee.
ATP is seeking court approval to sell substantially all of its
Deepwater Assets and Shelf Property Assets.
AVANTAIR INC: To Restructure Affairs to Resume to Profitability
---------------------------------------------------------------
Avantair, Inc., sent a letter to its fractional customers on
June 28, 2013.
Dear Valued Owners:
As the company is considering its options with respect to its
current situation and its future plans, we wanted to give our
owner group a full picture of the current status of the company.
Unfortunately, Avantair has recently faced significant liquidity
issues. Our business model assumed efficiencies that never
materialized and a pricing schedule based on those efficiencies.
Over the past few months, we encountered issues that drained the
company's working capital, and it became impossible to recover
without reassessing our capital structure and business model. As
our service was impacted and we were forced to temporarily ground
our fleet, charter costs skyrocketed and our accounts receivable
grew as it became increasingly difficult to collect on outstanding
amounts due. This scenario is not sustainable and it is apparent
that Avantair must restructure its affairs in order to emerge
healthy and able to resume profitable operations. In addition to
restructuring the balance sheet, we plan to revise our pricing to
ensure profitable operations on a going forward basis. The
following are key points of which we would like our owners to be
aware:
* Your aircraft are on the ground at various maintenance
locations and they are currently insured.
* We have been in contact with key suppliers and are pleased
that most have expressed their ongoing support and
encouragement. Key among them is Piaggio, which has offered
to assist us in multiple ways.
* Over the next several days, the company will be validating
the fees we charge and a new business model will be presented
to the owner group. We are optimistic that a viable and
sustainable business plan will encourage owners to support
the new program. We also believe that with a restructured
organization and new business model going forward, Avantair
can emerge as a profitable business that is able to provide
the highest levels of customer service.
* Finally, we are in discussions with certain of our vendors,
lenders and other third parties to obtain the working capital
needed to restructure and fund operations going forward.
We will be in touch over the next several days with a more
detailed description of the company's business plan going forward.
Customer service and satisfaction remains of the utmost importance
to us as we work to implement a restructuring of our operations.
We greatly appreciate your patience and continued loyalty as the
company works through this difficult period.
Thank you,
Dave Haslett
President and Chief Operating Officer
Director Quits
On June 27, 2013, director Stephanie Cuskley informed the Board of
Directors of Avantair that she was resigning from the Board
effective immediately. Ms. Cuskley indicated that she was
resigning from the Board for personal reasons, and not as a result
of any disagreement with the Board or with the Company's
management. The Board will reduce the size of the Board to seven
members effective immediately until a replacement for Ms. Cuskley
is found.
About Avantair Inc.
Headquartered in Clearwater, Fla., Avantair, Inc. (OTC BB: AAIR)
-- http://www.avantair.com/-- sells fractional ownership
interests in, and flight hour card usage of, professionally
piloted aircraft for personal and business use, and the management
of its aircraft fleet. According to AvData, Avantair is the fifth
largest company in the North American fractional aircraft
industry.
Avantair also operates fixed flight based operations (FBO) in
Camarillo, California and in Caldwell, New Jersey. Through these
FBOs and its headquarters in Clearwater, Florida, Avantair
provides aircraft maintenance, concierge and other services to its
customers as well as to the Avantair fleet.
For the nine months ended March 31, 2013, the Company incurred a
net loss attributable to common stockholders of $11.56 million on
$113.02 million of total operating revenue, as compared with a net
loss attributable to common stockholders of $5.43 million on
$131.51 million of total operating revenue for the same period a
year ago.
As of March 31, 2013, the Company had $78.25 million in total
assets, $125.11 million in total liabilities, $14.86 million in
series A convertible preferred stock, and a $61.72 million total
stockholders' deficit.
"If we cannot generate the required revenues and gross margin to
achieve profitability or obtain additional capital on acceptable
terms, we will need to substantially revise our business plan in
order to continue operations and an investor could suffer the loss
of a significant portion or all of his investment in our Company.
The factors described herein raise substantial doubt about our
ability to continue as a going concern," according to the
Company's quarterly report for the period ended March 31, 2013.
BANYON 1030-32: Victims Want $72MM TD Bank Deal in District Court
-----------------------------------------------------------------
Carolina Bolado of BankruptcyLaw360 reported that victims of Scott
Rothstein who are targeting TD Bank NA for its role in his
$1.2 billion Ponzi scheme asked for federal district court review
of a proposed $72 million settlement that would block further
litigation against the bank.
According to the report, in a motion filed in the bankruptcy of
Rothstein feeder fund Banyon 1030-32 LLC, the unsecured Rothstein
creditors, who have pending state court actions against the bank,
asked for the removal of the bankruptcy reference in the Banyon
trustee's motion to approve the settlement.
About Banyon 1030-32 LLC
Banyon 1030-32, LLC, which was the largest lender to Scott
Rothstein's $1.2 billion Ponzi scheme, sought bankruptcy (Bankr.
S.D. Fla. Case No. 10-33691) in November 2011. Robert Furr was
named Chapter 7 trustee.
Banyon was formed in 2007 by George and Gayla Sue Levin for the
purpose of investing in Rothstein's confidential settlement scheme
and sunk more than $971 million into the scam before it collapsed
in October 2009.
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.
Mr. Rothstein pled guilty to the scheme in January 2010 and was
sentenced to 50 years in prison.
In September 2011, Banyon paid at least $10 million to exit a suit
brought by RRA's bankruptcy trustee, who had originally sought
$830 million from the company.
BERING EXPLORATION: Delays Form 10-K for Fiscal 2013
----------------------------------------------------
Bering Exploration, Inc.'s management was unable to obtain and
compile the business and financial information necessary to
complete the Company's financial statements for the year ended
March 31, 2013, and other required information in time for filing
the Form 10-K. That information is required in order to prepare a
complete filing. As a result of this delay, the Company was
unable to complete and file its annual report on Form 10-K within
the prescribed time period without unreasonable effort or expense.
The Company expects to file within the extension period.
About Bering Exploration
Houston-based Bering Exploration, Inc., primarily focuses its
business on the exploration, acquisition, development, production
and sale of natural gas, crude oil and natural gas liquids from
conventional reservoirs within the United States. In addition,
the Company owns 25% of Intertech Bio, which is developing
products to treat cancer, infectious diseases and other medical
conditions associated with compromised immune systems. The
Company is not actively involved in the management of Intertech
Bio.
LBB and Associates, Ltd, LLP, in Houston, Texas, issued a going
concern opinion on Bering Exploration's audited financial
statements for the fiscal year ended March 31, 2012. The
independent auditors noted that the Company's limited amounts of
revenue, recurring losses from operations and negative working
capital raise substantial doubt about the Company's ability to
continue as a going concern.
For the nine months ended Dec. 31, 2012, the Company had a net
loss of $3.0 million on $65,772 of oil and gas revenue, compared
with a net loss of $3.4 million on $49,369 of oil and gas revenue
for the nine months ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $1.3 million
in total assets, $1.2 million in total liabilities, and
stockholders' equity of $106,119.
BERNARD L. MADOFF: Trustee to Expunge 73+ Feeder-Fund Claims
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that another 73 victims of Bernard L. Madoff Investment
Securities Inc.'s Ponzi scheme are about to have their claims
tossed out, and the legal issue has already been decided against
them.
The report recounts that in 2010 Irving Picard, the Madoff
trustee, filed objections to knock out claims filed by investors
in 16 so-called feeder funds. Picard won in bankruptcy court, on
the theory the claimants invested in feeder funds not directly
with the Madoff firm. Given the definition of "customer" under
the Securities Investor Protection Act, the bankruptcy judge
agreed with Picard and dismissed the claims, in substance saying
their claims were against the feeder funds.
The report notes that the creditors appealed to a district judge
where they lost again. A final appeal to the U.S. Court of
Appeals in Manhattan was equally unsuccessful. In an opinion in
February, the appeals court ruled that the feeder fund investors
don't quality as customers.
The report relates that at the end of last week, Mr. Picard filed
papers to knock out 73 claims by investors in 12 other feeder
funds, based on the same theory. Mr. Picard said he didn't move
sooner to bar the 73 claims because at the time he didn't have
sufficient information about their relationships with the feeder
funds. Having a customer claims makes a difference in how much a
Madoff victim recovers. If the feeder fund investors had customer
claims, they would be entitled to $500,000 for each claim from the
Securities Investor Protection Corp., to make up for any shortfall
in recoveries from the trustee. With claims only against feeder
funds, the investors don't qualify for advances from SIPC and
stand to recover only whatever the feeder funds or their sponsors
can pay.
According to the report, those who do qualify as Madoff customers
so far received three distributions totaling 43 percent of their
claims. Mr. Picard has distributed $5.4 billion, including $806
million provided by the Securities Investor Protection Corp., The
distributions have been made from the $9.317 billion Mr. Picard
recovered so far. He is precluded from paying out almost
$2.5 billion held in reserve for disputed claims. In addition, he
is holding back $1.3 billion while courts rule on whether
customers are entitled to interest on their claims to take into
consideration the time-value of money.
The distributions by customers don't include $2.2 billion that was
forfeited to the federal government. Those funds eventually will
find their way into the hands of customers, although the district
court is yet to decide who will make the distributions and under
what ground rules.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
Mr. Picard has made three distributions, paying more than half of
smaller claims in full and satisfying just over 50 percent of
larger customer claims totaling more than $17 billion.
BERNARD L. MADOFF: 2nd Cir. Says Trustee Can't Assert Bank Claims
-----------------------------------------------------------------
The U.S. Court of Appeals for the Second Circuit, on review,
concluded last month that the trustee of the Bernard L. Madoff
Securities LLC estate does not have standing to pursue common law
claims against bank defendants on behalf of the Madoff victims.
The Appeals Court decision, penned by Chief Judge Dennis Jacobs,
held that the doctrine of in pari delicto bars Irving Picard, in
his capacity as trustee under the Securities Investor Protection
Act on behalf of victims in the multi-billion Ponzi scheme
orchesterated by Bernard Madoff, from asserting claims directly
against Bank Defendants on behalf of the estate for wrongdoing in
which Madoff participated. The claim for contribution is likewise
unfounded, as SIPA provides no such right, the judge said. A copy
of the Second Circuit's June 20, 2013 ruling is available at
http://is.gd/IFPyIofrom Leagle.com.
In issuing its decision, the Second Circuit upheld two district
court opinions -- Picard v. HSBC Bank PLC, 454 B.R. 25 (S.D.N.Y.
2011) (Rakoff, J.); Picard v. JPMorgan Chase & Co., 460 B.R. 84
(S.D.N.Y. 2011) (McMahon, J.).
The issues stemmed from four actions commenced by the SIPA trustee
in 2009 to 2010 against numerous major financial institutions,
which include JPMorgan Chase & Co., UBS AG, UniCredit Bank Austria
AG, HSBC Bank plc. The complaints allege that, when the Bank
Defendants were confronted with evidence of Madoff's illegitimate
scheme, their banking fees gave incentive to look away, or at
least caused a failure to perform due diligence that would have
revealed the fraud.
The appeal cases before the Second Circuit are:
IN RE: BERNARD L. MADOFF INVESTMENT SECURITIES LLC. IRVING H.
PICARD, Plaintiff-Appellant, v. JPMORGAN CHASE & CO., JPMORGAN
CHASE BANK, N.A., J.P. MORGAN SECURITIES LLC, J.P. MORGAN
SECURITIES LTD., Defendants-Appellees, and SECURITIES INVESTOR
PROTECTION CORPORATION, Intervenor.
IN RE: BERNARD L. MADOFF INVESTMENT SECURITIES LLC, Debtor.
IRVING H. PICARD, Plaintiff-Appellant, and SECURITIES INVESTOR
PROTECTION CORPORATION, Intervenor, v. UBS FUND SERVICES
(LUXEMBOURG) SA, ACCESS INTERNATIONAL ADVISORS LLC, ACCESS
INTERNATIONAL ADVISORS EUROPES LIMITED, ACCESS INTERNATIONAL
ADVISORS LTD., ACCESS PARTNERS (SUISSE) SA, ACCESS MANAGEMENT
LUXEMBOURG SA, as represented by its Liquidator MAITRE FERDINAND
ENTRINGER, FKA ACESS INTERNATIONAL ADVISORS LUXEMBOURG SA, ACCESS
PARTNERS SA, as represented by its Liquidator MAITRE FERDINAND
ENTRINGER, PATRICK LITTAYE, CLAUDINE MAGON DE LA VILLEHUCHET, in
her capacity as Executrix under the WILL OF THIERRY MAGON DE LA
VILLEHUCHET (AKA Rene Thierry de la Villehuchet), individually and
as the sole beneficiary under the WILL OF THIERRY MAGON DE LA
VILLEHUCHET (AKA Rene Thierry de la Villehuchet), AKA CLAUDINE DE
LA VILLEHUCHET, PIERRE DELANDMETER, THEODORE DUMBAULD, LUXALPHA
SICA V, as represented by its Liquidators MAITRE ALAIN RUKAVINA
and PAUL LAPLUME, ROGER HARTMANN, RALF SHROETER, RENE EGGER, ALAIN
HONDEQUIN, HERMANN KRANZ, BERNARD STIEHL, GROUPEMENT FINANCIER
LTD., UBS AG, UBS (LUXEMBOURG) SA, MAITRE ALAIN RUKAVINA, in his
capacity as liquidator and representative of LUXALPHA SICA V, PAUL
LAPLUME, in his capacity as liquidator and representative of
LUXALPHA SICA V, UBS THIRD PARTY MANAGEMENT COMPANY SA,
Defendants-Appellees.
IN RE: BERNARD L. MADOFF INVESTMENT SECURITIES LLC, Debtor.
IRVING H. PICARD, Plaintiff-Appellant, v. HSBC BANK PLC, HSBC
SECURITIES SERVICES (LUXEMBOURG) S.A., HSBC BANK BERMUDA LIMITED,
HSBC FUND SERVICES (LUXEMBOURG) S.A., HSBC PRIVATE BANK (SUISSE)
S.A., HSBC PRIVATE BANKING HOLDINGS (SUISSE) S.A., HSBC BANK
(CAYMAN) LIMITED, HSBC SECURITIES SERVICES (BERMUDA) LIMITED, HSBC
BANK USA, N.A., HSBC INSTITUTIONAL TRUST SERVICES (BERMUDA)
LIMITED, HSBC SECURITIES SERVICES (IRELAND) LIMITED, HSBC
INSTITUTIONAL TRUST SERVICES (IRELAND) LIMITED, HSBC HOLDINGS PLC,
UNICREDIT S.p.A., PIONEER ALTERNATIVE INVESTMENT MANAGEMENT
LIMITED, UNICREDIT BANK AUSTRIA AG, ALPHA PRIME FUND LIMITED,
Defendants-Appellees, and SECURITIES INVESTOR PROTECTION
CORPORATION, Intervenor.
IN RE: BERNARD L. MADOFF INVESTMENT SECURITIES LLC, Debtor. IRVING
H. PICARD, Plaintiff-Appellant, v. HSBC BANK PLC, HSBC SECURITIES
SERVICES (LUXEMBOURG) S.A., HSBC BANK BERMUDA LIMITED, HSBC
PRIVATE BANK (SUISSE) S.A., HSBC PRIVATE BANKING HOLDINGS (SUISSE)
S.A., HSBC BANK (CAYMAN) LIMITED, HSBC SECURITIES SERVICES
(BERMUDA) LIMITED, HSBC BANK USA, N.A., HSBC INSTITUTIONAL TRUST
SERVICES (BERMUDA) LIMITED, HSBC SECURITIES SERVICES (IRELAND)
LIMITED, HSBC INSTITUTIONAL TRUST SERVICES (IRELAND) LIMITED, HSBC
HOLDINGS PLC, HSBC FUND SERVICES (LUXEMBOURG) S.A., Defendants-
Appellees, SECURITIES INVESTOR PROTECTION CORPORATION, Intervenor.
Oren J. Warshavsky, Esq. -- owarshavsky@bakerlaw.com -- at Baker &
Hostetler LLP, in New York, New York for the Plaintiff-Appellant.
David J. Sheehan, Esq., Deborah H. Renner, Esq., Lan Hoang, Esq.,
and Geoffrey A. North, Esq. -- dsheehan@bakerlaw.com ,
drenner@bakerlaw.com , lhoang@bakerlaw.com , gnorth@bakerlaw.com
-- on the brief.
Christopher H. Larosa, Esq. -- clarosa@sipc.org -- for Securities
Investor Protection Corporation, Washington, D.C. as Intervenor.
Josephine Wang, Esq. and Kevin H. Bell, Esq. -- jwang@sipc.org ,
kbell@sipc.org -- on the brief.
John F. Savarese, Esq. -- JFSavarese@wlrk.com -- of Wachtell,
Lipton, Rosen & Katz, in New York, New York, for Defendant-
Appellee JPMorgan Chase & Co., et al. Douglas K. Mayer, Esq.,
Stephen R. DiPrima, Esq., Emil A. Kleinhaus, Esq., Lauren M.
Kofke, Esq., and Jonathon R. La Chapelle, Esq. -- DKMayer@wlrk.com
, STDiPrima@wlrk.com , EAKlienhaus@wlrk.com , LMKofke@wlrk.com ,
JRLachapelle@wlrk.com -- on the brief.
Thomas J. Moloney, Esq. -- tmoloney@cgsh.com -- of Cleary
Gottlieb Steen & Hamilton LLP, in New York, New York for
Defendant-Appellee HSBC Bank plc, et al. Evan A. Davis, Esq.,
David E. Brodsky, Esq., Marla A. Decker, Esq., Charles J. Keeley,
Esq., and Jason B. Frasco, Esq. -- edavis@cgsh.com ,
dbrodsky@cgsh.com , mdecker@cgsh.com , ckeeley@cgsh.com ,
jfrasco@cgsh.com -- on the brief.
Marco E. Schnabl, Esq. -- marco.schnabl@skadden.com -- of Skadden,
Arps, Slate, Meagher & Flom LLP, in New York, New York for
Defendants-Appellees UniCredit S.p.A. and Pioneer Alternative
Investment Management Ltd. Susan L. Saltzstein, Esq., and Jeremy
A. Berman, Esq. -- susan.saltzstein@skadden.com ,
jeremy.berman@skadden.com -- on the brief.
Marshall R. King, Esq. -- mking@gibsondunn.com -- of Gibson, Dunn
& Crutcher LLP, in New York, New York, for Defendant-Appellee UBS
AG, et al.
Franklin B. Velie, Esq. -- fvelie@sandw.com -- of Sullivan &
Worcester LLP, in New York, New York for Defendant-Appellee
UniCredit Bank Austria AG. Jonathan G. Kortmansky, Esq., and
Mitchell C. Stein, Esq. -- jkortmansky@sandw.com ,
mstein@sandw.com -- on the brief.
Robert W. Gottlieb, Esq., of Katten Muchin Rosenman LLP, in New
York, New York for Defendant-Appellee Access International
Advisers, LLC, et al.
Brett S. Moore, Esq. -- bsmoore@pbnlaw.com -- of Porzio Bromberg &
Newman P.C., in New York, New York for Defendant-Appellee Luxalpha
Sicav, et al.
Robert Knuts, Esq. -- rknuts@parkjensen.com -- of Park & Jensen
LLP, in New York, New York for Defendant-Appellee Theodore
Dumbauld.
The appeals court panel consists of Chief Judge Dennis Jacobs, and
Circuit Judges Ralph K. Winter, Jr. and Susan L. Carney.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
Mr. Picard has made three distributions, paying more than half of
smaller claims in full and satisfying just over 50 percent of
larger customer claims totaling more than $17 billion.
BIOVEST INTERNATIONAL: Approved for Debt-Swap Sale With Lenders
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Biovest International Inc., a developer of what would
be the first vaccine to treat lymphoma, received bankruptcy court
approval June 27 for selling the business in exchange for debt
owing to secured lenders Corps Real LLC and Laurus/Valens Funds.
Alternatively, the lenders can take ownership through a Chapter 11
reorganization plan the court is also approving. If the transfer
of ownership occurs by implementation of the plan, the sale-
approval will become void.
The report notes that there was an auction at the end of May to
insure there were no offers to compete with the lenders' bid. No
other purchase offers were made.
According to the report, the plan calls for the lenders to swap
about $44 million in debt for most of the new stock. In return
for their claims totaling $10.3 million, unsecured creditors will
have seven million shares. Biovest's majority owner Accentia
Biopharmaceuticals Inc. will have one share of stock for every
dollar of ultimately-approved claims. The lenders will have the
remainder of the 100 million shares of stock being issued.
About Biovest International
Biovest International, Inc. -- http://www.biovest.com/-- is an
emerging leader in the field of active personalized
immunotherapies. In collaboration with the National Cancer
Institute, Biovest has developed a patient-specific, cancer
vaccine, BiovaxID(R), with three clinical trials completed,
including a Phase III study, demonstrating evidence of safety and
efficacy for the treatment of indolent follicular non-Hodgkin's
lymphoma.
Headquartered in Tampa, Florida, with its bio-manufacturing
facility based in Minneapolis, Minnesota, Biovest is publicly-
traded on the OTCQB(TM) Market with the stock-ticker symbol
"BVTI", and is a majority-owned subsidiary of Accentia
Biopharmaceuticals, Inc. (OTCQB: "ABPI").
Biovest, along with its subsidiaries, Biovax, Inc., AutovaxID,
Inc., Biolender, LLC, and Biolender II, LLC, filed for Chapter 11
bankruptcy protection (Bankr. M.D. Fla. Case No. 08-17796) on
Nov. 10, 2008. Biovest emerged from Chapter 11 protection, and
its reorganization plan became effective, on Nov. 17, 2010.
Biovest International Inc., filed a petition for Chapter 11
reorganization (Bankr. M.D. Fla. Case No. 13-02892) on March 6,
2013, in Tampa, Florida. The new bankruptcy case was accompanied
by a proposed reorganization plan supported by secured lenders
owed about $38.5 million. Total debt is $44.9 million, with
assets listed in a court filing as being valued at $4.7 million.
About $5.4 million is owing to unsecured creditors, according to a
court paper.
BONDS.COM GROUP: Trimarc Capital Had 15% Equity Stake at June 25
----------------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Trimarc Capital Fund, L.P., and its affiliates
disclosed that, as of June 25, 2013, they beneficially owned
44,689 shares of common stock of Bonds.com Group, Inc.,
representing 15.5 percent of the shares outstanding. A copy of
the regulatory filing is available at http://is.gd/12hMkK
About Bonds.com Group
Based in Boca Raton, Florida, Bonds.com Group, Inc. (OTC BB: BDCG)
-- http://www.bonds.com/-- through its subsidiary Bonds.com,
Inc., serves institutional fixed income investors by providing a
comprehensive zero subscription fee online trading platform. The
Company designed the BondStation and BondStationPro platforms to
provide liquidity and competitive pricing to the fragmented Over-
The-Counter Fixed Income marketplace.
The Company differentiates itself by offering through Bonds.com,
Inc., an inventory of more than 35,000 fixed income securities
from more than 175 competing sources. Asset classes currently
offered on BondStation and BondStationPro, the Company's fixed
income trading platforms, include municipal bonds, corporate
bonds, agency bonds, certificates of deposit, emerging market
debt, structured products and U.S. Treasuries.
Bonds.com Group disclosed a net loss of $6.98 million in 2012, as
compared with a net loss of $14.45 million in 2011. The Company's
balance sheet at March 31, 2013, showed $8.36 million in total
assets, $5.75 million in total liabilities and $2.60 million in
total stockholders' equity.
EisnerAmper LLP, in New york, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012, citing recurring losses and negative
cash flows from operations, and a working capital deficiency and a
stockholders' deficiency that raise substantial doubt about its
ability to continue as a going concern.
BROOKE CORP: Founder Pleads Guilty to Deceiving SEC
---------------------------------------------------
Lance Duroni of BankruptcyLaw360 reported that the founder of
Brooke Corp., a defunct Kansas-based insurance holding company,
pled guilty to misleading the U.S. Securities and Exchange
Commission about the company's financial health as it descended
into bankruptcy.
According to the report, Robert D. Orr, 59, changed his plea to
guilty at a court hearing before U.S. District Judge Julie A.
Robinson, according to court documents.
He admitted that, while serving as nonexecutive chairman of Brooke
Corp. in 2007, the company filed an annual report with the SEC
that painted "a more financially robust" picture of the company,
the report related.
About Brooke Corp.
Based in Kansas, Brooke Corp. -- http://www.brookebanker.com/--
was an insurance agency and finance company. The company owned
81% of Brooke Capital. The majority of the company's stock was
owned by Brooke Holding Inc., which, in turn was owned by the Orr
Family. A creditor of the family, First United Bank of Chicago,
foreclosed on the BHI stock. The company's revenues were
generated from sales commissions on the sales of property and
casualty insurance policies, consulting, lending and brokerage
services.
Brooke Corp. and Brooke Capital Corp. filed separate petitions for
Chapter 11 relief on Oct. 28, 2008; Brooke Investments, Inc. filed
for Chapter 11 relief on Nov. 3, 2008 (Bankr. D. Kan. Lead Case
No. 08-22786). Angela R. Markley, Esq., was the Debtors' in-house
counsel. Albert Riederer was appointed as the Debtors' Chapter 11
trustee. He acted as special master of Brooke in prepetition
federal court proceedings. Benjamin F. Mann, Esq., John J.
Cruciani, Esq., and Michael D. Fielding, Esq,, at Husch Blackwell
Sanders LLP, and Kathryn B. Bussing, Esq., at Blackwell Sanders
LLP, represented the Chapter 11 trustee as counsel. David A.
Abadir, Esq., and Robert J. Feinstein, Esq., at Pachulski Stang
Ziehl & Jones LLP, Kristen F. Trainor, Esq., and Mark Moedritzer,
Esq., at Shook, Hardy & Bacon, represented the Official Committee
of Unsecured Creditors as counsel. The Debtors disclosed assets
of $512,855,000 and debts of $447,382,000.
On Oct. 29, 2008, the Court granted a motion to jointly administer
the bankruptcies of Brooke Corporation, Brooke Capital, and Brooke
Investment with the Brooke Corporation bankruptcy case being the
lead case.
The case was converted to Chapter 7 on June 29, 2009. Christopher
J. Redmond was named Chapter 7 Trustee. He is represented by
Benjamin F. Mann, Esq., John J. Cruciani, Esq., and Michael D.
Fielding, Esq., at Husch Blackwell LLP.
BROWN PUBLISHING: Court Dismisses Trust's Clawback Suit v. AXA
--------------------------------------------------------------
Bankruptcy Judge Dorothy Eisenberg granted the motion for summary
judgment by AXA Equitable Life Insurance Company, dismissing a
clawback lawsuit filed by The Brown Publishing Company Liquidating
Trust, on the basis that AXA was neither the initial transferee,
nor the immediate or mediate transferee of the initial transferee
of the aggregate total of $300,000 in funds transferred by The
Brown Publishing Company, with respect to an insurance policy
owned by B's Nest Ohio General Partnership.
The Trust commenced the adversary proceeding against AXA on April
30, 2012, to avoid $300,000 in payments it received from the
Debtor with respect to the Policy from December 22, 2006 through
October 1, 2009 claiming that these were fraudulent transfers.
A copy of the Court's June 24 Memorandum Decision and Order is
available at http://is.gd/3t6zqhfrom Leagle.com.
The case is, THE BROWN PUBLISHING COMPANY LIQUIDATING TRUST,
Plaintiff, v. AXA EQUITABLE LIFE INSURANCE COMPANY, Defendant,
Adv. Pro. No. 12-8194-DTE (Bankr. E.D.N.Y.).
Sonya J. Brouner, Esq., at The Law Offices of Sonya J. Brouner,
argues for the Trust.
Wendy G. Marcari, Esq. -- WMarcari@ebglaw.com -- at Epstein Becker
& Green, P.C., represents AXA.
About Brown Publishing
The Brown Publishing Company, Brown Media Holdings Company and
their subsidiaries filed for Chapter 11 bankruptcy (Bankr.
E.D.N.Y. Lead Case No. 10-73295) on April 30, 2010 and May 1,
2010. BPC estimated $10 million to $50 million in assets and
debts in its Chapter 11 petition. Edward M. Fox, Esq., and Eric
T. Moser, Esq., at K&L Gates LLP, served as counsel for the
Debtors.
BPC is a privately held community news and information
corporation, organized under the laws of the State of Ohio that,
prior to the sale of its assets, had been one of the largest
newspaper publishers in Ohio, and also operated publications in
Illinois, South Carolina, Texas and Utah.
Roy E. Brown, former CEO, shareholder, and director of each of the
debtors, and other insiders of the Debtors formed Brown Media
Corporation to acquire the assets and serve as stalking horse
bidder. BMC offered a stalking horse bid of $15.3 million cash
plus additional consideration. The auction commenced July 19,
2010 and lasted into the early morning hours of July 20. With the
exception of certain assets of the Debtors located in Van Wert,
Ada and Putnam, Ohio that were sold to Delphos Herald, Inc., BMC
was the successful bidder with respect to substantially all of the
Debtors's remaining assets after making the highest and best offer
for $22.4 million cash plus additional consideration. PNC Bank,
N.A., a secured creditor of the Debtors, was the next successful
bidder after BMC.
BMC, however, lost financing and failed to close on the sale. The
insiders had obtained a commitment from Guggenheim Corporate
Funding, LLC and/or one of its affiliates for financing.
Subsequently, the Court approved the asset purchase agreements for
the sale of the Debtors' assets to PNC's assignee, Ohio Community
Media LLC, and to ISIS Ventures Partners LLC pursuant to orders
dated Sept. 3, 2010. ISIS formed Dan's Papers Holdings LLC to
purchase the assets of one of the Debtors, Dan's Papers, for
$1,750,000. PNC agreed to pay $21,750,000 for substantially all
of the Debtors remaining assets. The total purchase price
tendered for the Debtors' assets, including cash and debt
forgiveness, was about $27.09 million.
On June 16, 2011, the Court entered an order confirming the
Debtors' chapter 11 plan which provided that any remaining assets
of the Debtors' bankruptcy estate that were not sold pursuant to
the Auction Sale, including all claims and causes of action, would
vest in a trust.
CAPITOL BANCORP: Creditors Pressing to Sue Officers
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Capitol Bancorp Ltd. could find its officers sued by
creditors before the bank holding company begins a confirmation
hearing on Sept. 25 for approval of the proposed Chapter 11 plan.
According to the report, in May the official creditors' committee
filed papers seeking permission from the bankruptcy judge in
Detroit to sue officers and directors. The creditors' complaints
are unknown publicly because the papers were all filed under seal.
The report notes that last week the indenture trustee for holders
of $35 million of the $151 million in trust-preferred securities
filed papers urging the judge to allow a suit by creditors. The
indenture trustee, Wilmington Trust Co., said the $20 million in
directors' and officers' liability insurance "may be the most
valuable asset" and could be tapped by the creditors' suit. The
bankruptcy judge held a hearing earlier this month on allowing the
suit to go forward. The creditors filed additional papers as the
judge requested.
The judge formally set down Sept. 25 as the date for a
confirmation hearing to consider approval of Capitol's Chapter 11
plan. Creditors will end voting on Sept. 10. Objections to the
plan are due the same day. Capital had wanted the confirmation
hearing in August.
The report notes creditors support Capitol's desire to sell the
remaining banks in six states, although the committee disagrees
with the Chapter 11 plan and aspects of the disclosure materials.
About Capitol Bancorp
Capitol Bancorp Ltd. and Financial Commerce Corporation filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case
Nos. 12-58409 and 12-58406) on Aug. 9, 2012.
Capitol Bancorp -- http://www.capitolbancorp.com/-- is a
community banking company with a network of individual banks and
bank operations in 10 states and total consolidated assets of
roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of
FCC, with a number of CBC affiliates owning the remainder. FCC,
in turn, is the holding company for five of the banks in CBC's
network. CBC is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841,
et seq., and trades on the OTCQB under the symbol "CBCR."
Lawyers at Honigman Miller Schwartz and Cohn LLP represent the
Debtors as counsel. John A. Simon, Esq., at Foley & Lardner LLP,
represents the Official Committee of Unsecured Creditors as
counsel.
In its petition, Capitol Bancorp scheduled $112,634,112 in total
assets and $195,644,527 in total liabilities. The petitions were
signed by Cristin K. Reid, corporate president.
The Company's balance sheet at Sept. 30, 2012, showed
$1.749 billion in total assets, $1.891 billion in total
liabilities, and a stockholders' deficit of $141.8 million.
Prepetition, the Debtor arranged a reorganization plan that was
accepted by the requisite majorities of creditors and equity
holders in all classes. Problems arose when affiliates of
Valstone Partners LLC declined to proceed with a tentative
agreement to fund the reorganization by paying $50 million for
common and preferred stock while buying $207 million in face
amount of defaulted commercial and residential mortgages.
Capitol is trying to sell the remaining banks before they are
taken over by regulators. Four were seized in May.
CASH STORE: Appoints Eugene Davis as Director and Chairman
----------------------------------------------------------
The Cash Store Financial Services Inc. has appointed Eugene I.
Davis as a director and Chairman of the Board effective June 26,
2013. The Company had previously announced that its Board was
separating the roles of Chairman and Chief Executive Officer.
"We welcome Gene to Cash Store Financial and look forward to
benefiting from his valuable corporate experience. Gene brings a
wealth of experience, both domestically and internationally,
across a wide range of businesses along with expertise in areas
such as strategic planning, mergers and acquisitions and
experience helping companies transition business models while
generating value," said Gordon J. Reykdal, chief executive
officer. "The appointment also reflects our commitment to
improving corporate governance in a manner consistent with best
practices for public companies."
Mr. Davis, 58, has served on over 40 public company boards. Mr.
Davis currently serves as Chairman of the Board of Atlas Air
Worldwide Holdings Inc., an air cargo services provider and the
world's largest operator of Boeing 747 freighter aircraft, and
U.S. Concrete, Inc., a provider of ready-mix concrete and related
building materials to the U.S. marketplace. In addition, Mr.
Davis serves on the Board of Directors of Global Power Equipment
Group Inc., Spectrum Brands Holdings Inc. and WMI Holdings Corp.
During the past five years, Mr. Davis has also been a director of
American Commercial Lines Inc., Delta Airlines, Foamex
International Inc., Granite Broadcasting Corporation, Ion Media
Networks, Inc., Media General, Inc., Mosaid Technologies, Inc.,
Ogelbay Norton Company, PRG-Schultz International Inc., Silicon
Graphics International, Terrastar Corp., Tipperary Corporation and
Viskase, Inc.
Mr. Davis holds a bachelor's degree from Columbia College, a
master of international affairs degree in international law and
organization from the School of International Affairs of Columbia
University, and a Juris Doctorate from Columbia University School
of Law.
About Cash Store Financial
Headquartered in Edmonton, Alberta, The Cash Store Financial is
the only lender and broker of short-term advances and provider of
other financial services in Canada that is listed on the Toronto
Stock Exchange (TSX: CSF). Cash Store Financial also trades on
the New York Stock Exchange (NYSE: CSFS). Cash Store Financial
operates 512 branches across Canada under the banners "Cash Store
Financial" and "Instaloans". Cash Store Financial also operates
25 branches in the United Kingdom.
Cash Store Financial is a Canadian corporation that is not
affiliated with Cottonwood Financial Ltd. or the outlets
Cottonwood Financial Ltd. operates in the United States under the
name "Cash Store". Cash Store Financial does not do business
under the name "Cash Store" in the United States and does not own
or provide any consumer lending services in the United States.
Cash Store Financial employs approximately 1,900 associates.
As restated, the Company reported a net loss and comprehensive
loss of $43.52 million on $187.41 million of revenue for the year
ended Sept. 30, 2012, as compared with a net loss of $43.08
million as originally reported.
The Company's restated balance sheet at Sept. 30, 2012, showed
$202.44 million in total assets, $168.92 million in total
liabilities and $33.51 million shareholders' equity.
* * *
As reported in the Feb. 8, 2013 edition of the TCR, Standard &
Poor's Ratings Services lowered its issuer credit rating on Cash
Store Financial (CSF) to 'CCC+' from 'B-'. The outlook is
negative.
"The downgrades follow a proposal by the payday loan registrar in
Ontario to revoke CSF's payday lending licenses and CSF's
announcement that it has discontinued its payday loan product in
the region," said Standard & Poor's credit analyst Igor Koyfman.
The company's businesses in Ontario, which account for
approximately one-third of its store count, will begin offering a
new line of credit product to its customers. S&P believes this is
to offset the loss of its payday lending product; however, this is
a relatively new product, and S&P believes that it will be
challenging for the company to replace its lost earnings from the
payday loan product. S&P also believes that the registrar's
proposal could lead to similar actions in other territories.
As reported by the TCR on May 22, 2013, Moody's Investors Service
downgraded the Corporate Family Rating and senior unsecured debt
rating of Cash Store Financial Services to Caa1 from B3 and
assigned a negative outlook. According to Moody's, CSFS remains
unprofitable on both the pretax and net income lines and prospects
for return to profitability are unclear.
CASPIAN ENERGY: Gets Notice of Default on Debentures From Firebird
------------------------------------------------------------------
Caspian Energy Inc. on June 28 disclosed that it has received
notices of a failure to make a payment from Firebird Global Master
Fund, Ltd. and Firebird Avrora Fund, Ltd. under Caspian's Amended
and Restated Convertible Debentures dated July 8, 2011 for failure
to pay the principal amount on maturity. The aggregate principal
amount of the Convertible Debentures held by Firebird Global
Master Fund, Ltd. is US$1,558,613 and the aggregate principal
amount of the Convertible Debentures held by Firebird Avrora Fund,
Ltd. is US$1,558,613. In each case the maturity date of the
Convertible Debentures was June 2, 2013. The terms of the
Convertible Debentures provide that a default occurs if there is a
failure to pay principal on maturity and such breach is not
remedied within 30 days after receipt of written notice from the
holder. Caspian has 30 days to repay the amounts owing to Firebird
Global Master Fund, Ltd. and Firebird Avrora Fund, Ltd. Caspian
intends to contact Firebird Global Master Fund, Ltd. and Firebird
Avrora Fund, Ltd. to discuss repayment terms. As per Caspian's
press release of June 26, 2013, notices were also received
relating to an additional US$9,343,731 aggregate principal amount
of Convertible Debentures held by another party.
Caspian Energy Inc. is an oil and gas exploration company,
operating in Kazakhstan where it has a number of targets in the
highly prospective Aktobe Oblast of Western Kazakhstan.
CEDAR BAY: S&P Assigns 'BB' Rating on $250MM Sr. 1st-Lien Loan
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to
Cedar Bay Generating Company Limited Partnership's $250 million
senior secured first-lien term loan B facility due 2020. The
outlook is stable. The recovery rating on the loan is
'1', indicating S&P's expectation of very high (90% to 100%)
recovery if a payment default occurs. The bonds are backed by
revenue from Cedar Bay's circulating fluidized bed (CFB) coal-
powered generation facility, which has been in operation since
1994.
Cedar Bay owns and operates a 250 MW coal-fired cogeneration power
plant located in Jacksonville, Fla. The plant began operations in
1994.
The project receives capacity and energy payments from Florida
Power & Light Co. (FPL; A-/Stable/A-2) under a long-term power
purchase agreement (PPA) effective until Jan. 31, 2025. A coal
price mismatch offsets favorable capacity payments. Cedar Bay also
sells processed steam to RockTenn CP LLC's (RockTenn) adjacent
recycled linerboard paper mill under a steam sales agreement,
which was recently extended through January 2025 -- coinciding
with PPA maturity. RockTenn CP LLC is a subsidiary of RockTenn
Co. (BBB-/Positive), which acquired the previous owner of this
mill, Smurfit-Stone Container Corp., in May 2011. Cedar Bay
maintains its qualifying facility (QF) status under the Public
Utility Regulatory Policies Act as a result of its steam
deliveries to RockTenn. Cedar Bay is operated by Cedar Bay
Operating Services LLC, which is owned by Cogentrix Energy Power
Management LLC.
The project has a long-term coal supply agreement through Jan. 31,
2025 with Nally & Hamilton Enterprises Inc. (unrated). It also
has a shorter-term limestone supply agreement (through 2014,
although S&P expects an extension) with Martin Marietta Materials
Inc. (BBB/Stable/A-2), and agreements for ash disposal with three
unrated companies (with contracts expiring in different years from
2013 to 2018).
Until late 2012, the plant was owned by Cogentrix Energy LLC
(Cogentrix), a wholly owned subsidiary of The Goldman Sachs Group
Inc. During the period from 2006 to 2008, the project suffered
from both high forced-outage rates and a steam offtaker that was
in financial distress and failing to pay its obligations. As a
result, the project also underperformed during that period and
entered into a debt restructuring. The project came out of the
restructuring process in December 2008 with approximately
$293 million of senior debt ($560 million including deeply
subordinated debt). Existing senior debt was due to mature in
mid-2013, and approximately $90.6 million of senior debt remained
outstanding at the end of March 2013.
The project has issued $250 million of senior debt and used the
proceeds to retire existing senior debt along with a portion of
the existing subordinate debt and accrued subordinate interest, as
well as to fund reserve accounts and to pay for transaction
expenses. The debt is a term loan with a seven-year term, 1%
required amortization, and 75% cash sweep, which can increase to
100% if amortization is slower than a defined schedule.
Cedar Bay was previously not structured as bankruptcy remote from
sponsors. As part of the refinancing, the project ownership
structure is being amended to allow the project to be bankruptcy
remote from its parents.
In December 2012, Carlyle Infrastructure Partners L.P., a
$1.14 billion fund, acquired from The Goldman Sachs Group the
North American power generation assets (including this project)
owned by Cogentrix. The Carlyle Group holds a 55% interest in
Cedar Bay, with Goldman Sachs holding the remaining 45% interest.
As part of the refinancing, the owners will establish a new
holding entity, Cedar Bay Holdings LLC (HoldCo), which will be
structured as a single-purpose, bankruptcy-remote entity with an
independent director and limitation on additional debt. HoldCo
will be an indirect 100% owner of Cedar Bay.
There are a number of intermediate entities between HoldCo and
Cedar Bay, but, as part of the refinancing, all these entities
will be structured as special-purpose entities with limitations on
additional debt and separateness covenants. At the time of the
new loan issuance, HoldCo and all subsidiaries have no debt other
than that at Cedar Bay itself. Furthermore, all the intermediate
subsidiaries (including the project) of HoldCo will be structured
as special-purpose entities with restrictions on their ability to
issue additional debt. As such, S&P is rating the project based
on its own creditworthiness and do not anticipate that the
creditworthiness of HoldCo or the sponsors will limit the rating
on the project.
Under the PPA with FPL, FPL pays the plant for availability along
with an energy payment when dispatched. Most of the value in the
PPA comes from the availability payments. FPL pays for fuel based
on the cost of coal at its own, nearby St. Johns River Power Park,
which can use less expensive coal than must be used at Cedar Bay.
Therefore, the cost difference between the two affects Cedar Bay's
profit. The cost difference has widened in recent months to more
than $20 per ton, but S&P do not anticipate that it will widen
beyond the largest historical gap.
The negative energy margin has a greater impact when Cedar Bay is
dispatched at high levels. Low natural gas prices within the U.S.
during the past three years have been concurrent with a falloff in
dispatch at Cedar Bay (which is scheduled by FPL). S&P do
anticipate that low gas prices will continue through the term of
the loan, but project debt service coverage (DSC) would be
materially lower than management expectations if the plant were
dispatched at historical levels.
The plant suffered from poor operational performance from 2006 to
2008, with an effective forced outage rate (EFOR) of more than
10%. Although some of the downtime was due to transmission
issues, many of the issues were in the plant itself. Circulating
fluidized-bed (CFB) plants generally require relatively high
levels of maintenance compared with other coal plants because of
potential erosion within the boiler and exhaust path. A major
maintenance and capital spending plan that included new internal
coatings within the furnace has resulted in marked improvements in
the project's EFOR rate, and S&P expects future EFOR of less than
5%.
The management projection assumes an EFOR rate of 3.5% to 4.5% for
the plant, depending on the level of dispatch, and a coal price
that grows by around 10% in real terms during the 12 years to
2025. S&P's base-case scenario includes an assumption that the
coal price differential moves to the historical maximum in 2015
(when the current fuel contract reopens) and remains at the
maximum spread through the debt term. S&P also assumes 5% higher
fixed and variable operating expenses and major maintenance, and
an EFOR rate 1% higher than management anticipates. S&P also
gives no credit to interest on reserve accounts and assumes that
the floating-rate debt issued by the project is 50% hedged. When
coverage is calculated including the 75% cash sweep (which,
although not required, is necessary to meet the scheduled debt
amortization), the management case results in average DSC of 1.68x
and minimum DSC of 1.43x, for the years 2013 to 2020, while S&P's
base case forecasts average DSC of 1.53x and minimum DSC of 1.40x.
In both cases, the debt fully amortizes within the seven-year
term. S&P's downside case includes an increase in heat rate and
operating expenses, together with higher-than-anticipated dispatch
and an EFOR of 6%. For this downside case, S&P sees an average of
1.32x and minimum of 1.19x, and about $78 million of debt
outstanding at the end of seven years, leading to some refinancing
risk.
The PPA with FPL requires that Cedar Bay maintain its cogeneration
status. The steam supply agreement has just been extended to 2025
from 2016, matching the term of the PPA. Although Cedar Bay did
agree to give up a large fixed payment under the steam agreement,
the new contract terms are priced to give RockTenn an incentive to
take enough steam from Cedar Bay to maintain cogeneration status.
Additional steam is expensive enough to encourage RockTenn to take
only the minimum.
The rating incorporates S&P's view of the following risks:
-- The project has an unfavorable energy margin. Under the
terms of the PPA with FPL, Cedar Bay partially derives
revenue from a function of the St. John's River Power Park's
(SJRPP) delivered cost of coal and the plant heat rate.
-- There is a basis risk between this SJRPP-based payment and
the actual cost of delivered coal for the plant, and the
size of this basis differential is significantly volatile.
The project does well during periods when the basis is small
or if the plant has not been dispatched much. The project
remains vulnerable to widening of the differential at
high levels of dispatch.
-- Cedar Bay needs RockTenn's adjacent paper mill to continue
to operate and take steam. To maintain its QF status, Cedar
Bay must sell at least 5% of its energy as steam to this
entity. While the steam contract is priced to make Cedar
Bay steam the cheapest alternative for RockTenn, that
company could choose to close the plant at any time after
2015. However, S&P believes that the project is structured
with enough liquidity to be able to fund identification or
construction of an alternative steam host.
-- Although project operations have been good during the past
three years, the project has experienced periods of high
EFOR in earlier years, and there is a risk that either
availability will be lower than projected, or that operating
and major maintenance expenses will be higher than projected
in order to address performance issues.
-- Much of the value in the plant is embedded in the long-term
PPA, but the project will not likely be able to renegotiate
this contract to remove the basis differential. As the two
coal prices are somewhat bespoke, the project would also
have difficulty entering into an effective hedge.
-- The loan is floating rate, but the issuer covenants to hedge
at least 50% of the interest rate exposure for at least four
years.
-- Cedar Bay buys 100% of its coal from an unrated supplier,
leaving the project exposed to market prices if the supplier
fails to deliver. The existing contract also matures in
December 2015. S&P notes that market prices are below the
project's contracted price for coal, and that there are
multiple alternative suppliers of coal in the Appalachia
region on the same CSX rail transport network.
-- The plant faces potential exposure to carbon emission costs
in that the PPA does not pass through these costs, but we
believe the likelihood of carbon-related legislation during
the term of the rated debt has diminished in the past year.
Partly offsetting the above risks, in S&P's view, are the
following strengths:
-- The PPA with FPL is above market and provides reliable cash
flows to Cedar Bay in the form of capacity and energy
payments. In addition, it expires five years after the
maturity of the term loan B.
-- S&P anticipates continued low natural gas prices in the near
future and, therefore, anticipates that this coal-powered
plant will be dispatched at lower-than-historical levels -
this is beneficial given the negative energy margin.
-- The steam supply agreement was recently extended to match
the term of the PPA, allowing the project greater assurance
that it will maintain its QF status.
-- 75% of excess cash is swept to pay down the term loan, which
will increase to 100% if amortization is more than 5% behind
a target seven-year schedule.
In the event that the paper mill closes, the project is at risk of
losing both steam revenue and its QF status. The PPA is
contingent on the project's retention of QF status. However,
management reports that constructing an alternative steam host to
retain QF status is feasible and could be done within required
time frames specified by regulators. S&P believes that the
project would be able to obtain required permits if this situation
arose. In addition, the project waterfall would start to fund a
$35 million reserve upon loss of the steam offtaker. Rock-Tenn is
also obligated to provide a $10 million letter of credit (LOC;
which would offset a portion of that reserve). Both the reserve
and LOC would be dedicated to replacing the steam host or else
paying off senior debt.
RECOVERY ANALYSIS
Cedar Bay's $250 million senior secured first-lien term loan B
facility has a recovery rating of '1', indicating S&P's
expectation of very high (90% to 100%) recovery in the event of a
default. The term loan B nature of the debt, with only 1% annual
required amortization, ensures that the project has reasonably
strong DSC during the seven-year term. Under management's and
S&P's base-case scenarios, the debt is fully paid within this
period. However, underperformance by the project will likely
result in the loan not amortizing within the seven years and
possibly defaulting earlier because of a covenant breach.
"The recovery scenario assumes that the plant faces a high coal
price mismatch (and large negative energy margin), as well as
levels of dispatch that start at the base-case forecast in 2013
but become high by 2016. The growth in dispatch would follow from
a sizable recovery in natural gas prices during the next few
years. We also assume that the plant experiences a 10% increase
in operating and maintenance costs and a 6% EFOR rate. As a
result, the leverage covenant is breached in 2016. At the time of
the breach, $170 million of senior debt remains outstanding. We
assume that the project continues to operate through the PPA term,
that coal and limestone supply remain adequate and available, and
that ash offtakers also remain available through 2024. The
recovery on the unpaid loan balance is then based on the present
value of future cash available for debt service through the
remainder of the PPA term. We do not give credit to revenue
beyond the term of the PPA although the project may be able to
enter into extensions to this offtake agreement," S&P said.
S&P also notes that if the loan leverage covenant breach did not
lead to acceleration, then the project would continue to service
debt. S&P forecasts that under this scenario, debt would still be
paid in full within the term of the PPA.
LIQUIDITY
Liquidity of $22 million (as of March 2013) includes the debt
service reserve, which will be initially funded at $10 million and
then sized at the next six months of interest and required
amortization, together with an operating account that must contain
the greater of $10 million or the next 30 days of operating
expenses. The project also has a major maintenance account that
is initially funded with $2 million and then sized at the next 12
months of major maintenance spending.
OUTLOOK
The stable outlook reflects S&P's view that Cedar Bay's negative
energy margin will not widen further than seen during the past
five years in the near term, as well as S&P's anticipation that
the plant will dispatch at lower levels than in recent years. S&P
could raise the rating if, over a sustained period, the coal
spread between the project and the SJRPP index becomes positive;
if DSC, including sweep payments, increases to at least 1.6x; and
if operations remain consistent with 3% to 5% EFOR rates. S&P
could lower the rating if the project's senior debt is paid down
more slowly than the scheduled amortization, which could result
from high dispatch and a coal price mismatch or operational issues
at the plant.
RATINGS LIST
New Ratings
Cedar Bay Generating Co. L.P.
$250 Mil. Sr. Sec. First Lien Term B Loan
Facility due 2020 BB/Stable
Recovery ratinig 1
CELOTEX CORP: Claims v. Integrity Insurance Barred by Estoppel
--------------------------------------------------------------
The Supreme Court of New Jersey issued an order dated June 19,
2013, on an appeal concerning excess comprehensive general
liability insurance issued by now-insolvent insurance company,
Integrity Insurance Company, to Celotex Corporation, which used
asbestos in many products it designed, manufactured, and
distributed and to a subsidiary corporation that mined the fiber.
The insureds sought bankruptcy protection in 1990 and, in 1991,
commenced a declaratory judgment action seeking coverage from the
many insurers that had issued layers of insurance over the years.
