/raid1/www/Hosts/bankrupt/TCR_Public/131018.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, October 18, 2013, Vol. 17, No. 289
Headlines
1118 LONGWOOD: Voluntary Chapter 11 Case Summary
1ST FINANCIAL: Treasury to Sell Pref. Shares to First-Citizens
AAMINA LLC: Mellen Foreclosing on $500,000 Mortgage Obligation
ACE EXPLORATION: Voluntary Chapter 11 Case Summary
AKORN INC.: Moody's Rates CFR & $600MM Sr. Secured Loan 'B1'
AKORN INC: S&P Assigns 'B+' Corp. Credit Rating; Outlook Stable
ALITALIA SPA: Faces Conditions on Refinancing
AMERICAN AIRLINES: Judge Greenlights $785MM in Aircraft Financing
AMERICAN AIRLINES: Democratic Lawmakers Urge DOJ to Drop Lawsuit
AMERICAN AIRLINES: AMR Posts $530MM Net Profit in Third Quarter
BERNARD L. MADOFF: Ex Workers Chose Freedom Fight over Plea Deal
BERNARD L. MADOFF: Clients Urge 2nd Circ. to Block Trustee's Suits
BLUEGREEN RESTAURANTS: Case Summary & 15 Top Unsecured Creditors
BOWLMOR AMF: S&P Assigns 'B' CCR & Rates $265MM Facilities 'B'
CAESARS ENTERTAINMENT: Signs $2.7 Billion Credit Facilities
CAMBRIDGE LAND: Voluntary Chapter 11 Case Summary
CAPITOL BANCORP: Ross Sees Ch. 11 as Venue for Bank Acquisitions
CAPITOL CITY: George Andrews Quits as President and CEO
CIRCUIT CITY: LCD Makers Look to Trim Antitrust Claims
CHURCH STREET: Trustee Sues To Recover $1MM From King & Spalding
COLFAX CORP: S&P Assigns 'BB+' Rating to New 5-Year Loans
COUNTRYWIDE FINANCIAL: Former Exec Denies Scheme to Mislead Buyers
CRESTWOOD HOLDINGS: Moody's Hikes Rating on $400MM Debt to 'B2'
CUMULUS MEDIA: Selling 16.4 Million Class A Shares at $5 Apiece
DETROIT, MI: DOJ Defends Constitutionality of Chapter 9 Bankruptcy
DETROIT, MI: Legality of Bankruptcy Argued in Court
DETROIT, MI: Mich. Says Funding State Court Is City's Problem
DON SEALS: Bids for Big Horn Travel Plaza Due Oct. 29
DVI INC: 2nd Circ. Frees Deloitte From $300MM Malpractice Suit
E-REWARDS INC: S&P Assigns Prelim. 'B' Rating to New Secured Debt
EDISON MISSION: Ch. 11 Doesn't Bar Enviro Action, Judge Told
ENDICOTT INTERCONNECT: Has Until Oct. 24 to Access Cash Collateral
ENDICOTT INTERCONNECT: Oct. 24 Hearing on Exclusivity Extensions
ENDICOTT INTERCONNECT: Wants Until Feb. 5 to Decide on Leases
ENDICOTT INTERCONNECT: Wins Approval to Sell Assets to Integrian
ENERGYSOLUTIONS INC: Inks 3rd Amendment to JPMorgan Facility
ENERGY FUTURE: Green Groups Seek Mine Clean Up Assurances
EQUIHOME MORTGAGE: Reed Smith Can't Shake Malpractice Suit
EXIDE TECHNOLOGIES: Wins Sole Plan Filing Right Through May 2014
EXIDE TECHNOLOGIES: Seeks Approval of CDTSC Stipulation
EXCEL MARITIME: Creditors Get OK to Probe Affiliate
FANNIE MAE: Fitch Affirms 'C' Preferred Stock Rating
FIRST DATA: Inks Pact to Refinance Holding Company Debt
GIORDANO'S ENTERPRISES: Seyfarth Shaw Sued Over Ch. 11 Advice
GOLDEN ENTERPRISES: Case Summary & 19 Largest Unsecured Creditors
GREEN ISLAND: Moody's Affirms 'Ba1' Rating on Revenue Bonds
GROEB FARMS: Continues to Operate Using Cash
GROEB FARMS: Seeks to Employ Foley & Lardner as Counsel
GROEB FARMS: Taps Kurtzman Carson as Claims & Noticing Agent
GUAM: S&P Raises Rating on Gen. Obligation Bonds to 'BB-'
HAAS BAKING: Case Summary & 20 Largest Unsecured Creditors
HAMPTON CAPITAL: Amended Plan Reflects Negotiated Deal With Panel
IRISH BANK: Gets Provisional Relief Over Flynn Parties Dispute
JANUS BLDG: Voluntary Chapter 11 Case Summary
JOURNAL REGISTER: Creditor Balks at Plan Confirmation
KHATI BROTHERS: Voluntary Chapter 11 Case Summary
LAFAYETTE YARD: Taps Delbello Donnellan as Bankruptcy Counsel
LIC CROWN: Files Chapter 11 Liquidating Plan
LIC CROWN: Seeks Authority to Use Cash Collateral
M FABRIKANT: 2nd Circ. Frees JPMorgan, BofA Of Fraud Case
MANTARA INC: Case Summary & 20 Largest Unsecured Creditors
MF GLOBAL: Execs Say Trustee Can't Sue If Customers Get Paid
MONTREAL MAINE: Trustee Hires Gordian Group as Investment Banker
MONTREAL MAINE: Verrill Dana Approved as Counsel for Trustee
MPG OFFICE: Closes Merger with Brookfield
NEFF RENTAL: S&P Puts 'B' Rating on $200MM Notes on Watch Negative
NORTH TEXAS BANCSHARES: Get Bidder for Dallas Bank, Seek Ch. 11
NORTH TEXAS BANCSHARES: Case Summary & 4 Unsecured Creditors
OGX PETROLEO: CEO Ouster May Open Door for Bankruptcy Filing
OLD SECOND: To Release Third Quarter Results on October 23
OMNITRACS INC.: Moody's Assigns B2 CFR & Rates 1st Lien Debt B1
ORECK CORP: Court Approves Modified Engagement of Carl Marks
ORECK CORP: Pillsbury Winthrop Approved to Handle FTC Matters
ORECK CORP: Committee Balks at Class Plaintiffs' Stay Relief Bid
ORMET CORP: Emergency Wind Down Approval Sought
P2 UPSTREAM: S&P Assigns 'B' CCR & Rates $30MM Facility 'B+'
PATRIOT COAL: Settlement Approval Sought
PERSONAL COMMUNICATIONS: Lead Bidder Lists of Contracts to Assume
PIAB REALTY: Case Summary & Largest Unsecured Creditor
PREMIER GOLF: Has Tentative Accord With Far East Nat'l Bank
QUEBECOR MEDIA: DBRS Confirms 'BB(low)' Issuer Rating
REVEL AC: Sued By IDEA Boardwalk Over Bar, Nightclub Lease
RESIDENTIAL CAPITAL: Court Approves $100-Mil. Securities Deal
RESIDENTIAL CAPITAL: Slams Bondholders' Bid For Higher Payout
REVOLUTION DAIRY: Confirms Joint Chapter 11 Plan
REVSTONE INDUSTRIES: Unit OK'd to Probe Creditor
RM GAMING: 53-Foot Yacht Being Auctioned in Louisiana on Oct. 23
RURAL/METRO CORP: Workers Seek $40MM in Wages
RURAL/METRO CORP: Argonaut Objects to Disclosure Statement
SAN JOSE, CA: Mayor Launches Pension Reform Initiative
SAVIENT PHARMACEUTICALS: Gets Nod to Fund Sale with Cash
SHEARER'S FOOD: Moody's Affirms B2 CFR & B3 Rating on $235MM Notes
SHERIDAN GROUP: Terminates Registration of 12.5% Senior Notes
SHERIDAN GROUP: Moody's Withdraws All Ratings After Debt Repayment
SHERIDAN GROUP: S&P Withdraws 'CCC+' Corporate Credit Rating
SOUNDVIEW ELITE: Taps Porzio Bromberg as Counsel
SPRINGDALE HAMPSHIRE: Case Summary & 20 Top Unsecured Creditors
STANFORD GROUP: SEC Lawyer Argues Victims Were SIPC "Customers"
SURTRONICS INC: Hires Carr Riggs as Accountants
SURTRONICS INC: Hires Terracon as Environmental Consulting Firm
TEMPE-MILL LLC: Case Summary & 20 Largest Unsecured Creditors
VALLEY FORGE Chapter 11 Petition Filed
UNIVERSITY GENERAL: Enters Next Stage in Development of Hospital
VIDEOTRON LTEE: DBRS Confirms 'BB(high)' Issuer Rating
VIVARO CORP: Has Until Dec. 29 to File Chapter 11 Plan
YTB INTERNATIONAL: Sale Completed
* JPMorgan Expected to Admit Fault in "London Whale" Trading Loss
* Fitch: State Regulatory Debate Creates Uncertainty for Insurers
* Retail Investors Call for Resolution of Argentine Debt Disputes
* U.S. Government Reopens after Congress Passes Budget Deal
* AEM Comments on Passage of Bipartisan Debt Deal
* Latino Coalition Comments Agreement to Reopen Government
* Crown Says "Extend and Pretend" Policy Endangers Futures
* USHCC Commends Agreement to Reopen Gov't & Raise Debt Ceiling
* Hughes Hubbard Partner Expresses View on Safe Harbor Protections
* Moore & Van Allen Nabs Puerto Rico Bankruptcy Pro
* BOOK REVIEW: The Phoenix Effect: Nine Revitalizing Strategies
No Business Can Do Without
*********
1118 LONGWOOD: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: 1118 Longwood Realty, LLC
1118 Longwood Avenue
Bronx, NY 10476
Case No.: 13-13365
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. Sean H. Lane
Debtor's Counsel: Craig Stuart Lanza, Esq.
145 West 12th, 4-1
New York, NY 10011
Tel: (646) 409-6529
Fax: (646) 365-3169
Email: cslanza@gmail.com
Total Assets: not indicated
Total Debts: not indicated
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
1ST FINANCIAL: Treasury to Sell Pref. Shares to First-Citizens
--------------------------------------------------------------
1st Financial Services Corporation, its wholly-owned subsidiary,
Mountain 1st Bank & Trust Company, and First-Citizens Bank & Trust
Company, previously entered into an Agreement and Plan of Merger.
The Merger Agreement provides that 1st Financial and Mountain 1st
will, on the terms and subject to the conditions set forth in the
Merger Agreement, merge with and into First-Citizens, so that
First-Citizens will be the surviving banking corporation in the
merger. The Merger Agreement also provides that, at the effective
time of the Merger:
(i) each share of common stock, par value $5.00 per share, of
1st Financial issued and outstanding immediately before the
Effective Time; and
(ii) each share of Fixed Rate Cumulative Perpetual Preferred
Stock, Series A, of 1st Financial issued and outstanding
immediately before the Effective Time will be converted
into the right to receive a cash payment.
At the request of the United States Department of the Treasury,
and as a means of effectuating the Merger, 1st Financial and
First-Citizens have entered into a Securities Purchase Agreement
dated as of Oct. 15, 2013, with Treasury, which provides for the
sale by Treasury to First-Citizens, and the purchase by First-
Citizens from Treasury, of all outstanding shares of 1st Financial
Preferred Stock and Treasury's warrant immediately prior to the
closing of the Merger.
The TARP Securities Purchase Agreement does not increase or
decrease the amount of the cash payments to be paid by First-
Citizens in exchange for the 1st Financial Common Stock and the
1st Financial Preferred Stock.
The TARP Securities Purchase Agreement contains customary
provisions for a securities purchase agreement, and detailed
representations, warranties and covenants of First-Citizens, 1st
Financial and Treasury, including certain restrictions on the
acceleration, vesting, enhancement or increase in the payments or
benefits that would otherwise become due as a result of the
consummation of the Merger to any of 1st Financial's current or
former executive officers. In order to comply with the foregoing
restrictions, the Boards of Directors of 1st Financial and
Mountain 1st have amended the employment agreements and the salary
continuation agreements of two of 1st Financial's executive
officers, Mr. Vincent K. Rees and Ms. Peggy H. Denny, and Mr. Rees
and Ms. Denny have each executed an agreement acknowledging these
amendments.
On Oct. 15, 2013, 1st Financial, Mountain 1st, and First-Citizens
amended and restated the Merger Agreement in order to modify
certain of the terms and conditions in the Merger Agreement to
reflect the existence and effect of the TARP Securities Purchase
Agreement.
1st Financial, Mountain 1st and First-Citizens anticipate that the
Merger will close no later than the first quarter of 2014, subject
to customary closing conditions, including regulatory approvals
and approval of 1st Financial's shareholders.
A copy of the Agreement and Plan of Merger is available at:
http://is.gd/mg8epa
About First Financial
Elizabethtown, Kentucky-based First Financial Service Corporation
is the parent bank holding company of First Federal Savings Bank
of Elizabethtown, which was chartered in 1923. The Bank serves
six contiguous counties encompassing central Kentucky and the
Louisville metropolitan area, through its 17 full-service banking
centers and a commercial private banking center.
In its 2012 Consent Order, the Bank agreed to achieve and maintain
a Tier 1 capital ratio of 9.0 percent and a total risk-based
capital ratio of 12.0 percent by June 30, 2012.
"At December 31, 2012, the Bank's Tier 1 capital ratio was 6.53%
and the total risk-based capital ratio was 12.21%. We notified
the bank regulatory agencies that one of the two capital ratios
would not be achieved and are continuing our efforts to meet and
maintain the required regulatory capital levels and all of the
other consent order issues for the Bank," the Company said in its
annual report for the year ended Dec. 31, 2012.
First Financial disclosed a net loss attributable to common
shareholders of $9.44 million in 2012, a net loss attributable to
common shareholders of $24.21 million in 2011 and a net loss
attributable to common shareholders of $10.45 million in 2010.
The Company's balance sheet at June 30, 2013, showed $692.08
million in total assets, $673.09 million in total liabilities and
$18.98 million in total stockholders' equity.
Crowe Horwath LLP, in Louisville, Kentucky, said in its report on
the consolidated financial statements for the year ended Dec. 31,
2012, "[T]he Company has recently incurred substantial losses,
largely as a result of elevated provisions for loan losses and
other credit related costs. In addition, both the Company and its
bank subsidiary, First Federal Savings Bank, are under regulatory
enforcement orders issued by their primary regulators. First
Federal Savings Bank is not in compliance with its regulatory
enforcement order which requires, among other things, increased
minimum regulatory capital ratios. First Federal Savings Bank's
continued non-compliance with its regulatory enforcement order may
result in additional adverse regulatory action."
AAMINA LLC: Mellen Foreclosing on $500,000 Mortgage Obligation
--------------------------------------------------------------
Fidelity Title Agency of Alaska, as Trustee, under a Deed of Trust
executed by Aamina, LLC, on July 11, 2012 (and recorded (Serial
No. 2012-014672-0) in the Palmer Recording District Recorder's
Office in the State of Alaska), in favor of Mellen Investment
Company, LLC, has published a Notice of Default and Sale in the
Alaska Journal of Commerce saying that a breach of the obligations
for which the Deed of Trust is security has occurred and it
intends to sell Aamina's property to satisfy the debt.
The amount due is principal in the amount of $497,618.40, plus
interest from June 17, 2013, accruing until the day of the sale at
the rate of 12.0% per annum, and sums properly advanced and
expended under the terms of the Deed of Trust. Fidelity intends
to sell the real property at public auction to the highest and
best bidder for cash in lawful money of the United States of
America, payable at the time of sale upon closing of bids to
satisfy all indebtedness, together with any interest and all sums
expended by the Beneficiary and Trustee under said Deed of Trust
with interest thereon. The Mellen will have the right to make an
offset bid without cash in an amount equal to the balance owed on
the obligation at the time of sale. The Sale will be held at
public auction inside the front door of Nesbett Courthouse, 825
West 4th Avenue, Anchorage, Alaska, on December 18, 2013 at 10:00
a.m.
The default may be cured and the sale terminated if (1) payment of
the sum then in default, other than the principal that would not
then be due if default had not occurred, and attorney and other
foreclosure fees and costs actually incurred by the beneficiary
and trustee due to the default is made at any time before the sale
date; (2) removal of the encumbrance on the property created by
Deed of Trust dated November 21, 2012 and recorded November 27,
2012, No. 2012-026005-0 in the Palmer Recording District, Third
Judicial District, State of Alaska which violates Trustor's Loan
Agreement with Beneficiary dated July 11, 2012; and (3) when
notice of default has been recorded two or more times previously
under this deed of trust and the default has been cured, the
Trustee does not elect to refuse payment and continue the sale.
A copy of the Notice is available at
http://www.alaskamagazine.com/ajoclegals/notice/0000000880.pdf
at no charge.
Aamina LLC describes itself on its Web site at
http://www.aamina.com/as "a specialist global investment company
and part of the Libra Group, a privately owned international
business group comprising diversified businesses across four
continents" providing "strategic thinking, access to capital and
local knowledge and insight to" investments and engagements.
ACE EXPLORATION: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Ace Exploration & Water Drilling Co., Inc.,
PO Box 6247
Santa Barbara, CA 93160
Case No.: 13-12563
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
Central District Of California (Santa Barbara)
Judge: Hon. Robin Riblet
Debtor's Counsel: Jill M Himlan, Esq.
GRIFFITH & THORNBURGH
8 E Figueroa St
PO Box 9
Santa Barbara, CA 93102
Tel: 805-965-5131
Fax: 805-965-6751
Email: himlan@g-tlaw.com
Joseph M Sholder, Esq.
GRIFFITH & THORNBURGH LLP
8 E Figuerora St Ste 300
Santa Barbara, CA 93101
Tel: 805-965-5131
Fax: 805-965-6751
Email: sholder@g-tlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Curtis R. Jahnke, president.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
AKORN INC.: Moody's Rates CFR & $600MM Sr. Secured Loan 'B1'
------------------------------------------------------------
Moody's Investors Service assigned a B1 Corporate Family Rating
and a B1-PD Probability of Default Rating to Akorn, Inc. Moody's
also assigned a B1 rating to the $600 million senior secured term
loan, the proceeds of which will be used to fund the acquisition
of Hi-Tech Pharmacal Company Inc. ("Hi-Tech"). Moody's also
assigned a Speculative Grade Liquidity rating of SGL-2, reflecting
Moody's expectation for good liquidity. This is the first time
that Moody's has rated Akorn. The outlook is stable.
Rating Assigned:
Corporate Family Rating, at B1
Probability of Default Rating, at B1-PD
Senior secured term loan rating, at B1, LGD4, 50%
Speculative Grade Liquidity Rating, SGL-2
The outlook is stable.
The B1 rating is constrained by Akorn's small size, even after the
Hi-Tech acquisition, and its niche position in the highly
competitive generic drug industry where it competes against
significantly larger companies. The rating is also constrained by
risks associated with the injectable drugs business -- namely the
risk of manufacturing or supply disruptions and regulatory risk.
Further, Moody's believes the generic injectable drug industry
will become more competitive as several large companies put
increasing focus on this area.
The B1 rating is supported by Akorn's good diversity by product
and dosage form. Akorn will generate a large portion of its sales
from a diversified portfolio of niche ophthalmics, liquids,
creams, nasal sprays and over-the-counter drugs. This portfolio of
more stable -- albeit slower growth -- products will offset the
higher growth and riskier injectable business. The rating is also
supported by Moody's expectation that the company will rapidly
delever due to EBITDA growth and will use free cash flow to repay
debt. EBITDA growth should be driven by the company's solid
pipeline of new product launches which will offset potential near-
term declines in fluticasone and Nembutal -- currently the
combined company's two largest products.
The ratings could be upgraded if Akorn successfully integrates Hi-
Tech, expands its scale through organic growth and product
acquisitions, and uses free cash flow to repay debt such that
Moody's expects adjusted debt to EBITDA to be sustained below 3.5
times and free cash flow to debt above 10%.
Moody's could downgrade the ratings if operating disruption occurs
as a result of the integration of Hi-Tech, or
regulatory/manufacturing/supply chain issues such that adjusted
debt to EBITDA is expected to be sustained above 4.5 times.
Meaningful sized acquisitions or share repurchases that slow the
company's deleveraging could also lead to a downgrade. Further,
any material deterioration in liquidity or significantly higher
than expected capital expenditures such that free cash flow is
expected to be negative could also result in a downgrade.
Akorn, Inc. ("Akorn": NASDAQ: AKRX), founded in 1971 and
headquartered in Lake Forest, IL, is a specialty generic
pharmaceutical manufacturer. The company focuses primarily on
generic ophthalmic drugs and injectable drugs for use in
hospitals. Akorn is acquiring Hi-Tech Pharmacal ("Hi-Tech"; NASDAQ
HITK) for approximately $640 million. Hi-Tech is headquartered in
Amityville, NY and generates the majority of its revenue from
generic drugs in liquid, semi-solid, topical and nasal spray
dosage forms. The combined company will generate revenue in excess
of $500 million.
AKORN INC: S&P Assigns 'B+' Corp. Credit Rating; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned Akorn Inc. a
'B+' corporate credit rating and stable outlook. S&P also
assigned its 'B+' issue-level rating to its senior secured credit
facility, with a recovery rating of '3', indicating expectations
for meaningful (50%-70%) recovery in the event of a payment
default.
"The ratings on Akorn Inc. reflect its "weak" business risk
profile and "aggressive" financial risk profile. S&P's assessment
of Akorn's business risk primarily reflects its minimal market
share in the highly competitive generic pharmaceutical industry.
S&P views scale and scope as key to gaining a competitive
advantage in this industry and Akorn, at a projected $575 million
in pro forma 2014 revenues, is significantly smaller than its
higher-rated peers," said credit analyst John Babcock. "The
company benefits from its solid pipeline and focus on difficult-
to-manufacture generic formulations. However, we do not view the
latter as a strong barrier to entry since most of the larger
generic companies also possess these capabilities. Akorn's
financial risk profile predominantly reflects its aggressively
leveraged capital structure, including a debt-to-EBITDA ratio of
between 4x and 5x."
The stable outlook reflects S&P's expectation that Akorn's debt-
to-EBITDA ratio will be between 4x and 5x for the next two years.
This is based on S&P's projection for mid-single-digit revenue
growth pro forma for the Hi-Tech Pharmacal acquisition and EBITDA
margin expansion of between 10 and 50 bps annually starting in
2014.
S&P could raise the rating if the company reduces its debt-to-
EBITDA ratio to between 3x and 4x. S&P believes Akorn is most
likely to achieve this by paying down $125 million on its term
loan. However, it could also get its debt-to-EBITDA ratio below
4x through double-digit revenue growth and EBITDA margin expansion
of more than 400 bps beyond S&P's projections.
While unlikely, S&P could lower the rating on the company if it
demonstrates a higher tolerance for leverage, including a debt-to-
EBITDA ratio sustainably above 5x. S&P believes this would be
driven by a large, debt-financed acquisition of more than
$250 million that would give the company increased scale in the
generic pharmaceutical market.
ALITALIA SPA: Faces Conditions on Refinancing
---------------------------------------------
David Pearson in Paris and Gilles Castonguay in Milan, writing for
The Wall Street Journal, reported that KLM SA will impose tough
conditions on Italian airline Alitalia in return for taking part
in the emergency capital increase that Alitalia's shareholders
agreed to in principle early on Oct. 15, an official at the
Franco-Dutch carrier said.
According to the report, after an Alitalia board meeting that
finished in the early hours of the morning, Air France-KLM and
Alitalia's other shareholders approved in principle a capital
increase of as much as EUR300 million ($407 million) for the
Italian flag carrier. They have 30 days to decide whether they
will take part in the refinancing. Alitalia's creditor banks have
agreed to extend the airline EUR200 million in new credit lines if
the capital increase goes ahead.
A person familiar with the overnight talks said some tough
negotiations are likely over the next month to ensure Alitalia
comes up with a convincing business plan to assure its long-term
profitability, the report related.
Air France-KLM itself remains financially fragile, the report
added. The airlines operator recorded a net loss of EUR163
million for the six months through June. Pouring more cash into
another unprofitable concern would sit badly with Air France-KLM's
own shareholders, which include the French state, unless
management can give assurances that helping Alitalia would be in
its strategic interest.
Air France-KLM is eliminating thousands of jobs at its French
operations as it tries to steer itself back to profitability amid
high fuel prices and intense competition in Europe from budget
carriers, the report further related. Air France owns 25% of
Alitalia.
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%.
AMERICAN AIRLINES: Judge Greenlights $785MM in Aircraft Financing
-----------------------------------------------------------------
Law360 reported that AMR Corp. on Oct. 16 received a New York
bankruptcy judge's approval to obtain up to $785 million in
financing secured by 75 separate Boeing jets, saying it is
necessary to amp up the carrier's liquidity moving forward.
According to the report, U.S. Bankruptcy Judge Sean H. Lane called
the financing "a good business deal" as he granted the airline's
motion, which was supported by the committee of unsecured
creditors and garnered no objections.
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: Democratic Lawmakers Urge DOJ to Drop Lawsuit
----------------------------------------------------------------
Bart Jansen, writing for USA Today, reported that a group of 68
Democratic House members wrote to President Obama, urging the
Justice Department to drop its lawsuit against the proposed merger
of American Airline and US Airways.
According to the report, the letter dated Oct. 15 is headed by
Reps. Marc Veasey of Texas, where American is based, and Ed Pastor
of Arizona, where US Airways is based. The letter was signed by
seven Texans, five Arizonans and a variety from states where the
airlines have major hubs, such as six Floridians.
The lawmakers urge Obama to consider the workers, the travelers
and the communities that could be hurt if the lawsuit prevents the
merger, the report added.
"I believe this merger is good for our local economy, good for
consumers, good for competition and should be approved," Veasey
said in a statement, noting that American has 20,000 in the Dallas
area alone, the report related.
The airlines and their unions are eager for the merger, which they
say will enable them to compete better against recently merged
Delta, United and Southwest airlines, the report said.
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: AMR Posts $530MM Net Profit in Third Quarter
---------------------------------------------------------------
AMR Corporation, the parent company of American Airlines, Inc., on
Oct. 17 reported results for the third quarter ended September 30,
2013. Key highlights include:
-- Net profit of $530 million, excluding reorganization and
special items, a $420 million improvement year-over-year; on that
basis, it is the most profitable quarter in company history
-- Revenue of $6.8 billion, up 6.2 percent year-over-year; the
highest quarterly revenue total in company history
-- Consolidated unit costs, excluding fuel and special items,
improved 5.0 percent year-over-year, marking the fourth
consecutive quarter of unit cost reduction
-- AMR ended the third quarter with approximately $7.7 billion
in cash and short-term investments, including restricted cash,
compared to a balance of approximately $5.1 billion at the end of
the third quarter of 2012
-- American continued its fleet renewal, taking delivery of ten
fuel-efficient Airbus A319s, eight Boeing 737-800s, and one Boeing
777-300ER in the quarter, while also placing into service four
Embraer E-175s operated by one of its affiliated regional carriers
-- American and US Airways Group are vigorously defending the
lawsuit filed by the Department of Justice seeking to enjoin their
planned merger and continue to move forward with developing a
merger integration plan
-- American accrued $59 million in employee profit sharing in
the quarter, and has accrued a total of $65 million for employee
profit sharing this year. The anticipated distribution would be
the first profit sharing payout in thirteen years
"We are pleased to report our highest quarterly net profit in
American's history, excluding reorganization and special items,
thanks to the hard work of the entire American team," said
Tom Horton, AMR's chairman, president and CEO. "Continued
execution on our product, network and alliance strategy, combined
with cost efficiencies from restructuring and fleet renewal,
creates strong momentum towards our planned merger with US
Airways. And we are especially pleased to set aside $59 million
this quarter in expectation of making our first profit-sharing
payout since 2001 to our people who have done so much to put
American back on top."
In the third quarter of 2013, GAAP net profit was $289 million, a
$527 million improvement compared to the prior-year period.
Excluding reorganization and special items, the third quarter 2013
net profit was $530 million. This is a $420 million improvement
compared to the prior-year period. In the quarter, AMR had $241
million of reorganization and special items, which are detailed
below.
Financial Progress
AMR continued to drive profitability and significant margin
expansion in the third quarter, achieving a pre-tax margin of 7.8
percent, excluding reorganization and special items, an
improvement of 6.1 points over the prior-year period, and a GAAP
pre-tax margin of 4.2 percent, an improvement of 7.9 points
compared to the third quarter of 2012.
On a trailing twelve month basis, the third quarter marked AMR's
seventh consecutive quarter of improved pre-tax margins. This
margin expansion is driven by the realization of restructuring
efforts to improve the operational and financial performance of
the company, and AMR expects to realize additional improvements as
the company continues to implement new terms reached with certain
vendors and suppliers. AMR also expects results going forward to
be bolstered as it competes more effectively by better matching
aircraft size with demand through the continued deployment of the
new Airbus A319 narrowbodies and the new two-class large regional
jets, both of which started entering into service in the third
quarter.
"As we continue to deliver substantial margin expansion and record
results, we are positioning the company for long-term success,"
said Bella Goren, AMR's chief financial officer. "In addition,
our financing activities have significantly enhanced our
liquidity, and are enabling us to pay down high-interest debt and
efficiently fund our impending emergence from the restructuring
process."
In the third quarter of 2013, AMR strengthened its liquidity and
reduced its effective interest rates through several key
transactions. AMR completed a private offering of $1.4 billion of
enhanced equipment trust certificates with a coupon of 4.95
percent. The proceeds from this offering were used to pay off in
full three prior aircraft financings with coupons of 8.625
percent, 10.375 percent, and 13 percent. The third quarter also
marked the closing of an $850 million term loan, secured by
American's South American slots, gates, and routes, incremental to
the $1.05 billion term loan secured by the same collateral that
closed in the second quarter.
Revenue Performance
For the third quarter of 2013, AMR reported record consolidated
revenue of approximately $6.8 billion, up 6.2 percent versus the
same period last year. Consolidated passenger revenue was
approximately $6.0 billion, an increase of 6.4 percent -- and the
highest quarterly passenger revenue in company history. Mainline
and regional passenger revenue and cargo revenue each increased
year-over-year as total operating revenue in the third quarter of
2013 was approximately $399 million higher than the third quarter
of 2012.
"American's solid revenue momentum continued in the third quarter,
with especially strong performance at our domestic hubs, and in
the Atlantic and Caribbean regions," said Virasb Vahidi,
American's chief commercial officer. "We're particularly pleased
with our strength across the Atlantic, reflecting the success of
our joint business with British Airways, Iberia and Finnair.
Through this partnership, we offer our customers more New York-
London travel options than any other alliance, with 17 daily
nonstop flights from New York area airports. This is yet another
example of putting the customer at the center of everything we
do."
Consolidated passenger revenue per available seat mile (unit
revenue) increased 3.4 percent versus the same quarter last year,
to an all-time record for any quarter of 13.79 cents per available
seat mile (ASM). Mainline unit revenue at American increased 4.0
percent versus the prior-year period, reaching an all-time record
for any quarter of 13.11 cents per ASM.
The company's unit revenue performance was driven by record
passenger yield, or revenue per passenger mile, of 16.36 cents per
mile, a 4.0 percent year-over-year improvement, and strong
mainline and consolidated load factors, or percentage of seats
filled, of 85.0 percent and 84.3 percent, respectively.
Operating Expense
For the third quarter, AMR's consolidated operating expenses
decreased $248 million, or 3.9 percent, versus the same period in
2012. Mainline and consolidated cost per available seat mile
(unit cost) in the third quarter decreased 7.4 percent and 6.6
percent, respectively.
Excluding special items, AMR's consolidated operating expenses
decreased $52 million, or 0.8 percent, year-over-year.
Fuel expense in the third quarter increased $40 million year-over-
year on a 2.9 percent increase in ASMs. Taking into account the
impact of fuel hedging, AMR paid $3.04 per gallon for jet fuel in
the third quarter of 2013 versus $3.12 per gallon in the third
quarter of 2012, a 2.6 percent decrease.
