/raid1/www/Hosts/bankrupt/TCR_Public/131108.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 8, 2013, Vol. 17, No. 310
Headlines
AGFEED INDUSTRIES: Ch. 11 Trustee After 'Massive Fraud,' U.S. Says
ALLIANT TECHSYSTEMS: S&P Lowers Subordinated Debt Rating to 'B+'
AMERICAN AIRLINES: Merger Antitrust Judge Limits Union Briefs
AMERICAN AXLE: Posts $31.6 Million Net Income in Third Quarter
ARC REALTY: Section 341(a) Meeting of Creditors Set on Dec. 19
AVON PRODUCTS: Fitch Lowers LT IDR to 'BB', on Watch Negative
AVON PRODUCTS: Fitch Notes Uncertainty in Company's CDS Pricing
BERGENFIELD SENIOR: Can Access Cash Collateral Until Jan. 31
BERGENFIELD SENIOR: Sale and Plan Deadlines Extended
BERGENFIELD SENIOR: NAI James Hanson Okayed as Real Estate Broker
BEVERAGES & MORE!: S&P Assigns 'CCC+' Rating to $180MM Sr. Notes
BLUEJAY PROPERTIES: May Pay $70,650 to Bankers' Bank of Kansas
BLUEJAY PROPERTIES: Court OKs Continued Hiring of CBRE as Broker
CARRIZO OIL: S&P Affirms 'B' CCR & Revises Outlook to Stable
CENGAGE LEARNING: Creditors Want Mediation, Balk at Plan
CITIZENS DEVELOPMENT: Has Until Nov. 11 to Amend Plan Outline
COLORADO EDUCATIONAL: S&P Cuts ICR to BB on Continued Shortfalls
DESIGNLINE CORP: Wins Final Order to Obtain $1.5MM DIP Financing
DESIGNLINE CORP: Goodman Approved as Chief Restructuring Officer
DESIGNLINE CORP: Nelson Mullins Approved as Bankruptcy Counsel
DETROIT, MI: $350 Million Financing May Not Fly, Moody's Says
DIGITAL DOMAIN: Seeks Final Plan Filing Exclusivity
EAST COAST BROKERS: Ch.11 Trustee Hires Read & Kelley as Appraiser
EDISON MISSION: Wants IBEW Local 15 CBA Extended Until Dec. 2014
ENDO HEALTH: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Stable
ENERGAE LP: North Dakota Shareholders Seeks Receivership
ENERGY FUTURE: Swings to $5-Mil. Net Income in Third Quarter
EWGS INTERMEDIARY: Seeks to Sell Assets, Proposes Dec. 4 Auction
EWGS INTERMEDIARY: Obtained Interim $5-Mil. DIP Loan Approval
EWGS INTERMEDIARY: Has Interim Authority to Use Cash Collateral
EXIDE TECHNOLOGIES: Deloitte Tax Approved as Tax Advisor
FIRST PHILADELPHIA: Files Motion to Extend Exclusivity to Feb. 19
FIRST PHILADELPHIA: Amends Disclosures for Liquidating Plan
FRIENDFINDER NETWORKS: Court OKs Hiring of EisnerAmper as Auditor
FURNITURE BRANDS: Samson Holding Beneficially Owns 9.5% of Shares
GASTAR EXPLORATION: S&P Retains 'B-' Rating on Notes After Add-On
GATEHOUSE MEDIA: Judge Confirms Chapter 11 Restructuring Plan
GELT PROPERTIES: Court Schedules Dec. 17 Cash Collateral Hearing
GENIUS BRANDS: Inks New Employment Agreements with CEO and CFO
GOLDKING HOLDINGS: Meeting to Form Creditors' Panel on Nov. 14
HUSKY INTERNATIONAL: S&P Affirms 'B' CCR over Schottli Grp Deal
INSTITUTO MEDICO: Section 341(a) Meeting Scheduled for Dec. 9
JOURNAL REGISTER: Exits Chapter 11 as Pulp Finish
KEMET CORP: Incurs $13.1 Million Net Loss in Second Quarter
LEVEL 3: Unit to Sell $640 Million of Senior Notes
LUXURY OUTER BANKS: Case Summary & 2 Unsecured Creditors
MED-DEPOT INC: Bank Lender Still Opposes Chapter 11 Plan
METRO AFFILIATES: Seeks Authority to Obtain $37-Mil. DIP Loan
METRO AFFILIATES: Needs to Use Cash Collateral
MISSION NEW ENERGY: Posts A$10 Million Net Profit in Fiscal 2013
MTS LAND: Plan Hearing Again Continued, Now Slated for Nov. 21
NGPL PIPECO: S&P Revises Outlook to Negative & Affirms 'B' CCR
NIRVANIX INC: Hires Epiq as Administrative Advisor
PACIFICA PARK: Failed to Prevail in Appeal From Case Dismissal
PATRIOT COAL: Files Amendment No. 3 to DIP Credit Agreement
PICCADILLY RESTAURANTS: Confirmation Hearing to Be Held Jan. 13-14
QUIGLEY CO: Attorneys' Final Fee Applications Allowed
R.R. DONNELLEY: S&P Lowers CCR to 'BB-' on New Debt Issuance
REGIONAL EMPLOYERS: Independent Fiduciary Appointed for Trust
RESIDENTIAL CAPITAL: Resolves Most Technical Plan Objections
REVSTONE INDUSTRIES: Seeking Consensual Plan With Committee
RIH ACQUISITIONS: Atlantic Club Casino's Chapter 11 Case Summary
RURAL/METRO CORP: Plan Scheduled for Dec. 16 Confirmation
SAND SPRING: Reorganization Plan Declared Effective
SAVIENT PHARMACEUTICALS: Auction Pushed Back Two Weeks to Dec. 10
SCI REAL ESTATE: Court Dismisses 1st Amended Suit vs. Provasi
SCOTTSDALE VENETIAN: Can Use ADOR Cash Collateral Until Nov. 30
SEVEN COUNTIES: Taps Bingham Greenebaum as Special Counsel
SPIG INDUSTRY: U.S. Trustee Unable to Form Creditors Committee
SPIG INDUSTRY: Hearing on Bid to Employ Counsel Stayed
SPIN HOLDCO: S&P Lowers Rating on First Lien Debt to 'B'
STREAMTRACK INC: State Court OKs Stipulation with ASC Recap
SUNTECH POWER: Wuxi Guolian Offers to Invest $150 Million
TEE INVESTMENT: Ch. 11 Trustee Taps Hartman & Hartman as Attorney
TLO LLC: Files Plan, Seeks OK of TransUnion-Led Auction
TLO LLC: Access to Tech. Investors' Cash Collateral Until Jan. 31
TLO LLC: Can Obtain Up to $1-Mil. in Additional Loans From CEOs
TRAVEL LEADERS: S&P Assigns 'B+' Corp. Credit Rating; Outlook Pos.
TRINITY COAL: Creditors Vote in Favor of Chapter 11 Plan
TWN INVESTMENT: Dec. 5 Hearing on Motion to Convert Case
TWN INVESTMENT: East West Permitted to Foreclose Properties
USEC INC: S&P Affirms 'CCC' Corp. Credit Rating; Outlook Negative
VELTI INC: Meeting to Form Creditors' Panel on Nov. 12
VELTI INC: Obtained Interim $6.3-Mil. DIP Loan Approval
VELTI INC: Has Interim Authority to Use Cash Collateral
VELTI INC: Seeks to Sell Mobile Marketing Business Unit
VERTIS HOLDINGS: Seeks Another Three Months for Liquidating Plan
VISUAL CONTROLS/CHAMP: Case Summary & 20 Top Unsecured Creditors
WAFERGEN BIO-SYSTEMS: Inks Pact to Liquidate Subsidiary
WALLDESIGN INC: Has Joint Plan With Creditors Committee
WEST CORP: Files Form 10-Q, Posts $46.1 Million Net Income in Q3
* Non-Recourse Underwater Mortgages Are Valid Claims
* Late Claim Doesn't Invalidate Underlying Mortgage
* Rollover IRA Remains an Exempt Asset in Bankruptcy
* Fitch: ACA Enrollment Extension Could Dent Insurance Industry
* BOOK REVIEW: The Oil Business in Latin America: The Early Years
*********
AGFEED INDUSTRIES: Ch. 11 Trustee After 'Massive Fraud,' U.S. Says
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that executives of AgFeed Industries Inc., a hog producer
in the U.S. and China, should be ousted and replaced by a Chapter
11 trustee, according to the U.S. Trustee in Delaware.
According to the report, in September, the Justice Department's
bankruptcy watchdog asked the bankruptcy judge to appoint an
examiner in view of what she called a "massive fraud" in the
company's Chinese operations that went undetected for years.
In October, U.S. Bankruptcy Judge Brendan Shannon declined for the
time being to order an investigation by an outsider, saying it
might interfere with the sale process then under way. The company
and the official creditors' committee opposed having an examiner.
Upping the ante in papers filed Nov. 5 and this time seeking
appointment of a trustee, the U.S. Trustee said incumbent
management's "continuing failure to make any meaningful
disclosures" about fraud "evidences dishonesty or gross
mismanagement."
The government's papers say the company failed to file corrected
financial statements in the two years since the fraud was
disclosed publicly.
According to papers from the U.S. Trustee, managers of the unit in
China created multiple sets of accounting books while reporting
fictitious sales and receivables.
In October, three months after its bankruptcy filing in the U.S.,
the company completed the sale of the U.S. operations to three
buyers for $79.5 million, including $53.4 million cash. An
auction is set for Nov. 20 to determine whether a $50.5 million
bid is the best offer for operations in China. The sale-approval
hearing will take place Nov. 21.
Opposing appointment of an examiner in October, the creditors'
committee said the second sale "may" generate sufficient funds so
unsecured creditors are fully paid, "with excess proceeds for the
equity holders."
About AgFeed Industries
AgFeed Industries, Inc., has 21 farms and five feed mills in China
producing more than 250,000 hogs annually. In the U.S., the
business included 10 sow farms in three states and two feed mills
producing more than one million hogs a year. AgFeed's revenue in
2012 was $244 million.
AgFeed and its affiliates filed voluntary petitions under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-11761) on
July 15, 2013, with a deal to sell most of its subsidiaries to The
Maschhoffs, LLC, for cash proceeds of $79 million, absent higher
and better offers. The Debtors estimated assets of at least $100
million and debts of at least $50 million.
Keith A. Maib signed the petition as chief restructuring officer.
Hon. Brendan Linehan Shannon presides over the case. Donald J.
Bowman, Jr., and Robert S. Brady, Esq., at Young, Conaway,
Stargatt & Taylor, serve as the Debtors' counsel. BDA Advisors
Inc. acts as the Debtors' financial advisor. The Debtors' claims
and noticing agent is BMC Group, Inc.
The U.S. Trustee has appointed a five-member official committee of
unsecured creditors to the Chapter 11 cases. The Creditors'
Committee tapped Lowenstein Sandler as lead bankruptcy counsel and
Greenberg Traurig, LLP, as co-counsel. CohnReznick LLP serves as
the Creditors' Committee's financial advisor.
A three-member official committee of equity security holders was
also appointed to the Chapter 11 cases. The Equity Committee
tapped Sugar Felsenthal Grais & Hammer LLP and Elliott Greenleaf
as co-counsel.
ALLIANT TECHSYSTEMS: S&P Lowers Subordinated Debt Rating to 'B+'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Alliant
Techsystems Inc.'s (ATK's) subordinated debt to 'B+' from 'BB' and
removed the ratings from CreditWatch, where S&P had placed them
with negative implications on Sept. 5, 2013. At the same time,
S&P lowered the recovery ratings on these debt issues to '6' from
'4'. These rating actions follow the company's closing and
financing of its acquisition of Bushnell Group Holdings Inc.
(Bushnell). In addition, because ATK has completed the
refinancing of the old revolver and term loans, S&P withdrew its
ratings on these debt issues.
On Sept. 5, 2013, Standard & Poor's affirmed its long-term 'BB'
corporate credit rating on ATK and maintained the stable outlook
following the company's announcement that it intended to acquire
Bushnell, a manufacturer of sporting and recreational gear, for
about $1 billion. The Bushnell transaction falls within the
parameters we established for ATK's debt capacity. "Our base case
also assumes that ATK will adhere to its pattern of deleveraging
following acquisitions," said credit analyst Sol Samson.
ATK is using a mix of secured and unsecured debt to refinance its
extant secured debt with a new revolving credit facility
(increased to $700 million, from the original plan of
$600 million), a new term loan A, and a new term loan B. In S&P's
view, the collateral value in a hypothetical default scenario for
the secured debt should suffice to repay at least 90% of the newly
enlarged amount.
However, there would be little or nothing to provide for recovery
for lower-priority debt. (Previously, the enterprise value
greatly exceeded the amount of the secured debt.) Accordingly,
S&P lowered the issue ratings on ATK's subordinated debt to 'B+'
from 'BB' and the recovery ratings on those debt issues to '6'
from '4'. (Similarly, S&P previously rated a senior unsecured
note issue 'B+' with a recovery rating of '6', even though it is
senior to the subordinated debt issues.)
On Sept. 5, 2013, Standard & Poor's placed the 'BB' subordinated
debt issue ratings on CreditWatch with negative implications.
With the action, S&P lowered those ratings and removed them from
CreditWatch.
AMERICAN AIRLINES: Merger Antitrust Judge Limits Union Briefs
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that unions representing workers at AMR Corp. and its
intended merger partner, US Airways Group Inc., will be able to
submit friend-of-the-court briefs for an antitrust trial -- within
limits.
According to the report, U.S. District Judge Colleen Kollar-
Kotelly in Washington is trying to prevent the unions and other
bystanders from submitting hundreds of pages of briefs all making
the same arguments in the lawsuit brought by the U.S. to block the
merger.
After she allowed five other unions to submit a brief by Nov. 15,
the US Airline Pilots Association, representing US Airways fliers,
asked to file a brief of its own, saying it had a different
perspective on the benefits to the public from merger of the
airlines.
This week, the judge allowed the US Airways pilots to file eight
pages, while telling them to exclude facts that won't be in
evidence at the antitrust trial set to start Nov. 25. If their
arguments are the same, the pilots should join in the brief from
the other unions, she said.
The judge is also allowing airports, the official AMR creditors'
committee and plaintiffs in a private antitrust suit to file
briefs, each not to exceed 25 pages. Judge Kollar-Kotelly said she
would ignore arguments based on facts not introduced at trial and
discouraged duplicative arguments.
American Airlines shares have risen steadily following a three-day
fall in August after the U.S. sued to bar the airlines from
merging under AMR's Chapter 11 plan. Since then, the stock has
more than tripled, closing on Nov. 6 at $9.22 in over-the-
counter trading.
A bankruptcy judge formally approved the plan last month.
AMR rose 25 percent on Nov. 4 on news that the airlines and the
government were in settlement talks. Selling for about 40 cents
in October 2012, the stock rose to $1.30 before the merger was
announced in February.
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 AXLE: Posts $31.6 Million Net Income in Third Quarter
--------------------------------------------------------------
American Axle & Manufacturing Holdings, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net income of $31.6 million on $820.8 million of
net sales for the three months ended Sept. 30, 2013, as compared
with a net loss of $8.2 million on $702.9 million of net sales for
the same period during the prior year.
For the nine months ended Sept. 30, 2013, the Company reported net
income of $64.7 million on $2.37 billion of net sales as compared
with net income of $46.8 million on $2.19 billion of net sales for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2013, showed
$3.11 billion in total assets, $3.16 billion in total liabilities
and a $46.8 million total stockholders' deficit.
"AAM's financial results in the third quarter of 2013 were
highlighted by solid sales growth, improved profit margin
performance and positive free cash flow," said David C. Dauch,
AAM's Chairman, president & chief executive officer. "For the
remainder of 2013, we are focused on successfully launching AAM's
industry-first EcoTracTM Disconnecting All Wheel Drive system, as
well as continuing to deliver positive financial results by
executing our aligned business strategy, which is built upon the
foundational principles of quality, operational excellence and
technology leadership."
A copy of the Form 10-Q is available for free at:
http://is.gd/x2nmXL
About American Axle
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- manufactures,
engineers, designs and validates driveline and drivetrain systems
and related components and chassis modules for light trucks, sport
utility vehicles, passenger cars, crossover vehicles and
commercial vehicles.
* * *
In September 2012, Moody's Investors Service affirmed the 'B1'
Corporate Family Rating (CFR) and Probability of Default Rating
(PDR) of American Axle.
American Axle carries a 'BB-' corporate credit rating from
Standard & Poor's Ratings Services. "The 'BB-' corporate credit
rating on American Axle reflects the company's 'weak' business
risk profile and 'aggressive' financial risk profile, which
incorporate substantial exposure to the highly cyclical light-
vehicle market," S&P said, as reported by the TCR on Sept. 6,
2012.
As reported by the TCR on Sept. 5, 2013, Fitch Ratings has
affirmed the 'B+' Issuer Default Ratings of American Axle &
Manufacturing Holdings, Inc. (AXL) and its American Axle &
Manufacturing, Inc. (AAM) subsidiary. The ratings and Positive
Outlook for AXL and AAM are supported by Fitch's expectation that
the drivetrain and driveline supplier's credit profile will
strengthen over the intermediate term, despite some deterioration
over the past year.
ARC REALTY: Section 341(a) Meeting of Creditors Set on Dec. 19
--------------------------------------------------------------
A meeting of creditors in the bankruptcy case of Arc Realty
Ventures, LLC, will be held on Dec. 19, 2013, at 10:00 a.m. at
Room 129, Clarkson S. Fisher Courthouse. Creditors have until
March 19, 2014, to submit their proofs of claim.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Arc Realty Ventures, LLC, filed a bankruptcy petition (Bankr.
D.N.J. Case No. 13-33862) on Oct. 31, 2013. The petition was
signed by Murty Azzarapu as manager. The Debtor estimated assets
of at least $10 million and liabilities of at least $1 million.
AVON PRODUCTS: Fitch Lowers LT IDR to 'BB', on Watch Negative
-------------------------------------------------------------
Fitch Ratings has downgraded Avon Products, Inc.'s long-term
ratings and placed the following on Rating Watch Negative:
-- Long-term Issuer Default Rating (IDR) to 'BB' from 'BB+';
-- Bank credit facility to 'BB' from 'BB+ ';
-- Bank Term Loan to 'BB' from 'BB+';
-- Senior unsecured notes to 'BB' from 'BB+'.
In addition, Fitch has affirmed Avon's and its subsidiary's short-
term (ST) ratings as follows:
Avon Products, Inc:
-- Short-Term IDR at 'B';
-- Commercial Paper at 'B';
Avon Capital Corporation (ACC):
-- Short-term IDR at 'B';
-- Commercial Paper at 'B'
Commercial paper issuances by ACC are fully guaranteed by Avon.
The short-term ratings have not been placed on Rating Watch.
KEY RATING DRIVERS
RATINGS DOWNGRADE ON INTENSIFIED BUSINESS MODEL RISKS
The downgrade of Avon's ratings is due to deteriorating operations
and intensifying business model risk as reflected in continued
double digit declines in revenue, volume and representative (rep)
counts in North America and Asia Pacific through the first three
quarters of 2013. Additionally, there are challenging market
conditions in the Latin American and European regions. The slow
growth macro environment has contributed to heightened
competition. Based on L'Oreal S.A (L'Oreal) estimates, worldwide
mass market channels are growing faster than the direct selling
channel in the first half of this year. Build-out of alternative
channels in emerging economies could have negative implications
for direct sellers.
The direct selling channel is growing but early indications are
that it is not as fast as other channels. Personal care companies
and retailers have invested heavily in emerging markets which had
been a stronghold for Avon. At the same time emerging markets
growth rates have slowed and Avon has had a number of executional
challenges to address. The challenges vary by country which
clearly adds complexity and therefore quick fixes are unlikely.
Avon commented that the Latin American region will continue to be
impacted by weaker economies and high levels of competition,
Russia is seeing high levels of price competition from retail,
recruitment fell apart in North America, and ongoing issues in
Asia Pacific will mean that results will remain soft in the near
term. The challenge to Avon is reflected in generally weaker
operating metrics such as overall volume and rep growth.
Visibility to sustained stability and overall growth is unclear.
