/raid1/www/Hosts/bankrupt/TCR_Public/131014.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, October 14, 2013, Vol. 17, No. 285
Headlines
197 DINOS: Voluntary Chapter 11 Case Summary
22ND CENTURY: Crede CG Held 5.9% Equity Stake at June 11
AGFEED INDUSTRIES: Bidding Procedures Approved
ALITALIA SPA: To Fend off Bankruptcy With Help from Italy's Post
AMBAC FINANCIAL: Discloses $2.5-Bil. Puerto Rico Exposure
AMERICAN AIRLINES: Merger Suffers New Setbacks
AMERICAN AIRLINES: Early Turbulence Won't Ground DOJ's Fight
AMERICAN APPAREL: Comparable Sales for Sept. 30 Qtr. Hiked 2%
ANCHOR BANCORP: EJF Capital Owns 9.7% of Common Stock
ANGLO IRISH: Hedge Fund Elliott Blocked in Bid for Info
API TECHNOLOGIES: Amends Credit Agreement with Guggenheim
API TECHNOLOGIES: Posts $6.9 Million Net Income in 3rd Quarter
ASR CONSTRUCTORS: Hires Shulman Hodges as General Counsel
ASR CONSTRUCTORS: Files Schedules of Assets and Liabilities
BERNARD L. MADOFF: NY AG Defends Merkin Settlement at 2nd Circuit
BERNARD L MADOFF: Trial of Ex-Employees Starts With Jury Selection
BERRY PLASTICS: Appoints New President - Rigid Open Top Division
BROCK HOLDINGS: Moody's Cuts CFR to B3 & Secured Debt Rating to B2
CAESARS ENTERTAINMENT: Bank Debt Trades at 9% Off
CASA CASUARINA: Court Okays Accord With Rothstein Trustee
CAPITOL BANCORP: Plan & CRO Appointment Hearings Rescheduled
CASH STORE: Appoints Two New Senior Executives
CATASYS INC: CEO's Crede CG Invests $2 Million
CENGAGE LEARNING: Plan Pitches 3.3% Recovery to Gen. Unsec. Claims
CENGAGE LEARNING: Exclusive Periods Extension Sought
CHA CHA ENTERPRISES: Hearing Tuesday on Cash Collateral Access
CHA CHA ENTERPRISES: Seeks Feb. Extension of Lease Decision Period
CHAMPION INDUSTRIES: Extends Maturity of Credit Facility to 2015
CHEMTURA CORP: To Sell Consumer Products Biz. to KIK for $135-Mil.
COMMUNITY HOME: Oct. 29 Hearing on Bid to Dismiss or Convert Case
COMMUNITY HOME: Edwards et al. Accuse Debtor of Delays
COUNTRYWIDE FINANCIAL: FDIC Urges Judge to Reject $500-Mil. Deal
CSN HOUSTON: Using Bankruptcy to Seize Network, Astros Owner Says
CUBIC ENERGY: Calvin Wallen Held 45.8% Equity Stake at Oct. 8
DETROIT, MI: Former Mayor Sentenced to 28 Years
DETROIT, MI: Given 35 Days to Deal With Pending Tort Claims
DEVON ENTERPRISES: 5th Circuit Revives School Contract Bias Suit
DEX MEDIA EAST: Bank Debt Trades at 25% Off
DIGITAL ANGEL: PositiveID Lowers Equity Stake to 9% at Sept. 30
DIGITAL INSIGHT: S&P Assigns Preliminary 'B' CCR; Outlook Negative
DOWNEY FINANCIAL: Wins $374 Million Tax Refund Fight
DRUMM CORP.: Moody's Lowers CFR & Sr. Sec. Loan Rating to 'B2'
EARL GAUDIO: Creditors Committee Balks at Bonus Payment
EAST COAST BROKERS: Trustee to Continue Fowler, Willcox Hirings
EASTMAN KODAK: BlueMountain Capital Owns 20.2% of Common Stock
ECOTALITY INC: Cleared to Sell to Three Bidders for $4.3-Mil.
ELCOM HOTEL: Seeks Approval of $1 Million OBH Loan
ELITE PHARMACEUTICALS: Inks License Agreement with Epic Pharma
EMERITO ESTRADA: Wants 60-Day Extension of Plan Filing Period
EMERITO ESTRADA: U.S. Trustee Balks at Retroactive Hiring
EMPIRE RESORTS: High Court Denies CALP's Article 78 Petition
EMPRESAS INTEREX: Creditor Defends Bid to Block Cash Use
ENDICOTT INTERCONNECT: Can Sell Assets to Integrian
ENERGY FUTURE: May Soon Obtain Bankruptcy Loan Exceeding $3-Bil.
ENERGY FUTURE: Fidelity Pitches Other Creditors on Restructuring
ENERGYSOLUTIONS INC: Wants to Amend 2010 Credit Facility
EUROPLAST LTD: Case Summary & 20 Largest Unsecured Creditors
EXIDE TECHNOLOGIES: Cole Bruce Acquires 69,674 Common Shares
FOCUS BRANDS: S&P Affirms 'B' CCR & Revises Outlook to Negative
FOX TROT CORP: Case Summary & 16 Largest Unsecured Creditors
FR 160: Gordon Silver's Withdrawal as Creditor Counsel Approved
FREDERICK'S OF HOLLYWOOD: Fursa Held 85% Equity Stake at Sept. 26
FREESEAS INC: Eliminates $30 Million Debt
FURNITURE BRANDS: Incentive Plans Approved
GETTY IMAGES: Bank Debt Trades at 11% Off
GIPPSLAND SECURED: Noteholders Waiting to Learn Firm's Fate
GLW EQUIPMENT: Hearing on Cash Use Continued Until Oct. 23
GLW EQUIPMENT: Hearing Tuesday on GECC's Bid to Foreclose
GROUP 1 AUTOMOTIVE: S&P Raises Corp Credit Rating to 'BB+'
HAAS ENVIRONMENTAL: Panel Taps Lowenstein Sandler as Counsel
HARTFORD FINANCIAL: Fitch Affirms 'BB+' Rating on Two Note Classes
HESPERIA GROUP: Case Summary & 11 Largest Unsecured Creditors
IDERA PHARMACEUTICALS: Pillar Pharma Held 19.9% Stake at Sept. 30
JACKSONVILLE BANCORP: Board OKs 1-for-20 Reverse Stock Split
JEFFERSON COUNTY, AL: Citigroup Violating Securities Law
JEFFERSON COUNTY, AL: Creditors Back Bankruptcy Plan
JEH COMPANY: Oct. 15 Hearing on Continued Use of Cash Collateral
JET ICU: Voluntary Chapter 11 Case Summary
JONESBORO HOSPITALITY: May Use Ciena Cash Collateral Thru October
JOURNAL REGISTER: Set to Liquidate as Judge OKs Plan
KBI BIOPHARMA: Disclosure Statement Hearing Set for Nov. 19
KBI BIOPHARMA: Creditor Objects to Proposed Cash Collateral Use
KIMBER RESOURCES: Incurs C$47.9-Mil. Net Loss in Fiscal 2013
KING'S DEVELOPMENT: Voluntary Chapter 11 Case Summary
L BRANDS: Fitch Rates $500MM Sr. Unsecured Notes at 'BB+'
L BRANDS: Moody's Affirms 'Ba1' CFR & Rates $500MM Notes 'Ba1'
L BRANDS: S&P Rates $500-Mil. Senior Unsecured Notes 'BB+'
LAKE PLEASANT GROUP: Resolves Final Decree Motion
LE-NATURE INC: Ex-CEO Says Inept Atty. Caused 20-Year Sentence
LEGAZEE PROPERTIES: Case Summary & 10 Largest Unsecured Creditors
LIBERTY INTERACTIVE: Fitch Affirms 'BB' Issuer Default Rating
LIC CROWN: Voluntary Chapter 11 Case Summary
LIGHTSQUARED INC: Wins Delay of Harbinger's $2-Bil. GPS Brawl
LIGHTSQUARED INC: Judge Gives Go Signal for Competing Plans
LIMESTONE REDBAY: Voluntary Chapter 11 Case Summary
LPATH INC: Pfizer Plans to Divest Rights to iSONEPTM
LONE PINE: Seeks to Tap $10 Million Bankruptcy Financing
MAINZEAL PROPERTY: Receivers Recover NZ$22.5 Million
MALLORY PARK: Owners Set Up New Firm in Hope of Running Race Track
MAXCOM TELECOMUNICACIONES: U.S. Offer Expired Sept. 26
MICHAELS STORES: EVP - Global Sourcing Quits
MDU COMMUNICATIONS: Lenders Exercise Voting Rights Over Unit
MORGANS HOTEL: David Hamamoto Lowers Stake to 7.8% at Oct. 1
MSD PERFORMANCE: Gets Ok to Tap Jones Day as Lead Ch. 11 Counsel
MSD PERFORMANCE: Logan & Co. Approved as Administrative Advisor
MSD PERFORMANCE: Richards Layton Okayed as Delaware Counsel
MTS GOLF: Plan Confirmation Hearing Continued Until Oct. 24
MUD KING: Court Junks National Oilwell Varco's Case Dismissal Bid
NEIMAN MARCUS: Fitch Withdraws Ratings After Acquisition
NEWALTA CORP: DNRS Confirms 'BB' Issuer Rating
NNN PARKWAY: Hires Christine Baur as General Counsel
NNN PARKWAY: Taps Weiland Golden as Local Counsel
NORTEK INC: Moody's Changes Ratings Outlook to Stable
NY COMMUNITY BANCORP: DBRS Confirms 'BB' Preferred Stock Rating
PATRIOT COAL: Files Notice of Rejection of Certain Contracts
PATRIOT COAL: Plan Revised for Settlements, Rights Offerings
PATRIOT COAL: UMWA Enters Into Settlement with Peabody on Benefits
RHODES MERGER: Moody's Rates New $250MM Unsecured Notes 'Caa3'
RIDGECREST ESTATES: Voluntary Chapter 11 Case Summary
RURAL/METRO CORP: Wants Lease Decision Deadline Extended to March
RURAL/METRO CORP: Oct. 24 Hearing on Adequacy of Plan Outline
RURAL/METRO CORP: Womble Okayed as Committee's Delaware Co-Counsel
SAKS INCORPORATED: Fitch Withdraws Ratings over Hudson's Bay Deal
SCICOM DATA: Court Approves Fafinski Mark as Committee Counsel
SOJOURNER INVESTMENT: Court Okays Hiring of NewDelman as Counsel
STONE ROSE: Court Converts Reorganization Case to Chapter 7
TERVITA CORP: Bank Debt Trades at 2% Off
TOMBERLIN AUTOMOTIVE: Case Summary & 20 Top Unsecured Creditors
TOYS R US: 2016 Bank Debt Trades at 4% Off
TOYS R US: 2019 Bank Debt Trades at 2% Off
TRINITY COAL: Wins OK to Present Plan for Confirmation Nov. 8
TXU CORP: 2017 Bank Debt Trades at 34% Off
TXU CORP: 2014 Bank Debt Trades at 34% Off
UNIVAR N.V.: Bank Debt Trades at 4% Off
VM PROPERTIES: Case Summary & 6 Largest Unsecured Creditors
WALTER ENERGY: Bank Debt Trades at 4% Off
WYNN MACAU: Fitch Affirms 'BB' Issuer Default Rating
WYNN MACAU: Moody's Rates New $500MM Sr. Notes Due 2021 'Ba2'
WYNN RESORTS: S&P Assigns 'BB+' CCR & Rates $500MM Notes 'BB'
* BOND PRICING -- For the Week From Oct. 7 to 11, 2013
*********
197 DINOS: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: 197 Dinos Corp.
131 West 119th Street
New York, NY 10028
Case No.: 13-13333
Chapter 11 Petition Date: October 11, 2013
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Debtor's Counsel: David Carlebach, Esq.
LAW OFFICES OF DAVID CARLEBACH
40 Exchange Place, Suite 1306
New York, NY 10005
Tel: (212) 785-3041
Fax: (646) 355-1916
Email: david@carlebachlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ricardo Reyes, managing member.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
22ND CENTURY: Crede CG Held 5.9% Equity Stake at June 11
--------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Crede CG III, Ltd., and its affiliates disclosed that
as of June 11, 2013, they beneficially owned 2,860,000 shares of
common stock of 22nd Century Group, Inc., representing 5.9 percent
of the shares outstanding. A copy of the regulatory filing is
available for free at http://is.gd/KWNECl
About 22nd Century
Clarence, New York-based 22nd Century Group, Inc., through its
wholly-owned subsidiary, 22nd Century Ltd, is a plant
biotechnology company using technology that allows for the level
of nicotine and other nicotinic alkaloids (e.g., nornicotine,
anatabine and anabasine) in tobacco plants to be decreased or
increased through genetic engineering and plant breeding.
22nd Century incurred a net loss of $6.73 million in 2012, as
compared with a net loss of $1.34 million in 2011. As of June 30,
2013, the Company had $3.16 million in total assets, $10.37
million in total liabilities and a $7.21 million total
shareholders' deficit.
Freed Maxick CPAs, P.C., in Buffalo, New York, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that 22nd Century has suffered recurring losses from operations
and as of Dec. 31, 2012, has negative working capital of
$3.3 million and a shareholders' deficit of $6.1 million.
Additional capital will be required during 2013 in order to
satisfy existing current obligations and finance working capital
needs as well as additional losses from operations that are
expected in 2013.
AGFEED INDUSTRIES: Bidding Procedures Approved
----------------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court approved
AgFeed Industries' motion for entry of (a) an order (i) scheduling
a hearing on approval of the proposed stock purchase agreement
(SPA) regarding the sale and purchase of the stock of AgFeed
Industries (British Virgin Islands); (ii) approving certain
bidding procedures with respect to the proposed SPA; (iii)
approving the break-up fee, expense reimbursement and form and
manner of notice thereof and (iv) granting related relief. The
Court approved the SPA by and among Good Charm International
Development as proposed purchaser, Ningbo Tech-Bank (NTB) as
parent and Agfeed Industries as seller.
As previously reported, "After consideration of the various
expressions of interest, AgFeed Industries and the Proposed
Purchaser entered into the SPA, pursuant to which, subject to
Court approval and the auction process proposed herein, the
Proposed Purchaser has agreed to purchase and AgFeed Industries
has agreed to sell 100% of the outstanding shares of AgFeed
Industries, Inc. (British Virgin Islands) (the 'Target Shares')
for $50.5 million. AgFeed Industries has determined that the floor
established by the proposed sale to the Proposed Purchaser (the
'Proposed Sale'), subject to higher and better bids with approval
of the Court in an open auction process pursuant to section 363 of
the Bankruptcy Code, affords AgFeed Industries the best
opportunity to maximize value for their creditors....The primary
purpose of the auction and sale process is to provide for a sale
of the Target Shares to the party that submits the highest and
best offer in accordance with the Bidding Procedures." If the
Company accepts a higher and better offer for the target shares
than the one proposed by Good Charm International Development (the
proposed purchaser) or confirms a Plan of Reorganization that
involves the disposition or revesting of the target shares, then
the seller may terminate the SPA and, upon closing on any
alternative transaction, pay to the proposed purchaser a break-up
fee of $1,586,400 and expense reimbursement fee not to exceed an
amount of $528,800."
The Court scheduled a November 21, 2013 sale hearing.
About AgFeed Industries
AgFeed Industries, Inc., and its affiliates filed voluntary
petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Case No. 13-11761) on July 15, 2013, with a deal to sell most of
its subsidiaries to The Maschhoffs, LLC, for cash proceeds of
$79 million, absent higher and better offers. The Debtors
estimated assets of at least $100 million and debts of at least
$50 million.
Keith A. Maib signed the petition as chief restructuring officer.
Hon. Brendan Linehan Shannon presides over the case. Donald J.
Bowman, Jr., and Robert S. Brady, Esq., at Young, Conaway,
Stargatt & Taylor, serve as the Debtors' counsel. BDA Advisors
Inc. acts as the Debtors' financial advisor. The Debtors' claims
and noticing agent is BMC Group, Inc.
The U.S. Trustee has appointed a five-member official committee of
unsecured creditors to the Chapter 11 cases. The Creditors'
Committee tapped Lowenstein Sandler as lead bankruptcy counsel and
Greenberg Traurig, LLP, as co-counsel. CohnReznick LLP serves as
the Creditors' Committee's financial advisor.
A three-member official committee of equity security holders was
also appointed to the Chapter 11 cases. The Equity Committee
tapped Sugar Felsenthal Grais & Hammer LLP and Elliott Greenleaf
as co-counsel.
ALITALIA SPA: To Fend off Bankruptcy With Help from Italy's Post
----------------------------------------------------------------
Gilles Castonguay, writing for The Wall Street Journal, reported
that Italy's government recruited help from the state-owned postal
service to inject capital into Alitalia, saving the struggling
airline from imminent bankruptcy.
According to the report, Prime Minister Enrico Letta's office said
on Oct. 10 that Poste SpA was ready to become the airline's
partner and take part in a planned capital increase.
The office didn't say how much the parent of Poste Italiane would
contribute, the report related. But people close to the matter
said it could be as much as EUR100 million ($135 million).
Poste officials couldn't be reached for comment, and Alitalia
declined to comment, the report said.
Shareholders are scheduled to meet next week to vote on proposals
to raise at least EUR155 million through a capital increase and a
convertible loan, the report further related. Alitalia is seeking
another EUR300 million in aid from creditors.
About Alitalia
Alitalia-Compagnia Aerea Italiana has navigated its way through
a successful restructuring. After filing for bankruptcy
protection in 2008, Alitalia found additional investors, acquired
rival airline Air One, and re-emerged as Italy's leading airline
in early 2009. Operating a fleet of about 150 aircraft, the
airline now serves more than 75 national and international
destinations from hubs in Fiumicino (Rome), Milan, Turin, Venice,
Naples, and Catania. Alitalia extends its network as a member of
the SkyTeam code-sharing and marketing alliance, which also
includes Air France, Delta Air Lines, and KLM. An Italian
investor group owns a majority of the company, while Air France-
KLM owns 25%.
AMBAC FINANCIAL: Discloses $2.5-Bil. Puerto Rico Exposure
---------------------------------------------------------
John Kell, writing for Daily Bankruptcy Review, reported that
Ambac Financial Group Inc. disclosed it insures $2.5 billion of
Puerto Rico-related debt, exposure the bond insurer is making
public as a result of worries about the island's deepening
economic and financial difficulties.
According to the report, of the company's exposure to Puerto Rico
debt, about 90% is revenue debt -- including revenue pledges from
toll receipts, and sales, gas, rum, and hotel-occupancy taxes.
Ambac's largest exposure is to sales-tax revenue bonds totaling
$808 million and issued by the Puerto Rico Sales Tax Financing
Corp., the report related. Those bonds are safer than other debt
issued by Puerto Rico, as the government isn't allowed to tap the
agency's sales taxes to pay other obligations.
Other exposure listed by Ambac, including the rum and hotel-
occupancy tax revenue bonds, are subject to claw back under Puerto
Rico's constitution, the report said.
Ambac also said about 10% of the total Puerto Rico debt it insures
is commonwealth general obligation-backed debt, the report further
related.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010.
Ambac's bond insurance unit, Ambac Assurance Corp., is being
restructured by state regulators in Wisconsin. AAC is domiciled
in Wisconsin and regulated by the Office of the Commissioner of
Insurance of the State of Wisconsin. The parent company is not
regulated by the OCI.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.
The Blackstone Group LP is the Debtor's financial advisor.
Kurtzman Carson Consultants LLC is the claims and notice agent.
KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
Bankruptcy Judge Shelley C. Chapman entered an order confirming
the Fifth Amended Plan of Reorganization of Ambac Financial Group,
Inc. on March 14, 2012. The Plan provides for the full payment of
secured claims and 8.5% to 13.2% recovery for general unsecured
claims. The second modified version of the confirmed Plan was
declared effective on May 1, 2013, with Ambac obtaining bankruptcy
court approval of a $100+ million claims settlement with the
Internal Revenue Service.
Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).
AMERICAN AIRLINES: Merger Suffers New Setbacks
----------------------------------------------
Brent Kendall, writing for The Wall Street Journal, reported that
US Airways Group Inc. and American Airlines parent AMR Corp.
suffered a pair of setbacks on Oct. 10 in their trial preparations
for the Justice Department's case against their proposed merger.
According to the report, a special master overseeing some pretrial
portions of the case largely rejected the airlines' request for
internal Justice Department materials about the department's
review of past airline deals that received antitrust approval.
The special master also rejected the airlines' request that the
Justice Department turn over information about which third parties
it interviewed while deciding whether to challenge the US Airways-
AMR merger, the report related.
The airlines believe the Justice Department used different
standards in evaluating their merger than it used in several past
airline deals that received the government's blessing, the report
said.
US Airways and AMR argued that access to Justice Department
materials from the past reviews would enable them to show that
their merger was good for competition when evaluated under the
type of models the government used previously, the report
recalled.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements. AMR, previously the world's largest airline prior to
mergers by other airlines, is the last of the so-called U.S.
legacy airlines to seek court protection from creditors.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
The Retiree Committee is represented by Jenner & Block LLP's
Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B.
Hankin, Esq.
AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a
definitive merger agreement under which the companies will combine
to create a premier global carrier, which will have an implied
combined equity value of approximately $11 billion.
The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan
to exit bankruptcy through a merger with US Airways. By
distributing stock in the merged airlines, the plan is designed to
pay all creditors in full, with interest.
Judge Sean Lane confirmed the Plan despite the lawsuit filed by
the U.S. Department of Justice and several states' attorney
general complaining that the merger violates antitrust laws. The
plan confirmation order means that if AMR and US Airways win the
Justice Department lawsuit or settle with the government, the
merger plan can go into effect.
The antitrust suit is U.S. v. US Airways Group Inc., 13-cv-1236,
U.S. District Court, District of Columbia (Washington).
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
AMERICAN AIRLINES: Early Turbulence Won't Ground DOJ's Fight
------------------------------------------------------------
Law360 reported that the U.S. Department of Justice's bid to block
US Airways Group Inc. from joining forces with American Airlines
Inc. may have gotten off to a bumpy start with union opposition, a
change of heart by the Texas attorney general and the government
shutdown, but attorneys say the obstacles will have little effect
on the outcome of the antitrust regulator's challenge.
According to the report, since the antitrust watchdog first sued
to stop the $13.8 billion deal in August, it has faced all manner
of setbacks and opposition.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements. AMR, previously the world's largest airline prior to
mergers by other airlines, is the last of the so-called U.S.
legacy airlines to seek court protection from creditors.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
The Retiree Committee is represented by Jenner & Block LLP's
Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B.
Hankin, Esq.
AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a
definitive merger agreement under which the companies will combine
to create a premier global carrier, which will have an implied
combined equity value of approximately $11 billion.
The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan
to exit bankruptcy through a merger with US Airways. By
distributing stock in the merged airlines, the plan is designed to
pay all creditors in full, with interest.
Judge Sean Lane confirmed the Plan despite the lawsuit filed by
the U.S. Department of Justice and several states' attorney
general complaining that the merger violates antitrust laws. The
plan confirmation order means that if AMR and US Airways win the
Justice Department lawsuit or settle with the government, the
merger plan can go into effect.
The antitrust suit is U.S. v. US Airways Group Inc., 13-cv-1236,
U.S. District Court, District of Columbia (Washington).
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
AMERICAN APPAREL: Comparable Sales for Sept. 30 Qtr. Hiked 2%
-------------------------------------------------------------
American Apparel, Inc., announced preliminary sales for the month
ended Sept. 30, 2013. Total net sales for September 2013 were
$49.9 million, a decrease of 2 percent over September 2012.
Comparable store sales for September 2013 decreased 6 percent,
including an 8 percent decrease in comparable store sales in the
retail store channel and an 8 percent increase in net sales in the
online channel. Wholesale net sales increased 12 percent for the
month as compared to September 2012. For the quarter ended
Sept. 30, 2013, total net sales increased 1 percent to $164.1
million, with a 2 percent increase in comparable sales and a 3
percent increase in wholesale net sales.
Dov Charney, Chairman and CEO, commented, "Our negative same store
sales for the month of September were primarily a result of
significant difficulties in the launch of our new distribution
center at La Mirada, California, for which I take responsibility.
A multitude of issues, including technical, planning, staffing and
design and integration, resulted in distractions in various
aspects of our operations, including store operations,
manufacturing and product development.
"Whereas the new distribution center was supposed to be (and will
become in the medium and longer term) a state of the art, best in
class, facility carrying the promise of reduced costs and faster
order fulfillment, it has so far been an example of how technology
- at least from a short term perspective - can sometimes work
against the success of an organization.
"The good news is we are on track to get our distribution center
in a place where it will help us build a stronger, leaner, larger
and more profitable American Apparel over the next five to ten
years. Despite our difficulties, I am proud that we were able to
demonstrate healthy increases in sales in two out of our three
sales channels, a testament to the fact that the American Apparel
brand remains extremely strong and continues to resonate with
consumers and wholesale buyers of clothing worldwide.
"Some additional good news is that we are planning to start
opening stores again. In the next several months, we are going to
open stores in Lyon, France, Stratford, United Kingdom, and
Atlanta, Georgia, as well as a new flagship store in New York
City. We are sensing major opportunities overseas both online and
in terms of new store possibilities. Additionally our wholesale
business is showing major signs of strength despite distribution
challenges, and I expect same store sales to be positive in the
fourth quarter in all channels, including online, retail, and
wholesale."
John Luttrell, CFO, added, "I also believe our sales were
negatively impacted by weak consumer spending levels across the
retail apparel sector. Although the distribution center is now
performing better from a shipping point of view, we have
experienced, and may continue to incur, higher than expected
distribution center labor costs. In addition, if there are any
further transition issues associated with the new center or if
apparel sector spending is soft in the fourth quarter, our sales
and financial results could be negatively impacted. However, we
have recently seen week-over-week reductions in distribution labor
costs, and we believe we will continue to reduce labor costs
during the fourth quarter. Although we are disappointed with the
additional costs and reduced sales caused by the distributions
center transition, we continue to believe we will benefit in the
future from our decision to invest in the new center."
A copy of the press release is available for free at:
http://is.gd/IZd0A3
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of September 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being. Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece. The deal allows the investors to purchase additional
27.4 million shares at the same price.
The Company incurred a net loss of $37.27 million in 2012, as
compared with a net loss of $39.31 million in 2011. The Company's
balance sheet at June 30, 2013, showed $335.32 million in total
assets, $392.67 million in total liabilities and a $57.35 million
total stockholders' deficit.
* * *
American Apparel carries a Caa1 Corporate Family Rating from
Moody's Investors Service and a 'B-' corporate credit rating from
Standard & Poor's Ratings Services.
ANCHOR BANCORP: EJF Capital Owns 9.7% of Common Stock
-----------------------------------------------------
EJF Capital LLC, in a Schedule 13G filing dated Oct. 9, 2013,
reports that as of Sept. 27, 2013, it beneficially owns
175,560,000 shares, representing 9.7% of the Common Stock, $0.19
par value, of Anchor BanCorp Wisconsin Inc.
A copy of the Schedule 13G submission is available at:
http://is.gd/8bIqzD
About Anchor Bancorp
Madison, Wisconsin-based Anchor BanCorp Wisconsin Inc. sought
protection under Chapter 11 of the Bankruptcy Code on Aug. 12,
2013 (Case No. 13-14003, Bankr. W.D. Wis.) to implement a
"pre-packaged" plan of reorganization in order to facilitate the
restructuring of the Company and the recapitalization of
AnchorBank, fsb, a wholly-owned subsidiary of the Company.
As of March 31, 2013, the Debtor listed total assets of
$2,367,583,000 and total liabilities of $2,427,447,000. Chief
Judge Robert D. Martin oversees the Chapter 11 case. The Debtor
is represented by Kerkman Dunn Sweet DeMarb as lead bankruptcy
counsel and Skadden, Arps, Slate, Meagher & Flom LLP, as special
counsel. CohnReznick LLP serves as the Debtor's financial
advisor.
Anchor BanCorp is a registered savings and loan holding company
incorporated under the laws of the State of Wisconsin. The
Company is engaged in the savings and loan business through its
wholly owned banking subsidiary, AnchorBank, fsb.
Anchor BanCorp and its wholly-owned subsidiaries, AnchorBank FSB,
each consented to the issuance of an Order to Cease and Desist by
the Office of Thrift Supervision. The Corporation and the Bank
continue to diligently work with their financial and professional
advisors in seeking qualified sources of outside capital, and in
achieving compliance with the requirements of the Orders.
In connection with the Plan, the Company has entered into
definitive stock purchase agreements with institutional and other
private investors as part of a $175 million recapitalization of
the institution. No new investor will own in excess of 9.9
percent of the common equity of the recapitalized Holding Company.
The reorganization filing includes only Anchor BanCorp, the
holding company for the Bank, allowing the Bank to remain outside
of bankruptcy and to continue normal operations. The Bank
operates 55 offices throughout Wisconsin. Operations at the Bank
will continue as usual throughout the reorganization process.
Anchor BanCorp Wisconsin Inc. on Aug. 30 disclosed that the
Holding Company has received court approval of its recently
announced plan of reorganization. U.S. Bankruptcy Court Judge
Robert Martin approved the plan at a hearing on Aug. 30.
ANGLO IRISH: Hedge Fund Elliott Blocked in Bid for Info
-------------------------------------------------------
Tom Hals, writing for Reuters, reported that a tenacious U.S.
hedge fund and an Irish property developer were blocked on Oct. 8
by a U.S. federal judge from digging into the secretive
communications that led to Ireland's decision to liquidate former
Anglo Irish Bank.
According to the report, Elliot Management, billionaire Paul
Singer's hedge fund, and John Flynn failed to convince a U.S.
Bankruptcy Court judge to allow them to demand a broad range of
information that they said could prove the bank was solvent when
put into liquidation.
"The court is not inclined, at least for now, to perform a
forensic analysis of Ireland's legislative and executive
departments," said U.S. Bankruptcy Court Judge Christopher Sontchi
of Wilmington, Delaware, the report related.
The former bank was at the heart of last decade's property boom
and bust in Ireland and the lender was put into an accelerated
liquidation during an emergency session of Ireland's parliament in
February, the report said. Now known as Irish Bank Resolution
Corp, or IRBC, the liquidating bank applied in August for U.S.
court protection to prevent creditors from going after more than
$1 billion in U.S. assets.
While the liquidator overseeing the former bank won an initial
legal skirmish on Oct. 8, a battle still looms over whether
Sontchi will grant IBRC protection under Chapter 15 of the U.S.
bankruptcy code, the report further related.
About Anglo Irish
Anglo Irish Bank was an Irish bank headquartered in Dublin from
1964 to 2011. It went into wind-down mode after nationalization
in 2009. In July 2011, Anglo Irish merged with the Irish
Nationwide Building Society, with the new company being named the
Irish Bank Resolution Corporation (IBRC).
Standard & Poor's Ratings Services said that it lowered its long-
and short-term counterparty credit ratings on Irish Bank
Resolution Corp. Ltd. (IBRC) to 'D/D' from 'B-/C'. S&P also
lowered the senior unsecured ratings to 'D' from 'B-'. S&P then
withdrew the counterparty credit ratings, the senior unsecured
ratings, and the preferred stock ratings on IBRC. At the same
time, S&P affirmed its 'BBB+' issue rating on three government-
guaranteed debt issues.
The rating actions follow the Feb. 6, 2013, announcement that the
Irish government has liquidated IBRC.
The former Irish bank sought protection from creditors under
Chapter 15 of the U.S. Bankruptcy Code on Aug. 26, 2013 (Bankr.
D. Del., Case No. 13-12159). The former bank's Foreign
Representatives are Kieran Wallace and Eamonn Richardson. Its
U.S. bankruptcy counsel are Mark D. Collins, Esq., and Jason M.
Madron, Esq., at RICHARDS, LAYTON & FINGER, P.A., in Wilmington,
Delaware.
API TECHNOLOGIES: Amends Credit Agreement with Guggenheim
---------------------------------------------------------
API Technologies Corp. entered into an Amendment No. 1 to Credit
Agreement, by and among the Company, as borrower, the lenders
party thereto and Guggenheim Corporate Funding, LLC, as
administrative agent. The Amendment amends the Credit Agreement,
dated as of Feb. 6, 2013, to among other things, reduce the
minimum interest coverage ratio, increase the maximum leverage
ratio, reduce the interest rate on the term loans and modify the
terms of the prepayment premium which the Company is required to
pay upon voluntary prepayments or certain mandatory prepayments of
the term loans. A copy of the Amended Credit Agreement is
available at http://is.gd/duLZIj
About API Technologies Corp.
API Technologies designs, develops and manufactures electronic
systems, subsystems, RF and secure solutions for technically
demanding defense, aerospace and commercial applications. API
Technologies' customers include many leading Fortune 500
companies. API Technologies trades on the NASDAQ under the symbol
ATNY. For further information, please visit the Company Web site
at www.apitech.com.
For the 12 months ended Nov. 30, 2012, the Company reported a net
loss of $148.70 million, as compared with a net loss of $17.32
million during the prior year. As of may 31, 2013, the Company
had $336.30 million in total assets, $179.79 million in total
liabilities, $25.47 million in redeemable preferred stock, and
$131.03 million in shareholders' equity.
* * *
As reported by the TCR on Feb. 14, 2013, Moody's Investors Service
has withdrawn all ratings of API Technologies Corp., including its
Caa1 Corporate Family Rating and negative outlook due to the
repayment of all rated debt. On Feb. 6, 2013, API Technologies
Corp. completed a refinancing of its previously outstanding rated
bank debt. All ratings of API have been withdrawn since the
company has no rated debt outstanding.
In the Feb. 22, 2013, edition of the TCR, Standard & Poor's
Ratings Services said that it lowered its corporate credit rating
on API Technologies Corp. to 'B-' from 'B'.
"The downgrade reflects weaker-than-expected credit metrics
resulting from less-than-expected improvements in operating
performance and higher debt, including a modest increase from the
recent refinancing," said Standard & Poor's credit analyst Chris
Mooney.
API TECHNOLOGIES: Posts $6.9 Million Net Income in 3rd Quarter
--------------------------------------------------------------
API Technologies Corp. reported net income of $6.96 million on
$62.63 million of net revenue for the three months ended Aug. 31,
2013, as compared with a net loss of $27.66 million on $58.75
million of net revenue for the same period during the prior year.
For the nine months ended Aug. 31, 2013, the Company reported net
income of $15,000 on $185.16 million of net revenue as compared
with a net loss of $136.40 million on $189.01 million of net
revenue for the same period last year.
For the 12 months ended Nov. 30, 2012, the Company reported a net
loss of $148.70 million, as compared with a net loss of $17.32
million during the prior year.
The Company's balance sheet at Aug. 31, 2013, showed $320.07
million in total assets, $156.30 million in total liabilities,
$25.89 million in redeemable preferred stock and $137.87 million
in shareholders' equity.
"We reported strong results this quarter, with over six percent
year-over-year revenue growth and achieved record revenue for our
Systems, Subsystems and Components segment, which is bolstered by
our differentiated portfolio of innovative products and end market
diversity," said Bel Lazar, president and chief executive officer
of API Technologies Corp. "We have delivered our highest Adjusted
EBITDA in five quarters and paid down over $77 million in term
debt year to date. We continue to execute our business strategy
and enhance our operational efficiencies, which positions us to
deliver strong performance and positive returns for our
shareholders."
A copy of the press release is available for free at:
http://is.gd/xXZ0HI
A copy of the Form 10-Q is available for free at:
http://is.gd/31h7VS
About API Technologies Corp.
API Technologies designs, develops and manufactures electronic
systems, subsystems, RF and secure solutions for technically
demanding defense, aerospace and commercial applications. API
Technologies' customers include many leading Fortune 500
companies. API Technologies trades on the NASDAQ under the symbol
ATNY. For further information, please visit the Company Web site
at www.apitech.com.
* * *
As reported by the TCR on Feb. 14, 2013, Moody's Investors Service
has withdrawn all ratings of API Technologies Corp., including its
Caa1 Corporate Family Rating and negative outlook due to the
repayment of all rated debt. On Feb. 6, 2013, API Technologies
Corp. completed a refinancing of its previously outstanding rated
bank debt. All ratings of API have been withdrawn since the
company has no rated debt outstanding.
In the Feb. 22, 2013, edition of the TCR, Standard & Poor's
Ratings Services said that it lowered its corporate credit rating
on API Technologies Corp. to 'B-' from 'B'.
"The downgrade reflects weaker-than-expected credit metrics
resulting from less-than-expected improvements in operating
performance and higher debt, including a modest increase from the
recent refinancing," said Standard & Poor's credit analyst Chris
Mooney.
ASR CONSTRUCTORS: Hires Shulman Hodges as General Counsel
---------------------------------------------------------
ASR Constructors Inc. asks for authorization from the Hon. Mark
Houle of the U.S. Bankruptcy Court for the Central District of
California to employ Shulman Hodges & Bastian LLP as general
bankruptcy counsel, effective as of Sept. 20, 2013.
ASR Constructors requires Shulman Hodges to:
(a) advise the Debtor with respect to its rights, powers,
duties and obligations as a debtor in possession in the
administration of this case, the management of its business
affairs and the management of its property;
(b) advise and assist the Debtor with respect to compliance
with the requirements of the Office of the U.S. Trustee;
(c) advise the Debtor regarding matters of bankruptcy law,
including the rights and remedies of the Debtor with
respect to its assets and with respect to the claims of
creditors;
(d) represent the Debtor in any proceedings or hearings in the
bankruptcy court related to bankruptcy law issues;
(e) conduct examinations of witnesses, claimants, or adverse
parties and to prepare and assist in the preparation of
reports, accounts and pleadings related to the Debtor's
Chapter 11 case;
(f) advise the Debtor regarding its legal rights and
responsibilities under the Bankruptcy Code and the Federal
Rules of Bankruptcy Procedure;
(g) assist the Debtor in the negotiation, preparation and
confirmation of a plan of reorganization;
(h) assist the Debtor to remove the following state court
action to the Bankruptcy Court: lawsuit pending in the
Riverside Superior Court styled, Gotte Electric, Inc. v.
ASR Constructors, Inc., Federal Insurance Company, Another
Merdian, LLC and Inland Machinery, Inc., Case No. RIC
1310089. Shulman Hodges will also assist the Debtor in
defending against this action; and
(i) perform any and all other legal services incident and
necessary as the Debtor may require of the Firm in
connection with its Chapter 11 case.
Shulman Hodges will be paid at these hourly rates:
Attorneys
---------
Leonard M. Shulman $525
Ronald S. Hodges $525
James C. Bastian, Jr. $525
Mark Bradshaw $495
J. Ronald Ignatuk $495
John Mark Jennings $495
Gary A. Pemberton $495
Michael J. Petersen $495
Lynda T. Bui $425
Franklin J. Contreras $425
Robert Huttenhoff $425
Paul S. Ocampo $400
Samuel J. Romero $400
Brian L. Bloom $375
Melissa Davis Lowe $375
Kiara W. Gebhart $350
Rika M. Kido $300
Ryan O'Dea $250
Paralegals
----------
Lorre E. Clapp $195
Pamela G. Little $195
Erlanna L. Lohayza $195
Patricia A. Britton $185
Melanie G. Rodgers $185
Steve P. Swartzell $175
Anne Marie Vernon $175
Tammy Walsworth $175
Arland Udo $150
Tonia Mann-Wooten $125
Of Counsel
----------
A. Lavar Taylor $525
Donald R. Kurtz $525
Gregory J. Anderson $450
Shulman Hodges will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Prior to the petition date, the Debtor and insiders of the Debtor
paid the Shulman Hodges retainers in the total amount of $170,000.
The Debtor paid $20,000 for out of court work-out services on
April 11, 2013 and on Sept. 20, 2013, the Debtor's insider Patty
Berry paid $75,000 and the Debtor's insiders Alan and Stacy
Regotti paid $75,000 for out of court work-out services and the
Chapter 11 bankruptcy case.
Shulman Hodges incurred total fees and costs of $47,871.49, prior
to the commencement of the bankruptcy case. Balance of funds held
in trust on the petition date was $122,128.
Shulman Hodges and the Debtor agreed that if the value of the
retainer is exhausted, the Debtor will place in the Firm's trust
account, on a monthly basis, 80% of the amount of the Firm's
monthly fees and 100% of the monthly expenses as they are
incurred.
One of the principal factors for the filing of the Debtor's
bankruptcy was a $6,655,486.47 judgment being asserted against the
Debtor's contractors' license by Gotte Electric, Inc. The Debtor
received a notice from the State Contractor's Board advising that
the Debtor was required to submit to the Board by Sept. 22, 2013,
either a proof that the $6,655,486.47 judgment in favor of Gotte
Electric had been paid, or proof of the Debtor's bankruptcy
filing.
James C. Bastian, Jr., Esq., a partner of Shulman Hodges, assured
the Court that the firm 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 Debtors and their estates.
Shulman Hodges can be reached at:
James C. Bastian, Jr., Esq.
SHULMAN HODGES & BASTIAN LLP
8105 Irvine Center Drive, Suite 600
Irvine, CA 92618
Tel: (949) 340-3400
Fax: (949) 340-3000
E-mail: jbastian@shbllp.com
ASR Constructors, Inc., filed a Chapter 11 petition (Bankr. C.D.
Calif. Case No. 13-25794) on Sept. 20, 2013. The petition was
signed by Alan Regotti as president. The Debtor estimated assets
and debts of at least $10 million. Judge Mark D. Houle presides
over the case. James C Bastian, Jr., Esq., at Shulman Hodges &
Bastian, LLP, serves as the Debtor's counsel.
ASR CONSTRUCTORS: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
ASR Constructors, Inc. filed with the U.S. Bankruptcy Court for
the Central District of California its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property 17,647,556.06
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $9,066,690.84
E. Creditors Holding
Unsecured Priority
Claims 145,000.00
F. Creditors Holding
Unsecured Non-priority
Claims 9,689,776.26
-------------- --------------
TOTAL $17,647,556.06 $18,901,467.10
Proposed Attorneys for ASR Constructors, Inc., may be reached at:
James C. Bastian, Jr., Esq.
Melissa Davis Lowe, Esq.
SHULMAN HODGES & BASTIAN LLP
8105 Irvine Center Drive, Suite 600
Irvine, CA 92618
Telephone: (949) 340-3400
Facsimile: (949) 340-3000
Email: jbastian@shbllp.com
mlowe@shbllp.com
About ASR
ASR Constructors, Inc., filed a Chapter 11 petition (Bankr. C.D.
Calif. Case No. 13-25794) on Sept. 20, 2013. The petition was
signed by Alan Regotti as president. The Debtor estimated assets
and debts of at least $10 million. Judge Mark D. Houle presides
over the case. James C Bastian, Jr., Esq., at Shulman Hodges &
Bastian, LLP, serves as the Debtor's counsel.
BERNARD L. MADOFF: NY AG Defends Merkin Settlement at 2nd Circuit
-----------------------------------------------------------------
Law360 reported that New York's attorney general on Oct. 10 asked
the Second Circuit to bless his $410 million settlement with
Madoff feeder fund manager J. Ezra Merkin, arguing that the
bankruptcy trustee recovering money for Madoff investors brought a
challenge too late.
According to the report, trustee Irving Picard has no reasonable
grounds to complain about the Merkin accord, since he knew years
in advance that New York intended to bring its own claims against
the prominent Madoff feeder, state lawyer Brian A. Sutherland told
a panel of judges during oral arguments.
The appellate case is Picard v. Schneiderman, Case No. 13-1785
(2d. Cir.).
BERNARD L MADOFF: Trial of Ex-Employees Starts With Jury Selection
------------------------------------------------------------------
Erik Larson, writing for Bloomberg News, reported that jury
selection started in the trial of five ex-employees of Bernard
Madoff, including his former personal secretary and two computer
programmers accused of helping carry out the biggest Ponzi scheme
in U.S. history.
