/raid1/www/Hosts/bankrupt/TCR_Public/130916.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, September 16, 2013, Vol. 17, No. 257
Headlines
1007 LLC: Files Chapter 11 in Washington D.C.
ALION SCIENCE: Inks Employment Agreement with CFO
AMERICAN PETRO-HUNTER: Incurs $394K Net Loss in 2nd Quarter
ANTIOCH COMPANY: To Sell StoryBook Software Rights
ANTIOCH COMPANY: Oct. 1 Hearing on Adequacy of Plan Outline
ARCH COAL: Bank Debt Trades at 2% Off
ARCHDIOCESE OF MILWAUKEE: To Enter Into Mediation With Insurers
AUGUSTINE PENA III: Calif. Court Affirms Chapter 7 Conversion
AURA SYSTEMS: Robert Kopple Held 30.1% Equity Stake at Dec. 27
BI-LO LLC: S&P Assigns 'CCC+' Rating to $400MM Unsecured Notes
BIOLIFE SOLUTIONS: John Baust Held 5% Equity Stake at July 2
BOART LONGYEAR: New $300MM Notes Offer Gets Moody's B1 Rating
BOART LONGYEAR: S&P Lowers Corp. Credit Rating to B; Outlook Neg.
BON-TON STORES: Files Form 10-Q, Incurs $37.3-Mil. Net Loss in Q2
CAESARS ENTERTAINMENT: Bank Debt Trades at 9% Off
CALCEUS ACQUISITION: Moody's Keeps Ratings at B2; Outlook Stable
CARL'S PATIO: Pride Family Brands May Proceed With Deposition
CENTENE CORP: A.M. Best Affirms 'bb' Issuer Credit Rating
CENTRAL ILLINOIS ENERGY: Dist. Court Affirms Froehling Decision
CHAIT PROPERTIES: Court Adopts People's United Bank's Valuation
CHARLES A. GROGAN: Ore. Court to Confirm Xmas Tree Farmers' Plan
CHRYSLER GROUP: Could This Month Begin Process to Go Public
CHRYSLER LLC: Order Denying Limited Assumption of SRP Affirmed
CIRCLE ENTERTAINMENT: Stockholders Elect Six Directors
COLONIAL BANCGROUP: No 3rd Serving for Pension Funds in Class Suit
COMMONWEALTH GROUP: Motion to Dismiss Case Granted
COMMUNITY'S BANK: FDIC Approves Payout of Insured Deposits
COMPETITIVE TECHNOLOGIES: Inks $10MM Equity Pact with Southridge
CORAL DYEING: Meeting to Form Creditors' Panel on Oct. 1
EASTMAN KODAK: Seeks More Time to File Post-Confirmation Timetable
ENERGY SERVICES: Centrus Serves as Financial Advisor
ERF WIRELESS: To Pay for Legal Fees in "Schlumberger" Dispute
FAIRBANKS COMMUNITY HEALTH: Cuts Jobs, Prepares for Bankruptcy
FAIRMONT GENERAL: Wants to Dispense with PCO Appointment
FINJAN HOLDINGS: Has Office Lease Agreement with 122 East
FIRST NATIONAL: PlainsCapital Bank Assumes All of Bank's Deposit
FISKER AUTO: U.S. Government Considers Auction of Car Marker
FREESEAS INC: Hanover No Longer a Shareholder at Sept. 10
FREESCALE SEMICONDUCTOR: S&P Rates 1st-Lien Term Loan Due 2021 'B'
GATEHOUSE MEDIA: Signs Restructuring and Investment Agreements
GETTY IMAGES: Bank Debt Trades at 6% Off
GLOBAL AXCESS: Creditors Committee Balks at Bidding Procedures
GLOBAL AXCESS: Gets Final OK to Incur $16.7MM Postpetition Loan
GLOBAL AXCESS: Trustee Wants Case Transferred to Las Vegas
GLOBAL AXCESS: U.S. Trustee Forms Four-Member Creditors Committee
GRYPHON GOLD: Ch. 11 Case Transferred to Reno Division
GRYPHON GOLD: Employs Harris Law as Ch. 11 Counsel
HAMPTON CAPITAL: Committee and SABAL Balk at Plan Confirmation
HERON LAKE: To Sell Corn Oil to RPMG
HOVNANIAN ENTERPRISES: Guarantees $41.5-Mil. Notes Offering
IBAHN CORP: Section 341(a) Meeting Set on October 7
INSPIREMD INC: To Report Fiscal Year 2013 Results on Sept. 17
J.C. PENNEY: Steven Roth Resigns from Company Board
JAMES RIVER: Extends Exchange Offer for $54MM Notes to Sept. 18
KEOKUK, IA: Moody's Withdraws Ratings on 1998 Revenue Bonds
LADDER CAPITAL: Fitch Affirms 'BB' Issuer Default Rating
LANDAUER HEALTHCARE: Overcomes Committee Objection to Cash Use
LEHMAN BROTHERS: Sign Goes on the Block Again
LIGHTSQUARED INC: Seeks Court Approval of Bidding Procedures
LOMPOC RDA: Moody's Confirms 'Ba1' Rating on Revenue Bonds
LOS BANOS RDA: Moody's Cuts Ratings on 3 Bond Series to Ba2
MAKENA GREAT: GAC Storage Gets OK to Make Final Distributions
MI PUEBLO: Has Interim Okay to Use Cash Collateral
MI PUEBLO: Seeks to Hire Avant Advisory as Financial Advisors
MI PUEBLO: May Hire BDO USA as Accountant & Tax Advisor
MI PUEBLO: Employment of Cavanagh Law as Special Counsel Approved
MOMENTIVE SPECIALTY: Extends Expiration of Exchange Offer
MSD PERFORMANCE: Section 341(a) Meeting Set on October 7
MVP HEALTH: A.M. Best Affirms 'B' Financial Strength Rating
NEONODE INC: Offering 2.5 Million Common Shares
NEW BERN RIVERFRONT: Court Tosses Bid to Strike Expert Report
NGPL PIPECO: Bank Debt Trades at 11% Off
OGX PETROLEO: Seeks Lifeline from Creditors
PLUG POWER: Offering $10 Million Common Shares
PROSPECT HOLDING: Good Performance Cues Moody's to Assign B2 CFR
RICHMOND VALLEY: Deutsch Metz Tapped as Special Litigation Counsel
ROCKWOOD SPECIALTIES: Moody's Lifts Rating on $1.2BB Notes to Ba1
ROSETTA GENOMICS: Executes Credentialing Pacts With FedMed & FPN
ROYAL CARIBBEAN: Moody's Keeps Ba1 CFR After Dividend Increase
SAN BERNARDINO, CA: Judge Zive Appointed as Mediator
SAN DIEGO HOSPICE: Plan Confirmation Hearing Continued to Oct. 3
SANCHEZ ENERGY: Moody's Assigns Caa1 Rating to Sr. Notes Add-On
SANCHEZ ENERGY: S&P Keeps CCC+ Rating After $150MM Add-On to Notes
SANTA ANA RDA: Moody's Confirms 'Ba1' Rating on Tax Bonds
SEARS HOLDINGS: Offering 1.1 Million Shares Under Plans
SHUANEY IRREVOCABLE: Files Outline Explaining Second Amended Plan
SHINGLE SPRINGS: Refinancing Prompts Moody's to Upgrade CFR to B3
SPRINGFIELD HOMES: Court to Dismiss Bankruptcy Case
TALON INTERNATIONAL: Appoints New Member to Board of Directors
TECHNOLOGY PROPERTIES: In Limine Motions Decided in HTC Suit
TOMSTEN INC: Can Hire 1st Audit as Consultant
TOMSTEN INC: Gets Court Nod to Tap SIB Development as Consultant
TORNANTE-MDP JOE: S&P Assigns B Corp Credit Rating; Outlook Stable
TORRANCE CITY RDA: Moody's Cuts Tax Allocation Bond Ratings to Ba2
TOWNSQUARE RADIO: S&P Affirms B Corp Credit Rating; Outlook Stable
TRIUS THERAPEUTICS: Closes Merger with Cubist Pharmaceuticals
TWIN CITY HOSPITAL: Ohio App. Court Flips Summary Judgment Order
TXU CORP: Bank Debt Trades at 31% Off
UNI-PIXEL INC: To Present at Oppenheimer Conference Sept. 17
UNIVAR NV: Bank Debt Trades At 3% Off
VICTOR VALLEY EDA: Moody's Confirms B3 Rating on Tax Bonds
VILLAGE AT KNAPP'S: Hire Robert Attmore, Esq., as Special Counsel
VILLAGE AT KNAPP'S: Amends Tishkoff Employment Application
VIRGIN OFFSHORE: Dist. Court Affirms Assumption of License Deal
WALTER ENERGY: Bank Debt Trades at 4% Off
WASHINGTON COMMUNITIES II: Files Chapter 11 in Washington D.C.
WASHINGTON MUTUAL: Distribution Plan Approved in Class Suit
* Moody's Notes Strong Performance for OFS Industry in 2013
* Moody's Changes Outlook on E&P Sector to Positive
* Moody's Outlook on North American Chemical Sector is Stable
* Moody's Expects Lower Recoveries for Municipal Bonds
* Moody's Says High-Yield Bond Covenant Quality Dips in August
* BOND PRICING -- For Week From Sept. 9 to 13, 2013
*********
1007 LLC: Files Chapter 11 in Washington D.C.
---------------------------------------------
1007 LLC, located at 1025 Thomas Jefferson St., Suite 165G,
Washington, D.C. 20007, commenced Chapter 11 bankruptcy
reorganization (Bankr. D.D.C. Case No. 13-00569) on Sept. 11,
represented by Michael H. Selter, Esq. 1007 LLC estimated
$1 million to $10 million in assets and $500,001 to $1 million in
debts.
ALION SCIENCE: Inks Employment Agreement with CFO
-------------------------------------------------
Alion Science and Technology Corporation entered into an
Employment Agreement effective as of Aug. 6, 2013, with Barry M.
Broadus, senior vice president, chief financial officer and
treasurer of the Company, pursuant to which the Company and Mr.
Broadus agreed upon the terms of Mr. Broadus' continued employment
with the Company.
Pursuant to the terms of the Agreement, the Company has agreed to
pay Mr. Broadus a base salary of not less than $310,687 per year,
subject to adjustments in the discretion of the Company. If Mr.
Broadus' employment is terminated without Cause other than within
a two year period after a Change in Control or during a Potential
Change in Control Protection Period, Mr. Broadus, subject to
satisfying certain conditions, would receive a severance payment
in an amount equal to (i) his then annual base salary, plus (ii)
his prior year's paid bonus, plus (iii) unpaid salary and benefits
through the date of termination, plus (iv) any unpaid bonus with
respect to the prior fiscal year plus (v) reimbursement of certain
expenses related to COBRA as described in the Agreement, plus (vi)
all other rights and benefits in which he has vested prior to or
as a result of his termination of employment pursuant to other
plans and programs of the Company. If Mr. Broadus' employment is
terminated without Cause or if he terminates his employment for
Good Reason within a two year period after a Change in Control or
during a Potential Change in Control Protection Period, Mr.
Broadus, subject to satisfying certain conditions, would receive
all of the foregoing benefits plus outplacement services in an
amount not to exceed $25,000. If Mr. Broadus' employment is
terminated for Cause, Mr. Broadus would receive his base salary
through the effective date of his termination and any other rights
and benefits that vested prior to termination.
A copy of the Employment Agreement is available for free at:
http://is.gd/qV52Rm
About Alion Science
Alion Science and Technology Corporation, based in McLean,
Virginia, is an employee-owned company that provides scientific
research, development, and engineering services related to
national defense, homeland security, and energy and environmental
analysis. Particular areas of expertise include communications,
wireless technology, netcentric warfare, modeling and simulation,
chemical and biological warfare, program management.
Alion Science incurred a net loss of $41.44 million for the year
ended Sept. 30, 2012, a net loss of $44.38 million for the year
ended Sept. 30, 2011, and a net loss of $15.23 million for the
year ended Sept. 30, 2010.
As of June 30, 2013, the Company had $632.86 million in total
assets, $799.58 million in total liabilities, $111.01 million in
redeemable common stock, $20.78 million in common stock warrants,
$149,000 in accumulated other comprehensive loss and a $298.37
million accumulated deficit.
Bankruptcy Warning
The Company said in its annual report for the fiscal year ended
Sept. 30, 2012, "Our credit arrangements, including our unsecured
and secured note indentures and our revolving credit facility
include a number of covenants. We expect to be able to comply
with our indenture covenants and our credit facility financial
covenants for at least the next twenty-one months. If we were
unable to meet financial covenants in our revolving credit
facility in the future, we might need to amend the revolving
credit facility on less favourable terms. If we were to default
under any of the revolving credit facility covenants, we could
pursue an amendment or waiver with our existing lenders, but there
can be no assurance that lenders would grant an amendment or
waiver. In light of current credit market conditions, any such
amendment or waiver might be on terms, including additional fees,
increased interest rates and other more stringent terms and
conditions materially disadvantageous to us. If we were unable to
meet these financial covenants in the future and unable to obtain
future covenant relief or an appropriate waiver, we could be in
default under the revolving credit facility. This could cause all
amounts borrowed under it and all underlying letters of credit to
become immediately due and payable, expose our assets to seizure,
cause a potential cross-default under our indentures and possibly
require us to invoke insolvency proceedings including, but not
limited to, a voluntary case under the U.S. Bankruptcy Code.
AMERICAN PETRO-HUNTER: Incurs $394K Net Loss in 2nd Quarter
-----------------------------------------------------------
American Petro-Hunter Inc. filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $394,409 on $30,770 of revenue for the three months
ended June 30, 2013, as compared with a net loss of $41,048 on
$72,954 of revenue for the same period last year.
For the six months ended June 30, 2013, the Company incurred a net
loss of $673,609 on $75,009 of revenue as compared with a net loss
of $945,349 on $187,677 of revenue for the same period a year ago.
As of June 30, 2013, the Company had $1.79 million in total
assets, $1.96 million in total liabilities and a $164,085 total
stockhodlers' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/JwKD9T
About American Petro-Hunter
Wichita, Kansas-based American Petro-Hunter, Inc., is an oil and
natural gas exploration and production (E&P) company with current
projects in Payne and Lincoln Counties in Oklahoma.
American Petro-Hunter disclosed a net loss of $3.30 million on
$308,770 of revenue for the year ended Dec. 31, 2012, as compared
with a net loss of $2.73 million on $317,931 of revenue during the
prior year.
Weaver Martin & Samyn, LLC, in Kansas City, Missouri, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has suffered recurring losses from
operations and is dependent upon the continued sale of its
securities or obtaining debt financing for funds to meet its cash
requirements. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
ANTIOCH COMPANY: To Sell StoryBook Software Rights
--------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota will
convene a hearing on Sept. 26, 2013, at 2 p.m. to consider The
Antioch Company, et al.'s motion to sell StoryBook Software and
Memory Manager Software to Panstoria. Objections, if any, are due
Sept. 20.
The Debtors requested that the Court authorize the Debtors and
Panstoria to enter into the agreement effective as of Sept. 27,
2013, whereby the Debtors are selling and assigning their rights
to the use of the StoryBook Software and Memory Manager Software
to Panstoria in exchange for cash and other consideration to the
estates.
Panstoria (formerly known as Caspedia Corporation), has partnered
with the Debtors to support all of the Debtors' digital platform
offerings. Over the years, the Debtors and Panstoria have been
parties to various licensing and software agreements for certain
digital and printing capabilities. Panstoria is the owner of the
primary software that supports the Debtors' current digital
business. On June 24, 2011, Panstoria and Antioch executed a
Software License Agreement (the StoryBook Agreement), whereby
Antioch obtained a non-exclusive license to reproduce and
sublicense the Artisan Program (as modified) under the title
"StoryBook Creator Plus 4.0"
The Agreement outlines economic factors (both cash and waiver of
certain claims) well as other non-economic obligations between the
parties. Under the terms of the agreement, Antioch is agreeing to
perform these, subject to Court approval:
a. acknowledge that the license under Section 2(d) of the
StoryBook Agreement is terminated, Antioch no longer has any
rights in or to the Encryption Code, and Antioch assigns any and
all of its licensed interests that it may have in the Encryption
Code back to Panstoria;
b. grant Panstoria the right and license to market and sell on
a non-exclusive basis Antioch's digital art kits for a period of
six months from the Effective Date; and
c. grant Panstoria permission to release Updates to the
StoryBook Software, and Updates to the Memory Manager Software at
any time prior to the termination of the Agreement, including
Updates that will create a print service for StoryBook Users that
will permit them to order print products from Panstoria.
About The Antioch Company
St. Cloud, Minn.-based scrapbook company The Antioch Company and
six affiliates filed for Chapter 11 bankruptcy (Bankr. D. Minn.
Case No. 13-41898) in Minneapolis on April 16, 2013. Sean D.
Malloy, Esq., at McDonald Hopkins LLC; and Clinton E. Cutler,
Esq., represent the Debtor as counsel. Antioch disclosed $10
million to $50 million in both assets and debts.
The affiliates that separate filed for Chapter 11 are Antioch
International-Canada LLC, Antioch International LLC, zeBlooms LLC,
Antioch Framers Supply LLC, Antioch International-New Zealand LLC,
and Creative Memories Puerto Rico, LLC.
Founded in 1926, Antioch and its affiliates make up one of the
world's preeminent suppliers of scrapbooks, related accessories,
and photo solutions for memory preservation through the direct
sales channel. The Debtors also go by business names Creative
Memories, Antioch, Agenda, Antioch Publishing, Cottage Arts, Frame
of Mind and Webway.
Antioch has 200 employees and currently has operations through the
Debtor companies and foreign subsidiaries in the United States,
Canada, Japan, Australia, and New Zealand. In 2012, the Company's
net revenue was approximately $93.8 million and it had a net loss
of $3.7 million.
Antioch previously sought bankruptcy protection in 2008 (Bankr.
S.D. Ohio Case No. 08-35741).
In the 2013 case, the U.S. Trustee appointed a seven-member
creditors committee. Michael B. Fisco, Esq., at Faegre Baker
Daniels LLP represents the Committee. Crowe Horwath LLP serves as
its financial advisor.
ANTIOCH COMPANY: Oct. 1 Hearing on Adequacy of Plan Outline
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota will
convene a hearing on Oct. 1, 2013, at 9 a.m., to consider the
adequacy of the Disclosure Statement explaining Plan of
Reorganization proposed by The Antioch Company, et al., and the
Official Committee of Unsecured Creditors on Aug. 28, 2013.
Objections, if any, are due five days prior to the hearing.
According to the Disclosure Statement, the Plan generally provides
for two restructuring alternatives: (i) a stand-alone
reorganization with equity ownership of the Reorganized Company
held by a liquidating trust for the benefit of the Debtors'
creditors; or (ii) the acquisition of the Reorganized Company's
assets or equity though investment by a plan sponsor, with
proceeds of the investment being contributed to a liquidating
trust. Under either scenario, certain cash generated during the
chapter 11 cases and the liquidation of any remaining assets not
necessary to operate the Reorganized Company will also be
distributed to creditors in accordance with the priority scheme of
the Bankruptcy Code.
The claims of creditors of the Debtors will be satisfied from the
Liquidating Trust Assets. The Plan is also predicated upon entry
of an order substantively consolidating the Debtors for the
purposes of the Plan, including for voting, confirmation, and
distribution purposes.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/THE_ANTIOCH_CO_ds.pdf
Sean D. Malloy, Esq. -- smalloy@mcdonaldhopkins.com -- at McDonald
Hopkins LLC; and Clinton E. Cutler, Esq. -- ccutler@fredlaw.com --
represent the Debtor as counsel.
Michael B. Fisco -- michael.fisco@FaegreBD.com -- at Faegre Baker
Daniels LLP represents the Committee.
About The Antioch Company
St. Cloud, Minn.-based scrapbook company The Antioch Company and
six affiliates filed for Chapter 11 bankruptcy (Bankr. D. Minn.
Case No. 13-41898) in Minneapolis on April 16, 2013. Antioch
disclosed $10 million to $50 million in both assets and debts.
The affiliates that separate filed for Chapter 11 are Antioch
International-Canada LLC, Antioch International LLC, zeBlooms LLC,
Antioch Framers Supply LLC, Antioch International-New Zealand LLC,
and Creative Memories Puerto Rico, LLC.
Founded in 1926, Antioch and its affiliates make up one of the
world's preeminent suppliers of scrapbooks, related accessories,
and photo solutions for memory preservation through the direct
sales channel. The Debtors also go by business names Creative
Memories, Antioch, Agenda, Antioch Publishing, Cottage Arts, Frame
of Mind and Webway.
Antioch has 200 employees and currently has operations through the
Debtor companies and foreign subsidiaries in the United States,
Canada, Japan, Australia, and New Zealand. In 2012, the Company's
net revenue was approximately $93.8 million and it had a net loss
of $3.7 million.
Antioch previously sought bankruptcy protection in 2008 (Bankr.
S.D. Ohio Case No. 08-35741).
In the 2013 case, the U.S. Trustee appointed a seven-member
creditors committee. Faegre Baker Daniels LLP serves as its
counsel. Crowe Horwath LLP serves as its financial advisor.
ARCH COAL: Bank Debt Trades at 2% Off
-------------------------------------
Participations in a syndicated loan under which Arch Coal Inc. is
a borrower traded in the secondary market at 97.67 cents-on-the-
dollar during the week ended Friday, September 13, 2013 according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents an increase of 0.52
percentage points from the previous week, The Journal relates.
Arch Coal pays 450 basis points above LIBOR to borrow under the
facility. The bank loan matures on May 17, 2018. The bank debt
carries Moody's Ba3 rating and Standard & Poor's BB- rating. The
loan is one of the biggest gainers and losers among 249 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
* * *
As reported in the Troubled Company Reporter on Aug. 7, 2013,
Moody's Investors Service placed all ratings of Arch Coal on
review for possible downgrade, including the company's B2
Corporate Family Rating, B2-PD Probability of Default Rating, Ba3
rating on senior secured credit facility, and the B3 rating on
senior unsecured debt. The rating action was prompted by recent
deterioration in performance and persistent weakness in market
conditions for both thermal and metallurgical coal.
ARCHDIOCESE OF MILWAUKEE: To Enter Into Mediation With Insurers
---------------------------------------------------------------
The Associated Press reports the Archdiocese of Milwaukee may be
poised for a settlement with its insurance companies that could
fast-track a resolution of its bankruptcy case. But attorneys for
sex-abuse victims are objecting, saying those who have claims
against the church deserve a voice in any settlement talks.
According to the AP, the archdiocese has asked a judge to stay its
lawsuit against insurance companies for 60 days. The move that
would allow the parties to enter mediation. Presumably it would
also put on hold the judge's pending decision on whether the
insurers are liable for sex-abuse claims against the church, the
Milwaukee Journal Sentinel reported, the AP relates.
According to the report, the victims' attorneys oppose the stay
because they want the case to keep moving forward. They're also
concerned that if the victims are denied input, the archdiocese
and insurance companies could agree on an unreasonably low
settlement figure.
About Archdiocese of Milwaukee
The Diocese of Milwaukee was established on Nov. 28, 1843, and
was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius
IX. The region served by the Archdiocese consists of 4,758 square
miles in southeast Wisconsin which includes counties Dodge, Fond
du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth,
Washington and Waukesha. There are 657,519 registered Catholics
in the Region.
The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for
Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No.
11-20059) on Jan. 4, 2011, to address claims over sexual abuse
by priests on minors.
The Archdiocese became at least the eighth Roman Catholic diocese
in the U.S. to file for bankruptcy to settle claims from current
and former parishioners who say they were sexually molested by
priests.
Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The
Official Committee of Unsecured Creditors in the bankruptcy case
has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and
Howard, Solochek & Weber, S.C., as its local counsel.
The Archdiocese estimated assets and debts of $10 million to
$50 million in its Chapter 11 petition.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
AUGUSTINE PENA III: Calif. Court Affirms Chapter 7 Conversion
-------------------------------------------------------------
Senior District Judge Anthony W. Ishii affirmed a bankruptcy court
order converting the Chapter 11 case of Augustine Pena, III, to
Chapter 7. On April 9, 2012, Mr. Pena filed a petition for relief
under Chapter 11 of the Bankruptcy Code. He was in the business
of property management. He owned 17 residential properties and 12
parcels of property in Kings, Tulare, Orange, and Los Angeles
Counties. Some were vacant and some were "deemed nuisances,"
requiring repair. Trudi Manfredo was appointed Chapter 7 Trustee.
A copy of the District Court's Sept. 6, 2013 order is available at
http://is.gd/KCBB1jfrom Leagle.com.
Augustine Pena, III, is represented by Vincent A. Gorski, Esq. --
vgorski@TheGorskiFirm.com -- at The Gorski Firm, PLC.
Trudi Manfredo is represented by:
Thomas Harold Armstrong, Esq.
LAW OFFICE OF THOMAS H. ARMSTRONG
5250 N. Palm Ave. Suite # 224
Fresno, CA 93704
Tel: 559-447-4700
East West Bank, a creditor, is represented by:
Dane Wyatt Exnowski, Esq.
MALCOLM CISNEROS, A LAW CORP
2112 Business Center Drive, Second Floor
Irvine, CA 92612
Tel: (949) 252-9400
Fax: (949) 252-1032
E-mail: info@mclaw.org
AURA SYSTEMS: Robert Kopple Held 30.1% Equity Stake at Dec. 27
--------------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Robert C. Kopple disclosed that as of Dec. 27, 2012,
he beneficially owned 25,349,089 shares of common stock of Aura
Systems, Inc., representing 30.1 percent of the shares
outstanding.
In August 2013, the Mr. Kopple purchased 1,852,623 Shares on the
open market.
On Aug. 19, 2013, the Company issued 500,000 Shares and 7-year
warrants to purchase an additional 800,000 Shares to E.L. II in
consideration of Robert C. Kopple agreeing to serve on the Board
of Directors of the Company. The warrants are exercisable at any
time until July 3, 2020. As of Sept. 11, 2013, the Board of
Directors of the Company has not appointed Robert C. Kopple as a
director.
A copy of the regulatory filing is available for free at:
http://is.gd/RD12ro
About Aura Systems
El Segundo, Calif.-based Aura Systems, Inc., designs, assembles
and sells the AuraGen(R), its patented mobile power generator that
uses a prime mover such as the engine of a vehicle to generate
power.
The Company's balance sheet at May 31, 2013, showed $2.9 million
in total assets, $25.2 million in total liabilities, and a
stockholders' deficit of $22.3 million.
The Company said that as a result of its losses from operations,
there is substantial doubt about the Company' ability to continue
as a going concern.
As reported in the TCR on June 18, 2013, Kabani & Company, Inc.,
in Los Angeles, California, issued a "going concern" qualification
on the consolidated financial statements for the year ended Feb.
28, 2013. The independent auditors noted that the Company has
historically incurred substantial losses from operations, and the
Company may not have sufficient working capital or outside
financing available to meet its planned operating activities over
the next 12 months. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
BI-LO LLC: S&P Assigns 'CCC+' Rating to $400MM Unsecured Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'B' corporate credit rating on Jacksonville, Fla.-based BI-LO
LLC. The outlook is stable.
S&P also assigned a 'CCC+' issue-level rating to the $400 million
unsecured notes issued at BI-LO Holdings Finance LLC (holdco) and
BI-LO Holding Finance Inc. These holdco notes have a '6' recovery
rating, which indicates S&P's expectation of negligible (0-10%)
recovery of principal in the event of default. S&P expects the
company will use the proceeds to pay a dividend to the company's
equity holders.
"The ratings on BI-LO reflect our view of the company's
participation in the intensely competitive supermarket industry,
and the relatively weak -- albeit improved -- operating metrics
compared with many industry peers," said Standard & Poor's credit
analyst Charles Pinson-Rose. "The ratings also incorporate our
view of the company's financial policies as a result of its
private equity sponsor."
The rating outlook on BI-LO LLC is stable. This incorporates
S&P's expectation that the company will improve credit metrics,
driven by profit growth, through 2013.
BIOLIFE SOLUTIONS: John Baust Held 5% Equity Stake at July 2
------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, John G. Baust, Ph.D., disclosed that as of
July 2, 2013, he beneficially owned 3,694,722 shares of common
stock of BioLife Solutions, Inc., representing 5.28 percent of the
shares outstanding. A copy of the regulatory filing is available
for free at http://is.gd/rdWvcM
About BioLife Solutions
Bothell, Washington-based BioLife Solutions, Inc., develops and
markets patented hypothermic storage and cryo-preservation
solutions for cells, tissues, and organs, and provides contracted
research and development and consulting services related to
optimization of biopreservation processes and protocols.
BioLife Solutions disclosed a net loss of $1.65 million in 2012,
as compared with a net loss of $1.95 million in 2011. The
Company's balance sheet at June 30, 2013, showed $3.43 million
in total assets, $16.09 million in total liabilities and a $12.66
million total shareholders' deficiency.
BOART LONGYEAR: New $300MM Notes Offer Gets Moody's B1 Rating
-------------------------------------------------------------
Moody's Investors Service assigned ratings to the proposed $300
million notes due 2018 being offered by Boart Longyear Management
Pty Limited, a subsidiary of Boart Longyear Limited; including a
B1 rating on the secured portion of the notes and a B3 rating on
the unsecured portion. These new ratings along with Boart's
existing B2 corporate family rating, B2-PD probability of default
rating and B3 rating on its outstanding senior unsecured notes
remain under review for downgrade. Moody's expects to confirm the
ratings at the current level if the offering is executed as
expected. The SGL-4 Speculative Grade Liquidity rating is
unchanged.
The notes will consist of a $260 million secured portion and a $40
million unsecured portion. The secured and unsecured notes
comprising each security are only transferable as a single unit
and do not separate into the two tranches, except upon occurrence
of certain limited events such as a default or an asset sale. The
secured portion of the notes will have first priority security
interest in certain fixed assets of the issuer and its guarantor
subsidiaries, and second priority security interest in working
capital assets collateralizing the amended revolver. Moody's
expects loss given default (LGD) for the instrument, on a blended
basis, to be potentially moderate given the unsecured portion of
the unit as well as the uncertainty with respect to the recovery
of the pledged assets, many of which are located overseas. Moody's
assigned a B1 rating (LGD 3, 39%) to the secured tranche and a B3
rating (LGD 5, 70%) to the unsecured tranche to reflect the
relative expected loss upon a default scenario. The company
intends to use the net proceeds to repay substantially all
borrowings under its existing revolving credit facility ($305
million as of June 30, 2013).
Simultaneous with the offering, the company has announced that it
is pursuing an amendment to its revolver. The amendment will,
among other proposed features, reduce the revolver size to $150
million from $450 million, provide a first priority security
interest in working capital assets (including accounts receivables
and inventory) of the issuer and its guarantor subsidiaries, and
second priority interest in the secured notes' collateral,
eliminate the maximum debt-to-EBITDA covenant, adjust the minimum
interest coverage ratio and add a minimum liquidity covenant
(unrestricted cash plus revolver availability) of $30 million and
a minimum asset coverage ratio covenant.
Ratings Rationale:
The B2 Corporate Family Rating reflects the contraction in the
company's core business evidenced by the pull back in exploration
and drilling expenditures as well as new capital investments by
Boart's principal end user market - the mining industry. This is a
result of the downward trend through the first half of 2013 in
metal prices, particularly for gold and copper. These metals
accounted for roughly 42% and 20% of Boart's revenues,
respectively, during the first half of 2013. The corporate family
rating recognizes the company's position as a leading global
supplier of drilling services and complementary drilling products,
principally to the mineral mining industry but also to the
environmental and infrastructure end markets.
Other rating considerations include the company's relatively small
size, and its need to invest in drilling equipment and inventory
in more robust market conditions.
Although Boart's performance through the first half of 2013 was
reasonably in line with expectations, the risk of further downward
pressure on rig utilization and backlog levels remains elevated,
likely resulting in a weaker second half of 2013 and continued
pressure on 2014 performance . Moody's anticipates that debt-to-
EBITDA will further deteriorate over the next 12 to 18 months and
will likely exceed 7.0 times while (EBITDA minus CAPEX)-to-
interest will remain below 1.0 time, respectively. Downside risk
remains given the ongoing weakness in metal prices and likely
further rationalization by the mining industry on expenditure
levels over the intermediate term.
The rating also contemplates that the company will be able to
achieve cost savings to mitigate a portion of the negative impact
on performance from the retreat in drilling activity with its
implementation of announced cost reductions, including work force
reductions, and rationalization of planned CAPEX. The rating also
anticipates that working capital conversion, as high inventory
levels at year-end 2012 are liquidated throughout 2013, along with
the paring of CAPEX, will substantially reduce cash consumption
and reliance on additional borrowings under the company's
revolving credit facility.
The SGL-4 speculative grade liquidity rating reflects the
expectation of more limited internal cash flow generation to
support the business, the potential for increased contingent
liabilities such as letters of credit to support security
requirements while Boart appeals the assessments of the Canadian
Revenue Agency, and the decline in cash balances ($34 million at
June 30, 2013 from $90 million at December 31, 2012) due to the
contraction in financial performance and substantial historical
CAPEX and working capital buildup.
The review for downgrade will focus on the successful conclusion
of the proposed notes offering and proposed amendments to the
revolver. Should the transactions be completed under the terms
currently proposed, the corporate family, probability of default
and instrument ratings will likely be confirmed at the current
levels and the SGL rating will likely be changed to a SGL-3.
Downward pressure could result should the company's fundamentals,
operating performance and liquidity position further deteriorate
such that debt-to-EBITDA will likely remain above 6.5 times over a
sustained period.
Given the weakness expected in Boart's key markets over the next
12 to 18 months, a rating upgrade is unlikely. The rating or
outlook could benefit from a stabilization in the company's end-
market fundamentals, driving improved profitability free cash flow
generation and leverage approaching 6.0 times.
The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Headquartered in South Jordan, Utah, Boart Longyear is
incorporated in Australia and listed on the Australian Securities
Exchange Limited. The company provides drilling services, and
complimentary drilling products and equipment principally for the
mining and metals industries. Revenues for the twelve months ended
June 30, 2013 were $1.6 billion. Revenues in fiscal 2012 were $2
billion.
BOART LONGYEAR: S&P Lowers Corp. Credit Rating to B; Outlook Neg.
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Salt Lake City-based Boart Longyear
Ltd. to 'B' from 'B+'. The rating outlook is negative.
S&P also lowered its issue-level rating on Boart Longyear's
existing $300 million senior unsecured notes to 'B', the same as
the corporate credit rating, from 'B+'. S&P revised the recovery
rating on the notes to '4', indicating its expectation for average
(30% to 50%) recovery in the event of payment default, from '3'.
Concurrently, S&P assigned its 'B+' (one notch higher than the
corporate credit rating) issue-level rating and '2' recovery
rating to the company's proposed $300 million senior units due
2018. The '2' recovery rating indicates S&P's expectation for
substantial (70% to 90%) recovery in the event of payment default.
The units consist of a $260 million senior secured component and a
$40 million senior unsecured component.
"The negative outlook reflects our view that we expect credit
measures to remain weak at least through 2014, reflecting weakness
in Boart Longyear's end markets, with debt to EBITDA in excess of
6x and FFO to debt of less than 10%. Furthermore, liquidity could
become less than adequate if demand and prices for Boart
Longyear's products and services deteriorate further," said
Standard & Poor's Megan Johnston.
S&P could lower the rating if it deems Boart Longyear's liquidity
to be less than adequate. This could occur if the company fails
to rationalize its inventories, causing free cash flow to turn
negative, or if sustained losses cause the company to borrow on
its revolving credit facility, leading to reduced headroom on its
covenants.