Brazil is Avon's largest market generating approximately 20% of
revenues. Latin America accounted for more than half of Avon's
operating profit before global and other expenses in 2012. Given
shrinking North American and Asia Pacific markets, Latin America
and Brazil in particular, are increasingly important. Low single-
digit average rep count growth through the third quarter of 2013
by Natura and Avon in the Latin American region signals channel
maturation. In Avon's case, there may not be enough growth in the
Latin America and European regions to offset accelerating
declining performance in North America and Asia Pacific. By
contrast, L'Oreal and Grupo Boticario, which has a large retail
store base across Brazil, also appear to be taking share.
SLOW TURNAROUND, DECLINING CASH FLOWS
The turnaround in Avon's operations is clearly taking longer than
management or Fitch expected. In the interim, the company needs to
continue investing in restructuring efforts, product launches,
improved business processes and its representatives. These are
future draws on internally generated liquidity from operating cash
flow which has declined sequentially from $782 million in 2009 to
$445 million through the latest 12 months (LTM). A lengthy
turnaround increases the potential of further market share losses,
sales deleveraging and a heightened risk that adequate credit
protection measures that exist today, could weaken.
RATING WATCH NEGATIVE on FCPA
The Rating Watch Negative is predicated on the uncertainty
regarding the potential size of the monetary penalties related to
the company's violation of the Foreign Corrupt Practices Act
(FCPA). In its 10-Q filing on Oct. 31, 2013, Avon wrote that in
September 2013, the staff of the Securities and Exchange
Commission (SEC) proposed terms of potential settlement that
included monetary penalties of a magnitude significantly greater
than the company's earlier offer of $12 million.
At Sept. 30, 2013 Avon had more than $1.8 billion in liquidity
with approximately $1 billion in revolver availability and $800
million of cash. As such, a significantly higher fine - as was
posed by a recent Wall Street Journal article in the $100 million
range - doesn't seem to warrant the more serious undertones in the
company's 10-Q, which suggests that not only would the company's
financial condition be affected, but its ongoing business would be
materially adversely impacted if it entered into settlements with
the SEC and U.S. Department of Justice (DOJ) with a proposal
similar to the SEC's staff.
The company cannot comment publicly on the amounts of the
settlements given the nature of the investigation and the
governmental bodies involved. While the language could indicate an
abundance of caution, the terminology used heightens Fitch's
concerns that there could be financial impacts to the business
model or much larger amounts than previously contemplated. As a
result, Avon's ratings are placed on Watch Negative until the
amounts or other actions are fully disclosed publicly and the
rating implications, if any, can be assessed. The Rating Watch
will be resolved when there is clarity on the settlement terms,
amount, timing and financing plan.
Fitch's Rating Watch status indicates a heightened probability of
a rating change and the likely direction of such a change. They
are typically event-driven and, as such, are generally resolved
over a relatively short period. After a Rating Watch has been in
place for six months, Fitch's policy is to review the Rating Watch
every three months until it is resolved. Fitch will monitor any
public statements made by Avon, the SEC or the DOJ.
ADEQUATE METRICS AND LIQUIDITY
Avon's credit protection measures have improved since the company
cut its dividend, used a portion of its cash balances to reduce
overall debt levels by more than $400 million to $2.8 billion, and
refinanced near-term maturities this year. Leverage (debt/EBITDA)
declined to 2.75x for the LTM ended Sept. 30, 2013 from 3.78x at
year end 2012. Long term debt maturities in the next two years are
modest at less than $50 million annually. These are related to the
$52.5 million term loan which matures in 2015. FCF for the LTM was
$124 million, a turnaround from several years of marginal or
negative results. The improvement in FCF was supported by the 75%
dividend cut from roughly $400 million to $100 million annually.
Although liquidity declined moderately from $2 billion last year
to $1.8 billion as the company used a portion of its cash to
reduce debt, it remains adequate.
RATINGS SENSITIVITIES
Positive: Future developments that may, individually or
collectively, lead to a positive rating action include:
-- A positive rating action is not likely in the next 12 - 18
months due to the slow pace of turnaround and potential
negative financial ramifications of the FCPA investigation.
Negative: Future developments that may, individually or
collectively, lead to a negative rating action:
-- Negative outcomes related to the FCPA settlement which could
have a material adverse impact on the company's earnings, cash
flow, liquidity, financial condition and/or ongoing business.
-- Continued declines in key operational metrics, particularly in
Latin America and Europe.
AVON PRODUCTS: Fitch Notes Uncertainty in Company's CDS Pricing
---------------------------------------------------------------
A 26% spike in Avon Products, Inc.'s (Avon) senior five-year
credit default swap (CDS) spreads underscores investor concern
precipitated by Foreign Corrupt Practices Act (FCPA) language and
accelerating declines in North America. Fitch Ratings on Nov. 4,
2013, downgraded Avon's long-term ratings and placed its long-term
ratings on Rating Watch Negative.
Avon's CDS spreads have widened 26% over the past month,
significantly underperforming the 3% tightening observed for the
broader North American consumer goods industry. Meanwhile, CDS
liquidity for Avon has increased notably since the end of July, up
20 rankings to trade in the sixth regional percentile. This
signals increasing uncertainty over the future direction of the
company's CDS pricing.
Fitch's downgrade of Avon's ratings is due to deteriorating
operations and intensifying business model risk as reflected in
continued double-digit declines in revenue, volume, and
representative counts in North America and Asia Pacific through
the first three quarters of 2013. Additionally, there are
challenging market conditions in the Latin American and European
regions. The slow-growth macro environment has also contributed to
heightened competition.
Uncertainty remains regarding the potential size of the monetary
penalties related to the company's violation of the FCPA, which
prompted the Rating Watch Negative. In its 10-Q filing on Oct. 31,
2013, Avon wrote that the staff of the Securities and Exchange
Commission (SEC) proposed in September 2013 terms of a potential
settlement that included monetary penalties of a magnitude
significantly greater than the company's earlier offer of $12
million.
At Sept. 30, 2013, Avon had more than $1.8 billion in liquidity
with approximately $1.0 billion in revolver availability and $800
million of cash. As such, a significantly higher fine -- as was
suggested by a recent Wall Street Journal article in the $100
million range -- does not seem to warrant the more serious
undertones in the company's 10-Q. This undertone suggests that the
company's financial condition and ongoing business would be
materially adversely affected if it entered into settlements with
the SEC and U.S. Department of Justice with a proposal similar to
that of the SEC's staff.
While the language in Avon's 10-Q could indicate an abundance of
caution, the terminology used heightens Fitch's concerns that the
amounts in question could be larger than previously contemplated
or could have major financial effects to its business model. As a
result, Avon's ratings were placed on Watch Negative until the
amounts or other actions are disclosed publicly and the rating
implications, if any, can be assessed. The Rating Watch will be
resolved when there is clarity on the settlement terms, amount,
timing, and financing plan.
BERGENFIELD SENIOR: Can Access Cash Collateral Until Jan. 31
------------------------------------------------------------
The Hon. Morris Stern of the U.S. Bankruptcy Court for the
District of New Jersey issued a fourth interim order that permits
Bergenfield Senior Housing LLC to use rents in which existing
secured creditors assert an interest.
Boiling Springs Savings Bank, its primary secured creditor, has
consented and licensed the Debtor to use rents to, among other
things, pay personnel, taxes, insurance and pay other operating
and maintenance expenses until Jan. 31, 2014.
As adequate protection from any diminution in value of the
lenders' collateral, the Debtor will grant the lenders replacement
liens in any and all assets in addition to rents, subject to carve
out on certain expenses.
The Court will convene a hearing on Jan. 27, 2014, at 10:00 a.m.,
to consider the Debtor's further use of cash collateral.
Objections, if any, are due Jan. 21, at 4:00 p.m.
About Bergenfield Senior Housing
Bergenfield Senior Housing, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. D.N.J. Case No. 13-19703) in Newark, New Jersey,
on May 2, 2013. Nicholas Rotonda signed the petition as
member/manager. Judge Morris Stern presides over the case.
Aaron Solomon Applebaum, Esq., and Barry D. Kleban, Esq., at
McElroy, Deutsch, Mulvaney & Carpenter, LLP, represent the Debtor
as counsel.
In its schedules, the Debtor disclosed $14,061,100 in assets and
$19,957,026 in liabilities as of the Petition Date.
The Bergenfield, New Jersey-based debtor is a single asset real
estate under 11 U.S.C. Sec. 101(51B) and said total assets and
debts exceed $10 million. The Debtor operates and wholly owns a
90-unit residential apartment building located at 47 Legion Drive,
Bergenfield, New Jersey.
The Debtor's primary secured creditor is Boiling Springs Savings
Bank. The Debtor is indebted to Boiling Springs on account of two
promissory notes, both of which are secured by mortgages on the
Property. Boiling Springs' first-position mortgage secures
indebtedness in the total amount of $12.02 million and the second-
position mortgage secures indebtedness of $575,000.
According to the Debtor's First Amended Disclosure Statement for
Plan of Liquidation filed Oct. 18, 2013, the purpose of the Plan
is to liquidate, collect and maximize the cash value of the assets
of the Debtor and make distributions on account of allowed claims
against the Debtor's estate. The Plan is premised on the
satisfaction of Claims through distribution of the proceeds raised
from the sale and liquidation of the Debtor's assets, claims and
causes of action.
BERGENFIELD SENIOR: Sale and Plan Deadlines Extended
----------------------------------------------------
In the chapter 11 case of Bergenfield Senior Housing, LLC, the
U.S. Bankruptcy Court for the District of New Jersey o n July 30,
2013, the Court entered an order approving bid procedures for the
sale of substantially all of the Debtor's assets.
On Sept. 27, 2013, the Debtor first filed a notice of
modifications and extensions to deadlines provided in the bid
procedures (the first bid procedures extension notice).
Consequently, the Debtor determined to extend the deadlines set
forth in the "form of agreement of sale" to conform to the
extended deadlines as set forth in the first bid procedures
extension notice.
The deadlines in the "form of agreement of sale" are modified and
extended as:
A. the deadline for the Debtor to obtain an order
confirming the Plan is extended until Dec. 24;
B. the deadline for the confirmation order to become a
final order is extended until Jan. 9, 2014;
C. the date before which the successful purchaser will not
be required to close is extended until Jan. 23;
D. the date on which either the Debtor or successful
purchaser may terminate if closing has not occurred is
extended until Feb. 24; and
E. the date on which the escrow agent may deliver the deposit
to purchaser if neither a 363 sale order or confirmation
order has become a final order is Feb. 24.
About Bergenfield Senior Housing
Bergenfield Senior Housing, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. D.N.J. Case No. 13-19703) in Newark, New Jersey,
on May 2, 2013. Nicholas Rotonda signed the petition as
member/manager. Judge Morris Stern presides over the case.
Aaron Solomon Applebaum, Esq., and Barry D. Kleban, Esq., at
McElroy, Deutsch, Mulvaney & Carpenter, LLP, represent the Debtor
as counsel.
In its schedules, the Debtor disclosed $14,061,100 in assets and
$19,957,026 in liabilities as of the Petition Date.
The Bergenfield, New Jersey-based debtor is a single asset real
estate under 11 U.S.C. Sec. 101(51B) and said total assets and
debts exceed $10 million. The Debtor operates and wholly owns a
90-unit residential apartment building located at 47 Legion Drive,
Bergenfield, New Jersey.
The Debtor's primary secured creditor is Boiling Springs Savings
Bank. The Debtor is indebted to Boiling Springs on account of two
promissory notes, both of which are secured by mortgages on the
Property. Boiling Springs' first-position mortgage secures
indebtedness in the total amount of $12.02 million and the second-
position mortgage secures indebtedness of $575,000.
According to the Debtor's First Amended Disclosure Statement for
Plan of Liquidation filed Oct. 18, 2013, the purpose of the Plan
is to liquidate, collect and maximize the cash value of the assets
of the Debtor and make distributions on account of allowed claims
against the Debtor's estate. The Plan is premised on the
satisfaction of Claims through distribution of the proceeds raised
from the sale and liquidation of the Debtor's assets, claims and
causes of action.
BERGENFIELD SENIOR: NAI James Hanson Okayed as Real Estate Broker
-----------------------------------------------------------------
The U.S. Bankruptcy Court authorized Bergenfield Senior Housing,
LLC, to employ NAI James E. Hanson as real estate broker.
As reported in the Troubled Company Reporter on Oct. 3, 2013,
Mr. Hanson will have exclusive authority to market the Debtor's
property for sale on an "exclusive right to sell" basis up to and
including Dec. 31, 2013.
The Debtor will compensate Mr. Hanson's services with:
a) 1.5% of the purchase price of the property shall be paid
to the Broker; plus
b) The 1.5% shall be the Broker's sole commission and shall be
inclusive of any expenses incurred by Broker; plus
c) In accordance with its Affidavit of Disinterestedness filed
with the Bankruptcy Court, if a cooperating broker is
involved in procuring a purchaser, the commission payment
shall be divided on a mutually acceptable basis between
Hanson and the co-broker; and
d) The Debtor requests that Hanson's commission (and, if
applicable, that portion of Hanson's commission payable to a
co-broker as noted above) be payable upon closing of a sale
approved by the Court, without the need for filing a
separate fee application.
The Debtor attests that the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
About Bergenfield Senior Housing
Bergenfield Senior Housing, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. D.N.J. Case No. 13-19703) in Newark, New Jersey,
on May 2, 2013. Nicholas Rotonda signed the petition as
member/manager. Judge Morris Stern presides over the case.
Aaron Solomon Applebaum, Esq., and Barry D. Kleban, Esq., at
McElroy, Deutsch, Mulvaney & Carpenter, LLP, represent the Debtor
as counsel.
In its schedules, the Debtor disclosed $14,061,100 in assets and
$19,957,026 in liabilities as of the Petition Date.
The Bergenfield, New Jersey-based debtor is a single asset real
estate under 11 U.S.C. Sec. 101(51B) and said total assets and
debts exceed $10 million. The Debtor operates and wholly owns a
90-unit residential apartment building located at 47 Legion Drive,
Bergenfield, New Jersey.
The Debtor's primary secured creditor is Boiling Springs Savings
Bank. The Debtor is indebted to Boiling Springs on account of two
promissory notes, both of which are secured by mortgages on the
Property. Boiling Springs' first-position mortgage secures
indebtedness in the total amount of $12.02 million and the second-
position mortgage secures indebtedness of $575,000.
BEVERAGES & MORE!: S&P Assigns 'CCC+' Rating to $180MM Sr. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned a 'CCC+'
issue-level rating to BevMo's $180 million senior secured notes
with a recovery rating of '5', indicating its expectation of
modest (10%-30%) recovery in the event of payment default.
Concurrently, S&P affirmed the 'B-' corporate credit rating. The
outlook is stable.
"Our ratings on BevMo reflect our assessment of the company's
"weak" business risk profile and "highly leveraged" financial risk
profile. The business risk profile incorporates our view of the
company's narrow business focus and participation in the highly
competitive, fragmented, and regulated alcoholic beverage retail
industry," said credit analyst Kristina Koltunicki. "While BevMo
possesses a recognized brand name within this segment, its current
geographic footprint is limited to California, Arizona, and
Washington. We do not anticipate geographic expansion into new
regions over the next 12 months because of capacity constraints
and a tough regulatory environment. Competition, especially with
respect to promotional activity, remains intense."
The stable outlook reflects S&P's expectation that credit
protection measures will remain in line with a highly leveraged
financial risk profile over the next 12 months, as the company
decelerates its growth plans and increases its focus on cost
control. S&P believes management's strategic shift to place more
emphasis on its core markets will assist in modestly higher EBITDA
generation over the next two years.
S&P could lower our rating if operating performance worsens,
potentially from deteriorating economic conditions in California,
resulting in moderate decreases in consumer spending or
operational challenges that cause a significant decline in
earnings. Under these scenarios, interest coverage would approach
the low-1x area. At that time, EBITDA would be approximately 25%
below our forecasted levels for the next year.
Although unlikely, S&P could raise its ratings if the company
exhibits strong performance improvement evidenced by consistent
positive comparable-store sales growth. At that time, adjusted
leverage would reach approximately 6x and interest coverage would
exceed 2x. EBITDA would have to increase by more than 35% for this
to occur.
BLUEJAY PROPERTIES: May Pay $70,650 to Bankers' Bank of Kansas
--------------------------------------------------------------
The Hon. Robert D. Berger of the U.S. Bankruptcy Court for the
District of Kansas entered a final order in relation to Bluejay
Properties LLC's motion for continuance of deadlines under Section
362(d)(3) of the Bankruptcy Code.
On Nov. 28, 2012, the Court entered its final order authorizing
the use of cash collateral, which by its terms expires on Jan. 31,
2013. The Debtor filed its motion for extension of order
authorizing the use of cash collateral.
Under the provisions of Section 362(d)(3), the Debtor will, not
later than Feb. 5, 2013, and on the 5th day of each month
thereafter, submit to Bankers' Bank of Kansas payment of $70,650,
which is an amount equal to interest at the then applicable non-
default contract rate of interest on the value of the creditor's
interest in the real estate.
For purposes of present calculation, such payment will be applied
against principal owed on the BBOK Claim. The Court acknowledges
that the claim of Bankers' Bank of Kansas is disputed, and that
the BBOK Claim represents a syndicated loan including Bankers'
Bank of Kansas and various other lender participant banks.
In the event that the Court later determines that Bankers' Bank of
Kansas has received more than it is entitled to receive on the
BBOK Claim or otherwise in the bankruptcy action, the Debtor will
have a claim against Bankers' Bank of Kansas and, to the extent
this Court has jurisdiction over the Participant Banks, against
the Participant Banks, for any excess payments made pursuant to
the order.
The parties and the Court acknowledge that there is disagreement
among the parties and the courts as to the application of the
Section 362(d)(3) payment to principal instead of interest, but
recognize that the dispute as the claims of Bankers' Bank of
Kansas's claims and the uncertainty as to the value of the
liquidated collateral make present resolution of this issue
unnecessary.
About Bluejay Properties
Based in Junction City, Kansas, Bluejay Properties, LLC, doing
business as Quinton Point, filed a bare-bones Chapter 11 petition
(Bankr. D. Kan. Case No. 12-22680) in Kansas City on Sept. 28,
2012. Bankruptcy Judge Robert D. Berger presides over the case.
Todd A. Luckman, Esq., and Kathryn E. Sheedy, Esq., at Stumbo
Hanson LLP, in Topeka.
The Debtor owns the Quinton Point Apartment Complex in Kansas City
valued at $17 million. The Debtor scheduled liabilities of
$13,112,325. The petition was signed by Michael L. Thomas of TICC
Prop., managing member.
Bankers' Bank of Kansas, owed approximately $13.08 million, is
represented by Arthur S. Chalmers of Hite, Fanning & Honeyman,
LLP. The University National Bank, owed approximately
$1.2 million, is represented by Edward J. Nazar of Redmond &
Nazar, L.L.P., and Todd Thompson of Thompson Ramsdell & Qualseth,
P.A.
BLUEJAY PROPERTIES: Court OKs Continued Hiring of CBRE as Broker
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Kansas, in a
courtroom minute sheet for the hearing held Oct. 16, 2013,
authorized Bluejay Properties LLC's continued employment of CBRE,
through its individual brokers Jeff Stingley and Gina Anderson, as
broker to assist in selling the Debtor's apartment complex.
The Court also determined that it will not appoint an examiner.
However, it directed that the Debtor will get the property sold at
the best price.
The Court added that the matter will be further considered at a
status hearing on January 2014, if no progress is made, the Court
will probably appoint trustee.
As reported in the Troubled Company Reporter on July 9, 2013,
CBRE will list and advertise the sale of the apartment complex
located in Junction City, Kansas.
The source of the compensation to be paid to the proposed broker
will be from the sale proceeds of the property. The commission
due to CBRE is two percent of the gross sales price. If a sale is
not completed, pursuant to the contract the Debtor would only be
responsible for marketing costs not to exceed $1,500. CBRE is to
be retained to sell the property pursuant to a liquidating plan.
To the best of the Debtor's knowledge, CBRE represents no interest
adverse to applicants as Debtor-in-Possession, or to the estate in
the matters upon which it is to be engaged by applicant as Debtor-
in-Possession, and its employment would be in the best interest of
this estate.
About Bluejay Properties
Based in Junction City, Kansas, Bluejay Properties, LLC, doing
business as Quinton Point, filed a bare-bones Chapter 11 petition
(Bankr. D. Kan. Case No. 12-22680) in Kansas City on Sept. 28,
2012. Bankruptcy Judge Robert D. Berger presides over the case.
Todd A. Luckman, Esq., and Kathryn E. Sheedy, Esq., at Stumbo
Hanson LLP, in Topeka.
