/raid1/www/Hosts/bankrupt/TCR_Public/131101.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, November 1, 2013, Vol. 17, No. 303
Headlines
1050 TIDEWATER: Case Summary & 20 Largest Unsecured Creditors
11850 DEL PUEBLO: Proposes Nov. 19 Auction for Assets
ACE WRECKER: Case Summary & 20 Largest Unsecured Creditors
ADAYANA INC: Hires Taft Stettinius as Counsel
ALLENS INC: Arkansas Case Pits Farmers Against Lenders
ALLY FINANCIAL: Inks Deals w/ Regulators to Settle Mortgage Suits
ALLY FINANCIAL: Settles with FHFA and FDIC
AMERICAN AIRLINES: Horton Says "There's a Way" to Settle
AMERICAN AIRLINES: Works Toward Proposal to Settle Antitrust Suit
AMERICAN PATRIOT: Court Okays Hiring of Baker & Assoc. as Counsel
AMES DEPARTMENT: Makes De Minimis Changes to 3rd Amended Plan
ANDERSON NEWS: Slams Publishers' Bid for Antitrust Counterclaim
ARG IH: S&P Assigns 'B' CCR & Rates Proposed $335MM Term Loan 'B'
ARMORWORKS ENTERPRISES: OCP, Arnold & Porter Hirings Affirmed
ATLANTIC COAST: Incurs $900,000 Net Loss in Third Quarter
BERNARD L. MADOFF: Judge Allows Suit Against Feeder-Fund Customers
BERNARD L. MADOFF: Broker-Dealer Backed by Stolen Money, Jury Told
BJ'S WHOLESALE: Moody's Cuts Rating on $1.29BB Loan to 'Caa1'
BOOZ ALLEN: Moody's Says Special Dividend is Credit Negative
BROCK HOLDINGS III: S&P Lowers CCR to 'B'; Outlook Negative
BUCKINGHAM SRC: Flux Maker Files for Chapter 11 in Cleveland
CAESARS ENTERTAINMENT: Incurs $761.8 Million Net Loss in Q3
CAMCO FINANCIAL: Reports $727,000 Net Earnings in 3rd Quarter
CHINA NATURAL: Exclusive Periods Extension Sought
CHRYSLER GROUP: Reports Higher Profit, Vehicle Shipments
CITIZENS DEVELOPMENT: Hiring Beth Regan as Public Accountant
CLUBCORP CLUB: Moody's Hikes Corp. Family Rating to B1
CONCHO RESOURCES: Inks Twelfth Amendment to JPMorgan Facility
COVANTA HOLDING: Fitch Affirms 'BB' Long-term Issuer Rating
CRESCENT RESOURCES: Trustee Says Duke Should Face Fraud Claims
CUMULUS MEDIA: Posts $2.6 Million Net Income in Third Quarter
CWGS ENTERPRISES: S&P Assigns B Corp. Credit Rating, Outlook Pos.
D & L ENERGY: Auction Rules Approved; Nov. 19 Sale Hearing Set
DELL INC: Moody's Lowers Pre-LBO Unsecured Debt Rating to 'B1'
DELTATHREE INC: Obtains Rights to Software License From ACN
DELUXE CORP: S&P Raises Corp. Credit Rating to 'BB'
DETROIT, MI: Bankruptcy Eligibility Trial to Run Into November
DETROIT, MI: Emergency Manager Says "Cram Down" a Possibility
DETROIT, MI: UAW Challenges City's Bid for Bar Date
DIXIE CHEMICAL: Moody's Assigns 'B3' Corp. Family Rating
EDGMONT GOLF CLUB: Seeks to Use Cash Collateral to Operate
EDGMONT GOLF CLUB: Employs Maschmeyer Karalis as Bankr. Counsel
ENERGY FUTURE: Plans $270MM Debt Payments to Avoid Bankruptcy
ENERGY FUTURE: Group Seeks $60-Mil. Cleanup Bond for Luminant Mine
EXIDE TECHNOLOGIES: Hires Newmark Grubb as Real Estate Consultant
FIRST DATA: Incurs $220 Million Net Loss in Third Quarter
FIRST DATA: Fitch Rates New Sr. Subordinated Notes at 'CCC'
FIRST DATA: S&P Affirms 'CCC+' Rating on $750MM Subordinated Notes
FNB CORP: Moody's Rates Non-Cumulative Preferred Stock 'Ba3(hyb)'
FREDERICK'S OF HOLLYWOOD: Mayer Hoffman Raises Going Concern Doubt
FRESH & EASY: Schedules Filing Deadline Extended to Nov. 14
GATEHOUSE MEDIA: IRS Objects to Prepackaged Plan
GATEHOUSE MEDIA: Gets Approval to Tap Hilco as Real Estate Advisor
GATEHOUSE MEDIA: Epiq Approved as Administrative Advisor
GELT PROPERTIES: Plan Outline Hearing Moved to Dec. 19
GENERAL MOTORS: Profit Drops on Stock Buyback Charge
GENERAL MOTORS: Feds Report $9.7 Billion Loss
GOLDKING RESOURCES: Files for Bankruptcy Protection
GOLDKING RESOURCES: Case Summary & 30 Largest Unsecured Creditors
GOOD SAM: Unit Seeking Senior Secured Financing
GPH OPERATING: S&P Assigns 'B' CCR & Rates $155MM Facilities 'B+'
GRAYMARK HEALTHCARE: Amends 2012 Form 10-K to Add Information
GREEN AUTOMOTIVE: Anton & Chia Raises Going Concern Doubt
GREEN AUTOMOTIVE: Has $3-Mil. Net Loss for Quarter Ended June 30
GREEN FIELD ENERGY: Carl Marks on Board as Investment Banker
GREEN FIELD ENERGY: Prime Clerk is Claims Agent & Admin. Advisor
GREEN FIELD ENERGY: Seeks Extension of Schedules Filing Deadline
GREEN FIELD ENERGY: Meeting to Form Creditors' Panel on Nov. 7
GREEN FIELD ENERGY: Given Interim $15 Million Loan Approval
GREENFIELD SPECIALTY: Moody's Rates C$190MM Secured Loan 'B2'
GREENFIELD SPECIALTY: S&P Assigns 'BB' Rating to C$190MM Loan
GULF ENERGY: Moody's Affirms B3 CFR & B3 Unsecured Notes Rating
HCA HOLDINGS: $500MM Share Repurchase No Effect on Fitch's IDR
HERCULES OFFSHORE: Seahawk Holds Less Than 1% Equity Stake
HOUSTON REGIONAL: Astros, Comcast Strike Truce in Row Over Ch. 11
HOUSTON REGIONAL: Astros to Lead Negotiations for Broadcaster
INSPIREMD INC: Presented at TCT Conference
INSTITUTO MEDICO: Files Schedules of Assets and Liabilities
INSTITUTO MEDICO: Case Summary & 20 Largest Unsecured Creditors
IOWORLDMEDIA INC: Inks Merger Agreement with Unit
ISTAR FINANCIAL: Incurs $30.6 Million Net Loss in 3rd Quarter
JEFFERSON COUNTY, AL: Reaches Deal to Salvage Debt Settlement
JEFFERSON COUNTY, AL: Gets New Creditor Accord to End Bankruptcy
K-V PHARMACEUTICAL: Reaches $5MM Deal with Lenders Over Interest
KSL MEDIA: Grobstein Teeple Approved as Financial Advisors
KSL MEDIA: May Hire Landau Gottfried as Bankruptcy Counsel
LA HAIR STRAIGHTENER: Voluntary Chapter 11 Case Summary
LABORATORY PARTNERS: Meeting to Form Creditors' Panel on Nov. 7
LABORATORY PARTNERS: Gets Interim Nod for $5-Mil. DIP Loan
LABORATORY PARTNERS: Wins Court Approval of Interim Loan
LEVEL 3 FINANCING: Fitch Rates $640MM Sr. Notes Due 2021 'BB-'
LEVEL 3 FINANCING: Moody's Rates $640MM Sr. Unsecured Notes 'B3'
LEVEL 3 FINANCING: S&P Assigns 'CCC+' Rating to $640MM Sr. Notes
LIGHTSQUARED INC: Harbinger Suit v. Ergen, Dish Dismissed Partly
LIME ENERGY: Regains Compliance with NASDAQ Listing Requirements
LONE PINE: U.S. Court Approves Canadian Loan
LONGVIEW PARTNERS: Gets Court Approval of Employee Bonus Payments
MAGYAR TELECOM: Invitel Owner Files in U.K. and N.Y.
MF GLOBAL: Investors Fire Back at PwC in Securities Suit
MF GLOBAL: Dewey, Proskauer Win Bid for $8.8-Mil. in Fees
NATIONAL HOLDINGS: Amends 10.5MM Shares Resale Prospectus
MISSION NEWENERGY: Posts $10 Million Profit in Fiscal 2013
MI PUEBLO: Wants Lease Decision Period Extended Until Feb. 17
NORTHEAST WIND: S&P Affirms Prelim. 'BB-' Rating to $315MM Loan
OGX PETROLEO: Files for Bankruptcy Protection in Rio de Janeiro
OGX PETROLEO: Files Latin America's Largest Corporate Default
ONE CALL: S&P Puts 'B' Corp. Credit Rating on CreditWatch Negative
ORMET CORP: Amended Credit Agreement Filed
ORMET CORP: Hires Sea Port Group's Unit as Consultant
ORMET CORP: Emergency CBA Relief Sought
ORMET CORP: Environmental Concerns Arise Amid Plant Shutdown
P2 UPSTREAM: S&P Revises Outlook to Negative & Affirms 'B' CCR
PACIFIC RUBIALES: Fitch Affirms 'BB+' Long-term Issuer Ratings
PATRIOT COAL: Files New Reorganization Plan, Detailed Disclosure
PERSONAL COMMUNICATIONS: Committee Sues Owners, Lenders
PERSONAL COMMUNICATIONS: Jan. 6 Set as Claims Bar Date
PICCADILLY RESTAURANTS: Creditors File Joint Chapter 11 Plan
PINNACLE RESTAURANT: Case Summary & 20 Top Unsecured Creditors
PLUG POWER: Enhances Leadership Team to Support Growth Strategy
PLYMOUTH OIL: Plan Denied; Lender May Foreclose
POINT CENTER: Court Converts Case to Chapter 7
RESIDENTIAL CAPITAL: Ally Sees $170MM Hit to Settle w/ FHFA, FDIC
RURAL/METRO CORP: Can Employ KPMG LLP as Independent Auditors
RURAL/METRO CORP: Lease Decision Period Extended Until March 3
RGR WATKINS: Receiver Can Use CJUF Cash Collateral Until Nov. 14
SALON MEDIA: Dave Talbot Quits as Director
SAN BERNARDINO, CA: In Showdown with CalPERS over Arrears
SANDISK CORP: S&P Assigns 'BB' Rating to Senior Convertible Notes
SEAHAWK DRILLING: Holds Less Than 1% Stake in Hercules Offshore
SINCERE HEALTH: Files for Bankruptcy Protection
SINCLAIR BROADCAST: Unit Raises $450 Million of Incremental Loan
SPRINT CORP: Reports Profit on Investment Gain
STELLAR BIOTECHNOLOGIES: Presents on Clostridium Difficile
STEREOTAXIS INC: Record Date for Rights Offering is Oct. 31
SUNTECH POWER: May Receive $150-Mil. in Support from Wuxi Guolian
TAYLOR BEAN: Says PwC's Negligent Audits Missed Fraud
TLO LLC: Has Continued Access to Lender's Cash Until Jan. 31
TRANS ENERGY: Settles with Oppenheimer for $300,000
VALENCE TECHNOLOGY: Creditors Approve Bankruptcy-Exit Plan
TAYLOR BEAN: Former Chairman Asks Judge to Toss Conviction
USEC INC: Government to Fund Add'l $13.6 Million for R&D Program
USG CORP: Prices $350 Million Senior Notes Offering
VANTAGE ONCOLOGY: S&P Retains 'B' Rating on Senior Secured Notes
WEST CORP: Reports $46.1 Million Net Income in Third Quarter
WESTMORELAND COAL: Posts $2.4 Million Net Income in Third Quarter
XCHANGE TECHNOLOGY: Wins Interim Stay in Chapter 15
YSC INC: Court Sets Dec. 12 as Claims Bar Date
* Later Inheritances Included in Chapter 13 Estate, Court Says
* BofA Says U.S. Could File Civil Suit on Mortgage Securities
* JPMorgan Mortgage Accord Said to Meet U.S. Resistance
* SAC to Plead Guilty to Securities Fraud
* Norwegian Firm Allowed to Stay in Boeing $350MM Contract Suit
* House Votes to Repeal Dodd-Frank Provision
* House Votes to Delay Rules on Retirement Investment Advice
* Elliott Sees More Detroit-Style Municipal Insolvencies
* BOOK REVIEW: A Legal History of Money in the United States,
1774-1970
*********
1050 TIDEWATER: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: 1050 Tidewater, LLC
4926 Market Street
Wilmington, NC 28405
Case No.: 13-74086
Chapter 11 Petition Date: October 30, 2013
Court: United States Bankruptcy Court
Eastern District of Virginia (Norfolk)
Debtor's Counsel: John D. McIntyre, Esq.
WILSON & MCINTYRE, PLLC
500 East Main Street, Suite 920
Norfolk, VA 23510
Tel: (757) 961-3900
Email: jmcintyre@wmlawgroup.com
Total Assets: $2.23 million
Total Liabilities: $3.19 million
The petition was signed by Vijay Patel, manager.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/vaeb13-74086.pdf
11850 DEL PUEBLO: Proposes Nov. 19 Auction for Assets
-----------------------------------------------------
11850 Del Pueblo, LLC, asks the U.S. Bankruptcy Court for the
Central District of California to enter orders:
(a) approving bid procedures, dates and deadlines relating to
the proposed sale of substantially all of the Debtor's assets,
including the conduct of the auction;
(b) authorizing a break-up fee and reimbursement of expenses in
favor of a stalking horse bidder, if any, which in the aggregate
does not exceed 1.5% of the proposed purchase price offered by the
Stalking Horse Bidder; and
(c) approving the assumption and assignment of executory
contracts and unexpired leases of the Debtor pursuant to the
purchase and sale agreement.
The Debtor proposes that the auction be held on Nov. 19, 2013, or
such other date that the Court may direct.
The Debtor asks the Court to set (a) the sale hearing on Nov. 15,
2013, or as soon thereafter as the Court's calendar may permit,
and (b) the deadline to file and serve any objection to such
relief.
A copy of the proposed sale and assignment procedures is available
at http://bankrupt.com/misc/11850delpueblo.doc233.pdf
The Debtor explains: "As detailed in the Settlement Motion, the
Noteholder, the Debtor and the Rodds have entered into a global
settlement, subject to this Court's approval, which provides a
blue-print for resolving this Case through a consensual sale of
the Property and an allocation of the sale proceeds in a manner
which allows for the Debtor's estate to share in a portion of the
sale proceeds before the Noteholder is potentially paid in full on
its asserted secured claim and the exchange of general releases.
"Pursuant to the terms of the Settlement Agreement, if the sale of
the Property is not consummated on or before the date that is 120
days from the date the Settlement Agreement is executed (the
"Relief Date"), subject to a limited right to extend for up to an
additional thirty (30) days, the Noteholder will be entitled to
relief from the automatic stay to foreclose on the Property. As
such, time is of the utmost importance and the Debtor would like
to proceed with the marketing and sale of the Property on an
expedited timeline to avoid a foreclosure by the Noteholder."
About 11850 Del Pueblo
11850 Del Pueblo, LLC, first filed a Chapter 11 petition (Bankr.
C.D. Cal. Case No. 12-42819) in Los Angeles on Sept. 27, 2012.
The Debtor, a Single Asset Real Estate under 11 Sec. 101(51B),
owns property on 11850 Valley Boulevard, in El Monte, California.
The property, according to the schedules filed together with the
petition, is worth $9 million and secures a $17.5 million claim.
The Court eventually dismissed the bankruptcy case on Oct. 12,
2012, due to the Debtor's failure to timely file certain necessary
documents.
The Debtor filed a second petition (Bankr. C.D. Cal. 12-44726)
on Oct. 15. Bankruptcy Judge Robert N. Kwan presides over the
case.
Patrick Galentine is the duly appointed state court receiver and
custodian for the Debtor. Craig A. Welin, Esq., and Reed S.
Wadell, Esq., serve as bankruptcy counsel for the receiver.
U.S. Bank National Association, as trustee, successor-in-interest
to Bank of America, N.A., as Trustee, as successor by merger to
LaSalle Bank National Association, as Trustee, for the Registered
Holders of Deutsche Mortgage & Asset Receiving Corporation
Mortgage Pass-Through Certificates, Series CD2006-CD3, is
represented by Alan M. Feld, Esq., M. Reed Mercado, Esq., and Adam
McNeile, Esq., at Sheppard, Mullin, Richter & Hampton LLP.
ACE WRECKER: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Ace Wrecker Service, Inc.
dba John Russ Wrecker Service
P.O. Box 24
Wilmington, NC 28401
Case No.: 13-06737
Chapter 11 Petition Date: October 30, 2013
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: Hon. Stephani W. Humrickhouse
Debtor's Counsel: Blake Y. Boyette, Esq.
BUTLER & BUTLER, LLP
PO Box 38
Wilmington, NC 28402
Tel: 910 762-1908
Fax: 910 762-9441
Email: blakeboyette@butlerbutler.com
- and -
Algernon L. Butler, III, Esq.
BUTLER & BUTLER, L.L.P.
P. O. BOX 38
Wilmington, NC 28402
Tel: 910 762-1908
Fax: 910 762-9441
Email: albutleriii@butlerbutler.com
Total Assets: $3.49 million
Total Liabilities: $3.36 million
The petition was signed by Vernon Ray Reason, Jr., president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/NCED13-6737.pdf
ADAYANA INC: Hires Taft Stettinius as Counsel
---------------------------------------------
Adayana, Inc. seeks authorization from the U.S. Bankruptcy Court
for the Southern District of Indiana to employ Taft Stettinius &
Hollister LLP as counsel, nunc pro tunc to Oct. 14, 2013.
The Debtor requires Taft Stettinius to:
(a) prepare filings and conduct examinations incidental to the
administration of a Chapter 11 case;
(b) advice regarding its legal rights, duties, and obligations
a debtor-in- possession;
(c) perform legal services incidental and necessary to the day-
to-day operations of the Debtor's business, including but
not limited to institution and prosecution of necessary
legal matters and proceedings, loan restructuring, and
general business and corporate legal advice and assistance,
all of which are necessary to the proper preservation and
administration of the estates;
(d) negotiate, prepare, confirm and consummate an asset sale
and related matters; and
(e) take any and all other necessary action incident to the
proper preservation and administration of the estate in the
conduct of the Debtor's business.
Taft Stettinius will be paid at these hourly rates:
Jerald I. Ancel, Partner $550
Timothy J. Hurley, Partner $495
Marlene Reich, Partner $495
Michael P. O'Neil, Partner $495
George D. Molinsky, Partner $470
Jeffrey J. Graham, Partner $395
John R. Humphrey, Partner $395
Andrew T. Kight, Partner $390
Sharon I. Shanley, Associate $365
Casey C. Schwartz, Associate $295
Erin C. Nave, Associate $250
Celeste A. Brodnik, Paralegal $245
Shawn D. Lantz, Filing Clerk $190
Taft Stettinius has received a retainer of $27,127 for its
services in this Chapter 11 case. The retainer is in Taft
Stettinius' trust account to be drawn upon if a monthly statement
is not paid pursuant to the terms of Taft's engagement and any
compensation procedures approved by this Court.
Taft Stettinius will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Michael P. O'Neil, partner of Taft Stettinius, 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.
Taft Stettinius can be reached at:
Michael P. O'Neil, Esq.
TAFT STETTINIUS & HOLLISTER LLP
One Indiana Square, Suite 3500
Indianapolis, IN 46204-2023
Tel: (317) 713-3561
Fax: (317) 713-3699
E-mail: moneil@taftlaw.com
Adayana, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Ind. Case No. 13-10919) on Oct. 14,
2013. The Debtor is represented by Michael P. O'Neil, Esq., at
Taft Stettinius & Hollister LLP, in Indianapolis, Indiana.
BMO Harris is represented by James P. Moloy, Esq. --
jmoloy@boselaw.com -- at Bose McKinney & Evans LLP, in
Indianapolis, Indiana.
ALLENS INC: Arkansas Case Pits Farmers Against Lenders
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that this week's bankruptcy of Allens Inc., a processor of
canned vegetables, gives an Arkansas judge the chance to decide
whether Congress favors farmers over secured lenders under the
federal Perishable Agricultural Commodities Act, or PACA.
According to the report, in the Allens bankruptcy, half of the 20
largest unsecured creditors are farmers, with six each owed more
than $1 million. Four other vegetable growers have claims
exceeding $500,000 each.
Razorback Farms Inc., which is owed $4.1 million, according to the
Allens filing, immediately acted to protect its rights under PACA,
the report related.
Springdale, Arkansas-based Razorback submitted papers to the
bankruptcy judge on Oct. 29 contending that under PACA, Allens is
prohibited from using inventory and accounts receivable as
collateral for a bankruptcy loan. Otherwise, Allens intends to
have the existing senior lenders provide a $14 million term loan
to pay off a pre-bankruptcy term loan and a $105 million revolving
credit to pay off the existing revolver.
U.S. Bankruptcy Judge Ben T. Barry in Fayetteville, Arkansas, will
be called on to decide whether he agrees with Razorback that all
of Allen's assets are considered held in trust for growers.
Razorback said every court to consider the issue concluded that
property falling under PACA can't be used to secure financing in
bankruptcy.
Razorback quoted the law as saying that all food inventories and
products derived from produce, along with accounts receivable and
proceeds, are considered held in trust for unpaid suppliers,
without requiring growers to trace where their produce went.
Razorback cited precedents for the proposition that inventory,
receivables and proceeds aren't included in the bankrupt estate
and can't be used for financing.
A call to Greenberg Traurig LLP, co-counsel for Allens, wasn't
returned, Mr. Rochelle said. The company is also represented by
Mitchell, Williams, Selig, Gates & Woodyard PLLC in Little Rock.
The Allens loan proposal calls for selling the business by Nov.
27. The Siloam Springs, Arkansas-based company has four processing
plants and six warehouses, encumbered with $178 million in secured
debt and $101.9 million owing to unsecured trade suppliers.
Secured debt includes a first-lien, $96.5 million revolving credit
and the $14 million term loan, with Bank of America NA as agent.
There is a second-lien note for $65.6 million.
The larger unsecured creditors include packaging maker Ball Corp.,
owed $46.3 million, followed by Crown Cork & Seal USA Inc.,
holding $18.4 million in debt.
About Allens Inc.
Siloam Springs, Arkansas-based Allens, Inc., a maker of canned and
frozen vegetables in business since 1926, filed for bankruptcy on
Oct. 28, 2013, seeking to sell some divisions or reorganize as a
new company (Case No. 13-bk-73597, Bankr. W.D. Ark.).
The Debtors' proposed counsel are Stan D. Smith, Esq. --
ssmith@mwlaw.com -- Lance R. Miller, Esq. -- lmiller@mwlaw.com --
and Chris A. McNulty, Esq. -- cmcnulty@mwlaw.com -- at Mitchell,
Williams, Selig, Gates & Woodyard, P.L.L.C., in Little Rock,
Arkansas; and Nancy A. Mitchell, Esq. -- mitchelln@gtlaw.com --
Maria J. DiConza, Esq. -- diconzam@gtlaw.com -- and Matthew L.
Hinker, Esq. -- hinkerm@gtlaw.com -- at Greenberg Traurig, LLP, in
New York.
ALLY FINANCIAL: Inks Deals w/ Regulators to Settle Mortgage Suits
-----------------------------------------------------------------
Andrew R. Johnson, writing for The Wall Street Journal, reported
that Ally Financial Inc. is settling lawsuits brought by federal
regulators over mortgage-backed securities sold during the
financial crisis as the government-owned auto lender takes another
step toward putting litigation woes behind it.
According to the report, the Detroit-based company said on Oct. 29
it will take a $170 million charge in the third quarter in
connection with the settlements with the Federal Deposit Insurance
Corp. and Federal Housing Finance Agency, the regulator for
government-backed mortgage-finance firms Freddie Mac and Fannie
Mae.
The settlement is the latest in a string of agreements for the
FHFA, which sued Ally and 17 other banks in 2011 alleging they
sold shoddy mortgage securities to Freddie Mac and Fannie Mae
leading up to the financial crisis, the report related. Losses on
those securities contributed to the near collapse of the mortgage
firms, which were ultimately taken over by the government in 2008.
The FDIC had also sued Ally and other banks for allegedly selling
defective mortgage securities to other banks that ultimately
failed and were taken over by the agency, the report said.
Ally's settlement with the FDIC is $55.3 million, a spokesman for
the regulator said, the report further related.
About Ally Financial
Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/--
is one of the world's largest automotive financial services
companies. The Company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3 percent stake. Private equity firm Cerberus
Capital Management LP keeps 14.9 percent, while General Motors Co.
owns 6.7 percent.
Ally Financial Inc. reported net income of $1.19 billion for the
year ended Dec. 31, 2012, as compared with a net loss of $157
million during the prior year. As of June 30, 2013, the Company
had $150.62 billion in total assets, $131.46 billion in total
liabilities and $19.16 billion in total equity.
ALLY FINANCIAL: Settles with FHFA and FDIC
------------------------------------------
The Chapter 11 plan related to the bankruptcy filings of
Residential Capital, LLC, and certain of its subsidiaries
provides for, among other things, full releases for all pending
and potential claims held by third parties related to the Debtors
that could be brought against Ally Financial Inc. and its
subsidiaries, excluding the Debtors. The Third Party Releases had
expressly excluded, among others, claims against Ally held by the
Federal Housing Finance Agency and the Federal Deposit Insurance
Corporation, as receiver for certain failed banks.
Ally has agreed to settlements with each of FHFA and FDIC. The
Settlements provide, among other things, that in exchange for a
monetary payment, FHFA's and FDIC's pending litigation against
Ally will be dismissed, and the Excluded Claims will no longer be
included as exceptions to the Third Party Releases. In connection
with the Settlements, Ally expects to record a charge of
approximately $170 million in the third quarter of 2013.
As part of the settlement with FHFA, the Plan will be amended to
add Freddie Mac, and FHFA as conservator for Freddie Mac and
Fannie Mae, as exceptions to the Third Party Releases, in each
case only with respect to certain ordinary-course claims against
Ally Bank, as a former mortgage seller and servicer.
The Settlements are not conditioned on the Plan becoming
effective. Further, both FHFA and FDIC have agreed not to object
to final confirmation of the Plan, and FHFA will change its vote
to support the Plan. FDIC did not cast a vote on the Plan.
About Ally Financial
Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/--
is one of the world's largest automotive financial services
companies. The Company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3 percent stake. Private equity firm Cerberus
Capital Management LP keeps 14.9 percent, while General Motors Co.
owns 6.7 percent.
Ally Financial Inc. reported net income of $1.19 billion for the
year ended Dec. 31, 2012, as compared with a net loss of $157
million during the prior year. As of June 30, 2013, the Company
had $150.62 billion in total assets, $131.46 billion in total
liabilities and $19.16 billion in total equity.
AMERICAN AIRLINES: Horton Says "There's a Way" to Settle
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Thomas Horton, the chief executive officer of
American Airlines, said on Oct. 29 "there's a way" to negotiate a
settlement with the U.S. Justice Department allowing a merger with
U.S. Airways Group.
According to the report, absent a settlement, a federal district
judge in Washington will hold a trial beginning in late November
to decide if the merger is barred by antitrust law.
The antitrust suit is U.S. v. US Airways Group Inc., 13-cv-1236,
U.S. District Court, District of Columbia.
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: Works Toward Proposal to Settle Antitrust Suit
-----------------------------------------------------------------
Jack Nicas and Susan Carey, writing for The Wall Street Journal,
reported that American Airlines parent AMR Corp. and US Airways
Group Inc. are preparing a settlement proposal to the U.S. Justice
Department that would include offers to give up slots at Reagan
National Airport, according to two people familiar with the
process.
According to the report, the Justice Department sued in August to
block the airlines' proposed merger, and the antitrust case is set
to go to trial on Nov. 25, a high-profile court contest that holds
big risks for both sides. The two airlines and the Justice
Department recently agreed to consult a mediator to negotiate
toward a settlement. The parties also have said they remain open
to resolving the case outside of court.
One of the people cautioned that the two airlines still are
expecting to go to trial, the report related. Richard Parker of
O'Melveny & Myers LLP, which is representing US Airways, also said
on Oct. 30 that the airlines were ready for trial and anxious to
make their case.
US Airways and American Airlines parent AMR along with the Justice
Department recently agreed to consult a mediator to negotiate a
settlement, the report said. Without a settlement, the case will
go to trial on Nov. 25. Associated Press
A big AMR bondholder said he has been pushing the airlines for
weeks to offer to divest AMR slots at Reagan National, which is
just outside Washington, D.C., but the carriers so far have seemed
reluctant, the report noted.
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 PATRIOT: Court Okays Hiring of Baker & Assoc. as Counsel
-----------------------------------------------------------------
American Patriot Gold LLC sought and obtained permission from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
Reese W. Baker, Esq., and Baker & Associates as attorney.
The Debtor designated Reese W. Baker as its attorney in charge.
The Debtor requires Baker & Associates to:
(a) analyze of the financial situation, and rendering advice
and assistance to the Debtor;
(b) advise the Debtor with respect to its duties as a Debtor;
(c) prepare and file all appropriate petitions, schedules of
assets and liabilities, statements of affairs, answers,
motions and other legal papers;
(d) represent the Debtor at the first meeting of creditors and
such other services as may be required during the course of
the bankruptcy proceedings;
(e) represent the Debtor in all proceedings before the Court
and in any other judicial or administrative proceeding
where the rights of the Debtor may be litigated or
otherwise affected;
(f) prepare and filing of a Disclosure Statement and Chapter 11
Plan of Reorganization; and
(g) assist the Debtor in any matters relating to or arising out
of the captioned case.
Baker & Associates will be paid at these hourly rates:
Reese W. Baker, Attorney $450
Patrick Gilpin, Jr., Attorney $350
Karen Rose, Attorney $225
Richard Brady, of Counsel $450
Rachael Sherman, of Counsel $350
Melanie Bolls, Paralegal $150
Tammy Chandler, Paralegal $100
Vanessa Denton, Paralegal $125
Vinette Ellis, Paralegal $125
Deisy Guillen, Paralegal $100
Phillip Murrell, Paralegal $100
Susanne Taylor, Paralegal $150
Gabby Martinez, Paralegal $120
Baker & Associates will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Baker & Associates received from the Debtor the amount of $8,333
on or before Aug. 29, 2013, for representation in the Chapter 11
case of the Debtor. The total pre-petition fees and expenses are
$16,995 plus the filing fee of $1,213. Baker & Associates paid
the filing fee and applied the remainder to the pre-petition fees.
Baker & Associates has canceled the remainder of the pre-petition
fees.
The source of the pre-petition retainer payments made to Baker &
Associates was from investors of Rock Energy.
Reese W. Baker 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.
Baker and Associates can be reached at:
Reese W. Baker, Esq.
BAKER & ASSOCIATES LLP
5151 Katy Freeway Ste 200
Houston, TX 77007
Tel: (713) 979-2251
American Patriot Gold, LLC, filed a bankruptcy petition (Bankr.
S.D. Tex. Case No. 13-35334) on Aug. 30, 2013. The petition was
signed by Rocky V. Emery as manager. The Debtor disclosed total
assets of $25.9 million and total liabilities of $11.6 million.
Reese W. Baker, Esq., at Baker & Associates, LLP, serves as the
Debtor's counsel.
AMES DEPARTMENT: Makes De Minimis Changes to 3rd Amended Plan
-------------------------------------------------------------
Ames Department Store, Inc., et al., filed a Third Amended Plan
dated Oct. 29, 2013, to reflect certain non-material
modifications. Among other things, Cellmark Paper, Inc.'s $2
million claim has been taken out of the administrative claims
list.
A redline-copy of the Third Amended Plan, along with certain plan
exhibits, is available for free at:
http://bankrupt.com/misc/AMES_3rdPlanOct29.PDF
As previously reported by The Troubled Company Reporter, a hearing
for Nov. 13 has been scheduled to consider confirmation of the
Plan.
The Plan is a straightforward mechanism for liquidating the
Debtors' Assets. Under the Plan, an initial Distribution will
occur on the Effective Date or as soon as practicable thereafter
to satisfy Allowed Administrative Claims, Allowed Priority Tax
Claims, Allowed Priority Non-Tax Claims, and Indenture Trustee
Fees, i.e., the reasonable and documented compensation, fees,
expenses, disbursements, and indemnity claims of the Indenture
Trustees and their attorneys, advisors, and agents (up to $125,000
per Indenture Trustee). Additional Distributions will be made to
holders of Allowed Note and General Unsecured Claims to the extent
the Debtors have sufficient Available Cash to make Distributions
to such Claimholders. If the Debtors do not have sufficient
Available Cash to make Distributions to such Claimholders, the
balance of the Debtors' Assets, once Professional Fee Claims are
paid, will be distributed to one or more reputable charitable
organization(s) pursuant to the Plan.
BankruptcyData reported that a related Disclosure Statement was
not filed as a result of the September 10, 2013 order approving
the Disclosure Statement.
About Ames Department Stores
Rocky Hill, Connecticut-based Ames Department Stores was founded
in 1958. At its peak, Ames operated 700 stores in 20 states,
including the Northeast, Upper South, Midwest and the District of
Columbia. In April 1990, Ames filed for bankruptcy protection
under Chapter 11 of the U.S. Bankruptcy Code. In Ames I, the
retailer closed 370 stores and emerged from chapter 11 on Dec. 30,
1992.
Ames filed a second bankruptcy petition under Chapter 11 (Bankr.
S.D.N.Y. Case No. 01-42217) on Aug. 20, 2001. Togut, Segal
& Segal LLP; Weil, Gotshal & Manges; and Storch Amini Munves PC;
Cadwalader, Wickersham & Taft LLP. When the Company filed for
protection from their creditors, they reported $1,901,573,000 in
assets and $1,558,410,000 in liabilities. The Company closed all
of its 327 department stores in 2002.
ANDERSON NEWS: Slams Publishers' Bid for Antitrust Counterclaim
---------------------------------------------------------------
Law360 reported that bankrupt magazine wholesaler Anderson News
LLC on Oct. 29 objected to a bid by publishers Time Inc., Rodale
Inc. and others targeted in an antitrust suit to bring a
counterclaim against the company, blasting the move as a "last-
ditch tactic" aimed at dragging out the case.
According to the report, five companies asked a Delaware
bankruptcy judge earlier this month for permission to bring a
counterclaim in the antitrust action and file related proofs of
claim against the debtor's estate, a request Anderson objected to
as belated and baseless.
About Anderson News
Anderson News LLC was a sales and marketing company for books and
magazines. Anderson News ceased doing business in February 2009,
and was the subject of an involuntary Chapter 7 petition filed by
certain of its creditors (Bankr. D. Del. Case No. 09-10695) on
March 2, 2009. The publishing companies claimed that Anderson
News owes them a combined $37.5 million. An order for relief was
entered on Dec. 30, 2009, and the bankruptcy case was converted
from one under Chapter 7 to one under Chapter 11 on the same day.
ARG IH: S&P Assigns 'B' CCR & Rates Proposed $335MM Term Loan 'B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B'
corporate credit rating to the Atlanta-based ARG IH Corp., whose
subsidiaries operate and franchise Arby's restaurants. At the
same time, S&P assigned a 'B' issue-level rating and '3' recovery
rating to the company's proposed $335 million term loan and
$35 million revolving credit facility. The company will use
proceeds from the term loan to fund a dividend to the equity
holders. The company will also fund a small portion of the
dividend with excess cash to pay fees associated with the
transaction.
"The ratings on Arby's reflect our assessment that the company's
business risk profile remains "vulnerable", which is primarily
based on the company's position in the very competitive quick
service restaurant industry, modest track record of improved
results, and the historical volatility of profits," said credit
analyst Charles Pinson-Rose. "We also view its financial risk
profile as "highly leveraged", which is based on forecasted credit
ratios and our view of the company's financial policy as "very
aggressive" as a result of the presence of private equity sponsor.
We expect moderate profit growth and the company to reduce debt
with free cash flow, but leverage ratios will still be indicative
of a "highly leveraged" financial risk profile over the near
term."
The outlook is stable and incorporates S&P's expectation that the
company should have relatively stable operating trends as a result
of low-single-digit same-stores sales growth while maintaining
operating margins. This should allow the company to have adjusted
debt to EBITDA in the mid- to low-5x area and FFO/debt between
12%-14% over the near term.
S&P would not expect a positive rating action because of its view
of the company's financial policy as very aggressive given the
control of the equity ownership by a private equity sponsor. As
such, S&P do not expect to change its view of the company's
financial risk. However, if S&P believed the company would
sustain leverage below 5x and it viewed the company's financial
policies as aggressive, it could consider a higher rating. S&P
believes Arby's could reach this threshold with stable profits and
approximately $80 million of debt reduction over the course of the
next two years. Prior to an upgrade, S&P would also likely need
to positively reassess the company's business risk profile to weak
from vulnerable. S&P would do so if the company continues to grow
sales at a pace near or better than industry peers and improves
operating margins so that they were more comparable to industry
competitors.
S&P would consider a lower rating if adjusted leverage was in the
low-6x area as result of weak performance. S&P believes this
could occur in 2014 if same-store sales decline in the low-single-
digit range and gross margins contract by approximately 100 basis
points -- leading to an approximately 15% EBITDA decline.
ARMORWORKS ENTERPRISES: OCP, Arnold & Porter Hirings Affirmed
-------------------------------------------------------------
In the chapter 11 cases of ArmorWorks Enterprises, LLC, and
affiliate TechFiber LLC, the U.S. Bankruptcy Court denied a motion
for reconsideration of the (I) Amended Order Authorizing Debtors
to Employ Professionals and Consultants Used by the Debtors in the
Ordinary Course of Business; and (II) Ruling Re: Debtors'
Application to Employ Arnold & Porter, LLP as an Ordinary Course
Professional filed by C Squared Capital Partners, LLC and Anchor
Management, LLC.
On September 3, 2013, the Court entered its Ruling Re: Debtors'
Application to Employ Arnold & Porter LLP as an Ordinary Course
Professional.
On September 12, 2013, the Court entered the Amended Order
Authorizing Debtors to Employ Professionals and Consultants Used
by the Debtors in the Ordinary Course of Business.
The Court finds that grounds do not exist warranting
reconsideration of either the Ruling or the Order. Accordingly,
the Court denied the Motion for Reconsideration filed by C Squared
and Anchor Management.
About ArmorWorks Enterprises
Military armor systems provider ArmorWorks Enterprises, LLC, and
affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D.
Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17,
2013, along with a plan that resolves a dispute with a minority
shareholder and $3.5 million of financing that would save the
company from running out of cash.
ArmorWorks develops advanced survivability technology and designs
and manufactures armor and protective products. ArmorWorks has
produced over 1.25 million ceramic armor and composite armor
protection components for a variety of personnel armor, aircraft,
and vehicle applications.
The Debtors have tapped Todd A. Burgess, Esq., John R. Clemency,
Esq., Lindsi M. Weber, Esq., and Janel M. Glynn, Esq., at
Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as
financial advisor. ArmorWorks estimated $10 million to $50
million in assets and liabilities.
As of May 26, 2012, ArmorWorks had total assets of $30.9 million
and total liabilities of $12.04 million.
The Plan filed in the Debtors' cases would resolve the ongoing
dispute with C Squared by allowing ArmorWorks to redeem C
Squared's 40% minority interest, or alternatively, allow C Squared
to purchase the 60% majority interest of AWI.
ArmorWorks and TechFiber sought and obtained an order (i)
transferring the In re TechFiber, LLC chapter 11 case to the
Honorable Brenda Moody Whinery, the judge assigned to the
ArmorWorks Chapter 11 case, and (ii) authorizing the joint
administration of the Debtors' cases.
ATLANTIC COAST: Incurs $900,000 Net Loss in Third Quarter
---------------------------------------------------------
Atlantic Coast Financial Corporation, the holding company for
Atlantic Coast Bank, reported financial results for the quarter
and nine months ended Sept. 30, 2013.
For the third quarter of 2013, the Company reported a net loss of
$0.9 million or $0.38 per diluted share compared with a net loss
of $1.7 million or $0.66 per diluted share in the year-earlier
quarter and a net loss of $1.6 million or $0.62 per diluted share
in the second quarter of 2013. For the first nine months of 2013,
the net loss totaled $4.5 million or $1.81 per diluted share
compared with a net loss in the year-earlier period of $6.4
million or $2.55 per diluted share.
The Company's results through Sept. 30, 2013, included costs
associated with the previously announced merger with Bond Street
Holdings, Inc., which stockholders rejected at a special meeting
held on June 11, 2013. In order to more clearly assess the
fundamental operations of the Company, management believes it is
appropriate to adjust the reported net losses for the first nine
months of 2013 to exclude these merger-related costs. On this as-
adjusted basis, the adjusted net loss for the nine months ended
Sept. 30, 2013, was $3.2 million or $1.29 per diluted share.
Total assets were $714.1 million at Sept. 30, 2013, compared
with $772.6 million at Dec. 31, 2012, as the Company has
continued to manage asset size consistent with its overall
capital management strategy.
On Sept. 10, 2013, the Company named John K. Stephens, Jr. as
the new chief executive officer of the Company and the Bank. Mr.
Stephens, who brings with him over 25 years of banking experience,
also will serve as a director of the Company and the Bank. Mr.
Stephens' appointment is contingent upon receipt of regulatory
non-objection. Additionally, the Boards of Directors of the
Company and the Bank each has four new members, all with extensive
management experience and three of whom have served as executives
of large community or national banks. The appointment of James D.
Hogan, one of the new directors, is contingent upon receipt of
regulatory non-objection.
Regulatory Capital
The Company has experienced steady erosion of its capital due to
significant net losses over the past five consecutive years.
Effective Aug. 10, 2012, the Bank's Board of Directors agreed to
the issuance of a Consent Order by the Office of the Comptroller
of the Currency. Among other things, the Order called for the
Bank to achieve and maintain a Tier 1 capital ratio of 9 percent
of adjusted total assets and a total risk-based capital ratio of
13 percent of risk-weighted assets by Dec. 31, 2012. The Bank was
not in compliance with the capital levels required by the Order at
Dec. 31, 2012, and remained non-compliant at Sept. 30, 2013.
A copy of the press release is available for free at:
http://is.gd/48u5lU
About Atlantic Coast
Jacksonville, Florida-based Atlantic Coast Financial Corporation
is the holding company for Atlantic Coast Bank, a federally
chartered and insured stock savings bank. It is a community-
oriented financial institution serving northeastern Florida and
southeastern Georgia markets through 12 locations, with a focus on
the Jacksonville metropolitan area.
The Company reported a net loss of $6.66 million on $33.50 million
of total interest and dividend income for the year ended Dec. 31,
2012, as compared with a net loss of $10.28 million on $38.28
million of total interest and dividend income in 2011. The
Company's balance sheet at June 30, 2013, showed $742.19 million
in total assets, $711.02 million in total liabilities and $31.16
million in total stockholders' equity.
McGladrey LLP, in Jacksonville, Florida, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that the
Company has suffered recurring losses from operations that have
adversely impacted capital at Atlantic Coast Bank. The failure to
comply with the regulatory consent order may result in Atlantic
Coast Bank being deemed undercapitalized for purposes of the
consent order and additional corrective actions being imposed that
could adversely impact the Company's operations. This raises
substantial doubt about the Company's ability to continue as a
going concern.
BERNARD L. MADOFF: Judge Allows Suit Against Feeder-Fund Customers
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. District Judge Jed Rakoff, who has written
decisions limiting or barring lawsuits brought by the trustee
liquidating Bernard L. Madoff Investment Securities Inc., handed
down a 22-page opinion on Oct. 29 solidly supporting the right of
trustee Irving Picard to sue so-called feeder-fund customers.
According to the report, affiliates of Citibank NA, Credit
Agricole SA, Barclays Plc and Merrill Lynch & Co. were among
financial institutions wanting Judge Rakoff to dismiss 40 of the
trustee's lawsuits. Picard is suing the banks for being subsequent
recipients of money stolen from Madoff customers. In a typical
situation, the banks received money from customers and invested
the funds with so-called feeder funds that in turn invested with
Madoff.
Often unable to identify the bank's ultimate customers, Picard
sued the banks under a provision in bankruptcy law known as
Section 550(a), which says in substance that a subsequent
recipient like the banks must pay money back if the initial
payment by Madoff to the feeder fund was a fraudulent transfer,
the report related.
The banks first succeeded in persuading Judge Rakoff to take some
of the issues in the lawsuit away from U.S. Bankruptcy Judge
Burton R. Lifland. Specifically, Judge Rakoff said it was proper
for him rule in the first instance on whether Picard was required
to obtain a judgment against feeder funds like Fairfield Sentry
Ltd. and Kingate Global Fund Ltd. before he could sue the banks.
Judge Rakoff also said he would decide if suits against the banks
had to be filed within two years of the Madoff bankruptcy.
In a two-page ruling in December, Judge Rakoff denied the banks'
motions to dismiss the suits on the two grounds. Judge Rakoff
said he would file an opinion "in due course" giving a legal
rationale for upholding Picard's suits.
Judge Rakoff distributed his opinion on Oct. 29 to the parties in
the case, giving a detailed explanation of why Picard can sue so-
called subsequent recipients although he never obtained a
fraudulent transfer judgment against Fairfield Sentry and Kingate,
the customers who received the initial transfers.
The subsequent recipients contended that the language in Section
550(a) barred lawsuits against them because Picard only settled
with the two feeder funds and never obtained a fraudulent transfer
judgment.