Excluding fuel and special items, mainline and consolidated unit
costs in the third quarter of 2013 decreased 5.4 percent and 5.0
percent year-over-year, respectively, primarily driven by the
company's restructuring efforts. This was the fourth consecutive
quarter of non-fuel unit cost reduction.
In addition, AMR achieved an operating profit of $713 million and
an operating margin of approximately 10.4 percent, an improvement
of approximately $451 million and 6.3 points, respectively, over
the prior-year period, excluding special items in both periods.
On a GAAP basis, AMR realized an operating profit of $698 million
and an operating margin of approximately 10.2 percent, an
improvement of approximately $647 million and 9.4 points,
respectively, over the prior-year period.
An unaudited summary of third quarter 2013 results, including
reconciliations of non-GAAP to GAAP financial measures, is
available in the tables at the back of this press release.
Cash Position
The company ended the third quarter with approximately $7.7
billion in cash and short-term investments, including a restricted
cash balance of $935 million, compared to a balance of
approximately $5.1 billion in cash and short-term investments,
including a restricted cash balance of approximately $847 million,
at the end of the third quarter of 2012. The increase was
generated by operating activities and by financing initiatives in
2013.
Fleet Renewal and Transformation
In the third quarter, American made significant progress on its
fleet renewal program, adding new, efficient and more comfortable
aircraft.
-- The newest member of America's fleet -- the Airbus 319 --
went into service in September, flying from Dallas/Fort Worth to
Charlotte, Cleveland, Memphis and Wichita. These modern and fuel-
efficient aircraft represent an important milestone in the
company's journey to transform the travel experience for its
customers. American took delivery of ten A319s in the third
quarter.
-- The company launched its first service with the 76-seat
Embraer E-175 operated by one of its affiliated regional carriers.
This large regional aircraft in a two-class cabin configuration
allows the company to better match supply and demand with the
right amount of schedule frequency.
-- American also took delivery of eight Boeing 737-800s and one
Boeing 777-300ER.
In the fourth quarter, American expects to take delivery of its
first five Airbus A321 Transcon aircraft -- specially configured
with fully lie-flat First and Business Class seats. These
aircraft are anticipated to enter service in January 2014.
Through the third quarter, American has taken delivery of 43 out
of the 59 new mainline aircraft slated for delivery in 2013,
including seven Boeing 777-300ERs.
Pending Merger with US Airways Group
-- In the third quarter, American and US Airways Group
continued preparing for their planned merger announced on Feb. 14,
2013.
-- On Aug. 13, the Antitrust Division of the Department of
Justice (DOJ) and certain states filed a lawsuit to enjoin the
merger.
-- American and US Airways Group are vigorously defending the
lawsuit. The trial is scheduled to begin Nov. 25. The company is
confident that the merger would provide significant customer
benefits and enhance competition in the airline industry.
-- On Oct. 1, American and US Airways Group announced they
reached an agreement with the Texas Attorney General to support
the proposed merger of American and US Airways Group.
-- American and US Airways Group continue to move forward with
developing a merger integration plan designed to ensure a positive
outcome for their customers, employees and stakeholders.
The merger is conditioned on the satisfactory resolution of the
pending antitrust litigation with the DOJ and other customary
closing conditions.
Operational Performance
American ran a solid operation during the busy summer travel
season, achieving an on-time arrival rate of 79.5 percent, its
best third quarter performance since 2010. American's improved
operational results for the quarter also include a completion
factor of 99.0 percent, its best since 2010.
Recent Business Highlights
American has a strong commitment to its customers, its people, and
the communities it serves. Recent American highlights include:
-- Launching new codeshare agreements with Bogota-based LAN
Colombia and Sao Paulo-based TAM Airlines, which will add new
service to key destinations and increase American's network
connectivity in the Latin American region, further strengthening
American's relationship with LATAM Airlines Group
-- Strengthening its global presence to best meet customer
demand by announcing that American will launch its first-ever
nonstop service from Dallas/Fort Worth International Airport (DFW)
to Hong Kong International Airport (HKG) and Shanghai Pudong
International Airport (PVG) next year
-- Opening its Flagship Check-In for premium customers at
Chicago's O'Hare airport, making it American's fourth airport to
offer this enhanced customer experience
-- Announcing plans to hire 1,500 new pilots over the next five
years. The company has offered to recall all of its furloughed
pilots and will begin the new recruiting later this fall. This is
in addition to the hiring and training underway for 1,500 new
flight attendants and the more than 1,200 Premium Services
Representatives, Airport Agents and Reservations Agents who have
joined the American team this year
Restructuring Progress
On Sept.12, the U.S. Bankruptcy Court for the Southern District of
New York stated that it would enter an order confirming American's
Plan of Reorganization (the Plan). The next steps the company
seeks to take are to achieve antitrust clearance and consummate
the Plan and the company's pending merger with US Airways Group.
The effective date of the Plan and American's emergence from
restructuring are expected to occur simultaneously with the
closing of the merger with US Airways Group.
Reorganization and Special Items
AMR's third quarter 2013 results include the impact of $241
million in reorganization and special items.
-- Of that amount, AMR recognized a $151 million loss in
reorganization items resulting from the filing of voluntary
petitions for reorganization under Chapter 11 by certain of its
direct and indirect U.S. subsidiaries on Nov. 29, 2011. These
items primarily consist of professional fees, as well as allowed
and estimated allowed claim amounts.
-- In conjunction with the repayment of the existing
financings, the company incurred cash charges of $19 million,
included in interest expense, and a charge of $54 million,
included in Miscellaneous, net, related to the premium on tender
for the existing financings and to the write-off of unamortized
issuance costs.
-- The company's results for the third quarter also include
special charges and merger-related expenses of $15 million.
Capacity Guidance
AMR estimates consolidated capacity in the fourth quarter of 2013
to be up approximately 3.5 percent versus the fourth quarter of
2012, primarily driven by the combination of an estimated 1.5
percent year-over-year increase in the average stage length per
operation flown, and by new or increased capacity into South
Korea, Mexico and Central and South America.
For the full year 2013, consolidated capacity is estimated to
increase approximately 1.5 percent versus the prior year.
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)
BERNARD L. MADOFF: Ex Workers Chose Freedom Fight over Plea Deal
----------------------------------------------------------------
Erik Larson, writing for Bloomberg News, reported that five former
employees of Bernard L. Madoff on trial over allegations they
aided in his $17 billion fraud probably scrapped plea talks
involving harsh prison terms to gamble for total exoneration from
a jury, ex-prosecutors said.
According to the report, the U.S. had little reason to offer the
group leniency in exchange for testimony against others, since
Madoff and his top aides had already pleaded guilty, said Philip
Hilder, a former federal prosecutor in Houston who represents
defendants accused of white-collar crimes.
"It's kind of like an airline that only has a couple seats
remaining on a flight," said Hilder, who ran the U.S. Justice
Department's organized crime strike force in Houston in the late
1980s, the report related. "There's no reason to give a discount.
They charge a full fare. That principle applies here too."
U.S. District Judge Laura Taylor Swain in Manhattan scheduled to
continue with jury selection, which started a week ago, with
opening statements to follow, the report said. Twelve jurors and
six alternates will hear what may become the fullest account of
how Madoff carried out the biggest Ponzi scheme in U.S. history.
The former employees, all of whom have pleaded not guilty, are
Annette Bongiorno, Madoff's personal secretary, who worked with
him for 40 years and helped recruit investors; Joann Crupi, a
manager of large accounts at Madoff's investment firm; Daniel
Bonventre, operations chief; and computer programmers Jerome
O'Hara and George Perez.
The case is U.S. v. O'Hara, 10-cr-00228, U.S. District Court,
Southern District of New York (Manhattan).
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has paid about 58 percent of customer claims totaling
$17.3 billion. The most recent distribution was in March 2013.
Mr. Picard has collected about $9.35 billion, not including an
additional $2.2 billion that was forfeit to the government and
likewise will go to customers. Picard is holding almost
$4.4 billion he can't distribute on account of outstanding
appeals and disputes. The largest holdback, almost $2.8 billion,
results from disputed claims.
BERNARD L. MADOFF: Clients Urge 2nd Circ. to Block Trustee's Suits
------------------------------------------------------------------
Law360 reported that former customers of Bernard Madoff pushed the
Second Circuit on Oct. 11 to block suits brought against them by
bankruptcy trustee Irving Picard, who is seeking to recover
payments made to them in the six years before the implosion of
Madoff's firm.
According to the report, the brief was filed on behalf of a
variety of former customers of Bernard Madoff Investment
Securities LLP who have been sued by Picard but are not alleged to
have knowingly participated in Madoff's fraud.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has paid about 58 percent of customer claims totaling
$17.3 billion. The most recent distribution was in March 2013.
Mr. Picard has collected about $9.35 billion, not including an
additional $2.2 billion that was forfeit to the government and
likewise will go to customers. Picard is holding almost
$4.4 billion he can't distribute on account of outstanding
appeals and disputes. The largest holdback, almost $2.8 billion,
results from disputed claims.
BLUEGREEN RESTAURANTS: Case Summary & 15 Top Unsecured Creditors
----------------------------------------------------------------
Debtor: Bluegreen Restaurants Inc.
dba Bluegreen on Bell Street
751 Bell Street
La Pointe, WI 54850
Case No.: 13-45033
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
District of Minnesota (Minneapolis)
Judge: Hon. Katherine A. Constantine
Debtor's Counsel: Pro Se
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $50,000 to $100,000
A list of the Debtor's 15 largest unsecured creditors is available
for free at http://bankrupt.com/misc/mnb13-45033.pdf
BOWLMOR AMF: S&P Assigns 'B' CCR & Rates $265MM Facilities 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned Bowlmor AMF Corp. a
'B' corporate credit rating. The outlook is stable.
At the same time, S&P assigned AMF Bowling Centers Inc.
subsidiary's $265 million senior secured credit facilities its 'B'
issue-level rating (at the same level as the corporate credit
rating), with a recovery rating of '3', indicating S&P's
expectation for meaningful (50% to 70%) recovery for lenders in
the event of a payment default. The facilities consist of a
$245 million term loan due 2018 and $20 million revolving credit
facility due 2018.
In July 2013, AMF and Strike Holdings LLC (Bowlmor) completed
their merger, with the new holding company named Bowlmor AMF Corp.
The company is owned by AMF's former second-lien debt holders and
Bowlmor's management. Bowlmor AMF used proceeds from the first-
lien term loan and a $55 million second-lien term loan (unrated)
to repay AMF's and Bowlmor's existing debt, fund distributions to
a Bowlmor minority investor and AMF unsecured creditors, pay fees
and expenses associated with the transaction, and provide working
capital to the company.
"Our 'B' corporate credit rating on Bowlmor AMF reflects its
assessment of its business risk profile as "vulnerable" and its
financial risk profile as 'highly leveraged,' S&P said.
S&P's assessment of the company's business risk profile as
vulnerable reflects the existence of many competing alternative
leisure venues, intense competition for consumers' discretionary
spending in the leisure market, and the risks associated with the
integration and repositioning of the AMF operations. In addition,
S&P's business risk assessment takes into account the secular
challenges facing the bowling center industry because of declining
league participation, which requires multiweek commitments. The
decrease in league play places greater reliance on impulse-driven
open bowling and food and beverage spending, which exposes Bowlmor
AMF to increased competition from other forms of entertainment.
These risks are tempered by the geographic diversity of the AMF
portfolio across the U.S., the contribution of the Bowlmor assets
into the portfolio, and Bowlmor managements' previous success in
turning around underperforming bowling assets. Although
management has not executed a turnaround of this scale, S&P
believes its experience coupled with Cerberus Capital Management
L.P.'s expertise (a Cerberus affiliate is an equity owner) in
operational turnarounds provides opportunities to achieve cost
savings and to support new revenue growth initiatives.
S&P's assessment of Bowlmor AMF's financial risk profile as highly
leveraged reflects high debt levels (including operating lease
commitments) and its expectation for modest excess cash flow
generation because of the company's capital program to execute its
growth initiatives. S&P expects operating lease-adjusted debt to
EBITDA to be in the low-6x area and total interest coverage to be
in the 1.7x area over the next two fiscal years. With interest
expense on the second-lien term loan pay-in-kind, cash interest
coverage is about 0.25x higher than total interest coverage.
CAESARS ENTERTAINMENT: Signs $2.7 Billion Credit Facilities
-----------------------------------------------------------
Caesars Entertainment Resort Properties, LLC, Caesars
Entertainment Resort Properties Finance, Inc., Harrah's Atlantic
City Holding, Inc., Harrah's Las Vegas, LLC, Harrah's Laughlin,
LLC, Flamingo Las Vegas Holding, LLC, Paris Las Vegas Holding,
LLC, and Rio Properties, LLC (the "CERP Entities"), each a wholly
owned subsidiary of Caesars Entertainment Corporation:
(i) completed the offering of $1,000 million aggregate
principal amount of their 8 percent first-priority senior
secured notes due 2020 and $1,150 million aggregate
principal amount of their 11 percent second-priority
senior secured notes due 2021; and
(ii) entered into a first lien credit agreement governing their
new $2,769.5 million senior secured credit facilities,
consisting of senior secured term loans in an aggregate
principal amount of $2,500 million and a senior secured
revolving credit facility in an aggregate principal amount
of up to $269.5 million.
The CERP Entities used the net proceeds from the offering of Notes
and the borrowings under the Term Loans, together with cash, to
retire 100 percent of the principal amount of loans under the
mortgage and mezzanine loan agreements entered into by certain
subsidiaries of Harrah's Atlantic City Holding, Inc., Harrah's Las
Vegas, LLC, Harrah's Laughlin, LLC, Flamingo Las Vegas Holding,
LLC, Paris Las Vegas Holding, LLC and Rio Properties, LLC, repay
in full all amounts outstanding under the senior secured credit
facility entered into by the Company and Caesars Linq, LLC and
Caesars Octavius, LLC, each an indirect subsidiary of the Company,
and to pay related fees and expenses.
On Oct. 11, 2013, in connection with the closing of the
Transactions, the CERP Entities entered into a series of
transactions to simplify their organizational structure. In
connection with this restructuring, certain subsidiaries of Paris
Las Vegas Holding, LLC, Harrah's Las Vegas, LLC, Flamingo Las
Vegas Holding, LLC, Rio Properties, LLC and Harrah's Laughlin,
LLC, were merged out of existence and, in addition, certain
unoccupied parcels of land not owned by the Casino Resort
Borrowers were transferred to subsidiaries of the Registrant other
than the CERP Entities.
Additionally, in connection with the closing of the Transactions,
on Oct. 11, 2013, Octavius/Linq Holdings, an indirect subsidiary
of Caesars Entertainment Operating Company, Inc., and owner of
Caesars Linq, LLC and Caesars Octavius, LLC (which own Octavius
Tower and Project Linq), transferred Octavius/Linq Intermediate
Holding, LLC to the Company, which then contributed Octavius/Linq
Intermediate Holding, LLC to Rio Properties, LLC. Caesars
Entertainment Operating Company, Inc., obtained an opinion of an
independent financial advisor that, based upon and subject to the
assumptions and other matters set forth in such opinion, it
received reasonably equivalent value in the transfer.
A complete copy of the Form 8-K disclosure is available at:
http://is.gd/CwLlib
About Caesars Entertainment
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.
CAMBRIDGE LAND: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Cambridge Land Company II, LLC
900 Rosemont Road
West Linn, OR 97068
Case No.: 13-36568
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
District of Oregon
Judge: Hon. Elizabeth L Perris
Debtor's Counsel: Matthew A Arbaugh
621 SW Morrison St #1225
Portland, OR 97205
Tel: (503) 228-9115
Email: matt@fieldjerger.com
Total Assets: $7.64 million
Total Debts: $6.10 million
The petition was signed by Alan O'Kain, majority member and
manager.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
CAPITOL BANCORP: Ross Sees Ch. 11 as Venue for Bank Acquisitions
----------------------------------------------------------------
Patrick Fitzgerald, writing for The Wall Street Journal, reported
that Wilbur Ross, whose Talmer Bancorp has agreed to invest $97
million to take over Capitol Bancorp's stakes in its four
remaining banks, said on Oct. 15 that such deals without
government assistance are fast becoming the model for rescuing
troubled banks.
"I'm seeing fewer FDIC-assisted transactions than there used to
be," said Mr. Ross, whose private equity arm W.L. Ross & Co. has
invested more than $2 billion in recent years to buy up struggling
regional banks in the U.S., the report related. "While the banks
have varying degrees of problems, the real problem is at the
holding company. We're finding that [the bank level] is a more
fruitful place to play to make acquisitions."
According to the report, Mr. Ross's Talmer, a Michigan-based
holding company that he has used in recent years to buy a number
of struggling banks in the Midwest, has agreed to be the stalking
horse, or lead bidder for Capitol's banks, which are slated to be
sold next month at a bankruptcy auction.
Mr. Ross's successful forays into the steel and textile industries
have earned him the title of the "King of Bankruptcy," the report
further related. But the deal for Capitol's remaining banks?Bank
of Las Vegas, Indiana Community Bank, Michigan Commerce Bank and
Sunrise Bank of Albuquerque?is structured to keep the banks
themselves out of Chapter 11. Instead, Mr. Ross is buying the bank
stock using a so-called 363 sale, which takes its name from
Section 363 of the U.S. Bankruptcy Code.
About Capitol Bancorp
Capitol Bancorp Ltd. and Financial Commerce Corporation filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case
Nos. 12-58409 and 12-58406) on Aug. 9, 2012.
Capitol Bancorp -- http://www.capitolbancorp.com/-- is a
community banking company with a network of individual banks and
bank operations in 10 states and total consolidated assets of
roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of
FCC, with a number of CBC affiliates owning the remainder. FCC,
in turn, is the holding company for five of the banks in CBC's
network. CBC is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841,
et seq., and trades on the OTCQB under the symbol "CBCR."
Lawyers at Honigman Miller Schwartz and Cohn LLP represent the
Debtors as counsel. John A. Simon, Esq., at Foley & Lardner LLP,
represents the Official Committee of Unsecured Creditors as
counsel.
In its petition, Capitol Bancorp scheduled $112,634,112 in total
assets and $195,644,527 in total liabilities. The petitions were
signed by Cristin K. Reid, corporate president.
The Company's balance sheet at Sept. 30, 2012, showed
$1.749 billion in total assets, $1.891 billion in total
liabilities, and a stockholders' deficit of $141.8 million.
Prepetition, the Debtor arranged a reorganization plan that was
accepted by the requisite majorities of creditors and equity
holders in all classes. Problems arose when affiliates of
Valstone Partners LLC declined to proceed with a tentative
agreement to fund the reorganization by paying $50 million for
common and preferred stock while buying $207 million in face
amount of defaulted commercial and residential mortgages.
CAPITOL CITY: George Andrews Quits as President and CEO
-------------------------------------------------------
George Andrews resigned as president and chief executive officer
of Capitol City Bancshares, Inc., and its subsidiary Capitol City
Bank and Trust Company. Mr. Andrews has advised the Company that
his resignation was not due to any disagreement with the Company.
Mr. Andrews will continue as an employee of the Company in a non-
executive officer position, concentrating on capital raising
initiatives.
Effective Oct. 9, 2013, the board of directors appointed John
Turner as president and chief executive officer of Capitol City
Bank and Trust Company and interim president and chief executive
officer of the Company. Mr. Turner's interim appointment as an
officer of the Company is pending regulatory approval.
Mr. Turner brings over 25 years of experience in the banking
industry and has served as Chief Operating Officer for the Bank
since May of 2010. Prior to his joining the Bank, Mr. Turner was
president and chief executive officer of Regional Bank of Middle
Georgia in Macon, Georgia from 2007 to 2010.
About Capitol City
Atlanta, Georgia-based Capitol City Bancshares, Inc., was
incorporated under the laws of the State of Georgia for the
purposes of serving as a bank holding company for Capitol City
Bank and Trust Company. The Bank operates a full-service banking
business and engages in a broad range of commercial banking
activities, including accepting customary types of demand and
timed deposits, making individual, consumer, commercial, and
installment loans, money transfers, safe deposit services, and
making investments in U.S. government and municipal securities.
Capitol City Bancshares disclosed a net loss of $1.73 million in
2012, as compared with a net loss of $1.59 million in 2011. As of
March 31, 2013, the Company had $299.23 million in total
assets, $291.86 million in total liabilities and $7.37 million in
total stockholders' equity.
Nichols, Cauley and Associates, LLC, in Atlanta, Georgia, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company is operating under regulatory
orders to, among other items, increase capital and maintain
certain levels of minimum capital. As of Dec. 31, 2012, the
Company was not in compliance with these capital requirements. In
addition to its deteriorating capital position, the Company has
suffered significant losses related to nonperforming assets, and
has significant maturities of liabilities within the next twelve
months. These matters raise substantial doubt about the ability
of Capitol City and subsidiaries to continue as a going concern
CIRCUIT CITY: LCD Makers Look to Trim Antitrust Claims
------------------------------------------------------
Law360 reported that four electronics companies asked a California
federal court on Oct. 14 to dismiss several state law claims from
an antitrust suit brought by the liquidating trust for bankrupt
Circuit City stores over a plot to fix the price of liquid crystal
display panels.
According to the report, AU Optronics Corp., HannStar Display
Corp., Toshiba Corp. and Epson Imaging Devices Corp. moved for
partial summary judgment against the Circuit City trust, saying
that the Virginia-based chain shouldn't be allowed to pursue
claims under California and Illinois antitrust law.
The case is In Re TFT-LCD (Flat Panel) Antitrust Litigation, Case
No. 3:07-md-01827 (N.D. Calif.) before Judge Susan Illston.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Va. Lead Case No. 08-35653) on Nov. 10, 2008.
InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, served as the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, acted as the Debtors' local counsel.
The Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel was Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC served as the Debtors' claims and voting
agent. The Debtors disclosed total assets of $3,400,080,000 and
debts of $2,323,328,000 as of Aug. 31, 2008.
Circuit City opted to liquidate its 721 stores and obtained the
Bankruptcy Court's approval to pursue going-out-of-business sales,
and sell its store leases in January 2009.
In May 2009, Systemax Inc., a multi-channel retailer of computers,
electronics, and industrial products, acquired certain assets,
including the name Circuit City, from the Debtors through a Court-
approved auction.
On Sept. 14, 2010, the Court entered an order confirming the
Debtors' Plan of Liquidation, which created the Circuit City
Stores, Inc. Liquidating Trust and appointed Alfred H. Siegel as
Trustee. The Plan became effective Nov. 1, 2010.
CHURCH STREET: Trustee Sues To Recover $1MM From King & Spalding
----------------------------------------------------------------
Law360 reported that the plan agent for the reorganized Tennessee
dental service Church Street Health Management LLC sued King &
Spalding LLP on Oct. 16 in an effort to recover almost $1 million
the firm received as payment shortly before the company entered
bankruptcy in 2012.
According to the report, plan agent Dan B. Lain says the $969,891
that Church Street paid King & Spalding for legal services was
made in the 90 days before the dental center manager sought
Chapter 11 protection, meaning it was insolvent at the time.
About Church Street
Church Street Health Management, LLC, which provided management
services for 67 dental practices in 22 states, filed a Chapter 11
petition (Bankr. M.D. Tenn. Case No. 12-01573) in Nashville,
Tennessee, on Feb. 20, 2012.
The following day, four affiliates, Small Smiles Holding Company,
LLC, Forba NY, LLC, EEHC, Inc., and Forba Services, LLC, filed
their Chapter 11 petitions (Case Nos. 12-01574 to 12-01577).
As of the Petition Date, the Debtors' assets have book value of
$895 million, with debt totaling $303 million. There is about
$131.5 million owing on first-lien obligations, plus $25.6 million
on a second-lien obligation. There is an additional $152 million
on three subordinated debts. The company's finances are
structured to comply with Islamic Shariah financing regulations.
In the Chapter 11 cases, the Debtors have engaged Waller Lansden
Dortch & Davis, LLP as bankruptcy counsel, and Alvarez & Marsal
Healthcare Industry Group, LLC, as financial and restructuring
advisor. Martin McGahan, a managing director at A&M, will serve
as chief restructuring officer of Church Street. Morgan Joseph
TriArtisan, LLC, is the investment banker. Garden City Group is
the claims and notice agent.
Garrison Investment Group is providing funding for the Chapter 11
case. The credit agreement will provide the Debtor with up to an
aggregate principal amount of $12 million in a revolving credit
facility.
Church Street Health Management LLC changed its name as a result
of the sale of the business to existing first-lien lenders in
exchange for $25 million in debt. The new name for the company in
Chapter 11 is CS DIP LLC.
The U.S. Trustee for Region 8 removed two creditors from the
Official Unsecured Creditors Committee. Through the sale of
assets approved by the Court, these two members no longer have
debts against the Debtors. The Committee tapped Gilbert LLP as
special insurance and mass tort counsel.
The Effective Date of the Second Amended Joint Plan of
Reorganization proposed by CS DIP, LLC, f/k/a Church Street Health
Management, LLC, and its debtor affiliates and the Official
Committee of Unsecured Creditors, occurred on April 15, 2013.
COLFAX CORP: S&P Assigns 'BB+' Rating to New 5-Year Loans
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' issue-level
rating and '2' recovery rating to Colfax Corp.'s proposed five-
year revolving credit and term loan A facilities, which refinance
its existing pro rata facilities due 2017. The company seeks to
upsize its U.S.-dollar revolving facility by US$200 million and
reduce its term loan B due 2019 by US$200 million. The recovery
rating of '2' reflects S&P's expectation for substantial recovery
prospects (70%-90%) in the event of a payment default.
The proposed pro rata credit facilities consist of a
US$500 million revolver, US$409 million term loan A-1,
US$380 million term loan A-2, EUR150 million term loan A-3,
EUR100 million term loan A-4, and a US$200 million multicurrency
revolver. Colfax UK Holdings Ltd. is the coborrower of the
multicurrency revolver and the sole borrower of term loans A-2 and
A-3.
The 'BB' corporate credit rating and stable rating outlook on
Colfax remain unchanged. The ratings on Colfax reflect its
"satisfactory" business risk profile and "aggressive" financial
risk profile. The business risk profile is characterized by the
company's good market position in certain fluid-handling and
welding products markets, its broad geographic diversity, and the
significant portion of revenue generated from aftermarket or
consumables sales, offset by its exposure to cyclical and
competitive industrial markets. S&P expects that Colfax will
continue to improve profitability at ESAB, even though further
restructuring efforts continue to involve execution risk and
associated costs.
S&P considers Colfax's financial risk profile to be aggressive.
As of June 30, 2013, funds from operations to total debt was about
15% and debt to EBITDA was about 4x, which are line with S&P's
expectations for the rating. These measures include its
adjustments for operating leases and pension liabilities as well
as about $330 million in preferred stock, which S&P considers to
have intermediate equity content based on its criteria. S&P
expects that Colfax's credit metrics will gradually improve due to
debt reduction from free cash flow generation and improved
earnings. Following the proposed transaction, S&P expects
Colfax's liquidity to remain adequate and its covenant cushion to
remain higher than 15%.
RATINGS LIST
Colfax Corp.
Corporate Credit Rating BB/Stable/--
NEW RATINGS
Colfax Corp.
Senior Secured
EUR100 mil term A-4 bank ln due 2018 BB+
Recovery Rating 2
US$500 mil revolving bank ln due 2018 BB+
Recovery Rating 2
US$409 mil term A-1 bank ln due 2018 BB+
Recovery Rating 2
Colfax Corp.
Colfax UK Holdings Ltd.
Senior Secured
US$200mil multicurrency revolving bank ln due 2018 BB+
Recovery Rating 2
Colfax UK Holdings Ltd.
Senior Secured
US$380mil term A-2 bank ln due 2018 BB+
Recovery Rating 2
EUR150 mil term A-3 bank ln due 2018 BB+
Recovery Rating 2
COUNTRYWIDE FINANCIAL: Former Exec Denies Scheme to Mislead Buyers
------------------------------------------------------------------
Bob Van Voris, writing for Bloomberg News, reported that a former
executive of Bank of America Corp.'s Countrywide unit testified
she wasn't part of a scheme to defraud Fannie Mae and Freddie Mac
by selling them thousands of defective loans.
According to the report, the U.S. sued Bank of America in October,
joining a whistle-blower action filed by another former
Countrywide executive, Edward O'Donnell. The U.S. claims Bank of
America and Countrywide, which the Charlotte, North Carolina-based
bank acquired in 2008, sold thousands of defective loans from 2007
to 2009 to the home-mortgage finance companies.
"There was no scheme," Rebecca Mairone, 46, a defendant in the
government's suit against Bank of America, testified on Oct. 16 in
Manhattan federal court, the report related.
The case is the first brought by the U.S. against a bank over
defective mortgages to go to trial, the report said. Mairone, the
only individual named as a defendant in the case, testified in
response to questioning by her lawyer, Marc Mukasey. Mairone said
she now works for JPMorgan Chase & Co.
Countrywide engaged in the fraud to boost profits, making at least
$165 million, Assistant U.S. Attorney Pierre Armand told jurors in
his opening statements Sept. 24, the report further related.
The case is U.S. v. Countrywide Financial Corp., 1:12-cv-01422,
U.S. District Court, Southern District of New York (Manhattan).
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.
CRESTWOOD HOLDINGS: Moody's Hikes Rating on $400MM Debt to 'B2'
---------------------------------------------------------------
Moody's Investors Service took a number of rating actions
following Crestwood's merger with Inergy. Moody's affirmed Inergy
Midstream, L.P.'s (NRGM; now known as Crestwood Midstream Partners
LP, or Crestwood) Ba3 Corporate Family Rating (CFR) and confirmed
Crestwood Holdings LLC's B2 CFR. Moody's affirmed Crestwood's $500
million senior unsecured notes (originally issued by NRGM) due
2020 at B1 and upgraded its $350 million senior unsecured notes
due 2019 to B1 from B3. Moody's upgraded Crestwood Holdings'
secured term loan to B2 from Caa1. This concludes the ratings
review for Crestwood Holdings and Crestwood Midstream's notes,
which commenced on May 7, 2013 following announcement of a merger
between Crestwood Holdings and Crestwood Midstream, and Inergy,
L.P. and NRGM (collectively, Inergy). The outlook is stable for
all companies.
On October 7, 2013, NRGM completed the acquisition of Crestwood
Midstream and assumed all of latter's debt. As part of the
acquisition, NRGM changed its name to Crestwood Midstream Partners
LP. The general partner (GP) of Crestwood is Crestwood Equity
Partners LP (CEQP, f.k.a Inergy, L.P., unrated). Crestwood
Holdings (Holdings) is the GP and owns 29% limited partner (LP)
interest of CEQP and a 13% LP interest in Crestwood.
On October 10, 2013, Crestwood announced the acquisition of Arrow
Midstream Holdings, LLC (Arrow, unrated) for $750 million. Arrow
owns substantial crude oil, natural gas and water gathering
systems in the Bakken Shale, approximately 60 miles away from
Crestwood's COLT Hub crude rail and pipeline terminal. This
transaction will be funded with $400 million of equity and $350
million of bridge financing, which Moody's expects will ultimately
be repaid with a senior note issuance. This transaction is
expected to close by the end of 2013.
The rating actions are summarized as follows:
Issuer: Crestwood Holdings LLC
Upgrades:
$400 million Senior Secured Bank Credit Facility due 2019,
Upgraded to B2 (LGD4-50%) from Caa1 (LGD5-88%)
Outlook Actions:
Outlook, Changed To Stable from RUR
Confirmation:
Corporate Family Rating, Confirmed B2
Probability of Default Rating, Confirmed B2-PD
Issuer: Crestwood Midstream Partners LP (f.k.a Inergy Midstream
L.P.)