The Debtor owns the Quinton Point Apartment Complex in Kansas City
valued at $17 million. The Debtor scheduled liabilities of
$13,112,325. The petition was signed by Michael L. Thomas of TICC
Prop., managing member.
Bankers' Bank of Kansas, owed approximately $13.08 million, is
represented by Arthur S. Chalmers of Hite, Fanning & Honeyman,
LLP. The University National Bank, owed approximately
$1.2 million, is represented by Edward J. Nazar of Redmond &
Nazar, L.L.P., and Todd Thompson of Thompson Ramsdell & Qualseth,
P.A.
CARRIZO OIL: S&P Affirms 'B' CCR & Revises Outlook to Stable
------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B'
corporate credit rating and 'B-' senior unsecured debt rating on
Houston-based Carrizo Oil & Gas Inc. At the same time, S&P
revised its outlook on the rating to stable from positive.
"The outlook revision primarily reflects Carrizo's smaller scale
and diversity of operations following the divestiture of its
Barnett assets," said Standard & Poor's credit analyst Christine
Besset.
Moreover, despite the expectation that Carrizo will continue to
add significant oil production and reserves from the Eagle Ford
shale, this growth will not offset the loss of scale following the
Barnett sale within the next 12 months. S&P also believes
potential increases in reserves tied to recently acquired acreage
in the Utica shale will not be realized within this time horizon,
but could provide some growth potential in 2015 and beyond.
The ratings on Carrizo continue to reflect S&P's assessment of the
company's participation in the highly cyclical and capital-
intensive oil and gas E&P industry, its relatively modest reserve
size and limited geographical diversity, and negative free cash
flow (before divestitures) due to high capital spending. These
factors are offset by increasing oil and liquids production and
profitability, and a moderate debt leverage.
S&P assess Carrizo's business risk profile as "vulnerable" and
classifies the company's financial risk profile as "aggressive".
S&P classifies Carrizo's liquidity as "adequate", reflecting its
expectation that liquidity sources will exceed uses by 1.2x for
the next 12 months.
The issue-level rating on Carrizo's senior unsecured debt is 'B-'.
The recovery rating is '5', indicating S&P's expectations for
modest (10% to 30%) recovery in the event of a payment default.
The stable outlook reflects Standard & Poor's view that Carrizo
will continue to increase oil reserves and production while
keeping leverage at less than 4.5x.
S&P would consider a downgrade if production and reserves
decreased significantly, the company materially increased debt
funding such that leverage approached 4.75x, or liquidity became
less than adequate.
S&P would consider an upgrade if Carrizo increased proved reserves
to around 600 billion bcfe, with a 60% oil content and the
expectation of continued strong growth, while sustaining leverage
below 3.75x.
CENGAGE LEARNING: Creditors Want Mediation, Balk at Plan
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the unsecured creditors' committee for Cengage
Learning Inc. is convinced there are "fatal flaws" in the college
textbook publisher's reorganization plan and scheduled a Nov. 12
hearing to seek permission to send creditors a letter urging them
to vote against it.
According to the report, voting against the plan is a backup
strategy for the committee. At next week's hearing, they will try
convincing the U.S. Bankruptcy Judge in Brooklyn, New York, that
the plan shouldn't go forward until the court decides whether
first-lien lenders have valid liens on 15,500 copyrights and
$273.9 million held in a money-market account.
The committee argues that the entire plan is based on an
assumption the first-lien lenders' liens are valid. At present,
there are multiple unresolved lawsuits and litigated disputes over
the validity of the liens and the value of collateral.
The committee doesn't want the plan to proceed until mediation is
completed. There were sessions held already, with more scheduled
for December and early January.
The indenture trustee for second-lien lenders also opposes the
plan, as does the U.S. Trustee in some respects.
Cengage filed a reorganization plan in August, with amendments
later. The original plan provides that first-lien lenders would
get the new stock plus a $1.5 billion term loan.
About Cengage Learning
Stamford, Connecticut-based Cengage Learning --
http://www.cengage.com/-- provides innovative teaching, learning
and research solutions for the academic, professional and library
markets worldwide. Cengage Learning's brands include
Brooks/Cole, Course Technology, Delmar, Gale, Heinle, South
Western and Wadsworth, among others. Apax Partners LLP bought
Cengage in 2007 from Thomson Reuters Corp. in a $7.75 billion
transaction. The acquisition was funded in part with $5.6 billion
in new debt financing.
Cengage Learning Inc. filed a petition for Chapter 11
reorganization (Bankr. E.D.N.Y. Case No. 13-bk-44106) on July 2,
2013, in Brooklyn, New York, after signing an agreement where
holders of $2 billion in first-lien debt agree to support a
reorganization plan. The plan will eliminate more than $4 billion
of $5.8 billion in debt.
First-lien lenders who signed the so-called plan-support agreement
include funds affiliated with BlackRock Inc., Franklin Mutual
Adviser LLC, KKR & Co. and Oaktree Capital Management LP. Second-
lien creditors and holders of unsecured notes aren't part of the
agreement.
The Debtors have tapped Kirkland & Ellis LLP as counsel, Lazard
Freres & CO. LLC as financial advisor, Alvarez & Marsal North
America, LLC, as restructuring advisor, and Donlin, Recano &
Company, Inc., as claims and notice agent.
The Debtors filed a Joint Plan of Reorganization and Disclosure
Statement dated Oct. 3, 2013, which provides that the Debtors took
extreme care to advance and protect the interest of unsecured
creditors -- including seeking to protect four primary sources of
potential recoveries for unsecured creditors and providing them
with appropriate time to conduct diligence, and discuss their
conclusions on, among other things, the value of those sources of
potential recoveries.
CITIZENS DEVELOPMENT: Has Until Nov. 11 to Amend Plan Outline
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
approved a stipulation continuing the Nov. 13, 2013 hearing until
Dec. 2, at 2 p.m., to consider adequacy of information in the
Amended Disclosure Statement explaining Citizens Development
Corp.'s Plan of Reorganization.
The stipulation entered among the Debtors and the City of
Vallecitos, City of San Marcos, and the County of San Diego,
provides that, among other things:
1. the Debtor has until Nov. 11, to file their Amended
Disclosure Statement;
2. objections, if any, are due Nov. 18; and
3. replies, if any, to objections are due Nov. 25.
At the hearing, the Court will also held a status conference/
order to show cause hearing.
The Court previously approved a stipulation extending until
Oct. 30, the Debtors' deadline to file an Amended Disclosure
Statement.
As reported by the Troubled Company Reporter on July 16, 2013, the
funding for the Plan 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.
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.
COLORADO EDUCATIONAL: S&P Cuts ICR to BB on Continued Shortfalls
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issuer credit
rating (ICR) to 'BB' from 'BBB-' on Colorado Educational and
Cultural Facilities Authority's series 2010 charter school revenue
bonds, issued on behalf of the Colorado Springs Charter Academy.
The outlook remains negative.
"The downgrade reflects our view of the academy's continued
audited shortfalls and the corresponding drop in cash and
coverage," said Standard & Poor's credit analyst Carlotta Mills.
The ICR reflects S&P's view of:
-- The possibility that the academy could fail to renew its
charter prior to the bonds' maturity;
-- Audited shortfalls in audited fiscal years 2011, 2012, and
2013;
-- Declining and low days' cash on hand of 16 days in audited
fiscal 2013; and
-- The academy's inability to meet its required fund balance
covenant in 2012 and 2013, requiring the intervention of a
consultant.
DESIGNLINE CORP: Wins Final Order to Obtain $1.5MM DIP Financing
----------------------------------------------------------------
The Hon. J. Craig Whitley of the U.S. Bankruptcy Court for the
Western District of North Carolina issued a final order allowing
Designline Corporation, et al., to obtain a multiple draw term
credit facility of up to $1.5 million in the aggregate principal
amount pursuant to the terms of a senior secured superpriority
debtor-in-possession credit agreement among the borrowers, Cyrus
Opportunities Master Fubd II Ltd., Cyrus Select Opportunities
Master Fund, Ltd., Crescent I, LP and potential other lenders
thereto.
On Sept. 30, creditor Cameron Harris filed a supplemental
objection stating that the budget proposed by the Debtors does not
provide funds in escrow to pay for Harris' reasonable expenses and
professional fees incurred in moving to transfer the venue of the
cases from the District of Delaware to the Court.
On Oct. 10, 2013, an Amended DIP Credit Agreement was submitted to
correct the specified vehicle collateral description.
As reported in the Troubled Company Reporter on Sept. 20, 2013,
the Debtors are permitted to use the interim loan amount solely
for general corporate purposes and for costs of administering
their bankruptcy cases. Specifically, the Debtors will use the
proceeds to continue to liquidate their business.
In exchange for the Loan, the DIP lenders are granted liens on the
Debtors' assets, claims and causes of action, subject to a carve-
out for fees to be paid to the bankruptcy court clerk, the
bankruptcy administrator and bankruptcy professionals of the
Debtors and the unsecured creditors committee. The DIP Loan
Obligations of the Debtors constitute allowed superpriority
administrative expense claims pursuant to Sec. 364(c)(1) of the
Bankruptcy Code.
The Debtors originally sought court approval for a $3 million
postpetition financing arranged with Cyprus.
Counsel for the Cyprus Entities are David B. Stratton, Esq., and
Kay S. Kress, Esq., at PEPPER HAMILTON LLP, and Joseph W. Grier,
III, Esq. -- jgrier@grierlaw.com -- at GRIER FURR & CRISP, PA.
About DesignLine
DesignLine Corporation is a manufacturer of coach, electric and
range-extended electric (hybrid) buses founded in Ashburton, New
Zealand in 1985. It was acquired by American interests in 2006,
and DesignLine Corporations' headquarters was relocated to
Charlotte, North Carolina. DesignLine Corporation is no longer
affiliated with the DesignLine operations in New Zealand, which
was placed in liquidation in 2011
DesignLine Corporation and DesignLine USA LLC originally sought
Chapter 11 protection with the U.S. Bankruptcy Court for the
District of Delaware, with Lead Case Nos. 13-12089 and 13-12090,
on Aug. 15, 2013. Katie Goodman signed the petitions as chief
restructuring officer. The Debtors estimated assets and debts of
at least $10 million. On Sept. 5, 2013, the case was transferred
to the U.S. Bankruptcy Court for the Western District of North
Carolina, under Case Nos. 13-31943 and 13-31944.
Mark D. Collins, Esq., and Michael Joseph Merchant, Esq., at
Richards, Layton & Finger, P.A., serve as the Debtors' counsel.
Terri L. Gardner, Esq., at Nelson Mullins Riley & Scarborough,
LLP, is the Debtors' general bankruptcy counsel. The Debtors'
financial advisor is GGG Partners LLC.
A five-member unsecured creditors panel has been appointed in the
Debtors' cases. Moon Wright & Houston PLLC and Benesch,
Friedlander, Coplan & Aronoff LLP are co-counsel to the Committee.
The Debtor is selling all its assets for $1.6 million cash to
Wonderland Investment Group Inc. from Pasadena, California.
DESIGNLINE CORP: Goodman Approved as Chief Restructuring Officer
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina authorized Designline Corporation and Designline USA,
LLC, to employ GGG Partners, LLC to provide a chief restructuring
officer and certain additional personnel; and (ii) designate Katie
Goodman as CRO.
As reported in the Troubled Company Reporter on Oct. 7, 2013, in
addition to the chief restructuring officer, GGG Partners will
provide additional employees as necessary to assist Ms. Goodman in
the execution of her duties.
Working collaboratively with the Debtors' Board of Directors, as
well as the Debtors' other professionals, Ms. Goodman and the
Additional Personnel will assist the Debtors in evaluating and
implementing strategic and tactical options throughout the Chapter
11 process. Among other things, Ms. Goodman and the Additional
Personnel's services to the Debtors will include:
(a) putting together materials and communicating with potential
purchasers;
(b) communicating with purchasers and other stakeholders
regarding any proposals;
(c) working with the Debtors, any committee appointed under
11 U.S.C. Section 1102(A) and other parties in interest as
appropriate to evaluate options;
(d) overseeing the necessary reporting requirements under the
Bankruptcy Code and any orders of the Court;
(e) interacting with the DIP lender, any Committee and other
parties in interest as appropriate, concerning the business
of the Debtors;
(f) overseeing the collection and disbursement of funds; and
(g) approving disbursements of the Debtors.
GGG Partners will be paid at these hourly rates:
Managing Partner $350
Partner $325
GGG Partners will also be reimbursed for reasonable out-of-pocket
expenses incurred.
GGG Partners received $35,000 in connection with preparing for and
conducting the filing of these chapter 11 cases. GGG Partners
received a payment of $25,000 on July 30, 2013 and a payment of
$10,000 on August 7, 2013 for services performed for the Debtors
from July 30, 2013 through the petition date. Previously, GGG
Partners received a payment of $25,000 on February 28, 2013 for
services performed for the Debtors. GGG Partners has applied these
funds to amounts due for services rendered and expenses incurred
prior to the petition date and has no unapplied residual retainer.
Katie Goodman, managing partner of GGG Partners, 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.
About DesignLine
DesignLine Corporation is a manufacturer of coach, electric and
range-extended electric (hybrid) buses founded in Ashburton, New
Zealand in 1985. It was acquired by American interests in 2006,
and DesignLine Corporations' headquarters was relocated to
Charlotte, North Carolina. DesignLine Corporation is no longer
affiliated with the DesignLine operations in New Zealand, which
was placed in liquidation in 2011.
DesignLine Corporation and DesignLine USA LLC originally sought
Chapter 11 protection with the U.S. Bankruptcy Court for the
District of Delaware (Lead Case Nos. 13-12089 and 13-12090), on
Aug. 15, 2013. Katie Goodman signed the petitions as chief
restructuring officer. The Debtors estimated assets and debts of
at least $10 million. On Sept. 5, 2013, the case was transferred
to the U.S. Bankruptcy Court for the Western District of North
Carolina (Case Nos. 13-31943 and 13-31944).
Mark D. Collins, Esq., and Michael Joseph Merchant, Esq., at
Richards, Layton & Finger, P.A.; and Terri L. Gardner, Esq., at
Nelson Mullins Riley & Scarborough, LLP, serve as the Debtors'
bankruptcy counsel. The Debtors' financial advisor is GGG
Partners LLC.
A five-member unsecured creditors panel has been appointed in the
Debtors' cases. Moon Wright & Houston PLLC and Benesch,
Friedlander, Coplan & Aronoff LLP are co-counsel to the Committee.
The Committee tapped to retain CBIZ MHM, LLC as their financial
advisor.
DESIGNLINE CORP: Nelson Mullins Approved as Bankruptcy Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina authorized Designline Corporation and Designline USA,
LLC, to employ Nelson Mullins Riley & Scarborough LLP as
bankruptcy counsel.
As reported in the Troubled Company Reporter on Oct. 3, 2013, the
firm will, among other things, provide these services:
a) prepare all necessary petitions, motions, applications,
orders, reports, and papers necessary to commence the
chapter 11 cases;
b) advise the Debtors of their rights, powers, and duties as
debtors and debtors in possession under chapter 11 of the
Bankruptcy Code;
c) prepare on behalf of the Debtors all motions, applications,
answers, orders, reports, and papers in connection with
the administration of the Debtors' estates.
The Debtor attests that the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
About DesignLine
DesignLine Corporation is a manufacturer of coach, electric and
range-extended electric (hybrid) buses founded in Ashburton, New
Zealand in 1985. It was acquired by American interests in 2006,
and DesignLine Corporations' headquarters was relocated to
Charlotte, North Carolina. DesignLine Corporation is no longer
affiliated with the DesignLine operations in New Zealand, which
was placed in liquidation in 2011.
DesignLine Corporation and DesignLine USA LLC originally sought
Chapter 11 protection with the U.S. Bankruptcy Court for the
District of Delaware (Lead Case Nos. 13-12089 and 13-12090), on
Aug. 15, 2013. Katie Goodman signed the petitions as chief
restructuring officer. The Debtors estimated assets and debts of
at least $10 million. On Sept. 5, 2013, the case was transferred
to the U.S. Bankruptcy Court for the Western District of North
Carolina (Case Nos. 13-31943 and 13-31944).
Mark D. Collins, Esq., and Michael Joseph Merchant, Esq., at
Richards, Layton & Finger, P.A.; and Terri L. Gardner, Esq., at
Nelson Mullins Riley & Scarborough, LLP, serve as the Debtors'
bankruptcy counsel. The Debtors' financial advisor is GGG
Partners LLC.
A five-member unsecured creditors panel has been appointed in the
Debtors' cases. Moon Wright & Houston PLLC and Benesch,
Friedlander, Coplan & Aronoff LLP are co-counsel to the Committee.
The Committee tapped to retain CBIZ MHM, LLC as their financial
advisor.
DETROIT, MI: $350 Million Financing May Not Fly, Moody's Says
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that when Detroit comes to bankruptcy court on Nov. 14 for
approval of a $350 million loan, Moody's Investors Service said
the outcome is "uncertain" because the entire loan proceeds
would be paid out immediately.
According to the report, apart from the immediate payout of all
loan proceeds, Moody's said in a report on Nov. 6 that the
proposed Detroit loan is "structurally similar" to loans companies
take down to finance reorganization.
Where most corporate loans are "credit positive" for a business in
Chapter 11 reorganization, Moody's sees the "credit impact" as
"not clear at this time."
Using up the entire loan all at once points up Detroit's "narrow
cash position," Moody's said, even though the city is not paying
unsecured debt while withholding pension contributions.
Detroit intends to use the loan in part to terminate swap
agreements that encumber the city's casino-tax revenue. The loan
is designed to free cash for infrastructure improvements and save
$60 million eventually.
Detroit is in the midst of a trial over its eligibility to be in
Chapter 9 municipal bankruptcy. Unions and retirees are trying to
show the city didn't file bankruptcy in good faith because it
never attempted serious negotiations with creditors before filing.
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.
DIGITAL DOMAIN: Seeks Final Plan Filing Exclusivity
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Digital Domain Media Group Inc. said in a bankruptcy
court filing that "certain critical parties" may not agree with
the idea of proposing a liquidating Chapter 11 plan.
According to the report, the provider of visual effects for the
movie industry sold almost all its assets and filed papers on Nov.
5 for a fourth extension of its exclusive right to propose a plan.
If the bankruptcy judge in Delaware agrees at a Dec. 18 hearing,
the deadline will be pushed back four months, to March 5. The
extension will be the last because, by then, Digital Domain will
have been in bankruptcy for 18 months, the longest Congress allows
before any creditor can file a plan.
The remaining assets are lawsuits and a property in Port St.
Lucie, Florida, that could be sold in a few months, the company
said.
Previously, the company said there should be some recovery for the
unsecured creditors flowing from a settlement negotiated by the
unsecured creditors' committee with secured lenders.
Most of the business was sold for $36.7 million to a joint venture
between Galloping Horse America LLC, an affiliate of Beijing
Galloping Horse Co., and an affiliate of Reliance Capital Ltd.,
based in Mumbai.
About Digital Domain
Port St. Lucie, Florida-based Digital Domain Media Group, Inc. --
http://www.digitaldomain.com/-- engaged in the creation of
original content animation feature films, and development of
computer-generated imagery for feature films and trans-media
advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on
Sept. 11, 2012, to sell its business for $15 million to
Searchlight Capital Partners LP, subject to higher and better
offers. The company disclosed assets of $205 million and
liabilities totaling $214 million.
The Debtors also have sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent. An official committee of unsecured
creditors appointed in the case is represented by lawyers at
Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP.
At a bankruptcy auction, the principal part of the business was
purchased by a joint venture between Galloping Horse America LLC,
an affiliate of Beijing Galloping Horse Co., and an affiliate of
Reliance Capital Ltd., based in Mumbai. The $36.7 million total
value of the contact includes $3.6 million to cure defaults on
contracts and $2.9 million in reimbursement of payroll costs. As
the result of a settlement negotiated by the unsecured creditors'
committee with secured lenders, there will be some recovery for
the committee's constituency.
EAST COAST BROKERS: Ch.11 Trustee Hires Read & Kelley as Appraiser
------------------------------------------------------------------
Gerard A. McHale, Jr., the Chapter 11 trustee of East Coast
Brokers & Packers, Inc. and its debtor-affiliates, asks for
permission from the U.S. Bankruptcy Court for the Middle District
of Florida to employ Read & Kelley Estate Services, LLC as
appraiser, nunc pro tunc to July 31, 2013.
Read and Kelley will provide appraisal services for the personal
property owned by the Debtors, including property located in
Virginia and Florida.