Judge Rakoff rejected the argument, saying Picard need only show
the right to obtain a fraud judgment against the feeder funds.
Judge Rakoff said his ruling was in line with a "majority of
courts."
Judge Rakoff went so far as to write a footnote disagreeing with a
statement on Section 550 contained in an Enron decision from the
U.S. Court of Appeals in Manhattan. Judge Rakoff said the
statement in Enron was dicta not binding on him. Dicta is a
statement in an opinion not necessary for a decision.
Also agreeing with Picard, Judge Rakoff interpreted the statute as
not requiring that suits against subsequent recipients be filed
within two years.
Having issued his opinion on Oct. 29, Judge Rakoff returned the
suits to Judge Lifland for further processing.
The issues before Judge Rakoff in the Madoff case is In re Bernard
L. Madoff Investment Securities LLC, 12-mc-00115, 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: Broker-Dealer Backed by Stolen Money, Jury Told
------------------------------------------------------------------
Erik Larson, writing for Bloomberg News, reported that Bernard
Madoff's broker-dealer and proprietary trading units were backed
by "hundreds of millions of dollars" in stolen money from his
fraudulent investment advisory business, a jury was told in the
trial of five former employees accused of aiding the $17 billion
Ponzi scheme.
According to the report, Madoff funneled money intended for
customer investments through his London-based operation and
through external U.S. brokerage accounts so it could be used for
rent, payroll and credit card payments at his businesses where
real trading took place, Bruce Dubinsky, a government witness who
analyzed the fraud in 2011, testified on Oct. 30 in federal court
in Manhattan.
"That's customer money -- the most sacred account in an investment
advisory business," Dubinsky told the panel of 12 jurors and six
alternates, the report related. "You can't stick your hand in the
piggy bank and use it for other means."
One of the defendants, Daniel Bonventre, who oversaw the broker-
dealer and proprietary trading operations, argues he wasn't aware
of the fraud because Madoff lied to him, and because he didn't
work in the investment advisory unit, the report added. The U.S.
alleges Bonventre knew his business benefited from fraud.
In his guilty plea in 2009, Madoff said the market-making and
proprietary trading side of his firm was "legitimate" while
admitting he ran the scheme from the advisory unit, the report
further related. The judge overseeing the liquidation of Madoff's
operations to help repay victims approved the sale of the market-
making business for as much $25.5 million in April 2009.
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.
BJ'S WHOLESALE: Moody's Cuts Rating on $1.29BB Loan to 'Caa1'
-------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family and
Probability of Default ratings for BJ's Wholesale Club, Inc. to B3
from B2, downgraded the ratings on two existing secured term
loans, and also assigned ratings to two proposed secured term
loans. The rating outlook is stable. Ratings are subject to
Moody's review of final documentation and terms and conditions.
Ratings downgraded:
Corporate Family Rating to B3 from B2
Probability of Default rating to B3-PD from B2-PD
Ratings downgraded and to be withdrawn upon closing of proposed
new loans:
$1.29 billion secured first lien term loan to Caa1 (LGD 4, 63%)
from B3 (LGD 4, 64%)
$325 million secured second lien term loan to Caa2 (LGD 6, 91%)
from Caa1 (LGD5, 88%)
New ratings assigned:
$1.45 billion secured first lien term loan at B3 (LGD 4, 56%)
$650 million secured second lien term loan at Caa2 (LGD 5, 88%)
Ratings Rationale:
"The downgrade recognizes the deterioration in the company's
credit metrics that will result from BJ's paying an approximately
$450 million debt-financed dividend to its sponsors and certain
members of management, as well as the increasingly-aggressive
financial policy tone that this dividend sets," stated Moody's
Vice President Charlie O'Shea. "Combined with 2012's almost $650
million dividend BJ's will have returned almost $1.1 billion to
its sponsor/owners and management in a little over a year. This is
well over double the initial approximately $600 million that was
contributed as equity to the go-private LBO in September 2011;
while debt has increased from $1.8 billion to $2.5 billion. This
results in debt/EBITDA pro forma for this incremental debt
approaching 8 times, and interest coverage will below 1.3 times,
the combination of which results in a quantitative profile that is
closer to Caa than B."
The B3 Corporate Family and Probability of Default ratings reflect
BJ's high leverage as measured by debt/EBITDA, which will now
approach 8 times, weak interest coverage with EBITA/interest of
around 1.2 times, as well as its limited ability to generate free
cash flow sufficient to attain a free cash flow/net debt metric
above the low single digits on a percentage basis. The ratings
also reflect the tone of financial policy being set by the new
dividend. The ratings continue to be supported by BJ's significant
"annuity stream" of membership revenue, which stood at around $240
million for the July 2013 LTM period, its favorable position in
the warehouse/wholesale club segment of retail, with its focus on
grocery-equivalents, and its strong, but highly concentrated
position in the populous Northeast region of the U.S. Ratings also
consider the "covenant lite" structure of the proposed credit
facilities, as well as continued inherent issues surrounding the
ownership of BJ's by private equity firms. Some of these issues
include the potential for additional extractions of equity and
otherwise maintenance of a shareholder-friendly financial policy,
which could lead to a further leveraging and weakening of the
company's capital structure. BJ's is a strong and very credible
competitor in its key Northeast market, with leading market share
as measured by store locations. Moody's also recognizes BJ's
excellent operating performance trend over the past several years,
which indicates that the company has been able to perform well
through myriad economic cycles, as well as its good liquidity.
The downgrade of the existing term loans, ratings for which will
be withdrawn upon closing of the proposed new term loans, result
from the downgrade of the Corporate Family rating and the
application of Moody's Loss Given Default Methodology, as well as
their respective positions in the capital structure. The Caa1
rating on the existing $1.29 billion term loan recognizes the
incremental benefit of first position collateral mortgages on a
small pool of warehouse clubs, as well as its more senior position
in the capital structure. The Caa2 rating on the existing $325
million term loan reflects the lack of any tangible hard asset
collateral and its more junior position in the capital structure.
The ratings on the proposed new term loans result from the
application of Moody's Loss Given Default Methodology, as well as
their respective positions in the capital structure. The B3 rating
on the proposed $1.45 billion term loan recognizes its more senior
position in the capital structure, as well as the presence of the
real estate collateral. The Caa2 rating on the proposed $650
million term loan reflects its more junior position in the capital
structure, and the lack of any tangible hard asset collateral.
The stable outlook recognizes the strength of the company's
business model and the overall operating performance of the
company. The stable outlook also considers the company's liquidity
which, while good, remains negatively impacted by the
approximately $300 million that is still outstanding on the
unrated $1 billion ABL which was utilized to help finance the
September 2011 LBO.
Given the downgrade and the company's highly-aggressive financial
policy, an upgrade is unlikely in the near term. Over time, an
upgrade could occur if BJ's financial policy tempers such that the
company can meaningfully reduce its leverage via application of
free cash flow, with a level below 6.5 times necessary for
consideration to be given to an upgrade, with interest coverage as
measured by EBITA/interest sustained above 1.5 times.
Ratings could be downgraded if there are additional debt-financed
extractions of equity, liquidity weakens, or if its credit metrics
deteriorate such that EBITA/interest begins to approach 1 time.
Moody's notes that BJ's has hedged roughly two-thirds of its
existing floating rate debt, with these hedges expiring in March
2016.
BJ's Wholesale Club, Inc., based in Westborough, Massachusetts, is
a leading warehouse club retailer, with 201 locations in 15
states. Annual revenues are around $12 billion. The company was
taken private in September 2011 in a leveraged transaction by
affiliates of Leonard Green Partners ("LGP") and CVC Capital
Partners ("CVC") for around $3 billion.
BOOZ ALLEN: Moody's Says Special Dividend is Credit Negative
------------------------------------------------------------
Moody's Investors Service said that Booz Allen Hamilton Holding
Corporation's (parent of Booz Allen Hamilton Inc.) announcement
during its second quarter fiscal 2014 earnings call that it has
declared a $1.00 per share special dividend in addition to its
regular $0.10 per share cash dividend is a credit negative event.
However, Booz Allen's ratings including its Ba3 Corporate Family
Rating, SGL-1 Speculative Grade Liquidity Rating and stable
outlook are unaffected.
Booz Allen Hamilton is a provider of management and technology
consulting services to the U.S. government in the defense,
intelligence and civil markets. Booz Allen is headquartered in
McLean, Virginia, and reported revenues of approximately $5.7
billion for the last twelve months ended September 30, 2013.
BROCK HOLDINGS III: S&P Lowers CCR to 'B'; Outlook Negative
-----------------------------------------------------------
Standard & Poor's Ratings Services said it has lowered its
corporate credit ratings on Brock Holdings II Inc. (BHII) and its
wholly owned subsidiary Brock Holdings III Inc. (Brock) to 'B'
from 'B+'. The outlook on both entities is negative.
At the same time, S&P lowered the ratings on Brock's $105 million
revolving credit facility and $510 million first-lien term loan to
'B' (the same as the corporate credit rating) from 'B+' and on its
$190 million second-lien term loan to 'CCC+' from 'B-'.
The downgrade reflects Standard & Poor's view that Brock's EBITDA
margins and cash generation will be weaker than S&P expected in
2013, combined with the imminent risk that the company could
violate its covenant in the absence of an amendment or an equity
cure from the sponsor.
S&P now views Brock's financial profile as "highly leveraged,"
(revised from "aggressive"). S&P continues to view its liquidity
as "less than adequate" under its criteria, primarily reflecting
covenant tightness.
S&P views the company's business risk profile as "weak,"
reflecting its exposure to somewhat cyclical end markets within a
highly fragmented and competitive industry, as well as potential
project deferrals, delays in contract awards, and, at times, the
shutdown of its customer facilities, which could cause cash flow
volatility.
Brock is owned by BHII, a subsidiary of The Brock Group Inc.,
which is controlled by private equity firm Lindsay Goldberg.
The company provides multicraft specialty maintenance services
(principally scaffolding, insulation, and coatings) to industrial
companies, with a focus on the refining, chemical, and power
industries. Brock's operations are concentrated in the U.S. and
in the Canadian oil sands markets. Although Brock's end markets
are cyclical, maintenance services tend to be somewhat resilient
to recessions. Brock's exposure to more-cyclical capital projects
is moderate and the largely cost-reimbursable nature of Brock's
contracts (more than 80% of sales) reduces the risk of cost
overruns.
Maintenance and plant turnarounds are slowly picking up across the
company's end markets, especially refining. S&P expects Brock's
track record of quality and safety to remain a key factor in
gaining and retaining customers in 2014 as it bids on large
contracts.
The rating outlook is negative. This reflects the combined risk
of the high likelihood of a covenant breach by Dec. 31, 2013, in
the absence of an equity cure from its sponsor or an amendment and
further weakness in the company's credit metrics if operating
performance does not improve.
S&P could lower the rating if it appears likely that free cash
flow will be negative over the next 12-18 months from continued
pressure on EBITDA margins due to Brock's weak execution on
certain job contracts. The increased risk of managing working
capital requirements amid growing end-markets could also reduce
FOCF, thereby leading to overreliance on the revolver, and raise
leverage to more than 6.0x for an extended period. S&P could also
lower the rating if the company is not able to address its
potential financial covenant breach.
Standard & Poor's will monitor the company's progress in
negotiating a covenant amendment with its lenders and in enhancing
its liquidity profile prior to revising the outlook back to
stable. S&P's review will also include an assessment of business
prospects for 2014.
BUCKINGHAM SRC: Flux Maker Files for Chapter 11 in Cleveland
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Buckingham SRC Inc., calling itself the only U.S.
producer of magnesium flux, filed a petition for Chapter 11
protection on Oct. 28 in its Cleveland hometown to obtain
financing required for repairing aged heavy machinery.
According to the report, the company blamed financial problems on
equipment "in dire need of repair" and a "devastating" electrical
failure in May that curtailed production.
Liabilities include about $375,000 on a revolving credit and $1.9
million on a term loan owing to Triangle Capital Corp., the report
related. In addition, the company borrowed $6.2 million from
Triangle on a subordinate term loan.
There's also a $2.1 million note payable to the former owner of
the business.
Trade payables amount to $718,000, according to a court filing.
Tangible assets are on the books for $3 million, the company said.
Triangle is offering to finance the bankruptcy and provide $1
million to repair machinery.
Flux is used in refining molten metals, mostly magnesium.
The case is In re Buckingham SRC Inc., 13-bk-17583, U.S.
Bankruptcy Court, Northern District of Ohio (Cleveland).
CAESARS ENTERTAINMENT: Incurs $761.8 Million Net Loss in Q3
-----------------------------------------------------------
Caesars Entertainment Corporation reported a net loss of $761.8
million on $2.18 billion of net revenues for the quarter ended
Sept. 30, 2013, as compared with a net loss of $503.4 million on
$2.19 billion of net revenues for the same period a year ago.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss of $1.18 billion on $6.48 billion of net revenues as
compared with a net loss of $1.02 billion on $6.56 billion of net
revenues for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2013, showed $26.09
billion in total assets, $27.59 billion in total liabilities and a
$1.49 billion total deficit.
"We made considerable progress on the execution of our strategy
and achieved key milestones on many projects during the quarter,
despite continued softness in the domestic gaming business," said
Gary Loveman, chairman, chief executive officer and president of
Caesars Entertainment Corporation. "Building on our momentum, we
further enhanced our hospitality assets in Las Vegas and are
particularly pleased with the improvements we've seen in hotel and
F&B performance.
"We advanced our expansion efforts with the continued development
of Horseshoe Baltimore and the launch of real money online poker
in Nevada. We also executed several transactions over the past
several months that strengthened our balance sheet, including the
refinancing of our CMBS debt, the initial closing of the Caesars
Growth Partners transaction, the sale of approximately $200
million of common equity and the announcement of the sale of our
Macau golf course for approximately $420 million, net of
commissions. As a result of these transactions, we have greater
liquidity and no significant maturities until 2018, providing a
runway for new growth opportunities to generate returns for the
recovery of the core business."
A copy of the press release is available for free at:
http://is.gd/xWXvKF
Sponsors Exercise of Subscription Rights
In connection with the previously announced offering of Class A
common stock of Caesars Acquisition Company to holders of
subscriptions rights that were distributed by Caesars on Oct. 21,
2013, affiliates of Apollo Global Management, LLC, and TPG Global,
LLC, (the "Sponsors") have advised Caesars that they intend to
exercise their over-subscription privileges in the offering such
that subscription rights of approximately $600 million would be
exercised in the aggregate by the Sponsors, or approximately $300
million by each Sponsor. The Sponsors have exercised their basic-
subscription rights in full for $457.8 million on Oct. 21, 2013.
Each Sponsor intends to exercise over-subscription privileges for
up to approximately $71.1 million (or approximately 8,229,166
shares) of additional CAC Class A common stock, subject to the
terms described in CAC's prospectus for the offering. Over-
subscription privileges will only be available with respect to
shares of CAC's Class A common stock underlying basic subscription
rights that are not exercised or affirmatively retained by the
holders of such basic subscription rights.
The subscription rights will expire if they are not exercised by
5:00 p.m., New York City time, on Nov. 2, 2013, the expiration
date. If you are a beneficial owner of shares of Caesars common
stock that are registered in the name of a broker, dealer,
custodian bank or other nominee, you will need to contact your
broker, dealer, custodian bank or other nominee for instructions
for exercising subscription rights because the deadline for you to
exercise subscription rights will be prior to the expiration date.
If you are a registered holder of shares of Caesars common stock,
subscription rights validly exercised by mail that is postmarked
on or before the expiration date and received by the subscription
agent before 5:00 p.m., New York City time, on Nov. 5, 2013, will
be deemed to have been exercised by the expiration date.
Upon the closing of the offering, which is expected to be on or
about Nov. 18, 2013, shares of CAC's Class A Common Stock will be
distributed to holders of subscription rights that validly
exercised their subscription rights. CAC has applied to list
shares of its Class A common stock for trading on the NASDAQ
Global Select Market under the symbol "CGP"; however, there can be
no assurances that CAC will achieve a listing upon completion of
this offering or thereafter.
CAC is a newly formed company created to facilitate the previously
announced strategic transaction pursuant to which Caesars will
form a new growth-oriented entity, Caesars Growth Partners, LLC,
to be owned by Caesars and CAC. The closing of the strategic
transaction is subject to certain conditions, including entry into
definitive documentation and the receipt of required regulatory
approvals and lenders' approvals, and there can be no assurance
that those conditions will be satisfied.
The offering of CAC's Class A common stock is being be made only
by means of a prospectus, including any supplement or amendment
thereto, copies of which have been distributed to holders of
subscription rights or may be obtained, when available, from the
information agent: Georgeson Inc. at (888) 624-2255 (Toll Free).
Banks and Brokerage Firms please call: (800) 223-2064 (Toll Free).
The prospectus, including any amendment or supplement thereto,
contains important information about the rights offering and CAC,
and holders of subscription rights are urged to read the
prospectus carefully.
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.
* * *
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.
CAMCO FINANCIAL: Reports $727,000 Net Earnings in 3rd Quarter
-------------------------------------------------------------
Camco Financial Corporation reported net earnings of $727,000 on
$7.02 million of total interest income for the three months ended
Sept. 30, 2013, as compared with net earnings of $6.15 million on
$6.88 million of total interest income for the same period during
the prior year.
For the nine months ended Sept. 30, 2013, the Company reported net
earnings of $7.38 million on $20.76 million of total interest
income as compared with net earnings of $1.37 million on $24.11
million of total interest income for the same period a year ago.
The Company's balance sheet at Sept. 30, 2013, showed $760.59
million in total assets, $693.31 million in total liabilities and
$67.28 million in stockholders' equity.
James E. Huston, president and CEO, stated, "As a result of the
solid year-over-year third quarter performance, we were able to
further strengthen our balance sheet and continue to improve
credit quality. Stockholders' equity to total assets increased to
8.85% of total assets at September, 30, 2013, from 6.29% on the
same date last year. Classified loans and non-performing loans at
quarter-end were 31% and 35%, respectively, below levels at the
same date in 2012. We are continuing to implement multiple
initiatives related to growth opportunities and are also focused
on adapting to the continuing sluggish economy while maintaining
strong liquidity. The sequential quarter improvement in the third
quarter 2013 net interest margin to 3.27% is a positive sign of
these efforts."
A copy of the press release is available for free at:
http://is.gd/EL6tTY
About Camco Financial
Cambridge, Ohio-based Camco Financial Corporation is a bank
holding company that was organized under Delaware law in 1970.
Camco is engaged in the financial services business in Ohio,
Kentucky and West Virginia, through its wholly-owned subsidiary,
Advantage Bank, an Ohio bank. On March 31, 2011, Camco divested
activities related to Camco Title Agency and decertified as a
financial holding company. Camco remains a bank holding company
and continues to be regulated by the Federal Reserve Board.
Plante & Moran PLLC, in Auburn Hills, Michigan, noted that the
Corporation's bank subsidiary is not in compliance with revised
minimum regulatory capital requirements under a formal regulatory
agreement with the banking regulators, and that failure to comply
with the regulatory agreement may result in additional regulatory
enforcement actions.
Camco's wholly-owned subsidiary Advantage Bank's Tier 1 capital
does not meet the requirements set forth in the 2012 Consent
Order. As a result, the Corporation will need to increase capital
levels.
The Corporation reported net earnings of $4.2 million on net
interest income (before provision for loan losses) of
$23.9 million in 2012, compared with net earnings of $214,000 on
net interest income of $214,000 on net interest income (before
provision for loan losses) of $25.9 million in 2011.
CHINA NATURAL: Exclusive Periods Extension Sought
-------------------------------------------------
BankruptcyData reported that China Natural Gas filed with the U.S.
Bankruptcy Court a motion to extend the exclusive period during
which the Company can file a Chapter 11 plan of reorganization and
solicit acceptances thereof through and including February 4, 2014
and April 7, 2014, respectively.
The motion explains, "The Debtor submits that an extension of the
Exclusive Periods as requested herein is necessary and appropriate
to allow it to complete its efforts to negotiate with key
constituents and develop and seek confirmation of a Chapter 11
Plan." The Court scheduled a November 13, 2013 hearing to consider
the motion.
About China Natural
Headquartered in Xi'an, Shaanxi Province, P.R.C., China Natural
Gas, Inc., was incorporated in the State of Delaware on March 31,
1999. The Company through its wholly owned subsidiaries and
variable interest entity, Xi';an Xilan Natural Gas Co., Ltd., and
subsidiaries of its VIE, which are located in Hong Kong, Shaanxi
Province, Henan Province and Hubei Province in the People's
Republic of China ("PRC"), engages in sales and distribution of
natural gas and gasoline to commercial, industrial and residential
customers through fueling stations and pipelines, construction of
pipeline networks, installation of natural gas fittings and parts
for end-users, and conversions of gasoline-fueled vehicles to
hybrid (natural gas/gasoline) powered vehicles at 0ptmobile
conversion sites.
On Feb. 8, 2013, an involuntary petition for bankruptcy was filed
against the Company by three of the Company's creditors, Abax
Lotus Ltd., Abax Nai Xin A Ltd., and Lake Street Fund LP (Bankr.
S.D.N.Y. Case No. 13-10419). The Petitioners claimed that they
have debts totaling $42,218,956.88 as a result of the Company's
failure to make payments on the 5% Guaranteed Senior Notes issued
in 2008. The Company says it intends to oppose the motion.
Adam P. Strochak, Esq., at Weil, Gotshal & Manges, LLP, in
Washington, D.C., represents the Petitioners as counsel.
CHRYSLER GROUP: Reports Higher Profit, Vehicle Shipments
--------------------------------------------------------
Christina Rogers and Nathalie Tadena, writing for The Wall Street
Journal, Chrysler Group LLC on Oct. 30 said its third-quarter
earnings rose 22% to $464 million, as demand for the company's
pickup trucks and SUVs helped boost vehicle shipments, offsetting
the delayed arrival of an important new Jeep.
According to the report, the Auburn Hills, Mich., auto maker,
which recently filed plans for an initial public offering, has
gotten a lift in the U.S., as low interest rates and slow-but-
steady job growth embolden consumers to trade in worn-out cars and
trucks.
Chrysler confirmed its full-year guidance of net income between
$1.7 billion and $2.2 billion and global vehicle shipments of
about 2.6 million, the report related. Net income for the first
nine months of the year totaled $1.1 billion.
"Chrysler Group's ninth consecutive quarter of positive net income
highlights our commitment to producing award-winning vehicles for
consumers, such as the Jeep Grand Cherokee and the Ram 1500,"
Chrysler CEO Sergio Marchionne said in a statement, the report
added.
The auto maker's continued profitability has helped bolstered
majority owner Fiat SpA, which has been stung by Europe's economic
woes, the report noted.
About Chrysler Group
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002). The U.S. and Canadian governments provided
Chrysler LLC with $4.5 billion to finance its bankruptcy case.
In connection with the bankruptcy filing, Chrysler reached an
agreement to sell all assets to an alliance between Chrysler and
Italian automobile manufacturer Fiat. Under the terms approved by
the Bankruptcy Court, the company formerly known as Chrysler LLC
in June 2009, formally sold substantially all of its assets to the
new company, named Chrysler Group LLC.
* * *
Chrysler has a 'B1' corporate family rating from Moody's. Moody's
upgraded the rating from 'B2' to 'B1' in February 2013. In May
2013, Standard & Poor's Ratings Services affirmed its ratings,
including the 'B+' corporate credit rating, on Chrysler Group. At
the same time, S&P revised its outlook to positive from stable.
CITIZENS DEVELOPMENT: Hiring Beth Regan as Public Accountant
------------------------------------------------------------
Citizens Development Corp. asks the U.S. Bankruptcy Court for
permission to employ Beth Regan, CPA as certified public
accountant to assist with the preparation of corporate tax
returns.
The Debtor requests authority to pay Regan:
$7,000 to prepare the 2011 tax returns, and
$7,500 to prepare the 2012 tax returns.
Beth Regan attests that the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
Hearing on the employment application is set for Nov. 13, 2013, at
2:00 p.m. at Courtroom 3, Room 129, Weinberger Courthouse.
Tiffany L. Carroll, the acting U.S. Trustee, filed an objection to
the Debtor's proposed hiring. The Acting U.S. Trustee said the
Debtor cannot pay any post-petition fees to Beth Regan without
prior authorization from the Court, and the Debtor would be
required to notice creditors prior such payment since the request
for compensation of fees and expenses exceeds $1,000.
The Acting U.S. Trustee also said the one seeking employment has
the burden of proof to establish reasonableness of the proposed
terms and conditions of employment. The Debtor has not explained
why Beth Regan should be employed under 11 U.S.C. Sec. 328, and
the U.S. Trustee requests that the firm's employment be subject to
Sec. 330. If the court approves the firm's employment under Sec.
328, the Trustee said it may hinder the Court from reviewing the
reasonableness of additional fees at a future date.
In response to the U.S. Trustee's objection, the Debtor said it
has requested authority to pay to Regan. The Debtor also has
obtained the required consent of its secured creditor, and has not
received any objection from any other creditor, in connection with
the Debtor's cash collateral budget. Moreover, the Debtor will
agree that the payments to Regan will be interim payments, subject
to the filing and approval of final fee applications.
Accordingly, the Debtor says the Application should be approved.
The Debtor also agrees that the application may be subject to
11 U.S.C. Sec. 330 and the filing of a final fee application. The
employment of Regan and approval of the interim payments to Regan,
the Debtor said, will not hinder the Court's ability to later
review the reasonableness of the fees paid to Regan.
Attorneys for the Debtor can be reached at:
Ron Bender, Esq.
Krikor J. Meshefejian, Esq.
LEVENE, NEALE, BENDER, YOO & BRILL L.L.P.
10250 Constellation Boulevard, Suite 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
Fax: (310) 229-1244
E-mail: rb@lnbyb.com
kjm@lnbyb.com
About Citizens Development
San Marcos, California-based Citizens Development Corp., owns and
operates the Lake San Marcos Resort and Country Club located in
San Diego County. The Company filed a voluntary petition for
relief under Chapter 11 (Bankr. S.D. Calif. Case No. 10-15142) on
August 26, 2010. Ron Bender, Esq., and Krikor Meshefejian, Esq.,
at Levene, Neale, Bender, Yoo & Brill LLP, represent the Debtor.
The Debtor estimated its assets and debts at $10 million to
$50 million.
Chapter 11 petitions were also filed by affiliates LSM Executive
Course, LLC (Bankr. S.D. Calif. Case No. 10-07480), and LSM Hotel,
LLC (Bankr. S.D. Calif. Case No. 10-13024).
A bankruptcy-exit plan filed in the case provides that funding for
the Plan will initially come from a new value contribution in the
amount of up to $375,000 to be made to the Reorganized Debtor by
LDG Golf Marketing, LLC, Telesis' cash collateral in the amount of
$50,000 allocated to the payment of allowed administrative
expenses pursuant to the Telesis Settlement, and the Debtor's
additional cash on hand which is estimated to be $50,000, which
collectively equates to up to $475,000.
Tiffany L. Carroll, Acting U.S. Trustee for Region 15, was unable
to appoint an official committee of unsecured creditors in the
Chapter 11 case of Citizens Development Corp.
As reported by the TCR on July 16, 2013, the funding for the Plan
of Reorganization dated May 24, 2013, filed by the Debtor will
come from: (1) the additional financing; (2) new value
contribution in the amount of $400,000 to be made to the
Reorganized Debtor by Atlantica, the new investor; (3) the
Debtor's cash on hand which is estimated to be approximately
$25,000 as of the Effective Date -- which collectively equates to
$2,925,000 -- and (4) the revenue generated from continued
business operations.
CLUBCORP CLUB: Moody's Hikes Corp. Family Rating to B1
------------------------------------------------------
Moody's Investors Service upgraded ClubCorp Club Operations,
Inc.'s Corporate Family Rating to B1 from B2 and its Probability
of Default Rating to B1-PD from B2-PD. Moody's also assigned
ClubCorp a Speculative Grade Liquidity rating of SGL-1. At the
same time, a Ba2 rating was assigned to the company's new $135
million senior secured revolving credit facility due 2018. Moody's
affirmed the ratings on all of the company's existing debt. The
rating outlook is stable.
Ratings Rationale:
The upgrade reflects ClubCorp's improved leverage and coverage
metrics following its use of approximately $145 million of IPO
proceeds to permanently reduce its senior unsecured notes, as well
as its improved liquidity profile following several recent
amendments to its bank credit facility. The upgrade also reflects
higher earnings driven by lower membership attrition rates and
increasing revenues at existing clubs which have helped improve
the company's leverage and interest coverage metrics.
For the LTM period ended September 3, 2013, pro forma for the pay
down of ClubCorp's senior unsecured notes, the company's
debt/EBITDA and EBITDA less capex/interest expense ratios improve
to 4.6 times and 1.6 times from 5.3 times and 1.3 times,
respectively (metrics adjusted for Moody's standard adjustments,
primarily operating leases). Moody's estimates that the debt pay
down will reduce ClubCorp's cash interest expense by about $15
million annually, a material enhancement to its operating cash
flow. ClubCorp's improved liquidity profile comes on the heels of
amendments in July and August, the company's revolver commitment
was increased to $135 million from $50 million, reduced the
interest rate on the term loan, and pushed out maturities for the
revolver to 2018 from 2015 and the term loan to 2020 from 2016.
ClubCorp also has access to its $20 million revolver that expires
in 2015, however, there was no availability under this revolver
due to outstanding letters of credit.
The Ba2 rating on ClubCorp's senior secured revolvers and existing
$301 million senior secured first lien term loan -- two notches
above the Corporate Family Rating -- reflects their first lien on
substantially all of the company's assets and the material amount
of junior debt below them in the capital structure. The B3 rating
on the $270 million senior unsecured notes reflects their
effective subordination to all senior secured creditors. The
repayment of a portion of ClubCorp's senior unsecured notes has
resulted in less notching between the Corporate Family Rating and
the senior secured debt, reflecting the lower credit cushion
provided by the unsecured debt in the capital structure. Prior to
the reduction in unsecured debt, the secured debt was three
notches higher than the Corporate Family Rating.
The Speculative Grade Liquidity rating of SGL-1 reflects
ClubCorp's very good liquidity. Moody's expects that the company's
internal sources of cash will be sufficient to cover all cash flow
requirements over the next 12 to 18 months (excluding
acquisitions). At September 3, 2013, ClubCorp had approximately
$43 million of available cash. The company has access to a $135
million revolving credit facility which Moody's does not expect
the company will need to utilize outside of letters of credit.
ClubCorp also has access to its $20 million revolver that expires
in 2015, however, there was no availability under this revolver
due to outstanding letters of credit.
ClubCorp does not have any material debt maturing until an
approximate $30 million mortgage matures in 2017, nor does it have
any mandatory amortization on its term loan. There is only minimal
amortization on its outstanding mortgages. The company's credit
facility calls for an excess cash flow sweep based on certain
leverage levels. The company is currently not subject to the cash
flow sweep, which Moody's expects will remain the case over the
next 12 to 18 months. In August, ClubCorp amended its financial
covenants to include only a senior secured leverage ratio under
which Moody's believes the company will maintain good cushion.
The stable rating outlook reflects Moody's expectations that
ClubCorp will be able to continue to maintain its membership base
and stable operating performance over the intermediate term so
that debt/EBITDA and EBITDA-capex/cash interest will be in the 4.5
times and 2.0 times range, respectively. The stable rating outlook
also includes Moody's expectation that ClubCorp will maintain a
very good liquidity profile and will exercise a conservative
financial policy with respects to dividends and share repurchases.
A ratings upgrade is unlikely in the near term given ClubCorp's
scale and geographic concentration. Over the medium term, a
substantial expansion of the membership base and geographic
diversification accompanied by debt/EBITDA below 3.5 times and
EBITDA-capex/cash interest above 3.0 times could lead to an
upgrade.
Ratings could be downgraded if ClubCorp is unable to replace
membership attrition or if there is pressure on profitability for
any reason such that debt/EBITDA is sustained above 5.0 times, or
EBITDA-capex/cash interest expense falls to below 1.5 times.
Ratings could also be downgraded if liquidity deteriorates for any
reason or if the company's policy regarding dividends and share
repurchases becomes aggressive.
Ratings Upgraded:
Corporate Family Rating to B1 from B2
Probability of Default Rating to B1-PD from B2-PD
Ratings assigned:
$135 million senior secured revolving credit facility due 2018 at
Ba2 (LGD 2, 27%)
Speculative Grade Liquidity Rating of SGL-1
Ratings affirmed and LGD point estimates revised:
$20 million senior secured revolver due 2015 at Ba2 (LGD 2, 27%)
from (LGD 2, 22%)
$301 million senior secured term loan due 2020 at Ba2 (LGD 2,
27%) from (LGD 2, 22%)
$270 million senior unsecured notes due 2018 at B3 (LGD 5, 82%)
from (LGD 5, 77%)
ClubCorp is one of the largest owners and managers of private
golf, country, business, sports and alumni clubs in North America.
As of September 3, 2013, the company owned or operated 153 clubs
(104 golf and country clubs and 49 business, sports, and alumni
clubs) in 25 states, the District of Columbia, and two foreign
countries with over 148,000 memberships. For the LTM period ended
September 3, 2013, ClubCorp generated $785 million of revenues. In
September 2013 ClubCorp Holdings, Inc. -- ClubCorp's parent --
completed an IPO issuing 13.2 million shares of common stock --
along with an additional 7.5 million issued by KSL -- at
$14/share. The shares trade on the NYSE (ticker: MYCC).
CONCHO RESOURCES: Inks Twelfth Amendment to JPMorgan Facility
-------------------------------------------------------------
Concho Resources Inc. entered into the Twelfth Amendment to its
Amended and Restated Credit Agreement, dated as of July 31, 2008,
with the lenders party thereto and JPMorgan Chase Bank, N.A., as
administrative agent, as amended.
Prior to the Twelfth Amendment, the Amended and Restated Credit
Agreement required the Company to provide mortgages covering at
least eighty percent of the value of the properties included in
the Company's reserve report utilized to determine the borrowing
base. In addition to other technical revisions, the Twelfth
Amendment replaced the eighty percent mortgage coverage
requirement with a requirement for the Company to provide
mortgages covering properties included in the Company's reserve
report utilized to determine the borrowing base valued at a
minimum of the product of 1.75 multiplied by the lesser of the
borrowing base and the lenders' aggregate commitments under the
Amended and Restated Credit Agreement.
The Twelfth Amendment also reaffirms the Company's current
borrowing base of $3.0 billion and maintains the lenders'
aggregate commitments of $2.5 billion under the Amended and
Restated Credit Agreement.
A copy of the 12th Amendment is available for free at:
http://is.gd/B0M7Ff
Departure of Director
On Oct. 25, 2013, W. Howard Keenan, Jr., provided notice to
Timothy A. Leach, Chairman of the Board, chief executive officer
and president of the Company, of Mr. Keenan's resignation as a
member of the Company's Board of Directors and all committees
thereof, effective immediately. Mr. Keenan expressed no
disagreement with the Company on any matter relating to the
Company's operations, policies or practices. Mr. Keenan has
served on the Board since 2006.
After receipt of Mr. Keenan's resignation, the Company conferred
the honorary title of "Founding Director" on Mr. Keenan in
recognition of his service and contributions to the Company. The
Founding Director is not a member of the Company's Board, is not
entitled to attend, vote at and is not counted for purposes of
determining whether a quorum exists at any meeting of the Board,
and does not have any fiduciary duties to the Company or its
stockholders.
About Concho Resources Inc.
Concho Resources Inc. is an independent oil and natural gas
company engaged in the acquisition, development and exploration of
oil and natural gas properties. The Company's operations are
focused in the Permian Basin of Southeast New Mexico and West
Texas. For more information, visit Concho?s website at
www.concho.com.
The Company's balance sheet at June 30, 2013, showed $9.24 billion
in total assets, $5.64 billion in total liabilities and $3.59
billion in total stockholders' equity.
* * *
As reported by the TCR on May 22, 2013, Moody's Investors Service
upgraded Concho Resources Inc.'s Corporate Family Rating to Ba2
from Ba3.
"The upgrade to Ba2 reflects Concho Resources' strong cash
margins, relatively high proportion of oil in the production mix,
and continued growth in production and reserves," said Arvinder
Saluja, Moody's Assistant Vice President-Analyst.
Concho Resources Inc. carries a BB+ corporate credit rating
from Standard & Poor's.
COVANTA HOLDING: Fitch Affirms 'BB' Long-term Issuer Rating
-----------------------------------------------------------
Fitch Ratings has affirmed the Long-term Issuer Default Rating
(IDR) of Covanta Holding Corporation (CVA) and Covanta Energy
Corporation (CEC) at 'BB'. Fitch has also revised the Rating
Outlook to Negative from Stable for both companies. A complete
list of rating actions is provided at the end of this release.
Credit metrics for CVA and CEC have weakened due to higher
operational and maintenance expenses and are further stressed
under Fitch's conservative rating case assumptions, which include
low margins from spot electricity and recycled metal sales, higher
than normal generating assets maintenance expenses, and low waste
volume growth over next three years.
Tightening Metrics: Fitch calculated funds from operations (FFO)
based leverage (FFO/debt) and FFO to interest coverage ratios will
remain below 12% and 3x respectively, at least through 2016. Low
electricity price environment, rising generating asset maintenance
cost, and low metal prices are main reasons for the decline in
these ratios. In addition, an aggressive shareholder distribution
policy during elevated capex spending between 2014 and 2016
remains a concern.
Challenging Power Price Environment: Power prices have been
adversely affected by low peak-demand and low natural gas prices,
and Fitch does not expect any change in the current pricing
environment. A significant portion of Covanta's electricity
generation volume is rolling off lucrative long-term electricity
sales contracts over the next three years; the current electricity
price environment is expected to continue to adversely affect
CVA's margins at least through 2016.
Operating Challenges: Higher maintenance costs and increased
unscheduled outages at CEC's aging generating assets have impacted
recent results and, in Fitch's opinion, will continue to weigh on
future cash flow.
Sustainable Cash Flows from Waste Processing: Cash flows from the
waste management (approximately 60% of consolidated revenues) are
based on long-term contracts with high quality counter parties --
mainly municipalities and local governments. These contracts not
only provide cash flow sustainability, but also improve visibility
into cash flow over the rating horizon. New waste management
contract with New York City, beginning in 2015, is cash flow
positive. It displaces existing low tip-fee waste revenues for CVA
and MSW from New York City will be used at its existing electric-
from-waste (EfW) facilities. Fitch believes that it should improve
the contracted profile of these EfW facilities.
Strong Liquidity: Cash and cash equivalents totaled $252 million
at Sept. 30, 2013. Additional liquidity includes $493 million
available under a $900 million revolving credit facility. Covanta
primarily uses its revolver to support letters of credit (LOCs) as
well as for general corporate purposes. As of Sept. 30, 2013,
Covanta had $281 million in LOCs outstanding under its revolver
and $126 million in borrowings. The company's debt maturity
schedule is manageable, with no major payments required until 2014
when about $520 million in consolidated debt will mature.
Fitch affirms the following ratings:
Covanta Holding Corporation (CVA)
-- Long-term IDR at 'BB';
-- unsecured tax-exempt bonds 'BB+';
-- Senior unsecured debt at 'BB'.
Covanta Energy Corporation (CEC)
-- Long-term IDR at 'BB';
-- Senior secured debt at 'BBB-'.
The Rating Outlook is revised to Negative from Stable.
Rating Sensitivity:
Positive: An upgrade of CVA and its subsidiary, CEC, is considered
unlikely given they each have Negative Rating Outlooks.
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Decline in Fitch's FFO based credit metrics with FFO/interest
expenses remaining below 3.8x and FFO/adjusted debt ratio
remaining below 15% on a sustainable basis.
-- Additionally, new environmental rules or changes to the
regulatory framework could lead to a negative rating action.
CRESCENT RESOURCES: Trustee Says Duke Should Face Fraud Claims
--------------------------------------------------------------
Law360 reported that the trustee for Crescent Resources LLC fought
back in a Texas federal court on Oct. 28 against parent company
Duke Energy Corp.'s move for summary judgment of a suit over a
2006 debt transaction that allegedly left the real estate
investment company insolvent and careening toward bankruptcy while
Duke raked in $1.6 billion.
According to the report, Duke should not be protected from
fraudulent claims on the basis of estoppel because the debtor-in-
possession transaction involving several investment banks was set
up in 2006 by Duke after it allegedly drove Crescent to
bankruptcy.
About Crescent Resources
Crescent Resources, LLC -- http://www.crescent-resources.com/--
is a real estate development and management organization which
developed, owned, leased, managed, and sold real estate since
1969. Crescent Resources and its debtor-affiliates filed for
Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 09-11507) on
June 10, 2009, estimating more than $1 billion in assets and
debts. Judge Craig A. Gargotta presided over the case. Eric J.
Taube, Esq., at Hohmann, Taube & Summers, L.L.P., served as the
Debtors' bankruptcy counsel. The Official Committee of Unsecured
Creditors in Crescent Resources tapped Martinec, Winn, Vickers &
McElroy, PC, as counsel. On Dec. 20, 2010, the Court signed an
order confirming the Debtors' Revised Second Amended Joint Plan of
Reorganization.
CUMULUS MEDIA: Posts $2.6 Million Net Income in Third Quarter
-------------------------------------------------------------
Cumulus Media Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
attributable to common shareholders of $2.66 million on $281.07
million of net revenues for the three months ended Sept. 30, 2013,
as compared with net income attributable to common shareholders of
$50.77 million on $275.35 million of net revenues for the same
period during the prior year.
For the nine months ended Sept. 30, 2013, the Company reported net
income attributable to common shareholders of $14.47 million on
$803.62 million of net revenues as compared with net income
attributable to common shareholders of $34.29 million on $792.38
million of net revenues for the same peirod a year ago.
The Company's balance sheet at Sept. 30, 2013, showed $3.67
billion in total assets, $3.40 billion in total liabilities and
$268.43 million in total stockholders' equity.
At Sept. 30, 2013, cash on hand was $64.2 million.
Lew Dickey, chairman & CEO stated: "This was another solid quarter
for the Company. Our growth initiatives complimented our core
business, which continued to take share, and we are seeing a
continuation of these trends in fourth quarter."
A copy of the Form 10-Q is available for free at:
http://is.gd/akZ6I1
About Cumulus Media
Founded in 1998, Atlanta, Georgia-based Cumulus Media Inc.
(NASDAQ: CMLS) -- http://www.cumulus.com/-- is an 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.
* * *
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.
CWGS ENTERPRISES: S&P Assigns B Corp. Credit Rating, Outlook Pos.
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned Lincolnshire, Ill.-
based RV company CWGS Enterprises LLC a corporate credit rating of
'B'. The rating outlook is positive.
At the same time, S&P assigned CWGS subsidiary CWGS Group LLC's
proposed $545 million senior credit facility an issue-level rating
of 'B+', with a recovery rating of '2', indicating its expectation
for substantial (70% to 90%) recovery in the event of a payment
default. The credit facility consists of a $20 million revolver
due 2018 and a $525 million term loan due 2019. Both the revolver
and term loan will mature in September 2017 if CWGS' subordinated
notes (series B) have not yet been repaid, their maturity
extended, or the balance converted to preferred equity at that
time.
The proposed financing transaction will consolidate Good Sam and
FreedomRoads under one capital structure. The company will use
proceeds from the new term loan to:
-- Refinance the full $80 million balance in subordinated notes
(series A) at CWGS;
-- Refinance $29 million in accrued interest on $70 million in
principal in subordinated notes (series B) at CWGS;
-- Refinance all existing debt at Good Sam, including its
$325 million senior notes due 2016;
-- Fund about $29 million related to the call premium on Good
Sam's existing senior notes;
-- Refinance all outstanding debt (about $37 million) at
FreedomRoads; and
-- Pay transaction related fees and expenses.
S&P expects to withdraw all ratings on Good Sam, including its
'B-' corporate credit rating, once CWGS' proposed financing
transaction is completed and Good Sam's existing debt is fully
repaid.
S&P's 'B' corporate credit rating on CWGS reflects its view of the
company's financial risk profile as "highly leveraged" and its
business risk profile as "weak," according to its critieria.
D & L ENERGY: Auction Rules Approved; Nov. 19 Sale Hearing Set
--------------------------------------------------------------
On Oct. 22, 2013, the U.S. Bankruptcy Court for the Northern
District of Ohio entered an order approving bidding and auction
procedures that will govern the sale of all of the assets of D&L
Energy, Inc., & Petroflow, Inc.
Objections, if any, to the sale motion will be in writing, will
conform to the Bankruptcy Rules and the Local Rules and orders of
this Court, will set forth: (i) the nature of the objector's
claims against or interest in Debtors' estates; (ii) the basis for
the objection; and (iii) all evidence in support of said
objection, and will be filed and served so as to be received on or
before Nov. 18, 2013, at 12:00 p.m., by (a) Debtors and Debtors'
counsel, (b) counsel for the Committee, (c) the United States
Trustee, (d) counsel for Huntington National Bank, and (e) all
parties requesting service of notice and other motions and
pleadings in these chapter 11 proceedings.
The sale hearing to consider the relief requested in the Sale
Motion and to consider whether to approve the bid(s) by the Buyer
or other Successful Bidder(s) will be held on Nov. 19, 2013, at
9:30 a.m.
A copy of the Sales Procedure Order is available at:
http://bankrupt.com/misc/d&l.doc270.pdf
About D & L Energy
D & L Energy, Inc., based in Youngstown, Ohio, was formed by David
DeChristofaro, Ben Lupo, and James Beshara in 1986 to be a
conventional oil and gas well operator and producer, primarily
targeting oil and gas reserves in the Clinton Sandstone formation
throughout Northeast Ohio and Northwest Pennsylvania. D&L
currently has three (3) shareholders, Ben Lupo (80.76%
shareholder), Susan Faith (15% shareholder), and Holly Serensky
Lupo (4.24% shareholder). Nicholas C. Paparodis is the acting CEO
and President of D&L. Kathy Kaniclides is the acting Secretary
and Treasurer of D&L. Currently, Serensky Lupo is the sole
director of D&L.