According to the report, U.S. District Judge Laura Taylor Swain in
Manhattan, who said the criminal trial could last five months, on
Oct. 8 is questioning a group of about 300 potential jurors who
completed questionnaires the past week.
The trial, slated to start Oct. 7, was delayed a day by Swain
without explanation, according to the case's online court docket,
the report related. When the jurors are selected, prosecutors will
begin opening arguments.
The former employees, all of whom have pleaded not guilty, are
Annette Bongiorno, who worked with Madoff for 40 years and helped
recruit investors; Joann Crupi, a back-office worker who managed
large accounts; ex-operations chief Daniel Bonventre and computer
programmers Jerome O'Hara and George Perez, the report said.
The proceeding will offer the fullest public accounting yet of how
Madoff carried out the fraud, which cost thousands of investors
$17 billion in lost principal and billions more in imaginary
profit, the report said. Earlier guilty pleas by Madoff, 75, and
some of his top aides averted a trial until now.
The case is U.S. v. O'Hara, 10-cr-00228, U.S. District Court,
Southern District of New York (Manhattan).
BERRY PLASTICS: Appoints New President - Rigid Open Top Division
----------------------------------------------------------------
Berry Plastics Group, Inc., has appointed William J. (Bill) Norman
to the position of president - Rigid Open Top Division. Norman
most recently served as Berry Plastics' executive vice president
- Strategic Planning.
As President - Rigid Open Top Division, Mr. Norman will provide
overall leadership for the division which produces rigid plastic
packaging for the food service, dairy, food and beverage, and
industrial markets.
"In his prior roles, Bill has led a number of key change
initiatives at the Company," said Berry Plastics' Chairman and CEO
Jon Rich. "I look forward to working closely with him in his new
role as we accelerate the growth of our rigid open top business,
while researching, designing, and introducing innovative new
products."
Mr. Norman joined Berry Plastics in 1993 and has held managerial
and vice president positions in areas such as accounting, finance,
and commercial and strategic planning. He holds a bachelor's
degree in Accounting from the University of Southern Indiana.
The Company also announced that G. Adam Unfried, who most recently
served as president - Rigid Open Top Division will assume the role
of executive vice president - Strategic Planning.
"I look forward to Adam's contributions in his new role, where he
can utilize his vast commercial experience to represent the entire
Company at our largest multi-national accounts, as well as drive
improvements in our sales organizations throughout Berry," said
Rich.
Mr. Unfried began his career with Berry Plastics in 1993. Since
then, he has held a number of positions of increasing
responsibility including vice president Sales - Container
Division, Regional Sales Manager, Southeast Sales Representative,
and Midwest Sales Representative. Mr. Unfried holds a bachelor's
degree in Marketing from Ball State University.
About Berry Plastics
Berry Plastics Corporation manufactures and markets plastic
packaging products, plastic film products, specialty adhesives and
coated products. At Jan. 2, 2010, the Company had more than 80
production and manufacturing facilities, primarily located in the
United States. Berry is a wholly-owned subsidiary of Berry
Plastics Group, Inc. Berry Group is primarily owned by affiliates
of Apollo Management, L.P., and Graham Partners. Berry, through
its wholly owned subsidiaries operates five reporting segments:
Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings
and Specialty Films. The Company's customers are located
principally throughout the United States, without significant
concentration in any one region or with any one customer.
On Dec. 3, 2009, Berry Plastics obtained control of 100 percent of
the capital stock of Pliant upon Pliant's emergence from
reorganization pursuant to a proceeding under Chapter 11 for a
purchase price of $602.7 million. Pliant is a leading
manufacturer of value-added films and flexible packaging for food,
personal care, medical, agricultural and industrial applications.
The acquired business is primarily operated in Berry's Specialty
Films reporting segment.
As of June 29, 2013, the Company had $5.04 billion in total
assets, $5.29 billion in total liabilities and a $251 million
total stockholders' deficit.
* * *
As reported by the TCR on Feb. 1, 2013, Moody's Investors Service
upgraded the corporate family rating of Berry Plastics to B2 from
B3 and the probability of default rating to B2-PD from B3-PD. The
upgrade of the corporate family rating to B2 from B3 reflects
the improvement in pro-forma credit metrics and management's
publicly stated goal to pursue a less aggressive, more balanced
financial profile.
In November 2011, Standard & Poor's Ratings Services affirmed the
'B-' corporate credit rating on Berry and its holding company
parent, Berry Plastics Group Inc. "The ratings on Berry reflect
the risks associated with the company's highly leveraged financial
profile and acquisition- driven growth strategy as well as its
fair business risk profile," said Standard & Poor's credit analyst
Cynthia Werneth.
In November 2011, Standard & Poor's Ratings Services affirmed the
'B-' corporate credit rating on Berry and its holding company
parent, Berry Plastics Group Inc. "The ratings on Berry reflect
the risks associated with the company's highly leveraged financial
profile and acquisition- driven growth strategy as well as its
fair business risk profile," said Standard & Poor's credit analyst
Cynthia Werneth.
BROCK HOLDINGS: Moody's Cuts CFR to B3 & Secured Debt Rating to B2
------------------------------------------------------------------
Moody's Investors Service downgraded Brock Holdings III, Inc.'s
Corporate Family Rating to B3 from B2 and Probability of Default
Rating to B3-PD from B2-PD. Additionally, Moody's downgraded the
company's first lien credit facilities to B2 from B1 and second
lien term loan to Caa2 from Caa1. The rating outlook remains
negative.
The downgrade of the Corporate Family Rating to B3 reflects
Moody's view that Brock's operating performance over the next 12-
18 months will be weaker than previously anticipated leading to
key credit metrics that are more in line with a B3 rated entity.
Additionally, the downgrade and negative outlook consider the
extremely thin margin under the interest coverage covenant that
governs the company's first lien credit facilities. The covenant
steps up to 2.75x in the fourth quarter of 2013 from current 2.5x.
Moody's projects that the company will face difficulties complying
with the covenant.
The following actions were taken:
Corporate Family Rating downgraded to B3 from B2;
Probability of Default Rating downgraded to B3-PD from B2-PD;
Senior Secured Revolving Credit Facility, due 2016, lowered to B2
(LGD3, 39%) from B1 (LGD3, 38%);
1st Lien Senior Secured Term Loan, due 2017, lowered to B2 (LGD3,
39%) from B1 (LGD3, 38%);
2nd Lien Senior Secured Term Loan, due 2018, lowered to Caa2
(LGD5, 88%) from Caa1 (LGD5, 88%).
Ratings Rationale:
The B3 Corporate Family Rating reflects Brock's high debt
leverage, weak interest coverage, and minimal cash flow
generation. For fiscal 2014, adjusted debt to EBITDA is projected
to be around 6x, (EBITDA-CAPEX)/interest expense below 2x and free
cash flow to debt breakeven. Although the company's operating
performance is anticipated to improve slightly from current
levels, the improvement is not enough to maintain the B2 Corporate
Family Rating as the company's performance is projected to
continue to be below Moody's previous expectations. Moreover,
Moody's projects Brock's liquidity profile to be barely adequate
considering its high debt service needs, limited availability
under its $105 million revolving credit facility, very thin margin
under the covenants, and no unencumbered assets.
At the same time, the B3 Corporate Family Rating is supported by
limited refinancing risk as the nearest debt maturity is in 2016
and improvement in the company's end-markets including
petrochemical and oil refinery markets.
The negative outlook reflects Moody's concern about the company's
ability to meet its interest coverage covenant in the fourth
quarter of 2013 when the covenant steps up to 2.75x from current
2.5x.
The ratings could be downgraded if Brock's liquidity profile
deteriorates further and/or its financial performance weakens such
that adjusted debt to EBITDA nears 7.0 times or (EBITDA-CAPEX) to
interest expense edges toward 1.0 times (all ratios incorporate
Moody's standard adjustments).
The ratings could be upgraded if debt to EBITDA is maintained at
or below 5 times and/or (EBITDA-CAPEX) to interest expense
sustained above 2.0 times (all ratios incorporate Moody's standard
adjustments). In addition, improvement in the company's liquidity
profile along with increased covenant headroom is needed for the
ratings to be upgraded.
Brock Holdings III, Inc., headquartered in Houston, TX, is a
multi-craft specialty services company providing scaffolding,
insulation, coatings and other services supporting the refining,
chemical and power industries. Lindsay Goldberg, through
affiliated funds, is the primary owner of Brock. Revenues for the
twelve months ended through June 30, 2013 totaled about $1.38
billion.
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
91.52 cents-on-the-dollar during the week ended Friday, October
11, 2013, according to data compiled by LSTA/Thomson Reuters MTM
Pricing and reported in The Wall Street Journal. This represents
an increase of 0.89 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 212 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About Caesars Entertainment Inc
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.
CASA CASUARINA: Court Okays Accord With Rothstein Trustee
---------------------------------------------------------
The Hon. Laurel M. Isicoff of the U.S. Bankruptcy Court for the
Southern District of Florida approved a prepetition settlement
among:
* Casa Casuarina, LLC,
* the Estate of Rothstein Rosenfeldt Adler, P.A.,
* Loftin Family, LLC,
* Loftin Hospitality, LLC,
* Luxury Resorts, LLC and
* Peter Loftin,
resolving an adversary proceeding against the Loftin Parties.
Peter Loftin signed the Casa's bankruptcy petition as manager.
Herbert Stettin, as Chapter 11 trustee for RRA, commenced the
adversary proceeding against the Loftin Parties, including Casa
Casuarina, LLC.
Casa Casuarina related that after negotiations, on Jan. 22, 2013,
the parties entered into the agreement in the RRA bankruptcy. As
of the Petition Date, the agreement had not yet been approved by
the Bankruptcy Court in the RRA case.
The settlement, provided for, among other things:
1. the Loftin Parties agree and acknowledge that RRA,
beneficially owns, controls, and holds, a 9.99% minority
membership ownership interest in Luxury Resorts, the sole owner
and managing member of Casa;
2. Casa Casuarina will pay to the trustee from the sale
proceeds of the $41.5 million sale of fashion icon Gianni
Versace's former South Beach mansion to a company controlled by
the family behind Jordache jeans, an amount equal to either (1)
9.99% of the Net Sales, or, (2) if the option is exercised by
trustee, 49.99% of the Net Sales; and
3. RRA's claim is subordinate to the allowed secured claims of
VM South Beach LLC, Alexandra Albu, Joseph Bonifacio, Michael
Pospisil, Monique Alfonso, and Ranko Salvujevic, and the Miami-
Dade County Tax Collector, and will not be paid from the proceeds
of the sale unless such claims are paid in full, but RRA's claim
is superior to any and all other claims, if any.
Additionally, as the successful bid at the auction sale of the
property was $41,500,000, and VM's secured claim is in the amount
of $34,471,879, RRA will receive at closing (if the sale closes)
$692,109 as the settlement payment as payment in full of its claim
against the estate.
A copy of the settlement is available for free at
http://bankrupt.com/misc/casacasuarina_settlement.pdf
In a separate motion, the mother, Kairee Hall, on her own behalf
and as natural guardian acting on behalf of minor children, sought
to enforce an interim settlement agreement she reached with Peter
Loftin in a paternity case, which agreement has been adopted as an
order of the family division of the circuit court an incorporated
in a final judgment. That final judgment specifically requires
the escrow of funds received from the sale of Peter Loftin's
interest in real estate located at 1116 Ocean Drive, Miami Beach,
Florida, and further contemplates the appointment of an agent to
vote Peter Loftin's interest in the bankruptcy proceeding.
The motion was intended to enforce interim settlement agreement
and to require Peter Loftin to escrow sufficient funds to satisfy
father's current and future child support obligations and to
appoint an agent to vote Peter Loftin's interest in the Bankruptcy
Proceeding.
The agreement contemplates that sufficient funds be escrowed to
fund and secure the following obligations all of which may be
properly categorized as child support, among other things:
a. $6,000 per month in child support retroactive to the date
he stopped paying;
b. funds to assure that each child received one million
dollars at the father's death; and
c. between $2,500 to $3,000 per month for rent until a lump
sum payment pf $300,000 is paid as per settlement plus $21,000 in
back rent.
About Casa Casuarina
Casa Casuarina, LLC, owner of Gianni Versace's former South Beach
mansion on Ocean Drive in Miami Beach, Florida, filed a Chapter 11
petition (Bankr. S.D. Fla. Case No. 13-25645) in Miami on July 1,
2013. Peter Loftin signed the petition as manager. Judge Laurel
M. Isicoff presides over the case. The Debtor estimated assets of
at least $50 million and debts of at lease $10 million. Joe M.
Grant, Esq., at Marwill Socarras Grant, P.L., serves as the
Debtor's counsel.
Until his Ponzi scheme fell apart in 2009, Scott Rothstein had
controlled the company that owned the property. Herbert Stettin is
the Chapter 11 trustee for Rothstein's law firm Rothstein
Rosenfeldt Adler PA, which has been in Chapter 11 liquidation
since November 2009.
Before Casa Casuarina filed bankruptcy, Mr. Stettin had reached
agreement to settle his claim to partial ownership.
CAPITOL BANCORP: Plan & CRO Appointment Hearings Rescheduled
------------------------------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court approved
the motion filed by Capitol Bancorp, Financial Commerce
Corporation and the official committee of unsecured creditors for
entry of an order (i) rescheduling hearings on (a) confirmation of
the Debtors' Plan and adequacy of the Disclosure Statement and (b)
the committee's motion for appointment of a chief restructuring
officer or, in the alternative, a Chapter 11 trustee and (ii)
providing other relief.
The order explains, "The hearing on confirmation of the Plan and
the final approval of the adequacy of the Disclosure Statement
shall be held on December 18, 2013 at 10:30 a.m.; provided,
however, that nothing herein prejudices the Debtors' or
Committee's right to seek to further adjourn such hearing. The
currently scheduled October 16, 2013 hearing on confirmation of
the Plan and final approval of the adequacy of the Disclosure
Statement is hereby stricken....The hearing on the Committee's
Motion for an Order: (1) Appointing a Chief Restructuring
Officer...shall be docketed at the 10:30 a.m. call on December 18,
2013 to be heard immediately after the conclusion of the hearing
on confirmation of the Plan and approval of the adequacy of the
Disclosure Statement in the event that the Court denies
confirmation of the Plan or approval of the adequacy of the
Disclosure Statement at such hearing. In the event that the Court
does not approve or deny confirmation of the Plan and adequacy of
the Disclosure Statement on December 18, 2013, the hearing on the
CRO Motion shall be further adjourned and shall be conducted only
in the event, and in such event immediately after, the Court
denies confirmation of the Plan or adequacy of the Disclosure
Statement. The currently scheduled October 15, 2013 hearing on the
CRO Motion is hereby stricken....The Committee shall not file a
chapter 11 plan or disclosure statement prior to conclusion of the
hearing on confirmation of the Plan and approval of the adequacy
of the Disclosure Statement. In the event that any other person or
entity files a chapter 11 plan or disclosure statement, the
Committee shall take no position with respect to such chapter 11
Plan disclosure statement or filing prior to conclusion of the
hearing on confirmation of the Plan and approval of the adequacy
of the Disclosure Statement. Notwithstanding the foregoing, it is
the position of the Debtors that any such plan or disclosure
statement may not be filed under 11 U.S.C. Section 1121 and
otherwise applicable law, and it is the position of the Committee
that any such plan or disclosure statement may be filed under 11
U.S.C. Section 1121 and otherwise applicable law."
About Capitol Bancorp
Capitol Bancorp Ltd. and Financial Commerce Corporation filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case
Nos. 12-58409 and 12-58406) on Aug. 9, 2012.
Capitol Bancorp -- http://www.capitolbancorp.com/-- is a
community banking company with a network of individual banks and
bank operations in 10 states and total consolidated assets of
roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of
FCC, with a number of CBC affiliates owning the remainder. FCC,
in turn, is the holding company for five of the banks in CBC's
network. CBC is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841,
et seq., and trades on the OTCQB under the symbol "CBCR."
Lawyers at Honigman Miller Schwartz and Cohn LLP represent the
Debtors as counsel. John A. Simon, Esq., at Foley & Lardner LLP,
represents the Official Committee of Unsecured Creditors as
counsel.
In its petition, Capitol Bancorp scheduled $112,634,112 in total
assets and $195,644,527 in total liabilities. The petitions were
signed by Cristin K. Reid, corporate president.
The Company's balance sheet at Sept. 30, 2012, showed
$1.749 billion in total assets, $1.891 billion in total
liabilities, and a stockholders' deficit of $141.8 million.
Prepetition, the Debtor arranged a reorganization plan that was
accepted by the requisite majorities of creditors and equity
holders in all classes. Problems arose when affiliates of
Valstone Partners LLC declined to proceed with a tentative
agreement to fund the reorganization by paying $50 million for
common and preferred stock while buying $207 million in face
amount of defaulted commercial and residential mortgages.
CASH STORE: Appoints Two New Senior Executives
----------------------------------------------
The Cash Store Financial Services Inc. on Oct. 10 announced the
appointment of two new senior executives who will assist the
Company execute its strategic vision for long-term growth.
The appointment of Michael Baker as Senior Vice President of
Operations and Dean Ozanne as Senior Vice President of Virtual
Operations and Innovation will further support Cash Store
Financial's offering of a diversified suite of flexible consumer
finance products, filling a void in the near-prime segment.
"Having Michael and Dean join our Company, and the recent
appointments to the Board, coincide with Cash Store Financial's
new diversified consumer lending platform growth and strengthens
Cash Store Financial's continued focus on bridging the gap between
payday loans and products of traditional banks," Gordon Reykdal,
CEO for Cash Store Financial, said.
"Having two talented senior executives like Michael and Dean
choose to join our management team demonstrates the commitment
that Cash Store Financial has to transforming itself toward a
broad-based consumer finance Company serving everyday people with
a wide-range of credit products," Kevin Paetz, President and Chief
Operating Officer.
Michael Baker - Senior Vice President of Operations
Mr. Baker brings more than 30 years of commercial and retail
banking experience to the position. He has a wide and varied
background in banking, having spent 19 years with TD Bank, 11
years with ATB Financial, and for the past three years as the
Senior Vice President Investment Operations with AIMCO (Alberta
Investment Management Company).
Mr. Baker brings a visionary leadership style combined with
extensive experience in developing innovative solutions within the
financial services sector and expertise in businesses
transformation. Mr. Baker is a graduate of the Queen's
University Executive Program.
Dean Ozanne - Senior Vice President of Virtual Operations and
Innovation
An industry veteran, Mr. Ozanne brings more than 30 years of
commercial and retail banking experience, having held senior roles
with the Royal Bank of Canada and executive roles with ATB
Financial, including most recently, Vice President of Sales.
Mr. Ozanne has an extensive background in Six Sigma process
improvement, enterprise level policy, risk assessment and
management along with experience in system design, development and
implementation. He has held a variety of executive leadership
roles where he has been responsible for sales, central services,
loan review, policy and risk assessment, data conversion and
process design of the SAP system conversion. Mr. Ozanne has a
Bachelor of Arts Degree from the University of Alberta with a
concentration in Econometrics and Quantitative Economics.
About Cash Store Financial
Headquartered in Edmonton, Alberta, The Cash Store Financial is
the only lender and broker of short-term advances and provider of
other financial services in Canada that is listed on the Toronto
Stock Exchange (TSX: CSF). Cash Store Financial also trades on
the New York Stock Exchange (NYSE: CSFS). Cash Store Financial
operates 512 branches across Canada under the banners "Cash Store
Financial" and "Instaloans". Cash Store Financial also operates
25 branches in the United Kingdom.
Cash Store Financial is a Canadian corporation that is not
affiliated with Cottonwood Financial Ltd. or the outlets
Cottonwood Financial Ltd. operates in the United States under the
name "Cash Store". Cash Store Financial does not do business
under the name "Cash Store" in the United States and does not own
or provide any consumer lending services in the United States.
Cash Store Financial employs approximately 1,900 associates.
The Company's balance sheet at June 30, 2013, showed $192.73
million in total assets, $171.47 million in total liabilities and
$21.25 million in shareholders' equity.
* * *
As reported in the Feb. 8, 2013 edition of the TCR, Standard &
Poor's Ratings Services lowered its issuer credit rating on Cash
Store Financial (CSF) to 'CCC+' from 'B-'. The outlook is
negative.
"The downgrades follow a proposal by the payday loan registrar in
Ontario to revoke CSF's payday lending licenses and CSF's
announcement that it has discontinued its payday loan product in
the region," said Standard & Poor's credit analyst Igor Koyfman.
The company's businesses in Ontario, which account for
approximately one-third of its store count, will begin offering a
new line of credit product to its customers. S&P believes this is
to offset the loss of its payday lending product; however, this is
a relatively new product, and S&P believes that it will be
challenging for the company to replace its lost earnings from the
payday loan product. S&P also believes that the registrar's
proposal could lead to similar actions in other territories," the
Company said.
As reported by the TCR on May 22, 2013, Moody's Investors Service
downgraded the Corporate Family Rating and senior unsecured debt
rating of Cash Store Financial Services to Caa1 from B3 and
assigned a negative outlook. According to Moody's, CSFS remains
unprofitable on both the pretax and net income lines and prospects
for return to profitability are unclear.
CATASYS INC: CEO's Crede CG Invests $2 Million
----------------------------------------------
Between Oct. 2, 2013, and Oct. 8, 2013, Catasys, Inc., entered
into Securities Purchase Agreements with several investors,
including Crede CG III, Ltd., an affiliate of Terren S. Peizer,
chairman and chief executive officer of the Company, and Shamus,
LLC, an affiliate of the Company, relating to the sale and
issuance of an aggregate of 4,550,002 shares of the Company's
common stock, par value $0.0001 per share and warrants to purchase
an aggregate of 4,550,002 shares of Common Stock, at an exercise
price of $0.58 per share, for an aggregate gross proceed to the
Company of approximately $2.6 million.
Among other things, the Agreements provide that in the event that
the Company effectuates a reverse stock split of its Common Stock
within 24 months of the closing date of the Offering and the
volume weighted average price of the Common Stock during the 20
trading days following the effective date of the Reverse Split
declines from the closing price on the trading date immediately
prior to the effective date of the Reverse Split, that the Company
issue additional shares of Common Stock. The number of Adjustment
Shares will be calculated as the lesser of (a) 20 percent of the
number of shares of Common Stock originally purchased by such
Investor and still held by the Investor as of the last day of the
VWAP Period, and (b) the number of shares originally purchased by
such Investor and still held by that Investor as of the last day
of the VWAP Period multiplied by the percentage decline in the
VWAP during the VWAP Period. All prices and number of shares of
Common Stock will be adjusted for the Reverse Split and any other
stock splits or stock dividends.
The Warrants are exercisable immediately and expire on the fifth
anniversary of the date of issuance. The Warrants are
exercisable, at the option of each holder, in whole or in part by
delivering to the Company a duly executed exercise notice
accompanied by payment in full for the number of shares of Common
Stock purchased upon such exercise. The exercise price and the
number of shares of Common Stock purchasable upon the exercise of
each Warrant are subject to adjustment in the event of stock
dividends, distributions, and splits. The exercise price of the
Warrants will be adjusted downwards in the event that Common Stock
or Common Stock Equivalents are issued by the Company at a price
below the exercise price of the Warrants, with certain exceptions.
In the event that Adjustment Shares are issued, the number of
shares that may be purchased under the Warrants will be increased
by an amount equal to the Adjustment Shares. In addition, the
exercise price is subject to adjustment in the event that the VWAP
during the VWAP Period is less than the exercise price prior to
the VWAP Period.
In the aggregate, Crede invested approximately $2 million in the
Offering. After giving effect to the Offering, Mr. Peizer
beneficially owns approximately 77.8 percent of the Common Stock
of the Company, including shares underlying options and warrants
(or approximately 65.0 percent on a fully diluted basis). Shamus
invested $500,000 in the Offering and after giving effect to the
Offering, Shamus beneficially owns approximately 36.9 percent of
the Common Stock of the Company, including shares underlying
warrants (or approximately 22.8 percent on a fully diluted basis).
About Catasys Inc.
Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys,
Inc., is a healthcare services management company, providing
through its Catasys(R) subsidiary specialized behavioral health
management services for substance abuse to health plans.
Catasys disclosed a net loss of $11.64 million on $541,000 of
total revenues for the 12 months ended Dec. 31, 2012, as compared
with a net loss of $8.12 million on $267,000 of total revenues in
2011. Catasys' balance sheet at June 30, 2013, showed $3.36
million in total assets, $20.68 million in total liabilities and a
$17.32 million total stockholders' deficit.
Rose, Snyder & Jacobs LLP, in Encino, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has incurred significant operating losses and
negative cash flows from operations during the year ended Dec. 31,
2012, which raise substantial doubt about the Company's ability to
continue as a going concern.
Bankruptcy Warning
"Our ability to fund our ongoing operations and continue as a
going concern is dependent on our increasing fees from existing
contracts and signing and generating fees from new and existing
contracts for our Catasys managed care programs and the success of
management's plans to increase revenue and continue to control
expenses. We are operating our programs in Kansas, Louisiana,
Massachusetts, and Oklahoma. In 2013, we signed two agreements
with national health plans to provide services to their members in
New Jersey and Ohio, West Virginia, Kentucky, and Indiana,
respectively, which we expect to commence enrollment during the
third quarter of 2013. In the first half of 2013, we have
generated increased fees from our launched programs over the same
period in the prior year, and we expect to continue to increase
enrollment and fees from our programs throughout this year both
from existing programs and the contracts we signed in 2013.
However, there can be no assurance that we will generate such
fees. We continue to look for areas to reduce our operating
expenses. In addition, we are in need to obtain additional
capital and while we are currently in discussions with our
existing stockholders regarding additional financing there is no
assurance that additional capital can be raised in an amount which
is sufficient for us or on terms favorable to us and our
stockholders, if at all. If we do not obtain additional capital,
there is a significant doubt as to whether we can continue to
operate as a going concern and we will need to curtail or cease
operations or seek bankruptcy relief. If we discontinue
operations, we may not have sufficient funds to pay any amounts to
stockholders," the Company said in its quarterly report for the
period ended June 30, 2013.
CENGAGE LEARNING: Plan Pitches 3.3% Recovery to Gen. Unsec. Claims
------------------------------------------------------------------
Cengage Learning, Inc., et al., filed a Joint Plan of
Reorganization and Disclosure Statement dated Oct. 3, 2013, copies
of which plan documents and plan exhibits are available at:
http://bankrupt.com/misc/CENGAGE_DSOct2.PDF
Under the Disclosure Statement, the Debtors reveal that during the
Restructuring Support Agreement negotiations, they took extreme
care to advance and protect the interest of unsecured creditors --
including seeking to protect four primary sources of potential
recoveries for unsecured creditors and providint them with
appropriate time to conduct diligence, and discuss their
conclusions on, among other things, the value of those sources of
potential recoveries. Disputes, however, still exist with respect
to those potential recovery sources, the Debtors point out.
Nevertheless, they aim to continue to negotiate wth other major
stakeholders in the time leading up to the Disclosure Statement
and Plan hearings.
The Plan provides for the designation and treatment of 36 classes
of claims and interests.
Total estimated recovery amount for General Unsecured Claims is
$2.5 million, reflecting a 3.3% recovery.
Total First Lien Claims recovery amount is estimated at $3,380.4
million, reflecting a 72.9% recovery. Total Second Lien Claims
recovery amount is estimated at $41.2 million, reflecting a 5.5%
recovery.
As previously mentioned in the Oct. 9 issue of The Troubled
Company Reporter, the Plan contemplates:
* An approximate $4.3 billion reduction of funded debt;
* A post-reorganization capital structure consisting of (i) a
new first-out revolving credit facility of no less than $250
million and up to $400 million to be raised from third-parties
on market terms and (ii) no less than $1.5 billion first lien
term loan facility (subject to the terms of the Restructuring
Support Agreement);
* Holders of First Lien Secured Claims will receive their pro
rata share of (1) 100% of the New Equity in the Reorganized
Debtors less any equity distributed to unsecured creditors on
account of the value of any unencumbered assets of CLAI and
CLI (subject to dilution for the Management Incentive Plan);
(2) a new term loan facility described in the Rollover
Facility Term Sheet or the cash proceeds obtained from the
Debtors' entry into a new term loan facility from a third-
party (as applicable); and (3) cash on the Debtors' balance
sheets as of the Effective Date (other than the Disputed Cash)
after funding all payments and reserves required under the
Plan, less $50 million (subject to certain working capital
adjustments);
* Generally, unsecured creditors of CLAI and CLI (including the
Holders of First Lien Deficiency Claims) will receive their
Pro Rata share of the value of the Disputed Cash and Disputed
Copyrights, respectively, to the extent determined to be
unencumbered by valid liens or security interests, and the
value, if any, of 35% of the Debtors' international
operations, the value of the Debtors' non-wholly owned
subsidiaries (Hampton Brown and CourseSmart), and the value of
a certain piece of unencumbered real estate;
* The establishment of a trust to hold and maintain (a) the
value attributable to unencumbered or potentially unencumbered
assets of CLAI and CLI or (b) the actual unencumbered or
potentially unencumbered assets, in each case pending the
resolution of disputes regarding the valuation of such assets
and/or the validity of the liens on such assets;
* The terms of certain post-reorganization governance rights
applicable to the Holders of New Equity (including rights to
nominate directors);
* The cancellation of existing equity interests other than to
the extent necessary to preserve the general corporate
structure of the Debtors; and
* Certain other customary terms and provisions.
The Plan documents were signed by Dean D. Durbin, Esq., chief
financial officer of Cengage Learning Holings II, L.P.
Kirkland & Ellis LLP's Jonathan S. Henes, Esq., and Christopher
Marcus, Esq., in New York and James H.M. Sprayregen, Esq., in
Illinois represent the Debtors.
About Cengage Learning
Stamford, Connecticut-based Cengage Learning --
http://www.cengage.com/-- provides innovative teaching, learning
and research solutions for the academic, professional and library
markets worldwide. Cengage Learning's brands include
Brooks/Cole, Course Technology, Delmar, Gale, Heinle, South
Western and Wadsworth, among others. Apax Partners LLP bought
Cengage in 2007 from Thomson Reuters Corp. in a $7.75 billion
transaction. The acquisition was funded in part with $5.6 billion
in new debt financing.
Cengage Learning Inc. filed a petition for Chapter 11
reorganization (Bankr. E.D.N.Y. Case No. 13-bk-44106) on July 2,
2013, in Brooklyn, New York, after signing an agreement where
holders of $2 billion in first-lien debt agree to support a
reorganization plan. The plan will eliminate more than $4 billion
of $5.8 billion in debt.
First-lien lenders who signed the so-called plan-support agreement
include funds affiliated with BlackRock Inc., Franklin Mutual
Adviser LLC, KKR & Co. and Oaktree Capital Management LP. Second-
lien creditors and holders of unsecured notes aren't part of the
agreement.
The Debtors have tapped Kirkland & Ellis LLP as counsel, Lazard
Freres & CO. LLC as financial advisor, Alvarez & Marsal North
America, LLC, as restructuring advisor, and Donlin, Recano &
Company, Inc., as claims and notice agent.
CENGAGE LEARNING: Exclusive Periods Extension Sought
----------------------------------------------------
BankruptcyData reported that Cengage Learning filed with the U.S.
Bankruptcy Court a motion to extend the exclusive period during
which the Company can file a Chapter 11 plan and solicit
acceptances thereof through and including March 15, 2014 and
May 14, 2014, respectively.
The motion explains, "The Debtors have made significant progress
in their restructuring efforts since commencing these chapter 11
cases on July 2, 2013. The Debtors have stabilized their business,
brokered an agreement to use cash collateral on a consensual
basis. . .Despite this tremendous progress, work remains to be
done and this work - which is being done transparently and on a
consensual basis pursuant to a Mediation order and consistent with
a case schedule agreed upon by all of the Debtors' major
stakeholders - requires an extension of the Debtors' exclusive
periods to file and solicit votes on a chapter 11 plan of
reorganization."
The Court scheduled an Oct. 25, 2013 hearing on the motion.
About Cengage Learning
Stamford, Connecticut-based Cengage Learning --
http://www.cengage.com/-- provides innovative teaching, learning
and research solutions for the academic, professional and library
markets worldwide. Cengage Learning's brands include
Brooks/Cole, Course Technology, Delmar, Gale, Heinle, South
Western and Wadsworth, among others. Apax Partners LLP bought
Cengage in 2007 from Thomson Reuters Corp. in a $7.75 billion
transaction. The acquisition was funded in part with $5.6 billion
in new debt financing.
Cengage Learning Inc. filed a petition for Chapter 11
reorganization (Bankr. E.D.N.Y. Case No. 13-bk-44106) on July 2,
2013, in Brooklyn, New York, after signing an agreement where
holders of $2 billion in first-lien debt agree to support a
reorganization plan. The plan will eliminate more than $4 billion
of $5.8 billion in debt.
First-lien lenders who signed the so-called plan-support agreement
include funds affiliated with BlackRock Inc., Franklin Mutual
Adviser LLC, KKR & Co. and Oaktree Capital Management LP. Second-
lien creditors and holders of unsecured notes aren't part of the
agreement.
The Debtors have tapped Kirkland & Ellis LLP as counsel, Lazard
Freres & CO. LLC as financial advisor, Alvarez & Marsal North
America, LLC, as restructuring advisor, and Donlin, Recano &
Company, Inc., as claims and notice agent.
The company negotiated a proposed restructuring with the first-
lien holders to eliminate more than $4 billion in debt, according
to a statement.
CHA CHA ENTERPRISES: Hearing Tuesday on Cash Collateral Access
--------------------------------------------------------------
The Hon. Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the
Northern District of California will convene a hearing on Oct. 15,
2013, at 1:30 p.m., to consider Cha Cha Enterprises LLC's request
for continued use of cash collateral which secured creditor Wells
Fargo Bank, N.A. asserts an interest.
The Court authorized, on a third interim basis, the Debtor's use
of cash collateral to fund its business operations. The Court
also ordered that terms of the second further interim order
granting the Debtor's emergency motion for interim use of cash
collateral entered on Sept. 9, and on Sept. 10, are extended until
Oct. 20.
As reported in the Troubled Company Reporter on Sept. 18, 2013,
In addition to the variance for each line item category in each
weekly period during the budget period, permitted expenses for all
line item categories in each weekly period may exceed, in the
aggregate, $10,000 for that weekly period, all the foregoing
unless otherwise agreed to by the Bank or approved by an order of
the Court.
As adequate protection from any diminution in value of the
lender's collateral, the Debtor will grant replacement liens in
the dip collateral, subject to carve out on certain expenses.
Additionally, the Debtor will make adequate protection payments to
the Bank in the amount of $186,306.
About Cha Cha Enterprises
Cha Cha Enterprises, LLC, is a California limited liability
company formed in 1998 to purchase a fee interest in property
located at 1775 Story Road, San Jose, California and a leasehold
interest in property located at 1745 Story Road in San Jose. Cha
Cha's primary business is the rental of real property.
Cha Cha filed a Chapter 11 petition (Bankr. N.D. Calif. Case
No. 13-53894) on July 22, 2013. The Debtor estimated at least
$10 million in assets and liabilities.
Steven H. Felderstein, Esq., at Felderstein Fitzgerald Willoughby
& Pascuzzi LLP serves as counsel.
Nicolas De Lancie, Esq., at Jeffer Mangels Butler & Mitchell LLP
Robert B. Kaplan, P.C. represents secured creditor Wells Fargo
Bank, N.A.
CHA CHA ENTERPRISES: Seeks Feb. Extension of Lease Decision Period
------------------------------------------------------------------
The Hon. Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the
Northern District of California will convene a hearing on Nov. 8,
2013, at 2:15 p.m., to consider Cha Cha Enterprises, LLC's request
for lease extension period.
Paul J. Pascuzzi, Esq., at Felderstein Fitzgerald Willoughby &
Pascuzzi LLP, on behalf of the Debtor requested extension from
Nov. 19, until Feb. 17, 2014, of the Debtor's time to assume or
reject nonresidential real property leases.
Mr. Pascuzzi related that Cha Cha's primary business is the rental
of real property to Mi Pueblo, although Cha Cha also rents
property to third parties. Cha Cha's members hold 99% of the
shareholder interests in Mi Pueblo.
Mr. Pascuzzi noted that Cha Cha's decisions to assume or reject
the nonresidential real property leases depend upon the business
decisions to be made by Mi Pueblo with respect to the properties.
Until Mi Pueblo is able to report its financial results for at
least six months and consider its options with respect to Wells
Fargo Bank, Mi Pueblo will not know if a plan will be feasible and
whether to assume or reject its nonresidential real property
leases. In turn, Cha Cha will not know whether to assume or
reject the nonresidential real property leases.
In this relation, Cha Cha needs additional time to determine what
nonresidential real property leases it needs to assume or reject.
About Cha Cha Enterprises
Cha Cha Enterprises, LLC, is a California limited liability
company formed in 1998 to purchase a fee interest in property
located at 1775 Story Road, San Jose, California and a leasehold
interest in property located at 1745 Story Road in San Jose. Cha
Cha's primary business is the rental of real property.
Cha Cha filed a Chapter 11 petition (Bankr. N.D. Calif. Case
No. 13-53894) on July 22, 2013. The Debtor estimated at least
$10 million in assets and liabilities.
Steven H. Felderstein, Esq., at Felderstein Fitzgerald Willoughby
& Pascuzzi LLP serves as counsel to the Debtor.
Nicolas De Lancie, Esq., at Jeffer Mangels Butler & Mitchell LLP
Robert B. Kaplan, P.C. represents secured creditor Wells Fargo
Bank, N.A.
CHAMPION INDUSTRIES: Extends Maturity of Credit Facility to 2015
----------------------------------------------------------------
Champion Industries, Inc., various Champion subsidiaries, as
Guarantors, Marshall T. Reynolds, as shareholder and Big 4
Investments, LLC, as Lender and Administrative Agent, entered into
a Third Amended and Restated Credit Agreement dated Oct. 7, 2013.
Big 4 purchased the Company's outstanding syndicated debt from
Fifth Third Bank and the other Lenders for a price of $10 million.
Big 4 then simultaneously entered into the October 2013 Credit
Agreement with the Company pursuant to the provisions of Term Note
A for $10 million and related Guaranty Agreement and Stock Pledge
and Security Agreement all dated Oct. 7, 2013. The indebtedness
immediately prior to the note sale reflected a balance pursuant to
the Loan Purchase Agreement between Administrative Agent and the
Previous Lenders of approximately $19.9 million representing Term
Loan A, Term Loan B and Revolving Loans plus Previous Lenders'
accrued deferred fee and accrued interest of approximately $1.0
million.
The October 2013 Credit Agreement and related Term Note A,
Guaranty Agreement and Stock Pledge and Security Agreement as
further amended various provisions of the Restated Credit
Agreement dated Oct. 19, 2012, including but not limited to:
* October 2013 Credit Agreement maturity of April 1, 2015;
* Existing debt restructured fromTerm Loan A, Term Loan B, and
Revolving Credit Facility to Term Note A in the amount of
$10,000,000;
* The Company's debt will not have a revolving credit facility
component;
* Interest rate at the Wall Street Journal prime rate of
interest plus two percent;
* Principal payments due monthly at $50,000;
* $500,000 maturity or prepayment premium;
* Financial covenant of maximum capital expenditures of
$3,000,000 during any fiscal year;
* Personal guaranty of Marshall T. Reynolds;
* Stock Pledge and Security Agreement providing a third party
credit enhancement to fully support the credit facility
underwritten by the Administrative Agent.
* In consideration for the personal Guaranty Agreement of
Marshall T. Reynolds and Stock Pledge and Security Agreement,
the warrants currently held by the Previous Lenders are to be
assigned to Marshall T. Reynolds pursuant to discussions with
the Previous Lenders' Administrative Agent and counsel. The
anticipated timing of the completion of the warrant
assignment has not yet been determined. The warrants
represented $0.001 per share warrants issued for up to 30
percent (on a post-exercise basis) of the outstanding common
stock of the Company in the form of non-voting Class B common
stock and associated Investor Rights Agreement.
A copy of the Third Amendment is available for free at:
http://is.gd/IddaC2
CRO Quits
Timothy D. Boates of RAS Management Advisors, LLC, resigned as
chief restructuring officer of Champion Industries, Inc.,
effective Oct. 3, 2013.
About Champion Industries
Champion Industries, Inc., is engaged in the commercial printing
and office products and furniture supply business in regional
markets east of the Mississippi River. The Company also publishes
The Herald-Dispatch daily newspaper in Huntington, West Virginia
with a total daily and Sunday circulation of approximately 23,000
and 28,000.
Arnett Foster Toothman PLLC, in Charleston, West Virginia,
expressed substantial doubt about Champion Industries' ability to
continue as a going concern following the fiscal 2012 annual
results. The independent auditors noted that the Company has
suffered recurring losses from operations and has been unable to
obtain a longer term financing solution with its lenders.
The Company reported a net loss of $22.9 million in fiscal year
ended Oct. 31, 2012, compared with a net loss of $4.0 million in
fiscal 2011. Champion reported a $3.5 million net loss for the
quarter ended Jan. 31 on revenue of $22.6 million. As of July 31,
2013, the Company had $26.51 million in total assets, $33.35
million in total liabilities and a $6.83 million total
shareholders' deficit.
CHEMTURA CORP: To Sell Consumer Products Biz. to KIK for $135-Mil.
------------------------------------------------------------------
Chemtura Corporation on Oct. 10 disclosed that it has entered into
a stock purchase agreement to sell its Consumer Products business,
including dedicated manufacturing plants in the U.S. and South
Africa, to KIK Custom Products Inc. for $315 million in cash at
closing subject to certain customary pre- and post-closing
adjustments, including for working capital and assumed pension
liabilities. The Company also disclosed on Oct. 10 that its board
of directors has decided to explore a sale of the Company's
agrochemicals business, Chemtura AgroSolutions.
The agreement to sell the Consumer Products business, combined
with the decision to explore a sale of Chemtura AgroSolutions, is
aimed at delivering substantial near-term value to shareholders
while further focusing the Company on opportunities to create
additional value as a pure-play leader in the global development,
marketing, manufacture and sale of industrial specialty chemicals.
The Company expects to use a substantial portion of the proceeds
from the sale of Consumer Products and potential sale of the
agrochemicals business to return capital to shareholders. The
Company will also use proceeds to continue to make important
investments to strengthen and enable the continuing growth of the
remaining businesses, as well as pay down debt in order to return
towards its long-term stated total leverage target of
approximately 2X Adjusted EBITDA.
"Today's announcements represent the next step in our plan to
simplify and transform our portfolio, positioning us to better
benefit from secular industry growth trends in our chosen areas of
market focus and create a sustainable competitive advantage," said
Craig A. Rogerson, Chairman, President and CEO of Chemtura.
"Following the sales of our Consumer Products and Antioxidants
businesses, a sale of Chemtura AgroSolutions would transform
Chemtura into a more focused, pure-play industrial specialty
chemicals company with leading global positions that we believe
can capitalize on attractive end-market growth trends, and
continue delivering superior value to our shareholders and
opportunities for our employees for many years to come."
Potential Sale of Chemtura Agrosolutions
Mr. Rogerson continued, "A sale of Chemtura AgroSolutions at the
right price would be a compelling opportunity to unlock
significant value for our shareholders and a logical strategic
step for Chemtura at this time. We recognize the strength of our
agrochemicals business and its long-term prospects. However, we
believe our current share price does not fully reflect its
embedded value. We have received credible unsolicited expressions
of interest and the board has determined, consistent with its
fiduciary duties, that this is the right time to invite and
evaluate offers for the business. Importantly, while we think
this may be a compelling financial opportunity, we will complete a
sale only if we can realize an attractive value for the business."