Read & Kelley's rates to conduct the appraisal will be $250 for
the first hour if the estate property is located in Lee, Charlotte
or Collier Counties, and $350 for the first hour if outside of
Lee, Charlotte and Collier Counties. Thereafter, the Trustee will
be billed at $30 for every additional 15 minutes spent on the
appraisal of the Personal Property.
Read & Kelley will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Joy Augustine, licensed consultant of Read & Kelley, 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.
Read & Kelley can be reached at:
Joy Augustine
READ & KELLEY ESTATE SERVICES, LLC
18031 Dunn Road, North Fort
Fort Myers, FL 33917
Tel: (239) 731-2201
About East Coast Brokers
East Coast Brokers & Packers, Inc., along with four related
entities, sought Chapter 11 protection (Bankr. M.D. Fla. Case No.
13-02894) in Tampa, Florida, on March 6, 2013. East Coast Brokers
& Packers disclosed $12,663,307 in assets and $75,181,975 in
liabilities as of the Chapter 11 filing. Scott A. Stichter, Esq.,
and Susan H. Sharp, Esq., at Stichter, Riedel, Blain & Prosser,
P.A., in Tampa, serve as counsel to the Debtors. Steven M.
Berman, Esq., and Hugo S. deBeaubien, Esq., at Shumaker, Loop, &
Kendrick, LLP, in Tampa, are the Debtors' special counsel.
In June 2013, the bankruptcy court approved the appointment of
Gerard A. McHale, Jr., to serve as Chapter 11 trustee. MLIC Asset
Holdings LLC and MLIC CB Holdings LLC asked the Bankruptcy Court
to appoint a Chapter 11 trustee, or, in the alternative, dismiss
the Debtors' Chapter 11 cases. According to the MLIC entities,
the Debtors, among other things had mishandled the potential rents
from employees, failed to pay taxes, failed to maintain insurance,
has inadequate security regarding the Debtors' personal and real
property, and delayed the filing of schedules and reports required
under the Bankruptcy Code.
Brian G. Rich, Esq., at Berger Singerman LLP, in Tallahassee,
Fla., represents the Chapter 11 trustee as counsel.
EDISON MISSION: Wants IBEW Local 15 CBA Extended Until Dec. 2014
----------------------------------------------------------------
Edison Mission Energy, et al., ask the U.S. Bankruptcy Court for
the Northern District of Illinois to extend the collective
bargaining agreement among Debtor Midwest Generation EME, LLC, and
the International Brotherhood of Electric Workers Local 15.
According to the Debtors, approximately 93 percent of the Debtors'
hourly employees are members of Local 15. All of these employees
are employed pursuant to the CBA, which expires on Dec. 31, 2013.
In the face of the upcoming expiration of the CBA, MWG and Local
15 leadership have engaged in arms'-length negotiations in an
effort to come to terms on an extension to the CBA, thereby
avoiding the risk and uncertainty associated with expiration
or termination of the CBA.
Moreover, the proposed transaction to sell substantially all of
EME's assets and interests in its subsidiaries to NRG Energy, Inc.
contemplates an extension and ultimate assumption of the CBA as
part of a chapter 11 plan of reorganization that incorporates the
NRG transaction.
In this relation, MWG and Local 15 leadership reached agreement on
the terms of a one-year extension to the CBA memorialized as part
of (a) a memorandum of understanding, and (b) a letter with
respect to MWG's short-term incentive compensation policy.
The key terms of the CBA extension are:
Term: One year, through Dec. 31, 2014.
Base Wages: Unchanged. Current base wages are
approximately 108-110% of median for the
Central/Midwest region based on market
data.
Incentive Compensation: Increase short-term incentive plan
payment from a historical practice of 4%
to 6% of base pay. Cost to company at
"target" level performance would be
approximately $850/employee (i.e.
approximately $365,000 in the aggregate)
for each 6-month performance measurement
period.
Health/Welfare Benefits: Local 15 leadership has consented to
certain changes, including basing the
employer subsidy on the 80/60 preferred
provider option.
Ratification Incentive: $1,000/employee (i.e. approximately
$450,000 in the aggregate).
Under the Benefits Agreement, MWG is required to offer an
exclusive provider organization plan among its health care options
and to base the employer subsidy on the cost of the EPO plan. As
part of the CBA Extension, MWG has agreed with Local 15 leadership
to base the employer subsidy on the cost of an 80/60 preferred
provider option, which MWG anticipates will result in savings of
$400,000 to $1,000,000 in 2014. Expectations are that members
will migrate from the current EPO to a 90/70 PPO plan, and in so
doing the "per employee" contribution would increase, on average,
by approximately $1,300 per full-time employee plus the cost of
deductibles.
The Debtors scheduled a Nov. 6 hearing on the approval of the
motion.
About Edison Mission
Santa Ana, California-based Edison Mission Energy is a holding
company whose subsidiaries and affiliates are engaged in the
business of developing, acquiring, owning or leasing, operating
and selling energy and capacity from independent power production
facilities. EME also engages in hedging and energy trading
activities in power markets through its subsidiary Edison Mission
Marketing & Trading, Inc.
EME was formed in 1986 and is an indirect subsidiary of Edison
International. Edison International also owns Southern California
Edison Company, one of the largest electric utilities in the
United States.
EME and its affiliates sought Chapter 11 protection (Bankr. N.D.
Ill. Lead Case No. 12-49219) on Dec. 17, 2012.
EME has reached an agreement with the holders of a majority of
EME's $3.7 billion of outstanding public indebtedness and its
parent company, Edison International EIX, that, pursuant to a plan
of reorganization and pending court approval, would transition
Edison International's equity interest to EME's creditors, retire
existing public debt and enhance EME's access to liquidity.
The Company's balance sheet at Sept. 30, 2012, showed
$8.17 billion in total assets, $6.68 billion in total liabilities
and $1.48 billion in total equity.
In its schedules, Edison Mission Energy disclosed total assets of
assets of $5,721,559,170 and total liabilities of $6,202,215,094
as of the Petition Date.
The Debtors other than Camino Energy Company are represented by
David R. Seligman, Esq., at Kirkland & Ellis LLP; and James H.M.
Sprayragen, Esq., at Kirkland & Ellis LLP. Counsel to Debtor
Camino Energy Company is David A. Agay, Esq., at McDonald Hopkins
LLC.
Perella Weinberg Partners is acting as the Debtors' financial
advisor and McKinsey & Company Recovery and Transformation
Services is acting as restructuring advisor. GCG, Inc., is the
claims and notice agent.
An official committee of unsecured creditors has been appointed in
the case and is represented by Ira S. Dizengoff, Esq., Stephen M.
Baldini, Esq., Arik Preis, Esq., and Robert J. Boller, Esq., at
Akin Gump Strauss Hauer & Feld LLP in New York; James Savin, Esq.,
and Kevin M. Eide, Esq., at Akin Gump Strauss Hauer & Feld LLP in
Washington, DC; and David M. Neff, Esq., and Brian Audette, Esq.,
at Perkins Coie LLP. The Committee also has tapped Blackstone
Advisory Partners as investment banker and FTI Consulting as
financial advisor.
EME said it doesn't plan to emerge from Chapter 11 until
December 2014 to receive benefits from a tax-sharing agreement
with parent Edison International Inc.
ENDO HEALTH: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'BB-'
corporate credit rating on pharmaceutical company Endo Health
Solutions Inc. The outlook is stable.
At the same time, S&P placed its 'BB+' credit rating on Endo's
senior secured debt and 'BB-' rating on Endo's senior unsecured
debt on CreditWatch with negative implications because the size of
these debt classes could increase relative to our estimate of
Endo's value in the event of default. S&P's recovery rating on
the senior secured debt is '1', indicating its expectation for
very high (90% to 100%) recovery of principal, and its recovery
rating on the senior unsecured debt is '4', indicating its
expectation for average (30% to 50%) recovery of principal, both
in the event of payment default.
The acquisition of Paladin does not alter S&P's "fair" assessment
of Endo's business risk profile, with gradually improving product
diversity. S&P do not expect the transactions to materially
affect Endo's leverage, but it continues to believe Endo's growth
goals and financial policies are "aggressive", and S&P expects
leverage to rise above 4x, from 2.7x as of Sept. 30, 2013,
reflecting both higher debt levels and lower EBITDA. In S&P's
view, the creation of an Irish corporate structure provides a
platform and incentive for sizeable debt-financed acquisitions.
S&P expects to resolve the CreditWatch listings after Endo
announces the terms of its planned debt refinancing.
"The rating on Endo reflects its "fair" business risk profile,
with still-significant product and therapeutic concentrations.
Endo's business portfolio is in transition as sales of its key
branded pharmaceutical products decline with the loss of market
exclusivity, Endo's lower-margin generic drug unit continues to
grow, it phases out early-stage research and development, and we
believe the HealthTronics unit will be sold," said credit analyst
Gail Hessol. "We expect Endo to emphasize acquisitions and in-
licensing of drugs, in part, because we believe its existing
operations (including Paladin and soon-to-be-acquired Boca
Pharmacal LLC) will not achieve EBITDA growth over the next five
years, including benefits of Endo's ongoing cost reduction
program. We expect Paladin to account for only about 10% of
Endo's 2014 revenue and we expect Paladin's margins to be somewhat
lower than Endo's overall margins."
The rating outlook is stable, reflecting S&P's view that Endo will
manage its EBITDA decline and growth ambitions such that leverage
will rise but remain below 5x.
S&P could raise the rating if the company stabilizes its revenue
and earnings base and it become convinced that leverage would
remain below 4x. This could result from of a combination of
developments: if the pace of Lidoderm and Opana revenue declines
is slower than S&P expects; if growth in the company's generic
drugs or new drugs in its pipeline exceed its expectations; and if
acquired businesses make a meaningful contribution. Leverage
could also remain below 4x if acquisition activity is more
moderate than S&P anticipates, if the company meaningfully pays
down debt, or if it achieves higher than anticipated cost
synergies from acquired companies.
S&P could lower the rating if it expects leverage to rise above
5x. This could occur if revenue from branded products drops more
rapidly than it expects, if growth of generic drugs falters, if
cost reduction efforts are not as successful as S&P anticipates,
or if the company becomes more aggressive in terms of acquisition
activity.
ENERGAE LP: North Dakota Shareholders Seeks Receivership
--------------------------------------------------------
The Mason City Globe Gazette (globegazette.com) reports that a
Cerro Gordo County judge set Tuesday as the hearing date for the
second in a series of petitions by North Dakota shareholders to
put the Energae LP company into receivership.
Judge Colleen Wieland set the hearing in the case of Clifton and
Joshua Hylden of Park River, N.D., and the Rev. Lee Laaveg of
Spencer, formerly of Forest City, in a petition involving Energae
LP and i-Lenders LLC, all based in Clear Lake or Mason City,
according to globegazette.com.
The hearing is scheduled for 10:30 a.m. Tuesday at the Cerro Gordo
County Courthouse.
The report notes that attorneys for the plaintiffs said that no
representatives of Energae LP or i-Lenders responded to the
petition. They said a notice of default was mailed to the two
companies' last known registered agents along with the court's
order, the report relates.
The report discloses that an earlier state petition for
receivership that was filed by two Fargo, N.D., residents was
settled Aug. 26, the day before that hearing was set to take place
in Mason City.
Clifton Hylden is a brother to both Robert and the Rev. Todd
Hylden, a Lutheran pastor from Fergus Falls, Minn., who formerly
was vice president of marketing for Energae LP. Energae officials
include Duane Darrell Smith of Forest City, who was identified as
director of operations for the company during a meeting in
Grafton, N.D., in 2012.
Mr. Smith, the report notes, was promoting a plan for farmers to
put a minimum of $10,000 into the company and to put sugar beets
through a sugar beet-to-ethanol plant. Energae and i-Lenders are
associated with other ethanol and wood-to-electricity plants in
Iowa, among other things, the report relates. The Grafton plans
fell through.
In 2013, the report notes that Mr. Smith dropped appeals and was
permanently stripped of his insurance and securities licenses by
the Iowa Insurance Division.
Separately, federal officials appear interested in the company.
On Oct. 3, Mr. Smith's home and places of business were visited by
FBI and other officials, who carried out documents. On Oct. 23,
some former Energae officials testified at a federal grand jury in
Cedar Rapids after being subpoenaed by the Internal Revenue
Service, the report adds.
ENERGY FUTURE: Swings to $5-Mil. Net Income in Third Quarter
------------------------------------------------------------
Energy Future Holdings Corp. filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $5 million on $1.89 billion of operating revenues
for the three months ended Sept. 30, 2013, as compared with a net
loss of $407 million on $1.75 billion of operating revenues for
the same period during the prior year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss of $635 million on $4.57 billion of operating revenues as
compared with a net loss of $1.40 billion on $4.35 billion of
operating revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2013, showed $38.69
billion in total assets, $50.24 billion in total liabilities and a
$11.55 billion total deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/rSsFr9
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.
EWGS INTERMEDIARY: Seeks to Sell Assets, Proposes Dec. 4 Auction
----------------------------------------------------------------
EWGS Intermediary, LLC, and Edwin Watts Golf Shops, LLC, seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to approve a purchase agreement with GWNE, Inc., for the
sale of these assets:
-- real property relating to a minimum of 40 store locations,
distribution center and the corporate offices;
-- all inventory located at the GWNE stores and the portion of
the inventory located at the distribution center allocated
to GWNE by agreement with Hilco Merchant Resources, LLC;
-- all intellectual property and other intangible property;
-- all personal property of the Debtors located at the GWNE
stores, the distribution center and the corporate offices
and certain of the property of EWGS located at the non-GWNE
stores; and
-- certain executory contracts for equipment, software and
services as may be agreed to by GWNE prior to the closing of
the sale.
The Debtors' estates will receive $45 million together with
adjustments set forth in the purchase agreement for the assets and
the consideration for the closing of the Debtors' retail stores,
which have been operating at a loss and represent a drain on the
Debtors' liquidity.
The Debtors entered into an agency agreement with Hilco for the
firm to serve as agent in conducting the store closing. Hilco
made its agreement contingent upon commencing the store closing
sales on Dec. 6, 2013.
Under the Agency Agreement, Hilco will guarantee that the Debtors
will recover $45 million, subject to certain adjustments. Hilco
will be unconditionally responsible for all store closing
expenses. In consideration of the services to be provided by
Hilco, the firm will be entitled to retain all proceeds from the
sale of the assets, after payment of store closing expenses.
To maximize the value of their assets, the Debtors propose to sell
the assets to GWNE or sell the assets in whole or part, to the
highest and best successful bidders at an auction. Interested
bidders must submit qualified bids on or before Dec. 2. An
auction will follow on Dec. 4 if two or more qualified bids are
timely received. A hearing to consider approval of the sale will
take place on Dec. 5.
About EWGS Intermediary
EWGS Intermediary and Edwin Watts Golf Shops, which operate as an
integrated, multi-channel retailer, offering brand name golf
equipment, apparel and accessories, filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 13-12876). They are
represented by Domenic E. Pacitti, Esq., and Michael W. Yurkewicz,
Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington,
Delaware. The Debtors tapped Bayshore Partners LLC as their
investment banker, FTI Consulting, LLC, as their financial
advisors, and Epiq Bankruptcy Solutions, LLC, as claims and
noticing agent. The Company indicates total assets greater than
$100 million on its Chapter 11 petition.
EWGS INTERMEDIARY: Obtained Interim $5-Mil. DIP Loan Approval
-------------------------------------------------------------
Judge Mary Walrath of the U.S. Bankruptcy Court for the District
of Delaware gave interim authority for Edwin Watts Golf Shops,
LLC, and EWGS Intermediary, LLC, to obtain up to $5 million of the
$38 million senior secured postpetition loan from PNC Bank,
National Association, in its capacity as agent on behalf of a
consortium of lenders.
Advances under the DIP Facility will bear interest at a rate equal
to the Alternate Base rate plus 125 basis points. The Default
Rate will be 2.0% in excess of the rate then in effect. The DIP
Financing Agreement expires on the date that is the earlier to
occur of: (a) Dec. 31, 2013; (b) the effective date of a
substantial consummation of a reorganization plan; (c) the closing
of an approved sale; (d) the date of the conversion of the Chapter
11 cases to cases under Chapter 7 of the Bankruptcy Code; (e) the
date of the dismissal of the cases; and (f) Nov. 26, 2013, if a
final DIP order has not been entered as of that date.
Subject to a carve-out, the DIP Lenders will be granted junior
liens on all prepetition assets of the Debtors to the extent those
assets are subjected to valid, fully perfected and unavoidable
liens; and fully perfected and unavoidable first-priority senior
priming security interests in and liens upon all of the Debtors'
assets. The claim for repayment of the DIP Obligations, subject
only to the carve-out, has priority over all administrative
expenses.
Carve-out means (a) statutory fees payable to the U.S. Trustee;
and (b) reasonable fees and expenses incurred on or after the
Petition Date, by professionals hired by the Debtors and any
official committee.
A final hearing on the motion is scheduled for Nov. 20, 2013, at
10:00 a.m. Objections are due Nov. 18.
The DIP Agent is represented by Regina Stango Kelbon, Esq. --
Kelbon@BlankRome.com -- at Blank Rome LLP, in Wilmington,
Delaware.
About EWGS Intermediary
EWGS Intermediary and Edwin Watts Golf Shops, which operate as an
integrated, multi-channel retailer, offering brand name golf
equipment, apparel and accessories, filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 13-12876). They are
represented by Domenic E. Pacitti, Esq., and Michael W. Yurkewicz,
Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington,
Delaware. The Debtors tapped Bayshore Partners LLC as their
investment banker, FTI Consulting, LLC, as their financial
advisors, and Epiq Bankruptcy Solutions, LLC, as claims and
noticing agent. The Company indicates total assets greater than
$100 million on its Chapter 11 petition.
EWGS INTERMEDIARY: Has Interim Authority to Use Cash Collateral
---------------------------------------------------------------
Judge Mary Walrath of the U.S. Bankruptcy Court for the District
of Delaware gave interim authority for Edwin Watts Golf Shops,
LLC, and EWGS Intermediary, LLC, to use cash collateral securing
their prepetition indebtedness.
In consideration of the Debtors' use of the cash collateral and as
adequate protection, PNC Bank, National Association, as
prepetition agent and lender, is granted valid and perfected
replacement and additional security interests in and liens on the
DIP Collateral and an allowed administrative claim, subject to the
carve-out and junior in priority to the DIP Liens and Permitted
Liens. EW Golf Holdings Corp., as subordinated lender, is also
granted valid and perfected replacement and additional security
interests in and liens on the DIP Collateral and an allowed
administrative claim, subject to the carve-out, the DIP Liens, the
First Lien Adequate Protection Liens and the Permitted Liens.
Carve-out means (a) statutory fees payable to the U.S. Trustee;
and (b) reasonable fees and expenses incurred on or after the
Petition Date, by professionals hired by the Debtors and any
official committee.
A final hearing on the motion is scheduled for Nov. 20, 2013, at
10:00 a.m. Objections are due Nov. 18.
About EWGS Intermediary
EWGS Intermediary and Edwin Watts Golf Shops, which operate as an
integrated, multi-channel retailer, offering brand name golf
equipment, apparel and accessories, filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 13-12876). They are
represented by Domenic E. Pacitti, Esq., and Michael W. Yurkewicz,
Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington,
Delaware. The Debtors tapped Bayshore Partners LLC as their
investment banker, FTI Consulting, LLC, as their financial
advisors, and Epiq Bankruptcy Solutions, LLC, as claims and
noticing agent. The Company indicates total assets greater than
$100 million on its Chapter 11 petition.
EXIDE TECHNOLOGIES: Deloitte Tax Approved as Tax Advisor
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Exide Technologies to employ Deloitte Tax LLP as tax advisor.
To the best of the Debtor's knowledge, Deloitte Tax is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
As reported in the Troubled Company Reporter on Oct. 25, 2013, the
Debtors also sought permission to employ PricewaterhouseCoopers
LLP as tax advisor, nunc pro tunc to Aug. 30, 2013.
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 PHILADELPHIA: Files Motion to Extend Exclusivity to Feb. 19
-----------------------------------------------------------------
First Philadelphia Holdings, LLC, filed on Oct. 29, 2013, a third
motion for extension of the Debtor's exclusive periods to file and
obtain acceptances of a plan until Feb. 19, 2014, and April 21,
2014, respectively.
The Debtor believes that if the exclusivity period is not extended
as requested, the Debtor's efforts to reorganize will be
compromised.