Affirmation:
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
$500 million Senior Unsecured Notes due 2020, Affirmed B1 (LGD4-
68% from LGD5-78%)
Outlook Actions:
Outlook, Changed To Stable from Positive
Issuer: Crestwood Midstream Partners LP (old)
Upgrades:
$350 million Senior Unsecured Notes due 2019, Upgraded to B1
(LGD4-68%) from B3 (LGD4-58%)
Ratings Rationale:
Crestwood's Ba3 CFR reflects the increased scale, large geographic
diversification and high proportion of fee-based contracts of the
combined company consisting of NRGM and Crestwood Midstream. The
rating is restrained by the lack of track record as a combined
company and high likelihood of further acquisitions, which will
need to be integrated into Crestwood and will involve an increase
in debt. The ratings also consider the large amount of
consolidated debt and the moderate level of structural complexity
within the entire Crestwood family (including Holdings, CEQP, and
Crestwood). The Crestwood family has gathering and processing
operations in the Bakken, Niobrara, Barnett, Granite Wash,
Haynesville and Marcellus shales. It also has numerous NGL
facilities and natural gas storage facilities in the Eagle Ford,
Devonian, Marcellus and Utica Shale. This increased scale, along
with 85% of the margins being fee-based, will help improve and
diversify Crestwood's cash flow stream going forward. The Arrow
acquisition will be beneficial to the company's COLT Hub
operations in the Bakken, since the assets at Arrow will provide
an ongoing supply of crude to the COLT Hub in North Dakota.
Following the closing of the merger between Crestwood and NRGM,
the Crestwood family has several pieces of debt at different
entities, creating structural subordination issues. Crestwood has
a $1 billion secured credit facility and $850 million of senior
unsecured notes that are closest to most of the cash flow
generating assets. Since the senior notes are subordinated to a
sizeable secured revolver, they are rated one notch below the CFR
at B1. A portion of the cash flows at Crestwood will flow up to
CEQP and Holdings to support debt payments at those levels.
Moody's consolidates the debt and net EBITDA at Holdings and CEQP
within leverage metrics for Crestwood to get an overall Crestwood
family Debt/EBITDA of 6.5x at June 30, 2013 pro-forma for NRGM and
Crestwood Midstream combination. However, incorporating 2014
EBITDA contribution from Arrow and acquisition financing related
debt, Moody's expects Crestwood family leverage to get below 5x
within the next 12-15 months.
Holdings' B2 CFR reflects the structural subordination of the
creditors at that level to the cash flows from CEQP and Crestwood
for debt service. Holdings' $400 million secured term loan is
rated B2, in line with the CFR, as there is only one class of debt
at that entity.
The stable outlook reflects Moody's view that Crestwood will need
to successfully integrate and run the disparate assets which form
its now meaningfully larger and more diversified footprint, while
absorbing the newly acquired Arrow assets into its asset
portfolio. The ratings may be upgraded if the new portfolio
generates enough EBITDA growth to reduce leverage materially while
benefitting from Crestwood's improved presence in the major oil
and natural gas producing basins, Specifically, an upgrade could
be considered if consolidated leverage approaches 4.0x with
expectations of remaining around that level. The ratings may be
downgraded if leverage levels rise above 7.0x, if operational or
integration issues plague Crestwood, if its acquisition strategy
becomes aggressive, or if production backdrop in the regions it
operates dramatically shifts negatively.
CUMULUS MEDIA: Selling 16.4 Million Class A Shares at $5 Apiece
---------------------------------------------------------------
Cumulus Media Inc. has priced its previously announced
underwritten public offering of 16,400,000 shares of its Class A
common stock at a price to the public of $5.00 per share. Cumulus
has also granted the underwriters a 30-day option to purchase up
to an additional 2,460,000 shares of Class A common stock. The
offering is expected to close on or about Oct. 16, 2013, subject
to the satisfaction of customary closing conditions.
Cumulus expects to receive net proceeds from the offering of
approximately $77.6 million after underwriting discounts and
commissions and estimated offering expenses (or approximately
$89.3 million if the underwriters exercise their option to
purchase additional shares of Class A common stock in full).
Cumulus intends to use approximately $77.6 million of the net
proceeds from the offering to redeem all outstanding shares of the
Company's Series B preferred stock, including accrued and unpaid
dividends. The remaining net proceeds from the offering, if any,
are expected to be placed in the Company's corporate treasury and
used for general corporate purposes.
RBC Capital Markets is acting as the sole book-running manager and
Macquarie Capital, CRT Capital and Noble Financial Capital Markets
are acting as the co-managers for the offering.
About Cumulus Media
Founded in 1998, Atlanta, Georgia-based Cumulus Media Inc.
(NASDAQ: CMLS) -- http://www.cumulus.com/-- is the second largest
operator of radio stations, currently serving 110 metro markets
with more than 525 stations. In the third quarter of 2011,
Cumulus Media purchased Citadel Broadcasting, adding more than 200
stations and increasing its reach in 7 of the Top 10 US metros.
Cumulus also acquired the Citadel/ABC Radio Network, which serves
4,000+ radio stations and 121 million listeners, in the
transaction
Cumulus Media said in its annual report for the year ended
Dec. 31, 2011, that lenders under the 2011 Credit Facilities have
taken security interests in substantially all of the Company's
consolidated assets, and the Company has pledged the stock of
certain of its subsidiaries to secure the debt under the 2011
Credit Facilities. If the lenders accelerate the repayment of
borrowings, the Company may be forced to liquidate certain assets
to repay all or part of such borrowings, and the Company cannot
assure that sufficient assets will remain after it has paid all of
the borrowings under those 2011 Credit Facilities. If the Company
was unable to repay those amounts, the lenders could proceed
against the collateral granted to them to secure that indebtedness
and the Company could be forced into bankruptcy or liquidation.
Cumulus Media put AR Broadcasting Holdings Inc. and three other
units to Chapter 11 protection (Bankr. D. Del. Lead Case No.
11-13674) in 2011 after struggling to pay off debts that topped
$97 million as of June 30, 2011. Holdings estimated debts between
$50 million and $100 million but said assets are worth less than
$50 million. AR Broadcasting operated radio stations in Missouri
and Texas.
As of June 30, 2013, the Company had $3.69 billion in total
assets, $3.35 billion in total liabilities, $72.87 million in
total redeemable preferred stock, and $262.92 million in total
stockholders' equity.
* * *
Standard & Poor's Ratings Services in October 2011 affirmed is 'B'
corporate credit rating on Cumulus Media.
"The ratings reflect continued economic weakness and higher post-
acquisition leverage than we initially expected," said Standard &
Poor's credit analyst Jeanne Shoesmith. "They also reflect the
combined company's sizable presence in both large and midsize
markets throughout the U.S."
As reported by the TCR on April 3, 2013, Moody's Investors Service
downgraded Cumulus Media, Inc.'s Corporate Family Rating to B2
from B1 and Probability of Default Rating to B2-PD from B1-PD.
The downgrades reflect Moody's view that the pace of debt
repayment and delevering will be slower than expected. Although
EBITDA for 4Q2012 reflects growth over the same period in the
prior year, results fell short of Moody's expectations.
DETROIT, MI: DOJ Defends Constitutionality of Chapter 9 Bankruptcy
------------------------------------------------------------------
Reuters reported that a U.S. Department of Justice attorney on
Wednesday defended the legality of Chapter 9 municipal bankruptcy
in the second day of hearings addressing legal issues surrounding
Detroit's bankruptcy case.
According to the report, municipal bankruptcy does not infringe on
states' rights because the state needs to authorize Chapter 9
filing by a local government, Matthew Troy, an attorney in the
Justice Department's Civil Division, told U.S. Bankruptcy Judge
Steven Rhodes, who is overseeing the case.
"It's the state's decision," Troy said, the report related.
A union attorney argued on Oct. 16 the bankruptcy process erodes
states' accountability under their constitutions by ceding their
responsibility for financial management within their borders to
the federal bankruptcy court.
With Michigan Governor Rick Snyder's permission, Detroit filed the
largest municipal bankruptcy in U.S. history on July 18, and a
trial to determine the city's eligibility for bankruptcy
protection is scheduled for next week, the report said. That
trial will determine whether the city is insolvent and if it
engaged in good-faith negotiations with its creditors or that
those negotiations were not possible due to a huge number of
creditors.
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: Legality of Bankruptcy Argued in Court
---------------------------------------------------
Reuters reported that a lawyer representing Detroit's largest
public union argued on Oct. 16 that Chapter 9 municipal bankruptcy
is unconstitutional because it impairs states' rights to manage
their own finances.
"States are ceding accountability for their own financial
management," attorney Sharon Levine, representing Council 25 of
the American Federation of State, County and Municipal Employees,
said in a hearing before U.S. Bankruptcy Judge Steven Rhodes, the
report related. "By turning it over to the federal government and
hiding behind the bankruptcy process, we lose that accountability
which is a cornerstone of the state constitution."
According to the report, Levine argued that it should be left to
the states to restructure municipal debt because Chapter 9
unfairly requires a municipality to settle debts in federal
bankruptcy court without full consent from all its creditors.
Oct. 15 marked the start of a two-day hearing that will address
the thorny legal issues surrounding Detroit's July 18 bankruptcy
filing, the biggest in U.S. history, the report said.
Attorneys representing unions, retirees and other creditors also
argued that Michigan's constitution protects public pensions from
being cut, the report further related. But Rhodes questioned
whether the city's eligibility for bankruptcy should hinge on a
plan of action it might take at a later date.
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: Mich. Says Funding State Court Is City's Problem
-------------------------------------------------------------
Law360 reported that the state of Michigan on Oct. 15 challenged a
union's claim that it must fund the state district court in
Detroit if the city can't, claiming a bankruptcy court can't
compel the city or the state to provide alternate sources of
funding.
According to the report, Michigan made a limited reply to the the
American Federation of State, County and Municipal Employees'
objection to Detroit's move to extend the automatic bankruptcy
stay to any litigation pending against the 36th District Court and
certain related entities.
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.
DON SEALS: Bids for Big Horn Travel Plaza Due Oct. 29
-----------------------------------------------------
Hilco Real Estate is accepting bids for The Big Horn Travel Plaza
located in Buffalo, Wyoming, until Oct. 29, 2013. The entire
property and all equipment associated with the operation of the
business are being sold. The property consists of 4.8 acres with
a 5,028 square-foot building. The sale includes the truck stop,
restaurant cafe, convenience store, campground, and liquor store.
The travel plaza is located at 207 S. Bypass Road in Buffalo
(Johnson County), Wyoming, at the intersection of Interstates 90
and 25. The Chapter 7 Trustee has asked that all expressions of
interest be delivered to Hilco Real Estate by 4:00 p.m.,
prevailing Mountain Time, on Tues., Oct. 29, 2013. Deliver bids
to:
Jeff Azuse
Hilco Trading, LLC
5 Revere Drive, Suite 206
Northbrook, IL 60062
Telephone: 847-418-2703
E-mail: jazuse@HilcoGlobal.com
Hilco says that the Chapter 7 Trustee prefers a non-contingent
offer with a quick closing timeframe.
Don Seals Enterprises, Inc., dba Ray's Liquor, Big Horn Travel
Plaza, and Duffy's Bluff Restaurant, sought chapter 11 protection
(Bankr. D. Wyo. Case No. 12-21079) on Oct. 29, 2012. At the time
of the filing, the Debtor estimated more than $1 million in assets
and less than $50,000 in debts. The chapter 11 proceeding
converted to a chapter 7 liquidation.
DVI INC: 2nd Circ. Frees Deloitte From $300MM Malpractice Suit
--------------------------------------------------------------
Law360 reported that the Second Circuit on Oct. 16 affirmed the
dismissal of a long-running $300 million suit accusing Deloitte &
Touche USA LLP of neglecting to investigate allegedly improper
accounting by insiders of a health care finance company that
spiraled into bankruptcy.
According to the report, a three-judge panel for the appeals court
also affirmed U.S. District Judge Sidney H. Stein's decision to
exclude expert testimony in the case lodged by Dennis J. Buckley,
the trustee of DVI Inc., calling it "unduly speculative."
The appellate case is Buckley v. Deloitte & Touche U.S.A. L.L.P.,
Case No. 12-3522 (2d. Cir.).
E-REWARDS INC: S&P Assigns Prelim. 'B' Rating to New Secured Debt
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned Dallas-based digital
data collection company e-Rewards Inc.'s proposed senior secured
credit facility a preliminary 'B' issue-level rating, with a
preliminary recovery rating of '3', indicating S&P's expectation
for meaningful (50% to 70%) recovery for lenders in the event of a
payment default. The credit facility consists of a $35 million
revolving credit facility due 2018 and a $210 million senior
secured term loan due 2020.
The company plans to use the proceeds to fund a distribution to
shareholders, refinance existing indebtedness, and pay associated
fees and expenses.
The 'B' corporate credit rating reflects S&P's expectation for
minimal debt leverage reduction over the intermediate term
primarily due to low discretionary cash flow generation and an
aggressive financial policy. S&P views e-Rewards' business risk
profile as "weak" primarily due to its niche market focus and
limited scope, and vulnerability to advertising spending. The
company's pro forma lease-adjusted leverage of 3.9x (5.2x when
adjusted for redeemable convertible preferred stock) and private
equity ownership underpins S&P's assessment of a "highly
leveraged" financial risk profile under its criteria. These
factors are tempered by the company's good market position in its
niche, strong panel retention rate, high survey response rate, and
diverse customer base. S&P expects e-Rewards to grow revenue at a
mid- to high-single-digit percent rate with a healthy high-teens
EBITDA margin. Nonetheless, S&P believes that leverage will
remain at about 4x over the intermediate term. S&P believes that
the company will use its free cash flow for bolt-on acquisitions
and, to a lesser extent, debt repayment.
e-Rewards is a leading provider of permission-based digital data
collection services to Market Research Agencies (MRAs) focused on
conducting online research for clients who serve business-to-
business, business-to-consumer, and hard-to-reach audiences. The
company provides customers with access to an online portal where
they can access information from e-Rewards or Valued Opinions
panels, so that they can conduct online market research studies.
Members are recruited by invitation or through affiliate marketing
and social media channels, and consist primarily of consumers,
business decision-makers, and medical professionals. Panel
members are incentivized with reward points, local currency
credits, or virtual currency to participate in market research
surveys.
EDISON MISSION: Ch. 11 Doesn't Bar Enviro Action, Judge Told
------------------------------------------------------------
Law360 reported that the Sierra Club on Oct. 16 asked a federal
judge for permission to drag bankrupt Edison Mission Energy before
Illinois state environmental regulators to answer for what the
group claims are excessive sulfur dioxide emissions from the power
company's coal-fired plants in the state.
According to the report, at a bankruptcy hearing in Chicago, the
environmental group argued that the automatic stay shielding EME
from creditors and lawsuits while it is in Chapter 11 does not
apply to the group's regulatory action before the Illinois
Pollution Control Board.
About Edison Mission
Santa Ana, California-based Edison Mission Energy is a holding
company whose subsidiaries and affiliates are engaged in the
business of developing, acquiring, owning or leasing, operating
and selling energy and capacity from independent power production
facilities. EME also engages in hedging and energy trading
activities in power markets through its subsidiary Edison Mission
Marketing & Trading, Inc.
EME was formed in 1986 and is an indirect subsidiary of Edison
International. Edison International also owns Southern California
Edison Company, one of the largest electric utilities in the
United States.
EME and its affiliates sought Chapter 11 protection (Bankr. N.D.
Ill. Lead Case No. 12-49219) on Dec. 17, 2012.
EME has reached an agreement with the holders of a majority of
EME's $3.7 billion of outstanding public indebtedness and its
parent company, Edison International EIX, that, pursuant to a plan
of reorganization and pending court approval, would transition
Edison International's equity interest to EME's creditors, retire
existing public debt and enhance EME's access to liquidity.
The Company's balance sheet at Sept. 30, 2012, showed
$8.17 billion in total assets, $6.68 billion in total liabilities
and $1.48 billion in total equity.
In its schedules, Edison Mission Energy disclosed total assets of
assets of $5,721,559,170 and total liabilities of $6,202,215,094
as of the Petition Date.
The Debtors other than Camino Energy Company are represented by
David R. Seligman, Esq., at Kirkland & Ellis LLP; and James H.M.
Sprayragen, Esq., at Kirkland & Ellis LLP. Counsel to Debtor
Camino Energy Company is David A. Agay, Esq., at McDonald Hopkins
LLC.
Perella Weinberg Partners is acting as the Debtors' financial
advisor and McKinsey & Company Recovery and Transformation
Services is acting as restructuring advisor. GCG, Inc., is the
claims and notice agent.
An official committee of unsecured creditors has been appointed in
the case and is represented by Ira S. Dizengoff, Esq., Stephen M.
Baldini, Esq., Arik Preis, Esq., and Robert J. Boller, Esq., at
Akin Gump Strauss Hauer & Feld LLP in New York; James Savin, Esq.,
and Kevin M. Eide, Esq., at Akin Gump Strauss Hauer & Feld LLP in
Washington, DC; and David M. Neff, Esq., and Brian Audette, Esq.,
at Perkins Coie LLP. The Committee also has tapped Blackstone
Advisory Partners as investment banker and FTI Consulting as
financial advisor.
EME said it doesn't plan to emerge from Chapter 11 until
December 2014 to receive benefits from a tax-sharing agreement
with parent Edison International Inc.
ENDICOTT INTERCONNECT: Has Until Oct. 24 to Access Cash Collateral
------------------------------------------------------------------
The Hon. Diane Davis of the U.S. Bankruptcy Court for the Northern
District of New York authorized, in a fifth interim order,
Endicott Interconnect Technologies, Inc., et al.'s continued use
of cash collateral which Prepetition Secured Lenders assert an
interest.
As of the Petition Date, EIT owed secured creditors Integrian
Holdings, LLC, M&T Bank and William and David Maines.
As of the Petition Date, EIT's obligations:
1. to Integrian as successor in interest to PNC under the PNC
Revolver included $4,981,262 in unpaid principal together with
accrued and unpaid interest of at least $1,149 and certain fees,
expenses and other amounts due.
2. under the Integrian Term Note included $6,084,750 in unpaid
principal together with accrued and unpaid interest of at least
$17,113 and certain fees, expenses and other amounts due.
3. under the Maines Loan Documents included $5,000,000 in
unpaid principal together with accrued and unpaid interest of at
least $9,895 and certain fees, expenses and other amounts due.
The Debtors will not, without the prior written consent of the
Prepetition Secured Lenders, use cash collateral in an amount that
exceeds any particular authorized line item on the budget by more
than 10%. The Debtors will provide written notice to counsel for
the creditors committee within five business days of any budget
variance of 10% or greater.
As adequate protection from any diminution in value of the
lenders' collateral, M&T will continue to receive the M&T adequate
protection payments. The Prepetition Secured Lenders (other than
M&T) will not receive adequate protection payments during the term
of the order. In order to provide the Prepetition Secured Lenders
with adequate protection, the Debtors will and grant the
Prepetition Secured Lenders replacement liens.
The Debtors will use cash collateral until Oct. 24.
A final hearing on the motion will be held on Oct. 24, at 10:00
a.m. Objections, if any, are due seven days before the final
hearing.
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 W. 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.
ENDICOTT INTERCONNECT: Oct. 24 Hearing on Exclusivity Extensions
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
will convene a hearing on Oct. 24, 2013, at 10:30 a.m., to
consider Endicott Interconnect Technologies, Inc., et al.'s motion
to extend their exclusive periods to file a Chapter 11 Plan until
March 7, 2013, and solicit acceptances for that Plan until May 6.
Objections, if any are due Oct. 17.
According to the Debtors, they have been working with the Official
Committee of Unsecured Creditors on all essential issues relating
to the Chapter 11 filings and the asset sale. After the sale
closing, the Debtors will work with the Committee to develop a
joint disclosure statement and liquidating plan for the Debtors.
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 W. 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.
ENDICOTT INTERCONNECT: Wants Until Feb. 5 to Decide on Leases
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
will convene a hearing on Oct. 24, 2013, at 10:30 a.m., to
consider Endicott Interconnect Technologies, Inc., et al.'s motion
extend the time to assume or reject leases of non-residential real
property.
The Debtor requested that the Court extend until Feb. 5, 2014, the
time within which the Debtor may assume or reject the non-
residential real property lease with Huron Real Estate Associates,
LLC. The Debtor's time to assume or reject its lease of non-
residential real property expires on Nov. 7.
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 W. 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.
ENDICOTT INTERCONNECT: Wins Approval to Sell Assets to Integrian
----------------------------------------------------------------
The Hon. Diane Davis of the U.S. Bankruptcy Court for the Northern
District of New York authorized Endicott Interconnect
Technologies, Inc., et al., to sell substantially all of its
assets to Integrian Holdings, LLC, the highest bidder in the
auction held Sept. 24, 2013.
Banc of America Leasing & Capital, LLC, filed a limited
"supplemental cure" objection of the Debtors' assumption of its
unexpired lease and assignment of the lease to Integrian. BofA
Leasing asked the Court to only grant the motion only if the
Debtor or Integrian remains responsible for the amount payable
under the lease for the period commencing with the original cure
objection deadline and continuing until the date of the closing.
As of the Petition Date, the Debtor had an unpaid balance of
$131,878 payable to owed Banc of America under the lease.
Pursuant to the Court's order, all defaults or other obligations
of the Debtor under any acquired contract will be deemed cured
upon payment at the closing or as soon thereafter as practicable
of the cure amounts with respect to each acquired contract. All
objections to the sale motion that have not been withdrawn, waived
or settled, and all reservations of rights are denied and
overruled on the merits.
The deal with Integrian includes 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.
A group led by the Debtor's minority shareholder James T. Matthews
served as lead bidder, offering $250,000 for the business,
assumption of 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.
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 W. 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 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.
ENERGYSOLUTIONS INC: Inks 3rd Amendment to JPMorgan Facility
------------------------------------------------------------
EnergySolutions, Inc., entered into Amendment No. 3 to the Credit
Agreement with JPMorgan Chase Bank, N.A., as administrative agent,
dated as of Aug. 13, 2010, as amended. The Loan Amendment
contains the following terms and conditions:
(1) that the applicable margin for the Company's senior secured
term loans made pursuant to the Credit Agreement be
increased until such time as the Company reduces the
aggregate outstanding amount of senior secured term loans
under the amended Credit Agreement and the Company's 10.75
Percent Senior Notes due 2018 to $675 million or less;
(2) that the Company will pay a consent fee to each lender that
has entered into the Loan Amendment equal to 0.25 percent
of the sum of the outstanding term loans and revolving
commitments of that lender as of the effective date of the
Loan Amendment (determined after giving effect to the Loan
Amendment);
(3) that the Company reimburse the administrative agent for
fees, charges and disbursements of counsel in connection
with preparation of the Loan Amendment; and
(4) that no later than 270 days after the effective date of the
Loan Amendment, the Company reduces its outstanding debt
with respect to the Company's senior secured term loans
under the amended Credit Agreement and the Company's 10.75
Percent Senior Notes due 2018 to $675 million or less.
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.
ENERGY FUTURE: Green Groups Seek Mine Clean Up Assurances
---------------------------------------------------------
Eileen O'Grady, writing for Reuters, reported that environmental
group leaders on Oct. 16 urged Texas regulators to ensure that
financially strapped Energy Future Holdings can cover the cost of
cleaning up its coal mine operations in the state in the future.
According to the report, Dallas-based Energy Future Holdings, the
state's largest generator of electricity, is working to
restructure about $40 billion in debt in the next few weeks.
Environmental interests, Public Citizen and the Sierra Club,
question whether EFH and its subsidiaries have set aside cash or
assets with sufficient value to cover a potential $1 billion tab
to clean up its mining operations as required by law should the
company declare bankruptcy and plants are shuttered by new owners,
the report said.
The Texas Railroad Commission, which oversees mining activity in
the state, has allowed Luminant Mining to "self-bond," or pledge
company assets to meet the agency's financial requirements rather
than put up a cash bond, the report related.
Luminant operates mines in 11 Texas counties that supply the
lignite, a low-quality coal, that is burned at five Luminant power
plants and can generate more than 8,000 megawatts of electricity,
enough to serve 4 million Texas homes on an average day, the
report further related.
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.
EQUIHOME MORTGAGE: Reed Smith Can't Shake Malpractice Suit
----------------------------------------------------------
Law360 reported that a New Jersey state judge ruled that Reed
Smith LLP couldn't toss a mortgage company's lawsuit claiming the
firm and Coffey & Associates PC negligently failed to advise the
company of insurance coverage in a consumer fraud lawsuit that
spawned a $780,000 jury verdict and helped drive it into
bankruptcy.
According to the report, Morris County Judge Robert J. Brennan
denied Reed Smith's dismissal motion in the case brought by
EquiHome Mortgage Corp., which contends the firm and Princeton-
based partner Robert Jaworski didn't properly investigate its
defense and indemnity.
EXIDE TECHNOLOGIES: Wins Sole Plan Filing Right Through May 2014
----------------------------------------------------------------
Peg Brickley, writing for Dow Jones Business News, reported that
Exide Technologies Inc. has been granted sole control of its
Chapter 11 reorganization process through July of next year.
According to the report, a bankruptcy judge signed off on Oct. 15
on the battery maker's request for an order barring others from
proposing a Chapter 11 reorganization plan, at least until the end
of May 2014. Judge Kevin Carey signed off on the order a day in
advance of the scheduled hearing on the motion, when no opposition
emerged.
Overloaded with debt, Exide filed for bankruptcy protection June
30, the report recalled. It has promised lenders it will deliver
a comprehensive business plan by March 10, 2014, setting the stage
for talks about how to reshape its balance sheet.
Exide said it needed the protective order to stay focused on its
turnaround effort without the distraction of competing Chapter 11
plans, the report related. The bankruptcy filing gave the company
a brief reprieve from creditor pressure, but subsequent extensions
of the so-called "exclusivity period," during which only Exide can
propose a Chapter 11 plan, have to be approved by the court.
The early months of Exide's case have been marked by efforts to
get its key Vernon, Calif., plant reopened, after California
regulators ordered it closed as dangerous, the report said.
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.
EXIDE TECHNOLOGIES: Seeks Approval of CDTSC Stipulation
-------------------------------------------------------
BankruptcyData reported that Exide Technologies filed with the
U.S. Bankruptcy Court a motion seeking entry of an order
authorizing and approving a stipulation with the California
Department of Toxic Substances Control.
The motion explains, "Notwithstanding Exide's success in
convincing the Los Angeles Superior Court to provisionally reopen
the Vernon Facility, because of continuing litigation risks Exide
engaged in extensive arm's-length negotiations with CDTSC in an
attempt to fully and finally resolve the issues connected with the
allegations made by CDTSC in relation to the Suspension Order.
These negotiations resulted in a consensual resolution, and Exide
now presents the Stipulation -- which establishes Exide's
commitment to ongoing environmental compliance -- to this Court
for approval."
Under the stipulation, Exide Technologies will continue to take
certain measures to ensure ongoing environmental compliance at the
Vernon Facility, including replacement of the facility's storm
water system, installation of additional air filtration systems,
modification of certain existing filters and the addition of a
thermal oxidizer to further reduce emissions.
In addition, the Debtor will conduct soil and dust sampling and
work with the county health department to offer blood lead
testing. The Company will provide CDTSC with financial assurance
in the form of a segregated account in the amount of $7.7 million
(less any amounts previously spent) that Exide Technologies will
set aside to pay for the costs and expenses of work completed
under the stipulation. In exchange, CDTSC will agree that the
stipulation constitutes full settlement of the allegations and
provide Exide Technologies a covenant not to sue. In particular,
the CDTSC will, among other things, dismiss the order for
temporary suspension with prejudice and waive its right to any
further proceedings on the accusation.
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.
EXCEL MARITIME: Creditors Get OK to Probe Affiliate
---------------------------------------------------
Law360 reported that unsecured creditors of Excel Maritime
Carriers Ltd. on Oct. 15 received a New York bankruptcy judge's
go-ahead to subpoena documents from another Greek shipping company
controlled by its chairman without the hassle of operating under
international discovery law.
According to the report, the official committee of unsecured
creditors received court approval to probe shareholder affiliate
Ivory Shipping Inc. for documents relating to its investigation
into the financial practices of Excel and its chairman, Gabriel
Panayotides, under Rule 2004 of the Federal Rules of Bankruptcy
Procedure.
About Excel Maritime
Based in Athens, Greece, Excel Maritime Carriers Ltd. --
http://www.excelmaritime.com/-- is an owner and operator of dry
bulk carriers and a provider of worldwide seaborne transportation
services for dry bulk cargoes, such as iron ore, coal and grains,
as well as bauxite, fertilizers and steel products. Excel owns a
fleet of 40 vessels and, together with 7 Panamax vessels under
bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax,
21 Panamax, 2 Supramax and 5 Handymax vessels) with a total
carrying capacity of approximately 3.9 million DWT. Excel Class A
common shares have been listed since Sept. 15, 2005, on the New
York Stock Exchange (NYSE) under the symbol EXM and, prior to that
date, were listed on the American Stock Exchange (AMEX) since
1998.
The company blamed financial problems on low charter rates.
The balance sheet for December 2011 had assets of $2.72 billion
and liabilities totaling $1.16 billion. Excel owes $771 million
to secured lenders with liens on almost all assets. There is $150
million owing on 1.875 percent unsecured convertible notes.
Excel Maritime, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case
No. 13-bk- 23060) on July 1, 2013, in New York after signing an
agreement where secured lenders owed $771 million support a
reorganization plan filed alongside the petition. The Debtor
disclosed $35,642,525 in assets and $1,034,314,519 in liabilities
as of the Chapter 11 filing.
Excel, which sought bankruptcy with a number of affiliates, has
tapped Skadden, Arps, Slate, Meagher & Flom LLP, as counsel;
Miller Buckfire & Co. LLC, as investment banker; and Global
Maritime Partners Inc., as financial advisor.
A five-member official committee of unsecured creditors was
appointed by the U.S. Trustee. The Creditors' Committee is
represented by Michael S. Stamer, Esq., Sean E. O'Donnell, Esq.,
and Sunish Gulati, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York; and Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer
& Feld LLP, in Dallas, Texas. Jefferies LLC serves as the
Committee's investment banker.
The Debtors' Chapter 11 plan filed on July 15 to provides to
implement a reorganization worked out before a July 1 bankruptcy
filing. The plan will give ownership to secured lenders owed $771
million, although the lenders will allow current owner Gabriel
Panayotides to keep control, at least initially. Unsecured
creditors with claims totaling $163 million will receive a $5
million, eight percent note for a predicted recovery of 3 percent.
Holders of $150 million in unsecured convertible notes make up the
bulk of the unsecured-claim pool.
FANNIE MAE: Fitch Affirms 'C' Preferred Stock Rating
----------------------------------------------------
Fitch Ratings has placed Fannie Mae's and Freddie Mac's 'AAA'
Long-term Issuer Default Ratings (IDRs) and debt ratings on Rating
Watch Negative. These rating actions follow Fitch's placement of
the United States of America's (U.S.) 'AAA' Long-term foreign and
local currency IDRs on Negative Watch on Oct. 15, 2013.
Key Rating Drivers - IDRs, Unsecured Debt, Support Ratings,
Support Rating Floors
The ratings of Fannie Mae and Freddie Mac are directly linked to
the U.S. sovereign rating, based on Fitch's view of the U.S.
government's direct financial support of the two housing
government sponsored enterprises (GSEs). The rating linkages are
further articulated in Fitch's report 'Rating Linkages to the U.S.
Sovereign Rating', dated July 18, 2011.
The housing GSEs remain regular issuers in the capital markets,
benefiting from meaningful financial support from the U.S.
government. A key rating driver and Fitch's rationale for aligning
the GSEs' ratings to the U.S. government rating is the U.S.
Treasury's Senior Preferred Stock Purchase Agreement (PSPA). Under
the PSPA, the U.S. Treasury is required to inject funds into
Fannie Mae and Freddie Mac to maintain positive net worth, so that
each firm can avoid being considered technically insolvent by
their conservator. Under the PSPA, the remaining funding available
to Fannie Mae and Freddie Mac is $117.6 billion and $140.5
billion, respectively.
Key Rating Drivers - Subordinated Debt & Preferred Stock
The terms of Fannie Mae and Freddie Mac's subordinated debt
require the deferral of interest payments if the firms fail to
maintain specified capital levels. However, in a 2008 statement,
the Director of FHFA stated that the GSEs would continue to make
interest and principal payments on the subordinated debt, even if
the minimum capital levels are not maintained. Fitch's 'AA-'
ratings on the subordinated debt are reflective of the
conservator's willingness to support these obligations and the
current timeliness of interest and principal on these obligations.
The 'C/RR6' ratings of Fannie Mae's and Freddie Mac's preferred
stock ratings reflect the ongoing deferral of payments and very
low prospects for recovery.