Chemtura AgroSolutions is a provider of fungicides, herbicides,
insecticides, miticides, plant growth regulators and seed
enhancement products for select crops in attractive geographies,
with a strong new product portfolio and development program and
field service expertise. It is a healthy and profitable business
segment which generated revenues of $435 million and Adjusted
EBITDA of $89 million in the last twelve months ending June 30,
2013 (refer to reconciliation table). Chemtura AgroSolutions has
a global presence serving customers in more than 120 countries.
The Company has retained Morgan Stanley & Co. LLC to act as its
financial advisor in connection with the Chemtura AgroSolutions
divestiture process. Debevoise & Plimpton LLP is acting as its
legal counsel.
The Company notes that a definitive timetable for the sale process
has not been finalized and there can be no assurance that the
process will result in a sale of the Chemtura AgroSolutions
business.
More Focused Platform Going Forward
Following a sale of Consumer Products and potential sale of the
Company's agrochemicals business, Chemtura's core platform will be
focused and organized around two attractive segments: Industrial
Performance Products ("IPP") (petroleum additives and urethanes
products) and Industrial Engineered Products ("IEP") (flame
retardants and brominated products, and organometallics). These
segments have leading global industry positions in a number of
markets.
Mr. Rogerson added, "Chemtura is well-positioned to extend IPP and
IEP in the faster growing regions and in high opportunity
applications across markets that offer strong secular growth. For
example, in the fourth quarter, we will formally open our new
multipurpose plant in Nantong, China, and we are committed to
continuing to invest in these kinds of platforms for higher margin
products going forward."
Sale of Consumer Products
With regard to the sale of the Consumer Products business,
Mr. Rogerson said, "We have already addressed a portion of the
stranded costs associated with this segment and have plans in
place to rapidly eliminate the remainder after the transaction
closes. KIK is a respected manufacturer and employer, and we
believe that the Consumer Products business will be in good
hands."
With over $1.2 billion in sales in 2012, and more than 3,000
employees, Toronto, Canada-based KIK -- http://www.kikcorp.com--
is one of North America's largest contract and private label
manufacturers of consumer, institutional and industrial products.
The KIK network includes 14 integrated manufacturing facilities
strategically located throughout North America. KIK's product
lines include bleach, household cleaners and sanitizers, pool and
spa water treatment products and additives, personal care and
over-the-counter medicated and pharmaceutical products, all
supported by in-house technical expertise and value-added
services. KIK produces national brand and private label consumer
products for Fortune 500 companies.
The Consumer Products business is known as BioLab in North America
and Bayrol in Europe. The purchase price is subject to pre- and
post-closing adjustments for working capital and assumed pension
liabilities. The transaction is subject to customary closing
conditions and regulatory approvals with a targeted close date of
December 31, 2013.
Chemtura expects to begin accounting for its Consumer Products
segment as a "discontinued operation" in its third quarter 2013
financial statements. Before the end of November, Chemtura
anticipates making available historical GAAP and Managed Basis
statements of income reflecting the discontinued operations
treatment to assist investors in making prior period comparisons.
Third Quarter 2013 Update
Mr. Rogerson continued, "While we are excited about the future
opportunities for our industrial segments, especially with the new
Nantong multipurpose plant officially opening in the fourth
quarter, the near-term weakness we have seen in the first half of
2013 for the IEP segment continued in the third quarter.
Electronics and insulation foam applications remained weak and we
have concluded to record an increase in inventory reserves for
some slower moving electronics products. As a result, third
quarter operating income for IEP will be close to break-even.
This quarter, IPP absorbed the initial start-up costs of its new
plants in the Netherlands and China, but still expects to deliver
about the same level of operating income as it did in the third
quarter of 2012. Chemtura AgroSolutions has continued its strong
track record of improvement and looks set to show year-on-year
growth in operating income of approximately 15%. These
performance trends combined with the impact of adopting
discontinued operations treatment for the Consumer Products
segment will result in our third quarter earnings being
substantially lower than current consensus."
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 (Bankr. S.D.N.Y. Case No.
09-11233) on March 18, 2009. The Debtors disclosed total assets
of $3.06 billion and total debts of $1.02 billion as of the
Chapter 11 filing.
M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York,
served as bankruptcy counsel for the Debtors. Wolfblock LLP was
the Debtors' special counsel. The Debtors' auditors and
accountant were KPMG LLP; their investment bankers are Lazard
Freres & Co.; their strategic communications advisors were Joele
Frank, Wilkinson Brimmer Katcher; their business advisors were
Alvarez & Marsal LLC and Ray Dombrowski served as their chief
restructuring officer; and their claims and noticing agent was
Kurtzman Carson Consultants LLC.
The Official Committee of Equity Security Holders tapped
Jay Goffman, Esq., and David Turetsky, Esq., at Skadden Arps Slate
Meagher & Flom LLP, in New York, as counsel. the Official
Committee of Unsecured Creditors retained Daniel H. Golden, Esq.,
Philip C. Dublin, Esq., and Meredith A. Lahaie, Esq., at Akin Gump
Strauss Hauer & Feld LLP, in New York, as counsel.
Chemtura completed its financial restructuring and emerged from
protection under Chapter 11 in November 2010. In connection with
the emergence, reorganized Chemtura is now listed on the New York
Stock Exchange under the ticker "CHMT".
COMMUNITY HOME: Oct. 29 Hearing on Bid to Dismiss or Convert Case
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Mississippi
will convene a hearing on Oct. 29, 2013, at 1:30 p.m., to consider
a motion to dismiss or convert the Chapter 11 case of Community
Home Financial Services, Inc., to one under Chapter 7 of the
Bankruptcy Code.
Creditors Beher Holdings Trust, Edwards Family Partnership, LP had
requested for the case dismissal or case conversion.
About Community Home
Community Home Financial Services, Inc., filed a Chapter 11
petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012.
Community Home Financial is a specialty finance company located in
Jackson, Mississippi, providing contractors with financing for
their customers. CHFS operates from one central location
providing financing through its dealer network throughout 25
states, Alabama, Delaware, and Tennessee. The Debtor scheduled
$44,890,581 in total assets and $30,270,271 in total liabilities.
Judge Edward Ellington presides over the case.
Derek A. Henderson, Esq., Jonathan Bisette, Esq., and Roy Liddell,
Esq., of Wells, Marble & Hurst, PLLC, serve as counsel to the
Debtor.
The Court approved the Disclosure Statement for the Plan of
Reorganization dated Jan. 29, 2013. Pursuant to the Plan, the
Home Improvement loan portfolios are calculated with formulas to
allow for obtaining new home improvement loans while allowing for
the declining amortization of the current Home Improvement loan
portfolios, he discloses. The Joint Venture incomes are based
upon a 25% share of three of the pools and 50 percent of four of
the pools. The projections do not include the additional funds
the Debtor should recover from the "Debt X" transactions being
litigated in pending adversary proceedings.
COMMUNITY HOME: Edwards et al. Accuse Debtor of Delays
------------------------------------------------------
Edwards Family Partnership LP and Beher Holdings Trust responded
to Community Home Financial Services, Inc.'s expedited motion for
extension of time and request to stay matters or hold in abeyance.
According to EFP and BHT, the motion is another delaying tactic,
is without merit and must be denied. The motion does not provide
any legal basis upon which the Bankruptcy Court can stay the
entire bankruptcy case, except for the Debtor's continued
operations, pending the resolution of objections to fee
applications.
On Aug. 15, 2012, EFP and BHT filed their motion to appoint a
Chapter 11 trustee for the Debtor. Since that motion was filed,
the Debtor has unleashed an avalanche of litigation directed at
EFP and BHT specifically designed to shift the focus off of the
Debtor's conduct and avoid the trustee motion.
About Community Home
Community Home Financial Services, Inc., filed a Chapter 11
petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012.
Community Home Financial is a specialty finance company located in
Jackson, Mississippi, providing contractors with financing for
their customers. CHFS operates from one central location
providing financing through its dealer network throughout 25
states, Alabama, Delaware, and Tennessee. The Debtor scheduled
$44,890,581 in total assets and $30,270,271 in total liabilities.
Judge Edward Ellington presides over the case.
Derek A. Henderson, Esq., Jonathan Bisette, Esq., and Roy Liddell,
Esq., of Wells, Marble & Hurst, PLLC, serve as counsel to the
Debtor.
The Court approved the Disclosure Statement for the Plan of
Reorganization dated Jan. 29, 2013. Pursuant to the Plan, the
Home Improvement loan portfolios are calculated with formulas to
allow for obtaining new home improvement loans while allowing for
the declining amortization of the current Home Improvement loan
portfolios, he discloses. The Joint Venture incomes are based
upon a 25% share of three of the pools and 50 percent of four of
the pools. The projections do not include the additional funds
the Debtor should recover from the "Debt X" transactions being
litigated in pending adversary proceedings.
COUNTRYWIDE FINANCIAL: FDIC Urges Judge to Reject $500-Mil. Deal
----------------------------------------------------------------
Edvard Pettersson, writing for Bloomberg News, reported that the
Federal Deposit Insurance Corp. urged a U.S. judge to reject a
proposed $500 million class-action settlement between Bank of
America Corp.'s Countrywide unit and investors in devalued
mortgage-backed securities.
According to the report, the FDIC, as receiver for 19 failed banks
that owned the Countrywide securities, said in a filing on Oct. 8
in federal court in Los Angeles that the proposed settlement sets
aside only $41 million for the claims of 91 percent of the
investors in the securities while the lawyers for the lead
plaintiffs will receive $85 million.
The lead plaintiffs and their lawyers can only represent a "tiny
minority" of the investors because of a series of rulings by U.S.
District Judge Mariana Pfaelzer in 2011 in the federal securities
class-action, the report said. The judge said only the claims for
securities that were purchased by investors who filed the very
first lawsuits could proceed under federal securities law.
"The court's ruling on standing disarmed the named plaintiffs,"
the FDIC said, the report cited. "They could no longer use the
threat of litigation to press for a better offer, and they then
ceased to be able to fairly and adequately protect the interests
of the class."
The case is Maine State Retirement System v. Countrywide Financial
Corp., 10-cv-00302, U.S. District Court, Central District of
California (Los Angeles).
About Countrywide Financial
Based in Calabasas, California, Countrywide Financial Corporation
(NYSE: CFC) -- http://www.countrywide.com/-- originated,
purchased, securitized, sold, and serviced residential and
commercial loans.
In mid-2008, Bank of America completed its purchase of Countrywide
for $2.5 billion. The mortgage lender was originally priced at $4
billion, but the purchase price eventually was whittled down to
$2.5 billion based on BofA's stock prices that fell over 40% since
the time it agreed to buy the ailing lender.
CSN HOUSTON: Using Bankruptcy to Seize Network, Astros Owner Says
-----------------------------------------------------------------
Patrick Fitzgerald, writing for Daily Bankruptcy Review, reported
that the fight over a Houston regional sports network is heating
up in Texas with Houston Astros owner Jim Crane saying estranged
partner Comcast Corp. is trying use an involuntary bankruptcy
filing to seize control of the network from the baseball club and
the NBA's Houston Rockets.
About Houston Regional Sports Network
An involuntary Chapter 11 bankruptcy petition was filed against
Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet
Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013.
The involuntary filing was launched by three units of Comcast/NBC
Universal and a television-related company. The petitioners are:
Houston SportsNet Finance LLC, Comcast Sports Management Services
LLC, National Digital Television Center LLC, and Comcast SportsNet
California, LLC.
The petitioning creditors have filed papers asking the Bankruptcy
Judge to appoint an independent Chapter 11 trustee "to conduct a
fair and open auction process for the Network's business assets on
a going concern basis."
Houston Regional Sports Network is a joint enterprise among
affiliates of the Houston Astros baseball team, the Houston
Rockets basketball team, and Houston SportsNet Holdings, LLC --
"Comcast Owner" -- an affiliate of Comcast Corporation. The
Network has three limited partners -- Comcast Owner, Rockets
Partner, L.P., and Astros HRSN LP Holdings LLC. The primary
purpose of Houston Regional Sports Network is to create and
operate a regional sports programming service that produces,
exhibits, and distributes sports programming on a full-time basis,
including live Astros and Rockets games within the league-
permitted local territories.
The Network also has one general partner -- Houston Regional
Sports Network, LLC -- "General Partner" -- which, subject to
certain limitations, exercises exclusive management, supervision,
and control over the Network's properties and business. The
General Partner's sole purpose is to serve as the Network's
general partner; it has no authority or power to act outside of
that role. The General Partner has three members -- Comcast
Owner, JTA Sports, Inc. -- "Rockets Owner" -- and Astros HRSN GP
Holdings LLC -- "Astros Owner".
Counsel for the petitioning creditors are Howard M. Shapiro, Esq.,
Craig Goldblatt, Esq., and Jonathan Paikin, Esq., at Wilmer Cutler
Pickering Hale and Dorr LLP in Washington, D.C.; George W.
Shuster, Jr., Esq., at Wilmer Cutler in New York; Vincent P.
Slusher, Esq., and Andrew Zollinger, Esq., at DLA Piper; and
Arthur J. Burke, Esq., Timothy Graulich, Esq., and Dana M.
Seshens, Esq., at Davis Polk & Wardwell LLP.
CUBIC ENERGY: Calvin Wallen Held 45.8% Equity Stake at Oct. 8
-------------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Calvin A. Wallen, III, disclosed that as of
Oct. 8, 2013, he beneficially owned 50,131,548 shares of common
stock of Cubic Energy, Inc., representing 45.84 percent of the
shares outstanding. A copy of the regulatory filing is available
for free at http://is.gd/fffqCT
About Cubic Energy
Cubic Energy, Inc., headquartered in Dallas, Tex., is an
independent upstream energy company engaged in the development and
production of, and exploration for, crude oil and natural gas.
Its oil and gas assets and activities are concentrated in
Louisiana.
Philip Vogel & Co. PC, in Dallas, Texas, 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 experienced recurring net losses from operations and
has uncertainty regarding its ability to meet its loan obligations
which raise substantial doubt about its ability to continue as a
going concern.
For the nine months ended March 31, 2013, the Company incurred a
net loss of $4.39 million on $3.01 million of total revenues, as
compared with a net loss of $8.84 million on $5.99 million of
total revenues for the same period a year ago. The Company's
balance sheet at March 31, 2013, showed $17.24 million in total
assets, $28.88 million in total liabilities, all current, and a
$11.63 million total stockholders' deficit.
Bankruptcy Warning
"Our debt to Wells Fargo, with a principal amount of $25,865,110,
is due on March 31, 2013, and the Wallen Note, with a principle
amount of $2,000,000, is due April 1, 2013, and both are
classified as current debt. As of December 31, 2012, we had a
working capital deficit of $26,312,271.
Our ability to make scheduled payments of the principal of, to pay
interest on or to refinance our indebtedness depends on our
ability to obtain additional debt and/or equity financing, which
is subject to economic and financial factors beyond our control.
Our business will not generate cash flow from operations
sufficient to pay our obligations to Wells Fargo and under the
Wallen Note. We may be required to adopt one or more
alternatives, such as selling assets, restructuring debt or
obtaining additional equity capital on terms that may be onerous
or highly dilutive. Our ability to refinance our indebtedness
will depend on the capital markets and our financial condition in
the immediate future, as well as the value of our properties. We
may not be able to engage in any of these activities or engage in
these activities on desirable terms, which could result in a
default on our debt and have an adverse effect on the market price
of our common stock.
"We may not be able to secure additional funds to make the
required payments to Wells Fargo. If we are not successful, Wells
Fargo may pursue all remedies available to it under the terms of
the Credit Facility including but not limited to foreclosure on
our assets or force the Company to seek protection under
applicable bankruptcy laws. If either of those were to occur, our
shareholders might lose their entire investment," the Company said
in its quarterly report for the period ended Dec. 31, 2012.
"We will continue negotiating with Wells Fargo and Mr. Wallen to
either payoff or paydown these debts and extend their respective
maturity dates," the Company added.
DETROIT, MI: Former Mayor Sentenced to 28 Years
-----------------------------------------------
Matthew Dolan, writing for The Wall Street Journal, reported that
former Detroit Mayor Kwame Kilpatrick was sentenced on Oct. 10 to
28 years behind bars for standing atop a vast criminal conspiracy
that prosecutors say contributed to the city's collapse into
bankruptcy.
According to the report, in federal court in downtown Detroit, Mr.
Kilpatrick offered a general apology to the judge, his family and
the city of 700,000 he once served. But he insisted he never
directly took any money illegally from taxpayers.
Before announcing her sentence, U.S. District Judge Nancy Edmunds
chided Mr. Kilpatrick for his abuse of office and the harm he
caused to the city and its residents, the report related.
Mr. Kilpatrick, 43 years old, resigned from office in 2008, the
report added. But the federal criminal investigation into his
administration took years, eventually exposing lavish trips and
gifts funneled to Mr. Kilpatrick through a nonprofit fund for city
residents and cash bribes. The son of a former congresswoman, Mr.
Kilpatrick won election in 2001, attracting new businesses to the
city's downtown and making modest gains in public safety and other
city services.
But his tenure was cut short in 2008 after a scandal involving his
coverup of a city whistleblower lawsuit for which he later served
time on state charges, the report further related. In all, more
than a dozen former city officials from Mr. Kilpatrick's time in
office were convicted of corruption-related charges.
About Detroit, Michigan
The city of Detroit, Michigan, weighed down by more than
$18 billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter 9
petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The city's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
Detroit is represented by David G. Heiman, Esq., and Heather
Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett,
Esq., at Jones Day, in Los Angeles, California; and Jonathan S.
Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield
Paddock and Stone PLC, in Detroit, Michigan.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP.
DETROIT, MI: Given 35 Days to Deal With Pending Tort Claims
-----------------------------------------------------------
Law360 reported that the city of Detroit has 35 days to come up
with a plan to deal with several hundred lawsuits against it
before at least one litigant will be allowed to pursue her tort
claims, a judge ruled on Oct. 8.
According to the report, in a ruling from the bench, U.S.
Bankruptcy Judge Steven W. Rhodes said that if the city did not
file a motion that outlined some sort of attempt to liquidate all
tort claims currently pending against the city within those 35
days, he would lift the automatic stay.
About Detroit, Michigan
The city of Detroit, Michigan, weighed down by more than
$18 billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter 9
petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The city's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
Detroit is represented by David G. Heiman, Esq., and Heather
Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett,
Esq., at Jones Day, in Los Angeles, California; and Jonathan S.
Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield
Paddock and Stone PLC, in Detroit, Michigan.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP.
DEVON ENTERPRISES: 5th Circuit Revives School Contract Bias Suit
----------------------------------------------------------------
Law360 reported that the Fifth Circuit on Oct. 8 revived Alliance
Bus Charters' lawsuit accusing a Texas school district of
discrimination, finding that an email sent between school district
administrators might show that the district wrongly denied the
company's bid for a yearlong contract because of its bankruptcy.
According to the report, reversing a decision by a Texas federal
judge who granted summary judgment to Arlington Independent School
District, the appellate court agreed with Alliance's assertion
that the email should have been allowed as evidence regarding the
district's denial of a contract from 2010.
The case is Devon Enterprises, L.L.C. v. Arlington Independent Sch
Dist., Case No. 13-10028 (5th Cir.).
Devon Enterprises LLC, aka Alliance Bus Charters, a Fort Worth,
Texas-based charter bus company providing bus services to area
school districts and others, filed for Chapter 11 bankruptcy
(Bankr. N.D. Tex.Case No. 10-46792) on Oct. 20, 2010. Judge
Russell F. Nelms oversees the case. Eric A. Liepins, P.C., serves
as the Debtor's counsel. In is petition, the Debtor estimated
under $50,000 in assets and $1 million to $10 million in debts.
The petition was signed by Richard Bastow, manager.
DEX MEDIA EAST: Bank Debt Trades at 25% Off
-------------------------------------------
Participations in a syndicated loan under which Dex Media East LLC
is a borrower traded in the secondary market at 75.85 cents-on-
the-dollar during the week ended Friday, October 11, 2013,
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. This represents a decrease
of 0.28 percentage points from the previous week, The Journal
relates. Dex Media East LLC pays 250 basis points above LIBOR to
borrow under the facility. The bank loan matures on Oct. 24,
2016. The bank debt carries is not rated by Moody's rating and
Standard & Poor's rating. The loan is one of the biggest gainers
and losers among 212 widely quoted syndicated loans with five or
more bids in secondary trading for the week ended Friday.
About Dex One
Dex One Corp., headquartered in Cary, North Carolina, is a local
business marketing services company that includes print
directories and online voice and mobile search. The company
employs 2,200 people across the United States. Dex One provides
print yellow pages directors, which it co-brands with other
recognizable brands in the industry, including Century Link and
AT&T. It also provides the yellow pages websites DexKnows.com and
DexPages.com, as well as mobile apps Dex Mobile, Dex CityCentral.
Dex One and 11 affiliates sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 13-10534) on March 17 and 18, 2013, with a
prepackaged plan of reorganization designed to effectuate a merger
with SuperMedia Inc. Dex One disclosed total assets of $2.84
billion and total liabilities of $2.79 billion as of Dec. 31,
2012.
Houlihan Lokey is acting as financial advisor to Dex One, and
Kirkland & Ellis LLP is acting as its legal counsel. Pachulski
Stang Ziehl & Jones LLP is co-counsel. Epiq Systems serves as
claims agent.
This is Dex One's second stint in Chapter 11. Its predecessor,
R.H. Donnelley Corp., and 19 affiliates, including Dex Media East
LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11
protection (Bank. D. Del. Case No. 09-11833 through 09-11852) on
May 28, 2009. They emerged from bankruptcy on Jan. 29, 2010. On
the Effective Date and in connection with its emergence from
Chapter 11, RHD was renamed Dex One Corporation.
As of Dec. 31, 2012, persons or entities directly or indirectly
own, control, or hold 5% or more of the voting securities of Dex
One are Franklin Advisers, Inc., Hayman Capital Management LP,
Robert E. Mead, Restructuring Capital Associates LP, Paulson &
Co., Inc., and Mittleman Investment Management LLC.
The 2013 Debtors emerged from Chapter 11 bankruptcy protection on
April 30, 2013.
DIGITAL ANGEL: PositiveID Lowers Equity Stake to 9% at Sept. 30
---------------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, PositiveID Corporation disclosed that as of
Sept. 30, 2013, it beneficially owned 871,754 shares of common
stock of Digital Angel Corporation representing 9 percent of the
shares outstanding. PositiveID previously reported beneficial
ownership of 1,199,540 common shares or 13 percent equity stake as
of July 11, 2013. A copy of the amended filing is available for
free at http://is.gd/eUs8KP
About Digital Angel
Delray Beach, Florida-based Digital Angel Corporation's operations
now consist primarily of the VeriTeQ Acquisition Corporation.
VeriTeQ is engaged in the business of radio frequency
identification, technologies for implantable medical device
identification and dosimeter technologies for use in radiation
therapy treatment. On May 3, 2013, the Company sold its mobile
game business to MGT Capital Investments, Inc., and has accounted
for its mobile games division as discontinued operations.
The Company's balance sheet at June 30, 2013, showed $1.52 million
in total assets, $3.51 million in total liabilities, and a
stockholders' deficit of $1.99 million.
DIGITAL INSIGHT: S&P Assigns Preliminary 'B' CCR; Outlook Negative
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B'
corporate credit rating to Menlo Park, Calif.-based Digital
Insight Corp. The outlook is negative.
In addition, S&P assigned its 'B+' issue-level rating to the
company's proposed $385 million first-lien term loan due 2019 and
$20 million revolving credit facility due 2018. The '2' recovery
rating indicates S&P's expectation for substantial (70% to 90%)
recovery in the event of payment default. S&P also assigned its
'CCC+' issue-level rating to the company's proposed $215 million
second-lien term loan due 2020. The '6' recovery rating indicates
S&P's expectation for negligible (0% to 10%) recovery in the event
of payment default. All ratings are preliminary, and S&P will
finalize them following the close of the transaction and receipt
of final documentation.
"The preliminary ratings on Digital Insight reflect our view of
its 'weak' business risk profile resulting from a competitive
operating environment and narrow product focus, and its 'highly
leveraged' financial risk profile," said Standard & Poor's credit
analyst Christian Frank.
The negative outlook reflects S&P's view of Digital Insight's
meaningful near-term transition risks, including the risk that the
company's anticipated cost structure is not sustainable.
DOWNEY FINANCIAL: Wins $374 Million Tax Refund Fight
----------------------------------------------------
Peg Brickley, writing for Daily Bankruptcy Review, reported that
bondholders of Downey Financial Corp. won big on Oct. 8 when a
bankruptcy judge said the former home lender, not the Federal
Deposit Insurance Corp., has top claim on a $374 million tax
refund.
According to the report, the ruling from Judge Christopher Sontchi
means the FDIC gets an unsecured claim in Downey Financial's
bankruptcy -- and must share the refund with investors in $200
million worth of bonds issued by the bank-holding company.
The FDIC is overseeing the liquidation of Downey Financial's bank
unit, Downey Savings & Loan, in a proceeding separate from the
parent company's bankruptcy, the report related.
The agency argued it was entitled to the tax refund, which was
generated by massive losses in the collapse of the housing market,
the report further related.
Judge Sontchi ruled otherwise, finding that the FDIC-controlled
bank is a creditor in its parent's bankruptcy case, the report
said.
Downey Financial Corp. filed a Chapter 7 petition (Bankr. D. Del.
08-13041) on Nov. 25, 2008, after the Office of Thrift Supervision
closed its banking unit Downey Savings & Loan Association, F.A.,
on Nov. 21, 2008, and appointed the FDIC as receiver. Montague S.
Claybrook serves as the Chapter 7 Trustee, and is represented by
William H. Stassen, Esq., at Fox Rothschild LLP.
As soon as the bank was taken over, the assets of the thrift
subsidiary were purchased by U.S. Bank NA in a transaction
assisted by the FDIC. The Downey bank failure cost the FDIC
insurance fund $1.4 billion, the agency said at the time.
DRUMM CORP.: Moody's Lowers CFR & Sr. Sec. Loan Rating to 'B2'
--------------------------------------------------------------
Moody's Investors Service downgraded Drumm Corp.'s corporate
family rating to B2 from B1, probability of default rating to
B3-PD from B2-PD, and senior secured revolving credit facility and
term loan ratings to B2 from B1. The outlook is stable.
The downgrade of the corporate family rating to B2 reflects
Drumm's weaker operating performance and Moody's expectation that
credit metrics are unlikely to improve materially in the near term
given the challenges the company faces in growing its earnings as
an operator of post-acute care facilities.
According to Moody's analyst Adam McLaren, "A reduction in length
of stay and patient days, exacerbated by an unfavorable change in
payor mix, has caused margins to decline, resulting in higher
leverage and lower cash flow than Moody's had expected."
The following rating actions were taken:
Corporate family rating, downgraded to B2 from B1;
Probability of default rating, downgraded to B3-PD from B2-PD;
$75 million senior secured revolving credit facility, due 2016,
downgraded to B2 (LGD3, 32%) from B1, (LGD3, 31%);
$1.5 billion ($1.4 billion outstanding) senior secured term loan,
due 2018, downgraded to B2 (LGD3, 32%) from B1 (LGD3, 31%).
Ratings Rationale:
The downgrade of Drumm's corporate family rating to B2 from B1
reflects an unfavorable change in payor mix, primarily a shift to
Managed Care from Medicare, that on top of Drumm's already low
revenue quality mix has led to weaker operating results.
Reimbursement rates are lower for Managed Care than for Medicare,
which has reduced margins and weakened the company's credit
metrics. The payor mix shift combined with the reduction in length
of stay has also lead to fewer total patient days and reduced
occupancy. As a result, Debt-to-EBITDA is expected to increase to
over 5.5 times from around 4 times in 2011 and EBITDA margins are
likely to fall to below 11% from over 14% (per Moody's standard
adjustments). Moody's also anticipates that the company will need
to access the capital markets or amend its existing credit
agreement as the senior secured leverage ratio covenant steps down
in the coming quarters and Moody's do not anticipate that the
company will be able to comply.
The stable outlook incorporates the expectation that the company
will continue to generate positive free cash flow with EBITDA
margins approximately 10% and that it will be successful in
addressing covenant pressure. The stable outlook also assumes
occupancy rates will remain stable based on increasing admissions.
The ratings could be downgraded if the company's adjusted Debt to
EBITDA is sustained over 6.5x, adjusted EBITA to interest expense
declines below 1.25 times, and/or free cash flow turns negative on
a sustained basis. A deterioration in the company's liquidity
profile resulting from the inability to remain covenant compliant
could result in a downgrade. Additionally, material negative
developments in the reimbursement environment and/or a larger than
expected decline in patient days and payor mix could negatively
pressure the rating.
Although unlikely in the near term, the ratings could be upgraded
if the company were to experience growth in adjusted EBITDA and/or
repay debt such that adjusted debt leverage is sustained below 4.5
times with adjusted free cash flow to debt in the mid to high
single digits. An upgrade would also require improvement in
patient days, increased occupancy, and a stable payor mix.
Drumm Corp. through its wholly-owned subsidiaries is a leading
national provider of long-term care services. Drumm's subsidiaries
include Golden Gate National Senior Care LLC (includes skilled
nursing facilities and assisted living centers), Aegis Therapies
(contract rehabilitation business), and AseraCare (hospice). As of
June 30, 2013 Drumm's wholly-owned subsidiaries operated 302
skilled nursing facilities ("SNF"), 14 assisted living centers, a
real estate investment partnership, and 59 hospice locations. In
addition, through its subsidiaries, Drumm operates an
administrative services company as well as certain other ancillary
businesses. For the last twelve month period ended June 30, 2013,
Drumm generated revenue of approximately $2.7 billion.
EARL GAUDIO: Creditors Committee Balks at Bonus Payment
-------------------------------------------------------
The Official Unsecured Creditors' Committee in the Chapter 11
cases of Earl Gaudio & Son, Inc., filed with the Bankruptcy Court
a limited objection to custodian First Midwest Bank's motion to
pay bonus to employees.
On Sept. 13, 2013, the Debtor requested that the Court authorize
payment of bonuses equal to one week of pay for employees that
remain with the Debtor until the closing of the sale of the
Debtor's assets.
According to the Committee, it is not clear to the Committee why
the custodian waited until little more than one week prior to a
closing of the sale to file the "stay" bonus motion. This places
the Committee in the position of reviewing after the fact a
commitment presumably already made by the custodian.
On information and belief, some of the employees are being
retained by the purchaser, Skeff Distributing Company, Inc. In
addition to the incentive of receiving the normal compensation in
exchange for the services they performed, those employees had
ample incentive to perform their work for the prospect of
continued employment with the purchaser.
The Committee asks the Court to either deny the bonus motion until
further information is disclosed by the custodian or limit the
relief granted.
About Earl Gaudio & Son, Inc.
Earl Gaudio & Son, Inc., filed a Chapter 11 petition (Bankr. C.D.
Ill. Case No. 13-90942) on July 19, 2013. The petition was signed
by Angela E. Major Hart, as authorized signer of First Midwest
Bank, custodian. Judge Gerald D. Fines presides over the case.
The Debtor disclosed $11,849,187 in assets and $8,489,291 in
liabilities as of the Chapter 11 filing. John David Burke, Esq.,
and Ben T. Caughey, Esq., at Ice Miller, LLP, serve as the
Debtor's counsel.
The U.S. Trustee appointed five creditors to serve in the Official
Committee of Unsecured Creditors. The Committee tapped to retain
Evans, Forehlich, Beth & Chamley as its local counsel, and Rubin &
Levin, P.C., as its counsel.
EAST COAST BROKERS: Trustee to Continue Fowler, Willcox Hirings
---------------------------------------------------------------
Gerard A. McHale, Jr., the Chapter 11 trustee for the estates of
East Coast Brokers & Packers, Inc., et al., in an amended motion,
asks the Bankruptcy Court for permission to continue employment of
these professionals nunc pro tunc to June 21, 2013:
i) Fowler White Boggs P.A., solely as its special tax counsel;
and
ii) Willcox & Savage, P.C. as its special real estate counsel.
The trustee said that the firms had served him, and he intends to
hire, each of Fowler White and Wilcox and Savage as special
counsel upon the same terms and conditions contained in the
employment orders.
To the best of the trustee's knowledge, the professionals do not
hold or represent any adverse interest to the Debtors or to the
estates on any matters in which the professionals are engaged.
In addition, Fowler White is owed postpetition fees associated
with transactional work performed for the Debtors in the
approximate sum of $7,500.
Debi Evans Galler, Esq., at Berger Singerman LLP, represent the
trustee.
As reported in the Troubled Company Reporter on April 18, 2013,
the Debtors required the services of special counsel to provide
advice and consulting services in connection wit the Debtors'
business and real estate operations. In addition, the Debtors
needed the services of tax counsel to analyze and liquidate the
anticipated or actual claims of the Internal Revenue Service. The
IRS claims arise against East Coast from the failure to pay
certain 941 taxes and timely file payroll tax returns.
The firm's hourly rates range from $255 to $500.
About East Coast Brokers
East Coast Brokers & Packers, Inc., along with four related
entities, sought Chapter 11 protection (Bankr. M.D. Fla. Case No.
13-02894) in Tampa, Florida, on March 6, 2013. East Coast Brokers
& Packers disclosed $12,663,307 in assets and $75,181,975 in
liabilities as of the Chapter 11 filing. Scott A. Stichter, Esq.,
and Susan H. Sharp, Esq., at Stichter, Riedel, Blain & Prosser,
P.A., in Tampa, serve as counsel to the Debtors. Steven M.
Berman, Esq., and Hugo S. deBeaubien, Esq., at Shumaker, Loop, &
Kendrick, LLP, in Tampa, are the Debtors' special counsel.
In June 2013, the bankruptcy court approved the appointment of
Gerard A. McHale, Jr., to serve as Chapter 11 trustee. MLIC Asset
Holdings LLC and MLIC CB Holdings LLC asked the Bankruptcy Court
to appoint a Chapter 11 trustee, or, in the alternative, dismiss
the Debtors' Chapter 11 cases. According to the MLIC entities,
the Debtors, among other things had mishandled the potential rents
from employees, failed to pay taxes, failed to maintain insurance,
has inadequate security regarding the Debtors' personal and real
property, and delayed the filing of schedules and reports required
under the Bankruptcy Code.
Brian G. Rich, Esq., at Berger Singerman LLP, in Tallahassee,
Fla., represents the Chapter 11 trustee as counsel.
EASTMAN KODAK: BlueMountain Capital Owns 20.2% of Common Stock
--------------------------------------------------------------
Eastman Kodak Company filed with the U.S. Securities and Exchange
Commission on Oct. 8, 2013, Amendment No. 1 to its Form 13-D,
originally filed Sept. 13, 2013, to report that as of Sept. 30,
2013, BlueMountain Capital Management, LLC, owns a beneficial
ownership of 20.2% of the Company's Common Stock, par value $0.01
per share.
On Aug. 23, 2013, the Bankruptcy Court entered an order confirming
the revised First Amended Joint Chapter 11 Plan of Reorganization
of Eastman Kodak Company and its Debtor Affiliates. On Sept. 3,
2013, the Plan became effective pursuant to its terms and the
Debtors emerged from their Chapter 11 cases.
According to the Schedule 13D/A, pursuant to the Plan, Eastman
Kodak issued to the BlueMountain Funds, on Sept. 30, 2013, an
aggregate of an additional 599,655 shares of Common Stock and, on
Oct. 1, 2013, mandatorily net-share settled warrants to purchase
an aggregate of (i) 208,375 of Common Stock at an exercise price
of $14.93 per share and (ii) 208,375 shares of Common Stock at an
exercise price of $16.12 per share. The additional shares of
Common Stock and the warrants were issued in connection with
distributions to the BlueMountain Funds as former unsecured
creditors on account of their unsecured claims against the Debtors
outstanding immediately prior to the effectiveness of the Plan.
A copy of the Schedule 13D/A, filed Oct. 8, 2013, is available at:
http://is.gd/x4I1Yk
A copy of the Schedule 13D, filed Sept. 13, 2013, is available at
http://is.gd/CtoXs5
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 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.
U.S. Bankruptcy Judge Allan Gropper confirmed the plan on August
20, 2013. Kodak and its affiliated debtors officially emerged
from bankruptcy protection on Sept. 3, 2013.
Mark S. Burgess, Matt Doheny, John A. Janitz, George Karfunkel,
Jason New and Derek Smith became members of Kodak's new board of
directors as of Sept. 3, 2013. Existing directors James V.
Continenza, William G. Parrett and Antonio M. Perez will continue
their service as members of the new board.
ECOTALITY INC: Cleared to Sell to Three Bidders for $4.3-Mil.
-------------------------------------------------------------
Marie Beaudette and Katy Stech, writing for DBR Small Cap,
reported that bankruptcy judge has cleared Ecotality Inc ., a
maker of electric vehicle charging stations, to sell its assets
after three separate bidders offered $4.3 million in total for the
company's assets at an auction earlier this week.
According to the report, Judge Randolph J. Haines of the U.S.
Bankruptcy Court in Phoenix on Oct. 9 signed off on the sale of
Ecotality's assets to the three bidders, according to lawyers
working on the case.
About Ecotality Inc.
Headquartered in San Francisco, California, Ecotality, Inc.
(Nasdaq: ECTY) -- http://www.ecotality.com-- is a provider of
electric transportation and storage technologies.
Ecotality Inc. along with affiliates including lead debtor
Electric Transportation Engineering Corp. sought Chapter 11
protection (Bankr. D. Ariz. Lead Case No. 13-16126) on Sept. 16,
2013, with plans to sell the business at an auction the following
month.
The cases are assigned to Chief Judge Randolph J. Haines. The
Debtors' lead counsel are Charles R. Gibbs, Esq., at Akin Gump
Strauss Hauer & Feld LLP, in Dallas, Texas; and David P. Simonds,
Esq., and Arun Kurichety, Esq., at Akin Gump Strauss Hauer & Feld
LLP, in Los Angeles, California. The Debtors' local counsel is
Jared G. Parker, Esq., at Parker Schwartz, PLLC, in Phoenix,
Arizona. The Debtors' claims & noticing agent is Kurtzman Carson
Consultants LLC.
Electric Transportation estimated assets of $10 million to $50
million and debt of $100 million to $500 million. Unlike most
companies in bankruptcy, Ecotality has no secured debt. It simply
ran out of money. There's $5 million owing on convertible notes,
plus liability on leases. Part of pre-bankruptcy financing took
the form of a $100 million cost-sharing grant from the U.S. Energy
Department. In view of the San Francisco-based company's
financial problems, the government cut off the grant when $84.8
million had been drawn.
On Sept. 24, 2013, the Office of the United States Trustee for
Region 14 appointed a committee of unsecured creditors.
ELCOM HOTEL: Seeks Approval of $1 Million OBH Loan
--------------------------------------------------
Elcom Hotel & Spa LLC and Elcom Condominium LLC ask the U.S.
Bankruptcy Court for the Southern District of Florida for
authorization to obtain a $1,000,000 postpetition loan from OBH
Funding, LLC, as a superpriority administrative expense claim.
According to the Debtor, during the pendency of the Chapter 11
cases, the Debtors funded postpetition operations through revenues
from the property, a capital contribution from F9 Properties, LLC
in the amount of $676,190, and debtor-in-possession financing from
OBH in the amount of $1,200,000 approved by the Court on June 5,
2013.
The significant aspects of the DIP Loan Agreement are:
a. OBH will provide the Debtors with up to $1,000,000 in
unsecured financing to be used in accordance with budgets approved
by OBH. The budgets will not be filed with the Court, but will be
available for inspection by the Associations upon request.
b. The outstanding balance of the DIP Loan will incur interest
at 9% per annum.
c. OBH will be entitled to a superpriority administrative
expense claim for the outstanding balance of the DIP Loan,
including all other amounts OBH is entitled to pursuant to the DIP
Loan Agreement.
d. The DIP Loan will be repaid upon the earlier of an event of
default, or upon the sale of any of the Debtors' assets in
connection with or prior to the confirmation of a Chapter 11 plan
of reorganization, or upon the confirmation of a Chapter 11 plan
of reorganization if the plan does not provide for a sale of any
of the Debtors' assets.
The Debtors needed the DIP Loan to fund the operational deficits
and other administrative expenses incurred during the Chapter 11
cases.
About Elcom Hotel
Elcom Hotel & Spa LLC and Elcom Condominium LLC sought Chapter 11
protection (Bankr. S.D. Fla. Case Nos. 13-10029 and 13-10031) on
Jan. 2, 2013, with plans to sell their hotel and condominium
property.
Elcom Condominium owns nine of the hotel condominium units at the
One Bal Harbor Resort & Spa. The resort is located on five acres
of land in Bal Harbor, Florida. The building and improvements
consist of 185 luxury residential condominium units and 124 hotel
condominium units. Elcom Hotel owns the hotel lot.
Elcom Hotel disclosed $10,378,304 in assets and $20,010,226 in
liabilities as of the Chapter 11 filing. The Debtor owes OBH
Funding, LLC, $1.8 million on a mortgage and F9 Properties, LLC,
formerly known as ANO, LLC, $9 million on a mezzanine loan secured
by a lien on the ownership interests in the project's owner. OBH
Funding and ANO are owned by Thomas D. Sullivan, the manager of
the Debtors.
Attorneys at Kozyak Tropin & Throckmorton, P.A., serve as
bankruptcy counsel to the Debtor. Duane Morris LLP is the special
litigation, real estate, and hospitality counsel. Algon Capital,
LLC, d/b/a Algon Group's Troy Taylor is the Debtors' Chief
Restructuring Officer.
The United States Trustee has said it will not appoint an official
committee of unsecured creditors for Elcom Hotel pursuant to
11 U.S.C. Section 1102 until further notice.
ELITE PHARMACEUTICALS: Inks License Agreement with Epic Pharma
--------------------------------------------------------------
Elite Pharmaceuticals, Inc., announced the signing of a
Manufacturing and License Agreement with Epic Pharma, LLC.
Pursuant to the Agreement, Epic will have the right to
manufacture, market and sell in the United States and Puerto Rico
12 generic products owned by Elite. Of the 12 products, Epic will
have the exclusive right to market six products and the non-
exclusive right to market six additional products.
Epic is also responsible for all regulatory and pharmacovigilance
matters related to the products and for all costs related to the
site transfer for all products. Pursuant to the Agreement, Elite
will receive a license fee and milestone payments. The license
fee will be computed as a percentage of the gross profit, as
defined in the Agreement, and earned by Epic as a result of sales
of the products. The license fee is payable monthly for the term
of the Agreement. The first milestone payment is due on or before
Nov. 15, 2013. Subsequent milestone payments are due upon the
filing of each product's supplement with the U.S. Food and Drug
Administration and the FDA approval of site transfer for each
product as specifically itemized in the agreement. The term of
the License Agreement is five years and may be extended for an
additional five years upon mutual agreement.
"We are delighted that Elite elected to further develop our
partnership by awarding this licensing agreement to Epic for these
recently acquired products. This is a natural extension of our
ongoing collaboration with Elite and allows Elite to leverage
Epic's ability to manufacture on a large scale," said Jeenarine
Narine, president and COO of Epic.
Nasrat Hakim, president and CEO of Elite, stated, "Epic continues
to be a valuable partner to us. Epic is able to provide
significant manufacturing resources for making these large volume
products and this will allow Elite to maximize our profit
potential for our generic business while we devote our resources
to the development of our abuse resistant products utilizing our
proprietary technology."
About Elite Pharmaceuticals
Northvale, New Jersey-based Elite Pharmaceuticals, Inc., is a
specialty pharmaceutical company principally engaged in the
development and manufacture of oral, controlled-release products,
using proprietary technology and the development and manufacture
of generic pharmaceuticals. The Company has one product,
Phentermine 37.5mg tablets, currently being sold commercially.