Petroflow, Inc., is an Ohio corporation which is a wholly owned
subsidiary of D&L. Originally intended to operate as the
"drilling arm" of D&L, Petroflow ceased all operations prior to
the filing of these bankruptcy matters. Petroflow has no current
income, no bank accounts, and no employees. Paparodis is the
president, CEO and sole director of Petroflow.
D&L and Petroflow filed for Chapter 11 bankruptcy (Bankr. N.D.
Ohio Lead Case No. 13-40813) on April 16, 2013. Judge Kay Woods
oversees the case. Brian T. Angeloni, Esq., Kathryn A. Belfance,
Esq., Steven Heimberger, Esq., and Todd A. Mazzola, Esq., at
Roderick Linton Belfance, LLP, serve as the Debtors' counsel, and
Walter Haverfield, LLP, is the environmental counsel. SS&G
Parkland Consulting, LLC, serves as financial advisor and
investment banker.
The Troubled Company Reporter reported on Oct. 22, 2013, the
Debtor disclosed in its amended schedules, $40,615,677 in assets
and $6,187,217 in liabilities as of the Chapter 11 filing.
Daniel M. McDermott, U.S. Trustee for Region 9, appointed seven
creditors to serve in the Official Committee of Unsecured
Creditors. Sherri Lynn Dahl, Esq., and Peter R. Morrison, Esq.,
at Squire Sanders (US) LLP, represent the Creditors Committee as
counsel. BBP Partners LLC serves as its financial advisors.
DELL INC: Moody's Lowers Pre-LBO Unsecured Debt Rating to 'B1'
--------------------------------------------------------------
Moody's Investors Service downgraded Dell Inc.'s pre leveraged
buyout (LBO) unsecured notes to B1 from Baa1 following the close
of the Dell LBO. This rating action concludes the review for
downgrade initiated on February 5, 2013 following the announcement
of a definitive agreement with founder Michael Dell and Silver
Lake to acquire Dell. In addition, the Ba3 rating for the second
lien notes was withdrawn as no such debt was raised as part of the
final debt structure. All other ratings of Dell Inc. and Dell
International LLC, a debt issuing subsidiary, and the stable
rating outlook remain unchanged.
For the unsecured notes that will be paid off with proceeds from
the LBO financing, the ratings will be withdrawn.
Ratings Rationale:
The Ba3 CFR reflects the high initial debt (gross reported debt of
about $18 billion; 6 times debt to EBITDA) arising from the LBO
debt combined with the challenges of the declining personal
computer (PC) industry, which still accounts for nearly half of
Dell's revenues. The increased debt burden will limit Dell's
financial flexibility, potentially hindering the company's ability
to transition more of its business to the faster growing and
potentially more profitable enterprise solutions from its core
hardware business.
Moody's could upgrade Dell's ratings if the company were to show
sustained revenue growth in the low single digits, operating
margins greater than 6%, free cash flow in excess of $2.5 billion,
and gross debt to EBITDA below 3.5 times. The rating could be
lowered with sustained erosion of market share, reported operating
profit margins lower than 2.5%, or contraction of the PC market
faster than anticipated. Also, any indications of any change from
Dell's intent to use the majority of free cash flow to reduce
debt, or that gross debt to EBITDA remains above 5 times beyond
fiscal 2015 could also pressure the rating down.
Rating downgraded:
Dell Inc.
Senior unsecured rating to B1 (LGD5, 73%) from Baa1
Rating withdrawn:
Dell International LLC
Second lien notes at Ba3 (LGD3, 44%)
Dell Inc. is one of the world's leading providers of personal
computers, servers, and related devices.
DELTATHREE INC: Obtains Rights to Software License From ACN
-----------------------------------------------------------
Pursuant to an Assignment and Assumption of Rights, Duties and
Interests Agreement between deltathree, Inc., and ACN Digital
Phone Services, Inc., a subsidiary of ACN, Inc., ACN Digital
assigned to the Company the licenses it acquired pursuant to that
certain Software License and Distribution Agreement between ACN
Digital and CounterPath Corporation subject to the finalization of
the terms of the Assignment. On Aug. 27, 2013, the Board of
Directors of the Company resolved that the consideration to be
paid by the Company to ACN Digital for the Assignment would be
equal to $287,000, which ACN Digital has informed the Company is
equal to ACN Digital's cost under the CounterPath Agreement, and
finalized the terms of the Assignment.
Each of Robert Stevanovski, Anthony Cassara and David Stevanovski,
members of the Company's Board of Directors, has an ownership
interest in, and a director, officer or advisory position with,
ACN. As a result of their relationship with ACN, each of these
individuals may be deemed to have a direct or indirect interest in
the transactions contemplated by the Assignment.
In accordance with the Company's Audit Committee Charter, on
Oct. 28, 2013, the payment of the Consideration and the
finalization of the terms of the Assignment were approved by the
Audit Committee, which includes those directors who are not
affiliated with ACN.
The amount of the Consideration will be added to the outstanding
amounts owed by the Company to ACN under, and will be paid in
accordance with, the Sales Agency Agreement between (inter alia)
the Company and ACN dated Sept. 27, 2010, as amended by that
certain Letter Amendment, dated as of April 1, 2012.
About deltathree
Based in New York, deltathree, Inc. (OTC QB: DDDC) --
http://www.deltathree.com/-- is a global provider of video and
voice over Internet Protocol (VoIP) telephony services, products,
hosted solutions and infrastructures for service providers,
resellers and direct consumers.
As of June 30, 2013, the Company had $1.33 million in total
assets, $7.69 million in total liabilities and a $6.36 million
total stockholders' deficiency.
Bankruptcy Warning
"In view of the Company's current cash resources, nondiscretionary
expenses, debt and near term debt service obligations, the Company
may begin to explore all strategic alternatives available to it,
including, but not limited to, a sale or merger of the Company, a
sale of its assets, recapitalization, partnership, debt or equity
financing, voluntary deregistration of its securities, financial
reorganization, liquidation and/or ceasing operations. In the
event that the Company requires but is unable to secure additional
funding, the Company may determine that it is in its best
interests to voluntarily seek relief under Chapter 11 of the U.S.
Bankruptcy Code. Seeking relief under the U.S. Bankruptcy Code,
even if the Company is able to emerge quickly from Chapter 11
protection, could have a material adverse effect on the
relationships between the Company and its existing and potential
customers, employees, and others. Further, if the Company was
unable to implement a successful plan of reorganization, the
Company might be forced to liquidate under Chapter 7 of the U.S.
Bankruptcy Code. There can be no assurance that exploration of
strategic alternatives will result in the Company pursuing any
particular transaction or, if the Company pursues any such
transaction, that it will be completed," the Company stated in the
quarterly report for the period ended June 30, 2013.
DELUXE CORP: S&P Raises Corp. Credit Rating to 'BB'
---------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Minn.-based customized printed products provider Deluxe
Corp. to 'BB' from 'BB-'. The outlook is stable.
At the same time, S&P revised its recovery rating on the company's
guaranteed senior notes to '3', indicating its expectation for
meaningful (50%-70%) recovery for noteholders in the event of a
payment default, from '4' (30%-50% recovery expectation). S&P
subsequently raised its issue-level rating on this debt to 'BB'
from 'BB-', in conjunction with its notching criteria.
In addition, S&P revised its recovery rating on the company's
senior notes to '4', indicating its expectation for average
(30%-50%) recovery for noteholders in the event of a payment
default, from '6' (0%-10% recovery expectation). S&P subsequently
raised its issue-level rating on this debt to 'BB' from 'B', in
conjunction with its notching criteria.
"The rating actions reflect our expectation for stable operating
performance, continued low leverage, moderate financial policy,
and further progress diversifying the business," said Standard &
Poor's credit analyst Peter Bourdon.
The rating on Deluxe Corp. reflects the intermediate- and long-
term risks the company's business segments face. In S&P's view,
Deluxe has a "weak" business risk profile, principally because of
the significant risk of continued secular declines related to
alternative forms of payments reducing check volumes and the still
keen competition in the check-printing sector. Year-to-date check
printing accounted for 55% of revenue, down from 59% last year.
S&P believes these trends will pressure Deluxe's organic revenue
growth and EBITDA margin over the next couple of years. However,
S&P expects growth in the company's non-check related marketing
solutions and other services to partially offset declines in check
volume. Relatively low leverage, at 1.7x, underpins S&P's view of
Deluxe's financial risk profile as "intermediate," based on its
criteria.
Deluxe is one of the largest U.S. providers of checks. The
company has three segments: Direct checks, small business
services, and financial services. S&P believes the decline in
check usage because of the continued adoption of electronic
payment methods will continue to hurt all three segments. S&P
expects check volume declines to continue at a mid-single-digit
percent rate, in line with recent trends. S&P also expects the
financial services segment to continue to face pressure from
consolidation among client financial institutions.
DETROIT, MI: Bankruptcy Eligibility Trial to Run Into November
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the trial on whether Detroit is eligible for
bankruptcy was supposed to end on Oct. 29. Instead, it will
continue on Nov. 4.
According to the report, the city's emergency manager, Kevyn Orr,
has been subjected to lengthy cross-examination by lawyers for
city workers and unions. He will take the witness stand once again
when the trial resumes. The workers' representatives say they will
call 15 witnesses to testify.
The trial adjourned until next week, the report related. Many
bankruptcy lawyers won't be available for the remainder of the
week to attend the year's largest bankruptcy convention.
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: Emergency Manager Says "Cram Down" a Possibility
-------------------------------------------------------------
Joseph Lichterman, writing for Reuters, reported that Detroit
Emergency Manager Kevyn Orr said on Oct. 29 he could force a
legally binding settlement on the city's creditors if they were
unwilling to accept a proposed restructuring plan in bankruptcy
court.
According to the report, the "cram down" provision of federal
bankruptcy law allows a judge to approve a plan of restructuring
over the objections of creditors, so long as at least one impaired
class of creditors votes to confirm it.
"We hope to reach a negotiated solution even now," Orr said as he
took the witness stand on the fifth day of a trial to determine
whether Detroit is eligible for Chapter 9 municipal bankruptcy,
the report related. "If we don't, we will address that situation
and certainly 'cram down' is an opportunity available to us."
If U.S. Bankruptcy Judge Steven Rhodes, who is overseeing the
case, finds Detroit eligible for bankruptcy, the city will need to
submit a plan of readjustment that must be approved by the court,
the report said.
Detroit filed the largest municipal bankruptcy in U.S. history on
July 18, the report recalled. But at a June 14 meeting with its
creditors, the city proposed offering its unsecured creditors, who
are owed about $11.9 billion, just pennies on the dollar through a
$2 billion note issue. Those creditors include city pension
funds, retirees, bondholders and bond insurers.
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: UAW Challenges City's Bid for Bar Date
---------------------------------------------------
Law360 reported that the United Auto Workers asked a Michigan
bankruptcy judge on Oct. 29 to deny the city of Detroit's bar date
motion, claiming that the bankrupt municipality is attempting to
block it from asserting claims on behalf of city workers related
to pension underfunding.
According to the limited objection filed by the union, Detroit's
Oct. 10 motion to set a bar date -- the deadline for all creditors
to claim they are owed money by the city -- is "nearly
incomprehensible," the report related.
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.
DIXIE CHEMICAL: Moody's Assigns 'B3' Corp. Family Rating
--------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating
("CFR") to Dixie Chemical Company, Inc. which will become a
subsidiary of GPH Operating Company LLC ("GPH"). Moody's also
assigned B2 and Caa2 ratings, respectively, to the company's
proposed first and second lien senior secured credit facilities.
Proceeds of a proposed $130 million first lien senior secured term
loan, proposed $45 million second lien senior secured term loan,
and a modest draw on a proposed $25 million first lien senior
secured revolving credit facility will refinance existing debt,
take out various co-investors, and fund a sponsor dividend to
consolidated the sponsor's ownership position at the fund level.
The rating outlook is stable.
"Bringing together three distinct businesses under one financing
structure provides some diversity but this is largely outweighed
by the small size of the individual businesses; additionally the
leveraging aspect of the transaction and modest anticipated free
cash flow drive the B3 rating assignment," said Ben Nelson,
Moody's Assistant Vice President and lead analyst for Dixie.
Actions:
Issuer: Dixie Chemical Company Inc.
-- Corporate Family Rating, Assigned B3
-- Probability of Default Rating, Assigned B3-PD
-- $25 million first lien senior secured revolving credit
facility due 2018, Assigned B2 (LGD3 38%)
-- $130 million first lien senior secured term loan B due 2019,
Assigned B2 (LGD3 38%)
-- $45 million second lien senior secured term loan due 2020,
Assigned Caa2 (LGD5 85%)
-- Outlook, Stable
The assigned ratings are first-time ratings on Dixie and first-
time ratings for a portfolio company of Chicago-based Glencoe
Capital. The ratings remain subject to Moody's review of the
final terms and conditions of the proposed transaction and all
related credit documentation. GPH is a holding company that will
own the three remaining portfolio companies of Glencoe's Fund III,
which the fund has owned since at least 2006, and will become
joint and several borrowers under the proposed credit facilities.
The borrowers include Dixie, Child Development Schools, Inc.
("CDS"), and Polyair Corporation ("Polyair"). Audited financial
statements will be provided for each of these entities or related
holding companies, but not at the GPH level. For this reason,
Moody's has assigned the CFR to Dixie, the largest of the three
co-borrowers. The ratings and rating analysis covers all three co-
borrowers on a consolidated basis,
Rating Rationale:
Moody's views the three co-borrowers as distinct and separable
businesses with little opportunity for synergies, and expects this
will remain the case in the intermediate term. Dixie produces
small-volume intermediate chemicals, including thermoset
materials, paper sizing chemicals, and fuel and lubricant
additives, from a single facility near Houston, Tex. These are not
high-growth products, but profitability is sufficient to enable
this business to generate free cash flow and current operating
rates leave sufficient capacity to support growth if the company
is able to pick up market share or enter new products. CDS
operates over 200 pre-schools mostly in the southeastern United
States. Growth in this business is likely to come through
acquisitions and could outpace CDS' internally-generated cash
flow. CDS is also exposed to margin compression risk related to
the upcoming implementation of the Affordable Care Act. Polyair
produces protective packaging, mostly bubble wrap and foam
products, in a very competitive market and has not generated
substantive free cash flow in recent years.
Moody's does not anticipate meaningful near-term deleveraging due
to the expectation for acquisitions related to the CDS business.
Deleveraging could occur in the event that the company does not
find suitable acquisition targets. Moody's estimates initial pro-
forma adjusted leverage in the low 5 times range (Debt/EBITDA) and
expects retained cash flow will run near 10% of debt, much of it
from the chemical operations. An acquisitive growth strategy in
the preschool business is likely to consume a significant portion
of free cash flow and limit prospects for debt reduction. The
interdependent nature of the anticipated growth strategy heightens
Moody's concern about the single site nature of the chemical
operations, especially considering Moody's view that the low-
margin packaging business is unlikely to generate meaningful free
cash flow in the intermediate term. Indeed, these factors
necessitate that the company maintain strong credit metrics for
its rating category.
The B3 CFR is constrained primarily by a leveraged balance sheet,
cyclicality and limited organic growth prospects in the chemicals
and packaging businesses, acquisitive growth model of the
preschool business, and aggressive financial policies
characterized by a debt-funded consolidation of control. Pro-forma
credit metrics are adequate for the rating category, but cash flow
available for debt repayment is likely to be limited. Business and
end market diversity, expectations for modestly-positive
discretionary cash flow, and adequate liquidity support the
rating. The rating also assumes that the proposed credit agreement
will not allow the company to sell Dixie or CDS without lender
consent.
The stable rating outlook assumes that the company will continue
to improve its operations, maintain adequate liquidity, and
generate modest free cash flow. Moody's could upgrade the rating
with expectations for financial leverage sustained below 5 times
and free cash flow sustained in the mid-to-upper single digit
range as a percentage of debt. Conversely, Moody's could downgrade
the rating with expectations for negative free cash flow or a
deteriorating liquidity position. An adverse change in the
composition or margin profile of the business could also have
negative rating implications.
Dixie Chemical Company, Inc. is a subsidiary of GPH Operating LLC.
GPH is a holding company that owns Dixie Chemical Company, Inc.,
Child Development Schools, Inc., and Polyair Corporation. GPH is
owned by Glencoe Capital. Taken together, these businesses
generated approximately $365 million of revenue for the twelve
months ended June 30, 2013.
EDGMONT GOLF CLUB: Seeks to Use Cash Collateral to Operate
----------------------------------------------------------
Edgmont Golf Club, Inc., and Edgmont County Club seek authority
from the U.S. Bankruptcy Court for the Eastern District of
Pennsylvania to use cash collateral in order to continue to
conduct their business, including making payroll that is due and
payable on Nov. 1, 2013.
As of the Petition Date, the Debtors had secured obligations of
approximately $2.3 million comprised of three credit facilities
from PNC Bank, N.A. According to Aris J. Karalis, Esq., at
Maschmeyer Karalis P.C., in Philadelphia, Pennsylvania, certain of
the PNC loan documents reflect a grant of security interest in
accounts. However, the Debtors' search has revealed no recorded
UCC-1 financing statement in favor of PNC Bank that includes
accounts. Therefore, it appears that PNC Bank does not hold a
perfected security interest in the Debtors' accounts and therefore
no interest in cash collateral.
If PNC has a perfected security interest in cash collateral, the
Debtors will have discussions with PNC to reach a consensual
agreement on the use of cash collateral.
About Edgmont Golf Club
Edgmont Golf Club sought protection under Chapter 11 of the
Bankruptcy Code on Oct. 28, 2013 (Bankr. E.D.Pa. Case No. 13-
19358). The case is before Judge Stephen Raslavich.
Aris J. Karalis, Esq., and Robert W. Seitzer, Esq., at MASCHMEYER
KARALIS P.C., in Philadelphia, Pennsylvania, serve as counsel.
The Debtor disclosed estimated assets ranging from $10 million to
$50 million and liabilities ranging from $1 million to
$10 million. The petition was signed by Peter Mariani, chief
financial officer.
EDGMONT GOLF CLUB: Employs Maschmeyer Karalis as Bankr. Counsel
---------------------------------------------------------------
Edgmont Golf Club, Inc., and Edgmont County Club seek authority
from the U.S. Bankruptcy Court for the Eastern District of
Pennsylvania to employ Maschmeyer Karalis P.C. as bankruptcy
counsel, to be paid the following hourly rates:
Shareholders $500
Associates $190-$420
Paralegals $120
Aris J. Karalis, Esq., a shareholder at Maschmeyer Karalis P.C.,
in Philadelphia, Pennsylvania, 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. On Oct. 25, 2013, MK received a
retainer from the Debtors in an amount of $65,000. On or within
90 days before the Petition Date, MK received no other payments
from the Debtors that aggregate more than the $6,225 cap put forth
in Section 547(c)(9) of the Bankruptcy Code.
About Edgmont Golf Club
Edgmont Golf Club sought protection under Chapter 11 of the
Bankruptcy Code on Oct. 28, 2013 (Bankr. E.D.Pa. Case No. 13-
19358). The case is before Judge Stephen Raslavich.
The Debtor disclosed estimated assets ranging from $10 million to
$50 million and liabilities ranging from $1 million to
$10 million. The petition was signed by Peter Mariani, chief
financial officer.
ENERGY FUTURE: Plans $270MM Debt Payments to Avoid Bankruptcy
-------------------------------------------------------------
Mike Spector and Emily Glazer, writing for The Wall Street
Journal, reported that the Texas utility at the center of a record
private-equity buyout plans to make a debt payment that would
stave off until next year one of the largest bankruptcy filings,
said people close to the situation.
According to the report, Energy Future Holdings Corp. is likely to
pay roughly $270 million owed to bondholders at Texas Competitive
Electric Holdings Co., the company's unregulated subsidiary that
sells power in a competitive wholesale market, the people said.
If the payment is made as planned, Energy Future, formerly TXU
Corp., likely won't file for bankruptcy protection until at least
early 2014, the people said, the report related. The company has
more than $40 billion in debt.
The payment isn't due until Friday, Nov. 1, so the company could
change course and seek bankruptcy protection if it reaches a last-
minute deal with creditors on a prearranged restructuring plan,
the people said, the report added. But the company's board met
throughout the day on Wednesday and was leaning toward making the
payment, they said.
It is also possible the company will make the payment later than
Nov. 1 during a grace period, some of the people said, but such a
move could create other consequences the company would have to
reckon with, the report said.
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.
ENERGY FUTURE: Group Seeks $60-Mil. Cleanup Bond for Luminant Mine
------------------------------------------------------------------
Law360 reported that a citizens group on Oct. 28 asked the Texas
Railroad Commission to require an Energy Future Holdings Corp.
subsidiary to post a $60 million cash bond for the cleanup of one
of its coal mines, contending the company's expected bankruptcy
makes it a financial risk.
According to the report, Neighbors for Neighbors Inc., which
includes Central Texas residents who live near Luminant Mining
LLC's Three Oaks Mine, wants the RRC to hold a contested case
hearing akin to a mini-trial on Luminant's application to revise
its surface mining permit.
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.
EXIDE TECHNOLOGIES: Hires Newmark Grubb as Real Estate Consultant
-----------------------------------------------------------------
Exide Technologies Inc. seeks authorization from the U.S.
Bankruptcy Court for the District of Delaware to employ Newmark
Midwest Region, LLC dba Newmark Grubb Knight Frank as real estate
consultant, nunc pro tunc to Oct. 1, 2013.
Newmark Grubb will provide the services, at the Debtor's sole and
exclusive direction, which shall include, but are not limited to:
(a) negotiate agreements with landlords for extensions to the
time frame for Debtor to assume or reject leases;
(b) negotiate with landlords, individual or multi-site, and
their agents with respect to lease modifications and
present proposed transactions for the Debtor's approval;
(c) assist the Debtor in implementing and negotiating lease
restructures;
(d) provide general lease restructuring advice, including
forming broker opinions of value, writing recommendation
reports and landlord letters;
(e) assist in communication and negotiation with the Debtor's
constituents, including creditors, employees, vendors,
shareholders, and interested parties in connection with the
Chapter 11 Case relative to the Debtor's leases;
(f) negotiate with and soliciting offers from prospective
relocation alternatives;
(g) negotiate sales of certain owned properties; and
(h) any other service set forth in the Engagement Letter.
The Debtor has agreed to pay Newmark Grubb under the fee and
expense structure set forth in the Engagement Letter.
Specifically:
-- if Newmark Grubb negotiates a lease modification that
results in a rent reduction to the Debtor, Newmark Grubb
will be entitled to an amount equal to 7.5% of the Total
Cash Savings to be realized by the Debtor for any term,
including option periods that are exercised and become firm
term;
-- in the event that options are added to the lease as
approved and agreed by the Debtor, but not exercised,
Newmark Grubb shall earn an incentive fee equal to 7.5%
of Total Cash Savings calculated by taking the difference
between the rental rate at the end of the lease and rental
rate for the options, multiplied by the number of years in
the options periods;
-- in the event that Newmark Grubb completes a lease
renewal, for a lease in which no options remain and thus
Newmark Grubb negotiates a new deal, said opportunities
will be evaluated and invoiced on a market-by-market and
case-by-case basis subject to the Debtor's prior approval
since commissions vary from market to market. In many
instances, the landlord will pay this fee;
-- if the Debtor assumes and assigns a lease, Newmark Grubb
shall earn an incentive fee equal to 7.5% of the lease sale
price to the assignee;
-- should the Debtor engage Newmark Grubb to assist with
subleasing space, the incentive fee would be equal to 6% of
gross rent for the entire term of the sublease;
-- in the event that the Company, in its sole discretion,
engages Newmark Grubb to sell any U.S. real property, the
incentive fee would be 6% of the gross sales price;
-- Total Cash Savings, for the purposes of this Application,
will be calculated by taking (i) the difference between (a)
the Debtor's Total Financial Obligation (as defined below)
for the then current lease term as of the Petition Date,
prior to any reduction negotiated by Newmark Grubb, and
(b) the Debtor's Total Financial Obligation for the then
current lease term negotiated by Newmark Grubb, plus (ii)
any landlord capital contribution resulting from the
negotiated lease, the use and or application of which is in
the full discretion of the Debtor; and
-- for purposes of the above calculation, Total Financial
Obligations will be comprised of the following items to the
extent they are required to be paid to the landlord under
the applicable lease: base rent, common area expenses,
property taxes, insurance, and any fixed rate rent
adjustments.
Newmark Grubb will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Steven Monroe, executive managing director and co-chair of the
corporate lease restructuring group of Newmark Grubb, 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 Court will hold a hearing on the employment application on
Nov. 14 at 10:00 a.m. Objections, if any, are due Nov. 7 at 4:00
p.m.
Newman Grubb can be reached at:
Steven J. Monroe
NEWMARK GRUBB KNIGHT FRANK
500 W Monroe St., Suite 2900
Chicago, IL 60661
Tel: (312) 224-3123
E-mail: smonroe@ngkf.com
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.
FIRST DATA: Incurs $220 Million Net Loss in Third Quarter
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First Data Corporation reported a net loss attributable to the
Company of $219.5 million on $2.71 billion of revenues for the
three months ended Sept. 30, 2013, as compared with a net loss
attributable to the Company of $212 million on $2.67 billion of
revenues for the same period during the prior year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss attributable to the Company of $746 million on $8.01
billion of revenues as compared with a net loss attributable to
the Company of $521.9 million on $7.92 billion of revenues for the
same period a year ago.
The Company's balance sheet at Sept. 30, 2013, showed $36.84
billion in total assets, $34.97 billion in total liabilities,
$67.9 million in redeemable noncontrolling interest, and
$1.79 billion in total equity.
"We introduced a new point-of-sale solution earlier this month at
the Money2020 conference in Las Vegas - CloverTM Station," said
First Data CEO Frank Bisignano. "Clover Station not only
represents nine months of dedicated engineering focus, but also
further demonstrates that First Data is committed to innovate with
our clients, incubate new technologies with developers, and drive
greater business success for our clients and partners."
A copy of the press release is available for free at:
http://is.gd/esPQA7
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 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.
FIRST DATA: Fitch Rates New Sr. Subordinated Notes at 'CCC'
-----------------------------------------------------------
Fitch Ratings has assigned a 'CCC/RR6' rating to First Data Corp's
(FDC) proposed senior subordinated note offering. Proceeds from
the offering will be used to refinance a portion of the company's
$1.75 billion 11.25% senior subordinated notes due 2016.
Rating Drivers:
From an operational perspective, Fitch believes core credit
strengths include:
-- Stable end-market demand with below-average susceptibility to
economic cyclicality;
-- A highly diversified, global and stable customer base
consisting principally of millions of merchants and large
financial institutions;
-- A significant advantage in scale of operations and
technological leadership which positively impact the company's
ability to maintain its leading market share and act as
barriers to entry to potential future competitors. In
addition, FDC's financial services (FS) business benefits from
long-term customer contracts and generally high switching
costs;
-- Low working capital requirements typically enable a high
conversion of EBITDA less cash interest expense into cash from
operations.
Fitch believes operational credit concerns include:
-- Mix shift in the RAS segment, including a shift in consumer
spending patterns favoring large discount retailers, has
negatively affected profitability and revenue growth and could
lead to greater than anticipated volatility in results;
-- High fixed cost structure with significant operating leverage
would typically drive volatility in profitability during
business and economic cycles;
-- Consolidation in the financial services industry and changes
in regulations could continue to negatively impact results in
the company's FS segment;
-- Potential for new competitive threats to emerge over the long
term including new payment technology in the RAS segment, the
potential for a competitor to consolidate market share in the
RAS segment, and the potential for historically niche
competitors in the FS segment to move upstream and challenge
FDC's relative dominance in card processing for large
financial institutions.
From a financial perspective, Fitch believes core credit strengths
include expectations that the company will use the majority of
excess free cash flow (FCF) for debt reduction. Credit concerns
include a highly levered balance sheet that results in minimal
financial flexibility and reduces the company's ability to act
strategically in a business that has historically benefited from
consolidation opportunities.
Liquidity as of Sept. 30, 2013 was solid with cash of $358.6
million, $91 million of which was available to the company in the
U.S. FDC has a $1 billion senior secured revolving credit facility
which expires September 2016 and had $873 million of available
borrowing capacity. Fitch estimates that FDC generated
approximately $56 million in FCF over the LTM period which further
adds to liquidity.
Total debt as of Sept. 30, 2013 was $22.8 billion, which includes
approximately $15.7 billion in secured debt, $4.6 billion in
unsecured debt and $2.5 billion in subordinated debt (all figures
approximate).
Fitch currently rates FDC as follows:
-- Long-term IDR 'B';
-- $1 billion senior secured revolving credit facility expiring
September 2016 'BB-/RR2';
-- $2.7 billion senior secured term loan B due 2017 'BB-/RR2';
-- $4.7 billion senior secured term loan B due 2018 'BB-/RR2';
-- $1 billion senior secured term loan B due 2018 'BB-/RR2';
-- $1.6 billion 7.375% senior secured notes due 2019 'BB-/RR2';
-- $510 million 8.875% senior secured notes due 2020 'BB-/RR2';
-- $2.2 billion 6.75% senior secured notes due 2020 'BB-/RR2';
-- $2 billion 8.25% junior secured notes due 2021 'CCC+/RR6';
-- $1 billion 8.75%/10% PIK Toggle junior secured notes due 2022
'CCC+/RR6';
-- $815 million 10.625% senior unsecured notes due 2021
'CCC+/RR6';
-- $785 million 11.25% senior unsecured notes due 2021
'CCC+/RR6';
-- $3 billion 12.625% senior unsecured notes due 2021 'CCC+/RR6';
-- $1.75 billion 11.25% senior subordinated notes due 2016
'CCC/RR6';
-- $750 million 11.75% senior subordinated notes due 2021
'CCC/RR6'.
The Rating Outlook is Stable.
The Recovery Ratings (RRs) for FDC reflect Fitch's recovery
expectations under a distressed scenario, as well as Fitch's
expectation that the enterprise value of FDC, and hence recovery
rates for its creditors, will be maximized in a restructuring
scenario (as a going concern) rather than a liquidation scenario.
In deriving a distressed enterprise value, Fitch applies a 15%
discount to FDC's estimated operating EBITDA (adjusted for equity
earnings in affiliates) of approximately $2.4 billion for the LTM
ended Sept. 31, 2012 which is equivalent to Fitch's estimate of
FDC's total interest expense and maintenance capital spending.
Fitch then applies a 6x distressed EBITDA multiple, which
considers FDC's prior public trading multiple and that a stress
event would likely lead to multiple contraction. As is standard
with Fitch's recovery analysis, the revolver is fully drawn and
cash balances fully depleted to reflect a stress event. The 'RR2'
for FDC's secured bank facility and senior secured notes reflects
Fitch's belief that 71%-90% recovery is realistic. The 'RR6' for
FDC's second lien, senior and subordinated notes reflects Fitch's
belief that 0%-10% recovery is realistic. The 'CCC/RR6' rating for
the subordinated notes reflects the minimal recovery prospects and
inherent subordination in a recovery scenario.
Rating Sensitivities:
Future developments that may, individually or collectively, lead
to positive rating action include:
-- Greater visibility and confidence in the potential for the
company to access the public equity markets.
Future developments that may, individually or collectively, lead
to negative rating action include:
-- If FDC were to experience sustained market share declines or
if typical price compression accelerates;
-- If the U.S. economy were to experience a sustained recession.
FIRST DATA: S&P Affirms 'CCC+' Rating on $750MM Subordinated Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services said its issue-level rating on
First Data Corp.'s $750 million subordinated notes due 2021
remains 'CCC+' following the company's announcement to upsize the
notes. S&P's recovery rating on this debt remains '6', indicating
its expectation for negligible (0% to 10%) recovery for lenders in
the event of a payment default.
The company intends to use the proceeds from the proposed notes
add-on for the repayment of a like amount of existing subordinated
notes due 2016.
S&P's 'B' corporate credit rating and stable outlook on First Data
reflect its "strong" business risk profile and "highly leveraged"
financial risk profile, according to its criteria. S&P views the
business risk profile as strong because of the company's leading
market presence as a provider of payment processing services for
merchants and financial institutions. The highly leveraged
financial risk profile reflects the company's debt-to-EBITDA ratio
that remains very high for the rating, at about 10x as of
Sept. 30, 2013. Given S&P's expectations for revenue and EBITDA
growth, it do not expect material improvement in credit metrics
over the coming year.
RATINGS LIST
First Data Corp.
Corporate Credit Rating B/Stable/--
Ratings Unchanged
First Data Corp.
Subordinated notes due 2021 CCC+
Recovery Rating 6
FNB CORP: Moody's Rates Non-Cumulative Preferred Stock 'Ba3(hyb)'
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Moody's Investors Service assigned a Ba3 (hyb) rating to the non-
cumulative perpetual preferred stock issued by F.N.B. Corporation
(FNB; long-term issuer rating of Baa3). The outlook on the
preferred stock rating is stable, consistent with the outlook on
the debt ratings of FNB and its lead bank, First National Bank of
Pennsylvania (standalone bank financial strength rating/baseline
credit assessment of C-/baa2 and long-term/short-term deposit
ratings of Baa2/Prime-2).
Ratings Rationale:
Moody's said that FNB's non-cumulative perpetual preferred stock
rating reflects the rating agency's normal notching practices.
FREDERICK'S OF HOLLYWOOD: Mayer Hoffman Raises Going Concern Doubt
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Frederick's of Hollywood Group Inc. filed with the U.S. Securities
and Exchange Commission on Oct. 25, 2013, its annual report on
Form 10-K for the year ended July 27, 2013.
Mayer Hoffman McCann expressed substantial doubt about the
Company's ability to continue as a going concern, citing the
company has suffered recurring losses from continuing operations,
has negative cash flows from operations, has a working capital and
a shareholders' deficiency at July 27, 2013.
The Company reported a net loss of $22,522,000 on $86,507,000 of
net sales in 2013, compared with a net loss of $6,432,000 in 2012.
The Company incurred a net loss of $6.43 million on $111.40
million of net sales for the year ended July 28, 2012, compared
with a net loss of $12.05 million on $119.61 million of net sales
for the year ended July 30, 2011. As of April 27, 2013, the
Company had $36.08 million in total assets, $46.35 million in
total liabilities and a $10.27 million total shareholders'
deficiency.
A copy of the Form 10-K is available at:
http://is.gd/o5SROh
About Frederick's of Hollywood
Frederick's of Hollywood Group Inc. (NYSE Amex: FOH) --
http://www.fredericks.com/-- through its subsidiaries, sells
women's intimate apparel, swimwear and related products under its
proprietary Frederick's of Hollywood brand through 122 specialty
retail stores, a world-famous catalog and an online shop.
Frederick's of Hollywood sought bankruptcy in July 10, 2000. On
Dec. 18, 2002, the court approved the company's plan of
reorganization, which became effective on Jan. 7, 2003, with the
closing of the Wells Fargo Retail Finance exit financing facility.
FRESH & EASY: Schedules Filing Deadline Extended to Nov. 14
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Fresh & Easy Neighborhood Market Inc., et al., sought and obtained
approval from the U.S. Bankruptcy Court for the District of
Delaware to extend until Nov. 14, 2013, the deadline by which they
must file their schedules of assets and liabilities, and
statements of financial affairs.
The additional time will help ensure that the relevant information
is fully processed through the Debtors' information system and can
be incorporated into the relevant schedules, Paul D. Leake, Esq.,
at Jones Day, in New York, explained. Rushing to complete the
Schedules and Statements soon after the Petition Date would likely
compromise the completeness and accuracy of the Schedules and
Statements, Mr. Leake said.
About Fresh & Easy Neighborhood Market Inc.
Fresh & Easy Neighborhood Market Inc., and its affiliate filed
Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-12569 and
13-12570) on Sept. 30, 2013. The petitions were signed by James
Dibbo, chief financial officer. Judge Kevin J. Carey presides
over the case.
Fresh & Easy owes $738 million to Cheshunt, England-based Tesco,
the U.K.'s biggest retailer. Fresh & Easy never made a profit and
lost an average of $22 million a month in the 12 months ended in
February, according to court papers.
Jones Day serves as lead bankruptcy counsel. Richards, Layton &
Finger, P.A., serves as local Delaware counsel. Alvarez & Marsal
North America, LLC, serves as financial advisors, and Alvarez &
Marsal Securities, LLC, serves as investment banker. Prime Clerk
LLC acts as the Debtors' claims and noticing agent. The Debtors
estimated assets of at least $100 million and liabilities of at
least $500 million.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five
creditors to serve in the Official Committee of Unsecured
Creditors in the Chapter 11 cases of Fresh & Easy Neighborhood
Market Inc., et al.
GATEHOUSE MEDIA: IRS Objects to Prepackaged Plan
------------------------------------------------
BankruptcyData reported that the Internal Revenue Service filed
with the U.S. Bankruptcy Court an objection to GateHouse Media's
Joint Prepackaged Chapter 11 Plan.
The IRS asserts, "IRS objects to the third party non-debtor
limitation of liability, exculpation, injunction and release
provisions set forth in Article VIII of the Plan. The injunction
provisions violate the Anti-Injunction Act, I.R.C. Section
7421(a)...Section 524(e) of the Bankruptcy Code addresses the
scope of a bankruptcy discharge and states, in relevant part, that
'discharge of a debt of the debtor does not affect the liability
of any other entity on, or the property of any other entity for
such debt.' The Bankruptcy Code contemplates that a discharge only
affects the debts of those submitting to its burdens. The weight
of case authority is consistent with the view that provisions that
affect a discharge of non-debtor liability run afoul of the
limitations on discharge set forth in Section 524(e) of the
Bankruptcy Code....IRS objects to the Plan to the extent it fails
to preserve the setoff and recoupment rights of the IRS.
Confirmation of a plan does not extinguish setoff claims when they
are timely asserted...Like other creditors, the United States has
the common law right to setoff mutual debts. 'The government has
the same right which belongs to every creditor, to apply the
unappropriated moneys of his debtor, in his hands, in
extinguishment of the debts due to him.' Hence, the United States
can setoff mutual prepetition debts and claims as well as post-
petition debts and claims...The Plan makes no provision for these
rights. Such treatment is impermissible, because Section 553 of
the Bankruptcy Code preserves the right of setoff in bankruptcy as
it exists outside bankruptcy....Wherefore, IRS respectfully
requests that the Court deny confirmation of the Plan and grant
other and further relief as the Court deems necessary and just."
About GateHouse Media
GateHouse Media, Inc. -- http://www.gatehousemedia.com/--
headquartered in Fairport, New York, is one of the largest
publishers of locally based print and online media in the United
States as measured by its 97 daily publications. GateHouse Media
currently serves local audiences of more than 10 million per week
across 21 states through hundreds of community publications and
local Web sites.
As of June 30, 2013, the Company had $433.70 million in total
assets, $1.28 billion in total liabilities and a $848.85 million
total stockholders' deficit.
GateHouse Media and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Case No. 13-12503, Bankr. D.Del.) on
Sept. 27, 2013. The case is assigned to Judge Mary F. Walrath.
The Debtors are represented by Patrick A. Jackson, Esq., and
Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware. Their financial advisor is Houlihan
Lokey Capital, Inc. Epiq Bankruptcy Solutions, LLC, serves as
their claims and noticing agent.
GATEHOUSE MEDIA: Gets Approval to Tap Hilco as Real Estate Advisor
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The U.S. Bankruptcy Court for the District of Delaware authorized
Gatehouse Media, Inc., et al., to employ Hilco Real Estate, LLC,
as their real estate advisor.
As reported in the Troubled Company Reporter on Oct. 11, 2013,
Hilco will provide services described in two engagement
agreements. The first agreement pertains to Hilco's services with
respect to the Debtors' lease for property in Downers Grove,
Illinois, and the second agreement pertains to the firm's services
with respect to the Debtors' other leased properties, which
initially identifies 10 properties. The agreements provide, among
other things, that Hilco will mutually agree with the Debtors with
respect to a strategic plan for the restructuring of each lease.
The Debtors paid Hilco an upfront fee of $15,000 under the Downers
Grove Agreement. Further, under the Downers Grove Agreement, if
the Debtors enter into a transaction during the term with the
Downers Grove landlord with the effect of modifying the lease,
Hilco will be paid an additional fee of $45,000.
Moreover, for each lease under the 10-Lease Agreement that becomes
a restructured lease, Hilco will earn a fee equal to $2,500 plus
8.5% of the restructured lease savings. Pursuant to the terms of
the 10-Lease Agreement, Hilco was provided a retainer in the
amount of $35,000 to be applied on a dollar for dollar basis
against fees earned under the 10-Lease Agreement.
About GateHouse Media
GateHouse Media, Inc. -- http://www.gatehousemedia.com/--
headquartered in Fairport, New York, is one of the largest
publishers of locally based print and online media in the United
States as measured by its 97 daily publications. GateHouse Media
currently serves local audiences of more than 10 million per week
across 21 states through hundreds of community publications and
local Web sites.
As of June 30, 2013, the Company had $433.70 million in total
assets, $1.28 billion in total liabilities and a $848.85 million
total stockholders' deficit.
GateHouse Media and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Case No. 13-12503, Bankr. D.Del.) on
Sept. 27, 2013. The case is assigned to Judge Mary F. Walrath.
The Debtors are represented by Patrick A. Jackson, Esq., and
Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware. Their financial advisor is Houlihan
Lokey Capital, Inc. Epiq Bankruptcy Solutions, LLC, serves as
their claims and noticing agent, and administrative advisor.
Hilco serves as their real estate advisor.
GATEHOUSE MEDIA: Epiq Approved as Administrative Advisor
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Gatehouse Media, Inc., et al., to employ Epiq Bankruptcy
Solutions, LLC, as administrative advisor.
In connection with its services as administrative advisor, Epiq
will be paid based on these rates:
Executive Vice President $225
Communications Counselor $225
Sr. Managing Consultant/
Vice President/Director $225
Senior Consultant $175-$220
Senior Case Manager $100-$140
IT/Programming $80-$150
Case Manager $60-$95
Clerical/Administrative Support $35-$50
The firm will also be reimbursed for any necessary out-of-pocket
expenses.
As reported in the Troubled Company Reporter on Oct. 11, 2013,
the Debtors sought and obtained authority from the Court to employ
Epiq as their claims and noticing agent.
About GateHouse Media
GateHouse Media, Inc. -- http://www.gatehousemedia.com/--
headquartered in Fairport, New York, is one of the largest
publishers of locally based print and online media in the United
States as measured by its 97 daily publications. GateHouse Media
currently serves local audiences of more than 10 million per week
across 21 states through hundreds of community publications and
local Web sites.
As of June 30, 2013, the Company had $433.70 million in total
assets, $1.28 billion in total liabilities and a $848.85 million
total stockholders' deficit.
GateHouse Media and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Case No. 13-12503, Bankr. D.Del.) on
Sept. 27, 2013. The case is assigned to Judge Mary F. Walrath.
The Debtors are represented by Patrick A. Jackson, Esq., and
Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware. Their financial advisor is Houlihan
Lokey Capital, Inc. Epiq Bankruptcy Solutions, LLC, serves as
their claims and noticing agent, and administrative advisor.
Hilco serves as their real estate advisor.
GELT PROPERTIES: Plan Outline Hearing Moved to Dec. 19
------------------------------------------------------
The hearing to consider the adequacy of the Disclosure Statement
describing the Chapter 11 Plan filed by Gelt Properties, LLC, et
al., has been further moved to Dec. 19, 2013, at 11:00 a.m. The
adequacy hearing has been adjourned several times.
The Bankruptcy Court will be reviewing the Third Amended
Disclosure Statement, which was filed by the Debtors on Oct. 22,
2013.
Consistent with older versions, the Third Amended Disclosure
Statement reiterates that the Plan contemplates that all assets of
the Debtors will be sold and liquidated, rented or leased,
developed and maintained, in the ordinary course of the Debtors'
business. The Debtors note that the Plan envisions the
utilization of management talents, commitment and an existing
infrastructure to restructure existing debt, liquidate
unprofitable properties and meaningfully shift focus to its
growing REO portfolio. Specifically, the Debtors project that
they will increase rental income, decrease carrying costs for
unprofitable properties, decrease maintenance costs for
unprofitable properties and emerge leaner, more focused
reorganized Debtors. The Debtors also expect fewer foreclosures
moving forward and thus reduce annual foreclosure costs line item
in its projections.
As with other Plan versions, the Amended Plan designates and
provides treatment for 16 classes of claim and one class of
interest holders. Under the Third Amended Plan, Class 15 general
unsecured creditors will receive a pro rata share of the Debtors'
assets after payment of claims having priority over Class 15
allowed claims. Total distributions to this class will be a
minimum of $150,000 within 24 months of the Effective Date.
A full-text copy of the Third Amended Disclosure Statement dated
Oct. 22 is available for free at:
http://bankrupt.com/misc/GELTProperties_3rdDS.PDF
About Gelt Properties
Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC,
and affiliate Gelt Financial Corporation borrow money from
traditional lenders and make loans to commercial borrowers. They
also acquire and manage real estate. Gelt Properties and Gelt
Financial filed for (Bankr. E.D. Pa. Case Nos. 11-15826 and
11-15826) on July 25, 2011. Judge Magdeline D. Coleman presides
over the cases.
William John Baldini, Esq., Albert A. Ciardi, III, Esq., Jennifer
E. Cranston, Esq., Daniel S. Siedman, Esq., and Jennifer C.
McEntee at Ciardi Ciardi & Astin, in Philadelphia, Pa.; Thomas
Daniel Bielli, Esq., at O'Kelly Ernst & Bielli, LLC, in
Philadelphia, Pa.; Janet L. Gold, Esq., at Eisenberg, Gold &
Cettei, P.C., in Cherry Hill, N.J.; David A. Huber, Esq., at
Benjamin Legal Services, in Philadelphia, Pa.; Alan L. Nochumson,
Esq., at Nochumson PC, in Philadelphia, Pa.; Axel A. Shield, II,
Esq., of Huntington Valley, Pa., serve as counsel for Debtor Gelt
Properties, LLC.
