/raid1/www/Hosts/bankrupt/TCR_Public/130709.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 9, 2013, Vol. 17, No. 188
Headlines
AGRIPARTNERS LP: Court Dismisses Chapter 11 Case
AMERICAN AIRLINES: APA President Lauds H.R. 2591 Bill
AMERICAN APPAREL: Dov Charney Held 42.8% Equity Stake at July 3
ANCHOR BANCORP: Regulators Deny Approval of Loan Extension
ARMORWORKS ENTERPRISES: Has OK to Obtain $875,000 DIP Financing
ATLS ACQUISITION: PolyMedica Corp. Files Schedules
ATLS ACQUISITION: FGST Investment Files Schedules
ATLS ACQUISITION: Liberty Marketplace Files Schedules
BIOVEST INTERNATIONAL: Expects to Exit Bankruptcy This Month
BLUEJAY PROPERTIES: Taps CBRE as Broker for Apartment Complex
BLUEJAY PROPERTIES: To File Plan by July 15; Seeks Access to Cash
BROADWAY FINANCIAL: Wins More Time to Comply With Nasdaq Rules
CAPABILITY RANCH: Court Sets July 30 Combined Plan Hearing
CAPITOL BANCORP: Sept. 25 Combined Hearing on Liquidation Plan
CAPITOL CITY: To Restate First Quarter 2013 Financial Report
CASA CASUARINA: Section 341(a) Meeting Scheduled for Aug. 9
CASH STORE: Allows Payday Loan Licenses in Ontario to Expire
CENGAGE LEARNING: Section 341(a) Meeting Set for Aug. 6
CHINA GINSENG: Unit Sells Asset for $0 + Assumption of $2MM Debt
CHINA GINSENG: Files Further Amendments to Quarterly Reports
CHRIST HOSPITAL: Liquidation Plan Declared Effective June 27
DBK INVESTMENTS: U.S. Trustee Fails to Appoint Committee
DETROIT, MI: S&P Cuts Ratings on Water, Sewer Bonds to Junk
DIGERATI TECHNOLOGIES: Can Employ Hoover Slovacek as Attorneys
DIGERATI TECHNOLOGIES: Court Denies Emergency Motion to Incur Debt
DIGERATI TECHNOLOGIES: Rhodes Wants Venue Moved to San Antonio
DUNLAP OIL: Court Okays Cash Collateral Use Until July 11
EDISON MISSION: Taps J.P. Morgan Securities to Assist in Sale
ERF WIRELESS: Inks New $8 Million Revolving Credit Facility
EXCEL MARITIME: Section 341(a) Meeting Set for Aug. 13
GUIDED THERAPEUTICS: Has 8.2 Million Shares Resale Prospectus
FIRST SECURITY: Has Rights Offering for 3.3 Million Shares
FLINTKOTE COMPANY: Has Until Nov. 30 to Propose Chapter 11 Plan
FLUX POWER: Chief Executive Officer Quits
HAWAII MEDICAL: May Hire Jayaram Law Group as Litigation Counsel
HI-WAY EQUIPMENT: Panel Objects to Continued Use of Comvest Cash
HI-WAY EQUIPMENT: Committee Retaining Shannon Gracey as Counsel
HIGH PLAINS GAS: D'Arelli Replaces Stark Schenkein as Accountants
HOSTESS BRANDS: Flowers Gets Regulatory OK to Acquire Assets
HOVNANIAN ENTERPRISES: Offering $481.8MM of Securities
INSPIREMD INC: To Present at 8th JMP Healthcare Conference Today
INTELLIPHARMACEUTICS: Has $1.8MM Net Loss in FY2013 2nd Quarter
INTERMETRO COMMUNICATIONS: Sells 420,000 Series A2 Preferreds
JOURNAL REGISTER: Court Extends Plan Filing Period Until Sept. 30
K-V PHARMACEUTICAL: Senior Noteholders File Suit v. Deutsche Bank
LAGUNA DEVELOPMENT: Fitch Affirms & Withdraws 'BB' Longterm IDR
LEVEL 3: To Issue 6.5 Million Shares Under Stock Plan
LIGHTSQUARED INC: Splits $3 Billion in Exit Financing
MAKENA GREAT: Court Dismisses Chapter 11 Case
MAKENA GREAT: GAC Storage El Monte's Chapter 11 Case Dismissed
MAXCOM TELECOMUNICACIONES: To Restructure Under Chapter 11
MDU COMMUNICATIONS: Unit Extends Maturity of $30MM Loan to Dec. 31
MOBIVITY HOLDINGS: Brodsky Replaces Linares as Director
MONITOR COMPANY: Has OK to Access Cash Collateral Until Aug. 8
MONTANA ELECTRIC: Committee Wants Case Converted to Chapter 7
MONTANA ELECTRIC: Court Expands Scope of Eide Bailly Retention
MOSS FAMILY: Has Access to BofA's Cash Collateral Until Dec. 10
MUNICIPAL CORRECTIONS: May Use Cash Collateral Through Aug. 31
MUNICIPAL CORRECTIONS: Court Limits Plan Exclusivity to July 31
MUSCLEPHARM CORP: Issues 1.2MM Restricted Stock to Executives
NOVOGEN LIMITED: Grant Thornton Raises Going Concern Doubt
ORCHARD SUPPLY: U.S. Trustee Forms Five-Member Committee
ORCHARD SUPPLY: Wants Schedules Filing Deadline Moved to Aug. 6
OVERLAND STORAGE: Appeals Nasdaq Delisting
PENSACOLA BEACH: Wants to Employ Highpointe to Manage Hotel
PENSACOLA BEACH: U.S. Trustee Will Not Appoint Creditors Committee
PREMIER PAVING: May Continue Cash Collateral Use Until Aug. 1
RAPID AMERICAN: Court Extends Plan Filing Deadline to Nov. 4
READER'S DIGEST: Modified 2nd Amended Joint Plan Confirmed June 28
READER'S DIGEST: Can Employ KPMG LLP as Fresh Start Accountants
RITE AID: Swings to $89.6 Million Net Income in First Quarter
ROTECH HEALTHCARE: Court Okays Protiviti as Internal Auditor
SCIENTIFIC LEARNING: Inks Retention Agreement With CFO Freeman
SEVEN COUNTIES: Can Continue Using Fifth Third Cash Until Sept. 1
SEVEN COUNTIES: Court OKs Lin Bell & Associates as Appraiser
SIAG AERISYN: Court Converts Chapter 11 Case to Chapter 7
SPECTRASCIENCE INC: Chief Financial Officer Quits
SPRINT NEXTEL: FCC OKs SoftBank Investment and Clearwire Deal
SPRINT NEXTEL: Crest Financial Now Supports Clearwire Deal
TALON THERAPEUTICS: Extends Change of Control Plan Term to 2014
TC GLOBAL: Closes Asset Sale to Global Baristas
TITAN PHARMACEUTICALS: Amends License Agreement With Braeburn
TONJI HEALTHCARE: Accountants Resign Due to Increased Audit Risks
TPO HESS: Can Employ Houlihan Lokey as Financial Advisor
TPO HESS: Hires Deloitte to Provide CRO & Restructuring Personnel
TPO HESS: Has Court OK to Employ Epiq as Administrative Advisor
TRANSVANTAGE SOLUTIONS: Court Converts Case to Ch.7 Liquidation
TRENDSET INC: Trustee Hiring Heritage Global as Appraiser
UNDERGROUND ENERGY: Securities Trading Suspended at TSX
UPH HOLDINGS: Bid Procedures Approved; Auction to Begin Today
UPH HOLDINGS: Court Extends Committee Challenge Period to July 31
VICTORY ENERGY: Wilson Morgan Quits as Accountants
VISCOUNT SYSTEMS: Issues 24.723 Series A Redeemable Preferreds
VISUALANT INC: Amends 70.3 Million Shares Resale Prospectus
VPR OPERATING: Has OK to Hire Global Hunter as Financial Advisor
VPR OPERATING: Hires Holland & Knight to Replace Patton Boggs
VYSTAR CORP: Porter Keadle Replaces Habif Arogeti as Accountants
* Fitch Says FDIC Rule Could Push Banks to Buy Riskier CLOs
* SAC Capital's Steven Cohen Expected to Avoid Criminal Charges
* Elizabeth Cundiff-Klushpies Joins Lowenstein Sandler as CMO
* Thompson Law Opens Additional Office in Chadron
* Large Companies With Insolvent Balance Sheets
*********
AGRIPARTNERS LP: Court Dismisses Chapter 11 Case
------------------------------------------------
The Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the
Middle District of Florida has dismissed the Chapter 11 case of
Agripartners Limited Partnership.
On May 10, 2013, the Debtor filed a motion to voluntarily dismiss
its case.
The Debtor owns approximately 2,501 acres of undeveloped land in
Lee County, Florida, and is a co-beneficiary of the Edison Farms
Trust, which owns an adjacent parcel that consists of
approximately 1,400 acres. The Land and Adjacent Land are
encumbered by a mortgage held by Investors Warranty of America,
Inc.
Philip J. Landau, Esq., at Shraiberg, Ferrara & Landau, P.A., the
attorney for the Debtor, stated in a May 10 court filing that in
an effort to resolve their disputes, the Debtor and IWA have
engaged in extensive negotiations and have determined that they
believe they can better resolve their issues outside of
bankruptcy. "The Debtor submits that dismissal is a better
alternative than conversation to a case under Chapter 7 because
there are little to no assets for a Chapter 7 trustee to
administer since the Land is completely encumbered and IWA has
already obtained stay relief to schedule a foreclosure sale of the
Land for a date on or after June 28, 2013 conversion to a Chapter
7 would result in significant delays to any unsecured creditors,
and there would be additional Chapter 7 administrative expenses
that would be unnecessarily incurred by the estate," Mr. Landau
said.
About Agripartners Limited Partnership
Agripartners Limited Partnership filed a Chapter 11 petition
(Bankr. M.D. Fla. Case No. 12-19214) in Ft. Myers, Florida on
Dec. 24, 2012. Philip J. Landau, Esq., at Shraiberg, Ferrara &
Landau, P.A., serves as general bankruptcy counsel; Richard
Hollander, Esq., at Miller & Hollander serves as local counsel.
The Debtor estimated assets of at least $100 million and
liabilities of at least $50 million.
AMERICAN AIRLINES: APA President Lauds H.R. 2591 Bill
-----------------------------------------------------
The president of the Allied Pilots Association (APA), certified
collective bargaining agent for the 10,000 pilots of American
Airlines, expressed his gratitude for bipartisan legislation
designed to enable the carrier's front-line workers to defer taxes
on equity they are receiving as unsecured creditors.
"We are pleased that Republican and Democratic lawmakers have
shown a willingness to help our pilots and fellow employees defer
taxes on this equity," APA President Captain Keith Wilson said.
"The equity stake we will receive is designed in part to mitigate
the pension losses we have sustained in American Airlines' Chapter
11 bankruptcy."
The legislation, known as H.R. 2591, is intended to amend certain
provisions of the FAA Modernization and Reform Act of 2012.
American Airlines is expected to exit bankruptcy later this year,
which will trigger distribution of the equity.
U.S. Rep. Michael Grimm (R-NY) is the bill's sponsor. It is co-
sponsored by U.S. Rep. Tim Bishop (D-NY), along with U.S. Rep.
Michael Burgess (R-TX), U.S. Rep. Peter DeFazio (D-OR), U.S. Rep.
Richard Hanna (R-NY), U.S. Rep. Eddie Bernice Johnson (D-TX) and
U.S. Rep. Peter Roskam (R-IL).
"Most of these lawmakers represent districts that encompass large
numbers of American Airlines employees," Mr. Wilson said. "They
all recognize that an issue of basic fairness is at stake."
If approved, the legislation would provide American Airlines'
workers the same ability to defer taxes on their equity as other
airline employees in previous Chapter 11 bankruptcy
restructurings.
"We are hopeful that lawmakers will move to prevent a serious
inequity by approving this legislation promptly," he said.
About Allied Pilots Association
Founded in 1963, the Allied Pilots Association --
http://www.alliedpilots.org-- is the largest independent pilots'
union in the United States. APA is headquartered in Fort Worth,
Texas. APA represents the 10,000 pilots of American Airlines,
including several hundred pilots on full-time military leave of
absence serving in the armed forces. American Airlines is the
nation's largest international passenger carrier and fifth-largest
cargo carrier.
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: Dov Charney Held 42.8% Equity Stake at July 3
---------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Dov Charney disclosed that, as of July 3,
2013, he beneficially owned 47,209,406 shares of common stock of
American Apparel, Inc., representing 42.8 percent of the shares
outstanding. Mr. Charney previously reported beneficial ownership
of 48,305,866 common shares or 44.8 percent equity stake as of
June 25, 2013.
On June 25, 2013, in connection with the achievement of certain
performance goals in accordance with the terms set forth in Mr.
Charney's employment agreement dated March 22, 2012, with the
Company, Mr. Charney was awarded 2,500,000 shares of common stock,
less 1,096,460 shares of common stock withheld, and disposed of by
the plan administrator between June 27, 2013, and July 3, 2013, to
satisfy tax obligations related to that award.
A copy of the regulatory filing is available for free at:
http://is.gd/pkpV0y
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 carries a Caa1 Corporate Family Rating from
Moody's Investors Service and a 'B-' corporate credit rating from
Standard & Poor's Ratings Services.
ANCHOR BANCORP: Regulators Deny Approval of Loan Extension
----------------------------------------------------------
The Federal Reserve System has informed Anchor BanCorp Wisconsin
Inc. on July 2, 2013, that it was not prepared to approve a
further extension of the maturity date and related amendments
under Anchor Bancorp's credit agreement with a group of lenders
led by U.S. Bank National Association.
Anchor BanCorp is a party to the Credit Agreement, dated as of
June 9, 2008. As of March 31, 2013, the total revolving loan
commitment under the Credit Agreement was $116.3 million and
aggregate borrowings under the Credit Agreement were $116.3
million plus accrued interest and amendment fees payable of $53.3
million and $6.9 million, respectively. The loan matured June 30.
The Company has entered into extensions of the maturity date and
other amendments to the Credit Agreement with the Lenders on a
recurring basis. The Company said it was prepared to enter into a
further extension of the maturity date with the Lenders as of
June 30, 2013.
Under the Order to Cease and Desist between the Company and the
Office of Thrift Supervision, dated June 26, 2009, the Company may
not incur, issue, renew, or rollover any debt, increase any
current lines of credit, or guarantee the debt of any entity,
without prior written notice to and written approval from the
Federal Reserve System, which is the successor regulator to the
Office of Thrift Supervision.
The Company said it does not currently have the ability to satisfy
its payment obligations under the Credit Agreement.
As of July 5, 2013, the Company has not received any notice from
the Agent or the Lenders that they intend to exercise any remedies
under the Loan Agreement in connection with the event of default.
The Company intends to continue to pursue all alternatives to
address its capital needs.
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.
ARMORWORKS ENTERPRISES: Has OK to Obtain $875,000 DIP Financing
---------------------------------------------------------------
The Hon. Brenda Moody Whinery of the U.S. Bankruptcy Court for the
District of Arizona has granted ArmorWorks Enterprises, LLC, and
TechFiber, LLC, permission to incur debt from Lancelot Armor, LLC,
in the aggregate principal amount of $875,000.
The hearing to consider final approval of the DIP facility is
scheduled for July 12, 2013, at 10:00 a.m. (Mountain Standard
Time).
As they do not have sufficient available sources of working
capital and financing to operate their businesses, maintain their
properties in the ordinary course of business or conduct a
reorganization without the DIP Facility, the Debtors sought an
interim order allowing them to, among other things, obtain on a
final basis up to $3.5 million of secured postpetition financing
from the DIP Lender or its assignee, and on an interim basis
$875,000 through the date of the final hearing.
The interim financing will accrue interest at the non-default rate
of 15% per annum, and after the occurrence of an event of default,
at the default rate of 21% per annum. The Debtors are authorized
and required to pay the principal and all accrued but unpaid
interest, and all of the foregoing amounts will be immediately due
and payable on Dec. 31, 2013.
The Debtors will timely make monthly-interest-only payments at the
applicable default and non-default rates, in arrears, beginning 30
days after the entry of the interim court order, as the payments
become due and without need to obtain further court approval.
As a condition to the extension of credit under the interim court
order, the DIP Lender requires that proceeds of the DIP facility
will be used solely for (a) working capital and other general
corporate purposes, (b) permitted payment of costs of
administration of the Cases, and (c) payment or refinancing of
prepetition expenses as are approved by the Court.
The DIP Lender is granted continuing, valid, binding, enforceable,
non-avoidable and automatically and properly perfected
postpetition security interests in and liens on the collateral,
all real and personal property of the Debtors. The DIP Lender is
also granted an allowed superpriority administrative expense claim
in this case and any successor case for all Interim Financing
under this interim court order. The DIP Liens securing the
interim financing and the DIP superpriority claim will be
subordinate only to the carve-out. The U.S. Trustee carve-out and
the professionals' carve-out will not exceed $250,000 in the
aggregate.
The Court has also authorized the Debtors to use cash collateral
until the earlier to occur of the termination of the automatic
stay after an uncured event of default or the Maturity Date.
The DIP Lender is represented by:
Andrew Abraham, Esq.
BURCH & CRACCHIOLO
702 E. Osborn Road, Suite 200
Phoenix, Arizona 85014
E-mail: aabraham@bcattorneys.com
About ArmorWorks Enterprises
Military armor systems provider ArmorWorks Enterprises, LLC, and
affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D.
Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17,
2013, along with a plan that resolves a dispute with a minority
shareholder and $3.5 million of financing that would save the
company from running out of cash.
ArmorWorks develops advanced survivability technology and designs
and manufactures armor and protective products. ArmorWorks has
produced over 1.25 million ceramic armor and composite armor
protection components for a variety of personnel armor, aircraft,
and vehicle applications.
The Debtors have tapped Todd A. Burgess, Esq., at Gallagher &
Kennedy, as counsel; and MCA Financial Group, Ltd., as financial
advisor. ArmorWorks estimated $10 million to $50 million in
assets and liabilities.
As of May 26, 2012, ArmorWorks had total assets of $30.9 million
and total liabilities of $12.04 million.
The Plan would resolve the ongoing dispute with C Squared by
allowing ArmorWorks to redeem C Squared's 40% minority interest,
or alternatively, allow C Squared to purchase the 60% majority
interest of AWI.
ArmorWorks and TechFiber sought and obtained an order (i)
transferring the In re TechFiber, LLC chapter 11 case to the
Honorable Brenda Moody Whinery, the judge assigned to the
ArmorWorks Chapter 11 case, and (ii) authorizing the joint
administration of the Debtors' cases.
ATLS ACQUISITION: PolyMedica Corp. Files Schedules
--------------------------------------------------
PolyMedica Corporation, an affiliate of ATLS Acquisition LLC,
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 $0
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $40,263,562
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $0
----------- -----------
TOTAL $0 $40,263,562
A copy of the schedules is available for free at
http://bankrupt.com/misc/LIBERTY_MEDICAL_sal_e.pdf
About Liberty Medical
Entities that own diabetics supply provider Liberty Medical led by
ATLS Acquisition, LLC, sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 13-10262) on Feb. 15, 2013, just less than
three months after a management buy-out and amid a notice by the
lender who financed the transaction that it's exercising an option
to acquire the business.
Liberty has been in business for 22 years serving the needs of
both type 1 and type 2 diabetic patients. Liberty is a mail order
provider of diabetes testing supplies. In addition to diabetes
testing supplies, the Debtors also sell insulin pumps and insulin
pump supplies, ostomy, catheter and CPAP supplies and operate a
large mail order pharmacy. Liberty operates in seven different
locations and has 1,684 employees.
The Debtors have tapped Greenberg Traurig, LLP as counsel; Ernst &
Young LLP to provide investment banking advice; and Epiq
Bankruptcy Solutions, LLC, as claims and noticing agent for the
Clerk of the Bankruptcy Court.
ATLS ACQUISITION: FGST Investment Files Schedules
-------------------------------------------------
FGST Investment, Inc., an affiliate of ATLS Acquisition LLC, 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 $0
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $40,263,562
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $0
----------- -----------
TOTAL $0 $40,263,562
A copy of the schedules is available for free at
http://bankrupt.com/misc/LIBERTY_MEDICAL_sal_i.pdf
About Liberty Medical
Entities that own diabetics supply provider Liberty Medical led by
ATLS Acquisition, LLC, sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 13-10262) on Feb. 15, 2013, just less than
three months after a management buy-out and amid a notice by the
lender who financed the transaction that it's exercising an option
to acquire the business.
Liberty has been in business for 22 years serving the needs of
both type 1 and type 2 diabetic patients. Liberty is a mail order
provider of diabetes testing supplies. In addition to diabetes
testing supplies, the Debtors also sell insulin pumps and insulin
pump supplies, ostomy, catheter and CPAP supplies and operate a
large mail order pharmacy. Liberty operates in seven different
locations and has 1,684 employees.
The Debtors have tapped Greenberg Traurig, LLP as counsel; Ernst &
Young LLP to provide investment banking advice; and Epiq
Bankruptcy Solutions, LLC, as claims and noticing agent for the
Clerk of the Bankruptcy Court.
ATLS ACQUISITION: Liberty Marketplace Files Schedules
-----------------------------------------------------
Liberty Marketplace, Inc., an affiliate of ATLS Acquisition LLC,
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 $0
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $40,263,562
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $0
----------- -----------
TOTAL $0 $40,263,562
A copy of the schedules is available for free at
http://bankrupt.com/misc/LIBERTY_MEDICAL_sal_f.pdf
About Liberty Medical
Entities that own diabetics supply provider Liberty Medical led by
ATLS Acquisition, LLC, sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 13-10262) on Feb. 15, 2013, just less than
three months after a management buy-out and amid a notice by the
lender who financed the transaction that it's exercising an option
to acquire the business.
Liberty has been in business for 22 years serving the needs of
both type 1 and type 2 diabetic patients. Liberty is a mail order
provider of diabetes testing supplies. In addition to diabetes
testing supplies, the Debtors also sell insulin pumps and insulin
pump supplies, ostomy, catheter and CPAP supplies and operate a
large mail order pharmacy. Liberty operates in seven different
locations and has 1,684 employees.
The Debtors have tapped Greenberg Traurig, LLP as counsel; Ernst &
Young LLP to provide investment banking advice; and Epiq
Bankruptcy Solutions, LLC, as claims and noticing agent for the
Clerk of the Bankruptcy Court.
BIOVEST INTERNATIONAL: Expects to Exit Bankruptcy This Month
------------------------------------------------------------
Biovest International, Inc., disclosed in a regulatory filing with
the U.S. Securities and Exchange Commission that it anticipates to
emerge from Chapter 11 protection in July 2013, although the
Company made no assurances as to when, or ultimately if, the Plan
will become effective.
The Bankruptcy Court entered an order confirming Debtor's First
Amended Plan of Reorganization, which approved and confirmed the
Plan, on June 28, 2013.
The Plan provides for, among other things, the cancellation of all
presently outstanding common stock in the Company, which common
stock will cease to trade or be recognized as an ownership
interest in the Company as of the effective date of the Plan. In
addition, the Plan provides for the conversion of virtually all
pre-petition debt into new common stock of the reorganized
Company, as follows:
(i) all outstanding indebtedness due to the Company's senior
secured lenders, Corps Real, LLC, and LV Administrative
Services, totaling approximately $44 million, will be
converted into new equity representing 93 percent of the
issued and outstanding common stock in the reorganized
Company;
(ii) approximately $5.5 million of unsecured indebtedness
outstanding under the Company's prepetition unsecured debt
obligations will be converted and exchanged for new equity
representing 7 percent of the issued and outstanding common
stock in the reorganized Company.
As of the effectiveness of the Plan, the Company's Amended and
Restated Certificate of Incorporation will authorize the Company
to issue up to 50,000,000 shares of preferred stock and up to
300,000,000 shares of common stock. Each share of Company common
stock outstanding immediately before the effectiveness of the Plan
will, under the terms of the Plan, be canceled and of no further
force or effect after the Plan becomes effective. The Plan
provides for the issuance of new shares of common stock in
connection with the implementation of the Plan.
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.
BLUEJAY PROPERTIES: Taps CBRE as Broker for Apartment Complex
-------------------------------------------------------------
Bluejay Properties, LLC, asks the U.S. Bankruptcy Court for the
District of Kansas for authorization to employ CBRE, through its
individual brokers Jeff Stingley and Gina Anderson, as broker to
assist in selling the Debtor's apartment complex.
CBRE will list and advertise the sale of the apartment complex
located in Junction City, Kansas.
The source of the compensation to be paid to the proposed broker
will be from the sale proceeds of the property. The commission
due to CBRE is two percent of the gross sales price. If a sale is
not completed, pursuant to the contract the Debtor would only be
responsible for marketing costs not to exceed $1,500. CBRE is to
be retained to sell the property pursuant to a liquidating plan
the Debtor intends to file prior to July 19, 2013.
To the best of the Debtor's knowledge, CBRE represents no interest
adverse to applicants as Debtor-in-Possession, or to the estate in
the matters upon which it is to be engaged by applicant as Debtor-
in-Possession, and its employment would be in the best interest of
this estate.
About Bluejay Properties
Based in Junction City, Kansas, Bluejay Properties, LLC, doing
business as Quinton Point, filed a bare-bones Chapter 11 petition
(Bankr. D. Kan. Case No. 12-22680) in Kansas City on Sept. 28,
2012. Bankruptcy Judge Robert D. Berger presides over the case.
Todd A. Luckman, Esq., at Stumbo Hanson, LLP in Topeka.
The Debtor owns the Quinton Point Apartment Complex in Kansas City
valued at $17 million. The Debtor scheduled liabilities of
$13,112,325. The petition was signed by Michael L. Thomas of TICC
Prop., managing member.
Bankers' Bank of Kansas, owed approximately $13.08 million, is
represented by Arthur S. Chalmers of Hite, Fanning & Honeyman,
LLP. The University National Bank, owed approximately
$1.2 million, is represented by Edward J. Nazar of Redmond &
Nazar, L.L.P., and Todd Thompson of Thompson Ramsdell & Qualseth,
P.A.
BLUEJAY PROPERTIES: To File Plan by July 15; Seeks Access to Cash
-----------------------------------------------------------------
Bluejay Properties, LLC, asks the U.S. Bankruptcy Court for the
District of Kansas for a second extension of the order authorizing
the use of cash collateral for a period of six months or, in the
alternative, until a Chapter 11 plan is confirmed and consummated
according to the Bankruptcy Code.
The Debtor, by and through its attorney, Todd A. Luckman, Esq., at
Stumbo Hanson, LLP, requests that the Court extend the adequate
protection and cash collateral provisions of the previous court
order.
The Debtor, according to Mr. Luckman, intends to file a Chapter 11
Plan by July 15, 2013. "The Chapter 11 Liquidation Plan will
provide for the sale of the Debtor's asset in an orderly fashion
and for its highest and best price," Mr. Luckman says.
As reported by the Troubled Company Reporter on June 3, 2013, the
Court authorized the Debtor's use of creditor Bankers' Bank of
Kansas' cash collateral. The Court in March entered a second
extension to the final order authorizing use of cash collateral
and granting adequate protection to BBOK and University National
Bank until July 31, 2013. As adequate protection from any
diminution in value of the lenders' collateral, BBOK and UNB are
granted replacement security interests and liens, in the same
priorities as were present prepetition, and superpriority
administrative expense claim status.
As of the Petition Date, BBOK alleges the aggregate principal
amount of all obligations owed to it by the Debtor is
approximately $13.08 million, plus interest accrued and accruing
thereon. UNB additionally asserts that it holds a lien in the sum
of $1.2 million.
About Bluejay Properties
Based in Junction City, Kansas, Bluejay Properties, LLC, doing
business as Quinton Point, filed a bare-bones Chapter 11 petition
(Bankr. D. Kan. Case No. 12-22680) in Kansas City on Sept. 28,
2012. Bankruptcy Judge Robert D. Berger presides over the case.
Todd A. Luckman, Esq., at Stumbo Hanson, LLP in Topeka.
The Debtor owns the Quinton Point Apartment Complex in Kansas City
valued at $17 million. The Debtor scheduled liabilities of
$13,112,325. The petition was signed by Michael L. Thomas of TICC
Prop., managing member.
Bankers' Bank of Kansas, owed approximately $13.08 million, is
represented by Arthur S. Chalmers of Hite, Fanning & Honeyman,
LLP. The University National Bank, owed approximately
$1.2 million, is represented by Edward J. Nazar of Redmond &
Nazar, L.L.P., and Todd Thompson of Thompson Ramsdell & Qualseth,
P.A.
BROADWAY FINANCIAL: Wins More Time to Comply With Nasdaq Rules
--------------------------------------------------------------
Broadway Financial Corporation on July 8 disclosed that on July 3,
2013, the Company received a written notification from Nasdaq that
the Company has been granted an additional 180 calendar days, or
until December 30, 2013, to regain compliance with the minimum
$1.00 bid price per share requirement of Nasdaq's Marketplace Rule
5550(a)(2).
The Company had originally received a notification from Nasdaq on
January 3, 2013 stating that the Company had failed to comply with
the Rule because the bid price for the Company's common stock over
a period of 30 consecutive business days ending prior to such date
had closed below the minimum $1.00 per share requirement for
continued listing. That notification has provided the Company a
period of 180 days, ending on July 2, 2013, to regain compliance
with the Rule.