On Oct. 23, 2013, the Debtor filed its Amended Disclosure
Statement and Amended Plan with the Court. In order to effectuate
the Amended Plan through the sale of the Debtor's real estate
known as 6501 New State Street a/k/a Tacony Street, in
Philadelphia, Pa., on Oct. 23, the Debtor also filed a motion for
the entry of a Court Order authorizing the sale of the Property to
the Successful Bidder at the auction free and clear of all liens,
claims, encumbrances and interest, and granting related relief.
The hearing to approve the bidding procedures motion is scheduled
for Nov. 27, 2013.
About First Philadelphia
First Philadelphia Holdings, LLC, is a Pennsylvania limited
liability company formed on or about March 14, 2005. The Debtor
is headquartered in New Jersey and is in the business of owning
real estate located at 6501 New State Road a/k/a Tacony Street,
Philadelphia, Pennsylvania.
The Company filed a Chapter 11 petition (Bankr. D.N.J. Case No.
12-39767) on Dec. 21, 2012. The Debtor scheduled $15,000,000 in
assets and $10,346,981 in liabilities as of the Chapter 11 filing.
Judge Gloria M. Burns presides over the case.
Maureen P. Steady, Esq., who has an office in Marlton, New Jersey,
serves as the Debtor's bankruptcy counsel. In its schedules, the
Debtor disclosed $15,000,000 in total assets and $10,346,981 in
total liabilities.
No official committee of unsecured creditors, trustee or examiner
has been appointed in the Debtor's Chapter 11 case.
FIRST PHILADELPHIA: Amends Disclosures for Liquidating Plan
-----------------------------------------------------------
First Philadelphia Holdings, LLC, filed with the U.S. Bankruptcy
Court for the District of New Jersey on Oct. 23, 2013, an amended
disclosure statement describing the Debtor's Liquidating Chapter
11 Plan.
The Debtor seeks to accomplish payments under the Plan by (i)
marketing its real estate for sale; (ii) making payment to its
secured creditors from the proceeds of such sale; and (iii) making
payment to unsecured creditors funded by the Debtor's managing
member, George M. Diemer. If a sale cannot be achieved in the
time frame set forth in the Plan, the Debtor will transfer its
interest in the Property to one or both of the secured creditors.
Under the Plan, holders of allowed General Unsecured Claims will
receive an 8.47% dividend on account of the allowed claims.
The Interest Holder: George M. Diemer (Class 3) will not receive
and distribution under the Plan.
A copy of the Amended Disclosure Statement for the Debtor's
Liquidating Plan is available at:
http://bankrupt.com/misc/firstphiladelphia.doc67.pdf
About First Philadelphia
First Philadelphia Holdings, LLC, is a Pennsylvania limited
liability company formed on or about March 14, 2005. The Debtor
is headquartered in New Jersey and is in the business of owning
real estate located at 6501 New State Road a/k/a Tacony Street,
Philadelphia, Pennsylvania.
The Company filed a Chapter 11 petition (Bankr. D.N.J. Case No.
12-39767) on Dec. 21, 2012. The Debtor scheduled $15,000,000 in
assets and $10,346,981 in liabilities as of the Chapter 11 filing.
Judge Gloria M. Burns presides over the case.
Maureen P. Steady, Esq., who has an office in Marlton, New Jersey,
serves as the Debtor's bankruptcy counsel. In its schedules, the
Debtor disclosed $15,000,000 in total assets and $10,346,981 in
total liabilities.
No official committee of unsecured creditors, trustee or examiner
has been appointed in the Debtor's Chapter 11 case.
FRIENDFINDER NETWORKS: Court OKs Hiring of EisnerAmper as Auditor
-----------------------------------------------------------------
FriendFinder Networks (formerly Penthouse Media Group) and its
debtor-affiliates sought and obtained permission from the Hon.
Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware to employ EisnerAmper LLP as auditor for the
Debtors, nunc pro tunc to Sept. 17, 2013.
The Debtors require EisnerAmper LLP to:
(a) review interim financial information to be included in
FriendFinder Networks and its subsidiaries' quarterly
filings on Form 10-Q for each of the quarters in the year
ending Dec. 31, 2013;
(b) review and comment on any registration statements,
including but not limited to Forms S-1, S-3, S-8 and
provide the consent to include EisnerAmper LLP's report,
whether by inclusion of by reference, in the Forms filed
with the SEC. In the event that a SEC comment letter is
issued, EisnerAmper LLP will review and comment on the
Debtors' response; and
(c) audit of the financial statements and supplemental
schedules of the Various, Inc. 401(k) Plan as of Dec. 31,
2012 and for the year then ended in accordance with
auditing standards generally accepted in the United States
of America, except as permitted by Regulation 2520.103-08
of the Department of Labor's Rules and Regulations for
Reporting and Disclosure under ERISA.
EisnerAmper LLP will be paid at these hourly rates:
Partners $590
Managers/Senior Managers/
Directors $350-$460
Seniors/Staff $235-$310
EisnerAmper LLP will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Within the 90 days prior to the petition date, Eisner Amper
received from the Debtors payments totaling $573,865, $385,865 of
which has been applied in satisfaction of prepetition fees and
expenses incurred by Eisner Amper on behalf of the Debtors. As of
the date of the bankruptcy filing, Eisner Amper is owed $0.
Eisner Amper received $188,000 as a retainer for future services.
Michael Breit, partner of EisnerAmper LLP, 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.
EisnerAmper LLP can be reached at:
Michael Breit
EISNERAMPER LLP
750 Third Avenue
New York, NY 10017
Tel: (212) 949-8700
Fax: (212) 891-4100
E-mail: michael.breit@eisneramper.com
About FriendFinder Networks
FriendFinder Networks (formerly Penthouse Media Group) owns and
operates a variety of social networking Web sites, including
FriendFinder.com, AdultFriendFinder.com, Amigos.com, and
AsiaFriendFinder.com. In total, its Web sites are offered in
12 languages to users in some 170 countries. The company also
publishes the venerable adult magazine PENTHOUSE, and produces
adult video content and related images. The Company is based in
Boca Raton, Florida.
FriendFinder Networks reported a net loss of $49.44 million
in 2012, a net loss of $31.14 million in 2011, and a net loss of
$43.15 million in 2010.
FriendFinder Networks and affiliates, including lead debtor PMGI
Holdings Inc., sought bankruptcy protection (Bankr. D. Del. Lead
Case No. 13-12404) on Sept. 17, 2013, estimating assets of
$465.3 million and debt totaling $662 million.
The Debtors are represented by Nancy A. Mitchell. Esq., Matthew L.
Hinker, Esq., and Paul T. Martin, Esq., at Greenberg Traurig, LLP,
in New York, as lead bankruptcy counsel; and Dennis A. Meloro,
Esq., in Wilmington, Delaware, as local Delaware counsel. Akerman
Senterfitt serves as the Debtors' special and conflicts counsel.
The Debtors' financial advisor is SSG Capital Advisors LLC. BMC
Group, Inc., is the Debtors' claims and noticing agent.
On Sept. 21, 2013, the Debtors filed a plan of reorganization
containing details on a reorganization worked out with about 80
percent of first and second-lien lenders before the Sept. 17
Chapter 11 filing. Under the Plan, holders of the $234.3 million
in 14 percent first-lien notes will receive accrued interest plus
an equal amount in new 14 percent first-lien notes to mature in
five years. Excess cash will be used in part to pay down
principal on the notes before maturity. Holders of $330.8 million
in two issues of second-lien notes are to receive all the new
equity.
FURNITURE BRANDS: Samson Holding Beneficially Owns 9.5% of Shares
-----------------------------------------------------------------
Samson Holding Ltd., a Cayman Islands company, Advent Group
Limited, a British Virgin Islands company, Magnificent Capital
Holding Limited, a British Virgin Islands company, Mr. Shan Huei
Kuo, and Mr. Kuo's wife, Ms. Yi-Mei Liu, jointly filed with the
Securities and Exchange Commission on Nov. 4, 2013, Amendment No.
6 to the Schedule 13D relating to the common stock, without par
value, together with the associated Preferred Stock Purchase
Rights (collectively, the "Shares") of Furniture Brands
International, which the Reporting Persons first filed on Oct. 1,
2007.
The Reporting Persons amend Items 4 and 7 of the Schedule 13D as
follows:
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended by adding the
following:
On Nov. 1, 2013, Samson Holding informed a financial advisor to
the Issuer that Samson intends to submit a Qualified Bid to
complete an acquisition of the Issuer and its subsidiaries, with
terms that are the same or better than those of the "stalking
horse" bidder identified in the Issuer's Current Report on Form
8-K (filed with SEC on Oct. 9, 2013) and that will satisfy all the
other requirements to become a Qualified Bidder pursuant to the
bidding procedures order of the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court") issued on
Oct. 3, 2013, with respect to the Issuer's petition filed with
such Bankruptcy Court seeking relief under Chapter 11 of Title 11
of the United States Code. Samson intends to submit such bid on
or before Dec. 5, 2013 as required by such bidding procedures.
A "Qualified Bid" is a bid for the assets of the Issuer and its
subsidiaries that is determined by the Issuer to meet the various
requirements described in such bidding procedures.
Except as set forth in this Statement, none of the Reporting
Persons has any present plans or proposals that relate to or would
result in any of the transactions described in subparagraphs (a)
through (j) of Item 4 of Schedule 13D.
Item 7. Material to be Filed as Exhibits.
Exhibit A: Schedule 13D Joint Filing Agreement, dated Nov. 4,
2013, by and among the Reporting Persons.
As of Nov. 1, 2013, Samson Holding Ltd. directly beneficially
owns, and has shared power to vote, dispose or direct the
disposition of, 764,269 Shares, representing approximately 9.5% of
the outstanding Shares of the Issuer based on 8,041,438
outstanding Shares, which amount is set forth in the Issuer's
Quarterly Report on Form 10-Q filed with the SEC on Aug. 8, 2013.
A copy of the Schedule 13D Amendment No. 6 is available at:
http://is.gd/8RDXVi
About Furniture Brands
Furniture Brands International (NYSE:FBN) --
http://www.furniturebrands.com-- engages in the designing,
manufacturing, sourcing and retailing home furnishings. Furniture
Brands markets products through a wide range of channels,
including company owned Thomasville retail stores and through
interior designers, multi-line/ independent retailers and mass
merchant stores. Furniture Brands serves its customers through
some of the best known and most respected brands in the furniture
industry, including Thomasville, Broyhill, Lane, Drexel Heritage,
Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith and
LaBarge.
On Sept. 9, 2013, Furniture Brands International, Inc. and 18
affiliated companies sought Chapter 11 protection (Bankr. D. Del.
Lead Case No. 13-12329).
Attorneys at Paul Hastings LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. Alvarez and Marsal
North America, LLC, is the restructuring advisors. Miller
Buckfire & Co., LLC is the investment Banker. Epiq Systems Inc.
dba Epiq Bankruptcy Solutions is the claims and notice agent.
Furniture Brands' balance sheet at June 29, 2013, showed $546.73
million in total assets against $550.13 million in total
liabilities.
The company has an official creditor's committee with seven
members. The creditors' panel includes the Pension Benefit
Guaranty Corp., Milberg Factors Inc. and five suppliers.
GASTAR EXPLORATION: S&P Retains 'B-' Rating on Notes After Add-On
-----------------------------------------------------------------
Standard & Poor's Ratings Services said its 'B-' senior secured
note rating on Houston-based Gastar Exploration USA Inc.'s 8.625%
senior secured notes due 2018 remains unchanged after the company
announced it will seek to add on $125 million to the existing
$200 million notes outstanding. This brings the total issue
amount to $325 million. The recovery rating on the notes is '3',
indicating S&P's expectation of meaningful (50% to 70%) recovery
in the event of a payment default.
The 'B-' corporate credit rating and stable outlook on Gastar are
unaffected. The exploration and production company intends to use
proceeds to fund the West Edmond Hunton Lime Unit acquisition and
for general corporate purposes.
The ratings on Gastar reflect its very small reserve and
production base, currently high concentration of production in the
Marcellus shale, aggressive capital spending plan that could
significantly weaken its liquidity, and its natural gas-weighted
reserve base. The ratings also reflect Standard & Poor's
assessment of the volatility and capital-intensive nature of the
oil and gas industry. In S&P's view, these weaknesses are only
partially buffered by a decent reserve life and a good reserve
replacement history.
GATEHOUSE MEDIA: Judge Confirms Chapter 11 Restructuring Plan
-------------------------------------------------------------
Peg Brickley, writing for Daily Bankruptcy Review, reported that
GateHouse Media Inc. on Nov. 6 won court approval of a Chapter 11
exit plan that chops into its nearly $1.2 billion debt load and
sets it up to launch as part of a new community-news and digital-
marketing effort.
Law360 reported that Judge Mary F. Walrath confirmed GateHouse's
reorganization and debt restructuring plan, which was confirmed by
every secured creditor and supported by an affiliate of Fortress
Investment Group LLC, which nudged GateHouse into a quick
bankruptcy in September.
Prior to the Petition Date and pursuant to a plan support
agreement, GateHouse solicited votes on the Plan over from holders
of claims under its 2007 secured credit facility and certain
related interest rate swaps. The Plan was accepted by the only
impaired class of creditors entitled to vote on it. Specifically,
79 out of the 80 holders of secured debt entitled to vote holding
an aggregate amount of $1,199,317,153 (representing 99.99% of the
total secured debt) voted to accept the Plan. No creditors voted
to reject the Plan.
Pension, trade and all other unsecured creditors of GateHouse
would not be impaired under the Plan, and their votes were not
solicited. GateHouse's common stock would be canceled under the
Plan, and holders of secured debt would have the option of
receiving a cash distribution equal to 40% of their claims, or
stock in New Media Investment Group Inc., a new holding company
that will own GateHouse and Local Media Group.
The Plan hinges on the combination of Gatehouse with assets of Dow
Jones Local Media Group, which Newcastle Investment Corp. bought
for $87 million.
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.
GELT PROPERTIES: Court Schedules Dec. 17 Cash Collateral Hearing
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
has continued until Dec. 17, 2013, at 11:00 a.m., the hearing to
consider Gelt Properties, LLC, et al.'s motion to use cash
collateral (omnibus) of the Lenders with the exception of Vist
Bank, National Penn Bank, Bucks County Bank and Beneficial Mutual
Savings Bank.
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.
GENIUS BRANDS: Inks New Employment Agreements with CEO and CFO
--------------------------------------------------------------
Genius Brands International, Inc., entered into new employment
agreements, effective as of Oct. 1, 2013, with each of Klaus
Moeller, its chief executive officer and chairman and Jeanene
Morgan, its chief financial officer.
Pursuant to Mr. Moeller's employment agreement, Mr. Moeller will
serve as the Company's chief executive officer for a period of two
years in consideration for (i) an annual salary of $20,800 (except
that if the Company generates cash flow from operations of at
least $300,000 on an annual basis, Mr. Moeller's annual salary
shall be $100,000 plus an additional payment of $75,000 per annum,
payable in cash or shares of the Company's common stock, in
quarterly installments of $18,750 each, and (ii) the acceleration
of vesting of all previously issued option grants to Mr. Moeller
under the Company's 2008 Stock Option Plan as well as
participation in other Company benefit plans and the ability to
receive a year-end performance bonus, at the discretion of the
Company's Board of Directors. In the event Mr. Moeller's
employment is terminated by the Company without "Cause", Mr.
Moeller will be entitled to severance payments for 12 months,
based on the annual salary rate of $100,000.
Pursuant to Ms. Morgan's employment agreement, Ms. Morgan will
serve as the Company's chief financial officer for a period of two
years in consideration for (i) an annual salary of $175,000 and
(ii) the acceleration of vesting of all previously issued option
grants to Ms. Morgan under the Company's 2008 Stock Option Plan as
well as participation in other Company benefit plans and the
ability to receive a year-end performance bonus, at the discretion
of the Company's Board of Directors. In the event Ms. Morgan's
employment is terminated by the Company without "Cause", Ms.
Morgan will be entitled to severance payments for 12 months.
About Genius Brands
San Diego, Calif.-based Genius Brands International, Inc., creates
and distributes music-based products which it believes are
entertaining, educational and beneficial to the well-being of
infants and young children under its brands, including Baby Genius
and Little Genius.
The Company's balance sheet at June 30, 2013, showed $1.88 million
in total assets, $3.26 million in total liabilities, and a
stockholders' deficit of $1.38 million.
GOLDKING HOLDINGS: Meeting to Form Creditors' Panel on Nov. 14
--------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on Nov. 14, 2013 at 1:00 p.m. in
the bankruptcy cases of Goldking Holdings, LLC, 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.
Goldking Holdings LLC, an oil-and-gas exploration company, sought
bankruptcy protection (Bankr. D. Del. Case No. 13-12820) in
Wilmington on October 30, 2013, from creditors with plans to sell
virtually all its assets. The case is before Judge Brendan
Linehan Shannon.
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, represents the Debtors. Lantana Oil &
Gas Partners serves as the Debtors' financial advisors. The
Debtors' notice, claims, solicitation and balloting agent is Epiq
Bankruptcy Solutions, LLC.
HUSKY INTERNATIONAL: S&P Affirms 'B' CCR over Schottli Grp Deal
---------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B' long-
term corporate credit rating on Bolton, Ont.-based plastic
injection molding equipment manufacturer Husky International Ltd.
The outlook is stable.
S&P also affirmed its 'B' issue-level rating on Husky's
US$1.08 billion first-lien term loan and US$110 million revolver.
The first-lien term loan includes a US$160 million add-on
incremental term loan B due 2018, the proceeds of which Husky
plans to use to help fund its acquisition of Schottli Group. The
recovery rating on this debt remains '3', indicating S&P's
expectation for meaningful (50%-70%) recovery for lenders in the
event of default.
In addition, S&P affirmed its 'CCC+' issue-level rating on Husky's
US$570 million senior unsecured notes. The '6' recovery rating on
this debt is unchanged, indicating S&P's expectation for
negligible (0%-10%) recovery for lenders in a default situation.
Along with proceeds from the new US$160 million add-on, Husky is
also using available cash to fund its acquisition of Schottli,
which is expected to close in December 2013.
Pro forma for the transaction, Standard & Poor's adjusted debt to
annualized EBITDA will increase to approximately the high 5x area.
However, S&P expects that leverage will decline to the low 5x area
by the end of fiscal 2015, largely through EBITDA growth.
"The ratings on Husky mainly reflect what Standard & Poor's views
as the company's highly leveraged financial risk profile,
highlighted by the company's debt-to-EBITDA ratio in excess of 5x,
private equity ownership, and the cyclical nature of the plastic
injection molding machinery business," said Standard & Poor's
credit analyst Jamie Koutsoukis. "Partially offsetting these
concerns are what we deem Husky's fair business risk profile,
given the company's leading 70% market share in the sale of
plastic injection molding machines and systems for its target
markets, and its diverse customer and geographic base," Ms.
Koutsoukis added.
Husky is a privately owned global provider of manufacturing
systems and related tooling parts and services for the plastics
injection molding equipment market including the world's largest
installed base of polyethylene terephthalate (PET) injection
molding machines. Key manufacturing facilities are in Canada, the
U.S., Luxembourg, Austria, and China. With its announced
acquisition of Schottli, Husky will now be a global leader in a
number of select medical applications, such as syringes,
infusion/transfusion products, diagnostic systems, and feminine
care items; as well, Schottli's closures business complements
Husky's existing closures business by providing additional
technology and capacity in both established and growing markets.
The stable outlook reflects S&P's expectation that the company
will continue to generate positive cash flows, allowing it to
prepay some debt. However, given the current debt levels, S&P
expects leverage to remain above 5x for the next 18-24 months.
S&P could raise the ratings if a combination of stronger-than-
expected EBITDA generation and debt paydown leads to leverage
below 5x for a sustained period. On the other hand, S&P could
lower the ratings if there is an unexpected reversal of business
prospects or major acquisitions, or if dividend activity pushes up
leverage from its already-high levels to above 6x on a sustained
basis and liquidity becomes pressured.
INSTITUTO MEDICO: Section 341(a) Meeting Scheduled for Dec. 9
-------------------------------------------------------------
A meeting of creditors in the bankruptcy case of Instituto Medico
del Norte Inc. will be held on Dec. 9, 2013, at 09:00 a.m. at 341
meeting room, Ochoa Building, 500 Tanca Street, First Floor, San
Juan. Creditors have until March 9, 2014, to submit their proofs
of claim. The deadline for governmental units to file their
proofs of claim will be on April 28, 2014.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
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 (Bankr. D.P.R. Case No.
13-08961). 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.