Elite Pharmaceuticals reported net income attributable to common
shareholders of $1.48 million on $3.40 million of total revenues
for the year ended March 31, 2013, as compared with a net loss
attributable to common shareholders of $15.05 million on $2.42
million of total revenues for the year ended March 31, 2012. The
Company's balance sheet at June 30, 2013, showed $10.39 million in
total assets, $16.79 million in total liabilities, and a
$6.40 million total stockholders' deficit.
Demetrius Berkower LLC, in Wayne, New Jersey, issued a "going
concern" qualification on the consolidated financial statements
for the year ended March 31, 2013. The independent auditors noted
that the Company has experienced significant losses resulting in a
working capital deficiency and shareholders' deficit. These
conditions raise substantial doubt about its ability to continue
as a going concern.
EMERITO ESTRADA: Wants 60-Day Extension of Plan Filing Period
-------------------------------------------------------------
Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, LLC, on
behalf of Emerito Estrada Rivera Isuzu De P.R., Inc., asks the
U.S. Bankruptcy Court for the District of Puerto Rico to grant a
60-day extension of the Debtor's exclusive period to file its
disclosure statement and plan of reorganization.
Mr. Hernandez on Oct. 1, 2013, explained that the Debtor needed at
least 45 days to finalize or perfect the lease agreements that
will generate the funds to fuel the Debtor's reorganization plan.
About Emerito Estrada
Emerito Estrada Rivera Isuzu De PR Inc., a car dealer in Puerto
Rico, filed a bare-bones Chapter 11 petition (Bankr. D.P.R. Case
No. 13-04608) in Old San Juan, on June 4, 2013. Alexis Fuentes
Hernandez, Esq., at Fuentes Law Offices, serves as counsel. The
Debtor says its sole asset is a real property is worth $16.5
million. It has $8.68 million in liabilities, of which $8.1
million is secured.
The Debtor disclosed $23,860,000 in assets and $16,285,186 in
liabilities as of the Chapter 11 filing.
EMERITO ESTRADA: U.S. Trustee Balks at Retroactive Hiring
---------------------------------------------------------
Guy G. Gebhardt, the Acting U.S. Trustee for Region 21, objected
to Emerito Estrada Rivera Isuzu De P.R., Inc.'s request to employ
Albert Tamarez Vasquez, CPA as its accountant.
The U.S. Trustee noted that the Debtor requested the application
to be approved retroactively to the filing date, June 14, 2013.
The U.S. Trustee said that it does not have an objection to the
approval of the employment of the accounting firm. However, the
U.S. Trustee would object to a post facto approval of the
employment stating that the Debtor has failed to show the
existence of extraordinary circumstances which would warrant the
retroactive approval.
The Debtor stated that the accounting firm will render general
accounting, taxes and financial consulting services in connection
with the bankruptcy petition. Specifically, the accounting firm
will work on these matters:
a) reconciliation of financial information to assist the Debtor
in the preparation of monthly operating reports;
b) assist and preparation of year-end reports to complete
corporate tax returns, reconciliation of books and records,
including representation before governmental agencies, as
they may be necessary;
c) assist in the reconciliation and clarification of proofs of
claim filed and amount due to creditors;
d) assist the Debtor and its counsel in the preparation of
the supporting documents for the Chapter 11 Reorganization
Plan.
The Debtor agreed this compensation:
a) $150 per hour of service rendered by Albert Tamarez
Vasquez, CPA;
b) $100 per hour of services rendered by CPA supervisor; and
c) $65 per hour of service rendered by staff accountant.
The accounting firm received a $1,000 retainer, which sum was
generated by the Debtor from the regular operations of the
business.
To the best of the Debtor's knowledge, the accounting firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Emerito Estrada
Emerito Estrada Rivera Isuzu De PR Inc., a car dealer in Puerto
Rico, filed a bare-bones Chapter 11 petition (Bankr. D.P.R. Case
No. 13-04608) in Old San Juan, on June 4, 2013. Alexis Fuentes
Hernandez, Esq., at Fuentes Law Offices, serves as counsel. The
Debtor says its sole asset is a real property is worth $16.5
million. It has $8.68 million in liabilities, of which $8.1
million is secured.
The Debtor disclosed $23,860,000 in assets and $16,285,186 in
liabilities as of the Chapter 11 filing.
EMPIRE RESORTS: High Court Denies CALP's Article 78 Petition
------------------------------------------------------------
The New York Supreme Court in Sullivan County on Oct. 2, 2013,
denied in its entirety the Article 78 petition filed by Louis
Cappelli's Concord Associates, L.P. (CALP), on or about May 14,
2013. The Petition named the Town of Thompson and its Town Board
and Planning Board and EPR Properties' wholly owned subsidiary,
EPT Concord II, LLC, as respondents. Monticello Raceway
Management, Inc., a wholly-owned subsidiary of Empire Resorts,
Inc, asked and received Intervenor/Respondent status in the
proceeding in light of its interest in the outcome of the matter.
In its Petition, CALP challenged the actions and determinations
made by the Thompson Parties regarding the phased development of
EPR's approximately 1,500 acres at the site of the former Concord
Resort in Sullivan County, New York. EPR and MRMI envision MRMI
developing a comprehensive resort destination that includes a
casino and a harness racetrack and may also include one or more
hotels, food and beverage outlets, a spa facility, retail venues,
space for conferences, meetings, entertainment and special events
in a multi-purpose conference space supported by separate meeting
rooms and parking facilities on a portion of the EPR Property. In
addition to the Casino Project, the Project is expected to include
a golf course and a resort including a variety of amenities.
Emanuel Pearlman, chairman of the Board of Empire Resorts stated,
"We are pleased with the Court's decision to deny CALP's petition,
consequently allowing us to stay on track as we finalize our
resort destination plans which we expect will create thousands of
new jobs and economic activity in the Mid-Hudson region of New
York State."
David Brain, president and CEO of EPR Properties stated, "We
continue to see positive decisions from both Federal and State
Courts in our litigation with CALP. We look forward to moving
ahead with the development of this destination resort."
Next steps for the project include submitting detailed
construction plans to the Town, and securing remaining regulatory
approvals, including approvals from the U.S. Army Corps of
Engineers and the New York State departments of Environmental
Conservation, Transportation, and Health, prior to the
commencement of construction.
About Empire Resorts
Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY)
-- http://www.empireresorts.com/-- owns and operates Monticello
Casino & Raceway, a video gaming machine and harness racing track
and casino located in Monticello, New York, 90 miles northwest of
New York City.
Empire Resorts reported a net loss applicable to common shares of
$2.26 million in 2012, as compared with a net loss applicable to
common shares of $1.57 million in 2011. As of June 30, 2013, the
Company had $60.48 million in total assets, $51.51 million in
total liabilities and $8.96 million in total stockholders' equity.
EMPRESAS INTEREX: Creditor Defends Bid to Block Cash Use
--------------------------------------------------------
Secured creditor PR Asset Portfolio 2013-1 International, LLC
replied to Empresas Interex, Inc.'s objection to PRAPI's urgent
motion to prohibit the use of cash collateral and for adequate
protection.
On Sept. 24, 2013, the Court entered an order and notice which
provided that PRAPI's urgent motion would be granted unless the
Debtor objected by Sept. 30.
According to PR Asset, the Debtor on Sept. 30 presented its
objection in which the Debtor misconstrues the applicable law
regarding the use of cash collateral, among other issues.
As reported in the Troubled Company Reporter on Sept. 20, 2013,
PRAPI said the Debtor currently generates cash from five known
leases of certain real property listed as property of the estate.
The Debtor's obligations are secured by real property mortgages
and a collateral assignment of rents that cover, among other
interests, "rents due" from the subject realty. The rents from
the Debtor's realty are the Debtor's principal source of cash.
PRAPI asserted that the rent being collected by the Debtor on a
monthly basis since the filing of the case constitute PRAPI's cash
collateral. PRAPI does not consent to any use of its Cash
Collateral and, accordingly, should not be forced to continue to
bear the risk of its erosion. It said the Debtor has no right to
use the Cash Collateral, and all such Cash Collateral should be
forthwith turned over to PRAPI.
PRAPI wants the Court to prohibit any use of cash collateral and,
in addition to the prohibition, grant PRAPI adequate protection on
an emergency basis by:
a. granting a first priority replacement lien on all of
the Debtor's post-petition assets;
b. requiring an accounting of all cash collateral received
by or for the benefit of the Debtor since the Petition Date;
c. requiring that any cash collateral or property of PRAPI
that is in the possession, custody or control of the Debtor
or any of the insiders of the Debtor including but not
limited to the $90,375 in Debtor's bank account as of
Aug. 31, be turned over to PRAPI; and
d. prohibiting the Debtor from using any cash collateral of
PRAPI unless otherwise ordered by the Court.
In its objection, the Debtor said it needs to use the rent to pay
on the Effective Date of its consented to plan of reorganization
the Administrative Expenses, Priority Tax Claims, and other
operational costs, to consummate the Plan.
In a separate filing, Patricia I. Varela-Harrison, Esq., at
Charles A. Cuprill, P.S.C., Law Offices, on behalf of the Debtor
notified the Bankruptcy Court that it has withdrawn its motion to
strike document relating to urgent motion for entry of order
prohibiting the use of cash collateral and for adequate
protection.
O'Neill & Borges LLC represents PR Asset.
About Empresas Interex Inc.
San Juan, Puerto Rico-based Empresas Interex Inc. is engaged in
the development, construction, and lease of real estate. One of
the Debtor's construction project is known as Ciudad Atlantis at
Hato Bajo Ward, Arecibo, Puerto Rico.
Empresas Interex filed for Chapter 11 bankruptcy (Bankr. D.P.R.
Case No. 11-10475) on Dec. 7, 2011. Bankruptcy Judge Mildred
Caban Flores presides over the case. The company disclosed
$11,412,500 in assets and $9,335,561 in liabilities. The Debtor
is represented by Charles A. Cuprill P.S.C. Law Offices.
ENDICOTT INTERCONNECT: Can Sell Assets to Integrian
---------------------------------------------------
Marie Beaudette, writing for DBR Small Cap, reported that a
bankruptcy judge said Endicott Interconnect Technologies Inc. can
sell its assets to Integrian Holdings LLC, which won an auction
for the microelectronics company late last month.
According to the report, Judge Diane Davis of the U.S. Bankruptcy
Court in Utica, N.Y., signed an order last week clearing the
company to sell itself to Integrian in a deal that includes the
assumption of more than $6.1 million in liabilities, a $1.5
million note, $1 million in debt forgiveness and at least $350,000
in cash.
About Endicott Interconnect
Endicott Interconnect Technologies, Inc., and its affiliates filed
a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 13-bk-61156) in
Utica, New York, on July 10, 2013, to sell the business before
cash runs out by the end of September. David Van Rossum is the
Debtors' sole officer. Bond, Schoeneck & King, PLLC, is counsel
to the Debtor.
Based in Endicott, New York, and formed in 2002, EIT is the
successor to the microelectronics division of IBM Corp. The
products are used in aerospace, defense and medication
applications, among others.
The company sought Chapter 11 bankruptcy protection after
suffering $100 million in operating losses in the last four years.
In addition to $16 million in secured claims, trade suppliers are
owed $34 million. There is another $32 million owing for loans
made by shareholders. The company said the book value of property
is $36 million.
An official committee of unsecured creditors has been appointed in
the case with Avnet Electronics Marketing, Arrow Electronics,
Inc., Acbel Polytech, Inc., Cadence Design Systems, Inc.,
Orbotech, Inc., Tyco Electronics, and High Performance Copper
Foil, Inc. as members. The committee is represented by Arent Fox
LLP.
The business will be sold at auction on Sept. 24. Bids are due
Sept. 19. The hearing to approve sale is set for Sept. 26. The
first bid of $250,000 is coming come from an insider group. The
purchase offer is from company owned by minority shareholder James
T. Matthews. In addition to the cash, he would assume a
$6.1 million secured term loan of which he is already the owner.
There is about $10 million owing on two other secured loans.
The official creditors' committee said there could be
$20.8 million in claims to bring against insiders. In August, the
judge authorized the committee to conduct an investigation of the
insiders.
ENERGY FUTURE: May Soon Obtain Bankruptcy Loan Exceeding $3-Bil.
----------------------------------------------------------------
Beth Jinks and Jeffrey McCracken, writing for Bloomberg
Businessweek, reported that Energy Future Holdings Corp., the
Texas power generator taken private in the biggest leveraged
buyout ever, is close to obtaining a loan of more than $3 billion
ahead of a bankruptcy filing that may come this month, said four
people with knowledge of the matter.
According to the report, Citigroup Inc., JPMorgan Chase & Co.,
Bank of America Corp. and Morgan Stanley are the key lenders vying
to provide parts of the debtor-in-possession financing, and first-
lien creditors to Energy Future's Texas Competitive subsidiary
have been invited to participate, said the people, who asked not
to be named because the process is private. The final terms and
lenders may be decided next week, according to two of the people.
The size of the loan for the former TXU Corp., which has
fluctuated over the past few weeks, is now likely to be about $3.5
billion, said two of the people, the report related. Debtor-in-
possession financing is funding arranged by a company going
through the Chapter 11 bankruptcy process, which typically has
priority over existing debt, equity and other claims. Such a large
DIP may help reassure vendors, customers and regulators the
company can meet its obligations.
"The discussions that are underway right now are not about
valuation and mostly about how the losses will be allocated,"
James Hempstead, a credit analyst at Moody's Investors Service,
said in a telephone interview with Bloomberg. "We think a filing
will be organized and amenable as opposed to disorganized and
contentious."
About Energy Future Holdings, fka TXU Corp
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 percent-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.
Restructuring Talks With Creditors
In April 2013, Energy Future confirmed in a regulatory filing that
they are in restructuring talks with certain unaffiliated holders
of first lien senior secured claims concerning the Companies'
capital structure.
Energy Future retained retained Kirkland & Ellis LLP and Evercore
Partners to assist in the evaluation of restructuring options.
Creditors have reportedly retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP and Millstein & Co., L.P.
Dallas-based Energy Future has struggled with its debt load since
it was taken private in 2007 by KKR & Co., TPG Capital and Goldman
Sachs Capital Partners for a record $48 billion.
Creditors are working on a bankruptcy proposal to cut the
company's $43.6 billion of obligations before its November coupon
payment. Lenders turned down an initial proposal advanced by the
company, according to an April 15 regulatory filing.
ENERGY FUTURE: Fidelity Pitches Other Creditors on Restructuring
----------------------------------------------------------------
Mike Spector and Emily Glazer, writing for The Wall Street
Journal, reported that efforts by creditors of Energy Future
Holdings Corp. to reach a wide-ranging deal to address the Texas
power company's massive debt load suffered a setback earlier this
week when separate groups of lenders and bondholders gave a tepid
response to a proposal from another large creditor, the giant
mutual-fund firm Fidelity Investments, according to people
familiar with the matter.
According to the report, Fidelity holds debt at many of Energy
Future's subsidiaries and on Oct. 7 presented a plan for reworking
the company's finances at the midtown Manhattan offices of its
lawyers at Fried, Frank, Harris, Shriver & Jacobson LLP, in an
effort to bridge disagreements among creditors so the company can
pursue an organized bankruptcy filing before month's end, the
people said. It's not clear in what vehicles the debt is held at
Fidelity.
Fidelity proposed senior lenders owed more than $20 billion at
Texas Competitive Electric Holdings, an unregulated company
subsidiary that sells power in a competitive wholesale market,
forgive debt for a roughly 94% ownership stake in the parent
company, the people said, the report related. Energy Future's
private-equity owners would retain a roughly 2% stake, while
unsecured bondholders at the parent company would get about 4%,
under the proposal, they said.
Bondholders owed $1.5 billion at subsidiary Energy Future
Intermediate Holding Co. would receive a so-called tracking stock
at the parent company that would rise or fall based on the
performance of Oncor, the regulated business that delivers
electricity to consumers, the report further related. Energy
Future Intermediate Holding owns Oncor. But those bondholders were
cool to the proposal, in part over difficulties related to how the
tracking stock would be valued, some of the people said. Senior
lenders at Texas Competitive Holdings, meanwhile, worried that the
tracking stock could be confusing to investors and potentially
negatively impact their proposed equity at the parent company,
these people said.
KKR & Co., TPG, and Goldman Sachs Group Inc.'s private-equity arm
took TXU Corp., later renamed Energy Future Holdings, private in
2007 in a record buyout for roughly $32 billion and about $13
billion in assumed debt, the report recalled. They hoped natural
gas prices would rise and allow the Dallas-based company to charge
more for electricity. Instead, prices fell precipitously,
resulting in billions of dollars of red ink.
About Energy Future Holdings, fka TXU Corp.
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 percent-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.
Restructuring Talks With Creditors
In April 2013, Energy Future Holdings Corp., Energy Future
Competitive Holdings Company, Texas Competitive Electric Holdings
Company LLC, and Energy Future Intermediate Holding Company LLC
confirmed in a regulatory filing that they are in restructuring
talks with certain unaffiliated holders of first lien senior
secured claims concerning the Companies' capital structure.
The Companies expect to continue to explore all available
restructuring alternatives to facilitate the creation of
sustainable capital structures for the Companies and to otherwise
attempt to address the Creditors' concerns with the Restructuring
Proposal and Sponsor Proposal.
The Companies have retained Kirkland & Ellis LLP and Evercore
Partners to advise the Companies with respect to the potential
changes to the Companies' capital structure and to assist in the
evaluation and implementation of other potential restructuring
options.
The Creditors have retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP and Millstein & Co., L.P. to advise the Creditors and
to assist in the Creditors' evaluation of potential restructuring
options involving the Companies.
According to a Wall Street Journal report, people familiar with
the matter said Apollo Global Management LLC, Oaktree Capital
Management, Centerbridge Partners and GSO Capital Partners, the
credit arm of buyout firm Blackstone Group LP, all hold large
chunks of Energy Future Holdings' senior debt. Many of these
firms belong to a group being advised by Jim Millstein, a
restructuring expert who helped the U.S. government revamp
American International Group Inc.
According to the Journal, people familiar with Apollo's thinking
said Apollo recently enlisted investment bank Moelis & Co. for
additional advice to ensure it gets as much attention as possible
on the case given its large debt holdings.
ENERGYSOLUTIONS INC: Wants to Amend 2010 Credit Facility
--------------------------------------------------------
EnergySolutions, Inc., is seeking a proposed amendment with
respect to the Credit Agreement with JPMorgan Chase Bank, N.A., as
administrative agent, dated Aug. 13, 2010, as amended. The
proposed amendment is being sought to, among other things:
(i) extend the date by which the Company must reduce its debt
with respect to its senior secured term loans under the
Credit Agreement and the Company's 10.75 percent Senior
Notes due 2018; and
(ii) increase the applicable margin for the Company's senior
secured term loans under the Credit Agreement.
A copy of a presentation to be made to lenders party to the Credit
Agreement, dated Oct. 8, 2013, in connection with the Proposed
Amendment is available for free at http://is.gd/srpoBz
http://is.gd/srpoBz
About EnergySolutions
Salt Lake City, Utah-based EnergySolutions offers customers a full
range of integrated services and solutions, including nuclear
operations, characterization, decommissioning, decontamination,
site closure, transportation, nuclear materials management, the
safe, secure disposition of nuclear waste, and research and
engineering services across the fuel cycle.
EnergySolutions reported net income of $3.92 million in 2012, as
compared with a net loss of $193.64 million in 2011. The
Company's balance sheet at June 30, 2013, showed $2.44 billion
in total assets, $2.21 billion in total liabilities and $233.08
million in total equity.
Bankruptcy Warning
"Our senior secured credit facility contains financial covenants
requiring us to maintain specified maximum leverage and minimum
cash interest coverage ratios. The results of our future
operations may not allow us to meet these covenants, or may
require that we take action to reduce our debt or to act in a
manner contrary to our business objectives.
"Our failure to comply with obligations under our senior secured
credit facility, including satisfaction of the financial ratios,
would result in an event of default under the facilities. A
default, if not cured or waived, would prohibit us from obtaining
further loans under our senior secured credit facility and permit
the lenders thereunder to accelerate payment of their loans and
not renew the letters of credit which support our bonding
obligations. If we are not current in our bonding obligations, we
may be in breach of our contracts with our customers, which
generally require bonding. In addition, we would be unable to bid
or be awarded new contracts that required bonding. If our debt is
accelerated, we currently would not have funds available to pay
the accelerated debt and may not have the ability to refinance the
accelerated debt on terms favorable to us or at all particularly
in light of the tightening of lending standards as a result of the
ongoing financial crisis. If we could not repay or refinance the
accelerated debt, we would be insolvent and could seek to file for
bankruptcy protection. Any such default, acceleration or
insolvency would likely have a material adverse effect on the
market value of our common stock," the Company said in its annual
report for the year ended Dec. 31, 2012.
* * *
As reported in the Jan. 9, 2013 edition of the TCR, Standard &
Poor's Ratings Services placed its ratings, including its 'B'
corporate credit rating, on EnergySolutions on CreditWatch with
developing implications.
"The CreditWatch placement follows EnergySolutions' announcement
that it has entered into a definitive agreement to be acquired by
a subsidiary of Energy Capital Partners II," said Standard &
Poor's credit analyst Jim Siahaan.
EnergySolutions is permitted to engage in discussions with other
suitors, which may include other financial sponsors or strategic
buyers.
EUROPLAST LTD: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: EuroPlast, Ltd.
100 Industrial Lane
Endeavor, WI 53930
Case No.: 13-33464
Chapter 11 Petition Date: October 11, 2013
Court: United States Bankruptcy Court
Eastern District of Wisconsin (Milwaukee)
Judge: Hon. Margaret Dee McGarity
Debtor's Counsel: Leonard G. Leverson, Esq.
LEVERSON & METZ S.C.
225 East Mason Street, Suite 100
Milwaukee, WI 53202
Tel: 414-271-8503
Email: lgl@levmetz.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Harald Zacharias, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/wieb13-33464.pdf
EXIDE TECHNOLOGIES: Cole Bruce Acquires 69,674 Common Shares
------------------------------------------------------------
In an initial statement of beneficial ownership of securities on
Form 3, filed with the U.S. Securities and Exchange Commission on
Oct. 9, 2013, Cole Bruce, President, Ind. Energy Americas, reports
that he has acquired 69,674 shares of the Common Stock of Exide
Technologies.
A copy of the Form 3 submission is available at:
http://is.gd/uoJ1yT
About Exide Technologies
Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products.
Exide first sought Chapter 11 protection (Bankr. Del. Case No.
02-11125) on April 14, 2002 and exited bankruptcy two years after.
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl &
Jones LLP represented the Debtors in their successful
restructuring.
Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No.
13-11482) on June 10, 2013.
For the new case, Exide has tapped Anthony W. Clark, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang
Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial
advisor; Sitrick and Company Inc. as public relations consultant
and GCG as claims agent.
The Debtor disclosed $1.89 billion in assets and $1.14 billion in
liabilities as of March 31, 2013.
Exide's international operations were not included in the filing
and will continue their business operations without supervision
from the U.S. courts.
The Official Committee of Unsecured Creditors is represented by
Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as
co counsel. Zolfo Cooper, LLC serves as its bankruptcy
consultants and financial advisors.
FOCUS BRANDS: S&P Affirms 'B' CCR & Revises Outlook to Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B'
corporate credit rating on Atlanta-based Focus Brands Inc. and
revised the outlook to negative.
S&P also affirmed the 'B' issue-level rating on the company's
first-lien credit facilities. The '3' recovery rating is
unchanged. S&P affirmed the 'CCC+' issue-level rating on the
second-lien facility and the '6' recovery rating is unchanged.
"The ratings on Focus Brands reflect our assessment that the
company's business risk profile remains "weak" although the
McAlister's purchase adds some diversity and profits," said credit
analyst Helena Song. "Our view of its financial risk profile as
"highly leveraged" incorporates debt levels that spike from time
to time for dividends or acquisitions, free cash flow but limited
cash flow protection measures, and our expectation that debt-
financed dividends will likely resume in the next one to two
years. In S&P's opinion, these debt-funded shareholder
initiatives represent a very aggressive financial policy."
The outlook is negative. Although S&P believes continuing EBITDA
growth and debt reduction will likely lead to some credit ratio
improvement in the next several quarters, we could lower the
ratings if leverage does not improve to at least mid- to high-6x
by the end of next year, due to weaker-than-expected operating
performance or less rapid debt repayment. Such a scenario could
occur if revenue grows less than 30% (including the acquisition)
when operating margins decline 100 basis points next year
following the acquisition. This could also occur if the company
fails to use the bulk of its free operating cash flow to reduce
debt in the next several quarters.
S&P could revise the outlook to stable if operating performance
remains consistent with recent trends and leverage is unlikely to
be above 7x on a sustained basis. S&P believes the company's very
aggressive financial policies limit the potential for a higher
rating.
FOX TROT CORP: Case Summary & 16 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Fox Trot Corporation
6000 Sulphur Well Rd
Lexington, KY 40509
Case No.: 13-52471
Chapter 11 Petition Date: October 12, 2013
Court: United States Bankruptcy Court
Eastern District of Kentucky (Lexington)
Judge: Hon. Gregory R. Schaaf
Debtor's Counsel: Adam R. Kegley, Esq.
250 West Main Street, Suite 2800
Lexington, KY 40507-1742
Tel: (859) 231-0000
Email: akegley@fbtlaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jacquelyn D Yates, president.
List of Debtor's 16 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
A-1 Portable Restrooms LLC Maintenance $188
American Express Other $14,555
Bubalo Goode Sales & Bliss Legal Expenses $16,263
Commonwealth of Kentucky Taxes Unknown
David Beck Fees $11,837
Dell Jaggers Fees $374,868
Duane Cook & Associates Legal Expenses $3,602
PLC
Fayette County Public Taxes Unknown
Schools
Golden Burley Tobacco Trade Debt $35,000
Warehouse
Home Lumber Company Trade Debt $512
I-64 Tractor & Farm Supply Trade Debt $899
Inc
Lexington-Fayette Urban Taxes Unknown
Statewide Alarms Other $172
Sword Floyd & Moody PLLC Legal Expenses $21,480
Travelers Insurance Maintenance $6,674
Windstream Communications Utilities $336
FR 160: Gordon Silver's Withdrawal as Creditor Counsel Approved
---------------------------------------------------------------
The Hon. Randolph J. Haines, of the U.S. Bankruptcy Court for the
District of Arizona authorized the law firm of Gordon Silver to
withdraw as counsel of record for Flagstaff Ranch Golf Club, a
creditor in the Chapter 11 case of FR 160, LLC.
The firm, in its motion, stated that the Golf Club retained Gordon
Silver for purposes of providing legal services in exchange for
payment of fees and reimbursement of expenses, relating to its
role as creditor in the Debtor's case. On Aug. 6, 2013, Thomas E.
Littler, Esq., shareholder and employee of Gordon Silver,
terminated his relationship with Gordon Silver. In this relation,
on Sept. 5, 2013, the Golf Club terminated the attorney
relationship with Gordon Silver and indicated that it intended to
move forward in the Debtor's bankruptcy case with Mr. Litter as
its sole counsel.
About FR 160
FR 160 LLC, originally named IMH Special Asset NT 160 LLC, was
formed for the purpose of owning 51 residential lots and Tract H
at the Flagstaff Ranch Golf Club Community generally located in
Coconino County, Arizona. In January 2011, to resolve disputes
with the golf club, the parties entered into an agreement where
FR 160 delivered to the golf club a promissory note in the amount
of $4,950,000, a promissory note of $720,000 and a deed of trust
on the real property. FR 160 failed to make certain payments and
the golf club initiated the non-judicial foreclosure process.
FR 160 commenced bankruptcy to stop the trustee's sale of the
property. It filed a Chapter 11 petition (Bankr. D. Ariz. Case
No. 12-13116) in Phoenix on June 12, 2012.
FR 160, which claims to be a Single Asset Real Estate as defined
in 11 U.S.C. Sec. 101(51B), estimated assets of up to $50 million
and debts of up to $100 million. Attorneys at Snell & Wilmer
L.L.P., in Phoenix, serve as counsel.
The U.S. Trustee has not appointed an official committee in the
case due to an insufficient number of persons holding unsecured
claims against the Debtor that have expressed interest in serving
on a committee. The U.S. Trustee reserves the right to appoint a
committee should interest develop among the creditors.
Attorneys at Gordon Silver, in Phoenix, represent creditor
Flagstaff Ranch Golf Club as counsel. On Sept. 5, 2013, the Golf
Club terminated the attorney relationship with Gordon Silver and
indicated that it intended to move forward in the Debtor's
bankruptcy case with Thomas E. Littler, Esq., shareholder and
employee of Gordon Silver, as its sole counsel.
The Amended Plan dated April 1, 2013, provides that funds to be
used to make cash payments under the Amended Plan have been or
will be generated from (i) the new value contributed by IMHFC in
the amount of $500,000 to be deposited with the Debtor by no later
than the Effective Date, (ii) the revenues derived from the sale
of lots by the Debtor or the Reorganized Debtor; and (iii) the net
proceeds from any Debtor Causes of Action.
FREDERICK'S OF HOLLYWOOD: Fursa Held 85% Equity Stake at Sept. 26
-----------------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission Fursa Alternative Strategies LLC, Arsenal
Group, LLC, and William F. Harley disclosed that as of Sept. 26,
2013, they beneficially owned 87,701,513 shares of common stock of
Frederick's of Hollywood Group Inc. representing 85 percent of the
shares outstanding.
On Sept. 26, 2013, Arsenal, Fursa, HGI Funding, TTG, and Tokarz
Investments, entered into a non-binding consortium term sheet
agreement. Under the Consortium Term Sheet, the Consortium
Members agreed, among other things, to jointly deliver a non-
binding proposal to the Company's board of directors for the
acquisition of all of the publicly held Common Stock in a "going
private" transaction with the Company, and to use their
commercially reasonable efforts to work together to structure,
negotiate and do all things necessary or desirable, subject to the
Company's approval, to enter into definitive agreements in respect
of the transactions contemplated under the Proposal. Mr. Harley
is not a party to the Consortium Term Sheet.
A copy of the regulatory filing is available for free at:
http://is.gd/BKfeqQ
About Frederick's of Hollywood
Frederick's of Hollywood Group Inc. (NYSE Amex: FOH) --
http://www.fredericks.com/-- through its subsidiaries, sells
women's intimate apparel, swimwear and related products under its
proprietary Frederick's of Hollywood brand through 122 specialty
retail stores, a world-famous catalog and an online shop.
Frederick's of Hollywood sought bankruptcy in July 10, 2000. On
Dec. 18, 2002, the court approved the company's plan of
reorganization, which became effective on Jan. 7, 2003, with the
closing of the Wells Fargo Retail Finance exit financing facility.
The Company incurred a net loss of $6.43 million on $111.40
million of net sales for the year ended July 28, 2012, compared
with a net loss of $12.05 million on $119.61 million of net sales
for the year ended July 30, 2011. As of April 27, 2013, the
Company had $36.08 million in total assets, $46.35 million in
total liabilities and a $10.27 million total shareholders'
deficiency.
FREESEAS INC: Eliminates $30 Million Debt
-----------------------------------------
The Supreme Court of the State of New York approved the terms and
conditions of an exchange agreement between FreeSeas and Crede CG
III, Ltd, a wholly owned subsidiary of Crede Capital Group, on
Oct. 9, 2013.
Mr. Ion G. Varouxakis, chairman, president and chief executive
officer of the Company made the following comments: "We are
pleased to announce the extinguishment of approximately $30
million of debt, representing approximately one third of the
Company's total bank debt. This transaction will result in
significant gains, which are presently estimated to exceed $12
million. As a result, our balance sheet will be completely
transformed, resetting us in position for future growth."
Previously, the Company amended a settlement agreement with
Deutsche Bank Nederland N.V., and Crede became a party thereto and
agreed to purchase $10.5 million of outstanding indebtedness owed
by the Company to Deutsche Bank, subject to, among other things,
court approval of the Exchange Agreement. As a result of the
court approval, Crede will release $10.5 million to Deutsche Bank
Nederland N.V., presently held in escrow, and Deutsche Bank, upon
receipt of the funds, will, in accordance with the Settlement
Agreement, forgive the remaining outstanding indebtedness and
overdue interest owed by FreeSeas of approximately $19.5 million
in total as well as release all collateral associated with the
loan, including the lifting of the mortgages over the M/V Free
Maverick and the M/V Free Knight. The other $10.5 million of
outstanding indebtedness will be eliminated upon consummation of
the transactions contemplated by the Exchange Agreement.
The Company is reviewing the accounting treatment of the
transaction and preliminary expects to recognize a gain on
extinguishment of debt during the year ending Dec. 31, 2013. The
gain, which represents the difference between the fair value of
the equity interest granted by the Company and the carrying amount
of the debt, is estimated to be in excess of $12 million.
Additional information is available for free at:
http://is.gd/KiPLDn
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.
FURNITURE BRANDS: Incentive Plans Approved
------------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court approved
Furniture Brands International's motion to implement a key
employee incentive plan (KEIP) and key employee retention plan
(KERP).
As previously reported, "The KEIP provides incentive payments to
seven senior management employees, including insiders (the 'KEIP
participants'), based on two performance metrics: (a) a successful
sale or sales of the Debtors' lines of business at a range of
price levels, and (b) preservation and enhancement of the Debtors'
financial condition measured by meeting liquidity targets. The
KERP provided retention payments to 48 non-insider employees (the
KERP Participants) constituting 15, 25 or 30% of annual base
salary of each Participant. An additional $225,000 is allocated to
a discretionary pool for employees who may be added to participate
in the pool. It is essential to the Debtors that the KERP
Participants remain employed until the Sale Date. The KERP
Participants include employees from various functions, including,
but not limited to business development, sale/marketing, finance,
human resources, legal, IT, supply chain, and operations. Without
payments under the proposed KERP, the KERP participants are likely
to seek alternative employment, harming the value of the estates
and affecting the efficiency of the Sale Processes."
About Furniture Brands
Furniture Brands International (NYSE:FBN) --
http://www.furniturebrands.com-- engages in the designing,
manufacturing, sourcing and retailing home furnishings.
Furniture Brands markets products through a wide range of
channels, including company owned Thomasville retail stores and
through interior designers, multi-line/ independent retailers and
mass merchant stores. Furniture Brands serves its customers
through some of the best known and most respected brands in the
furniture industry, including Thomasville, Broyhill, Lane, Drexel
Heritage, Henredon, Pearson, Hickory Chair, Lane Venture,
Maitland-Smith and LaBarge.
On Sept. 9, 2013, Furniture Brands International, Inc. and 18
affiliated companies sought Chapter 11 protection (Bankr. D. Del.
Lead Case No. 13-12329).
Attorneys at Paul Hastings LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. Alvarez and Marsal
North America, LLC, is the restructuring advisors. Miller
Buckfire & Co., LLC is the investment Banker. Epiq Systems Inc.
dba Epiq Bankruptcy Solutions is the claims and notice agent.
Furniture Brands' balance sheet at June 29, 2013, showed $546.73
million in total assets against $550.13 million in total
liabilities.
The company has an official creditor's committee with seven
members. The creditors' panel includes the Pension Benefit
Guaranty Corp., Milberg Factors Inc. and five suppliers.
GETTY IMAGES: Bank Debt Trades at 11% Off
-----------------------------------------
Participations in a syndicated loan under which Getty Images Inc
is a borrower traded in the secondary market at 89.39 cents-on-
the-dollar during the week ended Friday, October 11, 2013,
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. This represents a decrease
of 0.19 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 carries Moody's B1 rating and Standard &
Poor's B rating. The loan is one of the biggest gainers and
losers among 212 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
About Getty Images
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.
GIPPSLAND SECURED: Noteholders Waiting to Learn Firm's Fate
-----------------------------------------------------------
Sarah Scopelianos at Weekly Times Now now reports that noteholders
waiting to learn the fate of Gippsland Secured Investments are
supportive of a rescue group's plan to re-capitalize the company.
About 350 people attended the first of three meetings in Gippsland
today to hear from the receiver, The Trust Company and a rescue
group, according to Weekly Times Now.
The report notes that GSI accounts have been frozen since July 19
after a review of the company's loan book. The company went into
receivership on September 3.
The report relates that an interim report forecasted investors
would see between an 80 to 90 cent return in the dollar.
Ernst & Young partner Adam Nikitins told Weekly Times Now the
first meeting in Bairnsdale was attended by about 350 noteholders
who heard from him as the receiver.
Mr. Nikitins said the rescue group's proposal to "re-capitalise"
the company had "threshold issues" but receivers would continue to
work with the group, the report relates.
The report discloses that Mr. Nikitins said the meeting showed
noteholders appeared supportive of the re-capitalization plan.
The report relays that the Trust Company's representative David
Grbin said the first interim distribution payments had been sent
to noteholders early this week in the mail.
The report adds that Mr. Grbin said the Trust had been working
with the GSI board for about 10 months about issues including low
levels of equality.
GLW EQUIPMENT: Hearing on Cash Use Continued Until Oct. 23
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota continued
until Oct. 23, 2013, at 2 p.m., the hearing to consider GLW
Equipment Leasing LLC's continued access to cash collateral.
The Court will also consider secured creditor General Electric
Capital Corporation's objection to the Debtors' motion for cash
use.
GECC requested that the Court deny the Debtor's motion and
proposed order on the grounds that the Debtor has failed to offer
adequate protection to GECC and the Debtor's proposed use of cash
collateral will erode and further diminish the value of GECC
collateral including proceeds of its collateral.
As reported in the Troubled Company Reporter on Oct. 1, 2013, the
Debtor projects that it can operate in the ordinary course through
Dec. 31, 2013, with use of cash collateral and without additional
post petition financing. The Debtor said it has a need to use
cash collateral through December 31, 2013, to pay operating
expenses in the amounts identified in the Budget. If the Debtor
is not permitted to use cash collateral in the amounts and for the
purposes set forth in the budget from Sept. 25, through Dec. 31,
the Debtor cannot continue to operate.
The Debtor is a Minnesota limited liability company formed to own
and manage a truck and trailer equipment lease portfolio. As of
the Petition Date, the total debt incurred, owing and secured by
the Equipment is $17,888,993. The Equipment Debt was first
incurred by the three members of the Debtor -- Warren Cadwallader,
Lee Cadwallader and Gale Werner.
The Debtor proposes, as adequate protection for the Equipment
Lenders, to grant (i) replacement liens in the Equipment Lenders
respective collateral; and to (ii) report and account for the cash
proceeds from use of the Equipment.
As additional adequate protection, the Debtor proposes, on or
before the 27th day of each calendar month commencing Sept. 27, to
make interest payments at the rate of 3-1/2% per annum and
principal reduction payments to each Equipment Lender. The
interests of the Equipment Lenders are adequately protected by the
replacement liens and monthly cash payments.
The Debtor notes that prior to the hearing on the Cash Collateral
Motion, it may enter into a stipulation with one or all of the
Equipment Lenders concerning use of cash collateral, adequate
protection and other related matters. In the event the Debtor
enters into any such stipulation, the Debtor will seek approval of
the stipulation without further notice of hearing pursuant to
Bankruptcy Rule 4001(d)(4).
About GLW Equipment Leasing
GLW Equipment Leasing, LLC, a Minnesota limited liability company
formed to own and manage a truck and trailer equipment lease
portfolio, filed a bare-bones Chapter 11 petition (Bankr. D. Minn.
Case No. 13-44202) in Minneapolis, Minnesota, on Aug. 27, 2013.
Warren Cadwallader signed the petition as president. The Debtor
estimated at least $10 million in assets and liabilities. Michael
F. McGrath, Esq., at Will R. Tansey, Esq., and Michael D. Howard,
Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey, P.A.,
Minneapolis, MN, serves as the Debtor's counsel. Judge Katherine
A. Constantine presides over the case.
GLW EQUIPMENT: Hearing Tuesday on GECC's Bid to Foreclose
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota will
convene a hearing on Oct. 15, 2013, at 10:30 a.m., to consider
creditor General Electric Capital Corporation's motion for relief
from the automatic stay in all of GLW Equipment Leasing, LLC's now
owned or hereafter acquired new and used equipment or inventory.
Objections, if any, are due Oct. 10.
According to GECC, as of the petition Date, the Debtor was
indebted to GECC in the amount of $2,402,833 pursuant to 15
separate Loan and security agreement which provided financing for
the purchase of the equipment. The loan agreements are in default
because the Debtor has failed to make payment when due.
GECC asserts that it lacks adequate protection of its interest in
the collateral since the Debtor has only one asset, the subleases
of the equipment.
About GLW Equipment Leasing
GLW Equipment Leasing, LLC, a Minnesota limited liability company
formed to own and manage a truck and trailer equipment lease
portfolio, filed a bare-bones Chapter 11 petition (Bankr. D. Minn.
Case No. 13-44202) in Minneapolis, Minnesota, on Aug. 27, 2013.
Warren Cadwallader signed the petition as president. The Debtor
estimated at least $10 million in assets and liabilities. Michael
F. McGrath, Esq., at Will R. Tansey, Esq., and Michael D. Howard,
Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey, P.A.,
Minneapolis, MN, serves as the Debtor's counsel. Judge Katherine
A. Constantine presides over the case.
GROUP 1 AUTOMOTIVE: S&P Raises Corp Credit Rating to 'BB+'
----------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Houston-based Group 1 Automotive Inc. to 'BB+' from
'BB'. The rating outlook is stable. S&P also raised its rating
on the company's senior unsecured debt to 'BB' from 'BB-'; the
recovery rating remains '5', indicating S&P's expectation that
lenders would receive modest (10%-30%) recovery in the event of a
payment default.
The ratings on Group 1 reflect S&P's view of its "satisfactory"
business risk profile and "significant" financial risk profile.
Group 1 is one of several large consolidators in the highly
competitive and significantly fragmented U.S. auto retailing
industry.
"We view Group 1's business risk profile as "satisfactory" because
we expect its resilient business model, with its diverse revenue
stream and variable cost structure, to support continued solid
profitability during the next two years," said credit analyst
Nancy Messer. The high-margin revenue that its parts and service
(P&S) operations generate is relatively stable compared with
vehicle sales, which have volatile revenue and lower margin, so
the P&S business should provide some revenue and margin stability
for Group 1 if the U.S. experiences a double-dip recession. Group
1's competitive position benefits from its established
relationships with automakers and the floorplan financing these
automakers provide, its variety of brand offerings, and its
employment of corporate-wide automated systems to bring
efficiencies to dealer management and customer service.
Although S&P expects U.S. new-vehicle sales growth in each year
through 2015, new-vehicle gross profit for the retailers remains
in the single digits. Retailers benefited from robust new-vehicle
sales that rose at a compound annual growth rate (CAGR) of nearly
12% from 2009 through 2012, but S&P expects a more modest 4% CAGR
from 2012 to 2015. S&P expects Group 1 to have manageable capital
spending and working capital needs, combined with tightly
controlled selling, general, and administrative expenses (SG&A),
to lead to good cash generation.
S&P's base-case assumptions for Group 1 are as follows:
-- Revenue growth of 10% on a CAGR basis through fiscal 2015;
-- Capital expenditures averaging 1.2% of revenue annually;
-- Acquisition of dealerships and real estate costing up to
$740 million cumulatively through 2015;
-- Free operating cash flow of about $150 million annually in
2013 and 2014; and
-- Share repurchases of about $20 million annually.
Group 1's new-vehicle unit sales benefit from some geographic
diversity: the U.S. accounted for 78% of unit sales in first-half
2013, followed by Brazil (13%) and the U.K. (9%). In the U.S.,
although new-vehicle sales are spread through many eastern and
western states, having different economic factors, unit sales are
concentrated in Texas and Oklahoma (50%) and California (14%).
This geographic diversity could change with future acquisitions,
as was the case following the U.K. and Brazilian acquisitions,
which differentiate Group 1's geographic profile from most of its
rated peers.
The company's new-vehicle sales are heavily weighted toward four
manufacturers: Toyota Motor Corp., Honda Motor Co. Ltd., Ford
Motor Co., and BMW AG. Each manufacture's vehicles are in high
demand and together accounted for 62% of Group 1's U.S. new-
vehicle sales in second-quarter 2013. S&P don't expect this brand
mix to change materially in the near term.