By the end of June 2013 it became apparent that the Company would
not be in compliance with the Rule by July 2, 2013, which would
subject the Company's common stock to delisting from The Nasdaq
Capital Market. As a result, the Company notified Nasdaq and
applied for an extension of the cure period, as permitted under
the original notification. In the application the Company
indicated that it met all other continuing listing requirements
for the Nasdaq Capital Market and provided written notice of its
intention to cure the deficiency during the second compliance
period of an additional 180 days, by various plans, including
effecting a reverse stock split, if necessary.
If at any time before December 30, 2013, the bid price of the
Company's common stock closes at or above $1.00 per share for a
minimum of 10 consecutive business days, Nasdaq will provide
written notification that the Company has achieved compliance with
the Rule.
If compliance with the Rule cannot be demonstrated by December 30,
2013, Nasdaq will provide written notification that the Company's
common stock will be delisted. At that time, the Company may
appeal Nasdaq's determination to a Hearings Panel.
As previously disclosed, the Company is pursuing a comprehensive
Recapitalization that is intended to reduce approximately $22.7
million of senior debt, preferred stock and related accumulated
dividends, eliminate the estimated $1.69 million of accrued but
unpaid interest on all of the Company's senior debt, raise gross
proceeds of $4.2 million of new equity capital, and result in the
issuance of approximately 18.1 million shares of common stock and
common stock equivalents.
The Company will continue to monitor the bid price for its common
stock and consider various options available to it if its common
stock does not trade at a level that is likely to regain
compliance.
About Broadway Financial Corporation
Broadway Financial Corporation --
http://www.broadwayfederalbank.com-- conducts its operations
through its wholly-owned subsidiary, Broadway Federal Bank,
f.s.b., which is the leading community-oriented savings bank in
Southern California serving low to moderate income communities.
The company offers a variety of residential and commercial real
estate loan products for consumers, businesses, and non-profit
organizations, other loan products, and a variety of deposit
products, including checking, savings and money market accounts,
certificates of deposits and retirement accounts. The Bank
operates three full service branches, two in the city of Los
Angeles, and one located in the nearby city of Inglewood,
California.
CAPABILITY RANCH: Court Sets July 30 Combined Plan Hearing
----------------------------------------------------------
A combined hearing will be held on July 30, 2013, at 10:00 a.m. to
finally consider the adequacy of Capability Ranch LLC's Amended
Disclosure Statement and confirmation of the Debtor's Amended
Chapter 11 Plan.
Parties-in-interest may file objected to the Amended Disclosure
Statement and Plan no later than July 22.
To be counted, ballots for the Plan must be submitted so as to be
received by July 22.
Judge Bruce A. Markell conditionally approved the Debtor's Amended
Disclosure Statement on June 20, 2013. The Disclosure Statement
outlines the classification and treatment of 9 classes of claims
and interests against and in the Debtor.
Claim Classes 1 to 4 are claims of American AgCredit. Class 1
Claim -- due in 5 years, will be paid with 3.83% interest per
annum while Class 2 Claim -- due in 10 years, will be paid with a
3.63% interest per annum. Claim Classes 3 and 4 will be paid
within 30 days of the Effective Date, with a 5.75% interest per
annum.
Class 5 Other Secured Claims and Class 6 Priority Unsecured claims
will be paid in full in cash.
The Debtor will pay a $3,000 monthly payment on account of all
Class 7 Allowed General Unsecured Claims, estimated to total
$160,890, until all Class 7 Claims are paid in full.
Class 8 Related Party Secured Claims, estimated to total
$76,529,917, will retain their liens, with all sums due and
payable on June 30, 2033. Holders of Class 9 Equity Securities in
the Debtor will retain all their legal interests.
Copies of the Disclosure Statement and Amendments to the Plan are
available at:
http://bankrupt.com/misc/CAPABILITYRANCH_DSJune17.PDF
http://bankrupt.com/misc/CAPABILITYRANCH_AmendmenttoDSJune19.PDF
About Capability Ranch
Las Vegas-based Capability Ranch, LLC, fdba Monroe Property
Company, LLC, filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case
No. 12-21121) on Sept. 21, 2012. Bankruptcy Judge Bruce A.
Markell presides over the case. Thomas H. Fell, Esq., Gabrielle
A. Hamm, Esq., and Kirk D. Homeyer, Esq. at Gordon Silver, serves
as the Debtor's counsel.
Capability Ranch estimated assets and debts of $50 million to
$100 million. The Debtor said it owns property on 40060 Paws Up
Road in Greenough, Montana. The property is a 37,000-acre luxury
Montana ranch and Montana resort. According to
http://www.pawsup.com/, The Resort at Paws Up has 28 luxury
vacation homes and 24 luxury camping tents. The resort offers
horseback riding, fly fishing, and spa treatments.
CAPITOL BANCORP: Sept. 25 Combined Hearing on Liquidation Plan
--------------------------------------------------------------
Bankruptcy Judge Marci B. McIvor will convene a hearing on
Sept. 25, 2013, at 10:00 a.m., at Courtroom 1875 in Detroit,
Michigan, to consider final approval of Capitol Bancorp Ltd., et
al.'s Disclosure Statement and confirmation of the Debtors' Joint
Liquidating Plan.
The judge preliminarily approved the Amended Disclosure Statement
on June 27, subject to timely and proper objections. Any
objection to confirmation of the Plan or approval of the
Disclosure Statement on a final basis must be filed with the Court
on or before Sept. 10, at 4:30 p.m. Eastern Daylight Time.
With the preliminary approval on the Disclosure Statement, the
Debtors are to distribute copies of the Plan and other plan
documents to creditors eligible to vote no later than July 15.
The Court established June 28 as the record date for purposes of
determining the creditors and interest holders entitled to receive
the Solicitation Package, or the Non-Voting Creditor Notice, and
to vote on the Plan.
All ballots on the Plan must be properly executed and delivered to
the Balloting Agent so as to be received on or before Sept. 10, at
4:30 p.m. Eastern Daylight Time.
As reported by The Troubled Company Reporter on May 31, 2013, the
Liquidation Plan is premised on the Company conducting sales under
Bankruptcy Code Section 363(b) of some or all of the remaining
non-debtor subsidiary banks, as and when commercially reasonable
opportunities for those transactions develop. However, it is
unlikely that the proceeds of any those sales could or would be
available for distribution to the Company's creditors without the
cooperation of the FDIC, if and to the extent the FDIC has that
authority. This is because, under a pre-bankruptcy FDIC order and
a subsequent agreement between Capitol and the FDIC, the Company
has no interest in or right to ever receive proceeds from the sale
of non-debtor subsidiary banks. Instead, those proceeds are to be
remitted directly by the relevant purchaser to an escrow account
managed by a third-party escrow agent. Under the FDIC Order and
related agreements, those proceeds can only be distributed to bank
shareholders (other than CBC) and to CBC's other subsidiary banks.
The Company also will continue to seek a sale of its non-
performing assets and non-performing loans to third parties. At
the same time, the Plan contemplates that the Company continue to
seek to obtain one or more Equity Investors to make it feasible to
attempt to reorganize the Company and preserve the Company's
ownership of at least certain of the remaining non-debtor
subsidiary banks.
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 CITY: To Restate First Quarter 2013 Financial Report
------------------------------------------------------------
The management, the Audit Committee and the Board of Directors of
Capitol City Bancshares, Inc., determined that certain adjustments
to the Company's financial statements for the first quarter ended
March 31, 2013, were necessary based upon management's ongoing
investigation of the employee fraud loss and corresponding
recognition of amounts receivable.
Through management's continued review of the subsidiary bank's
receivable for an insurance claim on employee fraud loss, it was
determined the amount included as a receivable for $833,000 should
be written off and recorded as an expense. Due to this
determination, the Company is in the process of restating and
amending its quarterly information filed with regulatory
authorities and its Form 10-Q related to the quarter ended
March 31, 2013.
This restatement will reduce the Company's assets, equity and net
income for the three months ended March 31, 2013, and will have a
corresponding effect on the related disclosures and ratios. As
such, the financial information as of and for the three months
ended March 31, 2013, which was reported in Form 10-Q filed on
May 14, 2013, should no longer be relied on. The Company intends
to file an amended quarterly report on Form 10-Q as soon as
reasonably practicable. The Company will amend any disclosures
regarding management's evaluation of internal controls over
financial reporting as appropriate in connection with its future
filings with the Commission.
About Capitol City
Atlanta, Georgia-based Capitol City Bancshares, Inc., was
incorporated under the laws of the State of Georgia for the
purposes of serving as a bank holding company for Capitol City
Bank and Trust Company. The Bank operates a full-service banking
business and engages in a broad range of commercial banking
activities, including accepting customary types of demand and
timed deposits, making individual, consumer, commercial, and
installment loans, money transfers, safe deposit services, and
making investments in U.S. government and municipal securities.
Capitol City Bancshares disclosed a net loss of $1.73 million in
2012, as compared with a net loss of $1.59 million in 2011. The
Company's balance sheet at March 31, 2013, showed $300.06 million
in total assets, $291.86 million in total liabilities and $8.20
million in total stockholders' equity.
Nichols, Cauley and Associates, LLC, in Atlanta, Georgia, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company is operating under regulatory
orders to, among other items, increase capital and maintain
certain levels of minimum capital. As of Dec. 31, 2012, the
Company was not in compliance with these capital requirements. In
addition to its deteriorating capital position, the Company has
suffered significant losses related to nonperforming assets, and
has significant maturities of liabilities within the next twelve
months. These matters raise substantial doubt about the ability
of Capitol City and subsidiaries to continue as a going concern
CASA CASUARINA: Section 341(a) Meeting Scheduled for Aug. 9
-----------------------------------------------------------
A meeting of creditors in the bankruptcy case of Casa Casuarina
LLC will be held on Aug. 9, 2013, at 10:00 a.m. at 51 SW First Ave
Room 1021, Miami. Creditors have until Nov. 7, 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.
Casa Casuarina, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla.
Case No. 13-25645) on July 1, 2013. Peter Loftin signed the
petition as manager. Judge Laurel M. Isicoff presides over the
case. The Debtor estimated assets of at least $50 million and
debts of at lease $10 million. Joe M. Grant, Esq., at Marshall
Socarras Grant, P.L., serves as the Debtor's counsel.
CASH STORE: Allows Payday Loan Licenses in Ontario to Expire
------------------------------------------------------------
The Cash Store Financial Services Inc. provided an update on
regulatory matters related to The Cash Store Inc. and Instaloans
Inc. chains that operate in Ontario.
Effective July 4, 2013, The Cash Store Inc. and Instaloans Inc.
will allow their respective payday loan licenses in Ontario to
expire. Neither company has offered payday loans in Ontario since
Feb. 1, 2013. On that date, the Company made available to
consumers a suite of unsecured line of credit products that
enables consumers to move up the credit ladder towards credit-
scored products that will eventually enable access to mainstream
lending products. At that time, the Company also stated that it
would retain payday loan licenses for The Cash Store Inc. and
Instaloans Inc. in Ontario until such time that the performance of
the new product offering in that market materialized as the
Company anticipated.
Cash Store Financial has evaluated the success of the line of
credit products in Ontario. It is now satisfied that there is no
need to renew its payday loan licenses and will allow its current
licenses to expire.
"We have been very pleased with consumer acceptance of the lines
of credit products distributed through our branches in Ontario
which serve a large consumer segment not currently accommodated by
traditional banks or credit unions," said Gordon J. Reykdal, CEO.
Faces Class Action Suit
A proposed class action proceeding for violation of U.S. federal
securities laws has been commenced in the United States District
Court of the Southern District of New York against the Company and
certain of its present and former officers. The claim is
substantially similar to the recently announced proposed class
action proceedings in Alberta and Ontario and the previously
disclosed complaint filed by Globis Capital Partners L.P.
The proposed U.S. class action concerns alleged misrepresentations
made in the Company's quarterly and annual financial statements
between Nov. 24, 2010, and May 13, 2013. In particular, the U.S.
complaint alleges that Cash Store Financial overvalued the
consumer loan portfolio acquired from third party lenders,
overstated its net income, understated losses on its internal
consumer loan portfolio, and understated its liabilities
associated with the settlement of the British Columbia class
action.
The Company will defend itself vigorously against what it believes
are unfounded allegations.
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 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," the
Company said.
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.
CENGAGE LEARNING: Section 341(a) Meeting Set for Aug. 6
-------------------------------------------------------
A meeting of creditors in the bankruptcy case of Cengage Learning
Inc. and its affiliates will be held on Aug. 6, 2013, at 2:30 p.m.
at 271-C Cadman Plaza East, Room 4529, Brooklyn, New Yori.
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 Cengage Learning
Stamford, Connecticut-based Cengage Learning --
http://www.cengage.com/-- provides innovative teaching, learning
and research solutions for the academic, professional and library
markets worldwide. The company's products and services are
designed to foster academic excellence and professional
development, increase student engagement, improve learning
outcomes and deliver authoritative information to people whenever
and wherever they need it. Cengage Learning's brands include
Brooks/Cole, Course Technology, Delmar, Gale, Heinle, South
Western and Wadsworth, among others.
Cengage Learning and its affiliates filed Chapter 11 petitions
(Bankr. E.D.N.Y. Case Nos. 13-44105 to 13-44108) on July 2, 2013.
Dean D. Durbin signed the petitions as chief financial officer.
The Debtors estimated assets and debts of more than $1 billion.
Cengage Learning's legal advisor for the Chapter 11 proceedings is
Kirkland & Ellis LLP, its restructuring advisor is Alvarez &
Marsal, and its financial advisor is Lazard Freres & Co. LLC.
Donlin, Recano & Company, Inc., serves as the Debtors' claims and
notice agent.
CHINA GINSENG: Unit Sells Asset for $0 + Assumption of $2MM Debt
----------------------------------------------------------------
Tonghua Linyuan Grape Planting Co. Limited, a subsidiary of China
Ginseng Holdings, Inc., entered into a sale agreement with Mr.
Wenkai Wang to transfer all assets and debts of Tonghua Linyuan to
Mr. Wenkai Wang for $0, including the ownership of machinery and
equipment, the right to the use of the plant and the debt of
$2 million of Tonghua Linyuan, effective as of June 30, 2013. Mr.
Wang has been engaged in wine sale business in Tonghua City for
many years and does not have any material relationship with the
Company, or any of its affiliates, or any director or officer of
the Company, or any associate of any such director or officer,
other than in respect of the sale of Tonghua Linyuan.
On March 31, 2008, the Company acquired Tonghua Linyuan whose
principal activity was the growing, cultivation and harvesting of
a grape vineyard. The Company planned to produce wine and grape
juice but to date has not commenced production. In June 2012, the
Company decided to abandon the growing and harvesting of grapes
due to the poor quality of the harvests which were not suitable
for the production of wine or grape juice. Management of the
Company believes that it is the best interest of the Company to
dispose the assets and debts of Tonghua Linyuan. Going forward,
the Company will purchase grapes in the open market to produce
wine and grape juice.
A copy of the Sale Agreement is available for free at:
http://is.gd/cXgFMq
About China Ginseng
Changchun City, China-based China Ginseng Holdings, Inc., conducts
business through its four wholly-owned subsidiaries located in
China. The Company has been granted 20-year land use rights to
3,705 acres of lands by the Chinese government for ginseng
planting and it controls, through lease, approximately 750 acres
of grape vineyards. However, recent harvests of grapes showed
poor quality for wine production which indicates that the
vineyards are no longer suitable for planting grapes for wine
production. Therefore, the Company has decided not to renew its
lease for the vineyards with the Chinese government upon
expiration in 2013 and, going forward, it intends to purchase
grapes from the open market in order to produce grape juice and
wine.
The Company reported a net loss of $3.1 million on $2.7 million of
revenues for the nine months ended March 31, 2013, compared with a
net loss of $1.1 million on $3.1 million of sales for the nine
months ended March 31, 2012. "The net loss was primarily due to
the decreased whole sales and increased cost of sales as a
percentage of revenue and the inventory impairment," the Company
said.
The Company's balance sheet at March 31, 2013, showed $6.3 million
in total assets, $6.8 million in total liabilities, and a
stockholders' deficit of $462,148.
CHINA GINSENG: Files Further Amendments to Quarterly Reports
------------------------------------------------------------
China Ginseng Holdings, Inc., has filed a second amendment to its
quarterly report on Form 10-Q for the period ended Dec. 31, 2012,
solely to respond to the Securities and Exchange Commission's
comments the Company received. The Company is including, in
accordance with the disclosure requirement provided by Exchange
Act Rule 12b-15, the complete text of Item 2 Management's
Discussion and Analysis of Financial Condition and Results of
Operations in the Amended Report No. 2. No other changes have
been made to the Form 10-Q. A copy of the amended Form 10-Q is
available for free at http://is.gd/1Ph7gK
In addition, the Company has further amended its quarterly report
for the period ended March 31, 2013, to furnish Exhibit 10.1 to
the Form 10-Q which was accidentally omitted in the Amendment No.1
to the Form 10-Q for the same period that was filed with the SEC
on June 25, 2013. No other changes have been made to the Form
10-Q. A copy of the amended Form 10-Q is available for free at:
http://is.gd/2zbR9I
About China Ginseng
Changchun City, China-based China Ginseng Holdings, Inc., conducts
business through its four wholly owned subsidiaries located in
China. The Company has been granted 20-year land use rights to
3,705 acres of lands by the Chinese government for ginseng
planting and it controls, through lease, approximately 750 acres
of grape vineyards. However, recent harvests of grapes showed
poor quality for wine production which indicates that the
vineyards are no longer suitable for planting grapes for wine
production. Therefore, the Company has decided not to renew its
lease for the vineyards with the Chinese government upon
expiration in 2013 and, going forward, it intends to purchase
grapes from the open market to produce grape juice and wine.
The Company reported a net loss of $3.1 million on $2.7 million of
revenues for the nine months ended March 31, 2013, compared with a
net loss of $1.1 million on $3.1 million of sales for the nine
months ended March 31, 2012. "The net loss was primarily due to
the decreased whole sales and increased cost of sales as a
percentage of revenue and the inventory impairment.
The Company's balance sheet at March 31, 2013, showed $6.3 million
in total assets, $6.8 million in total liabilities, and a
stockholders' deficit of $462,148.
CHRIST HOSPITAL: Liquidation Plan Declared Effective June 27
------------------------------------------------------------
The Joint Liquidation Plan of Christ Hospital has been fully
consummated and thus, the declared effective date is June 27,
2013. The Plan was confirmed last June 4, 2013.
As noted in the June 10, 2013 edition of the Troubled Company
Reporter, BankruptcyLaw360 reported that U.S. Bankruptcy Judge
Morris Stern gave his approval to the hospital's plan just more
than 16 months after the Jersey City, N.J., facility filed for
Chapter 11 protection amid large pension obligations, an
increasing Medicaid population and unfavorable agreements with
insurance companies. The plan hinged on the sale of the 367-bed
facility to Hudson Hospital Holdco LLC for $45.3 million, the
report said.
About Christ Hospital
Christ Hospital filed for Chapter 11 bankruptcy (Bankr. D.N.J.
Case No. 12-12906) on Feb. 6, 2012. Christ Hospital, founded in
1872 by an Episcopalian priest, is a 367-bed acute care hospital
located in Jersey City, New Jersey at 176 Palisade Avenue, serving
the community of Hudson County. The Debtor is well-known for its
broad range of services from primary angioplasty for cardiac
patients to intensity modulated radiation therapy for those
battling cancer. Christ Hospital is the only facility in Hudson
County to offer IMRT therapy, which is the most significant
breakthrough in cancer treatment in recent years.
Christ Hospital filed for Chapter 11 after an attempt to sell the
assets fell through. Judge Morris Stern presides over the case.
Lawyers at Porzio, Bromberg & Newman, P.C., serve as the Debtor's
counsel. Alvarez & Marsal North America LLC serves as financial
advisor. Logan & Company Inc. serves as the Debtor's claim and
noticing agent.
The Health Professional and Allied Employees AFT/AFI-CIO is
represented in the case by Mitchell Malzberg, Esq., at Mitnick &
Malzberg P.C.
Attorneys at Sills, Cummis & Gross, P.C., represent the Official
Committee of Unsecured Creditors.
On March 27, 2012, Judge Stern approved the sale of the Hospital's
assets to Hudson Hospital Holdo, LLC. Hudson bid $45,271,000 for
the Hospital's assets. The sale of the Debtor's assets to Hudson
closed on July 13, 2012.
DBK INVESTMENTS: U.S. Trustee Fails to Appoint Committee
--------------------------------------------------------
Judy A. Robbins, the U.S. Trustee for Region 4, has informed the
U.S. Bankruptcy Court for the Southern District of West Virginia
that she was unable to appoint a committee of unsecured creditors
in the bankruptcy case of DBK Investments & Development
Corporation. The U.S. Trustee stated in a court filing dated
July 1, 2013, that despite efforts by the U.S. Trustee to solicit
unsecured creditors for appointment to a committee of unsecured
creditors, as of this date, she has not received sufficient
indications of willingness to serve on the committee from persons
eligible to serve.
Bettye J. Morehead, Brown, Edwards & Co., and Smith & Co. filed on
April 1, 2013, an involuntary Chapter 11 petition (Bankr. S.D.
W.V. Case No. 13-50063) against Beckley, West Virginia-based DBK
Investments & Development Corporation, dba Americas Best Value
Inn, fka Best Western. Judge Ronald G. Pearson presides over the
case. The Petitioners are represented by Joe M. Supple, Esq., at
Supple Law Office, PLLC.
An order for relief was entered in the case on May 1, 2013.
DETROIT, MI: S&P Cuts Ratings on Water, Sewer Bonds to Junk
-----------------------------------------------------------
Reuters reported that Standard & Poor's Ratings Services on
Wednesday pushed the investment grade ratings on $5.42 billion of
Detroit water and sewage revenue bonds down into the junk
category, citing uncertainty over a potential restructuring of the
debt by the emergency manager running the city.
According to the report, Kevyn Orr, the corporate bankruptcy
attorney picked by the state of Michigan in March to manage its
biggest city, last month proposed spinning off Detroit's water and
sewer services into an independent authority that could redeem or
restructure outstanding revenue debt.
S&P said that under a restructuring the repayment terms could
change, including principal and interest amounts and the
amortization schedule, the report related. It added that the lower
BB-minus ratings were placed on a watch list until a clearer plan
emerges for the senior-lien water and sewage bonds, which had been
rated A-plus, and the second-lien bonds, which had been rated A.
The agency also said the ratings could drop further to the C
category if a debt restructuring or negotiated exchange of the
debt is likely to, or will, occur, the report further related.
Detroit's credit ratings progressively fell into the junk category
as its fiscal problems mushroomed, culminating with the
appointment of Orr who has said there is a 50/50 chance the city
could file what would be the biggest Chapter 9 municipal
bankruptcy ever, the report said.
DIGERATI TECHNOLOGIES: Can Employ Hoover Slovacek as Attorneys
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
granted Digerati Technologies, Inc., permission to employ Hoover
Slovacek, LLP, as its bankruptcy counsel.
As reported by the Troubled Company Reporter on June 19, 2013,
current hourly billing rates for HSLLP are:
* Edward L. Rothberg $400
* Annie Catmull $320
* Melissa Haselden $285
* Deirdre Brown $275
* T. Josh Judd $260
* Mazelle Krasoff $185
* Legal Assistants / Paralegals $80 to $130
The firm was given a $50,000 retainer by the Debtor.
Mr. Rothberg avers that HSLLP does not represent any interest
adverse to the Debtor, its estates and creditors and is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
About Digerati Technologies
Digerati Technologies, Inc., filed a Chapter 11 petition (Bankr.
S.D. Tex. Case No. 13-33264) in Houston, on May 30, 2013.
Digerati Technologies, Inc. -- http://www.digerati-inc.com-- is a
provider of cloud communication services. The Stafford, Texas-
based company said its principal assets are subsidiaries with
operations in Fairview, Montana; Williams County, North Dakota;
and San Antonio, Texas. The Debtor disclosed $60 million in
assets and $62.5 million in liabilities as of May 29, 2013.
Bankruptcy Judge Jeff Bohm oversees the case. Digerati is
represented by Edward L. Rothberg, Esq., at Hoover Slovacek, LLP,
in Houston.
DIGERATI TECHNOLOGIES: Court Denies Emergency Motion to Incur Debt
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas has
denied Digerati Technologies, Inc.'s June 24, 2013 emergency
motion to incur debt.
On June 27, 2013, Rhodes Holdings, LLC, a creditor, objected to
the motion.
Two witnesses gave testimony at the June 27, 2013 hearing on the
motion: (1) Antonio Estrada and (2) Art Smith. Their testimony
led the Court to make these findings of fact:
(1) the Debtor is the holding company of two entities:
Hurley Enterprises, Inc., and Dishon Disposal, Inc.;
(2) the Debtor's sole material assets are the stock that
it owns in Hurley and Dishon;
(3) Hurley and Dishon are presently operating entities
with their own management;
(4) Hurley and Dishon are both generating revenues and
have cash flows from their operations;
(5) the Debtor is purely a holding company with no
operations itself;
(6) Smith is the CEO of the Debtor;
(7) Estrada is the CFO of the Debtor; and
(8) Katie Keller is the accounting/administrative manager
of the Debtor.
The testimony also reflects that the Debtor wants the Court to
approve two DIP loans: one for $375,000 from Fairview, LLC, and
the other for $375,000 from Riverfront Capital, LLC. Both loans
are to bear interest at the rate of 7% per annum and are to be
secured by the Debtor's stock interest in Hurley and Dishon.
The Court said in its order:
(1) The Debtor has failed to satisfy the statutory
requirement imposed by Section 364(d)(1)(A) that the
Debtor is unable to obtain a DIP loan under terms less
onerous that what is actually being proposed.
(2) Moreover, the two proposed DIP lenders, if not
"insiders" under 11 U.S.C. Section 101(31), are hardly
parties whose negotiations with the Debtor could be
considered truly "arms length."
(3) Estrada made no attempt to communicate with any standard
lending institution to determine if the Debtor could
obtain financing on an unsecured basis under Section
364(b) or on an "administrative expense" basis under
Section 364(c). According to the Court, for this reason
alone, it concludes it must deny the motion.
(4) The Debtor has failed to demonstrate that the proposed
loans are necessary to avoid immediate and irreparable
harm to the estate.
(5) The record from the hearing held on June 27 leaves the
Court wondering just what exactly Smith, Estrada, and
Keller do for the Debtor that entitles them to very
generous salaries. The Debtor is a mere holding company
with no operations. The Court is also at a loss to
understand how it is beneficial to the Chapter 11 estate
for post-petition financing to be approved for the
purpose of paying substantial salaries to three persons
whose services do not appear to be necessary for the
Debtor to reorganize.
About Digerati Technologies
Digerati Technologies, Inc., filed a Chapter 11 petition (Bankr.
S.D. Tex. Case No. 13-33264) in Houston, on May 30, 2013.
Digerati Technologies, Inc. -- http://www.digerati-inc.com-- is a
provider of cloud communication services. The Stafford, Texas-
based company said its principal assets are subsidiaries with
operations in Fairview, Montana; Williams County, North Dakota;
and San Antonio, Texas. The Debtor disclosed $60 million in
assets and $62.5 million in liabilities as of May 29, 2013.
Bankruptcy Judge Jeff Bohm oversees the case. Digerati is
represented by Edward L. Rothberg, Esq., at Hoover Slovacek, LLP,
in Houston.
DIGERATI TECHNOLOGIES: Rhodes Wants Venue Moved to San Antonio
--------------------------------------------------------------
Rhodes Holdings, LLC, asks the U.S. Bankruptcy Court for the
Southern District of Texas to transfer the venue of Digerati
Technologies, Inc.'s Chapter 11 case, and any adversary
proceedings filed or pending in connection with the case, to the
United States District Court for the Western District of Texas,
San Antonio Division.
According to papers filed with the S.D. Tex. Court, in its Chapter
11 petition in this Court, the Debtor listed its principal office
at 12603 Southwest Freeway, Suite 170, Stafford Texas 77477 (the
"Stafford Address"). According to the Debtor's recently filed
Schedule G, the Debtor purportedly signed an "Office Rental
Agreement" for the Stafford Address dated May 28, 2013, a mere two
(2) days prior to the Petition Date. Prior to May 28, 2013, the
Debtor's sole business address and corporate office had been
either 3463 Magic Drive, Suite 202, San Antonio Texas, 78229, or
3201 Cherry Ridge, Suite C-300, San Antonio, Texas 78230. "Even
today, nearly a month after the Petition Date, the former address
in San Antonio is the only address listed on the Debtor's
website."
Moreover, according to Rhodes Holdings, the Debtor has admitted
that its principal assets are located in Fairview Montana and
Williams County North Dakota.
Rhodes says that the Debtor's only real connection, if any, to the
Southern District of Texas is that Bert Tarrant "Terry" Dunken,
Jr., resides in Fort Bend County, Texas.
According to Rhodes, "As the Court may recall from the Hearings
[on the Motion for Remand and the Motion to Amend the Temporary
Restraining Order in Adversary Proceeding No. 13-03121 conducted
on June 12 and 13, 2013], Dunken has no direct relationship to or
interest in the Debtor other than the fact that he is engaged in
litigation with Scott Hepford and The Lunaria Heritage Trust
concerning control of Oleum, the majority shareholder of the
Debtor."
"Upon information and belief, because the litigation in the Bexar
County District Court was not going well for Mr. Dunken, he
instructed Smith to file the Debtor's bankruptcy in Houston in an
attempt to remove the Bexar County litigation away from what he
perceived to be an unfavorable venue. Indeed, this Court has
previously found in connection with the Hearings that some forum
shopping occurred with respect to the filing of this Chapter 11
case and the removal of the Bexar County litigation. On that
basis, and others, the Court remanded the bulk of that litigation
back to the Bexar County District Court.