JOURNAL REGISTER: Exits Chapter 11 as Pulp Finish
-------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Journal Register Co. changed its name to Pulp Finish
I Co. after selling its newspapers and emerged from Chapter 11
last week under a reorganization plan approved on Oct. 15 when the
bankruptcy judge in Manhattan signed a confirmation order.
According to the report, the disclosure statement told unsecured
creditors they won't recover more than 5 percent and might get
nothing.
Journal Register filed for Chapter 11 reorganization in September
2012 and sold its newspaper business to lender and owner Alden
Global Capital Ltd., mostly in exchange for $114.2 million in
secured debt and $6 million in cash. After debts with higher
priority were paid, what's left from the cash and a $630,000 tax
refund represented most of the unsecured creditors' recovery, the
New York-based company has said.
Journal Register had been in bankruptcy before. A Chapter 11 case
three years previously gave ownership to secured lenders in
exchange for debt.
Journal Register listed assets of $235 million and liabilities
totaling $268.6 million. At the outset of the new Chapter 11 case,
debt included about $13.2 million on a revolving credit. Alden had
two term loans totaling $152.3 million, acquired from lenders in
the prior bankruptcy.
About Journal Register
Journal Register Company -- http://www.JournalRegister.com/-- was
the publisher of the New Haven Register and other papers in 10
states, including Philadelphia, Detroit and Cleveland, and in
upstate New York. JRC was managed by Digital First Media and is
affiliated with MediaNews Group, Inc., the nation's second largest
newspaper company as measured by circulation.
Journal Register, along with its affiliates, first filed for
Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.
09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher
LLP, served as counsel to the Debtors. Attorneys at Otterbourg,
Steindler, Houston & Rosen, P.C., represented the official
committee of unsecured creditors. Journal Register emerged from
Chapter 11 protection under the terms of a pre-negotiated plan.
Journal Register exited the 2009 restructuring with $225 million
in debt and with a legacy cost structure, which includes leases,
defined benefit pensions and other liabilities that have become
unsustainable and threatened the Company's efforts for a
successful digital transformation. Journal Register managed to
reduce the debt by 28% with the Company servicing in excess of
$160 million of debt.
Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case
No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH
Acquisition Co., an affiliate of funds managed by Alden Global
Capital LLC. The deal was subject to higher and better offers.
Alden Global is the holder of two terms loans totaling $152.3
million. Alden Global acquired the stock and the term loans from
lenders in Journal Register's prior bankruptcy.
Journal Register disclosed total assets of $235 million and
liabilities totaling $268.6 million as of July 29, 2012. This
includes $13.2 million owing on a revolving credit to Wells Fargo
Bank NA.
Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case.
Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D.
Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R.
Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner,
Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012
Debtors' counsel. SSG Capital Advisors, LLC, serves as financial
advisors. American Legal Claims Services LLC acts as claims
agent. The petition was signed by William Higginson, executive
vice president of operations.
Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells
Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the
Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin &
Martin LLP, serves as counsel to Wells Fargo, in its capacity as
Tranche A Agent and the Tranche B Agent.
Gerald C. Bender, Esq., at Lowenstein Sandler LLP, represented the
Official Committee of Unsecured Creditors. FTI Consulting, Inc.,
served as financial advisor.
The Journal Register bankruptcy has been renamed Pulp Finish I
Co., after the estate sold the newspaper business to lender and
owner Alden Global Capital Ltd., mostly in exchange for $114.15
million in secured debt and $6 million cash. After debts with
higher priority are paid, what's left from the cash and a $630,000
tax refund represents most of unsecured creditors' recovery.
There were no bids to compete with Alden's offer. Alden paid off
financing for the bankruptcy and assumed up to $22.8 million in
liabilities, thus taking care of most trade suppliers who
otherwise would have ended up as unsecured creditors. In
addition, the lenders waived their deficiency claims, so
recoveries by unsecured creditors won't be diluted.
KEMET CORP: Incurs $13.1 Million Net Loss in Second Quarter
-----------------------------------------------------------
KEMET Corporation reported a net loss of $13.09 million on
$212.74 million of net sales for the quarter ended Sept. 30, 2013,
as compared with a net loss of $24.92 million on $215.99 million
of net sales for the same period during the prior year.
For the six months ended Sept. 30, 2013, the Company reported a
net loss of $48.23 million on $415.46 million of net sales as
compared with a net loss of $42.67 million on $439.62 million of
net sales for the same period a year ago.
The Company's balance sheet at Sept. 30, 2013, showed $880.21
million in total assets, $642.30 million in total liabilities and
$237.90 million in total stockholders' equity.
"We communicated last quarter that we expected a significant
positive change in our margins and net results this quarter as we
straightened out our supply chain issues and it is clear through
our financial results that we are putting those issues behind us,"
stated Per Loof, KEMET's chief executive officer. "Revenue
exceeded our expectations in a challenging economic environment
and we continue to see a slow growth scenario over the next couple
of quarters for the top line. Regardless of the top line we
expect that our margins will continue to improve quarter over
quarter through the remaining two quarters of our fiscal year,"
continued Loof.
A copy of the press release is available for free at:
http://is.gd/MgMu6L
About KEMET
KEMET, based in Greenville, South Carolina, is a manufacturer and
supplier of passive electronic components, specializing in
tantalum, multilayer ceramic, film, solid aluminum, electrolytic,
and paper capacitors. KEMET's common stock is listed on the NYSE
under the symbol "KEM."
* * *
As reported by the TCR on March 26, 2013, Moody's Investors
Service downgraded KEMET Corp.'s Corporate Family Rating to Caa1
from B2 and the Probability of Default Rating to Caa1-PD from B2-
PD based on Moody's expectation that KEMET's liquidity will be
pressured by maturing liabilities and negative free cash flow due
to the interest burden and continued operating losses at the Film
and Electrolytic segment.
As reported by the TCR on Aug. 9, 2013, Standard & Poor's Ratings
Services lowered its corporate credit rating on Simpsonville,
S.C.-based KEMET Corp. to 'B-' from 'B+'.
"The downgrade is based on continued top-line and margin pressures
and lagging results from the restructuring of the Film &
Electrolytic [F&E] business, which combined with cyclical weak
end-market demand, has resulted in sustained, elevated leverage
well in excess of 5x, persistent negative FOCF, and diminishing
liquidity," said Standard & Poor's credit analyst Alfred
Bonfantini.
LEVEL 3: Unit to Sell $640 Million of Senior Notes
--------------------------------------------------
Level 3 Communications, Inc.'s wholly owned subsidiary, Level 3
Financing, Inc., has agreed to sell $640 million aggregate
principal amount of its 6.125 Percent Senior Notes due 2021 in a
private offering to "qualified institutional buyers," as defined
in Rule 144A under the Securities Act of 1933, as amended, and
non-U.S. persons outside the United States under Regulation S
under the Securities Act of 1933.
The 6.125 Percent Senior Notes were priced to investors at 100
percent of their principal amount and will mature on Jan. 15,
2021. Level 3 Financing's obligations under the 6.125 Percent
Senior Notes will be fully and unconditionally guaranteed on an
unsecured basis by Level 3 Communications, Inc.
The net proceeds from the offering of the notes, together with
cash on hand, will be used to redeem, satisfy and discharge,
defease or otherwise repay all of Level 3 Financing's outstanding
10 Percent Senior Notes due 2018.
The offering is expected to be completed on Nov. 14, 2013, subject
to the satisfaction or waiver of customary closing conditions.
The senior notes will not be registered under the Securities Act
of 1933 or any state securities laws, and unless so registered,
may not be offered or sold except pursuant to an applicable
exemption from the registration requirements of the Securities Act
of 1933 and applicable state securities laws.
About Level 3 Communications
Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc., is a publicly traded international communications company
with one of the world's largest communications and Internet
backbones.
The Company's balance sheet at Sept. 30, 2013, showed $12.85
billion in total assets, $11.70 billion in total liabilities and
$1.14 billion in total stockholders' equity.
* * *
In October 2012, Fitch Ratings affirmed the 'B' Issuer Default
Ratings (IDRs) assigned to Level 3. LVLT's ratings recognize, in
part, the de-leveraging of the company's balance sheet resulting
from its acquisition of Global Crossing Limited (GLBC).
As reported by the TCR on June 5, 2013, Standard & Poor's Ratings
Services raised its corporate credit rating on Broomfield, Colo.-
based global telecommunications provider Level 3 Communications
Inc. to 'B' from 'B-'. "The upgrade reflects improved debt
leverage, initially from the acquisition of the lower-leveraged
Global Crossing in October 2011, and subsequently from realization
of the bulk of what the company expects to eventually be $300
million of annual operating synergies," said Standard & Poor's
credit analyst Richard Siderman.
LUXURY OUTER BANKS: Case Summary & 2 Unsecured Creditors
--------------------------------------------------------
Debtor: Luxury Outer Banks Homes, LLC
P.O. Box 329
Kill Devil Hills, NC 27948
Case No.: 13-06945
Chapter 11 Petition Date: November 6, 2013
Court: United States Bankruptcy Court
Eastern District of North Carolina
Judge: Hon. Randy D. Doub
Debtor's Counsel: James B Angell, Esq.
HOWARD, STALLINGS, FROM & HUTSON, PA
PO Box 12347
Raleigh, NC 27605-2347
Tel: 919 821-7700
Fax: 919 821-7703
Email: jangell@hsfh.com
Total Assets: $1.70 million
Total Liabilities: $3.78 million
The petition was signed by Kimberly H. Lane, manager.
A list of the Debtor's two largest unsecured creditors is
available for free at http://bankrupt.com/misc/nced13-6945.pdf
MED-DEPOT INC: Bank Lender Still Opposes Chapter 11 Plan
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Med-Depot Inc. has yet to persuade revolving credit
lender Texas Capital Bank NA to support the proposed bankruptcy
reorganization plan.
According to the report, consequently, the company, a provider of
respiratory therapy and home medical devices for hospices and
their patients, is seeking a four-month extension of exclusive
plan-filing rights to March 25.
Med-Depot filed for bankruptcy protection in July, proposed a
Chapter 11 plan and received approval of the explanatory
disclosure statement in October.
The confirmation hearing for approval of the plan has been set
back twice and is now on the calendar for Nov. 18.
In a Nov. 4 court filing, Med-Depot said the bank and several
other creditors oppose the plan. The company said it hopes at
least to narrow disputed issues before a contested confirmation
hearing.
About Med-Depot Inc.
Med-Depot, Inc., filed a Chapter 11 petition (Bankr. E.D. Tex.
Case No. 13-41815) on July 26, 2013, in Sherman, Texas. Attorneys
at Powell Goldstein, LLP and Bryan Cave, LLP, serve as counsel to
the Debtor. The Debtor estimated assets of $1,000,001 to
$10,000,000 and debt of $10,000,001 to $50,000,000. Parent
Med-Depot Holdings, Inc., also sought bankruptcy protection.
Based in Plano, Texas, 64 miles (103 kilometers) north of
Dallas, Med-Depot entered bankruptcy after working out a plan to
restructure the first-lien debt and give stock in return for the
second-lien loan.
Med-Depot entered bankruptcy after working out a plan to
restructure the first-lien debt while giving stock in return for
the second-lien loan. The plan offers a pot of $200,000 in cash
to unsecured creditors.
The company has $18 million in consolidated debt.
The company projected a $1.8 million net loss in the fiscal year
on revenue of $14.5 million. By fiscal 2015, Med-Depot was
forecasting revenue of $20.8 million and $1.6 million in net
income.
METRO AFFILIATES: Seeks Authority to Obtain $37-Mil. DIP Loan
-------------------------------------------------------------
Metro Affiliates, Inc., et al., are seeking authority from the
U.S. Bankruptcy Court for the Southern District of New York to
obtain $53.5 million in postpetition financing, which includes a
revolver with $37 million in availability, subject to a borrowing
base, from Wells Fargo Bank, N.A.
DBR reports that the bankruptcy court has authorized the New York
City school bus operator to begin tapping on the bankruptcy loan.
The DIP Loan will accrue interest at the prime rate + 0.5% for
Revolving Loans; Prime + 2.5% for Vehicle Term Loans; and 12% for
Supplemental Loans and the Non-Default Rate + 2% on and during the
occurrence of an event of default.
The maturity date of the DIP Credit Facility will be the earliest
of:
(i) Dec. 31, 2013; provided, however, that if by Dec. 6, 2013
the Borrowers have:
(a) reached an agreement on the terms of a new
collective bargaining agreement between the Debtors
and 1181-1061 Amalgamated Transit Union AFL-CIO and
(b) obtained a written commitment from a financial
institution providing for additional junior DIP
financing to the Borrowers in an amount not less
than $15,000,000, of which (1) not less than
$10,000,000 is funded pursuant to an order of the
Bankruptcy Court by Dec. 11, 2013 and (2) $5,000,000
is funded by Jan. 8, 2014, then the stated maturity
will mean Feb. 28, 2014; provided further, that in
the event that the Second Junior DIP Tranche is not
funded on or before Jan. 8, 2014, then the Stated
Maturity Date shall mean Jan. 8, 2014;
(ii) the confirmation of a plan of reorganization for any
Borrower in the Chapter 11 Cases;
(iii) the consummation of the sale or sales of all or
substantially all of the Debtors' assets an
properties or of all equity interests in Debtors;
(iv) the last termination date set forth in the Interim
Order, unless the Permanent Financing Order has been
entered prior to that date, and in that event, then
the last termination date set forth in the Permanent
Financing Order; or
(v) the occurrence of an Event of Default.
The Lenders will receive perfected liens and security interests on
substantially all of the Debtors' existing and after-acquired
property and assets and superpriority administrative expense
claims against the Debtors, subject to a carve-out and prepetition
liens.
Carve-out means the (i) statutory fees payable to the U.S.
Trustee; (ii) fees payable to the Clerk of the Court; (iii) the
allowed reasonable fees and expenses of any Chapter 7 trustee
appointed for any Debtor's Chapter 7 case, in the cumulative
aggregate sum for all of the Debtors' Chapter 7 cases not to
exceed $25,000; (iv) the unpaid and outstanding reasonable fees
and expenses actually incurred on or after the Petition Date by
professionals retained by the Debtors and any committee, in a
cumulative, aggregate sum not to exceed $1,500,000; and (v) the
unpaid and outstanding reasonable fees and expenses actually
incurred by any consumer privacy ombudsman appointed pursuant to
Section 332(a) of the Bankruptcy Code in a cumulative, aggregate
sum not to exceed $10,000.
Staten Island, New York-based Metro Affiliates, Inc., and its
subsidiaries sought protection under Chapter 11 of the Bankruptcy
Code on Nov. 4, 2013 (Bankr. S.D.N.Y. Case No. 13-13591).
Lisa G. Beckerman, Esq., and Rachel Ehrlich Albanese, Esq., at
Akin Gump Strauss Hauer & Feld LLP, in New York; and Scott L.
Alberino, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
Washington, D.C., represent the Debtors. Rothschild Inc. serves
as the Debtors' investment banker, while Kurzman Carson
Consultants LLC serves as their claims and noticing agent.
METRO AFFILIATES: Needs to Use Cash Collateral
----------------------------------------------
Metro Affiliates, Inc., et al., seek authority from the U.S.
Bankruptcy Court for the Southern District of New York to use cash
collateral securing their prepetition indebtedness in order to
continue to operate their business.
As adequate protection for any diminution in the value of the
prepetition collateral, the secured creditors will be granted
replacement liens on and security interests in the prepetition
collateral and an allowed superpriority administrative expense
claim, subject to a carve-out.
Carve-out means the (i) statutory fees payable to the U.S.
Trustee; (ii) fees payable to the Clerk of the Court; (iii) the
allowed reasonable fees and expenses of any Chapter 7 trustee
appointed for any Debtor's Chapter 7 case, in the cumulative
aggregate sum for all of the Debtors' Chapter 7 cases not to
exceed $25,000; (iv) the unpaid and outstanding reasonable fees
and expenses actually incurred on or after the Petition Date by
professionals retained by the Debtors and any committee, in a
cumulative, aggregate sum not to exceed $1,500,000; and (v) the
unpaid and outstanding reasonable fees and expenses actually
incurred by any consumer privacy ombudsman appointed pursuant to
Section 332(a) of the Bankruptcy Code in a cumulative, aggregate
sum not to exceed $10,000.
Staten Island, New York-based Metro Affiliates, Inc., and its
subsidiaries sought protection under Chapter 11 of the Bankruptcy
Code on Nov. 4, 2013 (Bankr. S.D.N.Y. Case No. 13-13591).
Lisa G. Beckerman, Esq., and Rachel Ehrlich Albanese, Esq., at
Akin Gump Strauss Hauer & Feld LLP, in New York; and Scott L.
Alberino, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
Washington, D.C., represent the Debtors. Rothschild Inc. serves
as the Debtors' investment banker, while Kurzman Carson
Consultants LLC serves as their claims and noticing agent.
MISSION NEW ENERGY: Posts A$10 Million Net Profit in Fiscal 2013
----------------------------------------------------------------
Mission NewEnergy Limited filed with the U.S. Securities and
Exchnage Commission its annual report on Form 20-F disclosing
net profit of A$10.05 million on A$8.41 million of total revenue
for the year ended June 30, 2013, as compared with a net loss of
A$6.19 million on A$38.20 million of total revenue during the
prior fiscal year.
The Company's balance sheet at June 30, 2013, showed A$20.10
million in total assets, A$32.60 million in total liabilities and
a A$12.50 million total deficiency.
BDO Audit (WA) Pty Ltd, in Perth, Western Australia, issued a
"going concern" qualification on the consolidated financial
statements for the year ended June 30, 2013. The independent
auditors noted that the Company incurred operating cash outflows
of $3.7 million during the year ended 30 June 2013 and, as of that
date the consolidated entity's total liability exceeded its total
assets by $12.5 million. These conditions, along with other
matters, raise substantial doubt the Company's ability to continue
as a going concern.
A copy of the Form 20-F is available for free at:
http://is.gd/oA3dzq
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.
MTS LAND: Plan Hearing Again Continued, Now Slated for Nov. 21
--------------------------------------------------------------
The hearing to consider confirmation of MTS Land LLC and MTS Golf
LLC's Third Amended Joint Plan of Reorganization has been
continued to Nov. 21, 2013, at 9:00 a.m. The hearing has already
been continued several times.
In a limited objection, the U.S. Trustee for the District of
Arizona insists that the exculpation provision set forth in the
Plan is inappropriate and should be deleted because:
(i) Such releases do not benefit a bankruptcy estate;
(ii) Section 524(e) prohibits a bankruptcy court from confirming
a plan with third-party releases; and
(iii) Contractual arrangements holding persons harmless for the
damages caused by their negligence are disfavored in the law,
especially where the services rendered are professional in nature
or are performed in a court-supervised bankruptcy proceeding.
The Debtors counter that the exculpation clause is in the best
interest of the estates as the exculpated parties contributed
substantially to the Chapter 11 cases by resolving substantial
claims against the estates, adding significant value to the
Debtors' assets, and clearing a path toward confirmation of the
Modified Plan.
Counsel to the Debtors, Gerald M. Gordon, Esq., at Gordon Silver,
added in court filings, "Although the Ninth Circuit precedent
provides that a plan of reorganization cannot discharge third-
party obligations of a nondebtor, bankruptcy courts have been
quick to distinguish such precedent in approving exculpation
clauses under similar circumstances as those present here. The
Exculpation Clause has a very specific, temporal limitation and is
narrow in scope to protect those that assisted with the Chapter 11
cases from liability arising from the actions taken in the Chapter
11 cases. Similar exculpation provisions have been routinely
approved by bankruptcy courts. Finally, the UST's assertion that
the rules of professional conduct prohibit the Court from
approving the Exculpation Clause is not persuasive. Consequently,
the Court should overrule the objection."
Further Modifications to Plan
The Debtors on Oct. 30, 2013, made further modifications to the
Third Amended Joint Plan of Reorganization. A copy of the
document is available for free at:
http://bankrupt.com/misc/MTS_Golf_3rd_Amended_Plan.pdf
The Debtors' Plan is a 100% payment plan. All creditors with
allowed claims will be paid the amount of their allowed claims in
full through the Plan. General unsecured creditors are still
impaired -- they will be paid in full in cash, plus post-Effective
Date interest on the first anniversary of the Effective Date. The
holders of equity securities are unimpaired and will retain all of
their legal interests.