Ciardi Ciardi & Astin also represents Debtor Gelt Financial
Corporation as counsel.
Gelt Properties disclosed $4.73 million in assets and
$4.84 million in liabilities as of the Chapter 11 filing. Its
affiliate, Gelt Financial has scheduled $20.3 million in assets
and $17.05 million in liabilities as of the Chapter 11 filing.
Paul J. Schoff, Esq., and Francis X. Gorman, Esq., at Schoff
McCabe, P.C., represent the Unsecured Creditors' Committee.
Craig Howe, CPA, and Howe, Keller & Hunter, P.C., serve as the
Committee's accountants.
GENERAL MOTORS: Profit Drops on Stock Buyback Charge
----------------------------------------------------
Jeff Bennett, writing for The Wall Street Journal, reported that
General Motors Co. reported a 6% drop in its third quarter net
income, but operating results beat analyst expectations as
stronger profit in North America and narrower loses in Europe
offset weakness in its international division.
According to the report, the No. 1 U.S. auto maker on Oct. 30
reported a profit of $1.72 billion for the July to September
period, before the payout of preferred dividends, compared with
$1.83 billion a year earlier. Wall Street, however, focused
primarily on the 96 cents a share GM earned excluding some
charges. That beat the average analyst estimate of 94 cents a
share. Revenue rose to $39 billion from $37.6 billion.
GM's results were lifted by stronger profit margins in North
America and a narrower loss in Europe, the report said. But
operating profit in international operations dropped about 60% to
$299 million. It's the second straight quarter of softness for
the division. GM's international operations, including Southeast
Asia, Australia, India and other markets, would have posted a loss
of about $100 million without profits from joint ventures in
China.
Chief Financial Officer Dan Ammann said the financial challenges
in GM International Operations will continue for the next few
quarters, although he declined to provide specifics of the
problems.
"Outside of China in some markets we continue to have some
challenges," Mr. Ammann said in a briefing for reporters, the
report cited. "Some challenges are industry related and some
challenges are execution-related that we are working through."
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of
the world's largest automakers, traces its roots back to 1908.
GM employs 208,000 people in every major region of the world and
does business in more than 120 countries. GM and its strategic
partners produce cars and trucks in 30 countries, and sell and
service these vehicles through the following brands: Baojun,
Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang,
Opel, Vauxhall, and Wuling. GM's largest national market is
China, followed by the United States, Brazil, the United Kingdom,
Germany, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. was formed to acquire the operations of
General Motors Corp. through a sale under 11 U.S.C. Sec. 363
following Old GM's bankruptcy filing. The U.S. government once
owned as much as 60.8% stake in New GM on account of the
financing it provided to the bankrupt entity. The deal was
closed July 10, 2009, and Old GM changed its name to Motors
Liquidation Co.
General Motors Corp. and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31, 2011.
GENERAL MOTORS: Feds Report $9.7 Billion Loss
---------------------------------------------
David Shepardson, writing for Detroit News, reported that the U.S.
Treasury has booked a $9.7 billion loss on its $49.5 billion
bailout of General Motors Co. on the sale of nearly all of its
shares it received as part of its $49.5 billion bailout.
According to the news agency, in a quarterly report to Congress on
Oct. 29, the Special Inspector General overseeing the $700 billion
Troubled Asset Relief Program bailout fund disclosed that the
Treasury had realized a significant loss on its sale of most of
its 60.8 percent stake in GM. Through Sept. 30, Treasury sold 811
million shares of the 912 million shares it received in the
automaker as part of its 2009 bankruptcy restructuring.
The taxpayers' ownership stake in the Detroit-based automaker --
swapped for more than $40 billion in loans, was initially 60.8
percent, but is now down to about 7 percent, the Treasury said,
the report related. "Because the common stock sales have all
taken place below Treasury's break even price, Treasury has so far
booked a loss of $9.7 billion on the sales," the report said.
Treasury would need to get $147.95 on its remaining shares to
break even, the report said. That's not going to happen: GM's
stock closed Wednesday at $35.80, up $0.21, or 1 percent. At
current trading prices, the government's remaining stake is worth
about $3.6 billion. At current stock prices, taxpayers would lose
about $10 billion on the bailout when all the stock is unloaded.
Earlier this month, Treasury reported it sold $570.1 million in
General Motors Co. stock in September, as it looks to complete its
exit from the Detroit automaker in the coming six months, the
report recalled. The Treasury says it has recouped $36 billion of
its $49.5 billion bailout in the Detroit automaker. The government
began selling off its remaining 101.3 million shares in GM on
Sept. 26, as part of its third written trading plan. The
government didn't disclose precisely how many shares it sold in
the final days of September, but at recent trading levels could
exit as early as January.
GOLDKING RESOURCES: Files for Bankruptcy Protection
---------------------------------------------------
Goldking Holdings LLC, an oil-and-gas exploration company, sought
bankruptcy protection from creditors with plans to sell virtually
all its assets.
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that the company, based in
Houston, listed assets of as much as $100 million and debt of less
than $10 million in Chapter 11 documents filed on Oct. 30 in U.S.
Bankruptcy Court in Wilmington, Delaware.
Affiliates Goldking Onshore Operating LLC and Goldking Resources
LLC, which listed as much as $50 million in debt, also sought
creditor protection.
Wayzata Opportunities Fund II LP owns 94 percent of Goldking
Holdings, and an entity owned by Leonard C. Tallerine Jr. has a
5.8 percent interest, according to court papers.
"A series of unforeseen events, including alleged past
mismanagement under Mr. Tallerine, beginning from the formation of
the debtors, and the expense and lost opportunity of unsuccessful
exploration and drilling efforts, have placed a significant strain
on the debtors' cash flow," Edward Hebert, the company's chief
executive officer, said in court filings.
In August 2010, the company acquired oil and gas assets in
Louisiana for about $39 million from White Oak Energy, and in
February 2011 it bought assets in Texas for about $19 million from
EOG Resources Inc.
The company has 47 wells, 12 in Louisiana and 35 in Texas, on
about 9,000 acres of leased property.
After receiving an anonymous tip, Wayzata began investigating
Tallerine in November 2012, removing him the next month, and in
February it sued him and related companies claiming fraud, theft,
unjust enrichment and breach of contract and fiduciary duty,
according to court filings.
Tallerine filed counterclaims against Wayzata alleging fraud,
failure to pay a consulting fee and theft of plane services and
against Goldking for indemnification and advancement of expenses.
The litigation is pending.
The exploration and drilling efforts at the acquired properties
"failed to bear fruit," which Hebert attributed to the previous
management team's failure to properly study the oil and gas
assets, "making flawed decisions on where to drill those
properties."
Goldking spent about $70 million acquiring, exploring and drilling
properties that failed to yield a meaningful return, according to
court documents.
Goldking owes Wayzata about $11.6 million on a credit agreement
secured by substantially all its assets, court papers show.
Wayzata has agreed to fund a sales process. The company will seek
court approval to borrow $16.1 million to help fund operations as
it pursues a sale.
The case is In re Goldking Holdings LLC, 13-bk-12820, U.S.
Bankruptcy Court, District of Delaware (Wilmington).
GOLDKING RESOURCES: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor entities filing separate Chapter 11 cases:
Debtor Case No.
------ --------
Goldking Resources, LLC 13-12819
777 Walker Street, Suite 2500
Houston, TX 77002
Goldking Onshore Operating, LLC 13-12818
aka Goldking Offshore Operating, LLC
777 Walker Street, Suite 2500
Houston, TX 77002
Golking Holdings, LLC 13-12820
Chapter 11 Petition Date: October 30, 2013
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Hon. Brendan Linehan Shannon
Debtors' Counsel: Robert S. Brady, Esq.
YOUNG, CONAWAY, STARGATT & TAYLOR, LLP
1000 North King Street
Wilmington, DE 19801
Tel: 302-571-6600
Fax: 302-571-1253
Email: bankfilings@ycst.com
Debtors'
Fin'l Advisor: Lantana Oil & Gas Partners
Debtors' Notice
Claims,
Solicitation &
Balloting Agent: Epiq Bankruptcy Solutions, LLC
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petitions were signed by Edward Hebert, chief executive
officer.
A list of the Debtors' consolidated 30 largest unsecured creditors
is available for free at http://bankrupt.com/misc/deb13-12819.pdf
GOOD SAM: Unit Seeking Senior Secured Financing
-----------------------------------------------
Good Sam Enterprises, LLC, announced that an intermediate parent,
CWGS Group, LLC, which also owns the outstanding equity interests
of its affiliate FreedomRoads Holding Company, LLC, has begun
seeking commitments for a privately arranged senior secured
financing. As part of the Refinancing, the Company intends to
make a tender offer, subject to consummation of the Refinancing,
for its 11.5 percent senior secured notes due 2016 on terms to be
announced at a later date by the Company. The Company also has
the right to redeem the Senior Secured Notes at par plus a premium
of 8.625 percent upon not less than 30 and no more than 60 days'
notice under the terms of the indenture pursuant to which the
Senior Secured Notes were issued. Other debt and obligations in
the CWGS corporate structure and at its parent company, CWGS
Enterprises, LLC, will be paid from proceeds of the Refinancing.
As part of the privately arranged Refinancing, prospective
participants will be provided information derived from the
following financial information of the Company for the nine months
ended Sept. 30, 2013, and 2012. The information to prospective
participants in the Refinancing will also include inter-company
eliminations at the CWGS level and certain reclassifications in
the presentation that are not included in the Company's results.
* Revenues of $419.8 million for the first nine months of 2013
increased $23.8 million, or 6.0 percent, from the comparable
period in 2012.
* Net income for the first nine months of 2013 was $22.2
million versus $10.4 million for the first nine months of
2012. This $11.8 million increase was mainly due to the
income from operations improvement.
The consummation of the Refinancing is subject to market and other
conditions and there can be no assurance that the Refinancing, and
therefore the tender offer for the Senior Secured Notes, will
occur.
A full-text copy of the Form 8-K is available for free at:
http://is.gd/mdKQgn
About Good Sam
Ventura, Calif.-based Affinity Group Holding, Inc., now known as
Good Sam Enterprises, LLC, is a holding company and the direct
parent of Affinity Group, Inc. The Company is an indirect wholly-
owned subsidiary of AGI Holding Corp, a privately-owned
corporation. The Company is a member-based direct marketing
organization targeting North American recreational vehicle owners
and outdoor enthusiasts. The Company operates through three
principal lines of business, consisting of (i) club memberships
and related products and services, (ii) subscription magazines and
other publications including directories, and (iii) specialty
merchandise sold primarily through its 78 Camping World retail
stores, mail order catalogs and the Internet.
Good Sam reported net income of $9.37 million in 2012, as compared
with net income of $3.90 million in 2011. The Company's balance
sheet at June 30, 2013, showed $251.32 million in total assets,
$487.52 million in total liabilities and a $236.20 million total
member's deficit.
* * *
Affinity Group Inc. carries 'B3' long term corporate family and
probability of default ratings, with 'stable' outlook, from
Moody's Investors Service.
As reported in the Troubled Company Reporter on November 9, 2010,
Standard & Poor's Ratings Services assigned Affinity Group Inc.'s
proposed $325 million senior secured notes due 2016 its
preliminary 'B-' issue-level rating. Following the close of the
proposed transaction, S&P expects to assign a 'B-' corporate
credit rating to Affinity Group Inc., and withdraw S&P's current
'D' corporate credit rating on Affinity Group Holding Inc. A
portion of the proceeds of the new notes will be used, in
conjunction with cash contributions from Holding's parent, to
repay in full $88 million of senior notes that are currently
outstanding at Holding.
S&P said the expected 'B-' corporate credit rating on Affinity
Group reflects S&P's expectation that, following the proposed
refinancing transaction, adjusted debt leverage will be reduced by
about 1x, the company will not have any meaningful near-term debt
maturities, and the company will generate some discretionary cash
flow (albeit minimal). Still, credit measures will remain
relatively weak, as adjusted debt leverage will remain above 6.0x
(S&P's operating lease adjustment adds about a turn to leverage),
and S&P expects interest coverage to remain in the low- to mid-
1.0x area over the intermediate term.
GPH OPERATING: S&P Assigns 'B' CCR & Rates $155MM Facilities 'B+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to GPH Operating Co. LLC (GPH). The outlook is
stable. At the same time, S&P assigned its 'B+' issue-level
rating to $155 million first-lien senior secured credit
facilities, with a recovery rating of '2', indicating S&P's
expectation for substantial (70% to 90%) recovery in the event of
a payment default. S&P also assigned its 'CCC+' issue-level
rating to a $45 million second-lien senior secured term loan with
a recovery rating of '6', indicating its expectation for
negligible (0% to 10%) recovery in the event of a payment default.
The proposed secured credit facilities will be co-issued by GPH
operating subsidiaries Dixie Chemical Co. Inc., Child Development
Schools Inc., and Polyair Corp.
GPH plans to use the proceeds from the proposed issuance to
refinance outstanding borrowings, to purchase co-investors' equity
in subsidiaries, and to fund a $35 million distribution to equity
owners.
"The ratings on GPH Operating Co. LLC reflect the company's small
scale of operations, its narrowly focused product lines in
commodity industries, dependence on government funding levels in
its education segment, a leveraged capital structure, and some
uncertainty regarding financial policies," said Standard & Poor's
credit analyst James Siahaan. These weaknesses are partially
offset by good market shares in its product lines and fair
business diversity. We characterize GPH's business risk profile
as "weak" and its financial risk profile as "highly leveraged."
With about $365 million in trailing-12-month revenue as of
June 30, 2013, GPH is the holding company of three distinct
businesses:
-- Dixie Chemical Co. Inc. (38% of trailing-12-month revenue),
a Pasadena, Texas-based producer of intermediate chemicals
to the thermoset, paper sizing, and fuel and lubricant
additives markets.
-- Child Development Schools Inc. (35%), a Columbus, Georgia-
based for-profit provider of preschool education and
childcare programs in the U.S.
-- Polyair Corp. (27%), a Toronto, Ontario-based manufacturer
of protective flexible packaging products.
GPH is owned by Glencoe Capital LLC, a Chicago-based private
equity firm which focuses on lower-middle-market companies.
S&P's ratings on GPH also reflect our base-case scenario, which
includes the following assumptions for 2013 and 2014:
-- Low-single-digit organic revenue growth rates for each
business segment, based on general macroeconomic conditions
including potentially lower government subsidies limiting
growth in the education segment.
-- Adjusted EBITDA margins of about 12%.
-- Funds from operations (FFO) to total adjusted debt should
exceed 12%.
-- Total adjusted debt to EBITDA should ease to near 5.0x over
this period.
The stable outlook reflects S&P's expectation that GPH's operating
performance will allow the company to maintain adequate liquidity
and FFO to total debt of 12% to 15%. S&P also expects that
management will not increase debt further to fund growth spending
or shareholder rewards.
S&P could raise the ratings modestly if GPH's management can
demonstrate its ability to adhere to credit measures appropriate
for a higher rating. If revenue grows at an annualized rate of
about 7% with EBITDA margins increasing by 250 basis points from
projected levels, FFO to total debt could surpass 15% and debt to
EBITDA could approach 4.8x. To consider higher ratings, S&P would
also expect the company to show a track record of successful
operations and prudent financial policy.
S&P could lower the ratings if GPH's operating performance suffers
such that its FFO to total debt would likely fall below 12% or if
its liquidity becomes pressured. S&P could also lower ratings if
the company further increases debt to fund long-term growth plans.
GRAYMARK HEALTHCARE: Amends 2012 Form 10-K to Add Information
-------------------------------------------------------------
Graymark Healthcare, Inc., amended its annual report on Form 10-K
for the year ended Dec. 31, 2012, pursuant to General Instruction
G(3) to Form 10-K for the purposes of filing the information
required to be disclosed pursuant to Part III of Form 10-K.
The Form 10-K/A does not reflect the Company's acquisition of
Foundation Surgical Hospital Affiliates, LLC, and Foundation
Surgery Affiliates, LLC, on July 22, 2013 or other events
occurring after the filing of the original Form 10-K. A copy of
the Form 10-K/A is available at http://is.gd/hGjx5m
About Graymark Healthcare
Graymark Healthcare, Inc., headquartered in Oklahoma City, Okla.,
provides care management solutions to the sleep disorder market.
As of June 30, 2012, the Company operated 107 sleep diagnostic and
therapy centers in 10 states.
The Company's balance sheet at June 30, 2013, showed $4.78 million
in total assets, $26.20 million in total liabilities and a $21.41
million total deficit.
Going Concern
As of March 31, 2013, the Company had an accumulated deficit of
$60.2 million and reported a net loss of $2.7 million for the
first quarter of 2013. In addition, the Company used $0.3 million
in cash from operating activities from continuing operations
during the quarter. On March 29, 2013, the Company signed a
definitive purchase agreement with Foundation Healthcare
Affiliates, LLC to purchase 100 percent of the interests in
Foundation Surgery Affiliates, LLC and Foundation Surgical
Hospital Affiliates, LLC, in exchange for 98.5 million shares of
the Company's common stock. Management expects the transaction to
close in the second quarter of 2013; however, there is no
assurance the acquisition will close at that time or at all.
"If the Company is unable to close the Foundation transaction or
raise additional funds, the Company may be forced to substantially
scale back operations or entirely cease its operations and
discontinue its business. These uncertainties raise substantial
doubt regarding the Company's ability to continue as a going
concern," according to the Company's quarterly report for the
period ended March 31, 2013.
GREEN AUTOMOTIVE: Anton & Chia Raises Going Concern Doubt
---------------------------------------------------------
Green Automotive Company filed with the U.S. Securities and
Exchange Commission on Oct. 25, 2013, a second amended annual
report on Form 10-K/A for the year ended Dec. 31, 2012.
Anton & Chia, LLP, expressed substantial doubt about the Company's
ability to continue as a going concern, citing the company's
present financial situation.
The Company reported a net loss of $84,547,954 on $320,648 of
revenues in 2012, compared with a net loss of $7,285,231 in 2011.
According to the Company: "On July 10, 2013, we filed an Amendment
No. 1 to our Annual Report on Form 10-K for the year ended
December 31, 2012 for the purpose of restating our audited
consolidated financial statements for the years ended December 31,
2012 and 2011, to correct inaccuracies in our consolidated
financial statements caused by management incorrectly applying a
16.667% limitation to the conversion terms of our Series A
Convertible Preferred Stock, which caused us to understate the
derivative liability and other income/expense -- change in value
in derivative liability."
"We are now filing this Amendment No. 2 to our Annual Report on
Form 10-K for the years ended December 31, 2012 and 2011 to
further correct and clarify certain errors in our restated
financial statements for the years ended December 31, 2012 and
2011. Other than these updates, this amendment does not otherwise
change or update the disclosures set forth in our Annual Report on
Form 10-K as originally filed and does not otherwise reflect
events occurring after the original filing of the 10-K Report."
Fred Luke signed the Company's original Annual Reports on Form 10-
K for the year ended December 31, 2012, and the first Amended
Annual Report on Form 10-K/A, in his then capacity as the
Company's President, which was the Company's principal executive
officer position at the time of those filings. The latest amended
filing is signed by Ian Hobday, the Company's Chief Executive
Officer, which is now the principal executive officer position.
A copy of the Form 10-K/A is available at:
http://is.gd/OFut7m
About Green Automotive Company
Green Automotive Company is a vehicle design, engineering,
manufacturing and distribution company. The Company also provides
after sales program. It possesses a portfolio of businesses and is
active in three main market segments: Cutting edge technology
development, engineering and design with a focus on zero and low
emission vehicle solutions; Manufacturing and customization of
vehicles for markets with the potential to be converted into low
emission or electric vehicles, such as shuttle buses, taxis,
commercial vehicles, and After sales services for electric or low
emission vehicles, including servicing and repair.
GREEN AUTOMOTIVE: Has $3-Mil. Net Loss for Quarter Ended June 30
----------------------------------------------------------------
Green Automotive Company filed with the U.S. Securities and
Exchange Commission its first amended quarterly report on Form
10-Q/A, reporting a net loss of $3,001,743 on $429,392 of revenues
for the three months ended June 30, 2013, compared to a net loss
of $413,000 for the same period last year.
The Company's balance sheet at June 30, 2013, showed $2,328,947 in
total assets, $38,220,419 in total liabilities, and total
stockholders' deficit of $35,891,472.
"We are filing this Amendment No. 1 to our Quarterly Report on
Form 10-Q/A for the quarterly period ended June 30, 2013 to
correct and clarify certain errors in our consolidated financial
statements for the period ended June 30, 2013, originally filed
with the Commission on August 14, 2013. Other than these updates,
this amendment does not otherwise change or update the disclosures
set forth in our Quarterly Report on Form 10-Q as originally filed
and does not otherwise reflect events occurring after the original
filing of the Quarterly Report on Form 10-Q Report," the Company
said.
A copy of the Form 10-Q/A is available at:
http://is.gd/lVCBq8
About Green Automotive Company
Green Automotive Company is a vehicle design, engineering,
manufacturing and distribution company. The Company also provides
after sales program. It possesses a portfolio of businesses and is
active in three main market segments: Cutting edge technology
development, engineering and design with a focus on zero and low
emission vehicle solutions; Manufacturing and customization of
vehicles for markets with the potential to be converted into low
emission or electric vehicles, such as shuttle buses, taxis,
commercial vehicles, and After sales services for electric or low
emission vehicles, including servicing and repair.
GREEN FIELD ENERGY: Carl Marks on Board as Investment Banker
------------------------------------------------------------
Green Field Energy Services, Inc., et al., seek authority from the
U.S. Bankruptcy Court for the District of Delaware to employ Carl
Marks Advisory Group LLC as investment banker.
The Debtors will pay CMAG a monthly advisory fee of $85,000, a
completion fee of $750,000 upon the closing of one or more
transactions, and a new capital fee equal to a certain percentage
of the amount of a financing commitment. The firm will also be
reimbursed for any necessary out-of-pocket expenses.
Christopher K. Wu, a partner at Carl Marks Advisory Group, 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.
CMAG received a retainer from Green Field of $100,000 prior to the
Petition Date.
About Green Field Energy
Green Field is an independent oilfield services company that
provides a wide range of services to oil and natural gas drilling
and production companies to help develop and enhance the
production of hydrocarbons. The Company's services include
hydraulic fracturing, cementing, coiled tubing, pressure pumping,
acidizing and other pumping services.
Green Field Energy and two affiliates filed Chapter 11 petitions
in Delaware on Oct. 27, 2013, after defaulting on an $80 million
credit provided by an affiliate of Royal Dutch Shell Plc (Case No.
13-bk-12783, Bankr. D. Del.).
The Debtors are represented by Michael R. Nestor, Esq., and Kara
Hammon Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware; and Josef S. Athanas, Esq., Caroline A.
Reckler, Esq., Sarah E. Barr, Esq., and Matthew L. Warren, Esq.,
at Latham & Watkins LLP, in Chicago, Illinois.
The Debtors' investment banker is Carl Marks Advisory Group LLC.
Thomas E. Hill, from Alvarez & Marsal North America, LLC, serves
as the Debtors' chief restructuring officer.
GREEN FIELD ENERGY: Prime Clerk is Claims Agent & Admin. Advisor
----------------------------------------------------------------
Green Field Energy Services, Inc., et al., filed with the U.S.
Bankruptcy Court for the District of Delaware applications to (i)
appoint Prime Clerk LLC as claims and noticing agent and (ii)
employ the firm as their administrative advisor.
Michael J. Frishberg, the co-president and chief operating officer
of Prime Clerk LLC, 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. Prior to the Petition Date, the
Debtors provided Prime Clerk a retainer in the amount of $25,000.
About Green Field Energy
Green Field is an independent oilfield services company that
provides a wide range of services to oil and natural gas drilling
and production companies to help develop and enhance the
production of hydrocarbons. The Company's services include
hydraulic fracturing, cementing, coiled tubing, pressure pumping,
acidizing and other pumping services.
Green Field Energy and its two affiliates filed Chapter 11
petitions in Delaware on Oct. 27, 2013, after defaulting on an $80
million credit provided by an affiliate of Royal Dutch Shell Plc
(Case No. 13-bk-12783, Bankr. D. Del.).
The Debtors are represented by Michael R. Nestor, Esq., and Kara
Hammon Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware; and Josef S. Athanas, Esq., Caroline A.
Reckler, Esq., Sarah E. Barr, Esq., and Matthew L. Warren, Esq.,
at Latham & Watkins LLP, in Chicago, Illinois.
The Debtors' investment banker is Carl Marks Advisory Group LLC.
Thomas E. Hill, from Alvarez & Marsal North America, LLC, serves
as the Debtors' chief restructuring officer.
GREEN FIELD ENERGY: Seeks Extension of Schedules Filing Deadline
----------------------------------------------------------------
Green Field Energy Services, Inc., et al., ask the U.S. Bankruptcy
Court for the District of Delaware to further extend until Dec.
13, 2013, the time within which they must file their schedules of
assets and liabilities and statements of financial affairs.
The Debtors assert that they need the additional time because they
do not believe they will be in a position to accurately complete
their Schedules and Statements within the current deadline, which
is Nov. 26.
About Green Field Energy
Green Field is an independent oilfield services company that
provides a wide range of services to oil and natural gas drilling
and production companies to help develop and enhance the
production of hydrocarbons. The Company's services include
hydraulic fracturing, cementing, coiled tubing, pressure pumping,
acidizing and other pumping services.
Green Field Energy and its two affiliates filed Chapter 11
petitions in Delaware on Oct. 27, 2013, after defaulting on an $80
million credit provided by an affiliate of Royal Dutch Shell Plc
(Case No. 13-bk-12783, Bankr. D. Del.).
The Debtors are represented by Michael R. Nestor, Esq., and Kara
Hammon Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware; and Josef S. Athanas, Esq., Caroline A.
Reckler, Esq., Sarah E. Barr, Esq., and Matthew L. Warren, Esq.,
at Latham & Watkins LLP, in Chicago, Illinois.
The Debtors' investment banker is Carl Marks Advisory Group LLC.
Thomas E. Hill, from Alvarez & Marsal North America, LLC, serves
as the Debtors' chief restructuring officer.
GREEN FIELD ENERGY: Meeting to Form Creditors' Panel on Nov. 7
--------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on Nov. 7, 2013 at 10:00 a.m. in
the bankruptcy cases of Green Field Energy Services, Inc., et al.
The meeting will be held at:
J. Caleb Boggs Federal Building
844 King Street, Room 2112
Wilmington, DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
The case is In re Green Field Energy Services Inc., 13-bk-12783,
U.S. Bankruptcy Court, District of Delaware (Wilmington).
GREEN FIELD ENERGY: Given Interim $15 Million Loan Approval
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Green Field Energy Services Inc., an oil-field
services provider, filed for bankruptcy reorganization on Oct. 27
and two days later got interim approval from the Delaware
bankruptcy court for a $15 million loan.
According to the report, there will be another financing hearing
on Nov. 26 where the company will seek approval of the entire $30
million loan package.
The loan is provided by BG Credit Partners LLC and ICON
Capital LLC.
Green Field resorted to bankruptcy after defaulting on an $80
million credit provided by an affiliate of Royal Dutch Shell Plc,
the report recalled. In court papers, the Lafayette, Louisiana-
based company said that some of Shell's lien may be voidable using
bankruptcy powers.
Green Field provides hydraulic fracturing and well services.
Revenue for the first eight months of 2013 was $183 million,
resulting in a net loss of $81.4 million.
Other secured debt includes $255.9 million on 13 percent
senior secured notes and $98.6 million payable to trade
suppliers. The balance sheet had assets of $352.1 million on
June 30 against liabilities totaling $412.1 million.
About Green Field Energy
Green Field is an independent oilfield services company that
provides a wide range of services to oil and natural gas drilling
and production companies to help develop and enhance the
production of hydrocarbons. The Company's services include
hydraulic fracturing, cementing, coiled tubing, pressure pumping,
acidizing and other pumping services.
Green Field Energy and its two affiliates filed Chapter 11
petitions in Delaware on Oct. 27, 2013, after defaulting on an $80
million credit provided by an affiliate of Royal Dutch Shell Plc
(Case No. 13-bk-12783, Bankr. D. Del.).
The Debtors are represented by Michael R. Nestor, Esq., and Kara
Hammon Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware; and Josef S. Athanas, Esq., Caroline A.
Reckler, Esq., Sarah E. Barr, Esq., and Matthew L. Warren, Esq.,
at Latham & Watkins LLP, in Chicago, Illinois.
The Debtors' investment banker is Carl Marks Advisory Group LLC.
Thomas E. Hill, from Alvarez & Marsal North America, LLC, serves
as the Debtors' chief restructuring officer.
GREENFIELD SPECIALTY: Moody's Rates C$190MM Secured Loan 'B2'
-------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to GreenField
Specialty Alcohols Inc.'s proposed US dollar senior secured term
loan, which will be executed in the US dollar equivalent of C$190
million (approximately US$182 million), and to its C$20 million
secured revolving credit facility. Moody's also assigned
GreenField a B3 Corporate Family Rating (CFR), a B3-PD Probability
of Default Rating (PDR), as well as an SGL-2 Speculative Grade
Liquidity rating. The rating outlook is stable. The ratings are
subject to receipt and review of final documentation. This is the
first time that Moody's has rated GreenField.
The proceeds of the term loan will be a component of the
refinancing of GreenField's capital structure.
Assignments:
Issuer: Greenfield Specialty Alcohols Inc.
-- Probability of Default Rating, Assigned B3-PD
-- Speculative Grade Liquidity Rating, Assigned SGL-2
-- Corporate Family Rating, Assigned B3
-- Senior Secured Bank Credit Facility, Assigned B2
-- Senior Secured Bank Credit Facility, Assigned a range of LGD3,
34 %
-- Senior Secured Bank Credit Facility, Assigned B2
-- Senior Secured Bank Credit Facility, Assigned a range of LGD3,
34 %
Rating Rationale:
The B3 corporate family rating reflects GreenField's small size
and scale with four small ethanol plants, a product mix derived
from one commodity product (ethanol), and exposure to commodity
price risk for ethanol, corn, natural gas and gasoline. GreenField
has a significant hedging program that is used to manage the
margin between corn, gasoline and ethanol, which somewhat
mitigates exposure to fluctuations in commodity markets, but is
complex and doesn't fully cover basis risk. The rating is
supported by considerable government incentive payments, low
leverage, a stable industrial alcohol business, a diverse customer
base and access to ample corn supplies in the areas surroundings
its plants. The government incentive payments total about C$80
million through to the first quarter of 2016 at which time
GreenField will be dependent on the success of various capital
improvement projects and growth in its non-fuel products.
The SGL-2 speculative grade liquidity rating reflects GreenField's
good liquidity. Pro forma for the term loan issuance, Moody's
expects that GreenField will have C$10 million of cash and no
drawings under its C$20 million revolving credit facility maturing
November 2016. Moody's expects positive free cash flow of about
C$60 million through to the end of 2014 and for GreenField to be
in compliance with its sole financial covenant (total debt to
EBITDA not greater than 3.5x) through this period. There are no
debt maturities in the next two years, but the company has
significant scheduled amortization, as well as cash flow sweep
payments to make. Alternate liquidity is limited given that
substantially all of the company's assets are pledged under the
revolver and term loan.
The US$185 million senior secured term loan and C$20 million
senior secured revolving credit facility are rated one notch above
the CFR in accordance with Moody's Loss Given Default methodology.
The secured debt benefits from its prior ranking to the C$30
million subordinated mezzanine facility.
The stable outlook reflects Moody's expectation that leverage will
remain below 3x through 2015 as government incentive payments
support EBITDA and the resultant free cash flow is used to pay
down debt. However, quarterly profitability could be volatile due
to GreenField's exposure to the fuel market and basis risk on its
hedges. The company generates much better margins on its
industrial alcohol sales.
The rating could be upgraded if GreenField diversifies away from
fuel ethanol and generates positive free cash flow without
government incentives while maintaining debt to EBITDA around 4x.
The rating could be downgraded if the company's liquidity weakens
to the extent that it will be insufficient to meet their cash
requirements through mid-2014 or if leverage as measured by debt
to EBITDA appears likely to rise towards 6x. Both of these
occurrences are most likely to result from deterioration in cash
margins in the fuel ethanol business.
GreenField based in Toronto, Ontario, is a producer and marketer
of fuel ethanol and industrial & packaged ethanol using corn as a
feedstock.
GREENFIELD SPECIALTY: S&P Assigns 'BB' Rating to C$190MM Loan
-------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B+' long-
term corporate credit rating on Toronto-based GreenField Specialty
Alcohols Inc. The outlook is negative.
At the same time, Standard & Poor's assigned its 'BB' issue-level
rating and '1' recovery rating to the company's proposed
C$190 million equivalent term loan (denominated in U.S. dollars).
A '1' recovery rating indicates S&P's expectation of very high
(90%-100%) recovery in the event of a default.
"A key factor in our assessment of GreenField's business risk
profile as weak is the scheduled reduction of federal and
provincial government ethanol operating incentives, which have
historically accounted for more than two-thirds of GreenField's
EBITDA," said Standard & Poor's credit analyst David Fisher.
"These incentives are set to decline in the next few years and
expire completely in 2016," he continued. "GreenField plans to
pursue a number of rapid-payback capital projects, many of which
have been proven -- at its other plants -- to bolster organic
EBITDA generation. We expect these projects to partly offset
incentive cuts, with improved crush margins relative to 2012
further bolstering earnings," Mr. Fisher added.
While the wind-down of operating incentives is a negative in the
long term, near-term committed incentives, a favorable crush
margin outlook, and contracted sales for significant ethanol sales
volumes provide decent near-term earnings visibility. This
visibility is enhanced by GreenField's industrial alcohol
business, which has generated a stable and growing gross profit
contribution. S&P views the industrial alcohol business as having
a solid market position with a sizable and well-entrenched
customer base, and S&P projects it will experience moderate growth
in the future. Still, S&P believes the company will remain
reliant on its fuel ethanol business and related incentives for
the bulk of its earnings.
The negative outlook reflects Standard & Poor's view that
GreenField is exposed to heightened refinancing risk because of
the impending maturity of its term loan in January 2014. S&P
believes the company's liquidity could be impaired in the event of
a capital market disruption, or if lenders are unreceptive to the
proposed offering.
S&P could lower the ratings if GreenField is unable to refinance
its maturing term loan in the near term as, in its view, this
would further heighten refinancing risk.
S&P would likely revise the outlook to stable if the company
successfully closes on the comprehensive refinancing package it
has proposed. The new credit facilities would, S&P believes,
significantly improve GreenField's debt maturity profile and
liquidity position, provided covenant headroom at initiation of
the term loan has sufficient leeway to accommodate some EBITDA
volatility.
GULF ENERGY: Moody's Affirms B3 CFR & B3 Unsecured Notes Rating
---------------------------------------------------------------
Moody's Investors Service changed Gulfport Energy Corporation's
rating outlook to positive from stable and affirmed the company's
B3 Corporate Family Rating (CFR) and B3 senior unsecured notes
rating. The Speculative Grade Liquidity Rating was downgraded to
SGL-3 from SGL-2, reflecting growing anticipated negative free
cash flow in 2014.
"The outlook change acknowledges Gulfport's drilling and
development progress in the Utica Shale and the projected rapid
ramp up in production and reserves in the coming months as a large
number of new wells are hooked to sales pipelines in late 2013 and
early 2014," noted Sajjad Alam, Moody's Analyst. "While the pace
of production growth has lagged Moody's previous expectations,
alleviation of midstream constraints and the transition to pad
drilling will significantly accelerate the company's production
growth in 2014."
Issuer: Gulfport Energy Corporation
Outlook Action:
Changed Outlook to Positive from Stable
Ratings Affirmed:
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
US$300M 7.75% Senior Unsecured Regular Bond/Debenture,
Affirmed B3 (LGD4, 58%)
Downgrades:
Speculative Grade Liquidity Rating, Downgraded SGL-3 from SGL-2
Gulfport's size and scale will improve sharply in 2014. The
company will benefit from shorter well resting periods resulting
in faster spud-to-sales timing and from more scientific data on
Utica geology. Gulfport has roughly 25-30 gross wells in the
condensate and wet gas windows of the Utica Shale producing (14
wells were drilled in 2012) and the company plans to drill 55-60
total gross wells in 2013 using a capex budget of about $500
million. Based on projected efficiency gains and the use of higher
average number of rigs in 2014, well count and capex will be
higher in 2014.
While initial production rates have been good, the lack of
sufficiently long and geographically spaced production data and
the variability in results make it unclear how these wells will
perform over an extended period. Since Utica is one of the least
developed among major shale plays, it poses greater uncertainty
around ultimate recovery, drilling economics and sustainability.
Ongoing successful execution of the Utica drilling program leading
to higher production and reserves will determine upward rating
progression. An upgrade would be considered if production can be
sustained above 20,000 boe/d alongside a retained cash flow to
debt ratio of 30% or greater. A downgrade is possible if the
company acquires significant non-producing properties using debt
or vastly outspends cash flow leading to an average daily
production ratio above 30,000 boe/d. Weak liquidity could also
trigger a downgrade.
Gulfport should have adequate liquidity through the end of 2014,
which is captured in the SGL-3 rating. At June 30, 2013, the
company had approximately $214 million of cash and full
availability under its $50 million borrowing base revolver, which
expires in June, 2018. The free cash flow generated from the
Louisiana Gulf Coast assets together with balance sheet cash and
availability under the revolver may not fully cover the large
Utica funding requirements. The company however, has substantial
alternate liquidity to bridge any funding gap. Gulfport has 12.1%
equity interest in Diamondback (B3 stable), 24.9% interest in the
Grizzly oil sands development and various small investments in the
US and Thailand that had a combined book value of $439 million at
June 30, 2013, and a market value significantly above that.
The B3 Corporate Family Rating (CFR) reflects Gulfport's small but
rapidly growing production base, high capital requirements through
2015, short reserve life in relation to proved developed (PD)
reserves, and significant development and execution risks
surrounding its aggressive drilling program in the emerging Utica
Shale play. The B3 rating is supported by Gulfport's substantial
acreage position (145,000 net acres) in some of the most
productive areas of the Utica Shale that could support strong
organic growth, improving leverage and significant alternative
liquidity, and fairly stable oil production in the Louisiana Gulf
Coast (roughly 6,000 boe/d), which produces strong free cash flow
at oil prices.
Based in Oklahoma City, Oklahoma, Gulfport Energy Corporation is
an independent E&P company with principal producing properties
located in the Louisiana Gulf Coast and the Utica Shale in Eastern
Ohio.
HCA HOLDINGS: $500MM Share Repurchase No Effect on Fitch's IDR
--------------------------------------------------------------
Fitch Ratings does not expect any change to HCA Holdings, Inc.'s
(HCA) ratings, including the 'B+' Issuer Default Rating (IDR), due
to the repurchase of $500 million of shares from the sponsors of a
2006 leveraged buyout (LBO). The Rating Outlook is Positive. A
full rating list is shown below. The ratings apply to $28.2
billion of debt outstanding at June 30, 2013.
HCA plans to fund the share repurchase through draws on the bank
credit revolvers, resulting in a less than 0.1x increase in total
debt-to-EBITDA. Considering the increase in debt to fund the share
repurchase, Fitch projects debt leverage of 4.5x at the end of
2013. The draw on the credit revolvers also does not affect
Fitch's recovery analysis for HCA, which is discussed in detail
below.
The sponsors of the LBO have been actively liquidating their
positions in the company since a March 2011 IPO. Along with the
share repurchase, Bain Capital Partners, LLC and Kohlberg Kravis
Roberts & Co. will sell 30 million shares to the public in a
secondary offering. Prior to the share repurchase and secondary
offering, Bain, KKR and the Frist Entities owned a combined 38% of
HCA's public equity value. As a result of the transactions, the
sponsors' ownership will drop to about 28%.
Under the direction of the LBO sponsors, HCA's ratings were
constrained by shareholder-friendly capital deployment; the
company funded $7.4 billion in special dividends since 2010 that
were mostly debt financed. Due to a drop in the ownership
percentage of the sponsors to below 40%, SEC regulations require
the company to appoint a majority of independent directors to the
Board during 2014; only four of the 14 current Board members are
considered independent.
Fitch revised HCA's Rating Outlook to Positive in August 2013,
indicating that a one-notch upgrade to 'BB-' is likely in the next
12-18 months. A positive rating action will require HCA to
maintain debt at or below 4.5x EBITDA. Although Fitch does not
expect a major departure in strategic direction under an
independent board, there may be some shifts in the company's
capital deployment strategy. A more consistent and conservative
approach to funding shareholder pay-outs in the form of special
dividends and share repurchases would support an upgrade.
Other factors that would support an upgrade of the ratings include
sustained improvement in organic acute care operating trends,
better clarity on the effects of the Affordable Care Act (ACA) on
operating results and sustained solid cash generation. Fitch
forecasts HCA will produce discretionary free cash flow (cash from
operations less capital expenditures and distributions to minority
interests) of $1.2 billion?$1.3 billion in 2013.
While Fitch currently forecasts revenue and EBITDA growth across
the group of for-profit hospital companies in 2014 due to the ACA,
estimating the precise effects is complicated by uncertainty over
the pace and progress of the growth of the insured population. As
the largest operator of acute-care hospitals in the country, with
a broad geographic footprint, HCA is well positioned to capture
market share if the ACA results in a boost in patient volumes in
2014. The company's organic growth in patient volumes has
consistently outpaced that of the broader for-profit hospital
industry over the past several years.
Growth in pricing has been relatively weaker, reflecting a
persistent shift in HCA's mix of patients to those with less
profitable Medicaid coverage, as well as uninsured patients.
However, pricing has recently improved. HCA previewed the third
quarter 2013 (3Q'13) results earlier this month including decent
3.4% growth in same facility revenue per equivalent admission.
Debt Issue Ratings And Recovery Analysis:
Fitch currently rates HCA as follows:
HCA, Inc.
-- IDR 'B+';
-- Senior secured credit facilities (cash flow and asset backed)
'BB+/RR1' (100% estimated recovery);
-- Senior secured first lien notes 'BB+/RR1' (100% estimated
recovery);
-- Senior unsecured notes 'BB-/RR3' (65% estimated recovery).
HCA Holdings Inc.
-- IDR 'B+';
-- Senior unsecured notes 'B-/RR6' (0% estimated recovery).
The recovery ratings are based on a financial distress scenario
which assumes that value for HCA's creditors will be maximized as
a going concern (rather than a liquidation scenario). Fitch
estimates a post-default EBITDA for HCA of $3.9 billion, which is
a 40% haircut from the June 30, 2013 LTM EBITDA level of $6.5
billion. A 40% haircut represents roughly the level of EBITDA
decline that would result in a 1.1x fixed charge coverage ratio.
Fitch then applies a 7.0x multiple to post-default EBITDA,
resulting in a post-default EV of $27.2 billion for HCA. The
multiple is based on observation of both recent
transactions/takeout and public market multiples in the healthcare
industry. Fitch significantly haircuts the transaction/takeout
multiple assigned to healthcare providers since transactions in
this part of the healthcare industry tend to command lower
multiples. The 7.0x multiple also considers recent public market
multiples for healthcare providers.
Fitch applies a waterfall analysis to the post-default EV based on
the relative claims of the debt in the capital structure.
Administrative claims are assumed to consume $2.7 billion or 10%
of post-default EV, which is a standard assumption in Fitch's
recovery analysis. Fitch assumes that HCA would fully draw the $2
billion available balance on its cash flow revolver and 50% of the
$2.5 billion available balance on its asset backed lending (ABL)
facility. The availability on the ABL facility is based on
eligible accounts receivable as defined per the credit agreement.
The 50% assumed draw on the ABL facility reflects Fitch assumption
of some degradation in the ABL borrowing base as the company
approaches default.
The 'BB+/RR1' rating for HCA's secured debt (which includes the
bank credit facilities and the first lien notes) reflects Fitch's
expectations for 100% recovery under a bankruptcy scenario. Claims
under the ABL facility are assumed to be recovered fully prior to
any recovery of the other first-lien debt, including the cash flow
revolver, cash flow term loans and first lien secured notes. The
'BB-/RR3' rating on HCA Inc.'s unsecured notes rating reflects
Fitch's expectations for recovery in the 51%-70% range. The 'B-
/RR6' rating on the HCA Holdings, Inc. unsecured notes reflects
expectation of 0% recovery.
HCA's debt agreement permit the company to issue first lien
secured debt up to an amount equal to 3.75x EBITDA. At June 30,
2013, Fitch estimates the company had $6.8 billion in first lien
capacity. Additional first lien debt issuance would result in
lower recovery for the HCA Inc. unsecured note holders.
Under Fitch's current recovery model assumptions, the company
could increase its outstanding first lien debt by up to $1.2
billion without diminishing recovery prospects for the HCA Inc.
unsecured note holders to below the 'RR3' recovery band of 51%-
70%. Should the company increase the amount of secured debt in the
capital structure by more than that amount, Fitch would likely
downgrade the HCA Inc. unsecured notes by one-notch, to 'B+/RR4'.
The ratings on the secured debt and HCA Holdings Inc. unsecured
notes would not be affected.
HERCULES OFFSHORE: Seahawk Holds Less Than 1% Equity Stake
----------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission on Oct. 29, 2013, Seahawk Drilling, Inc.,
Seahawk Liquidating Trust, and Eugene Davis disclosed that they
beneficially own 69,681 shares of common stock of Hercules
Offshore, Inc., representing 0.04 percent based on 159,748,613
shares of common stock outstanding as of Oct. 21, 2013, as
disclosed in Hercules Offshore, Inc.'s Form 10-Q for the quarter
ended Sept. 30, 2013. Seahawk previously reported beneficial
ownership of 22,321,425 common shares or 16.24 percent equity
stake, as reported by the TCR on May 13, 2011. A copy of the
regulatory filing is available for free at http://is.gd/HnRi9t
About Hercules Offshore
Hercules Offshore Inc. (NASDAQ: HERO) --
http://www.herculesoffshore.com/-- provides shallow-water
drilling and marine services to the oil and natural gas
exploration and production industry in the United States, Gulf of
Mexico and internationally. The Company provides these services
to integrated energy companies, independent oil and natural gas
operators and national oil companies. The Company operates in six
business segments: Domestic Offshore, International Offshore,
Inland, Domestic Liftboats, International Liftboats and Delta
Towing.