Relevant to the appeal, a bankruptcy judge found that the insured
corporations had failed to provide timely notice to their excess
insurers and barred coverage.
In 2009, Celotex submitted two proofs of claim to Thomas B.
Considine, Commissioner of Banking and Insurance of the State of
New Jersey in his capacity as Liquidator of Integrity Insurance
Company. Each sought the face amount of the 1982-1983 and 1983-
1984 policies, $5 million each, for bodily injury and property
damage claims arising from exposure to asbestos and asbestos-
containing materials. Both claims were rejected by the
Liquidator, a special master, and a trial judge. All relied on
the order entered in the prior declaratory judgment action. An
Appellate Division panel reversed; the Supreme Court granted leave
to appeal.
The appeal involves the application of collateral estoppel.
Determining whether collateral estoppel applies to the 2009 claims
requires a review of the circumstances that precipitated the
bankruptcy filing, the insureds' management of their insurance
program, and the declaratory judgment proceedings commenced by the
insureds regarding their insurance coverage. The result of the
review led the Supreme Court to conclude that the claims under
review are barred.
All of the claims brought against Celotex pertain to either bodily
injury or property damage resulting from exposure to Celotex's
asbestos-containing building materials. The very nature of the
claims in which the manifestation of injury to a person or to a
property owner may be delayed for years underscores the purpose of
timely notice of occurrence. In this case, even at the time
Celotex obtained the first of the two Integrity excess policies,
it knew that it would face many more individual claims for
asbestos-related bodily injury and asbestos-related property
damage due to its decision to incorporate asbestos in its
products, its manufacture and distribution of those products, and
the delay in manifestation of injury to person or to property. In
the context of the duty to provide notice of an occurrence, the
focus was on the entirety of the claims spawned by its inclusion
of asbestos in its products and the likelihood that it would
exhaust lower layers of insurance coverage. Under the plain and
ordinary meaning of the Integrity policies, all of the claims
result from a singular occurrence, the Supreme Court held.
The Supreme Court, therefore, determined that the orders entered
in the prior bankruptcy proceeding bar the 2009 proofs of claim
filed by the Trust because of the doctrine of collateral estoppel.
The case is IN THE MATTER OF THE LIQUIDATION OF INTEGRITY
INSURANCE COMPANY/THE CELOTEX ASBESTOS TRUST, NOS. 50 SEPTEMBER
TERM 2011, 068970 (N.J.). A full-text copy of the Decision is
available at http://is.gd/Amsn7Hfrom Leagle.com.
David M. Freeman, Esq. -- dfreeman@mskf.net -- at Mazie Slater
Katz & Freeman for appellant Thomas B. Considine, Commissioner of
Banking and Insurance of the State of New Jersey in his capacity
as Liquidator of Integrity Insurance Company. James R. Matthews,
Esq., a member of the Ohio bar, argued the cause for respondent
The Celotex Asbestos Settlement Trust.
CENTRAL EUROPEAN: Had $79.4 Million Net Loss in First Quarter
-------------------------------------------------------------
Central European Distribution Corporation filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss attributable to the Company of $79.45
million on $328.07 million of sales for the three months ended
March 31, 2013, as compared with net income attributable to the
Company of $60.18 million on $321.75 million of sales for the same
period during the prior year.
As of March 31, 2013, the Company had $1.52 billion in total
assets, $1.75 billion in total liabilities, $29.44 million in
temporary equity, and a $252.66 million total stockholders'
deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/oKFN8L
Terminates E&Y as Accountants
CEDC notified Ernst & Young Audit Sp. z o.o. that it was being
dismissed as the Company's independent registered public
accountant. The audit relationship ceased on June 28, 2013, upon
EY's completion of review of the Company's interim condensed
consolidated financial statements as of March 31, 2013, and for
three-month period then ended.
The reports of E&Y on the consolidated financial statements of the
Company as of and 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, except that:
(i) E&Y's report dated June 17, 2013, was modified to indicate
that the consolidated financial statements included in the
Form 10-K/A dated Oct. 4, 2012, had been restated to
correct certain errors resulting from improper accounting
for deferred tax assets and liabilities relating to the
acquisition of the Russian Alcohol Group in 2009; and
(ii) E&Y's report dated Oct. 4, 2012, was modified to include an
emphasis of matter regarding substantial doubt about the
Company's ability to continue as a going concern and also
to indicate that the Company has restated its consolidated
financial statements as of Dec. 31, 2011, and for the year
then ended to correct certain errors.
The Company currently intends to appoint PricewaterhouseCoopers
Sp. z o.o. as its independent registered public accountant.
However, PwC has not yet been engaged.
About CEDC
Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.
On April 7, 2013, CEDC and two subsidiaries sought bankruptcy
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.
Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan
that reduces debt by US$665.2 million.
Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as
legal counsel to the Debtor. Houlihan Lokey is the investment
banker. Alvarez & Marsal will provide the chief restructuring
officer. GCG Inc. is the claims and notice agent.
The Bankruptcy Court approved the Disclosure Statement and
confirmed the Second Amended and Restated Joint Prepackaged Plan
of Reorganization. CEDC's Plan, which won approval from the
U.S. Bankruptcy Court for the District of Delaware on May 13,
2013, was declared effective on June 5.
CENTRIX FINANCIAL: Court Allows Deposition in Suit v. Insurers
--------------------------------------------------------------
In the case, CENTRIX FINANCIAL LIQUIDATING TRUST and JEFFREY A.
WEINMAN in his capacity as Trustee for the Centrix Liquidating
Trust, Plaintiffs, v. NATIONAL UNION FIRE INSURANCE COMPANY OF
PITTSBURGH, PA and AIG DOMESTIC CLAIMS, INC., Defendants, PA No.
4:12-MC-624-JAR (E.D. Mo.), Missouri District Judge John A. Ross
granted Defendants National Union Fire Insurance Company and AIG
Domestic Claims, Inc.'s Motion to Compel 30(b)(6) Deposition of
Lyndon Property Insurance Company, and denied Lyndon Property
Insurance Company's Motion to Quash.
An adversary proceeding was brought by the Centrix Financial
Liquidating Trust and Trustee Jeffrey Weinman against National
Union in the United States Bankruptcy Court for the District of
Colorado. Plaintiffs seek coverage under a fidelity bond issued to
Centrix Financial, LLC, by National Union on May 29, 2006, which
provided coverage to Centrix for direct loss caused by the
fraudulent or dishonest acts of its employees. Plaintiffs allege
that certain Centrix officers defrauded Centrix of millions of
dollars, which losses are covered under the bond.
Under the terms of the bond, a covered loss must have been
"discovered" during the coverage period and reported to National
Union within 60 days of discovery. Plaintiffs allege that Centrix
discovered the loss when it was sued by non-party Lyndon Property
Insurance Company on February 7, 2007, yet the Lyndon lawsuit
alleges Lyndon communicated the fraud to Centrix in October 2006.
On June 13, 2012, National Union served a Rule 30(b)(6) notice of
deposition and subpoena on Lyndon seeking to ascertain when Lyndon
first became aware of the factual allegations alleged in the
Lyndon lawsuit. The subpoena called for deposition testimony on
five topics: (1) when Lyndon became aware of the facts alleged in
the Lyndon lawsuit; (2) the documents Lyndon relied on in drafting
the allegations in the Lyndon lawsuit; (3) communications between
Lyndon and Centrix concerning or relating to the allegations in
the Lyndon lawsuit; (4) communications between Lyndon and the
Committee of Unsecured Creditors for Centrix Financial concerning
or relating to the allegations in the Lyndon lawsuit; and (5)
Lyndon's knowledge of the Fidelity Bond.
On October 5, 2012, Lyndon served National Union with objections
to the deposition topics on the grounds that (1) the requested
testimony is duplicative of information already provided in this
case; (2) providing the requested testimony would be unduly
burdensome, particularly given Lyndon's third-party status in this
case; and (3) the testimony sought is protected by the attorney-
client privilege. Subject to its objections, Lyndon agreed to
produce a witness to testify on the first and fifth topics.
National Union filed the motion to compel because Lyndon's
objections did not allow it to obtain the information necessary
for its defenses.
A copy of the Court's June 25, 2013 Amended Memorandum and Order
is available at http://is.gd/ShMQKKfrom Leagle.com.
Centrix Financial Liquidating Trust, Plaintiff, is represented by
Ann M. Uetz, Esq. -- auetz@foley.com -- at FOLEY AND LARDNER.
Jeffrey A. Weinman, Plaintiff, is represented by Ann M. Uetz,
FOLEY AND LARDNER.
National Union Fire Insurance Company of Pittsburgh, PA,
Defendant, represented by L. James Lyman, Esq.
James.Lyman@APORTER.COM -- at ARNOLD AND PORTER, LLP.
AIG Domestic Claims, Inc., Defendant, represented by L. James
Lyman, Esq., ARNOLD AND PORTER, LLP.
Lyndon Property Insurance Company represented by Stephen J. Moore,
Esq. -- smoore@gjtbs.com -- at GALLOWAY AND JOHNSON.
About Centrix Financial
Based in Reno, Nevada, Centrix Financial LLC was a subprime
auto lender.
Three of Centrix Financial's creditors, IFC Credit Corporation,
Suntrust Leasing, and Wells Fargo Equipment Finance, filed an
involuntary chapter 11 petition against the Debtors (Bankr.
D. Colo. Case No. 06-16403) on Sept. 15, 2006, alleging more
than $4.6 million owed. Lee M. Kutner, Esq., at Kutner Miller,
P.C., and David von Gunten, Esq., at Von Gunten Law LLC,
represented the petitioners.
Centrix and some affiliates filed voluntary Chapter 11
petitions (Bankr. D. Nev. Case No. 06-50631) on Sept. 19,
2006. CMGN LLC, another affiliate, filed its Chapter 11
petition (Bankr. D. Nev. Case No. 06-50631) on Sept. 4, 2006.
The Debtors' cases were consolidated and transferred (Bankr.
D. Colo. Case No. 06-16403) on Sept. 27, 2006. Craig D.
Hansen, Esq., Thomas J. Salerno, Esq., and Sean T. Cork, Esq.,
at Squire, Sanders & Dempsey, L.L.P.; and Lawrence Bass,
Esq., and Elizabeth K. Flaagan, Esq., at Holme Roberts & Owen LLP,
represent the Debtors. The Official Committee of Unsecured
Creditors was represented by Douglas W. Jessop, Esq., and Kerstin
E. Kass, Esq., at Jessop & Company, P.C., and Michael P. Richman,
Esq., at Foley & Lardner LLP. Kurtzman Carson Consultants LLC was
the Debtors' claims agent. In it Schedules filed with the
Court, Centrix Financial disclosed total assets of $23,928,171
and total debts of $109,189,359.
On February 6, 2007, the Bankruptcy Court authorized the sale of
substantially all of the Debtors' assets. In late 2007, the
Debtors proposed a liquidating chapter 11 plan, and the Honorable
Elizabeth E. Brown confirmed that plan in early 2008. The Centrix
Liquidating Trust was created under that chapter 11 plan and
Jeffrey A. Weinman was appointed the liquidating trustee.
CENVEO INC: S&P Lowers CCR to 'B-'; Outlook Stable
--------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Stamford, Conn.-based diversified printing company
Cenveo Inc. to 'B-' from 'B'. The outlook is stable.
At the same time, S&P lowered the issue-level ratings on all of
the company's debt by one notch.
The rating action reflects the company's weak operating
performance and S&P's expectation for thin covenant compliance
over the near term. S&P could consider a further downgrade if
headroom continues to diminish. For the quarter ended March 31,
2013, the company had 7.6% headroom with its maximum leverage
covenant, and S&P expects headroom to continue to tighten before
potentially improving at the end of 2013 or in 2014.
"Over the next year, we expect the company's leverage to remain
high, at above 7x, and interest coverage to remain below 2x. For
these reasons, we consider Cenveo's financial risk profile "highly
leveraged" (based on our criteria). We view the company's
business risk profile as "weak" because of Cenveo's participation
in the highly competitive and cyclical printing markets. We
expect ongoing pricing pressure from industry overcapacity. Over
the near term, we expect this to result in lower organic revenue
and EBITDA margin contraction. We view Cenveo's management and
governance as "fair", S&P said
A midsize company, Cenveo has a leading niche position in
fragmented segments of the printing market, including direct-mail
envelope manufacturing, specialty-label manufacturing, packaging
printing, and technical journal printing. Despite this, S&P's
assessment of Cenveo's business profile as weak reflects S&P's
expectation for a continuing migration online of certain forms of
printed media--such as journals and periodicals--and intense
pricing pressure. Cenveo has been relatively effective at cost
management and realizing acquisition synergies, but, in S&P's
view, faces ongoing revenue pressures.
CHINA NATURAL: Pipeline Consents to Chapter 11 in New York
----------------------------------------------------------
China Natural Gas, Inc., has finally consented to the entry of an
order for relief under Chapter 11 of the U.S. Code.
On Feb. 8, 2013, an involuntary petition for bankruptcy was filed
against China Natural Gas by three alleged creditors of the
Company, namely Abax Lotus Ltd., Abax Nai Xin A Ltd., and Lake
Street Fund LP. The Petition was filed in the United States
Bankruptcy Court, Southern District of New York. The Petitioners
have claimed in the Involuntary Petition that they have debts
totaling $42,218,956 as a result of the Company's failure to make
payments on the 5 Percent Guaranteed Senior Notes issued in 2008.
The Company previously asked the Court to dismiss the Involuntary
Petition claiming that it has not been served with valid summons.
The Company's Board of Directors approved the consent to the entry
of an order for relief in response to the Involuntary Petition.
Appoints Chairman
On June 24, 2013, the Board of Directors of the Company appointed
its CEO, Mr. Shuwen Kang, as the Chairman and a member of the
Company's Board of Directors.
Mr. Kang has been serving as the Company's CEO since October 2011.
Prior to serving as the CEO of the Company, Mr. Kang was the vice
president of Xi'an Xilan Natural Gas Co., Ltd., the variable
interest entity of one of the Company's major subsidiaries, and
was in charge of Xi'an Xilan's business operations. From 2006 to
2010, Mr. Kang served as senior counsel to Xi'an Xilan,
responsible for making strategic and business development plans
for the Company. Mr. Kang has extensive experience in the
operations and management of the Company and in the natural gas
industry in general.
Mr. Kang holds an associate degree in Party and Government
Management from the Party School of the Shaanxi Provincial
Committee of the Communist Party of China.
Mr. Kang will not receive additional compensation for his services
as the Chairman of the Company's Board of Directors.
About China Natural
Headquartered in Xi'an, Shaanxi Province, P.R.C., China Natural
Gas, Inc., was incorporated in the State of Delaware on March 31,
1999. The Company through its wholly owned subsidiaries and
variable interest entity, Xi';an Xilan Natural Gas Co., Ltd., and
subsidiaries of its VIE, which are located in Hong Kong, Shaanxi
Province, Henan Province and Hubei Province in the People's
Republic of China ("PRC"), engages in sales and distribution of
natural gas and gasoline to commercial, industrial and residential
customers through fueling stations and pipelines, construction of
pipeline networks, installation of natural gas fittings and parts
for end-users, and conversions of gasoline-fueled vehicles to
hybrid (natural gas/gasoline) powered vehicles at 0ptmobile
conversion sites.
On Feb. 8, 2013, an involuntary petition for bankruptcy was filed
against the Company by three of the Company's creditors, Abax
Lotus Ltd., Abax Nai Xin A Ltd., and Lake Street Fund LP (Bankr.
S.D.N.Y. Case No. 13-10419). The Petitioners claimed that they
have debts totaling $42,218,956.88 as a result of the Company's
failure to make payments on the 5% Guaranteed Senior Notes issued
in 2008. The Company says it intends to oppose the motion.
Adam P. Strochak, Esq., at Weil, Gotshal & Manges, LLP, in
Washington, D.C., represents the Petitioners as counsel.
China Natural Gas reported net income of $4.6 million in the first
quarter on revenue of $35.5 million. In 2012, net income was
$12.6 million on revenue of $145.3 million.
The last regulatory filing listed assets of $293.5 million and
liabilities totaling $80 million.
CHRYSLER LLC: SDNY Court Trims Class Suit Over Defective Cars
-------------------------------------------------------------
Bankruptcy Judge Stuart M. Bernstein narrowed a complaint
commenced by plaintiffs who own vehicles that were manufactured
and sold by Old Carco LLC, formerly known as Chrysler LLC, and 24
of its affiliates.
The plaintiffs allege that their vehicles suffer from a design
flaw known as "fuel spit back." They commenced a class action in
Delaware state court against Chrysler Group LLC ("New Chrysler"),
the purchaser of Old Carco's assets, seeking relief for this
design flaw under a variety of theories. Following removal to
Delaware District Court, New Chrysler moved to dismiss the
plaintiffs' Second Amended Complaint pursuant to Federal Rule of
Civil Procedure 12(b)(6) arguing that the claims are barred by the
Sale Order entered in the Chrysler bankruptcy case.
The Delaware District Court transferred the dispute to the U.S.
Bankruptcy Court for the Southern District of New York, which
oversaw Chrysler LLC's Chapter 11 bankruptcy, solely to determine
the effect of the Sale Order on the plaintiffs' claims.
Judge Bernstein concludes that with two exceptions the Sale Order
bars any claims based on a breach of a duty that existed as of the
time of the June 10, 2009 closing. The exceptions relate to
claims for the repair or replacement of parts under warranties
that accompanied the purchase of the vehicles when new or were
acquired under extended service contracts and any "Lemon Law"
claims arising under non-bankruptcy law. Conversely, the Sale
Order obviously does not bar claims concerning vehicles
manufactured or sold by New Chrysler after the closing or injuries
resulting from the breach of any duties that arose under non-
bankruptcy law after the closing. The New York Court leaves the
determination of the legal sufficiency of those claims to the
Delaware District Court.
The parties are directed to arrange for a status conference to
discuss whether any further proceedings in the New York Court are
necessary or appropriate under the transfer order.
The case is AUTUMN BURTON, et al., Plaintiffs, v. CHRYSLER GROUP,
LLC, Defendant, Adv. Proc. No. 13-01109 (Bankr. S.D.N.Y.). A copy
of Judge Bernstein's June 26 Memorandum Decision And Order
Granting In Part And Denying In Part Motion To Dismiss The Second
Amended Complaint is available at http://is.gd/rcNoa8from
Leagle.com.
Attorneys for Plaintiffs are:
Kenneth R. Puhala, Esq.
Barry E. Bressler, Esq.
Richard A. Barkasy, Esq.
Eric A. Boden, Esq.
SCHNADER HARRISON SEGAL & LEWIS LLP
New York, NY
E-mail: kpuhala@schnader.com
bbressler@schnader.com
rbarkasy@schnader.com
eboden@schnader.com
Steven L. Holley, Esq., and Benjamin R. Walker, Esq., Of Counsel
-- holleys@sullcrom.com and walkerb@sullcrom.com -- at SULLIVAN &
CROMWELL LLP, New York, New York, Attorneys for Defendants.
About Chrysler Group
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002). The U.S. and Canadian governments provided
Chrysler LLC with $4.5 billion to finance its bankruptcy case.
In connection with the bankruptcy filing, Chrysler reached an
agreement to sell all assets to an alliance between Chrysler and
Italian automobile manufacturer Fiat. Under the terms approved by
the Bankruptcy Court, the company formerly known as Chrysler LLC
in June 2009, formally sold substantially all of its assets to the
new company, named Chrysler Group LLC.
* * *
Chrysler has a 'B1' corporate family rating from Moody's.
Moody's upgraded the rating from 'B2' to 'B1' in February 2013.
Moody's said that the upgrade reflects Moody's expectation that
Chrysler will be able to sustain the progress it has made during
the past 18 months in strengthening its competitive position in
North America.
CIRCLE STAR: OKs Issue of 4.2 Million Common Shares
---------------------------------------------------
Circle Star Energy Corp. authorized the issuances of 4,201,007
restricted shares of its common stock:
* 1,591,675 shares to Jeffrey Johnson for accrued salary of
$63,667, including a tax gross-up adjustment of 25 percent;
* 1,568,750 shares to Jayme Wollison for accrued salary of
$62,750, including a tax gross-up adjustment of 25 percent;
* 757,249 shares to Jeffrey Johnson for the June 1, 2013,
installment of his Restricted Share issuance required under
his employment agreement and the 25 percent tax gross-up
payments related to the March 1, 2013, and June 1, 2013,
installments of his Restricted Share issuance; and
* 283,333 shares to two employees of the Company, as required
under the terms of their employment arrangements with the
Company.
The shares issued to Messrs. Johnson and Wollison were valued at
$0.05 per share, which was less than the June 25, 2013, closing
price of $0.0353.
About Circle Star
Fort Worth, Tex.-based Circle Star Energy Corp. (OTC BB: CRCL)
owns royalty, leasehold, operating, net revenue, net profit,
reversionary and other mineral rights and interests in certain oil
and gas properties in Texas. The Company's properties are in
Crane, Scurry, Victoria, Dimmit, Zavala, Grimes, Madison,
Robertson, Fayette, and Lee Counties.
As reported by the Troubled Company Reporter on Aug. 17, 2012,
Hein & Associates LLP, in Dallas, Texas, expressed substantial
doubt about Circle Star's ability to continue as a going concern
its report on the Company's financial statements for the fiscal
year ended April 30, 2012. The independent auditors noted that
the Company has suffered recurring losses from operations and has
a working capital deficit.
The Company's balance sheet at Jan. 31, 2013, showed $4.74 million
in total assets, $5.49 million in total liabilities and a $754,119
total stockholders' deficit.
COLONIAL BROKERAGE: PBGC Claims to Be Treated as Timely Filed
-------------------------------------------------------------
Bankruptcy Judge Dwight H. Williams, Jr. grants the Pension
Benefit Guaranty Corporation's summary judgment motion filed in
the Chapter 7 case of Colonial Brokerage, Inc., asking that its
claims -- which were filed after the claims bar date -- be
accorded equal treatment with timely filed claims.
The judge finds that PBGC had neither sufficient notice nor actual
knowledge of the Debtor's bankruptcy case in time to file a timely
claim.
The objection of Chapter 7 Susan S. Depaola to PBGC's Motion is
overruled.
Colonial Brokerage, Inc. filed a voluntary chapter 7 petition
(Bankr. M.D. Ala., Case No. 10-31511) on June 7, 2010. The
Section 341(a) creditors' meeting was set for July 9, 2010, and
notices of the meeting were sent to all listed creditors. PBGC
was not listed among the creditors and did not receive notice of
the Debtor's bankruptcy.
A copy of the Court's June 17, 2013 Memorandum Opinion is
available at http://is.gd/hBmFqcfrom Leagle.com.
Von G. Memory, Esq., represented the Chapter 7 Trustee.
Mark S. Pfeuffer, Esq. -- pfeuffer.marc@pbgc.gov -- represented
the PBGC.
COOPER-BOOTH: U.S. Trustee Appoints 3-Member Creditors Committee
----------------------------------------------------------------
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
three members to the Official Unsecured Creditors' Committee in
the Chapter 11 case of Cooper-Booth Wholesale Company.
The Committee members are:
1) The Coca-Cola Company
8601 Dunwoody Place, Suite 200
Atlanta, GA 30350;
Attn: S. Curtis Marshall
Telephone: (404) 887-2681
E-mail: cumarshall@cocacola.com
2) The Hershey Company
19 East Chocolate Avenue
Hershey, PA 17033
Attn: Martin E. Taylor
Telephone: (717) 534 7205
Facsimile: (717) 534 7210
E-mail: mtaylor@hersheys.com
3) Kraft Foods
3 Lakes Drive
Northfield, IL 60093
Attn: Juan Mostek
Telephone: (847) 646-6408
E-mail: juan.mostek@kraftfoods.com
About Cooper-Booth Wholesale
Cooper-Booth Wholesale Company, L.P. and two affiliates sought
Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 13-14519) in
Philadelphia on May 21, 2013, after the U.S. government seized the
Company's bank accounts to recover payments made by a large
customer caught smuggling Virginia-stamped cigarettes into New
York.
Serving the mid-Atlantic region, Cooper is one of the top 20
convenience store wholesalers in the country. Cooper supplies
cigarettes, snacks, beverages and other food items from Hershey's,
Lellogg's, Bic, and Mars to convenience stores. Cooper has been
in the wholesale distribution business since 1865 when the Booth
Tobacco Company was incorporated in Lancaster, Pennsylvania. The
Company has been family owned and operated for three generations.
Aris J. Karalis, Esq., and Robert W. Seitzer, Esq., at Maschmeyer
Karalis, P.C., in Philadelphia, serve as the Debtors' bankruptcy
counsel. Executive Sounding Board Associates, Inc., is the
financial advisor. Blank Rome LLP represents the Debtor in
negotiations with federal agencies concerning the seizure warrant.
Cooper Booth estimated assets of at least $50 million and
liabilities of at least $10 million as of the bankruptcy filing.
As of the Petition Date, the Debtors' total consolidated funded
senior debt obligations were approximately $10.7 million and
consisted of, among other things, $7.72 million owing on a
revolving line of credit facility, $2.83 million owing on a line
of credit for the purchase of equipment, and $166,000 due on a
corporate VISA Card. PNC Bank asserts that a letter of credit
facility is secured by all personal property owned by Wholesale.
Unsecured trade payables totaled $22.8 million as of May 21, 2013.
COMPETITIVE TECHNOLOGIES: To Issue 200,000 Shares to Advisors
-------------------------------------------------------------
Competitive Technologies, Inc., registered with the U.S.
Securities and Exchange Commission 200,000 shares of common stock
issuable for legal services for a proposed maximum aggregate
offering price of $40,000. A copy of the Form S-8 is available
for free at http://is.gd/oCffva
About Competitive Technologies
Fairfield, Conn.-based Competitive Technologies, Inc. (OTC QX:
CTTC) -- http://www.competitivetech.net/-- was established in
1968. The Company provides distribution, patent and technology
transfer, sales and licensing services focused on the needs of its
customers and matching those requirements with commercially viable
product or technology solutions. Sales of the Company's
Calmare(R) pain therapy medical device continue to be the major
source of revenue for the Company.
Competitive Technologies incurred a net loss of $3 million on
$546,139 of gross profit from product sales in 2012, as compared
with a net loss of $3.59 million on $1.86 million of gross profit
from product sales in 2011. As of March 31, 2013, the Company had
$4.60 million in total assets, $9.25 million in total liabilities
and a $4.64 million total shareholders' deficit.
Mayer Hoffman McCann CPAs (The New York Practice of Mayer Hoffman
McCann P.C.), 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 incurred operating losses since fiscal year
2006. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
COMPETITIVE TECHNOLOGIES: Shareholders Elect Five Directors
-----------------------------------------------------------
Competitive Technologies, Inc., held its annual meeting of
shareholders on June 20, 2013, at which the shareholders:
(1) relected Peter Brennan, Rustin R. Howard, Robert G. Moussa,
Carl D. O'Connell and Stanley K. Yarbro, Ph.D., as
directors of the Company;
(2) ratified the appointment of Mayer, Hoffman McCann, CPAs, as
the Company's independent registered public accounting
firm; and
(3) approved, on an advisory basis, the compensation of the
Company's named executive officers.
A copy of the SEC filing is available for free at
http://is.gd/EsGKHO
About Competitive Technologies
Fairfield, Conn.-based Competitive Technologies, Inc. (OTC QX:
CTTC) -- http://www.competitivetech.net/-- was established in
1968. The Company provides distribution, patent and technology
transfer, sales and licensing services focused on the needs of its
customers and matching those requirements with commercially viable
product or technology solutions. Sales of the Company's
Calmare(R) pain therapy medical device continue to be the major
source of revenue for the Company.
Competitive Technologies incurred a net loss of $3 million on
$546,139 of gross profit from product sales in 2012, as compared
with a net loss of $3.59 million on $1.86 million of gross profit
from product sales in 2011.
Mayer Hoffman McCann CPAs (The New York Practice of Mayer Hoffman
McCann P.C.), 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 incurred operating losses since fiscal year
2006. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
As of March 31, 2013, the Company had $4.60 million in total
assets, $9.25 million in total liabilities and a $4.64 million
total shareholders' deficit.
COMSTOCK MINING: Stockholders Elect Five Directors
--------------------------------------------------
Comstock Mining Inc. held its annual meeting of stockholders on
June 27, 2013, at which the stockholders:
(1) elected John V. Winfield, Corrado De Gasperis, Daniel W.
Kappes, William J. Nance and Robert A. Reseigh
to the Board of Directors;
(2) ratified the appointment of Deloitte & Touche LLP as the
Company's independent registered public accounting firm for
the fiscal year ending Dec. 31, 2013;
(3) approved, a non-binding basis, the compensation of the
Company's named executive officers; and
(4) indicated "every year" as the desired frequency of periodic
advisory votes on executive compensation.
About Comstock Mining
Virginia City, Nev.-based Comstock Mining Inc. is a Nevada-based,
gold and silver mining company with extensive, contiguous property
in the historic Comstock district. The Company began acquiring
properties in the Comstock in 2003. Since then, the Company has
consolidated a substantial portion of the Comstock district,
secured permits, built an infrastructure and brought the
exploration project into test mining production. The Company
continues acquiring additional properties in the Comstock
district, expanding its footprint and creating opportunities for
exploration and mining. The goal of the Company's strategic plan
is to deliver stockholder value by validating qualified resources
(measured and indicated) and reserves (probable and proven) of
3,250,000 gold equivalent ounces by 2013, and commencing
commercial mining and processing operations by 2011, with annual
production rates of 20,000 gold equivalent ounces.
Comstock Mining disclosed a net loss of $30.76 million in 2012, a
net loss of $11.60 million in 2011 and a net loss of $60.32
million in 2010.
The Company's balance sheet at March 31, 2013, showed
$47.76 million in total assets, $25.34 million in total
liabilities, and $22.42 million in total stockholders' equity.
COOPER TIRE: S&P Puts 'BB-' CCR on CreditWatch Negative
-------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit rating and 'BB-' senior unsecured issue-level ratings on
Findlay, Ohio-based tire maker Cooper Tire & Rubber Co. on
CreditWatch with negative implications.
"The CreditWatch negative means that we could lower the ratings
following our review," said credit analyst Lawrence Orlowski.
Ultimately, we expect to withdraw the corporate credit rating on
Cooper Tire when the transaction closes.
Apollo Tyres is financing the $2.5 billion acquisition of Cooper
Tire with bank debt and secured notes. S&P believes that Cooper
Tire and Apollo Tyres' European operations will jointly issue
$2.1 billion in debt. Apollo Tyres will take on the remaining
newly issued debt at the holdco level. At this time, the details
of the proposed capital structure have not been fully revealed.
"Currently, Cooper Tire's leverage is below 2.0x, in line with our
expectations for a "significant" financial risk profile, albeit
stronger than the 3x-4x guideline for "significant." Based on
available information, we calculate that the consolidated
company's leverage could be about 5.0x with our adjustments for
unfunded pensions and retiree healthcare obligations and operating
leases. The leverage we project could lower our assessment of the
financial risk profile and likely lead to a downgrade, and
ultimately the withdrawal, of the corporate credit rating once the
transaction closes. We would likely lower the issue-level ratings
on the senior unsecured notes as well," S&P noted.
S&P will monitor developments relating to this transaction and
will resolve the CreditWatch listing if the sale occurs. S&P will
update its CreditWatch if substantive details regarding the
business strategy, financing plan, prospective capital structure,
or financial policies become available.
CREDITCORP: Moody's Rates New $165MM Senior Notes 'B3'
------------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating
and a B3 rating to the $165 million senior secured notes issuance
of Creditcorp. The rating outlook is stable.
Ratings Rationale:
The B3 CFR reflects Creditcorp's solid franchise positioning in
the United States as well as a strong capital position relative to
peers when measured by tangible common equity / tangible managed
assets. The company operates 1,049 stores, which includes a small
presence in the United Kingdom.
Balancing these positives is the company's monoline business model
focused on providing alternative financial products, primarily
payday lending to the unbanked and underbanked consumer. Intense
regulatory scrutiny of the payday loan product makes Creditcorp's
revenues vulnerable to negative regulatory actions at the federal,
state and local levels
In addition, the senior secured note issuance represents
opportunistic access to the capital markets as well as an
aggressive financial policy. The notes will be used to refinance
existing credit lines, pay a special shareholder dividend and
provide cash for general corporate usage. Moody's sees the cash as
most likely being used to fund growth. Currently, Creditcorp is
expanding into title lending and while Moody's views the
diversification in revenues as a positive, some execution risk
exists.
The B3 rating on the senior secured notes is the same as the CFR
and reflects the fact that the notes will comprise over 85% of the
company's debt structure.
The rating outlook is stable, based on Moody's view that
Creditcorp will be able to maintain profitability and adequate
debt service capability while growing additional product types and
diversifying its revenues.
Creditcorp, based in Cleveland, Tennessee, is an alternative
financial services provider serving the unbanked and underbanked
consumer.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.
CREDITCORP: S&P Assigns 'B' ICR & Rates $165MM Sr. Sec. Notes 'B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B'
issuer credit rating to Creditcorp. The outlook is stable. S&P
also assigned a 'B' issue rating and '4' recovery rating to
Creditcorp's proposed issuance of $165 million in senior secured
notes. The '4' recovery rating indicates S&P's expectation for
average recovery (30% to 50%) for creditors in the event of
payment default.
"Our ratings on Cleveland, Tenn.-based Creditcorp are based on the
company's exposure to regulatory and legislative risks, moderate
geographic and product diversity, and higher leverage that is
required for growth of auto title lending and other longer-term
assets," said Standard & Poor's credit analyst Igor Koyfman. We
also expect that the company will be marginally profitable on a
generally accepted accounting principles (GAAP) net income basis
at least for 12 months after it issues the proposed notes. The
company's well-managed funding and liquidity, strong credit
quality metrics, positive tangible equity, and management's
extensive expertise in small-dollar consumer lending mitigate
these weaknesses," S&P said.
Creditcorp operates in the alternative financial services sector,
providing payday advances, auto title loans, consumer installment
loans, lines of credit, pawn loans, and other related services to
retail consumers. The company was founded in 1993 and has
primarily expanded organically to its current level of
approximately 1,040 locations in 30 U.S. states and 22 locations
(including 13 franchises) in the U.K. Creditcorp has also
developed an Internet lending platform that is operational in 22
states, but the company has taken a measured approach to growth
through this channel. To finance further growth, Creditcorp plans
to access the capital markets by issuing $165 million of senior
secured notes. The company intends to use the proceeds to pay
down its existing revolving credit facility of approximately
$64.4 million and pay a $25 million dividend to existing
shareholders. The company will use the remainder of the cash
primarily for de novo store growth--focused on auto title lending-
-or for small acquisitions, which we believe to be a prudent
strategy.
Creditcorp's exposure to regulatory and legislative risks limits
S&P's ratings. The company offers financial products that
represent one of the more expensive sources of commercially
available credit, and as a result it draws scrutiny from
regulators and consumer advocate groups. In the U.S.,
Creditcorp's products are regulated at the state level, and the
rules have varied widely state-to-state on pricing, loan size, and
roll-over limitations (extending a loan term for a fee), among
other regulations. Creditcorp is also exposed to increased
federal regulation from the Consumer Financial Protection Bureau--
a body that monitors and regulates consumer financial products in
the U.S..
In S&P's view, Creditcorp's moderate product and geographic
diversity is a negative rating factor. Although the company has
an extensive store distribution across the U.S., operations in
five states generated more than one-half of the company's 2012
total revenues. S&P believes that unfavorable regulatory changes
at the top-revenue-generating states could materially hurt the
company's financial profile. Also, one type of product--payday
loans--represented nearly 60% of the company's total revenues in
2012. However, S&P expects Creditcorp to continue to diversify
its revenue streams.
The stable outlook reflects S&P's expectation that Creditcorp will
continue to grow while maintaining strong credit loss metrics.
S&P could raise the rating if Creditcorp mitigates its regulatory
risks by improving its geographic and product diversification.
For instance, S&P could raise its rating on Creditcorp if revenues
from its top five states fell to about one-third of its total
revenues from roughly half. An upgrade would also be contingent
on the company's ability to successfully expand into other
products, such as title lending, over a longer period of time.
S&P could lower its ratings on Creditcorp if earnings decline
materially and credit measures deteriorate. This could occur if
the company relaxes its underwriting standards--with the intent to
aggressively expand its loan portfolio--and credit losses increase
materially. Adverse regulatory developments in one or more states
that are high contributors to earnings could also lead to
financial underperformance. Specifically, S&P could lower the
rating if debt-to-adjusted EBITDA approaches or exceeds 5.0x on a
sustained basis.
DELTA AGGRIGATE: Involuntary Chapter 11 Case Summary
----------------------------------------------------
Alleged Debtor: Delta Aggrigate, LLC
6462 NW 63rd Way
Parkland, FL 33067
Case Number: 13-24916
Involuntary Chapter 11 Petition Date: June 25, 2013
Court: Southern District of Florida (Fort Lauderdale)
Judge: John K. Olson
Petitioner's Counsel: Michael J. Scaglione, Esq.
SCAGLIONE LAW FIRM, P.A.
2600 S Douglas Rd # PH 10
Coral Gables, FL 33134
Tel: (305) 447-0392
E-mail: mscaglione@sqblaw.com
Gene Delta Aggrigate, LLC's petitioner:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Raelaur Realty, LLC Mortgage $904,700
70 Split Rock Road,
Syosset, NY 11791
DEWEY & LEBOEUF: US Bank Urges Judge to Allow $8MM Equipment Claim
------------------------------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that U.S. Bank NA
urged a New York bankruptcy judge to allow its $8 million claim
for office equipment lease payments against the estate of Dewey &
LeBoeuf LLP stand, offering to reduce the amount by around
$371,000 as required by the lease agreement.
According to the report, the bank filed its claim for about $8.2
million in September, saying the fallen mega-firm is obligated to
make remaining lease payments under a contract the parties signed
more than a decade ago.
About Dewey & LeBoeuf
Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 12-12321) to complete the wind-down of its operations.
The firm had struggled with high debt and partner defections.
Dewey disclosed debt of $245 million and assets of $193 million in
its chapter 11 filing late evening on May 29, 2012.
Dewey & LeBoeuf LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
At its peak, Dewey employed about 2,000 people with 1,300 lawyers
in 25 offices across the globe. When it filed for bankruptcy,
only 150 employees were left to complete the wind-down of the
business.
Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate. The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.
The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
$6 million. The Pension Benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
Judge Martin Glenn oversees the case. Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent. The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.
JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP. JPMorgan, as Collateral Agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors. The Noteholders hired
Bingham McCutchen LLP as counsel.
The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners. The creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
Dewey filed a Chapter 11 Plan of Liquidation and an accompanying
Disclosure Statement on Nov. 21, 2012. It filed amended plan
documents on Dec. 31, in an attempt to address objections lodged
by various parties. A second iteration was filed Jan. 7, 2013.
The plan is based on a proposed settlement between secured lenders
and Dewey's official unsecured creditors' committee, as well as a
settlement with former partners.
On Feb. 27, 2013, the Bankruptcy Court confirmed Dewey & Leboeuf's
Second Amended Chapter 11 Plan of Liquidation dated Jan. 7, 2013,
As of the Effective Date of the Plan, the Debtor will be
dissolved.
Alan Jacobs of AMJ Advisors LLC, has been named Dewey's
liquidation trustee.
DIAGNOSTIC VENTURES: Former Exec, Deloitte Cleared From Fraud Suit
------------------------------------------------------------------
District Judge Legrome D. Davis granted a motion for summary
judgment clearing Terry W. Cady, the former executive at DVI
Business Credit, Inc., a subsidiary of Diagnostic Ventures Inc.,
from charges asserted by six institutional funds that invested in
DVI debt securities for violations of Section 10(b) of the
Securities Exchange Act of 1934, 15 U.S.C. Sec. 78j(b) and Rule
10b-5(a),(c), 17 C.F.R. Sec. 240.10b-5(a),(c), and imposition of
liability under Section 20(a) of the Exchange Act, 15 U.S.C. Sec.
78t(a). Judge Davis held that the record contains no evidence
that Mr. Cady culpably participated in the fraud that allegedly
occurred at DVI. A copy of Judge Davis' June 27, 2013 Memorandum
is available at http://is.gd/y09kwcfrom Leagle.com.
In separate decisions, Judge Davis also cleared Deloitte & Touche
LLP, DVI's former independent auditor; and Harold Neas, who was an
audit partner at Deloitte, from any role in the fraud.
"The primary question presented here is whether the record
contains sufficient evidence showing that a fraudulent
misrepresentation or omission by either Deloitte or Neas
proximately caused actual economic losses as alleged by
Plaintiffs. [Deloitte's and Neas'] motion for summary judgment
will be granted. Plaintiffs have not adduced that quantum of
evidence on the issues of loss causation and damages required to
withstand summary judgment on any of the asserted theories of
liability," Judge Davis said.
The judge also held that, "Absent any evidence that Neas publicly
made any false, misleading, or otherwise fraudulent statements or
omissions, or engaged in any manipulative or deceptive conduct
that was communicated to the investing public or specifically to
the Plaintiff Funds, the record fails to establish triable
disputes as to the essential elements of this private securities
fraud action -- a material misrepresentation or omission,
manipulative or deceptive conduct, and reliance."
A copy of Judge Davis' decision as to Deloitte is available at
http://is.gd/u071iMfrom Leagle.com. A copy of the decision as to
Mr. Neas is available at http://is.gd/ChJV2jfrom Leagle.com.
The Plaintiff Funds are WM High Yield Fund; WM Income Fund; WM VT
Income Fund; AT High Yield Fund; AT Income Fund; and Stellar
Funding, Ltd.
The case is WM HIGH YIELD FUND, et al., v. MICHAEL A. O'HANLON, et
al., Civil Action No. 04-3423 (E.D. Pa.).
The Plaintiff Funds are represented by BRIAN M. ROSTOCKI, GRANT &
EISENHOFER PA, DAVID E. SELLINGER, GRANT & EISENHOFER PA, JAMES P.
MC EVILLY, III, GRANT & EISENHOFER PA, JOHN A. CURSEADEN, GRANT &
EISENHOFER PA, JOHN C. KAIRIS, GRANT & EISENHOFER P.A., LAUREN E.
WAGNER, GRANT & EISENHOFER PA, MARY S. THOMAS, GRANT & EISENHOFER
PA, STUART M. GRANT, GRANT & EISENHOFER, P.A., RALPH N. SIANNI,
STEWARTS LAW US LLP & STEPHEN G. GRYGIEL, GRANT & EISENHOFER PA.
MICHAEL A. O'HANLON, Defendant, is represented by RICHARD L.
SCHEFF, MONTGOMERY MCCRACKEN WALKER & RHOADS LLP.
STEVEN R. GARFINKEL, Defendant, is represented by MAURA FAY
MCILVAIN, DILWORTH PAXSON LLP.
RICHARD MILLER, Defendant, is represented by JAMES J. ROHN, CONRAD
O'BRIEN & PATRICIA M. HAMILL, CONRAD O'BRIEN.
ANTHONY J. TUREK, Defendant, is represented by WILLIAM TAYLOR,
COZEN O'CONNOR & STUART M. GRANT, GRANT & EISENHOFER, P.A.
JOHN P. BOYLE, Defendant, is represented by ROBERT E. KELLY, LAW
OFFICES OF ROBERT E. KELLY LLC.
GERALD COHN, Defendant, represented by MARY MARGULIS-OHNUMA,
STILLMAN FRIEDMAN & SHECHTMAN PC, RICHARD R. HARRIS, LITTLER
MENDELSON, THOMAS A. LEONARD, OBERMAYER REBMANN MAXWELL & HIPPEL
LLP, CAROLYN BARTH RENZIN, STILLMAN FREIDMAN & SHECHTMAN,
ELIZABETH S. WEINSTEIN, STILLMAN FRIEDMAN & SHECHTMAN & WILLIAM J.
LEONARD, OBERMAYER, REBMANN, MAXWELL & HIPPEL, LLP.
HARRY T.J. ROBERTS, Defendant, represented by JEFFREY M. LINDY,
LAW OFFICES OF JEFFREY M. LINDY.
DOLPHIN MEDICAL, INC., Defendant, represented by LEAH J.
DOMITROVIC, KATTEN, MUCHIN, ZAVIS, ROSENMAN & RICHARD A. LEVAN,
WIGGIN & DANA LLP.
UNITED STATES OF AMERICA, Movant, represented by AMY L. KURLAND,
U.S. ATTORNEY'S OFFICE.
40/86 ADVISORS, INC., Movant, represented by JAMES P. MC EVILLY,
III, GRANT & EISENHOFER PA.
RADNET MANAGEMENT, INC., Movant, represented by WILLIAM J.
O'BRIEN, DELANY & O'BRIEN.
About Diagnostic Ventures
Diagnostic Ventures, Inc., was a healthcare finance company that
extended loans to medical providers to facilitate the purchase of
diagnostic medical equipment and leasehold improvements, and
offered lines of credit for working capital secured by healthcare
receivables. Founded in 1986, DVI was a publicly traded company
with reported assets of $1.7 billion in 2003. Its common stock
began trading on the New York Stock Exchange in 1992. It issued
two tranches of 9 7/8% senior notes: the first, issued in 1997,
totaled $100 million; the second, issued in 1998, totaled $55
million.
On August 13, 2003, DVI disclosed its intention to file for
bankruptcy protection. On August 25, 2003, DVI and affiliates DVI
Business Credit, Inc., and DVI Financial Services, Inc., filed for
Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the
District of Delaware and began liquidating assets. R. Todd
Neilson, CPA was appointed by the Bankruptcy Court to investigate
the Debtor DVI's financial transactions, accounting practices, and
alleged wrongdoing.
DIALOGIC INC: Lenders OK Patents Sale and Delayed Form 10-Q
-----------------------------------------------------------
Dialogic Inc. and Dialogic Corporation, a wholly owned subsidiary
of the Company, entered into a Consent to Credit Agreement with
Obsidian, LLC, as agent and collateral agent, and Special Value
Expansion Fund, LLC, Special Value Opportunities Fund, LLC and
Tennenbaum Opportunities Partners V, LP, as lenders, in connection
with a Third Amended and Restated Credit Agreement, as amended, by
and among the Company, the Term Lenders and the other parties. On
June 26, 2013, Dialogic Corporation also entered into a Consent
and Twenty-First Amendment to the Credit Agreement dated as of
March 5, 2008, as amended, with Wells Fargo Foothill Canada ULC,
as administrative agent, and certain lenders.
Pursuant to the TCP Consent, the Term Lenders agreed to consent to
the consummation of potential transactions to sell clusters of
patents and patent applications owned or controlled by the Company
and to waive the requirement of the Term Loan Agreement that the
Company offer to repay the term loan with the proceeds from the
Patent Offerings. Additionally, Obsidian, LLC, as Collateral
Agent under the Term Loan Agreement, has agreed to release and
reassign its security interest in the Offered Patents under the
terms of a Partial Release of Intellectual Property Security
Agreement dated June 26, 2013.
Pursuant to the TCP Consent, the Term Lenders agreed to further
extend the period for the Company to timely file its Form 10-Q for
the fiscal quarter ended March 31, 2013, and to deliver its
financial statements for the quarter ended March 31, 2013, until
July 31, 2013, and the Term Lenders waived certain events of
default that might otherwise result in the absence of this
extension.
Pursuant to the Twenty-First Amendment, the Revolving Credit
Lenders agreed to the consummation of the Patent Offerings by
amending the definition of "Permitted Disposition" thereunder to
include the Patent Offerings. The definition of "Availability
Block" under the Revolving Credit Agreement was also amended and
restated to increase the base amount of $500,000 to $600,000,
which amount shall increase by an additional $100,000 on July 1,
2013, and on the first day of each fiscal quarter thereafter.
Pursuant to the Twenty-First Amendment, the Revolving Credit
Lenders agreed to further extend the period for the Company to
timely file its Form10-Q for the fiscal quarter ended March 31,
2013, and to extend the time for the Company to deliver its
financial statements for the quarter ended March 31, 2013 until
July 31, 2013.
PAO Appointed
Effective June 26, 2013, Michael Schmitt was appointed by the
board of directors of the Company to serve as Principal Accounting
Officer of the Company. Mr. Schmitt, age 35, has served as the
Company's Director, Financial Reporting since July 2012. From
June 2011 to July 2012, he was Director, Financial Reporting of
PharmaNet Development Group, Inc., formerly SFBC International,
Inc., a global drug development services company, where he
previously served as Associate Director, Financial Reporting from
August 2008 to June 2011 and Manager, Financial Reporting from
June 2007 to August 2008. Mr. Schmitt previously was a senior
associate at KPMG LLP, an accounting firm, from June 2002 to June
2007. Mr. Schmitt holds a Bachelor of Science degree in Business
Administration from Monmouth University. Mr. Schmitt's
compensation was not changed in connection with the appointment.
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: Incurs $6.4 Million Net Loss in 2012
---------------------------------------------------
Digital Angel Corporation filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing
a net loss of $6.38 million on $0 of revenue for the year ended
Dec. 31, 2012, as compared with a net loss of $10.33 million on $0
of revenue during the prior year.
As of Dec. 31, 2012, the Company had $3.41 million in total
assets, $5.92 million in total liabilities and a $2.50 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
the Company has incurred recurring net losses, and at Dec. 31,
2012, had negative working capital and a stockholders' deficit.
These events and conditions raise substantial doubt about the
Company's ability to continue as a going concern
A copy of the Form 10-Q is available for free at:
http://is.gd/l2ThNV
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.
DUNE ENERGY: Obtains $10 Million From Securities Sale
-----------------------------------------------------
Dune Energy, Inc., on June 28, 2013, issued 6,249,996 shares of
its common stock to certain of its existing investors in exchange
for aggregate consideration of $10,000,000. The shares were
issued pursuant to a Stock Purchase Agreements between the Company
and the same existing investors, dated as of Dec. 20, 2012. After
giving effect to this transaction, the total number of outstanding
shares of the Company is 71,497,324.
About Dune Energy
Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/
-- is an independent energy company based in Houston, Texas.
Since May 2004, the Company has been engaged in the exploration,
development, acquisition and exploitation of natural gas and crude
oil properties, with interests along the Louisiana/Texas Gulf
Coast. The Company's properties cover over 90,000 gross acres
across 27 producing oil and natural gas fields.
Dune Energy disclosed a net loss of $7.85 million in 2012, as
compared with a net loss of $60.41 million in 2011. The Company's
balance sheet at March 31, 2013, showed $270.01 million in total
assets, $124.76 million in total liabilities and $145.25 million
in total stockholders' equity.
EASTMAN KODAK: Posts $279 Million Net Earnings in First Quarter
---------------------------------------------------------------
Eastman Kodak Company and its U.S. domestic subsidiaries, on
June 28, 2012, filed their Form B26, Periodic Report Regarding
Value, Operations and Profitability of Entities in which the
Estate Holds a Substantial or Controlling Interest as of and for
the three month period ended March 31, 2013, with the Bankruptcy
Court.
Eastman Kodak Company reported net earnings of $279 million on
$427 million of net sales for the three months ended March 31,
2013. As of March 31, 2013, the Debtor had $3.59 billion in total
assets, $4.96 billion in total liabilities and a $1.36 billion
total deficit.
The report is available for free at http://is.gd/3FwAiO
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.
At the end of April 2013, Kodak filed a proposed reorganization
plan offering 85 percent of the stock to holders of the remaining
$375 million in second-lien notes. The other 15 percent is for
unsecured creditors with $2.7 billion in claims and retirees who
have a $635 million claim from the loss of retirement benefits.
EDISON MISSION: May Sell Rather Than Reorganize
-----------------------------------------------
Edison Mission Energy disclosed in a court filing on June 26 that
it intends on hiring J.P. Morgan Securities LLC as a co-adviser to
explore a potential sale of the business.
As a result, may be sold, rather than reorganized in bankruptcy
court as a standalone company.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that, EME said there's no decision yet on selling. For
the time being, it will continue working on a dual track allowing
for a "standalone restructuring" or a sale.
There will be a hearing on July 17 in U.S. Bankruptcy Court in
Chicago for authority to engage J.P. Morgan.