Typically, financial institutions with hybrid capital instruments
would be assigned a Viability Rating (VR) from which the hybrid
capital instruments could be notched. However, the GSEs could not
exist without the funding advantage provided to them by the U.S.
Government's implicit guarantee. Given this unique funding/support
situation, Fitch has deviated from its financial institution
criteria and not assigned VR to Fannie Mae and Freddie Mac.
Rating Sensitivities - IDRs, Unsecured Debt, Subordinated Debt,
Support Ratings, Support Rating Floors
The ratings of Fannie Mae and Freddie Mac are directly linked to
the U.S. sovereign rating and will continue to move in tandem. If
at some point in the future, Fitch views government support as
being reduced, the ratings of the GSEs may be delinked from the
sovereign and downgraded.
As articulated in Fitch's comment, 'Fitch: Sovereign Rating
Implications of U.S. Debt Ceiling Crisis', dated Oct. 10, 2013,
Fitch would lower the U.S. sovereign rating to 'Restricted Default
(RD)' if the government failed to honor interest and/or principal
payments on the due date of U.S. Treasury securities. This would
not necessarily lead to an immediate downgrade of the GSEs'
ratings, which would likely remain on Negative Watch until any
such default is cured and the sovereign rating is revised up from
'RD'. However, if at the time of the 'RD', Fitch was able to
indicate the maximum rating it would expect to assign to the
sovereign after any default is cured, the GSEs' ratings would
likely be set relative to the expected U.S. sovereign rating. If
the U.S. sovereign IDR were lowered to 'RD', it would be unlikely
to return to 'AAA' in the short to medium term.
Deterioration in Fannie Mae's or Freddie Mac's available liquidity
and/or inability to access capital markets over an extended period
may result in negative rating actions, irrespective of the U.S.
sovereign rating.
Should the FHFA change its position regarding the payment of the
GSEs' subordinated debt obligations or if there is any deferral of
interest or principal payments, Fitch would likely downgrade the
ratings on the subordinated debt.
Rating Sensitivities - Preferred Stock
Given the ongoing deferral of dividends and low prospects for
recovery on Fannie Mae's and Freddie Mac's preferred stock
obligations, Fitch does not envision any changes to the 'C/RR6'
ratings for the foreseeable future.
As of June 30, 2013, Fannie Mae and Freddie Mac remained by far
the largest players in the U.S. mortgage market, with total assets
of $3.3 trillion and $2.0 trillion, respectively.
Fitch has placed the following ratings on Rating Watch Negative:
Fannie Mae (Federal National Mortgage Association)
-- Long-term IDR 'AAA';
-- Short-term IDR 'F1+';
-- Support rating '1';
-- Support floor 'AAA';
-- Short-term debt 'F1+';
-- Senior unsecured 'AAA';
-- Subordinated debt 'AA-';
Freddie Mac (Federal Home Loan Mortgage Corporation)
-- Long-term IDR 'AAA';
-- Short-term IDR 'F1+';
-- Support rating '1';
-- Support floor 'AAA';
-- Short-term debt 'F1+';
-- Senior unsecured 'AAA';
-- Subordinated debt 'AA-';
Fitch has affirmed the following ratings:
Fannie Mae
-- Preferred stock 'C/RR6'.
Freddie Mac
-- Preferred stock 'C/RR6'.
FIRST DATA: Inks Pact to Refinance Holding Company Debt
-------------------------------------------------------
First Data Corporation's parent company, First Data Holdings Inc.,
has reached an agreement with existing debt holders to repay a
portion of the approximately $2 billion 11.5 percent senior
payable-in-kind notes due 2016, and exchange the remainder for new
14.5 percent senior PIK notes due 2019.
In the refinancing, Holdings plans to:
* Issue approximately $300 million of new convertible
preferred equity in Holdings with a maturity date of
December 2021 to existing shareholders;
* Use the proceeds from the new preferred equity investment to
repay approximately $300 million of the existing notes; and
* Issue approximately $1.4 billion of new notes in exchange
for all of the remaining existing notes.
"First Data has been opportunistic since August 2010 when it began
working with its investors to amend and extend the maturities on
its debt," said First Data CEO Frank Bisignano. "While the
company has successfully extended the maturities for some $21
billion of debt through the second quarter of this year, this
agreement allows us to address the junior-most of the debt
structure and an element that has been of interest to investors.
With today's announcement we will have effectively addressed,
amended or extended the majority of the debt maturities that
originated in 2007."
The preferred equity and the new notes have not been registered
under the Securities Act of 1933, as amended, or the securities
laws of any state or other jurisdiction, and, unless so
registered, may not be offered or sold in the United States absent
registration or an applicable exemption from, or in a transaction
not subject to, the registration requirements of the Securities
Act and other applicable state securities or blue sky laws and
foreign securities laws.
About First Data
Based in Atlanta, Georgia, First Data Corporation provides
commerce and payment solutions for financial institutions,
merchants, and other organizations worldwide.
The Company's balance sheet at June 30, 2013, showed $43.70
billion in total assets, $41.67 billion in total liabilities,
$65.2 million in redeemable noncontrolling interest, and $1.95
billion in total equity.
* * *
The Company's carries a 'B3' corporate family rating, with a
stable outlook, from Moody's Investors Service, a 'B' corporate
credit rating, with stable outlook, from Standard & Poor's, and
a 'B' long-term issuer default rating from Fitch Ratings.
GIORDANO'S ENTERPRISES: Seyfarth Shaw Sued Over Ch. 11 Advice
-------------------------------------------------------------
Law360 reported that the former owners of once-bankrupt pizza
chain Giordano's Enterprises Inc. on Oct. 16 sued their former
counsel at Seyfarth Shaw LLP in Illinois state court for legal
malpractice, claiming the firm cost them more than $2 million by
botching a bankruptcy filing.
According to the report, John and Eva Apostolou say that after GEI
filed for Chapter 11, Seyfarth associate James B. Sowka and former
partner David C. Christian failed to file an adequate objection to
consolidate GEI's and its related entities' estates into one
bankruptcy action.
About Giordano's Enterprises
Chicago, Illinois-based Giordano's Enterprises, Inc., was founded
in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren
and Joseph Boglio. In 1988, John and Eva Apostolou purchased
control of Giordano's. Although this casual dining eatery offers
a broad array of fine Italian cuisine, it is primarily know for
its "Chicago's World Famous Stuffed Pizza". At present,
Giordano's operates six company owned stores in Chicagoland, four
joint venture stores, and thirty-five franchisee locations. In
addition, Giordano's operates Americana Foods, Inc., located in
Mount Prospect, Illinois, that serves as the commissary for the
majority of food products purchased by the Illinois locations.
An affiliated real estate holding company, Randolph Partners, LP,
owns 12 restaurant buildings that are leased to four of the
company-owned locations, two of the joint venture locations and
six of the franchisee locations. The other 33 locations are
leased from third party landlords; two for the Giordano's
locations, two for the joint venture locations and 29 for the
franchise locations. Giordano's is the lessee and subleases the
restaurant facility for 22 of the 29 franchise third party leases.
JBA Equipment Finance, Inc, another affiliated entity, leases
restaurant equipment packages to eight franchisee locations.
Giordano's Enterprises and 26 affiliates filed for Chapter 11
bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on
Feb. 16, 2011. Six additional affiliates filed for Chapter 11
protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A.
Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at
Arnstein & Lehr, LLP, in Chicago, serve as the Debtors'
bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in
assets and $45,538,574 in liabilities as of the Chapter 11 filing.
Certain of the Debtors owe Fifth Third Bank about $13,560,662,
pursuant to loans and financial accommodations, and $31,927,998
under a business loan as of the Petition Date. Fifth Third
provided DIP financing of up to $35,983,563.
Philip V. Martino was appointed as Chapter 11 trustee in the
Debtors' bankruptcy cases, at the behest of the U.S. Trustee.
Mr. Martino filed a $3,000,000 bond.
The pizza chain was auctioned on Nov. 16, 2011, and ultimately
sold for $61.6 million to an investor group led by Chicago-based
private equity firm Victory Park Capital. The Debtor was renamed
to GEI-RP following the sale.
GOLDEN ENTERPRISES: Case Summary & 19 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Golden Enterprises Group II, LLC
P.O. Box 141062
Miami, FL 33114
Case No.: 13-34869
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Judge: Hon. Robert A Mark
Debtor's Counsel: Geoffrey S. Aaronson, Esq.
100 SE 2nd St # 2700
Miami, FL 33131
Tel: 786-594-3000
Email: gaaronson@aspalaw.com
Total Assets: $3.60 million
Total Liabilities: $8.12 million
The petition was signed by Eugenio A. Rodriguez, manager.
A list of the Debtor's 19 largest unsecured creditors is available
for free at http://bankrupt.com/misc/flsb13-34869.pdf
GREEN ISLAND: Moody's Affirms 'Ba1' Rating on Revenue Bonds
-----------------------------------------------------------
Moody's Investors Service has affirmed Green Island Power
Authority's, NY (GIPA) Power System Revenue Bonds' Ba1 rating and
revised the outlook to stable from negative.
Ratings Rationale:
The affirmation of the Ba1 rating and the change in outlook to
stable reflect the authority's improved liquidity and financial
performance in fiscal year 2013 and expectations of continued
improvement into fiscal year 2014. Starting in January 2014,
Moody's expects GIPA's financial performance will benefit from
expiration of an above market power contract resulting in GIPA's
ability to use their own lower cost hydro-generated power for up
to approximately 50% of the Village of Green Island's power supply
needs on a long-term basis. Other factors supporting the Ba1
rating include very competitive retail rates compared to the state
average and fully funded 1 year debt service reserve.
The Ba1 rating also considers state regulated retail rates,
substantial decline in liquidity from 2009 through 2012, history
of insufficient costs recovery, and small service area. GIPA's
merchant exposure and high debt ratio are also viewed as credit
weaknesses.
Outlook:
The stable outlook reflects Moody's expectations that debt service
coverage will remain above 1.0 times in fiscal year 2014 and
improve further as the authority realizes the full benefit of
self-supplying a portion of its electric power needs.
What Could Make the Rating Go Up:
The rating could face upward momentum if there is a change to its
core business profile that substantially reduces GIPA's cash flow
volatility; if debt service coverage is consistently above 1.3
times on a net revenue basis; and liquidity is above 150 days cash
on hand.
What Could Make the Rating Go Down:
The rating could face downward pressure if GIPA's financial
performance is materially below Moody's expectations; GIPA does
not maintain rate covenant compliance; or if GIPA rapidly expands
the hydro facility and undertakes extensive capital expenditures
without beneficial long-term off-take contracts with reputable
counterparties.
Strengths:
* Monopoly provider of essential electric service, albeit in a
small service territory with below average socio-economic
factors
* Very competitive retail rates facilitated by a long-term
contract for electricity supplied by the New York State Power
Authority (NYPA rated Aa2) through 2025
* Self-use of low-cost hydro generation for a portion of power
supply expected to improve financial margins
* Generally good operating history over the years at the hydro
facility
* Strong historical water flow data and large water basin limit
low-water flow risks typical of run-of-the-river hydro
facilities
Challenges:
* Historically weak financial performance with debt service
coverage ratios on a net revenue basis below 1.0 times for
several consecutive years and declining liquidity from 2009
through 2012
* Captive to volatile and uncertain wholesale market prices for a
portion of authority's revenues
* Rate regulation constrains the authority's ability to timely
and sufficiently increase rates to boost liquidity
* Limited history of successful rate hearings and history of
insufficient cost recovery
* Potential costly replacement risk for turbine blades and
equipment as rotor and blades have not been replaced since
operations began in 1923
* Rate covenant has weak thresholds
GROEB FARMS: Continues to Operate Using Cash
--------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan,
Southern Division, gave interim authority for Groeb Farms, Inc.,
to use cash collateral securing its prepetition indebtedness.
A final hearing on the Motion will be heard before the Court on
Nov. 7, 2013, at 11:00 a.m. Objections are due on or before
Oct. 31.
As adequate protection, the Prepetition Secured Lender is granted
replacement liens and security interests in all collateral, which
liens will be junior to the DIP Liens and Non-Primed Liens and
subject and subordinate to a carve-out. The Prepetition Secured
Lender is also granted super-priority administrative expense
claims.
The "Carve-Out" means (a) payment for professional fees and
expenses accruing during the period on or prior to one Business
Day after the DIP Lender provides notice that it is entitled to
exercise remedies under the DIP Facility due to an Event of
Default (i) the payment of all accrued and unpaid professional
fees and expenses of professionals retained by the Debtor, and any
official committees; (ii) quarterly fees requested to be paid
pursuant to 28 U.S.C. Section 1930(a) and fees payable to the
Clerk of the Bankruptcy Court; and (iii) up to $25,000 for the
expenses of a Trustee appointed pursuant to Section 726(b) of the
Bankruptcy Code; and (b) for professional fees and expenses
accrued during the period after the Business Day following the DIP
Lender's provision of a Carve-Out Trigger Notice, in an amount not
to exceed $400,000.
About Groeb Farms
Headquartered in Onsted, Mich., Groeb Farms is one of the largest
honey packers in the nation. For more than 30 years, the company
has provided the finest, top quality, wholesome and safe honey and
related food products to industrial and retail customers as well
as the American consumer.
The Company sought protection under Chapter 11 of the Bankruptcy
Code on Oct. 1, 2013 (Case No. 13-58200, Bankr. E.D. Mich.).
Judge Walter Shapero is overseeing the case. The Debtor is
represented by Judy A. O'Neill, Esq., and John A. Simon, Esq., at
Foley & Lardner LLP, in Detroit, Michigan.
GROEB FARMS: Seeks to Employ Foley & Lardner as Counsel
-------------------------------------------------------
Groeb Farms, Inc., seeks authority from the U.S. Bankruptcy Court
for the Eastern District of Michigan, Southern Division - Detroit,
to employ Foley & Lardner LLP as general bankruptcy counsel.
In the event Foley is not retained as general bankruptcy counsel,
the Debtor seeks the authority to employ Foley as special counsel
to represent the Debtor with respect to: (1) all corporate matters
attendant to the reorganization; (2) the treatment of the putative
class action pending in the U.S. District Court for the Northern
District of Illinois under the Chapter 11 Plan of Reorganization;
(3) the Debtor's ongoing compliance requirements resulting from
the DPA; and (4) the Debtor's financing needs, including its DIP
Credit Agreement.
The following Foley professionals, who are expected to provide
primary services to the Debtor, will be paid their customary
hourly rates:
Lane, Patricia J. -- plane@foley.com $740
Noller, Lisa -- lnoller@foley.com $680
O'Neill, Judy A. -- joneill@foley.com $780
Simon, John A. -- jsimon@foley.com $635
Dolcourt, Tamar N. -- tdolcourt@foley.com $385
Pinder, Jennifer H. -- jpinder@foley.com $495
Rittberg, Chrissy L. -- crittberg@foley.com $450
Northcutt, Kathleen A. -- dnorthcutt@foley.com $175
The firm will also be reimbursed for any necessary out of-pocket
expenses.
Ms. O'Neill, a partner at Foley & Lardner LLP's Detroit, Michigan,
office, relates that her firm has represented the Debtor for over
six years. She says during the course of that representation,
three issues have arisen that may impact Foley's
disinterestedness: (1) a Foley partner, Joseph Tyson, Jr., Esq. --
jtyson@foley.com -- served as the Debtor's Assistant Secretary,
performing only ministerial acts in the capacity during the two
years prior to the Petition Date; (2) Foley has incurred an
unsecured claim in the amount of $922,748 for services rendered
and not paid by advance retainers prior to the Petition
Date; and (3) Foley has received payments on account of antecedent
debt in the last 90 days.
Ms. O'Neill states that despite Mr. Tyson's extremely limited role
as Assistant Secretary, in an abundance of caution, Foley will
implement an ethical wall with respect to the Chapter 11 Case.
She asserts that though arguably Mr. Tyson himself is not
disinterested, the lack of disinterestedness should not be imputed
to Foley. She points out that Section 101(14)(B) of the
Bankruptcy Code states that a disinterested person, among other
things, is one who is not, and was not, within 2 years before the
date of the filing of the petition, a director, officer, or
employee of the Debtor.
* * *
The Bankruptcy Court, having reviewed and heard arguments on the
application and the oral objections by the U.S. Trustee,
Bankruptcy Court concluded and ordered as follows:
* The Application will not be denied on the theory that the
relationship of Mr. Tyson automatically or per se requires
disqualification of the Applicant firm and consequent denial
of the Application for that reason;
* The alternative relief sought in the subject employment
application to wit: appointment of the Applicant firm as
special counsel, under the circumstances of the case as they
presently exist, is not an appropriate or workable
alternative;
A final hearing will be held on the employment application at a
date to be determined.
About Groeb Farms
Headquartered in Onsted, Mich., Groeb Farms is one of the largest
honey packers in the nation. For more than 30 years, the company
has provided the finest, top quality, wholesome and safe honey and
related food products to industrial and retail customers as well
as the American consumer.
The Company sought protection under Chapter 11 of the Bankruptcy
Code on Oct. 1, 2013 (Case No. 13-58200, Bankr. E.D. Mich.).
Judge Walter Shapero is overseeing the case. The Debtor is
represented by Judy A. O'Neill, Esq., and John A. Simon, Esq., at
Foley & Lardner LLP, in Detroit, Michigan.
GROEB FARMS: Taps Kurtzman Carson as Claims & Noticing Agent
------------------------------------------------------------
Groeb Farms, Inc., sought and obtained authority from the U.S.
Bankruptcy Court for the Eastern District of Michigan, Southern
Division, to employ Kurtzman Carson Consultants LLC as claims,
noticing, and balloting agent.
Evan Gershbein, the senior vice president of corporate
restructuring services of KCC, assures the Court that his 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.
About Groeb Farms
Headquartered in Onsted, Mich., Groeb Farms is one of the largest
honey packers in the nation. For more than 30 years, the company
has provided the finest, top quality, wholesome and safe honey and
related food products to industrial and retail customers as well
as the American consumer.
The Company sought protection under Chapter 11 of the Bankruptcy
Code on Oct. 1, 2013 (Case No. 13-58200, Bankr. E.D. Mich.).
Judge Walter Shapero is overseeing the case. The Debtor is
represented by Judy A. O'Neill, Esq., and John A. Simon, Esq., at
Foley & Lardner LLP, in Detroit, Michigan.
GUAM: S&P Raises Rating on Gen. Obligation Bonds to 'BB-'
---------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term rating to
'BB-' from 'B+' on the Government of Guam's general obligation
(GO) bonds. At the same time, S&P raised its long-term rating to
'B+' from 'B' on the Government of Guam's series 2010A
certificates of participation (COPs; John F. Kennedy High School
Project). The outlook is stable.
"The rating action reflects our view of the government's improved
financial management practices, including improved transparency,
stricter fiscal discipline, and enhanced cash flow monitoring
procedures and capabilities," said Standard & Poor's credit
analyst Paul Dyson.
The ratings remain speculative grade, however, and continue to
reflect S&P's view of:
-- The government's continued large negative unassigned general
fund balance position and reliance on nonrecurring sources
of funding to improve its total general fund balance in
fiscal years 2008 through 2012, although preliminary
unaudited results for fiscal 2013 indicate a more
structurally balanced general fund result;
-- Continued limited albeit improved general fund liquidity,
with negative balances in some months historically and as
projected;
-- The government's extremely high debt burden, which has grown
significantly in recent years, and a resulting lack of
financing flexibility given that the government is within
$33 million (3%) of its $1.14 billion debt ceiling (although
a large portion of debt issued in recent years has gone
toward paying down other long-term liabilities such as
unpaid tax refunds); and
-- The territory's mainly military- and tourism-based economy
(with tourism primarily from Japan), which leaves it
vulnerable to economic cycles and defense spending.
The stable outlook reflects S&P's anticipation that tourism and
the economy are likely to improve during the next two years,
benefiting Guam and providing it with opportunities to improve its
financial position.
HAAS BAKING: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Haas Baking Company
8815 Paragon Circle
Saint Louis, MO 63123
Case No.: 13-49433
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
Eastern District of Missouri (St. Louis)
Judge: Hon. Charles E. Rendlen III
Debtor's Counsel: Spencer P. Desai, Esq.
DESAI EGGMANN MASON LLC
Pierre Laclede Center
7733 Forsyth Boulevard, Suite 2075
St. Louis, MO 63105
Tel: (314) 881-0800
Fax: (314) 881-0820
Email: sdesai@demlawllc.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Joesph Gary Haas, secretary.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/moeb13-49433.pdf
HAMPTON CAPITAL: Amended Plan Reflects Negotiated Deal With Panel
-----------------------------------------------------------------
Hampton Capital Partners, LLC, doing business as Gulistan Carpet,
filed with the U.S. Bankruptcy Court for the Middle District of
North Carolina an Amended Disclosure Statement for the Second
Amended Plan of Liquidation dated Oct. 8, 2013.
According to the Disclosure Statement, the Plan reflects the
result of a negotiated agreement between (i) the Debtor; (ii) the
Official Committee of Unsecured Creditors; (iii) Ronile Inc., the
Debtor's parent entity and largest creditor; and (iv) the Ronile,
Inc. Welfare Benefit Trust, the voluntary employees' beneficiary
association in which the Debtor's employees participated.
As a result of the negotiated agreement, Ronile and the Ronile,
Inc. Welfare Benefit Trust have agreed to subordinate the payment
of their claims until the holders of allowed unsecured claims
receive a 15% recovery on their claims, with the possibility of a
further distribution from Avoidance Action Net Proceeds as set
forth in the Plan.
The Plan proposes the appointment of a trustee to wind up the
affairs of the Debtor, complete the final administration of the
Debtor's bankruptcy estate, and consummate the Plan. All
creditors and other parties in interest are encouraged to read the
Plan carefully and thoroughly, and to review the Plan with their
attorneys or other advisors to ascertain its terms, provisions,
and conditions and the effect of the Plan on any claims or
interests which the persons may possess.
A copy of Amended Disclosure Statement is available for free at
http://bankrupt.com/misc/HAMPTON_CAPITAL_amendedds_2plan.pdf
As reported in the Troubled Company Reporter on Sept. 16, 2013,
the Committee asked the Court to deny confirmation of the Plan of
Liquidation dated May 3, 2013, as amended on June 7, 2013. The
Committee has reviewed the Plan and the subsequent amendment
and has continued to negotiate with the Debtor regarding
modifications needed to satisfy the Committee that it fairly and
equitably treats the unsecured claims scheduled and file in the
case. Specifically, the Committee has encouraged the Debtor to
resolve the issues of the treatment of the Charter Note Holder
claims and has continued to negotiate an acceptable treatment of
the claims of the class of unsecured creditors.
In a separate filing, Crimson Portfolio, LLC and SABAL Financial
Group, L.P., stated that the Debtor's Plan is not confirmable and
unprecedented. As to SABAL, it was not given price approval for
lot sales and the Debtor does not set minimum release prices, so
accordingly, payment to SABAL is entire dependent on sales revenue
exceeding the Debtor's management and operational expenses.
As reported in the Troubled Company Reporter on Sept. 12, 2013,
Judy A. Robbins, U.S. Trustee for Region 4, also asked the Court
to deny confirmation of the Debtor's Plan. According to the U.S.
Trustee, the Plan contemplates that, among other things (a) Sabal
Financial Group, LP, will receive an aggregate of approximately
88.5% of its allowed claim as of the Petition Date from the sale
of the remaining lots; (b) general unsecured trade vendors will be
paid in full; (c) the Charter Note Holders will receive
approximately 8.75% of the principal loan balance owed at the
Petition Date; and (d) the equity interests in the Debtor will be
extinguished. In addition, Hampton Lake Realty, LLC, the Debtor's
sales arm, which may have value beyond the term of the Plan, will
be marketed and sold at the end of the Plan term, with the net
proceeds going to the Charter Note Holders in addition to the
payments set forth.
About Hampton Capital Partners
Hampton Capital Partners, LLC, an Aberdeen, N.C.-based
manufacturer of residential and commercial tufted carpets under
the Gulistan name, filed a Chapter 11 petition (Bankr. M.D.N.C.
Case No. 13-bk-80015) on Jan. 7, 2013.
The Company has been producing carpet under the Gulistan name
since 1924, although it traces its roots back to 1818, when an
Armenian textile importer established a business in Turkey. The
company began manufacturing carpet in Aberdeen in 1957, and was
acquired by J.P. Stevens & Co. Inc. in 1964. Over the last 25
years, Gulistan Carpet has undergone several ownership changes.
In addition to its headquarters and manufacturing operations in
Aberdeen, the company has a plant in Wagram, N.C. John Paul H.
Cournoyer, Esq., at Northen Blue, LLP, serves as counsel to the
Debtor. Getzler Henrich & Associates LLC is the financial
consultant.
IRISH BANK: Gets Provisional Relief Over Flynn Parties Dispute
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware, in a
second supplemental order, granted Irish Bank Resolution
Corporation provisional relief with respect to litigation against
John Flynn Sr., et al., citizens of the United States and
creditors of the Debtor captioned Flynn parties and the Flynn, et
al., v IRBC, et al., pending in the U.S. District Court for the
Southern District of New York.
The relief is subject to the entry of an order recognizing the
Irish Proceeding or denying recognition to the Irish proceeding
pursuant to Section 362 of the Bankruptcy Code. The relief is
applicable to the Debtor within the territorial jurisdiction of
the Unites States and all property of the Debtor located within
the territorial jurisdiction of the United States in the Chapter
15 case consistent with Section 1519(a)(1) of the Bankruptcy Code
and subject to Section 1519(f) of the Bankruptcy Code.
Kieran Wallace and Eamon Richardson, a foreign representatives or
special liquidators, sought recognition of the foreign proceeding
pursuant to Sections 105(a) and 1519 of the Bankruptcy Code.
The foreign representatives, in their reply to Flynn Parties'
objection to the provisional relief order, asked that the Court
overrule Flynn Parties' objection because the Flynn Parties failed
to demonstrate any substantial resulting harm.
The Flynn Parties, in their objection, stated that granting the
request for provisional relief will result in substantial harm to
the Flynn Parties and other creditors.
About Irish Bank Resolution
Irish Bank Resolution Corp., the liquidation vehicle for what was
once one of Ireland's largest banks, filed a Chapter 15 petition
(Bankr. D. Del. Case No. 13-12159) on Aug. 26, 2013, to protect
U.S. assets of the former Anglo Irish Bank Corp. from being
seized by creditors. Irish Bank Resolution sought assistance
from the U.S. court in liquidating Anglo Irish Bank Corp. and
Irish Nationwide Building Society. The two banks failed and were
merged into IBRC in July 2011. IBRC is tasked with winding them
down and liquidating their assets. In February, when Irish
lawmakers adopted the Irish Bank Resolution Corp., IBRC was
placed into a special liquidation in the Irish High Court to
complete liquidation and distribution of the two banks' assets.
IBRC's principal asset as of June 2012 was a loan portfolio
valued at some EUR25 billion (US$33.5 billion). About 70 percent
of the loans were to Irish borrowers. Some 5 percent of the
portfolio was under U.S. law, according to a court filing. Total
liabilities in June 2012 were about EUR50 billion, according
to a court filing.
Most assets in the U.S. have been sold already. IBRC is involved
in lawsuits in the U.S.
The IRBC liquidators want the U.S. bankruptcy judge to rule that
Ireland is home to the so-called foreign main bankruptcy
proceeding. If the judge agrees and determines that IBRC
otherwise qualifies, creditor actions in the U.S. will halt
automatically.
JANUS BLDG: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Janus Bldg. LLC
Indianapolis
225 S. McCrea St.
Indianapolis, IN 46225
Case No.: 13-11009
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
Southern District of Indiana (Indianapolis)
Judge: Hon. James M. Carr
Debtor's Counsel: Lawrence M. Hansen, Esq.
HANSEN LAW FIRM, LLC
152 S. 9th Street
Noblesville, IN 46060
Tel: 317-219-3600
Fax: 317-219-4455
Email: lhansen@hansenlawllc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Cornelius Alig, manager.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
JOURNAL REGISTER: Creditor Balks at Plan Confirmation
-----------------------------------------------------
James D. Schneller, potential unsecured creditor in the Chapter 11
case of Goodson Holding Company, debtor affiliate of Pulp Finish 1
Company, et al., asks the Bankruptcy Court to deny confirmation of
the Debtor's Plan of Reorganization, pending action in resolution
of the issues raised in the objection.
According to Mr. Schneller, the Debtors, among other things:
1. through non-transparent negotiations, may cause a tailoring
of the Class 5 363 Sale creditors, selectively chosen, which may
at the same time have been chosen, along with other acts, to
reduce voting power of Class 6 unsecured creditor claimants;
2. have not contested Mr. Schneller's proof of claim against
Journal Register Company a/k/a Pulp Finish 1 Company, and so
Mr. Schneller demands inclusion of that claim and classification
of it; and
3. the Debtors demand that the Plan make mention of how
litigation existing at the time of filing of the petition be
handled, because the Debtor has admitted a substantial number of
cases and Mr. Schneller requests continuity including treatment
among cases filed in violation of the permanent injunction
existing for debtor since 2009.
As reported in the Troubled Company Reporter on Oct. 15, 2013,
the Hon. Stuart M. Bernstein denied Mr. Schneller's motion
for temporary allowance of claim for voting purposes and for
estimation of the claim in the Debtors' cases.
On Feb. 2, 2013, Mr. Schneller filed proof of claim in an
unliquidated amount, against The Goodson Holding Company, one of
the Debtors. Other than the Schneller Claim, Mr. Schneller has
filed no claims against any of the Debtors.
Pursuant to the order, Mr. Schneller will not be permitted to vote
on any plan of reorganization in any of the Debtors' cases.
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 the Disclosure Statement on Aug. 29.
KHATI BROTHERS: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Khati Brothers Investments, Inc.
dba Roadway Auto Towing
P.O. Box 462707
Escondido, CA 92046
Case No.: 13-10168
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
Southern District of California (San Diego)
Judge: Hon. Christopher B. Latham
Debtor's Counsel: David L. Speckman, Esq.
SPECKMAN & ASSOCIATES
1350 Columbia Street, Suite 503
San Diego, CA 92101
Tel: (619) 696-5151
Email: speckmanandassociates@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Evan Khati, president.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
LAFAYETTE YARD: Taps Delbello Donnellan as Bankruptcy Counsel
-------------------------------------------------------------
Lafayette Yard Community Development Corporation asks the U.S.
Bankruptcy Court for the District of New Jersey for permission to
employ Delbello Donnellan Weingarten Wise & Wiederkehr, LLP as
bankruptcy counsel.
Robert L. Rattet, Esq., a member of DDWWW, tells the Court that on
Sept. 12, the Debtor paid DDWWW a prepetition retainer of $25,000.
The retainer was applied to the pre- September 12th billings of
DDWWW. Through the prepetition period, DDW billed $66,294. After
receipt of the Sept. 12, payment, DDWWW continued to provide
additional services to the Debtor of which $41,294 was unpaid on
the filing date of Sept. 23.
Mr. Rattet assures the Court that DDWWW is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The counsel can be reached at:
Robert L. Rattet, Esq.
One North Lexington Avenue, 11th Floor
White Plains, NY 10601
Tel: (914) 681-0200
Fax: (914) 684-0288
E-mail: rrattet@ddw-law.com
About Lafayette Yard Community Development Corporation
Lafayette Yard Community Development Corporation, owner of the
Lafayette Yard Hotel & Conference Center, previously called the
Trenton Marriott, sought protection under Chapter 11 of the
Bankruptcy Code on Sept. 23, 2013 (Case No. 13-30752, Bankr.
D.N.J.). The Debtor is represented by Gregory G. Johnson, Esq.,
at Wong Fleming, Attorneys At Law, in Princeton, New Jersey; and
Robert L. Rattet, Esq., Dawn Kirby, Esq., and Julie Cvek Curley,
Esq., at Delbello Donnellan Weingarten Wise & Wiederkehr, LLP, in
White Plains, New York.
LIC CROWN: Files Chapter 11 Liquidating Plan
--------------------------------------------
LIC Crown Mezz Borrower LLC, et al., filed with the U.S.
Bankruptcy Court for the Southern District of New York a
prepackaged liquidating Chapter 11 plan and disclosure statement.