"Despite the improper reasons behind the decision to place the
Debtor into bankruptcy in this District, Mr. Dunken's residence
has no bearing on where the Debtor's Chapter 11 proceedings may be
conducted. This type of transparent forum shopping should not be
allowed by this Court."
About Digerati Technologies
Digerati Technologies, Inc., filed a Chapter 11 petition (Bankr.
S.D. Tex. Case No. 13-33264) in Houston, on May 30, 2013.
Digerati Technologies, Inc. -- http://www.digerati-inc.com-- is a
provider of cloud communication services. The Stafford, Texas-
based company said its principal assets are subsidiaries with
operations in Fairview, Montana; Williams County, North Dakota;
and San Antonio, Texas. The Debtor disclosed $60 million in
assets and $62.5 million in liabilities as of May 29, 2013.
Bankruptcy Judge Jeff Bohm oversees the case. Digerati is
represented by Edward L. Rothberg, Esq., at Hoover Slovacek, LLP,
in Houston.
DUNLAP OIL: Court Okays Cash Collateral Use Until July 11
---------------------------------------------------------
The Hon. Brenda Moody Whinery of the U.S. Bankruptcy Court for the
District of Arizona has approved Dunlap Oil Company, Inc., and
Quail Hollow Inn, LLC's continued use of cash collateral until
July 11, 2013.
As adequate protection for the Debtors' continued use of the cash
collateral of Pineda Grantor Trust II and Canyon Community Bank,
N.A., in addition to the replacement liens, the Debtors agree that
Pineda Grantor will be entitled to entry of an order granting
relief from the automatic stay to enforce its rights and remedies
relating to gas stations/c-stores located at 696 N. Ocotillo,
Benson and 1796 E. Fry Boulevard, Sierra Vista, and that CCB will
be entitled to entry of an order granting relief from the
automatic stay to enforce its rights and remedies relating to
CCB's collateral locations located at 971 E. White Mountain
Boulevard, Pinetop, and 1051 E. Beta Street, Sahuarita.
On June 25, Pineda Grantor, successor-in-interest to Compass Bank,
gave notice of its non-consent to the Debtors' continued use of
its cash collateral, saying that the Debtors refused to consent to
provisions necessary to protect Pineda Grantor's interest in the
properties the Debtors are proposing to turnover to Pineda
Grantor.
Lindsi M. Weber, Esq., at Gallagher & Kennedy, P.A., the attorney
for the Debtors, responded, saying the Debtors have cooperated and
attempted to effectuate the immediate transfer of the properties
proposed to be returned under the plan of reorganization but have
met significant resistance from Pineda Grantor and CCB. Pineda
Grantor, Ms. Weber stated, does not hold a perfected security
interest in the Debtors' cash collateral, because Compass Bank
allowed its UCC-1 to lapse back in 2005, and then erroneously
filed subsequent "continuations" that are of no effect under
Arizona law.
The Debtors indicated their intent to cease operating CCB's
collateral locations on June 28. According to CCB, the Debtors
failed to confirm that following the cessation of operations at
the two locations that they will take any measures to secure the
location from theft or vandalism, whether they will raid the
locations to remove the fuel, convenience store inventory or leave
the inventory at the locations, or otherwise provide any other
specifics concerning the logistics of an orderly turnover. The
Debtors, CCB claimed, have as yet refused to provide any specific
information concerning the turnover.
CCB's counsel learned on June 27, 2013, that Ted Dunlap, the
President of DOC, has been having ongoing negotiations with a
potential buyer of the Pinetop and Grand Texaco locations, who has
also indicated an ability to serve as a receiver of the locations,
yet failed to disclose this information to CCB, its counsel or the
Court. Loans CCB has made to the Debtors are secured by three
locations, and the rolling stock of Debtors. CCB's claims exceed
the value of its security.
CCB and Pineda Grantor requested on June 27 that the Court require
Debtor DOC to continue to operate the Pinetop and Grand Texaco
location through July 11, 2013, or alternatively, require DOC to
provide adequate security for CCB's collateral at the two
locations, secure the locations and take measures to ensure the
locations are not broken into or vandalized, thus further
decreasing CCB's collateral. Pineda Grantor requested the same
relief with respect to Benson Little General and Sierra Vista
Chevron. Pineda Grantor also intends to seek the appointment of a
receiver over said properties.
The Debtors are also represented by John R. Clemency, Esq., at
Gallagher & Kennedy PA.
CCB is represented by:
RUSING LOPEZ & LIZARDI, P.L.L.C.
6363 North Swan Road, Suite 151
Tucson, AZ 85718
Tel: (520) 792-4800
Fax: (520)529-4262
Pat P. Lopez III, Esq.
Rebecca K. O'Brien, Esq.
Jeffrey G. Baxter, Esq
E-mail: plopez@rllaz.com
robrien@rllaz.com
jbaxter@rllaz.com
Pineda Grantor is represented by:
David Wm. Engleman, Esq.
Bradley D. Pack, Esq.
ENGELMAN BERGER, P.C.
3636 North Central Avenue, Suite 700
Phoenix, AZ 85012
E-mail: dwe@eblawyers.com
bdp@eblawyers.com
About Dunlap Oil Company and Quail Hollow Inn
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought
Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and
12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a
Willcox, Arizona-based operator of 14 gasoline services stations.
QOH owns the 89-room outside corridor Best Western Plus Quail
Hollow hotel in Willcox. The two companies are owned and operated
by the Dunlap family.
The Hon. Brenda Moody Whinery presides over the case. John R.
Clemency, Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy,
P.A., serve as the Debtors' counsel. Peritus Commercial Finance
LLC serves as financial advisor. Quail Hollow Inn also hired
Sally M. Darcy of McEvoy Daniels & Darcy P.C. for the limited
purpose of handling any claims, issues, and/or disputes between
QHI and Best Western International, Inc. The Debtors' lead
counsel, Gallagher & Kennedy, P.A., has a conflict precluding its
representation of the Debtor in matters relating to Best Western.
QOH declared assets of at least $1 million and debts exceeding
$10 million. DOC estimated assets and debts of $10 million to
$50 million.
The petitions were signed by Theodore Dunlap, president.
Ilene J. Lashinsky, the U.S. Trustee for Region 14, has appointed
three creditors to serve on an Official Committee of Unsecured
Creditor for the Chapter 11 bankruptcy case of Dunlap Oil Company.
The Committee tapped Nussbaum Gillis & Dinner, P.C. as its
counsel.
Pineda Grantor Trust II, successor-in-interest to Compass Bank, is
represented by Steven N. Berger, Esq., and Bradley D. Pack, Esq.,
at Engelman Berger, P.C.
Canyon Community Bank NA is represented by Pat P. Lopez III, Esq.,
Rebecca K. O'Brien, Esq., and Jeffrey G. Baxter, Esq., at Rusing
Lopez & Lizardi, P.L.L.C.
EDISON MISSION: Taps J.P. Morgan Securities to Assist in Sale
-------------------------------------------------------------
Edison Mission Energy, et al., asks the Hon. Jacqueline P. Cox of
the U.S. Bankruptcy Court for the Northern District of Illinois to
employ J.P. Morgan Securities LLC as co-advisor for the Debtors --
together with Perella Weinberg Partners -- in connection with any
potential sale process.
J.P. Morgan will work side-by-side with Perella to ensure that
value and stakeholder recoveries are maximized. Perella and J.P.
Morgan will coordinate the services they are providing to the
Debtors to ensure that there is no unnecessary duplication of
services by either firm during the pendency of these Chapter 11
cases.
J.P. Morgan will, among other things:
a. assist the Debtors in preparing a memorandum (based
entirely on information supplied by the Debtors) for
distribution to potential purchasers, describing the
assets, their business, and financial condition;
b. assist the Debtors in identifying and contacting
potential purchasers to ascertain their interest in a
transaction;
c. advise and assist the Debtors in their negotiation of the
financial aspects of a transaction; and
d. appear and testify in court proceedings related to any
Section 363 bankruptcy sale process in connection with
obtaining court approval of a transaction.
J.P. Morgan will be paid a progressive fee with respect to each
transaction payable upon the closing of a transaction, in an
amount equal to the percentage of cumulative consideration, only
to be received for transactions that are successfully completed,
as set forth below:
i. 0.9500 percent and 0.5625 percent for consideration of
$0 and $500 million, respectively;
ii. 0.5625 percent and 0.4575 percent for consideration of
$500 million and $750 million, respectively;
iii. 0.4575 percent and 0.4000 percent for consideration of
$750 million and $1 billion, respectively;
iv. 0.4000 percent and 0.3875 percent for consideration of
$1 billion and $1.25 billion, respectively;
v. 0.3875 percent and 0.3750 percent for consideration of
$1.25 billion and $1.75 billion, respectively;
vi. 0.3750 percent and 0.3450 percent for consideration of
$1.75 billion and $2.25 billion, respectively;
vii. 0.3450 percent and 0.3250 percent for consideration of
$2.25 billion and $3.25 billion, respectively;
viii. 0.3250 percent and 0.3100 percent for consideration of
$3.25 billion and $3.5 billion, respectively;
ix. 0.3100 percent and 0.3000 percent for consideration of
$3.5 billion and $3.75 billion respectively; and
x. 0.3000 percent for consideration above $3.75 billion.
The Transaction Fee will be equal to $2 million if the coal-fired
generation assets are the only assets sold. If, in lieu of a
transaction, the Debtors complete an alternative transaction
involving the assets with the assistance of J.P. Morgan, J.P.
Morgan and the Debtors will negotiate in good faith regarding the
appropriate form and amount of compensation for J.P. Morgan,
taking into account, among other things, the results obtained and
the custom and practice among investment bankers acting in similar
transactions.
If the Debtors receive any payment from another person (including
any payment as reimbursement of expenses) following or in
connection with the termination, abandonment, or failure to occur
of any proposed transaction, then the Debtors will pay to J.P.
Morgan a fee in an amount equal to 25 percent of the break-up fee.
In no event will any break-up fee portion exceed the amount of the
Transaction Fee that would have been payable to J.P. Morgan if the
transaction had been consummated.
Carsten Woehrn, managing director of J.P. Morgan, attests to the
Court that the firm is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code, as required by Section
327(a), and does not hold or represent an interest adverse to the
Debtors' estates.
The Court will hold a hearing on July 17, 2013, at 10:30 a.m.
(Central Time) to consider the Debtors' motion to hire J.P.
Morgan.
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.
ERF WIRELESS: Inks New $8 Million Revolving Credit Facility
-----------------------------------------------------------
ERF Wireless, Inc., has closed on an $8,000,000 revolving line of
credit facility. Under the terms of the agreement, TCA Global
Credit Master Fund, L.P., has committed to lend a total of
$8,000,000 over time through the issuance of senior secured
revolving notes, with the initial tranche of $1,500,000.
Following the initial draw, the company must meet specific monthly
collateral requirements, and receive the approval, of TCA to
further draw upon the revolving credit facility.
According to Dr. H. Dean Cubley, CEO of ERF Wireless, "We are
pleased to be able to put this new debt facility in place at this
particular point in the overall development of the ERF Wireless
business plan. We have a number of expansion projects where the
availability of such a credit facility will work to our advantage
as we utilize it in conjunction with our other sources of capital
to continue to grow our business."
About ERF Wireless
Based in League City, Texas, ERF Wireless, Inc., provides secure,
high-capacity wireless products and services to a broad spectrum
of customers in primarily underserved, rural and suburban parts of
the United States.
The Company incurred a consolidated net loss of $3.75 million for
the nine months ended Sept. 30, 2012, as compared with a
consolidated net loss of $2.32 million for the same period a year
ago.
The Company's balance sheet at March 31, 2013, showed $5.93
million in total assets, $8.61 million in total liabilities and a
$2.68 million total shareholders' deficit.
EXCEL MARITIME: Section 341(a) Meeting Set for Aug. 13
------------------------------------------------------
A meeting of creditors in the bankruptcy case of Excel Maritime
Carriers Ltd., et al., will be held on Aug. 13, 2013, at 2:00
p.m., at 80 Broad Street, 4th Floor, New York.
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 Excel Maritime
Based in Athens, Greece, Excel Maritime Carriers Ltd. --
http://www.excelmaritime.com/-- is an owner and operator of dry
bulk carriers and a provider of worldwide seaborne transportation
services for dry bulk cargoes, such as iron ore, coal and grains,
as well as bauxite, fertilizers and steel products. Excel owns a
fleet of 40 vessels and, together with 7 Panamax vessels under
bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax,
21 Panamax, 2 Supramax and 5 Handymax vessels) with a total
carrying capacity of approximately 3.9 million DWT. Excel Class A
common shares have been listed since Sept. 15, 2005, on the New
York Stock Exchange (NYSE) under the symbol EXM and, prior to that
date, were listed on the American Stock Exchange (AMEX) since
1998.
The company blamed financial problems on low charter rates.
The balance sheet for December 2011 had assets of $2.72 billion
and liabilities totaling $1.16 billion. Excel owes $771 million
to secured lenders with liens on almost all assets. There is $150
million owing on 1.875 percent unsecured convertible notes.
Excel Maritime, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case
No. 13-bk- 23060) on July 1, 2013, in New York after signing an
agreement where secured lenders owed $771 million support a
reorganization plan filed alongside the petition.
Excel, which sought bankruptcy with a number of affiliates, has
tapped Skadden, Arps, Slate, Meagher & Flom LLP, as counsel;
Miller Buckfire & Co. LLC, as investment banker; and Global
Maritime Partners Inc., as financial advisor.
GUIDED THERAPEUTICS: Has 8.2 Million Shares Resale Prospectus
-------------------------------------------------------------
Guided Therapeutics, Inc., registered with the U.S. Securities and
Exchange Commission 8.2 million shares of common stock consisting
of:
* 3,716,177 shares initially issued or issuable upon conversion
of an aggregate of 2,527 shares of the Company's series B
convertible preferred stock issued in a private placement
that closed on May 24, 2013;
* 836,610 shares issued or that may be issuable as payment for
dividends on the series B convertible preferred stock,
payable through Dec. 31, 2015; and
* 3,716,177 shares initially issued or issuable upon exercise
of warrants at an exercise price of $1.08 per share, subject
to adjustment as provided in the warrants, which warrants
were issued in the private placement.
The shares offered by this prospectus may be sold from time to
time by John Edwin Imhoff, Alpha Capital Anstalt, The Whittemore
Collection, Ltd., et al., at prevailing market prices or prices
negotiated at the time of sale.
The Company will not receive any cash proceeds from the sale of
shares by the selling stockholders, but to the extent that the
warrants are exercised in whole or in part, the Company will
receive payment for the exercise price. The Company will pay the
expenses of registering these shares.
The Company's common stock is dually listed on the OTC Bulletin
Board and the OTCQB quotation systems under the symbol "GTHP."
The last reported sale price of the Company's common stock on the
OTCBB on July 3, 2013, was $0.70 per share. The selling
stockholders will sell at prevailing market prices per share (as
quoted on the OTCBB), at the time of sale, at fixed prices, at
varying prices determined at the time of sale, or at negotiated
prices.
A copy of the Form S-1 prospectus is available for free at:
http://is.gd/0KlZHN
About Guided Therapeutics
Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP)
-- http://www.guidedinc.com/-- is developing a rapid and painless
test for the early detection of disease that leads to cervical
cancer. The technology is designed to provide an objective result
at the point of care, thereby improving the management of cervical
disease. Unlike Pap and HPV tests, the device does not require a
painful tissue sample and results are known immediately. GT has
also entered into a partnership with Konica Minolta Opto to
develop a non-invasive test for Barrett's Esophagus using the
LightTouch technology platform.
Guided Therapeutics disclosed a net loss of $4.35 million on $3.33
million of contract and grant revenue for the year ended Dec. 31,
2012, as compared with a net loss of $6.64 million on $3.59
million of contract and grant revenue in 2011. The Company's
balance sheet at March 31, 2013, showed $3.58 million in total
assets, $1.72 million in total liabilities, and $1.86 million in
total stockholders' equity.
UHY LLP, in Sterling Heights, Michigan, issued a "going concern"
qualification on the Company's consolidated financial statements
for the year ended Dec. 31, 2012, citing recurring losses from
operations and accumulated deficit that raise substantial doubt
about its ability to continue as a going concern.
Bankruptcy Warning
"The Company's capital-raising efforts are ongoing. If sufficient
capital cannot be raised during the second quarter of 2013, the
Company has plans to curtail operations by reducing discretionary
spending and staffing levels, and attempting to operate by only
pursuing activities for which it has external financial support,
such as under the Konica Minolta license agreement and additional
NCI, NHI or other grant funding. However, there can be no
assurance that such external financial support will be sufficient
to maintain even limited operations or that the Company will be
able to raise additional funds on acceptable terms, or at all. In
such a case, the Company might be required to enter into
unfavorable agreements or, if that is not possible, be unable to
continue operations, and to the extent practicable, liquidate
and/or file for bankruptcy protection."
FIRST SECURITY: Has Rights Offering for 3.3 Million Shares
----------------------------------------------------------
First Security Group, Inc., registered with the U.S. Securities
and Exchange Commission 3,329,234 shares of common stock issuable
upon the exercise of subscription rights at $1.50 per share.
Subscription rights will be distributed to persons who owned
shares of the Company's common stock as of 5:00 p.m. Eastern Time,
on April 10, 2013, the record date of the rights offering.
The Company expects the aggregate net proceeds from the rights
offering to be approximately $4.475 million. The Company intends
to use the proceeds of the rights offering to supplement the
capital of First Security and for general corporate purposes.
The Company's common stock is traded on the NASDAQ Capital Market
under the trading symbol "FSGI." The last reported sales price
for shares of the Company's common stock on July 2, 2013, was
$2.16 per share.
Raymond James & Associates, Inc., serves as dealer manager for the
offering.
A copy of the Form S-1 prospectus is available for free at:
http://is.gd/aMioYd
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee, with $1.2 billion in
assets as of Sept. 30, 2010. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Joseph Decosimo and Company, PLLC, in
Chattanooga, Tennessee, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has recently incurred substantial
losses. The Company is also operating under formal supervisory
agreements with the Federal Reserve Bank of Atlanta and the Office
of the Comptroller of the Currency and is not in compliance with
all provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
The Company reported a net loss of $23.06 million in 2011, a net
loss of $44.34 million in 2010, and a net loss of $33.45 million
in 2009. The Company's balance sheet at March 31, 2013, showed
$1.04 billion in total assets, $1.01 billion in total liabilities
and $20.99 million in total shareholders' equity.
FLINTKOTE COMPANY: Has Until Nov. 30 to Propose Chapter 11 Plan
---------------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware, at the behest of Flintkote Company and
Flinkote Mines Limited, has extended the Debtors' exclusive
periods to file a proposed Chapter 11 plan until Nov. 30, 2013;
and solicit acceptances for that plan until Jan. 31, 2014,
respectively.
As reported by the Troubled Company Reporter on June 26, 2013, the
Debtors said the plan proponents' cooperative efforts to confirm a
consensual plan will be protected by extending the exclusive
periods. The Debtors related that on Dec. 21, 2012, the Court
entered its memorandum opinion overruling objections to the
Amended Joint Plan of Reorganization, confirming plan and
recommending the affirmation of confirmation and of the so-called
Section 524(g) injunction.
On Jan. 4, 2013, Imperial Tobacco Canada Limited and certain of
its wholly owned subsidiaries, including Genstar Corporation,
filed a notice of appeal from the confirmation opinion and the
confirmation order, and the appeal is pending before the District
Court.
About The Flintkote Company
Headquartered in San Francisco, California, The Flintkote Company
is engaged in the business of manufacturing, processing and
distributing building materials. Flintkote Mines Limited is a
subsidiary of Flintkote Company and is engaged in the mining of
base-precious metals. The Flintkote Company filed for Chapter 11
protection (Bankr. D. Del. Case No. 04-11300) on April 30, 2004.
Flintkote Mines Limited filed for Chapter 11 relief (Bankr. D.
Del. Case No. 04-12440) on Aug. 25, 2004. Kevin T. Lantry, Esq.,
Jeffrey E. Bjork, Esq., Dennis M. Twomey, Esq., Jeremy E.
Rosenthal, Esq., and Christina M. Craige, Esq., at Sidley Austin,
LLP, in Los Angeles; James E. O'Neill, Esq., and Laura Davis
Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington,
Del., represent the Debtors in their restructuring efforts. Elihu
Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York,
N.Y.; Peter Van N. Lockwood, Esq., Ronald E. Reinsel, Esq., at
Caplin & Drysdale, Chartered, in Washington, D.C.; and Philip E.
Milch, Esq., at Campbell & Levine, LLC, in Wilmington, Del.,
represent the Asbestos Claimants Committee as counsel.
When Flintkote Company filed for protection from its creditors, it
estimated more than $100 million each in assets and debts. When
Flintkote Mines Limited filed for protection from its creditors,
it estimated assets of $1 million to $50 million, and debts of
more than $100 million.
The Debtors' Chapter 11 cases have been re-assigned to Judge Mary
F. Walrath in line with the retirement of former Bankruptcy
Judge Judith Fiztgerald.
FLUX POWER: Chief Executive Officer Quits
-----------------------------------------
Chris Anthony has tendered his resignation as Chief Executive
Officer and President of Flux Power Holdings, Inc., to return full
time to his position as CEO of Epic Boats, LLC, a company he
founded in 2005. Mr. Anthony, a founder of Flux Power, will
remain on the Company's Board of Directors as an outside director
and continue to provide on-going advisory services in this
capacity. Flux Power's CFO, Ron Dutt, has been named interim CEO.
Upon the closing of the proposed acquisition of KleenSpeed, its
current CEO, Timothy Collins, will join the Board of Flux Power
and assume Mr. Anthony's role of Executive Chairman.
"Chris founded Flux Power four years ago and has been instrumental
in developing and guiding the technology and product development
in advanced energy storage systems from concept through
application, including the recent introduction of our lithium 24V
LiFTTM Pack product line for the material handling industry," said
Ron Dutt, Interim CEO and CFO of Flux Power. "Chris' continued
involvement at Flux Power, including his vision, technology
insight, and product marketing will be welcomed as we move into
the next stage of production and growth. We truly appreciate all
of his contributions and support his decision to focus his
attention full time on Epic Boats at this time."
"Flux Power is now well positioned with the right technologies to
meet the ever increasing demands for cost efficient energy
storage. The Company's future growth will be well guided by the
Board of Directors and Ron. I look forward to being a part of
this next, exciting stage and will continue to lend my full
support as an active member of the Board," said Mr. Anthony.
Ron Dutt joined Flux Power in December 2012 as Chief Financial
Officer, with responsibility for financial operations, reporting
and accounting. Mr. Dutt brings more than 25 years of experience
in strategic and financial management to Flux Power, with a track
record for building companies for growth and leading companies
through transitions, including companies such as DHL, Ford Motor
Company, Visa, Directed Electronics and SOLA International. Mr.
Dutt has successfully led the financial performance of public and
private companies from early stage to revenues exceeding $1
billion. Mr. Dutt is an active board member of Rising
International and a board advisor for Tyga-Box Systems. He earned
an MBA from the University of Washington and an AB degree in
chemistry from the University of North Carolina.
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.
HAWAII MEDICAL: May Hire Jayaram Law Group as Litigation Counsel
----------------------------------------------------------------
Hawaii Medical Center et al., sought and obtained authorization
from the U.S. Bankruptcy Court for the District of Hawaii to
employ Jayaram Law Group, Ltd., as special litigation counsel.
Jayaram Law will provide legal services on behalf of the Debtor in
the Debtors' claims against (i) Salim Hasham for amounts received
by the Debtors prior to its bankruptcy filing; and (ii) Cain
Brothers for accepting a fee for services that exceeds the amount
it is entitled to as a professional under the U.S. Bankruptcy
Code.
Jayaram Law's scope of representation will include research,
communication with the parties involved, preparation of legal
documents as required, attendance and participation at court
hearings, and related activities reasonable and necessary to
adequately satisfy the Debtors' legal needs.
Jayaram Law will be paid $300 per hour for its services. The
Debtors will also provide Jayaram Law with a non-refundable
retainer in the amount of $7,500.
To the best of the Debtor's knowledge, Jayaram Law is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
Jayaram Law can be reached at:
Jayaram Law Group, Ltd.
Attn: Vivek Jayaram, Esq.
33 N. LaSalle Street, Suite 2900
Chicago, IL 60602
Tel: (312) 454-2859
Fax: (312) 551-0322
E-mail: vivek@jayaramlaw.com
About Hawaii Medical Center
The Hawaii Medical Center, along with its affiliates, filed for
Chapter 11 bankruptcy (Bankr. D. Hawaii Lead Case No. 11-01746) on
June 21, 2011, just a year after exiting court protection. Hawaii
Medical Center owns two hospital campuses -- HMC East in North
Honolulu and HMC West in Ewa Beach. The two hospitals have 342
licensed beds and have a total of more than 1,000 employees. The
hospitals were known as St. Francis Medical Center before Hawaii
Medical purchased the hospitals in 2007.
Judge Robert J. Faris presides over the 2011 case. Lawyers at
Moseley Biehl Tsugawa Lau & Muzzi, in Honolulu, Hawaii, and
McDonald Hopkins LLC, in Cleveland, Ohio, serve as the Debtors'
counsel. The Debtors' financial advisors are Scouler & Company,
LLC. In its 2011 petition, Hawaii Medical Center estimated
$50 million to $100 million in assets and $100 million to $500
million in debts. The petitions were signed by Kenneth J. Silva,
member of the board of directors.
Attorneys at Wagner Choi & Verbrugge, in Honolulu, Hawaii, and
Pachulski Stang Ziehl & Jones LLP, in Los Angeles, represent the
Official Committee of Unsecured Creditors as counsel.
The Debtors' prepetition debt structure is comprised of (i) the
Prepetition Revolving Loan with MidCap Financial, LLC, and the
Prepetition Term Loan with St. Francis Healthcare Systems of
Hawaii. As of the Petition Date, the aggregate outstanding
principal on the Prepetition MidCap Revolving Loan and the
Prepetition St. Francis Term Loan is $46,851,772. The principal
balance of the Prepetion MidCap Revolving Loan is $7,676,495. The
amount owed under the Prepetition St. Francis Term Loan is
$39,175,277, secured by St. Francis's first priority lien on,
among other things, all real property of the Debtors.
Through the Chapter 11 filing, the Debtors plan to return the
hospitals to the control of St. Francis.
In the prior case, HMC and its affiliated debtors were converted
to new, Hawaii non-profit corporations. CHA Hawaii, one of HMC's
affiliated debtors and a subsidiary of Cardiovascular Hospitals of
America LLC, discontinued management of the reorganized Debtors.
Wichita, Kansas-based CHA Hawaii LLC, and its affiliates --
including Hawaii Medical Center LLC -- filed for Chapter 11
protection on Aug. 29, 2008 (Bankr. D. Del. Case No. 08-12027).
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP
represented the Debtors in their restructuring efforts. CHA
Hawaii estimated assets of up to $10 million and debts between
$50 million and $100 million when it filed for bankruptcy. The
Debtors obtained confirmation of their Chapter 11 plan in May 2010
and emerged from bankruptcy in August 2010.
The Debtor disclosed $74,713,475 in assets and $91,599,563 in
liabilities as of the Chapter 11 filing.
HI-WAY EQUIPMENT: Panel Objects to Continued Use of Comvest Cash
----------------------------------------------------------------
Comvest Investment Partners III, LLC, has stipulated to debtors
Hi-Way Equipment Company LLC, Hi-Way Holdings LLC and HWE Real
Estate LLC's use of cash collateral pursuant to a budget.
According to papers filed with the Court, following the May 10,
2013 closing of the sale of substantially all of the Debtors'
assets to Associated Supply Company, Inc., and the payments of
certain secured claims and the real property taxes, the Debtors
had $4,583,114 in cash from the sale proceeds, and operations of
their businesses. Of this amount, $968,434 has been segregated
for various secured lenders of Hi-Way Equipment, $103,024 has been
segregated for ad valorem taxes, and $2,167,410 has been
segregated from the sale of HWE Real Estate's real property.
About $1,344,246 in un-segregated cash remains, which remaining
cash is subject to the remaining liens of Comvest and constitutes
Comvest's cash collateral.
A copy of the stipulation to continue the use of cash collateral
and the budget is available at:
http://bankrupt.com/misc/hi-wayequipment.doc229.pdf
The Official Committee of Unsecured Creditors of the Debtors
objects to the stipulation. The Committee was appointed June 5,
2013, and voted to retain Shannon, Gracey, Ratliff & Miller, LLP,
as proposed counsel on June 17, 2013.
The Committee said that upon retention, counsel for the Committee
immediately contacted the Debtors' counsel to inquire as to the
status of the case and the estimated distribution to unsecured
creditors. The Debtors informed the Committee that they did not
foresee any distribution to unsecured creditors and stated that
there is a shortfall to the secured creditor. Despite having been
contacted by the Committee, the Debtors filed the Stipulation
without seeking input from the Committee with respect to the
reasonableness of the line items of the proposed Budget.
The Committee said it expects to play a pivotal role in the
formation of a plan of reorganization, especially considering that
the expected distribution to unsecured creditors is 0%.
Additionally, the Committee intends to investigate causes of
action against the former Directors and Officers of the Debtors
and causes of action under chapter 5 of the Bankruptcy Code in an
attempt to obtain a recovery for unsecured creditors.
The Committee requests that the Stipulation be denied pending a
discussion between Comvest, the Debtors and the Committee
regarding the status and terms of the proposed plan, the
likelihood of any distribution to unsecured creditors, the
reasonableness of the budget, and inclusion in the Stipulation's
budget projected fees to be incurred by the Committee with respect
to plan negotiations, an investigation into causes of action
against the Directors and Officers, and an investigation into
potential avoidance actions.