S&P could revise the outlook to stable if it sees demand and
prices for Boart Longyear's products and services begin to
improve, which would lead to an improvement in operating
performance and liquidity for Boart Longyear and a decrease in
leverage. S&P would revise the outlook to stable if Boart
Longyear were able to maintain leverage of less than 5x.
BON-TON STORES: Files Form 10-Q, Incurs $37.3-Mil. Net Loss in Q2
-----------------------------------------------------------------
The Bon-Ton Stores, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $37.32 million on $557.14 million of net sales for
the 13 weeks ended Aug. 3, 2013, as compared with a net loss of
$45.03 million on $594.85 million of net sales for the 13 weeks
ended July 28, 2012.
For the 26 weeks ended Aug. 3, 2013, the Company incurred a net
loss of $63.96 million on $1.20 billion of net sales as compared
with a net loss of $85.81 million on $1.23 billion of net sales
for the 26 weeks ended July 28, 2012.
As of Aug. 3, 2013, the Company had $1.58 billion in total assets,
$1.53 billion in total liabilities and $49.70 million in total
shareholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/dnLxfz
About Bon-Ton Stores
The Bon-Ton Stores, Inc., with corporate headquarters in York,
Pennsylvania and Milwaukee, Wisconsin, operates 273 department
stores, which includes 11 furniture galleries, in 24 states in the
Northeast, Midwest and upper Great Plains under the Bon-Ton,
Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman,
Herberger's and Younkers nameplates and, in the Detroit, Michigan
area, under the Parisian nameplate.
Bon-Ton Stores disclosed a net loss of $21.55 million for the year
ended Feb. 2, 2013, as compared with a net loss of $12.12 million
for the year ended Jan. 28, 2012.
* * *
As reported by the TCR on May 15, 2013, Moody's Investors Service
upgraded The Bon-Ton Stores, Inc.'s Corporate Family Rating to B3
from Caa1 and its Probability of Default Rating to B3-PD from
Caa1-PD.
"The upgrade of Bon-Ton's Corporate Family Rating considers the
company's ability to drive modest same store sales growth as well
as operating margin expansion beginning in the second half of 2012
and that these positive trends have continued, with the company
reporting that its same store were positive, and EBITDA margins
expanded, in the first fiscal quarter of 2013," said Moody's Vice
President Scott Tuhy.
As reported by the TCR on May 17, 2013, Standard & Poor's Ratings
Services affirmed the 'B-' corporate credit rating on The Bon-Ton
Stores Inc.
CAESARS ENTERTAINMENT: Bank Debt Trades at 9% Off
-------------------------------------------------
Participations in a syndicated loan under which Caesars
Entertainment Inc. is a borrower traded in the secondary market at
90.63 cents-on-the-dollar during the week ended Friday,
September 13, 2013 according to data compiled by LSTA/Thomson
Reuters MTM Pricing and reported in The Wall Street Journal. This
represents an increase of 0.97 percentage points from the previous
week, The Journal relates. Caesars Entertainment Inc. pays 525
basis points above LIBOR to borrow under the facility. The bank
loan matures on Jan. 1, 2018. The bank debt carries Moody's B3
rating and Standard & Poor's B- rating. The loan is one of the
biggest gainers and losers among 249 widely quoted syndicated
loans with five or more bids in secondary trading for the week
ended Friday.
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.
-- http://www.caesars.com/-- is one of the world's largest casino
companies, with annual revenue of $4.2 billion, 20 properties on
three continents, more than 25,000 hotel rooms, two million square
feet of casino space and 50,000 employees. Caesars casino resorts
operate under the Caesars, Bally's, Flamingo, Grand Casinos,
Hilton and Paris brand names. The Company has its corporate
headquarters in Las Vegas.
Harrah's announced its re-branding to Caesar's on mid-November
2010.
The Company incurred a net loss of $1.49 billion on $8.58 billion
of net revenues for the year ended Dec. 31, 2012, as compared with
a net loss of $666.70 million on $8.57 billion of net revenues
during the prior year. As of June 30, 2013, the Company had
$26.84 billion in total assets, $27.58 billion in total
liabilities and a $738.1 million total deficit.
* * *
Caesars Entertainment carries a 'CCC' long-term issuer default
rating, with negative outlook, from Fitch and a 'Caa1' corporate
family rating with negative outlook from Moody's Investors
Service.
As reported in the TCR on Feb. 5, 2013, Moody's Investors Service
lowered the Speculative Grade Liquidity rating of Caesars
Entertainment Corporation to SGL-3 from SGL-2, reflecting
declining revolver availability and Moody's concerns that Caesars'
earnings and cash flow will remain under pressure causing the
company's negative cash flow to worsen.
In the May 7, 2013, edition of the TCR, Standard & Poor's Ratings
Services said that it lowered its corporate credit ratings on Las
Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned
subsidiary Caesars Entertainment Operating Co. (CEOC) to 'CCC+'
from 'B-'.
"The downgrade reflects weaker-than-expected operating performance
in the first quarter, and our view that Caesars' capital structure
may be unsustainable over the next two years based on our EBITDA
forecast for the company," said Standard & Poor's credit analyst
Melissa Long.
CALCEUS ACQUISITION: Moody's Keeps Ratings at B2; Outlook Stable
----------------------------------------------------------------
Moody's Investors Service has affirmed Calceus Acquisition, Inc.'s
(the parent company of Cole Haan) B2 Corporate Family Rating as
well as the B2 rating assigned to the company's senior secured
term loan due 2020 following the company's announcement of a debt
financed dividend. The rating outlook remains stable.
The following ratings were affirmed:
Calceus Acquisition Inc.:
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
Secured Term Loan due 2020 at B2 (LGD 4, 56% from LGD 4, 57%)
Ratings Rationale:
The affirmation of the B2 CFR reflects the proposed refinancing of
the existing senior secured term loan with a new $350 million
senior secured term loan, proceeds of which will also be used to
fund a distribution to existing shareholders. The proposed
distribution ($58.7 million) represents approximately 21% of the
original equity invested in the company in January of 2013
following the acquisition of the company from Nike (A1/stable).
Cole Haan has shown positive performance under new ownership and
the proposed transaction will return leverage to near 6 times
debt/EBITDA, comparable to when the company was first rated in
January of 2013. This transaction however signals a more
aggressive financial policy for the company than initially
expected.
The stable outlook reflects progress that the company has made
managing the transition from a subsidiary of Nike to a stand-alone
company. It also reflects Moody's expectations that the company
will continue to achieve its cost savings goals while modestly
growing revenue and maintaining high gross margins. The stable
outlook also reflects Moody's expectations that debt/EBITDA should
approach the mid-five times range over the next 12 to 18 months.
The B2 rating assigned to the senior secured term loan reflects
its second lien on the company's accounts receivable and inventory
(the company's $100 million asset based revolver will have a first
lien on accounts receivable and inventory) and first lien on
substantially all other assets of the company.
In view of the continued execution risks associated with its
transition to a stand-alone company, high leverage, and more
aggressive financial policies ratings are unlikely to be upgraded
in the near term. Over time ratings could be upgraded if the
company achieves meaningful operating margin expansion indicating
a successful transition to a stand- alone company, while also
maintaining positive revenue growth. Further diversification by
product category (e.g. -- expanding sales of accessories and
handbags) and distribution (e.g. -- continued international
expansion) would also be a positive. Quantitatively, ratings could
be upgraded if debt/EBITDA was sustained below 5 times while
maintaining a good overall liquidity profile.
Ratings could be lowered if the company experienced execution
issues in the transition to a stand-alone company. This would be
evidenced if the company was unable to achieve improvement in
operating margins within 12-18 months following the acquisition.
Ratings could be lowered if recent positive trends in revenues
were to reverse, financial policy was to become even more
aggressive or if the company's good liquidity profile were to
erode. Quantitatively ratings could be lowered if Moody's expected
leverage to remain above 6 times for an extended period.
Headquartered in New York, NY, Cole Haan is a designer and
retailer of men's and women's footwear, handbags, and accessories.
LTM May 2013 revenues were approximately $577 million.
The principal methodology used in this rating was the Global
Apparel Companies Industry Methodology published in May 2013.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
CARL'S PATIO: Pride Family Brands May Proceed With Deposition
-------------------------------------------------------------
In the case, Pride Family Brands, Inc., Plaintiff, v. Carls Patio,
Inc., Carls Patio West, Inc., Woodard-CM, LLC and Scott Coogan,
Defendants, Case No. 12-21783 (S.D. Fla.), Magistrate Judge Andrea
M. Simonton denied Carl's Patio Inc.'s Motion for Protective Order
From Plaintiff's Subpoena for Deposition Directed to Officer of
Carl's Patio Inc. In Violation of Automatic Stay. The Plaintiff's
Motion to Compel Witness, Motion for Sanctions and Motion for Fees
and Costs is granted, in part. The Plaintiff may take the
deposition of Paul Otowchits in his individual capacity but any
material obtained from or statements made during that deposition
are not binding on the Defendants Carl's Patio, Inc., and Carl's
Patios West, Inc., in any proceeding involving the Plaintiff's
instant claims against those debtors. The Parties were to arrange
to depose Mr. Otowchits at a mutually agreeable place and time on
or before Sept. 10, 2013. The Plaintiff's request for sanctions
is denied.
A copy of the Court's Aug. 29, 2013 Order is available at
http://is.gd/jb775dfrom Leagle.com.
Pride Family Brands, Inc., is represented by Yale Lance Galanter.
Carls Patio, Inc., is represented by James Alexander Stepan, Esq.,
Jonathan Perlman, Esq., and Andrew J. Daire, Esq., at Genovese
Joblove & Battista, P.A.
Oliver Alan Ruiz, Esq., and Benjamin Michael Hanrahan, Esq., at
Malloy & Malloy, P.L., represent defendants Scott Coogan; and
Woodard-CM, LLC.
About Carl's Patio
Founded in 1993, Carl's Patio claims to be a leading retailer of
upscale outdoor furniture and accessories. The company operates
10 retail locations and a warehouse in South Florida. The company
had 68 employees. The company leases all its locations and does
not own any real property.
Carl's Patio, Inc. and its affiliates sought Chapter 11 protection
(Bankr. D. Del. 13-10102) on Jan. 21, 2013, and immediately
conveyed plans to sell the business to Weinberg Capital, absent
higher and better offers. Bayard, P.A., represents the Debtor in
its restructuring efforts. BGA Management, LLC, doing business as
Alliance Management, serves as financial advisor, and Epiq
Bankruptcy Solutions LLC serves as claims and noticing agent.
Carl's Patio disclosed $6,228,725 in assets and $13,054,583 in
liabilities as of the Chapter 11 filing. The Debtor owes $2.19
million on a secured revolver, and $3.01 million on a term loan
from Fifth Third. The Debtor also has $600,000 of subordinated
debt.
The Official Committee of Unsecured Creditors filed a Plan of
Liquidation for the Debtors in July 2013. The panel is
represented Cross & Simon, LLC's Christopher P. Simon, Esq. and
Kevin S. Mann, Esq., as well as Platzer, Swergold, Karlin, Levine,
Goldberg & Jaslow, LLP's Henry G. Swergold, Esq. and Clifford A.
Katz, Esq. CBIZ Accounting Tax and Advisory of New York, LLC and
CBIZ, Inc., are the panel's financial advisors.
Judge Gross approved the Second Amended Disclosure Statement filed
by the Committee in support of its Second Amended Liquidation Plan
for CP Liquidating, Inc., et al., fka Carl's Patio, Inc., et al.
A confirmation hearing on the Plan is scheduled to be convened on
Oct. 15, 2013 at 2:00 p.m. Prevailing Eastern Time in Delaware.
Formal written objections to the confirmation may be filed no
later than 4:00 p.m on Oct. 8.
As reported by The Troubled Company Reporter, the Second Amended
Plan provides for up to 4.7% recovery on allowed claims.
Moreover, the Amended Plan embodies a Stipulation of Settlement
negotiated among the Debtors, the Creditors Committee, the Buyer
of substantially all of the Debtors' assets and the Debtors'
Lender. The Settlement provides for a pool of three particular
"assets" to be set aside fro the benefit of unsecured claims and
the administrative claims of the Committee's professionals -- (1)
cash totaling $140,000, consisting of the sum of $25,000 received
from the Lender and the sum of $115,000 received from the Buyer;
(2) all claims that may be asserted against the Debtors'
directors' and officers' liability insurance policy and any other
insurance policies; and (3) all avoidance action claims. A
full-text copy of the Second Amended Disclosure Statement dated
Aug. 30, 2013, is available for free at:
http://bankrupt.com/misc/CARLSPATIO_2ndAmdDSAug30.PDF
CENTENE CORP: A.M. Best Affirms 'bb' Issuer Credit Rating
---------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating (FSR) of
B++ (Good) and issuer credit ratings (ICR) of "bbb" of Absolute
Total Care, Inc. (Columbia, SC), Buckeye Community Health Plan,
Inc. (Columbus, OH), Coordinated Care Corporation (Indianapolis,
IN), Managed Health Services Insurance Corporation, Bankers
Reserve Life Insurance Company of Wisconsin (both domiciled in
Milwaukee, WI), Peach State Health Plan, Inc. (Smyrna, GA),
Sunshine State Health Plan, Inc. (Sunrise, FL) and Superior
HealthPlan, Inc. (Austin, TX). Additionally, A.M. Best has
affirmed the ICR of "bb" and debt rating of "bb" on $425 million
5.75% senior unsecured notes, due 2017 of the parent, Centene
Corporation (Centene) (Delaware). The outlook for all the above
ratings is stable.
A.M. Best also has downgraded the ICR to "bbb" from "bbb+" and
affirmed the FSR of B++ (Good) of Centene's subsidiary, Celtic
Insurance Company (Celtic) (Chicago, IL). The outlook for the ICR
has been revised to stable from negative, while the outlook for
the FSR is stable.
Concurrently, A.M. Best has withdrawn the ratings for all Centene
entities as the company has requested to no longer participate in
A.M. Best's interactive rating process.
The ratings for Centene and its subsidiaries reflect strong
revenue growth and improvement in operating earnings. Premium
growth has been augmented through Medicaid expansion in several
markets over the medium term, and rate increases have added to the
favorable trend in net premiums written as well as net gains
through six months ended June 30, 2013.
Partially offsetting these favorable rating attributes are
Centene's aggregate risk-based capital levels that have declined
over the medium term; however, Centene has historically provided
capital support to its subsidiaries, when needed. Furthermore,
the company primarily is engaged in the Medicaid market, which
poses concentration risks and is subject to highly competitive
market challenges.
CENTRAL ILLINOIS ENERGY: Dist. Court Affirms Froehling Decision
---------------------------------------------------------------
Senior District Judge Joe Billy McDade affirmed the determination
of the Bankruptcy Court for the Central District of Illinois that
the right to draw on a letter of credit is property of a
bankruptcy estate and that Michael E. Evans and Froehling, Weber &
Schell, LLP, formerly doing business as Froehling, Weber, Evans &
Schell, LLP, therefore did not proximately cause damages to Gary
T. Rafool, the Trustee for Central Illinois Energy, L.L.C., by
failing to cause the Debtor to draw upon the letters of credit
prior to the bankruptcy filing. Judge McDade agrees with the
Bankruptcy Court that the letters of credit were not contracts
between the Debtor and the issuing institution, that they were not
executory in nature, and that they were not a financial
accommodation to or for the benefit of the Debtor. Judge McDade
say 11 U.S.C. Sec. 365(c)(2) did not prevent the bankruptcy estate
from drawing upon the letters of credit after the bankruptcy
filing. Mr. Rafool had appealed the Bankruptcy Court's decision.
As reported by the Troubled Company Reporter on Nov. 27, 2012,
Bankruptcy Judge Thomas L. Perkins granted a motion for summary
judgment filed by defendants in a legal malpractice lawsuit by Mr.
Rafool. The Trustee alleges Mr. Evans and Froehling Weber as
"general counsel" to the Debtor, owed it a duty to determine the
effect that the filing of bankruptcy would have upon the Debtor's
right to call $8.7 million in pre-bankruptcy letters of credit to
be issued by Calyon Credit Agricole CIB, and to counsel the Debtor
regarding necessary actions to be taken to preserve its right to
collect the sums payable to the Debtor pursuant to those letters
of credit. The Defendants contend the Debtor's right to draw on
the letters of credit was not affected in any adverse way by the
bankruptcy filing.
The case before the District Court is GARY T. RAFOOL, not
individually but as Trustee for Central Illinois Energy, L.L.C.,
Plaintiff/Appellant, v. MICHAEL E. EVANS and FROEHLING, WEBER &
SCHELL, LLP, formerly doing business as FROEHLING, WEBER, EVANS &
SCHELL, LLP, Defendants/Appellees, Case No. 12-cv-1352 (C.D.
Ill.). A copy of the Court's Sept. 11 Order & Opinion is
available at http://is.gd/UrEnlcfrom Leagle.com.
Mr. Rafool is represented by:
Alan L. Fulkerson, Esq.
Stephen Alan Fulkerson, Esq.
RIORDAN FULKERSON HUPERT & COLEMAN
30 North LaSalle Street, Suite 2630
Chicago, IL 60602
Telephone: (312) 346-4740
Facsimile: (312) 346-1168
Michael E. Evans is represented by Kirk W. Laudeman, Esq. --
laudeman@dnmpc.com -- at Drake Narup & Mead PC. Froehling Weber &
Schell LLP is represented by Drake Narup & Mead.
About Central Illinois Energy
and Central Illinois Energy Cooperative
Central Illinois Energy Cooperative, an Illinois agricultural
cooperative comprised of Central Illinois farmers, was formed in
2001, for the purpose of constructing, owning and operating a
grain handling facility and administration building. The
Cooperative owned a controlling interest in Central Illinois
Holding Company, LLC, the holding company for Central Illinois
Energy, LLC -- http://www.centralillinoisenergy.com/-- an entity
formed in March 2004, for the purpose of constructing, owning and
operating an ethanol production facility and waste-coal fired
power generating plant. The grain handling facility being
constructed by the Cooperative was located adjacent to the ethanol
plant being constructed by CIE. The farmers who were members of
the Cooperative, hoped to sell corn to CIE for processing into
ethanol and other byproducts.
The two construction projects, separately financed, were both in
serious financial trouble by June 2007. The entire project failed
within six months thereafter.
Canton, Illinois-based Central Illinois Energy LLC --
http://www.centralillinoisenergy.com/-- filed for Chapter 11
protection (Bankr. C.D. Ill. Case No 07-82817) on Dec. 13, 2007,
and Barry M. Barash, Esq., at Barash & Everett, LLC, represented
CIE. The U.S. Trustee for Region 10 was unable to appoint an
Official Committee of Unsecured Creditors in the case. When CIE
filed for protection from its creditors, it estimated assets
between $1 million to $100 million, and more than $100 million in
liabilities. Following a sale of substantially all of CIE's
assets for $80 million, the U.S. Trustee moved to convert the
case. The Bankruptcy Court ordered the conversion of the Chapter
11 case to a Chapter 7 liquidation proceeding on Aug. 4, 2008.
A Chapter 11 involuntary petition was filed against the
Cooperative (Bankr. C.D. Ill. Case No. 09-81409) on May 1, 2009.
HWS Energy Partners, LLC, the petitioning creditor, was
represented by Douglas S. Slayton, Esq. The Cooperative did not
file an answer and an order for relief was entered on June 18,
2009. The case was converted to Chapter 7 on July 16, 2009, on
the motion of the U.S. Trustee. Richard E. Barber was appointed
as Chapter 7 trustee.
CHAIT PROPERTIES: Court Adopts People's United Bank's Valuation
---------------------------------------------------------------
People's United Bank, FSB -- seeking to determine the value of its
claim based on a note and mortgage secured by the real property
owned by Chait Properties, Inc., located at 60 Front Street, East
Rockaway, New York -- argues that 60 Front Street is presently
worth either $6.3 million under an income capitalization approach
or $6.2 million using a sales comparison approach and will be
worth either $6.8 million or $6.7 million, respectively, once
stabilized. In contrast, Chait Properties contends that 60 Front
Street is worth only $4.75 million in its present condition and
will be worth no more than $5,149,600 within nine-to-twelve
months.
According to the Debtor and People's Bank, the differences in
these values is attributable to only two factors: (1) the vacancy
rate, which People's Bank projects will be 3% (1 out of 43
apartments) but which the Debtor assumes will be 12% (5 out of 43)
once 60 Front Street is stabilized, and (2) the capitalization
rate, which People's Bank calculates to be approximately 5.75% but
which the Debtor estimates is 6.5%.
In a Sept. 10, 2013 Decision available at http://is.gd/cLQmIpfrom
Leagle.com, Bankruptcy Judge Robert E. Grossman adopts People's
Bank's valuation of 60 Front Street in the amount of $6.3 million,
assuming a vacancy rate of 3% and a cap rate of 6%.
On Jan. 25, 2012, People's Bank filed Proof of Claim Number 3-1.
On April 9, 2012, the Debtor filed a Disclosure Statement and Plan
of Reorganization. In the Disclosure Statement, the Debtor notes
that People's Bank filed a secured claim in the amount of
$6,449,212.95, plus charges, but disputes People's Bank's
valuation of the collateral and thus the value of the secured
portion of People's Bank's claim as filed. The disclosure
statement values 60 Front Street at only $5.1 million, thus
proposing to reduce the secured potion of People's Bank's claim.
People's Bank filed an amended proof, number 3-2, on April 23,
2012. With this amended proof, People's Bank included an appraisal
from All Island Valuation Services that valued the Subject
Property at $4.525 using the sales comparison approach and $4.35
million employing the income capitalization approach.
On April 1, 2013, People's Bank filed the Valuation Motion before
the Court.
Thereafter, the Debtor and People's Bank hired competing experts
to value 60 Front Street and exchanged the resulting appraisals.
On July 12, 2013, the Debtor filed a modified liquidation analysis
that set the Fair Market Value of 60 Front Street at $5.5 million.
On July 15, 2013, People's Bank filed a second amended proof,
number 3-3, asserting that the value of 60 Front Street is
presently $6.3 million and is projected to be $6.8 million under
an income capitalization approach. On August 26, 2013, the Court
held an evidentiary hearing on valuation in which the Parties'
experts testified. At the conclusion of this hearing, the question
of 60 Front Street's value was submitted to the Court.
The Debtor hired Mitchell Greenspan to prepare its valuation. Mr.
Greenspan is the President of Realco Group Asset Management, Ltd.,
a property management leasing and brokerage corporation with its
principal location in Garden City, New York; he has been a
licensed real estate broker for 23 years and manages four
properties in New York's Nassau and Suffolk Counties.
People's Bank's expert, CBRE, Inc., is a commercial real estate
services provider. Kevin Broderick -- Kevin.Broderick2@cbre.com
-- First Vice President in CBRE's New York Valuation & Advisory
group, performed the inspection and wrote CBRE's appraisal.
Chait Properties, Inc., based in Merrick, New York, filed for
Chapter 11 bankruptcy (Bankr. E.D.N.Y. Case No. 11-78236) in
Central Islip on Nov. 21, 2011. Judge Robert E. Grossman oversees
the case. Robert R. Leinwand, Esq. -- rrl@robinsonbrog.com -- at
Robinson Brog Leinwand Greene et al., serves as the Debtor's
counsel. In its petition, the Debtor estimated $1 million to
$10 million in both assets and debts. A list of the company's 20
largest unsecured creditors is available for free at
http://bankrupt.com/misc/nyeb11-78236.pdf The petition was signed
by David Chait, president.
CHARLES A. GROGAN: Ore. Court to Confirm Xmas Tree Farmers' Plan
----------------------------------------------------------------
Chief Bankruptcy Judge Frank R. Alley, III, in Oregon indicated he
will confirm the Third Amended Plan of Reorganization submitted by
Charles A. Grogan and Sarah A. Grogan, who are Christmas tree
farmers in the state.
The Grogans' Chapter 11 cases have been pending since Oct. 31,
2011. On April 26, 2013, the Court denied confirmation of the
Debtors' Second Amended Plan. After denying confirmation, the
Court gave the Debtors' largest secured creditor, Harvest Capital
Company, an opportunity to file its own plan, which Harvest
declined. The Court then held a show cause hearing regarding
dismissal or conversion. The Court took no action on the show
cause and gave the Debtors until July 19, 2013, to file a
supplement to their previously filed amended disclosure statement
and a further amended plan.
The Debtors timely filed the Plan and Supplement to their Amended
Disclosure Statement. The Court conditionally approved the
Disclosure Statement, and on Aug. 28, 2013, conducted a combined
hearing on the Plan and Disclosure Statement.
The Grogans' Plan significantly varies earlier plans in that it
proposes to liquidate most of the Christmas tree farm. The
Debtors, with their son Casey's assistance, will continue to
operate. However, they will also sell off six major parcels of
land, leaving them greatly reduced holdings. Some sales will
include trees on the stump, while others will allow the Debtors to
harvest the trees through leasebacks or other arrangements. There
is currently a pending sale for three parcels, namely, Markin (71
acres), Rock Pit (103 acres), and Canyon (440 of 600 acres). The
sale is set to close October 1, 2013. Prior to the confirmation
hearing, the Debtors moved to sell these parcels free and clear of
liens. Because the sale coincided with confirmation, the Court
ruled that it would consider the sale within the context of
confirmation.
Because they are downsizing operations, the Debtors propose a
reduced planting schedule, mainly to assure a crop on the parcels
remaining after the planned liquidation. However to garner
sufficient proceeds to make their plan payments, their harvest
schedule remains robust, averaging slightly over 115,000 trees per
year. General unsecured creditors are to receive a 20% dividend on
March 31, 2019. The Debtors' counsel has agreed to defer payment
of its fees (now approaching $575,000) until after Harvest is
paid, except for those fees allowed under 11 U.S.C. Sec. 506(c)
and those paid out of non-cash collateral.
Under the Plan, Harvest will receive a new note amortized over 25
years at 6.5% interest with a balloon payment on or before March
31, 2019. The Debtors will make annual payments on March 31st of
each year, with the first payment interest-only. In addition, the
Debtors will make lump sum payments of $200,000, $400,000, and
$400,000 on March 31, 2016, 2017, and 2018 respectively. Further,
the Debtor will periodically pay the net proceeds of the above-
described real property sales as well as proceeds from sales of
merchantable timber. If the real properties aren't sold by June 1,
2016, Harvest may elect to foreclose thereon. The Plan preserves
Harvest's right to credit bid. The Debtors propose to make the
balloon payment with a combination of cash on hand, and either
refinancing or sale of additional parcels.
As with the prior plan, Harvest has made a Sec. 1111(b) election.
Also, as before, Harvest is an impaired creditor who voted to
reject the Plan.
A copy of the Bankruptcy Court's Sept. 10, 2013 Memorandum Opinion
is available at http://is.gd/F8vY2Rfrom Leagle.com.
Charles and Sarah Grogan own and operate Silver Bells Tree Farm,
located in Marion County, Oregon, where they plant and grow
Christmas trees, mostly of the popular Noble fir variety. They
filed their voluntary Chapter 11 petition (Bankr. D. Ore. Case No.
11-65409) on October 31, 2011.
CHRYSLER GROUP: Could This Month Begin Process to Go Public
-----------------------------------------------------------
Gilles Castonguay and Christina Rogers, writing for The Wall
Street Journal, reported that Chrysler Group LLC this month
expects to seek regulatory approval for an initial public offering
of shares, paving the way for an open-market sale of part of a
union trust's holdings early next year, the auto maker's chief
executive said on Sept. 13.
According to the report, the move ratchets up the pressure on
Chrysler Chief Executive Sergio Marchionne to come to a deal for
trust shares before an IPO could occur. The two sides have been in
talks for months without agreement on a disposition of the UAW
Retiree Medical Benefits Trust's shares.
An IPO would make it harder for Fiat to acquire the rest of the
U.S. auto maker that it doesn't already own and potentially force
Mr. Marchionne to buy the trust's shares on the open market,
analysts say, the report related. Mr. Marchionne is CEO of
Chrysler and its majority owner, Fiat SpA.
Mr. Marchionne has said repeatedly he hoped to avoid an IPO in
favor of acquiring the trust's shares outright, the report further
related. Asked on Sept. 13 if the IPO threatened to postpone
Fiat's acquisition of the rest of Chrysler, Mr. Marchionne
replied: "Yes."
Owning 100% of Chrysler is crucial to Mr. Marchionne's plan to
fully merge the two companies into a single, global auto maker
with the scale to compete with rivals like General Motors Co. and
Volkswagen AG, the report said. Full ownership would also give
him more flexibility to reorganize the two companies as he sees
fit and pool their resources.
About Chrysler Group
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002). The U.S. and Canadian governments provided
Chrysler LLC with $4.5 billion to finance its bankruptcy case.
In connection with the bankruptcy filing, Chrysler reached an
agreement to sell all assets to an alliance between Chrysler and
Italian automobile manufacturer Fiat. Under the terms approved by
the Bankruptcy Court, the company formerly known as Chrysler LLC
in June 2009, formally sold substantially all of its assets to the
new company, named Chrysler Group LLC.
* * *
Chrysler has a 'B1' corporate family rating from Moody's. Moody's
upgraded the rating from 'B2' to 'B1' in February 2013. In May
2013, Standard & Poor's Ratings Services affirmed its ratings,
including the 'B+' corporate credit rating, on Chrysler Group. At
the same time, S&P revised its outlook to positive from stable.
CHRYSLER LLC: Order Denying Limited Assumption of SRP Affirmed
--------------------------------------------------------------
District Judge Lorna G. Schofield for the Southern District of New
York affirmed the decision of the U.S. Bankruptcy Court
(Bernstein, J.) denying the limited assumption and assignment of
the Supplemental Executive Retirement Plan proposed by Old Carco
LLC f/k/a Chrysler LLC.
Gary Henson appealed the Bankruptcy Court decision. On June 1,
2009, Mr. Henson filed an objection to the Debtors' proposed
partial assumption of the SRP and sought determinations as to the
appropriate cure amounts. Mr. Henson is a former Chrysler
executive and participant in the SRP who retired before the filing
of Chrysler's bankruptcy petition, and who was 67 years old in
2009 when he filed the objection.
On Jan. 30, 2013, Old Carco Liquidation Trust filed an Omnibus
Reply to Objections to the Assumption and Assignment of SRP. On
Feb. 1, 2013, Mr. Henson and three other creditors jointly filed a
Sur-Reply.
On Feb. 5, 2013, the Bankruptcy Court held a hearing on the
objections to the Debtors' partial assumption and assignment of
the SRP. At the hearing, Judge Stuart M. Bernstein noted as an
initial matter that the SRP was never assumed, because the Debtors
designated the SRP as an executory contract subject to objection,
which the objectors exercised. Judge Bernstein then concluded that
the SRP was not an executory contract and, therefore, could not be
assumed by the Debtors. Judge Bernstein found that the SRP did not
contain anything in the nature of a restrictive covenant or other
obligations that required performance by Mr. Henson or any other
beneficiary under the SRP; rather, the provisions put forth by Mr.
Henson were conditions to payment or receiving benefits. In his
oral opinion, Judge Bernstein (a) denied the Debtors' motion to
assume and assign the SRP on the terms set forth in the
Designation Notice and the Confirmation Notice; (b) sustained in
part and overruled in part the creditors' objections; and (c)
struck the SRP from the Debtors' Designation Notice and
Confirmation Notice. Judge Bernstein further found that even if
the SRP were an executory contract, it could not be partially
assumed in the manner proposed by the Debtors, because a debtor
may not partially assume the obligations of an executory contract.
On Feb. 19, 2013, Judge Bernstein issued an Order reflecting these
rulings.
On March 5, 2013, Mr. Henson filed a timely notice of appeal. On
appeal, Mr. Henson seeks review of the Bankruptcy Court's order
only with respect to its conclusion that the SRP was not an
executory contract.
According to Judge Schofield, the SRP is not an executory contract
because no performance obligations remain for Mr. Henson. Because
the SRP is not an executory contract, it cannot be assumed by the
Debtors. Accordingly, Mr. Henson's objection is overruled.
The case before the District Court is, GARY HENSON, Appellant, v.
OLD CARCO LIQUIDATION TRUST as the successor in interest to Old
Carco LLC f/k/a Chrysler LLC, Appellee, No. 13 Civ. 02398
(LGS)(S.D.N.Y.). A copy of the Court's Sept. 9, 2013 Opinion And
Order is available at http://is.gd/Pwu6oxfrom Leagle.com.
Gary Henson is represented by Mayer Morganroth, Esq., at
Morganroth & Morganroth.
Old Carco Liquidation Trust is represented by Jeffrey Ellman,
Esq., at Jones Day.
About Chrysler Group
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002). The U.S. and Canadian governments provided
Chrysler LLC with $4.5 billion to finance its bankruptcy case.
In connection with the bankruptcy filing, Chrysler reached an
agreement to sell all assets to an alliance between Chrysler and
Italian automobile manufacturer Fiat. Under the terms approved by
the Bankruptcy Court, the company formerly known as Chrysler LLC
in June 2009, formally sold substantially all of its assets to the
new company, named Chrysler Group LLC.
* * *
Chrysler has a 'B1' corporate family rating from Moody's.
Moody's upgraded the rating from 'B2' to 'B1' in February 2013.
Moody's said that the upgrade reflects Moody's expectation that
Chrysler will be able to sustain the progress it has made during
the past 18 months in strengthening its competitive position in
North America.
CIRCLE ENTERTAINMENT: Stockholders Elect Six Directors
------------------------------------------------------
Circle Entertainment Inc. held its 2013 Annual Meeting of
Stockholders on Sept. 9, 2013, at which the stockholders:
(i) elected six directors to serve on the Company's Board of
Directors until the next annual meeting of stockholders and
until their respective successors are duly elected and
qualified, namely: (1) Paul C. Kanavos, (2) David Ledy, (3)
Michael J. Meyer, (4) Andrew Perel, (5) Robert F.X.
Sillerman and (6) Harvey Silverman;
(ii) ratified the appointment of L.L. Bradford & Company, LLC,
as the Company's independent registered public accounting
firm for the fiscal year ending Dec. 31, 2013;
(iii) approved on an advisory basis the compensation of the
Company's named executive officers; and
(iv) approved on an advisory basis the frequency option of every
three years for future advisory votes to approve named
executive officer compensation.
In light of the voting results with respect to the frequency for
future advisory votes to approve the compensation of the Company's
named executive officers, the Company's Board of Directors has
adopted a policy to hold future stockholder advisory votes to
approve the compensation of its named executive officers every
three years.
About Circle Entertainment
New York-based Circle Entertainment Inc. focuses on the
development of location-based entertainment line of business in
the United States. The Company, through its 8.5 percent
membership interest in I Drive Live Parent LLC, engages in the co-
development of an entertainment destination center on
International Drive in Orlando, Florida.
The Company's balance sheet at June 30, 2013, showed $681,100 in
total assets, $16.43 million in total liabilities, and a
stockholders' deficit of $15.75 million.
L.L. Bradford & Company, LLC, in Las Vegas, Nevada, in its report
on the Company's consolidated financial statements for the year
ended Dec. 31, 2012, said that Circle Entertainment Inc. has
limited available cash, has a working capital deficiency and will
need to rely on the Funding Agreement or secure new financing or
additional capital in order to pay its obligations. "These
conditions raise substantial doubt about the Company's ability to
continue as a going concern."
COLONIAL BANCGROUP: No 3rd Serving for Pension Funds in Class Suit
------------------------------------------------------------------
M.D. Alabama District Judge R. David Proctor denied the request of
pension fund groups, which serve as the lead plaintiffs in In Re
Colonial Bancgroup, Inc. Securities Litigation (M.D. Ala. Case No.