About MTS Land
MTS Land, LLC, and MTS Golf, LLC, own and operate the now dormant
Mountain Shadows Golf Club. They filed separate Chapter 11
petitions (Bankr. D. Ariz. Case Nos. 12-16257 and 12-16257) in
Phoenix on July 19, 2012. Mountain Shadows Golf Club --
http://www.mountainshadowsgolfclub.com/-- is an 18 hole, par 56
course located at Paradise Valley. Nestled in the foothills of
Camelback Mountain, the 3,081-yard Executive course claims to be
one of the most scenic golf courses in Arizona. MTS Land and MTS
Golf are affiliates of Irvine, Cal.-based Crown Realty &
Development Inc. MTS Land and MTS Golf each estimated assets and
debts of $10 million to $50 million.
Judge Charles G. Case II oversees the Debtors' cases. Gerald M.
Gordon, Esq., Robert C. Warnicke, Esq., and Teresa M. Pilatowicz,
Esq., at Gordon Silver, represent the Debtor. The petition was
signed by Robert A. Flaxman, administrative agent.
Lender U.S. Bank is represented by Steven D. Jerome, Esq., and
Evans O'Brien, Esq., at Snell & Wilmer L.L.P.
The Plan filed in the Debtors' cases provides that all creditors
with allowed claims will be paid the amount of their allowed
claims in full through the Plan. Holders of equity securities of
Debtors will retain all of their legal interests.
The U.S. Trustee for Region 14 advised the Court that an official
committee of unsecured creditors has not been appointed because an
insufficient number of persons holding unsecured claims against
the Debtors have expressed interest in serving on a committee.
The U.S. Trustee reserves the right to appoint a committee if
interest develop among the creditors.
NGPL PIPECO: S&P Revises Outlook to Negative & Affirms 'B' CCR
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its
outlook on Houston-based NGPL PipeCo LLC to negative from stable.
At the same time, S&P affirmed its 'B' corporate credit and senior
secured debt ratings on NGPL. The recovery rating on the senior
secured debt is '3', indicating S&P's expectation for meaningful
(50% to 70%) in the event of a payment default.
"The negative outlook reflects our expectation that NGPL's
financial measures will remain weak through the remainder of 2013
as well as 2014 because transportation and storage rates have been
lower than expected through the second quarter of 2013," said
Standard & Poor's credit analyst Michael Ferguson.
Excess natural gas supplies in the Mid-Continent region have
effectively eliminated meaningful price differentials that would
result in more reliable and robust cash flow, and, consequently,
leverage has increased while covenant cushions have continued to
decrease.
Standard & Poor's bases its ratings on NGPL on the company's
stand-alone credit quality. The corporate credit rating reflects
NGPL's business profile, which S&P considers "satisfactory",
offset by its financial risk profile, which S&P considers "highly
leveraged" under its criteria.
The negative rating outlook reflects S&P's expectation that NGPL's
debt/EBITDA and EBITDA/interest coverage will be more than 9x and
about 1.5x, respectively, and its liquidity profile could weaken
further in 2013 and during the early part of 2014.
Although the current ratings take into account S&P's assessment of
the reduced transportation rates and low natural gas prices, it
could lower the ratings if market conditions, key credit measures,
and the liquidity profile notably deteriorate. Specifically,
prolonged EBITDA interest coverage of less than 1.25x and debt to
EBITDA sustained above 9.2x could warrant a lower rating. A
revision of the liquidity descriptor to "weak" (from "less than
adequate") would also result in a lower the rating.
S&P do not expect to raise the rating unless it sees a material
change in the company's financial risk profile, such that the
company sustains debt to EBITDA at less than 7.5x and EBITDA
interest coverage of at least 1.75x, which it could achieve by
reducing debt or improving EBITDA levels; however S&P don't
believe this is likely during the next three years.
NIRVANIX INC: Hires Epiq as Administrative Advisor
--------------------------------------------------
Nirvanix, Inc. seeks permission from the U.S. Bankruptcy Court for
the District of Delaware to employ Epiq Bankruptcy Solutions, LLC
as administrative advisor, nunc pro tunc to Oct. 1, 2013.
The Debtor seeks to retain Epiq Bankruptcy to provide, among other
things, the following bankruptcy administrative services:
(a) assist with, among other things, solicitation, balloting
and tabulation and calculation of votes, as well as
preparing any appropriate reports, as required in
furtherance of confirmation of plans of reorganization;
(b) generate an official ballot certification and testify, if
necessary, in support of the ballot tabulation results;
(c) gather data in conjunction with the preparation, and assist
with the preparation, of the Debtor's schedules of assets
and liabilities and statements of financial affairs;
(d) generate, provide, and assist with claims objections,
exhibits, claims reconciliation, and related matters;
(e) provide a confidential data room;
(f) manage any distributions pursuant to a confirmed plan of
reorganization; and
(g) provide such other claims processing, noticing,
solicitation, balloting, and administrative services
described in the Agreement, but not included in the Section
156(c) Application, as may be requested from time to time
by the Debtor.
Epiq Bankruptcy will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Epiq Bankruptcy will receive a retainer in the amount of $10,000
that may be held by Epiq Bankruptcy as security for the Company's
payment obligations under the Agreement.
Todd W. Wuertz, director of Consulting Services of Epiq
Bankruptcy, 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.
Epiq Bankruptcy can be reached at:
Todd W. Wuertz
EPIQ BANKRUPTCY SOLUTIONS, LLC
824 N. Market Street, Suite 412
Wilmington, DE 19801
Tel: (646) 282-2500
About Nirvanix, Inc.
Cloud storage company Nirvanix, Inc., based in San Diego,
California, sought protection under Chapter 11 of the Bankruptcy
Code on Oct. 1, 2013 (Case No. 13-12595, Bankr. D.Del.). The case
is assigned to Judge Brendan Linehan Shannon.
The Debtor is represented by Norman L. Pernick, Esq., Marion M.
Quirk, Esq., and Patrick J. Reilley, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, PA. Cooley LLP serves as the Debtor's
special corporate counsel. Arch & Beam Global LLC serves as the
Debtor's financial advisor. Epiq Systems Inc. is the Debtor's
claims and noticing agent.
The Debtor disclosed estimated assets of $10 million to $50
million and estimated debts of $10 million to $50 million.
The petition was signed by Debra Chrapaty, CEO.
PACIFICA PARK: Failed to Prevail in Appeal From Case Dismissal
--------------------------------------------------------------
Pacifica Park Apartments, LLC, appealed from a bankruptcy court
order granting U.S. Bank N.A.'s motion for relief from automatic
stay, denying Pacifica Park's motion for authority to use cash
collateral, and granting the bank's motion to dismiss the
bankruptcy case.
Pacifica Park Apartments filed a Chapter 11 bankruptcy petition on
December 6, 2012. As part of the filing, it listed as an asset an
interest in the Citrus Plaza Shopping Center in Exeter,
California. U.S. Bank is a secured creditor with an interest in
the Property, who made a motion for relief from the automatic stay
to allow foreclosure on the Property. Bankruptcy Judge Richard Lee
granted U.S. Bank's motion to use cash collateral on Jan. 17,
2013. He also dismissed the entire case on Jan. 31, 2013.
In a Sept. 20, 2013 Order, Senior District Judge Anthony W. Ishii
dismissed the appeal on the Bankruptcy Court's decision. The
judge said Pacifica Park failed to timely file an appeal from the
dismissal order or meet any of the requirements for an extension
of the filing period.
A copy of Judge Ishii's Sept. 20 Order is available at
http://is.gd/lAAHgrfrom Leagle.com.
PATRIOT COAL: Files Amendment No. 3 to DIP Credit Agreement
-----------------------------------------------------------
On Oct. 29, 2013, Patriot Coal Corporation entered into Amendment
No. 3 to the Superpriority Secured Debtor-in-Possession Credit
Agreement dated July 9, 2012, and as amended Aug. 7, 2012, and
Aug. 7, 2013, among Patriot, certain subsidiaries of Patriot
designated therein as guarantors, Citibank, N.A., as
Administrative Agent, Citicorp North America, Inc., Barclays Bank
PLC, New York Branch and Bank of America, N.A., as L/C Issuers,
and certain other lenders party thereto. The Credit Agreement
Amendment amends the Credit Agreement to remove a covenant that
required Patriot to obtain committed financing related to a plan
of reorganization no later than Oct. 31, 2013. The Credit
Agreement Amendment became effective in accordance with its terms
on Oct. 30, 2013.
A copy of the Credit Agreement Amendment is available at:
http://is.gd/klAlRS
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 explanatory disclosure
statement on Oct. 9, 2013, a Second Amended Joint Chapter 11 Plan
of Reorganization and explanatory disclosure statement on Oct. 26,
2013, and a Third Amended Joint Chapter 11 Plan of Reorganization
and explanatory disclosure statement on Nov. 4, 2013.
PICCADILLY RESTAURANTS: Confirmation Hearing to Be Held Jan. 13-14
------------------------------------------------------------------
At a hearing held on Oct. 29, 2013, the U.S. Bankruptcy Court for
the Western District of Louisiana approved the disclosure
statement filed by Atalaya and the Official Committee of Unsecured
Creditors explaining the Plan Proponents' Joint Plan for
Piccadilly Restaurants, LLC, et al. The Confirmation hearing will
be held on Jan. 13, and Jan. 14, 2014, commencing at 9:00 a.m.
Yucaipa Corporate Initiatives Fund I, L.P., objected to approval
of the disclosure statement.
Yucaipa holds 100% of the ownership interests in debtor Piccadilly
Investments, LLC. Piccadilly Investments in turn owns 100% of the
equity in the other two debtors, Piccadilly Restaurants, LLC and
Piccadilly Food Service, LLC.
Confirmation Issues
Atalaya entities -- Administrative LLC, Atalaya Funding II, LP,
Atalaya Special Opportunities Fund IV, LP (Tranche B), and Atalaya
Special Opportunities Fund (Cayman) IV, LP (Tranche B) -- asked
the Court to overrule Yucaipa's objection to approval of the
Disclosure Statement.
Atalaya said that Yucaipa's objection raises primarily
confirmation issues that relate to the Plan Proponents' treatment
of Yucaipa's equity interest under the Joint Plan. In addition,
Atalaya relates that Yucaipa's objection has no merit.
"Indeed, given the nature of Yucaipa's arguments, it is doubtful
that any amount of information included within a disclosure
statement would affect Yucaipa's decision regarding the proposed
plan. Nevertheless, as detailed below, the Plan Proponents have
agreed to modify, and/or have highlighted specific provisions of
the disclosure statement that resolve all of Yucaipa's true
disclosure statement objections. Specifically, the Plan
Proponents:
1. Have provided financial projections and a liquidation
analysis (prior to Yucaipa's objection being filed);
2. Have agreed to include language in the disclosure statement
setting forth Yucaipa's position regarding valuation and
confirmability;
3. Have agreed to modify the disclosure statement to provide
further information regarding the rationale for settlement
of the adversary pending between the Plan Proponents; and
4. Have agreed to describe Yucaipa's contentions regarding
Atalaya's secured claims."
Atalaya explains: "As an initial matter, Yucaipa lacks standing to
raise a disclosure statement objection here. Because Yucaipa's
equity interest will be cancelled under the Joint Plan, Yucaipa
will be deemed to have rejected the Joint Plan. Accordingly, no
amount of additional information in the Disclosure Statement will
"affect its class" or change Yucaipa's vote.
"Further, the weight of Yucaipa's objection must be measured
against its obvious motivation in the case -- to delay
confirmation of any plan that Yucaipa does not support. Yucaipa
withdrew its plan after it was clear no creditors supported its
failed reorganization efforts. Faced with a plan now that
recognizes the economic reality of these cases, Yucaipa's
goal is not to improve the Disclosure Statement, but rather to
delay the confirmation process. As a result, Yucaipa's objections
should be properly addressed at confirmation, not a disclosure
statement hearing.
"Yucaipa's first objection asserts that the Disclosure Statement
does not have appropriate disclosures regarding financial
projections and a liquidation analysis. As noted, the Plan
Proponents filed detailed financial projections and a liquidation
analysis -- prior to Yucaipa's objection being filed -- thereby
mooting this objection.
"Yucaipa asserts next that the Disclosure Statement does not
contain "valuation information" to support Atalaya's conversion of
debt to equity and the cancellation of Yucaipa's equity. In the
first place, the financial projections and liquidation analysis
provided by the Plan Proponents contain more than sufficient
information to allow Yucaipa to assess value here. Moreover,
while valuation will be relevant to confirmation of the Joint
Plan, to require the Plan Proponents to establish evidence of
valuation in a disclosure statement would effectively require the
Plan Proponents to establish, in advance, their case for "cram
down" of Yucaipa's claim. That is not what is contemplated by the
Bankruptcy Code.
"Yucaipa next asserts that the Disclosure Statement does not
adequately describe the potential value conferred on the estate by
resolution of an adversary proceeding filed by the Committee
against Atalaya (the "Atalaya Adversary"), which will be settled
by virtue of confirmation of the Joint Plan. Yucaipa also argues
that the Debtors' alleged dispute regarding the outstanding letter
of credit balance and certain fees and interest owed to Atalaya
are somehow issues that need further disclosure. But these
arguments have no merit. In the first place, the Plan Proponents
believe the fact that Atalaya has agreed to turn over proceeds of
the BP Tort Claim to unsecured creditors, and has agreed to
convert $9 million of secured debt to equity in order to
facilitate payment to unsecured creditors, is more than sufficient
justification for settlement of the very limited lien challenges
in the Atalaya Adversary. In any event, resolution of the Atalaya
Adversary would have no impact on Yucaipa's position as an
equityholder of the Debtors. The Committee's lien challenge in
the Atalaya Adversary is limited, and even if the Committee were
successful, Atalaya would still maintain a lien on substantially
all of the Debtors' assets and would be still be entitled to
payment ahead of Yucaipa on all of its outstanding claims.
"Yucaipa also contends that the Disclosure Statement should more
adequately describe the Debtors' "dispute" over Atalaya's secured
claim as it relates to the outstanding letter of credit balance
and certain interest and fees. First, there is no "dispute" over
the letter of credit or interest and fees outside of the Atalaya
Adversary. The Debtors filed no adversary proceeding or other
action to dispute any claims of Atalaya. But even if the Debtors
had raised such a dispute, the fact that Atalaya is converting
$9 million of debt to equity under the Joint Plan more than
offsets any alleged dispute.
"Finally, Yucaipa argues that the Disclosure Statement should
include a "calculation" of post-petition interest for Atalaya's
claims. Providing such a calculation will have no impact on
creditor votes on the plan, as Atalaya's accrued interest will
become principal amounts in the restructured notes, and principal
payments are not scheduled to be made until unsecured creditors
are paid in full. That said, Atalaya will provide Yucaipa with
such calculation in accordance with discovery exchanged between
the parties in advance of the confirmation hearing.
"Yucaipa then argues that the Joint Plan is "patently
unconfirmable" and should not be distributed to creditors because
Atalaya is receiving more than 100% of its claim under the Joint
Plan. That argument misstates both the facts and applicable law.
First, Yucaipa's calculation of Atalaya's claims is incorrect.
. . . the total amount of Atalaya debt under the Joint Plan is
approximately $35.3 million, not $28.1 million as alleged by
Yucaipa. In exchange for more than $35 million in secured claims,
Atalaya has agreed to convert approximately $9 million to equity,
and has agreed to payment of interest only on its remaining debt
until unsecured creditors are paid in full. Such treatment could
hardly be described as inequitable. Second, Yucaipa's allegation
that Atalaya has improperly included the undrawn letter of credit
balance of $2.9 million in the Term A Note ignores the language of
the Joint Plan (as described in the Disclosure Statement), which
clearly states:
provided, however, that the aggregate principal amount of the
Term A Note shall be reduced by any corresponding reduction in
the existing letter of credit balance.
"Finally, Yucaipa's argument that the Disclosure Statement should
not be approved because it describes a plan that is unconfirmable
simply misstates the law. Courts are clear that confirmation
objections are not appropriately addressed in the context of
approval of a disclosure statement."
Thus, Atalaya asks that the Court deny Yucaipa's objection,
enter an order approving the Disclosure Statement and grant
Atalaya such other and further relief as is just and equitable.
Yucaipa's Objection to Plan Outline
Yucaipa Corporate Initiatives Fund I, L.P., in its objection to
the approval of the Disclosure Statement, 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.
The Chapter 11 Plan
As reported in the TCR on Nov. 1, 2013, Atalaya and the statutory
committee of unsecured creditors of Piccadilly Restaurants, LLC,
et al., filed with the U.S. Bankruptcy Court for the Western
District of Louisiana on Sept. 27, 2013, a Joint Chapter 11 Plan
for the Debtors and a disclosure statement.
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.
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
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.
QUIGLEY CO: Attorneys' Final Fee Applications Allowed
-----------------------------------------------------
Judge Stuart M. Bernstein of the United States Bankruptcy Court
for the Southern District of New York issued an order overruling
the objections raised by the U.S. Trustee to the final fee
applications submitted by Schulte Roth & Zabel LLP, as attorneys
for debtor Quigley Company, Inc.; Togut, Segal & Segal LLP, as
attorneys for Albert Togut in his capacity as legal representative
for future asbestos personal injury claimants; and Caplin &
Drysdale, Chartered, as attorneys for the Official Committee of
Unsecured Creditors.
The following table summarizes the final applications that were
submitted by the professionals:
Applicant Fees Expenses
--------- ----------- --------
Schulte $21,080,652 $519,770
Caplin $5,406,992 $215,502
The Togut Firm $3,651,454 $48,133
The U.S. Trustee raised the question on whether the counsel and
other professionals are entitled to compensation for the work they
did in proposing or supporting a plan that failed, inter alia, for
lack of good faith.
Judge Bernstein allowed the final fee applications filed by the
three firms, although he asked that Caplin's fees be reduced by
$20,600.
In supporting his decision, Judge Bernstein held that "Schulte and
the Togut Firm established the presumptive reasonableness of their
fee requests through the twenty-six interim applications, and with
a few exceptions, so did Caplin. These applications detailed the
services that each rendered in connection with the case. The time
entries adequately detail what each firm did, when it did it and
how long it took to do. All of the services were rendered in the
case, and on their face, were reasonable and necessary to the
administration of the case. Furthermore, Schulte and the Togut
Firm certified in accordance with the Court's Amended Guidelines,
that the fees and disbursements they sought were billed at rates
and in accordance with practices customarily employed and
generally accepted by their applicant's clients."
Judge Bernstein rejected the U.S. Trustee's argument that
Schulte's services rendered in connection with the promulgation
and prosecution of the Fourth Plan would not have been undertaken
by a reasonable attorney on behalf of its client although Quigley
faced a difficult fight and the outcome was in doubt. This
conclusion follows even more strongly in the case of Caplin and
the Togut Firm who did not propose the Fourth Plan but ultimately
supported it, Judge Bernstein said.
The bankruptcy case is In re: QUIGLEY COMPANY, INC., Chapter 11,
Debtors, CASE NO. 04-15739 (SMB)(Bankr. S.D.N.Y.). A full-text
copy of Judge Bernstein's Decision dated Oct. 24, 2013, is
available at http://is.gd/OjpXvKfrom Leagle.com.
Michael L. Cook, Esq. -- michael.cook@srz.com -- and Lawrence V.
Gelber, Esq. -- lawrence.gelber@srz.com -- at SCHULTE ROTH & ZABEL
LLP, in New York, Attorneys for Debtor.
Elihu Inselbuch, Esq. -- einselbuch@capdale.com -- Ronald E.
Reinsel, Esq. -- rreinsel@capdale.com -- and Rita C. Tobin, Esq. -
- rtobin@capdale.com -- at CAPLIN & DRYSDALE, CHARTERED, in
Washington, D.C. 20005, Attorneys for the Official Committee of
Unsecured Creditors.
Scott E. Ratner, Esq. -- seratner@teamtogut.com -- at TOGUT, SEGAL
& SEGAL, LLP, in New York, Attorneys for the Legal Representative
for Future Asbestos Personal Injury Claimants of Quigley Company,
Inc.
THE UNITED STATES TRUSTEE is represented by Greg M. Zipes, Esq.,
and Andrew Velez-Rivera, Esq., in New York.
About Quigley Co.
Quigley Co. was acquired by Pfizer in 1968 and sold small amounts
of products containing asbestos until the early 1970s. In
September 2004, Pfizer and Quigley took steps that were intended
to resolve all pending and future claims against the Company and
Quigley in which the claimants allege personal injury from
exposure to Quigley products containing asbestos, silica or mixed
dust. Quigley filed for bankruptcy in 2004 and has a Chapter 11
plan and a settlement with Chrysler.