The Committee's objection was submitted by:
John Y. Bonds, III, Esq.
H. Brandon Jones, Esq.
SHANNON, GRACEY, RATLIFF & MILLER, LLP
777 Main Street, Suite 3800
Fort Worth, TX 76102-5304
Tel: (817) 336-9333
Fax: (817) 336-3735
E-mail: jbonds@shannongracey.com
bjones@shannongracey.com
- and -
Joshua N. Eppich, Esq.
SHANNON, GRACEY, RATLIFF & MILLER, LLP
1301 McKinney, Suite 2900
Houston, TX 77010-3082
Tel: (713) 255-4700
Fax: (713) 655-1597
E-mail: jeppich@shannongracey.com
About Hi-Way Equipment Company
Hi-Way Equipment Company LLC filed a Chapter 11 petition (Bankr.
N.D. Tex. Case No. 13-41498) on April 1, 2013. Charles W. Reeves,
Jr., signed the petition as chief restructuring officer.
Gardere Wynne Sewell, LLP, in Dallas, Texas, serves as the
Debtor's counsel. The Debtor estimated assets and debts of at
least $10 million.
Shannon, Gracey, Ratliff & Miller is the proposed counsel for the
Official Committee of Unsecured Creditors.
Hi-Way Equipment has been providing rental and sales of equipment
since 1948. In 2008, Hi-Way Equipment acquired Equipment Support
Services, Inc. As part of that acquisition, Hi-Way Equipment
expanded to become a dealer of Case and Case IH equipment through
CNH America LLC. With the acquisition of ESS, Hi-Way Equipment
acquired ESS' subsidiaries: CDI Equipment, Ltd., Carruth-Doggett
Industries Partners Acquisition, LLC, Future Equipment Holdings,
LLC, Future Equipment Partners, LLC, Equipment Support Services,
Inc., ESS Acquisition LLC, Carruth-Doggett Industries Holdings
Acquisition, LLC, and Southern Power Acquisition, Inc. In 2011,
Hi-Way Equipment merged with the Subsidiaries and Hi-Way Equipment
was the sole surviving entity. Hi-Way Equipment serves as the
non-exclusive dealer of Case and Case IH equipment in numerous
counties across Texas.
HI-WAY EQUIPMENT: Committee Retaining Shannon Gracey as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Hi-Way
Equipment Company, LLC, Hi-Way Holdings LLC, and HWE Real Estate
LLC, asks the U.S. Bankruptcy Court for the Northern District of
Texas for authority to retain Shannon, Gracey, Ratliff & Miller,
LLP, as its counsel. No hearing will be conducted unless a
written responses is filed with the Court before the close of
business on July 22, 2013.
Shannon Gracey will render these professional services:
a. assist, advise and represent the Committee in its
consultations regarding the administration of this case;
b. assist, advise and represent the Committee in
investigating the acts, conduct, assets, liabilities and financial
condition of the Debtors, the operation of the Debtors' businesses
and the desirability of the continuance of such businesses, and
any other matters relevant to these cases or the formulation of a
plan;
c. assist, advise and represent the Committee in analyzing
the Debtors' remaining assets and liabilities, investigating the
extent and validity of liens, cash collateral stipulations and
contested matters;
d. assist, advise and represent the Committee in
participating in the negotiation and formulation of a disclosure
statement and plan of reorganization and to advise those
represented by the Committee of the Committee's determinations as
to any plan;
e. request the appointment of a trustee or examiner as
provided for under Section 1104 of the Bankruptcy Code, if
appropriate;
f. assist, advise and represent the Committee with respect to
the Debtors' potential postpetition financing transactions and
cash collateral issues;
g. assist, advise and represent the Committee in any manner
relevant to preserving and protecting the Debtors' estates and the
rights of creditors;
h. assist, advise and represent the Committee regarding the
evaluation of claims, preferences, fraudulent transfers and other
actions;
i. prepare on behalf of the Committee all necessary
applications, motions, answers, orders, reports, and other legal
papers;
j. appear in Court and to protect the interests of the
Committee before the Court; and
k. perform all other legal services of the Committee which
may be necessary and proper in this proceeding.
Shannon Gracey's current standard hourly rates for attorneys and
other professionals are:
Attorneys $220 to $525
Paralegals/Law Clerks $90 to $150
To the best of the Committee's knowledge, Shannon Gracey does not
hold or represent any interest adverse to the Debtors or the
Debtors' estates in the matters on which it is to be retained and
that Shannon Gracey is a "disinterested person" as that phrase is
defined in Section 101(14) of the Bankruptcy Code.
About Hi-Way Equipment Company
Hi-Way Equipment Company LLC filed a Chapter 11 petition (Bankr.
N.D. Tex. Case No. 13-41498) on April 1, 2013. Charles W. Reeves,
Jr., signed the petition as chief restructuring officer.
Gardere Wynne Sewell, LLP, in Dallas, Texas, serves as the
Debtor's counsel. The Debtor estimated assets and debts of at
least $10 million.
Shannon, Gracey, Ratliff & Miller is the proposed counsel for the
Official Committee of Unsecured Creditors.
Hi-Way Equipment has been providing rental and sales of equipment
since 1948. In 2008, Hi-Way Equipment acquired Equipment Support
Services, Inc. As part of that acquisition, Hi-Way Equipment
expanded to become a dealer of Case and Case IH equipment through
CNH America LLC. With the acquisition of ESS, Hi-Way Equipment
acquired ESS' subsidiaries: CDI Equipment, Ltd., Carruth-Doggett
Industries Partners Acquisition, LLC, Future Equipment Holdings,
LLC, Future Equipment Partners, LLC, Equipment Support Services,
Inc., ESS Acquisition LLC, Carruth-Doggett Industries Holdings
Acquisition, LLC, and Southern Power Acquisition, Inc. In 2011,
Hi-Way Equipment merged with the Subsidiaries and Hi-Way Equipment
was the sole surviving entity. Hi-Way Equipment serves as the
non-exclusive dealer of Case and Case IH equipment in numerous
counties across Texas.
HIGH PLAINS GAS: D'Arelli Replaces Stark Schenkein as Accountants
-----------------------------------------------------------------
Stark Schenkein, LLP, resigned as independent registered public
accounting firm of High Plains Gas, Inc., on March 29, 2013.
Stark did not perform any material audit work for the Company.
Stark did not issue any adverse opinion or disclaimer of opinion,
nor did they qualify any opinion as to uncertainty, audit scope or
accounting principles.
The resignation was not a result of any disagreement with the
Company.
High Plains has engaged the firm of D'Arelli Pruzansky,
P.A., Certified Public Accounts, to serve as its independent
registered public accountants for the fiscal year ending Dec. 31,
2012.
About High Plains
Houston, Texas-based High Plains Gas, Inc., is a provider of goods
and services to regional end markets serving the energy industry.
It produces natural gas in the Powder River Basin located in
Northeast Wyoming. It provides construction and repair and
maintenance services primarily to the energy and energy related
industries mainly located in Wyoming and North Dakota.
The Company reported a net loss of $57.48 million on
$17.15 million of revenues for 2011, compared with a net loss of
$5.48 million on $2.61 million of revenues for 2010. The
Company's balance sheet at June 30, 2012, showed $10.26 million in
total assets, $40.42 million in total liabilities, and a $30.16
million total stockholders' deficit.
Its former accountant, Eide Bailly LLP, in Greenwood Village,
Colorado, issued a "going concern" qualification on the financial
statements for the year ending Dec. 31, 2011, citing significant
operating losses which raised substantial doubt about High Plains
Gas' ability to continue as a going concern.
HOSTESS BRANDS: Flowers Gets Regulatory OK to Acquire Assets
------------------------------------------------------------
Flowers Foods, Inc. on July 8 confirmed that it has received
regulatory approval pursuant to the Hart-Scott-Rodino Act to
acquire the Wonder, Nature's Pride, Merita, Home Pride, and
Butternut bread brands; 20 bakeries; and 36 depots from Old HB,
Inc., formerly known as Hostess Brands. Flowers expects to
complete the transaction in the coming weeks.
In February 2013, the company announced its agreement to purchase
the assets from Old HB, Inc. for $360 million was declared the
best and highest bid for such assets. In March 2013, the court
overseeing the Old HB, Inc. bankruptcy proceeding approved the
sale.
About Flowers Foods
Headquartered in Thomasville, Ga., Flowers Foods, Inc. --
http://www.flowersfoods.com-- is one of the largest producers of
packaged bakery foods for retail and foodservice customers in the
United States with 2012 sales of $3.05 billion. Flowers operates
44 bakeries that produce a wide range of bakery products. Among
the company's top brands are Nature's Own and Tastykake.
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. Hostess Brands disclosed
assets of $982 million and liabilities of $1.43 billion as of the
Chapter 11 filing.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814).
In the new Chapter 11 case, Hostess has hired Jones Day as
bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.
The official committee of unsecured creditors selected New York
law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom
Mayer and Ken Eckstein head the legal team for the committee.
Hostess Brands in mid-November 2012 opted to pursue the orderly
wind down of its business and sale of its assets after the Bakery,
Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a
nationwide strike. The Debtor failed to reach an agreement with
BCTGM on contract changes.
Hostess Brands sold its businesses and most of the plants to five
different buyers for an aggregate of $860 million. Hostess still
has some plants, depots and other facilities the buyers didn't
acquire.
The bankruptcy estate has changed its name to Old HB Inc.
HOVNANIAN ENTERPRISES: Offering $481.8MM of Securities
------------------------------------------------------
Hovnanian Enterprises, Inc., registered with the U.S. Securities
and Exchange Commission a combination of securities totalling
$481.8 million. This prospectus includes the sale by Ara K.
Hovnanian, Sirwart Hovnanian, Estate of Kevork S. Hovnanian and
Hovnanian Family 2012 L.L.C. of 8,726,003 shares of Class A common
stock.
The net proceeds from the sale of the Securities will be used for
general corporate purposes, which may include working capital
needs, the refinancing or repayment of existing indebtedness,
capital expenditures, expansion of the business and acquisitions.
Hovnanian will not receive any proceeds from the sale of any
shares of Class A common stock offered by the selling
shareholders.
The Company's common stock is traded on the New York Stock
Exchange under the symbol "HOV."
A copy of the Form S-3 prospectus is available for free at:
http://is.gd/xoDpJh
About Hovnanian Enterprises
Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV)
-- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian,
is one of the nation's largest homebuilders with operations in
Arizona, California, Delaware, Florida, Georgia, Illinois,
Kentucky, Maryland, Minnesota, New Jersey, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and
West Virginia. The Company's homes are marketed and sold under
the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton
Homes, Parkwood Builders, Town & Country Homes, Oster Homes and
CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons
communities, the Company is also one of the nation's largest
builders of active adult homes.
The Company's balance sheet at April 30, 2013, showed $1.61
billion in total assets, $2.09 billion in total liabilities and a
$478.52 million total deficit.
* * *
As reported by the Troubled Company Reporter on April 25, 2013,
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Hovnanian Enterprises Inc. to 'B-' from 'CCC+'.
"The upgrade reflects strengthening operating performance
supported by the broader recovery in the housing market that, we
believe, should support modest profitability in 2013," said
Standard & Poor's credit analyst George Skoufis.
In the Dec. 11, 2012, edition of the TCR, Fitch Ratings has
affirmed the ratings for Hovnanian Enterprises, Inc. (NYSE: HOV),
including the company's Issuer Default Rating (IDR), at 'CCC'.
The rating for HOV is influenced by the company's execution of its
business model, land policies, and geographic, price point and
product line diversity. The rating additionally reflects the
company's liquidity position, substantial debt and high leverage.
Hovnanian carries 'Caa2' corporate family and probability of
default ratings from Moody's.
Moody's said in April 2012 that the Caa2 corporate family rating
reflects Hovnanian's elevated debt leverage weak gross margins,
continued operating losses, negative cash flow generation, and
Moody's expectation that the conditions in the homebuilding
industry over the next one to two yeas will provide limited
opportunities for improvement in the company's operating and
financial metrics. In addition, the ratings consider Hovnanian's
negative net worth position, which Moody's anticipates will be
further weakened by continuing operating losses and impairment
charges. As a result, adjusted debt leverage, currently standing
at 149%, is likely to increase further.
INSPIREMD INC: To Present at 8th JMP Healthcare Conference Today
----------------------------------------------------------------
Alan Milinazzo, InspireMD Inc.'s president and CEO, will present
at the 8th Annual JMP Securities Healthcare Conference to be held
July 9 & 10 in New York City. Mr. Milinazzo's presentation is
scheduled to take place today, July 9, at 11:00 AM EDT.
About InspireMD
InspireMD, Inc., was organized in the State of Delaware on
Feb. 29, 2008, as Saguaro Resources, Inc., to engage in the
acquisition, exploration and development of natural resource
properties. On March 28, 2011, the Company changed its name from
"Saguaro Resources, Inc." to "InspireMD, Inc."
Headquartered in Tel Aviv, Israel, InspireMD, Inc., is a medical
device company focusing on the development and commercialization
of its proprietary stent platform technology, Mguard. MGuard
provides embolic protection in stenting procedures by placing a
micron mesh sleeve over a stent. The Company's initial products
are marketed for use mainly in patients with acute coronary
syndromes, notably acute myocardial infarction (heart attack) and
saphenous vein graft coronary interventions (bypass surgery).
InspireMD reported a net loss of US$17.59 million on US$5.35
million of revenue for the year ended June 30, 2012, compared with
a net loss of US$6.17 million on US$4.67 million of revenue during
the prior year. For the nine months ended March 31, 2013, the
Company incurred a net loss of $14.31 million on $3.37 million of
revenues. The Company's balance sheet at March 31, 2013, showed
$9.79 million in total assets, $13.20 million in total
liabilities, and a $3.40 million total capital deficiency.
Kesselman & Kesselman, in Tel Aviv, Israel, issued a "going
concern" qualification on the consolidated financial statements
for the year ended June 30, 2012. The independent auditors noted
that the Company has had recurring losses, negative cash flows
from operating activities and has significant future commitments
that raise substantial doubt about its ability to continue as a
going concern.
The Company said the following statement in its quarterly report
for the period ended Dec. 31, 2012: "The Company has had
recurring losses and negative cash flows from operating activities
and has significant future commitments. For the six months ended
December 31, 2012, the Company had losses of approximately $9.4
million and negative cash flows from operating activities of
approximately $5.8 million. The Company's management believes
that its financial resources as of December 31, 2012 should enable
it to continue funding the negative cash flows from operating
activities through the three months ended September 30, 2013.
Furthermore, commencing October 2013, the Company's senior secured
convertible debentures (the "2012 Convertible Debentures") are
subject to a non-contingent redemption option that could require
the Company to make a payment of $13.3 million, including accrued
interest. Since the Company expects to continue incurring
negative cash flows from operations and in light of the cash
requirement in connection with the 2012 Convertible Debentures,
there is substantial doubt about the Company's ability to continue
operating as a going concern. These financial statements include
no adjustments of the values of assets and liabilities and the
classification thereof, if any, that will apply if the Company is
unable to continue operating as a going concern."
INTELLIPHARMACEUTICS: Has $1.8MM Net Loss in FY2013 2nd Quarter
---------------------------------------------------------------
Intellipharmaceutics International Inc. reported a net loss of
$1.8 million on $nil revenue for the three months ended May 31,
2013, compared with a net loss of $1.4 million on $nil revenue for
the three months ended May 31, 2012.
"he higher loss during the second quarter of 2013 when compared to
the loss in the first quarter of 2013 can be mainly attributed to
the smaller fair value adjustment of derivative liability of $0.2
million in the second quarter of 2013 versus $1.2 million in the
first quarter of 2013, the financing expense of $0.1 million in
the second quarter of 2013, which was offset by a decrease in R&D
of $0.4 million, a decrease in selling, general and administrative
expense of $0.1 million, and a decrease in foreign exchange loss
of $0.2 million," the Company said in a regulatory filing.
The Company reported a net loss of $3.1 million $nil revenue for
the six months ended May 31, 2013, compared with a net loss of
$3.3 million on $107,091 of research and development revenue for
the six months ended May 31, 2012.
The Company's balance sheet at May 31, 2013, showed $3.6 million
in total assets, $5.4 million in total liabilities, and a
stockholders' deficiency of $1.8 million.
Going Concern Uncertainty
According to the Company, the condensed unaudited interim
consolidated financial statements are prepared on a going concern
basis and substantial doubt exists on the appropriateness of this.
"In order for the Company to continue operations at existing
levels, the Company expects that for at least the next twelve
months the Company will require significant additional capital.
While the Company expects to satisfy its operating cash
requirements over the next twelve months from cash on hand,
collection of anticipated revenues resulting from future
commercialization activities, development agreements or marketing
license agreements, through managing operating expense levels,
funds from senior management through the convertible debenture
described elsewhere herein, equity and/or debt financings, and/or
new strategic partnership agreements funding some or all costs of
development, there can be no assurance that the Company will be
able to obtain any such capital on terms or in amounts sufficient
to meet its needs or at all," the Company said.
A copy of the Company's condensed unaudited interim consolidated
financial statements for the three months ended May 31, 2013,
filed with the U.S. Securities and Exchange Commission is
available at http://is.gd/haUwAP
A copy of the 2013 Second Quarter Management Discussion and
Analysis is available at http://is.gd/7SAhPE
Toronto, Canada-based Intellipharmaceutics International Inc. is
incorporated under the laws of Canada. Intellipharmaceutics is a
pharmaceutical company specializing in the research, development
and manufacture of novel and generic controlled-release and
targeted-release oral solid dosage drugs. Its patented
Hypermatrix(TM) technology is a multidimensional controlled-
release drug delivery platform that can be applied to the
efficient development of a wide range of existing and new
pharmaceuticals. Based on this technology, Intellipharmaceutics
has a pipeline of product candidates in various stages of
development, including filings with the FDA in therapeutic areas
that include neurology, cardiovascular, gastrointestinal tract,
diabetes and pain.
INTERMETRO COMMUNICATIONS: Sells 420,000 Series A2 Preferreds
-------------------------------------------------------------
InterMetro Communications, Inc., and its subsidiaries sold 420,000
shares of Series A2 Preferred Stock together with warrants to
purchase 420,000 shares of common stock at an exercise price of
$0.20 per share in exchange for a total purchase price of
$420,000. The Series A2 Preferred stock may be converted into
shares of common stock at a conversion rate of 6.66 shares of
common stock for each share of Series A2 Preferred.
About InterMetro
Simi Valley, Calif.-based InterMetro Communications, Inc.,
-- http://www.intermetro.net/-- is a Nevada corporation which
through its wholly owned subsidiary, InterMetro Communications,
Inc. (Delaware), is engaged in the business of providing voice
over Internet Protocol ("VoIP") communications services.
InterMetro Communications disclosed net income of $699,000 on
$20.06 million of net revenues for the year ended Dec. 31, 2012,
as compared with net income of $3.61 million on $21.31 million of
net revenue in 2011.
Gumbiner Savett Inc., in Santa Monica, 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 incurred net losses in previous years, and as of
Dec. 31, 2012, the Company had a working capital deficit of
approximately $7,460,000 and a total stockholders' deficit of
approximately $10,692,000. The Company anticipates that it will
not have sufficient cash flow to fund its operations in the near
term and through fiscal 2013 without the completion of additional
financing.
JOURNAL REGISTER: Court Extends Plan Filing Period Until Sept. 30
-----------------------------------------------------------------
The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York has extended, at the behest of
Journal Register Company, f/k/a Pulp Finish 1 Company, and its
debtor affiliates, the time within which the Debtors' have
exclusive right to propose a plan of reorganization until
Sept. 30, 2013, and the time within which they have exclusive
right to solicit acceptances of that plan until Nov. 29, 2013.
As reported by the Troubled Company Reporter on June 13, 2013, the
Debtors hope that with the additional time, they will be able to
bring their Chapter 11 cases to a conclusion through the wind down
of their estates and file a plan of liquidation and accompanying
disclosure statement. The Debtors related that they are in the
process of negotiating the terms of a plan and disclosure
statement at this time and anticipate filing the documents in the
near term.
About Journal Register
Journal Register Company -- http://www.JournalRegister.com/-- is
the publisher of the New Haven Register and other papers in 10
states, including Philadelphia, Detroit and Cleveland, and in
upstate New York. JRC is managed by Digital First Media and is
affiliated with MediaNews Group, Inc., the nation's second largest
newspaper company as measured by circulation.
Journal Register, along with its affiliates, first filed for
Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.
09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher
LLP, served as counsel to the Debtors. Attorneys at Otterbourg,
Steindler, Houston & Rosen, P.C., represented the official
committee of unsecured creditors. Journal Register emerged from
Chapter 11 protection under the terms of a pre-negotiated plan.
Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case
No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH
Acquisition Co., an affiliate of funds managed by Alden Global
Capital LLC. The deal is subject to higher and better offers.
Journal Register exited the 2009 restructuring with $225 million
in debt and with a legacy cost structure, which includes leases,
defined benefit pensions and other liabilities that have become
unsustainable and threatened the Company's efforts for a
successful digital transformation. Journal Register managed to
reduce the debt by 28% with the Company servicing in excess of
$160 million of debt.
Alden Global is the holder of two terms loans totaling $152.3
million. Alden Global acquired the stock and the term loans from
lenders in Journal Register's prior bankruptcy.
Journal Register disclosed total assets of $235 million and
liabilities totaling $268.6 million as of July 29, 2012. This
includes $13.2 million owing on a revolving credit to Wells Fargo
Bank NA.
Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case.
Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D.
Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R.
Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner,
Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012
Debtors' counsel. SSG Capital Advisors, LLC, serves as financial
advisors. American Legal Claims Services LLC acts as claims
agent. The petition was signed by William Higginson, executive
vice president of operations.
Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells
Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the
Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin &
Martin LLP, serves as counsel to Wells Fargo, in its capacity as
Tranche A Agent and the Tranche B Agent.
The Official Committee of Unsecured Creditors appointed in the
case has retained Lowenstein Sandler PC as counsel and FTI
Consulting, Inc. as financial advisor.
K-V PHARMACEUTICAL: Senior Noteholders File Suit v. Deutsche Bank
-----------------------------------------------------------------
BankruptcyData reported that K-V Pharmaceutical's ad hoc senior
noteholders' group, Wilmington Trust filed with the U.S.
Bankruptcy Court a complaint against Deutsche Bank Trust Company
America solely as trustee for K-V Pharmaceutical Company's 2.5%
Contingent Convertible Subordinated Notes due 2033.
According to the report, the noteholders seek a declaration that
the convertible notes are subordinated under the convertible notes
indenture from the petition date through repayment in full of all
principal and interest accrued on the senior notes, and that all
such post-petition interest must be paid to senior noteholders
before the convertible noteholders may receive any distribution on
account of the convertible notes.
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.
LAGUNA DEVELOPMENT: Fitch Affirms & Withdraws 'BB' Longterm IDR
---------------------------------------------------------------
Fitch Ratings has affirmed and simultaneously withdrawn the
following ratings for Laguna Development Corporation (LDC):
-- Long-term Issuer Default Rating (IDR) at 'BB';
-- Enterprise Revenue Bonds at 'BB+.
The Rating Outlook is Stable. Fitch is withdrawing the ratings as
the enterprise revenue bonds have been refinanced with a private
loan transaction and Fitch will no longer have access to financial
documents. The enterprise revenue bonds were tendered at 107.5 and
108.5 for the notes due 2015 and 2021, respectively.
The affirmation of the ratings remains consistent with Moody's
rationale and expectations on LDC as the prior affirmation dated
April 16, 2013.
LEVEL 3: To Issue 6.5 Million Shares Under Stock Plan
-----------------------------------------------------
Level 3 Communications, Inc., registered with the U.S. Securities
and Exchange Commission 6,500,000 shares of common stock issuable
under the Company's stock plan at a proposed maximum aggregate
offering price of $133.2 million.
The Company amended the Stock Plan in May 2012 to increase the
number of shares of Common Stock reserved for issuance thereunder
by 6,500,000 shares in the aggregate, which was approved by the
Company's stockholders at the annual meeting of stockholders held
on May 24, 2012.
A copy of the Form S-8 registration statement is available at:
http://is.gd/xKHvvd
About Level 3 Communications
Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc., is a publicly traded international communications company
with one of the world's largest communications and Internet
backbones.
Level 3 incurred a net loss of $422 million in 2012, a net loss of
$756 million in 2011, and a $622 net loss in 2010. The Company's
balance sheet at March 31, 2013, showed $12.88 billion in total
assets, $11.77 billion in total liabilities and $1.10 billion in
total stockholders' equity.
* * *
In October 2012, Fitch Ratings affirmed the 'B' Issuer Default
Ratings (IDRs) assigned to Level 3. LVLT's ratings recognize, in
part, the de-leveraging of the company's balance sheet resulting
from its acquisition of Global Crossing Limited (GLBC).
As reported by the TCR on June 5, 2013, Standard & Poor's Ratings
Services raised its corporate credit rating on Broomfield, Colo.-
based global telecommunications provider Level 3 Communications
Inc. to 'B' from 'B-'. "The upgrade reflects improved debt
leverage, initially from the acquisition of the lower-leveraged
Global Crossing in October 2011, and subsequently from realization
of the bulk of what the company expects to eventually be $300
million of annual operating synergies," said Standard & Poor's
credit analyst Richard Siderman.
LIGHTSQUARED INC: Splits $3 Billion in Exit Financing
-----------------------------------------------------
Billy Cheung, writing for Reuters, reported that LightSquared Inc.
is splitting its proposed $3 billion senior secured exit term loan
into a $2 billion first-lien loan and $1 billion second-lien
tranche, according to sources. The loan originally consisted of a
single tranche.
Proceeds are to fund the company's emergence from bankruptcy.
Jefferies is arranging the first lien portion, the report said.
Lender commitments are due at 4 p.m. July 9.
The now $2 billion first-lien portion will offer coupons payable
in cash and in kind, the report related.
The report said price guidance on the four-year first-lien tranche
is set at LIB+650 with a 1.5 percent Libor floor. Pricing now
includes an additional 3 percent payable-in-kind coupon, bringing
the total coupon to 11 percent, said sources. The loan is offered
at a discount price of 98.5, as proposed at launch.
According to the report, lenders will receive upfront warrants,
immediately vested, for 10 percent of fully diluted ownership. The
company had previously offered warrants amounting to 5 percent of
fully diluted ownership.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
MAKENA GREAT: Court Dismisses Chapter 11 Case
---------------------------------------------
The Hon. Jacqueline Cox has dismissed the Chapter 11 case of
Makena Great American Anza Company LLC.
As reported by the Troubled Company Reporter on June 7, 2013, the
U.S. Trustee asked the Court to convert the Debtor's Chapter 11
case to Chapter 7, or, alternatively, dismiss the case. The U.S.
Trustee believes that Makena has no remaining assets with which to
reorganize and that there is no reasonable likelihood of
reorganization in this case.
Makena is a single asset jointly-administered case which owns and
operates a storage facility located in Westminster, California,
which was subject to a mortgage lien held by Wells Fargo Bank, NA.
On Feb. 13, 2013, the Court entered an order lifting the stay as
to the Bank and an amended order denying confirmation of Makena's
third amended plan. "Since then, the Property has been sold
pursuant to state foreclosure proceedings," the U.S. Trustee
stated.
About Makena Great American
GAC Storage Lansing LLC -- which owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois -- filed for Chapter 11 bankruptcy
(Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011. Jay S.
Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure, Esq.,
at Bernstein, Shur, Sawyer & Nelson, P.A., represents the Debtor
as counsel. Robert M, Fishman, Esq., and Gordon E. Gouveia, Esq.,
at Shaw Gussis Fishman Glantz Wolfson, & Towbin LLC, in Chicago,
represents the Debtor as local counsel. It estimated $1 million
to $10 million in assets and debts. The petition was signed by
Noam Schwartz, secretary and treasurer of EBM Mgmt Servs, Inc.,
manager of GAC Storage, LLC.
The Makena Great American Anza Company LLC --
http://www.makenacapital.net/-- a commercial shopping center
developers in Southern California, filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 11-48549) on Dec. 1, 2011, in Chicago.
Anza leads the way in the acquisition and development of
"A-Location" small commercial shopping centers and corner
properties in Southern California. Lawyers at Shaw Gussis Fishman
Glantz Wolfson & Towbin, LLC, in Chicago, and Bernstein, Shur,
Sawyer & Nelson, P.A., in Portland, Maine, serve as counsel to the
Debtor. Makena disclosed $13,938,161 in assets and $17,723,488 in
liabilities.
Other affiliates that sought bankruptcy protection are GAC Storage
Copley Place LLC, GAC Storage El Monte LLC, and San Tan Plaza LLC.
The cases are being jointly administered under lead case no.
11-40944.
At the behest of lender Bank of America, N.A., the Bankruptcy
Court dismissed the Chapter 11 case of San Tan Plaza, as reported
by the Troubled Company Reporter on July 17, 2012.
MAKENA GREAT: GAC Storage El Monte's Chapter 11 Case Dismissed
--------------------------------------------------------------
The Hon. Jacqueline Cox has dismissed the Chapter 11 case of GAC
Storage El Monte.
On May 30, 2013, the U.S. Trustee sought for the conversion of GAC
Storage El Monte's Chapter 11 case to one under Chapter 7, or,
alternatively, dismiss the case.