Edison Mission Energy, which declared bankruptcy and was
deconsolidated from utility holding company Edison International
in December 2012, is set to transfer ownership of its division to
creditors upon the approval of U.S. Bankruptcy Judge Jacqueline
Cox, according to its restructuring plan, BankruptcyLaw360
related.
The Bloomberg report, however, notes that previously, the company
was saying there would be no emergence from bankruptcy
reorganization until December 2014 to continue receiving benefits
from a tax-sharing agreement with the non-bankrupt parent Edison
International Inc. J.P. Morgan, given its "energy-related
experience," will complement Perella Weinberg Partners which is
already working for EME as investment banker and financial
adviser.
About Edison Mission
Santa Ana, California-based Edison Mission Energy is a holding
company whose subsidiaries and affiliates are engaged in the
business of developing, acquiring, owning or leasing, operating
and selling energy and capacity from independent power production
facilities. EME also engages in hedging and energy trading
activities in power markets through its subsidiary Edison Mission
Marketing & Trading, Inc.
EME was formed in 1986 and is an indirect subsidiary of Edison
International. Edison International also owns Southern California
Edison Company, one of the largest electric utilities in the
United States.
EME and its affiliates sought Chapter 11 protection (Bankr. N.D.
Ill. Lead Case No. 12-49219) on Dec. 17, 2012.
EME has reached an agreement with the holders of a majority of
EME's $3.7 billion of outstanding public indebtedness and its
parent company, Edison International EIX, that, pursuant to a plan
of reorganization and pending court approval, would transition
Edison International's equity interest to EME's creditors, retire
existing public debt and enhance EME's access to liquidity.
The Company's balance sheet at Sept. 30, 2012, showed
$8.17 billion in total assets, $6.68 billion in total liabilities
and $1.48 billion in total equity.
In its schedules, Edison Mission Energy disclosed total assets of
assets of $5,721,559,170 and total liabilities of $6,202,215,094
as of the Petition Date.
Kirkland & Ellis LLP is serving as legal counsel to EME, Perella
Weinberg Partners, LP is acting as financial advisor and McKinsey
Recovery & Transformation Services U.S., LLC is acting as
restructuring advisor. GCG, Inc., is the claims and notice agent.
An official committee of unsecured creditors has been appointed in
the case and is represented by the law firms Akin Gump and Perkins
Coie. The Committee also has tapped Blackstone Advisory Partners
as investment banker and FTI Consulting as financial advisor.
EME said it doesn't plan to emerge from Chapter 11 until December
2014 to receive benefits from a tax-sharing agreement with parent
Edison International Inc.
ELPIDA MEMORY: Japanese Bankruptcy Plan Enforced in U.S.
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Japanese court was formally entrusted by the U.S.
Bankruptcy Court with responsibility for distributing the assets
of Elpida Memory Inc. to the Japanese memory-chip maker's
creditors, including those in the U.S.
According to the report, U.S. Bankruptcy Judge Christopher S.
Sontchi signed an order in Delaware giving the court in Tokyo
"exclusive jurisdiction" to resolve disputes arising from Elpida's
amended bankruptcy plan approved in Japan on June 12.
The report notes that Elpida's plan, based on an acquisition by
Micron Technology Inc., was originally approved by the Japanese
court in February. An appeal by creditors was dismissed in May,
followed by a settlement with bondholders where the plan was
amended to increase payments to secured and unsecured creditors.
The report relates that Judge Sontchi permanently enjoined
creditors from taking action in the U.S. in conflict with Elpida's
Japanese plan. He said the plan will be "accorded full force and
effect in the U.S." Judge Sontchi's ruling was made in Elpida's
Chapter 15 case begun in Delaware in March 2012.
The U.S. court ruled in April 2012 that Japan is home to the so-
called foreign main bankruptcy proceeding. That finding
automatically halted creditor actions in the U.S. and allows the
Delaware judge to enforce the Japanese reorganization in the U.S.
Elpida was Japan's last memory chip maker.
About Elpida Memory Inc.
Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is
a Japan-based company principally engaged in the development,
design, manufacture and sale of semiconductor products, with a
focus on dynamic random access memory (DRAM) silicon chips. The
main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM,
Mobile RAM and XDR DRAM, among others. The Company distributes
its products to both domestic and overseas markets, including the
United States, Europe, Singapore, Taiwan, Hong Kong and others.
The company has eight subsidiaries and two associated companies.
After semiconductor prices plunged, Japan's largest maker of DRAM
chips filed for bankruptcy in February with liabilities of 448
billion yen ($5.6 billion) after losing money for five quarters.
Elpida Memory and its subsidiary, Akita Elpida Memory, Inc.,
filed for corporate reorganization proceedings in Tokyo District
Court on Feb. 27, 2012. The Tokyo District Court immediately
rendered a temporary restraining order to restrain creditors from
demanding repayment of debt or exercising their rights with
respect to the company's assets absent prior court order.
Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo
Court as Supervisor and Examiner in the case.
Elpida Memory Inc. sought the U.S. bankruptcy court's recognition
of its reorganization proceedings currently pending in Tokyo
District Court, Eight Civil Division. Yuko Sakamoto, as foreign
representative, filed a Chapter 15 petition (Bankr. D. Del. Case
No. 12-10947) for Elpida on March 19, 2012.
Micron Technology, Inc. on Feb. 28 announced the Tokyo District
Court's issuance of an order approving Elpida Memory Inc.'s plan
of reorganization. Elpida's plan of reorganization calls for
Micron to sponsor Elpida's reorganization under which Elpida will
become a wholly owned subsidiary of Micron. The Tokyo District
Court's approval follows an Elpida creditor vote, concluded on
Feb. 26, in which the creditors voted to approve the
reorganization plan.
FIRST QUANTUM: S&P Affirms B+ Corp. Credit Rating, Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B+'
corporate credit rating on Canada-registered mid-sized copper
mining group First Quantum Minerals Ltd. (FQM). The outlook is
stable. At the same time, S&P lowered to 'B' from 'B+' its issue
rating on FQM's existing $350 million senior unsecured notes. S&P
removed all ratings from CreditWatch developing, where it
initially placed them on April 22, 2013.
The affirmation reflects S&P's view that FQM's business risk
profile strengthened after the acquisition of Toronto-based mining
company FQM (Akubra) Inc. -- formerly Inmet Mining Corp. --
increased its geographic and asset diversity. At the same time,
FQM's financial risk profile weakened because of the $2.5 billion
50% debt-funded acquisition, and anticipated higher negative free
operating cash flow (FOCF) over the next three years. The falling
FOCF will be prompted by the newly acquired multibillion dollar
greenfield copper project Cobre Panama, in addition to existing
projects including a copper smelter and mine expansions in Zambia.
S&P lowered the issue rating on the $350 million bond to reflect
the higher amount of priority debt, including FQM (Akubra)'s
$2 billion bonds.
"We view FQM's broader geographic footprint, good cash cost
position, and diversified asset base--with seven mines running
independently -- as the key positives for its business risk
profile. We also note that FQM's dependence on cash flows from and
assets in Zambia has fallen. We estimate that pro forma EBITDA
outside Zambia was close to 50% of the group's total $1.7 billion
EBITDA in 2012, compared with 80% for FQM, excluding FQM (Akubra).
Furthermore, by 2017, FQM (Akubra)'s key Cobre Panama project will
be a low-cost copper mine making large EBITDA contributions.
However, we attach high execution risks to FQM's growth plan,
including project concentration in 2014-2016. In addition, the
revision of Cobre Panama's development plan will take another
several months and we have not factored in potential savings
from already announced capital expenditure (capex) of $6.2
billion," S&P said.
S&P currently forecasts that FQM's intensive growth plan will lead
to substantial debt increases in 2013-2015, while adjusted debt-
to-EBITDA ratios should average about 2.5x. For 2013, S&P
projects that FQM's net financial debt will reach about $2.5
billion, versus a pro forma net $1.5 billion cash position at
year-end 2012.
FLUX POWER: Plans to Acquire KleenSpeed Technologies
----------------------------------------------------
Flux Power(R) Holdings, Inc., has entered into a non-binding
letter of intent to acquire KleenSpeed Technologies. KleenSpeed
develops technology for distributed energy markets, including grid
storage. The LOI proposes that upon the successful closing of the
acquisition, KleenSpeed will become a wholly-owned subsidiary of
Flux Power and Flux Power's Board of Directors will be expanded
from three members to five members with KleenSpeed's current CEO,
Timothy Collins, joining the Board of Flux Power and assuming the
role of Executive Chairman of Flux Power.
While the specific terms of the acquisition will be announced upon
the execution of a definitive agreement, the acquisition is
expected to be completed within the next 12 months. The LOI
contemplates that 11 million shares of Flux Power common stock
would be issued to KleenSpeed shareholders upon closing as
consideration for the purchase of KleenSpeed. In addition, the
LOI contemplates that the consummation of the acquisition will be
conditioned upon other customary closing conditions and the
successful completion of a private placement of Flux Power's
common stock for a minimum of $800,000 and a maximum of
$2,500,000, with the proceeds to be used primarily as working
capital and future product development.
"We are looking forward to becoming part of the Flux team. There
is a tremendous synergy between our technologies, products, and
vision for the alternative energy storage market. The proposed
acquisition will enable both of our organizations to leverage the
strength of our financial resources, broaden our product
development and sales reach globally, and significantly increase
our opportunity to grow revenue and returns to our shareholders,"
said Timothy Collins, CEO of KleenSpeed.
About Flux Power
Escondido, California-based Flux Power Holdings, Inc., designs,
develops and sells rechargeable advanced energy storage systems.
The Company reported a net loss of $231,000 on $700,000 of net
revenue for the nine months ended March 31, 2013, compared with a
net loss of $1.1 million on $3.0 million of revenue for the nine
months ended March 31, 2012. The Company's balance sheet at
March 31, 2013, showed $2.5 million in total assets, $4.7 million
in total liabilities, and a stockholders' deficit of $2.1 million.
According to the quarterly report for the period ended March 31,
2013, there are certain conditions which raise substantial doubt
about the Company's ability to continue as a going concern. "We
have a history of losses and have experienced a lack of revenue
due to the time to launch the Company's revised business strategy.
Our operations have primarily been funded by the issuance of
common stock. Our continued operations are dependent on our
ability to complete equity financings, increase credit lines, or
generate profitable operations in the future.
FLY LEASING: Moody's Changes Outlook to Positive; Keeps B2 CFR
--------------------------------------------------------------
Moody's Investors Service affirmed FLY Leasing Limited's B2
corporate family rating and the B1 rating of its secured term loan
due 2018 issued by subsidiary FLY Funding II S.a.r.l. Moody's also
revised the outlook for FLY's ratings to positive from stable.
Ratings Rationale:
Moody's revised FLY's rating outlook to positive based on
improvements in the firm's leverage and profitability. FLY has
steadily repaid debt since 2011, when leverage peaked after the
company acquired a highly leveraged aircraft portfolio. The firm's
debt/equity measured 3.52x at March 31, 2013, compared to 4.54x at
December 31, 2011. FLY has also reduced its cost of funding,
aiding profitability. Moody's could upgrade FLY's ratings if the
company demonstrates an ability to achieve continued improvements
in profitability and leverage levels during the outlook period.
Additional funding diversification, including reduced reliance on
secured financing, could also improve the firm's prospects for a
higher rating. Factors that could lead to a downgrade include
significant deterioration in the company's leverage, profitability
and liquidity position.
FLY's B2 corporate family rating reflects its modest competitive
positioning in the commercial aircraft leasing business, its focus
on mid-aged, widely operated narrow-body aircraft, and its
experienced management. FLY's rating is constrained by its
exposure to certain aircraft that are experiencing weaker demand,
notable lessee concentrations, and high reliance on secured debt
that limits financial flexibility.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.
FNB UNITED: Now Known as CommunityOne Bancorp
---------------------------------------------
FNB United Corp.'s name became CommunityOne Bancorp and its stock
symbol was changed from "FNBN" to "COB." effective July 1, 2013.
The change in name had been approved by the shareholders at its
annual meeting of shareholders held on
June 20, 2013.
"We are pleased that our shareholders overwhelmingly approved our
name change to CommunityOne Bancorp," said Brian Simpson, chief
executive officer of the Company. "Along with the change in stock
symbol to "COB," we now will have one brand to market to all of
our stakeholders - whether they are our shareholders, customers or
the public."
"Having one name in the market reduces confusion," added Bob Reid,
president of the Company. "We will now operate under a unified
name and brand that focuses on communities and pledges to our
customers that serving their financial lives is our number one
priority."
About FNB United
Asheboro, N.C.-based FNB United Corp. (Nasdaq:FNBN) is the bank
holding company for CommunityOne Bank, N.A., and the bank's
subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne
Bank -- http://www.MyYesBank.com/-- operates 45 offices in 38
communities throughout central, southern and western North
Carolina. Through these subsidiaries, FNB United offers a
complete line of consumer, mortgage and business banking services,
including loan, deposit, cash management, wealth management and
internet banking services.
FNB United incurred a net loss of $40 million in 2012, a net loss
of $137.31 in 2011, and a net loss of $131.82 million in 2010.
The Company's balance sheet at March 31, 2013, showed $2.09
billion in total assets, $2 billion in total liabilities and
$89.37 million in total shareholders' equity.
GFI GROUP: Downgraded to B+ Corporate by S&P
--------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that GFI Group Inc., a broker catering to institutional
clients, was lowered one grade June 26 by Standard & Poor's to a
B+ corporate rating. The new S&P rating matches the grade handed
out in January by Moody's Investors Service.
S&P blamed "lower trading volume" while Moody's focused on "weak
profitability" and the company's "aggressive dividend and share
repurchase policy."
Revenue was down 9 percent in 2012 compared with 2011 and was off
another 6.1 percent in the first quarter, S&P said.
GFI lost investment-grade status in April 2012 from S&P, which
characterized the New York-based company then as a "small firm in
the intensely competitive, low-margin, and relatively narrow
institutional agency brokerage business."
In the first quarter this year, net income of $4.7 million derived
from revenue of $244.4 million. For 2012, the net loss was $10
million on revenue of $924.6 million. For 2011, GFI reported a
$3.1 million net loss on total revenue of $1.015 billion. In
2010, there was $25.6 million in net income.
The report notes that the $240 million in 8.375 percent senior
unsecured bonds due 2018 last traded June 26 for 100 cents on the
dollar, to yield 8.882 percent, according to Trace, the bond-price
reporting system of the Financial Industry Regulatory Authority.
The stock rose 2 cents June 26 to $3.81 in New York Stock Exchange
trading. In the last three years, the high was $6.20 on July 9,
2010. The low in the period was $2.43 on Nov. 15.
GFI GROUP: Fitch Affirms 'B' Short-Term Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has downgraded the ratings of three inter-dealer
brokers (IDBs) including the following:
ICAP plc (ICAP)
ICAP Group Holdings plc (IGHP)
-- Long-term Issuer Default Rating (IDR) to 'BBB' from 'BBB+';
-- Senior debt to 'BBB' from 'BBB+'.
Tullett Prebon plc (Tullett)
-- IDR to 'BBB-' from 'BBB'.
BGC Partners Inc. (BGC)
-- IDR to 'BBB-' from 'BBB'.
The Rating Outlooks for ICAP, Tullett, and BGC's are Stable.
Fitch has affirmed GFI Group, Inc.'s (GFI) long-term IDR has at
'BB', and its Outlook remains Negative.
The downgrades of ICAP, Tullett and BGC reflect the persistently
challenging operating and earnings environment for IDBs, which are
driven mainly by revenues pressures and, to a certain extent,
operating leverage in voice broking activities. This results in
weaker earnings, margin pressure, and varying degrees of increases
in gross leverage metrics. EBITDA and earnings volatility has been
greater than previously anticipated. Fitch considers some of the
earnings challenges to be due to structural factors such as
regulatory changes, as well as due to cyclical factors such as a
flat yield curve.
Proposed regulatory changes could increase the competition that
IDBs face on certain products that could be traded over exchanges,
increase costs in terms of trade reporting, compliance and risk
management, and may potentially shrink their revenue base by
restricting activities of global banking institutions, which are
the primary clients of IDBs.
All IDBs have responded to revenue pressures by looking to reduce
costs, including renegotiating their compensation expense, which
has been the biggest expense contributor. However, there has been
an increase in core gross leverage metrics - to varying degrees -
due to weaker EBITDA and, for BGC, higher gross debt. IDBs must
continue to incur technology and development costs and invest in
their business to align themselves with the industry developments,
for example more electronic/hybrid trading.
The Outlooks are Stable for all but GFI, which is further
challenged by its smaller size and limited scale and revenue
diversity. The Stable Outlooks on ICAP, Tullett and BGC reflect
Fitch's expectation that revenues will remain pressured but not to
the same magnitude as experienced in 2012, (for ICAP, FY13), and
that management's efforts to streamline their compensation expense
bases and reduce debt levels will help stabilize profit margins
and stabilize or improve leverage and interest coverage.
Company-specific rating drivers are discussed below.
ICAP plc
Key Rating Drivers
Fitch has downgraded the IDR and senior debt rating of ICAP and
IGHP to 'BBB' from 'BBB+'. Despite ICAP having a more diversified
strategy than other IDBs, with two-thirds of its operating profit
coming from electronic and post-trade and information, revenues
fell by 12% year on year at FY13 with statutory operating profit
falling 61% and EBITDA falling by 21% (or 18% adjusting for LIBOR-
related legal costs). Management cost exercises and stable
revenues in the post-trade and information sector helped mitigate
the decline, but Fitch still considers EBITDA and earnings
volatility to be greater than previously anticipated. In addition,
ICAP faces increased legal costs, possible fines/litigation and
heightened reputation risk arising from investigations into its
potential involvement in the LIBOR scandal.
Due to earnings pressure across all broking product areas and a
lag in a material rebasing of compensation levels, leverage and
interest coverage ratios deteriorated moderately in FY13, with
leverage (measured as Gross Debt to Adjusted EBITDA) calculated by
Fitch to be 1.7x (or 1.6x adding back LIBOR-related legal costs),
up from 1.4x at FY12. Ratios remain comfortably below ICAP's
leverage covenant of 3.0x gross debt/EBITDA and above the interest
coverage covenant of 5.0x. Despite an improvement in H213, Fitch
anticipates that the margin pressure in voice broking will
continue in the short to medium term relative to previous years as
revenue will continue to be pressured and renegotiations of the
cost base will take time to come through.
In Fitch's opinion ICAP's diversification strategy means it is
relatively better placed to face regulatory/market uncertainties
than other IDBs, despite potential challenges related to
expansion, as emphasised for example by the FY12 and FY13 goodwill
impairments of the voice broking business, Link.
Fitch considers ICAP's refinancing risk as low and liquidity is
supported by the June 2013 refinancing of its USD880 million
unsecured revolving credit facility (RCF) with a three-year GBP425
million RCF, incorporating a USD200 million swingline facility.
Credit and market risks in its IDB businesses are also considered
low because of the name give up or matched principal conventions
employed.
IGHP is a fully controlled, non-operating subsidiary of ICAP and
the obligor of the group's bank facilities, loans and debt, with
the exception of the group's subordinated debt, retail bond and
European Commercial Paper. IGHP is covenanted to consolidate at
least 85% of the group's EBITDA, supporting the alignment of its
ratings with ICAP.
RATING SENSITIVITIES - IDRS AND SENIOR DEBT
The Outlook is Stable, for the reasons cited earlier. However,
Fitch notes that should regulatory developments be significantly
detrimental to its business model or if EBITDA performance is
materially worse than FY13, leading to further weakening in core
leverage metrics, the Outlook may be revised to Negative and/or
downgraded. Large LIBOR-related payments, should they materialise,
could also place pressure on ratings.
Nonetheless, should regulation end up opening further
opportunities and a larger customer base as well as creating a
more simplified and liquid market for certain products, then Fitch
would view this as a positive to the ratings.
Tullett Prebon plc
Key Rating Drivers
Fitch downgraded the IDR and senior debt rating of Tullett to
'BBB-' from 'BBB' for the reasons outlined earlier in this rating
action commentary. Tullett is the second-largest IDB, focused
mainly on foreign exchange, interest rate derivatives, government
and corporate bonds.
Despite being more focused on voice/hybrid broking, which has been
the area under greater margin compression across the sector,
revenues were relatively more resilient than peers', down 7% in
2012 and 4% year-over-year in 4M13, in part due to acquisitions.
However, EBITDA fell by 17% in 2012 (or by 13% adjusting for legal
costs). Tullett reported a loss before tax of GBP34.7 million at
end-2012 (2011: GBP119.2 million profit) which included a non-cash
charge of GBP123 million related to the write-down of the carrying
value of goodwill from its North American business following the
poaching of employees by BGC in 2009.
Following recent acquisitions in the Americas (Covencao in Brazil
and a few small U.S. bolt-ons) and the initial front-loading of
costs, Fitch expects the profit contribution from the Americas to
improve in 2013. Tullett's overall margins have historically been
lower than those of market leader ICAP, although the voice
business has enjoyed better margins. Fitch views Tullett's actions
on costs and restructuring (which began in 2011) as positive
mitigants to the revenue pressures being experienced, but they
have not been sufficient to stop the decline in earnings.
Tullett's senior bond issue in December 2012 has been used to
refinance bank borrowings, including GBP30m since end-2012. As a
result, its gross level of financial debt is broadly the same
today as it was a year ago. Adjusting for the repayments in early
2013, pro forma gross debt/ EBITDA was around 1.8x at end-2012
(1.6x adjusting EBITDA for legal costs). This compares with 1.5x
at end-2011 (1.4x adjusting for legal costs), adjusting for the
similar GBP30m bank repayment made in early 2012. This means the
weakening in these pro forma gross leverage metrics is due to
EBITDA pressure, rather than higher indebtedness. Interest cover
fell to 8.4x in 2012 from 9.4x in 2011. Covenant headroom is
comfortable. Fitch notes there is a base level of term debt which
the company operates with, and therefore there is likely to be
limited scope for debt amortisation, although surplus cash may be
held at the holding company level to pre-fund upcoming maturities.
Credit and market risks are considered low because of the name
give up or matched principal conventions employed. Refinancing
risk is also low and liquidity satisfactory, with very limited
debt repayments before 2016.
RATING SENSITIVITIES - IDRS AND SENIOR DEBT
As with the other IDBs Tullett's IDR and senior debt ratings are
sensitive to changes in the financial profile, including leverage
and interest coverage, its ability to contain earnings pressure,
as well as to regulatory developments. Ratings may come under
further pressure should these developments be decidedly more
negative for Tullett or its customers (global banks) than
currently assumed by Fitch or if Tullett fails to adjust its
business model to new market realities, supported by investment in
technology without materially jeopardising free cash flow
generation. Equally, should Tullett materially improve margins or
successfully diversify its earnings, Fitch would view this as a
positive for the rating.
BGC Partners Inc.
KEY RATING DRIVERS
The downgrade of BGC's long-term IDR and senior debt ratings from
'BBB' to 'BBB-' reflects the persistently challenging operating
and earnings environment facing its IDB business. This is due in
part to structural factors as well as cyclical factors, increased
concentration in low margin voice/hybrid IDB and commercial real
estate brokerage segments after the pending sale of its high-
margin eSpeed electronic trading platform, the potential execution
risks related to the deployment of proceeds from the eSpeed sale.
It also reflects BGC's significant interrelationship with its
parent, Cantor Fitzgerald L.P. (Cantor), who is also facing some
pressures in many of its core operating businesses. The ratings
also incorporate key man risk and concentrated decision making
across the two firms.
Over the past two years, BGC's management has taken a number of
steps to transform its business in light of challenging operating
conditions, first by expanding into commercial real estate (CRE)
brokerage business with two large acquisitions, and then recently
by announcing the sale of its on-the-run benchmark two-, three-,
five-, seven-, 10-, and 30-year fully-electronic trading platform
for U.S. Treasuries (eSpeed). This sale is expected to generate
$1.23 billion in proceeds for BGC, including $750 million in cash
this quarter. Fitch believes that both strategies will lead to
more concentration of revenues in cyclical and low-margin
businesses, which will continue to make the company's earnings
susceptible to capital market trends.
Financial brokerage revenues, excluding CRE brokerage revenues,
fell 11% and 6% for FY12 and 1Q13, year-over-year. While financial
brokerage revenues remain pressured, BGC's expansion in to real
estate brokerage space is driving costs higher, particularly in
the compensation area, further pressuring margins. Real estate
brokerage is expected to continue to generate relatively lower
margins, until critical scale is achieved.
Historically, BGC has operated at lower leverage levels compared
to its IDB peers. However, the company's opportunistic debt funded
acquisitions in recent years, particularly in the CRE brokerage
space, have coincided with very challenging industry operating
trends in the financial brokerage space, which has resulted in
weakened leverage and interest coverage metrics.
Fitch calculated leverage, measured as gross debt to trailing 12
month (TTM) adjusted EBITDA, increased to 2.4x at 1Q13, from 1.5x
in FY11 and 0.9x in FY10. At the same time, increased borrowing
costs from recent longer-term debt issuances have resulted in
weakening in interest coverage, measured as TTM adjusted EBITDA to
interest expense, to 5.3x in 1Q13, from 9.6x in FY11 and 14.6x in
FY10. Both metrics are expected to improve as the company has
represented that it intends to hold $150 million of eSpeed
proceeds in reserve to pay down its $150 million April 2015
convertible note obligation to Cantor, and invest a portion of the
proceeds in cash generative business activities.
RATING SENSITIVITIES - IDRS AND SENIOR DEBT
Fitch's current ratings assume that the company will use a portion
of the proceeds from the eSpeed sale to repay a portion of its
outstanding debt, which should improve pro forma leverage and
interest coverage metrics. The ratings could come under pressure,
absent such debt pay-down or material improvement in top line
EBITDA.
The ratings could also come under pressure if regulatory changes
materially impact the profitability or viability of certain
business lines. Further, any changes in Cantor's ratings could
also result in changes to BGC's ratings. Positive rating momentum,
although limited in the medium term, will be driven by sustained
improvement in leverage, interest coverage, and profitability
metrics.
GFI Group, Inc.
KEY RATING DRIVERS
The affirmations of GFI's long-term IDR and senior unsecured debt
ratings at 'BB' 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 more predictable revenue
streams and high operating margins. The Negative Outlook reflects
GFI's continued sensitivity to the challenging operating
environment, given its smaller scale and lack of revenue
diversity.
On April 19, 2013, Fitch downgraded GFI's rating from 'BBB-' to
'BB', reflecting sustained decline in profitability, increasing
leverage, deteriorating interest coverage, and a weaker liquidity
profile. Fitch believes that as the smallest of the top five IDBs,
GFI has been more susceptible to industry pressures, due to its
relatively smaller scale, lower revenue/product diversity and
higher fixed-cost base, compared to its larger IDB peers.
Consistent with broader IDB industry trends, GFI experienced lower
revenues and earnings in 1Q13, due to reduced risk appetite from
clients and lower market volatility. Revenues further fell 6% in
1Q13 from 1Q12, driven by 15% decline in brokerage revenues.
Positively, revenues from software, analytics, and market data
were robust and increased 11% due to strong growth in Trayport
revenues. Still, Fitch calculated EBITDA declined 9% to $86.2
million for trailing 12 months (TTM) ending March 31, 2013, from
$94.7 million in FY12.
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 in 2013 compared to
the 2011 expense base. The compensation ratio declined to 56.1% in
1Q13 from 59.9% in 1Q12 (based on total revenues), the lowest
level seen in years driven by company's continued efforts to
contain sign-on bonuses and bring the overall cost in line with
industry levels.
Leverage, measured as gross debt to TTM adjusted EBITDA, increased
to 2.9x at 1Q13 from 2.6x at YE12, due to a decline in cash flows.
Interest coverage, measured as TTM adjusted EBITDA to interest
expense, further declined to 3.1x at 1Q13 from 3.5x at YE12.
Absent an increase in EBITDA levels, interest coverage ratio is
expected to further deteriorate as the coupon on GFI's $250
million senior notes (current principal outstanding: $240 million)
is expected to increase to 10.375% based on interest-rate step-
ups.
RATING SENSITIVITIES - IDRS AND SENIOR DEBT
The 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 taken the following rating actions:
ICAP plc
-- Long-term IDR downgraded to 'BBB' from 'BBB+'; Outlook Stable;
-- Short-term IDR and commercial paper downgraded to 'F3' from
'F2';
-- Senior debt downgraded to 'BBB' from 'BBB+';
-- Subordinated debt downgraded to 'BBB-' from 'BBB'.
ICAP Group Holdings plc
-- Long-term IDR downgraded to 'BBB' from 'BBB+'; Outlook Stable;
-- Short-term IDR downgraded to 'F3' from 'F2';
-- Senior debt downgraded to 'BBB' from 'BBB+'.
Tullett Prebon plc
-- Long-term IDR downgraded to 'BBB-' from 'BBB'; Outlook Stable;
-- Senior debt downgraded to 'BBB-' from 'BBB';
-- Subordinated debt downgraded to 'BB+' from 'BBB-'.
BGC Partners Inc.
-- Long-term IDR downgraded to 'BBB-' from 'BBB'; Outlook Stable;
-- Short-term IDR downgraded to 'F3' from 'F2';
-- Senior unsecured debt downgraded to 'BBB-' from 'BBB'.
GFI Group Inc.
-- Long-term IDR affirmed at 'BB'; Outlook Negative;
-- Short-term IDR affirmed at 'B';
-- Senior unsecured debt affirmed at 'BB'.
HAMPTON ROADS: To Be Added to Russell 2000(R) Index
---------------------------------------------------
Hampton Roads Bankshares, Inc., the holding company for The Bank
of Hampton Roads and Shore Bank, said that Russell Investments has
added the Company to the Russell 2000(R) Index effective July 1,
2013, as a result of Russell's annual reconstitution of its
comprehensive set of U.S. and global equity indexes on June 28,
2013.
Douglas J. Glenn, president and chief executive officer of the
Company and chief executive officer of BHR, said, "We are pleased
to join the Russell 2000(R) Index. We believe that our inclusion
will increase our exposure to investors and the financial
community, allowing us to broaden our shareholder base."
Russell indexes are widely used by investment managers and
institutional investors for index funds and as benchmarks for both
passive and active investment strategies. About $4.1 trillion in
assets are currently benchmarked to these indexes.
The Russell 2000(R) Index measures the performance of the small-
cap segment of the U.S. equity universe. The Russell 2000 is a
subset of the Russell 3000(R) Index representing approximately 10
percent of the total market capitalization of that index. It
includes approximately 2000 of the smallest securities based on a
combination of their market capitalization and current index
membership.
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and 15 ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company reported a net loss of $98 million in 2011, compared
with a net loss of $210.35 million in 2010. The Company's balance
sheet at March 31, 2013, showed $2.03 billion in total assets,
$1.84 billion in total liabilities and $185.36 million in total
shareholders' equity.
HARRISBURG, PA: Reaches Deal with Covanta Over $22Mm Loan Default
-----------------------------------------------------------------
Linda Chiem of BankruptcyLaw360 reported that Covanta Energy Corp.
has agreed in principle with Pennsylvania's capital city of
Harrisburg to settle a 2010 suit it filed after the financially
troubled city defaulted on a $22 million loan for construction
upgrades to an incinerator plant.
According to the report, Covanta and Harrisburg's receiver William
B. Lynch told a Pennsylvania state court that they had reached a
tentative deal that would end the suit, which Covanta Harrisburg
Inc. launched after the city missed nearly $2 million in loan
repayments in connection with major construction project.
About Harrisburg, Pennsylvania
The city of Harrisburg, in Pennsylvania, is coping with debt
related to a failed revamp of an incinerator. The city is
$65 million in default on $242 million owing on bonds sold to
finance an incinerator that converts trash to energy.
The Harrisburg city council voted 4-3 on Oct. 11, 2011, to
authorize the filing of a Chapter 9 municipal bankruptcy (Bankr.
M.D. Pa. Case No. 11-06938). The city claims to be insolvent,
unable to pay its debt and in imminent danger of having
tax revenue seized by holders of defaulted bonds.
Judge Mary D. France presided over the Chapter 9 case. Mark D.
Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's
counsel. The petition estimated $100 million to $500 million in
assets and debts. Susan Wilson, the city's chairperson on Budget
and Finance, signed the petition.
Harrisburg said in court papers it is in imminent jeopardy through
six pending legal actions by creditors with respect to a number of
outstanding bond issues relating to the Harrisburg Materials,
Energy, Recycling and Recovery Facilities, which processes waste
into steam and electrical energy. The owner and operator of the
incinerator is The Harrisburg Authority, which is unable to pay
the bond issues. The city is the primary guarantor under each
bond issue. The lawsuits were filed by Dauphin County, where
Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and
Covanta Harrisburg Inc.
The Commonwealth of Pennsylvania, the County of Dauphin, and
Harrisburg city mayor Linda D. Thompson and other creditors and
interested parties objected to the Chapter 9 petition. The state
later adopted a new law allowing the governor to appoint a
receiver.
Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss
Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg,
P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to
the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey
G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor.
In November 2011, the Bankruptcy Judge dismissed the Chapter 9
case because (1) the City Council did not have the authority under
the Optional Third Class City Charter Law and the Third Class City
Code to commence a bankruptcy case on behalf of Harrisburg and (2)
the City was not specifically authorized under state law to be a
debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2).
Dismissal of the Chapter 9 petition was upheld in a U.S. District
Court.
That same month, the state governor appointed David Unkovic as
receiver for Harrisburg. Mr. Unkovic is represented by the
Municipal Recovery & Restructuring group of McKenna Long &
Aldridge LLP, led by Keith Mason, Esq., co-chair of the group.
Mr. Unkovic resigned as receiver March 30, 2012. Mr. Unkovic was
replaced by William Lynch as receiver.
HIGHWAY TECHNOLOGIES: Auction Brings Higher Price
-------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the experience of Highway Technologies Inc. is a
testament for how a bankruptcy auction can lead to a handsome
increase in price, so long as there is competitive bidding.
According to the report, the provider of roadway guard rails,
barriers, and signs put the Minnesota location up for auction,
with an opening bid of $2.5 million. When all was said and done,
the original bidder named SSJS Inc. won the auction at $5.6
million. The bankruptcy court approved the sale last week.
About Highway Technologies
Highway Technologies Inc. and affiliate HTS Acquisition Inc.
sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11325 to
13-11326) on May 22, 2013, to conduct an orderly liquidation.
Attorneys at Pachulski Stang Ziehl & Jones LLP serve as counsel to
the Debtors. Kurtzman Carson Consultants LLC is the claims and
notice agent.
The prepetition lenders are represented by David M. Hilllman,
Esq., at Schulte Roth & Zabel, in New York.
The company's balance sheet as of March 31, 2013, showed
$55 million in total assets and $102 million in liabilities.
HIGHWAY TECHNOLOGIES: 7-Member Creditors Committee Named
--------------------------------------------------------
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
seven members to the Official Unsecured Creditors' Committee in
the Chapter 11 case of Highway Technologies, Inc.
The Committee members are:
1) Ennis Paint, Inc.
Attn: Ted Navitskas, Esq.
5910 N. Central Expressway
Ste. 1050, Dallas, TX 75206
Telephone: (800) 331 8118
2) TrueBlue, Inc.
Attn: Albert H. Kirby, Sr.
1015 A. Street
Tacoma, WA 98402
Telephone: (253) 680 8468
Facsimile: (253) 382 2522
3) Traffix Devices Inc.
Attn: James King
160 Avenida La Plata
San Clemente, CA 92673
Telephone: (949) 361 5663
Facsimile: (949) 361 9205
4) 3M Company
Attn: Alan Brown, Esq.
3M Center, 220-9E-02
St. Paul, MN 55144
Telephone: (651) 736 6739
Facsimile: (651) 736 2131
5) Automotive Rentals, Inc.
Attn: Richard E. Moyer
4021 Leadenhall Rd.
Mt. Laurel, NJ 08054
Telephone: (856) 914 7555
Facsimile: (856) 608 7151
6) The Sherwin-Williams Company
Attn: Sean Pleva
101 W. Prospect Ave.
Cleveland, OH 44115
Telephone: (216) 515 8733
Facsimile: (216) 830 0329
7) Aspen American Insurance Company
Attn: Kevin Gillen
175 Capital Blvd., Ste. 100
Rocky Hill, CT 06067
Telephone: (860) 656 2936
Facsimile: (860) 760 7702
A meeting of creditors in the bankruptcy case of Highway
Technologies was scheduled for June 27, 2013, at 10:00 a.m. in
Wilmington, Delaware.
The 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.
About Highway Technologies
Highway Technologies Inc. and affiliate HTS Acquisition Inc.
sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11325 to
13-11326) on May 22, 2013, to conduct an orderly liquidation.
Attorneys at Pachulski Stang Ziehl & Jones LLP serve as counsel to
the Debtors. Kurtzman Carson Consultants LLC is the claims and
notice agent.
The prepetition lenders are represented by David M. Hilllman,
Esq., at Schulte Roth & Zabel, in New York.
The company's balance sheet as of March 31, 2013, showed
$55 million in total assets and $102 million in liabilities.
IDERA PHARMACEUTICALS: Investors to Sell 2 Million Shares
---------------------------------------------------------
Idera Pharmaceuticals, Inc., filed with the U.S. Securities and
Exchange Commission a Form S-3 registration statement relating to
the resale from time to time of up to 2,000,000 shares of common
stock of the Company by Pillar Entities and Participations
Besancon.
The Company will not receive any proceeds from the sale of the
shares offered by this prospectus.
The Company has agreed to bear all of the expenses incurred in
connection with the registration of these shares. The selling
stockholders will pay or assume brokerage commissions and similar
charges incurred for the sale of shares of the Company's common
stock.
The Company's common stock is currently traded on the Nasdaq
Capital Market under the symbol "IDRA." On June 27, 2013, the
closing sale price of the Company's common stock on the Nasdaq
Capital Market was $0.71 per share.
A copy of the Form S-3 is available for free at:
http://is.gd/LrwGqW
About Idera Pharmaceuticals
Cambridge, Massachusetts-based Idera Pharmaceuticals, Inc., is a
clinical stage biotechnology company engaged in the discovery and
development of novel synthetic DNA- and RNA-based drug candidates
that are designed to modulate immune responses mediated through
Toll-like Receptors, or TLRs. The Company has two drug
candidates, IMO-3100, a TLR7 and TLR9 antagonist, and IMO-8400, a
TLR7, TLR8, and TLR9 antagonist, in clinical development for the
treatment of autoimmune and inflammatory diseases.
In the auditors' report on the consolidated financial statements
for the year ended Dec. 31, 2012, Ernst & Young LLP, in Boston,
Mass., expressed substantial doubt about Idera's ability to
continue as a going concern, citing recurring losses and negative
cash flows from operations and the necessity to raise additional
capital or alternative means of financial support, or both, prior
to Dec. 31, 2013, in order to continue to fund its operations.
The Company reported a net loss of $19.2 million on $51,000 of
revenue in 2012, compared with a net loss of $23.8 million on
$53,000 of revenue in 2011. Revenue in 2012 and 2011 consisted of
reimbursement by licensees of costs associated with patent
maintenance.
The Company's balance sheet at March 31, 2013, showed $6.81
million in total assets, $4.10 million in total liabilities, $5.92
million in series D redeemable convertible preferred stock, and a
$3.21 million total stockholders' deficit.
IGPS CO: Committee Opposes Quick Sale of Pallet Business
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the iGPS Co. LLC creditors' committee joined the U.S.
Trustee in opposing a quick sale of the business of leasing
plastic pallets.
According to the report, the official creditors' representative
contends in papers filed last week there is no emergency requiring
a quick sale of the business. The committee believes the impetus
for a quick sale is intended to benefit the purchaser and will
leave unsecured creditors with "no prospect for recovery." The
committee also sees a likelihood that expenses run up during
bankruptcy can't be paid.
The bankruptcy judge in Delaware was slated to hold a hearing
July 1 to decide when the business will go up for auction.
Originally, iGPS wanted the auction itself held July 1. There is
agreement for Balmoral Funds LLC, One Equity Partners LLC, and
Jeff and Robert Liebesman to buy the business in exchange for
$36 million in secured debt, $1 million cash, and assumption of
the loan financing bankruptcy. Just before bankruptcy, they
purchased the $250 million working-capital loan on which $148.8
million is outstanding, according to court filings.
The committee, the report discloses, argues iGPS won an
arbitration against a company controlled by the buyers. To fend
off the award, they purchased secured debt, intending to acquire
IGPS and avoid paying the arbitration award. The committee says
the amount of the arbitration award isn't known. The U.S. Trustee
previously said the company is worth "significantly more" than the
proposed sale price. Like the committee, the U.S. Trustee wants
more time to find a buyer.
DIP Financing
The committee is also opposing final approval of the Company's
$12 million of DIP financing. The bankruptcy judge signed an
order on June 7 giving interim approval for a $6 million loan from
Crystal Financial LLC.
According to BankruptcyLaw360, the committee is arguing that the
loan's budget is too low to get the company through the Chapter 11
process.
Law360 relates that the committee doesn't dispute that iGPS should
get some type of post-petition financing, but argues the
bankruptcy loan offered by Crystal Financial doesn't provide
enough money to keep iGPS solvent through a proposed sale.
About iGPS Co.
iGPS Company LLC filed a Chapter 11 bankruptcy petition (Bankr. D.
Del. Case No. 13-11459) on June 4, 2013, to sell its assets to a
group led by Balmoral Funds LLC, absent higher and better offers.
iGPS Company -- http://www.igps.net-- is the first and only
plastic pallet pooling rental and leasing company in the U.S. It
offers plastic pallets with embedded radio frequency
identification (RFID) tags. Founded in 2006, the company is
headquartered in Orlando, Florida, and has a sales and innovation
center in Bentonville, Arkansas.
The Debtor estimated $100 million to $500 million in assets and
liabilities in its Chapter 11 petition.
According to the board resolution authorizing the bankruptcy,
Pegasus IGPS LLC owns 12.55% of the company; iGPS Co-Investment
LLC owns 18.75%; Kia VIII (iGPS Sub), LLC owns 30.74%; and KIA
VIII iGPS Blocker, LLC, owns 12.27%.
The bankruptcy judge signed an order on June 7 giving interim
approval for a $6 million loan from Crystal Financial LLC. The
final hearing for approval of the entire $12 million loan package
will take place July 1.
IN THE PLAY: Files Schedules of Assets and Liabilities
------------------------------------------------------
In The Play Inc. filed with the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $4,640
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $1,944,973
E. Creditors Holding
Unsecured Priority
Claims $11,785
F. Creditors Holding
Unsecured Non-priority
Claims $2,632,639
----------- -----------
TOTAL $4,640 $4,589,397
A copy of the schedules is available for free at
http://bankrupt.com/misc/IN_THE_PLAY_sal.pdf
About In The Play
Three alleged creditors filed an involuntary Chapter 11 petition
for Lansdale, Pennsylvania-based In The Play, Inc., (Bankr. E.D.
Pa. Case No. 13-11666) in Philadelphia on Feb. 27, 2013. The
petitioners are Richard Strauss (with $479,443 in claims), JAAZ,
LLC ($409,166) and Andrew Michelin ($157,522). Garabed Kendikian,
Esq., at the Law Offices of Charles Kendikian, LLC, serves as
counsel to the petitioners.
The Court on May 10, 2013, entered an order for relief placing In
the Play under bankruptcy protection.
INDEPENDENCE TAX II: Posts $12.5MM Net Income in Fiscal 2013
------------------------------------------------------------
Independence Tax Credit Plus L.P. II filed with the U.S.
Securities and Exchange Commission its annual report on Form 10-K
disclosing net income of $12.52 million on $825,809 of total
revenues for the year ended March 31, 2013, as compared with a net
loss of $237,376 on $827,909 of total revenues during the prior
year.
As of March 31, 2013, the Company had $2.93 million in total
assets, $16.07 million in total liabilities and a $13.14 million
total partners' deficit.
"At March 31, 2013, the Partnership's liabilities exceeded assets
by $13,140,279 and for the year then ended had net income of
$12,528,794, including gain on sale of properties of $14,845,849
and loss on impairment of fixed assets of $1,758,541. These
factors 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/ARpGIi
About Independence Tax Credit Plus L.P. II
Based in New York, Independence Tax Credit Plus L.P. II was
organized on Feb. 11, 1992, and commenced its public offering on
Jan. 19, 1993. The general partner of the Partnership is Related
Independence Associates L.P., a Delaware limited partnership. The
general partner of Related Independence Associates L.P. is Related
Independence Associates Inc., a Delaware Corporation. The
ultimate parent of Related Independence Associates L.P. is
Centerline Holding Company.
The Partnership's business is primarily to invest in other
partnerships owning leveraged apartment complexes that are
eligible for the low-income housing tax credit enacted in the Tax
Reform Act of 1986, some of which may also be eligible for the
historic rehabilitation tax credit.
The Partnership is in the process of developing a plan to dispose
of all of its investments.
INDEPENDENCE TAX III: Terminates Registration of Certificates
-------------------------------------------------------------
Independence Tax Credit Plus L.P. III has completed its
liquidation and winding-up, and has filed a certificate of
cancellation with the Secretary of State of the State of Delaware
and a Form 15 with the Securities and Exchange Commission to
terminate registration of its Limited Partnership Interests and
Beneficial Assignment Certificates under Section 12(g) of the
Securities Exchange Act of 1934. As a result of the Form 15
filing, the Partnership will no longer be required to file reports
under Sections 13 and 15(d) of the Exchange Act. The Partnership
transferred its entire cash balance, after setting aside a reserve
for the payment of accrued operating expenses and accrued
liquidation expenses, to pay accounts payable, including related
party accounts payable.
Independence Tax Credit Plus L.P. III, headquartered in New York
City, is a limited partnership which was formed under the laws of
the State of Delaware on Dec. 23, 1993. The general partner of
the Partnership is Related Independence Associates III L.P., a
Delaware limited partnership (the "General Partner"). The general
partner of the General Partner is Related Independence Associates
III Inc., a Delaware corporation. The ultimate parent of the
General Partner is Centerline Holding Company.
The Partnership's business is to invest in other partnerships
owning leveraged apartment complexes that are eligible for the
low-income housing tax credit enacted in the Tax Reform Act of
1986, some of which may also be eligible for the historic
rehabilitation tax credit.
For the nine months ended Dec. 31, 2012, the Company posted net
income of $13.78 million on $505,033 of total revenues, as
compared with net income of $3.26 million on $443,986 of total
revenues for the same period a year ago.
The Company's balance sheet at Dec. 31, 2012, showed $4.19 million
in total assets, $9.20 million in total liabilities and a $5
million total partners' capital.
"At December 31, 2012, the Partnership's liabilities exceeded
assets by $5,009,122 and for the nine months ended December 31,
2012 the Partnership recognized net income of $13,780,173
including the gain on sale of properties of $13,974,545. These
factors raise substantial doubt about the Partnership's ability to
continue as a going concern."
INOVA TECHNOLOGY: Trading of Securities Resumes
-----------------------------------------------
Inova Technology, Inc.'s stock split became effective on June 17,
2013. The Company has been notified that the Depository Trust
Company has now completed the process of changing the Company's
CUSIP number and trading has resumed.
The board of directors of the Company authorized a 100 to one
reverse split of all outstanding common shares and a corresponding
decrease in the Company's authorized common stock.
About Inova Technology
Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA)
-- http://www.inovatechnology.com/-- through its subsidiaries,
provides information technology (IT) consulting services in the
United States. It also manufactures radio frequency
identification (RFID) equipment; and provides computer network
solutions. The company was formerly known as Edgetech Services
Inc. and changed its name to Inova Technology, Inc., in 2007.
The Company reported a net loss of $1.24 million for the year
ended April 30, 2012, compared with a net loss of $3.35 million
during the prior year. The Company's balance sheet at Jan. 31,
2013, showed $6.26 million in total assets, $20.73 million in
total liabilities and a $14.46 million total stockholders'
deficit.
MaloneBailey, LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the
year ended April 30, 2012. The independent auditors noted that
Inova incurred losses from operations for the years ended
April 30, 2012, and 2011 and has a working capital deficit as of
April 30, 2012, which raise substantial doubt about Inova's
ability to continue as a going concern.
INTERFAITH MEDICAL: Keeps Chapter 11 Control
--------------------------------------------
Marie Beaudette writing for Dow Jones' DBR Small Cap reports that
a bankruptcy judge is allowing Interfaith Medical Center in
Brooklyn, N.Y., to keep control over its Chapter 11 case as it
works to advance a stalled merger with Brooklyn Hospital Center.
As reported in the June 13 edition of the TCR, the Debtor asked
the Court to further extend until Sept. 30, 2013, the time within
which it has exclusive right to file a plan of reorganization and
until Dec. 2, 2013, the time within which it has exclusive right
to solicit acceptances of that plan.
According to the Debtor, the additional time will be used to
ensure that it has an opportunity to address all stakeholders'
concerns. The Debtor says its commitment to working with its
creditors is underscored by the finalization of the memorandum of
understanding with the Dormitory Authority of the State of New
York and multiple New York State entities and regulatory
authorities, active unions, and pension funds. The Debtor needs
the time to finalize the MOUs.
About Interfaith Medical Center
Headquartered in Brooklyn, New York, Interfaith Medical Center,
Inc., operates a 287-bed hospital on Atlantic Avenue in Bedford-
Stuyvesant and an ambulatory care network of eight clinics in
central Brooklyn, in Crown Heights and Bedford-Stuyvesant.
The Company filed for Chapter 11 protection (Bankruptcy E.D. N.Y.
Case No. 12-48226) on Dec. 2, 2012. The Debtor disclosed
$111,872,972 in assets and $193,540,998 in liabilities as of the
Chapter 11 filing.
Alan J. Lipkin, Esq., at Willkie Farr & Gallagher LLP, serves as
bankruptcy counsel to the Debtor. Nixon Peabody LLP is the
special corporate and healthcare counsel. CohnReznick LLP serves
as financial advisor. Donlin, Recano & Company, Inc. serves as
administrative agent.
The Official Committee of Unsecured Creditors tapped Alston & Bird
LLP as its counsel, and CBIZ Accounting, Tax & Advisory of New
York, LLC as its financial advisor.
Eric M. Huebscher, the patient care ombudsman tapped the law firm
of DiConza Traurig LLP, as his counsel.
INTEGRATED HEALTHCARE: Withdraws Unsold Shares Under 2006 Plan
--------------------------------------------------------------
Integrated Healthcare Holdings, Inc., filed a post-effective
amendment No. 1 to its registration statement on Form S-8 to
withdraw and remove from registration the unissued and unsold
shares of the Company's common stock, par value $0.001 per share,
issuable by the Company pursuant to the Company's 2006 Stock
Incentive Plan. The Plan was previously registered by the Company
pursuant to that certain Registration Statement on Form S-8,
registering 12,000,000 shares of common stock filed with the
Securities and Exchange Commission on Feb. 2, 2007.
About Integrated Healthcare
Santa Ana, Calif.-based Integrated Healthcare Holdings, Inc., owns
and operates four community-based hospitals located in southern
California. The Company's balance sheet at Dec. 31, 2012, showed
$164.0 million in total assets, $191.8 million in total
liabilities, and a stockholders' deficit of $27.8 million.
As of Dec. 31, 2012, the Company had total stockholders'
deficiency of $28 million and a working capital deficit of
$33 million. The Company did not meet the financial covenants for
its revolving line of credit with MidCap, for the period ended
Dec. 31, 2012. "Although the Company is not required to report
compliance with the financial covenant for its revolving line of
credit until 50 days after the fiscal quarter end, the Company is
seeking the lenders' consent to a potential non-compliance with
this financial covenant." the Company said in its quarterly report
for the period ended Dec. 31, 2012.
INTEGRATED HEALTHCARE: Swings to $15.8 Million Net Loss in 2013
---------------------------------------------------------------
Integrated Healthcare Holdings, Inc., filed with the U.S.
Securities and Exchange Commission its annual report on Form 10-K
disclosing a net loss of $15.86 million on $383.50 million of net
patient service revenues for the year ended March 31, 2013, as
compared with net income of $7.94 million on $362.19 million of
net patient service revenues for the year ended March 31, 2012.