2:09-CV-00104-RDP-WC), for leave to amend their complaint. The
request is "due to be denied because of undue delay in bringing
the Motion and the undue prejudice which would be caused by
allowing the amendment after the court has already approved a pro
tanto settlement on behalf of the conditionally certified class,"
Judge Proctor said.
Judge Proctor's Sept. 9, 2013 Memorandum Opinion, available at
http://is.gd/snofRGfrom Leagle.com, included an admonition
addressed to the Lead Plaintiffs. According to Judge Proctor:
"There is an old adage: "measure twice, cut once." Although it is
generally accepted that this maxim originated in the carpentry
vocation, it nonetheless has a number of applications in other
areas. For example, it can serve as sound advice in the legal
profession. Lawyers must train themselves to think carefully about
the consequences (both intended and unintended) of their tactical
decisions. As it turns out, this age old admonition would have
been instructive in this case because here, rather than
"measur[ing] twice [and] cut[ting] once," Lead Plaintiffs have
measured once and attempted to cut thrice. But, for the reasons
explained in this opinion, they cannot avail themselves of the
third try."
Public Pension Fund Group, (DESIGNATED AS LEAD PLAINTIFF) class
members Arkansas Teacher Retirement System, State-Boston
Retirement System, Norfolk County Retirement System, and City of
Brockton Retirement System, Plaintiff, are represented by Alan I.
Ellman, Labaton Sucharow LLP, Angelina Nguyen, Labaton Sucharow,
Christopher J. Keller, Labaton Sucharow LLP, Craig A. Martin,
Labaton Sucharow LLP, Douglas Scott Wilens, Robbins Geller Rudman
& Dowd LLP, Gerald Clark Brooks, Jr., Brooks Law Group, LLC, Henry
Lewis Gillis, Thomas Means Gillis & Seay PC, Ira M Levee,
Lowenstein Sandler PC, Jack Reise, Robbins Geller Rudman Dowd,
LLP, James W. Johnson, Labaton Sucharow LLP, Michael Stephen
Dampier, Law Offices of M. Stephen Dampier, P.C., Michael S Etkin,
Lowenstein Sandler PC, Paul J Geller, Robbins Geller Rudman & Dowd
LLP, Stefanie J. Sundel, Labaton Sucharow LLP, Steven A. Schwartz,
Chimicles & Tikellis LLP, Thomas A. Dubbs, Labaton Sucharow LLP,
Thomas G Hoffman, Jr., Labaton Sucharow LLP, Timothy N Mathews,
Chimicles & Tikellis LLP, Tyrone Carlton Means, Thomas Means
Gillis & Seay PC, Matthew C Moehlman, Labaton Sucharow LLP &
Nicole M. Zeiss, Labaton Sucharow LLP.
The Horace F. Moyer and Joan M. Moyer Living Trust, Plaintiff, are
represented by Alan I. Ellman, Labaton Sucharow LLP, Angelina
Nguyen, Labaton Sucharow, Christopher J. Keller, Labaton Sucharow
LLP, Gerald Clark Brooks, Jr., Brooks Law Group, LLC, Henry Lewis
Gillis, Thomas Means Gillis & Seay PC, James W. Johnson, Labaton
Sucharow LLP, Jeffrey A. Klafter, KLAFTER OLSEN & LESSER LLP,
Stefanie J. Sundel, Labaton Sucharow LLP & Tyrone Carlton Means,
Thomas Means Gillis & Seay PC.
City of Worcester, Plaintiff, are represented by Gerald Clark
Brooks, Jr., Brooks Law Group, LLC, Henry Lewis Gillis, Thomas
Means Gillis & Seay PC, James W. Johnson, Labaton Sucharow LLP,
Matthew C Moehlman, Labaton Sucharow LLP, Thomas A. Dubbs, Labaton
Sucharow LLP & Tyrone Carlton Means, Thomas Means Gillis & Seay
PC.
Robert E. Lowder, Defendant, is represented by Enrique Jose
Gimenez, Lightfoot Franklin & White LLC, James Fletcher Hughey,
III, Robert David Segall, Copeland Franco Screws & Gill, Samuel
Holley Franklin, Lightfoot Franklin & White LLC & Mitchell David
Greggs, Maynard Cooper & Gale, PC.
Sarah H. Moore, Defendant, is represented by Enrique Jose Gimenez,
Lightfoot Franklin & White LLC, James Fletcher Hughey, III, Robert
David Segall, Copeland Franco Screws & Gill, Samuel Holley
Franklin, Lightfoot Franklin & White LLC & Mitchell David Greggs,
Maynard Cooper & Gale, PC.
T. Brent Hicks, Defendant, is represented by Enrique Jose Gimenez,
Lightfoot Franklin & White LLC, James Fletcher Hughey, III, Robert
David Segall, Copeland Franco Screws & Gill & Samuel Holley
Franklin, Lightfoot Franklin & White LLC.
PricewaterhouseCoopers LLP, Defendant, is represented by Edward
Hamilton Wilson, Jr., Ball Ball Matthews & Novak PA, Elizabeth V
Tanis, King & Spalding LLP, Geoffrey Michael Ezgar, King &
Spalding, LLP, Shelby S. Guilbert, Jr., King & Spalding LLP, Tabor
Robert Novak, Jr., Ball Ball Matthews & Novak PA, Thomas Edward
Walker, Johnston Barton Proctor & Rose LLP & Drew David Dropkin,
King & Spalding LLP.
Alan Frederick Enslen, Maynard, Cooper & Gale, P.C., Armistead
Inge Selden, III, Maynard Cooper & Gale, PC, Carl Stanley
Burkhalter, Maynard, Cooper & Gale, P.C., Kathryn Dietrich
Perreault, Maynard Cooper & Gale, PC, Richard Jon Davis, Maynard
Cooper & Gale & Steven Lee McPheeters, Maynard, Cooper & Gale,
P.C., represent these defendants: Banc of America Securities LLC;
Citigroup Global Markets Inc.; Credit Suisse Securities (USA) LLC;
Deutsche Bank Securities Inc.; Morgan Keegan & Company, Inc.;
Morgan Stanley & Co. Inc.; RBC Dain Rauscher Inc.; Stifel,
Nicolaus & Company, Inc.; SunTrust Robinson Humphrey, Inc.; UBS
Securities LLC; and Wachovia Capital Markets, LLC.
Larry Brittain Childs, Waller Lansden Dortch & Davis LLP, Walter
Edgar McGowan, Gray Langford Sapp McGowan Gray, Gray & Nathanson
PC & William Charles Athanas, Waller Lansden Dortch & Davis, LLP,
represent these defendants: Lewis E. Beville; Augustus K.
Clements, III; Robert S. Craft; Patrick F. Dye; Hubert L. Harris,
Jr.; Clinton O. Holdbrooks; Deborah L. Linden; John Ed Mathison;
Milton E. McGregor; Joseph D. Mussafer; William E. Powell, III;
James W. Rane; Simuel Sippial, Jr.; and Edward V. Welch,
Defendant.
About The Colonial BancGroup
Headquartered in Montgomery, Alabama, The Colonial BancGroup,
Inc., (NYSE: CNB) owned Colonial Bank, N.A, its banking
subsidiary. Colonial Bank -- http://www.colonialbank.com/--
operated 354 branches in Florida, Alabama, Georgia, Nevada and
Texas with over $26 billion in assets. On Aug. 14, 2009, Colonial
Bank was seized by regulators and the Federal Deposit Insurance
Corporation was named receiver. The FDIC sold most of the assets
to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T
acquired $22 billion in assets and assumed $20 billion in deposits
of the Bank.
The Colonial BancGroup filed for Chapter 11 bankruptcy protection
(Bankr. M.D. Ala. Case No. 09-32303) on Aug. 25, 2009. W. Clark
Watson, Esq., at Balch & Bingham LLP, and Rufus T. Dorsey IV,
Esq., at Parker Hudson Rainer & Dobbs LLP, serve as counsel to the
Debtor. The Debtor disclosed $45 million in total assets and $380
million in total liabilities as of the Petition Date.
In September 2009, an Official Committee of Unsecured Creditors
was formed consisting of three members, Fine Geddie & Associates,
The Bank of New York Trust Company, N.A., and U.S. Bank National
Association. Burr & Forman LLP and Schulte Roth & Zabel LLP serve
as co-counsel for the Committee.
Colonial Brokerage, a wholly owned subsidiary of Colonial
BancGroup, filed for Chapter 7 protection with the U.S. Bankruptcy
Court in the Middle District of Alabama in June 2010. Susan S.
DePaola serves as Chapter 7 trustee.
COMMONWEALTH GROUP: Motion to Dismiss Case Granted
--------------------------------------------------
Judge Richard Stair, Jr., of the U.S. Bankruptcy Court for the
Eastern District of Tennessee, Northern Division at Knoxville,
granted Commonwealth Group-Mocksville Partners, LP's motion to
dismiss its Chapter 11 case.
As previously reported by The Troubled Company Reporter, the
Debtor asked the Court to dismiss its Chapter 11 case stating that
it has already reached an agreement with PNC Bank, National
Association, the principal creditor in the case holding a secured
claim amounting to $8,602,427. The claim was scheduled in a
lesser amount.
The Debtor said it has sufficient funds to pay all of the allowed
claims other than the claim of PNC Bank upon dismissal of the
case. The Debtor intends to pay unsecured creditors and the
claims of Davie County ($1,650) and Town of Mocksville ($1,600)
within 10 days of the dismissal of the case.
Any quarterly fee owing to the U.S. Trustee will be paid on or
before the date of the entry of the order dismissing the case.
The Debtor notes that the July 2013 Monthly Operating Report
reflects an ending book balance of $349,531.
Maurice K. Guinn, Esq., at Gentry, Tipton & McLemore, P.C., in
Knoxville, Tennessee, represents the Debtor.
About Commonwealth Group
Commonwealth Group-Mocksville Partners, LP, filed a Chapter 11
petition (Bankr. E.D. Tenn. Case No. 12-34319) on Oct. 25, 2012,
in Knoxville, Tennessee. The Debtor disclosed $11,391,578 in
assets and $22,668,998 in liabilities in its amended schedules.
The Debtor owns 30 acres of commercial property in Mocksville,
Davie County, North Carolina. The Debtor constructed a 48,179
square foot retail shopping center on 5.58 acres of the property,
which is currently 95% leased to various retail tenants.
Judge Richard Stair Jr. presides over the case. Maurice K. Guinn,
Esq., at Gentry, Tipton & McLemore P.C., in Knoxville, Tenn.,
represents the Debtor as counsel. The petition was signed by
Milton A. Turner, chief manager and general partner.
On March 28, 2013, Mocksville Partners filed its Amended Chapter
11 Plan. On April 22, 2013, the Court entered the Order Approving
the Amended Disclosure Statement.
COMMUNITY'S BANK: FDIC Approves Payout of Insured Deposits
----------------------------------------------------------
The Federal Deposit Insurance Corporation approved the payout of
the insured deposits of The Community's Bank, Bridgeport,
Connecticut. The bank was closed Friday by the Connecticut
Department of Banking, which appointed the FDIC as receiver.
The FDIC was unable to find another financial institution to take
over the banking operations of The Community's Bank. The FDIC
will mail checks directly to depositors of The Community's Bank
for the amount of their insured money. As a convenience to
depositors, the FDIC has made arrangements with People's United
Bank, Bridgeport, CT, to accept the failed bank's direct deposits
from the federal government, such as Social Security and Veterans'
payments for 90 days. The two People's United Bank locations
designated to service The Community's Bank's customers receiving
federal government direct deposit payments are as follows: 4531
Main Street, Bridgeport, CT - located inside the Brookside Stop
and Shop Supermarket, and 58 Boston Avenue, Bridgeport, CT.
Customers with questions about transaction, including those with
accounts in excess of $250,000, should call the FDIC toll-free at
1-800-430-6165. The phone number will be operational this evening
until 9:00 p.m., Eastern Daylight Time (EDT); on Saturday from
9:00 a.m. to 6:00 p.m., EDT; on Sunday from noon to 6:00 p.m.,
EDT; on Monday from 8:00 a.m. to 8:00 p.m., EDT; and thereafter
from 9:00 a.m. to 5:00 p.m., EDT.
Starting Monday, Sept. 16, 2013, depositors of The Community's
Bank with more than $250,000 at the bank may visit the FDIC's Web
page "Is My Account Fully Insured?" at
http://www2.fdic.gov/dip/Index.aspto determine their insurance
coverage.
As of June 30, 2013, The Community's Bank had approximately $26.3
million in total assets and $25.7 million in total deposits. The
amount of uninsured deposits will be determined once the FDIC
obtains additional information from those customers.
The FDIC as receiver will retain all the assets from The
Community's Bank for later disposition. Loan customers should
continue to make their payments as usual.
The FDIC estimates that the cost to the Deposit Insurance Fund
(DIF) will be $7.8 million. The Community's Bank is the 21st
FDIC-insured institution to fail in the nation this year, and the
first in Connecticut. The last FDIC-insured institution closed in
the state was Connecticut Bank of Commerce, Stamford, on June, 26,
2002.
COMPETITIVE TECHNOLOGIES: Inks $10MM Equity Pact with Southridge
----------------------------------------------------------------
Competitive Technologies, Inc., entered into an Equity Purchase
Agreement with Southridge Partners II, L.P., on Sept. 10, 2013.
The Equity Purchase Agreement replaces and supersedes the
agreement entered into on Feb. 25, 2013.
Under the terms of the Purchase Agreement, Southridge will
purchase, at the Company's election, up to $10,000,000 of the
Company's registered common stock. During the two year term of
the Purchase Agreement, the Company may at any time in its sole
discretion deliver a "put notice" to Southridge thereby requiring
Southridge to purchase a certain dollar amount of the Shares.
Simultaneous with the delivery of those Shares, Southridge will
deliver payment for the Shares. Subject to certain restrictions,
the purchase price for the Shares will be equal to 90 percent of
the lowest closing bid price for the Company's common stock during
the 10-day trading period immediately after the Shares specified
in the Put Notice are delivered to Southridge.
The number of Shares sold to Southridge will not exceed the number
of those shares that, when aggregated with all other shares of
common stock of the Company then beneficially owned by Southridge,
would result in Southridge owning more than 9.99 percent of all of
the Company's common stock then outstanding. Additionally,
Southridge may not execute any short sales of the Company's common
stock.
A copy of the Purchase Agreement is available for free at:
http://is.gd/TEziOR
About Competitive Technologies
Fairfield, Conn.-based Competitive Technologies, Inc. (OTC QX:
CTTC) -- http://www.competitivetech.net/-- was established in
1968. The Company provides distribution, patent and technology
transfer, sales and licensing services focused on the needs of its
customers and matching those requirements with commercially viable
product or technology solutions. Sales of the Company's
Calmare(R) pain therapy medical device continue to be the major
source of revenue for the Company.
Competitive Technologies incurred a net loss of $3 million on
$546,139 of gross profit from product sales in 2012, as compared
with a net loss of $3.59 million on $1.86 million of gross profit
from product sales in 2011. As of June 30, 2013, the Company had
$4.47 million in total assets, $9.78 million in total liabilities
and a $5.31 million total shareholders' deficit.
Mayer Hoffman McCann CPAs (The New York Practice of Mayer Hoffman
McCann P.C.), in New York, issued a "going concern" qualification
on the consolidated financial statements for the year ended
Dec. 31, 2012. The independent auditors noted that at Dec. 31,
2012, the Company has incurred operating losses since fiscal year
2006. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
CORAL DYEING: Meeting to Form Creditors' Panel on Oct. 1
--------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on October 1, 2013 at 10:30 a.m. in
the bankruptcy case of Coral Dyeing & Finishing Corp. The meeting
will be held at:
United States Trustee's Office
One Newark Center, 1085 Raymond Blvd.
21st Floor, Room 2106
Newark, NJ 07102
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
EASTMAN KODAK: Seeks More Time to File Post-Confirmation Timetable
------------------------------------------------------------------
Eastman Kodak Co. asked U.S. Bankruptcy Judge Allan Gropper to
move to Sept. 30 the deadline to file its proposed order
containing a post-confirmation timetable.
Kodak said that given the complexity of their bankruptcy cases,
the company and its reorganized subsidiaries require additional
time to develop a timetable as required by Rule 3021-1(a)
of the Local Bankruptcy Rules for the Southern District of New
York.
The company officially emerged from Chapter 11 protection on
Sept. 3.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.
Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras. Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies
with strong balance sheets and an awareness of Kodak's liquidity
challenges.
In recent years, Kodak has been working to transform itself from
a business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies. Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent.
The Official Committee of Unsecured Creditors has tapped Milbank,
Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
Unofficial Second Lien Noteholders Committee.
The Retirees Committee has hired Haskell Slaughter Young &
Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper,
LLC, as Bankruptcy Consultants and Financial Advisors; and the
Segal Company, as Actuarial Advisors.
Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato,
Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners
II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth
S. Grossman; and Paul Martin.
Kodak completed the $527 million sale of digital-imaging
technology on Feb. 1, 2013. Kodak intends to reorganize by
focusing on the commercial printing business.
At the end of April 2013, Kodak filed a proposed reorganization
plan offering 85 percent of the stock to holders of the remaining
$375 million in second-lien notes. The other 15 percent is for
unsecured creditors with $2.7 billion in claims and retirees who
have a $635 million claim from the loss of retirement benefits.
ENERGY SERVICES: Centrus Serves as Financial Advisor
----------------------------------------------------
Energy Services of America Corporation, on Nov. 28, 2012, entered
into an agreement with Centrus Group, Inc., pursuant to which
Centrus will provide chief restructuring agent services to the
Company. By letter dated Sept. 4, 2013, and entered into on
Sept. 9, 2013, the Company entered into an agreement with Centrus
which supercedes its prior agreement. Pursant to the new
agreement, Centrus' role as chief restructuring agent had ended
and Centrus will now act as financial advisor to the Company. A
copy of the agreement is available for free at:
http://is.gd/P45HPq
About Energy Services
Huntington, West Virginia-based Energy Services of America
Corporation provides contracting services to America's energy
providers, primarily the gas and electricity providers.
Arnett Foster Toothman PLLC, in Charleston, West Virginia,
expressed substantial doubt about Energy Services' ability to
continue as a going concern following the annual report for the
year ended Sept. 30 ,2012. The independent auditors noted that
the Company has suffered recurring losses from operations and has
entered into a forbearance arrangement with its lenders as a
result of continued noncompliance with certain debt covenants.
The Company reported a net loss of $48.5 million on $157.7 million
of revenue in fiscal 2012, compared with a net loss of $5.3
million on $143.4 million of revenue in fiscal 2011. The
Company's balance sheet at June 30, 2013, the Company had
$44.10 million in total assets, $36.66 million in total
liabilities and $7.44 million in total stockholders' equity.
ERF WIRELESS: To Pay for Legal Fees in "Schlumberger" Dispute
-------------------------------------------------------------
A three-member arbitration panel had ordered that no reward will
be made to ERF Wireless in connection with the Company's claims
against Schlumberger Technology Corporation and Schlumberger
Canada Limited. The arbitrators held that each party will be
responsible for its own legal expenses and one-half of the
arbitrator fees.
ERF Wireless, on Jan. 13, 2009, entered into exclusive reseller
agreements with Schlumberger Technology Corporation and
Schlumberger Canada Limited for all of North America. The
contracts completed their three year initial terms in January
2012. During the fourth quarter of 2010, ERF Wireless initiated a
contractual mediation with Schlumberger to attempt to resolve
various financial issues in the reseller agreements. Mediation
was unsuccessful, and in 2011 ERF Wireless availed itself of the
right to submit a claim against Schlumberger Technology
Corporation in binding arbitration as mandated in the parties'
reseller agreement. The hearings and other associated formal
submittals of this arbitration were completed in June 2013.
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 June 30, 2013, showed $6.80
million in total assets, $10.69 million in total liabilities and a
$3.88 million total shareholders' deficit.
FAIRBANKS COMMUNITY HEALTH: Cuts Jobs, Prepares for Bankruptcy
--------------------------------------------------------------
Jeff Richardson, writing for Fairbanks (Alaska) Daily News-Miner,
reports that budget problems will result in staffing cuts of about
20 personnel at Fairbanks' primary mental health organization this
week, as Fairbanks Community Health Center overhauls its
operations.
The report relates the health center is preparing a Chapter 11
bankruptcy filing, which will allow it to restructure both the
organization and its debt. No date has been set for the filing.
The report says the layoffs represent about a third of the
employees at the center.
Mr. Richardson reports the center's South Cushman Street facility
will be closed until Wednesday as the organization shifts to new
leadership. A community meeting will be held 5:30-7:30 p.m.
Wednesday at 2830 South Cushman St. to discuss changes at the
organization. The report notes the nonprofit organization will
emerge from the short closure with a different name -- Fairbanks
Community Mental Health Services -- and new oversight from the
nonprofit organization that provides mental-health care in
Anchorage.
According to the report, the self-insured organization, which is
$1.2 million in debt, was hit by a pair of large medical claims
and has struggled with a backlog of Medicaid reimbursements, board
president Barbara Burch said last month. Executive director Kelly
Shanklin abruptly resigned from her position on Aug. 26.
The report is notes members of the board of directors said they
didn't know how troubled the organization was until last month,
when a financial review determined it only had enough funding to
survive until mid-September. The first indication that the
organization was in crisis came in May, when it almost failed to
meet payroll, board members said. A state audit is in progress to
determine why the organization's struggles weren't more apparent.
FAIRMONT GENERAL: Wants to Dispense with PCO Appointment
--------------------------------------------------------
Fairmont General Hospital, Inc. and Fairmont Physicians, Inc., ask
the U.S. Bankruptcy Court for the Northern District of West
Virginia to dispense with the appointment of a patient care
ombudsman.
According to Rayford K. Adams, III, Esq., at Spilman Thomas &
Battle, PLLC, in Winston-Salem, North Carolina, appointment of a
PCO is not necessary for the protection of patients at Fairmont
General Hospital and will hinder the Debtors' ability to quickly
and effectively reorganize the Debtors' business operations, in
part by adding unnecessary administrative expenses to the Debtors'
case.
Mr. Adams point out that empirical evidence shows that the
Hospital has had no prepetition patient care issues and that the
Debtors' bankruptcy filing was not precipitated by patient care
issues. Mr. Adams further points out that the Hospital was named
a Top Performer on Key Quality Measures for 2011 and 2012 by the
Joint Commission, which is awarded to the nation's top performers
on key quality measures. The Hospital, he adds, was named a Home
Care Elite Top Agency for Home Health in six of the last seven
years and the Hospital has received a Hospital Safety Score of "A"
from The Leapfrog Group for 2012 and 2013. He asserts that the
circumstances leading to the filing of the Chapter 11 cases were
related to financial and industry factors and not to any matters
related to patient care or patient safety.
Moreover, Mr. Adams asserts that, the Debtor already has the
equivalent to a PCO. Within the Hospital, the Debtor maintains a
well-developed system and protocol for the monitoring and
reporting of patient care and safety matters. All reporting
requirements with respect to patient care are met on a timely
basis, he says. The Hospital employs an employee with a title of
"Patient Advocate," who is responsible for the monitoring and
maintenance of all areas of Hospital operations related to patient
care and serves as a de facto PCO.
U.S. Trustee Objects
Judy A. Robbins, U.S. Trustee for Region 4, argues that the
appointment of a PCO is important in the Chapter 11 cases. The
Debtors, according to the U.S. Trustee, presented "empirical
evidence" that the Debtors have had not prepetition care issues
and that the bankruptcy filing was not precipitated by patient
care issues. However, those references are to historical, pre-
bankruptcy periods, the U.S. Trustee asserts.
Although the Debtors assert that they have the equivalent of a PCO
by maintaining a system for monitoring and reporting of patient
care and safety matters, and employs a "Patient Advocate," the
U.S. Trustee asserts that the PCO is an independent health care
professional who would monitor patient care, not an employee of
the Debtor.
Furthermore, the U.S. Trustee asserts that although a hospital may
proclaim that it has no prepetition patient care issues, the
financial circumstances of a Chapter 11 bankruptcy may result in a
reduction of services or cost-cutting measures that may, in turn,
compromise the care of patients who are dependent on the Debtor
for their care. The representation of those patients is precisely
the purpose of a PCO under Section 333 of the Bankruptcy Code, the
U.S. Trustee further asserts.
Oct. 2 Evidentiary Hearing
On Sept. 5, 2013 a hearing was held to consider the Debtors'
motion and the objection filed by the U.S. Trustee. Upon
consideration of the representations of the counsel for each party
and for reasons fully stated on the record, the Court ordered that
a final evidentiary hearing on the motion will be held on Oct. 2,
at 9:30 a.m. The parties confer before the final hearing and, to
the extent possible, be prepared to stipulate to the admission of
exhibits, or agree to the exhibits for which admission is
contested and the grounds therefor.
The Debtors are also represented by Casey H. Howard, Esq., at
Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina;
David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in
Wheeling, West Virginia; and Michael S. Garrison, Esq., at Spilman
Thomas & Battle, PLLC, in Morgantown, West Virginia.
The U.S. Trustee is represented by Douglas A. Kilmer, Esq., Trial
Attorney, Office of U.S. Trustee, in Charleston, West Virginia.
About Fairmont General
Fairmont General Hospital Inc. and Fairmont Physicians, Inc.,
which operate a 207-bed acute-care facility in Fairmont, West
Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D.
W.Va. Case No. 13-01054) on Sept. 3, 2013, listing between $10
million and $50 million in both assets and debts.
The fourth-largest employer in Marion County, West Virginia, filed
for bankruptcy as it looks to partner with another hospital or
health system.
The Debtors are represented by Rayford K. Adams, III, Esq., at
Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina;
David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in
Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman
Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors'
financial analyst is Gleason & Associates, P.C. The Debtors'
claims and noticing agent is Epiq Bankruptcy Solutions.
FINJAN HOLDINGS: Has Office Lease Agreement with 122 East
---------------------------------------------------------
Finjan Holdings, Inc., entered in an Agreement of Lease with 122
East 42nd Street, LLC, pursuant to which the Company will lease
3,558 square feet of office space located at 122 East 42nd Street,
New York, from 122 East. Upon the completion of substantially all
of certain repair and related work by 122 East, the Company may
occupy the Premises.
Beginning on the Commencement Date and for a period of five years,
the Company will owe to 122 East an initial annual rent of
$138,952, payable in monthly installments of $11,579, unless
earlier terminated by either party in accordance with the Lease.
The annual rental rate is subject to a 2.5 percent increase each
anniversary of the Commencement Date during the Term. Upon the
execution of the Lease, the Company delivered $69,476 as a
security deposit to be held and applied (or returned) in
accordance with the Lease.
The Company expects to terminate its license to use its current
office space at 261 Madison Avenue, New York, New York, upon the
Commencement Date.
A copy of the Lease Agreement is available for free at:
http://is.gd/2GRTDA
About Finjan
Finjan, formerly known as Converted Organics, is a leading online
security and technology company which owns a portfolio of patents,
related to software that proactively detects malicious code and
thereby protects end-users from identity and data theft, spyware,
malware, phishing, trojans and other online threats. Founded in
1997, Finjan is one of the first companies to develop and patent
technology and software that is capable of detecting previously
unknown and emerging threats on a real-time, behavior-based basis,
in contrast to signature-based methods of intercepting only known
threats to computers, which were previously standard in the online
security industry.
Converted Organics disclosed a net loss of $8.42 million in 2012,
as compared with a net loss of $17.98 million in 2011. The
Company's balance sheet at June 30, 2013, showed $31.84 million in
total assets, $1.16 million in total liabilities and $30.67
million total stockholders' equity.
Moody, Famiglietti & Andronico, LLP, in Tewksbury, Massachusetts,
issued a "going concern" qualification on the consolidated
financial statements for the year ended Dec. 31, 2012, citing
recurring losses and negative cash flows from operations and an
accumulated deficit that raises substantial doubt about the
Company's ability to continue as a going concern.
FIRST NATIONAL: PlainsCapital Bank Assumes All of Bank's Deposit
----------------------------------------------------------------
First National Bank, Edinburg, Texas, was closed by the Office of
the Comptroller of the Currency, which appointed the Federal
Deposit Insurance Corporation (FDIC) as receiver. To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with PlainsCapital Bank, Dallas, Texas, to assume all of
the deposits of First National Bank.
The 51 former branches of First National Bank will reopen as
branches of PlainsCapital Bank during their normal business hours,
including the two branches in El Paso doing business as The
National Bank of El Paso. Depositors of First National Bank will
automatically become depositors of PlainsCapital Bank. Deposits
will continue to be insured by the FDIC, so there is no need for
customers to change their banking relationship in order to retain
their deposit insurance coverage up to applicable limits.
Customers of First National Bank should continue to use their
current branch until they receive notice from PlainsCapital Bank
that systems conversions have been completed to allow full-service
banking at all branches of PlainsCapital Bank.
Depositors of First National Bank can continue to access their
money by writing checks or using ATM or debit cards. Checks drawn
on the bank will continue to be processed. Loan customers should
continue to make their payments as usual.
As of June 30, 2013, First National Bank had approximately $3.1
billion in total assets and $2.3 billion in total deposits. In
addition to assuming all of the deposits of First National Bank,
PlainsCapital Bank agreed to purchase approximately $2.7 billion
of First National Bank's assets. The FDIC will retain the
remaining assets for later disposition.
The FDIC and PlainsCapital Bank entered into a loss-share
transaction on $1.8 billion of First National Bank's assets.
PlainsCapital Bank will share in the losses on the asset pools
covered under the loss-share agreement. The loss-share
transaction is projected to maximize returns on the assets covered
by keeping them in the private sector. The transaction also is
expected to minimize disruptions for loan customers.
FISKER AUTO: U.S. Government Considers Auction of Car Marker
------------------------------------------------------------
Mike Ramsey, writing for The Wall Street Journal, reported that
the U.S. government is awaiting approvals for an auction of the
loan obligation held by plug-in hybrid electric car maker Fisker
Automotive Inc., a U.S. official said.
According to the report, Fisker received a $529 million loan from
the Department of Energy's Advanced Technology Vehicles
Manufacturing Loan Program and drew down about $192 million before
the department froze the loan after Fisker failed to hit several
development targets.
The company defaulted on its loan in April and hired restructuring
advisers, but hasn't filed for bankruptcy, the report related.
The company's investors have sought to sell the business and its
loan obligation at a reduced rate outside of bankruptcy court.
There have been several reported suitors for the maker of the
$100,000 and up Fisker Karma sedan, the report said. In each
case, the buyers want the U.S. government to take much less than
the amount owed on the loan by the auto maker, according to people
familiar with the matter.
Fisker raised more than $1.2 billion over five years, including
the about $192 million in U.S. taxpayer funds, to build its car,
the report noted. After it failed to make loan payments earlier
this year, the government seized $21 million from the company's
bank account.
Anaheim, Calif.-based Fisker Automotive Inc., is a manufacturer of
plug-in hybrid sports cars.
FREESEAS INC: Hanover No Longer a Shareholder at Sept. 10
---------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Hanover Holdings I, LLC, and Joshua Sason
disclosed that as of Sept. 10, 2013, they do not hold shares of
common stock Freeseas Inc. A copy of the regulatory filing is
available for free at http://is.gd/TYsMiz
About FreeSeas Inc.
Headquartered in Athens, Greece, FreeSeas Inc., formerly known as
Adventure Holdings S.A., was incorporated in the Marshall Islands
on April 23, 2004, for the purpose of being the ultimate holding
company of ship-owning companies. The management of FreeSeas'
vessels is performed by Free Bulkers S.A., a Marshall Islands
company that is controlled by Ion G. Varouxakis, the Company's
Chairman, President and CEO, and one of the Company's principal
shareholders.
The Company's fleet consists of six Handysize vessels and one
Handymax vessel that carry a variety of drybulk commodities,
including iron ore, grain and coal, which are referred to as
"major bulks," as well as bauxite, phosphate, fertilizers, steel
products, cement, sugar and rice, or "minor bulks." As of
Oct. 12, 2012, the aggregate dwt of the Company's operational
fleet is approximately 197,200 dwt and the average age of its
fleet is 15 years.
Freeseas disclosed a net loss of US$30.88 million in 2012, a net
loss of US$88.19 million in 2011, and a net loss of US$21.82
million in 2010. The Company's balance sheet at Dec. 31, 2012,
showed US$114.35 million in total assets, $106.55 million in
total liabilities and US$7.80 million in total shareholders'
equity.
RBSM LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2012. The independent auditors noted that the Company has
incurred recurring operating losses and has a working capital
deficiency. In addition, the Company has failed to meet
scheduled payment obligations under its loan facilities and has
not complied with certain covenants included in its loan
agreements. It has also failed to make required payments to
Deutsche Bank Nederland as agreed to in its Sept. 7, 2012,
amended and restated facility agreement and received notices of
default from First Business Bank. Furthermore, the vast majority
of the Company's assets are considered to be highly illiquid and
if the Company were forced to liquidate, the amount realized by
the Company could be substantially lower that the carrying value
of these assets. These conditions, among others, raise
substantial doubt about the Company's ability to continue as a
going concern.
FREESCALE SEMICONDUCTOR: S&P Rates 1st-Lien Term Loan Due 2021 'B'
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' issue-level
rating to Austin, Tex.-based Freescale Semiconductor Inc.'s first-
lien term loan due 2021, with a '3' recovery rating, indicating
S&P's expectations of meaningful (50% to 70%) recovery for lenders
in a payment default.
The company intends to use the proceeds from the proposed term
loan for the repayment of a portion of its existing first-lien
notes due 2018. S&P rates the new term loan the same as the
corporate credit rating on the company.
The 'B' corporate credit rating and stable outlook reflect the
company's position as one of the leading providers of automotive
semiconductor products, moderated by its U.S. and European
automotive client concentration and its exposure to cyclical
market conditions, which contribute to a "fair" business risk
profile. Freescale's revenues and earnings have resumed growth
following declines in 2012 due to cyclical market weakness and the
secular downturn of its cellular handset business. Over the
coming year, considering positive automotive and
telecommunications industry conditions, S&P expects Freescale's
revenues will grow in the mid-single digits and the company's
financial risk profile will remain "highly leveraged," reflecting
S&P's expectation for leverage to subside to about 7x from 8.5x at
June 30, 2013.
RATINGS LIST
Freescale Semiconductor Inc.
Corporate Credit Rating B/Stable/--
Senior Secured B
Recovery Rating 3
Senior Unsecured CCC+
Recovery Rating 6
New Rating
Freescale Semiconductor Inc.
First-lien term loan due 2021 B
Recovery Rating 3
GATEHOUSE MEDIA: Signs Restructuring and Investment Agreements
--------------------------------------------------------------
Newcastle Investment Corp. entered into a Restructuring Support
Agreement effective Sept. 3, 2013, with GateHouse Media, Inc., and
certain of its subsidiaries and the other debtholders. Newcastle
and GateHouse also entered into an Investment Commitment Letter,
effective Sept. 3, 2013.
The Restructuring Support Agreement and the Investment Commitment
Letter relate to a potential restructuring of the obligations of
GateHouse under the 2007 Credit Agreement debt and under certain
interest rate swaps secured thereunder and GateHouse's equity
pursuant to a prepackaged plan of reorganization under Chapter 11
of title 11 of the United States Code.
As of the date of the Restructuring Support Agreement and the
Investment Commitment Letter, Newcastle and its affiliates held
approximately 52 percent of the principal amount currently
outstanding under the 2007 Credit Agreement, including certain
amounts still pending trade settlement. Other Participating
Lenders held approximately 59.8 percent of the remaining principal
amount of the Loans, including certain amounts still pending trade
settlement. Additional holders of Outstanding Debt may join the
Restructuring Support Agreement in the future as Participating
Lenders.