GAC Storage El Monte is a single asset jointly-administered case
which owns and operates a storage facility located at 11310
Stewart Street in El Monte, California, which was subject to a
mortgage lien held by Wells Fargo Bank, NA. On Feb. 27, 2013, the
Court entered orders lifting the automatic stay as to the Bank and
denying confirmation of the Debtor's third amended plan. Since
then, the Property has been sold pursuant to state foreclosure
proceedings and since then, the Property has been sold pursuant to
state foreclosure proceedings. The U.S. Trustee believes the
Debtor has no remaining assets with which to reorganization and
that there is no reasonable likelihood of reorganization in this
case.
About Makena Great American
GAC Storage Lansing LLC -- which owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois -- filed for Chapter 11 bankruptcy
(Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011. Jay S.
Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure, Esq.,
at Bernstein, Shur, Sawyer & Nelson, P.A., represents the Debtor
as counsel. Robert M, Fishman, Esq., and Gordon E. Gouveia, Esq.,
at Shaw Gussis Fishman Glantz Wolfson, & Towbin LLC, in Chicago,
represents the Debtor as local counsel. It estimated $1 million
to $10 million in assets and debts. The petition was signed by
Noam Schwartz, secretary and treasurer of EBM Mgmt Servs, Inc.,
manager of GAC Storage, LLC.
The Makena Great American Anza Company LLC --
http://www.makenacapital.net/-- a commercial shopping center
developers in Southern California, filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 11-48549) on Dec. 1, 2011, in Chicago.
Anza leads the way in the acquisition and development of
"A-Location" small commercial shopping centers and corner
properties in Southern California. Lawyers at Shaw Gussis Fishman
Glantz Wolfson & Towbin, LLC, in Chicago, and Bernstein, Shur,
Sawyer & Nelson, P.A., in Portland, Maine, serve as counsel to the
Debtor. Makena disclosed $13,938,161 in assets and $17,723,488 in
liabilities.
Other affiliates that sought bankruptcy protection are GAC Storage
Copley Place LLC, GAC Storage El Monte LLC, and San Tan Plaza LLC.
The cases are being jointly administered under lead case no.
11-40944.
At the behest of lender Bank of America, N.A., the Bankruptcy
Court dismissed the Chapter 11 case of San Tan Plaza, as reported
by the Troubled Company Reporter on July 17, 2012.
MAXCOM TELECOMUNICACIONES: To Restructure Under Chapter 11
----------------------------------------------------------
Maxcom Telecomunicaciones, S.A.B. de C.V., has negotiated the
terms of a comprehensive recapitalization and debt restructuring
that is expected to significantly reduce Maxcom's debt service
expense and position Maxcom for growth with a US$45 million
capital infusion.
Maxcom, private equity firm Ventura Capital Privado, S.A. de C.V.,
an ad hoc group holding an aggregate amount of approximately US$84
million of Maxcom's 11 percent Senior Notes due 2014, and certain
of its current equity holders have reached agreement on the terms
of a restructuring and support agreement, a recapitalization
agreement, and agreements to tender.
In connection with the recapitalization, Maxcom has entered into a
recapitalization agreement with Ventura and certain related
parties, pursuant to which the Purchasers have agreed to make a
capital contribution of US$45 million and conduct a tender offer
to acquire for cash, at a price equal to Ps.$2.90 (two pesos and
90/100) per CPO, up to 100 percent of the issued and outstanding
shares of Maxcom, subject to the terms of the recapitalization
agreement. The Purchasers' obligation to consummate the tender
offer and make the capital contribution is subject to a number of
conditions, including: receiving legal and regulatory approvals
from the Mexican Banking and Securities Commission (Comision
Nacional Bancaria y de Valores), the Mexican Ministry of
Communications and Transportation (Secretaria de Comunicaciones y
Transportes) and the Mexican Antitrust Commission (Comision
Federal de Competencia), the absence of certain material adverse
effects, the entry of an acceptable bankruptcy court confirmation
order consistent with the terms of the restructuring and support
agreement and the recapitalization agreement and that order
becoming final.
Pursuant to the terms of the Chapter 11 plan that have been agreed
by and among Maxcom, the Purchasers and the Ad Hoc Group, all
classes of creditors are unimpaired and will be paid in full in
the ordinary course, except for the Senior Notes claims, which
will receive:
(1) the step-up senior notes (which include the capitalized
interest amount for unpaid interest accrued on the Senior
Notes from (and including) April 15, 2013, through (and
excluding) June 15, 2013, at the rate of 11 percent per
annum);
(2) cash in the amount of unpaid interest accrued on the Senior
Notes (A) from (and including) Dec. 15, 2012, through (and
excluding) April 15, 2013, at the rate of 11 percent per
annum, and (B) from (and including) June 15, 2013, through
(and excluding) the effective date of the Plan at the rate
of 6 percent per annum; and
(3) rights to purchase equity that is unsubscribed by the
Company's current equity holders pursuant to the terms of
the Plan.
The step-up senior notes will: (a) be issued in an aggregate
principal amount of US$200 million, minus the amount of Senior
Notes held in treasury by the Company, plus the capitalized
interest amount; (b) bear interest (i) from the date of issuance
until June 14, 2016, at the annual rate of 6 percent per annum,
(ii) from June 15, 2016, until June 14, 2018, at the annual rate
of 7 percent per annum, and (iii) from June 15, 2018, until the
maturity date, at the annual rate of 8 percent per annum; (c) have
a maturity date of June 15, 2020; (d) be secured by the same
collateral that currently secures the Senior Notes; and (e) be
unconditionally guaranteed, jointly and severally and on a senior
unsecured basis, by all of Maxcom's direct and indirect
subsidiaries, excluding Fundacion Maxcom, A.C.
Maxcom's recapitalization and debt restructuring will be
implemented through a voluntary, prepackaged Chapter 11 filing
under the U.S. Bankruptcy Code and an equity tender offer in
accordance with U.S. and Mexican securities laws. Maxcom
commenced solicitation of votes from holders of the Senior Notes
on July 3, 2013.
The Company intends to operate in the ordinary course of business
during the implementation of its recapitalization and debt
restructuring and continue to provide a high level of
responsiveness to its customers, vendors and business partners.
No assurances can be given that a proposed recapitalization and
debt restructuring will be successful or that holders of Maxcom's
debt obligations or relevant stakeholders will reach an agreement.
If a consensual, pre-packaged Chapter 11 restructuring cannot be
implemented, Maxcom may be forced to file for bankruptcy or
concurso mercantil without the support of a significant portion of
its creditors. A failure to complete a restructuring, through a
pre-packaged Chapter 11 filing or otherwise, could have a material
adverse effect on the business or the interests of holders of
Maxcom's debt and equity securities.
The Company has engaged Lazard Freres & Co. LLC and its alliance
partner Alfaro, Davila y Rios, S.C., as its financial advisor and
Kirkland & Ellis LLP and Santamarina y Steta, S.C. as its U.S. and
Mexican legal advisors in connection with its restructuring
proceedings and potential Chapter 11 case. The Ad Hoc Group has
retained Cleary Gottlieb Steen & Hamilton LLP and Cervantes Sainz,
S.C., as its U.S. and Mexican legal advisors. Ventura has retained
VACE Partners as its financial advisor, and Paul Hastings LLP and
Jones Day as its U.S. and Mexican legal advisors, respectively.
About Maxcom
Maxcom Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico
City, Mexico, is a facilities-based telecommunications provider
using a "smart-build" approach to deliver last-mile connectivity
to micro, small and medium-sized businesses and residential
customers in the Mexican territory. Maxcom launched commercial
operations in May 1999 and is currently offering local, long
distance, data, value-added, paid TV and IP-based services on a
full basis in greater metropolitan Mexico City, Puebla, Tehuacan,
San Luis, and Queretaro, and on a selected basis in several cities
in Mexico.
* * *
Maxcom carries a 'CC' corporate credit rating from Standard &
Poor's Ratings Services and a "Caa1" from Moody's Investors
Service.
MDU COMMUNICATIONS: Unit Extends Maturity of $30MM Loan to Dec. 31
------------------------------------------------------------------
MDU Communications International, Inc.'s wholly owned subsidiary,
MDU Communications (USA) Inc., entered into an Amendment to the
Amended Loan and Security Agreement with FCC, LLC, d/b/a First
Capital, and Full Circle Capital Corporation, for an extension to
the senior secured $30 million revolving credit facility
originally entered into on Sept. 11, 2006, amended, on June 30,
2008, with a maturity date of June 30, 2013.
The Lenders have provided the Company with a six month extension
to the Credit Facility, through Dec. 31, 2013, with the potential
for further extension up through and including March 31, 2014, at
the discretion of Lenders. Other material terms of the Extension
Amendment include:
(i) an increase in the definition of prime rate from 7.75
percent to 8.75 percent, which will increase to 10.25
percent on Oct. 31, 2013;
(ii) the reduction of the maximum borrowing base from $30
million to $28 million, subject to further reduction;
(iii) the reduction from 65,000 subscribers to 62,500 subscribers
as a condition for the Company to maintain borrowings above
$25 million;
(iv) approval by Lenders of a rolling 13-week cash flow provided
weekly by the Company; and
(v) the payment of an extension fee of $100,000 payable in four
equal monthly payments beginning July 1, 2013.
Beginning July 1, 2013, the borrowing base (maximum that the
Company can borrow under the Credit Facility) will be determined
as an amount equal to (x) the lesser of 55 percent of the
discounted cash flow of the Company and $28 million, minus (y) the
sum of those reasonable reserves that Lenders may establish from
time to time in its discretion, plus the amount available to be
drawn under, plus the amount of any unreimbursed draws with
respect to, any letters of credit or acceptances which have been
issued, created or guaranteed by Lender for Company's account. As
of June 30, 2013, the borrowing base was $28 million, under which
the Company has borrowed approximately $27.7 million. The Credit
Facility continues to be secured by all the assets of the Company.
The Company informed the Lenders that in June 2013 (i) its
outstanding borrowings under the Credit Facility exceeded the
borrowing base as previously calculated, and (ii) it no longer met
the condition of having a subscriber base of 65,000 subscribers to
maintain borrowings in excess of $25 million. These events are
events of defaults under the Credit Facility entitling the Lender
to declare immediately due and owing the entire principal amount
outstanding under the Credit Facility. Pursuant to the Extension
Amendment, the Lenders have acknowledged and waived these specific
defaults.
The Company does not expect its available cash, estimated revenues
and remaining Credit Facility to be sufficient to cover liquidity
needs for the next twelve months. Without additional funding
sources, proceeds from asset sales, or a merger, the Company
forecasts that its available capital will be depleted sometime
during its fourth fiscal quarter ending Sept. 30, 2013. The
Company is continuing to explore large asset sales or a merger in
order to satisfy its obligations to the secured Lenders under the
Credit Facility prior to the end of the six month extension.
About MDU Communications
Totowa, New Jersey-based MDU Communications International, Inc.,
is a national provider of digital satellite television, high-speed
Internet, digital phone and other information and communication
services to residents living in the United States multi-dwelling
unit market -- estimated to include 32 million residences.
The Company reported a net loss of $6.4 million on $27.3 million
of revenue for 2012, compared with a net loss of $7.4 million on
$27.9 million of revenue for 2011. The Company's balance sheet at
March 31, 2013, showed $18.04 million in total assets, $32.14
million in total liabilities and a $14.09 million total
stockholders' deficiency.
CohnReznick LLP, in Roseland, New Jersey, expressed substantial
doubt about MDU's ability to continue as a going concern following
the financial results for the year ended Sept. 30, 2012. The
independent auditors noted that the Company has incurred
significant recurring losses, has a working capital deficit, and
an accumulated deficit of $75 million at Sept. 30, 2012. They
also noted that the Company's $30 million Credit Facility matures
on June 30, 2013.
MOBIVITY HOLDINGS: Brodsky Replaces Linares as Director
-------------------------------------------------------
Ronald Linares resigned from the Board of Directors of Mobivity
Holdings Corp. effective June 28, 2013.
Effective July 1, 2013, the Board elected Peter Brodsky to fill
one of the existing vacancies on the Company's Board. He has also
been elected as a member of the Company's Compensation Committee.
Since 2011 Mr. Brodsky has been a partner at HBC Investments, a
private equity firm located in Dallas, Texas, that specializes in
investments of middle-market companies. Prior to joining HBC
Investments, from 1995 to December 2010, Mr. Brodsky was employed
by Hicks, Muse, Tate & Furst (renamed HM Capital Partners in
2006), a nationally prominent private equity firm in the United
States that specialized in leveraged acquisitions, and served as a
partner beginning in 2001.
Mr. Brodsky received a Bachelor of Arts degree from Yale
University in 1992.
Mr. Brodsky was granted 10-year options to purchase 100,000 shares
of common stock of the Company at $.41 per share that vest at the
rate of 1/3 per year over a three-year period.
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," the Company has warned in a regulatory
filing.
MONITOR COMPANY: Has OK to Access Cash Collateral Until Aug. 8
--------------------------------------------------------------
The Hon. Christopher S. Sontchi has granted MCG Limited
Partnership, f/k/a Monitor Company Group Limited Partnership, et
al., authorization to continue using cash collateral until Aug. 8,
2013.
The Debtors need continued use of cash collateral to, among other
things, satisfy their administrative obligations in connection
with the cases while the Debtors perform their post-closing sale
obligations and otherwise work with their key constituencies to
maximize the value of the estates.
As adequate protection, Caltius IV, LP, on behalf of itself and
its co-lender affiliates Caltius Partners Executive IV, LP, and CP
IV Pass-Through (Monitor), LP, is granted senior adequate
protection liens; provided, however, that Caltius will be granted
a senior adequate protection lien on the Debtors' rights, title,
and interest in any tax refund, return of amounts withheld in
connection with the Debtors' satisfaction of Trust Fund
Obligations, or recovery of amounts paid from partners for whom
amounts are withheld in satisfaction of the Trust Fund
Obligations.
As of the Petition Date, the Debtors were indebted and liable to
Caltius, without defense, counterclaim, or offset of any kind, in
the aggregate principal amount of approximately $58,869,914, plus
non-capitalized prepetition interest, fees, and costs in respect
of loans made pursuant to that certain investment agreement
between Caltisu and Monitor Company.
A final hearing on the Debtor's bid for continued use of cash
collateral is slated for Aug. 5, 2013, at 10:00 a.m. (prevailing
Eastern time). Objections to the Debtor's cash collateral use
must be filed by July 15, 2013, at 4:00 p.m. (prevailing Eastern
time).
About Monitor Company
Monitor Company Group LP -- http://www.monitor.com/-- is a global
consulting firm with 1,200 personnel in offices across 17
countries worldwide. Founded in 1983 by six entrepreneurs, and
headquartered in Cambridge, Massachusetts, Monitor advises for-
profit, sovereign, and non-profit clients on growing their
businesses and economies and furthering their charitable purposes.
Monitor and several affiliates filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case Nos. 12-13042 to 12-13062) on Nov. 7, 2012.
Judge Hon. Christopher S. Sontchi presides over the case. Pepper
Hamilton LLP and Ropes & Gray LLP serve as the Debtors' counsel.
The financial advisor is Carl Marks Advisory Group LLC. Epiq
Bankruptcy Solutions, LLC is the claims and noticing agent.
The petitions were signed by Bansi Nagji, president.
Cole, Schotz, Meisel, Forman & Leonard, P.A., represents the
Committee of Unsecured Creditors as counsel.
Bank of America is represented in the case by Jinsoo Kim, Esq.,
and Timothy Graulich, Esq., at Davis Polk & Wardwell LLP; and Mark
D. Collins, Esq., at Richards Layton & Finger PA.
J. Gregory Milmoe, Esq., and Shana A. Elberg, Esq., at Skadden
Arps Slate Meagher & Flom LLP in New York; and Mark Chehi, Esq.,
and Christopher DiVirgilio, Esq., at Skadden Arps in Delaware,
represent Deloitte Consulting LLP.
Caltius Partners IV LP; Caltius Partners Executive IV, LP; and CP
IV Pass-Through (Monitor) LP are represented by John Sieger, Esq.,
at Katten Muchin Rosenman LLP.
Monitor's consolidated unaudited financial statements as of
June 30, 2012, which include the assets and liabilities of non-
Debtor foreign subsidiaries, reflected total assets of roughly
$202 million (including $93 million in current assets) and total
liabilities of roughly $200 million.
Monitor filed for bankruptcy to sell substantially all of their
businesses and assets to Deloitte Consulting LLP, a Delaware
registered limited liability partnership and DCSH Limited, a UK
company limited by shares, subject to higher or otherwise better
offers. The base purchase price set forth in the Stalking Horse
Agreement is $116.2 million, plus (i) assumption of certain
liabilities and (ii) certain cure costs for assumed contracts.
The Stalking Horse Agreement provides for the Stalking Horse
Bidder to receive a combined breakup fee and expense reimbursement
of $4 million.
The Debtors held an auction on Nov. 28, 2012, at the offices of
the Sellers' counsel, Ropes & Gray LLP in New York. In mid-
January 2013, Judge Sontchi allowed the Debtors to sell its assets
to Deloitte Consulting for $116.2 million.
MONTANA ELECTRIC: Committee Wants Case Converted to Chapter 7
-------------------------------------------------------------
The Unsecured Creditors' Committee of Southern Montana Electric
Generation and Transmission Cooperative, Inc., asks the U.S.
Bankruptcy Court for the District of Montana to convert the
Debtor's Chapter 11 case to one under Chapter 7 of the Bankruptcy
Code due to the "substantial or continuing loss to or diminution
of the estate and the absence of a reasonable likelihood of
rehabilitation."
The Committee cited that:
1) The settlements with the City of Great Falls and,
especially, Yellowstone Valley Electric Cooperative (YVEC) have
removed approximately 35 percent of the Debtor's future income.
2) While the Debtor's cost of power can be expected to
decrease proportionately with the decline in revenue, there is no
indication that its operating expenses will decline at all.
3) Another factor contributing to the Debtor's sure road to
ruin is the adequate protection payments paid to the Prepetition
Noteholders. The Debtor pays the Noteholders a cash adequate
protection payment of $1,040,774 per month and also pays for their
legal and professional expenses.
4) There also appears to be little chance of a consensual
agreement between the Noteholders and the remaining member
cooperatives for a payment structure that the members can afford.
The Unsecured Creditors Committee believes that if a plan were
confirmed that gave the Noteholders their demand, then
confirmation would be rapidly followed by the bankruptcy of the
member coops.
About Southern Montana Electric
Based in Billings, Montana, Southern Montana Electric Generation
and Transmission Cooperative, Inc., was formed to serve five
other electric cooperatives. The city of Great Falls later joined
as the sixth member. Including the city, the co-op serves a
population of 122,000. In addition to Great Falls, the service
area includes suburbs of Billings, Montana.
Southern Montana filed for Chapter 11 bankruptcy (Bankr. D.
Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana
estimated assets of $100 million to $500 million and estimated
debts of $100 million to $500 million. Timothy Gregori signed the
petition as general manager.
Malcolm H. Goodrich, Esq., at Goodrich Law Firm, P.C., in
Billings, Montana, serves as the Debtor's counsel.
After filing for reorganization in October, the co-op agreed to a
request for appointment of a Chapter 11 trustee. Lee A. Freeman
was appointed as the Chapter 11 trustee in December 2011. He is
represented by Joseph V. Womack, Esq., at Waller & Womack, and
John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M.
Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett,
P.C.
Harold V. Dye, Esq., at Dye & Moe, P.L.L.P., in Missoula, Montana,
represents the Unsecured Creditors' Committee as counsel.
MONTANA ELECTRIC: Court Expands Scope of Eide Bailly Retention
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Montana on June 25,
2013, granted the third supplement to the application of Lee A.
Freeman, the Chapter 11 trustee of Southern Montana Electric
Generation and Transmission Cooperative, Inc., to employ Eide
Bailly LLP as audit and tax accountants for the Chapter 11
trustee. The supplement application expands the scope of Eide
Bailly's retention to include, in conjunction with its forensic
accounting, an analysis of and a report on potential avoidance
actions.
On Dec. 13, 2012, the Bankruptcy Court approved the application to
employ Eide Bailly as audit accountants for the Chapter 11
trustee. On March 22, 2013, the Bankruptcy Court approved the
Chapter 11 trustee's first supplement to the application, which
expanded Eide Bailly's retention to include ESI preservation.
On May 7, 2013, the Bankruptcy Court approved the second
supplement to the application which expanded Eide Bailly's
retention to include forensic accounting to further assist the
Chapter 11 trustee comply with is investigation and reporting
duties.
About Southern Montana Electric
Based in Billings, Montana, Southern Montana Electric Generation
and Transmission Cooperative, Inc., was formed to serve five
other electric cooperatives. The city of Great Falls later joined
as the sixth member. Including the city, the co-op serves a
population of 122,000. In addition to Great Falls, the service
area includes suburbs of Billings, Montana.
Southern Montana filed for Chapter 11 bankruptcy (Bankr. D.
Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana
estimated assets of $100 million to $500 million and estimated
debts of $100 million to $500 million. Timothy Gregori signed the
petition as general manager.
Malcolm H. Goodrich, Esq., at Goodrich Law Firm, P.C., in
Billings, Montana, serves as the Debtor's counsel.
After filing for reorganization in October, the co-op agreed to a
request for appointment of a Chapter 11 trustee. Lee A. Freeman
was appointed as the Chapter 11 trustee in December 2011. He is
represented by Joseph V. Womack, Esq., at Waller & Womack, and
John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M.
Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett,
P.C.
Harold V. Dye, Esq., at Dye & Moe, P.L.L.P., in Missoula, Montana,
represents the Unsecured Creditors' Committee as counsel.
MOSS FAMILY: Has Access to BofA's Cash Collateral Until Dec. 10
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Indiana
entered an interim order allowing Moss Family Limited Partnership,
et al., to access cash collateral of Federal National Mortgage
Association/Bank of America through Dec. 10, 2013, at 1:30 p.m.
Hearing on the use of the cash collateral will take place on
Dec. 10, 2013, at 1:30 p.m.
As reported by the Troubled Company Reporter on Feb. 8, 2013, the
Court approved stipulations and agreed orders extending interim
orders that authorized the use of Bank of America's cash
collateral until June 30, 2013, at 11:59 p.m.
On May 15, Fannie Mae, as secured creditor c/o Seterus, Inc.,
filed a motion to abandon real estate and to modify the stay.
The Debtors are the fee simple owner of Lot 58B in Beachwalk
Phase 3 in La Porte County that is encumbered with a mortgage from
Thomas J. Moss to Mortgage Electronic Registration Systems, Inc.,
as Nominee for America's Wholesale Lender in the amount of
$376,000 dated Oct. 11, 2005. The mortgage was last assigned to
Fannie Mae by assignment dated Nov. 30, 2012. The value of that
real estate, according to the Debtors' schedules, is $500,000.
According to Fannie Mae, the Debtors have defaulted in the
payments to Fannie Mae post-petition "in that there is presently
due Fannie Mae the post-petition payment due Sept. 1, 2012, and
all subsequent payments, and the unpaid amount presently due post-
petition is $27,009.36, plus late charges." The last payment made
by the Debtors was received on Aug. 1, 2012, in the amount of
$3,001.04, which sum was applied to the July 1, 2012 monthly
mortgage payment.
Fannie Mae believes that the real estate should be abandoned and
that the stay should be terminated to allow Fannie Mae to proceed
with its foreclosure action against the real estate.
Fannie Mae is represented by:
Jennifer R. Fitzwater, Esq.
MERCER BELANGER
One Indiana Square, Suite 1500
Indianapolis, IN 46204
Tel: (317) 636-3551
Fax: (317) 636-6680
E-mail: jfitzwater@indylegal.com
As reported by the Troubled Company Reporter on June 21, 2013, the
Court entered a fifth interim order allowing the Debtors to access
Fifth Third Bank's cash collateral through Aug. 30, 2013.
The Aug. 6, 2013 hearing on the Debtors' use of Fifth Third's cash
collateral has been rescheduled to 10:00 a.m., from 10:30 a.m.
About Moss Family
Moss Family Limited Partnership and Beachwalk, L.P., filed Chapter
11 petitions (Bankr. N.D. Ind. Case Nos. 12-32540 and 12-32541) on
July 17, 2012. Judge Harry C. Dees, Jr., presides over the case.
Daniel Freeland, Esq., at Daniel L. Freeland & Associates, P.C.,
represents the Debtors. Moss Family disclosed $6,609,576 in
assets and $6,299,851 in liabilities as of the Chapter 11 filing.
MUNICIPAL CORRECTIONS: May Use Cash Collateral Through Aug. 31
--------------------------------------------------------------
The Hon. Paul W. Bonapfel of the U.S. Bankruptcy Court for the
Northern District of Georgia has granted on a final basis
Municipal Corrections LLC's motion extending its right to use cash
collateral through Aug. 31, 2013.
As reported by the Troubled Company Reporter on April 5, 2013, the
Court approved a stipulation allowing the Debtor to continue using
cash collateral until April 15, 2013. The Stipulation was entered
into by and between the Debtor and UMB Bank, as successor Trustee
with respect to the $49.5 million Irwin County, Georgia
Participation Certificates, issued pursuant to that indenture,
dated Aug. 1, 2007, between the Debtor and Bank of Oklahoma, N.A.,
Trustee.
On April 24, 2013, the Court entered an order granting further
extension to the Stipulation through and including June 30, 2013.
In the recent order, the Cash Collateral Stipulation is extended
through and including Aug. 31, 2013, with additional
modifications. UMB Bank, N.A., will cause the transmission to
Irwin County, Georgia, of the $250,000 balance in the tax escrow
account established with the parties' consent by court order dated
Feb. 12, 2013, along with the $50,000 scheduled to be deposited in
the account on June 28, 2013. Irwin County will apply the funds
to the 2013 administrative ad valorem tax claim it asserts against
this estate. In the event the Court or another court of
appropriate jurisdiction determines that the 2013 ad valorem taxes
are lower in amount than $300,000, then the excess of the funds
will be applied to the Irwin County pre-petition claim in a manner
to be determined by court order. The monthly $50,000 tax escrow
deposits will continue through the term of this cash collateral
extension. There will also be a carve-out retainer for the
Debtor's counsel Stone & Baxter, LLP, in the amount of $30,000,
which will be in addition to the previous carve-outs in this case.
About Municipal Corrections
Hamlin Capital Management, LLC, Oppenheimer Rochester National
Municipals, and UMB, N.A., as indenture trustee -- owed an
aggregate $90 million on a bond debt -- filed an involuntary
Chapter 11 petition for Municipal Corrections, LLC (Bankr. D. Nev.
Case No. 12-12253) on Feb. 29, 2012. Jon T. Pearson, Esq., at
Ballard Spahr LLP, in Las Vegas, Nevada, serves as counsel to the
petitioners. In August, the bankruptcy judge ruled that the
prison is properly in Chapter 11 to reorganize.
Austin E. Carter, Esq., at Stone & Baxter LLP, in Macon, Ga.; and
Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, in
Las Vegas, Nevada, represent the Debtor as counsel.
The Debtor disclosed $656,378 in assets and $61,769,528 in
liabilities as of the Chapter 11 filing.
As reported by the TCR on Jan. 3, 2013, Bankruptcy Judge Thad J.
Collins granted the request of creditor Irwin County to transfer
the venue of the Debtor's Chapter 11 bankruptcy case to the U.S.
Bankruptcy Court for the Northern District of Georgia.
No committee was appointed in the case.
MUNICIPAL CORRECTIONS: Court Limits Plan Exclusivity to July 31
---------------------------------------------------------------
The Hon. Paul W. Bonapfel of the U.S. Bankruptcy Court for the
Northern District of Georgia has denied Municipal Corrections,
LLC's request to extend the exclusive periods to file and solicit
acceptances of a plan for an additional 76 days, through and
including June 30, 2013, and Aug. 29, 2013, respectively, for
reasons stated at the June 20, 2013 hearing.
The Court ruled that the deadline for the filing of plans in the
case is July 31, 2013. The hearing to consider approval of
disclosure statements related to any filed plans will be held on
Aug. 15, 2013, at 10:00 a.m. Aug. 9, 2013, is fixed as the last
day for filing and serving in accordance with Federal Rule of
Bankruptcy Procedure 3017(a) written objections to any disclosure
statement.
About Municipal Corrections
Hamlin Capital Management, LLC, Oppenheimer Rochester National
Municipals, and UMB, N.A., as indenture trustee -- owed an
aggregate $90 million on a bond debt -- filed an involuntary
Chapter 11 petition for Municipal Corrections, LLC (Bankr. D. Nev.
Case No. 12-12253) on Feb. 29, 2012. Jon T. Pearson, Esq., at
Ballard Spahr LLP, in Las Vegas, Nevada, serves as counsel to the
petitioners. In August, the bankruptcy judge ruled that the
prison is properly in Chapter 11 to reorganize.
Austin E. Carter, Esq., at Stone & Baxter LLP, in Macon, Ga.; and
Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, in
Las Vegas, Nevada, represent the Debtor as counsel.
The Debtor disclosed $656,378 in assets and $61,769,528 in
liabilities as of the Chapter 11 filing.
As reported by the TCR on Jan. 3, 2013, Bankruptcy Judge Thad J.
Collins granted the request of creditor Irwin County to transfer
the venue of the Debtor's Chapter 11 bankruptcy case to the U.S.
Bankruptcy Court for the Northern District of Georgia.
No committee was appointed in the case.
MUSCLEPHARM CORP: Issues 1.2MM Restricted Stock to Executives
-------------------------------------------------------------
The board of directors of MusclePharm Corporation approved
restricted stock grants to certain key employees, including named
executive officers and directors, conditioned upon the execution
and delivery of certain restricted stock agreement between the
Company and such employees, officers and directors. The
Restricted Stock Agreements were executed and delivered by the
parties on July 5, 2013.