As of March 31, 2013, the Company had $166.70 million in total
assets, $196.59 million in total liabilities and a $29.88 million
in total stockholders' deficiency.
A copy of the Form 10-K is available for free at:
http://is.gd/e4VvKW
About Integrated Healthcare
Santa Ana, Calif.-based Integrated Healthcare Holdings, Inc., owns
and operates four community-based hospitals located in southern
California.
IPC STRATEGIC: Fund Files Ch. 15 in New York for Investigation
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that IPC Strategic Credit Income Fund Ltd., a Cayman
Islands based hedge fund created to invest in residential mortgage
backed securities, filed a petition for Chapter 15 protection in
New York on June 28 (Bankr. S.D.N.Y. Case No. 13-bk-12116). The
U.S. case is designed to assist the fund's Cayman Islands
liquidation that commenced in August 2010.
According to the report, in papers in the U.S. court, the
liquidators say the fund was the victim of fraud. Creditors filed
claims for $115 million, according to the liquidators.
The liquidators intend to employ Chapter 15 by using the power of
the U.S. bankruptcy law to require production of documents and
conduct investigations in the U.S.
ISC8 INC: Reports Change in Fiscal Year
---------------------------------------
The Board of Directors of ISC8 Inc. unanimously approved a change
to the Company's fiscal year end date from the last Sunday of
September to September 30, effective immediately. Accordingly,
the Company's third quarter of fiscal 2013 will end on June 30,
2013, and fiscal 2013 will end on Sept. 30, 2013, rather than
Sept. 29, 2013. Because the new fiscal year end is less than 7
days from the previous year-end date, under the applicable rules
of the Securities and Exchange Commission, no transition report is
required.
About ISC8 Inc.
Costa Mesa, California-based ISC8 Inc. is engaged in the design,
development, manufacture and sale of a family of security
products, consisting of cyber security solutions for commercial
and U.S. government applications, secure memory products, some of
which utilize technologies that the Company has pioneered for
three-dimensional ("3-D") stacking of semiconductors, systems in a
package ("Systems in a Package" or "SIP"), and anti-tamper
systems.
Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport
Beach, California, expressed substantial doubt about ISC8 Inc.'s
ability to continue as a going concern. The independent auditors
noted that as of Sept. 30, 2012. the Company has negative working
capital of $10.1 million and a stockholders? deficit of
$35.4 million.
The Company reported a net loss of $19.7 million on $4.2 million
of revenues in fiscal 2012, compared with a net loss of
$15.8 million on $5.2 million of revenues in fiscal 2011. The
Company's balance sheet at March 31, 2013, showed $4.71 million in
total assets, $47.74 million in total liabilities and a $43.02
million total stockholders' deficit.
J. HOWARD MARSHALL III: Judge Not Biased by Anna Nicole Smith Case
------------------------------------------------------------------
Dan Prochilo of BankruptcyLaw360 reported that the Ninth Circuit
ruled that the judge who oversaw the bankruptcy of Playboy model
and celebrity Anna Nicole Smith didn't need to recuse himself from
the Chapter 11 proceedings of her late billionaire husband's son,
striking down allegations that the judge was biased and the
bankruptcy filing was a ploy.
According to the report, the panel upheld a trial court's findings
that U.S. Bankruptcy Judge Samuel Bufford rightfully denied
motions by the brother of debtor J. Howard Marshall III asking the
judge to step aside from the bankruptcy case.
Tim Hull, writing for Courthouse News Service, also reported that
the Ninth Circuit approved the bankruptcy plan of Mr. Marshall.
J. Howard Marshall III's brother, E. Pierce Marshall, had
challenged the Chapter 11 proceedings before his death in 2006,
according to the CN report. He claimed that they represented an
attempt to dodge payment of a $10 million fraud judgment related
the brothers' long battle over their father's estate.
Both J. Howard Marshall III and his now-late stepmother, referred
to in court papers by her legal name Vickie Lynn Marshall,
challenged the will of J. Howard Marshall II after the oilman's
death at age 90 in 1995, the report said.
In 2001, E. Pierce Marshall won a $10 million counterclaim
judgement against his brother for fraud based on the latter's
alleged scheme to inherit part of his father's estate despite
being disinherited in 1980, the CN report related. Thereafter, J.
Howard Marshall III and his wife filed for bankruptcy in
California. Their case was assigned to U.S. Bankruptcy Judge
Samuel Bufford, the same judge who had very publicly presided over
Smith's bankruptcy and who had, during the case, slapped E. Pierce
Marshall with heavy sanctions for various alleged discovery
violations.
Bufford ruled against E. Pierce Marshall, as did the District
Court on appeal in 2009, with Pierce's wife Elaine now at the
helm. The 9th Circuit unanimously affirmed Friday, the report
said.
Elaine Marshall argued that Judge Bufford had shown "partiality"
toward Smith in the previous case, and that his impartiality in
the present case could not be trusted because of his "issuance of
severe discovery sanctions and 'critical' statements against
Pierce and Pierce's attorney throughout the proceedings indicated
prejudice against Pierce, and that his communications with the
press and the district court evinced an uncommon interest in the
case," the report related.
But the judge's imposition of sanctions in a previous case is not
enough to disqualify him from the present action, the panel found,
the report related.
About Anna Nicole Smith
Anna Nicole Smith, formally known as Vickie Lynn Hogan, filed
under Chapter 11 in 1996 as part of a struggle over the estate of
J. Howard Marshall, whom she married in 1994 when she was 26 and
died barely a year after they were wed. Ms. Smith, a former
Playboy model and actress, died in February 2007.
Mr. Marshall left his estate to his son, E. Pierce Marshall, and
nothing to Ms. Smith. Ms. Smith, alleging that her husband had
promised to leave her a large share of the estate, won a ruling
from a bankruptcy judge in 2000 awarding her $475 million from Mr.
Marshall's estate. A federal judge in 2002 reduced that amount to
$89 million. The U.S. Court of Appeals for the Ninth Circuit in
San Francisco threw out the judgment in 2004, holding that the
bankruptcy court didn't have jurisdiction over probate matters.
The U.S. Supreme Court in May 2006 issued a decision, overruling
the appeals court and finding that the bankruptcy court had
jurisdiction, even though the issues also could have been decided
in the Texas probate court. The Supreme Court remanded the case
for the federal appellate court to decide whether her victory in
the bankruptcy and district courts was knocked out because a Texas
probate court had entered judgment first against her.
On remand from the Supreme Court, the 9th Circuit issued its
decision in March 2010, concluding that the bankruptcy court
didn't have so-called core jurisdiction. The 9th Circuit noted
that before the U.S. district court was able to enter judgment in
her favor, the Texas probate court had entered judgment against
her saying she was entitled to nothing from her deceased husband's
estate.
In September 2010, the Supreme Court agreed to take a second look
at disputes arising in and related to Ms. Smith's 1996 bankruptcy
case and her entitlement to payment of the $449 million bankruptcy
court judgment.
JAMESTOWN LLC: Files Schedules of Assets & Liabilities
------------------------------------------------------
Jamestown LLC filed with the U.S. Bankruptcy Court for the Western
District of Missouri its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $4,016,465
B. Personal Property $0
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $2,882,375
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $0
-------------- --------------
TOTAL $4,016,465 $2,882,375
Jamestown LLC filed a Chapter 11 petition (Bankr. W.D. Mo. Case
No. 13-60728) on May 7, 2013. The petition was signed by Stephen
Cope as managing member. The Debtor estimated assets of at least
$10 million and debts of at least $1 million. Douglas L. Healy,
Esq., at Healy & Healy serves as the Debtor's counsel. Judge
Arthur B. Federman presides over the case.
This is the Company's second bankruptcy filing. In May 2010,
Jamestown filed a Chapter 11 petition in Missouri. About six
months after the Petition Date, the Bankruptcy Court dismissed the
Chapter 11 case upon the request of the U.S. Trustee for Region
13. The U.S. Trustee told the Court that the Debtor failed to
provide proof of insurance and failed to file applications and
amendments as requested.
JEFFERSON COUNTY, AL: Makes Another Deal Ahead of Final Plan
------------------------------------------------------------
Melinda Dickinson and Verna Gates, writing for Reuters, reported
that Alabama's Jefferson County approved another negotiated
settlement covering $138 million of creditors' claims as the local
government put finishing touches on a plan to wind up America's
biggest municipal bankruptcy.
According to the report, county officials said the so-called plan
of adjustment, which includes years of rate hikes for sewer
customers and a late 2013 sale by the county of $1.9 billion of
refinancing debt, would be filed electronically with the U.S.
Bankruptcy Court for the Northern District of Alabama.
The court filing will be the latest chapter in a saga of
corruption and mismanagement of public finances that brought the
most populous county in the southern U.S. state to ask for
creditors' protection in November 2011, the report noted.
The county commissioners voted 4 to 1 to approve the deal with
Bank of Nova Scotia, State Street Bank & Trust and Bank of New
York Mellon, which had been the county's liquidity banks and
provided short-term loans, the report said.
The agreement will return 80 cents on the dollar to the banks,
plus $2.7 million to satisfy claims of more than $20 million for
interest costs tied to defaulted sewer debt, the commissioners
were told during a commission meeting, the report added.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers
at Bradley ArantBoult Cummings LLP and Klee, Tuchin, Bogdanoff&
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent. Jefferson estimated more than $1 billion in assets. The
petition was signed by David Carrington, president.
The bankruptcy judge in January 2012 ruled that the state court-
appointed receiver for the sewer system largely lost control as a
result of the bankruptcy. Before deciding whether Jefferson County
is eligible for Chapter 9, the bankruptcy judge will allow the
Alabama Supreme Court to decide whether sewer warrants are the
equivalent of "funding or refunding bonds" required under state
law before a municipality can be in bankruptcy.
U.S. District Judge Thomas B. Bennett ruled in March 2012 that
Jefferson County is eligible under state law to pursue a debt
restructuring under Chapter 9. Holders of more than $3 billion in
defaulted sewer debt had challenged the county's right to be in
Chapter 9.
JEFFERSON COUNTY: Judge Rules on Paying Lawyers From Sewer Fees
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Jefferson County, Alabama, will be able to pay some
legal expenses of the Chapter 9 municipal bankruptcy from sewer
revenue, as the result of a 51-page, singled-spaced opinion handed
down June 27 by U.S. Bankruptcy Judge Thomas B. Bennett.
According to the report, Judge Bennett ruled that there are some
legal expenses the county can charge to sewer bondholders under
Section 928(b) of the Bankruptcy Code, even though they aren't
operating expenses defined in the indenture that come ahead of
payments to bondholders.
At the June 27 hearing, the county told the bankruptcy judge that
additional lenders owed $138 million joined in a previously
announced settlement that will be incorporated into a Chapter 9
municipal bankruptcy plan enabling the county to emerge by the
year's end.
The report notes that the June 27 decision in a lawsuit with the
bondholders' indenture trustee is the third of what could be four
opinions defining how much sewer revenue the county can retain
before paying the remainder to bondholders. Following the June 27
decision, Judge Bennett will enter a separate order specifying
which of 13 categories of expenses can be paid from sewer revenue.
The report notes that Judge Bennett will be required to write a
fourth opinion if the parties can't agree on the reasonableness of
items within the categories. As was true with Judge Bennett's
prior opinions, last week's was a rhetorical tour de force.
Beginning with observations on the "elasticity of the meaning of
words," Judge Bennett explained he was delving into the "arcane
world of municipal finance." The decision, he said, must be made
through the "opaque world of municipal finance usage."
The report says that Judge Bennett eschewed answering complicated
questions with simple analysis. He said answers lay in the
"indenture as a whole." He declined to "intuit the meaning of
Operating Expenses by simply looking to its definition." The
larger part of the opinion is devoted to an analysis of the
county's legal expenses that can be paid from sewer revenue under
the terms of the indenture. In the later portion of the opinion,
Judge Bennett looked at Section 928(b) of the Bankruptcy Code and
found that bankruptcy law allows a municipality to divert some
revenue to payment of expenses. Judge Bennett buttressed his
analysis of bankruptcy law by reference to Alabama law he saw as
treating the sewer system as though it were an entity separate
from the county. To exclude most legal expenses from
reimbursement with sewer revenue would cause an "operational
collapse" not intended by Congress.
Payment to Firms
Katy Stech writing for Dow Jones' DBR Small Cap reports that the
Alabama bankruptcy judge ruled that financially struggling
Jefferson County can pay for much its $10 million-a-month
bankruptcy case using the sewer bill money it collects for
bondholders who financed the sewer system's expensive repairs.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers
at Bradley ArantBoult Cummings LLP and Klee, Tuchin, Bogdanoff&
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent. Jefferson estimated more than $1 billion in assets. The
petition was signed by David Carrington, president.
The bankruptcy judge in January 2012 ruled that the state court-
appointed receiver for the sewer system largely lost control as a
result of the bankruptcy. Before deciding whether Jefferson County
is eligible for Chapter 9, the bankruptcy judge will allow the
Alabama Supreme Court to decide whether sewer warrants are the
equivalent of "funding or refunding bonds" required under state
law before a municipality can be in bankruptcy.
U.S. District Judge Thomas B. Bennett ruled in March 2012 that
Jefferson County is eligible under state law to pursue a debt
restructuring under Chapter 9. Holders of more than $3 billion in
defaulted sewer debt had challenged the county's right to be in
Chapter 9.
In June 2013, the county reached settlement with holders of 78
percent of the $3.1 billion in sewer debt at the core of the
county's financial problems. The bondholders will be paid $1.84
billion through a refinancing, according to a term sheet. The
settlement calls for JPMorgan Chase & Co., the owner of $1.22
billion in bonds, to make the largest concessions so other
bondholder will recover more.
JMC STEEL: Pipe Producer Downgraded to 'B' Corporate From S&P
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that JMC Steel Group Inc., one of the largest U.S.
producers of steel pipe, was downgraded June 26 by Standard &
Poor's in view of "difficult industry conditions." The corporate
rating for the Chicago-based company went down one grade to B.
S&P said liquidity is "strong."
K-V PHARMACEUTICAL: Hearing on 6th Amended Plan Yet to Be Set
-------------------------------------------------------------
K-V Pharmaceutical Company and its affiliates filed with the
Bankruptcy Court a proposed Sixth Amended Joint Chapter 11 Plan of
Reorganization and a related disclosure statement on June 21,
2013. The Bankruptcy Court has not yet set a hearing on approval
of the Disclosure Statement.
The overall purpose of the Plan is to provide for the
restructuring of the Debtors' liabilities in a manner designed to
maximize recovery to stakeholders and to enhance the financial
viability of the Reorganized Debtors. The Plan reflects an
agreement and compromise among the Debtors, the Creditors'
Committee, the holders of at least 75 percent in dollar amount of
the Class 3 Senior Secured Notes Claims, and the holders of
approximately 97 percent in dollar amount of Class 6 Convertible
Subordinated Notes Claims. Under this agreement and compromise:
(a) each holder of an Allowed Senior Secured Notes Claim will
receive its pro rata share of a Cash distribution in the
amount of (i) $231,409,850; plus (ii) the amount of any
postpetition interest and accreted original issue discount
amount determined by the Bankruptcy Court to be owed to the
holders of Senior Secured Notes under the subordination
provisions of the Convertible Subordinated Notes Indenture;
(b) the Debtors' existing indebtedness under the DIP Credit
Agreement will be paid in full in Cash;
(c) the Debtors' existing indebtedness in respect of
Convertible Subordinated Notes Claims will be cancelled and
exchanged for 7 percent of the New Common Stock of
Reorganized KV; and
(d) each holder of an Allowed General Unsecured Claim against
any Debtor will receive Cash in an amount equal its Pro
Rata Share of $10,250,000.
Copies of the Plan and the Disclosure Statement are available for
free at:
http://is.gd/ORfSCz
http://is.gd/R4yVoh
About K-V Pharmaceutical
K-V Pharmaceutical Company (NYSE: KVa/KVb) --
http://www.kvpharmaceutical.com/-- is a fully integrated
specialty pharmaceutical company that develops, manufactures,
markets, and acquires technology-distinguished branded and
generic/non-branded prescription pharmaceutical products. The
Company markets its technology distinguished products through
ETHEX Corporation, a subsidiary that competes with branded
products, and Ther-Rx Corporation, the company's branded drug
subsidiary.
K-V Pharmaceutical Company and certain domestic subsidiaries on
Aug. 4, 2012, filed voluntary Chapter 11 petitions (Bankr.
S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions
Inc.) to restructure their financial obligations.
K-V employed Willkie Farr & Gallagher LLP as bankruptcy counsel,
Williams & Connolly LLP as special litigation counsel, and SNR
Denton as special litigation counsel. In addition, K-V tapped
Jefferies & Co., Inc., as financial advisor and investment banker.
Epiq Bankruptcy Solutions LLC is the claims and notice agent.
The U.S. Trustee appointed five members to serve in the Official
Committee of Unsecured Creditors. Kristopher M. Hansen, Esq.,
Erez E. Gilad, Esq., and Matthew G. Garofalo, Esq., at Stroock &
Stroock & Lavan LLP, represent the Creditors Committee.
Weil, Gotshal & Manges LLP's Robert J. Lemons, Esq., and Lori R.
Fife, Esq., represent an Ad Hoc Senior Noteholders Group.
KARAM INC: Dist. Court Rejects Appeal Over Ch.11 Case Dismissal
---------------------------------------------------------------
Senior District Judge Thomas B. Russell in Paducah, Kentucky,
granted the request of BW Loan Holdings LLC to dismiss, as moot,
an appeal taken by Karam Inc. over the dismissal of its Chapter 11
case. Karam has not responded to BW Loan Holdings' request, and
the time to do so has expired. The Court considered BW Loan
Holdings' motion without the benefit of a response from Karam.
Karam, Inc., first filed a bankruptcy petition on May 2, 2012, in
response to a foreclosure action by BW Loan Holdings in state
court. By filing the bankruptcy petition, Karam used the
automatic stay to temporarily halt the foreclosure sale of its
sole asset, the Quality Inn hotel located in Murray, Kentucky.
The foreclosure sale was scheduled to take place on May 18, 2012,
but was halted by the automatic stay.
During early proceedings in Karam I, BW Loan Holdings moved the
bankruptcy court to lift the automatic stay so that it might
complete the foreclosure sale. The court continued the motion on
several occasions while Karam attempted to develop a Chapter 11
reorganization plan. None of Karam's proposed plans were ever
approved by its creditors, however. Realizing that its
reorganization plans would not receive approval, Karam moved to
dismiss the bankruptcy case on January 15, 2013. Shortly
thereafter, on January 17, 2013, BW Loan Holdings also moved to
dismiss.
On January 24, 2013, the bankruptcy court heard arguments on the
Lender's motion to lift the stay and the motion to dismiss. The
next day, the court granted both motions. Thereafter, BW Loan
Holdings returned to state court and rescheduled the foreclosure
sale of the hotel, which was no longer subject to the automatic
stay. The foreclosure sale was rescheduled for March 14, 2013.
In the interim, two other events occurred. On Feb. 7, 2013, Sewa
Bhinder, the president of Karam, filed a notice of appeal with the
District Court. Mr. Bhinder contends that the bankruptcy court
erred when it lifted the automatic stay and granted the Lender's
motion to dismiss the bankruptcy case. Mr. Bhinder filed the
appeal on his own accord on behalf of Karam and not through
retained counsel. On March 11, 2013, just three days prior to the
foreclosure sale, Karam, through newly retained counsel, filed a
second bankruptcy petition. Again, it appears that Karam filed
the second petition to delay the foreclosure sale.
BW Loan Holdings again moved to lift the stay imposed in Karam II.
The bankruptcy judge granted the motion because, pursuant to 11
U.S.C. Sec. 362(n), no automatic stay arose upon the filing of
Karam II. Without a stay to impede the foreclosure sale, the
hotel was auctioned on March 14, 2013. The Lender purchased the
hotel with a credit bid. Soon thereafter, on March 25, 2013, Karam
moved to dismiss Karam II, and the motion was granted on March 26,
2013. BW Loan Holdings now moves to dismiss Karam's appeal from
dismissal of Karam I.
The case before the District Court is, KARAM, INC., Appellant, v.
BW LOAN HOLDINGS, LLC, Appellee, Case No. 5:13-CV-00027 (W.D.
Ky.). A copy of the Court's June 25, 2013 Memorandum Opinion and
Order is available at http://is.gd/yggamLfrom Leagle.com.
BW Loan Holdings, LLC is represented by Brian H. Meldrum, Esq.,
and David C. Robertson, Esq. -- bmeldrum@stites.com and
crobertson@stites.com -- at Stites & Harbison, PLLC.
Karam Inc., based in Murray, Kentucky, filed for Chapter 11
bankruptcy (Bankr. W.D. Ky. Case No. 13-50197) on March 11, 2013.
Michael Allan Noll, Esq., at Noll Law Office in Louisville, serves
as counsel. Karam estimated both assets and liabilities of
$1 million to $10 million. A list of the Company's eight largest
unsecured creditors, filed together with the petition, is
available for free at http://bankrupt.com/misc/kywb13-50197.pdf
The petition was signed by Sewa S. Bhinder, president.
Karam Inc. first filed for bankruptcy (Bankr. W.D. Ky. Case No.
12-50405) on May 2, 2012. Patricia Kovacs, Esq. --
patricia.kovacs@bex.net -- in Toledo, Ohio, represented Karam in
the first bankruptcy. The Debtor estimated under $50,000 in
assets, and $1 million to $10 million in debts. A copy of the
Company's list of its eight largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/kywb12-50405.pdf The petition was signed
by Mr. Bhinder.
KICKAPOO KENNELS: Judge Dismisses Bankruptcy, Citing 'Bad Faith'
----------------------------------------------------------------
Bankruptcy Judge Letitia Z. Paul dismissed the bankruptcy case of
Kickapoo Kennels, LLC (Bankr. S.D. Tex. Case No. 12-39321-H3-11),
saying that the case appears to have been filed to gain an unfair
advantage of a two-party dispute.
The Debtor operates an animal kennel on real property in Harris
County, Texas. Its principals are Michael and Kari Enmon. It
filed a Chapter 11 voluntary petition on Dec. 20, 2012.
The Bankruptcy Court found that the Debtor is operating
profitably, but seemed to have filed for bankruptcy to delay
implementation of a Texas district court judgment while appeal is
pending. The district court judgment voids transfer of mineral
rights from Mr. Enmon to his mother, Grace, which transfer
supposedly occurred while the Debtor was in arbitration with
Prospect Capital Corporation.
A copy of the Court's June 19, 2013 Memorandum Opinion is
available at http://is.gd/vRWwiwfrom Leagle.com.
KIDSPEACE CORP: U.S. Trustee Appoints 5-Member Creditors Committee
------------------------------------------------------------------
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
five members to the Official Unsecured Creditors' Committee in the
Chapter 11 case of Kidspeace Corporation.
The Committee members are:
1) UMB Bank, N.A.
on Behalf of Bondholders
11 Red Cedar Lane
Minneapolis, MN 55410
Attn: Lorna P. Gleason
Vice-President
Telephone: (816) 213 4547
E-mail: lorna.gleason@umb.com
2) Performance Food Group d/b/a AFI
12650 East Arapahoe Road
Centennial, CO 80112
Attn: Brad Boe, Director of Credit
Telephone: (303) 662 7121
Facsimile: (303) 662 7540
E-mail: bboe@pfgc.com
3) W.B. Mason Co., Inc.
59 Centre Street
Brockton, MA 02301
Attn: Emily K.Wallengren
Director of Credit & Collections
Telephone: (508) 436 8365
Facsimile: (508) 588 7766
E-mail: emily.wallengren@wbmason.com
4) Pension Benefit Guaranty Corporation
1200 K Street
N.W., Washington, DC 20005
Attn: Adam Greenhouse
Financial Analyst
Telephone: (202) 326 4000 Ext. 3507
Facsimile: (202) 326 4112
E-mail: greenhouse.adam@pbgc.gov
5) Teresa Laudenslager
384 Broad Street
Emmaus, PA 18049
Telephone: (610) 554 0585
E-mail: reeselaudens@aol.com
About KidsPeace Corp.
KidsPeace Corp., a provider of behavioral services for children,
filed a petition for Chapter 11 reorganization (Bankr. E.D. Pa.
Case No. 13-14508) on May 21, 2013, in Reading, Pennsylvania.
KidsPeace operates a 96-bed pediatric psychiatric hospital in
Orefield, Pennsylvania. Assets are $86.7 million, and debt on the
books is $158.6 million, according to a court filing.
The Debtor, which sought bankruptcy protection with eight
affiliates, tapped Norris McLaughlin & Marcus, P.A. as counsel;
EisnerAmper LLP as financial advisor, and Rust Omni as claims and
notice agent.
Assets total $158,587,999 at the end of 2012. The Debtors owe
approximately $56,206,821 in bond debt, and they have been told
that their pension liability is allegedly about $100,000,000 of
which the Debtors currently reflect $83,049,412 on their books.
KidsPeace sought Chapter 11 (i) as a means to implement a
negotiated restructuring of bond debt currently aggregating
approximately $51,310,000 plus accrued interest to a reduced
amount of approximately $24 million in new 30-year bonds with
interest at 7.5 percent, and (ii) to continue on-going
negotiations with the Pension Benefit Guaranty Corporation in
hopes of reducing the PBGC asserted obligation of $100+ million to
an amount that the Debtors can reasonably expect to satisfy.
Since March of 2012, MK has been exploring possible affiliation or
acquisition opportunities; however, no offer of an affiliation or
acquisition has been presented to the Debtors.
Gemino Healthcare Finance, LLC, the prepetition revolving lender,
is represented by:
PARKER, HUDSON, RAINER & DOBBS LLP
James S. Rankin, Jr., Esq.
1500 Marquis Two Tower
285 Peachtree Center Avenue NE
Atlanta, GA 30303
Phone: (404) 420-5560
E-mail: jrankin@phrd.com
- and -
WEIR & PARTNERS LLP
Walter Weir, Jr., Esq.
Fifth Floor, The Widener Building
One South Penn Square
Philadelphia, PA 19107-3519
Phone: (215) 241-7721
E-mail: wweir@weirpartners.com
KIT DIGITAL: Reaches $6MM Deal to End Securities Class Actions
--------------------------------------------------------------
Matthew Heller of BankruptcyLaw360 reported that KIT Digital Inc.
announced that its insurers had agreed to pay $6 million to settle
four putative securities class actions alleging the bankrupt media
software company made financial statements that didn't disclose
accounting irregularities.
According to the report, the announcement came less than two weeks
after KIT Digital received court approval for a disclosure
statement and a plan support agreement under which three private
equity firms have pledged $25 million to its bankruptcy
reorganization.
The case is McHardy v. Kit Digital Inc. et al., Case No. 1:12-cv-
04199 (S.D.N.Y.).
About KIT digital
New York-based KIT digital Inc. -- http://www.kitd.com/-- is a
video management software and services company. KIT digital
services nearly 2,500 clients in 50+ countries including some of
the world's biggest brands, such as Airbus, The Associated Press,
AT&T, BBC, BSkyB, Disney-ABC, Google, HP, MTV, News Corp, Sky
Deutschland, Sky Italia, Telecom Argentina, Telecom Italia,
Telefonica, Universal Studios, Verizon, Vodafone VRT and
Volkswagen.
KIT digital filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case
No. 13-11298) in Manhattan on April 25, 2013. The Debtor
disclosed $310,206,684 in assets and $23,011,940 in liabilities.
KIT's operating subsidiaries, including Ioko 365, Polymedia,
Kewego, Multicast and Megahertz are not included in the Chapter 11
filing.
Jennifer Feldsher, Esq., and Anna Rozin, Esq., at Bracewell &
Giuliani LLP, in New York, serve as counsel to the Debtor.
American Legal Claims Services LLC is the claims and noticing
agent and the administrative agent.
LEHMAN BROTHERS: Trustee Settles Luxembourg Affiliates' Claims
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the trustee liquidating the brokerage subsidiary of
Lehman Brothers Holdings Inc. reached a settlement with his
counterparts liquidating affiliates in Luxembourg named Lehman
Brothers (Luxembourg) SA and Lehman Brothers (Luxembourg) Equity
Finance SA.
According to the report, the affiliates had claims resulting from
stock lending transactions and stock and cash held in accounts
with the U.S. company. Although Lehman brokerage trustee James
Giddens didn't contest the amount of the claims, he disagreed how
they should be treated. In settlement, the affiliates will have
an approved $5 million customer claim that will be a paid in full
like other customer claims. In addition, the affiliates will have
a general creditor claim for $158 million.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1. A
third distribution is set for around March 30, 2013. The
brokerage is yet to make a first distribution to non-customers.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates.
LOCATION BASED TECHNOLOGIES: Sees $755,000 Revenues for Q3 2012
---------------------------------------------------------------
Location Based Technologies Inc. released a letter to its
shareholders from CEO, Dave Morse which discloses the following
information:
* Combined revenues for the fiscal 2012 third quarter will be
approximately $755,000.
* Delivery completed of AT&T's first run of LBT-886 devices.
* The Company is looking to expand its relationship with AT&T
by placing its 3G PocketFinder Vehicle product in their
retail stores.
* The PF-886 has passed its testing with the military and the
Company could begin receiving orders as soon as this summer.
* The Company is continuing to work with Apple on launching its
PocketFinder products in Asia. The Company's initial launch
may occur this year in Singapore and Australia.
- The Company continues to work closely with the military and
several different organizations/branches within the military
have expressed interest in its products and requested demo
units.
A copy of the letter is available for free at:
http://is.gd/WFNCYv
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.
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.
LONGVIEW POWER: S&P Lowers Rating on Sr. Sec. Facilities to 'CCC-'
------------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its debt rating
on Longview Power LLC's senior secured credit facilities to 'CCC-'
from 'B-' and kept the ratings on negative outlook. S&P left
unchanged the '3' recovery rating on the credit facilities,
indicating meaningful recovery (50% to 70%) if a default occurs.
U.S.-based electric power project Longview Power is unlikely to
refinance its approximate $445 million in senior secured term loan
B debt due in February 2014 on reasonable terms due to continued
prospects for depressed merchant power prices and to continuing
operational setbacks at the plant. S&P thinks Longview will
undertake a debt restructuring before this maturity date, which
reflects a 'CCC-' rating under our criteria. Longview is a 775
megawatt (MW) mine-mouth coal-fired power plant that earns cash
flow from selling energy and capacity into the PJM Interconnection
market and from a portion of the revenues earned by its affiliate
Mepco Inc. from producing and selling coal.
"The negative outlook reflects the high potential for a
restructuring before the February 2014 senior secured debt
maturity. When the project announces a restructured event or
similar distressed debt exchange, we would likely lower the debt
ratings to 'CC'," said Standard & Poor's credit analyst Terry
Pratt.
S&P thinks merchant power prices will remain depressed due to the
continued low price of natural gas. S&P's natural gas price
assumption is $3.50 per million Btu in 2013, 2014, and 2015.
These translated to power prices of about $35 per megawatt-hour in
2013 to about $40 in 2015 in the third party Ventyx model that S&P
uses to help it form a view of the market. The project's exposure
to merchant markets is also increased now that it has sold the
favorable contract for differences with PPL Energy Plus to a third
party. Under this contract, Longview realized the strike price of
around $52 per megawatt-hour on 300 MW of capacity. Proceeds were
used to retire some debt and enhance Longview's limited liquidity
position.
LUKEN COMMUNICATIONS: Section 341(a) Meeting Set on July 25
-----------------------------------------------------------
A meeting of creditors in the bankruptcy case of Luken
Communications, LLC, will be held on July 25, 2013, at 11:45 a.m.
at Basement Room 18, Chattanooga, Tennessee. Creditors have until
Oct. 23, 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.
About Luken Communications
Luken Communications, LLC, filed a bare-bones Chapter 11 petition
(Bankr. E.D. Tenn. Case No. 13-bk-13069) on June 23, 2013, in
Chattanooga, Tennessee. The Debtor estimated at least $10 million
in assets and liabilities. Henry G. Luken, III, signed the
petition as managing member. Judge John C. Cook presides over the
case. The Debtor is represented by James A. Fields, Esq., at
Fields & Moss, P.C.
Luken Communications sought Chapter 11 bankruptcy protection after
its founder Henry Luken was slapped with a $47.4 million civil
verdict Friday in a lawsuit involving another bankrupt company,
Equity Media Holdings Corp. Mr. Luken was the former chairman and
CEO of Equity Media.
LUXLAS FUND: S&P Affirms 'B+' CCR and Senior Secured Debt Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Canada-
based Luxlas Fund Limited Partnership, including its 'B+'
corporate credit rating and senior secured debt rating. The
'4' recovery rating remains unchanged, indicating S&P's
expectation of average (30%-50%) recovery in the event of a
payment default. For analytical purposes, S&P views Luxlas and
its ultimate parent company, Lassonde Industries Inc. (not rated),
and indirect operating company, Clement Pappas and Co. Inc. (not
rated), as one economic entity.
"We expect Luxlas' proposed amendment to its term loan will reduce
loan pricing and revise its leverage covenant and maximum capital
expenditure levels once the amendment is executed, and result in
stronger covenant cushion under Luxlas' term loan and improved
liquidity," said Standard & Poor's credit analyst Jean Stout.
The outlook revision reflects Standard & Poor's opinion that the
company's "aggressive" financial risk profile will continue to
strengthen as the company further reduces debt, and that credit
measures could strengthen closer to those indicative of the upper
end of a "significant" financial risk profile within the next
year. The positive outlook also reflects S&P's revised assessment
of the company's business risk profile, which has improved to
"weak" from "vulnerable."
S&P could raise the corporate credit rating to 'BB-' if the
company is able to reduce and sustain its ratio of adjusted total
debt to EBITDA at 2.5x or below and its ratio of funds from
operations (FFO) to total debt above 30%. Alternatively, S&P
could revise the outlook back to stable if adjusted total debt to
EBITDA increases to the 3.0x-3.5x range and FFO to debt falls
closer to or below 20%.
M/V ENDEAVOUR: Court Tosses Chapter 11 Case
-------------------------------------------
District Judge Timothy J. Corrigan in Jacksonville, Florida,
granted the separate requests of M.D. Moody & Sons, Inc., and the
Acting U.S. Trustee to dismiss the Chapter 11 case of M/V
Endeavour, LLC (Bankr. M.D. Fla. Case No. 13-00136). M.D. Moody &
Sons argued that the filing was done in bad faith filing, while
the Acting U.S. Trustee cited the Debtor's gross noncompliance
with the bankruptcy rules and procedures.
The Court also granted M.D. Moody & Sons' Motion to Lift Automatic
Stay, Enter Final Judgment, and Allow Plaintiff to Credit Bid Its
Judgment, to the extent that the dismissal of the bankruptcy case
dissolves the automatic stay. The Court permits M.D. Moody & Sons
to credit bid its judgment at an upcoming sale by the U.S. Marshal
of the debtor's vessel.
The Court also authorized the U.S. Marshal to sell the vessel M/V
Endeavor, her engines, tackle, apparel, and equipment, at public
auction on at least one calendar week's notice to the highest and
best bidder, in accordance with Local Admiralty Rule 7.05(r), and
subject to the confirmation of the Court. The minimum bid is
established as $150,000. Any net proceeds (after payment of
Marshal's fees and charges and other costs of sale) shall be
deposited into the Court's registry for distribution following
resolution of the admiralty case. The Marshal will set the sale
for a date as soon as practicable.
In late December 2012, the Court entered an Order granting summary
judgment in favor of Moody and against Alexander McLaren and M/V
Endeavor. That judgment is for $158,766, representing the amount
due Moody as of January 2, 2013. The Court also permitted Moody
to credit bid its judgment at a Jan. 3, 2013 Marshal's Sale.
Mr. McLaren and his brother, however, transferred ownership of the
vessel into a limited liability corporation and then immediately
filed a Chapter 11 petition, resulting in an automatic stay of an
admiralty case before the Court could enter final judgment.
A copy of the Court's June 25 Order is available at
http://is.gd/03JljFfrom Leagle.com.
The case is M.D. MOODY & SONS, INC., Plaintiff, v. ALEXANDER
McLAREN, etc., et al., Defendants, Case Nos. 3:13-cv-136-J-32,
3:11-cv-1242-J-32JBT (M.D. Fla.) in Jacksonville.
M.D. Moody & Sons, Inc., Plaintiff, is represented by Eric N.
McKay, Esq., and Richard Roemheld Thames, Esq. -- enm@stmlaw.net
and rrt@stmlaw.net -- at Stutsman, Thames & Markey, PA; Henry H.
Bolz, III, Esq. -- hbolz@kellerbolz.com -- at Keller & Bolz, LLP;
and Thomas Albert Boyd, Jr., Esq. -- tboyd@boydsutter.com -- at
Boyd & Sutter, PA.
Alexander McLaren, Defendant, Pro Se.
M/V Endeavor, Defendant, represented by Robert William Elrod, Jr.,
Elrod & Elrod.
Peter H. Arkison, Defendant, represented by Peter H. Arkison,
Esq., at Law Offices of Peter H. Arkison.
Guy G. Gebhardt, Defendant, represented by Scott Bomkamp, US
Trustee's Office.
Mr. Peter Arkison -- the Chapter 7 Trustee for Alexander McLaren's
Chapter 7 case, who previously opposed actions resulting in a sale
of the vessel -- has now negotiated a sale of the Chapter 7
Trustee's interest in the vessel to Moody for $15,000.
MADISON INSURANCE: A.M. Best Cuts Finc'l. Strength Rating to 'B-'
-----------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating (FSR)
to B- (Fair) from A- (Excellent) and the issuer credit rating
(ICR) to "bb-" from "a-" of Madison Insurance Company (MIC). At
the same time, A.M. Best has withdrawn both ratings due to the
company's request to no longer participate in A.M. Best's
interactive rating process. The rating downgrades reflect a
sizeable commutation of reserves from MIC's primary reinsurer and
the negative impact on its Best Capital Adequacy Ratio (BCAR).
Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and
ICR of "a-" of Accident Insurance Company Inc. (AIC). The outlook
for both ratings is stable. Both companies are domiciled in
Columbia, SC.
The ratings reflect AIC's strong balance sheets and liquidities as
well as its conservative operating strategies. The ratings also
recognize AIC's experienced management team, favorable operating
results and rate-making and reserving practices. Partially
offsetting these positive rating factors are the company's
dependence on reinsurance and its low retentions.
AIC writes risks with low severity and frequency while attending
to strict underwriting standards and controls, aggressive claims
management practices, conservative investment policies and
objectives, high quality infrastructure and technology-based
services, as well as solutions based on the insurance industry's
best practices and standards.
AIC's ratings are not expected to be upgraded and/or its outlook
revised within the next 12-24 months, as its operating performance
and capital position already have been considered in the ratings
process. A.M. Best could downgrade AIC's ratings and/or revise
its outlook if its BCAR score declines, operating performance and
risk profile deteriorate, insured losses deplete capital, or
significant changes and turnover occur in its management team
and/or risk management controls and tolerances.
MARVIN-WAXHAW ASSOCIATES: Court Grants Surcharge Exemption Motion
-----------------------------------------------------------------
Judge Laura T. Beyer granted the Motion for Order Surcharging
Exemptions of Edward P. Bowers, the chapter 11 trustee for Debtors
William Joseph Nolan, III, and Martha Louise Hemphill-Nolan and
the trustee of the Marvin-Waxhaw Associates/Nolan Liquidating
Trust established on January 25, 2011.
The Debtors filed for a Chapter 11 voluntary petition on June 5,
2009 (Bankr. W.D. N.C. Case No. 09-31456). The case has been
substantively consolidated with In re Marvin-Waxhaw Associates,
LLC, Case No. 09-31455.
In a June 19, 2013 Order available at http://is.gd/BvJvmCfrom
Leagle.com, Judge Beyer ruled that:
(a) The Debtors' claimed exemption in a 2003 Mercedes Benz is
surcharged in the full amount of $3,500 as recovery for a
portion of the $4,354 in attorneys' fees and costs incurred
by the Trustee in regaining possession to the Mercedes;
(b) The Debtors' claimed exemption in a 1956 Thunderbird vehicle
is surcharged in the full amount of $3,500 as recovery for a
portion of the $40,722 in attorneys' fees and costs incurred
by the Trustee in unwinding asset transfers to co-
conspirator named Carlton Rembert;
(c) The Debtors' claimed exemption in the Real Property is
surcharged in the full amount of $37,000 as recovery for (i)
the $14,082 in attorneys' fees and costs incurred by the
Trustee in obtaining possession to the Real Property, and
(ii) a portion of the $40,722 in attorneys' fees and costs
incurred by the Trustee in unwinding the Rembert Transfers.
The Trustee is otherwise relieved from any obligation to honor the
Debtors' Automobile Exemption or Homestead Exemption whatsoever.
The Trustee is represented by his attorney, Michael L. Martinez,
Esq. -- mmartinez@grierlaw.com -- of Grier Furr & Crisp, PA.
MERCANTILE BANCORP: Files Ch.11 to Sell Biz, Avoid Takeover
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Mercantile Bancorp Inc. is the latest bank holding
company to file in Chapter 11, intending to sell the bank
subsidiary before it's taken over by regulators.
Mercantile Bancorp, owner of the three-branch Mercantile Bank,
filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-11634) on
June 27.
The report notes that the company's two other bank subsidiaries
were already taken over by regulators.
United Community Bancorp Inc. has been designated as the so-called
stalking horse to make the first bid at auction for the bank
subsidiary. Chatham, Illinois-based United Community will pay
$22.3 million in cash, less the amount necessary to pay
liabilities to the Federal Deposit Insurance Corp. arising from
the failure of the two other banks.
The petition shows assets and debt both exceeding $50 million.
Liabilities include $61.9 million owing on junior subordinated
debentures. Mercantile stopped paying interest on the debentures
in 2009, since then running up $14 million in unpaid interest.
About Mercantile Bancorp
Mercantile Bancorp -- http://www.mercbanx.com/-- is a Quincy,
Illinois-based bank holding company with wholly owned subsidiaries
consisting of one bank in Illinois and one each in Kansas and
Florida, where the Company conducts full-service commercial and
consumer banking business, engages in mortgage banking, trust
services and asset management, and provides other financial
services and products. The Company also operates Mercantile Bank
branch offices in Missouri and Indiana.
On Aug. 10, 2011, the Illinois Division of Banking released a
Consent Order that Mercantile Bank, the Federal Deposit Insurance
Corporation, and the Division entered into as of July 28, 2011.
Under the Order, Mercantile Bank will cease operating with all
money transmitters and currency businesses providing brokerage,
sale or exchange of non-United States currency for deposit
customers. Furthermore, Mercantile Bank may not enter into a new
line of business without the prior written consent of the FDIC and
the Division.
The Company also reported a net loss of $11.25 million on
$27.28 million of total interest and dividend income for the nine
months ended Sept. 30, 2011, compared with a net loss of
$30.68 million on $34.13 million of total interest and dividend
income for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$868.26 million in total assets, $885.67 million in total
liabilities, and a $17.41 million total stockholders' deficit.
MERCED FALLS RANCH: Cappello & Noel Allowed $24,000 in Fees
-----------------------------------------------------------
The law firm of Cappello & Noel LLP seeks payment of legal fees
and reimbursement of expenses under 11 U.S.C. Sec. 3281 in the
Chapter 11 case of Merced Falls Ranch, LLC. Cappello seeks
compensation for services it performed in the prior prosecution of
a contested fee application and for its opposition to the Debtor's
motion for entry of a final decree. Merced Falls Ranch opposes
the Supplemental Application on the grounds that the requested
fees are unreasonable.
Because Cappello didn't exercise prudent billing judgment in the
performance of its legal services, and for the reasons set forth
below, the Supplemental Application will only be allowed in part,
said Bankruptcy Judge W. Richard Lee in Fresno, California, in a
June 20, 2013 Memorandum Decision available at http://is.gd/egyQUv
from Leagle.com.
The court finds and concludes that Cappello is entitled to
reasonable compensation for the work it performed in preparing and
litigating the Contingency Application and protecting its
interest. However, Cappello was at all times required to exercise
prudent billing judgment, and its right to be compensated for the
time spent in the case was qualified by the "reasonableness"
standard applicable generally to the award of attorney's fees in
bankruptcy cases. Pursuant to the terms of the Fee Agreement,
Cappello's fees are subject to an immediate 20% reduction.
Thereafter, the court is not persuaded that Cappello exercised
prudent billing judgment for the 140 hours that it billed to the
Debtor. Accordingly, Cappello's request for additional fees will
be allowed in the amount of $24,038. Its request for
reimbursement of expenses will be allowed in full in the amount of
$156.15. No additional fees will be awarded for litigating the
present dispute.
The Debtor filed a voluntary petition under chapter 11 to stay a
non-judicial foreclosure sale by its secured creditor American
AgCredit, ACA. Prior to the bankruptcy, the Debtor retained
Cappello to prosecute an action in the state court for, inter
alia, damages against AAC based on claims of lender liability.
Jasper L. Ozbirn, Esq., of Cappello & Noel LLP, appeared on behalf
of the applicant, Cappello & Noel LLP.
Jake A. Soberal, Esq., of Walter & Wilhelm Law Group, appeared on
behalf of the debtor, Merced Falls Ranch, LLC.
About Merced Falls
Merced Falls Ranch LLC filed a Chapter 11 petition (Bankr. E.D.
Calif. Case No. 11-19212) on Aug. 16, 2011, in Fresno, California.
The Debtor disclosed assets of $100 million to $500 million and
debts of $10 million to $50 million. Judge W. Richard Lee
presides over the case. Walter & Wilhelm Law Group serves as the
Debtor's bankruptcy counsel. Cappello and Noel LLP acts as
special litigation counsel. Atherton & Associates acts as
accountants. The petition was signed by Stephen W. Sloan, the
Debtor's member.
The United States Trustee said that an official committee has not
been appointed in the bankruptcy case of Merced Falls Ranch LLC
because an insufficient number of persons holding unsecured claims
against the Debtor have expressed interest in serving on a
committee.
The Bankruptcy Court, according to the June 14, 2012 civil
minutes, approved the Chapter 11 Plan dated March 30, 2012, that
was co-proposed by the Debtor and lender American AgCredit, FLCA.
MERIT LIFE: A.M. Best Affirms 'B' Financial Strength Rating
-----------------------------------------------------------
A.M. Best Co. has revised the outlook to stable from negative and
affirmed the issuer credit ratings (ICR) of "bb+" of Merit Life
Insurance Co. (Merit) and Yosemite Insurance Company (Yosemite).
Concurrently, A.M. Best has affirmed the financial strength rating
of B (Fair) of both companies, with a stable outlook. Both
companies are based in Evansville, IN.
The change in the ICR outlook reflects A.M. Best's view of the
modest improvement in the funding strategy for Merit and
Yosemite's parent, Springleaf Finance Corporation (SFC). SFC is a
below investment grade company, whose operating flexibility and
business profile remain somewhat challenged due to the uncertain
macroeconomic environment. SFC faces a continuing need to improve
liquidity and secure long-term funding to address ongoing debt
maturities. A.M. Best notes that SFC recently has demonstrated
access to long-term funding through its May 2013 issuance of a 7-
year $300 million 6.00% privately placed senior note, which was
upsized from $250 million due to increased demand. In addition,
for the twelve-month period ended April 30, 2013, SFC saw personal
loan volume per branch increase approximately 28% compared to the
same period the year prior.
On a stand-alone basis, Merit continues to exhibit strong levels
of risk-adjusted capital despite the upstreaming of significant
dividends to its parent. In addition, the company continues to
report positive net income. Although statutory earnings reflect
new business strain and reduced net investment income from a
declining asset base and lower rates, Merit's capitalization
continues to support growing direct premiums and a well-performing
investment grade bond portfolio. A.M. Best notes that Merit
continues to maintain an above-average allocation to commercial
mortgage loans, although the portfolio has been declining on an
absolute basis in each of the past five years. Finally, A.M. Best
acknowledges the benefits of Merit's access to SFC's national
distribution platform while noting the concentration risk of
relying on one distribution channel.
The stand-alone attributes of Yosemite are extremely favorable in
terms of its strong risk-adjusted capitalization, liquidity and
continued outstanding underwriting and operating profitability
derived from its credit insurance operations. Yosemite maintains
a level of risk-adjusted capitalization that is well supportive of
its ratings and continues to produce operating results that
significantly outperform its peer composite. Yosemite also
maintains liquidity measures above composite averages. The
advantages and disadvantages of the company's captive relationship
with SFC were additional factors considered in the ratings, which
contemplate the potential for any future operational disruption
due to Yosemite's dependence on SFC as its sole source of business
and distribution channel. Future financial constraints also were
considered in terms of dividends and/or potential divestitures.
Rating factors that could cause future positive or negative
rating/outlook changes for Merit and Yosemite are directly
influenced by SFC's financial condition, which is largely tied to
its ability to meet upcoming debt maturities and secure long-term
funding. As such, the published ratings of Merit and Yosemite
incorporate some drag from its affiliation with a less-
creditworthy organization.
MF GLOBAL: Suit Designed to Bar Corzine From Securities Industry
----------------------------------------------------------------
Jon S. Corzine, the former chief executive officer of MF Global
Holdings Ltd., was sued June 27 in federal district court in
Manhattan by the U.S. Commodity Futures Trading Commission
alleging failure to supervise workers at the broker that went
bankrupt on public disclosure of a $1.6 billion shortfall in funds
that should have been segregated for customers.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that if the CFTC prevails, Mr. Corzine in substance could
be banned from the securities industry. Mr. Corzine's lawyer said
the lawsuit is "based on meritless allegations." Mr. Corzine is a
former U.S. senator and governor of New Jersey. Assistant
Treasurer Edith O'Brien was also named in the suit. Other
defendants in the suit are former President Bradley Abelow and
former Chief Financial Officer Henri Steenkamp.
The report relates that as part of the suit, the trustee
liquidating the MF Global brokerage agreed to a $1 billion
restitution and a $100 million penalty. Restitution will be paid
from distributions MF Global brokerage trustee James Giddens is
making under the Securities Investor Protection Act. The $100
million penalty is a general unsecured claim to be paid only after
creditors recover fully.
The report notes that Mr. Giddens said he aided the CFTC by
supplying information gathered in his own investigation. In a
report earlier this month to the bankruptcy court, Mr. Giddens
said domestic customers should receive a 96 percent recovery
following implementation of settlement with the U.K. subsidiary
and JPMorgan Chase & Co. Domestic customers already received 89
percent, he said. Customers who traded on foreign exchanges, who
received 18 percent so far, are destined for an 84 percent to 91
percent recovery, Mr. Giddens projected. Full recovery for
customers may depend on the outcome of a lawsuit against MF
Global's officers and directors. Mr. Giddens allowed a class suit
by customers to proceed, coupled with an agreement that recoveries
will be funneled to customers through the bankruptcy-court
liquidation under SIPA.
The report discloses that a sufficiently successful lawsuit
against Corzine and other officers would result in some recovery
for general creditors.
The suit against Corzine is U.S. Commodity Futures Trading
Commission v. MF Global Inc., 13-04463, U.S. District Court,
Southern District of New York (Manhattan).
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was one of
the world's leading brokers of commodities and listed derivatives.
MF Global provides access to more than 70 exchanges around the
world. The firm also was one of 22 primary dealers authorized to
trade U.S. government securities with the Federal Reserve Bank of
New York. MF Global's roots go back nearly 230 years to a sugar
brokerage on the banks of the Thames River in London.
On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance
USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y.
Case Nos. 11-15059 and 11-5058), after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S.
Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the
Bankruptcy Court entered an order approving the appointment of
Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC,
as Chapter 11 trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11
petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and
11-15810). On Dec. 27, the Court entered an order installing Mr.