Pursuant to the Restructuring:
* Newcastle would offer to purchase the Outstanding Debt in
cash at 40 percent of par on the effective date of the Plan;
* The holders of the Outstanding Debt would have the option of
receiving, in satisfaction of their Outstanding Debt, (i) the
Cash-Out Offer, or (ii) (A) common stock in a new holding
company that would own the reorganized GateHouse and Dow
Jones Local Media Group, Inc., and (B) the net cash proceeds,
if any, of a potential new debt facility;
* Newcastle would contribute its interests in Local Media,
which it acquired on Sept. 3, 2013, to New Media in exchange
for common stock of New Media equal in value to the cost of
the Local Media acquisition, subject to the adjustments set
forth in the Restructuring Support Agreement;
* On account of any purchases of Outstanding Debt, Newcastle
would receive a pro rata share of (a) New Media Common Stock
and (b) the net proceeds, if any, of the New Debt Facility;
* GateHouse would use commercially reasonable efforts, in light
of market conditions and other relevant factors, to raise a
New Debt Facility for reorganized GateHouse of up to
approximately $150 million on the same or better terms than
those set forth in the Restructuring Support Agreement.
Entry into a New Debt Facility will not be a condition to the
effectiveness of the Restructuring;
* Pension, trade and all other unsecured claims of GateHouse
would be unimpaired; and
* Equity interests in GateHouse, including warrants, rights and
options to acquire those equity interests would be cancelled,
and the holders of Existing Equity Interests would receive
10-year warrants, collectively representing the right to
acquire, in the aggregate, 5 percent of the common stock of
New Media Common Stock as of the Effective Date, with the
strike price for those warrants calculated based on a total
equity value of New Media, prior to contribution of Local
Media, of $1.2 billion.
GateHouse has agreed that, subject to the conditions of the
Restructuring Support Agreement, (1) if debtholders holding at
least 67 percent of the aggregate amount of the Outstanding Debt
necessary for acceptance of a plan of reorganization under the
Bankruptcy Code have become party to the Restructuring Support
Agreement, GateHouse will commence a pre-packaged solicitation of
the Plan, and (2) if holders of Outstanding Debt sufficient to
meet the requisite threshold of 67 percent in amount and majority
in number necessary for acceptance of the Plan under the
Bankruptcy Code vote to accept the Plan in the Solicitation,
GateHouse will commence Chapter 11 cases and seek approval of the
disclosure statement for the Plan and confirmation of the Plan
therein. Under the Restructuring Support Agreement, each of the
Participating Lenders agrees to (a) support and take any
reasonable action in furtherance of the Restructuring, (b) timely
vote their Outstanding Debt to accept the Plan and not change or
withdraw that vote, (c) support approval of the Disclosure
Statement and confirmation of the Plan and support certain relief
to be requested by GateHouse from the Bankruptcy Court, (d)
refrain from taking any action inconsistent with the confirmation
or consummation of the Plan, and (e) not propose, support, solicit
or participate in the formulation of any plan other than the Plan.
Termination Provisions
The Restructuring Support Agreement will terminate automatically
upon certain events, including the following: (i) GateHouse has
commenced Chapter 11 cases that are subsequently dismissed or
converted to Chapter 7, or a Chapter 11 trustee, responsible
officer or examiner with enlarged powers is appointed; (ii)
GateHouse has elected to terminate the Restructuring Support
Agreement in accordance with the exercise of its fiduciary duties;
or (iii) the occurrence of the earlier of (a) Dec. 16, 2013, and
(b) the Effective Date.
The Investment Commitment Letter will terminate automatically and
immediately if the Restructuring Support Agreement has terminated
or ceased to be in full force and effect.
Credit Amendment
On or around Sept. 4, 2013, GateHouse and certain Lenders
(including Newcastle) constituting the "Required Lenders" under
the 2007 Credit Agreement entered into Amendment Agreement to the
2007 Credit Agreement effective Sept. 3, 2013. Pursuant to the
terms of the Credit Amendment, GateHouse obtained the following
improvement in terms:
-- a clarified and expanded definition of "Eligible Assignee";
-- an increase in the base amount in the formula used to
calculate the "Permitted Investments" basket from $35
million to a base of $50 million;
-- the removal of the requirement that GateHouse's annual
financial statements not have a "going concern" or like
qualification to the audit;
-- the removal of a cross default from any Secured Hedging
Agreement to the 2007 Credit Agreement;
-- the removal of a Bankruptcy Default, as defined therein,
arising from actions in furtherance of or indicating consent
to the specified actions; and
-- a waiver of any prior Default or Event of Default, including
without limitation from the negotiation, entry into, or
performance of the Restructuring Support Agreement or the
Investment Commitment Letter.
In consideration of the changes, GateHouse agreed to pay each of
the Lenders party to the Credit Amendment that timely executed and
delivered its signature to the Credit Amendment and the
Restructuring Support Agreement, an amendment fee equal to 3.5
percent multiplied by the aggregate outstanding amount of the
Loans held by that Lender, unless waived in writing. Newcastle
and certain other Lenders elected to waive their amendment fee
pursuant to the Credit Amendment. Newcastle indemnified other
Lenders with respect to their entry into the Credit Amendment,
subject to the limitations set forth in the Credit Amendment.
A copy of the Restructuring Agreement is available at:
http://is.gd/DPWTgh
A copy of the Investment Commitment Letter is available at:
http://is.gd/gvDueE
A copy of the Amended Credit Agreement is available at:
http://is.gd/iBNKWN
About GateHouse Media
GateHouse Media, Inc. -- http://www.gatehousemedia.com/--
headquartered in Fairport, New York, is one of the largest
publishers of locally based print and online media in the United
States as measured by its 97 daily publications. GateHouse Media
currently serves local audiences of more than 10 million per week
across 21 states through hundreds of community publications and
local Web sites.
As of June 30, 2013, the Company had $433.70 million in total
assets, $1.28 billion in total liabilities and a $848.85 million
total stockholders' deficit.
GETTY IMAGES: Bank Debt Trades at 6% Off
----------------------------------------
Participations in a syndicated loan under which Getty Images Inc.
is a borrower traded in the secondary market at 94.35 cents-on-
the-dollar during the week ended Friday, September 13, 2013,
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. This represents a decrease
of 1.80 percentage points from the previous week, The Journal
relates. Getty Images Inc. pays 350 basis points above LIBOR to
borrow under the facility. The bank loan matures on Oct. 14,
2019. The bank debt is not rated by Moody's and Standard &
Poor's. The loan is one of the biggest gainers and losers among
255 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
Headquartered in Seattle, Wash., Getty Images is a leading creator
and distributor of still imagery, video and multimedia products,
as well as a recognized provider of other forms of premium digital
content, including music. The company was founded in 1995 and
provides stock images, music, video and other digital content
through several web sites, nota0bly gettyimages.com,
istockphoto.com, and thinkstock.com. In October 2012, The Carlyle
Group completed the acquisition of a controlling indirect interest
in Getty Images in a transaction valued at approximately $3.3
billion (up from the $2.4 billion transaction value of the prior
LBO in 2008). The Carlyle Group owns approximately 51% of the
company with a trust representing certain Getty family members
owning approximately 49%. Revenues totaled $897 million for the 12
months ended June 30, 2013.
* * *
As reported in the Troubled Company Reporter on Sept. 5, 2013,
Moody's Investors Service placed the ratings of Getty Images on
review for downgrade based on weaker than expected results through
2Q2013 and Moody's revised expectations for the next 12 months.
According to Moody's, Corporate Family Rating of Issuer: Getty
Images, Inc. and Abe Investment Holdings, Inc., currently B2, is
placed on review for possible downgrade.
GLOBAL AXCESS: Creditors Committee Balks at Bidding Procedures
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Global Axcess Corp., et al., filed a limited objection
and reservation of rights to the Debtors' emergency motion for
order (a) approving auction procedures and bid procedures; (b)
approving form of asset purchase agreement, including break-up
fee; and (d) scheduling dates to conduct auction and hearing to
consider final approval of sale and related matters.
According to the Committee, it does not oppose the outright the
sale of the Debtors' assets, but the Committee does object to
various terms of the proposed Sale and corresponding order
approving the sale, and objects to the entry of any sale order
that does not provide the minimal protections to which the
creditors of the estate are entitled.
Specifically, any order approving the Sale must, at a minimum:
a) require that no proceeds from the sale are allowed to
be distributed without further Court order;
b) allow the Committee at least 60 days to conduct a thorough
review of the: (i) assets sold; (ii) adequacy of the Bank's
liens, including any lien avoidance actions; and (iii)
remaining assets of the Debtors to determine whether there
are any unencumbered assets available for distribution to
unsecured creditors; and
c) include a requirement that all allowed administrative
claims are paid from the Sale proceeds through confirmation
or conversion.
Finally, the Committee, to the best of its knowledge, believes
that no postpetition services of creditors have been paid to date,
and it is the Committee's understanding that the Debtor intends to
convert its case to Chapter 7 upon closing of the sale and
distribution of the proceeds. Accordingly, the Court must order a
reserve of the sale proceeds to cover postpetition vendor costs.
As reported in the Troubled Company Reporter on Aug. 23, 2013,
Marie Beaudette, writing for DBR Small Cap, said a bankruptcy
judge has cleared Global Axcess Corp. to auction its ATM business
in September, with Financial Consulting & Trading International
Inc. kicking off bidding with a $10 million offer.
About Global Axcess
Jacksonville, Fla.-based Global Axcess Corp., through its wholly
owned subsidiaries, owns or leases, operates or manages Automated
Teller Machines ("ATM"s) and DVD kiosks with locations primarily
in the eastern and southwestern United States of America.
Affiliate Nationwide Ntertainment Services Inc. has 323 DVD
rental kiosks, mostly on military bases.
Global Axcess along with affiliates sought Chapter 11 protection
(Bankr. D. Nev. Case No. 13-51562) in Reno, Nevada on Aug. 5.
Gabrielle A. Hamm, Esq., at Gordon Silver, serve as counsel.
Brian P. Hall, Esq. -- bhall@sgrlaw.com -- at Smith, Gambrell &
Russell, LLP is the co-counsel. Morris Anderson is the financial
advisor, and Mayer Hoffman McCann, P.C., is the tax consultant.
Kurtzman Carson Consultants LLC serves as the official claims and
noticing agent.
Global Axcess disclosed assets of $9.2 million and debt totaling
$19.3 million.
The U.S. Trustee appointed four creditors to serve in the Official
Committee of Unsecured Creditors. Samuel A. Schwartz, Esq. --
ecf@schwartzlawyers.com -- at The Schwartz Law Firm, Inc.,
represents the Committee.
GLOBAL AXCESS: Gets Final OK to Incur $16.7MM Postpetition Loan
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada authorized,
on a final basis, Global Axcess Corp., et al., to (a) use cash
collateral; (b) incur postpetition debt in an aggregate amount not
to exceed $16,729,164; and (c) grant adequate protection and
provide security and other relief to Fifth Third Bank, in its
capacity as the lender party to the Prepetition Credit Agreements,
Fifth Third Equipment Finance Company in its capacity as the
lessor party to the Prepetition Lease Agreements, and Fifth Third
Bank in its capacity as the lender party to Postpetition Credit
Agreement.
As of the filing date, the Debtors are liable for payment of the
Prepetition Debt, and the Prepetition Debt will be an allowed
claim in an amount not less than $14,757,771, exclusive of accrued
and accruing Allowable 506(b) Amounts.
The Debtors need to use cash collateral and incur postpetition
debt until the termination date in order to prevent immediate and
irreparable harm to the estate and minimize disruption to and
avoid the termination of their business operations.
The Debtors were unable to obtain unsecured credit allowable under
Code Section 503(b)(1) of the Bankruptcy Code sufficient to
finance the operations of their businesses.
Certain material terms of postpetition debt includes, among other
things:
i) the maximum principal amount of postpetition debt
outstanding will not at any time exceed the DIP Commitment;
ii) the postpetition debt will bear interest at a per annum
rate equal to LIBOR plus 7%;
iii) the Debtors will pay to postpetition lender a closing fee
in an amount equal to (1) one percent of the DIP Revolver
Commitment, which portion of the closing fee will be fully
earned, due and payable immediately upon the closing of the
Postpetition Credit Agreement; (2) one percent of the
Interim DIP Amount (less the DIP Revolver Commitment), which
portion of the closing fee will be fully earned, due and
payable immediately upon the entry of the Second Interim
Order; and (3) one percent of the DIP Commitment (less
the Interim DIP Amount), which portion of the closing fee
will be fully earned.
iv) the Postpetition Debt will mature and be due and payable
in full by Debtors on the termination date.
As adequate protection from any diminution in value of the
lender's collateral, the Debtors will grant the lender replacement
liens, a superpriority administrative expense status, subject to
carve out on certain expenses.
The postpetition debt will also be subject to certain sale
covenants to effectuate the sale process for all or substantially
all of the Debtors' assets, which include, among other things:
1. an auction scheduled for Sept. 9, 2013;
2. a sale hearing scheduled for Sept. 10;
3. sale closing by Sept. 27, one or more sales of all or
substantially all of the Debtors' assets; and
4. the right to use the postpetition debt or any part
thereof to credit bid with respect to any bulk or piecemeal
sale of all or any portion of the aggregate collateral,
and (b) the Prepetition Financing Group will have the
right to use the Prepetition Debt or any part thereof
to credit bid with respect to any bulk or piecemeal sale
of all or any portion of the Aggregate Collateral, so
long as any such credit bid by the Prepetition Financing
Group provides for a cash payment sufficient to repay
the Postpetition Debt in full in cash.
About Global Axcess
Jacksonville, Fla.-based Global Axcess Corp., through its wholly
owned subsidiaries, owns or leases, operates or manages Automated
Teller Machines ("ATM"s) and DVD kiosks with locations primarily
in the eastern and southwestern United States of America.
Affiliate Nationwide Ntertainment Services Inc. has 323 DVD
rental kiosks, mostly on military bases.
Global Axcess along with affiliates sought Chapter 11 protection
(Bankr. D. Nev. Case No. 13-51562) in Reno, Nevada on Aug. 5.
Gabrielle A. Hamm, Esq., at Gordon Silver serve as counsel. Brian
P. Hall, Esq., at Smith, Gambrell & Russell, LLP is the co-
counsel. Morris Anderson is the financial advisor, and Mayer
Hoffman McCann, P.C., is the tax consultant. Kurtzman Carson
Consultants LLC serves as the official claims and noticing agent.
Global Axcess disclosed assets of $9.2 million and debt totaling
$19.3 million.
The U.S. Trustee appointed four creditors to serve in the Official
Committee of Unsecured Creditors. Samuel A. Schwartz, Esq., at
The Schwartz Law Firm, Inc., represents the Committee.
GLOBAL AXCESS: Trustee Wants Case Transferred to Las Vegas
----------------------------------------------------------
Nicholas Strozza, Assistant U.S. Trustee, on behalf of August B.
Landis, Acting U.S. Trustee, said in an August court filing that
Global Axcess Corp., et al.'s Chapter 11 cases should be
transferred to Las Vegas or to Florida. The Trustee said that,
among other things:
1. all of the Debtors use the same Florida address;
2. the Debtor's primary creditors are in Florida; and
3. the chief operating officer for all the Debtor,
David Bagley, is a restructuring professional located in
Chicago, Illinois.
According to the Trustee, no cause or basis has been stated for
the case to be filed in Reno instead of Las Vegas. The Debtor's
connections are primarily in Henderson, not Reno; and the Debtors'
primary counsel is in Las Vegas, not in Reno.
About Global Axcess
Jacksonville, Fla.-based Global Axcess Corp., through its wholly
owned subsidiaries, owns or leases, operates or manages Automated
Teller Machines ("ATM"s) and DVD kiosks with locations primarily
in the eastern and southwestern United States of America.
Affiliate Nationwide Ntertainment Services Inc. has 323 DVD
rental kiosks, mostly on military bases.
Global Axcess along with affiliates sought Chapter 11 protection
(Bankr. D. Nev. Case No. 13-51562) in Reno, Nevada, on Aug. 5.
Gabrielle A. Hamm, Esq., at Gordon Silver serve as counsel. Brian
P. Hall, Esq., at at Smith, Gambrell & Russell, LLP is the co-
counsel. Morris Anderson is the financial advisor, and Mayer
Hoffman McCann, P.C., is the tax consultant. Kurtzman Carson
Consultants LLC serves as the official claims and noticing agent.
Global Axcess disclosed assets of $9.2 million and debt totaling
$19.3 million.
The U.S. Trustee appointed four creditors to serve in the Official
Committee of Unsecured Creditors. Samuel A. Schwartz, Esq., at
The Schwartz Law Firm, Inc., represents the Committee.
GLOBAL AXCESS: U.S. Trustee Forms Four-Member Creditors Committee
-----------------------------------------------------------------
The U.S. Trustee, in an amended notice, appointed four creditors
to serve in the Official Committee of Unsecured Creditors in the
Chapter 11 cases of Global Axcess Corp., et al.
The Committee consists of:
1. Triton Systems Of Delaware, LLC & Atmgurus
Attn: Toni Hufft
21405 B Street
Long Beach, MS 39560
Tel: (228) 575-3127
Fax: (228) 575-3383
E-mail: toni.hufft@triton.com
2. Contour Networks
Attn: Mark Zwecker
1349 W. Peachtree Street, Suite 1740
Atlanta, GA 30309
Tel: (404) 347-8352
Fax: (404) 347-8370
E-mail: mzwecker@contournetworks.com
3. Carolina Technical Services, LLC
d/b/a SQL Insight
Attn: Susan H. Schneider
4753 Pirates Bay Drive
Jacksonville, FL 32210
Tel: (904) 465-3526
E-mail: susanh@sqlinsight.net
4. Pendum, LLC
c/o JP Reyes
Attn: Dawn Cica, Partner
Lewis and Roca, LLP
3993 Howard Hughes Parkway
Las Vegas NV 89169
Tel: (702) 949-8257
Fax: (702) 216-6208
E-mail: dcica@LRRlaw.com
About Global Axcess
Jacksonville, Fla.-based Global Axcess Corp., through its wholly
owned subsidiaries, owns or leases, operates or manages Automated
Teller Machines ("ATM"s) and DVD kiosks with locations primarily
in the eastern and southwestern United States of America.
Affiliate Nationwide Ntertainment Services Inc. has 323 DVD
rental kiosks, mostly on military bases.
Global Axcess along with affiliates sought Chapter 11 protection
(Bankr. D. Nev. Case No. 13-51562) in Reno, Nevada, on Aug. 5.
Gabrielle A. Hamm, Esq., at Gordon Silver serve as counsel. Brian
P. Hall, Esq., at Smith, Gambrell & Russell, LLP is the co-
counsel. Morris Anderson is the financial advisor, and Mayer
Hoffman McCann, P.C., is the tax consultant. Kurtzman Carson
Consultants LLC serves as the official claims and noticing agent.
Global Axcess disclosed assets of $9.2 million and debt totaling
$19.3 million.
The U.S. Trustee appointed four creditors to serve in the Official
Committee of Unsecured Creditors. Samuel A. Schwartz, Esq., at
The Schwartz Law Firm, Inc., represents the Committee.
GRYPHON GOLD: Ch. 11 Case Transferred to Reno Division
------------------------------------------------------
Judge Mike K. Nakagawa of the U.S. Bankruptcy Court for the
District of Nevada approved Gryphon Gold Corporation's to transfer
its Chapter 11 case to Reno Division.
Gryphon Gold filed for Chapter 11 protection (Bankr. D. Nev. Case
No. 13-51496). The Company, which engages in the acquisition,
exploration and development of gold properties primarily in
Nevada, is represented by Stephen R. Harris of Harris Law
Practice.
The Company announced that it initiated this filing "in an effort
to address certain operational and liquidity challenges," the
report related. Gryphon Gold also announced that, on July 22,
2013, it was served with a civil complaint to appoint a receiver.
The complaint was filed in the Second Judicial District Court for
the State of Nevada by certain shareholders.
Gryphon Gold Corporation, headquartered in Carson City, Nevada,
holds a 40% joint venture interest in the gold producing Borealis
Property through its 40% ownership of Borealis Mining Company LLC,
which is located in Nevada's Walker Lane Gold Belt.
GRYPHON GOLD: Employs Harris Law as Ch. 11 Counsel
--------------------------------------------------
Gryphon Gold Corporation sought and obtained authority from the
U.S. Bankruptcy Court for the District of Nevada to employ Harris
Law Practice LLC as its counsel.
Gryphon Gold filed for Chapter 11 protection (Bankr. D. Nev. Case
No. 13-51496). The Company, which engages in the acquisition,
exploration and development of gold properties primarily in
Nevada, is represented by Stephen R. Harris of Harris Law
Practice.
The Company announced that it initiated this filing "in an effort
to address certain operational and liquidity challenges," the
report related. Gryphon Gold also announced that, on July 22,
2013, it was served with a civil complaint to appoint a receiver.
The complaint was filed in the Second Judicial District Court for
the State of Nevada by certain shareholders.
Gryphon Gold Corporation, headquartered in Carson City, Nevada,
holds a 40% joint venture interest in the gold producing Borealis
Property through its 40% ownership of Borealis Mining Company LLC,
which is located in Nevada's Walker Lane Gold Belt.
HAMPTON CAPITAL: Committee and SABAL Balk at Plan Confirmation
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
case of Hampton Lake, LLC, asks the U.S. Bankruptcy Court for the
District of South Carolina to deny confirmation of the Plan of
Liquidation dated May 3, 2013, as amended on June 7, 2013.
The Committee has reviewed the Plan and the subsequent amendment
and has continued to negotiate with the Debtor regarding
modifications needed to satisfy the Committee that it fairly and
equitably treats the unsecured claims scheduled and file in the
case.
Specifically, the Committee has encouraged the Debtor to resolve
the issues of the treatment of the Charter Note Holder claims and
has continued to negotiate an acceptable treatment of the claims
of the class of unsecured creditors.
In a separate filing, Crimson Portfolio, LLC and SABAL Financial
Group, L.P., stated that the Debtor's Plan is not confirmable and
unprecedented.
As to SABAL, it was not given price approval for lot sales and the
Debtor does not set minimum release prices, so accordingly,
payment to SABAL is entire dependent on sales revenue exceeding
the Debtor's management and operational expenses.
As reported in the Troubled Company Reporter on Sept. 12, 2013,
Judy A. Robbins, U.S. Trustee for Region 4, asked the Court to
deny confirmation of the Debtor's Plan. According to the U.S.
Trustee, the Plan contemplates that, among other things (a) Sabal
Financial Group, LP, will receive an aggregate of approximately
88.5% of its allowed claim as of the Petition Date from the sale
of the remaining lots; (b) general unsecured trade vendors will be
paid in full; (c) the Charter Note Holders will receive
approximately 8.75% of the principal loan balance owed at the
Petition Date; and (d) the equity interests in the Debtor will be
extinguished. In addition, Hampton Lake Realty, LLC, the Debtor's
sales arm, which may have value beyond the term of the Plan, will
be marketed and sold at the end of the Plan term, with the net
proceeds going to the Charter Note Holders in addition to the
payments set forth.
The U.S. Trustee relates that none of the parties that are being
released through the Plan are providing a substantial contribution
to the Plan. Reed and Reed Development are not providing any
contribution to the Plan. Moreover, the proposed subordination of
Hampton Funding, which has a second mortgage, ignores the fact
that the Debtor's projected proceeds from the liquidation of its
assets are insufficient to pay the senior lender, SABAL, in full.
In addition, the Plan contemplates that Hampton Lake Funding, LLC,
which is an entity controlled by Reed that loaned the Debtor
$2,000,000 in return for a second priority mortgage on the
Debtor's real property, and is now owed $2,290,835, will
subordinate its claims to all other creditors in return for third-
party releases well as for declarant rights contemplated in the
Community Charter for the Hampton Lake Subdivision.
The U.S. Trustee notes that to date, there has not been a record
of specific factual findings that would support the releases
proposed in the Plan.
The Plan
As reported in the Troubled Company Reporter on July 19, 2013, the
Plan contemplates that the best disposition of the Debtor's estate
would involve (i) the appointment of trustee on or before the
Effective Date, (ii) the sale and/or collection of any remaining
property of the Estate, and (iii) the pursuit of any causes of
action or claims held by the Debtor's estate, followed by
distribution of cash and net sale proceeds to creditors.
The Plan provides for the appointment of a trustee by the
Bankruptcy Administrator, subject to approval by the Court. The
Debtor recommends the appointment of Sara A. Conti as trustee. If
the Plan is confirmed, a claims review and reconciliation process
is anticipated to take approximately between 60 and 180 days
after the Effective Date, although resolution of the Ronile
Secured Claim may take additional time to complete.
Full-text copies of the Liquidation Plan and Disclosure Statement
dated July 8 are available at:
http://bankrupt.com/misc/HAMPTONCAPITAL_PlanDSJul8.PDF
About Hampton Capital Partners
Hampton Capital Partners, LLC, an Aberdeen, N.C.-based
manufacturer of residential and commercial tufted carpets under
the Gulistan name, filed a Chapter 11 petition (Bankr. M.D.N.C.
Case No. 13-bk-80015) on Jan. 7, 2013.
The Company has been producing carpet under the Gulistan name
since 1924, although it traces its roots back to 1818, when an
Armenian textile importer established a business in Turkey. The
company began manufacturing carpet in Aberdeen in 1957, and was
acquired by J.P. Stevens & Co. Inc. in 1964. Over the last 25
years, Gulistan Carpet has undergone several ownership changes.
In addition to its headquarters and manufacturing operations in
Aberdeen, the company has a plant in Wagram, N.C. John Paul H.
Cournoyer, Esq., at Northen Blue, LLP, serves as counsel to the
Debtor. Getzler Henrich & Associates LLC is the financial
consultant.
Five creditors have been appointed to serve on the Official
Committee of Unsecured Creditors. The Committee tapped Lowenstein
Sandler LLP as its counsel and Wilson and Ratledge PLLC as its
North Carolina counsel. The Committee also tapped BDO Consulting,
a division of BDO USA LLP, as its financial advisors.
HERON LAKE: To Sell Corn Oil to RPMG
------------------------------------
Heron Lake BioEnergy, LLC, finalized a Corn Oil Marketing
Agreement with RPMG, Inc., dated Sept. 4, 2013. Pursuant to the
Agreement, the Company will sell to RPMG, and RPMG will purchase
and market, all of the corn oil produced by the Company at the
Company's Heron Lake, Minnesota, ethanol production plant. The
Company will pay RPMG a commission based on each pound of corn oil
sold by RPMG. The Agreement will become effective as of Sept. 16,
2013.
About Heron Lake
Heron Lake BioEnergy, LLC, operated a dry mill, coal fired ethanol
plant in Heron Lake, Minnesota. After completing a conversion in
November 2011, the Company is now a natural gas fired ethanol
plant. Its subsidiary, HLBE Pipeline Company, LLC, owns 73
percent of Agrinatural Gas, LLC, the pipeline company formed to
construct, own, and operate a natural gas pipeline that provides
natural gas to the Company's ethanol production facility through a
connection with the natural gas pipeline facilities of Northern
Border Pipeline Company in Cottonwood County, Minnesota. Its
subsidiary, Lakefield Farmers Elevator, LLC, has grain facilities
at Lakefield and Wilder, Minnesota. At nameplate, the Company's
ethanol plant has the capacity to process approximately 18.0
million bushels of corn each year, producing approximately 50
million gallons per year of fuel-grade ethanol and approximately
160,000 tons of distillers' grains with soluble.
In its report on the Company's financial statements for the fiscal
year ended Oct. 31, 2012, Boulay, Heutmaker, Zibell & Co.
P.L.L.P., in Minneapolis, Minnesota, expressed substantial doubt
about Heron Lake BioEnergy's ability to continue as a going
concern. The independent auditors noted that the Company has
incurred losses due to difficult market conditions and the
impairment of long-lived assets. "The Company is out of
compliance with its master loan agreement and is operating under a
forbearance agreement whereby the Company agreed to sell
substantially all of its assets."
The Company reported a net loss of $32.35 million for the year
ended Oct. 31, 2012, as compared with net income of $543,017 for
the year ended Oct. 31, 2011. As of April 30, 2013, the Company
had $59.78 million in total assets, $44.05 million in total
liabilities and $15.72 million in total members' equity.
Bankruptcy Warning
At Jan. 31, 2013, the Company's total indebtedness to AgStar was
approximately $41.1 million. All of the Company's assets and real
property are subject to security interests and mortgages in favor
of AgStar as security for the obligations of the master loan
agreement. The Company's failure to pay any required installment
of principal or interest or any other amounts payable under the
Company's Term Loan or Term Revolving Loan or the Company's
failure to perform or observe any covenant under the Sixth Amended
and Restated Master Loan Agreement would result in an event of
default, entitling AgStar to accelerate and declare due all
amounts outstanding under the Company's Term Loan and its Term
Revolving Loan.
"Upon the occurrence of any one or more Events of Default, as
defined under the Sixth Amended and Restated Forbearance
Agreement, including failure to observe any of the financial or
affirmative covenants...AgStar may accelerate all of our
indebtedness and may seize the assets that secure our
indebtedness, causing us to lose control of our business. We may
also be forced to sell our assets, restructure our indebtedness,
submit to foreclosure proceedings, cease operations or seek
bankruptcy or reorganization protection," according to the
Company's quarterly report for the three months ended Jan. 31,
2013.
HOVNANIAN ENTERPRISES: Guarantees $41.5-Mil. Notes Offering
-----------------------------------------------------------
K. Hovnanian Enterprises, Inc., is offering $41,581,000 6.25
percent senior notes due 2016 guaranteed by Hovnanian Enterprises,
Inc. Interest payments on the Notes are payable every January 15
and July 15 commencing on Jan. 1, 2014. Credit Suisse Securities
(USA) LLC serves as the book-runner of the offering. A copy of
the free writing prospectus is available for free at:
http://is.gd/nXftVv
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.
As of July 31, 2013, the Companies' balance sheet showed $1.66
billion in total assets, $2.13 billion in total liabilities and a
$467.20 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.
As reported in the TCR on Aug. 5, 2013, Moody's Investors Service
raised the Corporate Family Rating of Hovnanian Enterprises, Inc.
to Caa1 from Caa2. The upgrade reflects both the industry's
growing strength and Hovnanian's own improved results, which make
it far less likely that the company will default on its debt
obligations.
IBAHN CORP: Section 341(a) Meeting Set on October 7
---------------------------------------------------
A meeting of creditors in the bankruptcy case of iBahn Corp. is
scheduled for Oct. 7, 2013, at 11:30 a.m.
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.
Salt Lake City, Utah-based IBahn Corp., a provider of Internet
services to hotels, sought bankruptcy protection (Bankr. D. Del.
Case No. 13-12285), citing a loss of contracts with largest
customer Marriott International Inc. and patent litigation costs.
IBahn Chief Financial Officer Ryan Jonson said the company had
assets of $13.6 million and it listed liabilities of as much as
$50 million in the Chapter 11 filing on Sept. 6, 2013. The
petitions were signed by Ryan Jonson as chief financial officer.
Judge Peter J. Walsh presides over the case.
Pachulski Stang, Ziehl Young & Jones, LLP, serves as the Debtors'
counsel. The Debtors' claims and noticing agent is Epiq
Bankruptcy Solutions.
INSPIREMD INC: To Report Fiscal Year 2013 Results on Sept. 17
-------------------------------------------------------------
InspireMD, Inc., will release its financial results for the fiscal
year ended June 30, 2013, on Tuesday, Sept. 17, 2013. The Company
will host a conference call on that day at 4:30 p.m. ET to review
the Company's financial results and business outlook.
Participants should call (877) 375-4189 (United States/Canada) or
(973) 935-2046 (International) and request the InspireMD call or
provide confirmation code 45736242. A live webcast of the call
will be available on the Investor Relations section of the
Company's Web site at
http://www.inspire-md.com/site_en/for-investors/
Please allow 10 minutes prior to the call to visit this site to
download and install any necessary audio software.
A replay of the conference call will be available approximately
two hours after completion of the live conference call and will be
accessible until 11:59 p.m. ET on Oct. 1, 2013. To listen to the
replay, dial (855) 859-2056 (United States/Canada) or (404) 537-
3406 (International) and enter code 45736242. The webcast of the
event will also be archived for two weeks on the Investor
Relations section of the Company's Web site at
http://www.inspire-md.com/site_en/for-investors/
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."
J.C. PENNEY: Steven Roth Resigns from Company Board
---------------------------------------------------
Ben Fox Rubin, writing for The Wall Street Journal, reported that
Steven Roth, chief executive of Vornado Realty Trust, stepped down
from J.C. Penney Co.'s board on Sept. 13, becoming the second big
investor to leave the struggling department-store chain's board in
recent weeks.
According to the report, in a filing with the Securities and
Exchange Commission, Vornado said it intends to review its
investments in Penney, noting at a recent conference Vornado Chief
Administrative Officer Joseph Macnow said his company expects to
exit its investment "in the not-too-distant future." Vornado said
it has a 6.1% stake in Penney.
Mr. Roth's resignation comes a few weeks after hedge-fund manager
Bill Ackman left Penney's board amid a disagreement about its
direction and soon after opted to sell his fund's nearly 18% stake
in the company, the report related. His failed bet on the
retailer cost his fund, Pershing Square Capital Management LP,
more than $600 million.
In a separate filing, J.C. Penney said: "Mr. Roth's decision was
not the result of any disagreement with the company or the board
of directors," the report cited.
Mr. Roth and Mr. Ackman joined Penney's board in February 2011
after amassing a 27% stake in the retailer, the report said.
About J.C. Penney
Plano, Texas-based J.C. Penney Company, Inc. is one of the U.S.'s
largest department store operators with about 1,100 locations in
the United States and Puerto Rico.
* * *
The Company carries Moody's Investors Service's B3 Corporate
Family Rating with negative outlook.
Early in March 2013, Standard & Poor's Ratings Services lowered
its corporate credit rating on Penney to 'CCC+' from 'B-'. The
outlook is negative. At the same time, S&P lowered the issue-
level rating on the company's unsecured debt to 'CCC+' from 'B-'
and maintained its '3' recovery rating on this debt, indicating
S&P's expectation of meaningful (50% to 70%) recovery for
debtholders in the event of a payment default.
"The downgrade reflects the performance erosion that has
accelerated throughout the previous year and seems likely to
persist over the next 12 months," explained Standard & Poor's
credit analyst David Kuntz.
At the same time, Fitch Ratings downgraded the Company's Issuer
Default Ratings to 'B-' from 'B'. The Rating Outlook is Negative.
The rating downgrades reflect Fitch's concerns that there is a
lack of visibility in terms of the Company's ability to stabilize
its business in 2013 and beyond after a precipitous decline in
revenues leading to negative EBITDA of $270 million in 2012.
Penney, Fitch said, will need to tap into additional funding to
cover a projected FCF shortfall of $1.3 billion to $1.5 billion in
2013, which could begin to strain its existing sources of
liquidity.
In February 2013, Penney received a notice of default from a law
firm representing more than 50% of its 7.4% Debentures due 2037.
The Company has filed a lawsuit in Delaware Chancery Court seeking
to block efforts by the bondholder group to declare a default on
the 2037 bonds. Penney also asked lawyers at Brown Rudnick LLP to
identify the investors they represent.
In March 2013, Penney received a letter from bondholders
withdrawing and rescinding the Notice of Default.
On April 12, 2013, Penney borrowed $850 million out of its $1.85
billion committed revolving credit facility with JPMorgan Chase
Bank, N.A., as Administrative Agent, and Wells Fargo Bank,
National Association, as LC Agent. Penney said the move was to
enhance the Company's financial flexibility and position.