The Board approved Restricted Stock grants of the Company's common
stock in the aggregate amount of 1,550,000 shares and also issued
shares of the Company's restricted stock to these following named
executive officers:
No. of
Restricted
Name Title Stock
------------- ------------------------- ----------
Brad J. Pyatt Co-Chairman, CEO and Pres. 350,000
L. Gary Davis CFO 200,000
John H. Bluher Co-Chairman and EVP 150,000
Richard Estalella COO 100,000
Jeremy R. DeLuca EVP - CMO 225,000
Cory J. Gregory EVP 150,000
Michael Doron Director 25,000
James Greenwell Director 25,000
Donald W. Prosser Director 25,000
The Pursuant to the Restricted Stock agreements, 17 percent of
each individual grant will vest on Dec. 31, 2013, and the
remaining 83 percent will vest on Dec. 31, 2015. The grants for
all will vest immediately upon (i) a change of control, and are
subject to, that executive or employees continued employment, and
in the case of any director, that director's continued service on
the Board, and (ii) an employee, who has an entered into an
employment agreement with the Company, serving the duration of the
term of that employment agreement in accordance with its terms.
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100% free of banned substances. MusclePharm is sold in over
120 countries and available in over 5,000 U.S. retail outlets,
including GNC and Vitamin Shoppe. MusclePharm products are also
sold in over 100 online stores, including bodybuilding.com,
Amazon.com and Vitacost.com.
The Company reported a net loss of $23.28 million in 2011,
compared with a net loss of $19.56 million in 2010. The Company's
balance sheet at March 31, 2013, showed $20.53 million in total
assets, $13.31 million in total liabilities and $7.22 million in
total stockholders' equity.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Berman & Company,
P.A., in Boca Raton, Florida, expressed substantial doubt about
the Company's ability to continue as a going concern. The
independent auditors noted that the Company has a net loss of
$23,280,950 and net cash used in operations of $5,801,761 for the
year ended Dec. 31, 2011; and has a working capital deficit of
$13,693,267, and a stockholders' deficit of $12,971,212 at
Dec. 31, 2011.
NOVOGEN LIMITED: Grant Thornton Raises Going Concern Doubt
----------------------------------------------------------
Novogen Limited filed a Form 20-F/A on July 5, 2013, to amend the
audit report of its independent registered public accounting firm
Grant Thornton Audit Pty Limited for the fiscal year ended
June 30, 2012, which was filed with the Securities and Exchange
Commission on Oct. 29, 2012.
Grant Thornton Audit Pty Ltd., in Sydney, Australia, expressed
substantial doubt about Novogen Limited's ability to continue as a
going concern.
The independent auditors noted that the Company intends to
undertake, subject to shareholder approval, an in specie
distribution of the MEI Pharma, Inc. shares, following the
distribution the Company will have no active operations and
limited financial resources. "These conditions, among others, as
discussed in Note 1 to the consolidated financial statements,
raise substantial doubt about the Company's ability to continue as
a going concern."
The Company reported a net loss of A$1,350,000 on A$1,513,000 of
revenue in fiscal 2012, compared with a net loss of A$9,479,000 on
A$2,025,000 of revenue in fiscal 2011. Profit after tax from
discontinued operations was A$7,392,000 in fiscal 2012, and
A$1,467,000 in fiscal 2011.
The Company's balance sheet at June 30, 2012, showed A$8,985,000
in total assets, A$3,872,000 in total liabilities, and equity of
A$5,113,000.
A copy of the Form 20-F/A is available at http://is.gd/gnnfeI
Based in Horsby, Australia, Novogen Limited, a public company
limited by shares, was incorporated in March 1994 under the
jurisdiction of the laws of New South Wales, Australia.
The Company is a pharmaceutical company which has been involved in
the discovery, development, manufacture and marketing of products
based on the emerging field of isoflavonoid technology. The
Company's product development program, which it conducts through
its subsidiary MEI Pharma, Inc. ("MEI"), embraces a novel range of
pharmaceuticals based on the field of isoflavonoid technology and
on compounds known as isoflavones.
ORCHARD SUPPLY: U.S. Trustee Forms Five-Member Committee
--------------------------------------------------------
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five
members to the official committee of unsecured creditors in the
Chapter 11 case of Orchard Supply Hardware Stores Corporation, et
al.
The Creditors Committee members are:
1. Eleven Western Builders, Inc.
Attn: Richard Huey, 2862 Executive Place
Escondido, CA 92029
Tel: (760) 796-6346
Fax: (760) 796-6360
2. Jordan Manufacturing Company, Inc.
Attn: David Jordan
1200 S. 6th Street
Monticello, IN 47960
Tel: (574) 583-6008
Fax: (574) 583-6675
3. Kawahara Nurseries, Inc.
Attn: Josh Kawahara
698 Burnett Avenue
Morgan Hill, CA 95037
Tel: (408) 779-2400
Fax: (408) 779-6850
4. National Retail Properties, Inc.
Attn: Christopher P. Tessitore
450 South Orange Avenue, Suite 900
Orlando, FL 32801
Tel: (407) 650-1115
Fax: (321) 206-2138
5. Gina Rondone on behalf of Certified Class
Attn: Laura M. Cotter, Esq.
The Markam Law Firm
750 B Street, Suite 1950
San Diego, CA 92101
Tel: (619) 399-3995
Fax: (619) 224-3974
About Orchard Supply
San Jose, Calif.-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 affiliates 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.
ORCHARD SUPPLY: Wants Schedules Filing Deadline Moved to Aug. 6
---------------------------------------------------------------
Orchard Supply Hardware Stores Corporation, et al., ask the Hon.
Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware to extend the time within which the Debtors
must file their schedules of assets and liabilities and statement
of financial affairs by 20 days, through and including Aug. 6,
2013.
The deadline for the Debtors to file their Schedules and
Statements is currently July 17, 2013. Stuart M. Brown, Esq., at
DLA Piper LLP, the attorney for the Debtor, says that as a result
of the size and scope of the Debtors' business and the complexity
of their financial affairs, the Debtors will be unable to complete
the Schedules and Statements within 30 days of the Petition Date.
According to Mr. Brown, the Debtors' employees and professionals
have been focused on assisting the Debtors with respect to
numerous motions filed with the Court in the early days of these
Chapter 11 cases, including the Debtors' efforts to coordinate
going out of business sales for certain of their stores and the
proposed sale of all remaining assets to the stalking horse
purchaser.
"In view of these critical matters and the volume of material that
must be compiled and reviewed by the Debtors' staff and
professionals in order to complete the Schedules and Statements,
there is more than ample 'cause' for granting the requested
extension," Mr. Brown states.
The Debtors are also represented by Richard A. Chesley, Esq., Chun
I. Jang, Esq., and Daniel M. Simon, Esq., at DLA Piper LLP.
The Court will hold a hearing on July 15, 2013, at 1:00 p.m.
(Eastern Daylight Time), to consider the Debtors' request for
extension of the deadline to file Schedules and Statements.
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 affiliates 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.
The U.S. Trustee for Region 3 has appointed five members to the
official committee of unsecured creditors in the case.
OVERLAND STORAGE: Appeals Nasdaq Delisting
------------------------------------------
Overland Storage, Inc., on July 2, 2013, received the expected
written notification from The NASDAQ Stock Market LLC of the
NASDAQ Staff's decision to delist the Company's securities from
The NASDAQ Capital Market as a result of the Company's failure to
comply with the minimum market value of listed securities of $35
million requirement set forth in NASDAQ Listing Rule 5550(b)(2).
To regain compliance with that rule, the MLVS (which is determined
based on closing bid price of the Company's common stock on The
NASDAQ Capital Market) would have had to have been at least $35
million for ten consecutive trading days during the period from
Jan. 2, 2013, through July 1, 2013. Based on the number of shares
of common stock outstanding as of June 27, 2013, the MLVS would
have exceeded $35 million if that closing bid price was at least
$1.17 per share for the ten trading day period.
The Staff Determination provides that the Company's common stock
would be delisted from The NASDAQ Capital Market unless the
Company requests an appeal of this determination to a NASDAQ
Hearings Panel no later than 4:00 p.m. Eastern Time on July 9,
2013. On July 5, 2013, the Company requested an appeal to seek
continued listing pending its return to compliance with the
minimum MVLS requirement under Rule 5550(b)(2). While the appeal
is pending, the Company's common stock will not be delisted.
However, there can be no assurance that the Panel will grant the
Company's request for continued listing.
About Overland Storage
San Diego, Cal.-based Overland Storage, Inc. (Nasdaq: OVRL) --
http://www.overlandstorage.com/-- is a global provider of unified
data management and data protection solutions designed to enable
small and medium enterprises (SMEs), corporate departments and
small and medium businesses (SMBs) to anticipate and respond to
change.
The Company incurred a net loss of $16.16 million for the fiscal
year 2012, compared with a net loss of $14.49 million for the
fiscal year 2011. For the nine months ended March 31, 2013, the
Company incurred a net loss of $14.22 million on $35.95 million of
net revenue, as compared with a net loss of $13.46 million on
$44.33 million of net revenue for the same period during the prior
year. The Company's balance sheet at March 31, 2013, showed $38.40
million in total assets, $44.79 million in total liabilities and a
$6.38 million total shareholders' deficit.
Moss Adams LLP, in San Diego, California, issued a "going concern"
qualification on the consolidated financial statements for the
year ended June 30, 2012. The independent auditors noted that the
Company's recurring losses and negative operating cash flows raise
substantial doubt about the Company's ability to continue as a
going concern.
PENSACOLA BEACH: Wants to Employ Highpointe to Manage Hotel
-----------------------------------------------------------
Pensacola Beach, LLC, asks the U.S. Bankruptcy Court for the
Northern District of Florida for authority to employ Highpointe
Hospitality, Inc., d/b/a Highpointe Hotel Corporation as the
management company for the Debtor, to be effective as of May 1,
2013. The non-evidentiary hearing on the application is scheduled
on July 29, 2013, at 2:30 p.m.
Highpointe will continue the daily management of the Marriott
Springhill Suites, located on Pensacola Beach. Subject to the
terms of the Management Agreement and Stipulated Order Regarding
Management of Hotel and Dismissal of Highpointe Hospitality, Inc.
as Defendant, dated March 25, 2010, entered in the Circuit Court
In and For Escambia County, Florida, Case No. 2010-CA-810-J, those
duties will include:
a. Recruit, train and hire & fire employees;
b. Handle promotions, publicity, sales, and marketing;
c. Maintain licenses and permits;
d. Purchase inventory & and supplies;
e. Coordinate entertainment, food & beverage services and
amusement;
f. Establish reservation services and policies;
g. Receive, hold and distribute funds;
h. Oversee necessary maintenance, repair, and cleaning
i. Payment of employees;
j. Obtain and maintain insurance; and
k. Handle all other matters that the manager deems consistent
to maintain good order and management.
Highpointe will be paid a basic management fee of 3% of the Total
Net Revenues, plus state sales taxes, all as set forth in
Section 6.2 of the Management Agreement. Other incentive payments
are detailed in Section 6.3 of the Management Agreement, and
Highpointe will be entitled to deduct its management fee from the
General Account, all as set forth in Section 6.7 of the Management
Agreement.
Highpointe attests it is disinterested as required by Sec. 327 of
the Bankruptcy Code.
A copy of the Management Agreement is available at:
http://bankrupt.com/misc/pensacola.doc106
About Pensacola Beach
Gulf Breeze, Florida-based Pensacola Beach, LLC, aka Springhill
Suites by Marriott Pns Beach, filed for Chapter 11 bankruptcy
(Bankr. N.D. Fla. Case No. 13-30569) on May 2, 2013. Judge
William S. Shulman oversees the case. Sherry F. Chancellor, Esq.,
at The Law Office of Sherry F. Chancellor, serves as the Debtor's
counsel. The Debtor also tapped Mark J. Proctor and Travis P.
Lepicier and the law firm of Levin, Papantonio, Thomas, Mitchell,
Rafferty and Proctor, P.A., as attorneys in regard to the British
Petroleum/Deep Water Horizon Oil Spill claims.
In its petition, Pensacola Beach estimated $10 million to
$50 million in both assets and debts. The petition was signed by
David Brannen, managing member.
In its schedules, the Debtor disclosed $22,523,252 in assets and
$16,655,337 in liabilities.
PENSACOLA BEACH: U.S. Trustee Will Not Appoint Creditors Committee
------------------------------------------------------------------
Until further notice, the United States Trustee said it will not
appoint a committee of creditors pursuant to 11 U.S.C. Sec. 1102
in the Chapter 11 case of Pensacola Beach, LLC.
Gulf Breeze, Florida-based Pensacola Beach, LLC, aka Springhill
Suites by Marriott Pns Beach, filed for Chapter 11 bankruptcy
(Bankr. N.D. Fla. Case No. 13-30569) on May 2, 2013. Judge
William S. Shulman oversees the case. Sherry F. Chancellor, Esq.,
at The Law Office of Sherry F. Chancellor, serves as the Debtor's
counsel. The Debtor also tapped Mark J. Proctor and Travis P.
Lepicier and the law firm of Levin, Papantonio, Thomas, Mitchell,
Rafferty and Proctor, P.A., as attorneys in regard to the British
Petroleum/Deep Water Horizon Oil Spill claims.
In its petition, Pensacola Beach estimated $10 million to
$50 million in both assets and debts. The petition was signed by
David Brannen, managing member.
In its schedules, the Debtor disclosed $22,523,252 in assets and
$16,655,337 in liabilities.
PREMIER PAVING: May Continue Cash Collateral Use Until Aug. 1
-------------------------------------------------------------
The Hon. Michael E. Romero of the U.S. Bankruptcy Court for the
District of Colorado has approved a stipulation between Premier
Paving, Inc., and Wells Fargo Bank, NA, allowing the Debtor
continued access to cash collateral.
Since Sept. 30, 2012, the Debtor and Wells Fargo consented to the
continued use of cash collateral on a monthly basis. The latest
agreement expired July 1, 2013.
As reported by the Troubled Company Reporter on June 20, 2013, the
Debtor sought and obtained approval from the Court to use Wells
Fargo's cash collateral until July 1, 2013. Aaron A. Garber,
Esq., at Kutner Miller Brinen, P.c., the attorney for the Debtor,
said that to the extent that Wells Fargo or any other party
possesses a properly perfected security interest in the Debtor's
cash collateral, as adequate protection for the Debtor's use of
cash collateral, the Debtor will continue to provide the party
with a replacement lien on all inventory, equipment, accounts and
general intangibles generated by the Debtor postpetition to the
extent that the use of cash collateral results in a decrease in
the value of the secured party's interest in the property. The
Debtor will pay Wells Fargo the sum of $25,000 per month, with the
first payment having been due on June 30, 2012.
In a court filing dated June 24, 2013, Mr. Garber stated that the
Debtor and Wells have consented to the continued use of cash
collateral for an additional month through Aug. 1, 2013, on nearly
identical terms and budget.
Wells Fargo is represented by Douglas W. Brown, Esq., at Brown,
Berardini & Dunning, P.C.
About Premier Paving
Headquartered in Denver, Colorado Premier Paving Inc. --
http://www.premierpavinginc.com/-- operates a full-service
highway construction company, which services include paving,
grading and milling, geo-textiles, trucking, traffic control and
quality control. Premier Paving also owns and operates an asphalt
plant.
Premier Paving filed for Chapter 11 bankruptcy (Bankr. D. Colo.
Case No. 12-16445) on April 2, 2012. Judge Michael E. Romero
presides over the case. In its petition,
the Debtor estimated up to $50 million in assets and debts. The
petition was signed by David Goold, treasurer.
Lee M. Kutner, Esq., at Kutner Miller Brinen, P.C., serves as the
Debtor's counsel. Pinnacle Real Estate Advisors LLC provides
professional broker services related to the sale of certain of the
Debtor's real estate assets. The Official Unsecured Creditors
Committee is represented by Onsager, Staelin & Guyerson, LLC.
RAPID AMERICAN: Court Extends Plan Filing Deadline to Nov. 4
------------------------------------------------------------
The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York, at the behest of Rapid-American
Corporation, has extended the Debtor's exclusive plan filing
period through and including Nov. 4, 2013, and the exclusive
solicitation period through and including Jan. 3, 2014.
As reported by the Troubled Company Reporter on July 5, 2013, the
Debtor said that the additional time will allow it to evaluate and
discuss potential structures of a reorganization plan with the
Official Committee of Unsecured Creditors and other parties-in-
interest, such as its insurers.
About Rapid-American Corp.
Rapid-American Corp. filed for bankruptcy protection in Manhattan
(Bankr. S.D.N.Y. Case No. 13-10687) on March 8, 2013, to deal with
debt related to asbestos personal-injury claims.
New York-based Rapid-American was formerly a holding company with
subsidiaries primarily engaged in retail sales and consumer
products and was never engaged in an asbestos business of any
kind. Through a series of merger transactions going back more
than 45 years, Rapid has nevertheless incurred successor liability
for personal injury claims arising from plaintiffs' exposure to
asbestos-containing products sold by The Philip Carey
Manufacturing Company -- Old Carey -- as that entity existed prior
to June 1, 1967.
Attorneys at Reed Smith LLP serve as counsel to the Debtor.
The Debtor disclosed assets in excess of $4,446,261 and unknown
liabilities.
The Official Committee of Unsecured Creditors retained Caplin &
Drysdale, Chartered, as counsel.
READER'S DIGEST: Modified 2nd Amended Joint Plan Confirmed June 28
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York on
June 28, 2013, entered its Findings of Fact, Conclusions of Law
and Order confirming the Modified Second Amended Joint Plan of
Reorganization of RDA Holding Co., The Reader's Digest
Association, Inc., and certain of their debtor-affiliates, dated
May 7, 2013.
The Court determined that the Reorganization Plan complies with
all applicable provisions of the Bankruptcy Code, thereby
satisfying Section 1129(a)(1) of the Bankruptcy Code.
The plan in the new Chapter 11 case provides that 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 Court stated that:
Class 1 (Other Priority Claims) and Class 7 (Intercompany
Interests), which are unimpaired under the Reorganization Plan,
are deemed to have accepted the Reorganization Plan pursuant to
Section 1126(f) of the Bankruptcy Code.
Class 2 (Other Secured Claims), Class 3 (Senior Noteholder Secured
Claims), Class 4 (General Unsecured Claims) and Class 5 (Plan
Debtor Intercompany Claims) have voted to accept the
Reorganization Plan in accordance with Sections 1126(c) and (d) of
the Bankruptcy Code.
Holders of Claims and Interests in Class 6 (Existing RDA Holding
Interests) and Class 8 (Subordinated Securities Claims) are not
entitled to receive or retain any property under the
Reorganization Plan and, therefore, are deemed to have rejected
the Reorganization Plan pursuant to Section 1126(g) of the
Bankruptcy Code. Although Section 1129(a)(8) of the Bankruptcy
Code has not been satisfied with respect to the deemed rejecting
Class 6 (Existing RDA Holding Interests) and Class 8 (Subordinated
Securities Claims), the Reorganization Plan is confirmable because
the Reorganization Plan satisfies Section 1129(b) of the
Bankruptcy Code with respect to those Classes.
A copy of the Order Confirming the Debtors' Modified Second
Amended Joint Plan of Reorganization is available at:
http://bankrupt.com/misc/reader'sdigest.doc478.pdf
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.
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.
READER'S DIGEST: Can Employ KPMG LLP as Fresh Start Accountants
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of
New York has authorized RDA Holding Co., The Reader's Digest
Association, Inc., and their debtor-affiliates to employ KPMG LLP
as fresh start accountants for the Debtors, nunc pro tunc to
May 1, 2013.
As reported in the TCR on June 13, 2013, KPMG will, among other
things, work closely with the Debtors' advisors and external
auditors throughout the engagement and assist the Debtors with
researching and extracting existing financial information needed
for substantiated responses to valid requests of third parties;
and assist in the preparation of financial documents which may
include monthly operating reports and plan of reorganization.
KPMG will be paid $570 per hour for partner and managing director,
$480 for director, $305 for manager, $225 per hour for staff, and
$85 per hour paraprofessionals, and reimbursed for any necessary
out-of-pocket expenses.
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.
The plan in the new Chapter 11 case provides that 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.
RITE AID: Swings to $89.6 Million Net Income in First Quarter
-------------------------------------------------------------
Rite Aid Corporation filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $89.66 million on $6.29 billion of revenues for the 13 week
period ended June 1, 2013, as compared with a net loss of $28.08
million on $6.46 billion of revenues for the 13 week period ended
June 2, 2012.
As of June 1, 2013, the Company had $6.94 billion in total assets,
$9.30 billion in total liabilities and a $2.35 billion total
stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/86iMRy
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.
* * *
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.
ROTECH HEALTHCARE: Court Okays Protiviti as Internal Auditor
------------------------------------------------------------
The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware has granted Rotech Healthcare Inc. and its
debtor affiliates permission to employ Protiviti, Inc., as
internal auditor and internal control consultants.
As reported by the Troubled Company Reporter on June 13, 2013, the
internal audit services are expected to include, among other
things, internal audit function project management, including
reporting directly to the Rotech Audit Committee and
administratively to the Chief Financial Officer.
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.
SCIENTIFIC LEARNING: Inks Retention Agreement With CFO Freeman
--------------------------------------------------------------
Scientific Learning Corporation, on June 30, 2013, entered into a
retention agreement with Jane A. Freeman, the Company's chief
financial officer and treasurer, to incentivize her to remain
employed with the Company until at least Dec. 31, 2013.
The terms of Ms. Freeman's retention agreement include:
* Payment of a retention bonus equal to seven months of Ms.
Freeman's base salary as of Dec. 31, 2013;
* A guaranteed minimum payout of 100 percent of Ms. Freeman's
bonus under the 2013 Management Incentive Plan (MIP). The
100 percent payout of the MIP bonus is not dependent on the
Company's financial performance in 2013 and Ms. Freeman will
not be required to remain employed until August 2014 to
receive this payment, as she otherwise would have been
required under the terms of the 2013 Management Incentive
Plan. As originally adopted by the Board in February 2013,
Ms. Freeman's bonus under the MIP had a potential range from
zero to 200 percent of her base salary; and
* A restricted stock unit award of 100,000 shares. The
restricted stock units will begin to vest on Sept. 10, 2013,
and will vest 25 percent at the end of 12 months after that
date and 12.5 percent at the end of the succeeding six six-
month periods, but only for so long as Ms. Freeman is
providing continuous service to the Company, subject to any
applicable vesting acceleration provisions.
Eligibility for any of the retention benefits is based on the
following terms and conditions:
-- Ms. Freeman must remain an active employee of the Company,
in good standing, until Dec. 31, 2013, or have been
released by the Company without Cause at its convenience
before that date.
-- Ms. Freeman must maintain a satisfactory level of
performance during the Retention Period, as determined by
management and the Board of Directors at their sole
discretion.
-- Ms. Freeman will no longer be eligible for participation in
the Scientific Learning Corporation Change of Control
Benefit Plan.
-- If the Company chooses to release Ms. Freeman without Cause
at its convenience, but before Dec. 31, 2013, she will
still be eligible to receive the full retention bonus and
the minimum payout of 100 percent of her bonus under the
2013 Management Incentive Plan (MIP).
If Ms. Freeman resigns before Dec. 31, 2013, or violates any
provision of the retention agreement or any other agreement she
has with the Company, she will not be eligible for any portion of
the retention benefits.
A copy of the Retention Agreement is available for free at:
http://is.gd/wWWdua
About Scientific Learning Corp
Scientific Learning is an education company. The Company
accelerates learning by applying proven research on how the brain
learns in online and on-premise software solutions. The Company
provides its learning solutions primarily to United States K-12
schools in traditional brick-and-mortar, virtual or blended
learning settings and also to parents and learning centers, in
more than 40 countries around the world. The Company's sales are
concentrated in K-12 schools in the U.S., which in during the year
ended December 31, 2011 were estimated to total over 116,000
schools serving approximately 55 million students in almost 14,000
school districts. During the year ended Dec. 31, 2011, the K-12
sector accounted for 87% of the sales of the Company.
The Company reported a net loss of $9.65 million in 2012, as
compared with a net loss of $6.47 million in 2011. The Company's
balance sheet at March 31, 2013, showed $11.30 million in total
assets, $17.30 million in total liabilities, and a $6 million net
capital deficiency.
In its report on the Company's consolidated financial statements
for the year ended Dec. 31, 2012, Ernst & Young, LLP, in San Jose,
Cal., expressed substantial doubt Scienfic Learning's ability to
continue as a going concern, citing the Company's recurring losses
from operations, deficiency in working capital and its need to
raise additional capital.
SEVEN COUNTIES: Can Continue Using Fifth Third Cash Until Sept. 1
-----------------------------------------------------------------
The Hon. Joan A. Lloyd on July 3, 2013, entered a fourth interim
order granting Seven Counties Services, Inc.'s motion to use the
cash collateral of Fifth Third Bank through Sept. 1, 2013.
As adequate protection for the Debtor's continued use of cash
collateral, Fifth Third is granted (i) a valid, enforceable,
attached, and automatically perfected first priority assignment of
and security interest in and lien on all of the existing and
hereafter acquired right, title, and interest of the Debtor in and
to the Cash Collateral and post-petition accounts receivable
solely for the Fourth Interim Period and only to the same extent
Fifth Third held valid, enforceable, and perfected security
interests in the Cash Collateral prior to the Petition Date; and
(ii) Debtor will reimburse Fifth Third for Interest Drawings, as
that term is defined in the Letters of Credit; and (iii) to the
extent that Bank of New York Mellon ("BONY") makes a Remarketing
Drawing or Liquidity Drawing (as defined in the Letters of Credit)
on any Letter of Credit, the Debtors will make monthly payments to
Fifth Third at the interest rate set forth in Section 6.1(b) of
the 2005 and 2011 Reimbursement Agreements and/or Section 2.2(b)
of the 1999 Reimbursement Agreement, as applicable, on the
outstanding amount drawn pursuant to the Remarketing Drawing(s)
and/or Liquidity Drawing(s).
About Seven Counties
Seven Counties Services Inc., a not-for-profit behavioral
services provider from Louisville, Kentucky, filed for Chapter 11
protection (Bankr. W.D. Ky. Case No. 13-31442) in its hometown
on April 4, 2013. The petition was signed by Anthony M. Zipple as
president/CEO. The Debtor scheduled assets of $45,603,716 and
scheduled liabilities of $232,598,880. Seiller Waterman LLC
serves as the Debtor's counsel. Judge Joan A. Lloyd presides over
the case.
The agency generates more than $100 million a year in revenue and
employs a staff of 1,400 providing services at 21 locations and
120 schools and community centers.
SEVEN COUNTIES: Court OKs Lin Bell & Associates as Appraiser
------------------------------------------------------------
Seven Counties Services Inc. obtained authorization from the U.S.
Bankruptcy Court for the Western District of Kentucky to employ
Lin Bell & Associates, Inc., as appraisers.
As reported by the Troubled Company Reporter on June 7, 2013, Lin
Bell will perform an appraisal on Seven Counties' real estate.
Seven Counties owns nine tracts of real estate on which the Debtor
performs its services and manages its operations. Four tracts are
unencumbered and could provide value to unsecured creditors.
About Seven Counties
Seven Counties Services Inc., a not-for-profit behavioral
services provider from Louisville, Kentucky, filed for Chapter 11
protection (Bankr. W.D. Ky. Case No. 13-31442) in the hometown
on April 4, 2013. The petition was signed by Anthony M. Zipple as
president/CEO. The Debtor scheduled assets of $45,603,716 and
scheduled liabilities of $232,598,880. Seiller Waterman LLC
serves as the Debtor's counsel. Judge Joan A. Lloyd presides over
the case.
The agency generates more than $100 million a year in revenue and
employs a staff of 1,400 providing services at 21 locations and
120 schools and community centers.
SIAG AERISYN: Court Converts Chapter 11 Case to Chapter 7
---------------------------------------------------------
Upon the motion of debtor Siag Aerisyn, LLC, also known as
Aerisyn, LLC, the U.S. Bankruptcy Court for the Eastern District
of Tennessee has converted the Debtor's Chapter 11 case to one
under Chapter 7 of the Bankruptcy Code.
In an amended motion dated June 26, 2013, the Debtor told the
Court that all of its assets have been sold, there are no
prospects for reorganization, and the case should proceed pursuant
to Chapter 7 as a liquidation.
The amended motion was submitted by:
Thomas E. Ray, Esq.
SAMPLES, JENNINGS, RAY & CLEM, PLLC
Attorneys for Debtor In Possession
130 Jordan Drive
Chattanooga, TN 37421
Tel: (423) 892-2006
(423) 892-1919
E-mail: tray@raylegal.com
About SIAG Aerisyn
SIAG Aerisyn LLC, aka Aerisyn LLC, filed a Chapter 11 petition
(Bankr. E.D. Tenn. Case No. 12-11705) on April 2, 2012, in its
hometown in Chattanooga, Tennessee. The Debtor manufactures wind
towers essential for wind turbines as alternative energy sources.
The plant is located in Chattanooga, employing roughly 84 persons.
Judge Shelley D. Rucker presides over the case. Samples,
Jennings, Ray & Clem, PLLC, serves as the Debtor's Chapter 11
counsel. Wormser, Kiely, Galef & Jacobs, LLP, serves as special
counsel. Jerome Luggen of Cincinnati Industrial Auctioneers,
Inc., was tapped as appraiser of the Debtor's equipment. The
Debtor estimated up to $50 million in assets and debts.
In its schedules, the Debtor disclosed $18,728,994 in total assets
and $24,261,855 in total liabilities.