Under the Plan, which will be funded by the Debtors' assets,
claims against and Equity Interests in the Debtors are divided
into Classes and will receive the distributions and recoveries as
follows:
Est. Amount of
Type of Claim Allowed Claims Est. Recovery
------------- -------------- -------------
Administrative Claims $___ 100%
Priority Tax Claims $___ 100%
Fee Claims TBD 100%
Other Priority Claims $___ 100%
Mortgage Lender Claim $71,559,083 100%
Mezzanine Lender Claim $57,022,400 --
General Unsecured Claims $645,498 100%
Equity Interests N/A --
On the Effectve Date, the Debtors will transfer and convey to the
designee of Factory Mezz, LLC, as Mezzanine Lender, the real
property commonly known as the Factory Building, located at 47-44
31st Street, Block 282, Lot 1, in Long Island, County of Queens,
in New York. On the Effective Date, the Mezzanine Lender will
transfer to the Debtors for the benefit of holders of equity
interests $5.0 million, without set-offs or offset for any claims
or deductions not specifically contemplated under the Plan Support
and Cooperation Agreement dated Oct. 2, 2013, payable to Gerstein
Strauss & Rinaldi, Esqs.
A full-text copy of the Disclosure Statement dated Oct. 10, 2013,
is available for free at http://bankrupt.com/misc/LICds1010.pdf
The Debtors are represented by Tracy L. Klestadt, Esq., and Joseph
C. Corneau, Esq. -- jcorneau@klestadt.com -- at KLESTADT &
WINTERS, LLP, in New York; and Victor Gerstein, Esq., at Gerstein
Strauss & Rinaldi LLP, in New York.
Mr. Gerstein may be reached at:
Victor Gerstein, Esq.
GERSTEIN STRAUSS & RINALDI LLP
57 West 38th Street
New York, New York 10018
Tel: (212) 398-7900
Fax: (212) 575-2387
Email: HGoldstein@GSRLAW.com
The Mezzanine Lender is represented by John H. Bae, Esq. --
jhbae@mintz.com -- and Kaitlin R. Walsh, Esq. -- KRWalsh@mintz.com
-- at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., in New
York; and Howard Schochet, Esq. -- schocheth@gtlaw.com -- at
Greenberg Traurig, LLP, in New York.
Mortgage Lender U.S. Bank National Association is represented by
W. Michael Bond, Esq. -- michael.bond@weil.com -- at Weil, Gotshal
& Manges LLP, in New York.
LIC Crown Mezz Borrower LLC and its two affiliates sought
protection under Chapter 11 of the Bankruptcy Code on Oct. 10,
2013 (Case No. 13-13304, Bankr. S.D.N.Y.). The Debtors' Chief
Restructuring Officer is Steven A. Carlson.
LIC CROWN: Seeks Authority to Use Cash Collateral
-------------------------------------------------
LIC Crown Mezz Borrower LLC, et al., seeks authority from the U.S.
Bankruptcy Court for the Southern District of New York to use cash
collateral securing their prepetition indebtedness from U.S. Bank
National Association, mortgage lender, and Factory Mezz LLC as
mezzanine lender.
As adequate protection against any diminution in value of the
Lenders' interest in the Prepetition Collateral, the Lenders will
be granted replacement liens on all of the right, title and
interest of the Debtors in the Collateral, as well as
superpriority adequate protection claim status, subject to a
Carve-Out.
The "Carve-Out" are (i) fees pursuant to 28 U.S.C. Sec.
1930(a)(6); (ii) fees payable to the clerk of the Bankruptcy
Court; (iii) pursuant to Section 726(b) of the Bankruptcy Code,
reasonable fees and expenses of a trustee that are incurred after
the conversion of the Chapter 11 Cases to cases under chapter 7 of
the Bankruptcy Code, in an amount not to exceed $50,000; (iv)
professional fees and expenses incurred by professionals by the
Debtors and the Creditors' Committee; and and (v) the $75,000.00
amount provided by Mezzanine Lender prior to the Petition Date for
the payment of Debtors' legal fees and expenses.
The Debtors seek to be authorized to use Cash Collateral for the
period from the Petition Date through the date which is the
earlier to occur of (a) December 31, 2013, or (b) a Termination
Declaration Date.
The Debtors are required to confirm the Prepackaged Chapter 11
Plan of Liquidation by Feb. 10, 2013.
LIC Crown Mezz Borrower LLC and its two affiliates sought
protection under Chapter 11 of the Bankruptcy Code on Oct. 10,
2013 (Case No. 13-13304, Bankr. S.D.N.Y.). The Debtors' Chief
Restructuring Officer is Steven A. Carlson. The Debtors are
represented by Klestadt & Winters, LLP, and Gerstein Strauss &
Rinaldi LLP.
M FABRIKANT: 2nd Circ. Frees JPMorgan, BofA Of Fraud Case
---------------------------------------------------------
Law360 reported that the Second Circuit ruled on Oct. 15 that
fraudulent conveyance claims brought by the trustee of bankrupt
jeweler M. Fabrikant & Sons Inc. against high-profile lenders such
as JPMorgan Chase Bank NA, Bank of America NA and Israel Discount
Bank of New York were correctly dismissed.
According to the report, in a summary order, a three-judge panel
led by Chief Judge Robert A. Katzmann affirmed the New York
bankruptcy and district courts' orders dismissing the claims in a
suit brought by Buchwald Capital Advisors LLC against a consortium
of banks.
The appellate case is In re: M. Fabrikant &Sons, Inc., Case No.
12-4335 (2d. Cir.).
MANTARA INC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Mantara, Inc.
215 Park Avenue, Suite 2001
New York, NY 10003
Case No.: 13-13370
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. Allan L. Gropper
Debtor's Counsel: Wojciech F Jung, Esq.
LOWENSTEIN SANDLER LLP
1251 Avenue of the Americas
New York, NY 10020
Tel: (212)262-6700
Fax: (973)597-2465
Email: wjung@lowenstein.com
Kenneth A. Rosen, Esq.
LOWENSTEIN SANDLER LLP
65 Livingston Avenue
Rosaland, NJ 07068
Tel: (973) 597-2548
Fax: (973) 597-2549
Email: krosen@lowenstein.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael Chin, president and chief
executive officer.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/nysb13-13370.pdf
MF GLOBAL: Execs Say Trustee Can't Sue If Customers Get Paid
------------------------------------------------------------
Law360 reported that former MF Global Inc. executives, including
former CEO Jon Corzine, on Oct. 16 argued that if customers who
lost $1.6 billion are to be repaid in full, they cannot transfer
any claims against the executives to a trustee overseeing the
liquidation.
According to the report, Corzine, Bradley Abelow, David Dunne,
Laurie Ferber, Vinay Mahajan, Edith O'Brien, Christine Serwinski
and Henri Steenkamp, former executives who were all sued in a
customer class action following the firm's downfall, submitted a
limited objection to MFGI Securities Investor Protection Act
Trustee James W. Giddens' motion.
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was one of
the world's leading brokers of commodities and listed derivatives.
MF Global provides access to more than 70 exchanges around the
world. The firm also was one of 22 primary dealers authorized to
trade U.S. government securities with the Federal Reserve Bank of
New York. MF Global's roots go back nearly 230 years to a sugar
brokerage on the banks of the Thames River in London.
On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance
USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y.
Case Nos. 11-15059 and 11-5058), after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S.
Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the
Bankruptcy Court entered an order approving the appointment of
Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC,
as Chapter 11 trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11
petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and
11-15810). On Dec. 27, the Court entered an order installing Mr.
Freeh as Chapter 11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan
LLP, as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained
Capstone Advisory Group LLC as financial advisor, while lawyers at
Proskauer Rose LLP serve as counsel.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
In April 2013, the Bankruptcy Court approved MF Global Holdings'
plan to liquidate its assets. Bloomberg News reported that the
court-approved disclosure statement initially told
creditors with $1.134 billion in unsecured claims against the
parent holding company why they could expect a recovery of 13.4%
to 39.1% from the plan. As a consequence of a settlement with
JPMorgan, supplemental materials informed unsecured creditors
their recovery was reduced to the range of 11.4% to 34.4%. Bank
lenders will have the same recovery on their $1.174 billion claim
against the holding company. As a consequence of the settlement,
the predicted recovery became 18% to 41.5% for holders of $1.19
billion in unsecured claims against the finance subsidiary,
one of the companies under the umbrella of the holding company
trustee. Previously, the predicted recovery was 14.7% to 34% on
bank lenders' claims against the finance subsidiary.
MONTREAL MAINE: Trustee Hires Gordian Group as Investment Banker
----------------------------------------------------------------
Robert J. Keach, the Chapter 11 trustee in Montreal, Maine &
Atlantic Railway Ltd.'s bankruptcy case, sought and obtained court
approval to employ Gordian Group, LLC as investment banker.
The Trustee and Gilles Robillard, the Monitor in the Debtor's
concurrent proceeding under Canada's Companies' Creditors
Arrangement Act, R.S.C. 1985, c. C-36, as amended, in Superior
Court in Canada, selected Gordian Group for its considerable
experience in financial and investment banking matters in general
and in bankruptcy cases in particular as well as its familiarity
with transportation and regulated industries in both the United
States and Canada.
Gordian Group will provide these services to the Trustee, the
Monitor, and the Debtors, upon the request of these parties, in
connection with any sale of substantially all or a portion of the
assets, businesses, or outstanding securities of the Debtors:
a) advise as to the sale or other disposition of any of the
Debtors' assets or businesses as an operating railroad, in
whole or in part;
b) assist with the development, negotiation and implementation of
a Sale Transaction or Sale Transactions, including rendering
advice and services regarding a sale of all or a portion of the
Debtors' assets, businesses or outstanding securities or
acquisitions as an operating railroad, in whole or in part, as
contemplated by the Debtors (whether in one or a series of
transactions, by asset or equity sale or otherwise);
c) assist in negotiations with interested acquirers or investors,
current or potential lenders, creditors, shareholders and other
interested parties regarding any potential Sale Transaction;
and
d) render other financial advisory and investment banking services
as may be mutually agreed upon by the parties.
In exchange, Gordian Group will be paid, at the closing of any
Sale Transaction, a transaction fee in an amount equal to 1.7% of
Aggregate Consideration as that term is defined in the Retention
Agreement. No up-front or monthly fees are being paid to Gordian
Group.
Gordian Group will also be reimbursed upon invoice for all of its
reasonable out-of-pocket expenses incurred in connection with its
engagement, provided that Gordian Group will obtain the prior
consent of both the Trustee and the Monitor before incurring
aggregate expenses in excess of $15,000, and provided further that
all expenses are subject to final review by the Bankruptcy Court
upon application by Gordian Group.
The Parties' Retention Agreement also contains standard
indemnification and exculpation agreements.
Subject to the approval of the U.S. Bankruptcy Court and the
Canadian Court, Gordian Group will be paid by in the U.S. Case and
in the Canadian Case. The payment of the Transaction Fee and
reimbursement of expenses incurred by Gordian Group will be
allocated between the Debtor's and MMA Canada's estates, which
allocation will be subject to the approval of the U.S. Court and
the Canadian Court.
Peter S. Kaufman, president and head of restructuring and
distressed M&A at Gordian, assured the Court that his firm does
not hold or represent any interest adverse to the Debtor's estate
and is a "disinterested person" as that phrase is defined in
Section 101(14) of the Bankruptcy Code.
The order approving Gordian Group's employment will become final
in 14 days unless a party-in-interest sooner objects, in which
case the matter will be set for hearing and considered by the
Court as if the Order had not been entered.
The Chapter 11 Trustee' attorneys may be reached at:
Michael A. Fagone, Esq.
D. Sam Anderson, Esq.
BERNSTEIN, SHUR, SAWYER & NELSON, P.A.
100 Middle Street
P.O. Box 9729
Portland, ME 04104
Telephone: (207) 774-1200
Facsimile: (207) 774-1127
E-mail: mfagone@bernsteinshur.com
About Montreal Maine
Montreal, Maine & Atlantic Railway Ltd., the railway company that
operated the train that derailed and exploded in July 2013,
killing 47 people and destroying part of Lac-Megantic, Quebec,
sought bankruptcy protection in U.S. Bankruptcy Court in Bangor,
Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling
its business. Its Canadian counterpart, Montreal, Maine &
Atlantic Canada Co., meanwhile, filed for protection from
creditors in Superior Court of Quebec in Montreal.
Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson,
P.A., has been named as chapter 11 trustee. His firm serves as
his chapter 11 bankruptcy counsel. Development Specialists, Inc.,
serves as his financial advisor.
U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the
U.S. case. The Maine law firm of Verrill Dana serves as counsel
to MM&A.
Justice Martin Castonguay oversees the case in Canada.
The Canadian Transportation Agency suspended the carrier's
operating certificate after the accident, due to insufficient
liability coverage.
The town of Lac-Megantic, Quebec, is seeking financial aid to
restore the gutted community and a civil complaint alleges a
failure to take steps to prevent a derailment.
The Hermon, Maine-based carrier is still working to create a
formal claims process for the families of the victims and other
claims holders. The carrier will present a formal process to the
court for approval by Nov. 30, according to the filings, Bloomberg
News reported.
MONTREAL MAINE: Verrill Dana Approved as Counsel for Trustee
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maine authorized
Robert J. Keach, the chapter 11 trustee of Montreal, Maine &
Atlantic Railway Ltd., to employ Verrill Dana LLP as special
counsel to perform necessary legal services on his behalf during
the Case.
About Montreal Maine
Montreal, Maine & Atlantic Railway Ltd., the railway company that
operated the train that derailed and exploded in July 2013,
killing 47 people and destroying part of Lac-Megantic, Quebec,
sought bankruptcy protection in U.S. Bankruptcy Court in Bangor,
Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling
its business. Its Canadian counterpart, Montreal, Maine &
Atlantic Canada Co., meanwhile, filed for protection from
creditors in Superior Court of Quebec in Montreal.
Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson,
P.A., has been named as chapter 11 trustee. His firm serves as
his chapter 11 bankruptcy counsel. Development Specialists, Inc.,
serves as his financial advisor.
U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the
U.S. case. The Maine law firm of Verrill Dana serves as counsel
to MM&A.
Justice Martin Castonguay oversees the case in Canada.
The Canadian Transportation Agency suspended the carrier's
operating certificate after the accident, due to insufficient
liability coverage.
The town of Lac-Megantic, Quebec, is seeking financial aid to
restore the gutted community and a civil complaint alleges a
failure to take steps to prevent a derailment.
The Hermon, Maine-based carrier is still working to create a
formal claims process for the families of the victims and other
claims holders. The carrier will present a formal process to the
court for approval by Nov. 30, according to the filings, Bloomberg
News reported.
MPG OFFICE: Closes Merger with Brookfield
-----------------------------------------
Brookfield Office Properties Inc., through its newly formed fund
completed the acquisition of MPG Office Trust, Inc. The
transaction was contingent upon several conditions, including the
approval of MPG's common stockholders, the receipt of certain
consents from MPG's lenders, and certain regulatory approvals, all
of which have been met. MPG common shares will be delisted from
the NYSE on Oct. 15, 2013. Pursuant to the terms of the
transaction, each share of MPG Series A Preferred Stock that was
not tendered and accepted for payment by Brookfield Office
Properties in the tender offer has been converted into, and
canceled in exchange for, one share of Brookfield DTLA Fund Office
Trust Investor Inc. Series A Preferred Stock, which will be listed
on the NYSE under the symbol DTLA PR.
American Stock Transfer & Trust Company, LLC, the depositary for
the tender offer, has advised BPO that, as of 6:00 p.m. New York
City time, on Monday, Oct. 14, 2013, when the tender offer
expired, 372,901 shares of MPG preferred stock were validly
tendered and not properly withdrawn, representing approximately
3.832 percent of the outstanding shares of preferred stock of MPG.
All shares that have been validly tendered and not properly
withdrawn have been accepted for purchase, and payment for those
shares will be made promptly in accordance with the terms of the
tender offer and Merger Agreement at the offer price of $25.00 per
share, net to the seller in cash, without interest and less any
applicable withholding taxes.
"We are pleased to be able to complete this transaction and look
forward to the opportunity to combine and operate a sizeable
portfolio of the highest quality assets in a major U.S. gateway
city," said Dennis Friedrich, chief executive officer of
Brookfield Office Properties. "Downtown Los Angeles is a dynamic
urban market and the addition of the MPG portfolio allows a new
phase of growth to both expand our reach in this city and create
new long-term value in these assets for our investors."
Brookfield Office Properties announced the acquisition in April,
pursuant to which DTLA Holdings was formed. DTLA Holdings is
sponsored and managed by Brookfield Office Properties, which owns
approximately 47 percent of the fund and includes institutional
partners who hold the remaining approximately 53 percent interest.
DTLA Holdings now owns both Brookfield Office Properties' existing
downtown Los Angeles office assets and all of the assets of MPG.
DTLA Holdings will own principally seven Class A office properties
totaling 8.3 million square feet.
Bank of America Plaza
601 S. Figueroa
Ernst & Young Tower
Wells Fargo Center ? North & South Towers*
The Gas Company Tower*
777 Tower*
* Denotes former MPG asset
"Brookfield Office Properties is dedicated to excellence in
property management and committed to bringing the highest levels
of environmental responsibility to its buildings," said Bert
Dezzutti, senior vice president of Brookfield Office Properties'
Western Region. "We also look forward to bringing our world-
renowned Arts Brookfield program to these properties to enliven
the public spaces and add another fantastic amenity to our
tenants."
The fund will also acquire two additional assets in Downtown Los
Angeles: FIG@7th, Brookfield Office Properties' newly redeveloped
retail complex, as well as a strategically located development
site.
As a result of the merger, the Company has terminated all
offerings of securities pursuant to its existing registration
statements under the Securities Act of 1933, as amended, including
the Registration Statement.
Additional information is available for free at:
http://is.gd/WVVoEg
About MPG Office Trust
MPG Office Trust, Inc., fka Maguire Properties Inc. --
http://www.mpgoffice.com/-- owns and operates Class A office
properties in the Los Angeles central business district and is
primarily focused on owning and operating high-quality office
properties in the Southern California market. MPG Office Trust is
a full-service real estate company with substantial in-house
expertise and resources in property management, marketing,
leasing, acquisitions, development and financing.
For the year ended Dec. 31, 2012, the Company reported net income
of $396.11 million, as compared with net income of $98.22 million
on $234.96 million of total revenue during the prior year. As of
June 30, 2013, the Company had $1.28 billion in total assets,
$1.71 billion in total liabilities and a $437.26 million
total deficit.
In its Form 10-K filing with the Securities and Exchange
Commission for the fiscal year ended Dec. 31, 2012, the Company
said it is working to address challenges to its liquidity
position, particularly debt maturities, leasing costs and capital
expenditures. The Company said, "We do not currently have
committed sources of cash adequate to fund all of our potential
needs, including our 2013 debt maturities. If we are unable to
raise additional capital or sell assets, we may face challenges in
repaying, extending or refinancing our existing debt on favorable
terms or at all, and we may be forced to give back assets to the
relevant mortgage lenders. While we believe that access to future
sources of significant cash will be challenging, we believe that
we will have access to some of the liquidity sources identified
above and that those sources will be sufficient to meet our near-
term liquidity needs."
On March 11, 2013, the Company entered into an agreement to sell
US Bank Tower and the Westlawn off-site parking garage. The
transaction is expected to close June 28, 2013, subject to
customary closing conditions. The net proceeds from the
transaction are expected to be roughly $103 million, a portion of
which may potentially be used to make loan re-balancing payments
on the Company's upcoming 2013 debt maturities at KPMG Tower and
777 Tower.
Roughly $898 million of the company's debt matures in 2013.
"Our ability to access the capital markets to raise capital is
highly uncertain. Our substantial indebtedness may prevent us
from being able to raise debt financing on acceptable terms or at
all. We believe we are unlikely to be able to raise equity
capital in the capital markets," the Company said.
"Future sources of significant cash are essential to our liquidity
and financial position, and if we are unable to generate adequate
cash from these sources we will have liquidity-related problems
and will be exposed to material risks. In addition, our inability
to secure adequate sources of liquidity could lead to our eventual
insolvency," the Company added.
NEFF RENTAL: S&P Puts 'B' Rating on $200MM Notes on Watch Negative
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' issue-level
rating on Neff Rental LLC's $200 million 9.625% second-lien notes
due 2016 on CreditWatch with negative implications due to a
potential downward revision of the recovery rating on the second-
lien debt. The 'B' corporate credit rating and positive rating
outlook on Neff were not affected by this rating action.
S&P's reassessment of the recovery rating stems from Neff's recent
commencement of a consent solicitation and subsequent proposed
amendment to its senior secured asset-based loan credit facility,
which may increase the facility's amount to up to $400 million.
The company intends to use the proceeds to pay a dividend of about
$110 million to the sponsors. The additional loan proceeds reduce
the expected recoveries for the second-lien notes under S&P's
hypothetical default scenario.
The 'B' corporate credit rating and positive rating outlook
reflect S&P's view of the improvement in Neff's credit measures
through June 2013 and its view that although leverage will
increase by almost 1x, it will likely remain at less than 4x on an
adjusted basis.
RATINGS LIST
Neff Rental LLC
Corporate credit rating B/Positive/--
CreditWatch Action
Neff Rental LLC/Neff Rental Finance Corp. (coborrower)
To From
Senior Secured B/Watch Neg B
Recovery rating 4
NORTH TEXAS BANCSHARES: Get Bidder for Dallas Bank, Seek Ch. 11
---------------------------------------------------------------
Law360 reported that a pair of Texas-based holding companies filed
for Chapter 11 in Delaware bankruptcy court on Oct. 16, after
lining up a stalking horse bidder to purchase and recapitalize
their main asset, a Dallas-area community bank.
According to the report, North Texas Bancshares Inc. and its
subsidiary plan to sell their interest in Park Cities Bank through
a Section 363 sale, in a deal that will bring the debtors $7.35
million in cash and infuse the nondebtor bank with up to $40
million in additional equity.
NORTH TEXAS BANCSHARES: Case Summary & 4 Unsecured Creditors
------------------------------------------------------------
Debtor entities filing separate Chapter 11 cases:
Debtor Case No.
------ --------
North Texas Bancshares of Delaware, Inc. 13-12699
5307 E. Mockingbird, Ste 200
Dallas, TX 75206
North Texas Bancshares, Inc. 13-12700
5307 E. Mockingbird, Ste 200
Dallas, TX 75206
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Hon. Kevin Gross
Debtor's Counsel: Tobey M. Daluz, Esq.
BALLARD SPAHR LLP
919 Market Street, 12th Floor
Wilmington, DE 19801
Tel: 302-252-4465
Fax: 302-252-4466
Email: daluzt@ballardspahr.com
Leslie C. Heilman, Esq.
BALLARD SPAHR LLP
919 N. Market Street, 11th Floor
Wilmington, DE 19801
Tel: 302-252-4465
Fax: 302-252-4466
Email: heilmanl@ballardspahr.com
Matthew Summers, Esq.
BALLARD SPAHR LLP
919 Market Street, 11th Floor
Wilmington, DE 19801
Tel: 302-252-4428
Fax: 410-361-8930
Email: summersm@ballardspahr.com
Debtors' Special
Counsel: Bracewell & Giuliani LLP
Debtors'
Fin'l Advisor: Commerce Street Capital, LLC
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petitions were signed by John Dienes, president.
A consolidated list of the Debtors' four largest unsecured
creditors is available for free at:
http://bankrupt.com/misc/deb13-12699.pdf
OGX PETROLEO: CEO Ouster May Open Door for Bankruptcy Filing
------------------------------------------------------------
Jeb Blount and Guillermo Parra-Bernal, writing for Reuters,
reported that the ouster of OGX's chief executive opens the door
for embattled Brazilian tycoon Eike Batista to exit the oil
company and for OGX to seek bankruptcy protection, sources told
Reuters.
According to the report, Luiz Carneiro was replaced on Oct. 15 by
Chief Financial Officer Paulo Simoes Amaral as CEO of OGX Petroleo
e Gas Participacoes SA. The move likely puts more power in the
hands of Brazil-based Angra Partners, the financial adviser hired
by Batista to restructure the liabilities of OGX and its sister
company shipbuilder OSX Brasil SA, said one of the sources who is
familiar with Angra's thinking.
As the collapse of Batista's empire has accelerated over the past
three months, Angra and its senior partner, Ricardo
Knoepfelmacher, have sought to arrange for bankruptcy protection
to shrink OGX and OSX and save them as going concerns, the report
related. Nearly all OSX business involves building or leasing
vessels for OGX, which is not producing enough oil and gas to pay
for them.
Batista's fall from grace, which knocked him off his perch as one
of the world's 10 richest men, has led to a struggle between
shareholders, banks and bondholders over who will get to keep the
scraps, the report said. The dramatic unraveling of Batista's
energy, mining, port operation and shipbuilding empire has also
become a symbol of Brazil's own recent economic woes after a
decade-long boom that made it one of the world's hottest emerging
economies.
Carneiro did not always agree on strategy with Knoepfelmacher, the
source said, the report further related. Angra turned down
repeated requests for interviews with Knoepfelmacher and other
partners.
About OGX Petroleo
Based in Rio de Janeiro, Brazil, OGX Petroleo e Gas Participaaoes
S.A. is an independent exploration and production company with
operations in Latin America.
* * *
As reported in the Troubled Company Reporter-Latin America on
July 17, 2013, Moody's Investors Service downgraded OGX Petroleo e
Gas Participaaoes S.A.'s Corporate Family Rating to Ca from Caa2
and OGX Austria GmbH's senior unsecured notes ratings to Ca from
Caa2. The rating outlook remains negative.
OLD SECOND: To Release Third Quarter Results on October 23
----------------------------------------------------------
Old Second Bancorp, Inc., will release financial results for the
third quarter of 2013 after the market closes on Oct. 23, 2013.
The Company will also host an earnings call on Thursday, Oct. 24,
2013, at 11:00 a.m. Eastern Time (10:00 a.m. Central Time).
Investors may listen to the Company's earnings call via telephone
by dialing 877-407-8035. Investors should call in to the dial-in
number set forth above at least 10 minutes prior to the scheduled
start of the call.
A replay of the earnings call will be available until 12:00 p.m.
Eastern Time (11:00 a.m. Central Time) on Nov. 7, 2013, by dialing
877-660-6853, using Conference ID #: 100679.
About Old Second
Old Second Bancorp, Inc., is a financial services company with its
main headquarters located in Aurora, Illinois. The Company is the
holding company of Old Second National Bank, a national banking
organization headquartered in Aurora, Illinois and provides
commercial and retail banking services, as well as a full
complement of trust and wealth management services. The Company
has offices located in Cook, Kane, Kendall, DeKalb, DuPage,
LaSalle and Will counties in Illinois.
Old Second reported a net loss available to common stockholders of
$5.05 million in 2012, as compared with a net loss available to
common stockholders of $11.22 million in 2011. The Company's
balance sheet at June 30, 2013, showed $1.93 billion in total
assets, $1.86 billion in total liabilities and $71.10 million in
total stockholders' equity.
OMNITRACS INC.: Moody's Assigns B2 CFR & Rates 1st Lien Debt B1
---------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating
and B2-PD probability of default rating to first time issuer
Omnitracs, Inc. as well as a B1 rating on their proposed first
lien senior secured facilities and Caa1 on their second lien
facilities. The facilities are being used to finance the
acquisition of the Omnitracs fleet management systems business
from Qualcomm, Inc. by private equity firm Vista Equity Partners.
The ratings outlook is stable.
Ratings Rationale:
The B2 corporate family rating reflects the high leverage as a
result of the acquisition and cyclical nature of the business. The
ratings also reflect the leading position Omnitracs has built
providing fleet management software and communications systems for
the long haul trucking industry, its strong recurring revenue
base, high retention rates and cash generating capabilities. Debt
to EBITDA is estimated at over 6x pro forma for the transaction
and various cost adjustments (and well over 7x based on the most
recent audited results -- FYE September 2012). Although revenue
has declined in recent years as the industry shifts from high
priced and high margin satellite systems to more moderately priced
cellular systems, the transition is nearly complete though
revenues aren't expected to resume growth until 2016. EBITDA
margins are expected to grow through this period however as the
company transitions to a lower run-rate stand alone cost structure
and several R&D projects are behind them. Nonetheless
restructuring and separation costs will likely continue for a
period after separation and impact margins and cash flow. Actual
leverage is expected to fall below 6x sometime in 2014.
Trends are favorable in the fleet management industry as the
number of Class 6-8 vehicles continues to grow and In-Cab
monitoring and communications systems continue to evolve, adding
more functionality, improving efficiency and addressing regulatory
requirements. Omnitracs sells the in truck hardware as well as
monthly contracts for communications and software systems.
Omnitracs is a pioneer in the fleet management communications
systems business (it was Qualcomm's original business) and has
built the largest market position in the trucking industry. The
company has 70 of the top 100 long haul companies as customers and
the average tenure of its largest customers is estimated at well
over a decade. The business is however impacted by economic cycles
as the number of trucks in service rise and fall with demand. The
ratings could face downward pressure if leverage were to exceed
6.5x on other than a temporary basis. Though unlikely in the near
term due to company's aggressive financial profile, ratings could
be upgraded if leverage declines below 4.5x on a sustainable
basis.
Liquidity is good based on an estimated $25 million of cash at
closing and $30 million undrawn revolver. Free cash flow is
expected to be positive in the first year after separation.
The following ratings were assigned:
Assignments:
Issuer: Omnitracs, Inc.
Probability of Default Rating, Assigned B2-PD
Corporate Family Rating, Assigned B2
Senior Secured 1st Lien Revolving Bank Credit Facility, Assigned
B1, LGD3, 38 %
Senior Secured 1st Lien Term Bank Credit Facility, Assigned B1,
LGD3, 38 %
Senior Secured 2nd Lien Bank Credit Facility, Assigned Caa1, LGD5,
89 %
Ratings Outlook: Stable
The debt instrument ratings were determined in conjunction with
Moody's Loss Given Default Methodology. The instrument ratings
reflect their relative position in the capital structure.
ORECK CORP: Court Approves Modified Engagement of Carl Marks
------------------------------------------------------------
The Hon. Keith M. Lundin of the U.S. Bankruptcy Court for the
Middle District of Tennessee approved the modified engagement of
Carl Marks Advisory Group LLC to provide crisis management
services to Oreck Corporation, et al.
The Debtors are authorized to modify the terms of the engagement
of Carl Marks, including the firm's partners, employees, agents
and independent contractors, and specifically, W. Michael Robbins,
as interim president and chief restructuring officer, and Jeffrey
E. Kies as interim chief financial officer, under the terms and
conditions set forth in the Second Amended Consulting Agreement
dated as of May 6, 2013, as modified by the terms of the order.
Carl Marks will charge the Debtors on an hourly basis for the
services of Mr. Robbins ($475/hour) and Mr. Kies ($425/hour).
Carl Marks will not incur nor be paid any fees in excess of
$80,000, or be reimbursed for related expenses in excess of
$20,000 for the month of August 2013. Thereafter, Carl Marks will
not incur nor be paid any fees in excess of $35,000, or be
reimbursed for related expenses in excess of $20,000 per month,
unless otherwise agreed by the Committee and the lenders. Carl
Marks will be paid within five days of delivery of invoices to the
Debtors, U.S. Trustee, the Committee, and the Lenders unless any
amounts set forth therein are disputed, in which case the
undisputed portion will be promptly paid. Any disputed amounts
will be promptly resolved between Carl Marks and the disputing
party.
About Oreck Corp.
Oreck Corporation and eight affiliates sought Chapter 11
protection (Bankr. M.D. Tenn. Lead Case No. 13-04006) in
Nashville, Tennessee, on May 6, 2013, with plans to sell the
business as a going concern.
Oreck has been in the business of manufacturing, marketing and
selling vacuum cleaners and related products since the late 1960s.
The corporate offices are located in Nashville, and the
manufacturing and call center is located in Cookeville, Tennessee.
Oreck has 70 employees in Nashville, 250 employees at its plant in
Cookeville and 325 employees operating 96 company-owned and
managed retail stores. The Debtor disclosed $18,013,249 in assets
and $14,932,841 plus an unknown amount in liabilities as of the
Chapter 11 filing.