Hercules incurred a net loss of $127 million in 2012, a net loss
of $76.12 million in 2011, and a net loss of $134.59 million in
2010. The Company's balance sheet at Sept. 30, 2013, showed $2.40
billion in total assets, $1.48 billion in total liabilities and
$922.37 million in stockholders' equity.
* * *
The Troubled Company Reporter said on April 11, 2013, that
Moody's Investors Service upgraded Hercules Offshore, Inc.'s
Corporate Family Rating to B2 from B3. Hercules' B2 CFR is
supported by its improved cash flow and lower leverage on the back
of increased drilling activity and higher day-rates in the Gulf of
Mexico (GOM)
As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Houston-based
Hercules Offshore Inc. to 'B' from 'B-'. "The upgrade reflects
the improving market conditions in the Gulf of Mexico and our
expectations that Hercules' fleet will continue to benefit," said
Standard & Poor's credit analyst Stephen Scovotti.
HOUSTON REGIONAL: Astros, Comcast Strike Truce in Row Over Ch. 11
-----------------------------------------------------------------
Law360 reported that a Texas bankruptcy judge on Oct. 29 approved
a truce between affiliates of Comcast and the Houston Astros in
their fight over jointly owned Houston Regional Sports Network LP,
allowing the ballclub to lead negotiations for third-party
carriage agreements in a bid to save the troubled network.
According to the report, U.S. Bankruptcy Judge Marvin Isgur signed
off on a three-way deal that also involves the Houston Rockets,
giving the Astros 45 days to try and hammer out contracts with
major networks to pick up HRSN.
About Houston Regional Sports Network
An involuntary Chapter 11 bankruptcy petition was filed against
Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet
Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013.
The involuntary filing was launched by three units of Comcast/NBC
Universal and a television-related company. The petitioners are:
Houston SportsNet Finance LLC, Comcast Sports Management Services
LLC, National Digital Television Center LLC, and Comcast SportsNet
California, LLC.
The petitioning creditors have filed papers asking the Bankruptcy
Judge to appoint an independent Chapter 11 trustee "to conduct a
fair and open auction process for the Network's business assets on
a going concern basis."
Houston Regional Sports Network is a joint enterprise among
affiliates of the Houston Astros baseball team, the Houston
Rockets basketball team, and Houston SportsNet Holdings, LLC --
"Comcast Owner" -- an affiliate of Comcast Corporation. The
Network has three limited partners -- Comcast Owner, Rockets
Partner, L.P., and Astros HRSN LP Holdings LLC. The primary
purpose of Houston Regional Sports Network is to create and
operate a regional sports programming service that produces,
exhibits, and distributes sports programming on a full-time basis,
including live Astros and Rockets games within the league-
permitted local territories.
The Network also has one general partner -- Houston Regional
Sports Network, LLC -- "General Partner" -- which, subject to
certain limitations, exercises exclusive management, supervision,
and control over the Network's properties and business. The
General Partner's sole purpose is to serve as the Network's
general partner; it has no authority or power to act outside of
that role. The General Partner has three members -- Comcast
Owner, JTA Sports, Inc. -- "Rockets Owner" -- and Astros HRSN GP
Holdings LLC -- "Astros Owner".
Counsel for the petitioning creditors are Howard M. Shapiro, Esq.,
Craig Goldblatt, Esq., and Jonathan Paikin, Esq., at Wilmer Cutler
Pickering Hale and Dorr LLP in Washington, D.C.; George W.
Shuster, Jr., Esq., at Wilmer Cutler in New York; Vincent P.
Slusher, Esq., and Andrew Zollinger, Esq., at DLA Piper; and
Arthur J. Burke, Esq., Timothy Graulich, Esq., and Dana M.
Seshens, Esq., at Davis Polk & Wardwell LLP.
HOUSTON REGIONAL: Astros to Lead Negotiations for Broadcaster
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that rather than rule on whether a Houston sports
television network should be in bankruptcy involuntarily, the
bankruptcy judge worked out an arrangement where the Houston
Astros will be the lead negotiator in finding a broadcaster to
carry games for the baseball club and the Houston Rockets of the
National Basketball Association.
The report recalled that in late September, Comcast Corp. and
others filed an involuntary Chapter 11 petition against Houston
Regional Sports Network LP, the network that carries Astros and
Rockets games. The network is a joint venture among Comcast and
the two teams. Comcast is also seeking appointment of a trustee.
The teams disagree on whether the network should be in Chapter 11
reorganization involuntarily.
There will be further hearings in Houston bankruptcy court on Nov.
13 and Dec. 12, when the authorization for the Astros to negotiate
expires.
According to the report, a the Rockets tell the story, Comcast and
the Astros were deadlocked before bankruptcy on how to run and
grow the business. The Astros want the bankruptcy dismissed while
the Rockets favor Chapter 11.
Comcast previously said in filings that it's willing to buy the
network's assets, which have "significant value." A "substantial
majority" of the network's revenue comes from redistribution of
the teams' games.
About Houston Regional Sports Network
An involuntary Chapter 11 bankruptcy petition was filed against
Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet
Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013.
The involuntary filing was launched by three units of Comcast/NBC
Universal and a television-related company. The petitioners are:
Houston SportsNet Finance LLC, Comcast Sports Management Services
LLC, National Digital Television Center LLC, and Comcast SportsNet
California, LLC.
The petitioning creditors have filed papers asking the Bankruptcy
Judge to appoint an independent Chapter 11 trustee "to conduct a
fair and open auction process for the Network's business assets on
a going concern basis."
Houston Regional Sports Network is a joint enterprise among
affiliates of the Houston Astros baseball team, the Houston
Rockets basketball team, and Houston SportsNet Holdings, LLC --
"Comcast Owner" -- an affiliate of Comcast Corporation. The
Network has three limited partners -- Comcast Owner, Rockets
Partner, L.P., and Astros HRSN LP Holdings LLC. The primary
purpose of Houston Regional Sports Network is to create and
operate a regional sports programming service that produces,
exhibits, and distributes sports programming on a full-time basis,
including live Astros and Rockets games within the league-
permitted local territories.
The Network also has one general partner -- Houston Regional
Sports Network, LLC -- "General Partner" -- which, subject to
certain limitations, exercises exclusive management, supervision,
and control over the Network's properties and business. The
General Partner's sole purpose is to serve as the Network's
general partner; it has no authority or power to act outside of
that role. The General Partner has three members -- Comcast
Owner, JTA Sports, Inc. -- "Rockets Owner" -- and Astros HRSN GP
Holdings LLC -- "Astros Owner".
Counsel for the petitioning creditors are Howard M. Shapiro, Esq.,
Craig Goldblatt, Esq., and Jonathan Paikin, Esq., at Wilmer Cutler
Pickering Hale and Dorr LLP in Washington, D.C.; George W.
Shuster, Jr., Esq., at Wilmer Cutler in New York; Vincent P.
Slusher, Esq., and Andrew Zollinger, Esq., at DLA Piper; and
Arthur J. Burke, Esq., Timothy Graulich, Esq., and Dana M.
Seshens, Esq., at Davis Polk & Wardwell LLP.
INSPIREMD INC: Presented at TCT Conference
------------------------------------------
Professor Dariusz Dudek, of Hospital University of Krakow, Poland,
on behalf of the MASTER Trial Investigators, presented on Oct. 29,
2013, at the Transcatheter Cardiovascular Therapeutics (TCT)
Conference, at the Moscone Center in San Francisco, CA, with
respect to the 12 month results of InspireMD, Inc.'s MASTER trial.
A copy of the PowerPoint presentation is available at:
http://is.gd/JgT7V7
A copy of the press release announcing the 12 month results of
InspireMD, Inc.'s MASTER trial is available for free at:
http://is.gd/8ctCjv
About InspireMD
InspireMD, Inc., was organized in the State of Delaware on
Feb. 29, 2008, as Saguaro Resources, Inc., to engage in the
acquisition, exploration and development of natural resource
properties. On March 28, 2011, the Company changed its name from
"Saguaro Resources, Inc." to "InspireMD, Inc."
Headquartered in Tel Aviv, Israel, InspireMD, Inc., is a medical
device company focusing on the development and commercialization
of its proprietary stent platform technology, Mguard. MGuard
provides embolic protection in stenting procedures by placing a
micron mesh sleeve over a stent. The Company's initial products
are marketed for use mainly in patients with acute coronary
syndromes, notably acute myocardial infarction (heart attack) and
saphenous vein graft coronary interventions (bypass surgery).
InspireMD incurred a net loss of $29.25 million for the year ended
June 30, 2013, as compared with a net loss of $17.59 million
during the prior year. The Company's balance sheet at June 30,
2013, showed $20.74 million in total assets, $4.64 million in
total liabilities and $16.10 million in total equity.
INSTITUTO MEDICO: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
Instituto Medico del Norte, Inc., filed with the U.S. Bankruptcy
Court for the District of Puerto Rico its schedules of assets and
liabilities disclosing the following:
Assets Liabilities
----------- -----------
A. Real Property $16,000,000
B. Personal Property 6,119,132
C. Property Claimed as Exempt N/A
D. Creditors Holding Secured Claims $10,682,758
E. Creditors Holding Unsecured
Priority Claims 6,589,771
F. Creditors Holding Unsecured
Non-priority Claims 6,503,203
----------- -----------
Total [$22,119,132] [$23,775,732]
A copy of the Schedules dated Oct. 30, 2013, is available for free
at http://bankrupt.com/misc/IMNsal1030.pdf
Instituto Medico del Norte, Inc., aka Centro Medico Wilma N.
Vazquez, aka Hospital Wilma N. Vazquez Skill Nursing Facility of
Centro Medico Wilma N. Vazquez, sought protection under Chapter 11
of the Bankruptcy Code on Oct. 30, 2013 (Case No. 13-08961, Bankr.
D.P.R.). The case is assigned to Judge Mildred Caban Flores.
The Debtor is represented by Fausto David Godreau Zayas, Esq. --
dgodreau@LBRGlaw.com -- and Rafael A Gonzalez Valiente, Esq. --
rgonzalez@lbrglaw.com -- at LATIMER BIAGGI RACHID & GODREAU, in
San Juan, Puerto Rico.
INSTITUTO MEDICO: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Instituto Medico Del Norte, Inc.
aka Centro Medico Wilma N. Vazquez
aka Hospital Wilma N. Vazquez Skill Nursing Facility of
Centro Medico Wilma N. Vazquez
Po Box 7001
Vega Baja, PR 00694
Case No.: 13-08961
Type of Business: Health Care
Chapter 11 Petition Date: October 30, 2013
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Judge: Hon. Mildred Caban Flores
Debtor's Counsel: Fausto David Godreau Zayas, Esq.
Po Box 9022512
San Juan, PR 00902-2512
Tel: 787-724-0230
Email: dgodreau@LBRGlaw.com
- and -
Rafael A Gonzalez Valiente, Esq.
LATIMER BIAGGI RACHID & GODREAU
Po Box 9022512
San Juan, PR 00902-2512
Tel: 787-724-0230
Email: rgonzalez@lbrglaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by ING. Jose Orlando Pabon, president.
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
AFE $1,008,974
PO Box 1717
Vega Baja PR
00964
Maria De Los Angeles Vazquez $675,000
Po Box 4422
Vega Baja PR
00694-4422
GE Healthcare IITS LLC $670,002
PO Box 100930
Atlanta, GA
303840930
GE Healthcare IITS LLC $655,000
PO Box 100930
Atlanta, GA
30484-0930
J&M Depot Inc. $521,790
PO Box 29427
San Juan PR
00929-9427
Borschow Hospital & Medical $373,235
Supplies
Po Box 366211
San Juan PR, 009036
Top Financing Corp. $323,000
Po Box 195375
San Juan PR
00919-5375
Alpha Biomedical Service $313,341
PO Box 670
Turabo Ave. #21
Urb. Bonn
Caguas PR 00726
McKesson $256,559
PO Box 98347
Chicago, IL
606930001
Perfect Service Inc. $202,664
100 Grand Boulevard
Los Paseos 112
MCS 115
San Juan PR, 00926
Borschow Hospital & Medical $160,615
Supplies Inc.
PO Box 366211
San Juan PR
00936
Maria De Los Angeles Vazquez $150,000
PO Box 4422
Vega Vaja PR
00694-4422
Advanced Wound Healing $176,488
PO Box 11023
San Juan PR
00910
MCAA Radiologi Servi. PSC $95,574
Po Box 370
Caguas PR 00726
Baxter $82,370
Advanced Wound Healing $76,515
Imperial Credit Insurance $74,360
Dr. Rafael Felix $70,000
Philips Medical Systems PR Inc. $68,995
MCS Life Insurance Co. $54,979
IOWORLDMEDIA INC: Inks Merger Agreement with Unit
-------------------------------------------------
ioWorldMedia, Incorporated, on Oct. 28, 2013, entered into an
Agreement and Plan of Merger with Radioio, Inc., a wholly-owned
subsidiary of the Company, pursuant to which the Company will
merge with and into Radioio, with Radioio continuing as the
surviving corporation. The articles of incorporation and bylaws
of Radioio will be the articles of incorporation and bylaws of the
surviving corporation, and the surviving corporation will be a
Nevada corporation.
At the effective time of the Merger, each holder of the Company's
common stock will receive one share of Radioio common stock for
every 100 shares of the Company's common stock held and each
holder of the Company's preferred stock will receive .4950495 of
one share of Radioio common stock for each share of the Company's
preferred stock held. The Company's shareholders will receive one
whole share of Radioio common stock in lieu of a fractional share.
Radioio, as the surviving corporation, will have 100,000,000
authorized shares of common stock, 3,865,656 of which will be
outstanding after converting all of the outstanding shares of the
Company's common stock and preferred stock into shares of Radioio
common stock, and 10,000,000 shares of preferred stock, none of
which will be outstanding.
It is anticipated that the Merger will be completed in November
2013. The board of directors of the Company may abandon the
Merger at any time prior to the effective time of the Merger.
As of Oct. 28, 2013, the Merger Agreement was approved by the
written consent of the holders of 144,509,942 shares of the
Company's common stock outstanding as of Oct. 9, 2013,
representing approximately 60.7 percent of the issued and
outstanding shares of the Company's common stock as of that date,
and by the holders of the 3,000,000 shares of the Company's
preferred stock outstanding as of Oct. 9, 2013, representing 100
percent of the issued and outstanding shares of the Company's
preferred stock as of that date.
A copy of the Merger Agreement is available for free at:
http://is.gd/KoCkuE
Hires New Accounting Firm
On Oct. 23, 2013, the Company dismissed Patrick Rodgers, CPA, PA,
as the Company's independent registered public accounting firm.
The Company has engaged WeiserMazars LLP as its independent
registered public accounting firm (principal accountant) effective
Oct. 23, 2013. The decision to change independent registered
public accounting firms was approved by the Company's board of
directors.
The Former Accountant's audit reports on the consolidated
financial statements of the Company for the past two years ended
Dec. 31, 2012, and 2011 and subsequent interim period through
June 30, 2013, did not contain any adverse opinion or disclaimer
of opinion, and were not qualified or modified as to uncertainty,
audit scope, or accounting principles, except that the audit
reports on the consolidated financial statements of the Company
for each of the years ended Dec. 31, 2012, and 2011 contained an
uncertainty about the Company's ability to continue as a going
concern.
During each of the two years ended Dec. 31, 2012, and 2011 and
through the interim period ended Oct. 23, 2013, there were no
"disagreements" with the Former Accountant on any matter.
Prior to retaining the New Accountant, the Company did not consult
with the New Accountant regarding either: (i) the application of
accounting principles to a specified transaction, either
contemplated or proposed, or the type of audit opinion that might
be rendered on the Company's consolidated financial statements; or
(ii) any matter that was the subject of a "disagreement" or a
"reportable event".
About ioWorldMedia
Tampa, Fla.-based ioWorldMedia, Incorporated, operates three
primary internet media subsidiaries: Radioio, ioBusinessMusic, and
RadioioLive.
ioWorldMedia disclosed a net loss of $746,619 in 2012, as compared
with a net loss of $954,652 in 2011. The Company's balance sheet
at June 30, 2013, showed $1.73 million in total assets, $1.88
million in total liabilities, $5.77 million in preferred stock,
and a $5.92 million total stockholders' deficit.
Patrick Rodgers, CPA, PA, in Altamonte Springs, FL, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the company has a minimum cash balance
available for payment of ongoing expenses, a negative working
capital balance, has incurred losses and negative cash flow from
operations for the past two years, and it does not have a source
of revenue sufficient to cover its operating costs. These factors
raise substantial doubt about the Company's ability to continue as
a going concern.
ISTAR FINANCIAL: Incurs $30.6 Million Net Loss in 3rd Quarter
-------------------------------------------------------------
iStar Financial Inc. reported a net loss allocable to common
shareholders of $30.57 million on $95.80 million of total revenues
for the three months ended Sept. 30, 2013, as compared with a net
loss allocable to common shareholders of $71.78 million on $93.53
million of total revenues for the same period during the prior
year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss allocable to common shareholders of $97.83 million on
$290 million of total revenues as compared with a net loss of
$185.57 million on $301.18 million of total revenues for the same
period a year ago.
The Company's balance sheet at Sept. 30, 2013, showed $5.77
billion in total assets, $4.37 billion in total liabilities,
$12.39 million in redeemable noncontrolling interests and $1.38
billion in total equity.
A copy of the press release is available for free at:
http://is.gd/ro37hQ
About iStar Financial
New York-based iStar Financial Inc. (NYSE: SFI) provides custom-
tailored investment capital to high-end private and corporate
owners of real estate, including senior and mezzanine real estate
debt, senior and mezzanine corporate capital, as well as corporate
net lease financing and equity. The Company, which is taxed as a
real estate investment trust, provides innovative and value added
financing solutions to its customers.
iStar Financial incurred a net loss of $241.43 million in 2012,
following a net loss of $25.69 million in 2011.
* * *
In March 2013, Fitch Ratings affirmed iStar's 'B-' issuer default
rating and revised the outlook to "positive" from "stable." The
revision of the outlook to positive is based on the company's
demonstrated access to the unsecured debt market, which, combined
with certain secured debt refinancings, have significantly
improved SFI's near-term debt maturity profile.
As reported by the TCR on Oct. 5, 2012, Standard & Poor's Ratings
Services affirmed its 'B+' long-term issuer credit rating on iStar
Financial.
In October 2012, Moody's Investors Service upgraded the corporate
family rating to B2 from B3. The current rating reflects the
REIT's success in extending near term debt maturities and
improving fundamentals in commercial real estate. The ratings on
the October 2012 senior secured credit facility takes into account
the asset coverage, the size and quality of the collateral pool,
and the term of facility.
JEFFERSON COUNTY, AL: Reaches Deal to Salvage Debt Settlement
-------------------------------------------------------------
Katy Stech, writing for Daily Bankruptcy Review, reported that
Jefferson County, Ala., leaders who were pushing bondholders to
give them $350 million worth of additional breaks on the county's
sewer debt announced Wednesday that they have a new deal to put
before the county's bankruptcy judge next month for approval.
According to the report, in a statement, Jefferson County
Commission President David Carrington said he and other leaders
have a new settlement after reaching agreements with J.P. Morgan
Chase & Co., hedge funds, bond insurers and other groups behind
the $ 3.1 billion debt tied to the county's sewer system.
Mr. Carrington didn't detail the extent of the cuts to which the
bondholders agreed, but he indicated in the statement that they
would allow the county to move forward on a refinancing that
became unworkable after interest rates unexpectedly rose this
spring, the report related.
"Without question, more work remains to get the county out of
bankruptcy by the end of the year," said Mr. Carrington in the
written statement, which also was signed by Commissioner Jimmie
Stephens, the report added.
The sewer-debt settlement is the biggest piece of the county's
bankruptcy-exit plan, which still needs approval from Judge Thomas
Bennett of the U.S. Bankruptcy Court in Birmingham, the report
said. He is expected to look over the voting results at a Nov. 12
plan-confirmation hearing.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers
at Bradley ArantBoult Cummings LLP and Klee, Tuchin, Bogdanoff&
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent. Jefferson estimated more than $1 billion in assets. The
petition was signed by David Carrington, president.
The bankruptcy judge in January 2012 ruled that the state court-
appointed receiver for the sewer system largely lost control as a
result of the bankruptcy. Before deciding whether Jefferson County
is eligible for Chapter 9, the bankruptcy judge will allow the
Alabama Supreme Court to decide whether sewer warrants are the
equivalent of "funding or refunding bonds" required under state
law before a municipality can be in bankruptcy.
U.S. District Judge Thomas B. Bennett ruled in March 2012 that
Jefferson County is eligible under state law to pursue a debt
restructuring under Chapter 9. Holders of more than $3 billion in
defaulted sewer debt had challenged the county's right to be in
Chapter 9.
In June 2013, the county reached settlement with holders of 78
percent of the $3.1 billion in sewer debt at the core of the
county's financial problems. The bondholders will be paid $1.84
billion through a refinancing, according to a term sheet. The
settlement calls for JPMorgan Chase & Co., the owner of $1.22
billion in bonds, to make the largest concessions so other
bondholder will recover more.
On June 30, 2013, Jefferson County filed a Chapter 9 plan of debt
adjustment. Pursuant to the Plan, sewer bondholders will receive
65 percent in cash. If they elect to waive claims against JPMorgan
and bond insurers, they receive 80 percent in cash. Bondholders
supporting the plan already agreed to waive claims and receive the
larger recovery. Existing sewer bonds will be canceled in
exchange for payments under the plan. The county will fund plan
distributions by selling new sewer bonds calculated to generate
$1.96 billion to cover the $1.84 billion earmarked for existing
sewer bondholders. JPMorgan has agreed to waive $842 million of
the sewer debt and a $657 million swap debt, resulting in an 88
percent overall write off by JPMorgan. To finance the new sewer
bonds, there will be 7.4 percent in rate increases for sewer
customers in each of the first four years. In later years, rate
increases will be 3.5 percent.
JEFFERSON COUNTY, AL: Gets New Creditor Accord to End Bankruptcy
----------------------------------------------------------------
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that Jefferson County,
Alabama, reached tentative new terms with creditors on exiting
bankruptcy, avoiding a collapse that would have allowed the
parties to back out of a settlement reached in June.
According to the report, the commission will meet on Oct. 31 to
consider the agreement in principle, reached with all the major
creditor groups tied to the sewer financing, county commission
Chairman David Carrington said in an Oct. 30 statement. He didn't
provide details of the new terms.
"This effort has involved a lot of people who have worked
diligently to solve a very difficult problem," Carrington said.
The June accord with creditors that hold most of about $3 billion
in sewer-system debt was in danger of being canceled if creditors
didn't give about $350 million in new concessions, commissioners
said Oct. 17. That deal provided $1.84 billion in cash to settle
the debt, tied to a bankruptcy-exit plan. The county entered court
protection about two years ago.
The June agreement was signed by JPMorgan Chase & Co., as well as
a group of hedge funds and bond insurers.
Carrington said on Oct. 17 that the county would consider forcing
creditors to accept less than they have been offered under the
settlement, using the so-called cramdown rules of the U.S.
bankruptcy code.
U.S. Bankruptcy Judge Thomas Bennett is scheduled to consider
approving the bankruptcy-exit plan next month at a hearing in
Birmingham.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers
at Bradley ArantBoult Cummings LLP and Klee, Tuchin, Bogdanoff&
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent. Jefferson estimated more than $1 billion in assets. The
petition was signed by David Carrington, president.
The bankruptcy judge in January 2012 ruled that the state court-
appointed receiver for the sewer system largely lost control as a
result of the bankruptcy. Before deciding whether Jefferson County
is eligible for Chapter 9, the bankruptcy judge will allow the
Alabama Supreme Court to decide whether sewer warrants are the
equivalent of "funding or refunding bonds" required under state
law before a municipality can be in bankruptcy.
U.S. District Judge Thomas B. Bennett ruled in March 2012 that
Jefferson County is eligible under state law to pursue a debt
restructuring under Chapter 9. Holders of more than $3 billion in
defaulted sewer debt had challenged the county's right to be in
Chapter 9.
In June 2013, the county reached settlement with holders of 78
percent of the $3.1 billion in sewer debt at the core of the
county's financial problems. The bondholders will be paid $1.84
billion through a refinancing, according to a term sheet. The
settlement calls for JPMorgan Chase & Co., the owner of $1.22
billion in bonds, to make the largest concessions so other
bondholder will recover more.
On June 30, 2013, Jefferson County filed a Chapter 9 plan of debt
adjustment. Pursuant to the Plan, sewer bondholders will receive
65 percent in cash. If they elect to waive claims against JPMorgan
and bond insurers, they receive 80 percent in cash. Bondholders
supporting the plan already agreed to waive claims and receive the
larger recovery. Existing sewer bonds will be canceled in
exchange for payments under the plan. The county will fund plan
distributions by selling new sewer bonds calculated to generate
$1.96 billion to cover the $1.84 billion earmarked for existing
sewer bondholders. JPMorgan has agreed to waive $842 million of
the sewer debt and a $657 million swap debt, resulting in an 88
percent overall write off by JPMorgan. To finance the new sewer
bonds, there will be 7.4 percent in rate increases for sewer
customers in each of the first four years. In later years, rate
increases will be 3.5 percent.
K-V PHARMACEUTICAL: Reaches $5MM Deal with Lenders Over Interest
----------------------------------------------------------------
Law360 reported that the reorganized K-V Pharmaceutical Co. on
Oct. 29 reached a $5 million settlement with a group of senior
secured lenders who had sued to obtain $34.7 million in additional
interest on the debt they held.
According to the report, the pharmaceutical company, which
received a bankruptcy judge's approval to reorganize and be taken
over by a group of convertible noteholders in August, had been
embroiled in a long-standing dispute with its senior secured
lenders over whether they were entitled to post-petition interest
on the $235.8 million in debt they said they are owed.
About K-V Pharmaceutical
K-V Pharmaceutical Company (NYSE: KVa/KVb) --
http://www.kvpharmaceutical.com/-- is a fully integrated
specialty pharmaceutical company that develops, manufactures,
markets, and acquires technology-distinguished branded and
generic/non-branded prescription pharmaceutical products. The
Company markets its technology distinguished products through
ETHEX Corporation, a subsidiary that competes with branded
products, and Ther-Rx Corporation, the company's branded drug
subsidiary.
K-V Pharmaceutical Company and certain domestic subsidiaries on
Aug. 4, 2012, filed voluntary Chapter 11 petitions (Bankr.
S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions
Inc.) to restructure their financial obligations.
K-V employed Willkie Farr & Gallagher LLP as bankruptcy counsel,
Williams & Connolly LLP as special litigation counsel, and SNR
Denton as special litigation counsel. In addition, K-V tapped
Jefferies & Co., Inc., as financial advisor and investment banker.
Epiq Bankruptcy Solutions LLC is the claims and notice agent.
The U.S. Trustee appointed five members to serve in the Official
Committee of Unsecured Creditors. Kristopher M. Hansen, Esq.,
Erez E. Gilad, Esq., and Matthew G. Garofalo, Esq., at Stroock &
Stroock & Lavan LLP, represent the Creditors Committee.
Weil, Gotshal & Manges LLP's Robert J. Lemons, Esq., and Lori
R. Fife, Esq., represent an Ad Hoc Senior Noteholders Group.
KSL MEDIA: Grobstein Teeple Approved as Financial Advisors
----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
authorized KSL Media, Inc. and its debtor-affiliates to employ
Grobstein Teeple Financial Advisory Services, LLP, as their
financial advisors, effective Sept. 11, 2013.
As Troubled Company Reporter on Oct. 21, 2013, Grobstein Teeple
will:
(a) review and analyze the Debtors' financial data;
(b) assist the Debtors in the preparation of information and
reports for the Debtors' counsel, the Court, and U.S.
Trustee;
(c) review weekly expenditures and assist the Debtors in
preparing weekly budget variance reports;
(d) assist the Debtors with operational and financial issues,
including business wind-down oversight and the
reconciliation process;
(e) proceed with the forensic accounting and reconstruction of
records including general ledgers and other schedules;
(f) evaluate tax issues and prepare tax returns;
(g) provide other accounting and consulting services requested
by the Debtors and their counsel; and
(h) provide litigation consulting if required.
Grobstein Teeple will also be paid at these hourly rates:
Partners $325-$400
Senior Consultants $125-$325
Administrators $95
About KSL Media
One of the largest independent media-buying firms in the United
States, KSL Media Inc., and two affiliates filed for Chapter 11
protection on Sept. 11, 2013, in Central California, driven to
bankruptcy after losing a major account and claiming it was the
victim of an alleged multimillion-dollar embezzlement scheme it
blamed on its former controller.
According to the bankruptcy declaration from current controller
Janet Miller-Allen, the company's former controller Geoffrey
Charness is the subject of an FBI investigation connected to an
alleged scheme to dump $140 million from the company's accounts.
The lead case is Case No. 13-15929 (Bankr. C.D. Calif.) before
Judge Alan M. Ahart.
The Debtors are represented by Rodger M. Landau, Esq., and Monica
Rieder, Esq., at Landau Gottfried & Berger, LLP, in Los Angeles,
California. The Debtors' accountant is Grobstein Teeple Financial
Advisory Services LLP. The Debtors disclosed $34,652,932 in
assets and $64,946,225 in liabilities as of the Chapter 11 filing.
KSL MEDIA: May Hire Landau Gottfried as Bankruptcy Counsel
----------------------------------------------------------
The U.S. Bankruptcy Court Central District of California, San
Fernando Valley Division, authorized KSL Media, Inc., et al., to
employ Landau Gottfried & Berger LLP, as their general bankruptcy
counsel, effective as of Sept. 11, 2013.
As reported in the Troubled Company Reporter on Oct. 1, 2013,
the attorneys who will be primarily responsible for the
representation are Rodger M. Landau, Esq., to be paid $565 per
hour; Jon L.R. Dalberg, Esq., to be paid $530 per hour; Monica
Rieder, Esq., to be paid $440 per hour; and Robert G. Wilson,
Esq., at $530 per hour. Where appropriate, LGB will utilize the
services of LGB lawyers, whose hourly rates range from $330 to
$565. Law clerk and paralegal time is billed at $160 to $225 per
hour.
Prior to the Petition Date, the firm received multiple retainer
deposits from the Debtors totaling $875,000. As of the Petition
Date, the amount of the retainer remaining in LGB's client trust
account was $367,079.
About KSL Media
One of the largest independent media-buying firms in the United
States, KSL Media Inc., and two affiliates filed for Chapter 11
protection on Sept. 11, 2013, in Central California, driven to
bankruptcy after losing a major account and claiming it was the
victim of an alleged multimillion-dollar embezzlement scheme it
blamed on its former controller.
According to the bankruptcy declaration from current controller
Janet Miller-Allen, the company's former controller Geoffrey
Charness is the subject of an FBI investigation connected to an
alleged scheme to dump $140 million from the company's accounts.
The lead case is Case No. 13-15929 (Bankr. C.D. Calif.) before
Judge Alan M. Ahart.
The Debtors are represented by Rodger M. Landau, Esq., and Monica
Rieder, Esq., at Landau Gottfried & Berger, LLP, in Los Angeles,
California. The Debtors' accountant is Grobstein Teeple Financial
Advisory Services LLP. The Debtors disclosed $34,652,932 in
assets and $64,946,225 in liabilities as of the Chapter 11 filing.
LA HAIR STRAIGHTENER: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: La Hair Straightener Inc.
dba Forever Beauty
1634 S Central Ave
Glendale, CA 91206
Case No.: 13-36341
Chapter 11 Petition Date: October 30, 2013
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Hon. Neil W. Bason
Debtor's Counsel: Mark J Leonardo, Esq.
LAW OFFICE OF MARK J LEONARDO
25019 Pacific Coast Highway
Malibu, CA 90265
Tel: 310-456-7373
Total Assets: $1 million
Total Debts: $200,000
The petition was signed by Jamal Chowdhary, president.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
LABORATORY PARTNERS: Meeting to Form Creditors' Panel on Nov. 7
---------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on Nov. 7, 2013 at 10:00 a.m. in
the bankruptcy cases of Laboratory Partners, Inc., et al. The
meeting will be held at:
J. Caleb Boggs Federal Building
844 King Street, Room 5209
Wilmington, DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
The case is In re Laboratory Partners Inc., 13-bk-12769, U.S.
Bankruptcy Court, District of Delaware (Wilmington).
LABORATORY PARTNERS: Gets Interim Nod for $5-Mil. DIP Loan
----------------------------------------------------------
Law360 reported that Delaware bankruptcy judge on Oct. 29 blessed
a $5 million debtor-in-possession loan for Laboratory Partners
Inc., also known as MedLab, and other first-day motions designed
to keep the clinical testing company afloat as it pursues Chapter
11 sales of its various units.
According to the report, at a hearing in Wilmington, U.S.
Bankruptcy Judge Peter J. Walsh approved the financing motion on
an interim basis, which makes $2.85 million of the DIP available
immediately and authorizes the debtors to use their cash
collateral.
Laboratory Partners Inc., a Cincinnati-based provider
of lab and pathology services, filed a petition for Chapter 11
protection on Oct. 25 in Delaware. The case is In re Laboratory
Partners Inc., 13-bk-12769, U.S. Bankruptcy Court, District of
Delaware (Wilmington).
LABORATORY PARTNERS: Wins Court Approval of Interim Loan
--------------------------------------------------------
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that Laboratory Partners
Inc., a provider of clinical testing and pathology services, won
court approval to borrow as much as $2.85 million to help fund
operations in bankruptcy as it pursues a sale.
According to the report, U.S. Bankruptcy Judge Peter Walsh granted
the Cincinnati-based company interim approval of bankruptcy
financing, according to court documents filed Oct. 29 in
Wilmington, Delaware.
The company will seek final court approval to borrow the full $5
million of the bankruptcy loan at a hearing scheduled for Nov. 26,
court paper show.
Laboratory Partners, also known as MedLab, offers services to
skilled nursing facilities in eight states and the District of
Columbia, which it calls its long-term care division. It also
provides service to physicians in Indiana and Illinois and to
Union Hospital Inc. in Terre Haute and Clinton, Indiana. It has 11
laboratory facilities, according to court filings.
The company is seeking court approval of a process to sell
virtually all its assets, according to court documents filed
on Oct. 30.
"A prompt sale of the long-term care division is a matter
of urgency" because the bankruptcy financing can only fund the
operations for 60 days, according to court filings. The company
believes a going-concern sale of the long-term care business is
the best way to maximize the return for the estate.
The company hasn't reached a deal with any so-called stalking
horse bidders, who would set the floor at bankruptcy auctions for
other potential buyers to beat. The company has "multiple
interested buyers" in its long-term care business, according to
court papers.
The company has asked the court to schedule a hearing to approve
any sale of the long-term care business between Dec. 16 and Dec.
20, and a sale hearing for other assets between Jan. 27 and Jan.
31, to meet requirements under its bankruptcy loan, according to
court documents.
An auction would be held three days before the date set as the
sale hearing for the long-term care assets and four days before
the sale hearing for the other assets, court papers show. The
company wants the court to set Dec. 3 as the deadline for all
competing bids to be submitted for the long-term care auction. The
bid deadline for the other assets would be one week before the
proposed auction.
Laboratory Partners was forced to seek bankruptcy due to cuts in
Medicare reimbursements for lab services and defaults on its
notes. The company has funded debt of about $42.3 million, court
papers show. It owes about $11 million to unsecured creditors.
The case is In re Laboratory Partners Inc., 13-bk-12769, U.S.
Bankruptcy Court, District of Delaware (Wilmington).
LEVEL 3 FINANCING: Fitch Rates $640MM Sr. Notes Due 2021 'BB-'
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB-/RR2' rating to Level 3
Financing, Inc.'s issuance of $640 million senior notes due 2021.
Level 3 Financing is a wholly owned subsidiary of Level 3
Communications, Inc. (LVLT). The Issuer Default Rating (IDR) for
both LVLT and Level 3 Financing is 'B' with a Positive Rating
Outlook. LVLT had approximately $8.5 billion of debt outstanding
on September 30, 2013.
Proceeds from the senior note offering are expected to be used to
refinance the company's existing equivalent sized senior notes due
2018. The senior notes will be guaranteed by LVLT and other
operating subsidiaries including Level 3 LLC (a direct wholly
owned subsidiary of Level 3 Financing, Inc.) in a manner similar
to the existing senior notes issued by Level 3 Financing. The new
notes will rank pari passu with Level 3 Financing's existing
senior unsecured indebtedness. Outside of the extended maturity
date and an expected reduction of interest expense related to this
transaction, LVLT's credit profile has not substantially changed.
Fitch believes that LVLT's liquidity position is adequate given
the rating and is primarily supported by cash carried on its
balance sheet, which as of September 30, 2013 totaled
approximately $507 million. The company does not maintain a
revolver and relies on capital market access to replenish cash
reserves, which limits the company's financial flexibility in
Fitch's opinion. LVLT does not have any significant maturities
scheduled during the remainder of 2013 or into 2014. LVLT's next
scheduled maturity is not until 2015 when approximately $775
million of debt is scheduled to mature or convert into equity.
Key Rating Drivers:
-- LVLT's credit profile continues to strengthen in line with
Fitch's expectations. Fitch foresees LVLT leverage will
approximate 5.3x by the end of 2013 and 4.9x by year end 2014
as the company continues its progress to achieving its 3x to 5x
net leverage target.
-- The company is poised to generate sustainable levels of free
cash flow (FCF - defined as cash flow from operations less
capital expenditures and dividends). Fitch anticipates LVLT FCF
generation during 2014 will approximate 4% of consolidated
revenues.
-- LVLT's revenue mix transformation is proceeding. LVLT's
operating strategies are aimed at shifting its revenue and
customer focus to become a predominantly enterprise-focused
entity.
-- The operating leverage inherent within LVLT's business model
positions the company to expand both gross and EBITDA margins.
The Positive Rating Outlook reflects Fitch's belief that LVLT will
continue capitalizing on operating synergies captured to date
(related to the Global Crossing acquisition) and expand operating
margins, which in turn will position the company to generate
sustainable levels of positive FCF and strengthen its credit
profile during the remainder of 2013 and into 2014.
LVLT's leverage has declined to 5.3x as of the latest 12 months
(LTM) period ended September 30, 2013, which compares favorably
with company's leverage of 5.85x as of Dec. 31, 2012 and 6.10x as
of September 30, 2012. Fitch foresees LVLT leverage will move
below 5.3x by the end of 2013 and below 5x as of year-end 2014 as
the company continues its progress to achieving its 3x to 5x net
leverage target.
Positive rating actions will likely occur as the company
demonstrates that it can consistently generate positive free cash
flow and maintain leverage below 5.5x. Equal consideration will be
given to the company's ability to capitalize on operating cost
synergies achieved to date while maintaining positive operational
momentum. Evidence of positive operating momentum includes stable
to expanding gross margins and revenue growth within the company
Core Network Services segment. Fitch believes the company's
ability to grow high margin CNS revenues coupled with the strong
operating leverage inherent in its operating profile will enable
the company to generate consistent levels of free cash flow. The
company reported a $42 million free cash flow deficit during the
LTM period ended September 30, 2013, which compares favorably to
the $165 million FCF deficit reported during the year ended Dec.
31, 2012. Fitch expects that LVLT will generate a nominal amount
of positive free cash flow during 2013 and that FCF generation
will approximate 4% of consolidated revenues during 2014.
Overall, Fitch's ratings incorporate LVLT's highly levered balance
sheet, its weaker competitive position and lack of scale relative
to larger and better capitalized market participants. The ratings
for LVLT reflect the company's strong metropolitan network
facilities position relative to alternative carriers, as well as
the diversity of its customer base and service offering, and a
relatively stable pricing environment for a significant portion of
LVLT's service portfolio.
Based largely on LVLT's strategy to invest in metropolitan
facilities and carry more communications traffic on its network,
the company derives strong operating leverage from its cost
structure and network, enabling it to enhance margins.
Additionally, Fitch expects that the company can further
strengthen its operating leverage by continuing to shift its
revenue and customer focus to become a predominantly enterprise-
focused entity.
Rating Sensitivities:
What Could Trigger a Positive Rating Action:
-- Consolidated leverage maintained at 5.5x or lower;
-- Consistent generation of positive free cash flow;
-- Positive operating momentum characterized by consistent core
network services revenue growth and gross margin expansion.
What Could Trigger a Negative Rating Action:
-- Weakening of LVLT's operating profile, as signaled by
deteriorating margins and revenue erosion brought on by
difficult economic conditions or competitive pressure.
-- Discretionary management decisions including but not limited
to execution of merger and acquisition activity that increases
leverage beyond 6.5x in the absence of a credible de-
leveraging plan.
LEVEL 3 FINANCING: Moody's Rates $640MM Sr. Unsecured Notes 'B3'
----------------------------------------------------------------
Moody's Investors Service has assigned a B3 rating to Level 3
Financing, Inc.'s (Financing) new $640 million senior unsecured
notes. Financing is a wholly-owned subsidiary of Level 3
Communications, Inc. (Level 3), the guarantor of the notes. Level
3's corporate family and probability of default ratings remain
unchanged at B3 and B3-PD, respectively, and its speculative grade
liquidity rating remains unchanged at SGL-1 (very good liquidity).
In addition, the ratings outlook remains stable.
Proceeds from the new issue will be used to repay a similar amount
of the company's 10% notes that mature 2018. As sources and uses
are approximately equal and the new issue is the same class of
debt as that being fully repaid (i.e. senior unsecured in the name
of Financing, Inc., guaranteed by Level 3), the new notes are
rated at the same level as the debt they replace and there is no
ratings impact.
The following summarizes rating action as well as Level 3's
ratings:
Assignments:
Issuer: Level 3 Financing, Inc.
Senior Unsecured Regular Bond/Debenture, B3 (LGD4, 58%)
Issuer: Level 3 Communications, Inc.
Corporate Family Rating, unchanged at B3
Probability of Default Rating, unchanged at B3-PD
Speculative Grade Liquidity Rating, unchanged at SGL-1
Outlook, unchanged at Stable
Senior Unsecured Bond/Debenture, unchanged at Caa2 (LGD6, 92%)
Issuer: Level 3 Financing, Inc.
Senior Secured Bank Credit Facility, unchanged at Ba3 (LGD2, 10%)
Senior Unsecured Regular Bond/Debenture (including debts issued
by Level 3 Escrow, Inc. that have been assumed by Level 3
Financing, Inc.), unchanged at B3 (LGD4, 58%)
Ratings Rationale:
Level 3's B3 CFR is based on the company's limited ability to
generate free cash flow over the next 12-to-18 months and the lack
of visibility with respect to current and future activity levels.
Level 3 has a reasonable business proposition as a facilities-
based provider of optical, Internet protocol telecommunications
infrastructure and services, however, owing to excess long-haul
transport capacity, margins are relatively weak. Moody's does not
expect supply and demand balance to change and therefore expect
stable margins going forward. With no quantity or price metrics
disclosed by the company or its competitors, visibility of current
and future activity is very limited, a credit negative. The rating
is also based on the expectation that there is sufficient
liquidity to continue to fund investments in synergy-related
initiatives, and that the company's improving credit profile
facilitates repayment and/or roll-over of 2015 and 2016 debt
maturities.
Rating Outlook:
The stable ratings outlook is premised on the expectation that
Level 3 will be modestly cash flow positive (on a sustained
basis).
What Could Change the Rating Up:
In the event that Debt/EBITDA declines towards 5.0x and (RCF-
CapEx)/Debt advances beyond 5% (in both cases, inclusive of
Moody's adjustments and on a sustainable basis), positive ratings
actions may be warranted.
What Could Change the Rating Down:
Whether the result of execution mis-steps or adverse industry
conditions, should it appear that the company is not cash flow
self-sufficient, or in the event of significant debt-financed
acquisition activity, negative ratings activity may be considered.
Corporate Profile:
Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc. (Level 3) is a publicly traded international communications
company with one of the world's largest long-haul communications
and optical Internet backbones. Level 3's annual revenue is
approximately $6.4 billion and annual (Moody's adjusted) EBITDA is
$1.7 billion. Approximately 62% of revenue is generated in North
America, 14% in Europe, 12% in Latin America, while the remaining
12% of revenue is generated through other sources.
LEVEL 3 FINANCING: S&P Assigns 'CCC+' Rating to $640MM Sr. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' issue-level
rating and '6' recovery rating to Level 3 Financing Inc.'s
$640 million senior notes due 2021. Level 3 Financing is a
subsidiary of Broomfield, Colo.-based Level 3 Communications Inc.
The '6' recovery rating on these unsecured notes reflects S&P's
expectation of negligible (0% to 10%) recovery for noteholders in
the event of a default.
The notes will be sold under Rule 144A with registration rights,
and proceeds will refinance the $640 million 10% senior notes due
2018. Other ratings on Level 3 Communications and subsidiaries,
including the 'B' corporate credit rating, are unchanged as the
modest reduction in interest expense anticipated from this
refinancing would not materially change consolidated financial
metrics. The outlook is stable.
Level 3 Communications, a global telecommunications provider,
reported approximately $8.6 billion of outstanding debt at
Sept 30, 2013.
RATINGS LIST
Level 3 Communications Inc.
Corporate Credit Rating B/Stable/--
New Rating
Level 3 Financing Inc.
$640 mil. Senior notes due 2021 CCC+
Recovery Rating 6
LIGHTSQUARED INC: Harbinger Suit v. Ergen, Dish Dismissed Partly
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Charles Ergen and his Dish Networks Corp. succeeded
in persuading the bankruptcy judge to dismiss part of lawsuits
contending that an Ergen-owned company named SP Special
Opportunities Holdings LLC improperly bought secured debt owing by
bankrupt LightSquared Inc., the developer of a satellite-based
wireless communications system.