Profitability, as measured by EBITDA margin, is thin, at 3.6% for
the 12 months ended June 30, 2013, but it has been stable in
recent years. S&P expects Group 1 to maintain, or expand, this
margin in 2013 and 2014 because of expanding gross profit in its
P&S business. The company generates cash from its consistently
high-margin P&S operations (54% margin in second-quarter 2013),
which accounted for 41% of total gross profit for the second
quarter, and its tight focus on controlling SG&A as a percent of
gross profits, which were about 73.6% as of June 30, 2013.
Group 1's significant financial risk profile reflects S&P's view
that the company will generate discretionary free cash flow in
2013 and 2014. S&P also expects Group 1 to maintain a balanced
financial policy, using cash for acquisitions and capital
spending, which will keep debt leverage near current levels (2.8x)
or lower. S&P views the company's financial policy as aggressive,
reflecting the pace and geographic dispersion of its acquisitions.
S&P expects Group 1 to continue acquiring dealerships
opportunistically, funding them with cash from operations, the
revolving acquisition credit line, or mortgage debt. In the first
half of 2013 alone, Group 1 made acquisitions totaling
$173.3 million, including $90 million of cash and 1.45 million of
the company's common stock. These acquisitions included the
purchase of all of the stock of UAB Motors Participacoes S.A. in
Brazil, which consisted of 18 dealerships, 22 franchises, and five
collision centers; four Ford Motor Co. dealerships in the U.K.;
and one dealership in the U.S. Still, S&P also assumes that the
company will forgo acquisitions if its EBITDA and cash flow
weaken.
S&P's rating outlook on Group 1 is stable, reflecting its
assumption that its variable cost structure and extensive internal
control systems (for dealer management and customer
relationships), combined with its diverse revenue streams,
geographic locations, and brand mix, will enable it to generate
positive free cash flow (after capital expenditures) of about
$150 million annually, even if the U.S. economy remains lackluster
in the next two years. Standard & Poor's assumes Group 1 will
pursue a financial policy that balances business expansion and
shareholder returns with lease-adjusted leverage appropriate for
the rating. For the rating, S&P expects debt leverage to be 2.5x-
3.0x and funds from operations (FFO) to debt to be 25%-35%.
Leverage that remains permanently higher than S&P's target of
2.5x-3x due to a change in financial policy could trigger a
downgrade. S&P could lower its rating if leverage exceeds 3.0x
and FFO to debt falls to less than 25% for an extended period.
This could occur if gross margin, by our calculation, falls to 14%
or less, perhaps because of an economic reversal, and lease-
adjusted debt remains near the current level. It could also occur
if Group 1 takes on a material amount of debt to make
acquisitions.
It is unlikely S&P would raise the rating in the year ahead
because it expects Group 1 will continue to use cash for
acquisitions and some share repurchases, depending on
opportunities in the market. For an investment-grade rating, the
company would need to exhibit a pattern of continued successful
operating and financial performance that would demonstrate its
ability to manage the increasing complexity of its multiregional
businesses. For the investment-grade rating, S&P would also
expect a continued record of consistency in business strategy,
management expertise, and financial policy over time.
HAAS ENVIRONMENTAL: Panel Taps Lowenstein Sandler as Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Haas
Environmental, Inc. asks for permission from the U.S. Bankruptcy
Court for the District of New Jersey to retain Lowenstein Sandler
LLP as counsel for the Committee, effective as of Aug. 23, 2013.
The professional services that Lowenstein Sandler will provide the
Committee include, but are not limited to:
(a) providing legal advice as necessary with respect to the
Committee's powers and duties as an official committee
appointed under 11 U.S.C. Sec. 1102;
(b) assisting the Committee in investigating the acts,
conducts, assets, liabilities, and financial condition of
the Debtor, the operation of the Debtor's business,
potential claims, and other matters relevant to the case,
to the sale of assets or the formulation of a plan of
reorganization;
(c) participating in the formulation of a plan;
(d) providing legal advice as necessary with respect to any
disclosure statement and plan filed in this Chapter 11 case
and with respect to the process for approving or
disapproving disclosure statements and confirming or
denying confirmation of a plan;
(e) preparing on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers;
(f) appearing in Court to present necessary motions,
applications, and pleadings, and otherwise protecting the
interests of those represented by the Committee;
(g) assisting the Committee in requesting the appointment of a
trustee or examiner, should such action be necessary; and
(h) performing other legal services as may be required and that
are in the best interests of the Committee and creditors.
Lowenstein Sandler will be paid at these hourly rates:
Partners of the Firm $500-$985
Senior Counsel and Counsel $385-$685
Associates $275-$480
Paralegals and Assistants $160-$270
Lowenstein Sandler will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Mary E. Seymour, Esq., member of Lowenstein Sandler, assured the
Court that the firm 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 Debtors and their estates.
Lowenstein Sandler can be reached at:
Mary E. Seymour, Esq.
LOWENSTEIN SANDLER LLP
65 Livingston Avenue
Roseland, New Jersey 07068
Tel: (973) 597-2376
Fax: (973) 597-2377
E-mail: mseymour@lowenstein.com
Haas Environmental, Inc., filed a Chapter 11 petition (Bankr.
D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the
petition as president. Judge Kathryn C. Ferguson presides over
the case. The Debtor estimated assets and debts of at least
$10 million. Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor,
in Cherry Hill, New Jersey, serves as the Debtor's counsel.
HARTFORD FINANCIAL: Fitch Affirms 'BB+' Rating on Two Note Classes
------------------------------------------------------------------
Fitch Ratings has affirmed all ratings for the Hartford Financial
Services Group, Inc. (HFSG) and its primary property/casualty and
life insurance subsidiaries. The Rating Outlook is Stable.
Key Rating Drivers
Fitch's rationale for the affirmation of HFSG's ratings reflects
the company's reasonable financial leverage, sizable levels of
holding company cash and financial resources, and strategy to
focus on property/casualty, group benefits and mutual funds
businesses. The ratings also consider the risks associated with
the company's runoff annuity and life businesses, and HFSG's near-
term capital management initiative to reduce overall financial
leverage to reflect a significantly altered business profile
following the sales of its retirement plans and individual life
businesses in January 2013.
HFSG's net earnings have declined recently as property/casualty
profitability has been offset by losses related to its Talcott
Resolution runoff life operations and losses on extinguishment of
debt. The company reported a $441 million GAAP net loss to common
shareholders in the first six months of 2013, following a net loss
of $80 million posted for full-year 2012.
The net loss thus far in 2013 is primarily due to a $505 million
after-tax non-cash charge related to a deferred acquisition cost
(DAC) unlock charge largely from Japan variable annuity (VA) hedge
cost assumption changes, a $394 million after-tax net realized
capital loss principally from international VA hedge program
losses and a $102 million after-tax loss on the sale of Hartford
Life International, Ltd., HFSG's U.K. VA business, expected to
close by the end of 2013. HFSG also posted a $138 million after-
tax loss on extinguishment of debt related to the repurchase of
approximately $800 million of senior notes in the first quarter of
2013.
A key challenge for HFSG going forward remains the management of
the Talcott runoff business. Fitch would view favorably a
successful execution of opportunities to reduce the size and risk
of the annuity book of business from the company's U.S. annuity,
international annuity, and institutional and private placement
life insurance businesses while honoring the company's obligations
to its annuity contractholders.
HFSG's property/casualty operations reported a 99.5% GAAP combined
ratio for the first half of 2013. This included 4.5 points for
catastrophe losses and 3.3 points of unfavorable prior-year
reserve development, as the company strengthened net asbestos
reserves by $130 million in the second quarter of 2013 as part of
its annual ground-up asbestos reserve review. This underwriting
result is improved from 101.9% for full-year 2012, which included
7.1 points for catastrophe losses (3.5 points from Hurricane
Sandy) and no points for reserve development.
Fitch expects HFSG to maintain a financial leverage ratio at or
below 25% following the successful execution of the company's
near-term capital management plan to reduce debt through early
2014. HFSG's financial leverage ratio (excluding unrealized
gains/losses on fixed maturities) was 27.0% at June 30, 2013, in
line with 27.2% at Dec. 31, 2012, as overall debt reductions thus
far were offset by a decline in shareholders' equity due to the
net loss and a return of capital to shareholders through the
company's increased equity repurchase and common stock dividend
plan.
HFSG maintains financial flexibility with approximately $2.2
billion in holding company cash, fixed maturities and short-term
investments at June 30, 2013. This provides flexibility for
funding potential capital requirements in adverse markets and
announced capital management plans including debt repayment.
HFSG's operating earnings-based interest and preferred dividend
coverage has been reduced in recent years, averaging a low 3.5x
from 2008 to 2012. This reflects both constrained operating
earnings and increased interest expense and preferred dividends
paid on capital over this period. Through the first six months of
2013 coverage was 1.7x, but would have improved to 5.3x excluding
the DAC unlock charge. Fitch expects HFSG's run-rate operating
earnings-based interest and preferred dividend coverage to improve
to at least 5.0x over the next 12-18 months, with a reduced
overall level of fixed charges from lower financial leverage.
Rating Sensitivities
The key rating triggers that could result in an upgrade to HFSG's
debt ratings include a financial leverage ratio maintained near
20%, maintenance of at least $1 billion of holding company cash,
and interest and preferred dividend coverage of at least 6x.
Continued success with the strategic plan and successful seasoning
of run-off operations would also be considered favorably. Fitch
considers a rating upgrade to be unlikely in the near term for
HFSG's life and property/casualty insurance subsidiaries.
The key rating triggers that could result in a downgrade include
significant investment or operating losses that materially impact
GAAP shareholders' equity or statutory capital within the
insurance subsidiaries, particularly as they relate to any major
negative surprises in the runoff VA business; a financial leverage
ratio maintained above 25%; a sizable drop in holding company
cash; failure to improve interest and preferred dividend coverage;
and an inability to execute on the company's strategic plan.
Fitch affirms the following ratings with a Stable Outlook:
Hartford Financial Services Group, Inc.
-- Long-term Issuer Default Rating (IDR) at 'BBB+';
-- $200 million 4.75% notes due 2014 at 'BBB';
-- $289 million 4.0% senior notes due 2015 at 'BBB';
-- $167 million 7.3% notes due 2015 at 'BBB';
-- $275 million 5.5% notes due 2016 at 'BBB';
-- $415 million 5.375% notes due 2017 at 'BBB';
-- $295 million 4.0% senior notes due 2017 at 'BBB';
-- $320 million 6.3% notes due 2018 at 'BBB';
-- $413 million 6% notes due 2019 at 'BBB';
-- $499 million 5.5% senior notes due 2020 at 'BBB';
-- $796 million 5.125% senior notes due 2022 at 'BBB';
-- $298 million 5.95% notes due 2036 at 'BBB';
-- $295 million 6.625% senior notes due 2040 at 'BBB';
-- $325 million 6.1% notes due 2041 at 'BBB';
-- $177 million 6.625% senior notes due 2042 at 'BBB';
-- $298 million 4.3% senior notes due 2043 at 'BBB';
-- $600 million 7.875% junior subordinated debentures due 2042
at 'BB+';
-- $500 million 8.125% junior subordinated debentures due 2068
at 'BB+'.
Hartford Financial Services Group, Inc.
-- Short-term IDR at 'F2';
-- Commercial paper at 'F2'.
Hartford Life, Inc.
-- Long-term IDR at 'BBB';
-- $80 million 7.65% notes due 2027 at 'BBB-';
-- $63 million 7.375% notes due 2031 at 'BBB-'.
Hartford Life Global Funding
-- Secured notes program at 'A-'.
Hartford Life Institutional Funding
-- Secured notes program at 'A-'.
Hartford Life and Accident Insurance Company
-- Insurer Financial Strength (IFS) at 'A-'.
Hartford Life Insurance Company
-- IFS at 'A-';
-- Medium-term note program at 'BBB+'.
Hartford Life and Annuity Insurance Company
-- IFS at 'A-'.
Members of the Hartford Fire Insurance Intercompany Pool:
Hartford Fire Insurance Company
Nutmeg Insurance Company
Hartford Accident & Indemnity Company
Hartford Casualty Insurance Company
Twin City Fire Insurance Company
Pacific Insurance Company, Limited
Property and Casualty Insurance Company of Hartford
Sentinel Insurance Company, Ltd.
Hartford Insurance Company of Illinois
Hartford Insurance Company of the Midwest
Hartford Underwriters Insurance Company
Hartford Insurance Company of the Southeast
Hartford Lloyd's Insurance Company
Trumbull Insurance Company
-- IFS at 'A+'.
HESPERIA GROUP: Case Summary & 11 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Hesperia Group Investments, LLC
dba Holiday Inn Express Hotel & Suites
3001 E. Andy Devine Avenue
Kingman, AZ 86401
Case No.: 13-17867
Chapter 11 Petition Date: October 11, 2013
Court: United States Bankruptcy Court
District of Arizona (Yuma)
Judge: Hon. Eileen W. Hollowell
Debtor's Counsel: John R. Clemency, Esq.
GALLAGHER & KENNEDY PA
2575 East Camelback Road, Suite 1100
Phoenix, AZ 85016
Tel: 602-530-8040
Email: john.clemency@gknet.com
Craig Solomon Ganz
GALLAGHER & KENNEDY PA
2575 E Camelback Rd #1100
Phoenix, AZ 85016
Tel: 602-530-8080
Email: craig.ganz@gknet.com
Total Assets: $9.77 million
Total Liabilities: $11.32 million
The petition was signed by Nilay S. Patel, managing member.
A list of the Debtor's 11 largest unsecured creditors is available
for free at http://bankrupt.com/misc/azb13-17867.pdf
IDERA PHARMACEUTICALS: Pillar Pharma Held 19.9% Stake at Sept. 30
-----------------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Pillar Pharmaceuticals I, L.P., and its
affiliates disclosed that as of Sept. 30, 2013, they beneficially
owned 11,772,592 shares of common stock of Idera Pharmaceuticals,
Inc., representing 19.9 percent of the shares outstanding. Pillar
previously reported beneficial ownership of 9,024,079 common
shares as of May 7, 2013. A copy of the regulatory filing is
available for free at http://is.gd/3jcsow
About Idera Pharmaceuticals
Cambridge, Massachusetts-based Idera Pharmaceuticals, Inc., is a
clinical stage biotechnology company engaged in the discovery and
development of novel synthetic DNA- and RNA-based drug candidates
that are designed to modulate immune responses mediated through
Toll-like Receptors, or TLRs. The Company has two drug
candidates, IMO-3100, a TLR7 and TLR9 antagonist, and IMO-8400, a
TLR7, TLR8, and TLR9 antagonist, in clinical development for the
treatment of autoimmune and inflammatory diseases.
In the auditors' report on the consolidated financial statements
for the year ended Dec. 31, 2012, Ernst & Young LLP, in Boston,
Mass., expressed substantial doubt about Idera's ability to
continue as a going concern, citing recurring losses and negative
cash flows from operations and the necessity to raise additional
capital or alternative means of financial support, or both, prior
to Dec. 31, 2013, in order to continue to fund its operations.
The Company reported a net loss of $19.2 million on $51,000 of
revenue in 2012, compared with a net loss of $23.8 million on
$53,000 of revenue in 2011. Revenue in 2012 and 2011 consisted of
reimbursement by licensees of costs associated with patent
maintenance.
The Company's balance sheet at March 31, 2013, showed
$6.81 million in total assets, $4.10 million in total liabilities,
$5.92 million in series D redeemable convertible preferred stock,
and a $3.21 million total stockholders' deficit.
JACKSONVILLE BANCORP: Board OKs 1-for-20 Reverse Stock Split
------------------------------------------------------------
Jacksonville Bancorp, Inc., holding company for The Jacksonville
Bank, announced that its Board of Directors has approved a 1-for-
20 reverse stock split of its common stock and nonvoting common
stock. The Company anticipates that the reverse stock split will
be effective on or about Oct. 24, 2013. The Company's
shareholders had authorized the Board to approve a reverse stock
split at a ratio of up to 1-for-20 at the special meeting of
shareholders in February.
The reverse stock split is being implemented primarily for the
purpose of regaining compliance with the $1.00 per share minimum
closing bid price requirement for continued listing on the Nasdaq
Capital Market, although there is no assurance that this will be
achieved.
When the reverse split becomes effective, every 20 shares of
common stock held by a shareholder will automatically combine into
one new share of common stock, and every 20 shares of nonvoting
common stock held by a shareholder will automatically combine into
one new share of nonvoting common stock. No fractional shares
will be issued as a result of the reverse stock split; any
fractional shares that would have resulted from the reverse split
will be rounded up to the nearest whole share. The number of
authorized shares of common stock and nonvoting common stock will
be proportionately reduced as a result of the reverse split; there
will be no change in par value for those shares.
About Jacksonville Bancorp
Jacksonville Bancorp, Inc., a bank holding company, is the parent
of The Jacksonville Bank, a Florida state-chartered bank focusing
on the Northeast Florida market with eight full-service branches
in Jacksonville, Duval County, Florida, as well as the Company's
virtual branch. The Jacksonville Bank opened for business on
May 28, 1999, and provides a variety of community banking services
to businesses and individuals in Jacksonville, Florida.
Jacksonville Bancorp disclosed a net loss of $43.04 million in
2012, a net loss of $24.05 million in 2011 and a $11.44 million
net loss in 2010. The Company's balance sheet at March 31, 2013,
showed $520.89 million in total assets, $487.47 million in total
liabilities and $33.42 million in total shareholders' equity.
"Both Bancorp and the Bank must meet regulatory capital
requirements and maintain sufficient capital and liquidity and our
regulators may modify and adjust such requirements in the future.
The Bank's Board of Directors has agreed to a Memorandum of
Understanding (the "2012 MoU") with the FDIC and the OFR for the
Bank to maintain a total risk-based capital ratio of 12.00% and a
Tier 1 leverage ratio of 8.00%. As of December 31, 2012, the Bank
was well capitalized for regulatory purposes and met the capital
requirements of the 2012 MoU. If noncompliance or other events
cause the Bank to become subject to formal enforcement action, the
FDIC could determine that the Bank is no longer "adequately
capitalized" for regulatory purposes. Failure to remain
adequately capitalized for regulatory purposes could affect
customer confidence, our ability to grow, our costs of funds and
FDIC insurance costs, our ability to make distributions on our
trust preferred securities, and our business, results of
operation, liquidity and financial condition, generally,"
according to the Company's annual report for the year ended
Dec. 31, 2012.
JEFFERSON COUNTY, AL: Citigroup Violating Securities Law
--------------------------------------------------------
Kyle Whitmire, writing for All Alabama, reported that The Wall
Street investment bank leading Jefferson County's pitch to exit
Chapter 9 municipal bankruptcy could be violating securities law
if it serves as an underwriter in the deal, a lawsuit brought by
Jefferson County sewer ratepayers says.
According to the report, under the Dodd-Frank Wall Street reform
and Consumer Protection Act, an investment bank may not act as
both a financial advisor to a municipal issuer and as an
underwriter when that debt goes to market. Serving in both roles
could create a conflict of interest for the bank, and the practice
was outlawed in 2011.
That appears to have been what's happening as part of Jefferson
County's plan to exit bankruptcy, the report related.
"The reason for the rule is simple," plaintiff lawyers wrote, the
report further related. "The MSRB and the SEC regard it as a
conflict for a municipal dealer to gain the trust and confidence
of an issuer through advisory relationship and then switch to an
underwriting relationship where the financial rewards are
potentially far greater," the lawsuit said.
In July, the Jefferson County Commission hired Citigroup Global
Markets, Inc. to lead its team when the county returns to the
market to sell new warrants, the report said. If the county's
plan is approved by the court, those warrants would refinance the
remaining debt not conceded by the county's creditors.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers
at Bradley ArantBoult Cummings LLP and Klee, Tuchin, Bogdanoff&
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent. Jefferson estimated more than $1 billion in assets. The
petition was signed by David Carrington, president.
The bankruptcy judge in January 2012 ruled that the state court-
appointed receiver for the sewer system largely lost control as a
result of the bankruptcy. Before deciding whether Jefferson County
is eligible for Chapter 9, the bankruptcy judge will allow the
Alabama Supreme Court to decide whether sewer warrants are the
equivalent of "funding or refunding bonds" required under state
law before a municipality can be in bankruptcy.
U.S. District Judge Thomas B. Bennett ruled in March 2012 that
Jefferson County is eligible under state law to pursue a debt
restructuring under Chapter 9. Holders of more than $3 billion in
defaulted sewer debt had challenged the county's right to be in
Chapter 9.
In June 2013, the county reached settlement with holders of 78
percent of the $3.1 billion in sewer debt at the core of the
county's financial problems. The bondholders will be paid $1.84
billion through a refinancing, according to a term sheet. The
settlement calls for JPMorgan Chase & Co., the owner of $1.22
billion in bonds, to make the largest concessions so other
bondholder will recover more.
On June 30, 2013, Jefferson County filed a Chapter 9 plan of debt
adjustment. Pursuant to the Plan, sewer bondholders will receive
65 percent in cash. If they elect to waive claims against JPMorgan
and bond insurers, they receive 80 percent in cash. Bondholders
supporting the plan already agreed to waive claims and receive the
larger recovery. Existing sewer bonds will be canceled in
exchange for payments under the plan. The county will fund plan
distributions by selling new sewer bonds calculated to generate
$1.96 billion to cover the $1.84 billion earmarked for existing
sewer bondholders. JPMorgan has agreed to waive $842 million of
the sewer debt and a $657 million swap debt, resulting in an 88
percent overall write off by JPMorgan. To finance the new sewer
bonds, there will be 7.4 percent in rate increases for sewer
customers in each of the first four years. In later years, rate
increases will be 3.5 percent.
JEFFERSON COUNTY, AL: Creditors Back Bankruptcy Plan
----------------------------------------------------
Melinda Dickinson, writing for Reuters, reported that creditors in
the $4.2 billion municipal bankruptcy case involving Alabama's
Jefferson County have "overwhelmingly approved" the county's plan
of adjustment, Jefferson County Commission President David
Carrington said on Oct. 8.
According to the report, a group of creditors which included
pension funds and individual investors had until an Oct. 7
deadline to submit their votes on a bankruptcy exit plan approved
in August by the judge in the case. Carrington said the final
count will come later this week.
The approval comes after the county's biggest Wall Street
creditors, including JPMorgan Chase & Co and Bank of New York
Mellon, previously signed off on the plan, which will include
losses of as much as 70 cents on the dollar, the report related.
The negotiated plan promises to deliver only $1.835 billion to
sewer-system warrant holders owed $3.078 billion, with bondholder
losses on a scale not seen since the 1930s, the report said.
Jefferson County was the largest municipal bankruptcy case in U.S.
history until the city of Detroit in July sought protection from
creditors under Chapter 9 of the U.S. bankruptcy code with a debt
load exceeding $18 billion, the report noted. That case is
ongoing.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers
at Bradley ArantBoult Cummings LLP and Klee, Tuchin, Bogdanoff&
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent. Jefferson estimated more than $1 billion in assets. The
petition was signed by David Carrington, president.
The bankruptcy judge in January 2012 ruled that the state court-
appointed receiver for the sewer system largely lost control as a
result of the bankruptcy. Before deciding whether Jefferson County
is eligible for Chapter 9, the bankruptcy judge will allow the
Alabama Supreme Court to decide whether sewer warrants are the
equivalent of "funding or refunding bonds" required under state
law before a municipality can be in bankruptcy.
U.S. District Judge Thomas B. Bennett ruled in March 2012 that
Jefferson County is eligible under state law to pursue a debt
restructuring under Chapter 9. Holders of more than $3 billion in
defaulted sewer debt had challenged the county's right to be in
Chapter 9.
In June 2013, the county reached settlement with holders of 78
percent of the $3.1 billion in sewer debt at the core of the
county's financial problems. The bondholders will be paid $1.84
billion through a refinancing, according to a term sheet. The
settlement calls for JPMorgan Chase & Co., the owner of $1.22
billion in bonds, to make the largest concessions so other
bondholder will recover more.
On June 30, 2013, Jefferson County filed a Chapter 9 plan of debt
adjustment. Pursuant to the Plan, sewer bondholders will receive
65 percent in cash. If they elect to waive claims against JPMorgan
and bond insurers, they receive 80 percent in cash. Bondholders
supporting the plan already agreed to waive claims and receive the
larger recovery. Existing sewer bonds will be canceled in
exchange for payments under the plan. The county will fund plan
distributions by selling new sewer bonds calculated to generate
$1.96 billion to cover the $1.84 billion earmarked for existing
sewer bondholders. JPMorgan has agreed to waive $842 million of
the sewer debt and a $657 million swap debt, resulting in an 88
percent overall write off by JPMorgan. To finance the new sewer
bonds, there will be 7.4 percent in rate increases for sewer
customers in each of the first four years. In later years, rate
increases will be 3.5 percent.
JEH COMPANY: Oct. 15 Hearing on Continued Use of Cash Collateral
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
according to JEH Company, et al.'s case docket, will convene a
hearing on Oct. 15, 2013, at 1:30 p.m., to consider the Debtors'
continued use of Frost Bank's cash collateral.
As reported in the Troubled Company Reporter on Sept. 9, 2013, in
a fourth agreed interim order, JEH Company and Frost Bank agreed
to the Debtor's continued use of cash collateral until Sept. 15,
2013.
In connection with this, the interim order, the second interim
order and the third interim order remain in full force and effect,
including but not limited to the provisions for replacement liens
granted for the benefit of the secured lender, and the Debtor is
required to continue to comply with the terms and conditions of
the interim orders.
Pursuant to the first agreed interim order, JEH Leasing is
authorized to use of cash collateral, provided Frost Bank will
receive, as adequate protection, replacement lien and security
interest in and to any and all assets pledged to Frost Bank by JEH
Leasing on a prepetition basis.
Debtor Stallion Station is also authorized to use cash collateral
to pay quarterly fees to the United States Trustee. On Aug. 1,
the Debtor disclosed that Frost Bank did not claim a cash
collateral interest in the cash of Stallion Station.
About JEH Company
JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company,
Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case
Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013.
Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in
Ft. Worth, serves as counsel to the Debtors.
JEH Company was organized in 1982 by Jim and Marilyn Helzer.
According to http://www.jehroofingcompany.com/,JEHCO buys roofing
material directly from the manufacturer and sell it to
contractors, builders, and homeowners. JEH Leasing owns and
leases equipment and vehicles primarily for use in the business of
JEHCO. Stallion is in the quarter horse and thoroughbred horse
business.
In its schedules, JEH Company disclosed $13,606,753 and
$18,351,290 in liabilities as of the Petition Date.
JEH Stallion Station, Inc., disclosed $364,007 in assets and
$3,982,012 in liabilities as of the Petition Date.
JEH Leasing Company, Inc., disclosed $1,242,187 in assets and
$155,216 in liabilities as of the Petition Date.
JET ICU: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: Jet ICU Leasing, Inc.
c/o Fred M. Judy, Registered Agent
348 Shore Drive
Ozona, FL 34660
Case No.: 13-13491
Chapter 11 Petition Date: October 10, 2013
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Debtor's Counsel: John V O'Grady, Esq.
WILKES & MCHIGH, P.A.
One North Dale Mabry Highway
Tampa, FL 33609
Tel: 813-873-0026
Fax: 813-286-8820
Email: jogrady@wilkesmchugh.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
JONESBORO HOSPITALITY: May Use Ciena Cash Collateral Thru October
-----------------------------------------------------------------
Dallas Bankruptcy Judge Harlin D. Hale signed off on a second
agreed interim order allowing Jonesboro Hospitality, LLC, to use
cash collateral of Ciena Capital LLC -- as servicer for Bank of
New York Mellon Trust Company, N.A. f/k/a the Bank of New York
Trust Company, N.A., not in its individual capacity but solely as
Indenture Trustee under that Indenture dated as of March 1, 2006,
as the same may be amended from time to time, for the benefit of
the Indenture Trustee and the holders of Business Loan Express
Business Loan-Backed Notes, 2006-A and the Hedge Counter party, as
their respective interest may appear -- through October 2013.
The Debtor's proposed counsel, David L. Woods, announced that the
Debtor and the Lender agreed to extend the use of cash collateral
on an interim basis through October 2013.
On Sept. 17, Judge Hale first signed off on an interim order
allowing the Debtor to use the lender's cash collateral.
A final final hearing on the use of cash collateral is scheduled
to be held on Oct. 15, 2013 at 1:30 p.m.
A copy of the Second Agreed Interim Order dated Oct. 1, 2013, is
available at http://is.gd/NVMm5kfrom Leagle.com.
A copy of the First Agreed Interim Order dated Sept. 17, 2013, is
available at http://is.gd/YurJ2ufrom Leagle.com.
Jonesboro Hospitality, LLC -- fka Fairbridge Inns & Suites and fka
Jonesboro Holiday Inn -- in Dallas sought Chapter 11 bankruptcy
protection (Bankr. N.D. Tex. Case No. 13-34324) on Aug. 27, 2013.
Judge Harlin DeWayne Hale oversees the case. In its petition,
Jonesboro Hospitality estimated under $10 million in both assets
and debts. The petition was signed by Atul Nanda, managing
member.
The Debtor's proposed counsel is:
David L. Woods, Esq.
McGUIRE, CRADDOCK & STROTHER, P.C.
500 North Akard, Suite 3550
Dallas, TX 75201
Tel: (214) 954-6800
The Debtor previously hired Arthur I. Ungerman, Esq., and Joyce W.
Lindauer, Attorneys at Law, as counsel.
Howard Marc Spector, Esq., at Spector & Johnson, PLLC, in Dallas,
Texas, represents lender Ciena Capital LLC.
JOURNAL REGISTER: Set to Liquidate as Judge OKs Plan
----------------------------------------------------
Law360 reported that Journal Register Co., the local newspaper
company now known as Pulp Finish 1 Co. in its bankruptcy
proceedings, on Oct. 8 received a judge's approval of its plan to
liquidate its remaining assets following a sale of nearly all of
its property.
According to the report, the company, which is now wrapping up its
second bankruptcy in four years, sold its assets earlier this year
to CMH Acquisition Co., a unit of hedge fund Alden Global Capital
LLC now known as 21st Century Media Inc.
About Journal Register
Journal Register Company -- http://www.JournalRegister.com/-- was
the publisher of the New Haven Register and other papers in 10
states, including Philadelphia, Detroit and Cleveland, and in
upstate New York. JRC was managed by Digital First Media and is
affiliated with MediaNews Group, Inc., the nation's second largest
newspaper company as measured by circulation.
Journal Register, along with its affiliates, first filed for
Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.
09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher
LLP, served as counsel to the Debtors. Attorneys at Otterbourg,
Steindler, Houston & Rosen, P.C., represented the official
committee of unsecured creditors. Journal Register emerged from
Chapter 11 protection under the terms of a pre-negotiated plan.
Journal Register exited the 2009 restructuring with $225 million
in debt and with a legacy cost structure, which includes leases,
defined benefit pensions and other liabilities that have become
unsustainable and threatened the Company's efforts for a
successful digital transformation. Journal Register managed to
reduce the debt by 28% with the Company servicing in excess of
$160 million of debt.
Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case
No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH
Acquisition Co., an affiliate of funds managed by Alden Global
Capital LLC. The deal was subject to higher and better offers.
Alden Global is the holder of two terms loans totaling $152.3
million. Alden Global acquired the stock and the term loans from
lenders in Journal Register's prior bankruptcy.
Journal Register disclosed total assets of $235 million and
liabilities totaling $268.6 million as of July 29, 2012. This
includes $13.2 million owing on a revolving credit to Wells Fargo
Bank NA.
Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case.
Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D.
Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R.
Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner,
Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012
Debtors' counsel. SSG Capital Advisors, LLC, serves as financial
advisors. American Legal Claims Services LLC acts as claims
agent. The petition was signed by William Higginson, executive
vice president of operations.
Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells
Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the
Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin &
Martin LLP, serves as counsel to Wells Fargo, in its capacity as
Tranche A Agent and the Tranche B Agent.
The Official Committee of Unsecured Creditors appointed in the
case has retained Lowenstein Sandler PC as counsel and FTI
Consulting, Inc. as financial advisor.
The Journal Register bankruptcy has been renamed Pulp Finish I
Co., after the estate sold the newspaper business to lender and
owner Alden Global Capital Ltd., mostly in exchange for $114.15
million in secured debt and $6 million cash. After debts with
higher priority are paid, what's left from the cash and a $630,000
tax refund represents most of unsecured creditors' recovery.
There were no bids to compete with Alden's offer. Alden paid off
financing for the bankruptcy and assumed up to $22.8 million in
liabilities, thus taking care of most trade suppliers who
otherwise would have ended up as unsecured creditors. In
addition, the lenders waived their deficiency claims, so
recoveries by unsecured creditors won't be diluted.
On July 2, 2013, the Debtors filed a Joint Plan of Liquidation.
The Court approved adequacy of the Disclosure Statement on Aug.
29. Voting deadline on the Plan is Oct. 1 at :00 p.m. ET. The
hearing to consider confirmation of the Plan is currently
scheduled for Oct. 8.
KBI BIOPHARMA: Disclosure Statement Hearing Set for Nov. 19
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of North
Carolina will convene a hearing to consider the adequacy of the
disclosure statement explaining KBI Biopharma Properties LLC's
joint plan on Nov. 19, 2013, at 9:30 AM. Objections are due
Nov. 8.
As previously reported by The Troubled Company Reporter, the
Debtor sought bankruptcy protection to implement a jointly
proposed plan with owner Howard Frank Auman Jr., who filed a
personal bankruptcy this year.
The company owns about 28 acres, which has four buildings, with
about 305,000 square feet of rentable space, court papers show.
The space was originally built in 1985 by Mitsubishi to build
microchips, and has been converted to be used by life science
companies. Some portions would need to be renovated before being
usable. The rented space is occupied by two biopharmaceutical
development companies, KBI Biopharma Inc., which used to own the
debtor, and BioMerieux Inc., according to court documents.
After a sale fell through that would have let Mr. Auman pay
creditors in his individual bankruptcy, it was decided that KBI
Biopharma Properties would be put into Chapter 11 "to allow for it
to restructure its debt obligations and generate additional funds
to assist the individual debtor," Mr. Auman, "in being able to
properly market and sell his other assets," the company said in
its disclosure statement, which describes the reorganization plan.
The company and its owner plan to sell assets and collect rent
from the property prior to possibly selling it as well, and it's
projected that all creditors will be paid in full with interest
following the liquidation. Mr. Auman believes enough proceeds
will be generated from the sales that he will get a distribution,
according to court documents. Under the plan, PNL Durham LP which
holds a secured claim of about $11.5 million against the company,
backed by the property, would be paid over six years with a 20-
year amortization bearing 8.5 percent interest, according to court
papers.
The primary asset to be liquidated is stock owned by Mr. Auman,
either directly or through another company he owns, in KBI
Biopharma Corp., court papers show. The biopharmaceutical company
is owned by venture capitalists that have restrictions on the sale
of the stock. The owners intend to take the company to the public
market in three to five years. Mr. Auman and the court-appointed
examiner in his personal bankruptcy estimate that "the stock in
this company has a legitimate opportunity to be sold for an amount
that will be sufficient to pay all debt obligations owed in the
individual case, as well as the LLC debtor's case." The company
has requested that its case be jointly administered with its
owner's individual case.
The case is In re KBI Biopharma Properties LLC, 13-11304, U.S.
Bankruptcy Court, Middle District of North Carolina (Greensboro).
The Debtor is represented by Charles M. Ivey, III, Esq., at Ivey,
McClellan, Gatton, & Talcott, LLP, in Greensboro, North Carolina.
The Debtor discloses total assets of $23 million and total
liabilities of $11.77 million.
The Chapter 11 petition was signed by Howard Frank Auman, Jr.,
member/manager.
KBI BIOPHARMA: Creditor Objects to Proposed Cash Collateral Use
---------------------------------------------------------------
PNL Durham, L.P., objects to KBI Biopharma Properties, LLC's
motion for authority to use cash collateral, complaining that its
interests are not being adequately protected.
PNL is the holder of a claim secured by a first priority deed of
trust on the Debtor's real property located at 1101 Hamlin Road,
in Durham, North Carolina. PNL also hold a first priority
security interest on all leases, proceeds, rents and profits from
the property. PNL, according to David M. Warren, Esq. --
dmwarren@poynerspruill.com -- at Poyney Spruill LLP, in Raleigh,
North Carolina, is owed contractual monthly loan payments in the
amount of $155,969; however, the Debtor's proposed operating
budget provides for monthly payments to PNL in the amount of only
$99,004. The Budget indicates a surplus of $80,221 that is PNL's
Cash Collateral. PNL does not consent to the Debtor's retention
or other use of its Cash Collateral without full payment of the
monthly contractual loan payment.
For the reasons stated, PNL asks the U.S. Bankruptcy Court for the
Middle District of North Carolina, Greensboro Division, to deny
approval of the Debtor's request.
PNL is also represented by Meghan B. Pridemore, Esq. --
mpridemore@poynerspruill.com -- in Raleigh, North Carolina,
KIMBER RESOURCES: Incurs C$47.9-Mil. Net Loss in Fiscal 2013
------------------------------------------------------------
Kimber Resources Inc. announced on Oct. 1, 2013, its financial
results for the year ended June 30, 2013.
Kimber's net loss for the fiscal year ended June 30, 2013, was
C$47,892,658 compared with a net loss of C$3,566,641 for the year
ended June 30, 2012. According to Kimber, the principal reason
for the increase in net loss relates to an impairment of the
Monterde mineral interests by C$44.4 million.
"During the year ended June 30, 2013, Kimber completed additional
technical milestones including the growth of gold-silver measured
and indicated mineral resources at the Carmen Deposit. However,
given our cash and working capital position in the face of a
challenging market for junior resource companies, Kimber needed to
achieve a funding solution to allow Kimber and the Monterde
project to advance," stated Gordon Cummings, President and CEO of
Kimber Resources. "The recently announced Invecture take-over
offer provides $2 million of cash from an initial placement and
liquidity to shareholders through a cash offer at a significant
premium to the spot price prior to the deal announcement."
The Company's balance sheet at June 30, 2013, showed
C$19.8 million in total assets, C$5.0 million in total
liabilities, and equity of $14.8 million.
A copy of the Company's financial statements is available at:
http://is.gd/EtdKni
A copy of the Company's Annual Information for the year ended
June 30, 2013, is available at http://is.gd/DIQdhX
About Kimber Resources
Vancouver-based Kimber Resources Inc. (TSX: KBR) owns mineral
concessions covering in excess of 39,000 hectares in the
prospective Sierra Madre gold-silver belt, including the Monterde
property, where three gold-silver mineral resources have already
been defined.
* * *
Kimber has no sources of revenues and has operated at a loss since
inception. As such, the ability of the Company to continue as a
going concern is uncertain and is dependent upon obtaining
financing necessary to meet its financial commitments and
complete the development of its properties, and/or is dependent
upon the Company realizing proceeds from the sale of one or more
of its properties.
KING'S DEVELOPMENT: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: King's Development Construction Inc
125 Jefferson Street
Garden City, NY 11530
Case No.: 13-46167
Chapter 11 Petition Date: October 11, 2013
Court: United Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Kevin K Tung, Esq.
KEVIN KERVENG TUNG, P.C.
136-20 38th Avenue, Suite 3D
Flushing, NY 11354
Tel: (718) 939-4633
Fax: (718) 939-4468
Email: ktung@kktlawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ching Lam, chief executive officer.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
L BRANDS: Fitch Rates $500MM Sr. Unsecured Notes at 'BB+'
---------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB+' to L Brands, Inc.'s
$500 million senior guaranteed unsecured notes due 2023. The notes
will be guaranteed on an unsecured basis by each of the
subsidiaries that guarantee the senior credit facility, the $500
million 8.5% senior notes due 2019, the $400 million 7% senior
notes due 2020, the $1,000 million 6.625% senior notes due 2021,
and the $1,000 million 5.625% senior notes due 2022.
The net proceeds of the offering will be used for repayment of the
company's $213 million of 5.25% senior unsecured notes due 2014
and for general corporate purposes, including repayment of
outstanding borrowings under the revolving credit facility, to
fund seasonal working capital, share repurchases and dividends. A
full rating list is shown below.
Key Rating Drivers
L Brands' current long-term Issuer Default Rating (IDR) of 'BB+'
continues to reflect L Brands' strong brand recognition and
dominant market positions in intimate apparel and personal care
and beauty products, strong operating results, reasonable credit
metrics and solid cash flow generation. The ratings also consider
the company's track record of shareholder-friendly activities.
L Brands' strong business profile is anchored by its two
profitable flagship brands, Victoria's Secret and Bath & Body
Works, a strong direct business, and a growing international
footprint. The company's comparable store sales (comps) trends
have remained robust in the past three years, driven by relevant
brands and merchandise that command attractive pricing and benefit
from a loyal customer base. In addition to positive operating
leverage from strong comps growth, the company has driven margin
growth through efficient inventory management. EBITDA margins in
the 20%-range compare favorably to the broader retail average in
the low teens.
Fitch expects that L Brands can sustain comps growth in 2%-3%
range and EBITDA margin to remain in excess of 20% over the next
three years. This is underscored by strong comp growth in both the
Victoria's Secret brand (approximately 63% of sales and 64% of
EBITDA including the Victoria's Secret direct business) and Bath &
Body Works brand (approximately 28% of sales and 32% of EBITDA).
Fitch expects the growth of PINK in the U.S. (which could double
over the next few years from $1.5 billion currently) and
international expansion, if executed successfully, could drive top
line growth in the mid-single-digit range and enable the company
to move towards its targeted EBIT margin of the high teens from
16.7% currently.
Pro forma for the new unsecured notes net of the repayment of the
2014 notes, lease-adjusted leverage is 3.4x, essentially flat to
the level at the end of fiscal 2012. Fitch expects the company to
maintain a leverage profile in the mid-3x area, directing free
cash flow (FCF) toward dividends and share repurchases.
Liquidity is strong, supported by a cash balance of $551 million
as of Aug. 3, 2013 and the company's $1 billion revolving credit
facility. The company has a comfortable maturity profile,
staggered over many years. Fitch considers refinancing risk low
given L Brands' strong business profile, favorable operating
trends, and reasonable leverage.
FCF before dividends is expected to be in the $650 million-$750
million range annually over the next 24 months. Capex is expected
to increase to $700 million in 2013 from $588 million in 2012,
reflecting new store constructions and square footage expansion to
primarily support PINK and international growth (square footage to
grow by approximately 3% in 2013). The company's shareholder-
friendly posture is a key constraint to the rating. More
significant debt-financed dividends and/or share repurchases could
be a concern for the rating.
Rating Sensitivities
A positive rating action would require both the continuation of
positive operating trends and the maintenance of financial
leverage in the low 3x on a consistent basis.
A negative rating action could be driven by a trend of negative
comparable store sales and/or margin compression from fashion
misses, execution missteps, or loss of competitive traction. A
larger than expected debt-financed share repurchase and/or
leverage rising to approximately 4x would be a negative for the
rating.
Fitch currently rates Limited Brands as follows:
-- Long-term IDR 'BB+';
-- Bank credit facility 'BBB-';
-- Senior guaranteed unsecured notes 'BB+';
-- Senior unsecured notes 'BB'.
The Rating Outlook is Stable.
L BRANDS: Moody's Affirms 'Ba1' CFR & Rates $500MM Notes 'Ba1'
--------------------------------------------------------------
Moody's Investors Service rated L Brands, Inc.'s proposed $500
million senior unsecured guaranteed notes Ba1. All other ratings
were affirmed including the Ba1 Corporate Family and Ba1-PD
Probability of Default Ratings. At the same time, Moody's assigned
a Speculative Grade Liquidity rating of SGL-1. The rating outlook
is stable.