JAMES RIVER: Extends Exchange Offer for $54MM Notes to Sept. 18
---------------------------------------------------------------
James River Coal Company has extended, until 5:00 p.m., New York
City time, on Sept. 18, 2013, its offers to exchange (i) up to
$31.7 million aggregate principal amount of its 10.00 percent
Convertible Senior Notes due 2018 for any and all of its
outstanding 4.50 percent Convertible Senior Notes due 2015 and
(ii) up to $22.7 million aggregate principal amount of its New
Notes for any and all of its outstanding 3.125 percent Convertible
Senior Notes due 2018.
The exchange offers were originally set to expire at 11:59 p.m.,
New York City time, on Sept. 11, 2013. U.S. Bank National
Association, the exchange agent and information agent for the
exchange offers, advised the Company that, as of 5:00 p.m. on
Sept. 11, 2013, tenders of approximately $3.6 million aggregate
principal amount of the Existing 2015 Notes and $38.5 million
aggregate principal amount of the Existing 2018 Notes had been
validly tendered for exchange and not withdrawn, representing
approximately 7.0 percent and 75.0 percent of the Existing 2015
Notes and Existing 2018 Notes, respectively. Except for the
extension of the expiration date, all of the other terms of the
exchange offers remain unchanged.
About James River
Headquartered in Richmond, Virginia, James River Coal Company
(NasdaqGM: JRCC) -- http://www.jamesrivercoal.com/-- mines,
processes and sells bituminous steam and industrial-grade coal
primarily to electric utility companies and industrial customers.
The company's mining operations are managed through six operating
subsidiaries located throughout eastern Kentucky and in southern
Indiana.
James River reported a net loss of $138.90 million in 2012,
as compared with a net loss of $39.08 million in 2011. The
Company's balance sheet at March 31, 2013, showed $1.16 billion in
total assets, $944.75 million in total liabilities and $215.26
million in total shareholders' equity.
* * *
In the May 24, 2013, edition of the TCR, Moody's Investors Service
downgraded James River Coal Company's Corporate Family Rating to
Caa2 from Caa1.
"While the company continues to take actions to reposition
operations and shore up its balance sheet, we expect external
factors will preclude James River from maintaining credit measures
and liquidity consistent with the Caa1 rating level," said Ben
Nelson, Moody's lead analyst for James River Coal Company.
As reported by the TCR on Nov. 19, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Richmond, Va.-based
James River Coal Co. to 'CCC' from 'SD' (selective default).
"We raised our rating on James River Coal because we understand
that the company has stopped repurchasing its debt at deep
discounts, for the time being," said credit analyst Megan
Johnston.
KEOKUK, IA: Moody's Withdraws Ratings on 1998 Revenue Bonds
-----------------------------------------------------------
Moody's Investors Service has withdrawn the rating assigned to
Keokuk Area Hospital's Series 1998 revenue bonds, issued through
the City of Keokuk, IA, at the Caa3 level with a negative rating
outlook. The withdrawal reflects the rating agency's belief that
it lacks adequate information to maintain a rating.
Ratings Rationale:
Moody's has withdrawn the rating because it believes it has
insufficient or otherwise inadequate information to support the
maintenance of the rating.
LADDER CAPITAL: Fitch Affirms 'BB' Issuer Default Rating
--------------------------------------------------------
Fitch Ratings has affirmed Ladder Capital Finance Holdings LLLP
and Ladder Capital Finance Corporation's (collectively, Ladder)
long-term Issuer Default Rating and senior unsecured debt at 'BB'.
The Rating Outlook is Stable.
Key Rating Drivers
The affirmation reflects Ladder's conservative leverage and
operating profile, strong credit and performance trends, good
liquidity, and experienced management team. Rating constraints
include limited financial flexibility due to a high proportion of
secured funding, exposure to cyclical commercial real estate (CRE)
markets, operating history limited to post-crisis, and key man
risk.
Improving Fundamentals
In 2012 and 1H'13, Ladder took advantage of improving fundamentals
in the CRE markets to reduce its CMBS investments and grow its
conduit and balance sheet loan book. Net revenues almost doubled
to$210.3 million in 1H'13 from $108.5 million in 1H'12, driven by
increased loan originations and attractive securitization profit
margins. Fitch expects margins to normalize as more competition
enters the conduit lending market and as liquidity in the CMBS
market improves. Still, demand for U.S. CRE lending is expected to
be robust, with over $1.6 trillion in loans maturing over the next
five years, which bodes well in terms of origination
opportunities.
Risk Management Focus
Ladder has yet to experience credit losses or impairments in its
loan portfolio. Fitch views the company's conservative risk
culture, its operating history limited to post-crisis and
unseasoned loan book as major contributors to this outstanding
performance. Fitch expects the company to manage leverage and
prudently add to its loan loss reserves with the growth in real
estate investments and balance sheet loans.
Equity Investment Increase
Ladder has opportunistically increased its direct equity
investment in real estate. Net equity exposure to real estate
investments increased to $355.1 million or 29.9% of total equity
at 2Q'13, from $28.8 million or 1.0% of total equity at YE2011.
Fitch notes that approximately 50% of these investments are in net
leased assets with high quality retail tenants and recurring cash
flow streams. However, certain of these assets are less liquidand
Fitch expects Ladder to manage its real estate exposure
conservatively by monetizing some of its less liquid investments.
Conservative Leverage Profile
Leverage, as measured by debt to tangible equity, declined to 1.0x
in 2Q'13, from 1.3x at YE2012 and 1.6x at YE2011, and is below
management's stated leverage target of 2.0x-3.0x. Leverage has
declined primarily due to the overall shift in asset mix from
highly levered CMBS securities to relatively low-levered loans and
real estate. Leverage has also declined as proceeds from the
senior unsecured issuance in 3Q'12 and recent CMBS securitizations
in 1H'13 were used to repay short-term borrowings under repurchase
facilities. Fitch expects management to continue to conservatively
manage its leverage, particularly in light of increased equity
real estate investments.
Diverse But Mostly Secured Funding Profile
Ladder lengthened and diversified its funding profile by accessing
the unsecured debt markets in 3Q'12, tapping Federal Home Loan
Bank (FHLB) borrowings via its captive insurance subsidiary, and
extending its financing lines. As a result, reliance on short-term
committed and uncommitted repurchase funding facilities has
declined materially, to 21% as of 2Q'13 from 89% of total funding
in YE2011, which Fitch views positively. Still, secured funding
made up a major portion (73.9% as of 2Q'13) of total funding,
which could restrict the company's financial flexibility in times
of stress.
Adequate Liquidity
Ladder's liquidity profile is enhanced by its high-quality and
liquid CMBS and U.S. agency securities portfolio, which, though
down from historically high levels, still comprised 35.5% of total
assets as of 2Q'13. Ladder has no unsecured debt maturities until
2017 and faces $242 million and $186 million of secured debt
maturities in 2H'13 and 2014, respectively, which are secured
primarily by investment grade rated securities.
Ladder has more than adequate resources between loan
repayment/securities amortization proceeds, excess funding
capacity under committed lines, and unencumbered assets to address
these maturities. As of June 30, 2013, Ladder had $1.8 billion of
available funding capacity under its committed secured repurchase
facilities and $902 million of available committed term financing
from FHLB, for a combined $2.7 billion in available funding to
fund future growth. Furthermore, unencumbered
securities/loans/real estate and unrestricted cash measured $1.1
billion at 2Q'13, providing ample coverage for unsecured debt
holders and offering a good source of contingent liquidity.
Stable Outlook
The Stable Outlook reflects Fitch's expectation that Ladder will
continue to prudently grow its business, maintain underwriting
standards, conservatively manage leverage, monetize or lower its
direct real estate equity exposure, and access diversified funding
sources, while maintaining adequate liquidity levels.
Rating Sensitivities
The following factors may have a positive impact on Ladder's
ratings and/or Outlook:
-- Increased economical access to long-term unsecured debt
funding;
-- Greater revenue diversity with reduced reliance on gain-on-sale
income;
-- Sustained profitability and asset quality performance through
multiple market environments, while maintaining conservative
leverage and strong liquidity levels.
The following factors may have a negative impact on Ladder's
ratings and/or Outlook:
-- Change in ownership structure or management that adversely
impacts the company's current balanced and conservative
operating approach;
-- Material increase in exposure to real estate equity investments
without appropriate reserves and a commensurate reduction in
leverage;
-- Regulatory or political risks that could impede access to FHLB
borrowings;
-- Sustained operating losses or material weakening of asset
quality;
-- Reduction in liquidity levels or unencumbered assets relative
to outstanding debt;
-- An increase in leverage beyond the company's stated target.
LANDAUER HEALTHCARE: Overcomes Committee Objection to Cash Use
--------------------------------------------------------------
The U.S. Bankruptcy Court gave final order authorizing Landauer
Healthcare Holdings, Inc. et al. to use cash collateral on interim
basis effective as of petition date through the time of the final
hearing on the motion; granting and affirming the adequate
protection being given to the Lender; and scheduling the final
hearing to consider entry of final order.
The Court's order gave the Debtor interim approval to use cash
collateral until Sept. 12, 2013.
Meanwhile, the official committee of unsecured creditors of the
Debtor submitted a preliminary objection to the Debtors' use of
cash collateral.
The Debtors requested the use of cash collateral to liquidate
their assets for the benefit of senior secured creditors who, by
all accounts at this early stage of the case, are vastly
undersecured.
According to the Committee, in this 9-week proposed liquidation,
the Debtor offer the Senior Secured Lenders significant and
excessive adequate protection, including the payment of more than
$2.5 million in interest, fees and principal, the effect which is
to render the Debtors cash flow negative. Worse, the proposed
Final Order dose not clearly provide for reallocation or
disgorgement, turning the adequate protection requirements of the
Bankruptcy Code on their head, to the obvious detriments of
creditors. There are numerous other issues with the proposed cash
collateral usage but, taken together what the Court is presented
with is a liquidation of the lenders' claimed collateral, fueled
by the Debtors' cash, with minimal protection for creditors.
The Committee believes the Cash Collateral Motion seeks and the
proposed final order grants unwarranted and overreaching
protection afforded to creditors by the Bankruptcy Code, restrict
the Committee and other creditor constituents from meaningfully
participating in the process going forward, or impair the
Bankruptcy Court's authority to ensure a fair and orderly chapter
11 process.
About Landauer Healthcare Holdings
Home medical equipment provider Landauer Healthcare Holdings,
Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
13-12098) on Aug. 16, 2013, with a deal to sell all assets to
Quadrant Management Inc. for $22 million, absent higher and better
offers.
The Company has 32 operating locations, with 50% of inventory
concentrated in Mount Vernon, New York; Great Neck, New York;
Warwick, Rhode Island; and Philadelphia, Pennsylvania. Landauer,
which derives revenues by reimbursement from insurers, Medicare
and Medicaid, reported net revenues of $128.5 million in fiscal
year ended March 31, 2013.
Landauer estimated assets and debt of at least $50 million.
Michael R. Nestor, Esq., Matthew B. Lunn, Esq., and Justin H.
Rucki, Esq., at Young Conaway Stargatt & Taylor, LLP; and John A.
Bicks, Esq., Charles A. Dale III, Esq., and Mackenzie L. Shea,
Esq., at K&L Gates LLP, serve as the Debtor's counsel. Carl Marks
Advisory Group serves as the Debtor's financial advisors, and Epiq
Systems as claims and notice agent.
LEHMAN BROTHERS: Sign Goes on the Block Again
---------------------------------------------
Mary M. Lane, writing for The Wall Street Journal, reported that a
Lehman Brothers asset plucked from the bank's ruins is set to soon
go to the highest bidder -- the sign from the failed investment
bank's London headquarters.
According to the report, Christie's plans to auction off the sign
that hanged in the bank's Canary Wharf office in London on Sept.
17.
The sale is expected to draw intense interest, the report said.
After Lehman's bankruptcy, its name became synonymous with an era
of Wall Street excess that brought the financial system to its
knees, the report related.
Even five years after those events, the Lehman name resonates far
beyond the confines of the insular world in which the bank
existed, the report said.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and
a third distribution of $14.2 billion on April 4, 2013. The
brokerage is yet to make a first distribution to non-customers,
although customers are being paid in full.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates.
LIGHTSQUARED INC: Seeks Court Approval of Bidding Procedures
------------------------------------------------------------
LightSquared Inc. asked U.S. Bankruptcy Judge Shelley Chapman to
approve a bidding process in connection with the sale of its
assets.
The move is part of the Chapter 11 plan filed by the company on
August 30, which proposes a sale of its assets at an auction to be
overseen by an independent board.
LightSquared had said the bidding process gives interested buyers
a chance to submit a proposal prior to the auction, and serve as a
"stalking horse" bidder.
Under the proposed bidding process, LightSquared will offer for
sale all assets. Interested buyers may submit a bid for any or
all of the assets. The deadline for submitting bids is Nov. 25 at
5:00 p.m. (prevailing Eastern time).
LightSquared will hold an auction on Dec. 5 at the New York
offices of its legal counsel, Milbank Tweed Hadley & McCloy LLP,
if it receives qualified bids.
Prior to the Nov. 25 deadline, LightSquared may enter into an
agreement with any interested buyer that will act as a "stalking
horse bidder." The stalking horse bidder will receive a break-up
fee of up to 3% of the cash purchase price, and a maximum expense
reimbursement of up to $1 million.
A copy of the document detailing the bidding process can be
accessed for free at http://is.gd/0h9xgY
LightSquared's lawyer, Matthew Barr, Esq., at Milbank, said the
company's plan is the only proposal that contemplates the sale of
all of its assets.
Mr. Barr said the rival plans filed by a group of LightSquared
lenders and U.S. Bank N.A. propose a "parallel, but not combined,
sale of substantially all of the assets."
"All that the competing sale plans seek to accomplish is the
disposition of their respective collateral packages to recover
their outstanding debts, with no concern for obtaining any value
for any junior stakeholder," the lawyer said.
Judge Chapman will hold a hearing on Sept. 24 to consider approval
of the bidding process. Objections are due by Sept. 17.
U.S. Bank, Mast Propose Bidding Procedures
In a related development, U.S. Bank N.A. and Mast Capital
Management LLC filed a motion in which it proposed another bidding
procedure to govern the sale of all or any combination or subset
of LightSquared's assets.
In the same filing, both companies also asked Judge Chapman to
approve Mast Spectrum Acquisition Co. LLC as stalking horse bidder
for One Dot Six Corp.'s wireless spectrum assets.
Under the proposed bidding procedure, all LightSquared assets will
be offered for sale at the auction to be conducted on Dec. 6.
Interested buyers have until Nov. 29 to submit their bids.
The bidding process contemplates that at least two stalking horse
bidders will participate at the auction. One of them is Mast
Spectrum and the other is L-Band Acquisition LLC, a subsidiary of
Dish Network Corp., which offered to purchase LightSquared's so-
called "LP" assets.
The bidding process also allows LightSquared to propose one or
more stalking horse bidders under its own plan in advance of the
Nov. 29 bid deadline.
Mast Spectrum, L-Band and the stalking horse bidder selected by
LightSquared will receive a break-up fee of up to 3% of the cash
or credit bid purchase price of the applicable assets, and a
maximum expense reimbursement of up to $2 million.
A copy of the document detailing the bidding process can be
accessed for free at http://is.gd/0IKHl9
"In order to manage the complex competing plan process that has
now been commenced and to ensure that the case timeline approved
by this court is upheld, it is critical that a single set of bid
procedures be approved that has the flexibility necessary to
enable bidders to bid on the assets of their choosing under any of
the competing sale plans," said Philip Dublin, Esq., at Akin Gump
Strauss Hauer & Feld LLP.
U.S. Bank and Mast Capital are represented by:
Michael S. Stamer, Esq.
Philip C. Dublin, Esq.
AKIN GUMP STRAUSS HAUER & FELD LLP
One Bryant Park
New York, New York 10036
Tel: (212) 872-1000
Fax: (212) 872-1002
E-mail: mstamer@akingump.com
pdublin@akingump.com
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.
LOMPOC RDA: Moody's Confirms 'Ba1' Rating on Revenue Bonds
----------------------------------------------------------
Moody's Investors Service has confirmed at Ba1 the rating of the
Successor Agency to the Lompoc Redevelopment Agency's outstanding
2004 Revenue Bonds Lompoc Public Financing Authority. The rating
action affects approximately $8.2 million of outstanding debt.
Ratings Rationale:
The confirmation at Ba1 is driven by changes to California law
that dissolved redevelopment agencies (RDAs) and changed the
method by which the successors agencies to the RDAs receive
incremental tax revenues to pay debt service on tax allocation
bonds; as a result of these changes, Moody's projects that debt
service coverage net of pass-through payments will remain below
Moody's threshold of two times to be considered investment grade.
Other factors affecting the rating include a large project area
and a limited project area assessed value; a somewhat concentrated
tax base; a narrow increment value to total project assessed
value; weak socio-economic indicators; and average debt service
coverage on a semi-annual basis.
Strengths
- A large project area in overall acreage
- Average debt service coverage ratios on a semi-annual basis
Challenges
- A narrow increment value to total project area assessed value
- Weak socio-economic profile
What Could Change The Rating Up
- Sizable increase in incremental AV of the project area, leading
to greater debt service coverage in all semi-annual periods and
improved incremental to assessed valuation
- Significant improvement to socio-economic indicators
What Could Change The Rating Down
- Material decline in the district's assessed valuation
The principal methodology used in this rating was Moody's Analytic
Approach To Rating California Tax Allocation Bonds published in
December 2003.
LOS BANOS RDA: Moody's Cuts Ratings on 3 Bond Series to Ba2
-----------------------------------------------------------
Moody's Investors Service has downgraded to Ba2 from Ba1 the
rating of the Successor Agency to Los Banos' Redevelopment
Agency's Series 2001, 2004 and 2006 bonds. The rating action
affects approximately $27.3 million of outstanding debt.
Ratings Rationale:
The downgrade to Ba2 is driven by changes to California law that
dissolved redevelopment agencies (RDAs) and changed the method by
which the successors agencies to the RDAs receive incremental tax
revenues to pay debt service on tax allocation bonds; as a result
of these changes, Moody's projects that debt service coverage net
of pass-through payments will remain below Moody's threshold of
two times to be considered investment grade.
Other factors affecting the rating include a project area with a
small assessed value (AV) relative to Moody's-rated CA tax
allocation bonds, with a weaker than average ratio of incremental
assessed value (AV) to total AV and wealth levels that are
slightly below average. The fact that the successor agency is no
longer administered by the city also is a factor in Moody's
rating.
Strengths:
- Narrow, but greater than sum-sufficient, coverage in all semi-
annual periods for the near- and mid-term
Challenges:
- Project area is located in the economically challenged Central
Valley of CA and is susceptible to further erosion in the tax
base. Further AV declines would have negative impacts on an
already thin coverage ratio.
- Low, relative to other rated CA tax allocation bonds, ratio of
incremental AV of the project area to overall project area AV
What Could Move The Rating-Up:
- Sizable increase in incremental AV of the project area, leading
to greater debt service coverage in all semi-annual periods.
- Significant improvement in socio-economic indicators
What Could Move The Rating-Down:
- Protracted decline in the district's assessed valuation
The principal methodology used in this rating was Moody's Analytic
Approach To Rating California Tax Allocation Bonds published in
December 2003.
MAKENA GREAT: GAC Storage Gets OK to Make Final Distributions
-------------------------------------------------------------
The U.S. Bankruptcy Court has authorized GAC Storage Lansing LLC
to make distributions to creditors, including payments of allowed
administrative and priority claims in full and a pro rata
distribution of the Creditor Payment to holders of allowed general
unsecured claims following the same of all of the Debtor's assets
pursuant to prior orders of the court including the court order
approving structured dismissal.
GAC Storage Lansing has submitted to the court the escrow trust
disbursement statement, asset sale distribution spreadsheet, and
proposed creditor distribution spreadsheet.
The Court also dismissed the chapter 11 case of the Debtor after
finding that there is a good cause to dismiss the case. The
Debtor has no likelihood of rehabilitation and its estate
continues to be dismissed by accruing administrative expenses.
About Makena Great American et al.
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.
MI PUEBLO: Has Interim Okay to Use Cash Collateral
--------------------------------------------------
The U.S. Bankruptcy Court early this month issued an interim order
granting a motion filed by Mi Pueblo San Jose, Inc. to use of cash
collateral, and to grant replacement liens as adequate protection
to secured creditor Wells Fargo Bank.
The terms of the Interim Order allows the Debtor to use cash
collateral through and including Sept. 15, 2013, and utilize the
budget for the Debtor's fiscal week ending Sept. 15, 2013.
A further interim hearing on the Debtor's use of cash collateral
was set last week.
Robert G. Harris is the attorneys for the Debtor.
Eric D. Goldberg is the attorneys for the official committee of
unsecured creditors.
About Mi Pueblo San Jose, Inc.
Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D.
Calif. Case No. 13-53893) in San Jose, California, on July 22,
2013. The Debtor estimated up to $50,000 in assets and up
$50,000,000 in liabilities. An affiliate, Cha Cha Enterprises,
LLC, sought Chapter 11 protection (Case No. 13-53894) on the same
day.
Heinz Binder, Esq. -- Heinz@bindermalter.com -- at Binder &
Malter, LLP, is the Debtor's general reorganization counsel. The
Law Offices of Wm. Thomas Lewis, sometimes doing business as
Robertson & Lewis, is the Debtor's special counsel.
The U.S. Trustee appointed seven members to the Official Committee
of Unsecured Creditors.
MI PUEBLO: Seeks to Hire Avant Advisory as Financial Advisors
-------------------------------------------------------------
Mi Pueblo San Jose, Inc., seeks authority from the U.S. Bankruptcy
Court for the Northern District of California to employ Avant
Advisory Partners, LLC as its financial advisors.
The firm will be paid based on its hourly billing rates:
Managing Directors/Directors $395 to $495
Principal Consultants $295 to $395
Consultants $225 to $325
Para Professionals/Analysts $175 to $250
Administrative Staff $75 to $100
The rates for Avant's most senior level professionals range up
to $495 per hour. George P. Blanco, the firm's managing director
and partner, will be paid at a rate not to exceed $395 per hour.
Messrs. Michael Ozawa and James Davidson would be paid up to $495
per hour for their specialized and technical support services.
Avant will also be reimbursed for out-of-pocket costs.
Additionally, a three percent administrative fee will be paid to
cover engagement related costs that include, but are not limited
to, photocopies, faxes, telephone charges, computer support,
printing costs, miscellaneous charges, etc.
Avant has requested a $75,000 post-petition retainer which it
believes is reasonable considering the tasks, the size of the
company and immediate time and expense to be incurred by the firm
in undertaking the representation. However, Mi Pueblo has since
been in communication with counsel for the Committee of Unsecured
Creditors and has proposed the filing of a Motion for Order
Establishing Procedures for Interim Payment of Fees and
Reimbursement of Expenses which puts forth a procedure for
monthly payment (with a holdback) to any and all estate
professionals who wish to participate and fee applications
approximately every four months. Mi Pueblo has obtained the
approval of Avant to temporarily forego its request for a post-
petition retainer until the Fees Motion has been heard by the
Court. Should the Fees Motion be denied, Avant will then seek a
post-petition retainer. Should the Fees Motion be approved, Avant
will seek payment according to the Fees Motion.
Mr. Blanco assures the Court that Avant is disinterested and does
not hold or represent an interest adverse to Mi Pueblo or to the
Estate as to the matters upon which it is to be employed.
Counsel for Mi Pueblo may be reached at:
Heinz Binder, Esq.
Robert G. Harris, Esq.
Roya Shakoori, Esq.
BINDER & MALTER, LLP
2775 Park Avenue
Santa Clara, CA 95050
Tel: (408) 295-1700
Fax: (408) 295-1531
Email: Heinz@bindermalter.com
Rob@bindermalter.com
Roya@bindermalter.com
About Mi Pueblo San Jose, Inc.
Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D.
Calif. Case No. 13-53893) in San Jose, California, on July 22,
2013. The Debtor estimated up to $50,000 in assets and up
$50,000,000 in liabilities. An affiliate, Cha Cha Enterprises,
LLC, sought Chapter 11 protection (Case No. 13-53894) on the same
day.
Heinz Binder, Esq. -- Heinz@bindermalter.com -- at Binder &
Malter, LLP, is the Debtor's general reorganization counsel. The
Law Offices of Wm. Thomas Lewis, sometimes doing business as
Robertson & Lewis, is the Debtor's special counsel.
The U.S. Trustee appointed seven members to the Official Committee
of Unsecured Creditors.
MI PUEBLO: May Hire BDO USA as Accountant & Tax Advisor
-------------------------------------------------------
Judge Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the
Northern District of California authorized Mi Pueblo San Jose,
Inc. on September 6, 2013, to employ BDO USA, LLP as its certified
public accountant, tax advisor.
As reported in the Troubled Company Reporter on September 10,
2013, BDO will be compensated on an hourly basis for the
accounting & audit services. The compensation to be paid to BDO
for the accounting & audit services is estimated to cost
approximately $50,000 to $60,000. BDO USA will charge Mi Pueblo
based on these agreed discounted hourly rates:
Partner/Managing Director $400 - $600
Director/Senior Manager $300 - $500
Manager $250 - $350
Senior $175 - $250
Staff $125 - $175
BDO will be compensated for tax services based on a fixed fee of
$15,900 (fiscal year ended Dec. 30, 2012) and the above agreed
hourly rates for services related to responding to notices or
inquiries from federal or state taxing authorities or services
related to additional research time related to non-recurring
transactions.
About Mi Pueblo San Jose, Inc.
Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D.
Calif. Case No. 13-53893) in San Jose, California, on July 22,
2013. The Debtor estimated up to $50,000 in assets and up
$50,000,000 in liabilities. An affiliate, Cha Cha Enterprises,
LLC, sought Chapter 11 protection (Case No. 13-53894) on the same
day.
Heinz Binder, Esq., at Binder & Malter, LLP, is the Debtor's
general reorganization counsel. The Law Offices of Wm. Thomas
Lewis, sometimes doing business as Robertson & Lewis, is the
Debtor's special counsel.
The U.S. Trustee appointed seven members to the Official Committee
of Unsecured Creditors.
MI PUEBLO: Employment of Cavanagh Law as Special Counsel Approved
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
authorized Mi Pueblo San Jose, Inc. to employ The Cavanagh Law
Firm, P.A., as its special counsel to represent it with respect to
the U.S. Immigrations and Customs Enforcement I-9 investigations
for Mi Pueblo's past and current employees and to provide legal
services, advice, and related representation regarding such
matters.
As reported in the Troubled Company Reporter on Aug 27, 2013,
Cavanagh will be employed on these terms:
a. Approval of attorneys' fees and costs to be paid to Special
Counsel by Mi Pueblo will be subject to one or more duly
noticed fee applications to be approved by the Court.
b. Any and all detailed time records to be attached to the
Special Counsel's fee applications will be filed under seal
due to confidentiality concerns in connection with the
Employment Matters, such time records to be available to
the United States Trustee and counsel for the Committee Of
Unsecured Creditors upon execution of a Non-Disclosure
Agreement and upon written notice to Mi Pueblo and Special
Counsel; the fee applications themselves will not be filed
under seal and time records will be summarized;
c. It is anticipated that Special Counsel will use the
following attorneys and paralegals in rendering services to
Mi Pueblo at the following hourly rates:
Professional Standard Hourly Billable Rate
--------------------- --------------------
Julie A. Pace $395.00
David A. Selden $395.00
Hilary L. Barnes $350.00
Heidi Nunn-Gilman $295.00
Jennifer L. Sellers $290.00
Meaghan E. Gallagher $260.00
Stephanie L. Coulter - paralegal $175.00
Monica R. Rushton - paralegal $175.00
About Mi Pueblo San Jose, Inc.
Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D.
Calif. Case No. 13-53893) in San Jose, California, on
July 22, 2013. The Debtor estimated up to $50,000 in assets and up
$50,000,000 in liabilities. An affiliate, Cha Cha Enterprises,
LLC, sought Chapter 11 protection (Case No.
13-53894) on the same day.
Heinz Binder, Esq., at Binder & Malter, LLP, is the Debtor's
general reorganization counsel. The Law Offices of Wm. Thomas
Lewis, sometimes doing business as Robertson & Lewis, is the
Debtor's special counsel.
The U.S. Trustee appointed seven members to the Official Committee
of Unsecured Creditors.
MOMENTIVE SPECIALTY: Extends Expiration of Exchange Offer
---------------------------------------------------------
Momentive Specialty Chemicals Inc. has extended the expiration
date for its previously announced exchange offer from 5:00 p.m.,
New York City time, at the end of Tuesday, Sept. 10, 2013, to 5:00
p.m., New York City time, on Friday, Sept. 13, 2013, unless
further extended. All other terms, provisions and conditions of
the exchange offer will remain in full force and effect.
On Aug. 12, 2013, the Company commenced its exchange offer to
exchange up to $1,100,000,000 aggregate principal amount of its
6.625 percent First-Priority Senior Secured Notes due 2020 and
related guarantees registered under the Securities Act of 1933, as
amended, for any and all of its outstanding 6.625 percent First-
Priority Senior Secured Notes due 2020 and related guarantees,
which were issued in January 2013 in a transaction exempt from
registration under the Securities Act.
As of 5:00 pm, New York City time, at the end of Sept. 10, 2013,
Wilmington Trust, National Association, the exchange agent for the
exchange offer, has advised that $1,096,995,000 aggregate
principal amount of the outstanding notes had been tendered for
exchange, representing approximately 99.7 percent of the
outstanding notes.
A Form S-4 registration statement filed by the Company with the
SEC regarding the exchange offer was declared effective by the SEC
on Aug. 12, 2013. The expiration date for the exchange offer is
being extended to provide time for remaining outstanding 6.625
percent First-Priority Senior Secured Notes due 2020 to be
exchanged.
About Momentive Specialty
Momentive Specialty Chemicals, Inc., headquartered in Columbus,
Ohio, is a leading producer of thermoset resins (epoxy,
formaldehyde and acrylic). The company is also a supplier of
specialty resins for inks and specialty coatings sold to a diverse
customer base as well as a producer of commodities such as
formaldehyde, bisphenol A, epichlorohydrin, versatic acid and
related derivatives.
Momentive Specialty posted net income of $324 million in 2012 and
net income of $118 million in 2011. The Company's balance sheet
at June 30, 2013, showed $3.47 billion in total assets, $5.06
billion in total liabilities and a $1.58 billion total deficit.
* * *
Momentive Specialty carries a 'B-' issuer credit rating from
Standard & Poor's Ratings Services. It has 'B3' corporate family
and probability of default ratings from Moody's Investors Service.
As reported in the Oct. 27, 2010 edition of TCR, Moody's Investors
Service assigned a 'Caa1' rating to the guaranteed senior secured
second lien notes due 2020 of Momentive Specialty (formerly known
as Hexion Specialty Chemicals Inc.). Proceeds from the notes were
allocated for the repayment of $533 million of guaranteed senior
secured second lien notes due 2014. "With this refinancing Hexion
will have refinanced or extended the maturities on the vast
majority of the debt that was originally slated to mature prior to
2015. There is less than $600 million of this debt remaining,
which should be much easier to for the company to refinance as its
credit metrics improve further," stated John Rogers, Senior Vice
President at Moody's.
MSD PERFORMANCE: Section 341(a) Meeting Set on October 7
--------------------------------------------------------
A meeting of creditors in the bankruptcy case of MSD Performance,
Inc., will be held on Oct. 7, 2013, at 1:30 p.m. at the J. Caleb
Boggs Federal Building, 5th Floor, Room 5209, Wilmington, DE.
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 MSD Performance
MSD Performance, Inc., headquartered in El Paso, Texas, operates
in the power sports enthusiast and professional racer markets
where the company maintains leading market share positions across
all of its product categories under the MSD Ignition(R),
Racepak(R) and Powerteq(R) brands. The company's facilities
encompass over 220,000 square feet in six buildings, five of which
are located across the U.S. and one in Shanghai, China.
MSD Performance and its U.S. affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case NO. 13-12286) on Sept. 6,
2013. Ron Turcotte signed the petitions as CEO. The Debtors
estimated assets of at least $50 million and debts of at least
$100 million.
The Debtors' restructuring counsel is Jones Day. Their investment
banker is SSG Advisors, LLC. The Debtors are also represented by
Richards Layton and Finger, as local counsel. Logan & Co. is the
claims and notice agent.
MVP HEALTH: A.M. Best Affirms 'B' Financial Strength Rating
-----------------------------------------------------------
A.M. Best Co. has removed from under review with developing
implications and affirmed the financial strength rating (FSR) of
B+ (Good) and issuer credit ratings (ICR) of "bbb-" of MVP Health
Plan, Inc. and MVP Health Services Corp.
Additionally, A.M. Best has removed from under review with
developing implications and affirmed the FSR of B (Fair) and ICRs
of "bb" of MVP Health Insurance Company and MVP Health Insurance
Company of New Hampshire, Inc. (Bedford, NH). All companies are
downstream subsidiaries of their ultimate parent, MVP Health Care,
Inc. (MVP) and are domiciled in Schenectady, NY, unless otherwise
specified. The outlook assigned to all the above ratings is
stable.
The ratings were placed under review in May 2013, following the
announcement that MVP was acquiring Hudson Health Plan (HHP), a
Tarrytown, NY-based Medicaid managed care organization. The
transaction closed on August 31, 2013 and positions MVP to
successfully participate in the state health exchanges, scheduled
to begin on October 1, 2013.
The rating affirmations reflect the organization's favorable
consolidated capitalization, conservative investment portfolio as
well as its sound business profile and strong brand name
recognition in the New York State region.
A.M. Best remains concerned about the deterioration in MVP's
operating results as of mid-2013. Additionally, the ratings
factor in the group's geographic and government programs
concentration as well as the potential impact of further
reimbursement rate cuts on its earnings. A.M. Best also will
continue to assess the ultimate impact of the acquisition of HHP
on the organization's overall capitalization and earnings trends
through discussions with management regarding its operational and
strategic plans.
A.M. Best believes MVP and its subsidiaries are well positioned at
their current rating levels. Future negative rating actions could
occur if MVP experiences material changes in its government
funding, which results in an adverse impact on its operating
performance and/or a significant decline in its risk-adjusted
capitalization.
NEONODE INC: Offering 2.5 Million Common Shares
-----------------------------------------------
Neonode Inc. announced the pricing of an underwritten public
offering of 2,490,612 shares of Neonode common stock, of which
1,168,939 shares are being offered by Neonode and an aggregate of
1,321,673 shares are being offered by selling stockholders
affiliated with Neonode, at a price to the public of $6.60 per
share. The selling stockholders are Neonode's executive chairman
Per Bystedt, chief executive officer and director Thomas Eriksson,
director Mats Dahlin, director John Reardon, and chief financial
officer David Brunton. The selling stockholders have granted the
underwriter a 30-day option to purchase up to an aggregate of
373,592 additional shares of common stock to cover overallotments,
if any. The offering is expected to close on or about Sept. 16,
2013, subject to the satisfaction of customary closing conditions.
Gross proceeds to the company from the offering are expected to be
$7,715,000. The company anticipates using its net proceeds from
the offering primarily for general corporate purposes, including
capital expenditures and working capital. The company will not
receive any proceeds from the sale of any shares by the selling
stockholders.
Craig-Hallum Capital Group is acting as the sole book-running
manager for the offering. GP Bullhound Ltd. is acting as a
financial advisor to the Company in connection with the offering.