Freeh as Chapter 11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan
LLP, as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained
Capstone Advisory Group LLC as financial advisor, while lawyers at
Proskauer Rose LLP serve as counsel.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
In April 2013, the Bankruptcy Court approved MF Global Holdings'
plan to liquidate its assets. Bloomberg News reported that the
court-approved disclosure statement initially told
creditors with $1.134 billion in unsecured claims against the
parent holding company why they could expect a recovery of 13.4%
to 39.1% from the plan. As a consequence of a settlement with
JPMorgan, supplemental materials informed unsecured creditors
their recovery was reduced to the range of 11.4% to 34.4%. Bank
lenders will have the same recovery on their $1.174 billion claim
against the holding company. As a consequence of the settlement,
the predicted recovery became 18% to 41.5% for holders of $1.19
billion in unsecured claims against the finance subsidiary,
one of the companies under the umbrella of the holding company
trustee. Previously, the predicted recovery was 14.7% to 34% on
bank lenders' claims against the finance subsidiary.
MF GLOBAL: Judge Rips $40MM Defense Cap Request
-----------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that a New York
bankruptcy judge demanded an explanation as to how former MF
Global Inc. employees have racked up $32 million in defense costs
and refused to rule on their bid for another $10 million in
insurance proceeds until he gets an answer.
According to the report, U.S. Bankruptcy Judge Martin Glenn heard
arguments from the lawyers present at a hearing Friday who
represent MFG Assurance Co. Ltd., U.S. Specialty Insurance Co., XL
Specialty Insurance Co., MF Global's Chapter 11 and liquidating
trustees.
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was one of
the world's leading brokers of commodities and listed derivatives.
MF Global provides access to more than 70 exchanges around the
world. The firm also was one of 22 primary dealers authorized to
trade U.S. government securities with the Federal Reserve Bank of
New York. MF Global's roots go back nearly 230 years to a sugar
brokerage on the banks of the Thames River in London.
On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance
USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y.
Case Nos. 11-15059 and 11-5058), after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S.
Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the
Bankruptcy Court entered an order approving the appointment of
Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC,
as Chapter 11 trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11
petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and
11-15810). On Dec. 27, the Court entered an order installing Mr.
Freeh as Chapter 11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan
LLP, as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained
Capstone Advisory Group LLC as financial advisor, while lawyers at
Proskauer Rose LLP serve as counsel.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
In April 2013, the Bankruptcy Court approved MF Global Holdings'
plan to liquidate its assets. Bloomberg News reported that the
court-approved disclosure statement initially told
creditors with $1.134 billion in unsecured claims against the
parent holding company why they could expect a recovery of 13.4%
to 39.1% from the plan. As a consequence of a settlement with
JPMorgan, supplemental materials informed unsecured creditors
their recovery was reduced to the range of 11.4% to 34.4%. Bank
lenders will have the same recovery on their $1.174 billion claim
against the holding company. As a consequence of the settlement,
the predicted recovery became 18% to 41.5% for holders of $1.19
billion in unsecured claims against the finance subsidiary,
one of the companies under the umbrella of the holding company
trustee. Previously, the predicted recovery was 14.7% to 34% on
bank lenders' claims against the finance subsidiary.
MILLENNIUM INORGANIC: S&P Raises Rating on 2nd-Lien Debt to 'BB+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'BB-'
corporate credit rating on Millennium Inorganic Chemicals
(Millennium). The outlook is stable.
At the same time, S&P raised its issue-level ratings on the
company's second-lien debt to 'BB+' (two notches above the
corporate credit rating) from 'BB-' and revised its recovery
ratings to '1' from '4'. The '1' recovery rating indicates S&P's
expectation for a very high (90% to 100%) recovery in the event of
a payment default.
S&P also affirmed its 'BB+' issue-level rating on the company's
first-lien revolving credit facility. The '1' recovery rating
(two notches above the corporate credit rating), indicating S&P's
expectation for a very high (90% to 100%) recovery in the event of
a payment default, is unchanged.
S&P withdrew its issue-level rating on the company's $550 million
first-lien term loan, following the company's full repayment of
the loan.
"The ratings on Millennium reflect the company's limited focus on
cyclical markets subject to commodity product cycles and our
limited visibility into its financial policy," said Standard &
Poor's credit analyst Seamus Ryan.
S&P's expectation that the company will maintain good free cash
flow and adequate liquidity partially offsets these risks. S&P
characterizes Millennium's business risk profile as "weak" and its
financial risk profile as "significant."
The stable outlook on Millennium reflects S&P's expectation that
gradually improving industry conditions should lead to an
operating performance for the company that supports cash flow
generation and financial metrics appropriate for the ratings.
"We could lower the ratings if any of the downside risks to our
forecast were to materialize, including signs of an overexpansion
of capacity, a further reduction in end-market demand, or renewed
significant increases in titanium ore prices. In such a scenario,
a further 10% decline in volumes and EBITDA margins near 10% could
lead to FFO to total adjusted debt approaching 15%. Although we
view it as unlikely, an increase in debt in order to fund growth
investments in the parent company's business, or a return of
capital to shareholders, could also cause us to lower the
ratings," S&P said.
S&P could raise the ratings modestly if TiO2 industry conditions
recover such that volumes begin to grow meaningfully, leading to
consistent selling price increases. To consider higher ratings,
S&P would also need further clarity about the company's future
capital structure objectives.
MOBIVITY HOLDINGS: John Lemak Held 6.7% Equity Stake at June 17
---------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, John S. Lemak disclosed that, as of June 17, 2013, he
beneficially owned 6,219,810 shares of common stock of Mobivity
Holdings Corp. representing 6.7 percent of the shares outstanding.
A copy of the regulatory filing is available at:
http://is.gd/wdfUeg
About Mobivity Holdings
Mobivity Holdings Corp. was incorporated as Ares Ventures
Corporation in Nevada in 2008. On Nov. 2, 2010, the Company
acquired CommerceTel, Inc., which was wholly-owned by CommerceTel
Canada Corporation, in a reverse merger. Pursuant to the Merger,
all of the issued and outstanding shares of CommerceTel, Inc.,
common stock were converted, at an exchange ratio of 0.7268-for-1,
into an aggregate of 10,000,000 shares of the Company's common
stock, and CommerceTel, Inc., became a wholly owned subsidiary of
the Company. In connection with the Merger, the Company changed
its corporate name to CommerceTel Corporation on Oct. 5, 2010.
In connection with the Company's acquisition of assets from
Mobivity, LLC, the Company changed its corporate name to Mobivity
Holdings Corp. and its operating company to Mobivity, Inc, on
Aug. 23, 2012.
Mobivity Holdings disclosed a net loss of $7.33 million in 2012,
as compared with a net loss of $16.31 million in 2011.
M&K CPAS, PLLC, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012, citing recurring operating losses and
negative cash flows from operations and dependence on additional
financing to fund operations which raise substantial doubt about
the Company's ability to continue as a going concern.
The Company's balance sheet at March 31, 2013, showed $3.25
million in total assets, $10.25 million in total liabilities, all
current, and a $6.99 million total stockholders' deficit.
Bankruptcy Warning
"...[A]ll of our assets are currently subject to a first priority
lien in favor of the holders of our outstanding convertible notes
payable in the current aggregate principal amount of $4,521,378.
The notes are due on October 15, 2013, if we are unable to repay
or refinance our obligations under those notes by October 15,
2013, the holders of the notes will have the right to foreclose on
their security interests and seize our assets. To avoid such an
event, we may be forced to seek bankruptcy protection, however a
bankruptcy filing would, in all likelihood, materially adversely
affect our ability to continue our current level of operations.
In the event we are not able to refinance or repay the notes, but
negotiate for a further extension of the maturity date of the
notes, we may be required to pay significant extension fees in
cash or shares of our equity securities or otherwise make other
forms of concessions that may adversely impact the interests of
our common stockholders.
MOUNTAIN PROVINCE: Joint Venture and GNWT Sign Economic Pact
------------------------------------------------------------
De Beers and Mountain Province Diamonds entered into a Socio
Economic Agreement with the Government of the Northwest
Territories for the proposed Gahcho Kue diamond mine located in
Canada's Northwest Territories.
The agreement formalizes commitments made with respect to
employment, training, business opportunities and other related
benefits for NWT residents. It also establishes measures to
monitor possible socio-economic impacts related to the proposed
mine and establishes the mechanism to work with communities close
to the mine site to ensure an adaptive management approach to
socio-economic performance of the mine.
"In signing this SEA, both parties are affirming their commitment
to advancing this Project in a way that not only creates jobs for
our residents, but that supports the health and wellness of the
region," said Minister of Industry, Tourism and Investment, David
Ramsay. "This is a significant step forward in opening this mine,
a project that will translate into economic opportunities for
people throughout the North and South Slave Regions, and across
the territory."
"This is an important milestone for De Beers and for our Joint
Venture Partner, Mountain Province Diamonds," said Tony Guthrie,
president and CEO of De Beers Canada and Chairman of the Gahcho
Kue JV Management Committee. "The signing of this Agreement
confirms that De Beers and the Government of the Northwest
Territories are committed to working together to optimize
opportunities for the residents and economy of the NWT, while
respecting the cultures and traditions of communities close to the
mine. This agreement positions Gahcho Kue to contribute to the
economic success of the NWT and its all-important diamond
industry."
Highlights of the SEA include:
* Incentives to assist employees living in the NWT, including
priority hiring and relocation benefits;
* Establishment of a trades training, apprenticeship and
professional training sponsorship program with at least 30
positions allocated for NWT residents;
* Establishment of NWT pick-up points and transportation
allowances to assist NWT resident employees travelling to
and from the Gahcho Kue mine from NWT communities.
* An innovative approach to community involvement in the
review of annual results with the GNWT and De Beers to
enhance opportunities for dialogue, transparency and
accountability.
An intensive two-year environmental impact review concluded in
December 2012. The report and recommendation will be released to
the Minister of Aboriginal Affairs and Northern Development by the
Mackenzie Valley Environmental Impact Review Board in July this
year. Upon receiving Ministerial approval on the EIR Report, the
Project will be able to proceed through the final permitting phase
where the terms and conditions of its permits and licenses will be
determined.
The Gahcho Kue diamond mine will have a mine life of approximately
eleven years, will employ up to 700 people during construction and
approximately 400 people during operations. It will produce on
average 4.5 million carats annually over its mine life.
About Mountain Province
Headquartered in Toronto, Canada, Mountain Province Diamonds Inc.
(TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/--
is a Canadian resource company in the process of permitting and
developing a diamond deposit known as the "Gahcho Kue Project"
located in the Northwest Territories of Canada. The Company's
primary asset is its 49% interest in the Gahcho Kue Project.
Mountain Province disclosed a net loss of C$3.33 million for the
year ended Dec. 31, 2012, a net loss of C$11.53 million in 2011,
and a net loss of C$14.53 million in 2010.
"The Company's primary mineral asset is in the exploration and
evaluation stage and, as a result, the Company has no source of
revenues. In each of the years December 31, 2012, 2011 and 2010,
the Company incurred losses, and had negative cash flows from
operating activities, and will be required to obtain additional
sources of financing to complete its business plans going into the
future. Although the Company had working capital of $46,653,539
at December 31, 2012, including $47,693,693 of cash and cash
equivalents and short-term investments, the Company has
insufficient capital to finance its operations and the Company?s
costs of the Gahcho Kue Project (Note 7) over the next 12 months.
The Company is currently investigating various sources of
additional funding to increase the cash balances required for
ongoing operations over the foreseeable future. These additional
sources include, but are not limited to, share offerings, private
placements, credit and debt facilities, as well as the exercise of
outstanding options. However, there is no certainty that the
Company will be able to obtain financing from any of those
sources. These conditions indicate the existence of a material
uncertainty that results in substantial doubt as to the Company's
ability to continue as a going concern," according to the
Company's annual report for the period ended Dec. 31, 2012.
MPF HOLDING: Litigation Trustee Lacks Standing to Sue InOcean
-------------------------------------------------------------
Jeff Compton, Litigation Trustee of the MPF Litigation Trust,
Plaintiff, v. InOcean AS, Defendant, Adv. Proc. No. 10-03454
(Bankr. S.D. Tex.), sued to recover alleged preferential payments
made to InOcean AS. Pending before the Court is InOcean's Renewed
and Amended and Supplemented Motion to Dismiss, which alleges
that: (1) the debtor assumed and assigned its contract with
InOcean pursuant to section 365 of the Bankruptcy Code, and thus
the Litigation Trustee is barred as a matter of law from now
pursuing a preference action against InOcean; and (2) even if the
debtor did not assume and assign its contract with InOcean, the
instant preference action was, nevertheless, released pursuant to
the debtor's confirmed plan of reorganization.
The ultimate issue which the Court must decide is whether the
Litigation Trustee has standing to pursue the instant preference
avoidance action against InOcean. In a June 21, 2013 Memorandum
Opinion available at http://is.gd/3xf5ctfrom Leagle.com,
Bankruptcy Judge Jeff Bohm in Houston held that the Litigation
Trustee lacks standing to bring this preference avoidance action,
and that dismissal is warranted under Federal Rule of Civil
Procedure 12(b)(1).
The Court's Opinion articulates its reasons for making this
decision, as well as to emphasize two points: (1) parties to an
executory contract in bankruptcy may not circumvent the
requirements of section 365 of the Bankruptcy Code; and (2) once
an executory contract is assumed pursuant to section 365, the
contract assumption defense bars future preference actions that
seek to recover payments made pursuant to that contract.
About MPF Corp.
Bermuda-based MPF Corp. Ltd. -- http://www.mpf-corp.com/--
engaged in deep water oil and gas exploration. The Company was
established on April 25, 2006. The company and debtor-affiliate
MPF Holding US LLC filed separate petitions for Chapter 11 relief
on Sept. 24, 2008 (Bankr. S.D. Tex. Case Nos. 08-36086 and
08-36084). MPF-01 followed on Sept. 25, 2008.
D. Bobbitt Noel, Jr., Esq. at Vinson & Elkins LLP, represented
the Debtors as counsel. MPF estimated assets and debts of
$100 million to $500 million in its Chapter 11 petition. The
Bermuda Proceedings and the Chapter 11 cases in the U.S. ran
as parallel proceedings.
On June 16, 2010, the Court entered an order approving the
Debtors' amended disclosure statement and confirming the Debtors'
amended joint plan of reorganization. The Plan was declared
effective August 9, 2010.
The Plan provided for the sale of the acquired assets to Cosco
Dalian Shipyard Co. Ltd., MPF's largest vendor, pursuant to the
assignment and purchase agreement. The essential terms of the
agreement includes: a) a cash payment of $104,000,000 to MPF and
MPF-01 on the closing date, in full; b) assumption of certain
liabilities; and c) release MPF-01 from its obligation to pay the
cure amount under a contract with Cosco.
The Plan allows for the appointment of a litigation trustee to
oversee and administer a post-confirmation litigation trust. The
purpose of the trust is to liquidate claims to pay allowed
unsecured claims pursuant to the Plan.
NATIONAL HERITAGE: Behrmanns Face Sanctions for Filing Class Suit
-----------------------------------------------------------------
Bankruptcy Judge Brian F. Kenney in Alexandria, Virginia, ruled
that John and Nancy Behrmann; Jonathan D. Miller, Esq., and his
firm Nye, Peabody, Stirling, Hale & Miller, LLP; and Daniel J.
Schendzielos, Esq., and his firm Schendzielos & Associates, LLC,
are in contempt of the Bankruptcy Court's 2009 order confirming
National Heritage Foundation, Inc.'s Fourth Amended and Restated
Chapter 11 Plan of Reorganization, for filing a purported class
action complaint.
On June 28, 2012, the Behrmanns filed a Complaint for Damages
against the Debtor and the Debtor's Officers and Directors in the
U.S. District Court for the Central District of California, Case
No. CV12-5636-DMG. The Complaint was filed by Mr. Miller of the
law firm of Nye, Peabody, Stirling, Hale & Miller, LLP, and Mr.
Schendzielos of Schendzielos & Associates, LLC.
The Complaint was filed by the Behrmanns in their own capacity,
and as Assignees of claimants: (a) Dr. Robert Griego and Dr.
Carole Griego; (b) John Goodson; (c) Terry P. Gillett and Brenda
A. Gillett.
The Complaint names the following individuals who are or were
officers and/or directors of the Debtor: John T. Houk, II; Miriam
M. Houk; John T. Houk, III; Janet H. Ridgely; and Julie L. Houk.
The Complaint contains "Class Action Allegations." The proposed
Class is defined as: "The Plaintiffs . . . and all others
similarly situated persons who were affected by the confiscation
of money placed in donor advised funds ('DAF') with NHF despite
repeated assurances that the funds were under the plaintiffs'
control." The putative class would have included virtually all of
the Donors in connection with the NHF bankruptcy case. This class
would have included the Donors who filed Proofs of Claim and whose
Proofs of Claim were disallowed by this Court, as well as those
who could have filed Proofs of Claim but did not, all of whom are
nonetheless bound by the terms of the confirmed Plan.
The Class is described as consisting of "over a thousand residents
of California and several thousands of persons throughout the
United States."
According to Judge Kenney, the Behrmanns et al. may purge
themselves of the foregoing contempt finding by complying with the
following within 10 days of the entry of the Court Order:
a. the Behrmanns et al. must dismiss with prejudice the
California federal action as against National Heritage Foundation.
Should the Behrmanns et al. fail to do so, the Court imposes a
daily fine in the amount of $500 per day, payable to the Debtor,
beginning on the 11th day after the entry of the Court's Opinion
and Order, as against the Behrmanns et al., jointly and severally,
until the case is dismissed against NHF with prejudice; and
b. the Behrmanns et al., within 10 days of the entry of the
Court Order, must move to amend their Amended Complaint in the
California action to dismiss with prejudice all Exculpated claims
as against the Debtor's Officers and Directors (the Houks and Jan
Ridgely). the Behrmanns et al. must diligently pursue this
motion. If the Behrmanns et al. fail to comply with this
requirement, the Court imposes a daily fine in the amount of $500
per day, payable to the Debtor, beginning on the 11th day after
the entry of the Court Opinion and Order, as against the Behrmanns
et al., jointly and severally, until compliance with the Opinion
and Order.
The Court awards a judgment against the Behrmanns et al., jointly
and severally, in the amount of $250,000 for the Debtor's
attorney's fees and $28,098.53 in costs in this matter, totaling
$278,098.53, payable within 10 days of the entry of the Opinion
and Order.
NHF's request for an award of punitive damages is denied.
A copy of Judge Kenney's June 20, 2013 Opinion And Order is
available at http://is.gd/bQBXc9from Leagle.com.
About National Heritage Foundation
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.
The Bankruptcy Court entered an Order confirming the Debtor's
Fourth Amended and Restated Plan of Reorganization on Oct. 16,
2009.
NEW LEAF: Incurs $1.3 Million Net Loss in Sept. 30 Quarter
----------------------------------------------------------
New Leaf Brands, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.29 million on $83,367 of net sales for the three months
ended Sept. 30, 2012, as compared with a net loss of $2.54 million
on $128,796 of net sales for the same period during the prior
year.
As of Sept. 30, 2012, the Company had $761,958 in total assets,
$4.06 million in total liabilities and a $3.30 million in total
stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/3h2noi
About New Leaf
Old Tappan, N.J.-based New Leaf Brands, Inc., is a diversified
beverage holding company acquiring brands, distributors and
manufacturers within the beverage industry.
EisnerAmper LLP, in New York City, expressed substantial doubt
about New Leaf's ability to continue as a going concern following
the 2011 financial results. The independent auditors noted that
the Company has suffered recurring losses from operations, has a
working capital deficiency, was not in compliance with certain
financial covenants related to debt agreements, and has a
significant amount of debt maturing in 2012.
The Company reported a net loss of $6.68 million on $2.27 million
of net sales for 2011, compared with a net loss of $9.13 million
on $4.26 million of net sales for 2010.
NEXEO SOLUTIONS: Poor Performance Cues Moody's to Cut CFR to B2
---------------------------------------------------------------
Moody's Investors Service downgraded Nexeo Solutions, LLC's
Corporate Family Rating to B2 from B1. The downgrade is a result
of Nexeo Solutions' earnings and margins underperforming both
management's and Moody's expectations due to higher than
anticipated operating costs, and modest free cash flow generation.
In conjunction with the downgrade of the CFR, Moody's also
downgraded the senior secured term loan to B2 as well as the
senior subordinated notes to Caa1. The outlook is stable.
Nexeo Solutions, LLC
Ratings downgraded:
Corporate Family Rating -- B2 from B1
Probability of Default Rating -- B2-PD from B1-PD
$325 mm Sr sec term loan B due 2017- B2 (LGD3, 46%) from B1
(LGD4, 52%)
$175 mm Sr sec term loan B due 2017- B2 (LGD3, 46%) from B1
(LGD4, 52%)
$175 mm Sr subordinated notes due 2018 - Caa1 (LGD6, 90%) from
B3 (LGD6, 92%)
Ratings outlook -- Stable
Ratings Rationale:
Nexeo Solutions' B2 CFR reflects its high leverage, history of
inconsistent free cash flow generation, low operating margins
(lower than management's expectations for an average through-the-
cycle EBITDA target) and working capital fluctuations. The firm's
profit margins and pace of deleveraging have lagged Moody's
expectations as well as management's original projections. Its
profit margins remain below those of peers in the chemical
distribution business. Additionally, the firm has not generated
positive free cash flow since its inception, primarily due to
working capital being a use of cash. The rating also considers
Moody's expectations the firm will continue to spend on improving
parts of its corporate infrastructure and operating capabilities.
The CFR also reflects Nexeo Solutions' regionally concentrated
European business which has a much smaller competitive position
measured against the top five competitors, a product mix weighted
towards commodity chemicals including many petrochemicals that
swing working capital requirements as crude oil prices fluctuate,
and some working capital seasonality. The ratings are supported by
Nexeo Solutions' economies of scale, significant market share in
North America, strong supplier base representing leading industry
producers, long-lived customer relationships with minimal
concentration, exposure to diverse end market uses for its
products, favorable industry trends in outsourcing to distributors
that have resulted in the distribution business growing faster
than overall chemicals sales, and relatively modest maintenance
capital expenditure requirements.
Nexeo Solutions' adequate liquidity position is supported by its
cash balances ($37.7 million as of March 31, 2013), gross cash
flows and capacity under its ABL revolver. Cash flow from
operations was negative for the year ending March 31, 2013, as a
result of a significant inventory investment in the first half of
FY2013 (FYE is September 30th). The five-year, $540 million ABL
revolver due 2018 had $305.8 million of available borrowing
capacity as of March 31, 2013. Additionally, there was $8.8
million available under short-term credit lines available to the
Beijing Plaschem joint venture. The firm does not pay a regular
dividend (certain restrictions under the revolver apply), but pays
member tax distributions and has a favorable debt maturity
profile, with no near-term debt maturities.
The prospect for an upgrade is unlikely as the ratings are limited
by the company's leverage and cash flow expectations. Moody's
could reassess the ratings should Nexeo Solutions improve its
profit margins, generate positive free cash flow consistently and
lower its leverage (Debt/EBITDA) to around 4.0x. Moody's would
consider a downgrade of the CFR, if operating cash flow remains
negative or leverage does not decline below 5.5x over the next 12
months.
The principal methodology used in this rating was Global Chemical
Industry published in December 2009. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Nexeo Solutions is one of the largest distributors of chemicals
and providers of related services in North America, where it
sources over 80% of its revenues. The company also has operations
in Europe and China. It is organized along the following products
lines: chemicals (e.g., hydrocarbons, alcohols, silicones,
surfactants, ketones), plastics (e.g., polypropylene,
polyethylene, nylon), composites (e.g., gelcoats, resins,
fiberglass, catalysts) and environmental services (only 3% of
revenues). Private equity firm TPG Capital purchased Ashland
Inc.'s distribution business in an leveraged buyout transaction
for $930 million to form Nexeo Solutions. Nexeo Solutions had
revenues of $4.2 billion for the year ending March 31, 2013.
NORD RESOURCES: Extends Copper Sales Agreement with Red Kite
------------------------------------------------------------
Nord Resources Corporation has extended a copper cathode sales
agreement with Red Kite Master Fund Limited for 100 percent of the
production from the Johnson Camp Mine, given the expiry of the
replacement copper cathode sales agreement between the parties
that was in place from Jan. 1, 2013, through June 30, 2013.
The agreement runs through Sept. 30, 2013, with renewable
extensions by mutual agreement of both parties. Pursuant to the
agreement, Red Kite accepts delivery of the cathodes at the
Johnson Camp Mine, and pricing is based on the COMEX price for
high-grade copper on the date of sale.
In July 2010, Nord suspended mining new ore at the Johnson Camp
Mine as it sought financing to permit the company to restructure
its debt and provide additional capital for constructing a new
leaching pad. It continues to leach copper from the material
previously placed on the existing three pads on its property,
processing it through the Johnson Camp Mine's SX-EW plant. As
expected, the level of copper production and sales continue to
decline at a steady rate.
About Nord Resources
Based in Tuczon, Arizona, Nord Resources Corporation
(TSX:NRD/OTCBB:NRDS.OB) -- http://www.nordresources.com/-- is a
copper mining company whose primary asset is the Johnson Camp
Mine, located approximately 65 miles east of Tucson, Arizona.
Nord commenced mining new ore in February 2009.
On June 2, 2010, Nord Resources appointed FTI Consulting to advise
on refinancing structures and strategic alternatives.
Nord Resources disclosed a net loss of $10.25 million on $8.14
million of net sales for the year ended Dec. 31, 2012, as compared
with a net loss of $10.31 million on $14.48 million of net sales
in 2011. The Company's balance sheet at March 31, 2013, showed
$50.09 million in total assets, $70.20 million in total
liabilities and a $20.10 million total stockholders' deficit.
"The results for 2012 continued to reflect the effects of the
measures that Nord implemented beginning in July 2010 to reduce
our costs, maximize cash flow, and improve operating
efficiencies," said Wayne Morrison, chief executive and chief
financial officer.
Mayer Hoffman McCann P.C., in Denver, 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 reported net losses of ($10,254,344) and
($10,316,294) during the years ended Dec. 31, 2012, and 2011,
respectively. In addition, as of Dec. 31, 2012 and 2011, the
Company reported a deficit in net working capital of ($57,999,677)
and ($51,783,180), respectively. The Company's significant
historical operating losses, lack of liquidity, and inability to
make the requisite principal and interest payments due under the
terms of the Amended and Restated Credit Agreement with its senior
lender raise substantial doubt about its ability to continue as a
going concern.
Bankruptcy Warning
"The Company's continuation as a going concern is dependent upon
its ability to refinance the obligations under the Credit
Agreement with Nedbank, the Copper Hedge Agreement with Nedbank
Capital, and the note payable with Fisher, thereby curing the
current state of default under the respective agreements. Any
actions by Nedbank, Nedbank Capital or Fisher Industries to
enforce their respective rights could force us into bankruptcy or
liquidation."
ONE ALLY: S&P Corrects Rating on Sr. Unsecured Notes to 'B+'
------------------------------------------------------------
Standard & Poor's Ratings Services said it corrected its rating on
a senior unsecured notes issuance of Ally Financial Inc. by
reinstating the 'B+' rating. The rating is on CreditWatch with
positive implications.
RATINGS LIST
Rating Reinstated
To From
Ally Financial Inc.
Senior Unsecured
6.7% SmartNotes due 06/15/2018 B+/Watch Pos NR
CUSIP 37042G4Z6
OP-TECH ENVIRONMENTAL: NRC Offers to Pay Holders $0.116 Apiece
--------------------------------------------------------------
NRC US Holding Company, LLC, through its wholly-owned subsidiary,
has offered to buy for cash all outstanding shares of common stock
of OP-TECH Environmental Services, Inc., at a price of $0.116 per
share. The Offer Price represents a premium of approximately
2,320 percent to the closing bid price for Shares on June 18,
2013.
The Offer is being made in connection with the Agreement and Plan
of Merger, dated as of June 19, 2013, pursuant to which, after the
completion of the Offer and the satisfaction or waiver of certain
conditions, NRC has agreed to merge with and into OP-TECH, with
OP-TECH surviving as a wholly-owned subsidiary of NRC.
The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on July 29, 2013, unless extended.
Computershare Trust Company, N.A., serves as the depositary for
the Offer.
NRC and its affiliates disclosed that they beneficially owned
53,136,263 shares of common stock of OP-TECH representing 89.7
percent of the shares outstanding as of June 19, 2013.
A copy of the Tender Offer Statement is available for free at:
http://is.gd/BEI7OU
About OP-TECh Environmental
East Syracuse, N.Y.-based OP-TECH Environmental Services, Inc.,
provides comprehensive environmental and industrial cleaning and
decontamination services predominately in New York, New England,
Pennsylvania, New Jersey, and Ohio.
Dannible & McKee, LLP, in their audit report, dated May 14, 2013,
for the fiscal year ended Dec. 31, 2012, expressed substantial
doubt about OP-TECH Environmental's ability to continue as a going
concern. The independent auditors noted that the Company has
negative working capital and a stockholders' deficit at Dec. 31,
2012, and caused violations of the Company's financing agreements.
The Company reported net income of $1.0 million on $32.3 million
of revenues in 2012, compared with a net loss of $7.5 million on
$30.7 million of revenues in 2011.
The Company's balance sheet at March 31, 2013, showed $8.99
million in total assets, $12.79 million in total liabilities and a
$3.79 million shareholders' deficit.
ORCHARD SUPPLY: Can Hold Liquidation Sales
------------------------------------------
Matt Chiappardi of BankruptcyLaw360 reported that a Delaware
bankruptcy judge gave the nod for Orchard Supply Hardware Stores
Corp. to hold going-out-of-business sales at eight locations to
bring in cash that could help fund its strategy to sell the bulk
of its stores to Lowe's Cos. Inc., which entered a $250 million
stalking horse bid.
According to the report, the agreement to run the liquidation
sales went to Great American Group WF LLC, which put in the
winning bid at auction with terms where Orchard would be
guaranteed an 82.5 percent cut of the proceeds.
About Orchard Supply
San Jose, Cal.-based Orchard Supply Hardware Stores Corporation
operates neighborhood hardware and garden stores focused on paint,
repair and the backyard. It was spun off from Sears Holdings
Corp. in 2012.
Orchard Supply and two affilitates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 13-11565) on June 16 to facilitate a
restructuring of the company's balance sheet and a sale of its
assets for $205 million in cash to Lowe's Companies, Inc., absent
higher and better offers. In addition to the $205 million cash,
Lowe's has agreed to assume payables owed to nearly all of
Orchard's supplier partners.
Bankruptcy Judge Christopher S. Sontchi oversees the case.
Michael W. Fox signed the petitions as senior vice president and
general counsel. The Debtors disclosed total assets of
$441,028,000 and total debts of $480,144,000.
Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington,
Delaware; and Richard A. Chesley, Esq., Chun I. Jang, Esq., and
Daniel M. Simon, Esq., at DLA Piper LLP (US), in Chicago,
Illinois, are the Debtors' counsel. Moelis & Company LLC serves
as the Debtors' investment banker. FTI Consulting, Inc., serves
as the Debtors' financial advisors. A&G Realty Partners, LLC,
serves as the Debtors' real estate advisors. BMC Group Inc. is
the Debtors' claims and noticing agent.
OXFORD BUILDING: CMC Suit Remanded to Marion Superior Court
-----------------------------------------------------------
District Judge Jane Magnus-Stinson in Indianapolis remanded the
lawsuit, CMC CONSTRUCTION SERVICES, INC., Plaintiff, v. DDR CORP.
and DDR-SAU INDIANAPOLIS GLENLAKE, L.L.C., Defendants, No. 1:13-
cv-00987-JMS-DKL (S.D. Ind.), to Marion Superior Court under
28 U.S.C. Sec. 1447(c).
Third-Party Defendants Control Building Services, Inc., Control
Equity Group, Inc., and Edward Turen had filed a Notice of Removal
on June 19, 2013. However, Judge Magnus-Stinson said that, to the
extent that the Defendants seek to remove the action after
severance of the claims against them, the Court notes that their
argument that those claims are related to the pending Chapter 11
bankruptcy involving Oxford Building Services, Inc., is somewhat
unclear. From the information contained in the Notice of Removal,
the Court cannot determine how Oxford's pending bankruptcy relates
to the claims made in this case, nor how it could possibly confer
federal question jurisdiction over this dispute. The Removing
Defendants are encouraged to provide more specific information
regarding that relationship if they seek to remove the claims
against them to the District Court in the future.
A copy of the Court's June 20, 2013 Remand Order is available at
http://is.gd/bV2p3afrom Leagle.com.
CMC Construction Services, Inc., is represented by James G.
Holland, Attorney At Law.
Defendants DDR Corp., and DDR-SAU Indianapolis Glenlake, L.L.C.,
Defendant, represented by A. Richard Blaiklock, Esq., and Ryan
John Vershay, Esq., at Lewis Wagner LLP.
Third Party Defendants Control Building Services, Inc., Control
Equity Group, Inc., and Edward Turen are represented by John A.
Conway, Esq., and Paul E. Harold, Esq., at Ladue Curran & Kuehn.
Third Party Defendant Neal Turen is represented by Thomas A.
Pastore, Thomas Pastore, PC.
About Oxford Building
Oxford Building Services, Inc., Oxford Property Services, Inc.,
and Origin PR LLC sought Chapter 11 protection (Bankr. D.N.J. Lead
Case No. 13-13821) on Feb. 26, 2013, in Newark, New Jersey.
Oxford is a national organization providing a full spectrum of
facility maintenance, housekeeping, janitorial and security
services for office building real estate investment trusts
("REITs"), retail and entertainment REITs, national retailers and
chain stores. Oxford also optimizes the facility maintenance
process for companies with multi-unit facility management needs
through the use of software, vendor management tools, statistical
modeling and analysis, paperless invoicing and a transaction/call
center. Oxford Building, the lead debtor, is the sole member of
Origin and owns 100% of the outstanding stock of OPS.
Warren A. Usatine, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., serve as counsel to the Debtors.
Oxford Property estimated assets and debts of $10 million to
$50 million. Oxford Building estimated at least $1 million in
assets and liabilities.
PARROTT BROADCASTING: Court Tosses Former Manager's Claim
---------------------------------------------------------
Bankruptcy Judge Jim D. Pappas ruled that Scott Daryl Parker, who
formed Parrott Broadcasting, L.P., along with his mother and
brother, and who served as Parrott's general manager, waived his
right to be paid both pre- and postpetition wages. Therefore, R.
Sam Hopkins, the Chapter 7 trustee for Mr. Parker's Chapter 7
bankruptcy estate, has no valid claim for those wages, and no
corresponding right to allowance of an administrative expense.
Judge Pappas said the objection of Gary L. Rainsdon, the Chapter 7
Trustee for Parrott's Chapter 7 bankruptcy estate, to Mr. Hopkins'
proof of claim is sustained, the claim will be disallowed, and the
motion for allowance of an administrative expense will be denied.
On June 13, 2011, Mr. Parker filed a proof of claim in Parrott's
bankruptcy case. It claimed Parrott owed him a total of $135,000
in unpaid wages, and asserted a right to priority for $120,000
pursuant to 11 U.S.C. Sec. 507(a)(4). The proof of claim was
amended on January 11, 2012, to substitute Mr. Hopkins as the
claimant in light of the filing of Mr. Parker's chapter 7 case.
Mr. Rainsdon objected to the proof of claim as amended, arguing
that Mr. Parker should not be entitled to claim any amounts due
for the management fees because Mr. Parker and Parrott had never
respected the terms of the Partnership Agreement giving rise to
Mr. Parker's claims. Mr. Rainsdon also pointed out that the
amount claimed as a priority grossly exceeded the cap in 11 U.S.C.
Sec. 507(a)(4). Finally, Mr. Rainsdon argued that the claim for
Mr. Parker's $15,000 "loan" to Parrott was not adequately
documented.
Mr. Hopkins filed a response to Mr. Rainsdon's objection to the
amended proof of claim. The response acknowledged that the
priority portion of the claim would indeed be subject to the
dollar limitation in 11 U.S.C. Sec. 507(a)(4), but insisted the
claim should otherwise be allowed as filed.
On March 7, 2013, Mr. Hopkins upped the ante. First, he amended
the proof of claim yet again to now reflect a total claim in the
amount of $495,000, with $10,9503 of those amounts entitled to a
priority claim under Sec. 507(a)(4). The total claim amount is
comprised of $48,000 in unpaid wages Mr. Parker earned from April
1, 2008, to December 31, 2008; $72,000 in unpaid wages from
January 1, 2009, to December 31, 2009; $15,000 for an unsecured
loan by Mr. Parker to Parrott to pay the legal fees to Parrott's
attorney; and $360,000 in statutory penalties on the unpaid wage
claims pursuant to Idaho Code Sec. 45-615(2).
In addition, on March 7, 2013, Mr. Hopkins filed a "Motion for
Allowance of Chapter 11 Wage Claim" in which he sought chapter 11
administrative expense priority for $68,695.18 of the back wages,
the difference between the $84,000.00 that Mr. Parker earned for
management fees during the chapter 11 case, and the $15,304.82 he
was paid by Parrott.
A copy of the Court's June 26, 2013 Memorandum of Decision is
available at http://is.gd/SzRSswfrom Leagle.com.
Daniel C. Green, Esq., and Brett R. Cahoon, Esq. --
dan@racinelaw.net and brc@racinelaw.net -- at RACINE OLSON NYE
BUDGE & BAILEY, in Pocatello, Idaho, for chapter 7 trustee Gary L.
Rainsdon.
Robert J. Maynes, Esq., at MAYNES TAGGART, PLLC, Idaho Falls,
Idaho, for chapter 7 trustee R. Sam Hopkins.
Parrott filed its chapter 11 petition (Bankr. D. Idaho Case No.
10-40017) on Jan. 7, 2010. On Feb. 10, 2011, Parrott's case was
converted to one under chapter 7, and Gary L. Rainsdon was
appointed to serve as the trustee.
On May 24, 2011, Mr. Parker filed a personal chapter 7 bankruptcy
petition (Bankr. D. Idaho Case No. 11-40823), and R. Sam Hopkins
was ultimately appointed as the trustee in that case.
PLEASE TOUCH: S&P Lowers Rating on 2006 Revenue Bonds to 'BB-'
--------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its long-term
rating on the Philadelphia Authority for Industrial Development,
Pa.'s series 2006 revenue bonds, issued for Please Touch Museum
(PTM) to 'BB-' from 'BBB-'. The outlook is stable.
"The 'BB-' rating reflects our view of PTM's reliance on
successful fundraising to fund future debt service coupled with
fundraising that has slowed for several years and diminishing
resources available to cover debt service," said Standard & Poor's
credit analyst Nick Waugh. PTM recently launched a new campaign
to raise funds for future debt service coverage, and over the past
year the museum secured a large bequest pledge, but S&P believes
the rate of pledge and cash collection is not currently
sustainable to meet future debt service needs. PTM has also
historically generated operating deficits on a full accrual basis,
but the fiscal 2012 deficit was considerably larger than the past
and was negative on a cash basis. The current debt burden remains
very high, in S&P's opinion, at 22% of fiscal 2012 operating
expenses and financial resources remain low with regard to debt.
S&P believes these credit weaknesses balance growing attendance
and membership figures, a fairly diverse revenue base, and limited
competition in Philadelphia.
The stable outlook reflects Standard & Poor's expectation that the
fundraising environment will remain constrained, but that PTM will
continue to solicit and collect pledges and cash for the capital
campaign. Failure to make progress on the campaign would lead to
additional credit pressure and further lowering of the rating.
S&P would consider raising the rating if PTM makes significant
progress toward its campaign goals and increases the Museum fund
reserves and resources available to pay debt service well above
five years.
PLUG POWER: Files Copy of Presentation to Stockholders
------------------------------------------------------
Representatives of Plug Power Inc. delivered a presentation to the
Company's stockholders at the Company's 2013 annual meeting of
stockholders held on June 28. A copy of the presentation is
available for free at http://is.gd/hnC6w9
About Plug Power
Plug Power Inc. is a provider of alternative energy technology
focused on the design, development, commercialization and
manufacture of fuel cell systems for the industrial off-road
(forklift or material handling) market.
KPMG LLP, in Albany, New York, expressed substantial doubt about
Plug Power's ability to continue as a going concern, following
their audit of the Company's financial statements for the year
ended Dec. 31, 2012, citing the Company's recurring losses from
operations and substantial decline in working capital.
The Company's balance sheet at March 31, 2013, showed
$37.1 million in total assets, $29.4 million in total liabilities,
and stockholders' equity of $7.7 million.
PONCE DE LEON: July 3 Hearing to Confirm Amended Plan
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Puerto Rico will
convene a hearing on July 3, 2013, at 9:30 a.m. to consider
confirmation of Ponce De Leon 1043, Inc.'s Amended Plan of
Reorganization.
The Debtor first filed its Disclosure Statement and Chapter 11
Plan of Reorganization on April 13, 2012. The Court approved the
Disclosure Statement on June 25, 2012.
The amended plan was filed Jan. 25, 2013.
Secured creditor PRLP 2011 Holdings LLC, which has objected to the
confirmation of the Plan, submitted a proof of claim against the
Debtor for $14,496,907. According to the Debtor, the outstanding
obligation to PRLP has been reduced to approximately $10.1
million. The Debtor will treat this obligation to PRLP under two
Scenarios.
Under Scenario A, the preferred scenario by the Debtor, the Debtor
will retain the property and PRLP will retain the liens securing
its claims. On account of such claim PRLP will receive deferred
cash payments totaling the full amount of its claim, of a value as
of the effective date of the Plan estimated in $10.1 million
approx. within 36 months. The treatment will continue the sale of
the unsold units for a term of 36 months with a mutually
satisfactory budget for the use of the cash collateral and a
strong and well-planned marketing strategy and lease program to be
agreed upon with the secured creditor, before the confirmation
hearing.
Under Scenario B, the Debtor will surrender to PRLP property of
the estate equal in value or equivalent to the value of PRLP's
secured claim as of the confirmation date. This property will be
the remaining residential units at Metro Plaza Towers Condominium
project, the commercial spaces and parking spaces.
General unsecured creditors were listed in the the Debtor's
Schedules in the total amount of $3,386,263, including the amount
owed to QB Construction Inc. After review of the proofs of claims
filed to date, those listed by the Debtor, and the agreements with
several creditors, excluding QB Construction Inc., who has
accepted to be classified separately in a junior class, the
liability to unsecured creditors under this class, including
disputed, contingent and unliquidated claims is estimated in the
amount of $41,065. The Debtor will pay 100% of the allowed claims
in this class with interest at prime rate (3.25%) under the terms
of the Plan. In the event the Debtor pays PRLP under the terms of
Scenario A, the Debtor will be making monthly installment payments
to this Class of creditors for months 37 - 72 of the Debtor's Plan
of Reorganization. In the event the Debtor pays PRLP under the
terms provided by Scenario B its shareholders will make a capital
contribution to pay general unsecured creditors in full with
interest within one year from the effective date of the Plan.
Equity security and interest holders will not receive any dividend
or other payment under the Debtor's Plan. All current equity
holders of the Debtor, however, will retain their equity
interests.
The Debtor will generate revenue by selling all of the remaining
residential units and selling or leasing commercial spaces in the
Metro Plaza Towers Projected including the public parking spaces.
Additionally, the Debtor says it is in the process of trying to
obtain tax credits which, if obtained, would provide additional
revenue for the Debtor and enable it to accelerate payments to
creditors.
As reported in the Troubled Company Reporter on March 25, 2013,
PRLP objected to confirmation of the Plan, citing that the Plan
suffers from various deficiencies pursuant to Section 1129 of the
Bankruptcy Code. According to papers filed with the Court, the
Plan is not feasible due to, among other things, the fact that the
treatment provided to creditors in the Plan is inconsistent with
the most recent Appraisal Report prepared by Luis E. Vallejo of
Vallejo & Vallejo Real Estate Appraisers and Counselors.
A copy of the Amended Plan is available at:
http://bankrupt.com/misc/poncedeleon1403.doc177.pdf
About Ponce De Leon
San Juan, P.R.-based Ponce De Leon 1403, Inc., developed,
constructed, and operates the Metro Plaza Tower condominium and
commercial property project in Santurce, Puerto Rico. The Metro
Plaza Tower project consists of two 15-story towers atop a base
structure that serves as a parking garage, common area, and retail
space. Each tower houses 87 residential units. The base
structure provides approximately 567 parking spaces and has
approximately 14,000 square feet of commercial space available for
lease. The common areas of the project include a swimming pool, a
gym, gardens and a gazebo.
Ponce De Leon 1403 Inc. filed for Chapter 11 protection (Bank. D.
P.R. Case No. 11-07920) on Sept. 19, 2011. The Debtor estimated
both assets and debts of between US$10 million and US$50 million.
Carmen Conde Torres, Esq., at C. Conde & Assoc., in Old San Juan,
Puerto Rico, represents the Debtor as counsel.
POWER BALANCE: Conference in Class Suit Moved to October
--------------------------------------------------------
San Francisco, Calif. District Judge Edward M. Chen vacated a case
management conference set for June 27 in the lawsuit suit, C.F.C.,
minor, by and through CHRISTINE F., his parent and guardian, on
behalf of himself and all others similarly situated, Plaintiff, v.
POWER BALANCE LLC; a Delaware Limited Liability Company,
Defendants, Case No. 3:11-CV-00487-EMC (N.D. Cal.). The case
management conference date is reset to a date in October 2013.
A copy of the Court's June 25, 2013 ruling is available at
http://is.gd/j4gxLGfrom Leagle.com.
LEXINGTON LAW GROUP's Mark N. Todzo, Esq., and Howard Hirsch,
Esq., in San Francisco; and Christopher M. Burke, Esq., at SCOTT +
SCOTT LLP, in San Diego, argue for Plaintiff, C.F.C., a minor, by
and through, Christine F., his parent and guardian.
About Power Balance Technologies
Power Balance LLC filed for Chapter 11 (Bankr. C.D. Calif. Case
No. 11-25982) on Nov. 18, 2011. Judge Theodor Albert presides
over the case. Garrick A. Hollander, Esq., at Winthrop Couchot,
serves as the Debtor's counsel. In its petition, Power Balance
estimated $1 million to $10 million in assets and $10 million to
$50 million in debts. The petition was signed by Henry G.
Adamanym, Jr., chairman.
Power Balance -- http://www.powerbalance.com-- is the creator of
the original Power Balance Performance Technology(TM) silicone
wristband and the leader in the market for Performance Technology
sports accessories. The company is headquartered in Orange
County, CA and distributes its products in the US and
internationally in more than 40 countries.
POWER BALANCE: July 10 Hearing to Approve Plan Outline
------------------------------------------------------
Power Balance, LLC's Chapter 11 bankruptcy is currently proceeding
as Case No. 8:11-25982 and pending before the Honorable Theodore
Albert, United States Bankruptcy Judge. A hearing regarding the
Debtor's Disclosure Statement is set for July 10, 2013, and a
hearing regarding confirmation of the Debtor's Chapter 11 Plan of
Reorganization has not yet been scheduled.
About Power Balance Technologies
Power Balance LLC filed for Chapter 11 (Bankr. C.D. Calif. Case
No. 11-25982) on Nov. 18, 2011. Judge Theodor Albert presides
over the case. Garrick A. Hollander, Esq., at Winthrop Couchot,
serves as the Debtor's counsel. In its petition, Power Balance
estimated $1 million to $10 million in assets and $10 million to
$50 million in debts. The petition was signed by Henry G.
Adamanym, Jr., chairman.
Power Balance -- http://www.powerbalance.com-- is the creator of
the original Power Balance Performance Technology(TM) silicone
wristband and the leader in the market for Performance Technology
sports accessories. The company is headquartered in Orange
County, CA and distributes its products in the US and
internationally in more than 40 countries.
PRIVATE MEDIA GROUP: Incurs $485,000 Net Loss in First Quarter
--------------------------------------------------------------
Private Media Group, Inc., on June 28, 2013, filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q for the three months ended March 31, 2013. Concurrently with
the Form 10-Q filing, the Company also filed its 2012 annual
report and 2012 periodic reports.
As a result of the recent change of management prior to the end of
fiscal quarter ended March 31, 2012, and because new management
was unable to obtain or locate certain of the financial
information necessary to complete the preparation of the Company's
Form 10-Q for the quarter ended March 31, 2012, the Company was
unable to file its quarterly report and the succeeding periodic
reports within the prescribed time period.
The Group incurred a net loss of EUR379,000 (US$485,000) on
EUR1.49 million of net sales for the three months ended March 31,
2013, as compared with a net loss of EUR921,000 on EUR1.70 million
of net sales for the same period during the prior year.
As of March 31, 2013, the Company had US$9.06 million in total
assets, US$9.40 million in total liabilities, US$10.24 million in
EUR 10.00 Series B 6% Convertible Redeemable Preferred Stock, and
a US$10.58 million total shareholders' deficit.
The Group had a net loss of EUR2.31 million(US$3.04 million) on
EUR6.69 million of net sales for the year ended Dec. 31, 2012, as
compared with a net loss of EUR29.32 million on EUR7.92 million of
net sales for the year ended Dec. 31, 2011.
BDO Auditores, S.L., in Barcelona, Espana, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Group has suffered recurring losses from operations, and,
at Dec. 31, 2012, have a working capital deficit and a negative
equity position. These factors raise substantial doubt about its
ability to continue as a going concern.
Copies of the Reports are available for free at:
(a) 2012 10K http://is.gd/hPGEZY
(b) Q1 2012 http://is.gd/sguYwD
(c) Q2 2012 http://is.gd/C4KP8Q
(d) Q3 2012 http://is.gd/GCuNrN
(e) Q1 2013 http://is.gd/Vg7DBY
Located in Barcelona, Spain, Private Media Group, Inc., is an
international provider of branded adult media across a wide range
of digital platforms and physical formats. It conducts its
operations through various non-U.S. subsidiaries located in a
number of countries, including Cyprus, Sweden, Spain and
Gibraltar.
PUGET ENERGY: Moody's Affirms 'Ba1' Rating; Outlook Positive
------------------------------------------------------------
Moody's Investors Service affirmed the ratings for Puget Energy,
Inc. (PE: Ba1 Issuer Rating) and its regulated utility subsidiary
Puget Sound Energy, Inc. (PSE: Baa2 Issuer Rating) and revised the
rating outlooks for both companies to positive from stable.
Ratings Rationale:
"The revision in outlooks to positive acknowledges a steady
improvement in PE and PSE's financial profiles driven by the
growth of PSE's rate base" said Moody's Vice President Scott
Solomon. "Continued improvement in the companies financial
profiles would likely trigger one-notch ratings upgrades over the
next 12-18 months", added Solomon.
PE's key consolidated financial metrics of cash from operations
pre-changes in working capital (CFO pre-WC) to debt improved to
approximately 12% in 2012 from 10% in 2010 while interest coverage
improved to 2.8 times from 2.6 times.
PSE' financial metrics have followed a similar trend.
Specifically, the utility's CFO pre-WC to debt metric improved to
21% in 2012 from 16% in 2010 while interest coverage improved to
4.4 times from 3.6 times.
The change in rating outlook also reflects a recent credit
supportive regulatory outcome that is expected to reduce
regulatory lag and increase PSE's opportunity to earn its
authorized rate of return. PSE's earned return on equity in 2012
was 7.7%, a modest improvement from the 6.9% earned in 2011, but
below the 9.8% return allowed by the Washington Utilities and
Transportation Commission (WUTC).
In a June Order approved earlier this week, the WUTC approved a
modest increase in electric rates, granted PSE authority to
implement full decoupling of electric and natural gas rates and
provided for a series of predetermined annual delivery rate
increases implemented through fixed escalation factors. Per the
Order, PSE may not file its next general rate case before April
2015. PSE is permitted, however, to seek rate increases during
this timeframe through existing riders and trackers including
power-cost-only rate case filings.
The positive outlook considers PSE's capital expenditures, which
are expected to be reduced considerably from historical levels. As
a result, the utility is transitioning from being a net cash
borrower, where in the past construction expenditures exceeded
funds from operations, to being net cash positive. Forecasted
expenditures for the 2013-2015 period total $1.6 billion and
represent more of a baseline spend without any significant planned
new generation. Moody's anticipates that a higher level of
dividends will be paid given the expected decline in the utility's
capital spending programs.
A rating upgrade over the next 12 to 18 months could be triggered
by continued regulatory support and evidence of PE's ability to
achieve consolidated interest coverage and CFO pre-W/C to debt
metrics in excess of 3.0 times and 13%, respectively, on a
sustainable basis.