According to the report, at a hearing on Oct. 29, the bankruptcy
judge dismissed parts of a fraud suit filed in August by Philip
Falcone's Harbinger Capital Partners LLC, LightSquared's
controlling shareholder. The judge said LightSquared itself could
pursue the suits.
According to Harbinger's suit, Dish, SP and Ergen committed fraud
by failing to disclose that SP was owned by Ergen. Harbinger also
contended that Ergen's companies were barred from buying
LightSquared debt in an effort at taking over the bankrupt
company.
Ergen and his companies argued that only Dish or its subsidiaries
were prohibited from buying LightSquared debt. Because affiliates
of Dish weren't prohibited buyers, the debt purchases by SP were
permitted and there was no duty to disclose, the argument said.
Dish contended the suit was is a "transparent effort by Harbinger
to retain control of a company that it has driven into
bankruptcy." The suit is designed to "discredit" the $2.22 billion
cash offer Dish is making to buy LightSquared, Dish said.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
LIME ENERGY: Regains Compliance with NASDAQ Listing Requirements
----------------------------------------------------------------
Lime Energy Co. received notice from the NASDAQ Hearing Panel
informing it that the Panel had determined that the Company was in
compliance with all its requirements for continued listing on the
NASDAQ Capital Market and that it would continue the listing of
the Company's securities on the NASDAQ Stock Exchange.
"We are very happy to know that our stock will continue to trade
on the NASDAQ exchange," commented John O'Rourke, the Company's
chief executive officer. "It has been a tough 18 months for our
stockholders, our employees and our loyal customers. Regaining
full compliance with NASDAQ's requirements for continued listing
is another important step in the return to normal operations for
the Company."
About Lime Energy
Headquartered in Huntersville, North Carolina, Lime Energy Co. --
http://www.lime-energy.com-- is engaged in planning and
delivering clean energy solutions that assist its clients in their
energy efficiency and renewable energy goals. The Company's
solutions include energy efficient lighting upgrades, energy
efficient mechanical and electrical retrofit and upgrade services,
water conservation, building weatherization, on-site generation
and renewable energy project development and implementation. The
Company provides energy solutions across a range of facilities,
from high-rise office buildings, distribution facilities,
manufacturing plants, retail sites, multi-tenant residential
buildings, mixed use complexes, hospitals, colleges and
universities, government sites to small, single tenant facilities.
The Company's balance sheet at June 30, 2013, showed $32.64
million in total assets, $31.68 million in total liabilities and
$952,000 in total stockholders' equity.
Lime Energy disclosed in regulatory filings in July 2013, it is in
discussions with PNC Bank about entering into a forbearance
agreement in which they would agree not to accelerate a loan for a
period of time while the Company attempts to correct the gas flow
issue and sell its landfill-gas facility. The bank is considering
the Company's request.
LONE PINE: U.S. Court Approves Canadian Loan
--------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Lone Pine Resources Inc., a Calgary-based oil-and-gas
exploration and production company, was authorized by the
bankruptcy court last week to pledge assets in the U.S. to provide
some of the collateral security for a loan approved by a court in
Alberta.
According to the report, in mid-October, a U.S. bankruptcy judge
in Delaware recognized Canada as home to the so-called foreign
main bankruptcy proceeding, thus invoking protections under
Chapter 15 of U.S. bankruptcy law.
Lone Pine filed for reorganization simultaneously in Canada and
the U.S. in September, the report recalled. Finding that Canada
has the main bankruptcy allows the Canadian court to decide how
the company should be restructured and creditors' claims treated.
Lone Pine worked out an agreement before bankruptcy with holders
of 75 percent of the $195 million in senior notes. Assuming the
arrangement comes to fruition, noteholders will get 100 percent
ownership of the new common stock in a plan under Canada's
Companies' Creditors Arrangement Act.
The 10.375 percent senior unsecured notes last traded on Oct. 25
for 50.9 cents on the dollar, according to Trace, the bond-price
reporting system of the Financial Industry Regulatory Authority.
The notes sold for 85 cents on June 3.
About Lone Pine Resources
Calgary, Canada-based Lone Pine Resources Inc. is an independent
oil and gas exploration, development and production company with
operations in Canada. The Company's reserves, producing
properties and exploration prospects are located in the provinces
of Alberta, British Columbia and Quebec, and in the Northwest
Territories. The Company is incorporated under the laws of the
State of Delaware.
Lone Pine entered bankruptcy protection in Canada on Sept. 25,
2013, under the Companies' Creditors Arrangement Act and received
an initial protection order from an Alberta court the same day.
Lone Pine Resources simultaneously filed for Chapter 15 protection
in Delaware in the United States (Bankr. D. Del. Case No. 13-
12487) to seek recognition of the CCAA proceedings.
Lone Pine, LPR Canada and all other subsidiaries of the Company
are parties to the CCAA and Chapter 15 proceedings.
Lone Pine is being advised by RBC Capital Markets, Bennett Jones
LLP, Vinson & Elkins LLP and Richards Layton & Finger P.A. in
connection with the restructuring, with Wachtell, Lipton, Rosen &
Katz LLP providing independent advice to the Company's board of
directors. The Supporting Noteholders are being advised by
Goodmans LLP and Stroock & Stroock & Lavan LLP.
LONGVIEW PARTNERS: Gets Court Approval of Employee Bonus Payments
-----------------------------------------------------------------
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that Longview Power LLC,
which spent $2 billion to build a coal-fired plant in West
Virginia, won court approval to pay as much as $3.7 million to 126
employees.
According to the report, U.S. Bankruptcy Judge Brendan Linehan
Shannon approved the company's so-called key employee retention
programs, which it called necessary to keep workers from leaving
for other jobs and to keep the plant operating, according to court
documents filed Oct. 29 in U.S. Bankruptcy Court in Wilmington,
Delaware.
Longview's "key employees are the lifeblood of their business,"
the company said in court papers. Their knowledge, experience and
expertise "are essential to both preserving operational stability
and maximizing estate value," because the highly trained personnel
can't easily be replaced.
Longview sought bankruptcy protection after construction flaws
reduced its power output, hindering its ability to make debt
payments. The company is in arbitration with the contractors that
built the plant, who dispute that they are responsible for the
design flaws.
Longview's 700-megawatt plant "has been plagued by design,
construction, and equipment defects and failures," Chief Executive
Officer Jeffery L. Keffer said in court papers. Sales also were
hurt by a drop in power prices because of rising supplies of
natural gas, he said.
The Maidsville, West Virginia-based company, an indirect
unit of investment firm First Reserve Corp., listed more than $1
billion in both assets and debt in Chapter 11 papers. Mepco
Holdings LLC and 11 other affiliates also sought protection.
Longview received a $1 billion equity investment from an affiliate
of Greenwich, Connecticut-based First Reserve and borrowed about
$1.2 billion on a secured credit facility to fund construction of
the West Virginia project, according to court papers. The company
has about $1 billion outstanding on the credit agreement, with
about $557 million due in February.
Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case.
13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery
L. Keffer, the Company's chief executive officer, president,
treasurer and secretary. The Debtor estimated assets and debts of
more than $1 billion. Judge Brendan Linehan Shannon presides over
the case. Kirkland & Ellis LLP and Richards, Layton & Finger,
P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC
acts as the Debtors' investment bankers. Alvarez & Marsal North
America, LLC, is the Debtors' restructuring advisors. Ernst &
Young serves as the Debtors' accountants. The Debtors' claims
agent is Donlin, Recano & Co. Inc.
Roberta A. DeAngelis, U.S. Trustee for Region 3, disclosed that as
of September 11, 2013, a committee of unsecured creditors has not
been appointed in the case due to insufficient response to the
U.S. Trustee's communication/contact for service on the committee.
MAGYAR TELECOM: Invitel Owner Files in U.K. and N.Y.
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Magyar Telecom BV, owner of Hungarian
telecommunications provider Invitel, filed a petition on Oct. 29
in New York under Chapter 15 to assist a court in the U.K. in
carrying out a scheme of arrangement to deal with 350 million
euros ($481 million) in 9.5 percent secured notes.
According to the report, Magyar is a Dutch company, and the
operating company Invitel is Hungarian. The companies determined
that a quickly accomplished debt restructuring was impossible in
either the Netherlands or Hungary. They also concluded that a
Chapter 11 reorganization in the U.S. would be too expensive.
Consequently, Magyar gained the support of holders of 70 percent
of the notes on a scheme of arrangement to be implemented through
the High Court of Justice of England and Wales, the report
related. The U.K. proceedings commenced Oct. 21. On Oct.28, the
U.K. judge authorized holding a creditors' meeting on Nov. 27 to
approve the scheme.
The scheme would reduce debt on the notes to 155 million euros.
The reorganized company will have another 10 million euros owing
to London-based Mid Europa Partners Ltd., which manages the
companies' ultimate parent. The so-called sponsor will inject 25
million euros in cash. The notes represent almost all of Magyar's
debt.
Noteholders will receive new notes representing 47.1 percent of
the existing notes, together with some of the reorganized
company's equity.
The companies took corporate actions to qualify for bankruptcy in
both the U.K. and the U.S. If the U.S. court decides that the U.K.
is home to the foreign main proceeding, the judge will enforce the
scheme in the U.S. and bar creditor actions.
The operating company's financial problems were caused by
competition and falling prices. It hasn't generated cash to
service the notes since 2010.
The case is In re Magyar Telecom BV, 13-bk-13508, U.S. Bankruptcy
Court, Southern District of New York (Manhattan).
MF GLOBAL: Investors Fire Back at PwC in Securities Suit
--------------------------------------------------------
Law360 reported that bankrupt MF Global Holdings Inc.'s customers
challenged PricewaterhouseCoopers' attempt to toss a proposed
class action in New York federal court on Monday, in a case
claiming the auditing firm failed to identify the brokerage's
alleged scheme to deceive investors about its financial stability.
According to the report, the customers emphasized that PwC's sole
purpose as an auditor was to ensure that the MF Global complied
with all state and federal regulations and that customer funds
were safe.
The case is Deangelis v. Corzine et al., Case No. 1:11-cv-07866
(S.D.N.Y.) before Judge Victor Marrero.
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was one of
the world's leading brokers of commodities and listed derivatives.
MF Global provides access to more than 70 exchanges around the
world. The firm also was one of 22 primary dealers authorized to
trade U.S. government securities with the Federal Reserve Bank of
New York. MF Global's roots go back nearly 230 years to a sugar
brokerage on the banks of the Thames River in London.
On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance
USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y.
Case Nos. 11-15059 and 11-5058), after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S.
Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the
Bankruptcy Court entered an order approving the appointment of
Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC,
as Chapter 11 trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11
petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and
11-15810). On Dec. 27, the Court entered an order installing Mr.
Freeh as Chapter 11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan
LLP, as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained
Capstone Advisory Group LLC as financial advisor, while lawyers at
Proskauer Rose LLP serve as counsel.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
In April 2013, the Bankruptcy Court approved MF Global Holdings'
plan to liquidate its assets. Bloomberg News reported that the
court-approved disclosure statement initially told
creditors with $1.134 billion in unsecured claims against the
parent holding company why they could expect a recovery of 13.4%
to 39.1% from the plan. As a consequence of a settlement with
JPMorgan, supplemental materials informed unsecured creditors
their recovery was reduced to the range of 11.4% to 34.4%. Bank
lenders will have the same recovery on their $1.174 billion claim
against the holding company. As a consequence of the settlement,
the predicted recovery became 18% to 41.5% for holders of $1.19
billion in unsecured claims against the finance subsidiary,
one of the companies under the umbrella of the holding company
trustee. Previously, the predicted recovery was 14.7% to 34% on
bank lenders' claims against the finance subsidiary.
MF GLOBAL: Dewey, Proskauer Win Bid for $8.8-Mil. in Fees
---------------------------------------------------------
Law360 reported that Dewey & LeBoeuf LLP and Proskauer Rose LLP on
Oct. 29 received a bankruptcy judge's approval of their request
for a combined $8.8 million in attorneys' fees for their work on
MF Global Holdings Ltd.'s case over the objections of the fallen
brokerage's plan administrator.
According to the report, U.S. Bankruptcy Judge Martin Glenn signed
off on the fees, $3.5 million of which were requested by the
defunct Dewey and $5.3 million of which were sought by Proskauer.
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.
NATIONAL HOLDINGS: Amends 10.5MM Shares Resale Prospectus
---------------------------------------------------------
National Holdings Corporation amended its Form S-1 registration
statement relating to the resale at various times by Iroquois
Master Fund Ltd., Stephen Nicholas, Chestnut Ridge Partners, LP,
et al., of up to 10,583,330 shares of the Company's common stock.
The Company will not receive any proceeds from the sale of shares
of its common stock by the selling stockholders.
The selling stockholders may sell the shares of the Company's
common stock being offered by them from time to time on the OTCQB
Marketplace operated by the OTC Market Group, Inc., in market
transactions, in negotiated transactions or otherwise, and at
prices and at terms that will be determined by the then prevailing
market price for the shares of the Company's common stock or at
negotiated prices directly or through brokers or dealers, who may
act as agent or as principal or by a combination of those methods
of sale.
The Company's common stock is traded on the OTCQB under the symbol
"NHLD". On Oct. 28, 2013, the closing sale price of the Company's
common stock was $0.37 per share.
A copy of the Form S-1/A is available for free at:
http://is.gd/Q7VXHQ
About National Holdings
New York, N.Y.-based National Holdings Corporation is a financial
services organization, operating primarily through its wholly
owned subsidiaries, National Securities Corporation, Finance
Investments, Inc., and EquityStation, Inc. The Broker-Dealer
Subsidiaries conduct a national securities brokerage business
through their main offices in New York, New York, Boca Raton,
Florida, and Seattle, Washington.
The Company incurred a net loss of $1.93 million for the year
ended Sept. 30, 2012, compared with a net loss of $4.71 million
during the prior year. The Company's balance sheet at June 30,
2013, showed $23.43 million in total assets, $11.81 million in
total liabilities and $11.62 million in total stockholders'
equity.
Sherb & Co., LLP, in Boca Raton, Florida, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Sept. 30, 2012. The independent auditors noted that
the Company has incurred significant losses and has a working
capital deficit as of Sept. 30, 2012, that raise substantial doubt
about the Company's ability to continue as a going concern.
Bankruptcy Warning
"Our independent public accounting firm has issued an opinion on
our consolidated financial statements that states that the
consolidated financial statements were prepared assuming we will
continue as a going concern and further states that our recurring
losses from operations, stockholders' deficit and inability to
generate sufficient cash flow to meet our obligations and sustain
our operations raise substantial doubt about our ability to
continue as a going concern. Our future is dependent on our
ability to sustain profitability and obtain additional financing.
If we fail to do so for any reason, we would not be able to
continue as a going concern and could potentially be forced to
seek relief through a filing under the U.S. Bankruptcy Code," the
Company said in its annual report for the year ended Sept. 30,
2012.
MISSION NEWENERGY: Posts $10 Million Profit in Fiscal 2013
----------------------------------------------------------
Mission NewEnergy filed its annual report with the U.S. Securities
and Exchange Commission disclosing profit of $10.05 million on
$8.41 million of total revenue for the year ended June 30, 2013,
as compared with a loss of $6.19 million on $38.20 million of
total revenue during the prior year.
The Company's balance sheet at June 30, 2013, showed
$20.10 million in total assets, $32.61 million in total
liabilities and a $12.50 million total deficiency.
A copy of the Annual Report is available for free at:
http://is.gd/i8qniK
Annual Meeting
The Annual General Meeting of the Shareholders of the Company will
be held at 2:30 pm (WST) on Nov. 29, 2013 at BDO, 38 Station St,
Subiaco, Perth, Western Australia, for the purposes of:
(1) Adoption of renumeration report;
(2) Re-election of director Dario Amara; and
(3) Re-election of director Peter Torre.
A copy of the Notice is available for free at:
http://is.gd/zSpzgc
About Mission NewEnergy
Based in Subiaco, Western Australia, Mission NewEnergy Limited is
a producer of biodiesel that integrates sustainable biodiesel
feedstock cultivation, biodiesel production and wholesale
biodiesel distribution focused on the government mandated markets
of the United States and Europe.
The Company is not operating its biodiesel refining segment. The
refineries are being held in care and maintenance either awaiting
a return to positive operating conditions or the sale of assets.
The Company has materially diminished its Jatropha contract
farming operation and the company is now focused on divesting the
remaining Indian assets. The Company intends to cease all Indian
operations.
Grant Thornton Audit Pty Ltd, in Perth, Australia, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
incurred operating cash outflows of A$4.9 million during the year
ended June 30, 2012, and, as of that date, the consolidated
entity's total liabilities exceeded its total assets by
A$24.4 million.
As of June 30, 2013, the Group had AU$7.53 million in total
assets, AU$32.60 million in total liabilities, and a AU$25.07
million total deficiency.
MI PUEBLO: Wants Lease Decision Period Extended Until Feb. 17
-------------------------------------------------------------
Mi Pueblo San Jose, Inc., asks the U.S. Bankruptcy Court for the
Northern District of California to extend the time within which it
may assume or reject a non-residential real property lease for an
additional 90 days through and including Feb. 17, 2013.
Mi Pueblo relates that it is current in the payment of post-
petition rent to all of the landlords and sublessors under the
Leases. According to the Motion, Mi Pueblo believes that it will
need several months of operations to evaluate its reorganization
efforts, profitability and ultimately determine how it plans to
proceed with financing its business. "However, until Mi Pueblo is
able to report its financial results for at least 6 months and
consider its options with respect to Wells Fargo Bank, Mi Pueblo
will not know if a plan will be feasible."
Mi Pueblo requests under the circumstances that the current
deadline to assume or reject non-residential real property leases
of Nov. 9, 2013 be extended. This is the first motion by Mi
Pueblo seeking an extension of time to assume or reject the
leases.
The Motion is set for hearing on Nov. 8, 2013, at 2:15 p.m.
A copy of the Motion is available at:
http://bankrupt.com/misc/MIPUEBLO_lease ext.pdf
Wells Fargo Bank, N.A., does not oppose the Motion. However, it
notes that the following corrections need to be made with respect
to the Leases:
1. Mi Pueblo Food Center #03, 235 East Julian Street, San Jose:
The same premises are identified in the Motion on page 2 at lines
24 1/2 - 27 1/2 as being leased by the Debtor both from landlords
JOHN AND PEGGY LYNCH and from landlord LOAN VU. Either (i) this
is a mistaken identification of one or the other of these two
purported leases of these premises, in which case the mistakenly
identified lease ought to be deleted; or (ii) there are two
separate premises being separately leased, one from each of these
landlords, in which case the separate premises ought to be
separately and specifically identified.
2. Mi Pueblo Food Center #04, 1745 Story Road, San Jose: With
respect to the premises identified in the Motion on page 3 at
lines 1 - 2 (not the ground lease) and the Lease thereof, the Bank
believes that (i) these premises are the Debtor's headquarters
office space at 1775 Story Road, Suites 120 and 170, San Jose, and
not the premises described; and (ii) the Lease of these premises
is month-to-month, not one that expires on May 31, 2014.
3. Mi Pueblo Food Center #18, 515 and 523 McLaughlin Avenue,
San Jose: One of the landlords for the premises identified in the
Motion on page 4 at lines 4 1/2 - 6 is identified as "MAJEET
GREWAL". The Bank believes that the correct name of this landlord
is "MANJEET GREWAL".
4. Mi Pueblo Food Center DC, 1025 Montague Court, Milpitas:
The Bank believes that the expiration date for the Lease of the
premises identified in the Motion on page 4 at lines 13 1/2 ? 14
1/2 is Dec. 31, 2014, not Dec. 31, 2016.
About Mi Pueblo San Jose
Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D.
Calif. Case No. 13-53893) in San Jose, California, on July 22,
2013. An affiliate, Cha Cha Enterprises, LLC, sought Chapter 11
protection (Case No. 13-53894) on the same day. The cases are not
jointly administered.
In its amended schedules, Mi Pueblo disclosed $61,577,296 in
assets and $68,735,285 in liabilities as of the Petition Date.
Heinz Binder, Esq., at Binder & Malter, LLP, is the Debtor's
general reorganization counsel. The Law Offices of Wm. Thomas
Lewis, sometimes doing business as Robertson & Lewis, is the
Debtor's special counsel. Avant Advisory Partners, LLC serves as
its financial advisors. Bustamante & Gagliasso, P.C. serves as its
special counsel.
The U.S. Trustee appointed seven members to the Official Committee
of Unsecured Creditors. Protiviti Inc. serves as financial
advisor. Stutman, Treister & Glatt P.C. serves as counsel to the
Committee.
NORTHEAST WIND: S&P Affirms Prelim. 'BB-' Rating to $315MM Loan
---------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B+'
corporate credit rating on Northeast Wind Capital II LLC (NWC II).
At the same time, S&P affirmed its preliminary 'BB-' issue rating
on NWC II's proposed $315 million first-lien term loan B facility
due 2020. The preliminary '2' recovery rating is unchanged. The
outlook is stable.
S&P's rating on the preliminary 'BB-' proposed term loan facility
assigned Aug. 7, 2013 reflects several changes, including a
reduction in the facility size by $10 million, an expectation of
accelerated amortization due to a scheduled target debt balance,
and a flexible cash sweep provision, which while nominally remains
at 50%, can potentially sweep up to 100% if starting from 2017 the
forward contracted revenues drop below 70% of the total expected
revenue for the next three years. The margin has also increased
from 3.5% to 4%. S&P views these modifications as modestly
positive for NWC II's credit profile, but not to a level that
warrants a change in the rating or outlook.
The ratings reflect S&P's view of the company's "satisfactory"
business risk profile that it has revised from "fair" and reflects
its significant reduction in merchant exposure in the past couple
of months for the next two years from 12% to 15% to 2% to 4%.
NWC II's business risk profile is underpinned by its strong
presence as a wind generation developer and producer in Maine, New
York, and Vermont. The business risk profile is supported by a
strong, but declining over time, contracted power sales position:
NWC II is generating about 98% of its 2013 revenue under power
purchase agreements, power swaps, and contracted renewable energy
credits (REC) with generally strongly rated counterparties. This
position declines to 65.5% under our base case (which excludes any
revenue from uncontracted, merchant REC sales) by 2020, when the
term loan matures.
The portfolio also benefits from its strong competitive position
stemming from its dominant position in the Northeast. The company
currently owns nearly 420 megawatts spread over nine separate
projects that have operated within production forecasts and at
high availability levels, with some diversity of wind turbine
technology and a wind regime that is only moderately correlated.
The high percentage of contracted revenue in the near term,
coupled with the relatively stable wind resource and a strong
operations and maintenance (O&M) regimen, contributes to a
business risk profile that is stronger than that of other
companies in this category.
"The company's primary risk is its increasing merchant exposure to
wholesale power prices, although continued renewable portfolio
standards in the region, along with the long lead times for
permitting and construction of new renewable projects, should
provide reasonable prospects for recontracting," said Standard &
Poor's credit analyst Jeong-A Kim.
"The stable outlook reflects our anticipation of stable cash flows
from existing contracts combined with continued high leverage as
the facility replaces amortizing debt at the project level. Under
our base case, we anticipate that adjusted debt to EBITDA will
modestly improve because of gradual debt repayment driven by the
50% cash flow sweep from around 9.8x at the end of this year to
around 7.6x by year-end 2015, leaving NWC II highly leveraged. We
could lower the ratings if FFO to debt drops to below 2%, which
would mean generation of below 850 gigawatts and weaker energy
prices. We could consider an upgrade if we performance continues
as anticipated and if the paydown of debt results in financial
risk ratios in line with an aggressive financial risk profile,
requiring debt to EBITDA to be at least 5x. We view this as
unlikely given our anticipation that at a P90 resource level, the
company's debt leverage reduction will be modest through 2015,
remaining well above the 5x threshold," S&P added.
OGX PETROLEO: Files for Bankruptcy Protection in Rio de Janeiro
---------------------------------------------------------------
Luciana Magalhaes and Tom Murphy, writing for Daily Bankruptcy
Review, reported that Brazilian oil company OGX Petroleo e Gas
Participacoes SA, controlled by Eike Batista, on Oct. 30 filed for
bankruptcy protection in a Rio de Janeiro court, as the firm seeks
to try to restructure its finances rather than face an immediate
liquidation.
According to the report, Sergio Bermudes, a lawyer for the firm
who said he filed the documents, said he believes it can solve its
financial problems. "This company has many assets and could form
partnerships with other companies," he said in a telephone
interview.
The civil division of the Rio de Janeiro state court system
confirmed that it had received a request for judicial recovery
from OGX, the report related.
If accepted, OGX will have 60 days to produce a plan to
restructure its finances, Mr. Bermudes said, the report added.
Creditors would then have 30 days to approve or deny the plan.
OGX raised billions of dollars from capital markets over the last
seven years to spend on exploring for oil and gas, mostly in
Brazil, the report further related. By Oct. 30, the firm was on
the verge of default on its bonds, struggling to pay suppliers,
and with little oil to show for its efforts.
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 Participacoes 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.
OGX PETROLEO: Files Latin America's Largest Corporate Default
-------------------------------------------------------------
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that OGX Petroleo & Gas
Participacoes SA's bankruptcy filing puts $3.6 billion of dollar
bonds into default in the largest corporate debt debacle on record
in Latin America.
According to the report, OGX, a startup based in Rio de Janeiro,
filed documents in a business tribunal there on Oct. 30, said
Sergio Bermudes, a lawyer representing the company's chairman and
founder, Eike Batista. An official at OGX's press office, who
isn't an authorized spokesperson, declined to comment.
The Oct. 30 filing by the oil company that transformed Batista
into Brazil's richest man followed a 16-month decline that wiped
out more than $30 billion of his personal fortune.
The Rio businessman had raised billions of dollars in equity
markets to fund OGX's drilling program and other commodities
startups. He then tapped debt markets, selling bonds to investors
including BlackRock Inc. and Pacific Investment Management Co.,
the report related. When some of the deposits he had valued at $1
trillion turned out to be duds, OGX lost 98 percent of its value
and ran out of cash.
The filing, which in Brazil is called a judicial recovery, follows
months of negotiations to restructure the dollar bonds, in which
OGX sought to convert debt to equity and secure as much as $500
million in new funds. OGX said Oct. 29 that the talks concluded
without an agreement. The company's cash fell to about $82 million
at the end of September, not enough to sustain operations further
than December.
Restructuring talks were complicated by OGX's cash burn and need
to fund testing of its most promising oil field, Tubarao Martelo.
The oil company missed a $45 million payment on Oct. 1, prompting
Standard & Poor's to assign a default rating to $1 billion of
bonds. Moody's Investors Service and Fitch Ratings gave OGX the
30-day grace period before calling a default. That period expires
on Oct. 31.
While Batista has yet to decide, his shipbuilding company OSX
Brasil SA probably will also seek protection against creditors,
said a person with direct knowledge of the plans.
By filing for bankruptcy protection, OGX risks having the
country's oil regulator revoke its 30 oil and natural gas licenses
in Brazil, according to Sao Paulo-based TozziniFreire Advogados, a
law firm that has clients in the oil industry.
The regulator, known as ANP, said in an Oct. 29 e-mail that the
company would be allowed to keep its blocks under bankruptcy
protection provided it has the funds to operate them.
OGX was the centerpiece of the group with a market value that
surpassed established producers including Repsol SA during its
exploration period. Batista has been struggling to save his empire
since mid-2012, when OGX began missing targets. On Aug. 15, the
company posted a record loss of 4.7 billion reais for the second
quarter and last generated a quarterly profit three years earlier,
according to data compiled by Bloomberg.
Shares of OGX, which Batista founded in 2007, lost 96 percent in
the past 12 months, the worst-performing stock among 73 members of
the Brazilian benchmark Ibovespa Index after investors sold shares
on missed output targets, according to the Oct. 31 Bloomberg
report. Companies that file for bankruptcy protection will have
shares suspended, the Brazilian exchange operator said in a
statement last month.
ONE CALL: S&P Puts 'B' Corp. Credit Rating on CreditWatch Negative
------------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'B'
corporate credit rating and 'B+' senior secured debt rating on One
Call Care Management Inc. on CreditWatch with negative
implications. The recovery ratings on the senior secured debt
remains '2', indicating that S&P believes lenders of One Call's
senior secured debt could expect substantial (70% to 90%) recovery
of principal and six months of prepetition interest in the event
of a default.
"The CreditWatch listing indicates that we could lower the ratings
following our review of the company. Although the company did not
disclose the financing terms for One Call's acquisition by Apax,
we believe leverage could exceed the 6.5x threshold that we
indicated as a potential downgrade trigger in our previous
outlook," said credit analyst James Sung. "Leverage was 6.2x when
we first assigned our 'B' corporate credit rating on One Call in
August 2012. At that time, One Call raised $625 million in debt
and $76 million in equity to finance its acquisition of MSC Care
Management Inc. and pay off existing debt."
S&P expects to resolve the CreditWatch listing during the next 30-
60 days after meeting with the One Call management team and Apax
Partners to assess the financial terms of the transaction and get
an update on prospective business strategy and financial policy.
ORMET CORP: Amended Credit Agreement Filed
------------------------------------------
BankruptcyData reported that Ormet filed with the U.S. Bankruptcy
Court an emergency motion for entry of interim and final orders
(a) authorizing the Debtors to enter into a fourth amendment to
the term loan D.I.P. credit agreement, (b) authorizing the Debtors
to enter into the second amendment to the revolving loan D.I.P.
credit agreement and (c) setting a final hearing.
The modified amendment states, "The Fourth Term DIP Amendment
would provide up to $10,000,000 in funding under the Term Loan DIP
Credit Agreement (the 'Supplemental Term DIP Financing').
Specifically, the Fourth Term DIP Amendment provides for up to a
total delayed draw term loan of $35,000,000, of which $10,000,000
constitutes the Supplemental DIP Financing....The Second Revolving
DIP Amendment would permit the Debtors to increase their
Indebtedness to $50,000,000, to provide for the Supplemental Term
DIP Financing. Specifically, the Second Revolving DIP Amendment
provides for an increase from $40,000,000 to $50,000,000."
Documents filed with the Court further explain, "Absent approval
of the Supplemental DIP financing, the DIP Lenders are unwilling
to lend additional funds to the Debtors. Without these additional
funds, the Debtors will not have a sufficient source of revenue
with which to make payment of their wind-down costs, which is
critical to the closing of the Burnside Sale and wind down and
sale of remaining assets in a way that maximizes value for the
benefit of the Debtors' estates....The Debtors will require access
to approximately $10,000,000 of the additional funds from the DIP
Term Loan Lenders during the interim period. Without the relief
requested herein, the wind-down costs will not be funded and the
Debtors would be forced to suspend their operations entirely and
consider alternate options, to the detriment of all creditors and
these estates."
The Court scheduled a November 7, 2013 hearing on the motion.
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 emerged from a prior bankruptcy in April 2005. Lender
Wayzata Investment Partners LLC is among existing owners. Others
are UBS Willow Fund LLC and Fidelity Leverage Company Stock Fund.
In the 2013 case, 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.
ORMET CORP: Hires Sea Port Group's Unit as Consultant
-----------------------------------------------------
Ormet Corp. and its debtor-affiliates ask for permission from the
U.S. Bankruptcy Court for the District of Delaware to employ
Industrial Investment Banking Group, a part of Sea Port Group
Securities, LLC, as consultant, effective Oct. 15, 2013.
The Debtors require Sea Port to perform the following advisory
services:
(a) analyze the existing Hannibal Collective Bargaining
Agreement and other employee and employment related
agreements, as requested, between Ormet Corp. and the
Steelworkers, including assessing the costs of benefits and
liabilities established by the CBAs;
(b) analyze the Debtors' plan for its facilities, including
desired modifications to the applicable CBAs and advise
Ormet Corp. on the feasibility of the plan, specifically
with regard to the Steelworkers;
(c) assist the Debtors in the development and execution of a
plan which will be acceptable to each of the Debtors' pre-
and post-petition lenders and is intended to be acceptable
to the Steelworkers;
(d) assist in drafting proposed amendments to such applicable
CBA and entry into a modified CBA, as applicable;
(e) communicate with the Steelworkers' representatives on
behalf of the Debtors about the Plan and represent the
Debtors in negotiations with the Steelworkers with regard
to said union's support for the Plan and desired
modifications to such applicable CBAs;
(f) represent the Debtors' interests with regard to its labor
strategies in meetings and negotiations as required with
other interested parties;
(g) assist the Debtors in all other labor related issues; and
(h) other services as requested and agreed.
The Debtors agree that Sea Port shall be entitled to the following
compensation, which shall be paid by the Debtors to Sea Port in
cash:
-- on the full execution and delivery of this Agreement, the
Debtors shall pay to Sea Port a cash fee of $100,000, which
shall be subject to the provisions of section 9 of the
Engagement Letter; and
-- the Debtors shall pay to Sea Port an hourly fee for all
services performed, which shall be netted against the
retainer payment:
Senior Managing Directors $600
Managing Directors $500
Analysts $250
Sea Port will also be reimbursed for reasonable out-of-pocket
expenses incurred.
James Tumulty, senior managing director of Sea Port Group
Securities, LLC, 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 employment
application on Nov. 15 at 10:30 a.m. Objections, if any, are due
Nov. 8 at 4:00 p.m.
Sea Port can be reached at:
James S. Tumulty
SEA PORT GROUP SECURITIES, LLC
360 Madison Ave Fl 23
New York, NY 10017-7111
Tel: (732) 539-8421
E-mail: jtumulty@theseaportgroup.com
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 emerged from a prior bankruptcy in April 2005. Lender
Wayzata Investment Partners LLC is among existing owners. Others
are UBS Willow Fund LLC and Fidelity Leverage Company Stock Fund.
In the 2013 case, 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.
ORMET CORP: Emergency CBA Relief Sought
---------------------------------------
BankruptcyData reported that Ormet filed with the U.S. Bankruptcy
Court an emergency motion for entry of an order authorizing
interim relief from various terms of the Hannibal collective
bargaining agreement and from certain retiree benefits
obligations.
The motion explains, "After entry of the PUCO (Public Utility
Commission of Ohio) Order, the Debtors shut down all remaining
operations at the Hannibal Smelter. Without reasonable economic
terms for their purchase of electricity and the inability to
satisfy the Condition Precedent, the Debtors concluded that they
would not be able to emerge from bankruptcy with ongoing
operations at the Hannibal Smelter. The Debtors are now seeking
the next best alternative, to wind down operations at the Hannibal
Smelter in such a way as to allow restart of operations at some
point in the future....The Steelworkers, and all parties involved,
have taken all appropriate measures to wind down operations at the
Hannibal Facility in such a way as to preserve the assets and
maximize remaining value at the facility. Unfortunately, the
economic reality is that, without operations at the Hannibal
Facility, employment levels have been substantially reduced, with
the Debtors continuing to reduce employment to the minimal level
necessary to preserve the ongoing value of the assets. The
requests contained herein are consistent with the terms of the
Budget. The Lenders have informed the Debtors they would not
support funding the wind down process other than to the extent
consistent with the Budget....Furthermore, the section 1114(h)
relief is particularly critical given that these claims may
otherwise accrue as administrative expenses against the Debtors'
estates pursuant to section 1114(e)(2) of the Bankruptcy Code,
which may be in an amount greater than $7,500,000....Granting the
Debtors' request for relief under sections 1113(e) and 1114(h) of
the Bankruptcy Code will allow the Debtors time to continue to
work cooperatively with the Steelworkers on modifications to the
Hannibal CBA and for the Debtors to take all efforts practicable
to maximize value for the benefit of their constituents. Without
the relief requested herein, the Debtors' estates will suffer
irreparable harm."
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 an 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 as of the bankruptcy filing. 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 emerged from a prior bankruptcy in April 2005. Lender
Wayzata Investment Partners LLC is among existing owners. Others
are UBS Willow Fund LLC and Fidelity Leverage Company Stock Fund.
In the 2013 case, 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.
ORMET CORP: Environmental Concerns Arise Amid Plant Shutdown
------------------------------------------------------------
Stephanie Gleason, writing for DBR Small Cap, reported that a new
problem has emerged for Ormet Corp. as the aluminum producer
begins winding down its operations: power to its Ohio smelter
could be shut off on Nov 1., potentially flooding the groundwater
with chemicals such as arsenic and cyanide.
According to the report, at a hearing on Oct. 28, American
Electric Power Co. Inc., Ormet's electricity provider, told Judge
Mary Walrath of the U.S. Bankruptcy Court in Wilmington, Del.,
that without payment of at least $1.4 million, electricity to
Ormet's Hannibal, Ohio, facility would be shut off on Nov. 1.
That facility, which has halted operations and is being
liquidated, has maintained interceptor wells since 1973 to prevent
harmful chemicals from leaching out of the facility and into Ohio
groundwater, the report related. Those wells require electricity
to continue pumping.
"We are very concerned about the dispute because it threatens the
[interceptor wells]," Alan Tenenbaum of the U.S. Department of
Justice said at the hearing, the report cited.
The EPA wasn't able to provide additional information on the
situation on Oct. 29, but it said in court documents that stopping
the pumping system "could pose substantial risks to public health
and safety," the report added.
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 emerged from a prior bankruptcy in April 2005. Lender
Wayzata Investment Partners LLC is among existing owners. Others
are UBS Willow Fund LLC and Fidelity Leverage Company Stock Fund.
In the 2013 case, 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 Revises Outlook to Negative & Affirms 'B' CCR
--------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its outlook on
P2 Upstream Acquisition Co. to negative and affirmed the 'B'
corporate credit rating on the company.
S&P also affirmed the '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 $310 million first-lien term loan. In addition, S&P
affirmed the 'CCC+' issue-level rating, with a recovery rating of
'6', to P2's $160 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.
"Standard & Poor's 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 negative reflecting the high leverage that
the company will have following the transaction. If the company
realizes expected improvement in leverage over the near term
arising from improved margins on its predictable and recurring
revenue base S&P could stabilize the rating. However, S&P could
lower the rating if margin deterioration and a weakening business
profile lead leverage to be maintained above the low-7x area
rather than decline as expected.
PACIFIC RUBIALES: Fitch Affirms 'BB+' Long-term Issuer Ratings
--------------------------------------------------------------
Fitch Ratings has affirmed Pacific Rubiales Energy Corp foreign
and local long-term Issuer Default Ratings (IDRs) at 'BB+'. Fitch
has also affirmed its 'BB+' long-term rating on the company's
outstanding senior unsecured debt issuances of approximately
USD1.7 billion due 2021 and 2023. The Rating Outlook is Stable.
Key Rating Drivers:
Pacific Rubiales' ratings are supported by the company's
leadership position as the largest independent oil and gas player
in Colombia and its strong management with recognized expertise in
heavy oil exploration and production. The ratings also reflect the
company's strong liquidity and adequate leverage. The company
faces developing risks associated with increasing production from
existing fields in order to offset decrease in production expected
for 2016, when the production agreement for its main producing
field expires. Pacific Rubiales' credit quality is tempered by the
company's small scale, production concentration and relatively
small reserve profile. The company also benefits somewhat from its
partnerships with Ecopetrol ('BBB-' IDR by Fitch), Colombia's
national oil and gas company, which supports Pacific Rubiales'
investments and shares production.
Solid Financial Profile:
The company's ratings reflect its adequate financial profile
characterized by low leverage and strong interest and debt service
coverage. As of the last 12 months (LTM) ended June 30, 2013, the
company reported leverage ratios, as measured by total net debt to
EBITDA and total debt-to-total proved reserves of 0.7 times (x)
and USD2.7 per barrels of oil equivalent (boe), respectively. As
of June 30, 2013, debt of approximately USD2 billion was primarily
composed mostly of senior unsecured notes due 2021 and 2023. As of
the LTM ended June 30, 2013, Pacific Rubiales reported an EBITDA,
as measured by operating income plus depreciation and stock-based
compensation, of USD2.1 billion.
Piriri-Rubiales Concession Expires in 2016:
Although Pacific Rubiales production and reserves profile has
significantly improved in recent years, the expiration of the
Piriri-Rubiales production agreement in 2016 is expected to have a
significant impact on the company's financial results. As a result
of the expiration of the Piriri-Rubiales production agreement in
2016, Fitch expects Pacific Rubiales' production level for 2017 to
be in line with that of 2012 or below current production. This
field currently represents 55% of total net production, down from
75% in 2010. The company is expected to be able to replace Piriri-
Rubiales production by 2017 given the company's recent
diversification efforts and high reserve replacement ratios,
coupled with its proven track record of increasing production. The
rating does not incorporate the possibility of extending
production from this field past its expiration date. As of
December 2012, this field represented approximately 19% of the
company's total proved and probable reserves of 514 million boe;
excluding Piriri-Rubiales resources, debt-to reserves (1P) are
still low at approximately USD4.7 per boe.
Petrominerales Acquisition Neutral for Credit Quality:
Pacific Rubiales intended acquisition of Petrominerales Ltd is
expected to be credit neutral as the transaction is believed to
marginally increase leverage and somewhat increase its production
diversification. On Sept. 29, 2013, Pacific Rubiales entered into
an agreement to acquire all outstanding common shares of
Petrominerales. The total purchase price of approximately USD1.5
billion includes a USD908 million cash payment and Pacific
Rubiales assumption of USD622 million of debt. The company expects
to finance the acquisition using cash on hand and short-term
financing from its committed credit lines. As a result of this,
Pacific Rubiales 2012 pro forma leverage would have been 1.2x,
after given effect to the incremental debt, from approximately the
0.7x as reported. Following the acquisition, the company intends
to divest some of Petrominerales asset, especially some
investments in pipelines in Colombia, to raise approximately
USD300 million to USD400 million of cash and reduce debt related
to the acquisition.
Improving Operating Metrics:
The operating metrics for the company have been improving rapidly
and its growth strategy is considered somewhat aggressive. During
2012, the company reserve replacement ratio was 398% and its
current 2P reserve life index is approximately 11 years using
current production levels. During the past two years, the company
increased gross and net production to approximately 310,065 boe/d
and 127,555 boe/d, from approximately 235,796 boe/d and 92,611
boe/d as of June 2012, respectively. As of December 2012, Pacific
Rubiales' proved (1P) and proved and probable (2P) reserves, net
of royalties, amounted to approximately 336 million and 514
million bbls, respectively. The company's reserves are composed of
heavy crude oil (59%) and natural gas and light and medium oil
(41%). Pacific Rubiales has a significant number of exploration
prospects, which will require significant funds to develop. In the
short term, the company plans to devote its efforts to develop the
Quifa, Sabanero and CPE-6 blocks, which surround and are near
Piriri-Rubiales block.
Negative Free Cash Flow Due to Large Capex:
Free cash flow (cash flow from operations less capital
expenditures and dividends) has been negative given the company's
growth strategy. Pacific Rubiales' significant capital
expenditures plans over the next few years could continue to
pressure free cash flow in the near term. Increasing production at
the Piriri-Rubiales and the surrounding Quifa block are expected
to account for the bulk of the company's capital expenditure,
which is expected to be approximately USD6.5 billion between 2012
and 2016, excluding Petrominerales acquisition. By the year 2017
and after the expiration of the Piriri-Rubiales concession,
leverage might increase to approximately 1.0x to 1.5x as a result
of decrease in production and lower oil prices considered under
Fitch's base case scenario.
Strong Liquidity Position:
The company's current liquidity position is considered strong,
characterized by strong cash flow generation and manageable short-
term debt obligations. As of June 30, 2013, cash on hand amounted
to approximately USD466 million, while short-term debt was USD21
million. The company also has two revolver credit facilities
totaling USD700 million and as of June 30, 2013, it had drawn down
approximately USD91 million.
Rating Sensitivity:
A rating downgrade would be triggered by any combination of the
following events: A sustained adjusted leverage above 2x, driven
by increase in debt for exploration combined with a low success
rate of discoveries; an increase in royalties that significantly
cripples the company's financial profile (no changes in royalties
are expected in the near future;) and/or a decline in production
and reserves. Pacific Rubiales ratings could also be pressured if
the company fails to increase production in order to replace the
significant contribution of the Pirir-Rubiales field by the time
the concession expires.
Although a positive rating action is unlikely in the medium term
given the current developing risks associated with the company,
factors that could result in a positive rating action include an
increased diversification of the production profile of the
company, consistent growth in both production and reserves,
positive free cash flow generation.
PATRIOT COAL: Files New Reorganization Plan, Detailed Disclosure
----------------------------------------------------------------
The St. Louis Post-Dispatch reported that Patriot Coal Corp. has
revised its reorganization plan, as expected, ahead of a key
bankruptcy hearing next week.
According to the report, the new plan, filed on Oct. 27 in U.S.
Bankruptcy Court in St. Louis, incorporates agreements that the
Creve Coeur-based coal producer reached with the unsecured
creditors committee as well as with the United Mine Workers of
America.
Assuming a judge approves the company's amended disclosure
statement on schedule, a confirmation hearing for approval of the
plan will take place Dec. 17, clearing the way for the company's
emergence from federal bankruptcy protection, the report related.
Funding for Patriot's plan comes in part from $250 million in two
rights offerings in which Knighthead Capital Management LLC
provides a backstop by agreeing to purchase securities not taken
by other creditors, the report said.
The offerings for second-lien senior notes and warrants are being
extended to holders of senior notes, convertible notes and general
unsecured creditors who qualify as so-called accredited investors,
the report further related.
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.
Houlihan Lokey 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 Corp., et al., filed with the U.S. Bankruptcy Court
for the Eastern District of Missouri a First Amended Joint Chapter
11 Plan of Reorganization and an explanatory disclosure statement
on Oct. 9, 2013.
PERSONAL COMMUNICATIONS: Committee Sues Owners, Lenders
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Personal Communications Devices LLC creditors'
committee filed a lawsuit this week alleging the claim of the
second-lien lenders should be treated as an equity contribution or
subordinated to other creditors' claims.