In a separate free writing prospectus filed with the SEC, the
Company disclosed that in addition to the shares of common stock
offered by the selling stockholders pursuant to the preliminary
prospectus supplement dated Sept. 10, 2013, certain selling
stockholders named in the accompanying prospectus are offering
420,000 additional shares of common stock. The Company will not
receive any proceeds from the increase of the sale of shares by
the selling stockholders. A copy of the FWP is available for free
at http://is.gd/i3WJE8
About Neonode Inc.
Lafayette, Calif.-based Neonode Inc. (OTC BB: NEON)
-- http://www.neonode.com/-- provides optical touch screen
solutions for hand-held and small to midsize devices.
The Company incurred a net loss of $9.28 million in 2012, a net
loss of $17.14 million in 2011 and a $31.62 million net loss in
2010. As of June 30, 2013, the Company had $7.31 million in total
assets, $4.14 million in total liabilities and $3.16 million in
total stockholders' equity.
NEW BERN RIVERFRONT: Court Tosses Bid to Strike Expert Report
-------------------------------------------------------------
Bankruptcy Judge Stephani W. Humrickhouse denied the joint motion
of Summit Design Group, Inc., Robert P. Armstrong, Jr., Inc,
Robert P. Armstrong, Jr., and National Erectors Rebar, Inc. f/k/a
National Reinforcing Systems, Inc., to strike the expert report of
H. Dean Penny of Kimley-Horn and Associates, Inc., dated May 24,
2013, in an adversary proceeding filed by New Bern Riverfront
Development, LLC. The crux of the adversary proceeding involves
alleged construction and design defects to Skysail Luxury
Condominiums, a 121-unit condominium development owned by New Bern
Riverfront Development and located along the Trent River in
downtown New Bern, North Carolina. In addition to a deepwater
marina with more than 200 slips, Skysail consists of an attached
L-shaped one-level parking structure and an adjacent terrace and
pool deck.
New Bern Riverfront Development initiated the civil action in the
Wake County Superior Court against, inter alia, Weaver Cooke,
National Erectors, JDavis Architects, PLLC, and Fluhrer Reed, PA,
on March 30, 2009. While the civil action was pending in state
court, New Bern Riverfront Development filed a voluntary Chapter
11 petition (Bankr. E.D.N.C. Case No. 09-10340) on Nov. 30, 2009,
and the case was subsequently removed to the U.S. Bankruptcy Court
for the Eastern District of North Carolina on Dec. 16, 2009.
The case is, NEW BERN RIVERFRONT DEVELOPMENT, LLC, Plaintiff, v.
WEAVER COOKE CONSTRUCTION, LLC, TRAVELERS CASUALTY AND SURETY
COMPANY OF AMERICA, J. DAVIS ARCHITECTS, PLLC, FLUHRER REED, PA,
and NATIONAL ERECTORS REBAR, INC. f/k/a NATIONAL REINFORCING
SYSTEMS INC., Defendants and
WEAVER COOKE CONSTRUCTION, LLC and TRAVELERS CASUALTY AND SURETY
COMPANY OF AMERICA, Defendants, Counterclaimants, Crossclaimants
and Third-Party Plaintiffs, v.
JDAVIS ARCHITECTS, PLLC; FLUHRER REED, PA, SKYSAIL OWNERS
ASSOCIATION, INC., NATIONAL REINFORCING SYSTEMS, INC., ROBERT
ARMSTRONG, JR., ROBERT P. ARMSTRONG, JR., INC., SUMMIT DESIGN
GROUP, INC., CAROLINA CUSTOM MOULDING, INC., CURENTON CONCRETE
WORKS, INC., WILLIAM H. DAIL d/b/a DD COMPANY, EAST CAROLINA
MASONRY, INC., GOURAS, INC., HAMLIN ROOFING SERVICES, INC.,
HUMPHREY HEATING & AIR CONDITIONING, INC., PERFORMANCE FIRE
PROTECTION, LLC, RANDOLPH STAIR AND RAIL COMPANY, STOCK BUILDING
SUPPLY, LLC, PLF OF SANFORD, INC. f/d/b/a LEE WINDOW & DOOR
COMPANY, UNITED FORMING, INC., a/d/b/a UNITED CONCRETE, INC., and
WATERPROOFING SPECIALTIES, INC., Crossclaimants, Counterclaimants
and Third-Party Defendants and NATIONAL ERECTORS REBAR, INC.,
Defendant, Counterclaimant, Crossclaimant, and Third-Party
Plaintiff, v.
ROBERT ARMSTRONG, JR., ROBERT P. ARMSTRONG, JR., INC., SUMMIT
DESIGN GROUP, INC., JMW CONCRETE CONTRACTORS, and JOHNSON'S MODERN
ELECTRIC COMPANY, INC., Third-Party Defendants and J. DAVIS
ARCHITECTS, PLLC, Third-Party Plaintiff, v.
MCKIM & CREED, P.A., Third-Party Defendant and GOURAS, INC.,
Fourth-Party Plaintiff, v.
RAFAEL HERNANDEZ, JR., CARLOS CHAVEZ d/b/a CHAVEZ DRYWALL, 5 BOYS,
INC., and ALEX GARCIA d/b/a JC 5, Fourth-Party Defendants.
United States Bankruptcy Court, E.D. North Carolina, Raleigh
Division.
AP No. 10-00023-8-SWH (Bankr. E.D.N.C.).
A copy of the Court's Sept. 10, 2013 Order is available at
http://is.gd/SgJW6Ofrom Leagle.com.
About New Bern Riverfront
Cary, North Carolina-based New Bern Riverfront Development, LLC,
is the developer of SkySail Condominium, consisting of 121
residential condominiums (plus 1 commercial/non-residential unit)
located on Middle Street on the waterfront in historic downtown
New Bern, North Carolina, and sells the SkySail Condominiums in
the ordinary course of business. New Bern Riverfront filed for
Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No.
09-10340) on Nov. 30, 2009. John A. Northen, Esq., at Northen
Blue, LLP, represents the Debtor. The Company disclosed
$31,515,040 in assets and $25,676,781 in liabilities as of the
Chapter 11 filing.
New Bern Riverfront has filed an Amended Plan of Reorganization
dated June 30, which represents a consensual plan negotiated with
the Debtor's secured creditor, Wells Fargo Bank, N.A. The Debtor
contemplates selling properties.
NGPL PIPECO: Bank Debt Trades at 11% Off
----------------------------------------
Participations in a syndicated loan under which NGPL PipeCo LLC is
a borrower traded in the secondary market at 89.30 cents-on-the-
dollar during the week ended Friday, September 13, 2013 according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents a decrease of 3.95
percentage points from the previous week, The Journal relates.
NGPL PipeCo LLC pays 550 basis points above LIBOR to borrow under
the facility. The bank loan matures on May 4, 2017. The bank
debt carries Moody's B2 rating and Standard & Poor's B rating.
The loan is one of the biggest gainers and losers among 249 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
NGPL PipeCo LLC is a holding company for Natural Gas Pipeline
Company of America and other interstate natural gas pipeline
assets. NGPL is 80% owned by Myria Acquisition LLC and 20% owned
and operated by Kinder Morgan, Inc., based in Houston Texas.
* * *
As reported in the Troubled Company Reporter on June 6, 2013,
Moody's Investors Service downgraded NGPL PipeCo LLC's (NGPL)
senior unsecured debt rating, Corporate Family Rating, and
Probability of Default Rating to B2 from Ba3. NGPL's Speculative
Grade Liquidity Rating is changed to SGL-3 from SGL-2. The rating
outlook is now stable.
OGX PETROLEO: Seeks Lifeline from Creditors
-------------------------------------------
Emily Glazer and Luciana Magalhaes, writing for The Wall Street
Journal, reported that Brazilian tycoon Eike Batista's flagship
oil company may need hundreds of millions of dollars to continue
operations as it faces a debt restructuring and operational
struggles, people familiar with the matter said.
According to the report, about 20 restructuring advisers for OGX
Petroleo e Gas Participacoes SA and its creditors gathered last
week in New York to discuss the struggling oil company's business
plan and possible next steps, these people said.
The company has told some advisers it needs about $500 million to
stay afloat, and in the meeting asked creditors through their
advisers for a roughly $300 million capital injection, some of
these people said, the report related. If the creditors don't
agree, the company said it would look for other financial
investors, one of these people said.
The sides will continue to hash out negotiations, and as they get
closer to a compromise some creditors may become "restricted," or
sign confidentiality agreements, as soon as early this week, these
people said, the report related. This would enable them to craft a
deal with the company but the situation remains fluid, these
people said.
OGX declined to comment, the report said.
About OGX Petroleo
Based in Rio de Janeiro, Brazil, OGX Petroleo e Gas Participaaoes
S.A. is an independent exploration and production company with
operations in Latin America.
* * *
As reported in the Troubled Company Reporter-Latin America on
July 17, 2013, Moody's Investors Service downgraded OGX Petroleo e
Gas Participaaoes S.A.'s Corporate Family Rating to Ca from Caa2
and OGX Austria GmbH's senior unsecured notes ratings to Ca from
Caa2. The rating outlook remains negative.
PLUG POWER: Offering $10 Million Common Shares
----------------------------------------------
Plug Power Inc. has priced an underwritten public offering of
18,600,000 shares of its common stock. The shares will be sold at
a price to the public of $0.54 per share for gross proceeds of
approximately $10 million.
Certain Plug Power directors and existing stockholders, including
the Chairman of Plug Power's board of directors and certain
holders of five percent or more of Plug Power's voting securities,
will purchase shares of its common stock in this offering at the
public offering price.
Cowen and Company, LLC, is acting as the sole underwriter for the
offering.
Net proceeds, after underwriting discounts and commissions and
other estimated fees and expenses payable by Plug Power, will be
approximately $9.1 million.
Plug Power intends to use the net proceeds of the offering for
working capital and other general corporate purposes, including
capital expenditures. In connection with the offering, Plug Power
has granted the underwriter a 30-day option to purchase up to an
additional 2,790,000 shares of common stock to cover over-
allotments, if any. The offering is expected to close on or about
Sept. 16, 2013, subject to satisfaction of customary closing
conditions.
About Plug Power
Plug Power Inc. is a provider of alternative energy technology
focused on the design, development, commercialization and
manufacture of fuel cell systems for the industrial off-road
(forklift or material handling) market.
KPMG LLP, in Albany, New York, expressed substantial doubt about
Plug Power's ability to continue as a going concern, following
their audit of the Company's financial statements for the year
ended Dec. 31, 2012, citing the Company's recurring losses from
operations and substantial decline in working capital.
As of June 30, 2013, the Company had $36.38 million in total
assets, $26.96 million in total liabilities, $2.45 million in
series C redeemable convertible preferred stock and $6.96 million
in total stockholders' equity.
Bankruptcy Warning
"Our cash requirements relate primarily to working capital needed
to operate and grow our business, including funding operating
expenses, growth in inventory to support both shipments of new
units and servicing the installed base, and continued development
and expansion of our products. Our ability to meet our future
liquidity needs, capital requirements, and to achieve
profitability will depend upon numerous factors, including the
timing and quantity of product orders and shipments; the timing
and amount of our operating expenses; the timing and costs of
working capital needs; the timing and costs of building a sales
base; the timing and costs of developing marketing and
distribution channels; the timing and costs of product service
requirements; the timing and costs of hiring and training product
staff; the extent to which our products gain market acceptance;
the timing and costs of product development and introductions; the
extent of our ongoing and any new research and development
programs; and changes in our strategy or our planned activities.
If we are unable to fund our operations without additional
external financing and therefore cannot sustain future operations,
we may be required to delay, reduce and/or cease our operations
and/or seek bankruptcy protection," the Company said in its
quarterly report for the period ended June 30, 2013.
PROSPECT HOLDING: Good Performance Cues Moody's to Assign B2 CFR
----------------------------------------------------------------
Moody's Investors Service assigned a first-time corporate family
rating of B2 to Prospect Holding Company, LLC and a B2 rating to
the planned $200 million senior unsecured notes co-issued by
Prospect Holding Company, LLC and Prospect Holding Finance
Company. The outlook is stable.
Ratings Rationale:
Prospect is a privately-held mortgage banking company
headquartered in Sherman Oaks, California. The senior notes
proceeds will be used primarily for general corporate purposes,
including to grow the firm's retail platform, correspondent
originations and its servicing business, as well as to pay a
dividend to Prospect's shareholders.
Prospect's CFR incorporates the company's satisfactory financial
performance and solid capital adequacy. The rating is constrained
by Prospect's limited franchise positioning, risks embedded in its
growth plans, relatively short operating history and limited
financial flexibility as a result of its reliance on short-term
secured bank warehouse facilities. The high level of regulatory
scrutiny of mortgage companies also constrains the rating.
The stable outlook reflects Moody's expectation that Prospect will
be able to profitably grow while employing modest leverage.
Given the company's growth aspirations, including a servicing
platform buildup and expansion of the price sensitive
correspondent business, an upgrade is unlikely for the foreseeable
future.
Negative rating pressure could develop in the event of a material
decrease in liquidity (including availability under warehouse
funding facilities), increase in leverage (e.g. if TCE to tangible
assets drops below 10%), or a material deterioration in financial
performance.
Prospect's senior notes rating of B2 reflects the fact that the
notes will comprise the majority of the company's recourse debt
post-issuance.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.
RICHMOND VALLEY: Deutsch Metz Tapped as Special Litigation Counsel
------------------------------------------------------------------
Debtor affiliate T.M. Real Estate Holding LLC aka T.M. Realty
Holding Corp., sought and obtained permission from the U.S.
Bankruptcy Court for the Eastern District of New York to hire
Deutsch, Metz and Deutsch, LLP, as special litigation counsel as
of the Petition Date.
The Debtor is hiring DM&D to continue to prosecute an appeal
pending in the U.S. Court for Appeals for the Second Circuit
captioned T.M. Real Estate Holding, LLC v. The Stop & Shop
Supermarket Company LLC.
The underlying action, commenced pre-bankruptcy in a New York
District Court, (i) alleges that Stop & Shop had improperly
repudiated and terminated its lease with TM involving development
of a real property known was Page Ave and Richmond Valley Road,
Block 7580, Lot 80, in Staten Island, and (ii) seeks damages from
Stop & Shop of the amount of payments which would have been due
under the Lease if fully performed, ranging in the millions of
dollars. The Property is being developed for a 70,000-sq. ft.
shopping center. The District Court dismissed the Complaint, and
TM appealed.
The Debtor says if successful, the appeal will allow it to proceed
with its lawsuit in the District Court against Stop & Shop and
hopes it will ultimately result in a significant monetary recovery
for its estate.
The Debtor understands that DM&D's fees and expenses incurred in
connection with the Appeal will be paid directly by Tottenville
Commons LLC.
Tottenville is a limited liability company whose members are
Joseph Noce, Alice Noce, Augusto Mandara, Antonio Mandara and Emil
Branchinelli, the same members as the Debtor. Tottenville and its
members have agreed to subordinate its rights to recover any
portion of recovery realized as a result of the Appeal. In
addition, Tottenville's payment of DM&D's legal fees and expenses
incurred in connection with the Appeal is not conditioned upon
Tottenville or its principals having any input or control over the
Debtor's bankruptcy case or the Appeal.
To the best of the Debtor's knowledge, DM&D does not hold any
actual or apparent conflict of interest in connection with its
representation of the Debtor in connection with the Appeal.
DM&D's contact details are:
DEUTSCH, METZ & DEUTSCH, LLP
Alfred N. Metz, Esq.
18 East 41st Street, Sixth Floor
New York, NY 10017
Tel No: (212) 684-1111
Email: almetz@dmdlegalny.com
Richmond Valley Plaza LLC filed a Chapter 11 petition
(Bankr. E. D. N.Y. Case No. 13-44040) on June 28, 2013 in
Brooklyn, New York. Yann Geron, Esq. and Kathleen Aiello, Esq.,
of Fox Rothschild LLP, serve as counsel to the Debtor. The Debtor
estimated up to $8,400,000 in assets and up to $6,517,934 in
liabilities. Affiliates, A.E.T. Realty Holding Corp., (Case No.
13-44043) and E.B. Realty Holding Corp (Case No. 13-44047) sought
Chapter 11 protections on the same day.
ROCKWOOD SPECIALTIES: Moody's Lifts Rating on $1.2BB Notes to Ba1
-----------------------------------------------------------------
Moody's Investors Service affirmed the Ba1 Corporate Family Rating
of Rockwood Specialties Group, Inc. and raised the ratings on its
$180 million senior secured revolving credit facility to Baa2 from
Baa3 and its $1.25 billion senior unsecured notes to Ba1 from Ba2.
The upgrade is a result of the repayment of the company's secured
term loans with a portion of the proceeds from the divestiture of
its CeramTec business. Following the repayment, the ratings on
both the Term A and Term B senior secured term loans were
withdrawn. Moody's also affirmed Rockwood's Corporate Family
Rating at Ba1. The outlook is stable as the company is expected to
have more cash than debt by the end of 2013. Rockwood's ratings
could be raised or lowered depending on any changes to the
management's financial priorities or plans to utilize its large
cash balance.
The following summarizes the ratings:
Rockwood Specialties Group, Inc.
Ratings upgraded:
Sr Sec Revolving Credit Facility due 2016 -- Baa2 (LGD2, 12%) from
Baa3 (LGD2, 20%)
Sr Unsecured Notes due 2020 -- Ba1 (LGD4, 57%) from Ba2 (LGD5,
75%)
Sr Unsecured Shelf Registration -- (P)Ba1 from (P)Ba2
Ratings affirmed:
Corporate Family Rating -- Ba1
Probability of Default Rating -- Ba1-PD
Speculative Grade Liquidity Rating -- SGL-1
Ratings Rationale:
Rockwood's Ba1 Corporate Family Rating is supported by its
business profile, size, relatively stable earnings, attractive
margins and positive free cash flow through the business cycle.
The company has a diverse set of inorganic chemical businesses
that provide diversification of revenues and have relatively
little exposure to volatile petrochemical feedstock prices.
However, the company is in the process of divesting businesses
such that its revenue base could decline by two-thirds and EBITDA
could decline by 50 percent. Rockwood recently completed the
divestiture of its CeramTec business for almost $2 billion and has
agreed to sell its Clay Additives business for approximately $635
million in a transaction that is expected to close in the fourth
quarter 2013. As a result, Rockwood is expected to have elevated
cash balances (around $1.7 billion), providing it the ability to
pursue a wide range of strategic and capital structure options.
The rating outlook is stable; however, management has not provided
an update on its long term financial objectives for the company,
its plans for the use of its elevated cash balance or if obtaining
an investment grade rating is still a priority for the company. A
positive rating action (to an investment grade rating) would
depend on the company announcing a credible business and financial
strategy that would be commensurate with an investment grade
rating, and the elimination of the secured revolver. The ratings
could be lowered if its cash balance is not used to increase the
company's sales, earnings and cash flow or if credit metrics are
expected to weaken to levels that would not support a Ba1 rating
(Debt/EBITDA below 3.5x on a sustained basis). Subsequent to the
planned divestitures, the company's remaining businesses would not
likely support a Ba1 CFR, if the $1.25 billion of unsecured notes
remain outstanding and cash drops to levels necessary to support
the business (less than $150 million). Before changing Rockwood's
ratings Moody's would expect to have a clearer picture of
Rockwood's future business portfolio, management's use of
divestiture proceeds, its plans for long term growth and updated
financial targets. The current leverage (3.9x as of June 30, 2013,
pro forma for the CeramTec divestiture and the repayment of the
term loans) is somewhat elevated, however Moody's recognizes that
the company's elevated cash balance provides it with the financial
flexibility to change its capital structure or acquire additional
earnings and cash flow.
Rockwood's SGL-1 Speculative Grade Liquidity Rating reflects its
very good liquidity, supported by positive operating cash flows,
cash and cash equivalents of $1.1 billion as of June 30, 2013 pro
forma for the divestiture of the CeramTec business. The $180
million secured credit facility due 2016 is undrawn.
The principal methodology used in rating Rockwood was Global
Chemical Industry rating methodology published in December 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Rockwood Specialties Group, Inc., headquartered in Princeton, New
Jersey, is a wholly owned subsidiary of Rockwood Holdings, Inc.
(Ticker: ROC). Rockwood produces of a variety of specialty
chemicals, including pigments, additives, surface treatment
chemicals, and lithium. Revenues were $3.0 billion for the twelve
months ended June 30, 2013 (excluding the divested CeramTec
business).
ROSETTA GENOMICS: Executes Credentialing Pacts With FedMed & FPN
----------------------------------------------------------------
Rosetta Genomics Ltd. has executed credentialing agreements with
FedMed, Inc., and Fortified Provider Network Inc. for Rosetta's
Cancer Origin TestTM.
FedMed is a Preferred Provider Organization (PPO) with over
550,000 physicians, 4,000 hospitals and 60,000 Ancillary Care
Providers nationwide. It is estimated that more than 40 million
Americans have access to FedMed's National Provider Network. FPN
is a national direct-contracted preferred provider network that
represents approximately four million covered lives. FPN's select
provider network is utilized by self-funded employer groups,
insurance carriers and regional and local provider networks that
process end-user patient claims.
"Rosetta now has executed credentialing agreements with four
national U.S. PPOs. Together with Medicare reimbursement, we
estimate that the total number of potential covered lives for
which the Cancer Origin Test could be adjudicated as 'in-network'
exceeds 100 million," said Kenneth A. Berlin president and chief
executive officer of Rosetta Genomics. "We continue to pursue
additional agreements with other PPOs as they provide faster
payment while maintaining acceptable levels of reimbursement, and
also reduce costs incurred through appealing denials. This has
become increasingly important to our company as we have expanded
our U.S. commercial operations and continue to process and bill a
growing number of samples.
"These agreements further validate the clinical utility and
improved patient outcomes of our Cancer Origin Test and underscore
the importance of determining the tumor origin in hard-to-diagnose
metastatic cancers, and Cancers of Unknown or Uncertain Primary
(CUP). We believe the Cancer Origin Test can help physicians to
accurately diagnose tumor origin in order to optimize treatment.
The availability and accuracy of our Cancer Origin Test
underscores why uncertainty in cancer diagnosis is no longer
acceptable," Mr. Berlin added.
A PPO is a managed care organization of medical doctors, hospitals
and other health care providers that has covenanted with an
insurer or a third-party administrator to provide health care at
reduced rates to the insurer's or administrator's clients.
Credentialing is a process whereby provider organizations such as
physicians, care facilities and ancillary providers (including
testing service providers such as Rosetta Genomics) contract
directly with the PPO.
Half Year Results
Rosetta Genomics reported a net loss after discontinued operations
of $6.29 million on $193,000 of revenues for the six months ended
June 30, 2013, as compared with a net loss after discontinued
operations $6.58 million on $51,000 of revenues for the same
period last year.
As of June 30, 2013, the Company had $30.28 million in total
assets, $2.34 million in total liabilities and $27.93 million in
total shareholders' equity.
"During the first half of 2013 we made meaningful progress in a
number of areas critical to our future success including
commercial progress with the Rosetta Cancer Origin Test. We
fortified our patent estate, published data in peer-reviewed
journals in support of our products, executed credentialing
agreements with several large network providers and received a
favorable local coverage determination from our Medicare
Administrative Contractor," said Kenneth A. Berlin, president and
chief executive officer of Rosetta Genomics. "Based on the
traction we gained in the first half of 2013, we expanded our U.S.
sales force from five to 12 sales territories and recently
completed training six new sales representatives who have already
begun generating demand for our Cancer Origin Test."
A copy of the press release is available for free at:
http://is.gd/6f5sbB
About Rosetta
Based in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to
develop and commercialize new diagnostic tests based on a recently
discovered group of genes known as microRNAs. MicroRNAs are
naturally expressed, or produced, using instructions encoded in
DNA and are believed to play an important role in normal function
and in various pathologies. The Company has established a CLIA-
certified laboratory in Philadelphia, which enables the Company to
develop, validate and commercialize its own diagnostic tests
applying its microRNA technology.
Rosetta Genomics disclosed a net loss of US$10.45 million on
US$201,000 of revenue for the year ended Dec. 31, 2012, as
compared with a net loss of US$8.83 million on US$103,000 of
revenue during the prior year.
Bankruptcy Warning
In its annual report for the year ended Dec. 31, 2012, the Company
said:
"We will require substantial additional funding and expect to
augment our cash balance through financing transactions, including
the issuance of debt or equity securities and further strategic
collaborations. On December 7, 2012, we filed a shelf
registration statement on Form F-3 with the SEC for the issuance
of ordinary shares, various series of debt securities and/or
warrants to purchase any of such securities, either individually
or in units, with a total value of up to $75 million, from time to
time at prices and on terms to be determined at the time of such
offerings. The filing was declared effective on December 19,
2012. However there can be no assurance that we will be able to
obtain adequate levels of additional funding on favorable terms,
if at all. If adequate funds are not available, we may be
required to:
* delay, reduce the scope of or eliminate certain research and
development programs;
* obtain funds through arrangements with collaborators or
others on terms unfavorable to us or that may require us to
relinquish rights to certain technologies or products that we
might otherwise seek to develop or commercialize
independently;
* monetizing certain of our assets;
* pursue merger or acquisition strategies; or
* seek protection under the bankruptcy laws of Israel and the
United States."
ROYAL CARIBBEAN: Moody's Keeps Ba1 CFR After Dividend Increase
--------------------------------------------------------------
Moody's Investors Service said that Royal Caribbean Cruises Ltd
(Ba1 Corporate Family Rating and stable rating outlook) remains
unchanged after the company announced an increase in its quarterly
cash dividend from $0.12 per share to $0.25 per share.
Royal Caribbean Cruises Ltd. is a global vacation company that
operates six brands (including one, TUI Cruises, through a joint
venture) -- the largest being Royal Caribbean International (RCI)
and Celebrity Cruises -- which collectively operate 41 cruise
ships with 5 ships on order.
SAN BERNARDINO, CA: Judge Zive Appointed as Mediator
----------------------------------------------------
Judge Meredith A. Jury of the U.S. Bankruptcy Court for the
Central District of California appointed The Hon. Gregg W. Zive as
mediator in the Chapter 9 case of the city of San Bernardino,
California.
The scope of the mediation will be broad, including all aspects of
negotiation of a plan of adjustment and any other issues submitted
jointly by parties to the mediator, which pertain to Chapter 9
issues, with the exception of discovery disputes unless the Court
issues an order that a specific discovery should be mediated.
In preparation for the mediation, the City will prepare and
circulate among interested parties a plan term sheet by no later
than Oct. 15, 2013. Also, in preparation for the mediation, the
attorney for the City is appointed as the "point person" to
coordinate a pre-mediation conference with the mediator and other
parties to discuss procedural aspects of the mediation.
About San Bernardino, Calif.
San Bernardino, California, filed an emergency petition for
municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code
(Bankr. C.D. Cal. Case No. 12-28006) on Aug. 1, 2012. San
Bernardino, a city of about 210,000 residents roughly 65 miles
(104 km) east of Los Angeles, estimated assets and debts of more
than $1 billion in the bare-bones bankruptcy petition.
The city council voted on July 10, 2012, to file for bankruptcy.
The move lets San Bernardino bypass state-required mediation with
creditors and proceed directly to U.S. Bankruptcy Court.
The city is represented that Paul R. Glassman, Esq., at Stradling
Yocca Carlson & Rauth.
San Bernardino joined two other California cities in bankruptcy:
Stockton, an agricultural center of 292,000 east of San Francisco,
and Mammoth Lakes, a mountain resort town of 8,200 south of
Yosemite National Park.
The City was granted Chapter 9 protection on Aug. 28, 2013.
SAN DIEGO HOSPICE: Plan Confirmation Hearing Continued to Oct. 3
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
continued until Oct. 3, 2013, at 10 a.m., the hearing to consider
confirmation of the First Amended Liquidating Plan, as modified on
Aug. 27, 2013, that was proposed by San Diego Hospice and
Palliative Care Corporation and the Official Committee of
Unsecured Creditors appointed in the Debtor's case.
As reported in the Troubled Company Reporter on Aug. 23, 2013,
Tiffany L. Carroll, Acting U.S. Trustee, objected to the First
Amended Liquidating Plan, stating that the Court must not confirm
the Plan because of the broad release, exculpation, injunction,
and indemnification contained in the Plan and the Liquidating
Trust Agreement. A copy of the objection is available at
http://bankrupt.com/misc/sandiegohospice.doc560.pdf
The Plan effectuates a distribution of the assets of the Estate to
Creditors in accordance with the priorities set forth in the
Bankruptcy Code. The Plan provides that all of the Debtor's
Assets, to the extent they have not already been liquidated, will
be liquidated and the proceeds will be utilized to pay Allowed
Claims pursuant to the terms of the Plan and to fund the
Liquidating Trust Expenses. All Holders of Allowed Administrative
Claims and Allowed Priority Claims against the Debtor will be
satisfied or paid in full. After payment of the Allowed
Administrative Claims and Allowed Priority Claims and the
provision for the Liquidating Trust Expenses, the balance of
remaining Cash will be distributed Pro-Rata to Holders of Allowed
General Unsecured Claims. The Proponents do not believe that the
Holder of the Subordinated Claim will receive any distributions
under the Plan. The Plan proposes to fairly and efficiently
distribute the Debtor's Assets.
The Plan will not be consummated or become binding unless and
until the Effective Date occurs, which shall in all events occur
prior to the date that is 90 days following entry of the
Confirmation Order, unless the Confirmation Order is stayed or an
order of the Court extending the Effective Date for good cause
shown is entered pursuant to a motion seeking such extension that
was filed prior to the expiration of said 90 day period.
About San Diego Hospice
San Diego Hospice & Palliative Care Corporation filed a Chapter 11
petition (Bankr. S.D. Cal. Case No. 13-01179) in San Diego on
Feb. 4, 2013. The Debtor is the operator of the San Diego Hospice
and The Institute for Palliative Medicine, one of the largest
community-owned, not-for-profit hospices in the country.
The Debtor scheduled $20,369,007 in total assets and $14,888,058
in total liabilities.
Even before the bankruptcy filing, the Debtor has been under a
federal investigation, focusing whether it allowed patients to
stay in the program even when their diagnosis changed. The Debtor
said that it will meet with government agencies to address their
concerns, explore partnerships with other health care
organizations, and work to restructure and resize San Diego
Hospice. The Debtor said it has encouraged Scripps Health, the
region's largest provider of health care services, to enter the
hospice business.
On April 30, 2013, San Diego Hospice received Court authority to
sell its unused 24-bed hospice facility to Scripps Health for
$16.55 million. Scripps made the opening bid of $10.7 million at
the auction that took place before the sale-approval hearing. The
other bidder was Sharp Healthcare. The sale is also subject to
approval by regulators in California.
In May 2013, San Diego Hospice and its creditors' committee
jointly filed a liquidating Chapter 11 plan and an explanatory
disclosure statement.
Jeffrey Isaacs, Esq. -- jeffrey.isaacs@procopio.com -- at
Procopio, Cory, Hargreaves & Savitch LLP represents the Debtor.
Samuel R. Maizel, Esq. -- smaizel@pszjlaw.com -- at Pachulski
Stang Ziehl & Jones LLP represents the Committee.
SANCHEZ ENERGY: Moody's Assigns Caa1 Rating to Sr. Notes Add-On
---------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Sanchez Energy
Corporation's announced $150 million add-on senior notes offering.
Proceeds from the notes, concurrent with the primary equity
offering of eight million shares (approximately $180 million) will
be used to finance the acquisition of assets in its core Eagle
Ford Shale (Wycross) for $220 million as well as undeveloped
acreage in the Tuscaloosa Marine Shale (TMS) for $78 million.
Approximately $8 million of the consideration for TMS acreage was
paid in Sanchez stock issued to the sellers. Sanchez's other
ratings are unchanged and the outlook remains positive.
"These acquisitions add to Sanchez's scale in the Eagle Ford
Shale, while providing opportunity for geographic diversification
if TMS is derisked," said Saulat Sultan, Moody's Vice President.
"However, the largely undeveloped nature of the acquired assets
results in elevated leverage metrics on a proved developed basis,
despite the equity offering."
Moody's current ratings for Sanchez are:
LT Corporate Family Rating of B3
Probability of Default Rating of B3 - PD
Senior Unsecured Rating of Caa1
LGD Senior Unsecured Assessment of LGD4 -- 62%
Ratings Rationale:
The Caa1 ratings on the $550 million of senior notes reflect their
relative ranking in Sanchez's capital structure. The company's
senior secured borrowing base revolving credit facility has first-
lien claims to substantially all of its assets. Given the priority
claim and relatively significant size of the secured revolver in
the capital structure, the unsecured notes are rated one notch
below the B3 CFR under Moody's Loss Given Default Methodology.
Moody's views the transaction as a positive for Sanchez's credit
profile. The company has rapidly grown production since Moody's
initial rating and pro forma for the announced acquisitions, its
average daily production as of September 3, 2013 had grown to over
15,500 barrels of oil equivalent per day (Boe/d). However, while
pro forma leverage on a debt to average daily production basis
will decrease to $35,000 / Boe, the proved undeveloped nature of
the acquired assets still leaves debt / proved developed reserves
high at more than $35 / Boe.
It is important to note that the TMS transaction includes about
40,000 net development acres in Mississippi and Louisiana to be
developed through a 50/50 joint venture partnership with Sanchez
Resources. As part of the agreement, Sanchez Energy has agreed to
carry Sanchez Resources for a minimum of three wells estimated at
approximately $40 million in value.
The B3 Corporate Family Rating reflects Sanchez's small scale and
single basin focus, high leverage in terms of average daily
production and PD reserves, and significant anticipated
outspending of cash flow at least through 2014. The CFR is
supported by the company's oil-weighted asset base in the Eagle
Ford Shale -- one of the largest and most active unconventional
resource plays in the US, which results in high cash margins.
The company should have adequate liquidity to cover its cash needs
through late-2014. Moody's expects the company to use cash from
operations and available liquidity (including revolver borrowings)
to fund its significant capital spending program. The borrowing
base should grow over time as the company adds more reserves to
improve liquidity and add financial flexibility.
The positive outlook reflects Moody's expectation that Sanchez
will continue to grow its production and reserves base. An upgrade
is possible if the company can achieve, on a sustained basis,
production levels approaching 20,000 boe/d while growing its PD
reserves base, reducing the debt to average daily production ratio
below $35,000 boe/d, and maintaining adequate liquidity. A
meaningful slowdown in production growth relative to expectations,
higher than expected capital spending, and / or a material
weakness in liquidity could prompt a downgrade. Sustained leverage
above $55,000 / boe/d on a production basis and above $20 / boe on
a PD reserves basis could also lead to a negative ratings action.
Sanchez's leverage metrics incorporate Moody's latest methodology
for "Debt and Equity Treatment for Hybrid Instruments of
Speculative-Grade Nonfinancial Companies", published on July 31,
2013, which results in 100% equity credit given to the company's
convertible preferred stock compared to 50% equity credit at the
time of its initial rating.
The principal methodology used in this rating was the Global
Independent Exploration and Production Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Sanchez Energy Corporation is an independent oil and gas
exploration and production company headquartered in Houston,
Texas.
SANCHEZ ENERGY: S&P Keeps CCC+ Rating After $150MM Add-On to Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'CCC+' senior
unsecured issue-level rating (one notch lower than the corporate
credit rating) on Houston-based Sanchez Energy Corp. remains
unchanged following the announcement that Sanchez plans to add on
$150 million to its existing $400 million senior unsecured notes
due 2021. The recovery rating on this debt is '5', indicating
S&P's expectation of modest (10% to 30%) recovery in the event of
a payment default.