William L. Norton III, Esq., and Alexandra E. Dugan, Esq., at
Bradley Arant Boult Cummings LLP, serve as counsel to the Debtor.
BMC Group Inc. is the claims and notice agent. Sawaya Segalas &
Co., LLC serves as financial advisor.
The U.S. Trustee appointed six creditors to the Official Committee
of Unsecured Creditors. Daniel H. Puryear, Esq., at Puryear Law
Group, and Sharon L. Levine, Esq., and Kenneth A. Rosen, Esq., at
Lowenstein Sandler LLP represent the Committee. The Committee
tapped to retain Gavin/Solmonese LLC as its financial advisor.
In July 2013, Royal Appliance Mfg. Co. (RAM), a subsidiary of the
TTI Group, finalized the purchase of Oreck Corp.'s assets. The
Bankruptcy Court approved the sale on July 16, 2013.
Royal, the maker of Dirt Devil floor-care products, won the
auction for Oreck Corp. The second-place bidder was the Oreck
family, which sold the business in a $272 million transaction in
2003. The Oreck family made the first bid at auction at
$21.9 million, including $14.5 million cash.
The terms of Royal's winning bid weren't disclosed publicly,
according to a Bloomberg News report. Royal was acquired in 2003
by Hong Kong-based Techtronic Industries Co., the maker of Hoover
vacuum cleaners.
ORECK CORP: Pillsbury Winthrop Approved to Handle FTC Matters
-------------------------------------------------------------
The Hon. Keith M. Lundin of the U.S. Bankruptcy Court for the
Middle District of Tennessee authorized Oreck Corporation, et al.,
to employ Pillsbury Winthrop Shaw Pittman LLP as their special
counsel relating to matters with the Federal Trade Commission and
matters of Chinese corporate law during the pendency of the cases.
As reported in the Troubled Company Reporter on Aug. 5, 2013, the
current discounted rate for the services of Michael Sibarium, Esq.
-- michael.sibarium@pillsburylaw.com -- a partner at the firm, who
will be the Debtor's main contact, is $815. Prepetition, Pillsbury
was paid $10,000 as a prepetition retainer.
To the best of the Debtors' knowledge, Pillsbury is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Oreck Corp.
Oreck Corporation and eight affiliates sought Chapter 11
protection (Bankr. M.D. Tenn. Lead Case No. 13-04006) in
Nashville, Tennessee, on May 6, 2013, with plans to sell the
business as a going concern.
Oreck has been in the business of manufacturing, marketing and
selling vacuum cleaners and related products since the late 1960s.
The corporate offices are located in Nashville, and the
manufacturing and call center is located in Cookeville, Tennessee.
Oreck has 70 employees in Nashville, 250 employees at its plant in
Cookeville and 325 employees operating 96 company-owned and
managed retail stores. The Debtor disclosed $18,013,249 in assets
and $14,932,841 plus an unknown amount in liabilities as of the
Chapter 11 filing.
William L. Norton III, Esq., and Alexandra E. Dugan, Esq., at
Bradley Arant Boult Cummings LLP, serve as counsel to the Debtor.
BMC Group Inc. is the claims and notice agent. Sawaya Segalas &
Co., LLC serves as financial advisor.
The U.S. Trustee appointed six creditors to the Official Committee
of Unsecured Creditors. Daniel H. Puryear, Esq., at Puryear Law
Group, and Sharon L. Levine, Esq., and Kenneth A. Rosen, Esq., at
Lowenstein Sandler LLP represent the Committee. The Committee
tapped to retain Gavin/Solmonese LLC as its financial advisor.
In July 2013, Royal Appliance Mfg. Co. (RAM), a subsidiary of the
TTI Group, finalized the purchase of Oreck Corp.'s assets. The
Bankruptcy Court approved the sale on July 16, 2013.
Royal, the maker of Dirt Devil floor-care products, won the
auction for Oreck Corp. The second-place bidder was the Oreck
family, which sold the business in a $272 million transaction in
2003. The Oreck family made the first bid at auction at
$21.9 million, including $14.5 million cash.
The terms of Royal's winning bid weren't disclosed publicly,
according to a Bloomberg News report. Royal was acquired in 2003
by Hong Kong-based Techtronic Industries Co., the maker of Hoover
vacuum cleaners.
ORECK CORP: Committee Balks at Class Plaintiffs' Stay Relief Bid
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Oreck Corporation, et al., asks the U.S. Bankruptcy Court
for the Middle District of Tennessee to deny the motion filed by
Linda Gonzalez, Gina Chenier, Gaya Yosri, Scott Stiepleman, Greg
Ruscitti, Teri Latta, and Edward Paragin for relief from the
automatic stay or, in the alternative, for class certification
pursuant to Bankruptcy Rule 7023.
The movants are parties in a consolidated class action entitled In
re: Oreck Corporation Halo Vacuum and Air Purifiers Marketing and
Sales Practices Litigation, filed in the U.S. District Court for
the Central District of California.
The Committee does not object to the relief sought in the motion
to the extent Lead Plaintiffs agree to limit their recovery to
available insurance proceeds. However, to the extent lead
plaintiffs seek to share in the pool of funds available to general
unsecured creditors, the Committee objects to the relief sought in
the motion.
About Oreck Corp.
Oreck Corporation and eight affiliates sought Chapter 11
protection (Bankr. M.D. Tenn. Lead Case No. 13-04006) in
Nashville, Tennessee, on May 6, 2013, with plans to sell the
business as a going concern.
Oreck has been in the business of manufacturing, marketing and
selling vacuum cleaners and related products since the late 1960s.
The corporate offices are located in Nashville, and the
manufacturing and call center is located in Cookeville, Tennessee.
Oreck has 70 employees in Nashville, 250 employees at its plant in
Cookeville and 325 employees operating 96 company-owned and
managed retail stores. The Debtor disclosed $18,013,249 in assets
and $14,932,841 plus an unknown amount in liabilities as of the
Chapter 11 filing.
William L. Norton III, Esq., and Alexandra E. Dugan, Esq., at
Bradley Arant Boult Cummings LLP, serve as counsel to the Debtor.
BMC Group Inc. is the claims and notice agent. Sawaya Segalas &
Co., LLC serves as financial advisor.
The U.S. Trustee appointed six creditors to the Official Committee
of Unsecured Creditors. Daniel H. Puryear, Esq., at Puryear Law
Group, and Sharon L. Levine, Esq., and Kenneth A. Rosen, Esq., at
Lowenstein Sandler LLP represent the Committee. The Committee
tapped to retain Gavin/Solmonese LLC as its financial advisor.
In July 2013, Royal Appliance Mfg. Co. (RAM), a subsidiary of the
TTI Group, finalized the purchase of Oreck Corp.'s assets. The
Bankruptcy Court approved the sale on July 16, 2013.
Royal, the maker of Dirt Devil floor-care products, won the
auction for Oreck Corp. The second-place bidder was the Oreck
family, which sold the business in a $272 million transaction in
2003. The Oreck family made the first bid at auction at
$21.9 million, including $14.5 million cash.
The terms of Royal's winning bid weren't disclosed publicly,
according to a Bloomberg News report. Royal was acquired in 2003
by Hong Kong-based Techtronic Industries Co., the maker of Hoover
vacuum cleaners.
ORMET CORP: Emergency Wind Down Approval Sought
-----------------------------------------------
BankruptcyData reported that Ormet filed with the U.S. Bankruptcy
Court an emergency motion for entry of interim and final orders,
pursuant to sections 105, 363, 365 and 503(c) of the Bankruptcy
Code: (a) approving a plan to wind down the Debtors businesses and
protections for certain employees implementing the wind down, (b)
authorizing the Debtors to modify employee benefit plans
consistent with the wind down plan and (c) authorizing the Debtors
to take any and all actions necessary to implement the wind down
plan.
The motion explains, "The Winddown Plan, as a whole and its
various discrete elements, are supported by sound business
justifications and should be approved by the Court. The Debtors
have continued to burn cash during the entirety of these
bankruptcy proceedings as a result of the low London Metal
Exchange (LME) Price and the high cost of electricity to power the
Hannibal Smelter. With the entry of the Public Utility Commission
of Ohio (PUCO) Order and inability to satisfy the Condition
Precedent, and the receipt of the Notices of Event of Default, the
Debtors have exhausted all options short of pursuing this Winddown
Plan. While the Debtors remain hopeful that the potential sale
will be finalized to sell the Burnside Refinery as a going
concern, the Debtors have no option but to pursue a liquidation of
assets at the Hannibal Smelter. As is evident from the Winddown
Plan, and the goals of maximizing recoveries and limiting the
administrative expenses, the actions necessary to properly wind
down the estates is not a simple matter of turning off the lights
and shutting the doors. Unnecessary raw materials and excess
assets must be sold, production equipment must be properly
protected and prepared for sale, and the property must be
protected from environmental and other risks. Finally, the Debtors
are duty-bound to seek to finalize the transaction with the
Potential Purchaser for the Burnside Refinery assets. The full
administration of the Debtors' chapter 11 estates requires, and
will continue to require, intensive planning, staffing and funding
to ensure a proper, safe and orderly winddown. A freefall shutdown
and fire sale liquidation would, among other things, irreparably
damage production equipment, could result in the failure to
properly dispose of waste materials and could force the Debtors to
incur significant additional administrative expenses. These
consequences would dissipate the value of the Debtors' assets and
harm recoveries in these chapter 11 cases. The orderly and
responsible process contemplated by the Winddown Plan avoids these
harsh consequences. The Debtors submit that the Winddown Plan
represents the best possible outcome to be achieved in the wake of
the current facts presented to the Debtors. Accordingly, and for
these reasons, the Winddown Plan represents a sound exercise of
the Debtors' business judgment and effectuates the general policy
of the Bankruptcy Code to maximize estate value for the benefit of
all stakeholders."
About Ormet Corp.
Aluminum producer Ormet Corporation, along with affiliates, filed
for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on
Feb. 25, 2013, with a deal to sell the business to a portfolio
company owned by private investment funds managed by Wayzata
Investment Partners LLC.
Headquartered in Wheeling, West Virginia, Ormet --
http://www.ormet.com/-- is a fully integrated aluminum
manufacturer, providing primary metal, extrusion and thixotropic
billet, foil and flat rolled sheet and other products.
Ormet disclosed assets of $406.8 million and liabilities totaling
$416 million. Secured debt of about $180 million includes $139.5
million on a secured term loan and $39.3 million on a revolving
credit.
Affiliates that separately filed Chapter 11 petitions are Ormet
Primary Aluminum Corporation; Ormet Aluminum Mill Products
Corporation; Specialty Blanks Holding Corporation; and Ormet
Railroad Corporation.
Ormet is represented in the case by Morris, Nichols, Arsht &
Tunnell LLP's Erin R. Fay, Esq., Robert J. Dehney, Esq., Daniel B.
Butz, Esq.; and Dinsmore & Shohl LLP's Kim Martin Lewis, Esq.,
Patrick D. Burns, Esq. Kurtzman Carson Consultants is the claims
and notice agent. Evercore's Lloyd Sprung and Paul Billyard serve
as investment bankers to the Debtor.
An official committee of unsecured creditors was appointed in the
case in March 2013. The Committee is represented by Rafael X.
Zahralddin, Esq., Shelley A. Kinsella, Esq., and Jonathan M.
Stemerman, Esq., at Elliott Greenleaf; and Sharon Levine, Esq., S.
Jason Teele, Esq., and Cassandra M. Porter, Esq., at Lowenstein
Sandler LLP.
P2 UPSTREAM: S&P Assigns 'B' CCR & Rates $30MM Facility 'B+'
------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned a 'B'
corporate credit rating to P2 Upstream Acquisition Co. The
outlook is stable.
S&P also assigned a 'B+' issue-level rating, with a recovery
rating of '2', to the co-borrowers' (P2 Upstream Acquisition Co.
and P2 Energy Solutions Alberta ULC) $30 million revolving credit
facility and $295 million first-lien term loan. In addition, S&P
assigned a 'CCC+' issue-level rating, with a recovery rating of
'6', to P2's $155 million second-lien term loan. The '2' recovery
rating indicates expectations of substantial (70%-80%) recovery in
the event of a payment default by the borrower and the '6'
recovery rating indicates expectations for negligible (0%-10%)
recovery in the event of a payment default.
Upon the close of this transaction, S&P will withdraw the existing
corporate credit rating on P2 Acquisition LLC and the issue-level
ratings on its debt.
"Our ratings on P2 Upstream Acquisition Co. reflect the company's
'weak' business profile, characterized by its modest overall
position in a fairly narrow segment of the oil and gas exploration
and production (E&P) market and its 'highly leveraged' financial
profile," said Standard & Poor's credit analyst Jacob Schlanger.
Offsetting some of these issues is the critical role the company's
products play in facilitating the E&P process, good growth
prospects, and a highly recurring revenue base. Management and
governance is viewed as 'fair.'
The rating outlook is stable, reflecting S&P's expectations of
modest improvement in leverage over the near term arising from the
company's improved margins on its predictable and recurring
revenue base as well as its good cash flow generation. S&P could
lower the rating if margin deterioration and a weakening business
profile lead leverage to be maintained above the low 7x area. S&P
could raise the rating if the company could reduce leverage to
below 5x while sustaining margins at present levels and expanding
the business organically.
PATRIOT COAL: Settlement Approval Sought
----------------------------------------
BankruptcyData reported that Patriot Coal filed with the U.S.
Bankruptcy Court a motion for entry of an order (a) approving a
settlement with Peabody Energy and the United Mineworkers of
America (UMWA), on behalf of itself and in its capacity as
authorized representative of the UMWA employees and UMWA retirees.
The motion explains, "The Peabody Settlement is one of three
agreements that are the cornerstones of the Debtors' plan of
reorganization. Together with the Arch Settlement and the rights
offerings backstopped by Knighthead, the Peabody Settlement will
provide the Debtors with critically-needed cash and credit support
that will position the Debtors to emerge from bankruptcy.
Moreover, the Peabody Settlement will provide hundreds of millions
of dollars in funding for the Patriot Retirees Voluntary Employee
Benefit Association (the 'VEBA'), the trust established by the
UMWA to provide healthcare benefits for thousands of retirees and
their families. Although the Debtors and the UMWA signed a new
collective bargaining agreement in August, the agreement left open
the question of how the VEBA would be funded, and the Peabody
Settlement addresses this final contingency. By resolving all
claims between and among the Debtors, Peabody and the UMWA, the
Peabody Settlement brings to a close the significant pending and
potential litigation between these parties in a manner that will
allow the Debtors to emerge from bankruptcy and preserve thousands
of jobs for the UMWA Employees and others, while helping the UMWA
Retirees continue to receive meaningful healthcare benefits."
Under the settlement, Peabody shall pay an aggregate amount of $90
million to the VEBA and Debtors, Peabody shall also pay the VEBA
the following amounts: $75 million on January 2, 2015, $75 million
on January 2, 2016 and $70 million on January 2, 2017, On the
effective date of the Debtors' Plan of Reorganization, Peabody
shall (i) post a $41.525 million letter of credit to secure the
benefits of the retirees covered by the Coal Act Assumption
Agreement; (ii) replace, either by letter of credit or surety, $15
million dollar cash collateral posted by Patriot Coal for Black
Lung Act liabilities and (iii) post $84 million in letters of
credit to replace letters of credit currently posted by the
Debtors.
The Court scheduled a November 6, 2013 hearing on the motion.
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.
PERSONAL COMMUNICATIONS: Lead Bidder Lists of Contracts to Assume
-----------------------------------------------------------------
Quality One Wireless, LLC and Q1W Newco, LLC, as stalking horse
bidder, notified the U.S. Bankruptcy Court for the Eastern
District of New York of designation of contracts or leases to be
assumed and assigned upon the purchase of substantially all of
Personal Communications Devices, LLC, et al.' assets.
A list of executory contracts that the stalking horse intends to
assume is available for free at: http://is.gd/bQLTUa
About PCD
Personal Communications Devices LLC and an affiliate, Personal
Communications Devices Holdings, LLC, filed for Chapter 11
bankruptcy (Bankr. E.D.N.Y. Case No. 13-74303) on Aug. 19, 2013,
in Central Islip, N.Y. The Debtor disclosed $247,952,684 in
assets and $284,985,134 in liabilities as of the Chapter 11
filing.
PCD -- http://www.pcdphones.com-- provides both carriers and
manufacturers an array of product life cycle management services
that includes planning and development; inventory; technical
testing; quality control; forward and reverse logistics; sell-in
and sell-thru, marketing & warranty support. Its extensive
portfolio of high-quality and versatile wireless devices includes
feature phones, smart phones, tablets, mobile hotspots, modems,
routers, fixed wireless, M2M, GPS, and other innovative wireless
connectivity devices and accessories. PCD is based in Hauppauge,
New York; and maintains operations facilities in Brea, California;
and Toronto, CA.
PCD filed for bankruptcy with a deal to sell the operations to
Quality One Wireless LLC for $105 million, absent a higher bid at
auction.
Bankruptcy Judge Alan S. Trust oversees the case. Attorneys at
Goodwin Procter, LLP and Togut, Segal & Segal, LLP serve as
counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the
claims and notice agent. BG Strategic Advisors, LLC, is the
financial advisor. Richter Consulting, Inc., is the investment
banker.
The petitions were signed by Raymond F. Kunzmann as chief
financial officer.
Q1W is advised by Raymond James and Associates, Inc. and Munsch
Hardt Kopf & Harr, P.C.
A three-member official committee of unsecured creditors was
appointed in the Chapter 11 case. The Committee retained FTI
Consulting, Inc., as financial advisor, and Perkins Coie LLP as
counsel.
PIAB REALTY: Case Summary & Largest Unsecured Creditor
------------------------------------------------------
Debtor: PIAB Realty, Inc.
2 Joyce Plaza
Stony Point, NY 10980
Case No.: 13-23695
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Judge: Hon. Robert D. Drain
Debtor's Counsel: Joseph J. Artrip, Esq.
JOSEPH J. ARTRIP, ATTORNEY AT LAW
45 Quaker Avenue, Suite 208
Cornwall, NY 12518
Tel: 845-534-2968
Fax: 845-458-5698
Email: jjartrip@verizon.net
Total Assets: $1.29 million
Total Liabilities: $234,721
The petition was signed by Dwight Joyce, president.
The Debtor listed Dwight Joyce as its largest unsecured creditor
holding $117,274 claim.
PREMIER GOLF: Has Tentative Accord With Far East Nat'l Bank
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
entered an order in relation to Far East National Bank's motion
for relief from the automatic stay in the Chapter 11 case of
Premier Golf Properties, LP.
In that order, the Court said it would cease efforts to resolve
the matters under submission pending the parties' opportunity to
document any agreement. The ruling came after the counsel for the
Debtor advised that an agreement in principle had been reached
between the Debtor and Far East. Accordingly, the matters will no
longer be under submission. The Court added that if the parties
are unable to memorialize any agreement, they may so notify the
Court, after which the matters will again be under submission.
About Premier Golf Properties, LP
Premier Golf Properties, L.P. owns and operates the Cottonwood
Golf Club in El Cajon, California. The Club has two 18-hole golf
courses, a driving range, pro shop, and club house restaurant.
The Club maintains the golf courses and operates a golf course
business on the real property. Its income comes from green fees,
range fees, annual membership sales, golf lessons, golf cart
rentals, pro shop clothing and equipment sales, and food and
beverage services.
Premier Golf filed for Chapter 11 protection (Bankr. S.D. Calif.
Case No. 11-07388) on May 2, 2011. Judge Peter W. Bowie presides
over the case. Jack F. Fitzmaurice, Esq., at Fitzmaurice &
Demergian, in Chula Vista, California, represents the Debtor.
The Debtor estimated assets and liabilities at $10 million to
$50 million.
Richard J. Frick, Esq., Ralph Ascher, Esq., and Richard Vergel de
Dios, Esq., at Frick Pickett & McDonald LLP, in Garden Grove,
Calif., represent Secured Creditor Far East National Bank as
counsel.
QUEBECOR MEDIA: DBRS Confirms 'BB(low)' Issuer Rating
-----------------------------------------------------
DBRS Inc. has confirmed the Issuer Rating of Quebecor Media Inc.
(QMI or the Company) at BB (low), its Secured Bank Debt rating at
BB (high), with an RR1 recovery rating, and its Senior Notes
rating at B (high), with an RR5 recovery rating. The trends on
all ratings are Stable. The confirmation reflects steady growth
within the Company's telecommunication segment over the past year.
The ratings continue to be supported by Videotron Ltee's
(Videotron) strong market position in Quebec and the Company's
ability to grow both wireline and more recently, wireless
services. DBRS's ratings also take into account Videotron's
maturing cable television subscriber base, increasing competition
in Quebec and QMI's struggling News Media segment.
On August 1, 2013, DBRS downgraded QMI's Senior Notes rating to B
(high) from BB (low) based on the Senior Notes' recovery prospects
in a default scenario falling from RR4 to RR5. These actions
followed the Company's announcement to raise approximately $350
million of Secured Bank Debt and concurrently redeem a portion of
its 7.75% unsecured Senior Notes due 2016.
In regards to QMI's earnings profile, steady subscriber growth,
increased average revenue per user (ARPU) and strong margins from
Videotron were largely offset by softer demand in the News Media
segment. DBRS expects QMI's earnings profile to remain relatively
stable over the near term, based on moderate sales growth and
strong margins from Videotron. DBRS remains concerned about the
Company's News Media segment and will continue to carefully
monitor how QMI reacts to a structural transition toward digital
media and a weaker advertising market. DBRS notes that after the
completion of refinancings at both the QMI and Videotron levels,
post H1 2013, the Company's gross debt-to-EBITDA ratio stands at
3.53 times (compared to under 2.9 times before the Caisse de dep“t
et placement du Quebec (CDP) buyout).
DBRS believes that QMI intends to reduce its leverage ratio
primarily through growth in operating income at Videotron going
forward and expects that the Company could achieve a consolidated
debt-to-EBITDA ratio of approximately 3.0 times by the end of
2015. That said, DBRS notes that a bid for spectrum in the 700
MHz wireless auction in early 2014 by wholly-owned subsidiary
Videotron could delay the consolidated deleveraging process by a
year.
DBRS notes that QMI's subsidiaries Videotron and Sun Media
Corporation support both interest payments and dividends at the
QMI holding company level. DBRS estimates that, going forward,
total interest expense at the QMI holding company will amount to
approximately $165 million to $170 million annually as a result of
the debt offerings in late 2012 (vs. $130 million in 2012). QMI
will continue to pay cash dividends of $100 million per annum
going forward. DBRS expects that Videotron will have the capacity
to absorb QMI's rising finance expenses over the near-to-medium
term, based on Videotron's cash generating capacity and current
debt levels.
In terms of inter-corporate debt allocation, Videotron may raise
debt in order to reduce borrowings at QMI in the future while
aiming to maintain a consolidated leverage ratio consistent with
past practice. However, the timing and amounts associated with
such a decision are uncertain. DBRS notes that the ratings of QMI
could come under pressure if credit metrics deteriorate from
current levels as a result of weakness in operating income and/or
an increased debt level within the consolidated entity.
After examining a wide range of factors, DBRS has concluded that
holders of the Secured Bank Debt would likely recover 100% of
their value in a default scenario, a level that corresponds with a
recovery rating of RR1. In accordance with the criteria "DBRS
Recovery Ratings for Non-Investment Grade Corporate Issuers," DBRS
has thus confirmed the security rating of BB (high) for QMI's
senior Secured Bank Debt, two notches above the Issuer Rating of
BB (low). DBRS has also concluded that the holders of the
unsecured Senior Notes could likely recover 10% to 30% of their
value in a default scenario, a level that corresponds with a
recovery rating of RR5. In accordance with these criteria, DBRS
has confirmed the security rating of B (high) for QMI's unsecured
Senior Notes, one notch below the Issuer Rating of BB (low).
REVEL AC: Sued By IDEA Boardwalk Over Bar, Nightclub Lease
----------------------------------------------------------
Law360 reported that Revel Entertainment Group LLC, the Atlantic
City luxury resort that recently emerged from Chapter 11
bankruptcy, was hit with an adversary lawsuit in New Jersey
bankruptcy court on Oct. 14 by IDEA Boardwalk LLC for allegedly
defaulting on obligations for three new nightclubs after IDEA
invested $16 million.
According to the report, the suit comes after Revel announced in
May that it had completed its financial restructuring and emerged
from Chapter 11 with lenders owning an 82 percent stake in the
resort and casino.
About Revel AC
Revel AC, Inc. -- http://www.revelresorts.com/-- owns and
operates Revel, a Las Vegas-style, beachfront entertainment resort
and casino located on the Boardwalk in the south inlet of Atlantic
City, New Jersey.
Revel AC Inc. along with four affiliates sought bankruptcy
protection (Bankr. D.N.J. Lead Case No. 13-16253) on March 25,
2013, in Camden, New Jersey, with a prepackaged plan that reduces
debt by $1.25 billion.
Revel's legal advisor in connection with the restructuring is
Kirkland & Ellis LLP. Alvarez & Marsal serves as its restructuring
advisor and Moelis & Company serves as its investment banker for
the restructuring. Epiq Bankruptcy Solutions is the claims and
notice agent.
The Official Committee of Unsecured Creditor retained Christopher
A. Ward, Esq., Jason Nagi, Esq., and Jarrett Vine, Esq., at
Polsinelli PC as counsel.
Revel AC Inc. on May 21 disclosed that it has successfully
completed its financial restructuring and emerged from Chapter 11
of the United States Bankruptcy Code. Through the restructuring
plan, which has been approved by both the U.S. Bankruptcy Court
for the District of New Jersey (Camden) and the New Jersey Casino
Control Commission, Revel has reduced its outstanding debt by
approximately $1.2 billion, or 82%, and its annual interest
expense on a cash basis by $98 million, or 96%.
RESIDENTIAL CAPITAL: Court Approves $100-Mil. Securities Deal
-------------------------------------------------------------
Peg Brickley, writing for Daily Bankruptcy Review, reported that a
federal judge has signed off on the $100 million settlement of a
class-action lawsuit over Residential Capital LLC's soured
mortgage-backed securities, some $37.66 billion worth of
investments that went bad in the collapse of the housing market.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities at March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
ResCap sold most of the businesses for a combined $4.5 billion.
The Bankruptcy Court in November 2012 approved ResCap's sale of
its mortgage servicing and origination platform assets to Ocwen
Loan Servicing, LLC and Walter Investment Management Corporation
for $3 billion; and its portfolio of roughly 50,000 whole loans to
Berkshire Hathaway for $1.5 billion.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Slams Bondholders' Bid For Higher Payout
-------------------------------------------------------------
Law360 reported that Residential Capital LLC and its unsecured
creditors on Oct. 15 kicked off their bid to keep an ad hoc group
of junior secured noteholders from obtaining post-petition
interest on the debt they hold by arguing that the noteholders are
more than $500 million undersecured.
According to the report, attorneys for the fallen mortgage
servicer and its official committee of unsecured creditors
presented their opening arguments to the bankruptcy judge
overseeing ResCap's Chapter 11 case in a trial over the scope of
the JSNs' liens on their assets.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities at March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
ResCap sold most of the businesses for a combined $4.5 billion.
The Bankruptcy Court in November 2012 approved ResCap's sale of
its mortgage servicing and origination platform assets to Ocwen
Loan Servicing, LLC and Walter Investment Management Corporation
for $3 billion; and its portfolio of roughly 50,000 whole loans to
Berkshire Hathaway for $1.5 billion.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
REVOLUTION DAIRY: Confirms Joint Chapter 11 Plan
------------------------------------------------
The U.S. Bankruptcy Court for the District of Utah, according to a
minute entry for the Oct. 10, 2013 hearing, confirmed Revolution
Dairy, LLC, et al.'s Joint Chapter 11 Plan dated Sept. 11, 2013.
The Court approved the Disclosure Statement on Sept. 12, paving
the way for the Debtors to begin soliciting votes on the Plan.
Ballots accepting or rejecting the Plan were due Oct. 7. Prince,
Yeates & Geldzahler as agent for the Debtors' counsel, was
designated to receive the Plan votes.
John Deere Financial filed a limited objection to the confirmation
of the Plan. Mona Lyman Burton, Esq., at Holland & Hart, LLP, on
behalf of John Deere Financial, said the plan provides that Bliss
LLC will enter into new notes with JDF for the amounts owed under
the loans and that JDF will retain its security interest in the
equipment. Ms. Burton added that the proposed Plan treatment does
not preserve the contractual obligations of Revolution and
Highline Dairy LLC. Instead of a new note being prepared for Bliss
LLC, Bliss LLC will need to enter into an assumption agreement to
be prepared by JDF. Ms. Burton said if the Debtors amend the Plan
to provide that Bliss LLC will complete the financing application,
enter in an assumption agreement to be prepared by JDF to reflect
Bliss LLC as an additional Debtor, JDF would withdraw its
objection to the confirmation.
About Revolution Dairy
Revolution Dairy LLC is one of the largest dairy farms in Utah.
Revolution Dairy and affiliate Highline Dairy, LLC, filed bare-
bones Chapter 11 petitions (Bankr. D. Utah Case Nos. 13-20770 and
13-20771) in Salt Lake City on Jan. 27, 2013. Each of the Debtors
estimated $10 million to $50 million in assets and liabilities.
Managers of Revolution and Highline -- Robert and Judith Bliss --
also sought Chapter 11 protection (Case No. 13-20772).
Revolution Dairy, LLC, is represented by Michael N. Zundel, Esq.,
Adam S. Affleck, Esq., and T. Edward Cundick, Esq., at Prince,
Yeates & Geldzahler. Highline Dairy, LLC, is represented by
George B. Hoffman, Esq., at Parsons Kinghorn & Harris. Robert and
Judith Bliss are represented by David T. Berry, Esq., at Berry &
Tripp P.C.
The Debtors' cases are jointly administered under Case No.
13-20770.
The U.S. Trustee appointed five members to the official committee
of unsecured creditors. The Committee tapped Snell and Wilmer
L.L.P. as its counsel. Berkeley Research Group LLC serves as the
panel's financial advisor.
REVSTONE INDUSTRIES: Unit OK'd to Probe Creditor
------------------------------------------------
Law360 reported that a unit of bankrupt auto parts conglomerate
Revstone Industries LLC on Oct. 16 got the go ahead to launch a
limited investigation into a creditor's dealings with a nondebtor
affiliate, as a Delaware bankruptcy judge worried the contentious
case could become "smoking rubble."
According to the report, U.S. Bankruptcy Judge Brendan L. Shannon
granted the motion from Revstone unit Spara LLC for a so-called
2004 examination of Boston Finance Group LLC, which Spara said it
requested to figure out what happened to cause a purported drop in
value at nondebtor subsidiary Lexington.
About Revstone Industries et al.
Lexington, Kentucky-based Revstone Industries LLC, a maker of
truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon
oversees the case. Laura Davis Jones, Esq., at Pachulski Stang
Ziehl & Jones LLP represents Revstone. In its petition, Revstone
estimated under $50 million in assets and debts.
Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del.
Case No. 12-13263) on Dec. 3, 2012.
Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No.
13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No.
13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013.
Judge Shannon also oversees the cases.
Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy
counsel to Greenwood and US Tool. Greenwood estimated $1 million
to $10 million in assets and $10 million to $50 million in debts.
US Tool & Engineering estimated under $1 million in assets and
$1 million to $10 million in debts. The petitions were signed by
George S. Homeister, chairman.
Metavation, also known as Hillsdale Automotive, LLC, joined parent
Revstone in Chapter 11 on July 22, 2013 (Bankr. D. Del. Case No.
13-11831) to sell the bulk of its assets to industry rival Dayco
for $25 million, absent higher and better offers.
Metavation has tapped Pachulski as its counsel. Pachulski also
serves as counsel to Revstone and Spara. Metavation also has
tapped McDonald Hopkins PLC as special counsel, and Rust
Consulting/Omni Bankruptcy as claims agent and to provide
administrative services.
Mark L. Desgrosseilliers, Esq., at Womble Carlyle Sandridge &
Rice, LLP, represents the Official Committee of Unsecured
Creditors in Revstone's case.