According to the report, this month, the bankruptcy judge in
Central Islip, New York, authorized the committee to investigate
the lenders' claims and file suit. The suit is entirely under
seal because it was based on information the lenders supplied and
said was confidential.
PCD is majority-owned by affiliates of PineBridge Investments LLC.
The minority owners are affiliates of DLJ Investment Partners LP.
The owners are among the second-lien lenders who were sued this
week.
PCD is a distributor of wireless communications devices. In mid-
month, the bankruptcy court overruled an objection from the
committee and authorized selling the business to competitor
Quality One Wireless LLC under a contract with a $105 million
sticker price.
Hauppauge, New York-based PCD is an intermediary between wireless
carriers in the U.S. and foreign handset makers. It filed for
Chapter 11 protection in August.
The committee said the sale price was "purely fictional" and would
confer no benefit on unsecured creditors.
PCD listed assets of $260.8 million and debt totaling $324.4
million. Liabilities include $35.9 million owing on a first-lien
revolving credit and a $71.3 million obligation to second-lien
lenders. Revenue was $1.6 billion in 2012. The net loss that year
was $16.9 million.
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.
PERSONAL COMMUNICATIONS: Jan. 6 Set as Claims Bar Date
------------------------------------------------------
The deadline for creditors to file proofs of claim in the
bankruptcy case of Personal Communications Devices LLC et al. is
Jan. 6, 2014.
Meanwhile, governmental units must file proofs of claim on or
before Feb. 18, 2014.
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.
PICCADILLY RESTAURANTS: Creditors File Joint Chapter 11 Plan
------------------------------------------------------------
Atalaya entities and the statutory committee of unsecured
creditors filed with the U.S. Bankruptcy Court for the Western
District of Louisiana on Sept. 27, 2013, a Joint Chapter 11 Plan
for Piccadilly Restaurants, LLC, et al., and an a disclosure
statement.
The Atalaya entities that are proponents of the Plan are Atalaya
Administrative, LLC, Atalaya Funding II, LP, Atalaya Special
Opportunities Fund IV, LP (Tranche B), Atalaya Special Opportunies
Fund (Cayman) IV, LP (Tranche B).
Under the Plan proposed by Atalaya and the Official Committee of
Unsecured Creditors, on or after the Effective Date, the Debtors
will continue to exist as the Reorganized Debtors. Except as
otherwise provided in the Joint Plan, all property of the Debtors'
Estates, and any property acquired by the Debtors or Reorganized
Debtors under the Joint Plan, will re-vest in the applicable
Reorganized Debtor, free and clear of all claims, liens, charges,
and other encumbrances created prior to the Effective Date.
On the Petition Date, the Debtors' senior secured debt was held by
Atalaya Funding II, LP, et al. Atalaya Administrative LLC acted
as Administrative Agent.
Pursuant to the Plan terms, the PR Class 2 Atalaya Secured Claim
will be satisfied as follows:
* Term A Note: The Reorganized Debtors will executive and
deliver to Atalaya the Term A Note, which will be in the
aggregate principal amount equal to the sum of: (1) the
existing revolving loan in the amount of $6,979,341; (2) the
existing letter of credit balance of balance of $2,927,538;
(3) $1,197,646.77, representing a portion of the accrued
unpaid post-petition interest on the Atalaya Secured Claim as
of Sept. 26, 2013; (4) daily interest accruals in the amount
of $3,151.70 for each day from Sept. 27, 2013, through and
including the Effective Date; and (5) the DIP Financing Claim
in the amount of $2,616,882.72; provided, however, that the
aggregate principal amount of the Term A Note will be reduced
by any corresponding reduction in the existing letter of
credit balance. The terms of the Term A Note will be, inter
alia, the following:
1. The Term A Note will accrue interest at the rate of 4.75%
per annum.
2. Interest payments will be made or will accrue monthly;
3. The Term A Note will be subject to a paid-in-kind
conversion (the "PIK Conversion) if at any time the
Reorganized Debtors are unable to timely make payment on
account of the General Unsecured Claim Note. Interest will
accrue at the rate of 9% per annum on or after and during
the trigger of the PIK Conversion, until such payment is
made;
4. The Term A Note will mature three years from the Effective
Date; and
5. The Term A Note will be in a form acceptable to the
Committee and Atalaya.
* Term B Note: The Reorganized Debtors will executive and
deliver to Atalaya the Term B Note, which will be in the
aggregate principal amount equal to the sum of: (1)
$9,050,539, representing one half of the outstanding principal
balance of under the existing term loan; (2) $3,024,117.05,
representing a protion of the accrued unpaid post-petition
interest on the Atalaya Secured Claim as of Sept. 26, 2013,
and (3) daily interest accruals in the amount of $7,958.20 for
each day from Sept. 27, 2013, through and including the
Effective Date. The terms of the Term B Note will be, inter
alia, the following:
1. The Term B Note will accrue interest at the rate of 4.75%
per annum.
2. Interest payments will be made or will accrue monthly;
3. The Term B Note will be subject to a PIK Conversion if at
any time the Reorganized Debtors are unable to timely make
payment on account of the General Unsecured Claim Note.
Interest will accrue at the rate of 9% per annum on or
after and during the trigger of the PIK Conversion, until
such payment is made;
4. The Term B Note will mature three years from the Effective
Date; and
5. The Term B Note will be in a form acceptable to the
Committee and Atalaya.
Equity Conversion: Atalaya will convert the remaining amount of
the existing term loan, in the amount of approximately $9,050,539,
into 100% of the equity in Reorganized Piccadilly Investments, LLC
("PI").
As of the Petition Date, the estimated, approximate amount of the
Atalaya Secured Claim in Class 2 is $28,104,722. Estimate
Percentage recovery is 100%.
Each holder of a PR Class 5 General Unsecured Claim will receive a
pro rata share of the Initial Unsecured Payment in the amount of
$1,000,000 which will be deposited by the Reorganized Debtors in
Cash on the Effective Date into the General Unsecured Distribution
Account, which the Administrator will then distribute to Holders
of Allowed Unsecured Claims, net of the Administrator's expenses,
plus, their pro rata share of Convenience Claim Excess (if any),
as soon as practicable after deposit but not later than ninety
(90) days after the Effective Date.
A complete summary of the treatment of PR Class 5 General
Unsecured Claims can be found on pages 10 through 14 of the
disclosure statement.
Interests held by Piccadilly Investments, LLC, in Piccadilly
Restaurants, LLC (PR Class 8), will not be altered under the Plan.
Complete summaries of the treatment of Claims against and
Interests in Debtor Piccadilly Food Services, LLC ("PFS"), and in
Debtor Piccadilly Investments, LLC, are discussed on pages 15
through 18 of the disclosure statement.
A copy of the disclosure statement for the Plan Proponents' Joint
Plan for the Debtors is available at:
http://bankrupt.com/misc/PICCADILLY_RESTAURANTS_ds.pdf
Yucaipa Objects to Approval of
Disclosure Statement for Joint Plan
Yucaipa Corporate Initiatives Fund I, L.P., objects to the
approval of the disclosure statement for the Joint Plan filed by
Atalaya and the Committee for the Piccadilly Restaurants, LLC, et
al.
Yucaipa explains: "The Atalaya Disclosure Statement should not be
approved because it contains inadequate information that prevents
stakeholders from thoroughly evaluating material aspects of
the Atalaya Plan and the Atalaya Plan is patently unconfirmable.
"The Atalaya Plan provides Atalaya with a recovery that far
exceeds its claim. In addition to over $25 million of secured
debt, Atalaya will convert $9 million of debt for 100% of the
equity of a solvent company. The Atalaya Disclosure Statement
provides no justification for this unfair treatment. The
Proponents must provide a valuation analysis and financial
projections to show that the Plan is fair and equitable and
otherwise consistent with the Bankruptcy Code.
"Also missing from the Disclosure Statement is support for
Atalaya's asserted face value of its secured claim, $3.9 million
of which cannot be reconciled by the Debtors. And the Atalaya
Disclosure Statement does not include a liquidation analysis or
financial projections to support the Atalaya Plan structure.
"In short, the information in the Atalaya Disclosure Statement is
deficient on many fronts that are critical to evaluating the most
important aspects of the Atalaya Plan -- fair and equitable
recoveries, feasibility, and whether it is in the best interests
of creditors. The Debtors' stakeholders simply cannot evaluate
the plan effectively without substantially more information
in the Atalaya Disclosure Statement."
Yucaipa is both the majority holder of equity interests in PI and
a general unsecured creditor on account of its Management Services
Fee Claim, which has been scheduled by the Debtors in the amount
of $452,791.18.
About Piccadilly Restaurants
Piccadilly Restaurants, LLC, and two affiliated entities sought
Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos.
12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are
Piccadilly Food Service, LLC, and Piccadilly Investments LLC.
Piccadilly Restaurants, LLC, headquartered in Baton Rouge,
Louisiana, is the largest cafeteria-style restaurant in the United
States, with operations in 10 states in the Southeast and Mid-
Atlantic regions. It is wholly owned by Piccadilly Investments,
LLC. Piccadilly operates an institutional foodservice division
through a wholly owned subsidiary, Piccadilly Food Service, LLC,
servicing schools and other organizations. With a history dating
back to 1944, the Company operates 81 restaurants at three owned
and 78 leased locations.
Then known as Piccadilly Cafeterias, Inc., the Company filed for
Chapter 11 relief (Bankr. S.D. Fla. Case No. 03-27976) on Oct. 29,
2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at
Berger Singerman, P.A., represented the Debtor in the case. After
Piccadilly declared bankruptcy under Chapter 11, but before its
plan was submitted to the Bankruptcy Court for the Southern
District of Florida, the Bankruptcy Court authorized Piccadilly to
sell its assets to Yucaipa Cos., for about $80 million. In
October 2004, the Bankruptcy Court confirmed the plan.
Judge Robert Summerhays oversees the 2012 cases. Attorneys at
Jones, Walker. Waechter, Poitevent, Carrere & Denegre, LLP,
represent the Debtors in their restructuring efforts. BMC Group,
Inc., serves as claims agent, noticing agent and balloting agent.
In its schedules, the Debtor disclosed $34,952,780 in assets and
$32,000,929 in liabilities.
Jeffrey L. Cornish serves as the Debtors' consultant.
Postlethwaite & Netterville, PAC, serve as their independent
auditors, accountants and tax consultants. GA Keen Realty
Advisors, LLC, serve as the Debtors' special real estate advisors
while FTI Consulting, Inc., as their financial consultants.
New York-based vulture fund Atalaya Administrative LLC, in its
capacity as administrative agent for Atalaya Funding II, LP,
Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya
Special Opportunities Fund (Cayman) IV LP (Tranche B), the
Debtors' prepetition secured lender, is represented in the case
by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman &
Areaux, L.L.C.; and Patton Boggs, LLP.
Henry G. Hobbs, Jr., Acting United States Trustee for Region 5,
has appointed seven members to the official committee of unsecured
creditors in the Debtors' Chapter 11 cases. The Committee sought
and obtained Court approval to employ Frederick L. Bunol, Esq.,
and Albert J. Derbes, IV, Esq., of Derbes Law Firm, LLC., as
attorneys. Greenberg Traurig LLP also serves as counsel for the
Committee while Protiviti Inc. serves as financial advisor.
PINNACLE RESTAURANT: Case Summary & 20 Top Unsecured Creditors
--------------------------------------------------------------
Debtor: Pinnacle Restaurant Corporation
203 Park Court
Ridgeland, MS 39157
Case No.: 13-03267
Chapter 11 Petition Date: October 30, 2013
Court: United States Bankruptcy Court
Southern District of Mississippi (Jackson Divisional
Office)
Judge: Hon. Edward Ellington
Debtor's Counsel: Christopher R. Maddux, Esq.
BUTLER SNOW O'MARA STEVENS & CANNADA
PO Box 6010
Ridgeland, MS 39158-6010
Tel: 601-985-4502
Fax: 601-985-4500
Email: chris.maddux@butlersnow.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Van Thomas Johnsey, Jr., president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/mssb13-3267.pdf
PLUG POWER: Enhances Leadership Team to Support Growth Strategy
---------------------------------------------------------------
Plug Power Inc. announced additions to its board of directors and
senior management team to support its ongoing growth strategy, as
the company moves toward expansion of its hydrogen fuel cell
business both in its core material handling market and in adjacent
markets.
Mr. Xavier Pontone, managing director of Air Liquide Advanced
Business, joins Plug Power as a director on the board of
directors, and brings with him a wide range of operations and new
business development experience. Mr. Pontone currently leads a
team that develops new growth opportunities for the Air Liquide
group, with a focus on hydrogen mobility, biogas, and energy
transition. Mr. Pontone also sits on the board of directors of
HyPulsion, the company's joint venture with Plug Power, and is
very active in expanding the market opportunity for hydrogen-
powered material handling vehicles throughout Europe. Mr. Pontone
previously served as manager of Operations Control Center of Air
Liquide Industries, where he managed operations of 12 large
industrial gas (O2, N2, H2 and CO) product networks.
Also joining the board of directors is Dr. Gregory Kenausis,
founding partner and chief investment officer at Grand Haven
Capital AG. Dr. Kenausis brings a wealth of investment,
technology and business development experience to Plug Power.
Based in Zurich, Switzerland, Dr. Kenausis has extensive
responsibilities, from business concept development to financial
model construction to investment decision-making. He holds
multiple patents and has been published in several distinguished
research publications. Dr. Kenausis holds a Ph.D. in Chemical
Engineering from the University of Texas at Austin.
"Mr. Pontone and Dr. Kenausis bring a unique set of capabilities
to the board of directors," said George McNamee, Chairman of the
Plug Power Board. "These skills will become critical to Plug
Power's execution of our operational strategy as our business
opportunities expand."
The company also added Mr. Keith Schmid to the management team as
Chief Operating Officer. Mr. Schmid has more than 20 years of
global experience in industrial business-to-business technology
markets, holding positions in product design, engineering,
marketing, and manufacturing. He has a successful track record in
driving growth through new product development, market entry,
geographic expansion and acquisition.
As inducement to accept the company's offer of employment, the
company approved an option grant to Mr. Schmid. The option grant
is for the purchase of an aggregate of 400,000 shares of common
stock of Plug Power at a per share price of $0.57, has a term of
10 years and is subject to a 3 year vesting schedule, with one
third of the shares vesting on each of the first, second and third
anniversary of Oct. 23, 2013. The board of directors and the
compensation committee of the board of directors each approved the
option grant on Oct. 23, 2013.
Schmid was general manager for Exide Industrial Energy-Americas
where he managed commercial activities for a $250 million division
consisting of two business units - motive power and network power.
Specific to motive power operations, Schmid engineered a
successful turnaround of the unit, restoring profitability,
establishing strong market growth, and delivering an industry-
leading product line.
Schmid served as President and CEO for Power Distribution Inc.,
where he led the growth of the business from approximately $40
million to $125 million, annually, based on a strategic vision to
diversify the business through markets and geography. Schmid also
worked as CEO of Boston-Power Inc., where he transitioned the
company into a provider of large format lithium ion battery
solutions for the electric vehicle and utility storage markets.
Here, Schmid successfully broke through to European and Asian
vehicle manufacturers with prototype systems and demo fleets.
Most importantly, Schmid completed fundraising efforts to ensure a
near-term future for Boston-Power Inc.
"I have had the privilege of working with Keith over the past 20
years," said Andy Marsh, CEO at Plug Power. "Based on his breadth
of experience, extensive knowledge, and proven results
successfully growing a business, I've added Keith to the team as
we focus on scaling the organization."
Leaving his post as Chief Technology Officer, Mr. Adrian Corless
has taken a new position as CEO of Carbon Engineering, Calgary.
Marsh commented, "I'd like to thank Adrian for his contributions
to Plug Power and the fuel cell industry. We all know that he
will have great success in the future."
Additional information is available for free at:
http://is.gd/cYtelx
About Plug Power
Plug Power Inc. is a provider of alternative energy technology
focused on the design, development, commercialization and
manufacture of fuel cell systems for the industrial off-road
(forklift or material handling) market.
KPMG LLP, in Albany, New York, expressed substantial doubt about
Plug Power's ability to continue as a going concern, following
their audit of the Company's financial statements for the year
ended Dec. 31, 2012, citing the Company's recurring losses from
operations and substantial decline in working capital.
As of June 30, 2013, the Company had $36.38 million in total
assets, $26.96 million in total liabilities, $2.45 million in
series C redeemable convertible preferred stock and $6.96 million
in total stockholders' equity.
Bankruptcy Warning
"Our cash requirements relate primarily to working capital needed
to operate and grow our business, including funding operating
expenses, growth in inventory to support both shipments of new
units and servicing the installed base, and continued development
and expansion of our products. Our ability to meet our future
liquidity needs, capital requirements, and to achieve
profitability will depend upon numerous factors, including the
timing and quantity of product orders and shipments; the timing
and amount of our operating expenses; the timing and costs of
working capital needs; the timing and costs of building a sales
base; the timing and costs of developing marketing and
distribution channels; the timing and costs of product service
requirements; the timing and costs of hiring and training product
staff; the extent to which our products gain market acceptance;
the timing and costs of product development and introductions; the
extent of our ongoing and any new research and development
programs; and changes in our strategy or our planned activities.
If we are unable to fund our operations without additional
external financing and therefore cannot sustain future operations,
we may be required to delay, reduce and/or cease our operations
and/or seek bankruptcy protection," the Company said in its
quarterly report for the period ended June 30, 2013.
PLYMOUTH OIL: Plan Denied; Lender May Foreclose
-----------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Plymouth Oil Company LLC, a corn oil producer, can be
taken over by secured lenders owed $8.3 million on a bridge loan.
According to the report, the company filed for Chapter 11
reorganization in July 2012 in Sioux City, Iowa. Although the
plant was later shut down, the owner went ahead trying to persuade
the bankruptcy judge to approve a reorganization plan.
U.S. Bankruptcy Judge Thad J. Collins wrote a 24-page opinion on
Oct. 28 explaining why he couldn't approve the plan and was
required to allow the lenders to foreclose.
Judge Collins previously said the plan was "too speculative to be
feasible" given the unproven ability to service $10 million in
debt. His opinion this week said the plan is a "visionary and
appealing idea, but is not supported by any concrete factual
evidence to meet the feasibility standards." It was "based
entirely on speculation" about the success of a gluten-free flour
product, he said.
About Plymouth Oil
Plymouth Oil Company, LLC, filed a bare-bones Chapter 11 petition
(Bankr. N.D. Iowa Case No. 12-01403) in Sioux City on July 23,
2012. In its amended schedules, the Debtor disclosed $21,623,349
in total assets and $12,891,586 in total liabilities.
Plymouth Oil -- http://www.plymouthoil.com-- has a $30 million
extraction plant located at 22058 K-42 Merrill, Iowa, directly
across from the new Plymouth Energy Ethanol Plant.
Founded by local investors, Plymouth Oil Company, LLC started
operations in February 2010 purchasing raw corn germ and refining
this material into de-oiled germ meal and kosher food-grade
cooking oil. The plant has the capability of pumping out 90 tons
of corn oil each day and about 300 tons of DCGM (defatted corn
germ meal) daily, which is used for hog, poultry and dairy feed.
Bankruptcy Judge Thad J. Collins presides over the case. Bradley
R. Kruse, Esq., and Adam J. Freed, Esq., at Brown, Winick, Graves,
Gross, Baskerville and Schoenebaum, P.L.C., represent the Debtor
as counsel. The petition was signed by David P. Hoffman,
president.
Secured creditors Arlon Sandbulte, Ryan Lake, Dirk Dorn, Steven
Vande Brake, and Iowa Corn Opportunities, LLC, are represented by
lawyers at Baird Holm LLP in Omaha, Nebraska.
POINT CENTER: Court Converts Case to Chapter 7
----------------------------------------------
The U.S. Bankruptcy Court granted the motion of Howard B.
Grobstein, the Chapter 11 Trustee for Point Center Financial,
Inc., to convert the chapter 11 case of the Debtor to liquidation
in chapter 7. There was no objection filed to the request.
About Point Center
Point Center Financial, Inc., a hard money lender, filed a
Chapter 11 petition (Bankr. C.D. Calif. Case No. 13-11495) in
Santa Ana, California, on Feb. 19, 2013. The Debtor disclosed
$109,257,545 in assets and $54,566,116 in liabilities as of the
Chapter 11 filing.
The Company claims to have a long track record of success in
originating and servicing loans from hundreds of investors.
Unfortunately, due to the historic collapse of the economy
beginning in about 2007, the Debtor, no different than many other
similar enterprises in real estate, has fallen on hard times.
From a high of about 130 performing loans with a total combined
face value of over $450 million in 2006, only 8 loans are now
performing. There were a total of only four foreclosed properties
("REOs") as of 2006. In comparison, between 2007 and 2012, there
were 60 foreclosure sales.
The result left the Debtor saddled with large secured liabilities
to PMB, which has a blanket lien on all of the Debtor's assets in
excess of $9 million, secured by the Debtor's primary asset of
loan servicing and management fees received from secured loans and
properties that have been taken back through foreclosure.
The MA Creditors are represented by Mary L. Fickel, Esq., at
Fickel & Davis.
The Official Committee of Unsecured Creditors is represented by
Marshack Hays LLP as counsel.
Howard B. Grobstein has been appointed as Chapter 11 trustee of
the Debtor's estate. John P. Reitman, Esq., and Roy Zur, Esq., at
Landau Gottfried & Berger LLP, serve as general counsel for the
Chapter 11 trustee.
RESIDENTIAL CAPITAL: Ally Sees $170MM Hit to Settle w/ FHFA, FDIC
-----------------------------------------------------------------
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that Ally Financial Inc.,
parent of bankrupt Residential Capital LLC, the bankrupt defunct
mortgage lender, reached settlements with the Federal Housing
Finance Agency and the Federal Deposit Insurance Corp. resolving
all pending litigation and related claims.
According to the report, Ally expects to take a $170 million
charge in the third quarter as part of the settlements, according
to an Oct. 29 statement.
"These settlements are key steps in Ally addressing its remaining
legacy mortgage risks," Chief Executive Officer Michael A.
Carpenter said in the statement. "We are pleased to be able to put
these matters behind us."
ResCap's bankruptcy plan will be amended as a result of the
settlements.
ResCap, based in New York, has been settling disputes with
creditors as it prepares for a hearing in November where it will
ask a judge to approve a plan to distribute billions of dollars to
creditors. Under the plan, unsecured creditors would get a
recovery of 36 percent on their claims, while debts backed by
collateral will be paid in full.
The plan is based on a $2.1 billion settlement ResCap reached with
Ally, and creditors, including mortgage bond investors who blame
both companies for their losses.
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).
About Ally Financial
Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/--
is one of the world's largest automotive financial services
companies. The Company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3 percent stake. Private equity firm Cerberus
Capital Management LP keeps 14.9 percent, while General Motors Co.
owns 6.7 percent.
Ally Financial Inc. reported net income of $1.19 billion for the
year ended Dec. 31, 2012, as compared with a net loss of $157
million during the prior year. As of June 30, 2013, the Company
had $150.62 billion in total assets, $131.46 billion in total
liabilities and $19.16 billion in total equity.
RURAL/METRO CORP: Can Employ KPMG LLP as Independent Auditors
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has granted
Rural/Metro Corporation, et al., authorization to employ KPMG LLP
as the Debtors' independent auditors, nunc pro tunc to Sept. 10,
2013.
As reported in the TCR on Sept. 24, 2013, KPMG's hourly rates are:
partner at $450 to $625, director/senior manager at $375 to $575,
manager at $300 to $450, senior associate at $200 to $350 and
associate at $150 to $250.
The motion explains, "The Debtors have selected KPMG as their
independent auditors because of the firm's diverse experience and
extensive knowledge in the fields of accounting and bankruptcy.
KPMG has significant qualifications and experience as auditors.
The firm's experience in audit is widely recognized, and it
regularly provides such services to large and complex business
entities. Significantly, KPMG has extensive experience in
delivering audit services in Chapter 11 cases."
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 was acquired in 2011 in a
leveraged buyout by Warburg Pincus LLC as part of a transaction
valued at $676.5 million.
Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 13-11952) on Aug. 4, 2013, before
the U.S. Bankruptcy Court for the District of Delaware. Debt
includes $318.5 million on a secured term loan and $109 million on
a revolving credit with Credit Suisse AG serving as agent. There
is $312.2 million owing on two issues of 10.125 percent senior
unsecured notes.
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.
The Debtors have filed a reorganization plan largely worked out
before the Chapter 11 filing in early August. Existing
shareholders receive nothing in the plan.
RURAL/METRO CORP: Lease Decision Period Extended Until March 3
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware entered on
Oct. 25, 2013, an order extending, pursuant to Section 365(d)(4)
of the Bankruptcy Code, the deadline for Rural/Metro Corporation,
et al, to assume or reject unexpired leases of nonresidential real
property through and including March 3, 2013.
As reported in the TCR on Oct. 14, 2013, the Debtors asked the
Bankruptcy Court to extend until March 3, 2014, the statutory
deadline to assume or reject their existing unexpired leases,
subleases or other agreements to which the Debtors are a
party and which may be considered unexpired leases of
nonresidential real property under applicable law.
The Debtors occupy premises across the United States in connection
with the operation of their businesses. With respect to many
locations, the Debtors do not own the real property where such
enterprises are located and, instead, lease the real property. As
a result, the Debtors are tenants under approximately 280 leases
of non-residential real property.
Absent the extension, the lease decision headline will expire on
Dec. 2, 2013.
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 was acquired in 2011 in a
leveraged buyout by Warburg Pincus LLC as part of a transaction
valued at $676.5 million.
Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 13-11952) on Aug. 4, 2013, before
the U.S. Bankruptcy Court for the District of Delaware. Debt
includes $318.5 million on a secured term loan and $109 million on
a revolving credit with Credit Suisse AG serving as agent. There
is $312.2 million owing on two issues of 10.125 percent senior
unsecured notes.
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.
The Debtors have filed a reorganization plan largely worked out
before the Chapter 11 filing in early August. Existing
shareholders receive nothing in the plan.
RGR WATKINS: Receiver Can Use CJUF Cash Collateral Until Nov. 14
----------------------------------------------------------------
On Oct. 28, 2013, the U.S. Bankruptcy Court for the Middle
District of Florida entered an agreed interim order authorizing
RGR Watkins, LLC, through Receiver Richard DeLisle, to use cash
collateral of CJUF III Atlas Portfolio LLC, in accordance with a
budget. A further hearing on the Motion is set for Nov. 14, 2013,
at 11:00 a.m.
CJUF is granted as adequate protection a post-petition replacement
lien against the Debtor's Cash Collateral to the same extent,
validity as existed as of the Petition Date.
A copy of the Agreed Interim Cash Collateral Order is available
at http://bankrupt.com/misc/rgrwatkins.doc48.pdf
RGR Watkins, LLC, filed a petition for Chapter 11 protection
(Bankr. M.D. Fla. Case No. 13-12147) on Sept. 12, 2013, in Tampa,
Florida. The petition was signed by Robert G. Roskamp as manager.
The Debtor estimated assets and debts of at least $10 million.
The Debtor is represented by Elena P. Ketchum, Esq. --
eketchum.ecf@srbp.com -- and Amy Denton Harris, Esq. --
aharris.ecf@srbp.com -- at Stichter, Riedel, Blain & Prosser,
P.A., in Tampa, FL, as counsel.
SALON MEDIA: Dave Talbot Quits as Director
------------------------------------------
Mr. David Talbot confirmed his resignation as a director of Salon
Media Group, Inc., which resignation was accepted by the Board of
Directors. In submitting his resignation, Mr. Talbot did not
express any disagreement on any matter relating to the operations,
policies or practices of the Company.
About Salon Media
San Francisco, Calif.-based Salon Media Group (OTC BB: SLNM.OB)
-- http://www.Salon.com/-- is an online news and social
networking company and an Internet publishing pioneer.
For the 12 months ended March 31, 2013, the Company had a net loss
of $3.93 million on $3.64 million of net revenues, as compared
with a net loss of $4.09 million on $3.47 million of net revenues
for the same period a year ago.
As of March 31, 2013, the Company had $1.29 million in total
assets, $11.32 million in total liabilities and a $10.02 million
total stockholders' deficit.
Burr Pilger Mayer, Inc., in San Francisco, California, issued a
"going concern" qualification on the consolidated financial
statements for the fiscal year ended March 31, 2012. The
independent auditors noted that the Company has suffered recurring
losses and negative cash flows from operations and has an
accumulated deficit of $112.5 million at March 31, 2012, which
raise substantial doubt about the Company's ability to continue as
a going concern.
SAN BERNARDINO, CA: In Showdown with CalPERS over Arrears
---------------------------------------------------------
Tim Reid, writing for Reuters, reported that the bankrupt city of
San Bernardino and its largest creditor, the California Public
Employees' Retirement System, are set for a showdown over the
city's $17 million in pension arrears, a important milestone in a
case the bankruptcy judge says could set a national precedent.
According to the report, after a hearing on Oct. 29 in the case,
an attorney for the Calpers -- America's largest public pension
fund with assets of $277 billion -- said San Bernardino cannot be
allowed to get away with failing to pay the pension fund for an
entire year.
San Bernardino stopped paying Calpers its $1.2 million bimonthly
employer's contribution for 12 months after it declared bankruptcy
in August 2012, the report related. Calpers says the city in
Southern California owes $17 million, plus growing interest, late
fees and penalty payments.
"Calpers can't have cities financing their bankruptcy cases by
just stopping making payments," Michael Lubic, an attorney for
Calpers, told Reuters. "You can't make not paying Calpers cheap
and easy, because then it creates this tremendous incentive for
other cities to file for bankruptcy and stop meeting their
obligations."
Lubic's comments came as San Bernardino's bankruptcy entered a
critical phase: three days of closed-door negotiations with
creditors next month, and local elections next week in which two
council members and the city attorney, a pivotal figure in the
bankruptcy, face recalls, the report said.
About San Bernardino, Calif.
San Bernardino, California, filed an emergency petition for
municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code
(Bankr. C.D. Calif. Case No. 12-28006) on Aug. 1, 2012. San
Bernardino, a city of about 210,000 residents roughly 65 miles
(104 km) east of Los Angeles, estimated assets and debts of more
than $1 billion in the bare-bones bankruptcy petition.
The city council voted on July 10, 2012, to file for bankruptcy.
The move lets San Bernardino bypass state-required mediation with
creditors and proceed directly to U.S. Bankruptcy Court.
The city is represented that Paul R. Glassman, Esq., at Stradling
Yocca Carlson & Rauth.
San Bernardino joined two other California cities in bankruptcy:
Stockton, an agricultural center of 292,000 east of San Francisco,
and Mammoth Lakes, a mountain resort town of 8,200 south of
Yosemite National Park.
The City was granted Chapter 9 protection on Aug. 28, 2013.
SANDISK CORP: S&P Assigns 'BB' Rating to Senior Convertible Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' issue-level
rating and '3' recovery rating to SanDisk Corp.'s senior
convertible notes due 2020. The '3' recovery rating indicates
S&P's expectation of meaningful (50% to 70%) recovery in a payment
default.
The company intends to use the proceeds from the notes for general
corporate purposes, which could include internal investment and
share repurchases. S&P rates the new notes the same as the
corporate credit rating on the company.
The 'BB' corporate credit rating and positive outlook reflect the
company's narrow scope of business in highly volatile
semiconductor flash memory markets and the substantial investment
required to maintain technology and cost leadership, what S&P
characterizes as a "weak" business risk profile, as well as an
"intermediate" financial risk profile. S&P expects that leverage
will remain under 2x over the coming year, but could temporarily
spike above 2x due to market supply and demand volatility. Pro
forma leverage amounted to about 1.6x in the September 2013
quarter. SanDisk is a leading producer of NAND flash memory-based
storage solutions whose products are broadly used in consumer
electronics products, including mobile phones, digital cameras,
and game systems. The company procures most of its flash memory
through fabrication facilities owned in joint venture partnerships
with Toshiba.
RATINGS LIST
SanDisk Corp.
Corporate Credit Rating BB/Positive/--
Senior Unsecured BB
Recovery Rating 3
New Rating
SanDisk Corp.
Senior convertible notes due 2020 BB
Recovery Rating 3
SEAHAWK DRILLING: Holds Less Than 1% Stake in Hercules Offshore
---------------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission on Oct. 29, 2013, Seahawk Drilling, Inc., and
its affiliates disclosed that they beneficially owned 69,681
shares of common stock of Hercules Offshore Inc. representing 0.04
percent of the shares outstanding. A copy of the regulatory
filing is available for free at http://is.gd/HnRi9t
About Seahawk Drilling
Houston, Texas-based Seahawk Drilling, Inc., engaged in a jackup
rig business in the United States, Gulf of Mexico, and offshore
Mexico. It offered rigs and drilling crews on a day rate
contractual basis. The Company and several affiliates filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Lead Case No.
11-20089) on Feb. 11, 2011. Berry D. Spears, Esq., and Jonathan
C. Bolton, Esq., at Fullbright & Jaworkski L.L.P., in Houston,
served as the Debtors' bankruptcy counsel. Shelby A. Jordan,
Esq., and Nathaniel Peter Holzer, Esq. at Jordan, Hyden, Womble,
Culbreth & Holzer, P.C., in Corpus Christi, Texas, served as the
Debtors' co-counsel. Alvarez and Marsal North America, LLC, acted
as the Debtors' restructuring advisor. Simmons & Company
International served as the Debtors' transaction advisor.
Kurtzman Carson Consultants LLC served as the Debtors' claims
agent. Judy A. Robbins, U.S. Trustee for Region 7, appointed
three creditors to serve on an Official Committee of Unsecured
Creditors. Heller, Draper, Hayden, Patrick & Horn, L.L.C.,
represented the creditors committee.
In its amended schedules, Seahawk Drilling disclosed $208,190,199
in assets and $438,458,460 in liabilities as of the petition date.
Seahawk filed for Chapter 11 protection to complete the sale of
all assets to Hercules Offshore, Inc. As reported by the Troubled
Company Reporter on April 11, 2011, the Bankruptcy Court approved
an Asset Purchase Agreement between Hercules Offshore and its
wholly owned subsidiary, SD Drilling LLC, and Seahawk Drilling,
pursuant to which Seahawk agreed to sell to Hercules, and Hercules
agreed to acquire from Seahawk, all 20 of Sellers' jackup rigs and
related assets, accounts receivable and cash and certain
liabilities of Sellers in a transaction pursuant to Section 363 of
the U.S. Bankruptcy Code. The deal was valued at about $176
million when it received court approval. The purchase price for
the acquisition was funded by the issuance of roughly 22.3 million
shares of Hercules Offshore common stock and cash consideration of
$25 million, which was used primarily to pay off Seahawk's DIP
loan. The number of shares of Hercules Offshore common stock to
be issued was to be proportionally reduced at closing, based on a
fixed price of $3.36 per share, if the outstanding amount of the
DIP loan exceeds $25 million, with the total cash consideration
not to exceed $45 million. The deal closed on April 27, 2011.
SINCERE HEALTH: Files for Bankruptcy Protection
-----------------------------------------------
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that Sincere Health Care
Services Inc., a provider of home health-care services that does
business as National Homecare Services, sought bankruptcy
protection from creditors.
According to the report, Sincere, based in Greenwell Springs,
Louisiana, listed debt of as much as $50 million and assets of
less than $50,000 in Chapter 11 documents filed Oct. 29 in U.S.
Bankruptcy Court in Baton Rouge, Louisiana. The company gave no
reason for the filing in court filings.
The 20 largest unsecured creditors are owed about $1.5 million,
with Woodlands Financial Service owed about $1.1 million, court
papers show.
The case is In re Sincere Health Care Services Inc., 13-bk-11475,
U.S. Bankruptcy Court, Middle District of Louisiana (Baton Rouge).
SINCLAIR BROADCAST: Unit Raises $450 Million of Incremental Loan
----------------------------------------------------------------
Sinclair Television Group, Inc., a wholly-owned subsidiary of
Sinclair Broadcast Group, Inc., entered into an amendment and
restatement of its credit agreement, with JPMorgan Chase Bank,
N.A., as administrative agent.
Pursuant to the Amendment, STG raised $450 million of incremental
loans, which consisted of $200 million in incremental delayed draw
term loan A loans, maturing April 2018 and priced at LIBOR plus
2.25 percent; and $250 million in incremental term loan B loans,
maturing April 2020 and priced at LIBOR plus 2.25 percent with a
LIBOR floor of 0.75 percent. In addition, STG obtained an
additional $57.5 million of capacity under its revolving line of
credit maturing April 2018. The terms loans are expected to be
used to fund acquisitions and for general corporate purposes. STG
also amended certain other terms of its Bank Credit Agreement.
The Bank Credit Agreement continues to contain certain (i)
restrictive covenants, including, but not limited to, restrictions
on indebtedness, liens, payments, investments, mergers,
consolidations, liquidations and dissolutions, acquisitions, sales
and other dispositions of assets, loans and advances and affiliate
transactions and (ii) financial maintenance covenants, including
an interest coverage ratio, a first lien indebtedness ratio and a
total indebtedness ratio. The Bank Credit Agreement also
continues to include affirmative covenants, representations and
warranties and events of default, including certain cross-default
and cross-acceleration provisions, customary for an agreement of
its type.
STG's obligations under the Bank Credit Agreement remain (i)
jointly and severally guaranteed by the Guarantors, which include
the Company and certain subsidiaries of the Company and (ii)
secured by a first-priority lien on substantially all of the
tangible and intangible assets (whether now owned or hereafter
arising or acquired) of STG and the subsidiaries of STG and the
Company that are Guarantors and, with respect to the Company, the
capital stock of certain of its directly owned subsidiaries.
A copy of the Second Amendment is available for free at:
http://is.gd/dJQrcq
About Sinclair Broadcast
Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc.
(Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and
most diversified television broadcasting companies, currently owns
and operates, programs or provides sales services to 58 television
stations in 35 markets. The Company's television group reaches
roughly 22 percent of U.S. television households and includes FOX,
ABC, CBS, NBC, MNT, and CW affiliates.
"Any insolvency or bankruptcy proceeding relating to Cunningham,
one of our LMA partners, would cause a default and potential
acceleration under the Bank Credit Agreement and could,
potentially, result in Cunningham's rejection of our seven LMAs
with Cunningham, which would negatively affect our financial
condition and results of operations," the Company said in its
annual report for the period ended Dec. 31, 2012.
As of June 30, 2013, the Company had $3.34 billion in total
assets, $2.95 billion in total liabilities and $386 million in
total stockholders' equity.
* * *
As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings
Services raised its corporate credit rating on Sinclair to 'BB-'
from 'B+'. The rating outlook is stable. "The 'BB-' rating on
Sinclair reflects S&P's expectation that the company could keep
its lease-adjusted debt to EBITDA below historical levels
throughout the election cycle, absent a reversal of economic
growth, meaningful debt-financed acquisitions, or significant
shareholder-favoring measures," explained Standard & Poor's credit
analyst Deborah Kinzer.
In September 2010, Moody's raised its ratings for Sinclair
Broadcast and subsidiary Sinclair Television Group, including the
Corporate Family Rating and Probability-of-Default Rating, each to
Ba3 from B1, and the ratings for individual debt instruments.
Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed
$250 million issuance of Senior Unsecured Notes due 2018 by STG.
The Speculative Grade Liquidity Rating remains unchanged at SGL-2.
The rating outlook is now stable.
SPRINT CORP: Reports Profit on Investment Gain
----------------------------------------------
Ben Fox Rubin and Ryan Knutson, writing for The Wall Street
Journal, reported that Sprint Corp. swung to a third-quarter
profit, helped by an investment gain, in its first quarterly
report since Japan's SoftBank Corp. acquired a majority stake in
the company.
According to the report, over the summer, SoftBank completed a
three-way merger with Sprint and Clearwire Corp., gaining control
of both companies. The deal provides a multibillion-dollar
injection of cash for Sprint, giving the Overland Park, Kan.,
company much-needed capital to expand its high-speed wireless
network.
Sprint has languished as a second-tier U.S. wireless carrier for
years, following its problematic $35 billion merger with Nextel in
2005 that saddled it with the costs of running two separate
networks, one of which it finally shut down completely a few
months ago, the report related. Now under SoftBank, Sprint needs
to prove it is able to compete in a wireless industry currently
dominated by Verizon Wireless and AT&T Inc.
During a conference call with analysts on Oct. 30 Sprint Chief
Executive Dan Hesse said the wireless carrier was open to joining
with other owners of wireless spectrum, which has been made easier
by upgrades to the company's network, the report further related.
Mr. Hesse didn't mention any specific partners, but the comments
hint at a willingness to consider a network sharing deal with Dish
Network Corp., the report said. Dish has accumulated billions of
dollars worth of rights to use the airwaves, known as spectrum,
but it hasn't begun to build a wireless network.
About Sprint Corp.
Sprint Corporation is a United States telecommunications holding
company that provides wireless services and is also a major global
Internet carrier.
* * *
In September 2013, Standard & Poor's Ratings Services said it
assigned its 'BB-' corporate credit rating to Sprint Corp., a
newly formed parent entity of the Overland Park, Kan.-based
wireless telecommunications carrier. At the same time, S&P
affirmed the 'BB-' corporate credit rating on Sprint Nextel Corp.,
which was renamed Sprint Communications Inc. and is a wholly owned
subsidiary of Sprint Corp. The outlook is stable. S&P also
affirmed all issue-level ratings at Sprint Communications as well
as at subsidiaries Sprint Capital Corp., iPCS, and Clearwire Corp.
STELLAR BIOTECHNOLOGIES: Presents on Clostridium Difficile
----------------------------------------------------------
Stellar Biotechnologies, Inc., presented a preclinical poster at
the 7th Vaccine and ISV Congress being held in Sitges, Spain, Oct.
27-29, 2013. The presentation relates to a recent study in mice
of Stellar's newly acquired active immunotherapy technology
targeting the treatment of Clostridium difficile infection ("C.
diff").
Clostridium difficile is a bacteria found in the intestines that
can cause severe and life-threatening intestinal conditions. C.
diff infections are at an all-time high and related
hospitalizations have tripled in the last decade.
The poster titled "Immunization with Clostridium difficile PSII
Polysaccharide Antigens Adjuvanted with KLH Induced Broad-based
Enhancement of Adaptive Immune Responses and Protection in Mice"
is the result of preclinical research conducted together by
scientists from Stellar and the University of Guelph.
In the study, vaccination with a PSII-KLH conjugate vaccine
conferred protection against C. diff infection, measured by
improved survival rates in vaccinated mice compared to
unvaccinated controls. The study concluded that the C. diff PSII-
KLH immunotherapy approach was safe and efficacious in a
preclinical model. Further preclinical development is underway.
The 7th Vaccine & ISV Congress features science and public health
topics, from primary vaccine research and vaccine manufacturers,
to governmental policy, safety and regulation.
About Stellar
Port Hueneme, Cal.-based Stellar Biotechnologies, Inc.'s
business is to commercially produce and market Keyhole Limpet
Hemocyanin ("KLH") as well as to develop new technology related to
culture and production of KLH and subunit KLH ("suKLH")
formulations. The Company markets KLH and suKLH formulations to
customers in the United States and Europe.
KLH is used extensively as a carrier protein in the production of
antibodies for research, biotechnology and therapeutic
applications.
The Company's balance sheet at May 31, 2013, showed $2.23 million
in total assets, $5.35 million in total liabilities and a $3.11
million total shareholders' deficiency.
"Without raising additional financial resources or achieving
profitable operations, there is substantial doubt about the
ability of the Company to continue as a going concern," the
Company said in its quarterly report for the period ended May 31,
2013.
STEREOTAXIS INC: Record Date for Rights Offering is Oct. 31
-----------------------------------------------------------
Stereotaxis, Inc., has fixed 5:00 p.m. New York City time on
Oct. 31, 2013, as the record date for determination of
stockholders (and eligible warrant holders) entitled to
participate in its previously-announced rights offering. Upon
commencement of the rights offering, Stereotaxis will distribute,
at no charge to the holders of record of its common stock (and of
certain of its warrants), as of the record date, subscription
rights for each share of common stock (or warrant, as applicable)
owned on the record date. Each subscription right will entitle
the holder to purchase one-third of a share of common stock, at a
price of $3.00 per share.
The subscription rights will be exercisable until 5:00 p.m. New
York City time, on Nov. 21, 2013. Stereotaxis may, subject to
certain limitations, extend the rights offering, but does not
currently intend to do so. Any fractional rights remaining after
aggregating all of the subscription rights issued to shareholders
and participating warrant holders will be rounded down to the
nearest whole number, and no shareholder or participating warrant
holder will receive any shares with respect to fractional rights
that are rounded down.
The rights will be listed on the NASDAQ Capital Market under the
symbol "STXSR," commencing on or about Friday, Nov. 1, 2013, and
continuing through the expiration of the rights offering. The ex-
rights date for the rights offering is pending and will be
announced once it is established by NASDAQ. The ex-rights date is
the date on which Stereotaxis's common stock will begin to trade
without the subscription rights and the rights will trade
separately from the common stock. As a result, shareholders who
sell their shares prior to the ex-rights date will also be selling
their subscription rights.
About Stereotaxis
Based in St. Louis, Missouri, Stereotaxis, Inc. is a manufacturer
and developer of a suite of navigation systems in interventional
surgical procedures. The Company's Epoch Solution is used in the
treatment of arrhythmias and coronary artery disease.
As of June 30, 2013, the Company had $23.99 million in total
assets, $49.63 million in total liabilities and a $25.63 million
total stockholders' deficit.
SUNTECH POWER: May Receive $150-Mil. in Support from Wuxi Guolian
-----------------------------------------------------------------
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that Suntech Power Holdings
Co., the Chinese solar company whose main unit was pulled into
bankruptcy, may get an equity investment of at least $150 million
from a state-backed enterprise.
According to the report, the support from Wuxi Guolian Development
Group may also lead to combining other solar and related
businesses it owns with Suntech, possibly as joint ventures, the
panel maker said in an Oct. 29 statement announcing it had
received an investment letter of intent.