SPECTRASCIENCE INC: Chief Financial Officer Quits
-------------------------------------------------
Jim Dorst gave notice of resignation from his positions as Chief
Financial Officer and Chief Operating Officer of SpectraScience,
Inc. Mr. Dorst will continue in his positions for a transition
period ending July 15, 2013, and the Company will pay Mr. Dorst in
accordance with the Company's normal payroll procedures through
that date. The Company expects that Michael P. Oliver, the
Company's President and Chief Executive Officer, will assume the
duties of Chief Financial Officer and Chief Operating Officer on
July 16, 2013, until a new Chief Financial Officer is hired, and
Mr. Oliver will continue under his prior compensation arrangement
without change.
About SpectraScience
San Diego, Calif.-based SpectraScience, Inc., focuses on
developing its WavSTAT(R) Optical Biopsy System. The WavSTAT
employs a non-significant risk technology that optically
illuminates tissue in real-time to distinguish between normal and
pre-cancerous or cancerous tissue.
McGladrey LLP, in Des Moines, Iowa, expressed substantial doubt
about SpectraScience, Inc.'s ability to continue as a going
concern. The independent auditors noted that the Company has
suffered recurring losses from operations and its ability to
continue as a going concern is dependent on the Company's ability
to attract investors and generate cash through issuance of equity
instruments and convertible debt.
The Company reported a net loss of $9.1 million on $461,296 of
revenue in 2012, compared with a net loss of $4.8 million on
$26,735 of revenue in 2011. The Company's balance sheet at
March 31, 2013, showed $2.60 million in total assets, $6.47
million in total liabilities, all current, and a $3.86 million
total shareholders' deficit.
SPRINT NEXTEL: FCC OKs SoftBank Investment and Clearwire Deal
-------------------------------------------------------------
The Federal Communications Commission has voted unanimously to
approve the applications filed by SoftBank, Sprint and Clearwire
related to their transactions announced last year.
This decision completes all Federal government reviews of both
SoftBank's investment in Sprint and Sprint's acquisition of
Clearwire. Sprint's shareholders approved the SoftBank
transaction with Sprint on June 25.
Clearwire's shareholders were scheduled to vote on the Sprint
transaction with Clearwire, which has been recommended by
Clearwire's Board of Directors, on July 8.
"We would like to thank Acting Chairwoman Clyburn, Commissioners
Rosenworcel and Pai, as well as the staff of the FCC for their
thorough review of these transactions," said Sprint CEO Dan Hesse.
"Just two years ago, the wireless industry was at the doorstep of
duopoly, but with these transformative transactions, we are one
step closer to a stronger Sprint which will better serve
consumers, challenge the market share leaders and drive innovation
in the American economy."
"We appreciate the forward thinking, consumer focused stance the
FCC has taken by approving the proposed transaction. As the
company that built America's first nationwide 4G network,
Clearwire looks forward to joining Sprint and deploying an even
faster and richer 4G experience for consumers across the country,"
said Clearwire CEO and President Erik Prusch. "This is the right
transaction at the right time to best deploy Clearwire's spectrum
to create a broadband network that will bring additional services
and alternatives to wireless consumers."
"The FCC's thoughtful review and approval of these transactions
represents an important step toward creating a more competitive
U.S. wireless marketplace," said SoftBank Chairman & CEO Masayoshi
Son. "SoftBank's investment in Sprint will bring innovation and
increased customer focus, which will enable us to begin creating a
true competitor in a market dominated by two companies. We look
forward to leveraging the significant talent and resources of the
New Sprint to bring innovation and better service to U.S.
consumers."
Sprint, Clearwire and SoftBank anticipate that the transactions
will close in early July 2013, subject to the remaining closing
conditions.
About Sprint Nextel
Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S)
-- http://www.sprint.com/-- is a communications company offering
a comprehensive range of wireless and wireline communications
products and services that are designed to meet the needs of
individual consumers, businesses, government subscribers and
resellers.
Sprint Nextel incurred a net loss of $4.32 million in 2012, a net
loss of $2.89 million in 2011, and a net loss of $3.46 million in
2010. The Company's balance sheet at March 31, 2013, showed
$50.75 billion in total assets, $44.28 billion in total
liabilities, and $6.47 billion in total shareholders' equity.
Bankruptcy Warning
"If the Merger Agreement terminates and we are unable to raise
sufficient additional capital to fulfill our funding needs in a
timely manner, or we fail to generate sufficient additional
revenue from our wholesale and retail businesses to meet our
obligations beyond the next twelve months, our business prospects,
financial condition and results of operations will likely be
materially and adversely affected, substantial doubt may arise
about our ability to continue as a going concern and we will be
forced to consider all available alternatives, including a
financial restructuring, which could include seeking protection
under the provisions of the United States Bankruptcy Code," the
Company said in its annual report for the period ended Dec. 31,
2012.
On Dec. 17, 2012, the Company entered into an agreement and plan
of merger pursuant to which Sprint agreed to acquire all of the
outstanding shares of Clearwire Corporation Class A and Class B
common stock not currently owned by Sprint, SOFTBANK CORP., which
or their affiliates. At the closing, the outstanding shares of
common stock will be canceled and converted automatically into the
right to receive $2.97 per share in cash, without interest.
* * *
As reported by the TCR on Oct. 17, 2012, Standard & Poor's Ratings
Services said its ratings on Overland Park, Kan.-based wireless
carrier Sprint Nextel Corp., including the 'B+' corporate credit
rating, remain on CreditWatch. "The CreditWatch update follows
the announcement that Sprint Nextel has agreed to sell a majority
stake to Softbank," said Standard & Poor's credit analyst Allyn
Arden.
In the Oct. 17, 2012, edition of the TCR, Moody's Investors
Service has placed all the ratings of Sprint Nextel, including its
B1 Corporate Family Rating, on review for upgrade following the
announcement that the Company has entered into a series of
definitive agreements with Softbank.
As reported by the TCR on Aug. 8, 2012, Fitch Ratings affirms,
among other things, the Issuer default rating (IDR) of Sprint
Nextel and its subsidiaries at 'B+'. The ratings for Sprint
reflect the ongoing execution risk both operationally and
financially regarding several key initiatives that the company
expects will improve cash generation, network performance and
longer-term profitability.
SPRINT NEXTEL: Crest Financial Now Supports Clearwire Deal
----------------------------------------------------------
Sprint Nextel Corporation and Clearwire Corporation have entered
into a Voting and Sale Agreement with Crest Financial Limited, et
al., pursuant to which Crest Financial has withdrawn its
opposition to merger between Sprint and Clearwire.
In its June 11, 2013, press release, Crest Financial, the largest
of the independent minority stockholders of Clearwire Corporation,
sent a letter to Clearwire's Board of Directors reiterating its
view that DISH Network Corporation's tender offer for all
outstanding shares of Clearwire for $4.40 per share "is both
actionable and superior in every way to Sprint Nextel
Corporation's current offer of $3.40 per share."
Pursuant to the Merger Agreement, as amended, Sprint has agreed to
acquire the approximately 50 percent of Clearwire it does not
currently own for $5.00 per share, valuing Clearwire at
approximately $14 billion.
In a proxy supplement filed July 3, 2013, Crest Financial urged
Clearwire stockholders to vote in favor of the proposal to adopt
the Merger Agreement and the other proposals to be considered at
the special meeting of the stockholders of Clearwire called for
the purpose of voting on the adoption of the Merger Agreement.
Sprint has agreed to reimburse Crest Financial of up to $2.5
million for documented costs and expenses incurred in connection
with the proxy solicitation in opposition of the Merger.
Sprint, Clearwire and Starburst II, subject to certain exceptions,
agreed to fully release and not sue the Crest Financial, et al.,
from any and all claims arising out of or related to the Merger or
the Merger Agreement and the Note Purchase Agreement.
Crest Financial, et al., own in the aggregate, 57,653,419 shares
of Class A Common Stock (or approximately 8.25 percent) of the
Class A common stock.
In addition, on July 2, 2013, the Comcast Entities and BHN
Spectrum entered into a Waiver and Amendment Agreement with the
Sprint Entities providing that (i) the Comcast Entities and BHN
Spectrum waive certain provisions of the standstill obligations
under the Equityholders' Agreement and (ii) the ROFO Agreement be
amended to provide that the terms of a sale to Sprint Holdco by
the Comcast Entities and BHN Spectrum in the case of a termination
of the Merger Agreement be substantially similar to the terms
provided in the Voting and Sale Agreements.
A copy of the Voting and Sale Agreement is available at:
http://is.gd/0y0UCH
About Sprint Nextel
Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S)
-- http://www.sprint.com/-- is a communications company offering
a comprehensive range of wireless and wireline communications
products and services that are designed to meet the needs of
individual consumers, businesses, government subscribers and
resellers.
Sprint Nextel incurred a net loss of $4.32 million in 2012, a net
loss of $2.89 million in 2011, and a net loss of $3.46 million in
2010. The Company's balance sheet at March 31, 2013, showed
$50.75 billion in total assets, $44.28 billion in total
liabilities, and $6.47 billion in total shareholders' equity.
Bankruptcy Warning
"If the Merger Agreement terminates and we are unable to raise
sufficient additional capital to fulfill our funding needs in a
timely manner, or we fail to generate sufficient additional
revenue from our wholesale and retail businesses to meet our
obligations beyond the next twelve months, our business prospects,
financial condition and results of operations will likely be
materially and adversely affected, substantial doubt may arise
about our ability to continue as a going concern and we will be
forced to consider all available alternatives, including a
financial restructuring, which could include seeking protection
under the provisions of the United States Bankruptcy Code," the
Company said in its annual report for the period ended Dec. 31,
2012.
On Dec. 17, 2012, the Company entered into an agreement and plan
of merger pursuant to which Sprint agreed to acquire all of the
outstanding shares of Clearwire Corporation Class A and Class B
common stock not currently owned by Sprint, SOFTBANK CORP., which
or their affiliates. At the closing, the outstanding shares of
common stock will be canceled and converted automatically into the
right to receive $2.97 per share in cash, without interest.
* * *
As reported by the TCR on Oct. 17, 2012, Standard & Poor's Ratings
Services said its ratings on Overland Park, Kan.-based wireless
carrier Sprint Nextel Corp., including the 'B+' corporate credit
rating, remain on CreditWatch. "The CreditWatch update follows
the announcement that Sprint Nextel has agreed to sell a majority
stake to Softbank," said Standard & Poor's credit analyst Allyn
Arden.
In the Oct. 17, 2012, edition of the TCR, Moody's Investors
Service has placed all the ratings of Sprint Nextel, including its
B1 Corporate Family Rating, on review for upgrade following the
announcement that the Company has entered into a series of
definitive agreements with SOFTBANK CORP.
As reported by the TCR on Aug. 8, 2012, Fitch Ratings affirms,
among other things, the Issuer default rating (IDR) of Sprint
Nextel and its subsidiaries at 'B+'. The ratings for Sprint
reflect the ongoing execution risk both operationally and
financially regarding several key initiatives that the company
expects will improve cash generation, network performance and
longer-term profitability.
TALON THERAPEUTICS: Extends Change of Control Plan Term to 2014
---------------------------------------------------------------
Talon Therapeutics, Inc., adopted Amendment No. 1 to the Talon
Therapeutics, Inc., 2012 Amended & Restated Change of Control
Payment Plan. The Amendment extends the term of the Change of
Control Plan for an additional year, to the earlier of June 30,
2014, or the effective date of a Change of Control. The Amendment
also amends the allocation of plan proceeds for certain Company
personnel. A copy of the Amended Change of Control Plan is
available at http://is.gd/xNE5GM
About Talon Therapeutics
Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc.
(TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical
company dedicated to developing and commercializing new,
differentiated cancer therapies designed to improve and enable
current standards of care. The company's lead product candidate,
Marqibo, potentially treats acute lymphoblastic leukemia and
lymphomas. The Company has additional pipeline opportunities some
of which, like Marqibo, improve delivery and enhance the
therapeutic benefits of well characterized, proven chemotherapies
and enable high potency dosing without increased toxicity.
Effective Dec. 1, 2010, Hana Biosciences changed its name to Talon
Therapeutics. The name change was effected by merging Talon
Therapeutics, a wholly owned subsidiary of the Company, with and
into the Company, with the Company as the surviving corporation in
the merger.
Talon Therapeutics incurred a net loss of $43.70 million for the
year ended Dec. 31, 2012, as compared with a net loss of $18.82
million in 2011. The Company's balance sheet at March 31, 2013,
showed $5.28 million in total assets, $51.39 million in total
liabilities, $53.89 million in redeemable convertible preferred
stock, and a $99.99 million total stockholders' deficit.
BDO USA, LLP, in San Jose, California, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012, citing recurring losses from operations
and net capital deficiency that, among other factors, raise
substantial doubt about its ability to continue as a going
concern.
TC GLOBAL: Closes Asset Sale to Global Baristas
-----------------------------------------------
The Deloitte Corporate Restructuring Group (Deloitte CRG) within
Deloitte Financial Advisory Services LLP served as financial and
restructuring advisor to TC Global, Inc. (Tully's Coffee)
throughout the bankruptcy process and during its sale of
substantially all of its assets through a Section 363 asset sale
to Global Baristas, LLC, an investment group led by actor Patrick
Dempsey. The sale closed effective at midnight Pacific Time on
June 30, 2013.
TC Global, Inc., operated approximately 47 company-owned coffee
shops under the Tully's Coffee brand in the Pacific Northwest and
75 franchised and licensed locations in the US and Asia. The sale
allows Tully's to pay all creditors in full, with a potential
distribution to equity, while also continuing operations and
maintaining the jobs of more than 500 employees.
Deloitte advised Tully's prior to and after the company filed for
Chapter 11 bankruptcy protection on October 10, 2012, a decision
driven by historical operating losses at existing locations and
high coffee prices. Prior to the asset sale, Deloitte
successfully assisted in identifying a Debtor-in-Possession (DIP)
loan facility in order to finance the restructuring and bankruptcy
process. The ultimate DIP loan solution involved the DIP lender
purchasing Tully's future credit card receipts, which allowed the
company to continue operating and also pursue an auction of its
assets using a Section 363 sale process.
During the restructuring process and around the time of its
bankruptcy filing, the company had closed 19 money-losing
locations and made reductions in overhead. After Tully's secured
the DIP loan, Deloitte conducted an auction of remaining assets.
The auction attracted eight bidders and generated final total
consideration of $9.2 million (including assumed liabilities),
more than double the initial stalking horse bid of $4.3 million.
"We are very excited about the result and the integral role
Deloitte CRG played in adding value to the restructuring process.
This transaction allows the company to continue operating and
providing jobs to more than 500 of its employees, while
strengthening relationships with suppliers in the area," said
Rob Carringer, principal, Deloitte CRG.
About Deloitte Corporate Restructuring Group
The Deloitte Corporate Restructuring Group (Deloitte CRG) is a
provider of financial and operational restructuring services,
turnaround and performance management, fiduciary services and
bankruptcy administrative services to underperforming companies
and their advisors, lenders, investors, courts and other
stakeholders.
About TC Global
Headquartered in Seattle, Washington, TC Global, Inc., dba Tully's
Coffee -- http://www.tullyscoffeeshops.com/-- is a specialty
coffee retailer and wholesaler. Through company owned, licensed
and franchised specialty retail stores in Washington, Oregon,
California, Arizona, Idaho, Montana, Colorado, Wyoming and Utah,
throughout Asia with Tully's Coffee International, and with its
global alliance partner Tully's Coffee Japan, Tully's premium
coffees are available at 545 branded retail locations globally.
TC Global Inc. filed a Chapter 11 petition (Bankr. W.D. Wash. Case
No. 12-20253-KAO) on Oct. 10, 2012.
The Debtor is represented by attorneys at Bush Strout & Kornfeld
LLP, in Seattle.
The Debtor disclosed assets of $4.9 million and debt totaling
$3.7 million, including $2.6 million in unsecured claims.
The Seattle-based chain has 57 company-owned stores and 12
franchised. There are another 71 franchises in grocery stores,
schools and airports. Tully's will close nine stores following
bankruptcy.
Bloomberg report discloses that Tully's sold the wholesale and
distribution business in 2009, generating $40 million that allowed
a $5.9 million distribution to shareholders.
TITAN PHARMACEUTICALS: Amends License Agreement With Braeburn
-------------------------------------------------------------
Titan Pharmaceuticals, Inc., and Braeburn Pharmaceuticals Sprl
entered into a second amendment to a License Agreement dated Dec.
14, 2012, as amended, primarily to establish and provide the
parameters for a committee comprised of representatives of Titan
and Braeburn responsible for and with the authority to make all
decisions regarding the development and implementation of a
strategic plan to seek approval from the U.S. Food and Drug
Administration of Probuphine(R) for subdermal use in the
maintenance treatment of adult patients with opioid dependence,
including development of the strategy for all written and oral
communications with the FDA. The Amendment also makes Braeburn
the primary contact for FDA communications regarding the
Probuphine New Drug Application.
A copy of the amended License Agreement is available at:
http://is.gd/5MCPZt
About Titan Pharmaceuticals
South San Francisco, California-based Titan Pharmaceuticals is a
biopharmaceutical company developing proprietary therapeutics
primarily for the treatment of central nervous system disorders.
The Company's balance sheet at March 31, 2013, the Company's
balance sheet showed $23.53 million in total assets, $26.58
million in total liabilities and a $3.04 million total
stockholders' deficit.
Titan Pharmaceuticals incurred a net loss applicable to common
stockholders of $15.18 million in 2012, as compared with a net
loss applicable to common stockholders of $15.20 million in 2011.
TONJI HEALTHCARE: Accountants Resign Due to Increased Audit Risks
-----------------------------------------------------------------
The Board of Directors of Tongji Healthcare Group, Inc., on
June 28, 2013, received a letter from EFP Rotenberg, LLP,
informing the Company that because of the increased audit and
business risks with performing so-called PCAOB audits in China,
they were resigning as the Company's independent registered public
accounting firm with immediate effect.
EFP's report on the Company's consolidated financial statements
for the years ended Dec. 31, 2012, and 2011 did not contain an
adverse opinion or a disclaimer of opinion and was not qualified
or modified as to uncertainty, audit scope, or accounting
principles. The resignation was not due to any disagreement with
the Company.
About Tongji Healthcare
Based in Nanning, Guangxi, the People's Republic of China, Tongji
Healthcare Group, Inc., a Nevada corporation, operates Nanning
Tongji Hospital, a general hospital with 105 licensed beds.
Tongji Healthcare disclosed a net loss of $1.20 million on $2.77
million of total operating revenue for the year ended Dec. 31,
2012, as compared with a net loss of $218,150 on $2.68 million of
total operating revenue during the prior year.
The Company's balance sheet at March 31, 2013, showed $14.20
million in total assets, $15.50 million in total liabilities and a
$1.29 million total stockholders' deficit.
EFP Rotenberg, LLP, in Rochester, New York, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has negative working capital of $12,264,823, an
accumulated deficit of $1,785,336, and shareholders' deficit of
$1,208,670 as of Dec. 31, 2012. The Company's ability to continue
as a going concern ultimately is dependent on the management's
ability to obtain equity or debt financing, attain further
operating efficiencies, and achieve profitable operations."
TPO HESS: Can Employ Houlihan Lokey as Financial Advisor
--------------------------------------------------------
TPO Hess Holdings, Inc., et al., can employ Houlihan Lokey
Capital, Inc., as their financial advisor, according to an order
signed by Judge Kevin J. Carey of the U.S. Bankruptcy Court for
the District of Delaware.
Houlihan will provide the Debtors with services that are necessary
to enable the Debtors to maximize the value of their assets.
Houlihan will, among other things, assist the Debtors in
evaluating proposals regarding a sale or restructuring, assist the
Debtors in negotiations, and provide expert advice and testimony
on behalf of the Debtors.
Houlihan will be paid the following consideration for its
services:
-- a monthly fee in advance of $50,000 per month, with 50
percent of the monthly fees paid after the sixth monthly fee
to be credited toward the transaction fee.
-- reimbursement of all reasonable and out-of-pocket-expenses.
-- upon closing of a sale transaction, a transaction fee equal
to the sum of (i) $250,000, plus (ii) 15 percent of the
difference between (x) the amount of any distribution paid
to, or any recovery or proceeds received by or on behalf of
second lien noteholders less (y) $2 million.
About TPO Hess
Commercial and educational printer TPO Hess Holdings Inc., D.B.
Hess Co., The Press of Ohio and other affiliates sought Chapter 11
protection (Bankr. D. Del. Case No. 13-11327) on May 22, 2013, to
seek approval of a liquidation plan that contemplates the sale of
the business to Bang Printing of Ohio Inc., absent higher and
better offers.
D.B. Hess was founded 1797 in Woodstock, Illinois. D.B. Hess and
its affiliates are now leading provider of print, related
services, and technology. Hess ranks among the top 50 U.S.
printers and has become one of the industry's most respected low-
to-medium volume producers of commercial and educational
materials. Hess Holdings, the ultimate parent, was formed after
Wellspring Capital Management LLC and certain co-investors
acquired D.B. Hess and The Press of Ohio in 2006.
The proposed purchaser, Bang Printing Of Ohio, Inc., is
represented by Leonard, Street and Deinard.
The Debtors have tapped Pauline K. Morgan at Young Conaway
Stargatt & Taylor, LLP, and Paul Weiss Rifkind Wharton Garrison,
LLP, as counsel, Epiq Bankruptcy Solutions as claims and noticing
agent, and Houlihan Lokey as financial advisor.
Holders of $74 million in second-lien notes had already
unanimously accepted the plan where they would receive $1.5
million, or a 2 percent recovery. First-lien debt of $11.9
million is to be paid in full. Unsecured creditors with $20
million in claims didn't vote on the plan because they are to
receive nothing. The bankruptcy court scheduled a July 24
confirmation hearing for approval of the plan.
A three-member Official Committee of Unsecured Creditors was
appointed in the Debtors' Chapter 11 cases.
TPO HESS: Hires Deloitte to Provide CRO & Restructuring Personnel
-----------------------------------------------------------------
TPO Hess Holdings, Inc., et al., seek authority from the U.S.
Bankruptcy Court for the District of Delaware to employ, pursuant
to Section 363 of the Bankruptcy Code, Deloitte Financial Advisory
Services LLP for the firm to provide Matthew Pascucci to serve as
the Debtors' chief restructuring officer and other personnel to
assist the CRO in the performance of his duties.
As CRO, Mr. Pascucci will provide the following services:
(a) Assist the Debtors in cash management and cash flow
forecasting processes, including the monitoring of actual
cash flow versus projections;
(b) Assist the Debtors in their analysis of their liquidity
outlook, debt service capacity and appropriate capital
structure;
(c) Assist the Debtors in their estimation of a future baseline
EBITDA;
(d) Assist the Debtors in evaluating the critical functional
areas of the Debtors' business;
(e) Assist the Debtors in (i) identifying various operational,
managerial, financial and strategic restructuring
alternatives, (ii) understanding the business and financial
impact of same and (iii) implementing the same;
(f) Assist the Debtors in their preparation of contingency
plans to reflect the impact of restructuring alternatives,
and assist in their revision of relevant cash flow
projections and business plans;
(g) Assist the Debtors in connection with the Debtors'
communications and negotiations with other parties,
including its secured lenders, significant vendors, etc.;
(h) Assist the Debtors with the development of a liquidation
analysis and a potential wind down and liquidation of the
Debtors' assets if necessary;
(i) Assist the Debtors in connection with the Debtors'
preparation of various financial reports which may be
required during discussions with the Debtors' Board,
lenders and stakeholders; and
(j) Provide advice and recommendations with respect to other
related matters as the Debtors or their professionals may
request from time to time, as agreed to by Deloitte FAS.
Deloitte will be paid professional fees in accordance with its
customary hours:
Chief Restructuring Officer $525
Partner, Principal Director $525 - $695
Senior Manager $450 - $525
Manager $395 - $450
Senior Associate/Associate $250 - $395
Paraprofessional $125 - $250
Deloitte FAS will also be reimbursed of reasonable expenses
incurred in connection with the engagement, including, but not
limited to travel, report preparation, delivery services,
photocopying and other costs included in providing the Services.
Deloitte FAS received a retainer in the amount of $100,000 prior
to the Petition Date. The firm has applied a portion of the
Retainer to their fees and expenses that were outstanding and
unpaid as of the Petition Date, and the remaining balance of
$82,998 will be held by Deloitte FAS in accordance with the terms
of its engagement agreement with the Debtors.
A hearing on the motion will be held on July 24, 2013, at 10:00
a.m. (ET).
The motion was filed by Pauline K. Morgan, Esq., Ryan M. Bartley,
Esq., and Laurel D. Roglen, Esq., at YOUNG CONAWAY STARGATT &
TAYLOR, LLP, in Wilmington, Delaware, on behalf of the Debtors.
About TPO Hess
Commercial and educational printer TPO Hess Holdings Inc., D.B.
Hess Co., The Press of Ohio and other affiliates sought Chapter 11
protection (Bankr. D. Del. Case No. 13-11327) on May 22, 2013, to
seek approval of a liquidation plan that contemplates the sale of
the business to Bang Printing of Ohio Inc., absent higher and
better offers.
D.B. Hess was founded 1797 in Woodstock, Illinois. D.B. Hess and
its affiliates are now leading provider of print, related
services, and technology. Hess ranks among the top 50 U.S.
printers and has become one of the industry's most respected low-
to-medium volume producers of commercial and educational
materials. Hess Holdings, the ultimate parent, was formed after
Wellspring Capital Management LLC and certain co-investors
acquired D.B. Hess and The Press of Ohio in 2006.
The proposed purchaser, Bang Printing Of Ohio, Inc., is
represented by Leonard, Street and Deinard.
The Debtors have tapped Pauline K. Morgan at Young Conaway
Stargatt & Taylor, LLP, and Paul Weiss Rifkind Wharton Garrison,
LLP, as counsel, Epiq Bankruptcy Solutions as claims and noticing
agent, and Houlihan Lokey as financial advisor.
Holders of $74 million in second-lien notes had already
unanimously accepted the plan where they would receive $1.5
million, or a 2 percent recovery. First-lien debt of $11.9
million is to be paid in full. Unsecured creditors with $20
million in claims didn't vote on the plan because they are to
receive nothing. The bankruptcy court scheduled a July 24
confirmation hearing for approval of the plan.
A three-member Official Committee of Unsecured Creditors was
appointed in the Debtors' Chapter 11 cases.
TPO HESS: Has Court OK to Employ Epiq as Administrative Advisor
---------------------------------------------------------------
TPO Hess Holdings Inc., et al., sought and obtained authority from
the U.S. Bankruptcy Court for the District of Delaware to employ
Epiq Bankruptcy Solutions, LLC, as administrative advisor.
About TPO Hess
Commercial and educational printer TPO Hess Holdings Inc., D.B.
Hess Co., The Press of Ohio and other affiliates sought Chapter 11
protection (Bankr. D. Del. Case No. 13-11327) on May 22, 2013, to
seek approval of a liquidation plan that contemplates the sale of
the business to Bang Printing of Ohio Inc., absent higher and
better offers.
D.B. Hess was founded 1797 in Woodstock, Illinois. D.B. Hess and
its affiliates are now leading provider of print, related
services, and technology. Hess ranks among the top 50 U.S.
printers and has become one of the industry's most respected low-
to-medium volume producers of commercial and educational
materials. Hess Holdings, the ultimate parent, was formed after
Wellspring Capital Management LLC and certain co-investors
acquired D.B. Hess and The Press of Ohio in 2006.
The proposed purchaser, Bang Printing Of Ohio, Inc., is
represented by Leonard, Street and Deinard.
The Debtors have tapped Pauline K. Morgan at Young Conaway
Stargatt & Taylor, LLP, and Paul Weiss Rifkind Wharton Garrison,
LLP, as counsel, Epiq Bankruptcy Solutions as claims and noticing
agent, and Houlihan Lokey as financial advisor.
Holders of $74 million in second-lien notes had already
unanimously accepted the plan where they would receive $1.5
million, or a 2 percent recovery. First-lien debt of $11.9
million is to be paid in full. Unsecured creditors with $20
million in claims didn't vote on the plan because they are to
receive nothing. The bankruptcy court scheduled a July 24
confirmation hearing for approval of the plan.
A three-member Official Committee of Unsecured Creditors was
appointed in the Debtors' Chapter 11 cases.
TRANSVANTAGE SOLUTIONS: Court Converts Case to Ch.7 Liquidation
---------------------------------------------------------------
The Hon. Kathryn C. Ferguson of the U.S. Bankruptcy Court for the
District of New Jersey has converted the Chapter 11 bankruptcy
case of TransVantage Solutions, Inc., to one under Chapter 7 of
the Bankruptcy Code.
As reported by the Troubled Company Reporter on June 26, 2013,
Alfred T. Giuliano, the Chapter 11 trustee for the Debtor, sought
the conversion of the Debtor's bankruptcy case to Chapter 7,
explaining that it would not be beneficial if the Debtor remains
in Chapter 11 to pursue various causes of action, when a Chapter 7
trustee can pursue those same causes of action.
About TransVantage Solutions, Inc.
Branchburg, New Jersey-based TransVantage Solutions, Inc., doing
business as Freight Traffic Services, provides billing and
payment services to shippers or receivers of goods.
The Company filed a Chapter 11 petition (Bankr. D.N.J. Case No.
13-19753) in Trenton, New Jersey on May 4, 2013, and immediately
filed a motion for Chapter 11 trustee to take over management of
the Debtor. The petition was signed by Shirley Sooy as president.