RM GAMING: 53-Foot Yacht Being Auctioned in Louisiana on Oct. 23
----------------------------------------------------------------
By virtue of and in obedience to a Writ of Execution from the
United States District Court for the Western District of Louisiana
in UNITED LEASING, INC. v. RM GAMING, INC. AND RYAN P. MULLEN,
Case No. 13-00022, the U.S. Marshal has seized and will proceed to
sell to the highest bidder at public auction, at the entrance of
the United States Court House, 800 Lafayette Street, Suite 3400,
Lafayette, La., on Wed., Oct. 23, 2013, at 10:00 a.m., a 1984
Hatteras 53' Extended Deck Yacht (Serial No. HATCN719M84C), to
satisfy (1) a debt consisting of (a) Unpaid principal in the
amount of $142,500 as of Dec. 4, 2012, plus (b) accrued interest
as of Dec. 4, 2012, in the amount of $5,700, plus (c) late charges
and NSF fees as of Dec. 4, 2012, in the amount of $575.52; PLUS
(2) interest accruing after Dec. 4, 2012, at the Default Rate of
$74.10 per day, together with all late charges, fees, expenses and
costs that have accrued as of Dec. 4, 2012, and that continue to
accrue thereafter, until all amounts due to United Leasing, Inc.,
under the Note are paid in full; PLUS (3) attorneys' fees and
costs of $19,592.13 incurred by United Leasing, Inc., through Feb.
28, 2013, in connection with the collection of amounts due to
United Leasing, Inc., together with all attorneys' fees and costs
that are incurred after Feb. 28, 2013, in connection with
obtaining the Judgment; PLUS (4) all costs of the proceedings;
PLUS (5) all attorneys' fees, costs and expenses incurred by
United Leasing, Inc. in connection with the collection of the
Judgment and any appeal thereof.
THE SUCCESSFUL BIDDER MUST PAY 10% DOWN AT THE MOMENT OF
ADJUDICATION AND THE BALANCE OF THE ADJUDICATION PRICE WITHIN TEN
(10) BUSINESS DAYS.
All funds must be by Cashier's Check or Certified Check; no cash
accepted. If balance is not paid within ten (10) business days
from the date of sale, bidder forfeits the 10% deposit amount.
United Leasing, Inc., may, by order of court dated July 5, 2013
[Doc. No. 4] and Sept. 24, 2013 [Doc. No. 19], apply the amounts
set forth in the Judgment entered on Mar. 13, 2013, in the United
States District Court for the Eastern District of Louisiana, Case
No. 12-03044 and registered with the United States District Court
for the Western District of Louisiana on July 2, 2013, pursuant to
28 U.S.C. Sec. 1963, as a credit against the adjudication price,
taking into account the payment of the U.S. Marshal's commission.
Contact United Leasing, Inc.'s lawyers:
Heather A. LaSalle, Esq.
Rudy J. Cerone, Esq.
McGLINCHEY STAFFORD
601 Poydras Street, 12th Floor
New Orleans, LA 70130
Telephone (504) 596-0395
E-mail: hlasalle@mcglinchey.com
rcerone@mcglinchey.com
with any questions prior to the sale.
Interested persons must sign a waiver, hold harmless, and
indemnification of the U.S. Marshal prior to any inspection of, or
any access to the yacht.
RURAL/METRO CORP: Workers Seek $40MM in Wages
---------------------------------------------
Law360 reported that ambulance workers on Oct. 15 sought class
certification in a Delaware bankruptcy court to pursue a $40
million class action that accuses the now-bankrupt ambulance
company Rural/Metro Corp. of failing to pay employees for
overtime.
According to the report, the class action was first lodged in a
California state court against private equity owned Rural/Metro,
one of the largest providers of ambulance services in the United
States, in February 2009 and was combined with a similar suit in
May 2010, according to the motion.
About Rural/Metro Corp
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 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: Argonaut Objects to Disclosure Statement
----------------------------------------------------------
BankruptcyData reported that Argonaut Insurance filed with the
U.S. Bankruptcy court an objection to Rural/Metro's Disclosure
Statement.
Argonaut Insurance asserts, "On or about May 11, 2011, Rural/Metro
Corporation executed a General Indemnity Agreement. Pursuant to
the Indemnity Agreement, Rural/Metro agreed, inter alia, to pay
all premiums due for surety bonds Argonaut issued on behalf of the
Rural/Metro and to indemnify, hold harmless and exonerate Argonaut
from and against all loss and expense, including attorney fees,
incurred by Argonaut as a result of having executed surety bonds
on behalf of Rural/Metro, as well in enforcing Argonaut's rights
under the Indemnity Agreement. Argonaut is currently holding a
letter of credit in the face amount of $537,025 as collateral for
the performance of Rural/Metro's obligations under the Indemnity
Agreement....Argonaut does not seek, at this time, to cancel its
Bonds. However, Argonaut is concerned that the proposed Disclosure
Statement and Plan of Reorganization are entirely silent as to
Argonaut's rights as surety under the Bonds....Neither the
Disclosure Statement nor the Plan, however, address whether (a)
the Bonds relating to the Bonded Contracts will also be assumed,
or (b) the Indemnity Agreement will be assumed by the Reorganized
Debtors. Accordingly, Argonaut seeks confirmation as whether the
Debtors and Reorganized Debtors intend to assume all of the Bonded
Contracts."
About Rural/Metro Corp
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 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.
SAN JOSE, CA: Mayor Launches Pension Reform Initiative
------------------------------------------------------
Jim Christie, writing for Reuters, reported that the mayor of
California's third largest city offered a plan on Oct. 15 to help
the state rein in spending on public pensions, drawing rebukes
from a group representing public employees as well as the state's
pension fund for public-sector workers.
According to the report, San Jose Mayor Chuck Reed said his
measure, which he hopes to qualify for the November 2014 ballot,
would urge voters to amend California's constitution to allow
local governments to reduce pension expenses associated with their
current employees.
Local governments in the most populous U.S. state may reduce
pension benefits for their future workers to lower retirement-
related spending but they face legal roadblocks in doing the same
for current employees, the report related.
"In order to save significant dollars you have to go where the
significant costs are and that's current employees," Reed told
Reuters by telephone.
Reed, a Democrat, has emerged as a high-profile advocate for
pension reform in California after successfully winning a measure
in his city last year that garnered national attention, the report
said. That measure allows San Jose's workers to keep pension
benefits they have earned but requires them to pay more toward
their pensions to keep up the same level of benefits.
SAVIENT PHARMACEUTICALS: Gets Nod to Fund Sale with Cash
--------------------------------------------------------
Law360 reported that a Delaware bankruptcy judge on Oct. 16 gave
Savient Pharmaceuticals Inc. the go-ahead to use cash collateral
to fund its stay in Chapter 11, enabling the drug developer to
proceed with a planned $55 million asset sale.
According to the report, at a hearing in Wilmington, U.S.
Bankruptcy Judge Mary F. Walrath signed off on the cash-collateral
motion and other pleadings designed to keep Savient up and running
while it pursues a stalking horse sale to Sloan Holdings CV, a
unit of US WorldMeds LLC.
About Savient Pharmaceuticals
Headquartered in Bridgewater, New Jersey, Savient Pharmaceuticals,
Inc. -- http://www.savient.com/-- is a specialty
biopharmaceutical company focused on developing and
commercializing KRYSTEXXA(R) (pegloticase) for the treatment of
chronic gout in adult patients refractory to conventional therapy.
Savient has exclusively licensed worldwide rights to the
technology related to KRYSTEXXA and its uses from Duke University
and Mountain View Pharmaceuticals, Inc.
The Company and its affiliate, Savient Pharma Holdings, Inc.,
sought protection under Chapter 11 of the Bankruptcy Code on Oct.
14, 2013 (Case No. 13-12680, Bankr. D.Del.).
Skadden, Arps, Slate, Meagher & Flom LLP and Cole, Schotz, Meisel,
Forman & Leonard P.A. are serving as the Company's legal advisors
and Lazard is serving as its financial advisor.
SHEARER'S FOOD: Moody's Affirms B2 CFR & B3 Rating on $235MM Notes
------------------------------------------------------------------
Moody's Investors Service affirmed Shearer's Foods LLC's Corporate
Family Rating ("CFR") at B2, its $235 million Secured Notes due
2018 at B3 and the Probability of Default rating at B2-PD .
Moody's also changed the outlook negative. The outlook revision
reflects the company's weaker than expected operating margins,
albeit partially influenced by transaction accounting, weak credit
metrics, slowing sales growth and reduced liquidity although
partially due to one off issues in recent quarters.
Ratings Rationale:
Shearer's B2 CFR reflects the company's small scale, narrow focus
on the salty snack sector, high leverage and weak margins which
have deteriorated in recent quarters. Shearer's rating is
supported by its solid positions in private label and salty snacks
co-packing as the largest producer of kettle chips in the country
and one of the largest producers of private label potato chips.
Shearer's still has many opportunities for growth, and its
customer base is still expanding although current customer
concentration remains high. However, despite experiencing some
growth in product range, it is less diversified geographically and
across segments than larger packaged food companies. Shearer's has
adequate liquidity but internal cash flow is weak, although this
is offset by the presence of a $50 million ABL revolving credit
facility (with approximately $40 million borrowing base
availability), no significant debt maturities until 2018, and no
financial maintenance covenants other than a 1.0 fixed charge
coverage ratio test if ABL availability falls below $7.5 million.
Moody's views most of Shearer's weakness in 2013 to be one-off;
due to unusual weather patterns that caused bad potato quality for
part of the year and an unexpected decline in private label sales
to one of its major customers as that customer reset its
strategies. The company expects both of these issues to turnaround
in its next fiscal year. Despite this weakness, Moody's still
views the long-term business profile of the company to be healthy
due to continued and growing demand for Shearer's products. While
the potato quality issue is likely to be one time, it demonstrates
that despite a number of pass through arrangements in the co-
packing part of its business, Shearer's does maintain some
meaningful exposure to raw materials availability and cost.
The negative rating outlook reflects credit metrics that are weak
for the rating category due partly to one-off challenges in 2013.
Failure to improve these metrics going forward will result in a
ratings downgrade. Moody's expects leverage to be sustained at or
below six times to sustain the current rating. While Moody's
expects improvement in sales to the company's major private label
customer, sales may not reach previous expectations. Furthermore,
as a result of a weak 2013, the company's liquidity will be
tighter and will cause Shearer's to rely more on its ABL revolver
over the next several quarters than it has in the past.
A ratings upgrade is unlikely in the next 12-18 months. To
stabilize the rating Shearers will need to improve its operating
margins and coverage metrics while growing its revenues.
Furthermore Moody's would expect to see leverage approaching 5
times. An upgrade could be considered if Shearer's gains greater
scale as well as product and geographic diversity. In addition, an
upgrade would require that Shearer's generates sustained positive
free cash flows, improves profitability and de-levers such that
debt/EBITDA were approaching 4 times. All ratios are calculated
using Moody's accounting adjustments.
Failure to improve EBIT margin and EBIT to interest coverage ratio
will lead to a downgrade. Furthermore, deterioration in cash flow
and profitability such that debt/EBITDA (calculated using Moody's
accounting adjustments) is sustained above 6 times would cause
ratings to be lowered. Aggressive shareholder returns and debt-
financed acquisitions would also lead to a downgrade.
Headquartered in Massillon, Ohio, Chip Holdings, Inc. through its
operating subsidiary Shearer's Foods, Inc. produces, markets and
distributes high quality, co-pack, private label and branded snack
food products such as kettle chips, tortilla chips, potato chips,
rice crisps, pretzels, ready-to-eat popcorn and extruded cheese
snacks. The company's generated net sales of approximately $506
million for the last twelve months ending June 2013. Shearer's is
majority owned by Wind Point Partners and Ontario Teachers'
Pension Plan Board, which acquired the company from Mistral Equity
Partners for approximately $358 million in 2012.
SHERIDAN GROUP: Terminates Registration of 12.5% Senior Notes
-------------------------------------------------------------
The Sheridan Group, Inc., filed with the U.S. Securities and
Exchange Commission a Form 15 to terminate the registration of its
12.5 Percent Senior Secured Notes due 2014. As of Oct. 15, 2013,
there was only one holder of the Senior Notes.
About The Sheridan Group
Hunt Valley, Maryland-based The Sheridan Group, Inc.
-- http://www.sheridan.com/-- is a specialty printer offering a
full range of printing and value-added support services for the
journal, catalog, magazine and book markets.
* * *
As reported by the TCR on Sept. 16, 2011, Standard & Poor's
Ratings Services lowered its corporate credit rating on Hunt
Valley, Md.-based printing company The Sheridan Group Inc. to
'CCC+' from 'B-'.
"The 'CCC+' corporate credit rating reflects Sheridan's ongoing
thin margin of compliance with its minimum EBITDA covenant," said
Standard & Poor's credit analyst Tulip Lim. "It also reflects our
expectation of continued difficult operating conditions across the
company's niche printing segments, its vulnerability to prevailing
economic pressures, its high debt leverage, and the secular shift
away from print media."
In the Dec. 14, 2012, edition of the TCR, Moody's Investors
Service downgraded the Corporate Family Rating (CFR) for The
Sheridan Group, Inc. (Sheridan) to Caa1 from B3. Sheridan's Caa1
CFR reflects risks that the intense secular challenges facing the
printing industry will compromise refinance activities as the
company addresses its upcoming maturities, including the $15
million revolving working capital facility due October 2013 and
the $128 million senior secured notes in April 2014.
The Group disclosed a net loss of $93,546 in 2012, a net loss of
$8.96 million in 2011 and a $5.94 million net loss in 2010. As of
June 30, 2013, the Company had $196.45 million in total assets,
$166.85 million in total liabilities and $29.59 million in
total stockholders' equity.
SHERIDAN GROUP: Moody's Withdraws All Ratings After Debt Repayment
------------------------------------------------------------------
Moody's Investors Service withdrew all ratings for The Sheridan
Group, Inc. following the repayment of the senior secured notes on
October 15, 2013. The company will not have outstanding rated debt
post the repayment.
A summary of actions follows
Sheridan Group, Inc. (The)
Corporate Family Rating, Caa1 withdrawn
Probability of Default Rating, Caa2-PD withdrawn
Senior Secured Notes, Caa1 LGD-3, 40% withdrawn
Negative outlook withdrawn
Ratings Rationale:
Headquartered in Hunt Valley, Maryland, Sheridan provides printing
solutions to niche markets within the specialty journal, catalog,
magazine, and book segments. Its annual revenue is approximately
$267 million as of Q2 2013.
SHERIDAN GROUP: S&P Withdraws 'CCC+' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings, including
its 'CCC+' corporate credit rating, on The Sheridan Group Inc. at
the company's request. The company repaid all of its rated debt
after completing a refinancing transaction.
SOUNDVIEW ELITE: Taps Porzio Bromberg as Counsel
------------------------------------------------
Soundview Elite Ltd., and its debtor-affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of New York to
employ Porzio, Bromberg & Newman, P.C. as counsel, nunc pro tunc
to Sept. 24, 2013.
The professional services that Porzio Bromberg will perform in
connection with its representation of the Debtors include:
(a) providing legal advice with respect to the Debtors' powers
and duties as a debtors-in-possession in the continued
management of its assets;
(b) representing the Debtors in contested matters and adversary
proceedings that may arise in these Chapter 11 Cases;
(c) pursuing of confirmation of a Chapter 11 plan and approval
of the corresponding solicitation procedures and disclosure
statement;
(d) preparing on behalf of the Debtors necessary applications,
motions, answers, orders, reports and other legal papers;
(e) appearing in Court and otherwise protecting the interests
of the Debtors before the Court; and
(f) performing all other legal services for the Debtors that
may be necessary and proper in this case.
Porzio Bromberg will be paid at these hourly rates:
Attorneys $300-$700
Paralegals $155-$220
Porzio Bromberg will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Prior to the filing of these Chapter 11 cases, Porzio Bromberg
received a retainer payment of $25,000, which was applied against
pre-petition fees and expenses that were accrued but unpaid
immediately prior to the filing of these Chapter 11 cases. The
retainer was received on the morning of Sept. 24, 2013, prior to
the filing of these Chapter 11 cases, and paid for fees incurred
during the period Sept. 20, 2013, through Sept. 23, 2013. There
is no balance remaining to apply to amounts approved pursuant to
Porzio Bromberg's first fee application that will be filed with
the Court.
The retainer was paid to Porzio Bromberg by Fletcher Asset
Management, Inc., an affiliate of the Debtors, on the Debtors'
behalf. The Debtors were unable to pay any retainer because
substantially all of the Debtors' funds were held in accounts
with Wilmington Trust, National Association that had been frozen.
Warren J. Martin Jr., principal of Porzio Bromberg, 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 Bankruptcy Court will hold a hearing on the engagement on
Nov. 6, 2013, at 9:45 a.m. Objections, if any, are due Oct. 30,
2013, at 4:00 p.m.
Porzio Bromberg can be reached at:
Warren J. Martin Jr., Esq.
PORZIO, BROMBERG & NEWMAN, P.C.
100 Southgate Parkway
P.O. Box 1997
Morristown, NJ 07962
Tel: (973) 538-4006
Fax: (973) 538-5146
Soundview Elite Ltd. filed a Chapter 11 petition (Bankr. S.D.N.Y.
Case No. 13-13098) on Sept. 24, 2013. The petition was signed by
Floyd Saunders as corporate secretary. The Debtor estimated
assets and debts of at least $10 million. Porzio, Bromberg &
Newman, PC, serves as the Debtor's counsel. Judge Robert E.
Gerber presides over the case.
SPRINGDALE HAMPSHIRE: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Springdale Hampshire House Hotel, LLC
30 Tricounty Parkway
Cincinnati, OH 45246
Case No.: 13-14768
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
Southern District of Ohio (Cincinnati)
Judge: Hon. Jeffery P. Hopkins
Debtor's Counsel: Mitchell W Allen, Esq.
ALLEN LAW FIRM
5947 Deerfield Blvd., Suite 201
Mason, OH 45040
Tel: 513-229-2900
Fax: 513-229-2699
Email: mitchell@allenlawco.com
Total Assets: $1.59 million
Total Liabilities: $2.84 million
The petition was signed by Jitendra Patel, member.
A list of the Debtor's 20 largest unsecured creditors is available
for free at: http://bankrupt.com/misc/ohsb13-14768.pdf
STANFORD GROUP: SEC Lawyer Argues Victims Were SIPC "Customers"
---------------------------------------------------------------
Andrew Zajac, writing for Bloomberg News, reported that the
Securities Investor Protection Corp., an industry fund that covers
losses from brokerage firm failures, must compensate victims of
Allen Stanford's $7 billion Ponzi scheme because they were
customers of a U.S.-based brokerage, a government lawyer told an
appeals court.
"We're not claiming that anyone is covered who did not have a
brokerage account" with Houston-based Stanford Group Co., U.S.
Securities and Exchange Commission attorney John Avery told a
panel of the U.S. Court of Appeals on Oct. 17 in Washington.
"That's how they got sucked into this scheme."
The SEC is seeking to overturn a lower court ruling that blocked
the agency from ordering SIPC to cover the Stanford victims, who
invested in phony certificates of deposit, according to the
report. U.S. District Judge Robert Wilkins in July 2012 ruled the
SEC had failed to show the 7,000 investors in the scheme met the
definition of "customer" under the Securities Investor Protection
Act, which set up the nonprofit fund run by the brokerage
industry.
The Stanford case is the first time the SEC has gone to court to
force SIPC to extend coverage, the report related.
Michael McConnell, an attorney for SIPC, urged the judges to
uphold the ruling, the report said.
The case is Securities and Exchange Commission v. Securities
Investor Protection Corp., 12-5286, U.S. Court of Appeals,
District of Columbia (Washington).
About Stanford Group
The Stanford Financial Group was a privately held international
group of financial services companies controlled by Allen
Stanford, until it was seized by United States (U.S.) authorities
in early 2009.
Domiciled in Antigua, Stanford International Bank Limited --
http://www.stanfordinternationalbank.com/-- is a member of
Stanford Private Wealth Management, a global financial services
network with US$51 billion in deposits and assets under
management or advisement. Stanford Private Wealth Management
served more than 70,000 clients in 140 countries.
On Feb. 16, 2009, the United States District Court for the
Northern District of Texas, Dallas Division, signed an order
appointing Ralph Janvey as receiver for all the assets and
records of Stanford International Bank, Ltd., Stanford Group
Company, Stanford Capital Management, LLC, Robert Allen Stanford,
James M. Davis and Laura Pendergest-Holt and of all entities they
own or control. The February 16 order, as amended March 12,
2009, directs the Receiver to, among other things, take control
and possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
The case in district court was Securities and Exchange Commission
v. Securities Investor Protection Corp., 11-mc-00678, U.S.
District Court, District of Columbia (Washington).
The U.S. Securities and Exchange Commission, on Feb. 17, charged
before the U.S. District Court in Dallas, Texas, Mr. Stanford and
three of his companies for orchestrating a fraudulent, multi-
billion dollar investment scheme centering on an US$8 billion
Certificate of Deposit program.
A criminal case was pursued against him in June before the U.S.
District Court in Houston, Texas. Mr. Stanford pleaded not
guilty to 21 charges of multi-billion dollar fraud, money-
laundering and obstruction of justice. Assistant Attorney
General Lanny Breuer, as cited by Agence France-Presse News, said
in a 57-page indictment that Mr. Stanford could face up to 250
years in prison if convicted on all charges. Mr. Stanford
surrendered to U.S. authorities after a warrant was issued for
his arrest on the criminal charges.
SURTRONICS INC: Hires Carr Riggs as Accountants
-----------------------------------------------
Surtronics, Inc. asks for permission from the U.S. Bankruptcy
Court for the Eastern District of North Carolina to employ Carr
Riggs & Ingram PLLC, as accountants, nunc pro tunc to Sept. 9,
2013.
The services Carr Riggs will perform include tax and accounting
services as well as the possible assistance with the Debtor's
compliance with its monthly reporting obligations.
Carr Riggs will also be reimbursed for reasonable out-of-pocket
expenses incurred.
G. Frank Whitley, partner of Carr Riggs, 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.
Carr Riggs can be reached by:
G. Frank Whitley
CARR, RIGGS, & INGRAM PLLC
911 Paverstone Drive, Suite A
Raleigh, NC 27624
Tel: (919) 751-8297
Fax: (919) 778-0575
Raleigh, North Carolina-based Surtronics, Inc., filed a Chapter 11
bankruptcy petition in Wilson, North Carolina (Bankr. E.D.N.C.
Case No. 13-05672) on Sept. 9, 2013. Founded in 1965, Surtronics
is in the business of providing electroplating and anodizing
services to base-metal alloys for use across various industries,
including but not limited to aerospace, defense, medical,
telecommunications, and automotive. Surtronics' primary
production facility and corporate office are located in a series
of buildings at 4001 and 4025 Beryl Drive, and 508 Method Road,
Raleigh, North Carolina.
The Debtor is represented by David A. Matthews, Esq., at Shumaker,
Loop & Kendrick, LLP, in Charlotte, North Carolina.
SURTRONICS INC: Hires Terracon as Environmental Consulting Firm
---------------------------------------------------------------
Surtronics, Inc. asks for permission from the U.S. Bankruptcy
Court for the Eastern District of North Carolina to employ
Terracon Consultants Inc., as environmental engineering services
and consulting firm, nunc pro tunc to Sept. 9, 2013.
Terracon Consultants will assist the Debtor with entry into the
NCDENR Inactive Hazardous Site Branch Registered Environmental
Consultant Program, and implementation of the administrative
environmental clean-up agreement. Terracon Consultants will also
perform necessary consulting services related to site
investigation, application for admission into the REC Program, and
appropriate clean-up or other remedial actions.
The scope of services outlined in Terracon Consultants proposal,
will be performed on a lump sum basis for an estimated cost of
$20,626. If laboratory results are expedited for a four-day
turnaround, an additional charge of $1,500 will be included.
Terracon Consultants will also be reimbursed for reasonable out-
of-pocket expenses incurred.
Prior to the petition date, Surtronics Inc. incurred a debt to
Terracon Consultants in the amount of $26,813.50 for services
rendered in connection with a groundwater assessment at the
Facility and preparation of an application for the REC Program.
The Debtor received an invoice for such services post-petition,
but such invoice has not been paid. In the Motion to Assume, the
Debtor seeks the Court's authority to pay the pre-petition amounts
owed to Terracon Consultants.
The remainder of the amount due to Terracon Consultants will
depend upon future services rendered and may vary based on the
nature of the remediation found to be necessary under the REC
Program.
Michael T. Jordan, senior geologist of Terracon Consulting,
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.
Terracon Consulting can be reached:
Michael T. Jordan, P.G.
TERRACON CONSULTING, INC.
2401 Brentwood Road, Suite 107
Raleigh, NC 27616
Tel: (919) 873-2211
Fax: (919) 873-9555
E-mail: mtjordan@terracon.com
Raleigh, North Carolina-based Surtronics, Inc., filed a Chapter 11
bankruptcy petition in Wilson, North Carolina (Bankr. E.D.N.C.
Case No. 13-05672) on Sept. 9, 2013. Founded in 1965, Surtronics
is in the business of providing electroplating and anodizing
services to base-metal alloys for use across various industries,
including but not limited to aerospace, defense, medical,
telecommunications, and automotive. Surtronics' primary
production facility and corporate office are located in a series
of buildings at 4001 and 4025 Beryl Drive, and 508 Method Road,
Raleigh, North Carolina.
The Debtor is represented by David A. Matthews, Esq., at Shumaker,
Loop & Kendrick, LLP, in Charlotte, North Carolina.
TEMPE-MILL LLC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Tempe-Mill, LLC
C/O J. Mario Sanchez
1669 Horizon Ridge #120
Henderson, NV 89012
Case No.: 13-18814
Chapter 11 Petition Date: October 16, 2013
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Hon. Bruce T. Beesley
Debtor's Counsel: Ambrish S. Sidhu, Esq.
SIDHU LAW FIRM
810 S. Casino Center Blvd., Suite 104
Las Vegas, NV 89101
Tel: 702-384-4436
Fax: 702-384-4437
Email: asidhu@sidhulawfirm.com
Total Assets: $2.20 million
Total Liabilities: $9.58 million
The petition was signed by Mario Sanchez, managing member.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/nvb13-18814.pdf
VALLEY FORGE Chapter 11 Petition Filed
--------------------------------------
BankruptcyData reported that Valley Forge Composite Technologies
filed for Chapter 11 protection with the U.S. Bankruptcy Court in
the Middle District of Pennsylvania, case number 13-05253.
The Company, which produces technology products, is represented by
Maurice R. Mitts of Mitts Milavec.
According to documents filed with the SEC, on October 14, 2013
Evan Levine was elected as chairman, following the resignation of
Larry K. Wilhide from that role -- and also following the
resignations of Richard Relac, Eugene Breyer, Dr. Victor Alessi
and Raul Fernandez. On the same date, Wilhide also resigned as
interim president, interim chief executive officer and chief
financial officer.
Valley Forge Composite Technologies further announced its board's
recent affirmation of the Company's decision to suspend all
efforts related to its photonuclear detection system project,
known as "THOR."
The Company explains, "When we review the objections of other
nuclear systems for commercial application, we find that this
system does not obviously improve upon their faults. Therefore,
with the data we currently have, we believe substantial investment
is required and the probability of success appears low."
Covington, Ky.-based Valley Forge Composite Technologies, Inc.,
has, in recent years, focused much of its energy on the
development and commercialization of its counter-terrorism
products. Such products include an advanced detection capability
for illicit narcotics, explosives, and bio-chemical weapons using
photo-nuclear reactions to initiate secondary gamma quanta the
result of which is a unique and distinguishable signal identifying
each component of a substance. This product is known as the THOR
LVX photonuclear detection system ("THOR"). The development of
the THOR advanced explosives detection system was completed in
Russia in 2009. The Company is currently focused on being able to
assemble a demonstration unit to further its efforts in marketing,
manufacturing and distribution of THOR in the United States and
other countries.
UNIVERSITY GENERAL: Enters Next Stage in Development of Hospital
----------------------------------------------------------------
University General Health System, Inc., provided an update
regarding its development of an acute care hospital in Alvin,
Texas, a suburb of Houston. The project is being developed with
great support from the City of Alvin.
The hospital is expected to be constructed on a 20-acre campus
located on land that is being contributed as an investment by a
local land owner. The location of the proposed hospital is
approximately a 30-minute drive from the Company's flagship
University General Hospital, in Houston, Texas. It is anticipated
that local area physicians will participate in the project as real
estate investors.
The hospital is anticipated to be developed in three phases. The
first phase would include a 10-bed hospital, a 10-bay emergency
room, and a diagnostic imaging center. Phase II would include the
addition of operating rooms and ICU beds. Finally, Phase III
would add additional beds as market conditions warrant.
"This new hospital development complements our growth strategy in
furthering the regional expansion of the University General system
and provides our physicians and patients access to a high quality
healthcare facility close to their homes," stated Hassan Chahadeh,
M.D., chairman and chief executive officer of University General
Health System, Inc. "The large underserved market of 125,000
people that live and work within ten miles of Alvin, which is
located just south of Houston. We estimate that there are
currently 16,000 visits to emergency rooms and over 4,000
ambulance transports annually within the areas expected to be
served by the Alvin Hospital. Working with the mayor and managers
of the City of Alvin has been very encouraging, and we share their
commitment to the health care needs of their community and
constituents."
The Company also announced that all lawsuits related to the land
investment, which previously delayed the project, have been
dismissed with prejudice.
About University General
University General Health System, Inc., located in Houston, Texas,
is a diversified, integrated multi-specialty health care provider
that delivers concierge physician- and patient-oriented services.
UGHS currently operates one hospital and two ambulatory surgical
centers in the Houston area. It also owns a revenue management
company, a hospitality service provider and facility management
company, three senior living facilities and manages six senior
living facilities.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Moss, Krusick &
Associates, LLC, in Winter Park, Florida, expressed substantial
doubt about University General's ability to continue as a going
concern. The independent auditors noted that the Company has
suffered recurring losses and negative operating cash flows, and
has negative working capital.
University General reported a net loss of $2.38 million in 2011,
following a net loss of $1.71 million in 2010. The Company's
balance sheet, as restated, at Sept. 30, 2012, showed $140.42
million in total assets, $128.38 million in total liabilities,
$3.22 million in series C, convertible preferred stock, and
$8.81 million in total equity.
VIDEOTRON LTEE: DBRS Confirms 'BB(high)' Issuer Rating
------------------------------------------------------
DBRS Inc. has confirmed Videotron Ltee's Issuer Rating at BB
(high), its Secured Bank Debt rating at BBB (low), with an RR1
recovery rating, and its Senior Unsecured Notes rating at BB
(high), with an RR2 recovery rating. The trends on all ratings
are Stable. The confirmation reflects the Company meeting
expected growth in broadband and wireless over the past year,
combined with improving margins as a result of higher average
revenue per user (ARPU) and greater bundling. Videotron's ratings
would likely be classified as investment grade if it were a stand-
alone entity, as the business profile continues to be supported by
Videotron's strong market position in Quebec and the Company's
ability to grow both wireline and more recently, wireless
services. However, DBRS notes that Videotron's Issuer Rating
remains constrained by the leverage and business mix of its holdco
parent, Quebecor Media Inc. (QMI), which depends on cash
distributions from Videotron and its sister companies to support
its own financing costs and fund its dividends. DBRS's ratings
also take into account increasing competition in Quebec and the
Company's maturing cable television subscriber base.
The earnings profile of Videotron remained fairly stable in H1
2013, due to steady subscriber growth, increased ARPU and strong
consolidated operating margins. Total revenues increased by 4.2%
to just over $1.3 billion in H1 2013 over the same period prior.
Consolidated ARPU rose to $115.86 in H1 2013, compared with
$109.98 last year. The increases were largely a result of
increased bundling, price hikes and higher value wireless
customers. Videotron's financial profile also remained relatively
steady, bolstered by the Company's growing free cash generating
capacity and lower capital intensity within its wireless division.
DBRS notes that on June 17, 2013, Videotron issued $400 million of
senior notes primarily to finance the redemption and retirement of
a portion of the Company's issued and outstanding 9.125% senior
notes due 2018, resulting in a temporary spike in leverage. The
Company's last 12 months (LTM) pro forma gross debt-to-EBITDA
ratio fell to 2.05 times (x) from 2.24x after the completion of
the refinancing in July. DBRS notes that Videotron maintains a
strong LTM EBITDA interest coverage ratio of 7.07x.