Greater than anticipated dividends to its private equity owners,
an inability to achieve key financial metrics or unexpected
regulatory setbacks or developments could cause us to revise the
rating outlooks for PE and PSE to stable.
PE is a holding company whose sole subsidiary is PSE, a
combination electric and natural gas utility. Both companies are
headquartered in Bellevue, Washington.
The principal methodology used in this rating was Regulated
Electric and Gas Utilities published in August 2009.
QUANTUM FUEL: Amends 6.1 Million Shares Resale Prospectus
---------------------------------------------------------
Quantum Fuel Systems Technologies Worldwide, Inc., has filed an
amendment no.1 to its Form S-1 registration statement relating to
the resale by Iroquois Master Fund Ltd, Hudson Bay Master Fund
Ltd., Cranshire Capital Master Fund, Ltd., et al., of up to
6,175,480 shares of the Company's common stock issuable upon the
exercise of warrants. Of this amount, 4,630,480 are issuable upon
exercise of "A" warrants that were sold by the Company in a
private placement that the Company completed on Oct. 27, 2006.
The Company is not selling any shares of common stock in this
offering and, therefore, will not receive any proceeds from this
offering.
The Company's common stock is quoted on The Nasdaq Capital Market
under the symbol "QTWW." The last reported sale price of the
Company's common stock on June 24, 2013, was $0.52 per share.
A copy of the amended prospectus is available for free at:
http://is.gd/Twuu3F
About Quantum Fuel
Lake Forest, Calif.-based Quantum Fuel Systems Technologies
Worldwide, Inc. (Nasdaq: QTWW) develops and produces advanced
vehicle propulsion systems, fuel storage technologies, and
alternative fuel vehicles. Quantum's portfolio of technologies
includes electronic and software controls, hybrid electric drive
systems, natural gas and hydrogen storage and metering systems and
other alternative fuel technologies and solutions that enable fuel
efficient, low emission, natural gas, hybrid, plug-in hybrid
electric and fuel cell vehicles.
Quantum Fuel disclosed a net loss attributable to stockholders of
$30.91 million in 2012 and a net loss attributable to common
stockholders of $38.49 million in 2011. The Company's balance
sheet at Dec. 31, 2012, showed $61.26 million in total assets,
$47.03 million in total liabilities and a $14.22 million in total
stockholders' equity.
Haskell & White LLP, in Irvine, 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 does not have sufficient existing sources of
liquidity to operate its business and service its debt obligations
for a period of at least twelve months. These conditions, along
with the Company's working capital deficit and recurring operating
losses, raise substantial doubt about the Company's ability to
continue as a going concern.
QUANTUM FUEL: Executives OK Base Salaries Cut
---------------------------------------------
Brian Olson, Quantum Fuel Systems Technologies Worldwide, Inc.'s
president and chief executive officer; Bradley J. Timon, the
Company's chief financial officer and treasurer; and Kenneth R.
Lombardo, the Company's vice president - legal, general counsel
and corporate secretary, each voluntarily agreed to revise the
terms of their employment. In connection therewith, each of
Messrs. Olson, Timon and Lombardo entered into new employment
agreements with the Company.
Concurrent with the execution of the Employment Agreements, the
employment agreements previously in effect for each of Messrs.
Olson, Timon and Lombardo were terminated.
The term of employment is three years with automatic one year
renewals unless either party provides the other with at least six
months prior written notice of nonrenewal of the Initial Term or
the then applicable Renewal Term. The term of employment can
generally be terminated by the Company at any time and for any
reason or by the employee with 30 days prior written notice.
Under the Former Employment Agreements, the term of employment was
indefinite.
Mr. Olson will receive an annual base salary of $400,000 which
represents a voluntary reduction of $50,000. Mr. Lombardo will
receive an annual base salary of $245,000 which represents a
voluntary reduction of $15,000. Mr. Timon will receive an annual
base salary of $250,000 which represents an increase from $192,400
to reflect his promotion in May 2012 to Chief Financial Officer.
Also on June 24, 2013, David M. Mazaika, the Company's executive
director of strategic development, agreed to voluntarily reduce
his annual base salary from $250,000 to $225,000.
A copy of the Form 8-K is available for free at:
http://is.gd/RtiLuE
About Quantum Fuel
Lake Forest, Calif.-based Quantum Fuel Systems Technologies
Worldwide, Inc. (Nasdaq: QTWW) develops and produces advanced
vehicle propulsion systems, fuel storage technologies, and
alternative fuel vehicles. Quantum's portfolio of technologies
includes electronic and software controls, hybrid electric drive
systems, natural gas and hydrogen storage and metering systems and
other alternative fuel technologies and solutions that enable fuel
efficient, low emission, natural gas, hybrid, plug-in hybrid
electric and fuel cell vehicles.
Quantum Fuel disclosed a net loss attributable to stockholders of
$30.91 million in 2012 and a net loss attributable to common
stockholders of $38.49 million in 2011. The Company's balance
sheet at Dec. 31, 2012, showed $61.26 million in total assets,
$47.03 million in total liabilities and a $14.22 million in total
stockholders' equity.
Haskell & White LLP, in Irvine, 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 does not have sufficient existing sources of
liquidity to operate its business and service its debt obligations
for a period of at least twelve months. These conditions, along
with the Company's working capital deficit and recurring operating
losses, raise substantial doubt about the Company's ability to
continue as a going concern.
QUIGLEY CO: Pfizer Unit to Emerge From Asbestos Bankruptcy
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Quigley Company Inc., a non-operating subsidiary of
drug maker Pfizer Inc., is on the verge of emerging from a Chapter
11 reorganization begun almost nine years ago. The bankruptcy
plan will shed both companies' liability on asbestos claims.
According to the report, the bankruptcy judge in Manhattan held a
hearing June 26 where he said he will sign a confirmation order
approving Quigley's plan. In return for a $964 million
contribution, Pfizer will receive releases for most claims even
though Pfizer itself isn't in bankruptcy.
The report recounts that the bankruptcy judge refused to approve a
prior version the plan, saying Pfizer's contribution at the time
was insufficient. In addition to increasing its cash
contribution, Pfizer is waiving a $95 million secured claim, a $19
million claim for financing the Chapter 11 case, and a $33 million
unsecured claim.
About Quigley Co.
Quigley Co. was acquired by Pfizer in 1968 and sold small amounts
of products containing asbestos until the early 1970s. In
September 2004, Pfizer and Quigley took steps that were intended
to resolve all pending and future claims against the Company and
Quigley in which the claimants allege personal injury from
exposure to Quigley products containing asbestos, silica or mixed
dust. Quigley filed for bankruptcy in 2004 and has a Chapter 11
plan and a settlement with Chrysler.
Quigley filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 04-15739) on Sept. 3, 2004, to implement a
proposed global resolution of all pending and future asbestos-
related personal injury liabilities.
Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte
Roth & Zabel LLP, represent the Debtor in its restructuring
efforts. Elihu Inselbuch Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it disclosed
$155,187,000 in total assets and $141,933,000 in total debts.
In April 2011, the bankruptcy judge approved a plan-support
agreement with Pfizer and an ad hoc committee representing 30,000
asbestos claimants.
A May 20, 2011 opinion by District Judge Richard Holwell concluded
that Pfizer was directly liable for some asbestos claims arising
from products sold by its now non-operating subsidiary Quigley.
The district court ruling was upheld in the appeals court.
READER'S DIGEST: Bankruptcy Court Confirms Plan of Reorganization
-----------------------------------------------------------------
The Reader's Digest Association, Inc. on June 28 disclosed that
the United States Bankruptcy Court for the Southern District of
New York has confirmed its Plan of Reorganization and expects to
emerge from bankruptcy at the end of July.
"The Court's confirmation of our restructuring plan is an
important step for our Company and sets the stage for our future
as a much more focused Company," said Robert E. Guth, CEO of
Reader's Digest Association. "We are taking decisive actions that
are placing our business on a stronger path for the long-term and
making us a more relevant and more profitable Company. We have
used the restructuring period to reset and refresh our Company and
have reconsidered nearly every aspect of our business. We look
forward to laying out our go-forward strategy in the weeks ahead."
Upon emergence, the Company will have reduced its debt by over 80%
from approximately $500 million to approximately $100 million and
have a stronger cash position. The Company will have converted
approximately $465 million of secured notes to equity. In
addition, it will focus solely on its most profitable core
businesses, having shed non-core and less profitable ones -- an
effort that began in earnest several quarters ago. The Company
has also made great progress in re-aligning its corporate
infrastructure with its more narrowly defined mission.
"The speed with which our restructuring plan proceeded reflects
the unanimity of purpose among our stakeholders about our path
forward, and we are very grateful for their support," Mr. Guth
said. "In addition, I want to extend my sincerest thanks and
appreciation to our board and to our employees for their enormous
dedication and commitment over the past several months, and we
thank our loyal customers who are the reasons why we continue to
strive so hard for success. We look forward to working with our
new owners and are excited about our future."
Bondholders
Drew Singer of BankruptcyLaw360 reported that the publication
whose slogan is "Life well shared" now finds itself shared among
bondholders as part of a bankruptcy exit plan, which a New York
bankruptcy judge approved, a Reader's Digest spokesman confirmed.
According to the report, the Reader's Digest Association Inc. has
emerged from its second Chapter 11 bankruptcy in four years, this
time in the hands of its bondholders, who forgave $231 in debt in
exchange for control of the highest-circulated paid magazine in
the world, spokesman David Press said.
About Reader's Digest
Reader's Digest is a global media and direct marketing company
that educates, entertains and connects consumers around the world
with products and services from trusted brands. For more than 90
years, the flagship brand and the world's most read magazine,
Reader's Digest, has simplified and enriched consumers' lives by
discovering and expertly selecting the most interesting ideas,
stories, experiences and products in health, home, family,
food, finance and humor.
RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No.
13-22233) filed for Chapter 11 protection on Feb. 17, 2013,
with an agreement with major stakeholders for a pre-negotiated
chapter 11 restructuring. Under the plan, the Debtor will issue
the new stock to holders of senior secured notes.
RDA Holding Co. listed total assets of $1,118,400,000 and total
liabilities of $1,184,500,000 as of the Petition Date.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Evercore Group LLC is the investment banker. Epiq
Bankruptcy Solutions LLC is the claims and notice agent.
Reader's Digest, together with its 47 affiliates, first sought
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24,
2009 and exited bankruptcy Feb. 19, 2010.
Under the Plan, holders of allowed general unsecured claims in
such sub-class will receive their pro rata share of the GUC
distribution; holders of allowed general unsecured claims of
Reader's Digest will also receive their pro rata share of the RDA
GUC distribution and the senior noteholder deficiency claims in
such sub-class will be deemed waived solely for purposes of
participating in the GUC distribution and the RDA GUC
distribution.
The Official Committee of Unsecured Creditors is represented by
Otterbourg, Steindler, Houston & Rosen, P.C. The Committee tapped
Alvarez & Marsal North America, LLC, as financial advisors.
RENO-SPARKS INDIAN: Fitch Upgrades Issuer Default Rating to 'BB+'
-----------------------------------------------------------------
Fitch Ratings takes the following rating action on Reno-Sparks
Indian Colony, NV (RSIC):
-- Long-term Issuer Default Rating (IDR) upgraded to 'BB+'
from 'BB'.
The Rating Outlook has been revised to Stable from Positive.
KEY RATING DRIVERS
CONTINUED DIVERSIFICATION: The upgrade reflects important strides
in diversifying away from declining tobacco related sales tax
revenues. Tobacco-related sales now account for less than half of
the Colony's tax base. Top taxpayers include Wal-Mart and several
high-end car dealerships.
SURPLUS CREATES FINANCIAL FLEXIBILITY: The upgrade further
reflects improved financial flexibility evidenced by solid
reserves driven by four years of general fund surpluses.
ECONOMICALLY SENSITIVE REVENUES REMAIN: RSIC revenues remain
concentrated and heavily dependent on economically sensitive sales
and excise taxes. Although the Reno economy shows signs of
improvement, it remains vulnerable to economic downturns due to
its reliance on the leisure and tourism industries.
ELEVATED BUT MANAGEABLE DEBT: A long-expected financing scheduled
for July 2013 will markedly increase the Colony's debt level.
However, pro forma carrying costs continue to represent a
manageable burden on the budget.
RATING SENSITIVITIES
FINANCIAL FLEXIBILITY: The rating is sensitive to shifts in the
Colony's financial flexibility. Maintenance of strong reserves and
liquidity are important mitigants to the Colony's significant
reliance on economically sensitive revenues and revenue
concentration in a few major taxpayers.
CREDIT PROFILE
The RSIC is a federally recognized tribe with a reservation
consisting of noncontiguous trust land totaling over 2,000 acres
in and around downtown Reno, Nevada, within Washoe County (the
county). The tribe has approximately 1,064 enrolled members and
employs approximately 300 people, 45% of which are tribal members.
The tribe is governed by an eight-member tribal council and a
tribal chairman, all elected to four year staggered terms.
DEPENDENCE ON SALES TAX REVENUES
The tribe's authority to levy and collect sales and excise taxes
on businesses operating on tribal trust land is generated from an
agreement with the state signed in 1991. The agreement stipulates
that the tribe must charge a rate at least equivalent to the
state's sales and excise tax rate on retail sales activity on
tribal trust land.
The Colony maintains an important pricing advantage over its non-
tribal competitors for the tobacco products sold at its five smoke
shops, because the Colony does not pay taxes to the state on
tobacco products purchased for sale. There are no other tribally
owned smoke shops in the RSIC service area.
DIVERSIFYING SALES TAX BASE AWAY FROM TOBACCO
Fiscal 2012 marked the second year in which the Colony's non-
tobacco business contributed the majority of general fund
revenues. Fitch notes that the Colony's credit profile will always
include a dependence on economically sensitive revenue streams and
concentration among a few top taxpayers but diversification within
this revenue source is a credit positive.
Sales tax revenues from the five tribal-owned smoke shops have
been the Colony's largest source of revenues historically but fell
significantly as a share of general fund revenue due to declining
consumption for tobacco products and the Colony's execution of a
long-term diversification plan. The preliminary fiscal 2012
results show tobacco-related sales and excise taxes totaling under
50% of general fund revenues for the second consecutive year, down
from 56% in fiscal 2010 (audited) but reduced dramatically from
93% in fiscal 1999.
Tobacco revenues started declining in fiscal 2006 between 1-3%
with more severe declines of in fiscal 2011 and 2012. Management
attributes the sharper drop largely to higher gas prices as Colony
smoke shops are focused on bulk sales with many customers from
outside the area.
The Colony remains focused on its diversification efforts to
counteract the long-standing trend of declining tobacco revenues.
Following some delays, Wal-Mart (rated 'AA', Stable Outlook by
Fitch) opened on Colony land in October 2010 and is now the
largest tax-payer contributing 33% of estimated fiscal 2012 sales
tax receipts. The Colony's majority of remaining non-tobacco sales
taxes is generated from high-end car dealerships with Mercedes and
Acura rounding out the top three payers.
Tobacco and non-tobacco sales tax revenues in fiscal 2012 are
estimated at 44% and 56%, respectively, of $11.9 million in total
sales tax receipts based on preliminary audited financial results.
The Colony projects continuation of favorable trends in fiscal
2013 with a further addition to unrestricted general fund
balances.
SALES TAX SHARING AGREEMENT SUPPORTS FUTURE DIVERSIFICATION
The Colony will obtain six acres of state land adjacent to its
Wal-Mart site which will be used for future economic development,
pursuant to a revenue sharing agreement with the state. In
exchange, the Colony will finance $8 million to construct a state
restitution center and satisfy its total revenue sharing
obligation to the state.
The revenue sharing agreement also includes the Colony sharing
revenue with the Washoe County school district. The Colony's
annual revenue sharing obligations is limited to no more than 2.5%
of annual taxable sales generated from Wal-Mart. The Colony
reports that loan payments on the $8 million have a first
priority, followed by payment to the schools, with the excess
flowing to the Colony.
Current Colony projections show construction starting in 2014 with
completion expected in the first quarter of 2015. With 2% annual
growth in Wal-Mart sales tax receipts, the Colony projects Wal-
Mart revenues to the Colony after revenue sharing will drop in
fiscal 2015. However, the Colony is projecting strong growth in
other non-tobacco sales tax receipts based on economic development
projects underway, the largest of which are a new Infiniti dealer
in 2013 and a CarMax Superstore in 2014. Fitch views the Colony's
base line sales tax growth assumption of 2% as reasonable given
apparent signs of recovery in the region.
GENERAL FUND RESERVE GROWTH
RSIC completed fiscal 2011 with a $2.5 million unrestricted
general fund balance, reversing a trend of negative fund balance
positions that reflected the Colony's initial support for a new
health clinic (opened in 2008) and recessionary conditions of the
region. The preliminary fiscal 2012 audit adds $3.7 million to
unrestricted reserves, representing a solid 61% of expenditures
and transfers out. Fiscal 2012 results benefited from broad-based
budgetary savings.
RSIC's general fund service spending is focused on tribal court
and administration, public works and education. The Colony has
proven consistently conservative on budgeting expenditures but
with a revenue base concentrated in sales taxes, remain vulnerable
to budget shocks. The Colony's health clinic operations maintain
profitability. Officials report that the clinic is expected to
fully fund fiscal 2013 debt service on the series 2006 debt issued
to fund its expansion.
GROWING DEBT PROFILE; MANAGEABLE CARRYING COSTS
The RSIC has outstanding debt of $13.3 million, series 2006 fixed
rated bonds rated 'AA-' by Fitch based on a direct-pay letter of
credit (LOC) provided by U.S. Bank, National Association. The
RSIC's debt profile includes $6.8 million in outstanding bank
loans in addition to the series 2006 bonds.
Total debt service represents a manageable 7.8% of the Colony's
fiscal 2012 total governmental spending, net of capital. The
aforementioned $8 million planned loan for the restitution center
will increase the Colony's debt by 40%. While representing a
significant jump in fixed costs, Fitch notes that the increased
debt service payments will be taken off the top of sales tax
revenues generated by Wal-Mart with a manageable net effect on the
general fund budget.
The LOC supporting the series 2006 bonds was auto-renewed again
and expires in June 28, 2014. If the LOC is terminated without
substitution, a mandatory tender is triggered. At that point the
bonds become bank bonds and the terms of the indenture specify
that the RSIC must pay the bonds in full within 36 hours or pay a
rate to the bank of 5% above prime until the bonds are paid in
full. Ongoing payments required under a bank bond scenario would
add significant additional stress to the RSIC's financial profile.
RESIDENTIAL CAPITAL: $2.1BB Ally Plan Support Agreement Okayed
--------------------------------------------------------------
Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern
District of New York approved the plan support agreement among (a)
Residential Capital, LLC, and its debtor affiliates, (b) the
Debtors' indirect parent, Ally Financial Inc., (c) the Official
Committee of Unsecured Creditors of Residential Capital, LLC, and
(d) certain Consenting Claimants.
Under the PSA, Ally will contribute $2.1 billion to fund the plan
the Debtors anticipate to file on July 3. Ally's contribution is
composed of $1.950 billion in cash on the effective date of the
plan and the first $150 million it receives for any Directors and
Officers or Errors and Omissions claims it pursues against its
insurance carriers. The plan will also be funded with net
proceeds from the Debtors' asset sales and the assets remaining in
the Debtors' estate. In exchange for its contribution, Ally will
be granted releases by the Debtors and certain third parties.
The PSA also requires the Debtors to comply with the following
milestones:
July 3, 2013 -- Filing of the Plan and Disclosure Statement
Aug. 19, 2013 -- Approval of a settlement among the Debtors,
Financial Guaranty Insurance Corporation and
certain of the RMBS Trustees, by the FGIC
Rehabilitation Court
Aug. 30, 2013 -- Approval of adequacy of the Disclosure
Statement
Dec. 15, 2013 -- Effectiveness of the Plan not later than 30
days following the entry of an order
confirming the Plan
According to Judge Peck, the real impact of the PSA, after nearly
one year with little progress in this large and complicated case,
is that the case will move forward towards possible resolution.
"Make no mistake about it, many difficult unresolved issues remain
to be settled or adjudicated; some of those issues could prevent a
plan on the proposed terms from being confirmed," Judge Glenn
stated in his memorandum opinion approving the PSA. "Judge Peck's
appointment as Mediator remains in place, and, indeed, additional
mediation sessions have been conducted since this Motion was filed
and more are scheduled. The parties need to continue working
diligently to reach consensual resolution of as many issues as
possible. That is how the chapter 11 process should work. The
PSA is an important step in the process; it is far from the last
step."
Judge Glenn noted that the PSA does obligate the Supporting
Parties to vote in favor of the plan, but there are numerous
termination events that allow a party to withdraw from this
obligation under certain circumstances. In addition, none of the
Parties have agreed to vote in favor of the Plan unless and until
the Court approves the disclosure statement and their votes have
been properly solicited pursuant to Section 1125 of the Bankruptcy
Code. As such, the Agreement does not constitute an improper
"solicitation" under Section 1125, Judge Glenn held.
Objections to the PSA Overruled
The PSA met numerous objections, with most objecting parties
complaining about the third-party releases and injunction embodied
in the PSA and insufficient funding for certain kinds of claims.
Among those who objected the PSA and those who reserved their
rights were:
* plaintiffs in the case captioned Rothstein, et al. v.
Mortgage, LLC, et al., No. 12-CV-3412-AJN (S.D.N.Y.),
represented by Mark A. Strauss, Esq., and J. Brandon Walker,
Esq., at Kirby McInerney LLP, in New York; and Mary E.
Augustine, Esq., and Garvan F. McDaniel, Esq., at Bifferato
Gentilotti, in Wilmington, Delaware;
* Citigroup Global Markets Inc., Deutsche Bank Securities
Inc., Goldman, Sachs & Co., and UBS Securities, LLC, as
underwriters in connection with certain Residential Accredit
Loans, Inc. Mortgage Asset-Backed Pass-Through Certificates,
represented by William G. McGuinness, Esq., Israel David,
Esq., and Gary L. Kaplan, Esq., at Fried, Frank, Harris,
Shriver & Jacobson LLP, in New York, for the RALI
Certificate Underwriters;
* Amherst Advisory & Management, LLC, acting in its capacity
as investment manager for holders of trust certificates
issued by RALI Series 2006-QO7 Trust, represented by David
M. Feldman, Esq., and Joshua P. Weisser, Esq., at Gibson,
Dunn & Crutcher LLP, in New York;
* Ambac Assurance Corporation and the Segregated Account of
Ambac Assurance Corporation, a monoline insurer, represented
by David W. Dykhouse, Esq., and Brian P. Guiney, Esq., at
Patterson Belknap Webb & Tyler LLP, in New York;
* Certain Underwriting Members at Lloyd's, London and Those
Companies Whose Names are Severally Subscribed to Policy No.
FD0001142 and Those Certain Underwriting Members at Lloyd's,
London and Those Companies Whose Names are Severally
Subscribed to Policy No. FD0001144, Twin City Fire Insurance
Company, Continental Casualty Company, Clarendon National
Insurance Company, Swiss Re International S.E., St. Paul
Mercury Insurance Company, and Axcelera Specialty Risk as
managing general agent of North American Specialty Insurance
Company, (collectively known as " Certain Insurers Under
General Motors Combined Specialty Insurance Program
12/15/00 - 12/15/03"), represented by Susan N.K. Gummow,
Esq. -- sgummow@fgppr.com -- and John Eggum, Esq. --
jeggum@fgppr.com -- at Foran Glennon Palandech Ponzi &
Rudloff PC, in Chicago, Illinois; and Matthew Fernandez
Konigsberg, Esq. -- Email: mkonigsberg@fgppr.com -- at Foran
Glennon Palandech Ponzi & Rudloff PC, in New York;
* Ad Hoc Group of Junior Secured Noteholders represented by J.
Christopher Shore, Esq., and Harrison L. Denman, Esq., at
White & Case LLP, in New York, and Gerard Uzzi, Esq., at
Milbank, Tweed, Hadley & McCloy LLP, in New York;
* Credit Suisse Securities (USA) LLC f/k/a Credit Suisse First
Boston LLC, represented by Richard Levin, Esq., Richard W.
Clary, Esq., Michael T. Reynolds, Esq., and Lauren A.
Moskowitz, Esq., at Cravath, Swaine & Moore LLP, in New
York;
* National Credit Union Administration Board as Liquidating
Agent for Western Corp., Federal Credit Union, and U.S.
Central Federal Credit Union, represented by Laura E. Neish,
Esq., at Zuckerman Spaeder LLP, in New York, and Nelson C.
Cohen, Esq., and Graeme Bush, Esq., at Zuckerman Spaeder
LLP, in Washington, D.C.;
* Monarch Alternative Capital LP and Stonehill Capital
Management LLC, in their capacity as investment advisors to
certain funds, CQS ABS Master Fund Limited and CQS ABS Alpha
Master Fund Limited, represented by Marc Abrams, Esq.,
Joseph T. Baio, Esq., Mary Eaton, Esq., and Paul Shalhoub,
Esq., at Willkie Farr & Gallagher LLP, in New York;
* Assured Guaranty Municipal Corp. f/k/a Financial Security
Assurance, represented by Irena M. Goldstein, Esq., and
Jeffrey Chubak, Esq., at Proskauer Rose LLP, in New York;
* Federal Home Loan Mortgage Corporation, represented by Peter
S. Goodman, Esq. -- pgoodman@mckoolsmith.com -- and Michael
R. Carney, Esq. -- mcarney@mckoolsmith.com -- at McKool
Smith, P.C., in New York,
* Syncora Guarantee Inc., represented by Paul R. DeFilippo,
Esq., and Randall R. Rainer, Esq., Wollmuth Maher & Deutsch
LLP, in New York;
* Tracy Hope Davis, U.S. Trustee for Region 2, represented by
Brian S. Masumoto, Esq., and Michael T. Driscoll, Esq.,
Trial Attorneys, in New York;
* Pension Benefit Guaranty Corporation, represented by Israel
Goldowitz, Esq., Chief Counsel, Charles L. Finke, Esq.,
Deputy Chief Counsel, and Andrea M. Wong, Esq., Assistant
Chief Counsel, and Vicente Matias Murrell, Esq. --
murrell.vicente@pbgc.gov -- Attorney, in Washington, D.C.;
* Huntington Bancshares Inc., represented by Jay W.
Eisenhofer, Esq., Geoffrey C. Jarvis, Esq., Matthew P.
Morris, Esq., at Grant & Eisenhofer P.A., in New York;
* Federal Home Loan Bank of Chicago, Federal Home Loan Bank of
Boston, and Federal Home Loan Bank of Indianapolis,
represented by Derek W. Loeser, Esq., and Amy Williams
Derry, Esq., at Keller Rohrback L.L.P., in Seattle,
Washington, and Gary A. Gotto, Esq., at Keller Rohrback,
P.L.C., in Phoenix, Arizona;
* United States of America, represented by Preet Bharara,
Esq., United States Attorney for the Southern District of
New York, and Joseph N. Cordaro, Esq. --
joseph.cordaro@usdoj.gov -- Assistant United States
Attorney, in New York;
* Frank Reed, a pro se creditor;
* Wendy Alison, Nora, a pro se creditor;
* UMB Bank, N.A., represented by Daniel H. Golden, Esq., David
M. Zensky, Esq., Philip C. Dublin, Esq., and Rachel Ehrlich
Albanese, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York; and
* Berkshire Hathaway Inc., represented by Thomas B. Walpe,
Esq., Seth Goldman, Esq., and Daniel J. Harris, Esq., at
Munger, Tolles & Olson LLP, in Los Angeles, California.
Prior to the approval of the PSA, HSBC Bank USA, National
Association, in its capacity as Trustee for certain RMBS trusts,
notified the Court of these trusts' withdrawal of support for the
PSA:
-- Nomura Asset Acceptance Corporation, Alternative Loan
Trust, Series 2005-S4
-- Nomura Asset Acceptance Corporation, Alternative Loan
Trust, Series 2006-S2
-- Nomura Asset Acceptance Corporation, Alternative Loan
Trust, Series 2006-S3
-- Nomura Asset Acceptance Corporation, Alternative Loan
Trust, Series 2006-54
-- SunTrust Acquisition Closed-End Seconds Trust, Series
2007-1
U.S. Bank National Association, in its capacity as trustee, also
notified the Court of Greenpoint Mortgage Funding Trust 2006-HE1's
withdrawal of support for the PSA.
Responding to the objections, the Debtors, Ally, the Creditors'
Committee, trustees for certain residential mortgage-backed
securities trusts, and certain investors led by AIG Asset
Management (U.S.), LLC and affiliates, maintained that the
agreement embodied by the PSA was a sound exercise of business
judgment for the constituencies to avoid years of costly, time-
consuming litigation -- with no assurance of a successful outcome
for any constituent.
Many of the Objecting Parties argued that the PSA should be under
a heightened scrutiny -- rather than a business judgment --
standard. Ally believed that this argument is unsupported
pointing out that the Southern District of New York is replete
with courts using a business judgment standard to evaluate a
debtors' request to enter into a plan support agreement. There is
no authority for imposing a heightened scrutiny standard for a 21-
party agreement reached during court-supervised mediation during a
Chapter 11 case, Ally said.
The RMBS Trustees pointed out that most of the objections raised
by the Objecting Parties are issues that went beyond the PSA and
are more properly reserved to be heard in the context of
confirmation of the Plan.
To resolve NCUAB's objection, this language "The discretionary
rights granted in paragraph 6 of the Treatment of Securities
Claims Section of the Supplemental Term Sheet are hereby
approved." was added to paragraph 6 of the Private Securities
Claims Section of the Supplemental Term Sheet.
The PSA gained support from the steering committee group of RMBS
holders, represented by Kathy D. Patrick, Esq., and Robert J.
Madden, Esq., at Gibbs & Bruns LLP, in Houston, Texas, and Keith
H. Wofford, Esq., and D. Ross Martin, Esq., at Ropes & Gray LLP,
in New York.
The proponents of the PSA filed revised orders prior to the
hearing on the PSA to resolve certain objections to the PSA. Full-
text copies of the revised orders are available for free at:
http://bankrupt.com/misc/RevisedPSAORD0619.pdf
http://bankrupt.com/misc/RevisedPSAORD0623.pdf
In overruling the objections that were not consensually resolved,
Judge Glenn stated, "Without the PSA this case would return to
square one. The PSA and attached term sheets, if they ultimately
result in a confirmed plan, embody numerous settlements and
resolutions of extremely complicated legal and factual disputes
that must be resolved to achieve a confirmable plan in this case.
But to be clear, approval of the PSA does not assure that a plan
embodying its terms will be confirmed. Approval of the PSA does
not bind the objecting parties or the Court from challenging (in
the case of the objectors) or rejecting (in the case of the Court)
a plan substantially on the terms set forth in the PSA. Some of
the objections raise difficult issues, but, unless they are
consensually resolved, those are issues for another day. The
standards applicable to approval of the PSA are not the standards
applicable to approval of a disclosure statement or confirmation
of a plan. Most of the objections that have been made are
confirmation objections not properly raised or considered at this
time."
He added, "Many of the objections (again, unless consensually
resolved) may be raised again in subsequent proceedings in this
case. To the extent properly applicable to the issues considered
by the Court in subsequent proceedings, the Court will rule on
them in due course."
Approval Order Interlocutory
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that ResCap shouldn't worry if a disgruntled creditor
files an appeal from approval given by the bankruptcy judge on
June 26 to a so-called plan support agreement outlining how
ResCap's non-bankrupt parent Ally will help fund a reorganization
plan by paying a $2.1 billion settlement.
According to the report, Judge Glenn filed a 46-page opinion June
27 giving more reasons why he formally approved the support
agreement after a hearing the day before. The report notes that
several times in the opinion, Judge Glenn said approval of the
agreement was an "interlocutory order." Those two magic words are
legal jargon meaning that a creditor unhappy with the support
agreement doesn't yet have a right to appeal. In federal courts,
interlocutory orders are interim orders made during the course of
a dispute that don't resolve the entire matter. Parties to
disputes in federal court are entitled to appeal only from final
orders, and Glenn was saying that approval of the support
agreement isn't a final appealable order.
According to Mr. Rochelle, the second significant feature of Judge
Glenn's opinion deals with the standard by which he decided to
approve the support agreement. On a topic that can arise again
when Glenn is faced with opposition to approval of the forthcoming
reorganization plan, Judge Glenn ruled that the settlement wasn't
an arrangement negotiated between related parties ResCap and Ally
which might require using the so-called heightened scrutiny test.
The report relates that instead, Judge Glenn said that he was only
required to employ the lower standard of review called the
business judgment rule. He concluded that the support agreement
was an exercise of ResCap's "sound business judgment" and could be
approved on that basis. Judge Glenn didn't see himself required
to use the heightened scrutiny standard because the settlement was
hashed out in mediation supervised by another judge where the
ResCap team was headed by a chief restructuring offer "who is an
un conflicted fiduciary." Much of the opinion is given over to a
detailed summary of every objection. Should anyone try to appeal,
Judge Glenn's discussion of the objections shows approval of the
agreement was no rubber stamp.
The report says that Judge Glenn ended the opinion, as he began,
by saying that no objecting creditor is bound by the support
agreement. The judge said some of the objections "raise difficult
issues" that must be addressed on approval of disclosure
materials, or "more likely, at the time of confirmation" where he
will be asked to approve the Chapter 11 plan. Judge Glenn
emphasized how he didn't approve the settlement with Ally. He
only allowed the parties to move ahead with a reorganization plan
whose approval would sanction the Ally settlement. At the same
time Glenn approved the support agreement on June 26, he released
the almost 1,900-page examiner's report. Although it's
susceptible to varying interpretations, the report could be used
to support an argument that Ally's payment of $2.1 billion is a
reasonable settlement.
The report shares that examiner Arthur Gonzalez, a retired
bankruptcy judge, concluded that ResCap has about $3.1 billion in
claims against Ally that are "likely to prevail" or "more likely
than not to prevail." To someone supporting the settlement, $2.1
billion is arguably close enough to $3.1 billion to fall within
the range of reasonableness and thus justify approval. On the
other hand, objectors can take issue with the examiner's
conclusions and contend that claims against Ally are more
valuable. The support agreement requires ResCap to file a
definitive reorganization plan and disclosure materials by July 3,
with the plan implemented by Dec. 15.
A full-text copy of Judge Glenn's Memorandum Opinion dated
June 27, 2013, is available for free at:
http://bankrupt.com/misc/RESCAPpsaorder0627.pdf
Ally's Statement on PSA Approval
"Ally is highly encouraged by this pivotal court approval, which
enables all parties involved to move forward to the final stages
of ResCap's Chapter 11 cases and resolve the associated mortgage-
related issues. Significantly, this agreement represents a
consensual, global settlement that was reached through the court's
mediation process overseen by the court's appointed mediator, the
Honorable James Peck, and included 18 groups of ResCap's most
significant creditors, as well as the fiduciaries for the ResCap
Chapter 11 estates and ResCap's unsecured creditors. Among
others, these parties include the official unsecured creditors'
committee, residential mortgage-backed securities trustees and
investors, monoline insurers and substantial senior unsecured
noteholders," Ally said in a press release.
"Consistent with the terms of the PSA, on June 13, 2013, ResCap
paid Ally approximately $1.13 billion to satisfy Ally's
substantial claims against ResCap on account of its secured credit
facilities provided to ResCap. As previously stated and subject
to court approval of the Plan, Ally has agreed to contribute $1.95
billion in cash to the ResCap estate, as well as the first $150
million from insurance proceeds Ally is pursuing related to
insurable losses, in exchange for broad releases under the plan
from potential mortgage-related claims against Ally related to
ResCap's businesses. Ally will make the payment to ResCap on the
effective date of the Plan, which is expected to occur in the
fourth quarter of this year," Ally continued.
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.
ResCap sold most of the businesses for a combined $4.5 billion.
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: Chapter 11 Examiner's Report Unsealed
----------------------------------------------------------
In line with the approval of the plan support agreement entered
into by Residential Capital LLC and its affiliated debtors with
their major stakeholders, Judge Martin Glenn ordered that the
report filed by Arthur J. Gonzalez, the Examiner appointed in the
Chapter 11 cases, be unsealed.
The report, which was filed on May 13, 2013, was sealed on the
condition that it would remain sealed until May 23 if the Debtors
have not filed, by that time, a motion seeking approval of a plan
support agreement, or until July 3 if the Debtors have filed a
motion seeking approval of a PSA. The Debtors were able to file a
motion seeking approval of a PSA by May 23.
Berkshire Hathaway, Inc., one of the major creditors of the
Debtors, previously asked the Court to unseal the Examiner's
Report. The Debtors, in response to the request, pointed out that
the temporary sealing of the Examiner's Report was a condition to
the global accord embodied in the PSA. The Debtors also pointed
out that the Examiner Report will also be unsealed if the PSA is
approved or not approved.
The Official Committee of Unsecured Creditors supported the
unsealing of the Examiner's Report although it requested that the
Examiner Report remain temporarily under seal on the terms of the
existing temporary sealing order. According to the Committee,
unsealing of the Report in advance of approval of the PSA Motion
would constitute a termination event under the PSA, allowing any
of the settling parties to walk away from the deal.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported that, according to the Examiner's Report, where Ally will
pay $2.1 billion for a release of claims by ResCap and its
creditors, there were about $3.1 billion in claims against Ally
where ResCap was "likely to prevail" or "more likely than not to
prevail." The Examiner also said that there were another $3.5
billion in claims where, although a "close question," ResCap and
its creditors were "more likely than not to fail."
The Examiner Report noted that ResCap didn't become insolvent
until December 2007 and that it had "unreasonably small capital"
after August 2007. Mr. Gonzalez, Mr. Rochelle pointed out, made
several conclusions in Ally's favor. The Examiner believes ResCap
and Ally should not be treated as one company. If they were
functionally one company, Ally would become liable for ResCap's
debt, the Examiner added. The Examiner also doesn't believe that
debt owing to Ally by ResCap should be recharacterized as equity.
With respect to the now-abandoned settlement where Ally would have
paid $750 million for a release of claims by ResCap and its
creditors, the Examiner said it was "unlikely" the court would
have approved the settlement, the Bloomberg report related.
Without commenting directly on whether the new $2.1 billion
settlement is adequate, Mr. Gonzalez recommended that the "best
course" was for Ally to negotiate a Chapter 11 plan contribution
with "very broad creditor support," Mr. Rochelle said.
The $1.38 billion in third-lien 9.625 percent secured notes due in
2015 last traded on June 24 for 111.75 cents on the dollar, the
Bloomberg report said, citing Trace, the bond-price reporting
system of the Financial Industry Regulatory Authority.
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.
ResCap sold most of the businesses for a combined $4.5 billion.
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: Noteholders Object to FGIC Settlement
----------------------------------------------------------
The Ad Hoc Group of Junior Secured Noteholders object to approval
of the settlement agreement among Residential Capital, Financial
Guaranty Insurance Company, the FGIC Trustees, and the
Institutional Investors and allowing FGIC's claims in the minimum
aggregate amount of not less than $596.5 million.
As reported in the June 19, 2013 edition of the TCR, the deal
slashes FGIC's more than $6 billion in claims and involves 47
separate securitizations with securities insured by FGIC. The
settlement provides for broad releases of claims asserted by both
FGIC and the FGIC Trustees in connection with the FGIC Insured
Trusts.
The Ad Hoc Group complains that, in many respects, the FGIC Motion
is a fitting example of just what is wrong with the Debtors' ends-
oriented approach in their Chapter 11 Cases and, more
particularly, with their proposed claims allowances in connection
with the Plan Support Agreement.
"The settlement with FGIC is best described as a lopsided claims
collar favoring the third-party claimant," the Ad Hoc Group
argues. To the extent that the plan contemplated in the PSA is
not consummated, the Debtors have apparently conceded that FGIC
can assert general unsecured claims against Residential Funding
Company, LLC, and GMAC Mortgage, LLC, at a guaranteed floor of
approximately 32% of the total claims filed by FGIC against those
Debtors and can assert, subject to defense by the Debtors, up to
an additional 65% of the total claims filed by FGIC against RFC,
GMACM and Residential Capital, LLC. The FGIC Motion is, however,
silent as to why these three Debtors believe that a locked-in 3%
discount to a maximum filed claim merits a settlement,
particularly where they have set the claim floor so high relative
to the ceiling, the Ad Hoc Group asserts.
Equally troubling is the lack of any explanation as to how these
Debtors are planning to apportion the allowed claims among their
estates or why all Debtors are locking themselves into particular
plan structures as they relate to the FGIC Claims even in the
event the Global Plan Agreement fails, the Ad Hoc Group further
asserts.
The Ad Hoc Group is represented by J. Christopher Shore, Esq., and
Harrison L. Denman, Esq., at White & Case LLP, in New York, and
Gerard Uzzi, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New
York.
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.
ResCap sold most of the businesses for a combined $4.5 billion.
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: To Escrow $450,000 for NJ Class Suit Fees
--------------------------------------------------------------
Residential Capital LLC's plan support agreement with parent Ally
Financial Inc. contemplates a near-global resolution of
substantial litigation and a resolution of complex disputed
matters in the Debtors' Chapter 11 cases, to be implemented
through a plan structure that will yield substantial value for
creditors and facilitate the Debtors' exit from bankruptcy. An
important aspect of that structure is the settlement of a
securities class action pending against certain of the Debtors,
former directors and officers of the Debtors, and Ally Securities,
captioned New Jersey Carpenters Health Fund, et al. v. Residential
Capital, LLC, et al., pending in the U.S. District Court for the
Southern District of New York (Civ. No. 08-8781 (HB))(commonly
referred to as the "NJ Carpenters Action").
According to Gary S. Lee, Esq., at Morrison & Foerster LLP, in New
York, the NJ Carpenters Claims are asserted on behalf of a class
of purchasers of certain residential mortgage-backed securities
issued by the Debtors based on alleged misstatements in the
securities' offering materials. On behalf of the class, the lead
plaintiff asserts claims on RMBS certificates with face value of
approximately $27 billion. Under the PSA and the Settlement
Agreement, the parties have agreed to settle the NJ Carpenters
Claims in exchange for payment to the class of $100,000,000 under
a contemplated joint plan of reorganization.
Pursuant to the Settlement Agreement, the Debtors have also agreed
to deposit $450,000 into an escrow account following preliminary
approval of the NJ Carpenters Settlement in the District Court.
The escrow account will be maintained and controlled by Lead
Counsel. The Notice Amount will be available to pay costs, fees
and expenses that are incurred by the claims administrator
selected by the Lead Plaintiff in connection with (a) providing
Notice to the members of the class action; and (b) administering
the claims process in the class action. Ultimately, the Notice
Amount will be deducted from the Settlement Amount.
Accordingly, the Debtors sought and obtained authority from the
U.S. Bankruptcy Court to advance the funds into escrow to be used
to pay for the costs to notify potential class members of the
proposed settlement of the NJ Carpenters Claims.
The Debtors are also represented by Joel C. Haims, Esq., James J.
Beha II, Esq., and Naomi Moss, Esq., at Morrison & Foerster LLP,
in New York.
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.
ResCap sold most of the businesses for a combined $4.5 billion.
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).
REVSTONE INDUSTRIES: Schoeller Arca Systems Resigns From Committee
------------------------------------------------------------------
Schoeller Arca Systems, Inc., stepped down as member of the
official committee of unsecured creditors in the Chapter 11 case
of Revstone Industries LLC, as of May 22, 2013.
On May 23, Roberta A. DeAngelis, the U.S. Trustee for Region 3,
filed with the Court a "First Amended Notice of Appointment of
Committee of Unsecured Creditors", appointing these four Committee
members:
1) Boston Finance Group LLC
Attn: Jonathan Golden
4912 Creekside Dr.
Clearwater, FL 33760
Telephone: (727) 497 1661
Facsimile: (727) 497 1666
2) Patrick J. O'Mara
1189 E. Tuttle Rd.
Ionia, MI 48846
3) Thule Holding, Inc.
Attn: Mark Schnitzler, Esq.
170 Mason St.
Greenwich, CT 06830
Telephone: (203) 661 6000
Facsimile: (203) 661 9462
4) Pension Benefit Guaranty Corp.
Attn: Craig Yamaoka
1200 K St. NW
Washington DC 20005
Telephone: (202) 326 4070x3614
Facsimile: (202) 842 2643
About Revstone Industries, Greenwood Forgings,
& US Tool & Engineering
Lexington, Kentucky-based Revstone Industries LLC, a maker of
truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon
oversees the case. In its petition, Revstone estimated under
$50 million in assets and debts.
Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del.
Case No. 12-13263) on Dec. 3, 2012.
Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No.
13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No.
13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013.
Judge Shannon also oversees the cases.
Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy
counsel to Greenwood and US Tool. Greenwood estimated $1 million
to $10 million in assets and $10 million to $50 million in debts.
US Tool & Engineering estimated under $1 million in assets and
$1 million to $10 million in debts. The petitions were signed by
George S. Homeister, chairman.
An official committee of unsecured creditors has been appointed in
the case. Steven K. Kortanek, Esq., Mark L. Desgrosseilliers,
Esq., Matthew P. Ward, Esq., at Womble Carlyle Sandridge & Rice
LLP, represent the Committee as counsel.
RITE AID: Jean Coutu Lowers Equity Stake to 7.2% at June 26
-----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, The Jean Coutu Group (PJC) Inc. and its
affiliates disclosed that, as of June 26, 2013, they beneficially
owned 65,401,162 shares of common stock of Rite Aid Corporation
representing 7.23 percent of the shares outstanding based on
904,564,621 shares of Company's common stock outstanding as of
April 11, 2013, as reported in the Company's Form 10-K for the
fiscal year ended March 2, 2013.
Jean Coutu previously reported beneficial ownership of
105,901,162 common shares or 11.7 percent equity stake as of
April 15, 2013.
A copy of the amended regulatory filing is available at:
http://is.gd/NLJEae
About Rite Aid Corp.
Drugstore chain Rite Aid Corporation (NYSE: RAD) --
http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, is
one of the nation's leading drugstore chains with 4,626 stores in
31 states and the District of Columbia.
Rite Aid disclosed net income of $118.10 million on $25.39 billion
of revenue for the year ended March 2, 2013, as compared with a
net loss of $368.57 million on $26.12 billion of revenue for the
year ended March 2, 2012. The Company's balance sheet at March 2,
2013, showed $7.07 billion in total assets, $9.53 billion in total
liabilities and a $2.45 billion total stockholders' deficit.
* * *
As reported by the TCR on March 1, 2013, Moody's Investors Service
upgraded Rite Aid Corporation's Corporate Family Rating to B3 from
Caa1 and Probability of Default Rating to B3-PD from Caa1-PD. At
the same time, the Speculative Grade Liquidity rating was revised
to SGL-2 from SGL-3. This rating action concludes the review for
upgrade initiated on Feb. 4, 2013.
Rite Aid carries a 'B-' corporate credit rating from Standard &
Poor's Ratings Services.
RIVIERA HOLDINGS: Has Resort Management Agreement with Paragon
--------------------------------------------------------------
Riviera Holdings Corporation and Riviera Operating Corporation, a
wholly-owned subsidiary of the Company, entered into a Resort
Management Agreement with Paragon Riviera LLC on June 21, 2013.
Pursuant to the Agreement, Riviera engaged Paragon to provide
oversight of the executive level management at the Riviera Hotel &
Casino in Las Vegas, Nevada. Paragon will also provide financial,
marketing, business and organizational strategy services to the
Casino. The term of the Agreement is two years from the date of
execution, unless earlier terminated in accordance with its terms
and conditions.
CEO Resigns
Andy Choy resigned as Director, President and Chief Executive
Officer of the Company and ROC, effective June 21, 2013.
Effective on June 21, 2013, all of the holders of the Class A
Shares of the Company elected Steven Hankin, age 52, to serve as
director of the Company and the Company, in its capacity as sole
shareholder of ROC, elected Mr. Hankin to serve as Director of
ROC.
Mr. Hankin was elected as a Class A Director pursuant to the terms
of the Stockholders Agreement, dated as of April 1, 2011, by and
among SCH/VIII Bonds, L.L.C., SCH/VIII Bonds II, L.L.C., SCH/VIII
Bonds III, L.L.C., SCH/VIII Bonds IV, L.L.C., Cerberus Series Four
Holdings, LLC, Desert Rock Enterprises, LLC, Strategic Value
Special Situations Master Fund, LP, Riviera Voteco, L.L.C., and
the Company. In addition, Mr. Hankin was appointed to serve as a
member of a newly formed management agreement committee.
Effective on June 21, 2013, the Board of Directors of the Company
appointed Robert James Kunkle, age 44, as the Company's President.
Further, Mr. Kunkle was also appointed as the President of ROC on
June 21, 2013, and was hired as General Manager of ROC on June 24,
2013.
Prior to joining the Company, Mr. Kunkle served in a number of
positions with Station Casinos from March 2008 to November 2012,
most recently as Vice President and General Manager of Texas
Station Hotel and Gambling Hall. Mr. Kunkle began his service
with Station Casinos as General Manager of Wildfire Gaming, a
division of Station Casino, with multiple casino properties in Las
Vegas and Henderson, Nevada, and also served as Vice President and
Assistant General Manager of Texas Station Hotel and Gambling Hall
and Vice President and General Manager of Fiesta Rancho Hotel and
Casino. From November 2006 through March 2008, Mr. Kunkle was
Director of Food and Beverage for Horseshoe Casino (Caesars
Entertainment) in Hammond, Indiana.
About Riviera Holdings
Riviera Holdings Corporation, through its wholly owned subsidiary,
Riviera Operating Corporation, owns and operates the Riviera Hotel
& Casino located in Las Vegas, Nevada, which consists of a hotel
comprised of five towers with 2,075 guest rooms, including 177
suites, and which has traditional Las Vegas-style gaming,
entertainment and other amenities.
In addition, Riviera Holdings, through its wholly-owned
subsidiary, Riviera Black Hawk, Inc., owns and operates the
Riviera Black Hawk Casino, a casino in Black Hawk, Colorado and
has various non-gaming amenities, including parking, buffet-styled
restaurant, delicatessen, a casino bar and a ballroom.
Riviera Holdings together with the two affiliates filed for
Chapter 11 on July 12, 2010 in Las Vegas, Nevada (Bankr. D. Nev.
Case No. 10-22910). Riviera Holdings estimated assets and debts
of $100 million to $500 million in its petition. Thomas H. Fell,
Esq., at Gordon Silver, represents the Debtors in the Chapter 11
cases. XRoads Solutions Group, LLC, is the financial and
restructuring advisor. Garden City Group Inc. is the claims and
notice agent.
Riviera Holdings' Second Amended Joint Plan of Reorganization was
confirmed on Nov. 17, 2010. Under the Plan, nearly $280 million
in debt will be replaced with a $50 million loan. Creditors will
receive new stock relative to what they are owed, and holders of
current stock will receive nothing. A total of $10 million in
working capital will come from the new owners, along with $20
million in loans to cover investments in the Las Vegas hotel.
The Plan of Reorganization became effective on Dec. 1, 2010, but
the Plan of Reorganization cannot be substantially consummated
until various regulatory and third party approvals are obtained.
The Substantial Consummation Date will be the 3rd business day
following the day the last approval is obtained.
Riviera Holdings disclosed a net loss of $29.62 million on $86.27
million of total revenues for the period from Jan. 1, 2012,
through Dec. 31, 2012. The Company incurred a net loss of $14.07
million on $70.38 million of total revenues for the period from
April 1, 2011, through Dec. 31, 2011.
The Company's balance sheet at March 31, 2013, showed $218.99
million in total assets, $114.25 million in total liabilities and
$104.74 million in total stockholders' equity.
* * *
In the July 9, 2012, edition of the TCR, Moody's Investors Service
downgraded Riviera Holdings Corporation's Corporate Family and
Probability of Default ratings to Caa2 from Caa1. The downgrade
of Riviera's Corporate Family Rating to Caa2 reflects heightened
concern on Moody's part regarding Rivera's ability to achieve
profitability over the next few years given that Riviera Las
Vegas, the company's only asset, generates negative EBITDA.