Suntech's main unit was pulled into bankruptcy proceedings after
the Wuxi, China-based panel maker missed a bond payment in March.
It was the world's biggest solar manufacturer by 2011 shipments.
The cash investment from Wuxi Guolian would support "a
comprehensive rehabilitation and restructuring of the financial
and operational affairs of" Suntech, according to the statement.
Suntech failed to repay $541 million in bonds that matured in
March.
Suntech had $2.26 billion in debt at the end of the first quarter,
the last time it reported earnings.
About Suntech
Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP)
produces solar products for residential, commercial, industrial,
and utility applications. With regional headquarters in China,
Switzerland, and the United States, and gigawatt-scale
manufacturing worldwide, Suntech has delivered more than
25,000,000 photovoltaic panels to over a thousand customers in
more than 80 countries.
As reported by the TCR on March 20, 2013, Suntech Power Holdings
Co., Ltd., received from the trustee of its 3 percent Convertible
Notes a notice of default and acceleration relating to Suntech's
non-payment of the principal amount of US$541 million that was due
to holders of the Notes on March 15, 2013. That event of default
has also triggered cross-defaults under Suntech's other
outstanding debt, including its loans from International Finance
Corporation and Chinese domestic lenders.
TAYLOR BEAN: Says PwC's Negligent Audits Missed Fraud
-----------------------------------------------------
Law360 reported that Taylor Bean & Whitaker Plan Trust filed suit
in Florida state court on Oct. 29 against PricewaterhouseCoopers
LLP, claiming the accounting firm was negligent in its audits of
Colonial BancGroup Inc., missing a multibillion-dollar fraud
carried out by now-bankrupt Taylor Bean & Whitaker Mortgage Corp.
and bank executives.
According to the report, the trust, formed as part of Taylor
Bean's bankruptcy plan, says that as a result of PwC's negligent
misrepresentation of the audits, Taylor Bean incurred billions in
debt that it cannot repay.
About Taylor Bean
Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala-
based mortgage broker to become one of the largest mortgage
bankers in the United States. In 2009, Taylor Bean was the
country's third largest direct-endorsement lender of FHA-insured
loans of the largest wholesale mortgage lenders and issuer of
mortgage backed securities. It also managed a combined mortgage
servicing portfolio of approximately $80 billion. The company
employed more that 2,000 people in offices located throughout the
United States.
Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case
No. 09-07047) on Aug. 24, 2009. Taylor Bean filed the Chapter 11
petition three weeks after federal investigators searched its
offices. The day following the search, the Federal Housing
Administration, Ginnie Mae and Freddie Mac prohibited the company
from issuing new mortgages and terminated servicing rights.
Taylor Bean estimated more than $1 billion in both assets and
liabilities in its bankruptcy petition
Lee Farkas, the former chairman, was sentenced in June to 30 years
in federal prison after being convicted on 14 counts of conspiracy
and bank, wire and securities fraud in what prosecutors said was a
$3 billion scheme involving fake mortgage assets.
Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at
Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq.,
and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain &
Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven
Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman
PA, in Miami, Fla., represent the Committee. BMC Group, Inc.,
serves as the claims and noticing agent.
Unsecured creditors were expected to receive 3.3% to 4.4% under a
Chapter 11 plan approved in July 2011.
TLO LLC: Has Continued Access to Lender's Cash Until Jan. 31
------------------------------------------------------------
TLO, LLC, asks the U.S. Bankruptcy Court for the Southern District
of Florida for authorization to continue using cash collateral in
which Technology Investors, Inc., holds a first priority lien, for
an additional three months, or until Jan. 31, 2014.
The Debtor requires the continued use of the Cash Collateral for
the continued operation of its business in the ordinary course,
including payment of expenses attendant thereto.
To adequately protect Lender in connection with the Debtor's
continued use of the Cash Collateral, the Debtor offers a first
priority post-petition lien on all cash of the Debtor generated
postpetition.
A full-text copy of the Debtor's motion with accompanying budget
is available at http://bankrupt.com/misc/tlollc.doc317.pdf
About TLO LLC
TLO LLC, a provider of risk-mitigation services, filed a petition
for Chapter 11 reorganization (Bankr. S.D. Fla. Case No.
13-bk20853) on May 9, 2013, in West Palm Beach, Florida, near the
company's headquarters in Boca Raton. The petition was signed by
E. Desiree Asher as CEO.
Judge Paul G. Hyman, Jr., presides over the case. Robert C. Furr,
Esq., and Alvin S. Goldstein, Esq., at Furr & Cohen, serve as the
Debtor's counsel. Bayshore Partners, LLC is the Debtor's
investment banker. Thomas Santoro and GlassRatner Advisory &
Capital Group, LLC are the Debtor's financial advisors.
Paul J. Battista, Esq., and Mariaelena Gayo-Guitian, Esq., at
Genovese, Joblove & Battista, P.A., represent the Official
Committee of Unsecured Creditors as counsel.
The Debtor disclosed assets of $46.6 million and liabilities of
$109.9 million, including $93.4 million in secured claims. The
principal lender is Technology Investors Inc., owed $89 million.
TII is owned by the estate of Hank Asher, the company's primary
owner who died this year. There is $4.6 million secured by
computer equipment.
TRANS ENERGY: Settles with Oppenheimer for $300,000
---------------------------------------------------
Trans Energy, Inc., and its subsidiary American Shale Development,
Inc., entered into a Settlement Agreement dated effective Oct. 9,
2013, with Oppenheimer & Co., Inc. Oppenheimer had previously
filed an action entitled Oppenheimer & Co. Inc. v. Trans Energy,
Inc. and American Shale Development, Inc., 12-cv-4726 (KPF)
against Trans Energy and American Shale in the United States
District Court for the Southern District of New York.
The Action arose out of a letter agreement entered into between
the Company and Oppenheimer on July 22, 2011, pursuant to which
the Company engaged Oppenheimer to serve as its investment banker
in connection with potential capital raising transactions. The
Company agreed to pay Oppenheimer a fee in the event that the
Company raised certain types of capital within certain time
periods. Oppenheimer brought the Action to collect fees that it
claims the Company owed as a result of the funding American Share
and the Company received under the Credit Agreement dated Feb. 29,
2012, by and among American Shale, several banks and other
financial institutions parties thereto, and Chambers Energy
Management, LP, as the administrative agent, pursuant to which the
Lenders agreed to lend American Shale up to $50 million.
Pursuant to the Settlement Agreement, in exchange for a release of
all claims brought in the Action, the Company has agreed to pay
Oppenheimer $300,000 in cash and to issue to Oppenheimer 37,500
shares of common stock, $.001 par value, of the Company. In
addition, the Company has entered into a Registration Rights
Agreement with Oppenheimer granting Oppenheimer "piggyback"
registration rights with respect to the shares of common stock
issued. The common stock issued was issued in a transaction
exempt from registration under the Securities Act of 1933 pursuant
to Section 4(2) thereof.
About Trans Energy
St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG)
-- http://www.transenergyinc.com/-- is an independent energy
company engaged in the acquisition, exploration, development,
exploitation and production of oil and natural gas. Its
operations are presently focused in the State of West Virginia.
In its audit report on the Company's 2011 results, Maloney +
Novotny, LLC, in Cleveland, Ohio, noted that the Company has
generated significant losses from operations and has a working
capital deficit of $18.37 million at Dec. 31, 2011, which together
raises substantial doubt about the Company's ability to continue
as a going concern.
The Company's balance sheet at June 30, 2013, showed $88.89
million in total assets, $85.48 million in total liabilities and
$3.40 million in total stockholders' equity.
VALENCE TECHNOLOGY: Creditors Approve Bankruptcy-Exit Plan
----------------------------------------------------------
Katy Stech, writing for DBR Small Cap, reported that lawyers for
Valence Technology Inc. said that most of the Texas battery
maker's creditors have voted to accept the bankruptcy repayment
plan that would give real-estate mogul Carl Berg full ownership of
the company.
On Aug. 21, 2013, the Company filed a proposed plan of
reorganization and related disclosure statement with the
Bankruptcy Court, soliciting acceptances of the Plan and seeking
confirmation of the Plan by the Bankruptcy Court. On Sept. 20,
2013, the Debtor filed a proposed Amended Plan related proposed
Amended Disclosure Statement.
The Amended Plan provides for the resolution of outstanding claims
against the Debtor. Among other things, the Amended Plan provides
that:
(i) each holder of an allowed Priority Non-Tax Claim, an
allowed DIP Claim, an allowed Convenience Claim or an
allowed general unsecured claim of $500 or less will be
paid in full;
(ii) Berg & Berg Enterprises, LLC, the pre-petition secured
lender, the holder of pre-petition secured indebtedness of
the Debtor, will extend the maturity date of part of its
pre-petition secured claim under a new promissory note
secured by a first priority lien against all of the
reorganized Debtor's assets, and receive, in exchange for
its remaining pre-petition secured claim in the amount of
$50 million, 100 percent of the shares of New Valence
Stock, representing 100 percent of the reorganized
Debtor's issued and outstanding shares of capital stock on
the effective date;
(iii) holders of certain classes of unsecured claims will
receive payment in full over time;
(iv) holders of pre-petition equity interests in the Debtor,
including, without limitation, any shares of the Debtor's
preferred stock, common stock, and any option, warrant or
right to acquire any ownership interest in the Debtor,
will receive no distribution; and
(v) all pre-petition equity interests in the Debtor will be
canceled on the effective date of the Amended Plan.
Under the terms of the Amended Plan, the Pre-petition Secured
Lender will provide exit financing to the Debtor by entering into
a new loan agreement in the amount of $20 million with the
reorganized Debtor on the effective date of the Amended Plan. The
New Loan will have a 5-year term and simple accrued interest at
the rate of 5 percent per annum, and will be secured by a first
priority lien against all of the reorganized Debtor's assets.
Payment of the New Loan will be subordinated to payment of claims
of a number of junior classes, including, without limitation, the
general unsecured creditors. The proceeds from the New Loan will
be used to pay claims under the Amended Plan and to fund the
reorganized Debtor's working capital and general corporate needs.
About Valence Technology
Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 12-11580) on July 12, 2012, in its home-town in
Austin. Founded in 1989, Valence develops lithium iron magnesium
phosphate rechargeable batteries. Its products are used in hybrid
and electric vehicles, as well as hybrid boats and Segway personal
transporters.
The Debtor disclosed debt of $82.6 million and assets of
$31.5 million as of March 31, 2012. The Debtor disclosed
$24,858,325 in assets and $78,520,831 in liabilities as of the
Chapter 11 filing. Chairman Carl E. Berg and related entities own
44.4 percent of the shares. ClearBridge Advisors LLC owns 5.5
percent.
Judge Craig A. Gargotta presides over the case. The Company is
being advised by Sabrina L. Streusand at Streusand, Landon &
Ozburn, LLP with respect to bankruptcy matters. The petition was
signed by Robert Kanode, CEO.
On Aug. 8, 2012, the U.S. Trustee for Region 7 appointed five
creditors to serve on the Official Committee of Unsecured
Creditors of the Debtor. Brinkman Portillo Ronk, PC, serves as
its counsel.
TAYLOR BEAN: Former Chairman Asks Judge to Toss Conviction
----------------------------------------------------------
Jacqueline Palank, writing for Daily Bankruptcy Review, reported
that former mortgage executive Lee Farkas is asking a judge to
toss his conviction for orchestrating a multibillion-dollar fraud
-- the only major conviction obtained in the financial crisis --
because of the shoddy defense he says his lawyers put up.
According to the report, Mr. Farkas, the 61-year-old former
chairman of Taylor, Bean & Whitaker Mortgage Corp ., hired and
fired lawyers throughout a criminal case that ultimately saw him
convicted of orchestrating a massive fraud that not only took down
one of the nation's biggest mortgage lenders but also a major
bank.
With a new legal team, Mr. Farkas continues to profess his
innocence and has asked a federal judge to vacate his conviction
and 30-year prison sentence, the report related.
"Lee Farkas, who is actually innocent, has been sentenced to
prison for 30 years as a result of a trial and appellate process
that were heavily freighted with errors and failings," his
attorneys wrote in court papers filed this month with the U.S.
District Court in Alexandria, Va., the report further related.
Reached on Oct. 29, Mr. Farkas's current lawyers declined to
comment beyond the filing, citing the pending case, the report
said.
About Taylor Bean
Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala-
based mortgage broker to become one of the largest mortgage
bankers in the United States. In 2009, Taylor Bean was the
country's third largest direct-endorsement lender of FHA-insured
loans of the largest wholesale mortgage lenders and issuer of
mortgage backed securities. It also managed a combined mortgage
servicing portfolio of approximately $80 billion. The company
employed more that 2,000 people in offices located throughout the
United States.
Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case
No. 09-07047) on Aug. 24, 2009. Taylor Bean filed the Chapter 11
petition three weeks after federal investigators searched its
offices. The day following the search, the Federal Housing
Administration, Ginnie Mae and Freddie Mac prohibited the company
from issuing new mortgages and terminated servicing rights.
Taylor Bean estimated more than $1 billion in both assets and
liabilities in its bankruptcy petition
Lee Farkas, the former chairman, was sentenced in June to 30 years
in federal prison after being convicted on 14 counts of conspiracy
and bank, wire and securities fraud in what prosecutors said was a
$3 billion scheme involving fake mortgage assets.
Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at
Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq.,
and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain &
Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven
Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman
PA, in Miami, Fla., represent the Committee. BMC Group, Inc.,
serves as the claims and noticing agent.
Unsecured creditors were expected to receive 3.3% to 4.4% under a
Chapter 11 plan approved in July 2011.
USEC INC: Government to Fund Add'l $13.6 Million for R&D Program
----------------------------------------------------------------
USEC Inc. and its subsidiary American Centrifuge Demonstration,
LLC, entered into Amendment No. 009 to the cooperative agreement
dated June 12, 2012, between the U.S. Department of Energy and
USEC and ACD for the research, development and demonstration
program for the American Centrifuge project. The Amendment amends
the cooperative agreement to provide for additional government
obligated funds of $13.6 million, bringing total government
obligated funding to $241.3 million. The cooperative agreement
provides funding for a cost-share RD&D program to demonstrate the
American Centrifuge technology through the construction and
operation of a commercial demonstration cascade of 120 centrifuge
machines and sustain the domestic U.S. centrifuge technical and
industrial base for national security purposes and potential
commercialization of the American Centrifuge technology. The
cooperative agreement provides for 80 percent DOE and 20 percent
USEC cost sharing for work performed during the period June 1,
2012, through Dec. 31, 2013. DOE's contribution is incrementally
funded. The other terms and conditions, including the milestones
and performance indicators under the RD&D program were not changed
by the Amendment.
The $13.6 million of additional government funding provided by the
Amendment is for the RD&D program funding period Nov. 2, 2013, to
Dec. 31, 2013. Although the $13.6 million of funding ($17
million, including USEC's $3.4 million cost share) is not
sufficient to fund the RD&D program through Dec. 31, 2013, the
Amendment states that there is an expectation that DOE would
provide additional funding for the RD&D program for the funding
period ending Dec. 31, 2013. The remaining funding would be made
through a subsequent modification to the cooperative agreement,
with the amount of such funding to be determined. USEC expects
cumulative spending for the RD&D program for the period June 1,
2012, through Dec. 31, 2013, to be approximately $320 million.
This amount is less than the originally estimated cost of the
program of up to $350 million as a result of cost savings achieved
by the Company and spending reductions made by the Company to
complete the program technical milestones within the reduced
government funds anticipated to be available for the program.
The government fiscal year 2014 continuing appropriations
resolution passed by Congress and signed by the President on
Oct. 16, 2013, provided for continued funding for the U.S.
government from Oct. 1, 2013, through Jan. 15, 2014. This
resolution continued funding for the RD&D program at the
government fiscal year 2013 annual rate of $110 million, less any
automatic spending cuts applied to U.S. government spending. USEC
believes that this level of funding, if provided, will be
sufficient to fund the RD&D program through Dec. 31, 2013, and
achieve the remaining technical milestones within the reduced
spending plan described above.
There is no assurance that additional funding will be made
available. DOE's remaining cost share is conditioned upon USEC
continuing to meet all milestones and deliverables on schedule,
USEC continuing to demonstrate to DOE's satisfaction its ability
to meet future milestones, and the availability of such government
funding.
The Company, or its subsidiaries, is also a party to a number of
other agreements or arrangements with the U.S. government, as
described in the Company's annual report on Form 10-K and
quarterly reports on Form 10-Q.
About USEC Inc.
Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) --
http://www.usec.com/-- supplies enriched uranium fuel for
commercial nuclear power plants.
USEC disclosed a net loss of $1.20 billion in 2012 as compared
with a net loss of $491.1 million in 2011. As of June 30, 2013,
the Company had $1.51 billion in total assets, $1.93 billion in
total liabilities and a $419.2 million stockholders' deficit.
PricewaterhouseCoopers LLP, in McLean, Virginia, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has reported net losses and a stockholders'
deficit at Dec. 31, 2012, and is engaged with its advisors and
certain stakeholders on alternatives for a possible restructuring
of its balance sheet, which raise substantial doubt about its
ability to continue as a going concern.
Bankruptcy Warning
"A delisting of our common stock by the NYSE and the failure of
our common stock to be listed on another national exchange could
have significant adverse consequences. A delisting would likely
have a negative effect on the price of our common stock and would
impair stockholders' ability to sell or purchase our common stock.
As of December 31, 2012, we had $530 million of convertible notes
outstanding. A 'fundamental change' is triggered under the terms
of our convertible notes if our shares of common stock are not
listed for trading on any of the NYSE, the American Stock
Exchange, the NASDAQ Global Market or the NASDAQ Global Select
Market. Our receipt of a NYSE continued listing standards
notification described above did not trigger a fundamental change.
If a fundamental change occurs under the convertible notes, the
holders of the notes can require us to repurchase the notes in
full for cash. We do not have adequate cash to repurchase the
notes. In addition, the occurrence of a fundamental change under
the convertible notes that permits the holders of the convertible
notes to require a repurchase for cash is an event of default
under our credit facility. Accordingly, the exercise of remedies
by holders of our convertible notes or lenders under our credit
facility as a result of a delisting would have a material adverse
effect on our liquidity and financial condition and could require
us to file for bankruptcy protection," according to the Company's
annual report for the year ended Dec. 31, 2012.
* * *
USEC Inc. carries 'Caa1' corporate and probability of default
ratings, with "developing" outlook, from Moody's.
As reported by the TCR on Aug. 17, 2012, Standard & Poor's Ratings
Services lowered its ratings on USEC Inc., including the corporate
credit rating to 'CCC' from 'CCC+'.
"The downgrade reflects our assessment of USEC's long-term
viability after the company publicly stated that it will be
difficult to continue enrichment operations at the Paducah Gaseous
Diffusion Plant after a one-year multiparty agreement to extend
operations expires in May 2013," said Standard & Poor's credit
analyst Maurice S. Austin.
USG CORP: Prices $350 Million Senior Notes Offering
---------------------------------------------------
USG Corporation announced the pricing of a private offering of
$350 million aggregate principal amount of its 5.875 percent
senior notes due 2021. The notes will be the unsecured
obligations of USG, and USG's obligations under the notes will be
guaranteed on a senior unsecured basis by certain of its domestic
subsidiaries. The offering of the notes is expected to close on
or about Oct. 31, 2013.
USG intends to use the net proceeds from the sale of the notes to
fund a portion of USG's initial $500 million cash investment
(consisting of the net proceeds of sale of the notes and cash on
hand) in its previously announced proposed joint venture with
Boral Limited. If USG does not complete the joint venture, USG
intends to use the net proceeds from the sale of the notes for
general corporate purposes, which may include the repayment of
indebtedness, the funding of pension obligations, working capital,
capital expenditures and potential acquisitions.
The notes will be offered and sold only to qualified institutional
buyers in accordance with Rule 144A under the Securities Act of
1933, and to non-U.S. persons in accordance with Regulation S
under the Securities Act. When issued, the notes will not have
been registered under the Securities Act or state securities laws
and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act and applicable state securities
laws.
About USG Corporation
Based in Chicago, Ill., USG Corporation -- http://www.usg.com/--
through its subsidiaries, manufactures and distributes building
materials producing a wide range of products for use in new
residential, new nonresidential and repair and remodel
construction, as well as products used in certain industrial
processes.
The company filed for Chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094). When the Debtors filed for
protection from their creditors, they disclosed $3.252 billion in
assets and $2.739 billion in liabilities. The Debtors emerged
from bankruptcy protection on June 20, 2006.
For the 12 months ended Dec. 31, 2012, the Company incurred a net
loss of $125 million on $3.22 billion of net sales, as compared
with a net loss of $390 million on $2.91 billion of net sales
during the prior year. The Company's balance sheet at Sept. 30,
2013, showed $3.71 billion in total assets, $3.64 billion in total
liabilities and $72 million total stockholders' equity including
noncontrolling interest.
* * *
As reported by the TCR on Aug. 15, 2011, Standard & Poor's Ratings
Services lowered its corporate credit rating on USG Corp. to 'B'
from 'B+'.
"The downgrade reflects our expectation that USG's operating
results and cash flow are likely to be strained over the next year
due to the ongoing depressed level of housing starts and still-
weak commercial construction activity," said Standard & Poor's
credit analyst Thomas Nadramia. "It is now more likely, in
our view, that any meaningful recovery in housing starts may be
deferred until late 2012 or into 2013. As a result, the risk that
USG's liquidity in the next 12 to 24 months will continue to erode
(and be less than we incorporated into our prior ratings) has
increased. The ratings previously incorporated a greater
improvement in housing starts, which would have enabled USG to
reduce its negative operating cash flow in 2012 and achieve
breakeven cash flow or better by 2013."
As reported by the TCR on Oct. 30, 2013, Moody's Investors Service
upgraded USG Corp.'s Corporate Family Rating to B3 from Caa1. The
upgrade reflects better than anticipated overall 3Q13 operating
performance.
In the Sept. 10, 2013, edition of the TCR, Fitch Ratings has
upgraded the ratings of USG Corporation, including the company's
Issuer Default Rating (IDR) to 'B' from 'B-'. The upgrade
reflects USG's improving profitability and credit metrics this
year and the expectation that this trend continues through at
least 2014.
VANTAGE ONCOLOGY: S&P Retains 'B' Rating on Senior Secured Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services said its 'B' issue-level rating
on Manhattan Beach, Calif.-based Vantage Oncology Holdings LLC's
subsidiaries', Vantage Oncology LLC's and Vantage Oncology Finance
Co.'s, senior secured notes are unchanged following the proposed
$50 million add-on. The recovery rating on the debt remains '3',
reflecting S&P's expectation for meaningful (50%-70%) recovery in
the event of a default.
S&P expects the company will use proceeds of the add-on to repay
the revolver and for acquisitions. The 'B' corporate credit
rating is unchanged and is based on S&P's assessment of the
company's business risk profile as "vulnerable" and financial risk
profile as "highly leveraged." Vantage Oncology's vulnerable
business risk profile reflects its narrow operating focus in the
highly fragmented radiation oncology market, high concentration in
prostate cancer treatments, and persistent reimbursement
pressures. The financial risk score of highly leveraged reflects
the company's very high leverage, which was 9.8x at June 30, 2013,
including an adjustment for operating leases and an adjustment for
the company's preferred stock, which we consider to be debt-like.
RATINGS LIST
Vantage Oncology Holdings LLC
Corporate Credit Rating B/Stable/--
Vantage Oncology LLC
Vantage Oncology Finance Co.
Senior Secured B
Recovery Rating 3
WEST CORP: Reports $46.1 Million Net Income in Third Quarter
------------------------------------------------------------
West Corporation reported net income of $46.14 million on $665.36
million of revenue for the three months ended Sept. 30, 2013, as
compared with net income of $22.09 million on $656.89 million of
revenue for the same period a year ago.
For the nine months ended Sept. 30, 2013, the Company reported net
income of $92.87 million on $1.99 billion of revenue as compared
with net income of $92.83 million on $1.95 billion of revenue for
the same period during the prior year.
The Company's balance sheet at Sept. 30, 2013, showed
$3.48 billion in total assets, $4.26 billion in total liabilities
and a $782.61 million stockholders' deficit.
"West Corporation continued to drive strong profitability during
the third quarter," said Tom Barker, CEO. "We grew Adjusted
EBITDA and Adjusted Net Income during the quarter and our free
cash flow generation remains robust, growing by nearly 21 percent
through the first nine months of the year."
"Our cash flow generation continued at a strong pace for the nine
months ended September 30, 2013. In the third quarter we realized
the full effect of our debt reduction and lower interest rates
from financing activities completed during the first half of the
year," said Paul Mendlik, CFO. "During the third quarter, we
repaid $35 million of debt outstanding on our revolving trade
accounts receivable financing facility. We also completed an
amendment to that facility which increased the line of credit to
$185 million and extended the maturity to June 2018, providing
West Corporation with increased financial flexibility."
The Company also announced a $0.225 per common share quarterly
dividend. The dividend is payable Nov. 18, 2013, to shareholders
of record as of the close of business on Nov. 8, 2013.
A copy of the press release is available for free at:
http://is.gd/9jmWBN
About West Corporation
Founded in 1986 and headquartered in Omaha, Nebraska, West
Corporation -- http://www.west.com/-- provides outsourced
communication solutions to many of the world's largest companies,
organizations and government agencies. West Corporation has a
team of 41,000 employees based in North America, Europe and Asia.
Bankruptcy Warning
The 2018 Senior Notes and the 2019 Senior Notes indentures contain
covenants limiting, among other things, the Company's ability and
the ability of the Company's restricted subsidiaries to: incur
additional debt or issue certain preferred shares, pay dividends
on or make distributions in respect of the Company's capital stock
or make other restricted payments, make certain investments, sell
certain assets, create liens on certain assets to secure debt,
consolidate, merge, sell, or otherwise dispose of all or
substantially all of the Company's assets, enter into certain
transactions with the Company's affiliates and designate the
Company's subsidiaries as unrestricted subsidiaries. The Company
was in compliance with these financial covenants at June 30, 2013.
The Company said the following statement in the regulatory filing,
"Our failure to comply with these debt covenants may result in an
event of default which, if not cured or waived, could accelerate
the maturity of our indebtedness. If our indebtedness is
accelerated, we may not have sufficient cash resources to satisfy
our debt obligations and we may not be able to continue our
operations as planned. If our cash flows and capital resources
are insufficient to fund our debt service obligations and keep us
in compliance with the covenants under our Senior Secured Credit
Facilities or to fund our other liquidity needs, we may be forced
to reduce or delay capital expenditures, sell assets or
operations, seek additional capital or restructure or refinance
our indebtedness including the notes.
If we cannot make scheduled payments on our debt, we will be in
default, and as a result:
* our debt holders could declare all outstanding principal and
interest to be due and payable;
* the lenders under our Senior Secured Credit Facilities could
terminate their commitments to lend us money and foreclose
against the assets securing our borrowings; and
* we could be forced into bankruptcy or liquidation," the
Company said in its quarterly report for the period ended
June 30, 2013.
WESTMORELAND COAL: Posts $2.4 Million Net Income in Third Quarter
-----------------------------------------------------------------
Westmoreland Coal Company reported net income applicable to common
shareholders of $2.42 million on $176.79 million of revenues for
the three months ended Sept. 30, 2013, as compared with net income
of $7.28 million on $161.33 million of revenues for the same
period during the prior year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss applicable to common shareholders of $928,000 on $500.73
million of revenues as compared with a net loss applicable to
common shareholders of $4.62 million on $441.41 million of
revenues for the same period a year ago.
"During the third quarter, favorable weather and low hydro
generation continued to generate high demand for power. Our
customers ran their plants at high levels and Westmoreland's mines
and plants operated very well, producing $30.1 million in Adjusted
EBITDA for the quarter. We view this level of Adjusted EBITDA as
very good considering impacts from the Colstrip Unit 4 outage on
Rosebud sales," said Robert P. King, Westmoreland's chief
executive officer.
"Based upon our current projections we have narrowed the range of
our previously announced Adjusted EBITDA guidance to $115-$119
million. We expect capital expenditures for the year to be $25-
$27 million."
"In the area of safety, Westmoreland had a much better quarter
resulting in our year-to-date reportable incident and lost time
frequency rates coming in at levels below the national average for
surface mines. We continue to work diligently at our mines to
make sure we provide the safest work environment possible for our
employees."
A copy of the press release is available for free at:
http://is.gd/wthLT5
About Westmoreland Coal
Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE
AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest
independent coal company in the United States. The Company's coal
operations include coal mining in the Powder River Basin in
Montana and lignite mining operations in Montana, North Dakota and
Texas. Its power operations include ownership of the two-unit
ROVA coal-fired power plant in North Carolina.
Westmoreland Coal incurred a net loss of $13.66 million in 2012, a
net loss of $36.87 million in 2011, and a net loss of $3.17
million in 2010. The Company's balance sheet at Sept. 30, 2013,
showed $939.83 million in total assets, $1.22 billion in total
liabilities and a $280.31 million total deficit.
* * *
As reported by the TCR on Nov. 6, 2012, Standard & Poor's
Ratings Services raised its corporate credit rating on Englewood,
Co.-based Westmoreland Coal Co. (WLB). to 'B-' from 'CCC+'.
"The upgrade reflects our view that WLB is less vulnerable to
default after successfully negotiating less restrictive covenant
requirements for an unrated $110 million term loan due 2018," said
credit analyst Gayle Bowerman. "Our assessment of WLB's business
risk profile as 'vulnerable' and financial risk profile as 'highly
leveraged' are unchanged. We also revised our liquidity score to
'adequate' based on the covenant relief and additional liquidity
provided under the company's new $20 million asset-based loan
(ABL) facility from 'less than adequate'."
Westmoreland Coal carries a Caa1 corporate family rating from
Moody's Investors Service.
XCHANGE TECHNOLOGY: Wins Interim Stay in Chapter 15
---------------------------------------------------
Xchange Technology Group LLC, a Canada-based supplier of
information technology products, filed on Oct. 29 a petition for
protection in the U.S. under Chapter 15 of the Bankruptcy Code.
Law360 reported that a Delaware bankruptcy judge on Oct. 30
granted an interim stay to Xchange Technology Group LLC,
protecting the Canadian information technology company from U.S.
creditors and lawsuits while it awaits Chapter 15 recognition and
approval of a planned sale.
According to the report, at a hearing in Wilmington, U.S.
Bankruptcy Judge Kevin Gross granted the provisional relief,
finding there was "more than a sufficient record for doing so."
Cash flow has been negative since 2012, when the operating loss
was $13 million. For the first seven months of 2013, the operating
loss was $2.6 million.
If the Delaware judge determines that Canada is home to the
foreign main bankruptcy proceeding, creditor actions in the U.S.
will be halted automatically. To ensure nothing untoward happens
in the meantime, Xchange intends to ask the Delaware court for a
preliminary halt to creditor suits and actions.
In Chapter 15, halting creditor suits isn't automatic as it is in
corporate bankruptcies under Chapters 7 or 11.
Canadian Proceedings
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Xchange filed for creditor protection in Canada on
Oct. 25, 2013, under the Bankruptcy and Insolvency Act. A
receiver was appointed on Oct. 29 and immediately filed the
Chapter 15 petition in Delaware.
The Canadian proceedings are designed to sell the business to
secured lender Callidus Capital Corp., which acquired the senior
secured debt from PNC Bank NA.
The court-appointed receiver is Duff & Phelps Canada Restructuring
Inc.
About Xchange Technology
Xchange Technology Group LLC, a Canada-based supplier of
information technology products, filed a petition on Oct. 29,
2013, in Delaware along with affiliates for protection in the U.S.
under Chapter 15 of the Bankruptcy Code (Bankr. D. Del. Case No.
13-bk-12809). The case is assigned to Judge Kevin Gross.
The Chapter 15 Petitioner's counsel is Mary Caloway, Esq., and
Kathleen A. Murphy, Esq., at Buchanan Ingersoll & Rooney PC, in
Wilmington, Delaware.
Xchange has 20 locations in eight countries, including Canada, the
U.S., the U.K. and Germany. In addition to information-technology
products, it provides associated hardware.
The senior secured debt amounts to $37 million. In addition, $6.4
million is owing to Triangle Capital Corp. on senior subordinated
notes. Trade suppliers have claims of $5.5 million, according to a
court filing.
YSC INC: Court Sets Dec. 12 as Claims Bar Date
----------------------------------------------
The deadline for creditors to file proofs of claim in the
bankruptcy case of YSC Inc. is Dec. 12, 2013.
YSC Inc., owner of a Comfort Inn in Federal Way, Washington, and a
Ramada Inn in Olympia, Washington, filed a petition for Chapter 11
protection (Bankr. W.D. Wash. Case No. 13-17946) on Aug. 30, 2013,
in Seattle.
The owner listed the hotels as worth $17.9 million. Total debt is
$18.5 million, including $18 million in secured debt. Among
mortgage holders, Whidbey Island Bank is owed $13.3 million.
* Later Inheritances Included in Chapter 13 Estate, Court Says
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that an inheritance arising more than 180 days after
confirmation of a Chapter 13 plan is nonetheless part of the
estate available for creditors in view of the more expansive
definition of estate property in Section 1306 of the Bankruptcy
Code, the U.S. Court of Appeals in Richmond, Virginia, ruled on
Oct. 28.
According to the report, a couple in Chapter 13 confirmed a plan
paying creditors 3.8 percent. More than two years after
confirmation, the husband's mother died, leaving him $100,000.
Over objection from the bankrupts, the bankruptcy judge ruled that
the inheritance was part of the estate, despite the 180-day post-
bankruptcy limit on inheritances in Section 541, the report
related.
Writing for the appeals court in Richmond, Circuit Judge James A.
Wynn Jr. agreed with the "overwhelming majority of courts" and
ruled that Section 1306 trumps Section 541.
Judge Wynn focused on the "plain language" of Section 1306, which
contains a list of property that becomes part of a Chapter 13
estate "in addition to the property specified in Section 541."
Section 1306 puts property into the bankrupt estate which is
acquired before the case is closed, dismissed or converted.
The case is Carroll v. Logan, 13-1024, U.S. Court of Appeals for
the Fourth Circuit (Richmond, Virginia).
* BofA Says U.S. Could File Civil Suit on Mortgage Securities
-------------------------------------------------------------
Shayndi Raice, writing for The Wall Street Journal, reported that
Bank of America Corp. said a U.S. attorney plans to recommend the
Justice Department file a civil lawsuit against the bank over
soured mortgage-backed securities, according to a regulatory
filing.
According to the report, the second-largest U.S. bank by assets
also said possible losses tied to litigation could rise to as much
as $5.1 billion, up from an estimated limit of $2.8 billion last
quarter.
Meanwhile, the Federal Home Loan Banks of Boston, Chicago and
Indianapolis and a hedge fund named Cranberry Park told a New York
state court that they were removing their objections to Bank of
America's $8.5 billion settlement with investors over mortgage-
backed securities, the report related.
The largest objector remaining to the deal is American
International Group Inc., which also has a separate outstanding
$10 billion lawsuit against Bank of America for allegedly
misleading the insurer about the quality of mortgage-backed
securities it sold, the report said.
The Charlotte, N.C., bank said the investigations into its sales
of residential mortgage-backed securities are coming from a
working group made up of members of the Justice Department, the
Securities and Exchange Commission and the New York attorney
general, the report further related. The bank didn't say which
U.S. attorney would be making the recommendation to the Justice
Department. U.S. banks could face more mortgage-related legal
settlements in coming years. The six largest banks by assets have
agreed to pay more than $66 billion in credit-crisis and mortgage-
related legal settlements since the start of 2010, according to
research firm SNL Financial. The total settlement figure could
grow to $107 billion or more in coming years, according to
estimates from SNL and Bernstein Research.
* JPMorgan Mortgage Accord Said to Meet U.S. Resistance
-------------------------------------------------------
Laurie Asseo, Tom Schoenberg & Dawn Kopecki, writing for Bloomberg
News, reported that JPMorgan Chase & Co.'s proposed terms to
settle state and federal probes of the bank's mortgage-bond sales
were rejected by the Department of Justice this week, said two
people familiar with the negotiations.
According to the report, the Justice Department told JPMorgan it
won't agree to language the firm submitted Oct. 27, said the
people, who asked not to be named because the talks are private.
The government would bar JPMorgan from trying to recover part of
the costs from the Federal Deposit Insurance Corp. and opposed the
company's bid to avoid criminal liability in cases that don't
involve residential mortgage-backed securities, one person said.
JPMorgan, led by Chief Executive Officer Jamie Dimon, is trying to
complete a $13 billion settlement outlined in talks earlier this
month, the report related. Part of the deal was finished with the
Federal Housing Finance Agency last week, as the New York-based
bank agreed to pay $4 billion to settle claims it sold faulty
mortgage bonds to Fannie Mae and Freddie Mac.
The Justice Department and JPMorgan, the biggest U.S. bank, also
differ on whether to include an additional $1.1 billion payment in
the FHFA pact as part of the total settlement, one person said,
the report further related.
Shares of JPMorgan advanced 5 cents to $52.73 in New York on Oct.
30, the report said. Brian Marchiony, a company spokesman,
declined to comment on the talks. Dow Jones reported elements of
the disagreements on Oct. 29.
The FHFA case is Federal Housing Finance Agency v. JPMorgan Chase
& Co., 11-06188, U.S. District Court, Southern District of New
York (Manhattan).
* SAC to Plead Guilty to Securities Fraud
-----------------------------------------
Michael Rothfeld and Jean Eaglesham, writing for The Wall Street
Journal, reported that SAC Capital Advisors LP will plead guilty
to securities fraud as part of a landmark criminal insider-trading
settlement with federal prosecutors set to be announced by next
week, people familiar with the discussions say.
According to the report, the exact timing of the pact isn't set,
though if final details are ironed out quickly, it could be
unveiled by the end of this week, these people said.
SAC, run by Wall Street titan Steven A. Cohen, also will agree to
stop managing outside money and to pay the government criminal
penalties of about $1.2 billion, according to these people, the
report related. That would be the largest-ever insider-trading
penalty.
SAC has thus far denied the criminal allegations and said Cohen
has done nothing wrong, the report said.
The penalty comes on top of a $616 million civil insider-trading
settlement SAC reached in March with the Securities and Exchange
Commission, and would bring the total to about $1.8 billion, the
report added.
* Norwegian Firm Allowed to Stay in Boeing $350MM Contract Suit
---------------------------------------------------------------
Law360 reported that a California federal judge on Oct. 28 denied
attempts to dismiss breach-of-contract claims brought by a
Norwegian investment company in Boeing Co.'s $350 million suit
over a failed satellite-launching company, ruling a Swedish
arbitration award in the dispute didn't preclude the claims.
According to the report, U.S. District Judge Audrey B. Collins
said the terms of the arbitration dispute didn't block Old
Kvaerner Invest AS from joining Boeing's U.S. complaint as an
intervening plaintiff because the arbitrator lacked the
jurisdictional authority to evaluate the merits of Old Kvaerner's
allegations.
The case is The Boeing Company et al v. KB Yuzhnoye et al., Case
No. 2:13-cv-00730 (C.D.Calif.) before Judge Audrey B. Collins.
* House Votes to Repeal Dodd-Frank Provision
--------------------------------------------
Eric Lipton, writing for The New York Times' DealBook, reported
that the House of Representatives, with bipartisan support, passed
legislation on Oct. 30 that would roll back a major element of the
2010 law intended to strengthen the nation's financial regulations
by allowing big banks like Citigroup and JPMorgan Chase to
continue to handle most types of derivatives trades in house.
According to the report, the bill, which passed by a 292-122 vote,
would repeal a requirement in the Dodd-Frank law that big banks
"push out" some derivatives trading into separate units that are
not backed by the government's insurance fund. But the debate
regarding this decidedly technical matter quickly turned into an
impassioned dispute over the role the federal government has
played since the recession in regulating financial markets.
Advocates of the legislation argued on the House floor that the
federal government is partly responsible for the slow rate of
economic growth because it imposed excessive new regulations.
"America's economy remains stuck in the slowest, weakest
nonrecovery recovery of all times," said Representative Jeb
Hensarling, Republican of Texas, the chairman of the House
Financial Services Committee, the report related. "Those who
create jobs for America are drowning in a sea of red tape
preventing them."
But opponents of the measure said that reckless activity by banks
like JPMorgan Chase, where a group of traders in London ran up $6
billion in losses in 2011, demonstrate that the tough requirements
contained in the Dodd-Frank law, passed in 2010, should not be
weakened, the report further related.
"It is clear that Wall Street has not learned its lesson,"
Representative Collin C. Peterson, Democrat of Minnesota, said
during the debate, the report cited. "This bill would effectively
gut important financial reforms and put taxpayers potentially on
the hook for big banks' risky behavior."
* House Votes to Delay Rules on Retirement Investment Advice
------------------------------------------------------------
Margaret Collins, writing for Bloomberg News, reported that the
U.S. House voted to delay a Labor Department effort to expand
investor protections for more than $13 trillion worth of private
retirement accounts, including 401(k)s and IRAs.
According to the report, the legislation, which passed 254-166 on
Oct. 29, would stop the department from issuing a proposal to
prevent conflicts of interest in retirement-investment advice
until 60 days after the Securities and Exchange Commission
finalizes a similar rule. The bill also would make the SEC rule-
writing task harder by requiring the agency to show that investors
have been harmed by existing rules governing brokers' advice.
The agencies have been working on regulations to require more
investment professionals to give advice that is in their clients'
best interests, meeting a standard known as fiduciary duty, the
report related. The Labor Department proposal would expand that
standard to more providers of retirement accounts while the SEC
rule would apply to sales of securities. The White House opposed
the bill, which now goes to the Democrat-controlled Senate.
"It only got 30 Democratic votes. That in our view is a very good
result," Barbara Roper, director of investor protection for the
Consumer Federation of America, said in an interview after the
House vote, the report related. "We needed to avoid a sense of
overwhelming bipartisan support that would have created pressure
on the Senate to act."
The Securities Industry and Financial Markets Association, a
lobbying group for banks and brokerages, said in 2011 that Labor
Department efforts might increase costs and limit products for
investors, especially those with small balances, the report
further related.
* Elliott Sees More Detroit-Style Municipal Insolvencies
--------------------------------------------------------
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that Elliott Management
Corp., the $23.3 billion hedge-fund firm run by Paul Singer,
expects more municipal insolvencies like the one in Detroit,
according to a letter to investors.
"We see Detroit as the ?coming attraction' to a significant number
of municipal insolvencies in the months and years to come," the
New York-based firm wrote in the Oct. 28 third-quarter letter, a
copy of which was obtained by Bloomberg News. "This episode is a
precursor to what will happen on the federal level as national
promises prove to be empty."
The city filed the biggest U.S. municipal bankruptcy on July 18,
saying it didn't have the money to pay its bondholders, retirees
and employees everything it owes them while still providing basic
services to citizens. Elliott didn't say in the letter whether it
is invested in Detroit's municipal bonds.
* BOOK REVIEW: A Legal History of Money in the United States,
1774-1970
-------------------------------------------------------------
Author: James Willard Hurst
Publisher: Beard Books
Paperback: US$34.95
Review by Gail Owens Hoelscher
Order your personal copy today and one for a colleague at
http://is.gd/x8Gesf
This book chronicles the legal elements of the history of the
system of money in the United States from 1774 to 1970. It
originated as a series of lectures given by James Hurst at the
University of Nebraska in 1973. Mr. Hurst is quick to say that
he , as a historian of the law, took care in this book not to
make his own judgments on matters outside the law. Rather, he
conducted an exhaustive literature review of economics, economic
history, and banking to recount the development of law over the
operations of money. He attempted to "borrow the opinions of
qualified specialists outside the law in order to provide a
meaningful context in which to appraise what the law has done or
failed to do."
Mr. Hurst define money, for the purposes of this books, as "a
distinct institutional instrument employed primarily in
allocating scarce economic resources, mainly through government
and market processes," and not shorthand for economic, social,
or political power held through command of economic assets."
From the beginning, public and legal policy in the U.S. centered
on the definition of legitimate uses of both law affecting
money, and allocation of power over money among official
agencies, both federal and state. The foundations of monetary
policy were laid between 1774 and 1788. Initially, individual
state legislatures and the Continental Congress issued paper
currency in the form of bills of credit. The Constitutional
Convention later determined that ultimate control of the money
supply should be at the federal level. Other issues were not
clearly defined and were left to be determined by events.
The author describes how law was used to create and maintain a
system of money capable of servicing the flow of resource
allocations in an economy of broadly dispersed public and
private decision making. Law defined standard money units and
made those units acceptable for use in conducting transactions.
Over time, adjustment of the money supply was recognized as a
legitimate concern of law. Private banks were delegated
expansive monetary action powers throughout the 1900s and
private markets for gold and silver were allowed to affect the
money supply until 1933-34. Although the Federal Reserve Act
was not aimed clearly at managing money for goals of major
economic adjustment, it set precedents by devaluing the dollar
and restricting the use of gold.
Mr. Hurst devotes a large part of his book to key issues of
monetary policy involving the distribution of power over money
between the nation and the states, between legal and market
processes, and among major agencies of the government. Until
about 1860, all major branches of government shared in making
monetary policy, with states playing a large role. Between 1908
and 1970, monetary policy became firmly centralized at the
national level, and separation or powers questions arose between
the Federal Reserve Board, the White House (The Council of
Economic Advisors), and the Treasury.
The book was an enormous undertaking and its research
exhaustive. It includes 18 pages of sources cited and 90 pages
of footnotes. Each era of American legal history is treated
comprehensively. The book makes fascinating reading for those
interested in the cause and effect relationship between legal
processes and economic processes and t hose concerned with
public administration and the separation of powers.
James Willard Hurst (1910-1997) is widely regarded as the
grandfather of American legal history. He graduated from
Harvard Law School in 1935 and taught at the University of
Wisconsin-Madison for 44 years.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
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related conferences are encouraged. Send announcements to
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Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
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
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Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
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Copyright 2013. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***