The proceeds of the proposed $500 million senior unsecured notes
are anticipated to be used to refinance L Brands' 2014 debt
maturity as well as for other general corporate purposes. Moody's
expects that a portion of the proceeds will be used for either
share repurchases or a special dividend based on the company's
track record.
The affirmation of L Brands' Ba1 Corporate Family Rating reflects
solid operating performance and pro forma leverage metrics that
remain in line with the rating category. Moody's estimates that
debt to EBITDA pro forma for the transaction for the twelve months
ended August 3, 2013 will be 3.5 times as compared to 3.3 times
currently.
The assignment of the Speculative Grade Liquidity rating of SGL-1
acknowledges L Brands' very good liquidity profile from its
healthy cash balances ($500 million at August 3, 2013) and $1
billion revolving credit facility expiring July 2016.
The following ratings are assigned
$500 million senior unsecured guaranteed notes due 2023 at Ba1
(LGD 3, 46%)
Speculative Grade Liquidity rating at SGL-1
The following ratings are affirmed and LGD point estimates changed
Corporate Family Rating at Ba1
Probability of Default Rating at Ba1 - PD
Senior unsecured guaranteed notes at Ba1 (LGD 3, to 46% from
44%)
Senior unsecured unguaranteed notes at Ba2 (to LGD 6, 91% from
LGD 5, 89%)
Senior unsecured guaranteed shelf at (P) Ba1
Senior unsecured unguaranteed shelf at (P) Ba2
Subordinated shelf at (P) Ba3
Preferred shelf at (P) Ba3
Ratings Rationale:
L Brands' Ba1 Corporate Family Rating is supported by its popular
well recognized brands which drive its strong profitability. The
rating also acknowledges its very good liquidity and moderate
leverage and interest coverage with debt to EBITDA of about 3.5
times and EBITA to interest expense of about 3.7 times. The rating
considers L Brands' scale with revenues about $11 billion and its
concentration on two narrow product niches. The rating also
acknowledges its expertise in merchandising and marketing.
However, the ratings are constrained by L Brands' financial
policies which favor share repurchases and special dividends. The
company's credit agreement provides it with significant
flexibility to make debt financed dividends and share repurchases.
The stable outlook reflects Moody's view that L Brands' financial
policies will continue to be shareholder friendly, but that credit
metrics will be maintained at levels appropriate for the Ba1
rating. Moody's expects that any excess cash flow will be returned
to shareholders. An upgrade would require a more conservative
financial policy such that debt to EBITDA was expected to be
maintained below 3.0 times and EBITA to interest expense above 4.5
times. Ratings could be downgraded should financial policy become
more aggressive than currently anticipated. Ratings could also be
downgraded should debt increase or operating performance falter
such that debt to EBITDA approaches 4.5 times or EBITA to interest
expense approaches 2.5 times.
Headquartered in Columbus, Ohio, L Brands, Inc. operates about
2,629 specialty stores in the United States under the Victoria's
Secret, Bath & Body Works, Pink, La Senza, and Henri Bendel name
plates. Its brands are also sold on-line and in more than 700
company operated and franchised additional locations outside the
US. Annual revenues are about $11 billion.
L BRANDS: S&P Rates $500-Mil. Senior Unsecured Notes 'BB+'
----------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'BB+'
issue-level rating to L Brands Inc.'s proposed $500 million
unsecured notes with subsidiary guarantees, with a recovery rating
of '3', indicating S&P's expectation of meaningful (50%-70%)
recovery in the event of payment default. At the same time, S&P
affirmed all other ratings, including the 'BB+' corporate credit
rating, on the company. The outlook is stable. In S&P's view,
the company will use the issuance to pre-fund 2014 debt maturities
and general corporate purposes, which may include share
repurchases or special dividends.
"The ratings on Columbus, Ohio-based specialty apparel retailer L
Brands reflect Standard & Poor's assessment of its "satisfactory"
business risk profile and its "significant" financial risk
profile. The business risk profile incorporates our opinion of
solid market positions in intimate apparel and personal care
products, strong brand recognition and marketing capabilities, and
broad geographic diversity," said credit analyst David Kuntz.
"These factors are offset in part by its participation in the
intensely competitive specialty retail industry. Both its
Victoria's Secret (VS) and Bath & Body Works (BBW) divisions are
relatively mature, and have historically provided consistent and
solid cash flows."
The stable outlook on L Brands reflects S&P's view that the
company's financial policies will remain aggressive, but that it
will manage its shareholder activities, with leverage at about 3x
over the next year. The outlook also incorporates S&P's view that
the company will demonstrate further modest performance gains over
the next 12 months that are lower than previous quarters due to
its forecast for a reduction in consumer spending.
S&P could lower the rating if additional shareholder-friendly
activities or performance erosion results in sustained leverage
above 3.5x. An example of this scenario would be if the company
funds share repurchases or special dividends through an additional
$1.5 billion of debt.
An upgrade is unlikely over the near term because S&P currently
assess the company's financial risk profile below investment-grade
and believe the financial policies will remain aggressive over the
next few years. However, S&P could upgrade the company if it
zeceived further clarity into its long-term financial policy with
respect to special dividends, share repurchases, and debt
issuance. Additionally, the company would have to demonstrate
stronger credit protection measures, with sustained leverage in
the low-2x area and interest coverage approaching 6x.
LAKE PLEASANT GROUP: Resolves Final Decree Motion
-------------------------------------------------
Lake Pleasant Group, LLP and DLGC II, LLC, reorganized debtors,
and Johnson Bank entered into a stipulation resolving pending
motions for sanctions and the entry of a final decree.
The stipulation provides for, among other things:
1. Upon entry of an order approving the terms of the
stipulation, the Reorganized Debtors will pay Johnson Bank the sum
of $10,000. None of the funds held in the Reorganized Debtors'
debtor-in-possession accounts will be distributed to any of the
Reorganized Debtors' equity holders, and the Reorganized Debtors
will provide documentation to Johnson Bank disclosing the use of
the Reorganized Debtors remaining funds.
2. Upon receipt of the Bank Payment, Johnson Bank's sanctions
motion will be deemed withdrawn with prejudice.
3. Upon receipt of the Bank Payment, Johnson Bank's final
decree objection will be deemed withdrawn and the court may enter
a final decree in the cases.
The parties request that the Bankruptcy Court approve the
stipulation. The Reorganized Debtors have agreed to the
stipulation solely to prevent further burdensome and expensive
litigation.
As reported in the Troubled Company Reporter on Sept. 6, 2013,
according to the Debtors, on July 3, Johnson Bank conducted a
trustee's sale of the Debtors' property -- approximately 444 acres
of undeveloped real property located near State Route 74 and Old
Lake Pleasant Road in Peoria, Arizona. In light of the
foreclosure upon the property, and upon the Debtors' surrender of
their other encumbered assets, the Debtors' estates will have been
fully administered in accordance with the Plan filed in the cases.
The Bank asserted a first-position lien against the property, to
the extent of approximately $19,334,987.
The order confirming the Plan was entered on April 23, 2012, and
the order granting the Debtors' motion to approve post-
confirmation clarification was entered on Nov. 6, 2012.
About Lake Pleasant and DLGC II
Lake Pleasant Group, LLP, and affiliate DLGC II, LLC, sought
Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-09574 and
13-09576) in Phoenix on June 5, 2013.
The Debtors have tapped Wesley Denton Ray, Esq., and Philip R.
Rudd, Esq., at Polsinelli, P.C., as counsel.
LPG estimated at least $10 million in assets and liabilities.
DLGC II estimated at least $10 million in assets and liabilities
of less than $10 million.
LPG and DLGC II, LLC, first filed for Chapter 11 bankruptcy
protection (Bankr. D. Ariz. Case No. 11-10170) on April 13, 2011,
with Philip R. Rudd, Esq., at Polsinelli PC on board as counsel.
At the request of Johnson Bank, the Court consolidated for
administrative purposes, the chapter 11 cases that Lake Pleasant
Group, LLP, and affiliate DLGC II, LLC, commenced on June 5, 2013,
with the cases the two Debtors commenced on April 13, 2011.
Phoenix, Arizona-based LPG was formed for the purpose of
purchasing and developing 244 acres of real property located near
State Route 74 and Old Lake Pleasant Road in Peoria, Arizona. In
the schedules filed in the original case, LPG disclosed assets of
$15,780,263 and liabilities of $10,301,552.
LE-NATURE INC: Ex-CEO Says Inept Atty. Caused 20-Year Sentence
--------------------------------------------------------------
Law360 reported that the former CEO of bankrupt beverage maker Le-
Nature's Inc. asked a Pennsylvania federal judge on Oct. 6 to
vacate the 20-year prison sentence he is serving for his role in a
$668 million accounting fraud, saying his attorney was incompetent
and laundering fees.
According to the report, Gregory Podlucky, who pled guilty in 2011
to money laundering and tax and securities fraud, told U.S.
District Judge Alan N. Bloch that his sentencing was substantially
more severe than what was promised to him by federal prosecutors
and his attorney.
The case is USA v. PODLUCKY et al., Case No. 2:09-cr-00279 (W.D.
Pa.).
About Le-Nature's Inc.
Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. --
http://www.le-natures.com/-- made bottled waters, teas, juices
and nutritional drinks. Its brands included Kettle Brewed Ice
Teas, Dazzler fruit juice drinks and lemonade, and AquaAde
vitamin-enriched water.
On Oct. 27, 2006, the Delaware Chancery Court appointed Kroll
Zolfo Cooper, Inc., as custodian of Le-Nature's, placing it in
charge of management and operations. Within several days, Kroll
uncovered massive fraud at Le-Nature's. On Nov. 1, 2006, Steven
G. Panagos, a Kroll managing director, filed an affidavit with the
Delaware Chancery Court setting forth the evidence of the
financial fraud he had discovered at Le-Nature's.
Four unsecured creditors of Le-Nature's filed an involuntary
Chapter 7 petition against the Company (Bankr. W.D. Pa. Case No.
06-25454) on Nov. 1, 2006. Kroll converted the proceedings from
Chapter 7 to Chapter 11.
On Nov. 6, 2006, two of Le-Nature's subsidiaries, Le-Nature's
Holdings Inc., and Tea Systems International Inc., filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code.
The Debtors' cases were jointly administered. The Debtors'
schedules filed with the Court showed $40 million in total assets
and $450 million in total liabilities.
Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and
Stanley Edward Levine, Esq., at Campbell & Levine, LLC,
represented the Debtors in their restructuring efforts. The Court
appointed R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl,
Esq., Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D.
Scharf, Esq., and Debra Grassgreen, Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub LLP, represented the Chapter 11
Trustee. David K. Rudov, Esq., at Rudov & Stein, and S. Jason
Teele, Esq., and Thomas A. Pitta, Esq., at Lowenstein Sandler PC,
represented the Official Committee of Unsecured Creditors. Edward
S. Weisfelner, Esq., Robert J. Stark, Esq., and Andrew Dash, Esq.,
at Brown Rudnick Berlack Israels LLP, and James G. McLean, Esq.,
at Manion McDonough & Lucas, represented the Ad Hoc Committee of
Secured Lenders. Thomas Moers Mayer, Esq., and Matthew J.
Williams, Esq. at Kramer Levin Naftalis & Frankel LLP, represented
the Ad Hoc Committee of Senior Subordinated Noteholders.
On July 8, 2008, the Bankruptcy Court issued an order confirming
the liquidation plan for Le-Nature's.
LEGAZEE PROPERTIES: Case Summary & 10 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Legazee Properties, LLC
dba The Glacier Ice Arena
2515 Riverside Parkway
Grand Junction, CO 81501
Case No.: 13-27054
Chapter 11 Petition Date: October 10, 2013
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Hon. Sidney B. Brooks
Debtor's Counsel: Stuart Borne, Esq.
925 S. Niagara St., Ste. 500
Denver, CO 80224
Tel: 303-758-5100
Fax: 303-758-5055
Email: sborne@archerbay.com
Total Assets: $2.40 million
Total Liabilities: $3.52 million
The petition was signed by Alan Koos, managing member.
A list of the Debtor's 10 largest unsecured creditors is available
for free at http://bankrupt.com/misc/cob13-27054.pdf
LIBERTY INTERACTIVE: Fitch Affirms 'BB' Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has affirmed all the ratings of Liberty Interactive
LLC and QVC, Inc., including the companies' 'BB' Issuer Default
Ratings (IDRs).
Liberty announced its intentions to (1) spin-off its 22%
equity/57% voting interest in TripAdvisor Inc. (TRIP) and its
BuySeasons Inc. business (Evite will be separated from BuySeasons)
and (2) separate the Liberty Interactive tracking stock into two
new tracking stocks, QVC and Liberty Digital Commerce.
TRIP and BuySeasons Inc. will be transferred to a new entity and
the new entity's equity will be distributed to the Liberty Venture
tracking stock holders. BuySeasons, which is currently
attributable to Liberty Interactive, will be reattributed to
Liberty Ventures. In return Liberty Interactive will receive cash
compensation equal to the fair market value of BuySeasons. In
conjunction with the spin off, the new entity is expected to
borrow $400 million, with $350 million distributed to Liberty and
$50 million will remain at the new entity for general corporate
purposes.
While Liberty consolidated TRIP into its financial statements,
Fitch excluded TRIP from its financial analysis. While the loss of
TRIP's value (approximately $2 billion) is unfavorable to the
credit profile, Fitch's ratings materially rely on QVC, with
Liberty's other investments, such as TRIP, viewed as incremental
support to the ratings.
The spin-off of BuySeasons will not have a material change to the
credit profile. The operations of BuySeasons was not a material
contributor to the Liberty consolidated profile.
Liberty intends to separate the Liberty Interactive tracking stock
into two new tracking stocks: Liberty Digital Commerce (LDCA/B),
which will have the e-commerce companies attributed to it, and QVC
(QVCA/B), which will hold QVC and the 38% HSN Inc. stake.
The Liberty debt attributed to Liberty Ventures is expected to
remain unchanged and the Liberty debt attributed to Liberty
Interactive is expected to be attributed to the QVC tracking
stock.
As Fitch's ratings for Liberty and QVC reflect the consolidated
legal entity/obligor credit profile, rather than the tracking
stock structure, the separation of the Liberty Interactive
tracking stock does not have a material impact on the credit
profile. Based on Fitch's interpretation of the Liberty bond
indentures, the company could not spin out QVC without consent of
the bondholders, based on the current asset mix at Liberty. QVC
generates 84% and 96% of Liberty's revenues and EBITDA,
respectively. In addition, Fitch believes QVC makes up a
meaningful portion of Liberty's equity value. Any spin off of QVC
would likely trigger the 'substantially all' asset disposition
restriction within the Liberty indentures.
Liberty is exploring financing alternatives for LDC, including a
potential $250 million credit facility. The facility is expected
to refinance existing facilities across the e-commerce businesses.
As Liberty would be the expected issuer of the facility, the
borrowing costs will be more favorable for the LDC group.
Key Rating Drivers
The consolidated legal/obligor credit view (discussed above) may
change over time if the Liberty Ventures (LVNT) or LDC assets
become a more meaningful portion of the consolidated Liberty asset
mix/equity value. At that point, Fitch may adopt a more hybrid
rating analysis, taking into consideration the attribution of
assets and liabilities within each tracking stock. Fitch does not
expect this to occur in the near or intermediate term.
The ratings reflect Fitch's expectation that the company will
continue to manage leverage on a Liberty consolidated basis. Fitch
expects Liberty's gross unadjusted leverage to be managed at 4x
and QVC unadjusted gross leverage to be managed at 2.5x.
As of June 30, 2013, Fitch calculates QVC's unadjusted gross
leverage at 2.1x and Liberty's unadjusted gross leverage at 3.6x
(excludes Trip Advisor's debt and EBITDA). Liberty's unadjusted
gross leverage is 3.8x pro forma the September issuance of $400
million of 1% HSN, Inc. (HSN) exchangeable debentures due 2043.
Fitch expects that EBITDA growth would lead to reduced leverage,
and that Liberty will manage leverage closer to its target levels
over the long term. Currently, there is financial flexibility for
debt funded acquisition and/or share repurchases.
Fitch rates both QVC's senior secured bank credit facility and the
senior secured notes 'BBB-' (two notches higher than QVC's IDR).
The secured issue ratings reflects what Fitch believes would be
QVC's standalone ratings.
The ratings incorporate the risk of continued acquisitions at
Liberty Interactive. Fitch recognizes that there is a risk of an
acquisition of HSN Inc. However, the ratings may remain unchanged
depending on how the transaction is structured and on the
company's commitment to returning QVC's or Liberty's leverage to
2.5x and 4x, respectively.
Operating Performance
The ratings reflect the solid operating performance at QVC with
revenues and EBITDA for the latest 12 months (LTM) ending June 30,
2013 up 1.2% and 3.3%, respectively. During the same period, QVC
Germany and Japan endured revenue declines of 6.3% and 4.9%,
respectively. The geographic diversification of QVC provides the
credit cushion to endure cyclical declines in the individual
regions. The ratings incorporate the cyclicality inherent in QVC's
business/retail industry.
Fitch recognizes QVC's ability to manage product mix and adapt to
its customers shopping preferences. QVC has managed to grow
revenues over the last three years and manage Fitch calculated
EBITDA margins in the 20% to 22% range over that same time frame.
Fitch believes that QVC will be able to continue to grow revenues
at least at GDP levels going forward. Fitch models low to mid-
single digit revenue growth at both QVC and at Liberty
consolidated.
QVC EBITDA margin fluctuation is driven in part by the product mix
and will likely fluctuate over time as the product mixes changes.
However, Fitch believes, over the next few years, QVC's EBITDA
margins will remain in this historical 20% to 22% range.
Liberty's e-commerce companies continue to have healthy revenue
growth with revenues up 12.3% in the LTM period ending June 30,
2013. However, EBITDA continues to be pressured, down 9.6% due to
increased promotional activity to move seasonal inventory and
increased spending on advertising and marketing. While margins and
EBITDA levels have been negatively affected, they remain positive
and contribute positive cash flows to the consolidated credit.
These businesses are relatively small in size, accounting for
approximately 5% of consolidated Liberty EBITDA. Fitch does not
ascribe a material weight to the e-commerce businesses when
assessing the consolidated credit profile.
Liquidity and Maturities
Fitch believes liquidity at QVC will be sufficient to support
operations its expansion into other markets. Acquisitions and
share buybacks are expected to be a primary use of free cash flow
(FCF).
Fitch believes that there is sufficient liquidity and cash
generation (from investment dividends and tax sharing between the
tracking stocks) to support debt service and disciplined
investment at LVNT. Fitch recognizes that in the event of a
liquidity strain at LVNT, QVC could provide funding to support
debt service (via intercompany loans), or the tracking stock
structure could be collapsed.
Fitch notes that cash can travel throughout all entities
relatively easily. Although the tracking stock structure adds a
layer of complexity, Liberty has in the past reattributed assets
and liabilities. Fitch believes that resources at QVC would be
used to support LVNT and LDC, and vice versa, if ever needed.
Fitch believes Liberty continues to carry meaningful liquidity.
Liberty carried $1.2 billion in cash (ex-TRIP), $1 billion of
availability on QVC $2 billion revolver (expires March 2018), and
$3.6 billion in other public holdings (ex-TRIP) as of June 30,
2013. Fitch calculates FCF of $714 million in LTM period ending
June 30, 2013. Based on Fitch's conservative projections, Fitch
expects Liberty's FCF to be in the range of $750 million to $950
million.
Liberty's near-term maturities include $400 million of 1% HSN
exchangeable debentures that may be put to or redeemed by the
company in 2016. QVC's next maturity, other than its credit
facility in 2018, is approximately $769 million in 7.5% senior
secured notes due in 2019. Fitch believes Liberty has sufficient
liquidity to handle these maturities and potential redemption.
Rating Sensitivities
Positive Rating Actions: Fitch believes that the current financial
policy is consistent with the current ratings. If the company were
to manage to more conservative leverage targets, ratings may be
upgraded.
Negative Rating Actions: Conversely, changes to financial policy
(including more aggressive leverage targets) and asset mix changes
that weakened bondholder protection, could pressure the ratings.
While unexpected, revenue declines in excess of 10% that
materially drove declines in EBITDA and FCF and resulted in QVC
leverage exceeding 2.5x would likely pressure ratings.
Fitch has affirmed the following ratings:
Liberty
-- IDR at 'BB';
-- Senior unsecured debt at 'BB'.
QVC
-- IDR at 'BB';
-- Senior secured debt at 'BBB-'.
The Rating Outlook is Stable.
LIC CROWN: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor entities filing separate Chapter 11 cases:
Debtor Case No.
------ --------
LIC Crown Fee Owner LLC 13-13305
601 West 26th Street, Suite 1260
New York, NY 10001
LIC Crown Leasehold Owner LLC 13-13306
601 West 26th Street, Suite 1207
New York, NY 10001
LIC Crown Mezz Borrower LLC 13-13304
601 West 26th Street, Suite 1260
New York, NY 10001
Chapter 11 Petition Date: October 10, 2013
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. Martin Glenn
Debtors' Counsel: Tracy L. Klestadt, Esq.
KLESTADT & WINTERS, LLP
570 Seventh Avenue, 17th Floor
New York, NY 10018
Tel: (212) 972-3000
Fax: (212) 972-2245
Email: tklestadt@klestadt.com
Chief
Restructuring
Officer: Steven A. Carlson
Crown Fee's Total Assets: $100.20 million
Crown Fee's Total Liabilities: $71.61 million
Crown Mezz's Total Assets: $0
Crown Mezz's Total Liabilities: $59.22 million
Crown Leasehold's Total Assets:$3.72 million
Crown Leasehold's Total Liabilities: $72.72 million
The petitions were signed by Steven A. Carlson, chief
restructuring officer.
The Debtors did not file a list of their largest unsecured
creditors when they filed the petitions.
LIGHTSQUARED INC: Wins Delay of Harbinger's $2-Bil. GPS Brawl
-------------------------------------------------------------
Law360 reported that a New York bankruptcy judge on Oct. 9 granted
LightSquared Inc.'s bid to stay its owner Harbinger Capital
Partners LLC's $1.9 billion suit alleging GPS makers withheld
crucial information on spectrum usage, giving the company 60 days
to focus on its Chapter 11 proceedings.
According to the report, U.S. Bankruptcy Judge Shelley C. Chapman
gave LightSquared until Dec. 8, or an earlier date if either party
is granted a motion to lift the stay, to assess its own claims
against defendants Deere & Co., Garmin International Inc., and
Trimble Navigation Ltd., among others.
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.
LIGHTSQUARED INC: Judge Gives Go Signal for Competing Plans
-----------------------------------------------------------
U.S. Bankruptcy Judge Shelley Chapman on Oct. 10 approved all four
disclosure statements proposed by LightSquared and three other
proponents of competing plans.
Judge Chapman's decision came after the companies have agreed to
resolve their objections to each others' disclosure statements.
The judge's decision means that creditors can vote on competing
plans by LightSquared, its primary shareholder Harbinger Capital
Partners LLC, a group of lenders, and U.S. Bank NA and Mast
Capital Management LLC. The court order can be accessed for free
at http://is.gd/kKCkwS
Creditors will use the disclosure statements to inform their
decision on whether to support the plans to restructure the
wireless-satellite company.
LightSquared's plan proposes a sale of almost all of its assets at
auction while it continues to pursue the Federal Communications
Commissions' approval to use its airwaves.
U.S. Bank and Mast Capital's plan calls for the sale of One Dot
Six Corp.'s wireless spectrum assets at an auction while the
lender group's plan proposes to auction off so-called "LP" assets,
with the $2.2 billion offer from Dish Network Corp.'s subsidiary
serving as the stalking horse bid.
Meanwhile, the plan by Philip Falcone's investment firm would
restructure the wireless-satellite company without a sale.
Full-text copies of the plan proponents' latest disclosure
statements and plans are available for free at:
http://bankrupt.com/misc/LightSquared_1stAmendGeneralDS.pdf
http://bankrupt.com/misc/LightSquared_1stAmendSpecificDS.pdf
http://bankrupt.com/misc/LightSquared_1stAmendPlan100713.pdf
http://bankrupt.com/misc/LightSquared_AmendPlanUSBank.pdf
http://bankrupt.com/misc/LightSquared_AmendDSUSBank.pdf
http://bankrupt.com/misc/LightSquared_AmendPlanHarbinger.pdf
http://bankrupt.com/misc/LightSquared_AmendPlan&DSLenders.pdf
Solicitation of Votes
Judge Chapman also approved on Oct. 10 the procedures for
soliciting votes and for voting on the plans. A copy of the
document detailing the procedures can be accessed for free at
http://is.gd/yxPqTN
Kurtzman Carson Consultants LLC, LightSquared's claim and
solicitation agent, will begin the distribution of solicitation
materials to voting creditors on or before Oct. 24.
Creditors have until Dec. 5 to vote on the competing plans. The
deadline for filing objections to confirmation of the plans is
Nov. 26 while the deadline for filing briefs in support of the
plans is Dec. 3.
Judge Chapman will hold a hearing on Dec. 10 to consider
confirmation of the plans.
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.
LIMESTONE REDBAY: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Limestone Redbay, Inc.
2601 Cleda Drive
Columbus, MS 39705
Case No.: 13-14259
Chapter 11 Petition Date: October 10, 2013
Court: United States Bankruptcy Court
Northern District of Mississippi (Aberdeen)
Debtor's Counsel: Craig M. Geno, Esq.
LAW OFFICES OF CRAIG M. GENO, PLLC
587 Highland Colony Parkway
Ridgeland, MS 39157
Tel: 601-427-0048
Email: cmgeno@cmgenolaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Thomas E. Comer, Jr.,
president/director.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
LPATH INC: Pfizer Plans to Divest Rights to iSONEPTM
----------------------------------------------------
Lpath, Inc., has received notice from Pfizer Inc. that Pfizer is
currently seeking to divest certain ophthalmology R&D assets,
including Pfizer's exclusive option for a worldwide license to
develop and commercialize Lpath's iSONEPTM. Lpath has presented
an offer to Pfizer to reacquire these rights, and Lpath believes
that a number of third parties may have an interest in acquiring
these rights as well.
iSONEP is currently being studied by Lpath in a Phase 2 clinical
trial as both monotherapy and adjunctive therapy in wet-AMD
patients. A data read-out on the study is expected in the third
quarter of 2014.
"Pfizer is seeking to divest its rights to iSONEP as it continues
to strategically refocus on its core areas of expertise," stated
Scott Pancoast, president and CEO of Lpath. "Even though we value
our partnership with Pfizer, we are excited by the potential to
either reacquire the rights and control iSONEP ourselves, or work
with a new partner."
About Lpath, Inc.
San Diego, Calif.-based Lpath, Inc. is a biotechnology company
focused on the discovery and development of lipidomic-based
therapeutics, an emerging field of medical science whereby
bioactive lipids are targeted to treat human diseases.
Lpath disclosed a net loss of $2.75 million in 2012, as compared
with a net loss of $3.11 million in 2011. The Company's balance
sheet at June 30, 2013, showed $20.20 million in total assets,
$7.54 million in total liabilities and $12.65 million in total
stockholders' equity.
LONE PINE: Seeks to Tap $10 Million Bankruptcy Financing
--------------------------------------------------------
Stephanie Gleason, writing for Daily Bankruptcy Review, reported
that Canadian oil and gas company Lone Pine Resources Inc. has
secured bankruptcy financing worth more than $9 million from J.P.
Morgan Securities LLC and is asking the U.S. Bankruptcy Court to
sign off on the loan.
About Lone Pine Resources
Calgary, Canada-based Lone Pine Resources Inc. is an independent
oil and gas exploration, development and production company with
operations in Canada. The Company's reserves, producing
properties and exploration prospects are located in the provinces
of Alberta, British Columbia and Quebec, and in the Northwest
Territories. The Company is incorporated under the laws of the
State of Delaware.
Lone Pine entered bankruptcy protection in Canada on Sept. 25,
2013, under the Companies' Creditors Arrangement Act and received
an initial protection order from an Alberta court the same day.
Lone Pine Resources simultaneously filed for Chapter 15 protection
in Delaware in the United States (Bankr. D. Del. Case No. 13-
12487) to seek recognition of the CCAA proceedings.
Lone Pine, LPR Canada and all other subsidiaries of the Company
are parties to the CCAA and Chapter 15 proceedings.
Lone Pine is being advised by RBC Capital Markets, Bennett Jones
LLP, Vinson & Elkins LLP and Richards Layton & Finger P.A. in
connection with the restructuring, with Wachtell, Lipton, Rosen &
Katz LLP providing independent advice to the Company's board of
directors. The Supporting Noteholders are being advised by
Goodmans LLP and Stroock & Stroock & Lavan LLP.
In October, U.S. Bankruptcy Judge Brendan Linehan Shannon issued
an order granting Lone Pine, et al., provisional relief under
Chapter 15 of the U.S. Bankruptcy Code.
MAINZEAL PROPERTY: Receivers Recover NZ$22.5 Million
----------------------------------------------------
The New Zealand Herald reports that the receivers for failed
construction firm Mainzeal Property and Construction have raised
some NZ$22.5 million in asset sales and recoveries from
outstanding contracts, and are confident there will be some money
left over for the liquidator to mop up.
PricewaterhouseCooper's David Bridgman and Colin McCloy expect to
have surplus funds for the liquidators once they've finished
managing the receivership of the Mainzeal companies they are
overseeing, according to The New Zealand Herald.
The report notes that of the NZ$111.4 million in known assets
identified, the pair have recovered NZ$9.4 million from contract
receivables, NZ$4.6 million from selling construction assets, and
NZ$9.7 million from property sales, as at Aug. 5.
The report relates that between February 6 and August 5 the
receivers made payments of NZ$18.6 million, including a NZ$4.9
million payment to the secured creditor, NZ$5.3 million in
contract expenses to complete work, NZ$2.4 million for staff and
NZ$2.4 million in receivers' fees. That left net funds of almost
NZ$3.9 million at the end of the period, the report relays.
With the sale of Mainzeal's former headquarters owned by related
party 200 Vic Ltd likely to cover secured creditor Bank of New
Zealand, Bridgman and McCloy say it is "likely that upon the
retirement the receivers will be able to provide the liquidators
with a surplus from net realizations," the report relays.
The liquidators, the report says, represent unsecured creditors
owed some NZ$106.3 million, whereas the receivers were appointed
by BNZ who was owed NZ$11.3 million, the bulk of which was over
the Victoria St building. Preferential creditors, including staff
entitlements and outstanding tax, are owed about NZ$5.3 million,
the report discloses.
The report notes that the receivers are working with liquidators
Brian Mayo-Smith, Andrew Bethell and Stephen Tubbs of BDO in
pursuing some NZ$46.6 million in related party debt, which stemmed
from two significant restructures in the two years leading up to
the group's collapse.
In the liquidator's latest update last month, Mayo-Smith, Bethell
and Tubbs said the quantum of any distribution to unsecured
creditors will depend on the pursuit of the related party debts,
and if unsuccessful, any return "is not likely to be substantial,"
the report relates.
The report recalls that Mainzeal Property and Construction and
Mainzeal Living were tipped into receivership on Feb. 6, the
Waitangi Day public holiday, and 200 Vic joined them on Feb. 13.
Liquidators were appointed to the Mainzeal group later that month
on Feb. 28.
The report recalls that former Prime Minister Jenny Shipley and
former Brierley Investments Chief Executive Paul Collins resigned
as directors of Mainzeal Property and Construction in December, at
the request of Mainzeal and Richina group principal Richard Yan,
an Auckland-based businessman, but remained directors of Mainzeal
Group until just before the MPC receivership.
MALLORY PARK: Owners Set Up New Firm in Hope of Running Race Track
------------------------------------------------------------------
Dan Martin at this is Leicestershire reports that the parent
company which placed the operators of Mallory Park racing circuit
into administration has set up a new firm in the hope of running
the track.
The future of the venue was thrown into doubt last month when
British Automobile Racing Club (BARC) placed Mallory Park
(Motorsport) Ltd (MPML) into the hands of administrators,
according to this is Leicestershire.
The report notes that the move followed a successful prosecution
of MPML by Hinckley and Bosworth Borough Council for breaches of a
1985 agreement, limiting noisy track days to 92 each year. The
report relates that BARC said the enforcement of the restrictions
made it impossible to run the track without making a loss, so
administrators were called in.
The report relays that it has now emerged BARC formed a company
called Mallory Park Motor Racing Ltd, three days after MPML was
put into administration.
Villagers in Kirkby Mallory, who have complained about breaches of
the 1985 terms, now fear the new company could start running the
track without restrictions if it was able to buy MPML, the report
says.
A council spokesman told this is Leicestershire that, "The 1985
agreement applies to MPML, not the circuit. "In that sense the
residents would be correct.
"However, there are discussions going on with the administrators
about how the council will regulate any new operator. . . . In the
worst case, the council would serve the 1985 notice on the new
operator but there might be a short breathing space. . . . We want
racing to continue within limits acceptable to the villagers.",
the report quoted the council spokesman as saying.
The report notes that Mark Jones, BARC chief operating officer,
who is listed as the sole director of the newly-formed company,
said: "We have always been clear we want to continue running
Mallory Park. . . . It's normal to have a shell company set up
ready and this is what we have done. . . . The administrators
know we are here but there is no deal on the table. . . . We are
happy to have an agreement with the council but not the old one."
The report relays that the company had been fined GBP2,500 and
ordered to pay costs of GBP23,000 to the council following the
noise breach case.
Administrator Ian Robert, of Kingston Smith Partners, said MPML
staff were still working and being paid.
MAXCOM TELECOMUNICACIONES: U.S. Offer Expired Sept. 26
------------------------------------------------------
Maxcom Telecomunicaciones, S.A.B. de C.V., filed on Oct. 8, 2013,
Amendment No. 2 to its Schedule TO-T Tender Offer Statement Under
Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of
1934.
This Amendment No. 2 amends and supplements the Tender Offer
Statement on Schedule TO-T, as amended from time to time, filed on
Aug. 23, 2013, in connection with an offer in the United States by
Banco Invex S.A., Institucion de Banca Multiple, Invex Grupo
Financiero, a banking institution organized and existing under the
laws of the United Mexican States, as Trustee for Trust Number
1387 (the "Trust"), Ventura Capital Privado, S.A. de C.V., Javier
Molinar Horcasitas and Enrique Castillo Sanchez Mejorada
(together with the Trust, Ventura Capital and Javier Molinar, the
"Purchasers") to purchase for cash (i) all of the outstanding
Series A Common Stock, without par value (the "Shares") of Maxcom
Telecomunicaciones, S.A.B. de C.V., (ii) all of the outstanding
Ordinary Participation Certificates ("CPOs") of Maxcom, and (iii)
all of the outstanding American Depository Shares ("ADSs," and
collectively with the Shares and the CPOs, and in each case, with
any coupon representing unpaid dividends as of the day hereof, the
"Securities"), of Maxcom, upon the terms and subject to the
conditions set forth in the U.S. Offer to Purchase, dated Aug. 23,
2013 (the "Offer to Purchase"), and in the related ADS Letter of
Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "U.S. Offer"), which were
annexed to and filed with the Schedule TO as Exhibits (a)(1)(A)
and (a)(1)(B), respectively. Each ADS represents seven CPOs.
Each CPO represents three Shares.
Simultaneously with the U.S. Offer, the Purchasers offered in
Mexico (the "Mexican Offer" and collectively with the U.S. Offer,
the "Offers") to purchase for cash all of the outstanding Shares
and CPOs of Maxcom for Ps.0.9666 for each Share and Ps.2.90 for
each CPO on substantially the same terms of the U.S. Offer.
This Schedule TO is being filed on behalf of the Purchaser and is
intended to satisfy the filing requirements of Rule 14d-3(b)(2)
promulgated under the Securities Exchange Act of 1934, as amended.
According to a press release from the Purchasers dated Sept. 27,
2013, the U.S. Offer expired at 12:00 midnight, New York City
time, on Sept. 26, 2013. In Mexico, the Purchasers' simultaneous
tender offer to purchase all of the outstanding Shares and CPOs of
Maxcom has also expired on Sept, 26, 2013.
A copy of the Schedule TO, filed Aug. 23, 2013, is available at:
http://is.gd/osR4wk
A copy of Amendment No. 1 to the Schedule TO, filed Sept. 4, 2013,
is available at:
http://is.gd/NEMCHT
A copy of this Amendment No. 2 is available at:
http://is.gd/4k5CIQ
About Maxcom
Maxcom Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico
City, Mexico, is a facilities-based telecommunications provider
using a "smart-build" approach to deliver last-mile connectivity
to micro, small and medium-sized businesses and residential
customers in the Mexican territory. Maxcom launched commercial
operations in May 1999 and is currently offering local, long
distance, data, value-added, paid TV and IP-based services on a
full basis in greater metropolitan Mexico City, Puebla, Tehuacan,
San Luis, and Queretaro, and on a selected basis in several cities
in Mexico.
* * *
Maxcom carries a 'CC' corporate credit rating from Standard &
Poor's Ratings Services and a "Caa1" from Moody's Investors
Service.
MICHAELS STORES: EVP - Global Sourcing Quits
--------------------------------------------
Weizhong "Wilson" Zhu has provided notice that he will resign from
his position as Michaels Stores, Inc.'s executive vice president -
Global Sourcing, effective mid-November 2013.
In connection with Mr. Zhu's departure, the Company will enter
into an agreement with Mr. Zhu, whereby Mr. Zhu will receive:
(i) his earned bonus for fiscal year 2013 pursuant to the
Company's bonus plan for executive officers, under
established bonus criteria associated with the bonus plan,
on the same terms as that paid to other executive officers
of the Company (if earned at all); and
(ii) a cash amount, less any applicable withholdings, equal to:
(x) the difference between the per share fair market value
of Michaels common stock on July 2, 2014, and $21.78 per
share, which represents the current fair market value of
the common stock, (y) multiplied by 69,984, that payment
subject to a $250,000 cap and payable in July 2014.
As consideration for the Company's entry into that agreement, the
agreement will contain a release of claims against the Company by
Mr. Zhu, as well as other typical restrictive covenants relating
to his departure.
About Michaels Stores
Headquartered in Irving, Texas, Michaels Stores, Inc., is the
largest arts and crafts specialty retailer in North America. As
of March 9, 2009, the Company operated 1,105 "Michaels" retail
stores in the United States and Canada and 161 Aaron Brothers
Stores.
Michaels Stores reported net income of $79 million on $2.80
billion of net sales for the nine months ended Oct. 29, 2011,
compared with net income of $0 on $2.70 billion of net sales for
the nine months ended Oct. 30, 2010. As of Aug. 3, 2013, Michaels
Stores had $1.62 billion in total assets, $3.83 billion in total
liabilities and a $2.21 billion total stockholders' deficit.
* * *
Michaels Stores carries a 'B2' corporate family rating from
Moody's Investors Service and 'B' corporate credit rating from
Standard & Poor's Ratings Services.
MDU COMMUNICATIONS: Lenders Exercise Voting Rights Over Unit
------------------------------------------------------------
MDU Communications International, Inc., disclosed in a Form 8-K
dated Sept. 24, 2013, that its wholly-owned subsidiary, MDU
Communications (USA) Inc., received a notice of default under the
Amended and Restated Loan and Security Agreement with FCC, LLC,
d/b/a First Capital, and Full Circle Capital Corporation for a
senior secured $30 million revolving credit facility. Per the
notice, the Lenders reserved their rights under the Loan Agreement
to exercise any and all remedies without further notice.
On Oct. 3, 2013, Parent and Subsidiary received a Notice of
Exercise of Certain Rights and Remedies to the Amended and
Restated Loan and Security Agreement and Stock Pledge Agreement,
whereby the Lenders, due to the notice of default, and pursuant to
the Stock Pledge Agreement, enforced their rights as attorney and
agent-in-fact on behalf of Parent and exercised control of the
stock voting rights that Parent held over Subsidiary.
Simultaneously, the Lenders, acting as attorney and agent-in-fact
on behalf of Parent and with control of the voting rights over
Subsidiary, executed a Written Consent of Sole Stockholder in Lieu
of Meeting directing Subsidiary to enter into and consummate the
transaction, to sell substantially all of its assets to Access
Media 3, Inc., pursuant to the previously disclosed Sept. 4, 2013,
Asset Purchase Agreement, with that purchase price proceeds being
directed to the Lenders to satisfy the outstanding balance under
the Loan Agreement.
By exercising that voting control, the Lenders circumvented the
requirement of submitting such a transaction, involving all or
substantially all of a company's assets, to a vote of the holders
of the outstanding stock of a corporation for majority approval.
About MDU Communications
Totowa, New Jersey-based MDU Communications International, Inc.,
is a national provider of digital satellite television, high-speed
Internet, digital phone and other information and communication
services to residents living in the United States multi-dwelling
unit market -- estimated to include 32 million residences.
For the six months ended March 31, there was $152,000 in operating
income and a net loss of $1.5 million on revenue of $12 million.
The Company reported a net loss of $6.4 million on $27.3 million
of revenue for fiscal year ended Sept. 30, 2012, compared with a
net loss of $7.4 million on $27.9 million of revenue for 2011.
The Company's balance sheet at March 31, 2013, showed $18.04
million in total assets, $32.14 million in total liabilities and a
$14.09 million total stockholders' deficiency.
CohnReznick LLP, in Roseland, New Jersey, expressed substantial
doubt about MDU's ability to continue as a going concern following
the financial results for the year ended Sept. 30, 2012. The
independent auditors noted that the Company has incurred
significant recurring losses, has a working capital deficit, and
an accumulated deficit of $75 million at Sept. 30, 2012. They
also noted that the Company's $30 million Credit Facility matures
on June 30, 2013.
MORGANS HOTEL: David Hamamoto Lowers Stake to 7.8% at Oct. 1
------------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commisssion, David T. Hamamoto and his affiliates
disclosed that as of Oct. 1, 2013, he beneficially owned
2,583,438 shares of common stock of Morgans Hotel Group Co.
representing 7.8 percent of the shares outstanding. Mr. Hamamoto
previously reported beneficial ownership of 3,638,619 common
shares or 11.1 percent equity stake as of Nov. 20, 2012. A copy
of the regulatory filing is available at http://is.gd/NUc4tw
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company incurred a net loss attributable to common
stockholders of $66.81 million in 2012, a net loss attributable to
common stockholders of $95.34 million in 2011, and a net loss
attributable to common stockholders of $89.96 million in 2010.
Morgans Hotel's balance sheet at June 30, 2013, showed $580.67
million in total assets, $744.32 million in total liabilities,
$6.04 million in redeemable noncontrolling interest and a
$169.70 million total stockholders' deficit.
MSD PERFORMANCE: Gets Ok to Tap Jones Day as Lead Ch. 11 Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
MSD Performance, Inc., et al., to employ Jones Day as lead
bankruptcy counsel, nunc pro tunc as of the Petition Date.
As reported in the Troubled Company Reporter on Sept. 18, 2013,
these professionals will take a primary role in representing the
Debtors and will be paid their customary hourly rates:
Aldo LaFiandra, Esq. $800
Thomas Howley, Esq. $725
Amy Edgy Ferber, Esq. $650
David Phillips, Esq. $625
Paul Green $500
Christa Smith, Paralegal $225
The firm will also be reimbursed for any necessary out-of-pocket
expenses. The Debtors have also agreed to pay the firm a $600,000
retainer, and to provide additional advance payment retainers in
amounts as agreed by the Debtors and the firm.
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.
MSD PERFORMANCE: Logan & Co. Approved as Administrative Advisor
---------------------------------------------------------------
MSD Performance, Inc., et al., obtained authority from the U.S.
Bankruptcy Court for the District of Delaware to employ Logan &
Company, Inc., to perform bankruptcy administrative services,
nunc pro tunc as of the Petition Date.