As reported by the TCR on July 5, 2011, Standard & Poor's Ratings
Services assigned its 'CCC+' corporate credit rating to Riviera
Holdings Corp.
"The 'CCC+' corporate credit rating reflects the company's high
debt leverage and vulnerable business position. Riviera operates
two properties (located in Blackhawk, Colo. and Las Vegas, Nev.)
with second-tier market positions in the highly competitive
markets," said Standard & Poor's credit analyst Michael Halchak.
"The rating also factors in the company's excess cash, which we
believe would support the company in the event of a moderate
decline in operating performance."
ROTECH HEALTHCARE: Seeks Disbandment of Equity Committee
--------------------------------------------------------
BankruptcyData reported that Rotech Healthcare filed with the U.S.
Bankruptcy Court a motion for an order determining the value for
confirmation purposes of all assets constituting Company
enterprise and securing first and second lien notes pursuant to
Bankruptcy Code section 506(a) and Bankruptcy Rule 3012 and
disbanding the equity committee if the estate is insolvent.
The Debtors state, "The sole issue impeding the successful
reorganization of Rotech's vital healthcare business and
preservation of its 4,000 jobs is the contention of the Equity
Committee that Rotech is worth more than all its liabilities.
Because almost all of Rotech's secured indebtedness encumbers
Rotech's entire enterprise, the question becomes whether Rotech's
enterprise value exceeds the sum of the amount outstanding under
its secured bonds and term loans and its other prepetition and
postpetition administrative, priority, secured and unsecured
claims (approximately $30 - $40 million). It is critical to place
a value on the Debtors' enterprise so that all parties in interest
will know the value available to distribute to the Debtors'
stakeholders. Currently, the Debtors' Plan allocates to many
unsecured claims between 12.5 cents and 25 cents on the dollar,
pays the Second Lien Noteholders nothing on their deficiency claim
and allocates no value to equity interests. As set forth in the
Debtors' disclosure statement approved by order dated June 14,
2013, the Debtors believe their estate is insolvent by more than
$100 million by any yardstick (i.e., earning capacity, asset
value, comparable sales, etc.). If the Debtors are right, then the
economic allocation in the Plan of their estates' value is
meritorious and the continued accrual of costs by the Equity
Committee at the expense of creditors is completely unjustified,
and the Equity Committee should be disbanded," the report related.
About Rotech Healthcare
Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/-- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services. The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.
The Company reported a net loss of $14.76 million in 2011, a net
loss of $4.20 million in 2010, and a net loss of $21.08 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed
$255.76 million in total assets, $601.98 million in total
liabilities, and a $346.22 million total stockholders' deficiency.
On April 8, 2013, Rotech Healthcare and 114 subsidiary companies
filed petitions seeking relief under chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre-
arranged plan negotiated with secured lenders.
Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt &
Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the
healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP
is the special healthcare regulatory counsel; Barclays Capital
Inc. is the financial advisor; Alix Partners, LLP is the
restructuring advisor; and Epiq Bankruptcy Solutions LLC is the
claims agent.
Prepetition term loan lender and DIP lender Silver Point Capital
and other consenting noteholders are represented by Wachtell,
Lipton, Rosen & Katz, and Richards Layton & Finger PA.
The U.S. Trustee at the end of April appointed an official
committee of equity holders. Members include Alden Global
Recovery Master Fund LP, Varana Capital Master LP, Wynnefield
Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and
Kenneth S. Grossman P.C. Pension Plan.
The plan is supported by holders of a majority of the first- and
second-lien secured notes. The $290 million in 10.5 percent
second-lien notes are to be exchanged for the new equity. Trade
suppliers are to be paid in full, if they agree to continue
providing credit. The existing $23.5 million term loan would be
paid in full, and the $230 million in 10.75 percent first-lien
notes will be amended.
The Official Committee of Unsecured Creditors tapped Otterbourg,
Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll &
Rooney PC as Delaware counsel; and Grant Thornton LLP as financial
advisor.
ROTECH HEALTHCARE: Equity Holders Lose Bid to Hire Valuation Firm
-----------------------------------------------------------------
Matt Chiappardi of BankruptcyLaw360 reported that a Delaware
bankruptcy judge rejected a bid by the equity committee in Rotech
Healthcare Inc.'s Chapter 11 case to hire Berenson & Co. LLC to
conduct a valuation of the company, telling attorneys for the
equity holders that they didn't follow his directions.
According to the report, U.S. Bankruptcy Judge Peter J. Walsh said
from the bench that he directed the committee to find a financial
expert to do an independent evaluation of Rotech's worth.
About Rotech Healthcare
Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/-- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services. The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.
The Company reported a net loss of $14.76 million in 2011, a net
loss of $4.20 million in 2010, and a net loss of $21.08 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed
$255.76 million in total assets, $601.98 million in total
liabilities, and a $346.22 million total stockholders' deficiency.
On April 8, 2013, Rotech Healthcare and 114 subsidiary companies
filed petitions seeking relief under chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre-
arranged plan negotiated with secured lenders.
Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt &
Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the
healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP
is the special healthcare regulatory counsel; Barclays Capital
Inc. is the financial advisor; Alix Partners, LLP is the
restructuring advisor; and Epiq Bankruptcy Solutions LLC is the
claims agent.
Prepetition term loan lender and DIP lender Silver Point Capital
and other consenting noteholders are represented by Wachtell,
Lipton, Rosen & Katz, and Richards Layton & Finger PA.
The U.S. Trustee at the end of April appointed an official
committee of equity holders. Members include Alden Global
Recovery Master Fund LP, Varana Capital Master LP, Wynnefield
Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and
Kenneth S. Grossman P.C. Pension Plan.
The plan is supported by holders of a majority of the first- and
second-lien secured notes. The $290 million in 10.5 percent
second-lien notes are to be exchanged for the new equity. Trade
suppliers are to be paid in full, if they agree to continue
providing credit. The existing $23.5 million term loan would be
paid in full, and the $230 million in 10.75 percent first-lien
notes will be amended.
The Official Committee of Unsecured Creditors tapped Otterbourg,
Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll &
Rooney PC as Delaware counsel; and Grant Thornton LLP as financial
advisor.
ROTECH HEALTHCARE: Iota Medical Files Schedules
-----------------------------------------------
Iota Medical Equipment, Inc., an affiliate of Rotech Healthcare,
Inc., filed with the U.S. Bankruptcy Court for the District of
Delaware its schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $10,408,756
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $560,871,725
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $82,073
----------- ------------
TOTAL $10,408,756 $560,953,798
A copy of the schedules is available for free at
http://bankrupt.com/misc/ROTECH_HEALTHCARE_sal_m.pdf
About Rotech Healthcare
Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/-- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services. The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.
The Company reported a net loss of $14.76 million in 2011, a net
loss of $4.20 million in 2010, and a net loss of $21.08 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed
$255.76 million in total assets, $601.98 million in total
liabilities, and a $346.22 million total stockholders' deficiency.
On April 8, 2013, Rotech Healthcare and 114 subsidiary companies
filed petitions seeking relief under chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre-
arranged plan negotiated with secured lenders.
Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt &
Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the
healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP
is the special healthcare regulatory counsel; Barclays Capital
Inc. is the financial advisor; Alix Partners, LLP is the
restructuring advisor; and Epiq Bankruptcy Solutions LLC is the
claims agent.
Prepetition term loan lender and DIP lender Silver Point Capital
and other consenting noteholders are represented by Wachtell,
Lipton, Rosen & Katz, and Richards Layton & Finger PA.
The U.S. Trustee at the end of April appointed an official
committee of equity holders. Members include Alden Global
Recovery Master Fund LP, Varana Capital Master LP, Wynnefield
Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and
Kenneth S. Grossman P.C. Pension Plan.
The plan is supported by holders of a majority of the first- and
second-lien secured notes. The $290 million in 10.5 percent
second-lien notes are to be exchanged for the new equity. Trade
suppliers are to be paid in full, if they agree to continue
providing credit. The existing $23.5 million term loan would be
paid in full, and the $230 million in 10.75 percent first-lien
notes will be amended.
The Official Committee of Unsecured Creditors tapped Otterbourg,
Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll &
Rooney PC as Delaware counsel; and Grant Thornton LLP as financial
advisor.
ROTECH HEALTHCARE: Medcorp International Files Schedules
--------------------------------------------------------
Medcorp International, Inc. an affiliate of Rotech Healthcare,
Inc., filed with the U.S. Bankruptcy Court for the District of
Delaware its schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $485,262
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $560,871,725
E. Creditors Holding
Unsecured Priority
Claims $0
Unsecured Non-priority
Claims $4,677
----------- -----------
TOTAL $485,262 $560,876,402
A copy of the schedules is available for free at
http://bankrupt.com/misc/ROTECH_HEALTHCARE_sal_o.pdf
About Rotech Healthcare
Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/-- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services. The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.
The Company reported a net loss of $14.76 million in 2011, a net
loss of $4.20 million in 2010, and a net loss of $21.08 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed
$255.76 million in total assets, $601.98 million in total
liabilities, and a $346.22 million total stockholders' deficiency.
On April 8, 2013, Rotech Healthcare and 114 subsidiary companies
filed petitions seeking relief under chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre-
arranged plan negotiated with secured lenders.
Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt &
Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the
healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP
is the special healthcare regulatory counsel; Barclays Capital
Inc. is the financial advisor; Alix Partners, LLP is the
restructuring advisor; and Epiq Bankruptcy Solutions LLC is the
claims agent.
Prepetition term loan lender and DIP lender Silver Point Capital
and other consenting noteholders are represented by Wachtell,
Lipton, Rosen & Katz, and Richards Layton & Finger PA.
The U.S. Trustee at the end of April appointed an official
committee of equity holders. Members include Alden Global
Recovery Master Fund LP, Varana Capital Master LP, Wynnefield
Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and
Kenneth S. Grossman P.C. Pension Plan.
The plan is supported by holders of a majority of the first- and
second-lien secured notes. The $290 million in 10.5 percent
second-lien notes are to be exchanged for the new equity. Trade
suppliers are to be paid in full, if they agree to continue
providing credit. The existing $23.5 million term loan would be
paid in full, and the $230 million in 10.75 percent first-lien
notes will be amended.
The Official Committee of Unsecured Creditors tapped Otterbourg,
Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll &
Rooney PC as Delaware counsel; and Grant Thornton LLP as financial
advisor.
ROTECH HEALTHCARE: Vitalcare Health Files Schedules
---------------------------------------------------
Vitalcare Health Services, Inc., an affiliate of Rotech
Healthcare, Inc., filed with the U.S. Bankruptcy Court for the
District of Delaware its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $7,753,872
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $560,871,725
E. Creditors Holding
Unsecured Priority
Claims $2,703
F. Creditors Holding
Unsecured Non-priority
Claims $50,303
----------- ------------
TOTAL $7,753,872 $560,924,731
A copy of the schedules is available for free at
http://bankrupt.com/misc/ROTECH_HEALTHCARE_sal_l.pdf
About Rotech Healthcare
Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/-- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services. The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.
The Company reported a net loss of $14.76 million in 2011, a net
loss of $4.20 million in 2010, and a net loss of $21.08 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed
$255.76 million in total assets, $601.98 million in total
liabilities, and a $346.22 million total stockholders' deficiency.
On April 8, 2013, Rotech Healthcare and 114 subsidiary companies
filed petitions seeking relief under chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre-
arranged plan negotiated with secured lenders.
Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt &
Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the
healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP
is the special healthcare regulatory counsel; Barclays Capital
Inc. is the financial advisor; Alix Partners, LLP is the
restructuring advisor; and Epiq Bankruptcy Solutions LLC is the
claims agent.
Prepetition term loan lender and DIP lender Silver Point Capital
and other consenting noteholders are represented by Wachtell,
Lipton, Rosen & Katz, and Richards Layton & Finger PA.
The U.S. Trustee at the end of April appointed an official
committee of equity holders. Members include Alden Global
Recovery Master Fund LP, Varana Capital Master LP, Wynnefield
Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and
Kenneth S. Grossman P.C. Pension Plan.
The plan is supported by holders of a majority of the first- and
second-lien secured notes. The $290 million in 10.5 percent
second-lien notes are to be exchanged for the new equity. Trade
suppliers are to be paid in full, if they agree to continue
providing credit. The existing $23.5 million term loan would be
paid in full, and the $230 million in 10.75 percent first-lien
notes will be amended.
The Official Committee of Unsecured Creditors tapped Otterbourg,
Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll &
Rooney PC as Delaware counsel; and Grant Thornton LLP as financial
advisor.
ROTECH HEALTHCARE: Whites Medical Files Schedules
-------------------------------------------------
Whites Medical Rentals, Inc., an affiliate of Rotech Healthcare,
Inc., filed with the U.S. Bankruptcy Court for the District of
Delaware its schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $1,324,281
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $560,871,725
E. Creditors Holding
Unsecured Priority
Claims $1,162
F. Creditors Holding
Unsecured Non-priority
Claims $$14,817
----------- -----------
TOTAL $1,324,281 $560,887,704
A copy of the schedules is available for free at
http://bankrupt.com/misc/ROTECH_HEALTHCARE_sal_e.pdf
About Rotech Healthcare
Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/-- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services. The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.
The Company reported a net loss of $14.76 million in 2011, a net
loss of $4.20 million in 2010, and a net loss of $21.08 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed
$255.76 million in total assets, $601.98 million in total
liabilities, and a $346.22 million total stockholders' deficiency.
On April 8, 2013, Rotech Healthcare and 114 subsidiary companies
filed petitions seeking relief under chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre-
arranged plan negotiated with secured lenders.
Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt &
Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the
healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP
is the special healthcare regulatory counsel; Barclays Capital
Inc. is the financial advisor; Alix Partners, LLP is the
restructuring advisor; and Epiq Bankruptcy Solutions LLC is the
claims agent.
Prepetition term loan lender and DIP lender Silver Point Capital
and other consenting noteholders are represented by Wachtell,
Lipton, Rosen & Katz, and Richards Layton & Finger PA.
The U.S. Trustee at the end of April appointed an official
committee of equity holders. Members include Alden Global
Recovery Master Fund LP, Varana Capital Master LP, Wynnefield
Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and
Kenneth S. Grossman P.C. Pension Plan.
The plan is supported by holders of a majority of the first- and
second-lien secured notes. The $290 million in 10.5 percent
second-lien notes are to be exchanged for the new equity. Trade
suppliers are to be paid in full, if they agree to continue
providing credit. The existing $23.5 million term loan would be
paid in full, and the $230 million in 10.75 percent first-lien
notes will be amended.
The Official Committee of Unsecured Creditors tapped Otterbourg,
Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll &
Rooney PC as Delaware counsel; and Grant Thornton LLP as financial
advisor.
SAFENET INC: S&P Revises Outlook to Stable & Affirms 'B' CCR
------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Belcamp,
Md.-based SafeNet Inc. to stable from positive.
At the same time, S&P affirmed its 'B' corporate credit rating on
the company. S&P also affirmed its 'BB-' issue-level rating on
the company's first-lien term loan. The recovery rating on the
debt remains at '1', indicating S&P's expectation for very high
(90% to 100%) recovery of principal in the event of payment
default.
In addition, S&P affirmed its 'B' issue-level rating on the
company's second-lien term loan. The recovery rating on this debt
remains at '3', indicating S&P's expectation for meaningful (50%
to 70%) recovery of principal in the event of payment default.
"The outlook revision reflects our expectation that the company
will retain its highly leveraged financial profile, due to its
private-equity ownership, which we expect to result in aggressive
financial policies, including the potential for debt-financed
shareholder returns," said Standard & Poor's credit analyst
Katarzyna Nolan.
The rating on SafeNet reflects its "weak" business risk profile,
which encompasses the company's modest scale, as well as
vulnerability to competition from large vendors with stronger
financial profiles and its "highly leveraged" financial risk
profile under our criteria. These factors are partly offset by a
diverse customer base and growing addressable markets.
SafeNet provides data protection and software monetization
solutions to commercial and government customers. The company
specializes incertificate-based token authentication products,
hardware security modules, data encryption and control solutions,
and software rights management (SRM).
The stable outlook reflects S&P's expectation of modest revenue
and EBITDA growth following the sale of the company's government
solutions business.
An upgrade in the near term is unlikely, given the company's
ownership structure, which is likely to preclude sustained
leverage reduction.
S&P could lower the rating if the company's profitability
deteriorates due to increased competition, or due to debt-financed
shareholder returns or acquisitions, such that leverage is
sustained above the low-7x area.
SALON MEDIA: Incurs $696,000 Net Loss in Fourth Quarter
-------------------------------------------------------
Salon Media Group, Inc., reported a net loss of $696,000 on
$920,000 of net revenues for the three months ended March 31,
2013, as compared with a net loss of $1.55 million on $761,000 of
net revenues for the same period during the prior year.
For the 12 months ended March 31, 2013, the Company had a net loss
of $3.93 million on $3.64 million of net revenues, as compared
with a net loss of $4.09 million on $3.47 million of net revenues
for the same period a year ago.
As of March 31, 2013, the Company had $1.29 million in total
assets, $11.32 million in total liabilities and a $10.02 million
total stockholders' deficit.
"Salon has made major strides over the past year towards
profitability," said Cynthia Jeffers, CEO and CTO of Salon Media
Group. "The bottom line is that debts our down, revenues are
rising and traffic continues to increase. I expect the recent
launches of our mobile and community initiatives will keep us on
pace to continue these positive trends moving forward."
A copy of the press release is available for free at:
http://is.gd/FK7rnV
About Salon Media
San Francisco, Calif.-based Salon Media Group (OTC BB: SLNM.OB)
-- http://www.Salon.com/-- is an online news and social
networking company and an Internet publishing pioneer.
The Company reported a net loss of $4.09 million for the
year ended March 31, 2012, a net loss of $2.58 million for fiscal
2011, and a net loss of $4.86 million for fiscal year 2010.
Burr Pilger Mayer, Inc., in San Francisco, California, issued a
"going concern" qualification on the consolidated financial
statements for the fiscal year ended March 31, 2012. The
independent auditors noted that the Company has suffered recurring
losses and negative cash flows from operations and has an
accumulated deficit of $112.5 million at March 31, 2012, which
raise substantial doubt about the Company's ability to continue as
a going concern.
SBM CERTIFICATE: Files Schedules of Assets and Liabilities
----------------------------------------------------------
SBM Certificate Company filed with the U.S. Bankruptcy Court for
the District of Maryland its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $992,893
B. Personal Property $19,472,753
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $0
E. Creditors Holding
Unsecured Priority
Claims $800
F. Creditors Holding
Unsecured Non-priority
Claims $49,234,868
----------- ------------
TOTAL $20,465,646 $49,235,668
A copy of the schedules is available for free at
http://bankrupt.com/misc/SBM_CERTIFICATE_sal.pdf
About SBM Certificate
SBM Certificate Company filed a bare-bones Chapter 11 petition
(Bankr. D. Md. Case No. 13-17282) in Greenbelt, Maryland, on
April 26, 2013. Eric W. Westbury, Sr., signed the petition as
director. Lawrence A. Katz, Esq., at Leach Travell Britt PC,
in Tysons Corner, Virginia, serves as counsel to the Debtors.
Silver Spring-based SBM disclosed $28.7 million in assets and
$49.4 million in liabilities as of Dec. 31, 2012.
SELECTOS WHOLE FOODS: Injunction Recommended in Supplier's Suit
---------------------------------------------------------------
Magistrate Judge Camille L. Velez-Rive in Puerto Rico recommends
the entry of a Preliminary Injunction in the lawsuit, SUN
COMMODITIES, INC., Plaintiff, v. SELECTOS WHOLE FOODS, INC., et
al, Defendants, Civil No. 13-1429 (D. P.R.).
On June 10, 2013, the District Court of Puerto Rico referred Sun
Commodities's request for a preliminary injunction to the
Magistrate Judge. The Court denied the Temporary Restraining
Order requested by plaintiffs.
A Status Conference was held in the morning of June 20. Counsel
for the parties discussed at the Status Conference that Selectos
has filed for Chapter 11 bankruptcy, and that Selectos has filed a
motion in the bankruptcy court to address the payment of trust
claims made under the Perishable Agricultural Commodities Act at
7 U.S.C. Sec. 499e(c), including the claim made herein by Sun
Commodities, Inc. Counsel for the parties stipulated to the entry
of a Preliminary Injunction against defendant Thomas Ward, and
that the hearing on the Motion for Preliminary Injunction against
Caroline Ward be continued. A separate order was issued which
continued the hearing date on the Motion for a Preliminary
Injunction against Caroline Ward for June 26, 2013 at 10:00 a.m.
Subsequent to the Status Conference, Counsel for the parties
further stipulated to the form of the Preliminary Injunction that
provides as follows:
1. Defendant Thomas Ward, on behalf of himself only, admits
he is the principal of Selectos Whole Foods, and that Selectos
owes Sun Commodities an amount -- and as of June 20 not determined
-- of money for the purchase of perishable agricultural
commodities, and that Sun Commodities preserved its trust rights
against Selectos under the Perishable Agricultural Commodities Act
by placing the language required by 7 U.S.C. Sec. 499(e)(c)(3) on
its invoices to Selectos. Sun Commodities is making a claim of
$143,526.
2. Defendant Thomas Ward, and his agents, assigns, and
financial institutions, are restrained and enjoined from
dissipating, disbursing, or otherwise encumbering any and all
monies and/or unliquidated assets of any type in their possession
and/or their control that are derived in whole or in part from
their receipt of money from Selectos. All financial institutions
receiving this Order are directed to comply with this requirement
until further notice. Defendant Thomas Ward is required to
promptly serve a copy of this Preliminary Injunction on all
financial institutions in which he has an account.
3. Within 20 days from the date of the Order, Thomas Ward
will provide Sun Commodities with a written accounting which
identifies the assets he received from Selectos since January 1,
2012, and which further identifies in reasonable detail the date
the assets were received and the amount, the form of the assets,
and to the extent that the assets consists of money, the location
of the money received, and the names, addresses, and telephone
numbers of the persons who have possession or control of the money
received, and if the money was used to purchase non-cash assets,
then a detailed description of the nature of the assets purchased,
the location of the assets, and the names, addresses, and
telephone numbers of the persons who have possession or control of
such assets.
A copy of the June 20, 2013 Report and Recommendation is available
at http://is.gd/9wQsjDfrom Leagle.com.
Sun Commodities, Inc., Plaintiff, represented by Orlando
Fernandez, Esq., at Orlando Fernandez Law Offices & Robert E.
Goldman, Esq., at Law Office of Robert E. Goldman.
Defendants Thomas Ward and Caroline Ward are represented by David
A. Carrion-Baralt, Esq.
Selectos Whole Foods, Inc., based in San Juan, Puerto Rico, filed
for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 13-04680) on
June 6, 2013. Judge Brian K. Tester oversees the case. Carlos
Rodriguez Quesada, Esq., at Law Office Of Carlos Rodriguez
Quesada, represents the Debtor as counsel. Selectos estimated
under $50,000 in assets and between $1 million to $10 million in
debts. A list of the Company's 20 largest unsecured creditors
filed with the petition is available for free at
http://bankrupt.com/misc/prb13-04680.pdf The petition was signed
by Thomas Ward, president.
SK FOODS: Four In One et al. to Seek Class Status
-------------------------------------------------
In light of a pending restitution hearing in United States v.
Salyer, Cr. No. S-10-61 LKK, District Judge Berly J. Mueller
issued an order approving deferral of discovery at this time.
After final approval of disposition as to the settling defendants,
the court will schedule a further status conference to consider
the status of defendant Scott Salyer.
In the lawsuit, FOUR IN ONE COMPANY, INC., et al., Plaintiffs, v.
S.K. FOODS, L.P., et al., Defendants, No. CIV S-08-3017 KJM EFB
(E.D. Cal.), the parties appeared on May 30, 2013 for a Pretrial
Scheduling Conference. The parties informed the court that
plaintiffs and defendants Ingomar Packaging Company, Los Gatos
Tomato Products, Greg Pruett and Stuart Woolf have reached an
agreement in principle to settle.
Plaintiffs will file a motion for preliminary approval of class
certification and settlement within 60 days of the date of Judge
Mueller's order and will file a stipulation to stay proceedings as
to these defendants as soon as the settlement agreements are
executed. In addition, the bankruptcy court has approved
plaintiffs' settlement with defendant S.K. Foods, but as no plan
of reorganization has been approved, there have no disbursements
to the class as yet.
A copy of Judge Mueller's June 20, 2013 Order is available at
http://is.gd/OxPM4Nfrom Leagle.com.
Four in One Company, Inc., Plaintiff, is represented by:
-- Arthur N. Bailey, Esq. -- abailey@hausfeldllp.com --
at Hausfeld LLP,
-- Dana Statsky Smith, Esq. -- Dsmith@bernlieb.com --
at Bernstein Liebhard, LLP,
-- Donald A. Ecklund, Esq. -- DEcklund@carellabyrne.com --
at Carella Byrne Bain Gilfillan Cecchi Stewart & Olstein,
-- James E. Cecchi, Esq. -- JCecchi@carellabyrne.com --
at Carella, Byrne, Bain, Gilfillan, Cecchi, Stewart and
Olstein,
-- Joey Dean Horton, Esq. -- jdhorton@quinnemanuel.com --
at Quinn Emanuel Urquhart and Sullivan LLP,
-- Ronald J. Aranoff, Esq. -- Aranoff@bernlieb.com -- at
Bernstein Liebhard, LLP,
-- Stanley D. Bernstein, Esq. -- Bernstein@bernlieb.com --
at Bernstein Liebhard, LLP,
-- Stephaine M. Beige, Esq. -- Beige@bernlieb.com -- at
Bernstein Liebhard, LLP,
-- Stephen R. Neuwirth, Esq. --
stephenneuwirth@quinnemanuel.com -- at Quinn Emanuel
Urquhart Oliver & Hedges, LLP, and
-- Tania T. Taveras, Esq. -- Taveras@bernlieb.com -- at
Bernstein Liebhard, LLP.
Cliffstar Corporation is represented by:
-- Arthur N. Bailey, Esq., at Hausfeld LLP,
-- Allan Steyer, Esq. -- asteyer@steyerlaw.com -- at Steyer
Lowenthal Boodrookas Alvarez & Smith LLP,
-- Holly Joy Stirling, Esq. -- hstirling@steyerlaw.com --
at Steyer Lowenthal Boodrookas Alvarez & Smith, LLP,
-- Lucas E. Gilmore, Esq. -- Lucas.Gilmore@blbglaw.com --
at Bernstein Litowitz Berger & Grossmann LLP, and
-- Bruce L. Simon, Esq., at Pearson, Simon, Warshaw & Penny.
SK Foods, L.P., is represented by:
-- Jonathan E. Swartz, Winston and Strawn LLP,
-- Paul Robert Griffin, Esq. -- pgriffin@winston.com -- at
Winston & Strawn LLP, and
-- Robert Bernard Pringle, Esq. -- rpringle@winston.com -- at
Winston and Strawn (SF).
Ingomar Packing Company is represented by:
-- Colin West, Esq. -- colin.west@bingham.com -- at Bingham
McCutchen LLP, and
-- Stephen Ara Zovickian, Esq. --
stephen.zovickian@bingham.com -- at Bingham Mccutchen LLP.
Los Gatos Tomato Products, Defendant, is represented by George A.
Nicoud, Esq. -- tnicoud@gibsondunn.com -- at Gibson, Dunn &
Crutcher, LLP.
Randall Rahal, Defendant, is represented by David Warren Dratman,
Esq., Attorney at Law.
Intramark USA, Inc., Defendant, is represented by David W.
Dratman, Attorney at Law.
Scott Salyer, Defendant, is represented by Malcolm S. Segal, Esq.
-- firm@segalandkirby.com -- at Segal & Kirby, LLP & James P.
Mayo, Esq. -- jmayo@segalandkirby.com -- at Segal & Kirby LLP.
Stuart Woolf, Defendant, is represented by William Silas Farmer,
Esq., Collette, Erickson, Farmer & O'Neill.
Greg Pruett, Defendant, represented by Miles Ehrlich, Esq., at
Ramsey & Ehrlich, LLP.
Bradley D. Sharp, Chapter 11 Trustee for SK Foods, LP, Defendant,
represented by Gregory C Nuti, Esq., at Schnader Harrison Segal &
Lewis LLP.
United States of America, Intervenor, represented by Sean C.
Flynn, United States Attorney's Office.
US Department of Justice, Intervenor, represented by Anna Tryon
Pletcher, US DOJ/Antitrust Division, Richard B. Cohen, Department
of Justice/Antitrust Division & Tai Snow Milder, U.S. DOJ
Antitrust Division.
Bruce Foods Corporation, Neutral, represented by Alexandra S.
Bernay, Robbins Geller Rudman & Dowd LLP, Bonny E. Sweeney,
Coughlin Stoia Geller Rudman and Robbins LLP, Carmen Anthony
Medici, Robbins Geller Rudman & Dowd LLP, Christopher L. Lebsock,
Hausfeld Llp, Craig C. Corbitt, Zelle Hofmann Voelbel & Mason,
LLP, Hilary K. Ratway, Hausfeld, LLP, Allan Steyer, Steyer
Lowenthal Boodrookas Alvarez & Smith LLP, Arthur N. Bailey,
Hausfeld LLP, Clinton Paul Walker, Damrell Nelson Schrimp Pallios
Pacher & Silva, Holly Joy Stirling, Steyer Lowenthal Boodrookas
Alvarez & Smith, LLP, Kimberly Ann Kralowec, The Kralowec Law
Group, Lucas E. Gilmore, Bernstein Litowitz Berger & Grossmann LLP
& Roger M. Schrimp, Damrell Nelson Schrimp Pallios Pacher & Silva.
Diversified Foods and Seasonings, Inc., Neutral, represented by
Arthur N. Bailey, Hausfeld LLP, Eric B. Fastiff, Lieff Cabraser
Heimann and Bernstein & Joseph R. Saveri, Saveri Law Firm.
Morning Star Packing Company, Neutral, represented by Alex James
Kachmar, Jr, Weintraub Genshlea Chediak Tobin & Tobin.
L'Ottavo Ristorante, et al., Neutral, represented by Jeff S.
Westerman, Westerman Law Corp.
About SK Foods
SK Foods LP ran a tomato processing facility. It filed for
Chapter 11 bankruptcy protection after being dropped by its
lending group. Creditors filed an involuntary Chapter 11 petition
against SK Foods LP and affiliate RHM Supply/ Specialty Foods Inc.
(Bankr. E.D. Cal. Case No. 09-29161) on May 8, 2009. SK Foods
had said it was preparing to file a voluntary Chapter 11 petition
when the creditors initiated the involuntary case. The Company
later put itself into Chapter 11 and Bradley D. Sharp was
appointed as Chapter 11 trustee. The Debtors were authorized on
June 26, 2009, to sell the business for $39 million cash to a U.S.
arm of Singapore food processor Olam International Ltd. The
replacement cost for the assets is $139 million, according to
Olam.
In February 2010, a federal grand jury returned a seven-count
indictment charging Frederick Scott Salyer, former owner and CEO
of SK Foods, with violations of the Racketeer Influenced and
Corrupt Organizations Act, in connection with his direction of
various schemes to defraud SK Foods' corporate customers through
bribery and food misbranding and adulteration, and with wire fraud
and obstruction of justice.
Salyer supporters launched a Web site which can be accessed from
two addresses: http://www.operationrottentomato.com/and
http://www.scott-salyer.com/
SOLERA HOLDINGS: S&P Retains 'BB-' Rating on New Sr. Unsec. Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'BB-' issue-level
and '4' recovery ratings on Westlake, Texas-based Solera Holdings
Inc.'s new senior unsecured notes are unaffected by the upsizing
of its notes issue to $850 million from $700 million. S&P's 'BB-'
corporate credit rating, stable outlook, and other ratings on the
company's debt are unchanged.
Although the company's pro forma leverage will increase to 4.7x
from 4.3x as a result of the upsizing, it is still within S&P's
leverage limit for the rating. S&P also believes that the
company's leverage will decline to the mid-to-low 4x area over the
next two years due to organic EBITDA growth and incremental EBITDA
contribution from acquisitions. S&P could lower the rating if
Solera's margins decline due to acquisition-related integration
missteps or additional debt-financed acquisitions, such that
sustained leverage exceeds 5x.
The 'BB-' corporate credit rating and stable outlook on Solera
reflect its "fair" business risk profile and "significant"
financial risk profile (as defined in S&P's criteria),
incorporating a relatively narrow target market and an aggressive
growth strategy than results in spikes in leverage. Consistent
profitability, good cash flow generation, and a solid market
position in the global automobile insurance claims processing
industry are partial offsets.
RATINGS LIST
Solera Holdings Inc.
Corporate Credit Rating BB-/Stable/--
Audatex North America Inc.
$850 Mil. Senior Unsecured BB-
Recovery Rating 4
SOPHIE NG: 9th Cir. Affirms Disallowance of Regulo Sierra's Claim
-----------------------------------------------------------------
The U.S. Court of Appeals for the Ninth Circuit upheld a district
court order sustaining the objections of Janina M. Hoskins,
trustee of the Chapter 11 case of Sophie Ng, to Regulo Sierra's
claim and disallowing the claim in its entirety.
The Ninth Circuit opined that the district court properly
concluded that Sierra could not assert a secured claim as the
property allegedly securing the debt had been abandoned by the
bankruptcy trustee.
Disallowance of Sierra's unsecured claim based on his alleged
disproportionate payment of the property's common expenses was
proper because Sierra failed to support the claim, the Ninth
Circuit added.
Sierra filed a claim in the Ng estate for $76,920. The Ng Trustee
objected.
The Bankruptcy Court for the Northern District of California
disallowed the secured portion of the claim after an initial
hearing; and then after Sierra failed to provide admissible
evidence supporting the unsecured portion of the claim, the
bankruptcy court sustained the Trustee's objection and disallowed
Sierra's claim in its entirety. Sierra appealed to the District
Court for the Northern District of California. District Judge
Charles R. Breyer affirmed in a December 2011 ruling.
A copy of the Ninth Circuit's June 20, 2013 Memorandum is
available at http://is.gd/PHGjKTfrom Leagle.com.
STANCORP FINANCIAL: Fitch Affirms 'BB+' Rating on $300MM Sub. Debt
------------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating (IDR) of
StanCorp Financial Group, Inc. (SFG) at 'BBB+' and the Insurer
Financial Strength (IFS) ratings of its subsidiaries, Standard
Insurance Company and Standard Life Insurance Company of New York
at 'A'. The Rating Outlook is Stable.
Key Rating Drivers
Today's affirmation reflects continued challenges in terms of
SFG's overall operating profitability, although Fitch acknowledges
signs of performance improvement in the first quarter of 2013. The
affirmation also reflects the company's good competitive position
in the group life and disability market, acceptable capitalization
and essentially stable financial leverage.
SFG's historically favorable earnings, driven by its group long-
term disability (LTD) and group life insurance business, have
weakened in recent years due to a competitive market environment
and poor economic conditions. SFG reported pretax operating income
of $192 million in 2012, down from $198 million in 2011. In the
first quarter of 2013, the company reported pretax operating
income of $62 million, up significantly from $48 million in the
first quarter of 2012 driven mostly by lower administrative
expenses. The benefit ratio for the company's group insurance
segment, its primary earnings driver, has increased in each of the
past five years from 73.6% in 2008 to 83.9% in 2011, and remained
at 83.9 in the first quarter of 2013.
SFG's statutory total adjusted capital increased 6% in 2012 to
$1.38 billion, and the NAIC risk based capital ratio of its
insurance subsidiaries improved to 364% from 327% in 2011. Fitch
estimates the 2011 ratio benefited approximately 15 points from a
reinsurance agreement executed at the end of the year and another
25 points by an expansion of that contract in 2012.
SFG's ratings are supported by the company's adequate balance
sheet fundamentals and solid competitive position in the U.S.
group insurance market. The company's balance sheet fundamentals
reflect strong asset quality, good risk adjusted capitalization,
and reasonable financial leverage. SFG's total financing and
commitments ratio was approximately 0.3 times (x) and financial
leverage was 23% at March 31, 2013.
Fitch believes that SFG's insurance subsidiaries maintain a high-
quality bond portfolio. Below investment grade (BIG) bonds
accounted for only 6% of the fixed maturity portfolio or a low 27%
of total adjusted capital (TAC) at Dec. 31, 2012. Market values of
SFG's fixed maturity investments continue to improve with the
investment market, bringing gross unrealized losses down to just
$4 million and gross unrealized gains up to $588 million at
yearend 2012. The speed and amount of recovery reflects the
conservative nature of SFG's bond portfolio and the relatively low
amount of financial sector securities.
While SFG's commercial mortgage portfolio allocation of
approximately 40% of total invested assets at Dec. 31, 2012, is
much higher than the industry average, Fitch believes it is
complementary to the company's stable liability structure, despite
its lower liquidity relative to publicly traded bonds. Commercial
mortgage loan loss experience, although heightened during the
financial crisis, has improved significantly in recent years and
remains in line with Fitch's overall loss expectations.
Rating Sensitivities
The key rating triggers that could result in an upgrade include:
-- A substantial increase in run-rate risk-adjusted capital
above 350%, with no significant deterioration in capital
quality.
-- A long-term improving trend in the group benefit ratio
substantially below its historic baseline of about 76%.
The key rating triggers that could result in a downgrade include:
-- A prolonged deterioration in the company's group benefit ratio
above the 2011 level of 83%;
-- An increase in financial leverage above 30%;
-- GAAP-based interest coverage below 6x for an extended period
of time;
-- A decrease in RBC below 300%, or a significant decrease in
the quality of capital supporting the company's RBC.
-- A significant deterioration in the performance of the company's
commercial mortgage loan portfolio.
Fitch affirms the following ratings with a Stable Outlook:
StanCorp Financial Group
-- Issuer Default Rating at 'BBB+';
-- Senior debt rating at 'BBB';
-- $250 million 5.000% senior notes due Aug. 15, 2022 at 'BBB';
-- Junior subordinated debt rating at 'BB+';
-- 60-year $300 million junior subordinated debt due June 1, 2067
at 'BB+'.
Standard Insurance Company
-- Issuer Financial Strength (IFS) rating at 'A'.
Standard Life Insurance Co. of New York
-- IFS rating at 'A'.
SPA CHAKRA: Judge Won't Sanction Neiger Firm
--------------------------------------------
Bankruptcy Judge Stuart M. Bernstein denied the request of GVK
Limited Partners, Kolber Properties LLC, and George Kolber --
defendants in an adversary proceeding filed by Spa Chakra -- for
sanctions against:
-- Neiger LLP, the attorney of record for Spa Chakra Fifth
Avenue LLC, under Rule 9011 of the Federal Rules of
Bankruptcy Procedure, 28 U.S.C. Sec. 1927 and the Court's
inherent authority; and
-- Edward E. Neiger, Esq., a partner in Neiger, and Jonathan
S. Bodner, Esq., a former Neiger associate who worked on
the Adversary Proceeding.
GVK et al. contend that the Adversary Proceeding was "utterly
frivolous" and a "blatant attempt to extort a settlement to
increase legal fees for plaintiff's counsel, Neiger, LLP."
The Neiger firm has raised several procedural objections to the
part of the Motion under Bankruptcy Rule 9011 and also contends
that the claims were not frivolous. Mr. Bodner argues that the
Court lacks personal jurisdiction over him and that he has been
denied due process of law. Mr. Neiger did not raise any separate
personal defenses.
On Sept. 1, 2012, Neiger merged with another law firm, ASK LLP.
Neiger continues to wind down its existing matters including the
Spa Chakra case.
The Adversary Proceeding centered on Spa Chakra's purchase of the
assets of Cornelia Fifth Avenue, LLC, in February 2009. The
Kolber Defendants were lenders to Cornelia, and at the time of the
Agreement, Cornelia owed them $1,285,009. Richard Aidekman and
Ellen Sackoff, the principals of Cornelia, had guaranteed the
debt. The loan was in default, and Spa Chakra and its affiliate
Spa Chakra, Inc. executed a Guaranty of the debt to induce the
Kolber Defendants to forbear from exercising their right to
receive full payment.
On Nov. 30, 2009, an involuntary chapter 7 petition was filed
against Spa Chakra. On Dec. 22, 2009, the case was converted to a
chapter 11, and relief was ordered. By order dated August 16,
2010, Spa Chakra retained Neiger as special litigation counsel on
a contingency fee basis to bring litigation in connection with the
sale transaction as well as other claims.
Spa Chakra, through Neiger, commenced the Adversary Proceeding on
May 22, 2011. The defendants included Cornelia and certain
affiliates, the Kolber Defendants, Terbell Partners, Ltd. and
Harriet A. Terbell, and unidentified John Does and Mary Roes. The
Complaint contained nine counts. In the main, it charged all of
the defendants with breach of contract, some variation of fraud
and conspiracy to defraud, violations of the Racketeer Influenced
and Corrupt Organizations Act and conspiracy to violate RICO. The
claims revolved around the following misrepresentations, omissions
and breaches of contract relating to the Agreement:
1. The Agreement stated that Cornelia's outstanding gift
card liability was $782,633, but the actual liability
was over $2.5 million, and Richard Aidekman, Cornelia's
principal, altered Cornelia's business records to hide
the true liability.
2. The Agreement did not disclose that Cornelia owed
approximately $637,000 in sales tax liability.
3. Cornelia failed to make a number of payroll payments
before the closing, resulting in additional liability to
Spa Chakra.
4. Although the Agreement stated that Spa Chakra would not
assume any liability under Cornelia's employee benefit
plans, "Cornelia Fifth terminated its employee benefit
plans and Spa Chakra had no choice but to assume
liabilities with respect to employee benefit plans,
causing substantial increases in Spa Chakra's benefit
plan ratings and premiums."
5. Finally, the "financial statements and related
representations made by the Defendants individually
and/or collectively to Spa Chakra did not fairly or
accurately present the financial condition of Cornelia
Fifth," and "the Defendants individually and/or
collectively knew that liabilities were grossly
understated in the [Agreement]."
The Kolber Defendants were not parties to the Agreement -- the
source of the misrepresentations, omissions and breaches. The
Complaint nevertheless named them as defendants on the breach of
contract, fraud and RICO claims, apparently on the basis that they
pressured Cornelia to enter into the transaction with actual or
constructive knowledge of the misrepresentations in the Agreement
because they wanted to get repaid and because they selected the
broker and paid its fees.
According to Judge Bernstein, Neiger and its attorneys showed poor
legal judgment but "there is no evidence to suggest that they had
utterly no basis for their subjective belief in the merits of
their case."
"Furthermore, I cannot conclude on this record that the conduct in
this case was so frivolous as to compel the inference that it was
undertaken in bad faith. . . . This is not intended to condone
what Neiger did, and the result might well have been different
under the objective standards of Bankruptcy Rule 9011. The
Movants have nevertheless failed to satisfy the criteria to
support the imposition of sanctions under 28 U.S.C. [Sec.] 1927 or
the Court's inherent authority, and the Motion is denied," Judge
Bernstein said.
The case is, SPA CHAKRA FIFTH AVENUE, LLC, Plaintiff, v. CORNELIA
FIFTH AVENUE LLC, et al., Defendants, Adv. Proc. No. 11-02151
(Bankr. S.D.N.Y.). A copy of the Court's June 27 Memorandum
Decision is available at http://is.gd/QhIspofrom Leagle.com.
Special Counsel to the Plaintiff is Edward E. Neiger, Esq., Of
Counsel, at NEIGER LLP.
Attorneys for Defendants GVK Limited Partners, Kolber Properties
LLC and George Kolber are Russell S. Burnside, Esq., Kathryn B.
Allibone, Esq. -- rburnside@greenbergdauber.com and
kallibone@greenbergdauber.com -- at GREENBERG, DAUBER, EPSTEIN &
TUCKER P.C.
Attorneys for Jonathan S. Bodner are Harry M. Gutfleish, Esq. --
hgutfleish@formanlaw.com -- at FORMAN HOLT ELIADES & YOUNGMAN LLC.
About Spa Chakra
A group of three vendors, including N.J.-based GVK Limited
Partners, Conn.-based JJB Public Relations and Manhattan-based
Zinna Floral Design, filed a petition on Nov. 30, 2009, to push
Spa Chakra Fifth Avenue LLC into Chapter 7 bankruptcy. The
vendors claimed they were owed more than $1.3 million for services
rendered.
Spa Chakra Inc. later filed a Chapter 11 petition; and both cases
were later consolidated into one Chapter 11 case. Spa Chakra
listed assets of nearly $283,000 and debts of over $5 million in
its bankruptcy petition. The company also named more than 100
creditors.
As of Aug. 20, 2010, all Spa Chakra-operated U.S. spa locations
ceased operations. Crain's New York Business reported that
Hercules Technology Growth Capital, a Palo Alto provider of debt
and equity growth capital, bought the spas.
SUN BANCORP: To Issue 200,000 Common Shares to Directors
--------------------------------------------------------
Sun Bancorp, Inc., registered with the U.S. Securities and
Exchange Commission 200,000 shares of common stock issuable under
the Company's Directors Stock Purchase Plan for a proposed maximum
aggregate offering price of $632,000.
The Company previously filed a registration statement on Form S-8
with the Commission on Aug. 1, 1997, covering, among other things,
17,250 shares of common stock authorized under the Plan. The
Company also filed a registration statement on Form S-8 with the
Commission on Aug. 12, 2009, covering an additional 50,000 shares
of common stock authorized pursuant to a prior amendment and
restatement of the Plan.
A copy of the Form S-8 is available for free at:
http://is.gd/7LAkjp
About Sun Bancorp
Sun Bancorp, Inc. (NASDAQ: SNBC) is a $3.23 billion asset bank
holding company headquartered in Vineland, New Jersey, with its
executive offices located in Mt. Laurel, New Jersey. Its primary
subsidiary is Sun National Bank, a full service commercial bank
serving customers through more than 60 locations in New Jersey.
The Company's balance sheet at March 31, 2013, showed
$3.227 billion in total assets, $2.963 billion in total
liabilities, and stockholders' equity of $264.3 million.
On April 15, 2010, Sun National Bank entered into a written
agreement with the OCC which contained requirements to develop and
implement a profitability and capital plan which provides for the
maintenance of adequate capital to support the Bank's risk profile
in the current economic environment.
TMT USA: U.S. Judge Permits Use of Cash
---------------------------------------
MarineLog.com reports that a U.S. Bankruptcy Judge has ruled that
banks in Taiwan seeking to put pressure on TMT must allow cash to
be used to pay for the costs of crewing and fueling including a
TMT ship the banks have detained as part of what TMT terms "their
commercial differences with" TMT shipowner Nobu Su.
According to the report, TMT says that two major vessels, the
74,000 cgt C Ladybug at Antwerp and the 320,000 dwt A Whale off
Suez, can now be given money which had been previously denied to
Mr. Su by banks in Taiwan.
The report relates a TMT spokesman said Mr. Su would soon travel
to Houston to give direct evidence to the court and that he was
seeking to come to an amicable arrangement with the creditor banks
in Taipei with the help of the Taiwanese government.
The report also relates TMT says it has already questioned the
$3.6 billion valuation the Royal Bank of Scotland placed on its
ship Iron Monger 3 in October 2008. This absurdly high price made
the sale of the vessel all but impossible and left the crew at the
mercy of the RBS over-valuation, says TMT.
Attack on Bankruptcy
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Mega International Commercial Bank Co. Ltd., as agent
for lenders owed $415.5 million secured by mortgages on seven
vessels, says TMT Group, the owner of 17 oceangoing vessels, does
"not belong in the U.S." and the bankruptcy cases "are not
appropriate for Chapter 11 reorganization."
Taiwan-based Mega argues that TMT "manufactured jurisdiction and
filed these cases in bad faith" when the Chapter 11 cases began in
Houston on June 20.
Mega filed papers in opposition to TMT's request for use of cash
representing collateral for secured lenders' claims. The
bankruptcy judge gave interim permission to use cash for two
vessels facing emergencies.
U.S. Bankruptcy Judge Marvin Isgur scheduled a trial to be held on
July 16 and 17 to decide if the bankruptcies were filed in good
faith and whether they should be dismissed.
Mega argued that Judge Isgur should be "particularly attentive" to
protecting rights of secured creditors because the bankruptcies
may be dismissed imminently. Mega said in its papers that three
of its vessels already were seized by other for non-payment of
debt.
Shanghai Commercial Savings Bank Ltd. also filed papers opposing
use of cash. It is owed $79.7 million secured by mortgages on
four vessels.
About TMT Group
Known in the industry as TMT Group, TMT USA Shipmanagement LLC and
its affiliates own 17 vessels. Vessels range in size from
approximately 27,000 dead weight tons (dwt) to approximately
320,000 dwt.
TMT USA and 22 affiliates sought Chapter 11 protection (Bankr.
S.D. Tex. Lead Case No. 13-33740) in Houston, Texas, on June 20,
2013 after lenders seized seven vessels.
TMT has tapped attorneys from Bracewell & Giuliani LLP and
AlixPartners as financial advisors.
On a consolidated basis, the Debtors have $1.52 billion in assets
and $1.46 billion in liabilities.
TMT already filed a lawsuit in U.S. bankruptcy court aimed at
forcing creditors to release the vessels so they can return to
generating income.
TRANSDIGM INC: S&P Cuts Rating on $3.4BB 1st-Lien Facility to 'B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issue rating to 'B'
from 'B+' on TransDigm Inc.'s $3.4 billion first-lien credit
facility, which now consists of a $310 million revolver and
$3.1 billion in term loans due 2017 and 2020, and revised the
recovery rating to '3' (indicating S&P's expectation of
"meaningful" [50%-70%] recovery in a simulated default scenario)
from '2'. The corporate credit rating is unaffected. In
addition, the recovery and issue-level ratings on the existing
subordinated notes remain unchanged.
The first-lien downgrade follows the $200 million increase of
TransDigm's first-lien term loan, to $900 million from
$700 million. As a result, S&P lowered its recovery expectations
for the first-lien lenders in its payment default scenario.
TransDigm also reduced the size of its senior subordinated notes
by a corresponding amount, but the downsizing doesn't affect S&P's
subordinated recovery expectations, given that it already believed
lenders would recover little to nothing in a payment default.
"Our 'B' corporate credit rating reflects our expectation that
leverage will continue to fluctuate as the company completes
acquisitions and pays special dividends and subsequently de-levers
through earnings growth," said credit analyst Tatiana Kleiman.
"We view TransDigm's financial risk profile as "highly leveraged,"
factoring in what we consider a "very aggressive" financial
policy. We view TransDigm's business risk profile as "fair,"
stemming from its participation in the cyclical and competitive
commercial aerospace industry. Its efficient operations, very
high profit margins, well-established positions in niche markets
for highly engineered aircraft components, and good product
diversity partially offset this," S&P noted.
The rating outlook is stable. Although S&P expects improving
commercial aerospace conditions and earnings from acquisitions to
allow the company to partially restore credit measures from
elevated post-dividend levels, S&P believes that the company's
shift toward a more aggressive financial policy and increased
appetite for leverage will result in higher-than-average debt to
EBITDA levels of around 5.5x-6.5x. S&P could lower the ratings if
total debt to EBITDA rises higher than 7x for a sustained period
because of increased debt to fund acquisitions or shareholder
rewards, particularly if changing business conditions or weakness
in the market prompts S&P to lower the company's business risk
profile to "weak" from "fair." S&P do not anticipate raising the
ratings over the next year unless management commits to a less
aggressive financial policy and debt to EBITDA remains less than
5x.
TRINITY COAL: Seeks to Auction Assets Without Lead Bidder
---------------------------------------------------------
Marie Beaudette writing for Dow Jones' DBR Small Cap reports that
Trinity Coal Corp. is seeking to auction its assets on July 30,
but it hasn't yet lined up a lead bidder to set a threshold price.
About Trinity Coal
Trinity Coal Corp. is a coal mining company that owns coal
deposits located in the Appalachian region of the eastern United
States, specifically, in Breathitt, Floyd, Knott Magoffin, and
Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo,
McDowell and Wyoming Counties in West Virginia.