DBRS expects Videotron's earnings profile to remain stable over
the near-to-medium term based on modest revenue growth, strong
margins, a loyal customer base and the upside of a growing
wireless offering. That said, DBRS will continue to monitor the
increasing competition in Quebec and its effect on the Company's
mature cable subscriber base. Management suspects that roughly
50% to 60% of Videotron's footprint currently faces IPTV
competition. DBRS expects the overlap to rise significantly
within the next two years, a trend that may place pressure on the
Company's subscriber growth going forward. DBRS forecasts revenues
to increase to between $2.65 billion and $2.8 billion in 2014 as a
result of modest PSU growth, higher prices and a continued focus
on bundling. Wireless revenue is expected to grow on the basis of
accelerated subscriber growth and ARPU rising to the low-to-mid
$50 range. DBRS expects operating margins to remain relatively
stable, resulting in EBITDA in the range of $1.2 billion to $1.3
billion next year.
DBRS expects the core financial profile of Videotron to remain
relatively steady going forward. DBRS expects Videotron to use
cash flow to continue to improve network infrastructure and 4G
deployment. Wireless capex seems to have reached an inflection
point in 2012. DBRS expects capex in 2013 to fall between $525
million and $600 million versus $740 million last year. DBRS
believes Videotron will be able to decrease capex spending going
forward, especially following the Company's long-term evolution
(LTE) build-out agreement with Rogers Communications Inc.
(Rogers). Capital outlays in 2014 could rise if Videotron is
successful in its bid for the one prime block reserved for new
entrants in the 700 MHz wireless spectrum auction. DBRS believes
Videotron, if successful in bidding, may look to finance the
purchase with a modest amount of debt. DBRS notes that cash
dividends fluctuate from year to year as they are largely based on
the financial decisions of the consolidated entity. DBRS also
notes that the Company's financial policy and its apportioned debt
levels are flexible given its relationship with the QMI holding
company.
After examining a wide range of factors, DBRS has concluded that
holders of the Secured Bank Debt would likely recover 100% of
their value in a default scenario, a level that corresponds with a
recovery rating of RR1. In accordance with the criteria "DBRS
Recovery Ratings for Non-Investment Grade Corporate Issuers," DBRS
has thus confirmed the security rating of BBB (low) for
Videotron's Secured Bank Debt, one notch above the Issuer Rating
of BB (high). DBRS has also concluded that the holders of the
Senior Unsecured Notes could likely recover 80% to 100% of their
value in a default scenario, a level that corresponds with a
recovery rating of RR2. In accordance with these criteria, DBRS
has confirmed the security rating of BB (high) for Videotron's
Senior Unsecured Notes, in line with the Issuer Rating of BB
(high).
VIVARO CORP: Has Until Dec. 29 to File Chapter 11 Plan
------------------------------------------------------
The Hon. Martin Glenn of the U.S. Bankruptcy Court for the
Southern District of New York extended Vivaro Corporation, et
al.'s exclusive periods to file a chapter 11 plan until Dec. 29,
2013, and solicit acceptances for that Plan until Feb. 28, 2014.
In light of the Debtors' substantial progress to date towards
monetizing their assets, and in accordance with the various
factors considered by the courts, the Debtors said ample cause
exists to further extend their exclusive periods and the
extensions are in the best interests of the Debtors' estates.
As reported in the Troubled Company Reporter on Sept. 24, 2013,
the Debtors related that now that the asset sale has been
consummated, the Debtors are focused on the monetization of the
remaining assets. In particular, the Debtors have settled,
subject to Court approval, certain of the A/R Litigations through
the use of mediation on terms very favorable to the Debtors and
their estates, and the Debtors are hopeful that the remaining A/R
Litigations, which are currently in various stages of mediation,
will result in similarly favorable results at minimal expense to
the Debtors' estates.
Since the entry of the third exclusivity order, the Debtors have
also sent out demand letters seeking the return of preferential
transfers and have settled, subject to Court approval, several
such matters on terms favorable to the Debtors and their estates.
In addition, the Debtors and the Committee are scheduled to meet
with the target of the largest Avoidance Action in the hope of
obtaining a swift and beneficial resolution to that claim.
The Debtors anticipate that the monetization of the Remaining
Assets will result in sufficient proceeds to fund a liquidating
plan, but the monetization of the Remaining Assets, particularly
the litigations, will take time. Absent the monetization of most
of the Remaining Assets, the Debtors will not have sufficient
funds to confirm a plan.
About Vivaro Corp.
Vivaro Corp., which specializes in the sale of international
calling cards in the U.S., filed a Chapter 11 petition (Bankr.
S.D.N.Y. Case No. 12-13810) on Sept. 5, 2012, together with six
other related companies, including Kare Distribution Inc. The
Debtor is represented by Frederick E. Schmidt, Esq., at Hanh V.
Huynh, Esq., at Herrick, Feinstein LLP. Garden City Group Inc. is
the claims and notice agent.
A five-member official committee of unsecured creditors has been
appointed in the case.
YTB INTERNATIONAL: Sale Completed
---------------------------------
BankruptcyData reported that YTB International announced
completion of the sale of all of its assets to a newly-formed
entity known as YTB Global Travel, which is owned by Sam Hathi.
YTB International's president and C.E.O., Andy Cauthen, comments,
"I am delighted by the completion of this transaction which
enables the YTB business model to emerge from the bankruptcy case
and to re-focus on its core travel services mission."
Hathi remarks, "We believe the YTB franchise can be turned around
and that it can regain the leadership position that it once held
in the travel services industry. There are a number of improvement
initiatives that we intend to pursue immediately and we are
committing our resources and full energy to those initiatives in
order to drive growth and opportunities for our employees and
independent marketing agents."
The sale was completed pursuant to Section 363 of the U.S.
Bankruptcy Code and approved by U.S. Bankruptcy Court on October
11, 2013 -- with the blessing of the official committee of
unsecured creditors. YTB International and its subsidiaries
anticipate that a liquidating trust, overseen by a Court-appointed
trustee, will be created pursuant to a yet-to-be-filed plan. The
trust will wind up the affairs of YTB International and its
subsidiaries and it will manage the claims of Company creditors.
Wood River, Illinois-based YTB International, Inc. (Pink Sheets:
YTBLA) -- http://www.ytb.com/-- is a marketer of Internet-based
travel services and products and has a network of almost 13,000
independent travel agents in North America.
* JPMorgan Expected to Admit Fault in "London Whale" Trading Loss
-----------------------------------------------------------------
Ben Protess and Jessica Silver-Greenberg, writing for The New York
Times DealBook, reported that for JPMorgan Chase, fines totaling
billions of dollars are no longer sufficient to placate the
government. Now the bank's regulators want something stiffer: a
mea culpa.
A month after JPMorgan acknowledged that "severe breakdowns" had
allowed a group of traders in London to run up $6 billion in
losses, the bank has preliminarily reached a rare agreement to
admit that the trading blowup itself represented reckless
behavior, according to people briefed on the negotiations, the
report related.
The bank could settle with the Commodity Futures Trading
Commission as soon as this week, according to the people briefed
on the negotiations, who were not authorized to discuss the
private settlement talks, the report further related. Aside from
admitting some wrongdoing, the bank is expected to pay about $100
million to resolve the case, a trading debacle last year that has
come to be known as the London Whale episode.
According to the report, unlike a settlement last month with the
Securities and Exchange Commission, which largely took aim at
porous controls and governance practices at the bank, the pact
with the Commodity Futures Trading Commission zeros in on the
bank's actual trading practices. The agency, using new authority
under the Dodd-Frank Act of 2010, argues that the bank's trading
was so large and voluminous that it violated a law preventing
banks from recklessly using a "manipulative device" in the market
for credit derivatives, financial contracts that let the bank bet
on the health of companies like American Airlines.
JPMorgan's concession, part of a broader policy shift in
Washington that emerged in fits and starts over the last year, is
the most aggressive step in reversing a decades-long practice of
allowing banks to "neither admit nor deny" wrongdoing, the report
said. The deal also could set a precedent that potentially
exposes a bank to scrutiny -- from the government and from
shareholder lawsuits -- whenever it builds a huge trading position
that alters the market.
* Fitch: State Regulatory Debate Creates Uncertainty for Insurers
-----------------------------------------------------------------
A lack of consensus among state regulators on captive insurance
companies and reserves is creating an uncertain environment for
the U.S. life insurance industry, which could ultimately adversely
affect insurer ratings, according to a new Fitch Ratings' report.
The New York State Department of Financial Services (NYSDFS)
published very critical commentary alleging weakness in regulation
exhibited by other states, and in the oversight provided by the
National Association of Insurance Commissioners (NAIC). The
department's focus was on captive arrangements described as
'shadow insurance', Actuarial Guideline 38 (AG38) and principles-
based reserving (PBR).
The NYSDFS concludes that New York insurers have engaged in $48
billion of so-called shadow insurance transactions, and that the
related reserve transfers 'artificially' inflate capital. In
addition, the NYSDFS asserts that certain other states may be
'racing to the bottom' in governing such transactions, while
concurrently making information on their captives unavailable to
other state regulators, such as New York.
Other state regulators declined to implement a moratorium on
captives, and some criticized NYSDFS's allegations, adding that
New York breached certain regulatory protocols in making its
statements. There has also been push back on the issue of PBR.
Fitch's report provides an analysis of the conflicting regulatory
treatments of these issues. As a matter of transparency, Fitch
believes that insurers should be required to publicly disclose key
information in a systematic and consistent basis, and accelerate
efforts already underway.
* Retail Investors Call for Resolution of Argentine Debt Disputes
-----------------------------------------------------------------
Comitato Holdouts Bonds Repubblica Argentina (COHBRA) disclosed
that on Oct. 17, retail investors from countries including
Argentina, Belgium, Italy and Germany banded together to call on
the Argentine government to offer a reasonable resolution to
outstanding debt disputes. Calls to Argentine President Kirchner
to negotiate with holdout creditors have increased in the weeks
following a U.S. Supreme Court decision denying appeal of an U.S.
District Court injunction that demands that holdouts be paid on
par with other bondholders. Thousands of investors, many of whom
have waited more than a decade for the Argentine government to
offer fair return on their investments following the nation's
historic 2001 default, are coming forward to express their desire
to reach a settlement. (see:It's High Time Argentina Talked to Its
Creditors.)
"The Argentine government has stolen my savings, which I invested
in good faith," stated Gianfranco Lucifora, an Italian investor.
"The country clearly has the ability to pay the debt owed to
pensioners like myself; it simply refuses to do so. The Argentine
government put forth ridiculously low, take-it-or-leave-it offers
which have wiped out individuals' pensions and life savings as
well as children's college funds. It has been a maddening
struggle for me and fellow Italian investors, but despite Buenos
Aires' recalcitrance, we will not give up."
"I have refused to even entertain the idea to agree to lose 70% of
the value of my investment in Argentina," said Luc de Meester of
Belgium, who first invested in Argentine bonds 16 years ago.
"When I purchased these bonds, the Argentine government guaranteed
that the bonds would remain true to value. But in the meantime,
there has never -- not once -- been a serious offer, so I'm
holding out. I would be happy to come to a decent agreement after
all these years of waiting."
"This is a matter of basic dignity," said Horacio Vazquez, an
Argentine whose struggle to win fair compensation has been
documented in The Miami Herald. " The government encouraged
citizens to invest our life savings in sovereign bonds. But after
investing in our nation's growth, they simply failed to honor
their contractual obligations, and we were devastated. We offered
to deal with the government several times, but officials
unilaterally refused to negotiate. If only President Kirchner
would satisfy debts to private creditors, that act alone would
immediately benefit all of South America through reduced credit
rates. It would provide great benefit to the Argentine people as
well."
By investing savings in Argentina, retail investors from across
the globe trusted the Argentine government's promises to satisfy
its payment obligations. Despite the nation's dramatic economic
rebound (in part fueled by these investments), officials have yet
to put forward an equitable payment offer. Thousands of retail
bondholders continue to demand a fair exchange that would absolve
Argentina's decade-old debt stand-off.
Comitato Holdouts Bonds Repubblica Argentina (COHBRA) is an
independent association of Italian holdout bondholders.
* U.S. Government Reopens after Congress Passes Budget Deal
-----------------------------------------------------------
Janet Hook and Kristina Peterson, writing for The Wall Street
Journal, reported that a potentially crippling U.S. debt default
was averted, as Congress passed legislation to end a political
showdown that had rattled financial markets, splintered the
Republican Party and showcased Washington dysfunction.
According to the report, the House voted 285-144 to reopen the
government through Jan. 15, suspend the debt ceiling through Feb.
7 and lay the groundwork for talks over broader budget issues. The
Senate earlier approved the bill 81-18. President Barack Obama
signed the bill early morning on Oct. 17.
The agreement, crafted by two Senate leaders, offers only a
temporary reprieve from the brinkmanship that has become a
hallmark of divided government, the report said. Still, news
earlier on Oct. 16 that the bill was moving toward final passage
had been enough to send the Dow Jones Industrial Average up 205.82
points, or 1.4%, to 15373.83 -- putting it 1.6% above its level on
Sept. 30, the last day the government was fully open.
Early Oct. 17, Asian stocks and bonds followed gains in the U.S.
while the dollar touched a three-week high against the yen and
Treasurys rose, the report pointed out.
The deal marked a victory for congressional Democrats and Mr.
Obama, who blocked GOP efforts to curtail the 2010 Affordable Care
Act, the report said. Conservatives had made curbs on the health
law a condition of funding federal agencies, prompting a fight
with Democrats and the government shutdown that started on Oct. 1.
* AEM Comments on Passage of Bipartisan Debt Deal
-------------------------------------------------
Association of Equipment Manufacturers (AEM) President Dennis
Slater issued the following statement in response to action by the
United States Senate and House of Representatives to re-open the
Federal Government and raise the debt ceiling.
"After weeks of partisan bickering and threatening to take the
U.S. economy to the brink, I'm pleased with the Members of
Congress who voted to do the right thing and enable the United
States to meet its financial obligations," said AEM President
Dennis Slater. "Failure to raise the federal debt limit would
have had dire consequences for the economy and for the health of
the manufacturing sector -- and many lawmakers deserve credit for
exhibiting courage and leadership in refusing to drive this nation
into an unprecedented default.
"I am glad for the sensible action to avoid catastrophe, but it's
only a temporary reprieve. The country could very well face the
same crisis again in just a few months. Congress and the President
must buckle down and work together to come to an agreement on a
long-term fiscal plan that puts the country on a sustainable path
to growth and prosperity," Mr. Slater continued. "We can no
longer avoid the problems our country faces, and it is imperative
that we rein in spending, reform the tax code and reform
entitlements in order to improve our economy today and for future
generations."
AEM, representing more than 900 companies in the off-road
equipment manufacturing industry, issued a key vote alert
yesterday strongly urging all Members of Congress to vote YES on
the bill. AEM scores key votes in evaluating the positions
Members of Congress take on issues important to U.S. equipment
manufacturers."
About the Association of Equipment Manufacturers
AEM -- http://www.aem.org-- is the North American-based
international trade group providing innovative business
development resources to advance the off-road equipment
manufacturing industry in the global marketplace. AEM membership
comprises more than 900 companies and more than 200 product lines
in the agriculture, construction, forestry, mining and utility
sectors worldwide. AEM is headquartered in Milwaukee, Wisconsin,
with offices in the world capitals of Washington, D.C.; Ottawa,
Canada; and Beijing, China.
* Latino Coalition Comments Agreement to Reopen Government
----------------------------------------------------------
The Latino Coalition, a leading center of influence for Latino-
owned, small and mid-sized businesses, issued the following
statement regarding the agreement to avert a Treasury default and
reopen government:
"We acknowledge Congress for agreeing to a solution to reopen
government and avoid a default; however, once again this is a
band-aid on a cancer," said Hector Barreto, TLC's Chairman and
Former Administrator of the U.S. Small Business Administration.
"Uncertainty and dysfunction by our government leaders is
destructive to small business, and even more damaging to the
lasting health of our nation's economy."
"As the engine of our economy, small business prefers a yes, can
accept a no, but the maybe's kill them. With the level of
uncertainty small business is having to deal with, they cannot
make informed decisions to invest, hire employees or expand their
operations. Now, more than ever, we need leadership that will
achieve a long-term solution to reduce the deficit, reign in out-
of-control spending, and provide an effective healthcare solution
to small businesses," Mr. Barreto added.
About The Latino Coalition
The Latino Coalition (TLC) -- http://www.thelatinocoalition.com/-
- was founded in 1995 by a group of Hispanic business owners from
across the country to research and develop policies relevant to
Latinos. TLC is a non-profit nationwide organization with offices
in California, Washington, DC and Guadalajara, Mexico.
Established to address policy issues that directly affect the well
being of Hispanics in the United States, TLC's agenda is to
develop initiatives and partnerships that will foster economic
equivalency and enhance overall business, economic and social
development for Latinos.
* Crown Says "Extend and Pretend" Policy Endangers Futures
----------------------------------------------------------
"Our budget crisis is not a Democratic problem or a Republican
problem, it is a math problem," said Crown's CEO Chuck Bentley.
"The numbers do not add up."
Crown Financial Ministries CEO Chuck Bentley said that the debt
ceiling deal reached overnight "irresponsibly creates an Extend-
and-Pretend Policy that ignores market reality. With this level
of debt, we cannot continue indefinitely to cover profligate
spending. Politicians offered Americans a false choice during the
shutdown between defaulting on mandated debt payments or extending
our current policies, with our eyes shut to the consequences."
"The Obama Administration and its allies in Congress drew a new
Red Line -- keeping the country in the red, through deficit
spending, and they won this battle. But our budget crisis is not a
Democratic problem or a Republican problem, it is a math problem.
The numbers do not add up."
Consider a breakdown of Uncle Sam's Budget in 2012:
-- Dollars in: U.S tax revenue -- $2.5 trillion
-- Dollars out: Federal spending -- $3.6 trillion
-- Budget shortfall: $1.1 trillion
-- National debt: $16.7 trillion
-- Budget Cuts 2012: Zero
-- Wild Card: Unfunded liabilities/contracts: $120 trillion
By adjusting the zeros, this translates into a Family Budget as
follows:
-- Dollars in: Your annual income -- $25,000
-- Dollars out: Your household spending -- $36,000
-- Budget Shortfall: $11,000
-- Your credit card debt: $167,000
-- Budget cuts: Zero
-- Wild Card: Unfunded Financial Obligations: $1,200,000
Federal spending grew 71 percent faster than inflation over the
last 20 years, according to the Heritage Foundation. Even today,
interest on the debt is the fifth largest federal spending
category partially camouflaged by artificially low interest rates,
courtesy of the Federal Reserve Board.
"Any financial planner can tell you that a family whose debt
increased by 55 percent over the last few years, is in trouble,"
said Bentley. "Spending cuts and budget changes must be discussed
when we go through this again in a few months."
Crown -- http://www.crown.org-- a non-profit, helps people and
businesses integrate their values into business practices, debt
reduction, and financial decision-making. For more than 40 years,
Crown has been offering economic analysis and advice based on
timeless truths. Theirs is a strong, international grassroots
organization with offices in the U.S. and overseas, where they
contribute to educational and anti-poverty programs.
* USHCC Commends Agreement to Reopen Gov't & Raise Debt Ceiling
---------------------------------------------------------------
"The United States Hispanic Chamber of Commerce (USHCC) commends
Congress for illustrating political courage to reach an agreement
on a deal that reopens the government and temporarily prevents
catastrophic default by raising the debt ceiling. While we
celebrate this victory, we understand that this is merely a short-
term solution to a long-term problem. Washington's current
environment of divisiveness and brinkmanship has reached its
tipping point. The latest threats of default created signs of
uncertainty that stressed national -- and international --
markets. The USHCC urges members of Congress and the
Administration to work together and pass legislation that sensibly
reduces our deficit and sets us on a sustainable path of economic
growth."
About the USHCC
Founded in 1979, the USHCC -- http://www.USHCC.com-- actively
promotes the economic growth and development of Hispanic
entrepreneurs and represents the interests of over 3 million
Hispanic owned businesses across the United States that contribute
in excess of $465 billion to the American economy each year. It
also serves as the umbrella organization for more than 200 local
Hispanic chambers and business associations in the United States
and Puerto Rico.
* Hughes Hubbard Partner Expresses View on Safe Harbor Protections
------------------------------------------------------------------
Five years after the historic collapse of Lehman Brothers, some
observers still see weaknesses in how bankrupt financial firms
maintain a flow of business with counterparties who are critical
in "providing transaction flow and liquidity that may . . . help
prevent additional firm failures."
Such is the view of Christopher Kiplok, a corporate reorganization
partner with Hughes Hubbard & Reed. Mr. Kiplok knows whereof he
speaks -- he has served as served as principal deputy to trustee
Jim Giddens in both the Lehman and MF Global bankruptcies, in
which he's watched hundreds of counterparties take advantage of
safe harbor protections on financial instruments involving tens of
billions of dollars.
He notes: "The unwinding of those financial products . . . . has
resulted in well over $4.5 billion in assets marshalled for the
two estates. However, with few exceptions, this process has been
arduous and expensive, and the results come only out of an
aggressive and innovative asset collection regime that future
estates may not necessarily be in a position to establish, or to
fund."
Mr. Kiplok recently gave a fuller account of the tricky dynamic
between failed financial firms and counterparties in testimony
given to the American Bankruptcy Institute, as part of ABI's
periodic field hearings. His thesis is clear from the title of
his presentation: "The Benefit of Safe Harbor Protections Should
Be Tied to an Obligation to Inform the Estate of the Closeout of
the Transaction."
Mr. Kiplok has a thick book of major Chapter 11 case experience,
as well as out-of-court restructurings and litigation. Over the
past year alone, he's represented parties in the following
matters:
* Liquidation of Lehman Brothers, the largest stockbroker
litigation in history
* Liquidation of MF Global, the biggest commodities broker
failure on record
* $1.4 billlion Chapter 11 of Excel Maritime Carriers, major
shipping line
* $1 billion restructuring of Eagle-Picher Trust
* $1 billion Chapter 11 restructuring of Longview Power
Here is a link to his Hughes Hubbard bio:
http://www.hugheshubbard.com/Christopher-K-Kiplok/Attorney.aspx
And below is full text of his ABI testimony on safe harbor
provisions.
Consideration Should be Given to the Impact of the Safe Harbors on
a Debtor Post-Petition; the Benefit of Safe Harbor Protections
Should be Tied to an Obligation to Inform the Estate of the
Closeout of the Transaction
Testimony to American Bankruptcy Institute by Christopher Kiplok,
Hughes Hubbard & Reed
A laudable goal of the safe harbor provisions is to assist the
financial markets by encouraging continued transactions during
periods of distress. This goal was to a significant degree met
during the worst periods of the financial crisis, as thousands of
counterparties continued to do business with struggling
institutions, providing transaction flow and liquidity that may
have helped prevent additional firm failures.
However, in the event of a failure, particularly a financial firm
failure, the safe harbors as currently drafted do little to assist
the debtor in understanding the impact of counterparties who
exercise their safe harbor rights.
This has been manifest in the liquidations of Lehman Brothers Inc.
and MF Global Inc., where several hundred counterparties availed
themselves of safe harbor protections on instruments involving
tens of billions of dollars.
The unwinding of these financial products -- including repurchase
and reverse repurchase transactions, securities lending
transactions, derivatives transactions, and to-be-announced
mortgage transactions -- has resulted in well over $4.5 billion in
assets marshaled for the two estates. However, with a few
exceptions, this process has been arduous and expensive, and the
results for the estates come only out of an aggressive and
innovative asset collection regime that future estates may not
necessarily be in a position to establish, or to fund.
Current law provides little incentive for counterparties to self-
report to a debtor and, with perhaps exception for an auditor's
demand to maintain a reserve, few do. At best, counterparties
have no reason to report their termination values to the estate
and wait for a demand letter, Rule 2004 subpoena, or an adversary
proceeding to begin a dialogue. At worst, counterparties
frustrate a debtor's attempt to marshal estate property, by
withholding information to gain a financial advantage.
A. The Debtor's View of a Closeout ? Consideration of a
Reporting Requirement
A reporting requirement to the exercise of safe harbor rights
could help further the policy goals of the safe harbors both pre
and post petition, as speeding the return of estate property can
only help expedite distributions and therefore return of capital
to the marketplace.
In the Lehman Brothers and MF Global liquidations, nearly all the
counterparties have been highly sophisticated market participants
that engaged in complex transactions worth millions or even
billions of dollars and, as such, are fully aware of (i) their
rights and obligations regarding the closeout of transactions, and
(ii) their financial exposure to the estate resulting from the
closeout, including whether an estate receivable or payable
exists.
While solvent, functioning counterparties may have this
information readily available, in practice estate professionals
can be required to expend tremendous effort and expense to
determine which counterparties had payables to the estate, send
inquiry or demand letters to such counterparties (if not
subpoenas), and then conduct the reconciliation of the outstanding
accounts. Even then, many of the counterparties can be slow to
respond to requests for information or support for their closeout
calculation, and subpoenas and/or litigation may be necessary.
It would aid future debtors if, within a period such as the bar
date, financial product counterparties were required to provide
the debtor, trustee or other liquidator information regarding
their terminated transactions, together with summaries setting
forth: (i) the trade information, closeout date and amount
believed to be owed; (ii) any collateral or other property of the
estate being held by the counterparty; (iii) the valuation
statements and the methodology employed in calculating valuation;
and (iv) the nature and amount of any setoff or other deduction or
adjustment the counterparty intends to assert.
The Counterparties should also identify any collateral held, and
provide a representation that the submission is a complete list as
along with copies of supporting contractual documents.
The debtor should in turn provide to financial product
counterparties, if possible, and post on its own and others', such
as SIFMA's, websites: (i) the updated mailing address to which the
counterparties should send a copy of their termination notices,
valuation statements, notices of default and other correspondence;
(ii) the updated bank/securities account(s) information to which
counterparties should make payments of cash or transfer of
securities, as applicable, and (iii) the name and address of the
trustee's or other liquidator's legal counsel to whom legal
questions should be directed.
A debtor should also (i) implement a standardized format (as
determined by the financial/accounting professionals) as to the
type of information that should be provided for each financial
product, and (ii) require that such reconciliation information, in
addition to hard copies, be provided in a modifiable electronic
format, e.g., excel format (no pdfs).
B. Special Considerations for Clearing Bodies
Clearing banks hold enormous amounts of collateral which, under
current safe harbor provisions, they are able to hold or liquidate
with little or no visibility or accountability until well into a
bankruptcy. These entities need security and should not be
prevented from exercising legitimate rights of secured creditors;
however, there should be visibility for the estate and
accountability by the clearing entity in contemporaneous fashion.
In the critical early days of the Lehman and MF Global failures,
access to data screens at clearing banks was limited or
nonexistent. This resulted in each estate expending substantial
resources to identify the ownership and interest in securities
that were part of trades or other transactions.
To remedy this challenge for future estates, the bilateral
information systems on which a broker-dealer relies in conducting
business with its clearing bank should maintain visibility to
information even if electronic trading access to accounts is cut
off or activity in the accounts is frozen.
Future liquidators should be provided with continuous, unimpeded
access to systems that monitor activity, and transmission of
information by clearing banks should be continued without
interruption on the same basis as prior to the bankruptcy.
This information flow should include daily reports identifying (i)
CUSIP-level detail of securities transactions that will occur
post-filing, including trade settlements and unwinds of repurchase
transactions, covering both the debtor's outgoing obligations and
anticipated receivables and (ii) securities that the clearing
banks have liquidated. Requiring clearing banks to maintain
systems visibility will ensure that any actions taken in their
capacity as creditors of the estate are done with complete
transparency and accountability.
* Moore & Van Allen Nabs Puerto Rico Bankruptcy Pro
---------------------------------------------------
Moore & Van Allen PLLC announced that Zachary H. Smith, Esq. --
zacharysmith@mvalaw.com -- has joined the Firm's Bankruptcy &
Financial Restructuring team as a Member, based in the firm's
Charlotte office. Smith concentrates his practice in the areas of
distressed situations and bankruptcy, representing strategic
investors, creditors, lenders, and debtors in in-court and out-of-
court restructurings, including complex restructuring matters
pertaining to Puerto Rico.
"I know I speak for the team when I say we are thrilled to have
Zach as the newest member. His practice will be a tremendous
asset to both our clients and the Firm," stated Bankruptcy Team
Leader and Firm Member David Eades.
Moore & Van Allen Chairman Ernie Reigel expressed similar
sentiments: "We welcome Zach and look forward to capitalizing on
his national practice experience, which will clearly enrich our
Bankruptcy team's existing relationships and strengths."
Smith has been featured in Turnarounds & Workouts and Law360, is
an author and panelist on bankruptcy and restructuring topics, and
is a Lecturer in Law (part-time faculty member) at Boston
University School of Law, where he teaches a financial
restructuring seminar. This year alone, Smith has been recognized
as one of Law360's five Bankruptcy "Rising Stars"; as one of
Turnarounds & Workouts' twelve "Outstanding Young Restructuring
Lawyers"; and as a New York Metro Super Lawyers' Bankruptcy &
Creditor/Debtor Rights "Rising Star."
Smith earned his A.B. from Harvard University and his J.D. from
Boston University. He graduated cum laude from both institutions.
* BOOK REVIEW: The Phoenix Effect: Nine Revitalizing Strategies
No Business Can Do Without
----------------------------------------------------------------
Authors: Carter Pate and Harlann Platt
Publisher: John Wiley & Sons, Inc.
Softcover: 244 Pages
List Price: $27.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at
http://amazon.com/exec/obidos/ASIN/0471062626/internetbankrupt
Think of all the managers of faltering companies who dream of
watching those companies rise from the ashes all around them!
With a record number of companies failing in 2001, and another
record-setting year expected for 2002, there are a lot of ashes
from which to rise these days.
Carter Pate and Harlan Platt highly value strong leadership able
to sharpen a company's focus and show the way to the future.
They believe that all too often, appropriate actions required to
improve organizations are overlooked because upper management
either isn't aware of the seriousness of the issues they face or
they don't know where to turn for accurate information to best
address their concerns. In the Phoenix Effect, the authors
present their ideas to "confront, comprehend, and conquer a
company's ills, big and small."
These ideas are grouped into nine steps: (i) Find out whether
the company needs a tune-up, a turnaround, or crisis management.
Locate the source of "the pain." (ii) Analyze the true scope of
the company's operations. Decide whether to stay in the same
businesses, withdraw from existing businesses, or enter new
ones. (iii) Hold the company to its mission statement. If it
strives to be "the most environmentally friendly." Figure out
how. (iv) Manage scale. Should the company grow, stay the same
size, or shrink? (v) Determine debt obligations and work toward
debt relief. (vi) Get the most from the company's assets.
Eliminate superfluous assets and evaluate underused assets.
(vii) Get the most from the company's employees. Increase output
and lower workforce costs. (viii) Get the most from the
company's products. Turn out products that are developed and
marketed to fill actual, current customer needs. (ix) Produce
the product. Search for alternate ways to create the product:
owning or leasing facilities, outsourcing, etc.
The authors believe that "how you're doing is where you're
going." They assert that the "one fundamental source of life in
companies, as in people,.is the capacity for self-renewal, the
ability to excite your team for game after game. to go for broke
season after season." This ability can come from "(g)enetics,
charisma, sheer luck, stock options - all crucial, yes, but the
best renewal insurance is a leader who always knows exactly how
his or her company is doing."
There are a lot of books written on this topic. Pate and Platt
successfully bridge the gap between overgeneralization and too
detail. They are equally adept at advising on how to go about
determining a business's scope and arguing for Monday rather
than Friday for implementing layoffs. They don't dwell on sappy
motivational techniques. They don't condescend to the reader or
depend too much on folksy vernacular and clich,. Their message
is clear: your company's phoenix, too, can rise from its ashes.
* Carter Pate is a well known turnaround expert at
PricewaterhouseCoopers with more than 20 years experience
providing strategic consulting and implementation strategies.
* Harlan Platt is a professor of finance at Northeastern
University and author of the book Principles of Corporate
Renewal.
*********
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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-241-8200.
*** End of Transmission ***