The Troubled Company Reporter reported on Sept. 19, 2013, that
under the services agreement between the Debtors and Logan, prior
to the Petition Date, the Debtors paid Logan an advanced payment
of $5,000. The Retainer will be held first as security for the
services to be rendered under the application to employ Logan as
the Debtors' claims and noticing agent, with any remaining amount
to be available as security for the services to be rendered under
the application to employ Logan as administrative advisor.
The Court approved indemnification provisions of the service
Agreement subject to certain clarifications.
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.
MSD PERFORMANCE: Richards Layton Okayed as Delaware Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave MSD
Performance, Inc., et al., permission to employ Richards, Layton &
Finger, P.A., as their local Delaware counsel, nunc pro tunc as of
the Petition Date.
As reported in the Troubled Company Reporter on Sept. 19, 2013,
the principal professionals and paraprofessionals designated to
represent the Debtors and their current standard hourly rates are:
Daniel J. DeFranceschi $700
Paul N. Heath $600
Zachary I. Shapiro $425
Amanda R. Steele $350
Ann Jerominski $215
The firm will also be reimbursed for any necessary out-of-pocket
expenses.
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.
MTS GOLF: Plan Confirmation Hearing Continued Until Oct. 24
-----------------------------------------------------------
The Bankruptcy Court, according to minutes for the Sept. 26
hearing, continued until Oct. 24, 2013, at 2:30 p.m., the hearing
to consider confirmation of MTS Land, LLC, and MTS Golf, LLC's
Third Amended Plan.
The Plan
As reported by the Troubled Company Reporter on April 10, 2013,
the Debtors' Third Amended Joint Plan, as Modified, was filed with
the Bankruptcy Court on April 2, 2013. The Debtors' Plan is a
100% payment plan. All creditors with Allowed Claims will be paid
the amount of their Allowed Claims in full through the Plan. The
Holders of Equity Securities of Debtors will retain all of their
legal interests.
Class 1 is comprised of the Secured Portion of the Allowed USB
Loan Claim, with an estimated Claim of $32,450,046.03 as of the
Petition Date. Beginning on the 14th Business Day of the 1st full
month after the Effective Date, and on each subsequent month up to
and through the Restated UBS Loan Maturity Date, Reorganized
Debtor will distribute to USB monthly principal and interest
payments on the Secured Portion of the outstanding balance of the
Restated USB Note amortized over a period of 25 years at the
Restated USB Interest Rate.
The Restated USB Loan Maturity Date will be 5th anniversary of the
Effective Date, provided that at the option of Reorganized Debtor,
the Restated USB Loan Maturity Date may be extended for up to
4 additional periods of 6 months each, subject to the certain
conditions including the payment of an extension fee of 0.25% of
the then outstanding principal balance of the Restated USB Note.
Except to the extent that a Creditor with an Allowed General
Unsecured Claim agrees to less favorable treatment, each Creditor
with an Allowed General Unsecured Claim, will, in full and final
satisfaction of such Claim, be paid in full in Cash, plus post-
Effective Date interest at the Unsecured Interest Rate.
a. In the event that USB is determined by the Bankruptcy
Court to be entitled to the 1111(b) Election and elects to make
it: on the latest of: (i) the 1st anniversary of the Effective
Date, as soon thereafter as is practical; (ii) such date as may be
fixed by the Bankruptcy Court, or as soon thereafter as is
practicable; (iii) the 14th Business Day after such Claim is
Allowed, or as soon thereafter as is practicable; or (iv) such
date as the Holder of such Claim and Reorganized Debtor have
agreed or will agree.
b. In the event that USB is determined by the Bankruptcy
Court to be entitled to the 1111(b) Election and elects not to
make it: The total amount of Allowed General Unsecured Claims
(including the Allowed unsecured portion of the USB Claims) plus
interest at the Unsecured Interest Rate, will be paid in 60 equal
monthly payments beginning on the 14th Business Day of the 1st
full month after the Effective Date, and on the same day of each
subsequent month; provided, however, in the event that the Class 1
USB Loan Claims and the Class 2 Hertz Loan Claims are paid in full
prior to the 60th month, then all net proceeds from the sale of
the remaining Real Property will be distributed Pro Rata among the
Holders of Allowed General Unsecured Claims until paid in full.
A copy of the Amended Disclosure Statement for the Debtors' Third
Amended Joint Plan, as Modified, is available at:
http://bankrupt.com/misc/mtsland.doc546.pdf
About MTS Land
MTS Land, LLC, and MTS Golf, LLC, own and operate the now dormant
Mountain Shadows Golf Club. They filed separate Chapter 11
petitions (Bankr. D. Ariz. Case Nos. 12-16257 and 12-16257) in
Phoenix on July 19, 2012. Mountain Shadows Golf Club --
http://www.mountainshadowsgolfclub.com/-- is an 18 hole, par 56
course located at Paradise Valley. Nestled in the foothills of
Camelback Mountain, the 3,081-yard Executive course claims to be
one of the most scenic golf courses in Arizona. MTS Land and MTS
Golf are affiliates of Irvine, Cal.-based Crown Realty &
Development Inc. MTS Land and MTS Golf each estimated assets and
debts of $10 million to $50 million.
Judge Charles G. Case II oversees the Debtors' cases. Gerald M.
Gordon, Esq., Robert C. Warnicke, Esq., and Teresa M. Pilatowicz,
Esq., at Gordon Silver, represent the Debtor. The petition was
signed by Robert A. Flaxman, administrative agent.
Lender U.S. Bank is represented by Steven D. Jerome, Esq., and
Evans O'Brien, Esq., at Snell & Wilmer L.L.P.
The Plan filed in the Debtors' cases provides that all creditors
with allowed claims will be paid the amount of their allowed
claims in full through the Plan. Holders of equity securities of
Debtors will retain all of their legal interests.
The U.S. Trustee for Region 14 advised the Court that an official
committee of unsecured creditors has not been appointed because an
insufficient number of persons holding unsecured claims against
the Debtors have expressed interest in serving on a committee.
The U.S. Trustee reserves the right to appoint a committee if
interest develop among the creditors.
MUD KING: Court Junks National Oilwell Varco's Case Dismissal Bid
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
denied National Oilwell Varco, L.P.'S motion to dismiss the
Chapter 11 case of Mud King Products, Inc., or in the alternative,
to appoint a Chapter 11 trustee.
The Debtor objected to the request.
As reported in the Troubled Company Reporter on Sept. 2, 2013,
according to National Oilwell, among other things:
1. The Debtor got caught stealing and committing textbook
corporate espionage against the Company. Because of this, at
least one Mud King director, Nigel Brassington, is under
federal criminal grand jury investigation. With no legal
or justifiable explanation for its actions, the Debtor's
strategy was not to deny, but to delay and obfuscate.
2. the failed to meet its burden to offer evidence of good
faith; and
3. the Debtor's solvent, asset-rich, nearly debt-free,
healthy business.
In a separate filing, National Oilwell requested for relief from
the automatic stay to proceed with a state court action pending
action in the District Court against Debtors and employee
defendants -- Nigel Brassington, Freddy Rubiano, Sean Cougot,
Martin Rodriguez, and former Mud King employee Gary Clayton.
According to National Oilwell, Messrs. Brassington and Handoyo
violated their Directors' duties of loyalty and care by amending
Mud King's bylaws. Messrs. Brassington and Handoyo violated
their duty of care when they authorized Mud King to incur
indemnification obligations to the employee defendants on the eve
of the Company's bankruptcy.
About Mud King Products
Mud King Products, Inc., filed a Chapter 11 petition (Bank. S.D.
Tex. Case No. 13-32101) on April 5, 2013. The petition was signed
by Erich Mundinger as vice president. The Debtor disclosed
$18,959,158 in assets and $3,351,216 in liabilities as of the
Chapter 11 filing. Annie E Catmull, Esq., Melissa Anne Haselden,
Esq., Mazelle Sara Krasoff, Esq., and Edward L Rothberg, Esq., at
Hoover Slovacek, LLP, represent the Debtor in its restructuring
effort. Judge Karen K. Brown presides over the case.
The U.S. Trustee was unable to appoint an official committee of
unsecured creditor.
NEIMAN MARCUS: Fitch Withdraws Ratings After Acquisition
--------------------------------------------------------
Fitch Ratings has withdrawn its ratings on Neiman Marcus, Inc.'s
and The Neiman Marcus Group, Inc. (together, Neiman Marcus).
Neiman Marcus does not participate in the rating process and Fitch
does not have sufficient information to provide ratings on the
company's new capital structure post its acquisition by Ares
Management LLC and Canada Pension Plan Investment Board.
Fitch currently rates Neiman Marcus as follows with a Rating Watch
Negative:
Neiman Marcus, Inc.
-- Long-term IDR 'B'.
The Neiman Marcus Group, Inc.
-- Long-term IDR 'B'.
-- Secured revolving credit facility 'BB/RR1';
-- Secured term loan facility 'B/RR4';
-- Secured debentures 'B/RR4'.
NEWALTA CORP: DNRS Confirms 'BB' Issuer Rating
----------------------------------------------
DBRS Inc. has confirmed the Issuer Rating of Newalta Corporation
at BB with a Stable trend. Using the methodology DBRS Criteria:
DBRS Recovery Ratings for Non-Investment Grade Corporate Issuers,
DBRS has also confirmed the recovery rating and rating of the
Unsecured Notes at RR4 and BB respectively, with a Stable trend.
The rating confirmation reflects Newalta's continued progress in
executing its business strategy toward improving business
stability through increasing its proportion of contracted revenue
from on-site waste processing and management works primarily in
its Heavy Oil segment and continued leadership and management
focus in adhering to its target financial metrics, which are
strong for the rating. For the last 12 months (LTM) period ended
June 30, 2013, these contracts contributed to 11% of total revenue
and the Company targets to increase the proportion steadily to 15%
by 2014. In addition, the contracted works help the Company
cement a stronger and ongoing working relationship with contracted
customers and help entrench the Company's market position against
its competitors. These contracts also reduce the Company's
overall exposure to commodity prices since they tend to base their
fees on service solutions provided. A higher mix of the more
stable on-site contract works coupled with the improved operating
efficiency and equipment utilization has strengthened Newalta's
business profile.
The Company's business risk profile and rating remain constrained,
however, by a number of business challenges, which includes demand
and revenue being sensitive to crude oil prices and drilling
activities in the oil and gas sector, possible changes in
environmental regulations, limited geographic presence beyond the
North American markets and exposure to commodity prices in the
Industrial division. In addition, the timing and amount of its
growth capital expenditure, in particular those related to its on-
site contracts, could be influenced by the Company's ability to
win contracts and the timing of their executions. As demonstrated
since 2012, growth capex has exceeded the Company's plan as a
result of winning a new on-site contract and the initial phase of
the execution of previously won contracts, resulting in periods of
free cash flow deficits.
Newalta's financial metrics have moderately weakened in LTM June
30, 2013, with adjusted debt-to-EBITDA of 3.0 times(x) (from 2.4x
in 2011) and adjusted cash flow-to-debt of 27% (from 36%). The
deterioration was the combined result of an increase in debt to
fund the higher growth capital expenditure associated with the
newly awarded contracts and weaker-than-expected operating
performance in the fourth quarter of 2012 due to lower drilling
activities and crude oil prices. Market conditions have
stabilized since the first half of 2013. DBRS believes that these
financial metrics are still consistent with Newalta's rating,
taking into consideration expected cash flow improvement of the
revenue-accretive investments. Newalta has provided guidance at
the release of the second quarter 2013 financial results that it
is on target to lower its total debt-to-adjusted EBITDA (as
defined in financial covenants for its credit facility, not a DBRS
definition) from 2.8x in LTM June 30, 2013, to 2.5x by the end of
the year and targets to maintain the ratio within 2.0x to 2.5x in
the longer term. DBRS also notes that the Company has raised
equity capital from time to time to finance its growth, the most
recent one being a $77 million equity issue concluded in October
2012, and total equity issued in the five-year period between 2008
and 2012 amounted to $122 million or about one-quarter of its
total capital expenditures.
Newalta remains one of the established leaders in the niche market
of providing waste processing and management services to the oil
and gas sector in Western Canada and increasingly in the United
States. Demand for such services has increased and is likely to
continue so as a result of increasingly stringent environmental
regulations relating to the production and drilling activities in
the sector. Compared to its industry peers, the Company's
competitive advantage lies mainly in its capability to provide on-
site services (which has been instrumental in its recent
acquisitions of mature fine tailings treatment and slop-oil
processing contracts) to its wider Canadian and U.S. network of
full and satellite facilities and its better financial flexibility
(operating with lower leverage). DBRS understands that the recent
corporate reorganization effective January 1, 2013, should help
the Company improve its customer focus and better allocation of
capital resources to higher-margin and faster-growing businesses.
Overall, DBRS considers the Company's near-term outlook as stable,
although market conditions remain mixed among the business
segments. Low natural gas prices, though moderately improved
recently, will continue to constrain material increases in
drilling activities, which in turn may limit improvement in the
Company's equipment utilization rate, while commodity (base oil,
crude oil and lead) prices remain under pressure. On the other
hand, Newalta's future revenues should be supported by its
recently acquired contracts in the higher-margin Heavy Oil and
Oilfield segments, improved operating efficiency in the lead
battery recycling Ville de Sainte-Catherine facility in Quebec and
moderate increase in business in the U.S. markets.
The Stable trend reflects DBRS' expectation that Newalta will
continue its efforts to improve its business risk profile by
increasing its contracted revenue and reducing its exposure to
commodity price swings over time. DBRS also expects the Company
to finance its growth capex by a balanced mix of operating cash
flow, debt and equity so that its financial metrics will improve
and not weaken further from the current levels. DBRS believes
that Newalta's rating could be pressured if its business becomes
materially affected by a severe and sustained drop in demand for
waste processing services due to lower oil and gas drilling and
production activities, if changes in environmental regulations or
operational errors result in a material increase in operating
costs or if the Company financial metrics materially weaken from
the LTM June 2013 levels for a sustained period. Conversely,
sustained improvement of their competitive position and in revenue
and earnings stability through an increased proportion of
contracted revenues while maintaining its financial metrics
similar to their full-year 2012 levels could be positive to the
rating.
Pursuant to the rating criteria on recovery ratings for non-
investment grade corporate issuers, DBRS has created a default
scenario for Newalta in order to analyze when and under what
circumstances a default could hypothetically occur and the
potential recovery of the Company's debt in the event of such
default. DBRS has determined Newalta's estimated value at default
using an EBITDA multiple valuation approach at approximately $360
million, using a 4.0x multiple of normalized EBITDA. Based on the
default scenario, the Unsecured Notes would have recovery
estimated between 30% and 60%, which aligns with a recovery rating
of RR4. Therefore, the instrument rating of the Unsecured Notes
is BB, the same as the Issuer Rating.
NNN PARKWAY: Hires Christine Baur as General Counsel
----------------------------------------------------
NNN Parkway 400 26, LLC and its debtor-affiliates seek
authorization from the Hon. Theodor C. Albert of the U.S.
Bankruptcy Court for the Central District of California to employ
Christine E. Baur as general bankruptcy counsel, nunc pro tunc to
Aug. 2, 2013 and Aug. 5, 2013.
Christine E. Baur's compensation will be at the expense of the
Estates in such amount as the Court may allow.
The Debtors require the services of Christine E. Baur for the
purpose of:
(a) assisting the Debtors in preparing and filing their
Petitions, Schedules, Statements of Financial Affairs and
other documents required to initiate the Debtors'
bankruptcy cases;
(b) serving as general counsel to the Debtors in the cases,
including advising the Debtors on requirements and
procedures of the Bankruptcy Code, the Federal Rules of
Bankruptcy Procedure, the U.S. Trustee Guidelines and the
Local Bankruptcy Rules;
(c) otherwise assisting the Debtors in an effort to prepare and
confirm a Chapter 11 plan.
The firm will be paid at these hourly rates:
Christine E. Baur $395
Attorney or Paralegal $295-$395
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
On July 3, 2013, the firm received a $150,000 pre-petition
retainer from Breakwater on behalf of the TIC. The firm applied
$829.50 of the pre-petition retainer to pre-petition services for
the August Debtor cases. The balance of the pre-petition retainer
is maintained in the firm's retainer account. Weiland, Golden,
Smiley, Wang Ekvall & Strok, LLP, co-counsel of Christine E. Baur,
also received a $150,000 pre-petition retainer from Breakwater on
behalf of the TICs. Co-counsel applied $45,664 of its retainer to
pre-petition services.
After application of the retainers to pre-petition services
rendered on behalf of the 28 affected Debtors, the balance of the
retainers will be used, on a pro-rata basis, to pay the firm's and
co-counsel's fees and expenses in connection with services
provided to any and all 29 Debtors. This is consistent with the
Court's orders entered Aug. 9, 2013, providing for the joint
administration of the 29 Debtors and the joint and several
liability of the 29 estates for allowed professional fees and
costs.
Using the modified fee application procedures, the Firm will first
draw down its fees and expenses on a pro rata basis from the
retainers, and then on a pro rata basis from any future retainers
provided by the Firm or co-counsel, to the extent not comprised of
cash collateral.
Christine E. Baur assured the Court that the firm 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 Debtors and their estates.
The firm can be reached at:
Christine E. Baur, Esq.
4563 Carmel Mountain Road, Suite 308 #332
San Diego, CA 92130
Tel: (858) 350-3757
Fax: (858) 876-9480
E-mail: christine@baurbklaw.com
About NNN Parkway 400
NNN Parkway 400 26, LLC, filed a bare-bones Chapter 11 petition
(Bankr. C.D. Calif. Case No. 12-24593) in Santa Ana, California,
on Dec. 31, 2012. Dana Point, California-based NNN Parkway
estimated assets and debts of $10 million to $50 million. The Law
Office of Christine E. Baur, and David A. Lee, Esq., at Weiland,
Golden, Smiley, Wang Ekvall & Strok, LLP, represent the Debtor.
Pre-petition, the Debtors retained HighPoint Management Solutions,
LLC, a bankruptcy consulting company, as a manager of the Debtors,
and HighPoint's President, Mr. Mubeen Aliniazee, as the Debtors'
Restructuring Officer, to assist the Debtors in their compliance
with the Chapter 11 bankruptcy process.
The Debtors' primary asset is a commercial real property commonly
known as Parkway 400, which is a two-building office campus
totaling approximately 193,281 square feet located at 11720 Amber
Park Drive and 11800 Amber Park Drive, Alpharetta, Georgia. The
Debtors hold a concurrent ownership interest in the Property with
other tenant-in-common investors and the sponsor, NNN Parkway 400,
LLC.
NNN PARKWAY: Taps Weiland Golden as Local Counsel
-------------------------------------------------
NNN Parkway 400 26, LLC and its debtor-affiliates ask for
authorization from the Hon. Theodor C. Albert of the U.S.
Bankruptcy Court for the Central District of California to employ
Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP as local
counsel, nunc pro tunc to Aug. 2, 2013 and Aug. 5, 2013.
Weiland Golden's compensation will be at the expense of the
Estates in such amount as the Court may allow.
The Debtors require the services of Weiland Golden for the purpose
of:
(a) assisting the Debtors and the Law Office of Christine E.
Baur, the Debtors' general bankruptcy counsel in preparing and
filing their petitions, schedules, statements of financial affairs
and other documents required to initiate the Debtors' bankruptcy
cases;
(b) serving as co-counsel to the Debtors in cases, in a local
capacity, including advising the Debtors on the requirements and
procedures of the Bankruptcy Code, the Federal Rules of Bankruptcy
Procedures, the U.S. Trustee Guidelines and the Local Bankruptcy
Rules; and
(c) assisting the Debtors, together with the Baur Firm, in an
effort to prepare and confirm a Chapter 11 plan.
Weiland Golden will be paid at these hourly rates:
Beth E. Gaschen $295
Attorney or Paralegal $200-$395
Weiland Golden will also be reimbursed for reasonable out-of-
pocket expenses incurred.
On July 3, 2013, Weiland Golden received a $150,000 pre-petition
retainer from Breakwater on behalf of the TICs. Weiland Golden
applied $45,664 of the pre-petition retainer to pre-petition
services for the August Debtor cases. The balance of the pre-
petition retainer is maintained in the firm's retainer account.
The Baur firm also received a $150,000 pre-petition retainer from
Breakwater on behalf of the TICs. Co-counsel applied $829.50 of
Baur retainer to pre-petition services.
After application of the retainers to pre-petition services
rendered on behalf of the 28 affected Debtors, teh balance of the
retainers will be used, on a pro-rata basis, to pay the firm's and
the Baur firm's fees and expenses in connection with services
provided to any and all 29 Debtors. This is consistent with the
Court's orders entered Aug. 9, 2013, providing for the joint
administration of the 29 Debtors and the joint and several
liability of the 29 estates for allowed professional fees and
costs.
Using the modified fee application procedures, Weiland Golden will
first draw down its fees and expenses on a pro rata basis from the
retainers, and then on a pro rata basis from any future retainers
provided by the Weiland Golden or the Baur Firm, to the extent not
comprised of cash collateral.
Beth E. Gaschen, associate of Weiland Golden, assured the Court
that the firm 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 Debtors and their estates.
Weiland Golden can be reached at:
Beth E. Gaschen, Esq.
WEILAND, GOLDEN, SMILEY,
WANG EKVALL & STROK, LLP
650 Town Center Drive, Suite 950
Costa Mesa, CA 92626
Tel: (714) 966-1000
Fax: (714) 966-1002
E-mail: bgaschen@wgllp.com
About NNN Parkway 400
NNN Parkway 400 26, LLC, filed a bare-bones Chapter 11 petition
(Bankr. C.D. Cal. Case No. 12-24593) in Santa Ana, California, on
Dec. 31, 2012. Dana Point, California-based NNN Parkway estimated
assets and debts of $10 million to $50 million. The Law Office of
Christine E. Baur, and David A. Lee, Esq., at Weiland,
Golden, Smiley, Wang Ekvall & Strok, LLP, represent the Debtor.
Pre-petition, the Debtors retained HighPoint Management Solutions,
LLC, a bankruptcy consulting company, as a manager of the Debtors,
and HighPoint's President, Mr. Mubeen Aliniazee, as the Debtors'
Restructuring Officer, to assist the Debtors in their compliance
with the Chapter 11 bankruptcy process.
The Debtors' primary asset is a commercial real property commonly
known as Parkway 400, which is a two-building office campus
totaling approximately 193,281 square feet located at 11720 Amber
Park Drive and 11800 Amber Park Drive, Alpharetta, Georgia. The
Debtors hold a concurrent ownership interest in the Property with
other tenant-in-common investors and the sponsor, NNN Parkway 400,
LLC.
NORTEK INC: Moody's Changes Ratings Outlook to Stable
-----------------------------------------------------
Moody's Investors Service affirmed the ratings of Nortek, Inc., a
diversified manufacturer of branded, residential and commercial
building products, including the B3 Corporate Family Rating, but
changed the rating outlook to stable from positive. The
stabilization of the outlook reflects Moody's view that Nortek's
operating performance will not be sufficiently robust to
significantly improve key debt leverage credit metrics to support
a higher rating. Although Moody's recognizes Nortek's
manufacturing and relocation program and other rationalization and
operational improvement programs will position the company over
the long term for future growth, the incurred costs are negatively
impacting earnings, cash flows and debt credit metrics, warranting
the stabilization of the rating outlook.
The following ratings/assessments were affected by this action:
Corporate Family Rating affirmed at B3;
Probability Default Rating affirmed at B3-PD; and,
1st lien Sr. Sec. Term Loan due 2017 affirmed at Ba3 (LGD2, 17%);
Sr. Unsec. Notes due 2018 affirmed at Caa1 (LGD4, 64%);
Sr. Unsec. Notes due 2021 affirmed at Caa1 (LGD4, 64%); and,
Speculative grade liquidity rating of SGL-2 is affirmed.
Ratings Rationale:
Nortek's B3 Corporate Family Rating reflects the company's
leveraged capital structure. For the 12 months ended June 29,
2013, debt-to-EBITDA was approximately 6.5x and debt-to-book
capitalization was about 85.4%, positioning the company solidly
within the current rating category. Interest coverage, defined as
EBITA-to-interest expense was approximately 1.4x over the same
period (all ratios incorporate Moody's standard adjustments).
Also, Nortek has significant negative tangible worth. Negatively
impacting Nortek's earnings and cash flows are the charges related
to its manufacturing and relocation program and other
rationalization programs. Through the first six months of 2013,
Nortek has taken about $20.0 million in charges and has indicated
that charges for the full year could reach about $30 to $35
million, with an additional $25 to $30 million to be taken mostly
in 2014. If Nortek's earnings were adjusted for charges incurred
during the first half of 2013, leverage would only improve by
about a half of turn and interest coverage by about a quarter of a
turn. Also, Nortek's earnings are highly volatile, especially in
its Custom & Engineered Solutions ("CES") business. Revenues
declined in this operating segment by almost $55 million or about
20% in the first half of 2013 relative to the same period of the
previous year.
However, backlog for the CES business is up by about 17% on a
year-over-year basis. Also, Moody's recognizes Nortek's
manufacturing and relocation program and other rationalization
programs will position it over the long term for future growth.
The company's good liquidity profile, characterized by abundant
availability under its $300 million asset-based revolving credit
facility, gives Nortek the financial flexibility to implement its
restructuring programs while meeting increased demand, as it
benefits from the recovery in the home building and repair and
remodeling sectors.
The change in rating outlook to stable from positive reflects
Moody's view that Nortek's key debt credit metrics will be
supportive of the current corporate family rating, but remain
below levels previously identified that could result in higher
ratings.
Positive rating actions could ensue when Nortek demonstrates an
ability to generate higher operating earnings and free cash flow.
Operating performance that results in adjusted EBITA-to-interest
expense sustained above 2.0x and adjusted debt-to-EBITDA sustained
below 5.0x (all ratios incorporate Moody's standard adjustments)
could have a positive impact on the company's credit ratings.
Negative rating actions may occur if Nortek fails to benefit from
its rationalization programs or if operating performance falls
below Moody's expectations. A weakening in financial performance
due to a decline in its end markets could also stress the ratings.
Adjusted EBITA-to-interest expense trending towards 1.25x,
adjusted debt-to-EBITDA sustained above 7.0x (all ratios
incorporate Moody's standard adjustments), or a deteriorating
liquidity profile could pressure the ratings.
Nortek, Inc., headquartered in Providence, Rhode Island, is a
diversified manufacturer of branded, residential and commercial
building products. Its produces residential ventilation products,
technology products, and air conditioning and heating products.
Ares Management LLC ("Ares"), through its respective funds, is
Nortek's largest shareholder. Revenues for the 12 months through
June 29, 2013 totaled about $2.2 billion.
NY COMMUNITY BANCORP: DBRS Confirms 'BB' Preferred Stock Rating
---------------------------------------------------------------
DBRS Inc. has confirmed the ratings of New York Community Bancorp,
Inc. and its related entities, including its Issuer & Senior Debt
rating of BBB (high). The trend for all ratings remains Stable.
The ratings action follows a detailed review of the Company's
operating results, financial fundamentals and future prospects.
NYCB's ratings confirmation considers the Company's resilient
earnings generation and sound asset quality through the cycle,
which reflects positively on its lower-risk niche business of
multi-family lending primarily on rent controlled/stabilized
buildings in New York City. The ratings also reflect NYCB's
relatively high, yet manageable level, of wholesale funding
reliance, exposure to larger credits and geographic concentration
in its loan book and its high dividend payout ratio which reduces
financial flexibility.
Although the Company's deposit franchise is in non-contiguous
states, including Ohio, Arizona, and Florida, its loan portfolio
is overwhelmingly collateralized by properties located within the
New York City metropolitan area. Specifically, NYCB utilizes
deposits generated across its non-contiguous branch network to
fund its niche business. Historically, NYCB's deposit franchise
has grown through acquisitions and DBRS expects this to continue.
Nonetheless, ratings could be pressured if the Company were to
reach for a large transformational acquisition or a new business
line in a significant way.
Overall, NYCB's earnings capacity remains sound, benefiting from a
low cost operating platform, stable net interest margin (NIM), and
low credit costs. DBRS notes that with the increase in long-term
rates in recent months that the company has seen an increase in
refinancing and associated prepayment fees from its core multi-
family customer which has helped to boost the NIM and net interest
income as these customers move to lock-in rates. This has helped
to offset a decline in mortgage banking activity and continued
asset yield pressure.
NYCB's expense base remains well-managed, in DBRS's opinion, as
its niche driven lending platform drives a low cost business
model. Indeed, the Company's efficiency ratio remains enviably
low (in the low 40% range in recent periods)and far below that of
most banks.
The Company's asset quality metrics were tested through the most
recent cycle and while nonperforming assets increased, losses
remained relatively low. DBRS views this as reflective of the
Company's conservative underwriting as well as the highly
predictable cash flows from its niche rent controlled/stabilized
multi-family lending product which represents over two-thirds of
the loan portfolio. Asset quality continues to trend positively
in recent periods with both NPAs and NCOs declining.
Finally, NYCB's capital remains sound and is of high quality with
a large common equity component. At June 30, 2013, the Company's
tangible common equity ratio was 7.74%.
NYCB, a multi-bank holding company headquartered in Westbury, New
York reported $44.2 billion in assets as of June 30, 2013.
Issuer Debt Rated Rating Action Rating
------ ---------- ------------- ------
New York Community Issuer & Senior Confirmed BBB (high)
Bancorp, Inc. Debt
New York Community Short-Term Confirmed R-2 (high)
Bancorp, Inc. Instruments
New York Community Trust Preferred Confirmed BBB
Bancorp, Inc. Securities
New York Community Deposits & Senior Confirmed A (low)
Bank Debt
New York Community Short-Term Confirmed R-1 (low)
Bank Instruments
New York Community Preferred Stock Confirmed BB (high)
Bank
PATRIOT COAL: Files Notice of Rejection of Certain Contracts
------------------------------------------------------------
On Oct. 8, 2013, Patriot Coal Corp., et al., filed with the U.S
Bankruptcy Court a Notice of Rejection of Certain Contracts and
the Abandonment of Expandable Property, as set forth on Schedule
"A" attached to said notice.
A copy of Schedule A is available at:
http://bankrupt.com/misc/patriotcoal.doc4752.pdf
Pursuant to the SDNY Bankruptcy Court's Aug. 16, 2013 Procedures
Order, unless a written Objection is filed with the Court and
served by Oct. 18, 2013, at 4:00 p.m. in accordance with the terms
of the Procedures Order, the Contracts listed on Schedule A will
be rejected pursuant to section 365(a) of the Bankruptcy Code, in
each case effective as of the date set forth on said schedule.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP serves as lead restructuring counsel.
Bryan Cave LLP serves as local counsel to the Debtors. Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The U.S. Trustee appointed a seven-member creditors committee.
Kramer Levin Naftalis & Frankel LLP serves as its counsel.
HoulihanLokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed December 19 by the
bankruptcy judge. The New York Judge in a Jan. 23, 2013 order
denied motions to transfer the venue to the U.S. Bankruptcy Court
for the Southern District of West Virginia.
Patriot Coal Corporation on Sept. 6 filed a Plan of Reorganization
with the U.S. Bankruptcy Court for the Eastern District of
Missouri as contemplated by the terms of Patriot's Debtor-in-
Possession financing. The Disclosure Statement is expected to be
filed on or before Oct. 2, 2013, and the approval hearing is
currently scheduled for Nov. 6, 2013.
PATRIOT COAL: Plan Revised for Settlements, Rights Offerings
------------------------------------------------------------
Patriot Coal Corp., et al., filed with the U.S. Bankruptcy Court
for the Eastern District of Missouri a First Amended Joint Chapter
11 Plan of Reorganization and an explanatory disclosure statement
on Oct. 9, 2013.
The Debtors filed an initial version of the plan documents on
Sept. 6. Following the filing, the Debtors continued to engage in
discussions with potential investors regarding a potential
transaction that would provide hundreds of millions of dollars of
emergence financing for the Estates. The Debtors also continued
their negotiations with the UMWA, Arch Coal, Inc., and Peabody
Energy Corporation in an attempt to reach global settlements with
these parties and resolve the risks and uncertainties created by
the parties' ongoing litigation, provide necessary liquidity to
the Debtors and provide funding to the UMWA VEBA.
As described in the Disclosure Statement, the results of these
extensive efforts, are, subject to Bankruptcy Court approval and
the additional conditions in the respective term sheets, (i) a
commitment by certain funds and accounts managed and/or advised by
Knighthead Capital Management, LLC, to backstop two rights
offerings, which was consented to by the Creditors' Committee and
the UMWA, (ii) a global settlement among the Debtors, the UMWA and
Peabody, and (iii) a global settlement between the Debtors and
Arch.
The Rights Offerings will provide the Debtors with $250 million of
capital, and the Peabody Settlement and Arch Settlement will
provide the Debtors with over $150 million in incremental
liquidity and value. The Peabody Settlement also provides the
UMWA VEBA with $280 million over the next four years. Moreover,
the Rights Offerings and these settlements will facilitate the
Debtors' satisfaction of certain conditions required by the
Debtors' settlement of the Section 1113/1114 Motion with the UMWA
that was approved by the Bankruptcy Court on Aug. 22, 2013, and
which is expected to provide the Debtors with labor stability and
critically needed savings of approximately $130 million annually
over the next four years.
According to the Debtors, the Creditors' Committee and the UMWA
have consented to the Rights Offerings Term Sheet and agreed to
support the Backstop Commitment Agreement and the consummation of
the transactions contemplated by the Rights Offerings Term Sheet
and the Backstop Commitment Agreement.
The Debtors continue to engage in active discussions with multiple
parties on the potential terms of senior exit financing. The
Debtors will include the terms of the Exit Credit Facilities in
the Plan Supplement.
According to papers filed with the Court, the Debtors are still in
the process of marketing the Exit Credit Facilities, and, as a
result, have yet to finalize their terms. The Debtors will
include the terms of the Exit Credit Facilities in the Plan
Supplement.
Treatment of Claims
Subject to Section 3.3(e) of the Plan each holder of an Allowed
General Unsecured Claim will be entitled to (i) if such holder is
an Eligible Holder, its Ratable Share of Patriot Coal's Debtor
Allocation of (1) the GUC Rights and (2) the GUC Stock Allocation,
or (ii) if such holder is not an Eligible Holder, its Ratable
Share of Patriot Coal's Debtor Allocation of the GUC Stock
Allocation.
Class IG Section 510(b) Claims and Class IH Interests in Patriot
Coal will receive no distribution under the Plan.
Senior Notes Parents Claims in Class IC will be entitled to (i) if
such holder is an Eligible Holder, its Ratable Share of (1) the
Senior Notes Rights and (2) the Senior Notes Stock Allocation or
(ii) if such holder is not an Eligible Holder, its Ratable Share
of the Senior Notes Stock Allocation.
Senior Notes Guarantee Claims (Class 2C-100C), with estimated
Allowed Claims of $24.75 billion, will receive the distribution
described above in respect of its Allowed Senior Notes Parent
Claim, the amount of which has been determined by giving effect to
the guarantees by the Subsidiary Debtors of the Senior Notes.
A copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/patriotcoal.doc4763.pdf
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP serves as lead restructuring counsel.
Bryan Cave LLP serves as local counsel to the Debtors. Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The U.S. Trustee appointed a seven-member creditors committee.
Kramer Levin Naftalis & Frankel LLP serves as its counsel.
HoulihanLokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed December 19 by the
bankruptcy judge. The New York Judge in a Jan. 23, 2013 order
denied motions to transfer the venue to the U.S. Bankruptcy Court
for the Southern District of West Virginia.
Patriot Coal Corporation on Sept. 6 filed a Plan of Reorganization
with the U.S. Bankruptcy Court for the Eastern District of
Missouri as contemplated by the terms of Patriot's Debtor-in-
Possession financing. The Disclosure Statement is expected to be
filed on or before Oct. 2, 2013, and the approval hearing is
currently scheduled for Nov. 6, 2013.
PATRIOT COAL: UMWA Enters Into Settlement with Peabody on Benefits
------------------------------------------------------------------
The United Mine Workers of America (UMWA) on Oct. 10 disclosed
that it has reached a global settlement with Peabody Energy and
Patriot Coal that will provide funding of more than $400 million
to cover future health care benefits for retirees affected by the
bankruptcy of Patriot Coal. Those benefits will be paid by the
Patriot Retirees Voluntary Employee Benefit Association (VEBA).
Peabody will make payments totaling $310 million over the next
four years, the proceeds of which will be applied to future
retiree health care benefits. Payments of $90 million will be
made in 2014, followed by payments of $75 million each year at the
beginning of 2015 and 2016, with a final payment of $70 million at
the beginning of 2017.
Patriot has agreed to contribute $15 million to the VEBA in 2014,
with up to an additional $60 million to be paid into the fund over
the following three years. This is in addition to the production-
based royalty payments Patriot will make to the VEBA in upcoming
years that could provide more than $15 million.
For its part, the UMWA has agreed to relinquish the value of
virtually all of its 35 percent stake in Patriot, which the union
received as a result of a May 29 ruling by federal Bankruptcy
Judge Kathy Surratt-States. The union has also agreed to halt its
months-long public relations and direct action effort related to
Peabody in St. Louis and elsewhere regarding the effects of the
Patriot Coal bankruptcy.
The settlement will be submitted to Judge Surratt-States for her
approval. She is expected to rule shortly after a Nov. 6 hearing
on this matter.
"I am very pleased that we have been able to reach this agreement
with Peabody and Patriot," said UMWA International President Cecil
E. Roberts. "This is a significant amount of money that will help
maintain health care for thousands of retirees who earned those
benefits though years of labor in America's coal mines. This
settlement will also help Patriot emerge from bankruptcy and
continue to provide jobs for our members and thousands of others
in West Virginia and Kentucky."
Patriot Coal was spun off from Peabody in 2007, and entered
Chapter 11 bankruptcy reorganization on July 9, 2012. Judge
Surratt-States' May 29 ruling allowed Patriot to quit paying
health care benefits for retirees, and authorized the
establishment of the VEBA, with initial funding of $15 million
from Patriot and the 35 percent equity stake, to take over that
responsibility.
Several thousand of those retirees worked for subsidiaries of Arch
Coal, which has not yet settled with the union. "Arch still can
step up and meet its obligation to these retirees," Mr. Roberts
said. "We will continue to encourage them to do so in the coming
days."
"This settlement, as significant as it is, still does not provide
the level of funding needed to maintain health care for these
retirees forever," Mr. Roberts said. "That is why we are
continuing our efforts to pass bipartisan legislation in Congress
that will put these retirees under the Coal Act, meaning their
long-term health care benefits would be secured at
no additional cost to taxpayers," Mr. Roberts said.
HR 2918, introduced in the House by Rep. David McKinley (R-W.Va.),
currently has 24 co-sponsors from both parties. SB 468 was
introduced in the Senate by Sen. Jay Rockefeller (D-W.Va.) and
currently has six co-sponsors.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP serves as lead restructuring counsel.
Bryan Cave LLP serves as local counsel to the Debtors. Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The U.S. Trustee appointed a seven-member creditors committee.
Kramer Levin Naftalis & Frankel LLP serves as its counsel.
HoulihanLokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed December 19 by the
bankruptcy judge. The New York Judge in a Jan. 23, 2013 order
denied motions to transfer the venue to the U.S. Bankruptcy Court
for the Southern District of West Virginia.
Patriot Coal Corporation on Sept. 6 filed a Plan of Reorganization
with the U.S. Bankruptcy Court for the Eastern District of
Missouri as contemplated by the terms of Patriot's Debtor-in-
Possession financing. The Disclosure Statement is expected to be
filed on or before Oct. 2, 2013, and the approval hearing is
currently scheduled for Nov. 6, 2013.
RHODES MERGER: Moody's Rates New $250MM Unsecured Notes 'Caa3'
--------------------------------------------------------------
Moody's Investors Service assigned a Caa3 rating to the senior
unsecured notes due 2021 to be offered by Rhodes Merger Sub, Inc.,
the acquirer of rue21, inc. Concurrently, Moody's affirmed all
other ratings, including the Caa1 Corporate Family Rating, Caa1-PD
Probability of Default Rating and B3 rating on the proposed
secured term loan due 2020. The ratings outlook is stable.
Proceeds from the notes, $539 million term loan and approximately
$270 million of equity, are to be used to fund the acquisition of
the company by funds managed by Apax Partners. The ratings on the
proposed notes and term loan are subject to review of final
documentation. Upon completion of the transaction, Rhodes will
merge with and into rue21, with rue21 being the surviving entity
and obligor under the proposed term loan and notes.
The following ratings were assigned:
Rhodes Merger Sub, Inc.:
-- $250 million senior unsecured notes due 2021 at Caa3 (LGD 5,
85%)
The following ratings were affirmed:
Rhodes Merger Sub, Inc.:
-- Corporate Family Rating at Caa1
-- Probability of Default Rating at Caa1-PD
-- $539 million senior secured term loan due 2020 at B3 (LGD 3,
39%)
Ratings Rationale:
rue21's Caa1 Corporate Family Rating reflects the company's
weaker-than-expected sales performance on top of its already-weak
pro forma debt protection metrics. Debt is high due to the
proposed acquisition of the company, which is expected to close in
mid-October. Pro forma debt/EBITDA (calculated using Moody's
standard analytic adjustments, including leases capitalized at 8
times), was around 8.0 times for the twelve months ended August 3,
2013. Given the discretionary nature of rue21's product, recent
fashion missteps and pressures facing the company's lower income
target customer, leverage is likely to further increase and remain
elevated over the near-to-intermediate term. The rating also
reflects the company's small relative scale in terms of revenue
and the moderate degree of differentiation within the highly
competitive and fragmented 'fast fashion' industry.
The rating is supported by adequate liquidity, including the
expectation for modest positive free cash flow augmented by the
discretionary nature of growth capital spending, largely undrawn
capacity under its proposed $150 million asset-based ("ABL")
revolving credit facility due 2018, lack of financial maintenance
covenants, and the lack of any near-term maturities in its pro
forma capital structure. The rating also considers rue21's longer
term track record of steady, profitable growth. Ongoing new store
openings, the launch of its e-commerce website, store remodels and
reconfigurations, and the expansion of its men's category are
expected to drive longer term growth.
The stable outlook reflects the expectation that rue21 will
maintain adequate liquidity, despite very weak credit metrics, as
it works to stabilize the current negative sales trends. Continued
sales decline could over time increase the risk that the proposed
capital structure becomes unsustainable.
Ratings could be downgraded if the company fails to stem the
declines in sales or if liquidity were to erode in any way.
Ratings could be upgraded if the company is able to reverse recent
negative sales trends, reducing leverage through both earnings
growth and debt reduction with excess free cash flow.
Quantitatively, ratings could be upgraded if debt/EBITDA was
sustained below 8 times and interest coverage above 1.25x.
Headquartered in Warrendale, PA, rue21 is a value-focused retailer
of teen apparel, accessories and footwear. The company operated
959 stores in 47 states, and generated nearly $950 million in
sales for the twelve months ended August 3, 2013.
RIDGECREST ESTATES: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor entities filing separate Chapter 11 petitions:
Debtor Case No.
------ --------
Ridgecrest Estates, L.P. 13-49315
4880 South Farm Road 189
Rogersville, MO 65742
Lost Tree South, L.P. 13-49316
4880 South Farm Road 189
Rogersville, MO 65742
Chapter 11 Petition Date: October 11, 2013
Court: United States Bankruptcy Court
Eastern District of Missouri (St. Louis)
Judge: Hon. Barry S. Schermer
Debtors' Counsel: Brian James LaFlamme, Esq.
SUMMERS COMPTON WELLS LLC
8909 Ladue Road
St. Louis, MO 63124
Tel: (314) 991-4999
Email: blaflamme@summerscomptonwells.com
David A. Sosne, Esq.
SUMMERS COMPTON WELLS LLC
8909 Ladue Rd.
St. Louis, MO 63124
Tel: (314) 991-4999
Fax: 314-991-2413
Email: dasattymo@summerscomptonwells.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by John Harpole, managing member of
Ridgecrest.