The 'B-' corporate credit rating and positive rating outlook on
Sanchez are unaffected. The exploration and production company
intends to use proceeds from the add-on, as well as proceeds from
a concurrent offering of 8 million shares of common stock, to fund
the previously announced Wycross acquisition, help fund capital
spending in 2013 and 2014, and for general corporate purposes.
The ratings on Houston-based Sanchez Energy Corp. reflect Standard
& Poor's Ratings Services' view of the company's "vulnerable"
business risk, "highly leveraged" financial risk, and "adequate"
liquidity. The ratings incorporate Sanchez's limited scale of
operations, high percentage of proved undeveloped reserves,
execution risk of its near-term growth plan, and aggressive
capital spending levels in 2013 and 2014. The ratings also take
into account its high percentage of Eagle Ford Shale crude oil
production that typically receives a premium to West Texas
Intermediate (WTI), low debt leverage, and potential for rapid
growth if it is able to execute its operational plans.
RATING LIST
Sanchez Energy Corp.
Corporate Credit Rating B-/Positive/--
$550 Mil. Senior Unsecured Notes Due 2021 CCC+
Recovery Rating 5
SANTA ANA RDA: Moody's Confirms 'Ba1' Rating on Tax Bonds
---------------------------------------------------------
Moody's Investors Service has confirmed the Ba1 rating on the
Successor Agency to the Santa Ana (CA) Redevelopment Agency's Tax
Allocation Bonds.
Rating Rationale:
The rating assignment reflects the agency's healthy actual and
estimated debt service coverage. The rating also incorporates the
large incremental assessed valuation with only a slightly weaker
than typical ratio of incremental to total assessed valuation in
addition to healthy total acreage, and below average resident
income levels. The bonds are secured by the tax increment revenues
of the agency.
Strengths:
- Large geographic size of project area
- Well sized total and incremental assessed valuation
- Healthy debt service coverage
Challenges:
- Low resident wealth levels and still recovering local economy
- Weak coverage of total debt service
What Could Change The Rating Up
- Sizable increase in incremental AV of the project area, leading
to greater debt service coverage in all semi-annual periods
What Could Change The Rating Down
- Decline in the assessed valuation that weakens coverage
- Absence of the cash funded reserve
The principal methodology used in this rating was Moody's Analytic
Approach To Rating California Tax Allocation Bonds published in
December 2003.
SEARS HOLDINGS: Offering 1.1 Million Shares Under Plans
-------------------------------------------------------
Sears Holdings Corporation registered with the U.S. Securities and
Exchange Commission 1.1 million shares of common stock issuable
under the Company's Savings Plan and Sears Holdings Puerto Rico
Savings Plan. The proposed maximum aggregate offering price is
$51.4 million. A copy of the Form S-8 registration statement is
available for free at http://is.gd/wTEUxF
About Sears
Hoffman Estates, Illinois-based Sears Holdings Corporation
(Nasdaq: SHLD) -- http://www.searsholdings.com/-- operates full-
line and specialty retail stores in the United States and Canada.
Sears Holdings operates through its subsidiaries, including Sears,
Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a
94 percent stake in Sears Canada and an 80.1 percent stake in
Orchard Supply Hardware. Key proprietary brands include Kenmore,
Craftsman and DieHard, and a broad apparel offering, including
such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer,
as well as the Apostrophe and Covington brands. It also has the
Country Living
collection, which is offered by Sears and Kmart.
Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary
Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on
Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6,
2003, pursuant to the terms of an Amended Joint Plan of
Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, represented the retailer in its
restructuring efforts. The Company's balance sheet showed
$16,287,000,000 in assets and $10,348,000,000 in debts when it
sought chapter 11 protection. Kmart bought Sears, Roebuck & Co.,
for $11 billion to create the third-largest U.S. retailer, behind
Wal-Mart and Target, and generate $55 billion in annual revenues.
Kmart completed its merger with Sears on March 24, 2005.
The Company's balance sheet at Aug. 3, 2013, showed $19.27 billion
in total assets, $16.45 billion in total liabilities and $2.82
billion in total equity.
Negative Outlook
Standard & Poor's Ratings Services in January 2012 lowered its
corporate credit rating on Hoffman Estates, Ill.-based Sears
Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from
CreditWatch, where we had placed it with negative implications on
Dec. 28, 2011. We are also lowering the short-term and commercial
paper rating to 'C' from 'B-2'. The rating outlook is negative,"
S&P said.
"The corporate credit rating reflects our projection that Sears'
EBITDA will be negative in 2012, given our expectations for
continued sales and margin pressure," said Standard & Poor's
credit analyst Ana Lai. She added, "We further expect that
liquidity could be constrained in 2013 absent a turnaround
or substantial asset sales to fund operating losses."
Moody's Investors Service in January 2012 lowered Sears Holdings
Family and Probability of Default Ratings to B3 from B1.
The outlook remains negative. At the same time Moody's affirmed
Sears' Speculative Grade Liquidity Rating at SGL-2.
The rating action reflects Moody's expectations that Sears will
report a significant operating loss in fiscal 2011. Moody's added
that the rating action also reflects the company's persistent
negative trends in sales, which continue to significantly
underperform peers.
As reported by the TCR on Dec. 7, 2012, Fitch Ratings has affirmed
its long-term Issuer Default Ratings (IDR) on Sears Holdings
Corporation (Holdings) and its various subsidiary entities
(collectively, Sears) at 'CCC' citing that The magnitude of Sears'
decline in profitability and lack of visibility to turn operations
around remains a major concern.
SHUANEY IRREVOCABLE: Files Outline Explaining Second Amended Plan
-----------------------------------------------------------------
Shuaney Irrevocable Trust delivered to the U.S. Bankruptcy Court
for the Northern District of Florida, Pensacola Division, a
disclosure statement explaining its Second Amended Chapter 11 Plan
of Reorganization.
Excluding the disputed and unliquidated claim filed by Adams Homes
of Northwest Florida, Inc., for approximately $147,000,000, the
aggregated proofs of claim filed by creditors is $17,393,000. The
aggregate of claims of creditors who did not file a claim is
$1,065,000. Based on the debt amounts and the assets, the Debtor
believes it is solvent and must pay all creditors in full. To the
extent that any secured claim is not satisfied as of the effective
date, the Plan provides for the payment of 3.5% interest per year
upon the portion of the claim that is not paid on the effective
date through the date on which the claim is full paid.
With regard to creditors holding unsecured claims, the Plan
provides for the payment of 2% interest per year until the claims
have been paid in full.
A full-text copy of the Disclosure Statement, dated Sept. 10,
2013, is available for free at:
http://bankrupt.com/misc/SHUANEYds0910.pdf
About Shuaney Irrevocable Trust
Shuaney Irrevocable Trust, in Fort Walton Beach, Florida, filed
for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 11-31887) on
Dec. 1, 2011. The Debtor scheduled $20,996,723 in assets and
$19,625,890 in debts. The Law Office of Mark Freund serves as
counsel to the Debtor. Judge William S. Shulman presides over the
case. The U.S. Trustee for Region 21 was unable to appoint an
Official Committee of Unsecured Creditors of Shuaney Irrevocable
Trust.
SHINGLE SPRINGS: Refinancing Prompts Moody's to Upgrade CFR to B3
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Shingle Springs
Tribal Gaming Authority, including its Corporate Family Rating to
B3 from Caa2 and Probability of Default Rating to B3-PD from Caa2-
PD. At the same time, Moody's affirmed the B2 rating on the
Authority's $15 million senior secured first out revolver expiring
in 2016 and the B3 ratings on its $245 million senior secured term
loan due 2016 and $260 million 9.75% senior unsecured notes due
2021. The ratings on Shingle Springs' $450 million senior notes
due 2015 are being withdrawn, as the debt has been repaid in full.
The rating outlook is stable. These actions conclude the review of
Shingle Springs' ratings that was initiated on August 6, 2013.
Ratings Rationale:
The upgrade to B3 reflects Shingle Springs' successful refinancing
of its $450 million notes due 2015, the final step required to
receive all of the benefits of its recently approved amended
compact. The benefits include improved free cash flow as a result
of no required compact payments through June 30, 2015, and reduced
revenue share payments thereafter (to 15% from 20%) which are
effectively offset with credits from the State of California
through June 2020. Shingle Springs' extended debt maturity profile
is also improved, with no material scheduled debt maturities until
the revolver expires in 2016 and the term loan is due in 2019.
Shingle Springs' free cash flow also benefits from lower overall
cost of debt, with savings of approximately $8 million annually as
a result of its recent refinancing transaction, and elimination of
its management agreement with Lakes, which was approximately $9
million over the last twelve month period. Moody's expects Shingle
Springs will lower its outstanding debt through scheduled debt
amortization of about $7 million on its term loan and through an
excess cash flow sweep. Moody's notes that the excess cash flow
sweep is calculated after both priority and certain discretionary
tribal distributions.
Despite the benefits from the amended compact, Shingle Springs
remains exposed to several near-term issues that will continue to
constrain its ratings. The Authority faces additional competition
with the opening of Graton Resort & Casino at the end of 2013 -- a
large competitor located about 125 miles from Shingle Springs'
casino -- and there is the potential for an adverse outcome in the
Sharp litigation -- the $30 million judgment could be upheld.
While an adverse decision would decrease the Authority's financial
flexibility, there is sufficient liquidity between the revolver
and cash on hand to provide for Sharp litigation-related
liquidity. Also, Shingle Springs is permitted to make certain
distributions to the Tribe, even in default. If Shingle Springs'
cash flow were to decrease for any reason and the Authority still
made allowed discretionary distributions to the Tribe, it would
decrease the amount of cash flow that is subject to the excess
cash flow sweep provision in the credit agreement.
The stable rating outlook reflects Moody's view that despite the
addition of new gaming supply competing with Shingle Springs' Red
Hawk Casino in 2013, the Authority will be able to generate free
cash flow and maintain debt/EBITDA around 5.0 times and
EBIT/interest expense above 1.5 times.
Ratings could be downgraded if debt/EBITDA (before tribal
distributions) exceeded 6.0 times or EBIT/interest expense
decreased below 1.0 time. Upward rating pressure is limited in the
near-term with the opening of Graton in 2013 and the pending Sharp
litigation, but ratings could be upgraded if debt/EBITDA (before
tribal distributions) was sustained below 4.5 times and
EBIT/interest expense remained above 2.0 times.
The B2 rating on the proposed first out revolver -- one notch
above the Corporate Family Rating -- reflects the $505 million of
lower priority debt in the company's capital structure. The B3
rating on the proposed term loan reflects the support it derives
from $260 million of unsecured notes. Moody's notes that under
certain circumstances, Shingle Springs has the ability to increase
the size of its first out revolver to $30 million and its senior
secured term loan by up to $35 million. If the Authority were to
add the incremental senior secured debt, per Moody's Loss Given
Default methodology and independent of a change to the Corporate
Family Rating, the ratings on the first out revolver and/or senior
unsecured notes could be downgraded.
Ratings upgraded:
Corporate Family Rating to B3 from Caa2
Probability of Default Rating to B3-PD from Caa2-PD
Ratings affirmed:
$15 million proposed senior secured 3-year first out revolver
at B2 (LGD 3, 43%)
$245 million senior secured 6-year term loan at B3 (LGD 3, 44%)
$260 million senior unsecured notes due 2021 at B3 (LGD 4, 57%)
Rating withdrawn:
$450 million senior notes due 2015 at Caa2 (LGD 4, 50%)
The principal methodology used in this rating was the Global
Gaming published in December 2009. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Shingle Springs is an unincorporated governmental authority of the
Shingle Springs Band of Miwok Indians. The Authority was formed to
develop, own and operate the Red Hawk Casino, which opened on
December 17, 2008 near Sacramento, California.
SPRINGFIELD HOMES: Court to Dismiss Bankruptcy Case
---------------------------------------------------
The Bankruptcy Court, according to Springfield Homes, LLC's case
docket, considered the motion to continue the Section 341(a)
meeting as moot. The Court said that the case will be dismissed.
The Debtor had requested that the meeting of creditors be
continued because a motion to dismiss the Bankruptcy Case was
scheduled for Aug. 26.
In this relation, the Bankruptcy Administrator for the Eastern
District of North Carolina had asked the Court to deny the motion
of G. Frank Moody, the Debtor's member/manager, to dismiss which
was filed on July 24. Mr. Moody asserted that David P. Cully,
another member/manager, did not have authority to sign or file the
petition.
About Springfield Homes, LLC
Raleigh, North Carolina-based Springfield Homes, LLC filed for
Chapter 11 protection (Bankr. E.D. N.C. Case No. 13-04550) on
July 22, 2013. Bankruptcy Judge Randy D. Doub represides over the
case. D. Kyle Deak, Esq., at Troutman Sanders, LLP, and Travis
Sasser, Esq., at Sasser Law Firm represent the Debtor as counsel.
The Debtor estimated assets at $10 million to $50 million. The
Debtor estimated debts at $1 million to $10 million. The petition
was signed by David P. Cully, member/manager.
TALON INTERNATIONAL: Appoints New Member to Board of Directors
--------------------------------------------------------------
Robert L. Golden was appointed as a member of the Board of
Directors of Talon International, Inc., by unanimous written
consent of the Board of Directors of the Company effective
Sept. 10, 2013. Mr. Golden was appointed to fill an existing
vacancy on the Board.
Mr. Golden (age 53) is a partner at the accounting firm Fenton &
Ross, providing business consulting and audit services for the
firm's clients. Since 2008, Mr. Golden has also served as chief
financial officer for Promo Shop, Inc., a promotional
merchandising and marketing services company that provides
creative branded merchandise and custom premiums. Previously, Mr.
Golden was a principal of the accounting firm of Saffer and Flint
LLP from 2004 to 2012, providing business consulting and tax
services to its clients. Prior to that, Mr. Golden spent several
years with national and regional accounting firms as a Certified
Public Accountant, beginning with Ernst & Young in 1984. Mr.
Golden has a bachelor's degree from the University of Southern
California, and has been a member of the California Society of
Certified Public Accountants and the American Institute of
Certified Public Accountants.
In connection with Mr. Golden's appointment as a director, and
consistent with Talon's policy for compensation of non-employee
directors, Talon's Board of Directors approved the grant to Mr.
Golden of an option to purchase 100,000 shares of Talon common
stock at an exercise price per share equal to the average closing
price for Talon's common stock over the five trading days
following approval of the option grant.
Mr. Golden does not have any family relationships with any of the
Company's other directors or executive officers. Mr. Golden does
not have a direct or indirect material interest in any transaction
with the Company involving an amount exceeding $120,000, and no
such transaction is currently proposed.
About Talon International
Woodland Hills, Cal.-based Talon International, Inc. (OTC BB:
TALN) -- http://www.talonzippers.com/-- is a global supplier of
apparel fasteners, trim and interlining products to manufacturers
of fashion apparel, specialty retailers, mass merchandisers, brand
licensees and major retailers. Talon manufactures and distributes
zippers and other fasteners under its Talon(R) brand, known as the
original American zipper invented in 1893. Talon also designs,
manufactures, engineers, and distributes apparel trim products and
specialty waistbands under its trademark names, Talon, Tag-It and
TekFit, to more than 60 apparel brands and manufacturers including
Wal-Mart, Kohl's, J.C. Penney, Victoria's Secret, Tom Tailor,
Abercrombie and Fitch, Polo Ralph Lauren, Phillips-Van Heusen,
Reebok and Juicy Couture. Talon has offices and facilities in the
United States, United Kingdom, Hong Kong, China, and Bangladesh.
Talon International disclosed net income of $679,347 for the year
ended Dec. 31, 2012, as compared with net income of $729,133
during the prior year.
As of June 30, 2013, the Company had $22.99 million in total
assets, $13.22 million in total liabilities, $25.77 million in
series B convertible preferred stock, and a $16 million total
stockholders' deficit.
TECHNOLOGY PROPERTIES: In Limine Motions Decided in HTC Suit
------------------------------------------------------------
Magistrate Judge Paul S. Grewal ruled on the in limine motions,
including three so-called "Daubert" motions, filed in the lawsuit,
HTC CORPORATION, et al., Plaintiffs, v. TECHNOLOGY PROPERTIES
LIMITED, et al., Defendants, Case No. 5:08-cv-00882-PSG (N.D.
Calif.). Defendants Technology Properties Limited, Patriot
Scientific Corporation, and Alliacense, Limited, bring five
motions and Plaintiffs HTC Corporation and HTC America, Inc., also
bring five.
A copy of the Court's Sept. 6, 2013 Order is available at
http://is.gd/kgtXlxfrom Leagle.com.
HTC Corporation, Plaintiff, represented by Kyle Dakai Chen, Cooley
Godward Kronish LLP, Mark R. Weinstein, Cooley Godward Kronish
LLP, Brandon D. Baum, Agility IP Law, LLP, Heidi Lyn Keefe, Cooley
Godward Kronish LLP, Lam Khanh Nguyen, Cooley LLP, Matthew James
Leary, Cooley LLP, Michael J. Bettinger, K&L Gates LLP & Ronald
Scott Lemieux, Cooley LLP.
HTC America, Inc., Plaintiff, represented by Kyle Dakai Chen,
Cooley Godward Kronish LLP, Mark R. Weinstein, Cooley Godward
Kronish LLP, Brandon D. Baum, Agility IP Law, LLP, Heidi Lyn
Keefe, Cooley Godward Kronish LLP, Lam Khanh Nguyen, Cooley LLP,
Matthew James Leary, Cooley LLP, Michael J. Bettinger, K&L Gates
LLP & Ronald Scott Lemieux, Cooley LLP.
Technology Properties Limited, Defendant, represented by James
Carl Otteson, Agility IP Law. LLP, Brandon D. Baum, Baum Legal,
David L. Lansky, Agility IP Law, LLP, Irvin E. Tyan, Agility IP
Law, James R. Farmer, OTTESON LAW GROUP AGILITY IP LAW, LLP,
Jedediah Phillips, Agility IP Law, LLP, Michael J. Bettinger, K&L
Gates LLP, Michelle Gail Breit, Agility IP Law, LLP, Philip
William Marsh, Agility IP Law, Thomas T. Carmack, Agility IP Law,
LLP & Vinh Huy Pham, Attorney at Law.
Patriot Scientific Corporation, Defendant, represented by Philip
William Marsh, Agility IP Law, Thomas T. Carmack, Agility IP Law,
LLP, Brandon D. Baum, Agility IP Law, LLP, David L. Lansky,
Agility IP Law, LLP, James Carl Otteson, Agility IP Law. LLP,
Jedediah Phillips, Agility IP Law, LLP, Michael J. Bettinger, K&L
Gates LLP & Michelle Gail Breit, Agility IP Law, LLP.
Alliacense Limited, Defendant, represented by James Carl Otteson,
Agility IP Law. LLP, Brandon D. Baum, Agility IP Law, LLP, David
L. Lansky, Agility IP Law, LLP, Irvin E. Tyan, Agility IP Law,
James R. Farmer, OTTESON LAW GROUP AGILITY IP LAW, LLP, Jedediah
Phillips, Agility IP Law, LLP, Michael J. Bettinger, K&L Gates
LLP, Michelle Gail Breit, Agility IP Law, LLP, Philip William
Marsh, Agility IP Law, Thomas T. Carmack, Agility IP Law, LLP &
Vinh Huy Pham, Attorney at Law.
Non Party Texas Instruments Incorporated, Movant, represented by
Anupam Sharma, Covington & Burling LLP.
Technology Properties Limited, Counter-claimant, represented by
James R. Farmer, OTTESON LAW GROUP AGILITY IP LAW, LLP & Michelle
Gail Breit, Agility IP Law, LLP.
Alliacense Limited, Counter-claimant, represented by James R.
Farmer, OTTESON LAW GROUP AGILITY IP LAW, LLP & Michelle Gail
Breit, Agility IP Law, LLP.
Technology Properties Limited, Counter-defendant, represented by
James R. Farmer, OTTESON LAW GROUP AGILITY IP LAW, LLP & Michelle
Gail Breit, Agility IP Law, LLP.
Alliacense Limited, Counter-defendant, represented by James R.
Farmer, OTTESON LAW GROUP AGILITY IP LAW, LLP & Michelle Gail
Breit, Agility IP Law, LLP.
Technology Properties Limited, LLC, fka Technology Properties
Limited Inc., based in Cupertino, California, filed for Chapter 11
bankruptcy (Bankr. N.D. Calif. Case No. 13-51589) on March 20,
2013. TPL develops and commercializes intellectual property
assets and leverages them to drive product development.
Bankruptcy Judge Stephen L. Johnson oversees the case. David B.
Rao, Esq., Heinz Binder, Esq., Robert G. Harris, Esq., Roya
Shakoori, Esq., and Wendy W. Smith, Esq., at Law Offices of Binder
and Malter, serve as the Debtor's counsel.
In its petition, TPL listed under $1 million in assets and between
$50 million to $100 million in debts. A list of the Company's 20
largest unsecured creditors is available for free at
http://bankrupt.com/misc/canb13-51589.pdf The petition was signed
by Daniel E. Leckrone, manager.
TOMSTEN INC: Can Hire 1st Audit as Consultant
---------------------------------------------
Tomsten, Inc., dba Archiver's, sought and obtained permission from
the U.S. Bankruptcy Court for the District of Minnesota to employ
1st Audit, Inc. as consultant.
The firm will be providing the Debtor services which include the
evaluation of the Debtor's executory contracts relating to
transport and delivery services to identify opportunities for cost
saving and negotiate amendments to the agreements to achieve those
savings.
1st Audit will render the services for a fee contingent on
achieving the cost savings with the fee being equal to 50% of
those savings over a 156-week period commencing when the savings
are first realized.
The engagement is expected to provide cost savings to the Debtor
of $60,000 to possibly more than $200,000.
Jon Jacobs, president of 1st Audit, assures the Court that his
firm does not have any connection with the creditors of the Debtor
or the U.S. Trustee. Moreover, the Debtor believes 1st Audit is a
"disinterested person" as the term is defined under 11 U.S.C. Sec.
101(13).
About Tomsten, Inc.
Hennepin, Minnesota-based Tomsten, Inc., doing business as
Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D.
Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The
Debtor estimated assets of at least $10 million and liabilities of
at least $1 million as of the Chapter 11 filing. The Debtor has
tapped and Michael L. Meyer, Esq., and the firm of Ravich Meyer
Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F.
Kishel presides over the case.
Steven M. Rubin and the law firm of Leonard Street and Deinard
serve as the Debtor's corporate counsel. M Squared Group, Inc.,
is the Debtor's marketing consultant while Lighthouse Management
Group, Inc., is the Debtor's financial consultant. Baker Tilly
Virchow Krause, LLP, serve as tax accountant to the Debtor.
The Official Unsecured Creditors' Committee is represented by Jay
Jaffe, Esq., at Faegre Baker Daniels LLP. CBIZ Accounting, Tax
and Advisory of New York, LLC, serves as the Committee's financial
advisor.
TOMSTEN INC: Gets Court Nod to Tap SIB Development as Consultant
----------------------------------------------------------------
Tomsten, Inc. obtained permission from the U.S. Bankruptcy Court
for the District of Minnesota to hire SIB Development &
Consulting, Inc., as its consultant. The firm is contemplated to
to provide services including evaluation of the Debtor's vendor
billings relating to utilities and related services; to identify
opportunities for cost savings; and negotiate agreements to
achieve those savings.
As reported on the Sept. 12, 2013 edition of The Troubled Company
Reporter, SIB will be paid a fee contingent on achieving the cost
savings with the fee being equal to 50% of the savings over a
60-month period commencing when the particular vendor relationship
is reviewed. SIB estimates cost savings for the Debtor of $30-
50,000 per year.
About Tomsten, Inc.
Hennepin, Minnesota-based Tomsten, Inc., doing business as
Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D.
Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The
Debtor estimated assets of at least $10 million and liabilities of
at least $1 million as of the Chapter 11 filing. The Debtor has
tapped and Michael L. Meyer, Esq., and the firm of Ravich Meyer
Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F.
Kishel presides over the case.
Steven M. Rubin and the law firm of Leonard Street and Deinard
serve as the Debtor's corporate counsel. M Squared Group, Inc.,
is the Debtor's marketing consultant while Lighthouse Management
Group, Inc., is the Debtor's financial consultant. Baker Tilly
Virchow Krause, LLP, serve as tax accountant to the Debtor.
The Official Unsecured Creditors' Committee is represented by Jay
Jaffe, Esq., at Faegre Baker Daniels LLP. CBIZ Accounting, Tax
and Advisory of New York, LLC, serves as the Committee's financial
advisor.
TORNANTE-MDP JOE: S&P Assigns B Corp Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's assigned its 'B' corporate credit rating to New
York City-based Tornante-MDP Joe Holding LLC. The outlook is
stable.
In addition, S&P assigned its 'B' issue-level rating to subsidiary
The Topps Co. Inc.'s proposed $175 million senior secured credit
facility, which is composed of a $150 million first-lien term loan
due 2020 and $25 million revolving credit facility due 2018. The
recovery rating is '3', indicating S&P's expectation for
meaningful (50%-70%) recovery in the event of a payment default.
The ratings are based on preliminary terms and subject to review
upon receipt and review of final documents.
For analytical purposes, S&P views Tornante-MDP Joe and it wholly
owned operating subsidiary, Topps, as one economic entity.
"The ratings on Tornante-MDP Joe and its operating company, Topps,
reflect our opinion that the company's business risk profile is
vulnerable and financial risk profile is highly leveraged," said
Standard & Poor's credit analyst Jean Stout.
Key credit factors in Standard & Poor's business risk assessment
include Tornante-MDP Joe's narrow focus as well as its
participation within the competitive North American non-chocolate
confectionary industry. S&P also considers the company's trading
cards and collectibles business as susceptible to demand
zolatility, as well as the fact that it competes with other
consumer oriented leisure interests and activities, and it has
product concentration risk. S&P believes the somewhat high
barriers to entry arising from existing multiyear licensing
contracts within its cards segment and customer and geographic
diversity only partially offset these risks.
S&P's financial risk profile is based on the company's controlling
ownership by a financial sponsor and its relatively high level of
debt. (Tornante-MDP Joe is a private company and does not publish
financial statements publicly.) For the 12 months ended June 29,
2013, S&P estimates the pro forma ratio of adjusted total debt to
EBITDA was about 5x.
The stable outlook on Tornante-MDP Joe reflects S&P's belief that
its operating performance will remain relatively steady despite
inherent volatility of demand within the trading cards segment.
However, S&P would consider lowering the ratings if liquidity
became constrained, including covenant cushion declining well
below 10%, or if credit ratios weaken significantly.
Although less likely within the next one to two years, S&P could
raise the corporate credit rating one notch to 'B+' if the company
improves its operating performance, resulting in higher positive
free cash flow, and reduces and maintains leverage at or below 4x.
TORRANCE CITY RDA: Moody's Cuts Tax Allocation Bond Ratings to Ba2
------------------------------------------------------------------
Moody's Investors Service has downgraded to Ba2 from Ba1 rating on
the Successor Agency to the City of Torrance RDA Tax Allocation
Bonds (Downtown Redevelopment Project Area), 1998 Series A. The
outlook is negative.
Rating Rationale:
The downgrade reflects the narrow total project area debt service
coverage, the uncertainty associated with the applicability of the
tax increment revenue cap for the Downtown Redevelopment project
area, the high taxpayer concentration of the combined project
areas and the assessed valuation trends and volatility for the
Industrial project area. The rating also factors in the moderate
size of the combined areas.
The bonds are secured by tax increment revenues of the Downtown
project area however under the recent RDA legislation Moody's
analysis factors in all of the Successor Agency's (SA) project
areas, including the larger Industrial Redevelopment Project area.
Under AB X1 26 and AB 1484, the statutes that dissolved all
California redevelopment agencies, tax increment revenue of all of
a SA's project areas are placed in trust with the County auditor,
who makes semi-annual distributions of funds sufficient to pay
debt service on tax allocation bonds as well as other obligations.
Strengths:
- High wealth levels
- High increment to total AV
Challenges:
- Weak debt service coverage levels
- Uncertainty over applicability of tax revenue increment cap in
the Downtown Project area
- Elevated taxpayer concentration for Industrial Redevelopment
project area and on a combined basis (Industrial and Downtown
Redevelopment Project areas)
- Trend of AV volatility and declines in the Industrial
Redevelopment project area
Outlook:
The negative outlook reflects the uncertainty surrounding the
applicability of the tax increment revenue cap for the Downtown
Redevelopment Project area. The outlook also incorporates the
unfavorable trends in the Industrial Redevelopment Project area
and potential for continuing volatility in such area.
What Could Change The Rating Up
- Sizable increase in incremental AV of the project area, leading
to greater debt service coverage in all semi-annual and annual
periods
What Could Change The Rating Down
- Decline in the project area's AV
- Tax increment cap is valid with no plan by SA to manage
The principal methodology used in this rating was Moody's Analytic
Approach To Rating California Tax Allocation Bonds published in
December 2003.
TOWNSQUARE RADIO: S&P Affirms B Corp Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Greenwich, Conn.-based Townsquare Radio LLC. The
rating outlook is stable.
At the same time, S&P affirmed its 'B' issue-level rating on
Townsquare's senior unsecured notes due 2019. The '4' recovery
rating on this debt remains unchanged, indicating S&P's
expectation for average (30% to 50%) recovery for lenders in the
event of a payment default.
S&P expects that the issuer will use the net proceeds from
additional debt issuance to finance the acquisition of Peak II
Holdings and 50 radio stations from Cumulus Media Holdings Inc.
In conjunction with the acquisition, Townsquare plans to exchange
five Peak radio stations for 15 Cumulus radio stations.
The 'B' corporate rating affirmation on Townsquare follows the
company's proposed acquisition of assets from Cumulus Media
Holdings Inc. and Peak Media Holdings Inc., which S&P expects will
be funded with debt. As a result of the acquisition and asset
exchange, pro forma lease-adjusted debt to EBITDA, including the
preferred equity at the holding company, increases modestly to
about 7.7x, up from 7.5x in 2012, as calculated by Standard &
Poor's. S&P expects that, despite the high leverage, the company
will be able to maintain adequate liquidity over the intermediate
term. S&P views Townsquare's business risk profile as "weak"
because of risks related to longer-term structural issues facing
the radio industry and the company's small market presence, which
we believe contributes to a lower EBITDA margin. S&P assess
Townsquare's management as "fair" under its criteria.
"We view Townsquare's financial risk profile as "highly
leveraged," based on its high debt-to-EBITDA ratio. Pro forma for
the proposed transaction as of June 30, 2013, lease-adjusted debt
to EBITDA was 6.7x and increases to a very high 7.7x when the
preferred equity at the holding company is included. We recognize
that the preferred equity provides the company with financial
flexibility, which we incorporate qualitatively into the rating.
Nevertheless, we believe the preferred units are unlikely to be a
permanent part of the holding company's capital structure, given
the incentives of the private equity shareholders to seek a return
on their investment, potentially over an intermediate horizon,"
S&P said.
TRIUS THERAPEUTICS: Closes Merger with Cubist Pharmaceuticals
-------------------------------------------------------------
Cubist Pharmaceuticals, Inc., announced the results of its tender
offer to purchase all of the outstanding common shares of Trius
Therapeutics, Inc., for $13.50 per share in cash, plus one
Contingent Value Right, entitling the holder to receive an
additional cash payment of up to $2.00 for each share they tender
if certain commercial sales milestones are achieved. The tender
offer is being effected by Cubist's subsidiary, BRGO Corporation.
The tender offer period expired on Sept. 11, 2013.
The depositary for the tender offer has advised Cubist that, as of
the expiration of the tender offer a total of approximately
31,716,244 shares of Trius common stock had been validly tendered
and not withdrawn, representing approximately 65 percent of the
outstanding Trius common shares (not counting as validly tendered
shares tendered through notice of guaranteed delivery and not
actually delivered). All shares that were validly tendered and
not withdrawn during the initial offering period have been
accepted for payment.
Pursuant to the terms of the merger agreement, BRGO Corporation, a
wholly-owned subsidiary of Cubist, will exercise its option to
purchase newly issued shares from Trius. Following this purchase,
BRGO Corporation will own sufficient shares to effect a short-form
merger with and into Trius. The merger was completed on September
11.
In the short-form merger, each share of common stock of Trius not
tendered in the tender offer (other than shares held by Trius as
treasury stock or owned by Cubist, BRGO Corporation or any other
subsidiary of Cubist, and other than shares held by a holder who
has properly demanded and perfected appraisal rights in accordance
with Section 262 of Delaware General Corporation Law) will be
converted into the right to receive $13.50 per share in cash, plus
one Contingent Value Right. This is the same price per share paid
in the tender offer.
As a result of the Merger, Trius no longer fulfills the numerical
listing requirements of The Nasdaq Global Market. Accordingly, on
Sept. 11, 2013, at Trius' request, Nasdaq filed with the U.S.
Securities and Exchange Commission a Notification of Removal from
Listing or Registration under Section 12(b) of the Securities
Exchange Act of 1934, as amended, on Form 25 thereby effecting the
delisting of the Shares from Nasdaq.
Pursuant to the terms of the Merger Agreement, immediately prior
to the Effective Time on Sept. 11, 2013, each of Jeffrey Stein,
Ph.D., David S. Kabakoff, Brian G. Atwood, Karin Eastham, Seth H.
Z. Fischer, Nina Kjellson, Brendan O'Leary, Theodore R. Schroeder
and Paul Truex resigned from the Board of Directors, and any
committee thereof, of Trius. Upon consummation of the Merger and
pursuant to the Merger Agreement, Michael W. Bonney, Thomas
DesRosier and Michael Tomsicek, each of whom is an officer of
Purchaser, became the directors of Trius.
Pursuant to the terms of the Merger Agreement, the executive
officers of Purchaser immediately prior to the Effective Time
became the executive officers of Trius following the Merger. The
new executive officers of Trius are Michael W. Bonney, Thomas
DesRosier and Michael Tomsicek.
At the Effective Time, Trius's certificate of incorporation and
by-laws were amended and restated in their entirety to be
identical to the certificate of incorporation and by-laws of
Purchaser as in effect immediately prior to the consummation of
the Merger, except that the name of the surviving corporation set
forth therein is "Trius Therapeutics, Inc."
"We are very pleased to complete this acquisition and welcome the
Trius team to Cubist," said Cubist Chief Executive Officer Michael
Bonney. "Trius is an excellent strategic fit, and its lead
product candidate, tedizolid phosphate, has the potential to be an
important new treatment in the fight against resistant infections.
The need for new treatments to combat drug resistant bacteria is
growing, and we will work diligently to bring this antibiotic
product candidate to market in order to help hospitals and their
patients combat these infections. This transaction is also an
important step towards achieving Cubist's Building Blocks of
Growth and continuing our track record of driving shareholder
value over the long term."
Additional information is available for free at:
http://is.gd/0xCUx4
About Trius Therapeutics
San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) --
http://www.triusrx.com/-- is a biopharmaceutical company focused
on the discovery, development and commercialization of innovative
antibiotics for serious, life-threatening infections. The
Company's first product candidate, torezolid phosphate, is an IV
and orally administered second generation oxazolidinone being
developed for the treatment of serious gram-positive infections,
including those caused by MRSA. In addition to the company's
torezolid phosphate clinical program, it is currently conducting
two preclinical programs using its proprietary discovery platform
to develop antibiotics to treat infections caused by gram-negative
bacteria.
Trius Therapeutics incurred a net loss of $53.92 million in 2012,
a net loss of $18.25 million in 2011 and a $23.86 million net loss
in 2010. As of June 30, 2013, the Company had $74.05 million in
total assets, $19.37 million in total liabilities and $54.68
million in total stockholders' equity.