John F. Bracaglia, Jr., Esq., at Cohn, Bracaglia & Gropper serves
as the Debtor's counsel. The Debtor disclosed assets in
$71,260,000 and scheduled liabilities in $41,319,266 in its
schedules.
Michael G. Menkowitz, Esq., and Jason C. Manfrey, Esq., at Fox
Rothschild LLP, represent the Chapter 11 Trustee.
TRENDSET INC: Trustee Hiring Heritage Global as Appraiser
---------------------------------------------------------
Katie Goodman, as Chapter 11 Trustee for Trendset, Inc., asks the
U.S. Bankruptcy Court for the District of South Carolina for
authority to employ Heritage Global Partners, Inc., as appraiser
of certain assets of the Debtor, nunc pro tunc to June 18, 2013.
The hearing on the motion is scheduled for July 9, 2013, at 10:00
a.m. Objections are due by July 5, 2013.
As appraiser for the Chapter 11 trustee, Heritage will, among
other things, appraise (1) the value of the Debtor's assets which
were conveyed to AFS Logistics, LLC, and (2) determine the value
of the collateral securing creditors' claims in the Debtor's
bankruptcy case.
To the best of the Trustee's knowledge, information, and belief,
Heritage is a "disinterested person" as defined by Section 101(14)
of the Bankruptcy Code.
Heritage will be paid $3,000 by the Debtor's estate for the
services of its professionals. Heritage will also be reimbursed
for the reasonable out-of-pocket expenses of its professionals
incurred in connection with the assignment, such as travel and
lodging.
The sale of substantially all of the Debtor's operating business
assets was consummated on June 14, 2013.
Counsel to Katie Goodman, as Chapter 11 Trustee, are:
Michael M. Beal, Esq.
Robin C. Stanton, Esq.
Elizabeth J. Phil, Esq.
Michael H. Weaver, Esq.
McNAIR LAW FIRM, P.A.
1221 Main Street, 18th Floor
Post Office Box 11390
Columbia, South Carolina 29211
Tel: (803) 799-9800
Fax: (803) 753-3277
E-mail: mbeal@mcnair.net
rstanton@mcnair.net
lphilp@mcnair.net
mweaver@mcnair.net
About Trendset, Inc.
Trendset, Inc., was the subject of an involuntary Chapter 11
petition (Bankr. D. S.C. Case No. 13-02225) filed on April 15,
2013. Rory D. Whelehan, Esq., at Womble Carlyle Sandridge & Rice,
LLP, serves as counsel to the alleged creditors. Creditors who
signed the Chapter 11 petition are Husqvarna Professional
Products, Inc., (owed $5,782,524), Legrand North America, Inc.
(owed $4,642,653) and DH Business Services, LLC (owed $3,883,360).
Katie Goodman was appointed Chapter 11 Trustee for Trendset, Inc.
The Chapter 11 Trustee is represented by Michael H. Weaver, Esq.,
Michael M. Beal, Esq., Robin C. Stanton, Esq., and Elizabeth J.
Phil, Esq., at McNair Law Firm, P.A., in Columbia, South Carolina.
UNDERGROUND ENERGY: Securities Trading Suspended at TSX
-------------------------------------------------------
Underground Energy Corporation on July 8 disclosed that the
British Columbia Securities Commission issued a cease trade order
on all of the securities of Underground on July 4, 2013.
As a result of the cease trade order, the TSX Venture Exchange has
suspended trading in the Company's shares effective as of July 4,
2013. The TSXV has also advised the Company that failure to meet
the continued listing requirements of the TSXV prior to October 2,
2013 will result in the transfer of the Company's shares to NEX, a
trading forum for listed companies that have fallen below the
ongoing listing standards of the TSXV.
The cease trade order and the suspension in trading of the
Company's shares are the result of the Company's failure to file
financial statements and management's discussion and analysis for
both the year ended December 31, 2012 and the three months ended
March 31, 2013, prior to the required deadlines. The Company's
only subsidiary, Underground Energy, Inc., filed for protection
from creditors under Chapter 11 of the U.S. Bankruptcy Code on
March 4, 2013 and remains under Chapter 11 proceedings. As a
result, the Company has no cash to pay its auditors for the audit
of the financial statements for the year ending December 31, 2012
and is therefore unable to file audited 2012 financial statements
or reliable March 31, 2013 financial statements due to the
possible audit adjustments for 2012.
Management of the Company remains in active discussions with the
creditors of Underground Energy, Inc. as well as potential
investors and joint venture partners. No agreements have been
reached to date, however, on any new investment in the Company or
its subsidiary or on a plan for the subsidiary to emerge from
Chapter 11.
About Underground Energy Corporation
Underground -- http://www.ugenergy.com-- is focused on developing
its Zaca Field Extension Project in Santa Barbara County,
California. In total, Underground currently holds mineral rights
on approximately 21,300 net acres of prospective lands in
California and Nevada with an initial focus on the Monterey Shale
in California.
UPH HOLDINGS: Bid Procedures Approved; Auction to Begin Today
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Texas on
June 28, 2013, approved bid procedures with respect to the sale of
substantially all of the assets of UPH Holdings, Inc., and its
subsidiaries.
Pursuant to the approved bid procedures, the auction, if
necessary, will be held on July 9, 2013, through July 11, 2013, at
the offices of Jackson Walker, L.L.P., located at 100 Congress
Avenue, Suite 1100, in Austin, Texas.
The Debtors' secured lender, Hercules Technology II. L.P., is
authorized, in its discretion, to credit bid at the auction all or
any portion of the Hercules Prepetition Indebtedness under Section
363(k) of the Bankruptcy Code.
At the Sale Hearing, which is set for July 22, 2013, the Debtors
will present to the Court the Winning Bid, and if applicable, the
Runner-Up Bid, and request the entry of the Sale Order.
If a Stalking Horse is selected, then the Stalking Horse will
be entitled to a Breakup Fee equal to 3% of the purchase price of
its bid, payable upon the closing of an Alternative Transaction.
The Breakup Fee, if applicable, will be paid from the proceeds of
the first scheduled closing of any Alternative Transaction and, if
applicable, from the proceeds of each subsequent closing until
paid in full; provided, however, that if the Alternative
Transaction is a plan of reorganization, then the Breakup Fee will
be paid upon the effective date of such plan.
Meanwhile, the Bankruptcy Court on June 27, entered an order
establishing procedures and deadlines in connection with the July
22, 2013 Sale hearing and the assumption and assignment of
executor contracts. The following deadlines and provisions were
approved:
1. The Debtors were to file schedules of proposed cure
amounts for any contract the Debtors anticipate the ultimate
purchaser may assume under the relevant APA, a pro forma APA and a
pro forma Sale Order on or before July 3, 2013.
2. The Debtors will serve notice of Winning Bidder; list of
contracts to be assumed and assigned; redline of APA and available
evidence they would use to demonstrate adequate assurance of
future performance by the Winning Bidder on or before July 12,
2013.
3. Any objections to the Cure Amounts will be filed on or
before July 15, 2013.
4. Any objections related to adequate assurance of future
performance and any other objections to the sale will be filed on
or before July 17, 2013.
5. The Debtors will file a redline of the proposed Sale Order
on or before July 17, 2013.
6. The Debtors will hold a conference call on July 19, 2013,
at 1:00 p.m. CDT to discuss any objections to the proposed Sale
Order via conference call at 1-877-760-2047; Participant Code 512-
236-2076. Parties objecting to the form of Sale Order shall
participate in the Conference Call. Any unresolved issues
remaining after the Conference Call may be raised and decided at
the Sale Hearing.
7. To the extent the Debtors extend any deadlines, the
creditors' time to respond will be extended by the same number of
business days.
About UPH Holdings
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).
UPH Holdings, Inc. and its subsidiaries disclosed $26,917,341 in
assets and $19,705,805 in liabilities.
UPH HOLDINGS: Court Extends Committee Challenge Period to July 31
-----------------------------------------------------------------
Bankruptcy Judge Tony M. Davis on June 27, 2013, approved the
stipulation between the Official Committee of Unsecured Creditors
of UPH Holdings, Inc., et al., and Hercules Technology II, LP,
granting limited extension of the Committee's challenge period
until July 31, 2013, solely with respect to the Reserved
Challenge.
Pursuant to a Second Amended Final Order for Use of Cash
Collateral entered on May 9, 2013, the Debtors acknowledged,
stipulated and agreed that pursuant to Prepetition Loan Documents:
(i) as of the Petition Date, the Debtors owed Hercules in the
aggregate principal amount of not less than $10,531,673.68, plus
accrued and unpaid interest, attorneys' fees, costs and expenses,
all as provided in the Prepetition Loan Documents; (ii) the
Hercules Prepetition Indebtedness is due without any claim,
defense, counterclaim or offset of any kind; and (iii) the
Prepetition Indebtedness is secured by a valid, binding,
perfected, enforceable, and non-avoidable blanket first priority
security interest and lien on substantially all of the Debtors'
property and assets, including the proceeds, products, rents and
profits therefrom all as more particularly described in the
Prepetition Loan Documents.
Pursuant to the Cash Collateral Order, the Committee was granted
standing to file and prosecute on behalf of the Debtors' estates a
meritorious adversary proceeding to contest the extent, validity
and priority of Hercules' Prepetition Liens.
The Lien Challenge Deadline was to expire June 30, 2013.
Pursuant to the Stipulation and Agreed Order, among others, the
Parties stipulated and agreed:
1. The Lien Challenge Deadline is extended to July 31, 2013,
only as to the Committee and no other person or entity for any
claims for actual or constructively fraudulent transfers arising
out of or relating to UPH's acquisition of Pac-West and its
subsidiaries, including Hercules's financing of such acquisition
(the "Reserved Challenge").
2. Except for the Reserved Challenge, the Lien Challenge
Deadline will expire on June 30, 2013, with respect to the
Debtors' Stipulations and all other issues, claims or challenges
subject to the Lien Challenge Deadline or otherwise.
The Stipulation was signed by Craig A. Wolfe, Esq., at Kelley Drye
& Warrant LLP, on behalf of the Official Committee of Unsecured
Creditors, and Stuart Komrower, Esq., on behalf of Hercules
Technology II, L.P.
About UPH Holdings
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).
UPH Holdings, Inc. and its subsidiaries disclosed $26,917,341 in
assets and $19,705,805 in liabilities.
VICTORY ENERGY: Wilson Morgan Quits as Accountants
--------------------------------------------------
Wilson Morgan LLP resigned as the independent registered public
accountants of Victory Energy Corporation on June 27, 2013. Just
prior to the resignation, Wilson Morgan communicated to the
Company their desire to no longer provide audit services as part
of their strategic business plan and also communicated a pending
merger with an un-named third-party. The merger was completed on
July 1, 2013, and Marcum LLP was announced as the successor firm.
The Company has begun discussions with the successor auditing firm
to conclude the previously announced restatement effort associated
with the 2011 and 2012 financial statements, that include
reconciling the restated quarterly consolidated balance sheets and
statements of operations to reflect the non-controlling interest
of its partner Navitus Energy Group.
The resignation of Wilson Morgan was accepted by the Audit
Committee of the Company on July 2, 2013.
Wilson Morgan's audit reports on the Company's consolidated
financial statements as of and for the years ended Dec. 31, 2011,
and Dec. 31, 2010, 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
their opinions expressed uncertainty as to the Company's ability
to continue as a going concern.
The Company has not yet filed its annual report on Form 10-K for
the year ended 2012 containing its audited financial statements as
of and for the 12 months ended Dec. 31, 2012.
During the Company's years ended Dec. 31, 2011, and Dec. 31, 2010,
and the subsequent interim period through June 27, 2013, there
were no disagreements with Wilson Morgan on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedures, which disagreements,
if not resolved to Wilson Morgan's satisfaction, would have caused
Wilson Morgan to make reference to the subject matter of the
disagreement in their reports on the Company's consolidated
financial statements.
About Victory Energy
Austin, Texas-based Victory Energy Corporation is engaged in the
exploration, acquisition, development and exploitation of domestic
oil and gas properties. Current operations are primarily located
onshore in Texas, New Mexico and Oklahoma.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, WilsonMorgan LLP, in Irvine, California,
expressed substantial doubt about Victory Energy's ability to
continue as a going concern. The independent auditors noted that
the Company has experienced recurring losses since inception and
has an accumulated deficit.
The Company reported a net loss of $3.95 million on $305,180 of
revenues for 2011, compared with a net loss of $432,713 on
$385,889 of revenues for 2010. The Company's balance sheet at
Sept. 30, 2012, showed $1.69 million in total assets, $259,886 in
total liabilities and $1.43 million in total stockholders' equity.
VISCOUNT SYSTEMS: Issues 24.723 Series A Redeemable Preferreds
--------------------------------------------------------------
Viscount Systems, Inc., on July 1, 2013, issued a total of 24.723
Series A Convertible Redeemable Preferred Stock, par value $0.001
per share, to the outstanding holders of A Shares as dividend
payments on the A Shares for the period ended June 30, 2013. The
A Shares issued are subject to the conversion and dividend rights
as set forth in the Certificate of Designation, Preferences and
Rights of the Series A Convertible Redeemable Preferred Stock, as
amended.
About Viscount Systems
Burnaby, Canada-based Viscount Systems, Inc., is a manufacturer,
developer and service provider of access control security
products.
The Company reported a net loss of C$2.9 million in 2011, compared
with a net loss of C$1.3 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed C$1.08
million in total assets, C$3.44 million in total liabilities and a
C$2.35 million total stockholders' deficit.
The Company's bank credit facility was suspended on December 30,
2011 due to the bank's assessment of the Company's financial
position. Management has determined that the Company will need to
raise a minimum of C$500,000 by way of new debt or equity
financing to continue normal operations for the next twelve
months. Management has been actively seeking new investors and
developing customer relationships, however a financing arrangement
has not yet completed. Short-term loan financing is anticipated
from related parties, however there is no certainty that loans
will be available when required. These factors raise substantial
doubt about the ability of the Company to continue operations as a
going concern.
Following the 2011 results, Dale Matheson Carr-Hilton Labonte LLP,
in Vancouver, Canada, expressed substantial doubt about Viscount
Systems' ability to continue as a going concern. The independent
auditors noted that the Company has an accumulated deficit of
C$5,769,027 and has reported a loss of C$2,883,304 for the year
ended Dec. 31, 2011.
VISUALANT INC: Amends 70.3 Million Shares Resale Prospectus
-----------------------------------------------------------
Visualant, Incorporated, has amended its Form S-1 prospectus that
covers the resale by Tom Juda & Nancy Juda Living Trust, J3E2A2Z
LP, an affiliate of Ronald P. Erickson, the Company's CEO, William
D. Moreland, et al., of up to 70,300,000 shares of the Company's
common stock, $.001 par value per share, including:
(i) 52,300,000 shares of common stock issued to Special
Situations Technology Funds, L.P., and forty other
accredited investors pursuant to a private placement which
closed June 14, 2013; and
(ii) 18,000,000 shares of common stock issuable upon exercise of
a portion of the five year Warrants to purchase a total of
52,300,000 shares of common stock at $0.15 per share, which
were issued as part of the Private Placement.
The Company will not receive any of the proceeds from the sale of
the common stock by the selling security holders.
The Company's common stock trades on the OTCQB under the symbol.
On July 2, 2013, the last reported sale price for the Company's
common stock as reported on OTCQB was $0.0925 per share.
A copy of the amended prospectus is available for free at:
http://is.gd/A1kQaj
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.
VPR OPERATING: Has OK to Hire Global Hunter as Financial Advisor
----------------------------------------------------------------
VPR Operating, LLC, et al., obtained authorization from the Hon.
Tony M. Davis of the U.S. Bankruptcy Court for the Western
District of Texas to employ Global Hunter Securities LLC as
financial advisor and investment banker.
As reported by the Troubled Company Reporter on June 17, 2013, the
Debtors, prior to the commencement of their proceedings, were
working with a different investment bank, Evercore Partners, to
assist them in evaluating potential restructuring alternatives.
In the course of evaluating the postpetition retention of an
investment banker, the Debtors sought proposals from several
investment banking firms (including Evercore) with experience in
both oil and gas and bankruptcy transactions. After weighing the
proposals and conducting interviews with certain of the investment
banking teams, the Debtors determined that Global Hunter had the
most experience and presented the best overall value for the
estates. Global Hunter will, among other things, review and
analyze the Debtors' businesses and financial projections.
About VPR Operating
VPR Operating, LLC, and three related entities sought Chapter 11
protection (Bankr. W.D. Tex. Lead Case No. 13-10599) in Austin
on March 29, 2013. VPR estimated assets and debts of at least
$50 million.
Robert W. Jones, Esq., and Brent R. McIlwain, Esq., at Holland &
Knight LLP, serve as the Debtor's counsel. Judge Craig A.
Gargotta presides over the case.
VPR Operating disclosed $13,400,000 in assets and $11,119,045 in
liabilities as of the Chapter 11 filing.
Privately owned VPR is an oil and gas company focused on acquiring
and developing assets in the domestic onshore basins of the United
States. It has 53 producing wells, which generate revenue of
approximately $375,000 per month on average after royalty
payments. VPR was founded in 2008, and maintains producing oil
and gas properties in Oklahoma and New Mexico.
The U.S. Trustee appointed five entities to an official committee
of creditors. The Committee tapped Brown McCarroll LLP as its
counsel.
VPR OPERATING: Hires Holland & Knight to Replace Patton Boggs
-------------------------------------------------------------
VPR Operating, LLC, et al., seek permission from the Hon. Tony M.
Davis of the U.S. Bankruptcy Court for the Western District of
Texas to employ Holland & Knight LLP as bankruptcy counsel, nunc
pro tunc to July 1, 2013.
The Debtors initially selected Patton Boggs LLP to act as
bankruptcy counsel for the Debtors. On April 11, 2013, the Debtor
filed an application to employ Patton Boggs LLP as bankruptcy
counsel, and the Court entered an order approving the application
on May 15, 2013, which was subsequently amended on May 20, 2013.
Patton Boggs' representation of the Debtors was led by Robert W.
Jones and Brent R. McIlwain, both partners at Patton Boggs as of
the Petition Date. Effective June 28, 2013, Messrs. Jones and
McIlwain resigned from Patton Boggs and joined Holland & Knight as
partners. Indeed, all of the attorneys who have assisted in
representing the Debtors since the Petition Date will be joining
Holland & Knight.
Given that all of the attorneys who have assisted in representing
the Debtors are now attorneys at Holland & Knight, the Debtors
have determined that it is in the best interests of their estates
to retain Holland & Knight as bankruptcy counsel for Debtors in
the place of Patton Boggs. The Debtors believe that Holland &
Knight will be able to efficiently and effectively represent the
estates, and will maintain the continuity of counsel necessary to
ensure that the Debtors continue to proceed toward realizing value
for creditors.
Holland & Knight will, among other things, assist the Debtors in
preparation of all documents, motions, applications, reports, and
papers necessary for the administration of these Chapter 11 cases,
at these hourly rates:
Robert W. Jones, Partner $755
Brent R. McIlwain, Partner $615
Brian Smith, Associate $460
Robert W. Jones, Esq., a partner at Holland & Knight, attests to
the Court that the firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
Holland & Knight can be reached at:
Robert W. Jones, Esq.
Brent McIlwain, Esq.
HOLLAND & KNIGHT LLP
300 Crescent Court, Suite 1100
Dallas, TX 75201
Tel: (214) 964-9500
Fax: (214) 964-9501
E-mail: robert.jones@hklaw.com
brent.mcilwain@hklaw.com
About VPR Operating
VPR Operating, LLC, and three related entities sought Chapter 11
protection (Bankr. W.D. Tex. Lead Case No. 13-10599) in Austin
on March 29, 2013. VPR estimated assets and debts of at least
$50 million. Judge Craig A. Gargotta presides over the case.
VPR Operating disclosed $13,400,000 in assets and $11,119,045 in
liabilities as of the Chapter 11 filing.
Privately owned VPR is an oil and gas company focused on acquiring
and developing assets in the domestic onshore basins of the United
States. It has 53 producing wells, which generate revenue of
approximately $375,000 per month on average after royalty
payments. VPR was founded in 2008, and maintains producing oil
and gas properties in Oklahoma and New Mexico.
The U.S. Trustee appointed five entities to an official committee
of creditors. The Committee tapped Brown McCarroll LLP as its
counsel.
VYSTAR CORP: Porter Keadle Replaces Habif Arogeti as Accountants
----------------------------------------------------------------
The Audit Committee of Vystar Corporation recently completed a
competitive process to determine what audit firm would serve as
the Company's independent registered public accounting firm for
the year ended Dec. 31, 2013. On June 28, 2013, the Audit
Committee determined to dismiss Habif, Arogeti & Wynne, LLP, as
the Company's independent registered public accounting firm
effective immediately following the Company's filing of its annual
report on Form 10-K for the year ending Dec. 31, 2012.
The reports of HAW on the Company's consolidated financial
statements as of and for the 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 audit scope or accounting
principles. The reports of HAW were prepared on a going concern
basis but the Company's recurring losses from operations, capital
deficit, and limited capital resources raise substantial doubt
about its ability to continue as a going concern.
The dismissal was not a result of any disagreement with the
accounting firm.
The Audit Committee has engaged Porter Keadle Moore, LLC, as the
Company's independent registered public accounting firm for the
year ended Dec. 31, 2013, also to be effective immediately
following the filing of the Company's 2012 10-K.
During the years ended Dec. 31, 2012, and 2011, the Company did
not consult with PKM regarding any of the matters or events set
forth in Item 304(a)(2) of Regulation S-K.
About Vystar Corp
Duluth, Ga.-based Vystar Corporation is the creator and exclusive
owner of the innovative technology to produce Vytex(R) Natural
Rubber Latex. This technology reduces antigenic protein in
natural rubber latex products to virtually undetectable levels in
both liquid NRL and finished latex products.
Vystar reported a net loss of $2.74 million on $540,168 of revenue
for the year ended Dec. 31, 2012, as compared with a net loss of
$3.60 million on $347,250 of revenue during the prior year.
As of Dec. 31, 2012, the Company had $1.19 million in total
assets, $2.94 million in total liabilities and a $1.74 million
total stockholders' deficit.
Habif, Arogeti & Wynne, LLP, in Atlanta, Georgia, 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 recurring losses from operations, capital
deficit, and limited capital resources raise substantial doubt
about its ability to continue as a going concern.
Bankruptcy Warning
"There can be no assurances that the Company will be able to
achieve its projected level of revenue in 2013 and beyond. If the
Company is unable to achieve its projected revenue and is not able
to obtain alternate additional financing of equity or debt, the
Company would need to significantly curtail or reorient its
operations during 2013, which could have a material adverse effect
on the Company's ability to achieve its business objectives and as
a result may require the Company to file for bankruptcy or cease
operations," the Company said.
* Fitch Says FDIC Rule Could Push Banks to Buy Riskier CLOs
-----------------------------------------------------------
Donal Griffin, writing for Bloomberg News, reported that U.S.
banks, spurred by a federal regulatory change, will be encouraged
to buy the riskiest pieces of a type of structured credit product
or exit the investments altogether, according to Fitch Ratings.
According to the report, JPMorgan Chase & Co. and Wells Fargo &
Co. are among the biggest investors in collateralized loan
obligations, or CLOs, which bundle speculative-grade loans into
securities of varying risk. Since April 1, the Federal Deposit
Insurance Corp.'s method for calculating premiums has assigned a
higher cost to all CLO investments, from the safest to the
riskiest.
Banks are grappling with the change in how the FDIC calculates
their deposit insurance premiums, funds that are used to repay
account holders if a lender fails, the report related. Banks that
choose to keep investing in CLOs may stick to the riskier slices
instead of the AAA-rated portions because they offer greater
returns, Fitch said in a statement.
"The FDIC is trying to keep ahead of any emerging risk related to
CLOs," Joo Yung Lee, head of Fitch's North American financial
institutions group, said in a phone interview, the report added.
"Their general intention is to keep it simple and have an
assessment for higher capital charges for what they view as a
riskier potential asset class."
U.S. banks owned $56.6 billion of CLOs at the end of March, up 24
percent from a year earlier, according to Fitch, the report cited.
Fitch cited data from Thomson Reuters Corp. unit Highline
Financial.
* SAC Capital's Steven Cohen Expected to Avoid Criminal Charges
---------------------------------------------------------------
Michael Rothfield, Jean Eaglesham and Jenny Strasburg, writing for
The Wall Street Journal, citing people familiar with the
situation, reported that U.S. prosecutors have concluded that they
don't have enough evidence against hedge-fund billionaire Steven
A. Cohen to file criminal insider-trading charges against him
before a July deadline.
According to the report, investigators probing the biggest alleged
insider-trading scheme in history have been eyeing the 57-year-old
Mr. Cohen and his namesake SAC Capital Advisors LP hedge-fund firm
for a decade, suspicious that some of its trading profits were too
good to be legitimate, according to people close to the probe.
According to the report, prosecutors filed criminal charges last
November against a portfolio manager at an SAC affiliate who was
close to Mr. Cohen -- and kept trying to work their way to the
top, the report said. Federal agents have approached many former
SAC employees for information, showing one person a diagram of the
investigation's targets, according to people familiar with the
matter. Mr. Cohen's picture was in the middle.
According to the report, this month's deadline is likely to come
and go without any action against Mr. Cohen, people familiar with
the investigation said, the report added. The deadline is tied to
a five-year statute of limitations to file criminal charges
related to his trading activity with the portfolio manager, Mathew
Martoma.
Prosecutors hoped to gain information from Mr. Martoma that could
be used against his former boss, but Mr. Martoma hasn't implicated
Mr. Cohen, the report further related. When he was approached by
two federal agents, Mr. Martoma fainted in the front yard of his
Florida home but has refused to cooperate with the government,
according to people familiar with the probe.
* Elizabeth Cundiff-Klushpies Joins Lowenstein Sandler as CMO
-------------------------------------------------------------
Lowenstein Sandler LLP on July 8 disclosed that Elizabeth Cundiff-
Kluhspies has joined the firm as its Chief Marketing Officer. In
this role, Cundiff-Kluhspies will play a leadership role in the
firm's continued, strategic growth of its core practice areas and
national platform. Since 2005, Cundiff-Kluhspies was Practice
Development Director for the Americas Disputes and Competition
practice at White & Case.
"Beth's experience and personal attributes are a great fit for
Lowenstein Sandler," said Gary M. Wingens, chairman and managing
partner. "She has all the experience needed to build and lead a
growth-oriented marketing organization, and possesses clear
leadership skills, strategic and analytical thinking, and a native
ability to work with talented and successful people. We are
delighted to welcome her as CMO and look forward to her leadership
of this critically important function."
At White & Case, Cundiff-Kluhspies led business development
strategy for more than 390 attorneys across 10 practice groups,
managing a practice development team located in New York, Palo
Alto, Washington DC and Los Angeles. Prior to White & Case,
Cundiff-Kluhspies was a senior marketing manager with Pillsbury
Winthrop Shaw Pittman leading business development for its
National Litigation Practice and assisting with numerous projects
related to the firm's merger with Shaw Pittman, including branding
consistency, new client outreach and marketing department
efficiency.
"Lowenstein Sandler is a visionary firm that has made
extraordinary progress and is well positioned for continued growth
in its core areas," said Cundiff-Kluhspies. "Its people are smart
and work hard for the firm and its clients. From a marketer's
perspective, they definitely 'get it' -- the firm is uncommonly
entrepreneurial and understands the value of business development.
Given what the firm has accomplished despite the tough environment
and its unbridled enthusiasm for marketing leadership, I am very
excited to join Lowenstein Sandler and fully expect that we'll do
great things."
Cundiff-Kluhspies is a member of the Illinois State Bar and earned
her J.D. at DePaul University College of Law in Chicago.
About Lowenstein Sandler
Lowenstein Sandler -- http://www.lowenstein.com-- is a provider
of transactional, litigation, and bankruptcy and creditors' rights
legal services to many of the country's top companies and funds.
Close to 300 lawyers in our New York, New Jersey and California
offices immerse themselves in our clients' industries in order to
deeply understand their businesses.
* Thompson Law Opens Additional Office in Chadron
-------------------------------------------------
West Omaha-based Thompson Law Office is expanding its geographic
reach with the opening of an additional office in Chadron. The
office will allow the firm to better serve clients with legal
issues in northwest Nebraska and the panhandle. Attorney Jane
Long will staff the office with additional support from the firm's
nine Omaha attorneys and legal professionals.
"As Chief Justice Michael Heavican and others in the Nebraska
legal system have noted, the availability of legal services in
rural communities has dwindled over the past twenty years," stated
Ben Thompson, the firm's managing attorney. "We are excited to
reverse that trend in Dawes County and supply our Chadron law
office with access to the same cutting-edge tools and resources
that we have in our Omaha office."
The public is invited to an open house at the firm's new office at
408 Main Street in Chadron on Thursday, July 11th, from 4 to 7.
The Chadron Chamber of Commerce will be assisting with a ribbon-
cutting ceremony at 5:15 p.m. The event coincides with the
opening of the annual Fur Trade Days.
Thompson Law Office, PC, LLO provides its individual, small
business and non-profit clients with practical advice and
passionate advocacy in a variety of legal matters, including
business, employment, real estate, family, estates, bankruptcy,
criminal defense and more. The firm's legal professionals have
over 150 years of combined experience. Visit
http://chadron.thompson.law.profor more information on the firm.
* 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)
ACASTI PHARMA IN APO CN 3.3 (1.8) 2.3
ADVANCED EMISSIO 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) 744.0
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)
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
GOLD RESERVE INC GRZ CN 78.3 (25.8) 56.9
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) 187.8
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) -
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)
ODYSSEY MARINE OMEX US 28.0 (7.1) (15.5)
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
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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
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Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
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