The Debtors did not file a list of their largest unsecured
creditors when they filed the petitions.
RURAL/METRO CORP: Wants Lease Decision Deadline Extended to March
-----------------------------------------------------------------
Rural/Metro Corporation, et al., ask the U.S. Bankruptcy Court for
the District of Delaware to extend until March 3, 2014, the
statutory deadline to assume or reject their existing unexpired
leases, subleases or other agreements to which the Debtors are a
party and which may be considered unexpired leases of
nonresidential real property under applicable law.
The Debtors occupy premises across the United States in connection
with the operation of their businesses. With respect to many
locations, the Debtors do not own the real property where such
enterprises are located and, instead, lease the real property. As
a result, the Debtors are tenants under approximately 280 leases
of non-residential real property.
Absent the extension, the lease decision headline will expire on
Dec. 2, 2013.
The Debtors set a Nov. 5, hearing at 11 a.m., on the matter.
Objections, if any, are due Oct. 17, at 4 p.m.
About Rural/Metro Corporation
Headquartered in Scottsdale, Arizona, Rural/Metro Corporation --
http://www.ruralmetro.com-- is a national provider of 911-
emergency and non-emergency interfacility ambulance services and
private fire protection services, operating in 21 states and
nearly 700 communities.
Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection
on Aug. 4, 2013, before the U.S. Bankruptcy Court for the District
of Delaware.
The Debtors' lead bankruptcy counsel are Matthew A. Feldman, Esq.,
Rachel C. Strickland, Esq., and Daniel Forman, Esq., at Willkie
Farr & Gallagher LLP, in New York. Maris J. Kandestin, Esq., and
Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, serve as the Debtors' local Delaware
counsel.
Alvarez & Marsal Healthcare Industry Group, LLC, and FTI
Consulting, Inc., are the Debtors' financial advisors, while
Lazard Freres & Co. L.L.C. is their investment banker. Donlin,
Recano & Company, Inc., is the Debtors' claims and noticing agent.
The U.S. Trustee has appointed a three-member official committee
of unsecured creditors in the Chapter 11 case. The Committee
retained Brown Rudnick LLP as co-counsel; Womble Carlyle Sandridge
& Rice, LLP as its Delaware co-counsel; and GLC Advisors & Co.,
LLC as financial advisor.
The Debtors have arranged $75 million of DIP financing from a
group of prepetition lenders led by Credit Suisse AG. An interim
order has allowed the Debtors to access $40 million of the DIP
facility.
RURAL/METRO CORP: Oct. 24 Hearing on Adequacy of Plan Outline
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
convene a hearing Oct. 24, 2013, at 2:30 p.m., to consider the
adequacy of information in the Disclosure Statement explaining
Rural/Metro Corporation, et al.'s Chapter 11 Plan. Objections, if
any, are due Oct. 17, at 4 p.m.
As reported in the Troubled Company Reporter on Oct. 7, 2013, the
Debtors had launched the final phase of their restructuring,
seeking court approval to start the balloting on a Chapter 11 plan
designed to cut its $750 million load of long-term debt down to
$375 million.
According to the Disclosure Statement, the consenting lenders
holding in excess of 51% of the Debtors' secured debt and the
consenting noteholders holding in excess of 66.66% of the Debtors'
unsecured notes support the confirmation of the Plan.
The overall purpose of the Plan is to provide for the
restructuring of the Debtors' liabilities in a manner designed to
maximize recovery to stakeholders and to enhance the financial
viability of the Reorganized Debtors. Generally, the Plan
provides for a consensual balance sheet restructuring that will
reduce the Debtors' funded indebtedness by approximately 50% and
cut interest payments nearly in half. Specifically, the
restructuring transactions contemplated in the Plan will
substantially de-lever debt obligations by (i) partially paying
down the prepetition senior secured facility by $50,000,000 and
(ii) converting Noteholder Claims and Other Unsecured Claims (to
the extent holders of Other Unsecured Claims elect to receive New
Common Stock in lieu of Cash) into 100% of the common stock of
Reorganized RMC subject to dilution.
The Debtors' prepetition equity holders' interests will be
canceled, and upon emergence, all of Reorganized RMC's New Common
Stock will be owned by the holders of Noteholder Claims (including
those participating in the Rights Offering) and the holders of the
Other Unsecured Claims (to the extent such holders of Other
Unsecured Claims elect to receive New Common Stock in lieu of
Cash). Creditors holding Other Secured Claims will receive cash,
their collateral, or retain their liens, as applicable, in
satisfaction of their Claims.
About Rural/Metro Corporation
Headquartered in Scottsdale, Arizona, Rural/Metro Corporation --
http://www.ruralmetro.com-- is a national provider of 911-
emergency and non-emergency interfacility ambulance services and
private fire protection services, operating in 21 states and
nearly 700 communities.
Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection
on Aug. 4, 2013, before the U.S. Bankruptcy Court for the District
of Delaware.
The Debtors' lead bankruptcy counsel are Matthew A. Feldman, Esq.,
Rachel C. Strickland, Esq., and Daniel Forman, Esq., at Willkie
Farr & Gallagher LLP, in New York. Maris J. Kandestin, Esq., and
Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, serve as the Debtors' local Delaware
counsel.
Alvarez & Marsal Healthcare Industry Group, LLC, and FTI
Consulting, Inc., are the Debtors' financial advisors, while
Lazard Freres & Co. L.L.C. is their investment banker. Donlin,
Recano & Company, Inc., is the Debtors' claims and noticing agent.
The U.S. Trustee has appointed a three-member official committee
of unsecured creditors in the Chapter 11 case. The Committee
retained Brown Rudnick LLP as co-counsel; Womble Carlyle Sandridge
& Rice, LLP as its Delaware co-counsel; and GLC Advisors & Co.,
LLC as financial advisor.
The Debtors have arranged $75 million of DIP financing from a
group of prepetition lenders led by Credit Suisse AG. An interim
order has allowed the Debtors to access $40 million of the DIP
facility.
RURAL/METRO CORP: Womble Okayed as Committee's Delaware Co-Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the Official Committee of Unsecured Creditors in the Chapter 11
cases of Rural/Metro Corporation, et al., to retain Womble Carlyle
Sandridge & Rice, LLP as its Delaware co-counsel.
As reported in the Troubled Company Reporter on Sept. 23, 2013,
the Committee anticipated that the primary attorneys who will
represent the Committee and their hourly rates are:
Steven K. Kortanek $600
Kevin J. Mangan $490
Thomas M. Horan $380
Attorneys $200 - $650
Paraprofessionals $100 - $270
To the best of the Committee's knowledge, WCSR is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Rural/Metro Corporation
Headquartered in Scottsdale, Arizona, Rural/Metro Corporation --
http://www.ruralmetro.com-- is a national provider of 911-
emergency and non-emergency interfacility ambulance services and
private fire protection services, operating in 21 states and
nearly 700 communities.
Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection
on Aug. 4, 2013, before the U.S. Bankruptcy Court for the District
of Delaware.
The Debtors' lead bankruptcy counsel are Matthew A. Feldman, Esq.,
Rachel C. Strickland, Esq., and Daniel Forman, Esq., at Willkie
Farr & Gallagher LLP, in New York. Maris J. Kandestin, Esq., and
Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, serve as the Debtors' local Delaware
counsel.
Alvarez & Marsal Healthcare Industry Group, LLC, and FTI
Consulting, Inc., are the Debtors' financial advisors, while
Lazard Freres & Co. L.L.C. is their investment banker. Donlin,
Recano & Company, Inc., is the Debtors' claims and noticing agent.
The U.S. Trustee has appointed a three-member official committee
of unsecured creditors in the Chapter 11 case. The Committee
retained Brown Rudnick LLP as co-counsel; Womble Carlyle Sandridge
& Rice, LLP as its Delaware co-counsel; and GLC Advisors & Co.,
LLC as financial advisor.
The Debtors have arranged $75 million of DIP financing from a
group of prepetition lenders led by Credit Suisse AG. An interim
order has allowed the Debtors to access $40 million of the DIP
facility.
SAKS INCORPORATED: Fitch Withdraws Ratings over Hudson's Bay Deal
-----------------------------------------------------------------
Fitch Ratings has withdrawn its ratings on Saks Incorporated as
Saks is in the process of being acquired by Hudson's Bay Company
(HBC). HBC has recently put the financing in place to fund the
acquisition which is expected to close before year end. Fitch does
not have sufficient information to provide ratings on HBC's new
capital structure.
Saks currently has a modest amount of on-balance sheet debt, which
is expected to be paid off (or converted into equity) before or at
the close of the transaction. Accordingly, Fitch will no longer
provide ratings or analytical coverage for Saks.
Fitch currently rates Saks as follows:
-- Long-term IDR at 'BB';
-- $600 million secured credit facility at 'BBB-';
-- Senior unsecured notes at 'BB'.
The ratings are on Negative Watch.
SCICOM DATA: Court Approves Fafinski Mark as Committee Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of SCICOM Data
Services, Ltd. sought and obtained permission from the Hon.
Michael E. Ridgway of the U.S. Bankruptcy Court for the District
of Minnesota to retain Fafinski, Mark & Johnson, P.A. counsel,
effective Sept. 25, 2013.
The Committee to retain and employ Fafinski Mark as its attorneys
to perform for the Committee all necessary legal services,
including but not limited to:
(a) consulting with the debtor-in-possession and the Office of
the U.S. Trustee regarding administration of the cases;
(b) advising the Committee with respect to its rights, power
and duties as they relate to the cases;
(c) investigating the acts, conduct, assets, liabilities and
financial condition of the Debtor;
(d) assisting the Committee in analyzing the Debtor's pre-
petition and post-petition relationships with its
creditors, equity interest holders, employees,
and other parties in interest;
(e) assisting and negotiating on the Committee's behalf in
matters relating to the claims of the Debtor's other
creditors;
(f) requesting the appointment of a trustee or examiner in
instances where the Committee deems such action
appropriate;
(g) advising the Committee in connection with any proposed sale
of the assets of the Debtor;
(h) assisting the Committee in preparing pleadings and
applications as may be necessary to further the Committee's
interests and objectives;
(i) researching, analyzing, investigating, filing and
prosecuting litigation on behalf of the Committee in
connection with issues including but not limited to
avoidance actions, fraudulent conveyances, and lender
liability;
(j) representing the Committee at hearings and other
proceedings;
(k) reviewing and analyzing applications, orders, statements of
operations and schedules filed with the Court and advising
the Committee regarding all such materials;
(l) aiding and enhancing the Committee's participation in
formulating a plan;
(m) assisting the Committee in advising unsecured creditors of
the Committee's decisions, including the collection and
filing of acceptances and rejections to any proposed plan;
and
(n) performing such other legal services as may be required and
are deemed to be in the interests of the Committee.
Fafinski Mark will be paid at these hourly rates:
Partners $360
Associates $195-$250
Paralegals $160
Fafinski Mark will also be reimbursed for reasonable out-of-pocket
expenses incurred.
The Committee requested that the professionals employed by the
Committee be permitted to submit invoices to the Committee, with
copies to the Debtor, on a monthly basis, and that the Debtor be
authorized to pay 80% of fees and 100% of costs owing pursuant to
monthly invoices. The Committee and Fafinski Mark acknowledge
that, if any fees or costs distributed to Fafinski Mark or other
professionals are subsequently disallowed, the professionals must
agree that such fees and costs are subject to disgorgement, and
the professionals must assure their ability and willingness to
disgorge the same.
David E. Runck, Esq., attorney and shareholder of Fafinskie Mark,
assured the Court that the firm 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 Debtors and their
estates.
Fafinskie Mark can be reached at:
David E. Runck, Esq.
FAFINSKI, MARK & JOHNSON, P.A
400 Flagship Corporate Center
775 Prairie Center Drive
Eden Prairie, MN 55344
Tel: (952) 995-9500
Fax: (952) 995-9577
E-mail: David.Runck@fmjlaw.com
About SCICOM
Headquartered in Minnetonka, Minnesota, SCICOM provides data
processing solutions that transform critical data into effective
customer communications, on any platform, at any time. SCICOM's
business focus has been employee benefits, retirement and
investment services, and statement processing.
SCICOM Data Services, Ltd., filed a Chapter 11 petition (Bankr. D.
Minn. Case No. 13-43894) on Aug. 6, 2013, in Minneapolis,
Minnesota, with a deal to sell assets to Venture Solutions without
an auction.
Arden Hills, MN-based Venture Solutions is a provider of print and
digital transactional Communications and is a subsidiary of Taylor
Corporation.
Judge Michael E. Ridgway presides over the case. The Debtor has
tapped Fredrikson & Byron, P.A., as counsel; Lighthouse Management
Group, Inc., as financial consultant; and Shenehon Company as
valuation expert.
The Debtor disclosed $13,254,128 in assets and $17,801,787 in
liabilities as of the Chapter 11 filing. The petition was signed
by Timothy L. Johnson, senior vice president and CFO.
SOJOURNER INVESTMENT: Court Okays Hiring of NewDelman as Counsel
----------------------------------------------------------------
Sojourner Investment Group, LLC sought and obtained authorization
from the U.S. Bankruptcy Court for the District of Arizona to
employ Allan D. NewDelman, P.C. as counsel.
The Debtor requires Allan D. NewDelman to provide these services:
(a) give legal advice with respect to all matters related to
the case;
(b) prepare on behalf of applicant, as debtor-in-possession
necessary applications, answers, orders, reports and other
legal papers; and
(c) perform all other legal services for the Debtor which may
be necessary herein.
Allan D. NewDelman will be paid at these hourly rates:
Allan D. NewDelman $395
Robert J. Sunkin $315
Paralegal $150-$180
Clerical and Legal Assistant $40-$150
Allan D. NewDelman will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Allan D. NewDelman, Esq., assured the Court that the firm 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 Debtors and their estates.
The firm can be reached at:
Allan D. Newdelman, P.C.
ALLAN D. NEWDELMAN, P.C
80 East Columbus Avenue
Phoenix, AZ 85012
Tel: (602) 264-4550
Fax: (602) 277-0144
E-mail: anewdelman@owestoffice.net
Shawn Railey, manager of Z Credit Repair, LLC, signed the
employment application on behalf of Sojourner.
An involuntary Chapter 11 petition (Bankr. D. Ariz. Case No.
13-00867) was filed on Jan. 22, 2013, against Sojourner Investment
Group, LLC, based in Tempe, Arizona. The petitioners were Don
Davis, allegedly owed $14,000; Shannah Guenthner, allegedly owed
$5,000; and Timthy Sierakowski, allegedly owed $2,000. Sojourner
Investment Group filed a voluntary Chapter 11 petition on June 6,
2013.
STONE ROSE: Court Converts Reorganization Case to Chapter 7
-----------------------------------------------------------
The U.S, Bankruptcy Court for the Northern District of Illinois
converted the Chapter 11 case of Stone Rose LP to one under
Chapter 7 of the Bankruptcy Code.
As reported in the Troubled Company Reporter on Sept. 20, 2013,
the U.S. Trustee for Region 11 asked the Bankruptcy Court to
dismiss or convert the Debtor's case to a Chapter 7 liquidation.
According to the U.S. Trustee, conversion or dismissal of the
Debtor's case is appropriate because the Debtor has proposed to
sell its main asset (an 82 acres of vacant land in Kansas City,
Missouri) in its Liquidation Plan; and has sold its 75% interest
in Big House Investments in December 2012. The U.S. Trustee
believes the Debtor has limited cash and no additional assets with
which to operate its business and reorganize.
Additionally, the so-called Sergi Investors have filed a motion to
appoint Chapter 11 trustee alleging accountability issues
concerning current and prior management of the Debtor.
About Stone Rose
Aurora, Illinois-based Stone Rose, LP, filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 13-16410) in Chicago, Illinois, on
April 19, 2013. Joseph G. Dinges signed the petition as president
of Stone Rose Mgmt., Inc., general partner. Judge Eugene R.
Wedoff presides over the case. G. Alexander McTavish, Esq., at
Foote, Mielke, Chavez & O'Neil, in Geneva, Ill., represents the
Debtor as counsel. Stone Rose disclosed $16.5 million in
total assets and $6.93 million in total liabilities in its
schedule.
The Debtor owns 82 acres of vacant land at 123rd St. and Parallel
Pky, in Kansas City, Missouri, which is valued at $4 million, and
serves as collateral for a $2 million debt to Metcalf Bank.
The Debtor also has a 75% interest as a member of Big House
Investments, LLC, which owns 17 acres of vacant land at 110th St.
and I-70 in Edwardsville, Kansas. The land is subject to a
contract for sale for $6 million and is subject to a $4.0 million
mortgage in favor of Metcalf Bank.
TERVITA CORP: Bank Debt Trades at 2% Off
----------------------------------------
Participations in a syndicated loan under which Tervita Corp is a
borrower traded in the secondary market at 98.19 cents-on-the-
dollar during the week ended Friday, October 11, 2013, according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents an increase of 0.35
percentage points from the previous week, The Journal relates.
Tervita Corp pays 500 basis points above LIBOR to borrow under the
facility. The bank loan matures on Jan. 24, 2018. The bank debt
is not rated by Moody's rating and Standard & Poor's rating. The
loan is one of the biggest gainers and losers among 212 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
Tervita, based in Calgary, Alberta, is a privately-owned oilfield
services company providing waste management, maintenance/workover
and reclamation services.
* * *
As reported in the Troubled Company Reporter on Jan. 31, 2013,
Moody's Investors Service assigned B2 ratings to Tervita
Corporation's proposed US$500 million senior secured term loan
(due 2018), and $1.1 billion (USD equivalent) of first lien notes
(due 2018). Moody's also assigned a Ba3 rating to Tervita's
proposed $300 million first-out senior secured revolver (due
2018). Tervita's B3 corporate family (CFR), B3-PD probability of
default, Caa2 senior unsecured, Caa2 senior subordinate and SGL-3
speculative grade liquidity ratings were affirmed. Tervita's
rating outlook remains negative.
TOMBERLIN AUTOMOTIVE: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Tomberlin Automotive Group, Inc.
P.O. Box 211027
Augusta, GA 30907
Case No.: 13-11903
Chapter 11 Petition Date: October 11, 2013
Court: United States Bankruptcy Court
Southern District of Georgia (Augusta)
Judge: Hon. Susan D. Barrett
Debtor's Counsel: Todd Boudreaux, Esq.
SHEPARD PLUNKETT HAMILTON BOUDREAUX LLP
7013 Evans Town Center Blvd, Ste 303
Evans, GA 30809
Tel: 706-869-1334
Fax: 706-868-6788
Email: tboudreaux@shepardplunkett.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael D. Tomberlin, CEO.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/gasb13-11903.pdf
TOYS R US: 2016 Bank Debt Trades at 4% Off
------------------------------------------
Participations in a syndicated loan under which Toys R Us is a
borrower traded in the secondary market at 96.73 cents-on-the-
dollar during the week ended Friday, October 11, 2013, according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents a decrease of 0.75
percentage points from the previous week, The Journal relates.
Toys R Us pays 450 basis points above LIBOR to borrow under the
facility. The bank loan matures on Aug. 17, 2016. 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 212 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
Toys "R" Us, Inc., headquartered in Wayne, New Jersey, is the
world's largest dedicated toy retailer, with annual revenues of
around $11 billion.
TOYS R US: 2019 Bank Debt Trades at 2% Off
------------------------------------------
Participations in a syndicated loan under which Toys R Us is a
borrower traded in the secondary market at 97.68 cents-on-the-
dollar during the week ended Friday, October 11, 2013, according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents a decrease of 0.72
percentage points from the previous week, The Journal relates.
Toys R Us pays 500 basis points above LIBOR to borrow under the
facility. The bank loan matures on July 25, 2019. 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 212 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
Toys "R" Us, Inc., headquartered in Wayne, New Jersey, is the
world's largest dedicated toy retailer, with annual revenues of
around $11 billion.
TRINITY COAL: Wins OK to Present Plan for Confirmation Nov. 8
-------------------------------------------------------------
Judge Tracey N. Wise approved on Oct. 3 the adequacy of the
Disclosure Statement explaining the Joint Chapter 11 Plan of
Trinity Coal Corporation, et al.
With this development, the Debtors are now permitted to solicit
acceptances of their Plan.
Epiq Bankruptcy Solutions, LLC is authorized to act as the
Debtors' voting and balloting agent and to certify to the
Bankruptcy Court the plan balloting results.
In order to be counted, ballots for the Plan must be submitted so
as to be received by Oct. 30, at 4:00 p.m. Eastern Time. Ballots
must be returned to:
* via first class mail
Trinity Coal Corp. Ballot Processing
c/o Epiq Bankruptcy Solutions, LLC
FDR Station, P.O. Box 5014
New York, NY 10150-5014
-- OR --
* via hand delivery or overnight delivery
Epiq Bankruptcy Solutions, LLC
757 Third Avenue, 3rd Floor
New York, NY 10017
Attn: Trinity Coal Corp. Ballot Processing
A hearing will be convened on Nov. 8, at 9:30 a.m. Eastern Time,
in Kentucky to consider confirmation of the Plan.
Parties-in-interest may filed formal objections to Plan
confirmation no later than Oct. 30 at 4:00 p.m. Eastern time.
About Trinity Coal
Trinity Coal Corp. is a coal mining company that owns coal
deposits located in the Appalachian region of the eastern United
States, specifically, in Breathitt, Floyd, Knott Magoffin, and
Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo,
McDowell and Wyoming Counties in West Virginia.
Trinity's coal mining operations are organized into six distinct
coal mining complexes. Three complexes are located in Kentucky and
are referred to as Prater Branch Resources, Little Elk Mining and
Levisa Fork. The Kentucky Operations produced compliance and low
sulfur steam coal. Three complexes are located in West Virginia
and are referred to as Deep Water Resources, North Springs
Resources and Falcon Resources.
Trinity is a wholly owned subsidiary of privately held
multinational conglomerate Essar Global Limited.
Credit Agricole Corporate & Investment Bank, ING Capital LLC and
Natixis, New York Branch filed an involuntary petition for relief
under Chapter 11 against Trinity Coal Corporation and 15
affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three
entities say they are owed a total of $104 million on account
loans provided to Trinity.
On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and
Cecil I. Walker Machinery Co. filed an involuntary petition for
relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335)
against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit
Agricole, ING Capital and Natixis joined as petitioning creditors.
On March 4, 2013, the Debtors filed their consolidated answer to
involuntary petitions and consent to an order for relief and
reservation of rights, thereby consenting to the entry of an order
for relief in each of their respective Chapter 11 cases. An order
for relief in each of the Debtors was entered by the Court on
March 4, 2013, which converted the involuntary cases to voluntary
Chapter 11 cases.
Steven J. Reisman, Esq., L. P. Harrison 3rd, Esq., Jerrold L.
Bregman, Esq., and Dienna Ching, Esq., at CURTIS, MALLET-PREVOST,
COLT & MOSLE LLP, in New York, N.Y.; and John W. Ames, Esq., C.R.
Bowles, Jr., Esq., and Bruce Cryder, Esq., at BINGHAM GREENEBAUM
DOLL LLP, in Lexington, Ky., represent the Debtors as counsel.
Attorneys at Foley & Lardner LLP, in Chicago, Ill., represent the
Official Committee of Unsecured Creditors as counsel. Sturgill,
Turner, Barker & Maloney, PLLC, in Lexington, Ky., represents the
Official Committee of Unsecured Creditors as local counsel.
TXU CORP: 2017 Bank Debt Trades at 34% Off
------------------------------------------
Participations in a syndicated loan under which TXU Corp is a
borrower traded in the secondary market at 66.54 cents-on-the-
dollar during the week ended Friday, October 11, 2013, according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents a decrease of 0.68
percentage points from the previous week, The Journal relates.
TXU Corp pays 450 basis points above LIBOR to borrow under the
facility. The bank loan matures on Oct. 10, 2017. The bank debt
carries Moody's Caa3 rating and Standard & Poor's CCC- rating.
The loan is one of the biggest gainers and losers among 212 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Energy Future Holdings, fka TXU Corp
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 percent-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.
Restructuring Talks With Creditors
In April 2013, Energy Future confirmed in a regulatory filing that
they are in restructuring talks with certain unaffiliated holders
of first lien senior secured claims concerning the Companies'
capital structure.
Energy Future retained retained Kirkland & Ellis LLP and Evercore
Partners to assist in the evaluation of restructuring options.
Creditors have reportedly retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP and Millstein & Co., L.P.
Dallas-based Energy Future has struggled with its debt load since
it was taken private in 2007 by KKR & Co., TPG Capital and Goldman
Sachs Capital Partners for a record $48 billion.
Creditors are working on a bankruptcy proposal to cut the
company's $43.6 billion of obligations before its November coupon
payment. Lenders turned down an initial proposal advanced by the
company, according to an April 15 regulatory filing.
TXU CORP: 2014 Bank Debt Trades at 34% Off
------------------------------------------
Participations in a syndicated loan under which TXU Corp is a
borrower traded in the secondary market at 66.85 cents-on-the-
dollar during the week ended Friday, October 11, 2013, according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents an increase of 0.40
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. The bank debt
carries withdrawn by Moody's rating and not rated by Standard &
Poor's rating. The loan is one of the biggest gainers and losers
among 212 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About Energy Future Holdings, fka TXU Corp
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 percent-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.
Restructuring Talks With Creditors
In April 2013, Energy Future confirmed in a regulatory filing that
they are in restructuring talks with certain unaffiliated holders
of first lien senior secured claims concerning the Companies'
capital structure.
Energy Future retained retained Kirkland & Ellis LLP and Evercore
Partners to assist in the evaluation of restructuring options.
Creditors have reportedly retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP and Millstein & Co., L.P.
Dallas-based Energy Future has struggled with its debt load since
it was taken private in 2007 by KKR & Co., TPG Capital and Goldman
Sachs Capital Partners for a record $48 billion.
Creditors are working on a bankruptcy proposal to cut the
company's $43.6 billion of obligations before its November coupon
payment. Lenders turned down an initial proposal advanced by the
company, according to an April 15 regulatory filing.
UNIVAR N.V.: Bank Debt Trades at 4% Off
---------------------------------------
Participations in a syndicated loan under which Univar N.V. is a
borrower traded in the secondary market at 96.32 cents-on-the-
dollar during the week ended Friday, October 11, 2013, according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents an increase of 0.27
percentage points from the previous week, The Journal relates.
Univar N.V. pays 350 basis points above LIBOR to borrow under the
facility. The bank loan matures on June 30, 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 212 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Univar N.V.
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.
VM PROPERTIES: Case Summary & 6 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: VM Properties LLC
1850 SW Skyline Blvd
Portland, OR 97221
Case No.: 13-36430
Chapter 11 Petition Date: October 10, 2013
Court: United States Bankruptcy Court
District of Oregon
Judge: Hon. Trish M Brown
Debtor's Counsel: Robert J Vanden Bos, Esq.
VANDEN BOS & CHAPMAN, LLP
319 SW Washington #520
Portland, OR 97204
Tel: (503) 241-4869
Email: vbcservice@yahoo.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Vincent P.J. McMahon, Jr., president.
A list of the Debtor's six largest unsecured creditors is
available for free at http://bankrupt.com/misc/orb13-36430.pdf
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 96.21 cents-on-
the-dollar during the week ended Friday, October 11, 2013,
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. This represents an increase
of 0.23 percentage points from the previous week, The Journal
relates. Walter Energy Inc 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 B3 rating and Standard &
Poor's B rating. The loan is one of the biggest gainers and
losers among 212 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
About Walter Energy Inc
Walter Energy, Inc. is primarily a metallurgical coal producer
with additional operations in metallurgical coke, steam and
industrial coal, and natural gas. Headquartered in Birmingham,
Alabama, the company generated $2 billion in revenue for the
twelve months ended June 30, 2013.
* * *
As reported in the Troubled Company Reporter on Sept. 23, 2013,
Standard & Poor's Ratings Services said that it assigned its 'B'
issue-level rating to Walter Energy Inc.'s proposed $350 million
senior secured notes due 2019. The issue level rating, which is
one notch above the corporate credit rating, and the '2' recovery
rating indicate S&P's expectation for a substantial (70% to 90%)
recovery in the event of a payment default. The corporate credit
rating remains 'B-' and the outlook is negative.
WYNN MACAU: Fitch Affirms 'BB' Issuer Default Rating
----------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to Wynn Macau, Ltd.'s
announced issuance of $500 million senior unsecured notes due 2021
and a 'BB' Issuer Default Rating (IDR) to Wynn Macau, Ltd.
Fitch also affirms the 'BB' IDRs of Wynn Las Vegas LLC (Wynn Las
Vegas), Wynn Resorts (Macau), S.A. (Wynn Macau S.A.), and Wynn
Resorts, Ltd (Wynn Resorts; collectively Wynn). Fitch affirms Wynn
Macau S.A.'s senior secured credit facility at 'BBB-'. At Wynn Las
Vegas, Fitch affirms the first mortgage notes (FMNs) at 'BB+' and
the senior unsecured notes at 'BB'.
The notes will mature in October 2021, about eight months before
Wynn's Macau concession is due to expire in June 2022. The notes
will be used for general corporate purposes and will not have
meaningful restrictive covenants.
The 'BB' rating on the Wynn Macau, Ltd notes is on par with the
'BB' IDR and two notches below the 'BBB-' rating on the Wynn Macau
S.A. $2.3 billion credit facility. Fitch believes that the senior
notes would be fully covered in an event of default at Wynn Macau,
Ltd given the equity value (about $19 billion market
capitalization), but does not notch the notes from the IDR. This
is because the notes are subordinated to the Wynn Macau S.A.
credit facility in terms of organizational structure and
collateral.
There will also be no debt incurrence covenants at Wynn Macau, Ltd
level, which would allow Wynn Macau, Ltd to incur additional debt
in the future and dilute the recovery prospects for the
noteholders. Wynn may choose to issue additional debt out of Wynn
Macau, Ltd to possibly fund its U.S. project pipeline, pay any
settlements potentially arising from the Okada dispute and/or ramp
up shareholder-friendly activity at the Wynn Resorts and Wynn
Macau, Ltd.
Fitch views the proposed transaction as neutral to slightly
positive with respect to Wynn's IDRs, as it improves Wynn's
overall liquidity at the expense of a near-term increase in
leverage. The issuance increases consolidated gross leverage by
about 0.4x to 4.7x from 4.3x for the LTM period ending June 30,
2013. When calculating leverage for Wynn, Fitch subtracts income
attributable to minority interests from EBITDA and subtracts $222
million of the 2017 Las Vegas FMNs remaining after Wynn made a
redemption offer earlier this year. These notes will be fully
redeemed later this year when they become callable with restricted
cash.
The increase in leverage is offset by improved liquidity. The
increased liquidity at Wynn Macau, Ltd provides Wynn added
flexibility in funding its $4 billion Cotai project while
maintaining its $400 million per year dividends out of Wynn
Resorts and potentially addressing requirements to fund additional
development if Wynn receives a license in Massachusetts and/or
Pennsylvania.
Wynn Macau, Ltd available liquidity pro forma for issuance of the
notes is approximately $3.1 billion as of June 30, 2013. This
includes $1.55 billion available on the revolver at Wynn Macau,
S.A. and roughly $1.1 billion in available cash (net of cage cash,
estimated by Fitch at $150 million). Wynn Macau, S.A.'s credit
facility also has a $200 million accordion option.
Fitch's estimated run-rate discretionary free cash flow (FCF) for
Wynn Macau, Ltd is approximately $900 million. This includes about
$1 billion in EBITDA net of corporate expense and royalty fees and
$100 million in combined interest expense and maintenance capex.
Fitch released a detailed credit analysis report on Wynn on Sept.
4, 2013, which is available on www.fitchratings.com.
Key Rating Drivers
The 'BB' IDR on Wynn, the parent and its subsidiaries reflects the
financial strength of the Macau subsidiary (pro forma net debt
near zero and $1.2 billion of property EBITDA), which offsets the
weaker financial strength at the Las Vegas subsidiary (7x net
leverage with $482 million of property EBITDA). Management's
historically prudent balance sheet management and Wynn's strong
brand value and high asset quality are also positively factored
into the ratings.
Fitch links the IDRs of the parent and Wynn's operating
subsidiaries. Linkage is supported by strong strategic linkage
between the entities (i.e. common branding, management, cross-
marketing, etc.) and a precedent of support to the weaker Las
Vegas subsidiary. However, there are no structural or legal
provisions, such as cross-defaults or guarantees, that support
linking the ratings. Fitch analyzes Wynn mostly on a consolidated
basis, but deducts earnings attributable to minority interest from
EBITDA.
Rating Sensitivities
Fitch may upgrade Wynn's IDR to 'BB+' as consolidated gross
leverage approaches 4x and net leverage declines below 4x
following the ramp up of Wynn's $4 billion Cotai project, which is
slated for early 2016 opening. An earlier upgrade is possible if
Fitch gains a fair amount of comfort that the forecast leverage
will be in line with these thresholds once the project ramps up.
There is cushion at the 'BB' IDR for a modest amount of operating
declines, additional borrowing to support the Cotai project, other
possible developments, and/or potential settlements related to the
Okada dispute. However, should these or other pressures cause
gross leverage to sustain above 5x (6.5x before Cotai ramps up),
there could be pressure on the ratings.
WYNN MACAU: Moody's Rates New $500MM Sr. Notes Due 2021 'Ba2'
-------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Wynn Macau,
Limited's US$500 million senior notes due 2021. Net proceeds from
the notes will be used for working capital requirements and
general corporate purposes. Wynn Macau, Limited ("WML") is a
majority-owned subsidiary of Wynn Resorts, Limited ("Wynn"). Wynn
owns and operates casino hotel resort properties in Las Vegas,
Nevada and Macau, China.
At the same time, Moody's affirmed Wynn's Ba1 Corporate Family
Rating, Ba1-PD Probability of Default Rating, along with the Ba2
rating on Wynn Las Vegas, LLC's ("WLV") $1.32 billion 7 3/4% first
mortgage notes due 2020. The rating outlook is stable.
Rating assigned:
WML US$500 million senior notes due 2021, at Ba2 (LGD 4, 69%)
Ratings affirmed:
Wynn Corporate Family Rating, at Ba1
Wynn Probability of Default Rating, at Ba1-PD
WLV $1.32 billion 7 3/% first mortgage notes due 2020, at Ba2 (LGD
4, 69% from LGD 4, 64%)
Ratings Rationale:
The Ba2 rating assigned to WML's proposed $500 million senior
unsecured notes -- one notch lower than Wynn's Corporate Family
Rating -- considers their unsecured status and structural
subordination to WML's credit facilities (not-rated). The notes
will not be guaranteed by WML's subsidiaries. The assigned rating
also reflects a consolidated rating approach, whereby Moody's
views all of the operations of Wynn as a single enterprise for
analytic purposes, regardless of whether or not financings for
some subsidiaries are done on a stand-alone basis.
The Ba2 rating of Wynn's first mortgage notes due 2020 -- also one
notch lower than Wynn's Corporate Family Rating -- considers that
in September 2012, the liens on the assets of Wynn Las Vegas and
its subsidiaries securing these notes was released. These first
mortgage notes have an LGD model indicated rating of Ba1. However,
Moody's has overridden the model to retain the Ba2 rating on these
notes in order to reflect the fact that notes are now unsecured,
except by a pledge of the equity interests of Wynn Las Vegas and
are not guaranteed by any of the Wynn Las Vegas subsidiaries.
Wynn's Ba1 Corporate Family Rating reflects the strong operating
performance of the company's Macau casino assets and Moody's
expectation that the Macau gaming market will continue to
experience growing visitation and consumer demand trends. Macau
continues to account for a significant majority of Wynn's
consolidated revenues and EBITDA. Positive rating consideration is
also given to the quality, popularity, and favorable reputation of
Wynn's casino properties -- a factor that continues to distinguish
the company from most other gaming operators. Historically, the
company's properties generated higher EBITDA margins than many of
their competitors demonstrating strong operational expertise,
which also support the ratings.
Key credit concerns include Moody's view that Wynn's
diversification remains limited despite the fact that it is one of
the largest U.S. gaming operators in terms of revenue. The
company's revenues and cash flow are concentrated in only two
gaming markets -- Las Vegas, Nevada and Macau, China -- which
makes it highly susceptible to specific market, economic, and
regulatory trends. Also constraining the rating is Moody's
expectation that further significant development activity is
expected.
Wynn's stable rating outlook incorporates Moody's opinion that
favorable gaming demand trends in Macau along with little in the
way of near-term scheduled debt maturities will provide Wynn with
the ability to absorb any earnings pressure at the company's Las
Vegas subsidiary. It will also afford Wynn the opportunity to
maintain consolidated net debt/EBITDA at/near 3.0 times over the
long-term despite Moody's expectation that large cash dividends
will continue.
Ratings improvement is limited at this time given the highly
secured nature of the company's consolidated debt capital
structure; a characteristic that Moody's does not believe is
consistent with an investment grade rating. While the security has
been released at the company's Las Vegas subsidiary, the secured
credit facilities at its Macau subsidiary, on a fully drawn basis,
continues to account for a significant portion of Wynn's
consolidated debt. Ratings could be lowered if Wynn's financial
policy becomes more aggressive, the gaming demand environment in
Macau weakens, and/or it appears Wynn's consolidated net
debt/EBITDA will, for any reason, rise and remain above 3.5 times
on a more permanent basis.
Wynn owns and operates casino hotel resort properties in Las
Vegas, Nevada and Macau. Wynn's consolidated net revenue for the
12-month period ended June 30, 2013 was about US$5.3 billion.
WYNN RESORTS: S&P Assigns 'BB+' CCR & Rates $500MM Notes 'BB'
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned Wynn Macau Limited, a
subsidiary of Wynn Resorts Ltd., its 'BB+' corporate credit
rating. The outlook is stable.
At the same time, S&P assigned the company's proposed $500 million
senior notes due 2021 an issue-level rating of 'BB'. Wynn Macau
will use proceeds from its new facilities for working capital and
general corporate purposes, which S&P expects to include
development and construction of the Wynn Cotai resort.
S&P rates the proposed senior notes one notch lower than the
corporate credit rating on Wynn Macau because they are being
issued by an entity that is structurally subordinated to Wynn
Macau's senior secured credit facilities, which are issued by an
entity closer to the company's casino assets. In addition, S&P
expects Wynn Macau's priority debt as a percentage of total assets
will remain below 30% but above 15% on average over the next
several years, which is aligned with an issue-level rating on the
proposed unsecured notes that is one notch below the company's
corporate credit rating, according to S&P's notching criteria.
S&P has applied its general notching criteria to rate these
proposed notes in lieu of assigning recovery ratings to them,
because S&P do not assign recovery ratings to debt issued in
Macau. Macau is a jurisdiction for which we have not published an
insolvency report and that S&P has not ranked because, to date,
there exists limited historical precedent for a large-scale
bankruptcy filing of a foreign-owned entity in Macau--a special
administrative region of the People's Republic of China.
Furthermore, even if lenders have a good claim with a registerable
interest in the real estate, S&P believes there is significant
uncertainty surrounding the application of the insolvency process
and the ability to realize asset value by lenders in this
jurisdiction.
S&P's corporate credit rating on Wynn Macau reflects the overall
credit quality of the Wynn family of companies and is aligned with
its 'BB+' corporate credit rating on its ultimate parent, Wynn
Resorts. Despite the distinct financing structures at Wynn
Resorts and the Las Vegas and Macau subsidiaries, S&P considers
the consolidated entity when assessing Wynn's credit quality. S&P
deems the strategic relationship between the parent and each
subsidiary as an important factor that has a bearing on the credit
quality of the overall consolidated entity. S&P considers Wynn
Macau to be a core subsidiary of Wynn Resorts, as it operates in
the same line of business as other Wynn entities, is integral to
Wynn Resorts' current identity and future strategy, and is
unlikely to be sold. Wynn Macau is majority owned through various
entities of Wynn Resorts and shares the same brands as other group
entities. Additionally, Wynn Macau constitutes a significant
percentage of Wynn Resorts' consolidated EBITDA (71% of
consolidated property level EBITDA for the 12 months ended June
30, 2013). In addition, Wynn Resorts has significant ability to
extract cash flows from Wynn Macau. Thus, despite credit measures
on a standalone basis that might otherwise be supportive of a
higher rating, S&P is assigning Wynn Macau a corporate credit
rating at the same level as its corporate credit rating on Wynn
Resorts.
* BOND PRICING -- For the Week From Oct. 7 to 11, 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 4.125 1/2/2029
AGY Holding Corp AGYH 11.000 56.625 11/15/2014
Affinion Group
Holdings Inc AFFINI 11.625 57.000 11/15/2015
Alion Science &
Technology Corp ALISCI 10.250 70.000 2/1/2015
Buffalo Thunder
Development
Authority BUFLO 9.375 35.625 12/15/2014
Cengage Learning
Acquisitions Inc TLACQ 12.000 13.250 6/30/2019
Cengage Learning
Acquisitions Inc TLACQ 10.500 19.125 1/15/2015
Cengage Learning
Acquisitions Inc TLACQ 10.500 19.125 1/15/2015
Cengage Learning
Acquisitions Inc TLACQ 13.250 1.375 7/15/2015
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 35.240 11/15/2014
FiberTower Corp FTWR 9.000 1.000 1/1/2016
GMX Resources Inc GMXR 9.000 0.990 3/2/2018
GMX Resources Inc GMXR 4.500 2.200 5/1/2015
James River Coal Co JRCC 4.500 32.500 12/1/2015
James River Coal Co JRCC 3.125 24.250 3/15/2018
LBI Media Inc LBIMED 8.500 30.000 8/1/2017
Lehman Brothers
Holdings Inc LEH 1.000 17.625 8/17/2014
Lehman Brothers
Holdings Inc LEH 1.000 17.625 8/17/2014
Lehman Brothers Inc LEH 7.500 17.500 8/1/2026
MF Global Holdings Ltd MF 6.250 45.500 8/8/2016
MF Global Holdings Ltd MF 1.875 45.250 2/1/2016
OnCure Holdings Inc ONCJ 11.750 49.000 5/15/2017
Overseas Shipholding
Group Inc OSG 8.750 86.500 12/1/2013
Platinum Energy
Solutions Inc PLATEN 14.250 43.625 3/1/2015
Powerwave
Technologies Inc PWAV 1.875 0.750 11/15/2024
Powerwave
Technologies Inc PWAV 1.875 0.750 11/15/2024
Residential
Capital LLC RESCAP 6.875 34.000 6/30/2015
School Specialty Inc SCHS 3.750 38.375 11/30/2026
Sorenson
Communications Inc SRNCOM 10.500 69.125 2/1/2015
Sorenson
Communications Inc SRNCOM 10.500 69.125 2/1/2015
THQ Inc THQI 5.000 50.500 8/15/2014
TMST Inc THMR 8.000 10.750 5/15/2013
Terrestar Networks Inc TSTR 6.500 10.000 6/15/2014
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 15.000 22.500 4/1/2021
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.250 4.350 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.250 3.375 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.500 2.625 11/1/2016
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 15.000 35.200 4/1/2021
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.250 3.250 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.500 2.625 11/1/2016
Titan
International Inc TWI 7.875 101.450 10/1/2017
Titan
International Inc TWI 7.875 101.450 10/1/2017
USEC Inc USU 3.000 22.750 10/1/2014
Verso Paper
Holdings LLC /
Verso Paper Inc VRS 11.375 42.470 8/1/2016
Verso Paper
Holdings LLC /
Verso Paper Inc VRS 8.750 33.750 2/1/2019
WCI Communities
Inc/Old WCI 4.000 0.625 8/5/2023
Washington Mutual
Bank / Debt not
acquired by JPMorgan WAMU 5.125 0.010 1/15/2015
Western Express Inc WSTEXP 12.500 58.875 4/15/2015
Western Express Inc WSTEXP 12.500 58.875 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
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2013. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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*** End of Transmission ***