TWIN CITY HOSPITAL: Ohio App. Court Flips Summary Judgment Order
----------------------------------------------------------------
The Court of Appeals of Ohio, Fifth District, Tuscarawas County,
reversed the judgment of the Tuscarawas County Court of Common
Pleas in the matter, MARK D. KOZEL, AS CHAPTER 7 TRUSTEE FOR TWIN
CITY HOSPITAL Plaintiff-Appellant, v. GREGG ANDREWS, ET AL.
Defendants-Appellees, No. 2012 AP 11 0066. The appeals court
remanded the matter for further proceedings. A copy of the
Court's Sept. 5 Opinion is available at http://is.gd/2QMflTfrom
Leagle.com.
The Chapter 7 Trustee for Twin City Hospital appealed the Oct. 12,
2012 Judgment Entry entered by the Tuscarawas County Court of
Common Pleas, which granted summary judgment in favor of Gregg
Andrews, et al.
Twin City Hospital is a small rural acute care hospital located in
Dennison, Tuscarawas County, Ohio. Twin City has served the
community for over one hundred years.
On Oct. 13, 2010, Twin City filed Chapter 11 bankruptcy. The
creditors of Twin City duly elected Mark D. Kozel as Chapter 11
Trustee, replacing the originally appointed Trustee. The
proceeding under Chapter 11 was subsequently converted to a
Chapter 7 proceeding.
On Jan. 23, 2012, Mr. Kozel filed a complaint in the U.S.
Bankruptcy Court for the Northern District of Ohio, Eastern
Division, against Appellees Carol Hoffman, Marge Jentes, Darrell
Pancher, John Rypien, Bill Surber, Jim Weaver, Dr. Gregg Andrews,
Fred Bollon, Greg DiDonato, Tim McKnight, Rod Rafael, and Doug
Ross as defendants. Mr. Kozel are the former Board Members of
Twin City. Mr. Kozel asserted Appellees acted improperly by
issuing approximately $17.3 million in tax exempt revenue bonds to
fund new construction and renovations to Twin City and to
refinance the hospital's outstanding long term obligations while
its finances were in poor condition. On March 12, 2012, Appellees
filed their motion for abstention, asking the bankruptcy court to
exercise its permissive authority to abstain from hearing the
adversary proceeding pursuant to 28 U.S.C. Sec. 1334(c)(1), and
allow the matter to be heard by the Tuscarawas County Court of
Common Pleas. The bankruptcy court granted Appellees' motion and
ordered the case be filed in the Tuscarawas County Court of Common
Pleas.
Mr. Kozel filed the instant action on May 22, 2012. A visiting
judge was assigned to the case. Appellees filed a Civ. R. 12(B)(6)
motion to dismiss. Mr. Kozel filed a brief in opposition thereto.
Via Order of the Court filed Aug. 15, 2012, the trial court found
the parties' motions presented matters outside the complaint and
ordered the motion to dismiss be treated as a motion for summary
judgment, and permitted the parties to file supplemental briefs
and supporting evidence.
The Defendants-Appellees are represented by:
DAVID L. DINGWELL, Esq.
EDMOND J. MACK, Esq.
LEE E. PLAKAS, Esq.
JOSHUA E. O'FARRELL, Esq.
Tzangas, Plakas, Mannos, LTD
220 Market Avenue South, Eighth Floor
Canton, OH 44702
The Plaintiff-Appellant are represented by:
JONATHON M. YARGER, Esq.
VICTOR D. RADEL, Esq.
ANDREW J. YARGER, Esq.
Yarger, Radel & Pentz, LLC
1111 Superior Avenue, Suite 530
Cleveland, OH 44114
The appellate panel consists of Judges W. Scott Gwin, William B.
Hoffman, and Patricia A. Delaney.
About Twin City Hospital
Dennison, Ohio-based Twin City Hospital filed for Chapter 11
bankruptcy protection (Bankr. N.D. Ohio Case No. 10-64360) on Oct.
13, 2010. Shawn M. Riley, Esq., at McDonald Hopkins LLC,
represents the Debtor in its restructuring effort. The Debtor
estimated its assets and debts at $10 million to $50 million.
Twin City Hospital has sold substantially all of its assets to
Trinity Hospital Twin City, an affiliate of the Franciscan
Services Corp. for $4.85 million. The case was converted from a
chapter 11 to a chapter 7 on June 28, 2011, following the sale.
Mark D. Kozel was appointed as Chapter 7 trustee.
TXU CORP: Bank Debt Trades at 31% Off
-------------------------------------
Participations in a syndicated loan under which TXU Corp is a
borrower traded in the secondary market at 68.70 cents-on-the-
dollar during the week ended Friday, September 13, 2013 according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents an increase of 1.08
percentage points from the previous week, The Journal relates.
TXU Corp pays 350 basis points above LIBOR to borrow under the
facility. The bank loan matures on Oct. 10, 2014. Moody's
withdraws the bank debt and Standard & Poor's has not rated the
bank debt. The loan is one of the biggest gainers and losers
among 249 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80%-owned entity within the EFH group, is the largest regulated
transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
The Company's balance sheet at Dec. 31, 2011, showed $44.07
billion in total assets, $51.83 billion in total liabilities, and
a $7.75 billion total deficit.
Energy Future had a net loss of $1.91 billion on $7.04 billion of
operating revenues for the year ended Dec. 31, 2011, compared with
a net loss of $2.81 billion on $8.23 billion of operating revenues
during the prior year.
* * *
In late January 2012, Moody's Investors Service changed the rating
outlook for Energy Future Holdings Corp. (EFH) and its
subsidiaries to negative from stable. Moody's affirmed EFH's Caa2
Corporate Family Rating (CFR), Caa3 Probability of Default Rating
(PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1
senior secured rating for Oncor.
EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed
company with limited flexibility. EFH's capital structure is
complex and, in our opinion, untenable which calls into question
the sustainability of the business model and expected duration of
the liquidity reserves.
UNI-PIXEL INC: To Present at Oppenheimer Conference Sept. 17
------------------------------------------------------------
UniPixel, Inc., has been invited to participate at Oppenheimer's
1st Annual Emerging Innovations Conference: Next Gen Display &
Touch Technologies on Tuesday, Sept. 17, 2013, at the Grand Hyatt
Hotel in New York City.
UniPixel President and Chief Executive Officer Reed Killion is
scheduled to participate on a panel discussion titled: "ITO
Replacement.' The panel discussion will be held at 11:25 a.m.
Eastern time, with one-on-one meetings held throughout the day.
Management will discuss the Company's progress towards
revolutionizing the touch-screen market, including its
manufacturing build-out of its UniBossTM pro-cap, multi-touch
sensor film per two preferred pricing and capacity agreements with
a major PC maker and major consumer electronics ecosystem partner.
For more information about the conference or to schedule a one-on-
one meeting with UniPixel management, please contact Oppenheimer
or visit www.opco.com.
About Uni-Pixel Inc.
The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.
"As of December 31, 2012, we had a cash balance of approximately
$13.0 million and working capital of $12.8 million. We project
that current cash reserves will sustain our operations through at
least December 31, 2013, and we are not aware of any trends or
potential events that are likely to adversely impact our short
term liquidity through this term. We expect to fund our
operations with our net product revenues from our commercial
products, cash and cash equivalents supplemented by proceeds from
equity or debt financings, and loans or collaborative agreements
with corporate partners, each to the extent necessary," according
to the Company's annual report for the year ended Dec. 31, 2012.
Uni-Pixel incurred a net loss of $9.01 million in 2012, as
compared with a net loss of $8.56 million in 2011. The Company's
balance sheet at June 30, 2013, showed $63.28 million in total
assets, $6.56 million in total liabilities and $56.71 million in
total shareholders' equity.
UNIVAR NV: Bank Debt Trades At 3% Off
-------------------------------------
Participations in a syndicated loan under which Univar NV is a
borrower traded in the secondary market at 97.31 cents-on-the-
dollar during the week ended Friday, September 13, 2013, according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents a decrease of 0.36 of
percentage points from the previous week. The loan matures on
June 30, 2017. The company pays 350 basis points above LIBOR to
borrow under the facility. The bank debt carries Moody's B2 and
Standard & Poor's B+ rating. The loan is one of the biggest
gainers and losers among 254 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
Univar N.V. -- http://www.univarcorp.com/-- is one of the largest
distributors of industrial chemicals and providers of related
services to a diverse set of end markets in the US, Canada and
Europe. In April 2007, the company purchased ChemCentral
Corporation, the fourth largest chemicals distributor in the US,
for a purchase price of about $650 million, which resulted in the
combined entities becoming the largest chemicals distributor in
North America. The company had pro forma revenues (including
ChemCentral Corporation) of $8.3 billion for the LTM ended
June 30, 2007.
VICTOR VALLEY EDA: Moody's Confirms B3 Rating on Tax Bonds
----------------------------------------------------------
Moody's Investors Service has the confirmed the B3 rating on
Southern California Logistics Airport Authority's (SCLA)
Subordinate Tax Allocation Revenue Bonds (Southern California
Logistics Airport Project), Series 2007 and 2008. The bonds are
secured solely by allocated incremental revenues from all twelve
sub-areas of Victor Valley Economic Development Authority's
(VVEDA) Project Area, net of housing set-asides, debt service on
senior lien bonds, and other senior pass-throughs. The rating
affects approximately $51 million in subordinate bonds. Moody's
has also confirmed the Ba1 rating SCLA's housing bonds.
Ratings Rationale:
The rating on the non-housing bonds reflects the debt service
payment default starting on December 1, 2011, and the high
likelihood that defaults will continue for multiple years. The
authority defaulted on $535,000 in principal payments on December
1, 2011 and again on $560,000 in principal payments on December 1,
2012. The December 1, 2011 default was cured on in March, 2012
with available tax increment revenues, but the default of December
1, 2012 remains outstanding as there were no excess funds
available in the subsequent debt service payment cycle. The
defaults are caused by the collapse in recent years of real estate
values and related revenues pledged to debt service.
The rating also reflects the project areas' long-term potential to
generate sufficient assessed valuation growth to recover unpaid
debt service in full. It also reflects the longer time-frame in
which Moody's expects this recovery to play out. In a scenario
assuming 1% annual assessed valuation (AV) growth, pledged
revenues would be expected to reach sum sufficient debt service
coverage by 2021, and full recovery of missed debt service
payments would occur by 2028. The B3 rating reflects the current
defaulted status of the bonds, the likelihood of continuing future
defaults, and ultimate bondholder debt service receipt estimated
at 95% of total scheduled debt service, but not the recovery of
missed debt service payments.
Recent trends in AV and home prices support the likelihood of AV
recovery. The county assessor's July 1, 2013 assessment roll
indicated a 2.7% increase in the city of Victorville's AV, which
is highly correlated with the AV supporting the bonds. Also,
recent home prices in Victorville are up more than 24% on a year-
over-year basis. Since much of the previous AV decline was due to
the collapse of the housing market and the Proposition 8 process,
increasing home prices has begun the reversal of the AV
reductions.
The rating on the housing bonds reflects their stronger legal
claim on receipts, which in 2013 was estimated at 1.2x. Through
four cycles of debt service payments since the dissolution of the
redevelopment agencies there has been no impairment of payment,
and the debt service reserve remains fully funded
Key Credit Strengths
- In the long run, AV and incremental revenues are likely to
increase
- Cash funded reserve funds
Key Credit Challenges
- Continued AV declines are possible
- Incremental AV to total AV ratio is very low and any future AV
declines would accelerate revenue decline
What could move the rating UP?
- Long-term growth of project area AV
What could move the rating DOWN?
- Inability to use future excess tax increments to repay
outstanding defaulted debt.
- Decline in incremental revenues
- Decline in AV
Rating Methodology
The principal methodology used in this rating was Moody's Analytic
Approach To Rating California Tax Allocation Bonds published in
December 2003.
VILLAGE AT KNAPP'S: Hire Robert Attmore, Esq., as Special Counsel
-----------------------------------------------------------------
The Village At Knapp's Crossing, L.L.C., seeks authority from the
U.S. Bankruptcy Court for the Western District of Michigan to
employ Robert Attmore, Esq., as special counsel, for the specified
purpose of continuing to represent the Debtor in the matter before
the Michigan Court of Appeals, The Village at Knapp's Crossing v.
Family Fare, LLC, Case Number 313154 (Kent County Circuit Court
No. 11-04168-CK).
Mr. Attmore will be paid $50 per hour for administrative work and
$70 for all legal work, including but not limited to, brief
writing.
The Debtor assures the Court that Mr. Attmore is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not represent any interest adverse to the
Debtor and its estates.
John W. Zaskiewicz, Esq. -- jack@tishlaw.com -- and William G.
Tishkoff, Esq. -- will@tishlaw.com -- at Tishkoff & Associates
PLLC, in Ann Arbor, Michigan, represent the Debtor in its Chapter
11 case.
About Village At Knapp's
The Village At Knapp's Crossing, L.L.C. in Grand Rapids, Michigan,
filed for Chapter 11 (Bankr. W.D. Mich. Case No. 13-06094) on
July 25, 2013. Judge Scott W. Dales handles the case. On the
Petition Date, the Debtor estimated its assets and debts at
$10 million to $50 million. The petition was signed by Steven D.
Benner, managing member on behalf of S.D. Benner, sole member.
Tishkoff & Associates PLLC is the Debtor's counsel.
VILLAGE AT KNAPP'S: Amends Tishkoff Employment Application
----------------------------------------------------------
The Village At Knapp's Crossing, L.L.C., filed an amended
application seeking authority from the U.S. Bankruptcy Court for
the Western District of Michigan to employ Tishkoff & Associates
PLLC as their bankruptcy counsel.
The amended employment application clarifies the proposed
compensation arrangement between the Debtor and TAP's connections
with the Debtor's principal, Steven D. Benner.
Prepetition, Mr. Benner, member and manager of the Debtor's sole
member, paid TAP $8,000 on behalf of the Debtor, as an initial
retainer for TAP's Chapter 11 legal services. The Debtor and TAP
agreed that TAP attorneys and paralegals are to be compensated for
their services at the following hourly rates:
William G. Tishkoff, Esq. $300
Associate Attorneys $200
Legal Assistants $95
The Debtor also intends to reimburse TAP for any necessary out-of-
pocket expenses.
The Debtor maintains that TAP is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor's and its estate.
About Village At Knapp's
The Village At Knapp's Crossing, L.L.C. in Grand Rapids, Michigan,
filed for Chapter 11 (Bankr. W.D. Mich. Case No. 13-06094) on
July 25, 2013. Judge Scott W. Dales handles the case. On the
Petition Date, the Debtor estimated its assets and debts at
$10 million to $50 million. The petition was signed by Steven D.
Benner, managing member on behalf of S.D. Benner, sole member.
Tishkoff & Associates PLLC is the Debtor's counsel.
VIRGIN OFFSHORE: Dist. Court Affirms Assumption of License Deal
---------------------------------------------------------------
TGS-NOPEC Geophysical Company, L.P., lost in its appeal from the
Bankruptcy Court's Order entered on Nov. 20, 2012, authorizing
Virgin Offshore USA, Inc., to assume a Master License Agreement
for Geophysical Data pursuant to 11 U.S.C. Sec. 365. District
Judge Carl J. Barbier of the Eastern District of Louisiania
affirmed the Bankruptcy Court's Order in a Sept. 10, 2013 Order
and Reasons available at http://is.gd/WkHW3Jfrom Leagle.com.
On Jan. 16, 2003, several years before the bankruptcy proceeding
commenced, TGSN granted to Virgin Offshore a non-exclusive license
to use certain (1) geophysical and geological data resulting from
seismic surveys performed by or on behalf of TGSN, (2) TGSN's
interpretations of any generated data, and (3) results of any
processing, reprocessing, and re-display of such data and/or
interpretations. Virgin Offshore paid consideration for this
License and was thereby permitted access to Seismic Material that
related to lands covered by a specific mineral lease. The
consideration paid was a one-time payment for full use of the
Seismic Material for the full term of the agreement.
On Sept. 16, 2011, Precision Drilling Company, LP, Dynamic Energy
Services, LLC, and Tanner Services, LLC filed an involuntary
Chapter 11 bankruptcy petition against Virgin Offshore, and Virgin
Offshore consented to entry of the Order for Relief. Virgin
Offshore moved to appoint a Chapter 11 Trustee on Oct. 6, 2011 and
Gerald H. Schiff was appointed as Trustee of the Estate on October
14, 2011.
The Chapter 22 Trustee moved to assume the TGSN License on Oct.
23, 2012, and Whistler Energy, Plan Trustee for Virgin Oil
Company, Inc. filed a Joinder in the Trustee's motion. TGSN
opposed the motion, and a hearing was held on Nov. 15, 2012, at
which time the Bankruptcy Judge approved the Trustee's assumption
of the TGSN license. TGSN filed a Notice of Appeal regarding the
Assumption Order and a Motion to Stay Pending the Appeal2 on
November 27, 2012.
About Virgin Offshore
Virgin Offshore U.S.A., Inc., is in the business of acquiring,
exploring and developing oil and gas properties with its parent,
Virgin Oil Co., Inc. Creditors Dynamic Energy Services LLC,
Precision Drilling Company, LP, and Tanner Services LLC, owed
$1,895,824 in the aggregate, commenced an involuntary Chapter 11
bankruptcy proceeding against Virgin Offshore USA (Bankr. E.D. La.
Case No. 11-13028) on Sept. 16, 2011. The petitioning creditors
are represented by Michael A. Crawford, Esq., at Taylor Porter
Brooks & Phillips LLP, H. Kent Aguillard, Esq., at Young, Hoychick
and Aguillard; and Jacque B. Pucheu, Jr., Esq., at Pucheu, Pucheu
& Robinson, LLP.
Offshore consented to entry of the Order for Relief and filed a
Motion to Appoint Chapter 11 Trustee on Oct. 6, 2011. The Order
for Relief was entered on Oct. 12, and on Oct. 14, Gerald H.
Schiff was appointed as the chapter 11 Trustee of the Offshore
estate. Offshore scheduled $2,330,734 in assets and $13,046,823
in liabilities.
An affiliate of Virgin Offshore USA, Virgin Oil Company Inc.,
filed a Chapter 11 petition (Bankr. E.D. La. Case No. 09-11899) on
June 25, 2009.
The 2011 involuntary Chapter 11 bankruptcy petition against Virgin
Offshore USA, Inc., has been transferred to Judge Elizabeth W.
Magner. The case was first given to Judge Jerry A. Brown.
WALTER ENERGY: Bank Debt Trades at 4% Off
-----------------------------------------
Participations in a syndicated loan under which Walter Energy Inc
is a borrower traded in the secondary market at 95.90 cents-on-
the-dollar during the week ended Friday, September 13, 2013
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. This represents an increase
of 0.79 percentage points from the previous week, The Journal
relates. Walter Energy pays 575 basis points above LIBOR to
borrow under the facility. The bank loan matures on March 14,
2018. The bank debt carries Moody's B2 rating and Standard &
Poor's B+ rating. The loan is one of the biggest gainers and
losers among 249 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
Walter Energy, Inc., headquartered in Birmingham, Alabama, is
primarily a metallurgical coal producer which also produces
metallurgical coke, steam and industrial coal, and natural gas.
The company acquired met coal producer Western Coal Corporation in
April 2011.
* * *
As reported in the Troubled Company Reporter on July 26, 2013,
Moody's Investors Service downgraded Walter Energy Inc.'s long-
term ratings, including the Corporate Family Rating to Caa1 from
B2, and affirmed the short-term liquidity rating at SGL-4. The
downgrade was prompted by continued deterioration in market
fundamentals for metallurgical coal, increasing evidence that the
market will remain oversupplied for at least several quarters, and
potential liquidity concerns in such a scenario.
WASHINGTON COMMUNITIES II: Files Chapter 11 in Washington D.C.
--------------------------------------------------------------
Washington Communities II, LLC, located at 374 Maple Avenue, #201,
Vienna, Va. 22180, sought Chapter 11 bankruptcy protection (Bankr.
D.D.C. Case No. 13-00570) on Sept. 11, represented by Jeffrey M.
Sherman. The Debtor estimated $1 million to $10 million in both
assets and debts.
WASHINGTON MUTUAL: Distribution Plan Approved in Class Suit
-----------------------------------------------------------
At the behest of the lead plaintiff in In Re Washington Mutual,
Inc. Securities Litigation No. 2:08-md-1919 MJP, Case No. C08-387
MJP (W.D. Wash.), Chief District Judge Marsha J. Pechman in
Seattle approved a distribution plan for the Net Settlement Funds
in the class action.
The Claims Administrator, The Garden City Group, Inc., is directed
to conduct an initial distribution of the Net Settlement Funds,
after deducting the payments previously allowed and authorized,
and after payment of any estimated taxes, the costs of preparing
appropriate tax returns, and any escrow fees.
All of GCG's fees and expenses incurred in connection with the
administration of the Settlements and to be incurred in connection
with the Initial Distribution of the Net Settlement Funds are
approved, and Lead Counsel is directed to pay $373,540.81 out of
the Settlement Funds to GCG for the unpaid balance of such fees
and expenses.
A copy of the Court's Sept. 10, 2013 Order is available at
http://is.gd/Uui5k3from Leagle.com.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
Records filed Jan. 24, 2012, say that Washington Mutual Inc.,
former owner of the biggest U.S. bank to fail, has spent
$232.8 million on bankruptcy professionals since filing its
Chapter 11case in September 2008.
In March 2012, the Debtors' Seventh Amended Joint Plan of
Affiliated, as modified, and as confirmed by order, dated Feb. 23,
2012, became effective, marking the successful completion of the
chapter 11 restructuring process.
The Plan is based on a global settlement that removed opposition
to the reorganization and remedy defects the judge identified in
September. The plan is designed to distribute $7 billion. Under
the reorganization plan, WaMu established a liquidating trust to
make distributions to parties-in-interest on account of their
allowed claims.
* Moody's Notes Strong Performance for OFS Industry in 2013
-----------------------------------------------------------
The stable outlook for the broad oilfield services and drilling
(OFS) industry reflects differing trends for its major components
based on their geographies and service offerings, Moody's
Investors Service says in a new report, "Headwinds in North
America Temper Steady Growth in International and Offshore
Markets." But it also reflects the overall sector's strong
business fundamentals.
"Despite the sluggish global economy, persistently high oil prices
and higher capital spending budgets underpin the industry's
current strength," says Vice President -- Senior Analyst, Michael
Somogyi. "Demand for OFS services depends on the spending patterns
of upstream oil and natural gas producers, and 2013 is the fourth
consecutive year of double-digit spending growth."
Activity across international and offshore markets remains strong,
despite near-term uncertainty in Egypt, Libya and Mexico, Somogyi
says. Crude prices support OFS activity in both shallow and
deepwater plays, while the addition of new rigs in the ultra-
deepwater segment will follow a measured pace.
But headwinds persist for companies exposed to onshore drilling
and development in North America, where too many service providers
are chasing limited new demand. This imbalance will persist
through early 2015, and once increasing efficiencies limit the
need for additional rigs and equipment, OFS companies such as
Nabors Industries, Key Energy Services, Basic Energy Services and
FTS International will come under operational pressure.
The biggest OFS companies are set to see long-term profitable
growth. "Oil producers continue to shift their focus from pursuing
new resources to increasing their returns on those they already
have," Somogyi says. "This change points to long-term growth for
the larger, more geographically and technologically focused
companies such as Schlumberger, Baker Hughes, Halliburton and
Weatherford International, whose margins will widen.
* Moody's Changes Outlook on E&P Sector to Positive
---------------------------------------------------
Moody's Investors Service has changed its outlook for the Global
Independent Exploration and Production (E&P) sector to positive
from stable. E&P companies' production will grow over the coming
12-18 months, more than offsetting a modest decline in crude oil
prices from the lofty levels, the rating agency says in a new
report, "Strong Oil Prices and Increased Operating Efficiency Give
Producers Boost."
Moody's has revised the pricing assumptions it uses for rating
purposes, raising WTI crude price by $5 per barrel to $90 per
barrel for 2014, while leaving NYMEX gas prices unchanged at $3.75
per thousand cubic feet.
"The positive outlook reflects expected higher production in 2014
and improved operating efficiencies derived from the application
of new technology to both new unconventional and more established
conventional resource plays," says Vice President -- Senior Credit
Officer, Stuart Miller.
After 2013, oil prices will drift lower but remain at relatively
high levels that continue to translate into strong cash flow for
the E&P sector and encourage further investment, Miller adds. "E&P
companies will have sufficient cash flow and committed credit
lines to fund their planned capital spending through 2014, driving
EBITDA growth of about 5% for larger companies and of over 10% for
smaller companies."
Costs for oilfield services and drilling will climb less steeply
next year, Moody's says. Rig counts have stabilized and the demand
for services has come into better balance with supply. The nearing
completion of many large midstream infrastructure projects will
alleviate the bottlenecks the E&P sector has faced in recent
years, providing the takeaway capacity needed to support higher
production.
Moody's adjusted its price assumptions for crude and natural gas
in its new report. Price assumptions are not forecasts, but
baseline pricing approximations the ratings agency uses to help
evaluate risk when it analyzes credit conditions for E&P issuers.
Moody's new price assumptions call for Brent crude at $110 per
barrel for the fourth quarter of 2013 and $95/bbl in 2014. For
WTI, Moody's assumes $100 per barrel for the fourth quarter and
$90 in 2014. The 2014 WTI price assumption implies a Brent/WTI
price differential of just $5/bbl, a change from the earlier
assumption of $10/bbl.
Moody's left its 2014 Henry Hub assumption unchanged at $3.75 per
thousand cubic feet.
* Moody's Outlook on North American Chemical Sector is Stable
-------------------------------------------------------------
The outlook for the North American and EMEA chemical industry has
been changed to stable from negative, Moody's Investors Service
says in a new report.
The outlook change is triggered by improvements in Europe, where
Moody's says the economy has begun showing signs of stability,
while China's demand for chemicals will grow, the rating agency
says in the report, "Signs of Economic Growth in Europe Offer
Relief for Chemical Producers."
"Most European chemicals companies expect modest growth for the
second half of this year as the risk of another economic downturn
recedes," says Vice President -- Senior Analyst, James Wilkins.
"Overall, we expect a continuation of modest growth next year in
line with the muted economic recovery, while some olefins
producers will remain disadvantaged by the high cost of naphtha-
based plants."
Moody's macro risk board in August raised its euro area GDP
forecast for 2013 to reflect modest growth in the latter half of
the year, and 1% growth in 2014.
China's demand for chemicals will likely improve over the next 12-
18 months, Wilkins says. Moody's expects broadly stable economic
growth in China in 2013-14. The country's demand for chemicals
grew modestly in the second quarter of this year, and Moody's
expects it to continue to increase.
In the meantime, North American chemical producers will continue
to benefit from modest, but steady US economic growth and low
natural gas prices. Moody's expects revenues to grow in the mid-
single digits next year, supported by GDP growth of around 2.5%.
North American producers of olefins will benefit from ample US
crude oil and natural gas supplies, while uncertainties in the
Middle East could push up oil prices and pressure the margins of
European petrochemicals producers with naphtha-based olefins
capacity.
* Moody's Expects Lower Recoveries for Municipal Bonds
------------------------------------------------------
Losses incurred and anticipated from recent US local government
defaults suggest recovery rates on defaulted municipal bonds are
likely to be lower than they have been in the past, says Moody's
Investors Service. After historically being extremely high,
recoveries in future local government defaults are likely to be
closer to the lower ones experienced in the corporate sector.
Since 1970, recoveries on local government defaults tracked by
Moody's have averaged 80%. Recent defaults for which Moody's
expects lower recoveries include Detroit, Harrisburg, Jefferson
County, and Stockton.
Moody's discusses the reasons for lower recoveries in the new
report "Recent US Local Government Defaults Point to Lower
Recovery Rates." Moody's emphasizes that local government defaults
are rare, with just 16 since 1970. The local government sector is
highly rated, with 50 speculative-grade ratings, and defaults
remain few in number relative to the roughly 12,000 Moody's rated
local government credits.
Reasons for the drop include the rise of service-level
insolvencies among defaulting local governments, the uncertain
treatment of bondholders in current bankruptcy proceedings, and
the greater likelihood bondholders may accept haircuts, or losses,
in distressed exchanges in order to avoid protracted legal
proceedings.
Historically recoveries on local government defaults have been
high because the defaults typically arose from temporary
constraints on liquidity and investors were made whole quickly. A
small but increasing number of recent municipal defaults, however,
have involved service-level insolvency, that is the bond issuer
has not had the money on hand to carry out basic governmental
functions.
Defaults arising from service-level insolvency are likely to lead
to larger bondholder losses than those caused by temporary
liquidity constraints. When a government is in service-level
insolvency, it seeks to materially reduce balance sheet
liabilities and annual outflows in order to allocate scarce
resources to essential services rather than pay debt service.
"Unlike defaults in other municipal sectors, such as healthcare or
stand-alone housing projects, local governments must continue to
operate in times of fiscal distress and maintain an acceptable
level of services," says Anne Van Praagh, chief credit officer for
public sector ratings. "The risk of a government being unable to
provide essential public services may be used as a rationale for
both filing for bankruptcy or failing to honor debt obligations."
Decision-makers in both Detroit and San Bernardino cited such a
rationale in their bankruptcy filings.
It is also possible the prioritization of bondholders over other
stakeholders, as outlined in bond documents and state statutes,
may not necessary hold in either future defaults or Chapter 9
bankruptcies, further increasing losses.
* Moody's Says High-Yield Bond Covenant Quality Dips in August
--------------------------------------------------------------
The covenant quality of North American high-yield bonds declined
markedly last month, Moody's Investors Service says in a new
report. August was the fourth-worst month so far in 2013 in terms
of bond covenant quality, and a continued decline in September
would cement a trend toward worsening investor protections.
"The average covenant quality score weakened to 4.01 in August
from 3.79 in July, approaching this year's low of 4.17, reached in
February," says Vice President -- Head of Covenant Research,
Alexander Dill in "Bond Covenant Quality Declines Markedly."
Moody's Covenant Quality Index uses a five-point scale, in which
1.0 denotes the strongest covenant protections and 5.0, the
weakest.
But despite weakening for two consecutive months, the Covenant
Quality Index, which is a three-month rolling average, has
improved modestly as weaker months have rolled off, Dill says. The
index ended August at 3.85, a slight improvement from 3.87 in July
and 3.93 in June. Nonetheless, it remains well below last July's
peak in covenant quality of 3.41 and the record high of 3.37, set
in 2011.
A key driver of last month's weaker covenant quality score was a
surge in the percentage of bonds rated Ba at issuance, which
typically have weaker covenant packages. Nearly half of the bonds
issued in August were rated Ba, compared with the historical
average of 27%, though the average covenant quality score of these
bonds last month was in line with the historical average.
Instruments rated single B represented 30% of issuance in August,
down from 60% in July, and those rated Caa or Ca accounted for 22%
of issuance, matching the historical average.
Among the weakest bonds issued last month were PIK notes from
Healthcare Technology Intermediate, Inc., with a CQ score of 4.73,
while ACI Worldwide, Inc.'s traditional structure scored 4.36. The
most protective full high-yield packages came from Mohegan Tribal
Gaming Authority, at 2.21, Endeavor Energy Resources, LP, at 2.74,
and DreamWorks Animation SKG, Inc., at 2.77.
* BOND PRICING -- For Week From Sept. 9 to 13, 2013
---------------------------------------------------
Company Ticker Coupon Bid Price Maturity Date
------- ------ ------ --------- -------------
AES Eastern Energy LP AES 9.000 1.750 1/2/2017
AES Eastern Energy LP AES 9.670 3.100 1/2/2029
Affinion Group
Holdings Inc AFFINI 11.625 60.500 11/15/2015
AGY Holding Corp AGYH 11.000 54.300 11/15/2014
Alion Science &
Technology Corp ALISCI 10.250 63.900 2/1/2015
Buffalo Thunder
Development
Authority BUFLO 9.375 31.875 12/15/2014
California Baptist
Foundation CALBAP 7.800 6.222 5/15/2015
Cengage Learning
Acquisitions Inc TLACQ 10.500 20.250 1/15/2015
Cengage Learning
Acquisitions Inc TLACQ 12.000 13.500 6/30/2019
Cengage Learning
Acquisitions Inc TLACQ 13.250 1.375 7/15/2015
Cengage Learning
Acquisitions Inc TLACQ 10.500 20.250 1/15/2015
Cengage Learning
Acquisitions Inc TLACQ 13.250 1.375 7/15/2015
Cengage Learning
Holdco Inc TLACQ 13.750 1.375 7/15/2015
Champion
Enterprises Inc CHB 2.750 0.375 11/1/2037
Energy Conversion
Devices Inc ENER 3.000 7.875 6/15/2013
Energy Future
Competitive
Holdings Co LLC TXU 8.175 15.000 1/30/2037
Energy Future
Holdings Corp TXU 5.550 54.875 11/15/2014
FiberTower Corp FTWR 9.000 1.000 1/1/2016
GMX Resources Inc GMXR 9.000 14.900 3/2/2018
GMX Resources Inc GMXR 4.500 3.500 5/1/2015
James River Coal Co JRCC 4.500 33.830 12/1/2015
James River Coal Co JRCC 3.125 19.000 3/15/2018
Keystone Automotive
Operations Inc KEAUOP 9.750 99.000 11/1/2013
LBI Media Inc LBIMED 8.500 30.000 8/1/2017
Lehman Brothers
Holdings Inc LEH 1.000 21.625 8/17/2014
Lehman Brothers
Holdings Inc LEH 1.000 21.625 8/17/2014
Lehman Brothers
Holdings Inc LEH 1.250 21.625 2/6/2014
Lehman Brothers
Holdings Inc LEH 1.000 21.625 3/29/2014
Lehman Brothers Inc LEH 7.500 19.500 8/1/2026
Mashantucket Western
Pequot Tribe MASHTU 6.500 15.250 7/1/2036
Overseas Shipholding
Group Inc OSG 8.750 90.800 12/1/2013
Penson Worldwide Inc PNSN 8.000 8.625 6/1/2014
Platinum Energy
Solutions Inc PLATEN 14.250 41.250 3/1/2015
PMI Group Inc/The PMI 6.000 31.000 9/15/2016
Powerwave
Technologies Inc PWAV 1.875 0.875 11/15/2024
Powerwave
Technologies Inc PWAV 1.875 0.875 11/15/2024
Residential
Capital LLC RESCAP 6.875 33.000 6/30/2015
Savient
Pharmaceuticals Inc SVNT 4.750 17.500 2/1/2018
School Specialty Inc SCHS 3.750 38.375 11/30/2026
Terrestar Networks Inc TSTR 6.500 10.000 6/15/2014
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.250 4.000 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 15.000 19.000 4/1/2021
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.250 3.875 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.500 5.850 11/1/2016
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 15.000 21.361 4/1/2021
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.250 3.750 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.500 4.750 11/1/2016
TMST Inc THMR 8.000 9.000 5/15/2013
UAL 2000-2 Pass
Through Trust UAL 7.762 2.008 4/29/2049
USEC Inc USU 3.000 28.000 10/1/2014
Verso Paper
Holdings LLC /
Verso Paper Inc VRS 11.375 42.459 8/1/2016
Verso Paper
Holdings LLC /
Verso Paper Inc VRS 8.750 30.848 2/1/2019
Verso Paper
Holdings LLC /
Verso Paper Inc VRS 4.015 75.000 8/1/2014
WCI Communities
Inc/Old WCI 4.000 0.625 8/5/2023
Western Express Inc WSTEXP 12.500 64.000 4/15/2015
Western Express Inc WSTEXP 12.500 64.000 4/15/2015
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
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related conferences are encouraged. Send announcements to
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On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
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available at your local bookstore or through Amazon.com. Go to
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Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
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Copyright 2013. All rights reserved. ISSN: 1520-9474.
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