Trinity's coal mining operations are organized into six distinct
coal mining complexes. Three complexes are located in Kentucky and
are referred to as Prater Branch Resources, Little Elk Mining and
Levisa Fork. The Kentucky Operations produced compliance and low
sulfur steam coal. Three complexes are located in West Virginia
and are referred to as Deep Water Resources, North Springs
Resources and Falcon Resources.
Trinity is a wholly owned subsidiary of privately held
multinational conglomerate Essar Global Limited.
Credit Agricole Corporate & Investment Bank, ING Capital LLC and
Natixis, New York Branch filed an involuntary petition for relief
under Chapter 11 against Trinity Coal Corporation and 15
affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three
entities say they are owed a total of $104 million on account
loans provided to Trinity.
On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and
Cecil I. Walker Machinery Co. filed an involuntary petition for
relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335)
against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit
Agricole, ING Capital and Natixis joined as petitioning creditors.
On March 4, 2013, the Debtors filed their consolidated answer to
involuntary petitions and consent to an order for relief. An
order for relief in each of the Debtors was entered by the Court
on March 4, 2013, which converted the involuntary cases to
voluntary Chapter 11 cases.
John W. Ames, Esq., C.R. Bowles, Jr., Esq., and Bruce Cryder,
Esq., at Bingham Greenebaum Doll LLP; and Steven J. Reisman, Esq.,
L. P. Harrison 3rd, Esq., and Jerrold L. Bregman, Esq., at Curtis,
Mallet-Prevost, Colt & Mosle LLP, represent the Debtors.
Edward J. Green, Esq., at Foley & Lardner LLP serves as counsel
for the Official Committee of Unsecured Creditors. Sturgill,
Turner, Barker & Moloney, PLLC serves as the Committee's local
counsel.
UNI-PIXEL INC: To Join Russell 3000 Index & Russell Global Index
----------------------------------------------------------------
UniPixel, Inc., is set to join the broad-market Russell 3000 Index
and the Russell Global Index when Russell Investments
reconstitutes its comprehensive set of U.S. and global equity
indexes on June 28, 2013, according to a preliminary list of
additions posted June 21, 2013, on www.russell.com/indexes.
Annual reconstitution of Russell's U.S. indexes captures the 4,000
largest U.S. stocks as of the end of May, ranking them by total
market capitalization. Membership in the Russell 3000, which
remains in place for one year, means automatic inclusion in the
large-cap Russell 1000? Index or small-cap Russell 2000 Index as
well as the appropriate growth and value style indexes. Russell
determines membership for its equity indexes primarily by
objective, market-capitalization rankings and style attributes.
The Russell 3000 also serves as the U.S. component to the Russell
Global Index, which Russell launched in 2007.
Russell indexes are widely used by investment managers and
institutional investors for index funds and as benchmarks for both
passive and active investment strategies. Approximately $4.1
trillion in assets are benchmarked to the Russell Indexes.
Russell calculates more than 700,000 benchmarks daily covering
approximately 98 percent of the investable market globally, more
than 80 countries and 10,000 securities. These investment tools
originated from Russell's multi-manager investment business in the
early 1980s when the company saw the need for a more objective,
market-driven set of benchmarks in order to evaluate outside
investment managers.
Final membership lists will be posted July 1, 2013. Total returns
data for the Russell 3000 and other Russell Indexes is available
at www.russell.com/Indexes/performance/default.asp.
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 March 31, 2013, showed $19.40 million in total
assets, $693,193 in total liabilities and $18.71 million in total
shareholders' equity.
"As of December 31, 2012, we had a cash balance of approximately
$13.0 million and working capital of $12.8 million. We project
that current cash reserves will sustain our operations through at
least December 31, 2013, and we are not aware of any trends or
potential events that are likely to adversely impact our short
term liquidity through this term. We expect to fund our
operations with our net product revenues from our commercial
products, cash and cash equivalents supplemented by proceeds from
equity or debt financings, and loans or collaborative agreements
with corporate partners, each to the extent necessary," according
to the Company's annual report for the year ended Dec. 31, 2012.
UNITEK GLOBAL: John Waterfield Held 6.2% Equity Stake at June 19
----------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, John Randall Waterfield disclosed that, as of
June 19, 2013, he beneficially owned 1,155,860 shares of common
stock of UniTek Global Services, Inc., representing 6.18 percent
of the shares outstanding. A copy of the regulatory filing is
available for free at http://is.gd/RqWGZK
About UniTek Global
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.
As reported by the TCR on June 11, 2013, Standard & Poor's Ratings
Services lowered its corporate credit rating on Blue Bell, Pa.-
based UniTek Global Services Inc. to 'D' from 'CCC'. "The
downgrade follows UniTek's announcement that it did not make
a scheduled interest payment on May 29, 2013, on its senior
secured term loan due 2018, which we consider to be a default
under our timeliness of payments criteria," said Standard & Poor's
credit analyst Michael Weinstein.
In the June 11, 2013, edition of the TCR, Moody's Investors
Service lowered UniTek Global Services, Inc.'s probability of
default and corporate family ratings to Ca-PD/LD and Ca,
respectively. The Ca corporate family rating reflects UniTek's
missed interest payment on the term loan which is considered a
default under Moody's definition, the heightened possibility of
another default event, continued delays in the filing of restated
financials including the last two audits, management turnover, the
potential loss of the company's largest customer and other
business and legal risks stemming from issues at the company's
Pinnacle subsidiary.
UNIVERSAL SETTLEMENTS: Mich. Court Dismisses Nat'l Viatical Suit
----------------------------------------------------------------
In the case, NATIONAL VIATICAL, INC., and JAMES TORTIA
Plaintiffs/Counter-Defendants, File v. UNIVERSAL SETTLEMENTS
INTERNATIONAL, INC., Defendant/Counter-Claimant, No. 1:11-CV-1226
(W.D. Mich.), a breach of contract action, Michigan District Judge
Robert Holmes Bell granted defendant Universal Settlements
International, Inc.'s motion for summary judgment in its favor and
against Plaintiffs, dismissing all of Plaintiffs' claims with
prejudice. The Court, however, denied as moot USI's request for
damages on its counter-claims.
National Viatical and James Torchia filed this action in the
Cherokee County Superior Court in Georgia, alleging that USI
breached the confidentiality provision of an oral settlement
agreement in a prior action, Universal Settlements International,
Inc. v. National Viatical, Inc., No. 1:07-CV-1243 (W.D. Mich.).
On April 21, 2011, Plaintiffs obtained a temporary restraining
order from the Georgia state court restraining USI from "(1)
demanding performance under its settlement agreement with
Plaintiffs; and (2) seeking default against Plaintiffs."
Defendant removed this action to the United States District Court
for the Northern District of Georgia. On May 10, 2011, Plaintiffs
filed a motion for a preliminary injunction requesting the same
relief addressed by the TRO. Defendant filed a counterclaim
alleging breach of contract and fraudulent inducement, and seeking
damages and declaratory relief.
On November 17, 2011, the action was transferred to the W.D.
Michigan Court. On August 31, 2012, the W.D. Mich. Court entered
an order dissolving the TRO entered by the Georgia state court.
The order dissolving the TRO was affirmed on appeal. Nat'l
Viatical, Inc. v. Universal Settlements Int'l, Inc., No. 12-2262,
___ F. 3d ___, 2013 WL 2249057 (6th Cir. May 23, 2013).
Plaintiffs allege breach of the settlement agreement in the prior
action. The prior action was a suit by USI against NVI, Torchia,
and their attorney, Mark Cellelo, claiming that they
misappropriated $5,000,000 in funds they were holding in escrow
for USI. USI sought the return of $5,000,0000 with interest, as
well as treble damages and reasonable attorney's fees for
statutory conversion.
On October 26, 2010, on the eve of trial and after an all-day
settlement conference, the parties entered into an oral settlement
which they placed on the record before Magistrate Judge Carmody.
In exchange for the mutual release of all claims, Celello agreed
to pay USI $242,000, and NVI and Torchia agreed to pay USI
$1,000,000 in installment payments, with the last installment due
12 months from the date of the settlement. To secure the
judgment, NVI and Torchia agreed to assign USI an interest in an
insurance policy. NVI and Torchia further agreed that if they
defaulted on any payment and failed to cure the default within ten
days after receiving notice, a judgment of $5,000,000 would enter
against them. Notice of the settlement would have to be given to
the Canadian CCAA court.
During the pendency of the prior action, USI sought relief in the
Ontario Superior Court under the Companies' Creditors Arrangement
Act of Canada, which is similar to a reorganization under Chapter
11 of the United States Bankruptcy Code.
The parties agreed that the terms of the settlement would be
confidential, except as to certain necessary disclosures,
including disclosures to the CCAA court, taxing authorities,
attorneys, accountants, and Ernst & Young, USI's Monitor in the
Canadian restructuring proceedings. Magistrate Judge Carmody
ordered the parties to file dismissal papers with the Court by
January 24, 2011.
USI circulated a proposed draft settlement agreement on November
17, 2010. Although Cellelo's counsel responded with edits, USI
received no response from NVI or Torchia. USI circulated revised
settlement agreements on January 21, 2011, and again on January
24, 2011, but again received no response from NVI and Torchia.
NVI and Torchia's first payment was due on January 26, 2011. They
did not make their first payment to USI by that date. According to
counsel for NVI and Torchia, NVI and Torchia overnighted their
first $100,000 check to him on January 27, 2011, after the payment
was due.
Following the settlement, a dispute arose concerning whether USI
breached the confidentiality provision by publishing some aspects
of the settlement on its website. When, as of March 8, 2011,
dismissal documents had still not been filed, the Court assumed
that the matter would have to proceed to trial, and rescheduled
the matter for a final pretrial conference. Celello responded by
filing an emergency motion to enforce the settlement agreement and
for injunctive and monetary sanctions against USI for breaching
the confidentiality agreement. NVI and Torchia moved to amend
their counterclaim to allege a claim against USI for breach of the
settlement agreement. NVI and Torchia then withdrew the motion.
Judge Carmody granted Cellelo's request for an order that the
parties have a valid oral settlement, denied his request for
monetary sanctions, but enjoined USI from posting any further
information regarding the settlement or otherwise violating the
confidentiality agreement. USI appealed.
The W.D. Mich. Court affirmed the Magistrate Judge's order, except
as to injunctive relief. On April 11, 2011, the W.D. Mich. Court
issued an order dismissing the case pursuant to the terms of the
parties' oral settlement agreement.
On April 20, 2011, NVI and Torchia filed the present action
against USI. Plaintiffs seek a judgment (1) declaring that USI's
breaches excuse Plaintiffs from performance under the settlement
agreement, (2) awarding them damages for breach of contract, (3)
temporarily enjoining USI from seeking default or demanding
performance of the settlement agreement until this case can be
tried on the merits, and (4) permitting Plaintiffs to set off all
damages incurred from USI's breaches against their performance
under the settlement agreement. USI contends that it is entitled
to summary judgment on Plaintiffs' complaint because it did not
breach the confidentiality agreement.
A copy of the District Court's June 21, 2013 opinion is available
at http://is.gd/fXFiSzfrom Leagle.com.
National Viatical, Inc., and James Torchia are represented by
Jason Wayne Graham, Graham & Penman LLP.
Universal Settlements International, Inc., is represented by
Robert J. Franzinger, Dykema Gossett PLLC & Mark D. van der Laan,
Dykema Gossett PLLC.
UPH HOLDINGS: Files Schedules of Assets and Liabilities
-------------------------------------------------------
UPH Holdings, Inc. filed with the U.S. Bankruptcy Court for the
Western District of Texas, Austin Division, its schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $26,917,341
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $11,142,062
E. Creditors Holding
Unsecured Priority
Claims $582,233
F. Creditors Holding
Unsecured Non-priority
Claims $7,981,510
----------- ------------
TOTAL $26,917,341 $19,705,805
A copy of the schedules is available for free at
http://bankrupt.com/misc/UPH_HOLDINGS_sal.pdf
About UPH and Pac-West
UPH Holdings Inc. and several affiliates filed Chapter 11
petitions (Bankr. W.D. Tex. Lead Case No. 13-bk-10570) on March
28, 2013. Judge Tony M. Davis oversees the case. Jennifer
Francine Wertz, Esq., and Patricia Baron Tomasco, Esq., at Jackson
Walker, L.L.P., serve as the Debtors' counsel. UPH Holdings
estimated assets and debts of at least $10 million.
Other affiliates that sought Chapter 11 protection are: Pac-West
Telecomm, Inc.; Tex-Link Communications, Inc.; Unipoint Holdings,
Inc.; Unipoint Enhanced Services, Inc.; Unipoint Services, Inc.;
Nwire LLC; and Peering Partners Communications LLC (Case Nos.
13-10571 to 13-10577).
VALENCE TECHNOLOGY: Storage Battery Maker Has Offer From Lender
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Valence Technology Inc., a developer of storage
batteries, might end up in the hands of lender Berg & Berg
Enterprises LLC.
According to the report, the company said in court filing last
week that it located a buyer. When the sale proposal was
presented to Berg, the lender rejected the transaction. According
to the filing, Berg said it is working on financing and submitted
a proposal for a Chapter 11 plan. Valence said it's studying the
proposal.
The report notes that with the exclusive right to propose a plan
ending in about a week, Valence filed papers for a three-month
expansion of exclusivity. If granted, the new deadline would be
Oct. 7. Austin, Texas-based Valence previously said it was unable
to propose a plan because it hadn't found a loan to finance an
exit from Chapter 11.
About Valence Technology
Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 12-11580) on July 12, 2012, in its home-town in
Austin. Founded in 1989, Valence develops lithium iron magnesium
phosphate rechargeable batteries. Its products are used in hybrid
and electric vehicles, as well as hybrid boats and Segway personal
transporters.
The Debtor disclosed debt of $82.6 million and assets of
$31.5 million as of March 31, 2012. The Debtor disclosed
$24,858,325 in assets and $78,520,831 in liabilities as of the
Chapter 11 filing. Chairman Carl E. Berg and related entities own
44.4% of the shares. ClearBridge Advisors LLC owns 5.5%.
Judge Craig A. Gargotta presides over the case. The Company is
being advised by Streusand, Landon & Ozburn, LLP with respect to
bankruptcy matters. The petition was signed by Robert Kanode,
CEO.
On Aug. 8, 2012, the U.S. Trustee for Region 7 appointed five
creditors to serve on the Official Committee of Unsecured
Creditors of the Debtor. Brinkman Portillo Ronk, PC, serves as
its counsel.
VAUGHAN COMPANY: Court Won't Dismiss Suit Against Lacys
-------------------------------------------------------
In the case, JUDITH A. WAGNER, Chapter 11 Trustee of the
bankruptcy estate of the Vaughan Company, Realtors, Plaintiff, v.
DONALD LACY, DEANNA LACY, AND DORIS LACY, Defendants, Case No.
12-cv-817WJ/SMV, Case No. 12-cv-547 WJ/SMV (D. N.M.), District
Judge William P. Johnson held that:
-- the Defendants' Motion to Dismiss Due To Insufficient
Service of Process is denied;
-- service of process should be quashed because the Plaintiff
failed to properly effectuate service, and
-- the Plaintiff should re-serve Defendants.
A copy of the Court's June 26 Order is available at
http://is.gd/G2InLIfrom Leagle.com.
Judith A Wagner, Plaintiff, is represented by Edward A. Mazel,
Esq., and James A. Askew, Esq. -- EDMAZEL@ASKEWMAZELFIRM.COM and
JASKEW@ASKEWMAZELFIRM.COM -- at Askew & Mazel, LLC.
Defendants Donald Lacy, Deanna Lacy, and Doris Lacy are
represented by Louis Puccini, Jr., Esq. --
puccinilaw@puccinilaw.com -- at Puccini Law, PA.
About Vaughan Company
The Vaughan Company, Realtors, descended into bankruptcy after
Douglas F. Vaughan, the former controlling shareholder, used the
company to run a Ponzi scheme from 1993 until January 2010. Mr.
Vaughan has entered into a plea agreement with the United States,
admitting guilt to various securities violations.
In March 2010, the Securities and Exchange Commission filed fraud
charges against Mr. Vaughan, a New Mexico realtor, and obtained an
emergency court order to halt his $80 million Ponzi scheme. The
SEC's complaint, filed in federal court in Albuquerque, alleges
Mr. Vaughan through his company issued promissory notes that he
claimed would generate high fixed returns for investors. Mr.
Vaughan also used another entity -- Vaughan Capital LLC -- to
solicit investors for different types of real estate-related
investments, such as buying residential properties at distressed
prices. Mr. Vaughan relied entirely on new money raised from
investors through both companies to fund Vaughan Company's ever-
increasing obligations to note holders.
The SEC also charged both of Mr. Vaughan's companies in the
enforcement action. Neither Mr. Vaughan nor his companies are
registered with the SEC to offer securities under the federal
securities laws.
The Vaughan Company Realtors filed for Chapter 11 protection on
Feb. 22, 2010 (Bankr. N.M. Case No. 10-10759). George D. Giddens,
Jr., Esq., represents the Debtor in its restructuring efforts.
The Company estimated both assets and debts of between $1 million
and $10 million. Judith A. Wagner was appointed as Chapter 11
Trustee.
Mr. Vaughan filed a separate Chapter 11 petition (Bankr. D. N.M.
Case No. 10-10763) on Feb. 22, 2010. The case was converted to a
chapter 7 proceeding on May 20, 2010. Yvette Gonzales is the duly
appointed trustee of the Chapter 7 estate.
VELATEL GLOBAL: Cures $600,000 Default Under Promissory Note
------------------------------------------------------------
Velatel Global Communications, Inc., has cured a default under
the promissory note issued as part of the Company's acquisition of
China Motions Telecom (HK) Limited. The Company previously
disclosed that it failed to pay the installment payment of
HK$4,650,000 (US$600,000) called for under the Note to be paid on
or before May 31, 2013. The default has been cured based on
payment of the installment, and the holder of the Note has
confirmed that the default no longer exists.
About VelaTel Global
VelaTel acquires spectrum assets through acquisition or joint
venture relationships, and provides capital, engineering,
architectural and construction services related to the build-out
of wireless broadband telecommunications networks, which it then
operates by offering services attractive to residential,
enterprise and government subscribers. VelaTel currently focuses
on emerging markets where internet penetration rate is low
relative to the capacity of incumbent operators to provide
comparable cutting edge services, or where the entry cost to
acquire spectrum is low relative to projected subscribers.
VelaTel currently has project operations in People's Republic of
China, Croatia, Montenegro and Peru. Additional target markets
include countries in Latin America, the Caribbean, Southeast Asia
and Eastern Europe. VelaTel's administrative headquarters are in
Carlsbad, California. See http://www.velatel.com/
Velatel Global incurred a net loss of $45.60 million on $1.87
million of revenue for the year ended Dec. 31, 2012, as compared
with a net loss of $21.79 million on $0 of revenue for the year
ended Dec. 31, 2011. As of March 31, 2013, the Company had $15.77
million in total assets, $62.25 million in total liabilities and a
$46.48 million total deficiency.
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's viability is dependent upon its
ability to obtain future financing and the success of its future
operations. The Company has incurred a net loss of $45,601,292
for the year ended Dec. 31, 2012, cumulative losses of
$298,347,524 since inception, a negative working capital of
$34,972,850 and a stockholders' deficiency of $36,566,868. These
factors raise substantial doubt as to the Company's ability to
continue as a going concern.
VILLAGE AT NIPOMO: Files Schedules of Assets and Liabilities
------------------------------------------------------------
The Village at Nipomo, LLC, filed with the U.S. Bankruptcy Court
for the Central District of California, San Fernando Valley
Division, its schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $11,500,000
B. Personal Property $302,970
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $9,600,000
E. Creditors Holding
Unsecured Priority
Claims $45,558
F. Creditors Holding
Unsecured Non-priority
Claims $0
----------- ------------
TOTAL $11,802,970 $9,645,558
A copy of the schedules is available for free at
http://bankrupt.com/misc/THE_VILLAGE_AT_NIPOMO_sal.pdf
About Village at Nipomo
The Village at Nipomo, LLC, operator of a shopping center in Tefft
and Mary Streets, in Nipomo, California, sought Chapter 11
protection (Bankr. C.D. Cal. Case No. 13-13593) on May 28, 2013.
The company sought bankruptcy protection following efforts by
Pacific Western Bank to appoint a receiver for the Debtor's
commercial shopping center known as "The Village at Nipomo".
VAN LLC was formed by Edwin F. Moore, who is currently a member of
the Debtor, holding a 25 percent interest in the company. Edwin
Moore and Carolyn W. Moore earlier filed a separate Chapter 11
petition (Case No. 12-15817). VAN LLC is seeking joint
administration of its case with the Moores' Chapter 11 case, which
is pending before Judge Alan M. Ahart.
VAN LLC estimated at least $10 million in assets and $1 million to
$10 million in liabilities. The Debtor is represented by Illyssa
I. Fogel & Associates.
VITESSE SEMICONDUCTOR: Kopp Held 7% Equity Stake at June 26
-----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Kopp Investment Advisors, LLC, and its
affiliates disclosed that, as of June 26, 2013, they beneficially
owned 3,770,319 shares of common stock of Vitesse Semiconductor
Corporation representing 7 percent of the shares outstanding.
The reporting persons previously disclosed beneficial ownership of
3,107,334 common shares or 8.3 percent equity stake as of May 29,
2013. A copy of the amended regulatory filing is available at:
http://is.gd/txzDOe
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 March 31, 2013, showed
$68.85 million in total assets, $80.96 million in total
liabilities and a $12.10 million total stockholders' deficit.
VISUALANT INC: Unit Renews Facility with BFI Until Dec. 31
----------------------------------------------------------
TransTech Systems, Inc., a subsidiary of Visualant, Inc., has
renewed its credit facility with BFI Business Finance until
Dec. 12, 2013, with a floor for prime interest of 4.5 percent.
On Dec. 9, 2008, TransTech Systems entered into a $1,000,000
secured credit facility with BFI to fund its operations.
The eligible borrowing is based on 80 percent of eligible trade
accounts receivable, not to exceed $700,000. The Company agreed
to repay the $183,000 inventory balance monthly with a final
payment by Nov. 30, 2013. The secured credit facility is
collateralized by the assets of TransTech Systems, Inc, with a
guarantee by Visualant.
The Company's revolving credit facility requires a lockbox
arrangement, which provides for all receipts to be swept daily to
reduce borrowings outstanding under the credit facility.
About Visualant Inc.
Seattle, Wash.-based Visualant, Inc., was incorporated under the
laws of the State of Nevada on Oct. 8, 1998. The Company
develops low-cost, high speed, light-based security and quality
control solutions for use in homeland security, anti-
counterfeiting, forgery/fraud prevention, brand protection and
process control applications.
Visualant incurred a net loss of $2.72 million for the year
ended Sept. 30, 2012, compared with a net loss of $2.39 million
for the same period during the prior year. The Company's balance
sheet at March 31, 2013, showed $4.14 million in total assets,
$5.53 million in total liabilities, a $1.42 million total
stockholders' deficit and $40,133 in noncontrolling interest.
PMB Helin Donovan, LLP, in Nov. 10, 2012, 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 sustained a net loss from operations and has an
accumulated deficit since inception which raise substantial doubt
about the Company's ability to continue as a going concern.
WALNUT CREEK STORAGE: Texas Judge Confirms Plan
-----------------------------------------------
Walnut Creek Storage Partners, LTD., won confirmation of its
Original Chapter 11 Plan of Reorganization dated June 10, 2013.
Bankruptcy Judge D. Michael Lynn issued "Findings Of Fact And
Conclusions Of Law In Connection With Confirmation Of Original
Chapter 11 Plan Of Reorganization" following a confirmation
hearing on June 26. A copy of the Court's ruling is available at
http://is.gd/DoomHgfrom Leagle.com.
Walnut Creek Storage Partners, LTD., based in Roanoke, Texas,
filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No.
12-45560) on Oct. 1, 2012. Judge D. Michael Lynn oversees the
case. Craig Douglas Davis, Esq. -- davisdavisandroberts@yahoo.com
-- Davis, Ermis & Roberts, P.C., serves as the Debtor's counsel.
In its petition, the Debtor estimated $1 million to $10 million in
both assets and debts. The petition was signed by Justin Nemec,
partner.
WESTERN CAPITAL: Creditors Have Until July 5 to File Claims
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado established
July 5, 2013, as the deadline for any individual or entity to file
proofs of claim against Western Capital Partners LLC.
The Court also established Nov. 18, as the deadline of government
proofs of claim.
Western Capital Partners LLC filed a bare-bones Chapter 11
petition (Bankr. D. Col. Case No. 13-15760) in Denver on April 10,
2013. The Englewood-based company estimated assets and debt of
$10 million to $50 million. Judge Michael E. Romero presides over
the case. The Debtor is represented by Jeffrey A. Weinman, Esq.,
at Weinman & Associates, P.C.
WESTINGHOUSE AIR: S&P Raises Corp. Credit Rating From 'BB+'
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate and senior
unsecured credit ratings on Wilmerding, Pa.-based Westinghouse Air
Brake Technologies Corp. (Wabtec) to 'BBB-' from 'BB+'. At the
same time, S&P removed the ratings from CreditWatch, where they
were placed with positive implications on May 23, 2013. The
outlook on the corporate credit rating is stable. S&P
simultaneously withdrew its '3' recovery rating on the senior
unsecured debt because it do not have recovery ratings on issues
of investment-grade companies.
"The upgrade reflects the company's good operating performance and
our expectation that it will adhere to moderate financial
policies," said Standard & Poor's credit analyst Sarah Wyeth. "We
revised our assessment of Wabtec's financial risk profile to
"intermediate" from "significant," which supports an investment-
grade rating. Funds from operations (FFO) to debt totaled more
than 60% as of March 31, 2013. For the 'BBB-' rating, we expect
FFO to debt of about 35%, which allows the company room for some
debt-funded acquisitions or shareholder-friendly activities".
The outlook is stable. "The rating on Wabtec reflects our
expectation that the company will maintain 'intermediate' credit
measures, including FFO to debt of about 35%, which it currently
exceeds," said Ms. Wyeth.
S&P could lower the rating if the company pursues a more
aggressive financial policy than it expects, such as debt-financed
acquisitions or shareholder-friendly activities that will likely
result in leverage declining to and remaining at less than FFO to
debt of 30%. S&P could raise the rating if Wabtec maintains good
operating and credit metrics while it pursues growth initiatives.
This could occur if the company improves its scale and diversity,
organically or via acquisitions, while maintaining good credit
measures and a moderate financial policy.
WILTON HOLDINGS: S&P Revises Outlook to Neg. & Affirms 'B' CCR
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Woodridge, Ill.-based Wilton Holdings Inc. to negative from
stable. At the same time, S&P affirmed the 'B' corporate
credit rating on Wilton.
S&P also affirmed its issue-level rating on the $400 million
senior secured term loan due 2018 at 'B'. The '3' recovery rating
on this term loan indicates S&P's expectation for meaningful (50%
to 70%) recovery in the event of payment default.
"The outlook revision to negative reflects our belief that
continued weak operating performance could persist," said Standard
& Poor's credit analyst Stephanie Harter. "This could result in
covenant cushion declining below 15%, which could constrain
liquidity following a covenant step-down at fiscal year-end 2013."
The ratings on Wilton reflect S&P's view that the company's
financial risk profile is "highly leveraged" and that the business
risk profile is "vulnerable." Wilton's highly leveraged financial
risk profile reflects its weak credit metrics and S&P's belief
that it has an aggressive financial policy. Wilton's vulnerable
business risk profile reflects S&P's view that the company
participates in a competitive and highly fragmented crafts
industry, which has low barriers to entry and a narrow product and
customer focus. S&P believes the company's products are also
vulnerable to changes in consumer tastes and cutbacks in
discretionary spending.
S&P could lower its ratings if business conditions, liquidity, or
credit protection measures weaken such that covenant cushion
declines to about 10% or below. Alternatively, S&P could revise
the outlook to stable if Wilton's operating performance recovers,
resulting in covenant cushion being sustained above 15% and a
gradual reduction in leverage.
WORLDCOM INC: Must Return to Mediation Over K&A Claim Dispute
-------------------------------------------------------------
By its latest estimate, Kennedy & Associates seeks approximately
$25 million in damages based on its assertion that WorldCom Inc.
breached an agreement between the parties by failing to pursue
potential insurance overpayment claims identified by K&A, even
though nothing in the agreement required WorldCom to pursue any or
every potential recovery identified by K&A.
WorldCom objected to the Claim and filed a Second Motion for
Partial Summary Judgment with Respect to Claim No. 23470.
At the March 14 hearing, counsel for K&A represented that the
damages approximated $21 million. At the June 19 hearing,
however, counsel estimated the potential damages approximated $25
million, "give or take several million."
In a June 26 Memorandum Opinion and Order available at
http://is.gd/9QXS0gfrom Leagle.com, Judge Martin Glenn grants the
motion for partial summary judgment in favor of the Debtors,
limiting any recovery by K&A, in the event it succeeds in
establishing the existence of a binding contract with WorldCom, to
a percentage of the actual cost or expense savings or
reimbursement achieved by WorldCom as a result of K&A's
recommendations. The parties are directed to return to mediation
in light of the disposition granting WorldCom partial summary
judgment. Counsel shall also confer regarding any discovery on
any issue remaining for the Court to decide. After a further
scheduling conference, the Court will establish a schedule for
disposition of the remaining issues.
All remaining unresolved matters in WorldCom, including the K&A
claim, were transferred to Judge Glenn when Chief Judge Gonzalez
retired.
Sara E. Welch, Esq. -- swelch@stinson.com -- at STINSON MORRISON
HECKER LLP, Kansas City, MO, Attorneys for the Debtors and Debtors
in Possession.
Alex Pirogovsky, Esq. -- alex@pflaw1.com -- at PIROGOVSKY
FREMDERMAN, LTD., Northbrook, IL, Counsel for Kennedy &
Associates, Inc.
Dean J. Polales, Esq. -- djpolales@uhlaw.com -- at UNGARETTI &
HARRIS LLP, Chicago, IL, Counsel for Kennedy & Associates, Inc.
WorldCom, Inc., a Clinton, Mississippi-based global communications
company, filed for chapter 11 protection (Bankr. S.D.N.Y. Case No.
02-13532) on July 21, 2002. On March 31, 2002, WorldCom disclosed
$103,803,000,000 in assets and $45,897,000,000 in debts. The
Debtors were represented by Weil, Gotshal & Manges LLP. The
Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and
on April 20, 2004, the Company formally emerged from Chapter 11
protection as MCI, Inc. On Jan. 6, 2006, MCI merged with Verizon
Communications, Inc. MCI is now known as Verizon Business, a unit
of Verizon Communications.
ZOGENIX INC: Has Exclusive Right Promote Migranal(R) in U.S.
------------------------------------------------------------
Zogenix, Inc., and Valeant Pharmaceuticals North America LLC
entered into a co-promotion agreement on June 27, 2013. Under the
terms of the Agreement, Zogenix was granted the exclusive right to
promote Migranal(R) (dihydroergotamine mesylate) Nasal Spray, to a
prescriber audience of physicians and other health care
practitioners in the United States. Under the Agreement, the
Zogenix sales team will begin selling Migranal to prescribers no
later than Aug. 26, 2013. The term of the Agreement will run
through Dec. 31, 2015, and can be extended by mutual agreement of
the parties in additional 12 month increments. Valeant remains
responsible for the manufacture, supply and distribution of
Migranal for sale in the United States. In addition, Valeant will
supply a specified amount of product samples to Zogenix every six
months, and Zogenix will reimburse Valeant for the cost of
additional samples and any promotional materials ordered by
Zogenix.
In partial consideration of Zogenix's sales efforts, Valeant will
pay Zogenix a co-promotion fee on a quarterly basis that
represents specified percentages of net sales generated from
Zogenix over defined baseline amounts of net sales. In addition,
upon completion of the co-promotion term, and only if the
Agreement is not terminated by Valeant due to a Zogenix bankruptcy
event or a material failure of Zogenix to comply with its material
obligations under the Agreement, Valeant will be required to pay
Zogenix an additional tail payment calculated as a fixed
percentage of the Zogenix net sales over the Baseline Forecast
during the first full six months following the last day of the
term.
Zogenix may terminate the Agreement in the event of a Valeant
supply failure or material product recall, or if the net sales
price in a fiscal quarter is less than a specified percentage of
the net sales price in the immediately preceding quarter, if the
reduction in such net sales price would have a material adverse
effect on Zogenix's financial return as a result of performance of
its obligation under the Agreement.
About Zogenix Inc.
Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and
Emeryville, California, is a pharmaceutical company
commercializing and developing products for the treatment of
central nervous system disorders and pain.
Zogenix incurred a net loss of $47.38 million in 2012, as compared
with a net loss of $83.90 million in 2011. The Company's balance
sheet at March 31, 2013, showed $65.57 million in total assets,
$70.56 million in total liabilities, and a $4.99 million total
stockholders' deficit.
Ernst & Young LLP, in San Diego, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012, citing recurring losses from
operations and lack of sufficient working capital which raise
substantial doubt about the Company's ability to continue as a
going concern.
* Bad Faith Is 'Cause' to Dismiss Individual Chapter 7
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in Atlanta joined an
already existing split among circuit courts and ruled on June 26
that an individual's pre-bankruptcy bad faith conduct can form the
basis for dismissing a Chapter 7 petition for "cause" under
Section 707(a) of the Bankruptcy Code.
According to the report, the individual bankrupt had about
$320,000 in primarily business debt. About half was an unpaid,
two-year-old judgment on a guaranty. The bankruptcy court
dismissed the Chapter 7 case, finding bad faith in pre-bankruptcy
conduct. The bankruptcy judge said the individual attempted to
evade the judgment, had the ability to pay some of the debt, and
made no changes in his lifestyle.
The report discloses that Eleventh Circuit Judge Susan H. Black
upheld the bankruptcy judge and joined the courts of appeal in
Philadelphia and New York by allowing dismissal for cause based on
pre-bankruptcy conduct. In a 1994 case, the appeals court in St.
Louis decided that bad faith isn't grounds for dismissal for
cause. Judge Black's opinion examines and rejects a plethora of
arguments against using bad faith as grounds for dismissal of an
individual's Chapter 7 petition.
The case is Piazza v. Nueterra Healthcare Physical Therapy LLC (In
re Piazza), 12-12899, U.S. Eleventh Circuit Court of Appeals
(Atlanta).
* Delaware Cases Get New Judge Following Fitzgerald's Retirement
----------------------------------------------------------------
Here are the new judges for the cases previously assigned to (now
retired) Judge Judith Fitzgerald of the U.S. Bankruptcy Court for
the District of Delaware:
Debtor New Bankruptcy Judge
------ --------------------
Swan Transportation Company Judge Brendan L. Shannon
A-Best Products Company, Inc. Judge Kevin J. Carey
Combustion Engineering, Inc. Judge Mary F. Walrath
ABB Lummus Global Inc. Judge Mary F. Walrath
W.R. Grace & Co. Judge Kevin J. Carey
Federal-Mogul Global, Inc. Judge Christopher S. Sontchi
The Flintkote Company Judge Mary F. Walrath
Specialty Products Holding Judge Peter J. Walsh
Just for Feet, Inc. Judge Christopher S. Sontchi
David J. Buchanan Judge Brendan L. Shannon
* U.S. Regulators Strike Agreement on Capital Rule
--------------------------------------------------
Michael R. Crittenden, writing for The Wall Street Journal,
reported that the Federal Reserve will vote this week to finalize
capital rules for U.S. banks after regulators agreed to resolve a
separate issue that had delayed action.
According to the report, after months of dispute, officials at the
Fed, Federal Deposit Insurance Corp. and Office of the Comptroller
of the Currency have agreed to increase one measure of the biggest
banks' ability to operate in times of stress. Banking regulators
will soon propose requiring banks to increase the amount of equity
they hold against assets, known as the "leverage ratio."
The issue has divided U.S. officials, delaying action on broader
international capital rules agreed to by global regulators in 2010
and revised in 2011, WSJ noted.
Some officials at the FDIC have been pushing for a much higher
leverage ratio than Fed officials believed necessary, according to
WSJ. The debate has been complicated by the uncertain status of
Richard Cordray, who heads the Consumer Financial Protection
Bureau and is also a member of the FDIC's five-member board. Mr.
Cordray was installed by President Barack Obama in a recess
appointment, and recent legal challenges have raised the specter
that his appointment, and any votes he casts at the FDIC, could be
invalidated.
That has given more bargaining power to the FDIC's two Republican
members, Thomas Hoenig and Jeremiah Norton, who favor a higher
leverage ratio than the 3% originally proposed by regulators, WSJ
said. The FDIC has used the need to get Messrs. Hoenig and Norton
on board as a bargaining tool in its discussions with the Fed.
* Finance Committee Asks Senators to Start Tax Reform Process
-------------------------------------------------------------
Jonathan Weisman, writing for The New York Times, reported that
the Democratic and Republican leaders of the Senate Finance
Committee began a legislative push to simplify the tax code by
asking all senators to identify what tax breaks, deductions and
credits should be kept.
According to the report, Senator Max Baucus of Montana, the
committee's chairman, and Senator Orrin G. Hatch of Utah, the
committee's ranking Republican, said they wanted to start the
process by clearing the tax code of all special breaks. They gave
their colleagues until July 26 to produce their so-called pardon
list.
"To make sure that we clear out all the unproductive provisions
and simplify tax reform, we plan to operate from an assumption
that all special provisions are out unless there is clear evidence
that they: (1) help grow the economy, (2) make the tax code
fairer, or (3) effectively promote other important policy
objectives," the senators told their colleagues, the report
related. They also asked for proposals for changes to the tax
code.
The leaders of both the finance committee and the House Ways and
Means Committee have promised a robust effort this Congress to
overhaul the tax code, but they face extremely long odds.
President Obama has expressed only tentative interest, the report
noted.
Senate Democratic leaders have offered little support, and
although Republicans say it is a top priority, they have been
loath to say which breaks they would sacrifice or curtail, the
report said.
* Fed Officials Intensify Effort to Curb Surge in Interest Rates
----------------------------------------------------------------
Joshua Zumbrun, Jeff Kearns and Steve Matthews, writing for
Bloomberg News, reported that Federal Reserve officials
intensified efforts to curb a growth-threatening rise in long-term
interest rates, seeking to clarify comments by Chairman Ben S.
Bernanke that triggered turmoil in global financial markets.
According to the report, William C. Dudley, president of the
Federal Reserve Bank of New York, said any decision to reduce the
pace of asset purchases wouldn't represent a withdrawal of
stimulus, and that an increase in the Fed's benchmark interest
rate is "very likely to be a long way off." He said bond purchases
could be prolonged if economic performance fails to meet the Fed's
forecasts.
Concerns the Fed may curtail accommodation helped push the yield
on the 10-year Treasury note as high as 2.61 percent last week
from as low as 1.63 percent in May, the report noted. The remarks
by Dudley, who also serves as vice chairman of the policy-setting
Federal Open Market Committee, along with Fed Governor Jerome
Powell and Atlanta Fed President Dennis Lockhart sought to damp
expectations that an increase in the benchmark interest rate will
come sooner than previously forecast.
"Such an expectation would be quite out of sync with both FOMC
statements and the expectations of most FOMC participants," said
Dudley, 60, a former chief U.S. economist for Goldman Sachs Group
Inc., the report related.
The Standard & Poor's 500 Index rose 0.6 percent to 1,613.20 at
the close of trading in New York on June 28, while the yield on
the 10-year Treasury note fell to 2.47 percent from 2.54 percent
on June 26, the report further related.
* Moody's Shows Wider Pension Gap for States
--------------------------------------------
Michael A. Fletcher, writing for The Washington Post, reported
that state pensions face a much larger funding gap than their
financial reports typically reveal, according to a new calculation
released by the credit rating firm Moody's Investors Service.
Moody's said its calculation shows that states had just 48 cents
of each dollar promised to current and future retirees in 2011,
the report related. Currently, states report that they have 74
cents of each dollar owed to retirees.
The report said 2012 figures, which Moody's plans to publish later
this year, will be worse, largely because of a mix of poor
investment returns and falling interest rates, which make pension
liabilities look bigger under accounting rules.
Moody's report adds fuel to the smoldering controversy over the
financial burden posed by the retirement plans of most government
employees, the report said. The issue has led to pitched battles
in states such as Wisconsin, Florida and New Jersey, where
Republican governors have sought to trim retirement benefits.
Meanwhile, many other states have taken the politically explosive
step of trimming pension liabilities by requiring public workers
to make higher contributions, work longer before collecting
pensions or, in the case of some new employees, make do with
smaller benefits, according to the report.
* Outlook Remains Dim for Bankruptcy Professionals
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that for under-employed bankruptcy professionals,
conditions don't show signs of improving because there won't be
more corporate reorganizations anytime soon.
Mr. Rochelle relates that according to a report last week from
Moody's Investors Service, companies with junk rating of B3 or
lower accompanied by negative outlooks numbered 160 on June 1,
about half as many as the trough of the credit cycle in the second
quarter of 2009. Although the roster of weakest companies grew
from 146 in the prior quarter, the total three months ago was the
lowest since the recession, Moody's reported.
The report discloses that there is a "solid climate for
speculative-grade companies," Moody's said. Although downgrades
now exceed upgrades, the causes are "company specific," Moody's
said, not the result of "fundamental conditions." Moody's sees
the future as having a "very low default rate." Where the default
on junk debt is now 2.9 percent, Moody's sees the rate declining
to 2.4 percent by the year's end and remaining at 2.4 percent at
least until May 2014. In the last quarter, 37 companies joined
the list while 23 were removed. Of those departing the list,
eight were the result of default.
* Weil Layoffs Show New Market Pressures Cut Deep
-------------------------------------------------
Andrew Strickler of BankruptcyLaw360 reported that the layoffs
that hit Weil Gotshal & Manges LLP last week didn't mark the first
time the firm has shrunk in a post-recession period, according to
an analysis of the firm's financial history. But unlike in
previous years, the firm's marquee bankruptcy practice is failing
to buoy the firm's profit levels, despite an abundance of
corporate crashes, the report said.
A review of Weil's annual revenues, head counts and profits shows
that Weil also lost lawyers following economic downturns in the
early 1990s and 2000s, the report related.
* Bankruptcy Pro David W. Carickhoff Joins Archer & Greiner
-----------------------------------------------------------
David W. Carickhoff has joined Archer & Greiner P.C. as a Partner
in the firm's Bankruptcy Department, where he will concentrate on
corporate bankruptcy and business reorganization matters. He will
be based in the firm's Wilmington, Delaware office.
Mr. Carickhoff has more than 15 years' experience representing
various chapter 11 debtors, creditors' committees, secured and
unsecured creditors, shareholders and purchasers in bankruptcy
proceedings and out-of-court restructurings. He has represented
both large and small clients in a variety of industries, including
energy, gaming, telecommunications, retail, biopharmaceutical and
aerospace. Mr. Carickhoff's diverse background and experience
provides further depth and expertise to the firm's bankruptcy
practice. He is recognized by Chambers USA as a leading
bankruptcy lawyer.
Mr. Carickhoff also represents various pro bono clients through
the Delaware Office of the Child Advocate and Delaware Volunteer
Legal Services, Inc.
Chambers calls Mr. Carickhoff a "diplomatic lawyer who has the
experience to provide additional firepower to the practice." He is
also "praised for his patient approach to clients, his
understanding of the law and his ability to get results."
Mr. Carickhoff is a graduate of Haverford College and earned his
law degree at Temple University Beasley School of Law.
Mr. Carickhoff may be reached at:
David W. Carickhoff, Esq.
ARCHER & GREINER PC
300 Delaware Avenue
Suite 1370
Wilmington, DE 19801
Tel: (302) 356-6621
Email: dcarickhoff@archerlaw.com
Archer & Greiner PC is a full-service regional law firm with more
than 200 lawyers and nine offices in Haddonfield, Hackensack,
Princeton, Flemington and Shrewsbury N.J.; Philadelphia, Pa.; New
York, N.Y.; and Wilmington and Georgetown, Del. The Firm has been
serving Fortune 100 clients, small to medium-sized businesses and
individuals for more than 80 years. Each office provides full-
service litigation and transactional capabilities in nearly every
area of law including corporate, estate & trust, family &
matrimonial, labor & employment, litigation, medical & personal
injury and real estate services. For more information, visit
http://www.archerlaw.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 120.5 (14.1) (11.1)
ADA-ES INC ADES US 92.5 (39.8) (11.0)
AK STEEL HLDG AKS US 3,906.1 (109.7) 604.0
ALLIANCE HEALTHC AIQ US 535.0 (119.7) 45.0
AMC NETWORKS-A AMCX US 2,568.3 (825.3) 620.4
AMER AXLE & MFG AXL US 3,029.6 (107.9) 354.0
AMERISTAR CASINO ASCA US 2,125.6 (2.6) (60.2)
AMR CORP AAMRQ US 23,852.0 (8,376.0) (2,465.0)
AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0
ANACOR PHARMACEU ANAC US 37.4 (8.0) 9.5
ANGIE'S LIST INC ANGI US 108.3 (0.1) 3.3
ARRAY BIOPHARMA ARRY US 107.4 (52.4) 40.0
AUTOZONE INC AZO US 6,783.0 (1,532.3) (657.7)
BERRY PLASTICS G BERY US 5,082.0 (315.0) 517.0
BRP INC/CA-SUB V DOO CN 1,768.0 (496.6) (21.8)
CABLEVISION SY-A CVC US 7,143.2 (5,676.0) (266.5)
CAESARS ENTERTAI CZR US 27,475.0 (560.0) 1,227.1
CAPMARK FINANCIA CPMK US 20,085.1 (933.1) -
CC MEDIA-A CCMO US 15,519.2 (8,209.7) 1,053.5
CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1)
CHIMERIX INC CMRX US 26.3 (2.1) 15.9
CHOICE HOTELS CHH US 546.0 (539.3) 56.8
CIENA CORP CIEN US 1,693.3 (97.9) 741.2
CINCINNATI BELL CBB US 2,151.5 (727.8) (93.4)
DELTA AIR LI DAL US 45,068.0 (1,943.0) (5,427.0)
DENDREON CORP DNDN US 639.0 (35.9) 339.3
DEX MEDIA INC DXM US 2,658.8 (17.7) (13.5)
DIRECTV DTV US 20,650.0 (5,748.0) 69.0
DOMINO'S PIZZA DPZ US 476.6 (1,323.4) 85.0
DUN & BRADSTREET DNB US 1,902.0 (1,097.0) (194.9)
DYAX CORP DYAX US 47.4 (59.8) 18.9
ESPERION THERAPE ESPR US 5.3 (5.0) 2.4
FAIRPOINT COMMUN FRP US 1,656.5 (360.7) 5.5
FAIRWAY GROUP HO FWM US 338.5 (1.2) 5.8
FERRELLGAS-LP FGP US 1,440.6 (29.0) 9.9
FIFTH & PACIFIC FNP US 826.3 (170.2) (17.7)
FOREST OIL CORP FST US 1,895.0 (104.8) (127.8)
FREESCALE SEMICO FSL US 3,139.0 (4,540.0) 1,209.0
GENCORP INC GY US 1,385.2 (379.1) 32.0
GIGAMON INC GIMO US 49.5 (1.7) 0.4
GLG PARTNERS INC GLG US 400.0 (285.6) 156.9
GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9
GLOBAL BRASS & C BRSS US 576.5 (37.0) 286.9
GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5
HALOGEN SOFTWARE HGN CN 22.8 (46.2) (9.4)
HCA HOLDINGS INC HCA US 27,882.0 (8,012.0) 1,796.0
HD SUPPLY HOLDIN HDS US 6,459.0 (1,720.0) 1,199.0
HOVNANIAN ENT-A HOV US 1,618.9 (478.5) 929.3
HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8)
HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8)
INCYTE CORP INCY US 330.3 (163.5) 178.7
INFOR US INC LWSN US 5,846.1 (480.0) (306.6)
INSYS THERAPEUTI INSY US 22.2 (63.5) (70.0)
INVIVO THERAPEUT NVIV US 13.8 (14.3) (15.3)
IPCS INC IPCS US 559.2 (33.0) 72.1
ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2
JUST ENERGY GROU JE CN 1,528.9 (164.9) (62.3)
JUST ENERGY GROU JE US 1,528.9 (164.9) (62.3)
L BRANDS INC LTD US 5,776.0 (994.0) 634.0
LIN TV CORP-CL A TVL US 1,201.4 (86.6) (101.7)
LORILLARD INC LO US 3,749.0 (1,796.0) 1,158.0
MANNKIND CORP MNKD US 215.2 (146.8) (231.9)
MARRIOTT INTL-A MAR US 6,523.0 (1,377.0) (732.0)
MDC PARTNERS-A MDCA US 1,418.5 (12.4) (165.9)
MDC PARTNERS-A MDZ/A CN 1,418.5 (12.4) (165.9)
MEDIA GENERAL-A MEG US 734.7 (191.7) 38.1
MERITOR INC MTOR US 2,337.0 (1,014.0) 208.0
MERRIMACK PHARMA MACK US 127.3 (32.1) 58.4
MONEYGRAM INTERN MGI US 4,892.0 (171.7) 14.1
MORGANS HOTEL GR MHGC US 583.6 (148.2) 104.5
MPG OFFICE TRUST MPG US 1,450.5 (530.6) -
NATIONAL CINEMED NCMI US 831.0 (308.8) 122.2
NAVISTAR INTL NAV US 8,723.0 (3,638.0) 1,562.0
NEKTAR THERAPEUT NKTR US 447.9 (2.6) 183.8
NPS PHARM INC NPSP US 188.5 (4.2) 133.4
NYMOX PHARMACEUT NYMX US 1.8 (7.4) (1.9)
OMEROS CORP OMER US 17.7 (15.9) -
OMTHERA PHARMACE OMTH US 18.3 (8.5) (12.0)
ORGANOVO HOLDING ONVO US 16.7 (5.3) (6.2)
PALM INC PALM US 1,007.2 (6.2) 141.7
PDL BIOPHARMA IN PDLI US 312.8 (93.7) 189.9
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)
PLY GEM HOLDINGS PGEM US 906.1 (343.4) 132.2
PROTECTION ONE PONE US 562.9 (61.8) (7.6)
QUALITY DISTRIBU QLTY US 510.5 (11.1) 88.5
QUINTILES TRANSN Q US 2,426.7 (1,322.3) 217.5
REGAL ENTERTAI-A RGC US 2,451.8 (706.2) 117.1
RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4)
RENTPATH INC PRM US 208.0 (91.7) 3.6
REVLON INC-A REV US 1,241.9 (655.1) 152.9
RURAL/METRO CORP RURL US 303.7 (92.1) 72.4
SALLY BEAUTY HOL SBH US 1,892.1 (280.5) 523.4
SILVER SPRING NE SSNI US 494.3 (104.0) 60.1
SINCLAIR BROAD-A SBGI US 2,734.5 (97.3) (18.2)
SUNGAME CORP SGMZ US 0.0 (1.0) (1.0)
SUPERVALU INC SVU US 11,034.0 (1,415.0) (1,380.0)
TAUBMAN CENTERS TCO US 3,302.5 (184.4) -
THRESHOLD PHARMA THLD US 113.9 (21.8) 88.3
TOWN SPORTS INTE CLUB US 406.2 (50.7) (13.2)
ULTRA PETROLEUM UPL US 2,035.4 (562.2) (293.0)
UNISYS CORP UIS US 2,323.2 (1,545.4) 453.1
VECTOR GROUP LTD VGR US 1,066.8 (108.3) 422.2
VENOCO INC VQ US 704.3 (299.9) (40.5)
VERISIGN INC VRSN US 2,071.1 (39.1) (91.2)
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 1,314.7 (1,620.7) (312.5)
WEST CORP WSTC US 3,940.9 (850.2) 297.8
WESTMORELAND COA WLB US 943.0 (286.5) (3.0)
XERIUM TECHNOLOG XRM US 616.9 (26.0) 123.4
XOMA CORP XOMA US 88.9 (0.9) 60.6
YRC WORLDWIDE IN YRCW US 2,200.9 (642.6) 111.1
*********
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.
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Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
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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
Tumanda, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez,
Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl
Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.
Copyright 2013. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***