Quigley filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 04-15739) on Sept. 3, 2004, to implement a
proposed global resolution of all pending and future asbestos-
related personal injury liabilities.
Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte
Roth & Zabel LLP, represent the Debtor in its restructuring
efforts. Elihu Inselbuch Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it disclosed
$155,187,000 in total assets and $141,933,000 in total debts.
In April 2011, the bankruptcy judge approved a plan-support
agreement with Pfizer and an ad hoc committee representing 30,000
asbestos claimants.
A May 20, 2011 opinion by District Judge Richard Holwell concluded
that Pfizer was directly liable for some asbestos claims arising
from products sold by its now non-operating subsidiary Quigley.
The district court ruling was upheld in the appeals court.
In August 2013, the U.S. District Court reaffirmed the June 28,
2013 U.S. Bankruptcy Court order confirming Quigley's Chapter 11
Plan of Reorganization. Because this proceeding involved
asbestos-related litigation, both Bankruptcy and District Court
approval was required.
R.R. DONNELLEY: S&P Lowers CCR to 'BB-' on New Debt Issuance
------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Chicago-based print company R.R.
Donnelley & Sons Co. to 'BB-' from 'BB'. The outlook is stable.
At the same time, S&P lowered its issue-level rating on the
company's senior secured debt to 'BB+' from 'BBB-'. The recovery
rating on this debt remains '1', indicating S&P's expectation for
very high (90%-100%) recovery in the event of a payment default.
S&P also lowered its issue-level rating on the company's senior
unsecured debt to 'BB-' from 'BB'. The recovery rating on this
debt remains '4', indicating average (30%-50%) recovery in the
event of a payment default.
In addition, S&P is assigning the company's proposed $350 million
senior unsecured notes due 2023 its 'BB-' issue-level rating, with
a recovery rating of '4' (30%-50% recovery expectation).
The downgrade follows Donnelley's announcement that it is issuing
$350 million notes due 2023. S&P views the addition of longer-
term permanent debt as inconsistent with the company's strategy to
reduce outstanding debt. S&P previously assumed that Donnelley
would be able to finance both the proposed Consolidated Graphics
acquisition and the April 2014 $258 million maturity with cash on
hand and that the company would address any short-term funding
needs via the currently undrawn $1.1 billion credit facility.
S&P's rating on Donnelley reflects its "fair" business risk
profile of the company, supported by Donnelley's market position
as the largest company in the printing industry, amid competitive
and long-term structural pressures. S&P's rating also reflects
its view of the company's financial risk profile as aggressive,
marked by elevated leverage that S&P expects will decline only
gradually. S&P assess the company's management and governance as
"fair."
S&P's business risk profile assessment reflects the company's
scale and competitive strengths in a fragmented industry, although
pressured by the industry's cyclicality, overcapacity, and intense
service and pricing competition. S&P believes that these trends
will cause Donnelley's organic revenue in its traditional printing
business to continue to decline at a low-single-digit percent pace
over time.
The printing industry has steadily lost ground to electronic
distribution of content and online advertising. As a result, it
has been afflicted by overcapacity, chronic pricing pressure, and
the need to continuously take out costs. Donnelley's size confers
important efficiencies including the capacity to provide one-stop
service to clients, the ability to invest in leading technology,
and the ability to cope with pricing pressure more successfully
than many of its competitors. Nevertheless, several of its
important end markets, notably the magazine, retail inserts,
directory, and book businesses, are subject to long-term adverse
fundamentals as well as general economic cyclicality. Industry
volume shrinkage is likely to continue to necessitate capacity
downsizing and restructuring charges. Donnelley has sought to
counter these trends by diversifying into services-related
businesses that are not under secular pressure. It remains
unclear whether growth in these businesses will offset the secular
declines plaguing the traditional printing business.
The service segment remains a small piece of consolidated
operations as it comprises just 17% of consolidated revenues, but
it has grown both organically and through acquisitions. The
acquisitions have been of lower-margin businesses, which will
reduce the overall EBITDA margin as the segment grows, and to some
degree, keep in place fixed overhead that might otherwise be
subject to large-scale rationalization.
"We regard Donnelley's financial risk as aggressive. Pro forma
for the proposed debt issuance and acquisition of Consolidated
Graphics, Inc., Donnelley's leverage (debt adjusted primarily for
pension and lease obligations and EBITDA including restructuring
charges) was 4.0x for the 12 months ended Sept. 30, 2013.
Donnelley has accomplished relatively modest debt reduction in the
last two years. While management intends to reduce leverage over
the coming several years, we expect deleveraging to proceed
slowly, due to revenue, EBITDA, and discretionary cash flow
declines that we expect in 2014 and 2015, absent meaningful
acquisition contributions or other unexpected strategic moves that
could supplement cash flow. In addition, the recent rise in
interest rates will reduce their underfunded pension obligation,
which should, in turn, reduce our pension adjustment to debt
beginning in 2014," S&P said.
"Our base-case scenario is consistent with Standard & Poor's
economic forecast of 1.6% U.S. GDP growth in 2013 and 2.5% in
2014. We expect that full-year 2013 revenue will increase about
1%, driven by easy comparisons in the second half of 2012 and
temporary stabilization, in our view, of a few traditional print
product lines. Still, we expect the adjusted EBITDA margin will
decrease to under 11% in 2013 from 11.4% in 2012. Further, we
expect 2014 revenue to decline about 1%, consistent with our view
that the print industry is in long-term secular decline. We
expect the EBITDA margin to tighten further to about 10.5% in 2014
due to the pricing pressures in the products segment," S&P added.
Based on S&P's criteria, it regards Donnelley's liquidity as
"adequate." S&P's assessment of the liquidity profile
incorporates the following expectations, factors, and assumptions:
-- S&P expects that sources of liquidity, including cash and
access to the revolving credit facility, will exceed uses by
2.2x over the next 12-18 months.
-- S&P expects that net sources of liquidity would remain
positive even if EBITDA were to decline 15% to 20%.
-- Because of the company's discretionary cash flow generating
ability, S&P believes it could absorb low-probability, high-
impact events without the need for refinancing.
-- S&P expects that the company will be able to maintain
sufficient covenant headroom so that EBITDA could decline by
about 15% to 20% and the company would still have a 15%
cushion of compliance with covenant tests.
-- S&P believes the company has good relationships with its
banks.
-- S&P views current financial risk management as aggressive.
Sources of liquidity consist of $700 million in cash expected on
the balance sheet as of Dec. 31, 2013, an undrawn $1.15 billion
revolving credit facility due 2017, $350 million from the 2023
notes issuance, and about $700 million in funds from operations in
2014. Uses include S&P's expectation for about $440 million for
the acquisition of Consolidated Graphics Inc., $225 million in
capital expenditures in 2014, dividend payments of about
$200 million in 2014, and upcoming debt maturities of $258 million
in 2014 and $200 million in 2015.
Covenants include a 3.75x total leverage ratio and a 3x interest
coverage covenant. S&P expects the company to maintain a 15%
cushion with financial covenants. As of June 30, 2013, Donnelley
had about a 28% cushion from the maximum leverage ratio of 3.75x,
its most restrictive covenant.
For the latest recovery analysis, see Standard & Poor's recovery
report on Donnelley, to be published on RatingsDirect following
the release of this report.
The stable outlook reflects S&P's expectation that leverage will
remain below 4.5x over the intermediate term. S&P expects that
the secular trends facing the printing sector will neither abate
nor worsen. Thus, S&P expects revenue and EBITDA will decline
organically at a low-single-digit percentage rate and that the
EBITDA margin will contract about 25 to 50 basis points per year.
S&P could lower the rating if leverage increases above 4.5x.
S&P could raise the rating if it become convinced that leverage
will fall and remain well below 3.75x on a sustainable basis and
the margin deterioration trend reverses. However, if secular
trends worsen, specifically if revenue declines accelerated to 5%
annually, or if the EBITDA margin falls below 10%, S&P will likely
reassess its leverage threshold for the current rating.
Downgraded Again
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that printer R.R. Donnelley & Sons Co. enjoyed an
investment grade rating until May 2011, when it was downgraded to
the highest junk ratings by both Moody's Investors Service and
Standard & Poor's.
According to the report, on top of downgrades last year, S&P
lowered the corporate grade to BB- this week as a consequence of
R.R. Donnelley's issuance of another $350 million in debt. S&P
said the new bonds are "inconsistent with the company's strategy
to reduce outstanding debt."
S&P is giving the new obligation a rating of BB-, accompanied by a
guess that the debt holders will recover as much as 50 percent if
there is a payment default.
The rating company said it had been assuming Chicago-based R.R.
Donnelley would use an undrawn $1.1 billion revolving credit to
cover both an acquisition and a $258 million debt maturity in
April.
Moody's and S&P both dropped the company to junk in May 2011 when
it announced a repurchase of as much as $1 billion in stock
through December 2012.
R.R. Donnelley fell 4 percent to $17.98 on Nov. 6 in Nasdaq Stock
Market trading. The shares reached a three-year high of $21.34 on
May 31, 2011, and a low of $8.58 on Dec. 17.
In the first three quarters this year, net income totaled $107.2
million on net sales of $7.73 billion.
R.R. Donnelley isn't to be confused with yellow page publisher
R.H. Donnelley Corp., which implemented a Chapter 11
reorganization plan in February 2010. Renamed Dex One Corp., that
company merged this year with SuperMedia Inc. by prepackaged
confirmation plans for both companies that were confirmed in six
weeks.
REGIONAL EMPLOYERS: Independent Fiduciary Appointed for Trust
-------------------------------------------------------------
District Judge Mary McLaughlin issued a limited injunction order
on Sept. 16, 2013, appointing an independent fiduciary to
administer the plans, employer arrangements, and two trusts at
issue -- Single Employer Welfare Benefit Plan Trust ("SEWBPT") and
Regional Employers Assurance League Voluntary Employees'
Beneficiary Association Trust ("REAL VEBA"). The independent
fiduciary was to report back to the Court by Oct. 28, with respect
to its inventory of all assets of REAL VEBA, SEWBPT, and its
constituent employer-level plans or arrangements.
The Court saw the need to make the appointment in light of recent
developments, bankruptcy filings, and correspondence from the
Koresko defendants attempting to get payments from plan
beneficiaries, in getting control of the dispersed trust assets
and determining the state of those assets. The move is related to
DOL's March 9, 2009 Complaint, alleging that Defendants John
Koresko, Jeanne Bonney, PennMont Benefit Services, Inc.
("PennMont"), Koresko Law Firm ("KLF"), Koresko and Associates,
P.C. ("KAPC"), Penn Public Trust ("PPT") and Community Trust Co.
(the "Koresko Defendants") were fiduciaries to ERISA-covered
employer-level plans. The DOL further alleged that these
fiduciaries had violated ERISA by, among other things,
transferring death benefits outside the trust holding the plans'
assets.
On July 25, 2013, a suggestion of bankruptcy was filed by REAL
VEBA, SEWBPT, PPT, PennMont, KAPC, and KLP in several cases
related to this death benefits arrangement. There were six
separate Chapter 11 petitions filed in the bankruptcy court on
behalf of REAL VEBA (No. 13-16440), SEWBPT (No. 13-16441), PPT
(No. 13-16443), PennMont (No. 13-16444), KAPC (No. 13-16445), and
KLP (No. 13-16446). The docket numbers used to describe the
bankruptcy proceedings originate from In re Regional Employers
Assurance Leagues Voluntary Employees' Beneficiary Association
Trust, No. 13-16440 (E.D. Pa. Bankr.).
The current case is HILDA SOLIS, SECRETARY OF LABOR, UNITED STATES
DEPARTMENT OF LABOR v. JOHN J. KORESKO, V, et al.
REGIONAL EMPLOYERS ASSURANCE LEAGUES VOLUNTARY EMPLOYEES'
BENEFICIARY ASSOCIATION TRUST v. GRETCHEN CASTELLANO
v. REGIONAL EMPLOYERS ASSURANCE LEAGUES VOLUNTARY EMPLOYEES'
BENEFICIARY ASSOCIATION TRUST BY PENMONT BENEFIT SERVICES, INC.,
PLAN ADMINISTRATOR, et al. HARRY R. LARKIN, et al. v.
PENN PUBLIC TRUST, et al. GREGORY A. OSWOOD, et al. v.
PENN PUBLIC TRUST, et al. BEN-LIN ASSOCIATES, LTD., et al.
v. PENN PUBLIC TRUST, et al., Case Nos. NOS. 09-988, 03-6903,
11-7421, 13-0666, 13-5268 (E.D. Pa.).
About Regional Employers Assurance Leagues
Voluntary Employees' Beneficiary Association Trust
Regional Employers Assurance Leagues Voluntary Employees'
Beneficiary Association Trust filed a Chapter 11 petition (Bankr.
E.D. Pa. Case No. 13-16440) on July 23, 2013. Judge Jean K.
FitzSimon presides over the case. The Debtor estimated assets at
$50 million to $100 million and debts at $1 million to $10
million. The petition was signed by John J. Koresko, V, director
of trustee and administrator.
In September, the Pennsylvania Bankruptcy Court entered an order
dismissing Real VEBA's Chapter 11 case. The dismissal came after
the U.S. Trustee called for the dismissal of the case, arguing,
among other things, that the Debtor cannot reorganize and that its
bankruptcy has no business purpose. According to the U.S.
Trustee, the sole purpose of the filing for bankruptcy relief was
an attempt to stay a police powers action brought by the U.S.
Department of Labor, hence, the filing was not commenced in good
faith.
On Oct. 1, 2013, creditors holding $1.19 million in claims filed
an involuntary petition under Chapter 11 against Regional
Employers Assurance Leagues Voluntary Employees' Beneficiary
Association Trust, d/b/a Real VEBA Trust (Case No. 13-05987,
Bankr. M.D. Fla.). The proposed Debtor is represented by Scott
Alan Orth, Esq., at LAW OFFICES OF SCOTT ALAN ORTH PA, in
Hollywood, Florida. The Petitioners are represented by Brett A
Mearkle, Esq., at LAW OFFICE OF BRETT A. MEARKLE, in Jacksonville,
Florida.
Later that month, Real VEBA Trust notified the Bankruptcy Court
for the Middle District of Florida, Jacksonville Division, of its
consent of an entry of the order for relief in the involuntary
Chapter 11 case.
RESIDENTIAL CAPITAL: Resolves Most Technical Plan Objections
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that when Residential Capital LLC arrives in bankruptcy
court Nov. 19 for a confirmation hearing on its reorganization
plan, about 30 objections will have been winnowed down to those
from second-lien lenders who say they are entitled to payment in
full.
In a report to the judge this week, the bankrupt mortgage-
servicing unit of Ally Financial Inc. laid out 27 objections that
were resolved consensually through modifications to technical
provisions in the plan. In addition to the junior lenders'
complaints, there are a dozen homeowners who contend the plan
doesn't address their claims properly.
According to the report, the U.S. Trustee still isn't on board
entirely with the plan. As she frequently does, the Justice
Department's bankruptcy watchdog says releases to non-bankrupt
third parties are being given without sufficient justification.
ResCap nonetheless said it hopes to resolve the U.S. Trustee's
objections before the confirmation hearing. Other objections from
the government are being settled, ResCap said.
In ResCap's words, the plan has "overwhelming support from the
vast majority of creditors." The plan is financed in part by a
$2.1 billion settlement contribution from Ally.
An ad hoc group holding $714 million in 9.625 percent junior notes
oppose the plan, saying they are entitled to payment in full with
interest.
Disclosure materials told holders of ResCap's $2.15 billion in
general unsecured claims to expect a 36.3 percent recovery.
Unsecured creditors with $2 billion in claims against the so-
called GMACM companies are predicted to get 30.1 percent.
The $1.1 billion in third-lien 9.625 percent secured notes due in
2015 last traded on Nov. 5 for 109.25 cents on the dollar,
according to Trace, the bond-price reporting system of the
Financial Industry Regulatory Authority. In January, the bonds
sold for 107 cents.
The $473.4 million of ResCap senior unsecured notes due in April
2013 last traded on Nov. 4 for 36.719 cents on the dollar, a 56
percent increase since Dec. 19, according to Trace.
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.
ResCap's Chapter 11 reorganization plan is set for approval at a
Nov. 19 confirmation hearing. Most ResCap creditors support the
plan, which is financed in part by a $2.1 billion settlement
contribution from Ally.
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).
REVSTONE INDUSTRIES: Seeking Consensual Plan With Committee
-----------------------------------------------------------
Debtor Revstone Industries LLC and its official committee of
unsecured creditors have proposed competing Chapter 11 plans for
the Debtor.
Revstone doesn't want another party to propose another bankruptcy-
exit plan. Accordingly, Revstone asks the Court to extend as to
all parties except for the Committee, its exclusive filing period
through and including Jan. 31, 2014, and its exclusive
solicitation period through March 31, 2014. This is the third
request by the Debtors for an extension.
Revstone and the Committee have engaged in negotiations related to
the competing plans of reorganization, according to Revstone. The
Debtor says that its goal in these negotiations is to develop a
single, confirmable plan acceptable to both parties. The parties
have adjourned their requests for a hearing to approve their
disclosure statements on several previous occasions. The hearing
to seek approval of both disclosure statements is currently
scheduled for Nov. 13, 2013.
A hearing on the proposed exclusivity extension is slated for Dec.
11, 2013, at 10:00 a.m. Objections are due Dec. 4, 2013 at 4:00
p.m.
About Revstone Industries et al.
Lexington, Kentucky-based Revstone Industries LLC, a maker of
truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon
oversees the case. Laura Davis Jones, Esq., at Pachulski Stang
Ziehl & Jones LLP represents Revstone. In its petition, Revstone
estimated under $50 million in assets and debts.
Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del.
Case No. 12-13263) on Dec. 3, 2012.
Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No.
13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No.
13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013.
Judge Shannon also oversees the cases.
Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy
counsel to Greenwood and US Tool. Greenwood estimated $1 million
to $10 million in assets and $10 million to $50 million in debts.
US Tool & Engineering estimated under $1 million in assets and
$1 million to $10 million in debts. The petitions were signed by
George S. Homeister, chairman.
Metavation, also known as Hillsdale Automotive, LLC, joined parent
Revstone in Chapter 11 on July 22, 2013 (Bankr. D. Del. Case No.
13-11831) to sell the bulk of its assets to industry rival Dayco
for $25 million, absent higher and better offers.
Metavation has tapped Pachulski as its counsel. Pachulski also
serves as counsel to Revstone and Spara. Metavation also has
tapped McDonald Hopkins PLC as special counsel, and Rust
Consulting/Omni Bankruptcy as claims agent and to provide
administrative services.
Mark L. Desgrosseilliers, Esq., at Womble Carlyle Sandridge &
Rice, LLP, represents the Official Committee of Unsecured
Creditors in Revstone's case.
RIH ACQUISITIONS: Atlantic Club Casino's Chapter 11 Case Summary
----------------------------------------------------------------
Debtor: RIH Acquisitions NJ, LLC
dba The Atlantic Club Casino Hotel
Boston Avenue & The Boardwalk
Atlantic City, NJ 08401
Case No.: 13-34483
Chapter 11 Petition Date: November 6, 2013
Court: United States Bankruptcy Court
District of New Jersey (Camden)
Judge: Hon. Gloria M. Burns
Debtor's Counsel: Michael D. Sirota, Esq.
COLE, SCHOTZ, MEISEL, FORMAN & LEONARD
25 Main St.
Hackensack, NJ 07601
Tel: (201) 489-3000
Email: msirota@coleschotz.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Eric J. Matejevich, co-chief operating
officer.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
RURAL/METRO CORP: Plan Scheduled for Dec. 16 Confirmation
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that for Rural/Metro Corp., winning approval of disclosure
materials and scheduling a confirmation hearing was easy once the
official creditors' committee came on board with the plan.
According to the report, the bankruptcy court in Delaware approved
the disclosure statement on Nov. 5. It explains the Chapter 11
plan scheduled for approval at a Dec. 16 confirmation hearing.
The plan for the Scottsdale, Arizona-based provider of emergency
and non-emergency medical transportation was largely worked out
before the Chapter 11 filing in early August.
The plan calls for unsecured noteholders with $312.2 million in
claims to acquire all of the preferred stock and 70 percent of the
common stock in return for a $135 million equity contribution
through a rights offering.
On Nov. 6, buyers were offering to purchase the $200 million in
10.125 percent senior unsecured notes for 57.375 cents on the
dollar, according to Trace, the bond-price reporting system of the
Financial Industry Regulatory Authority. The offering price for
the $108 million in unsecured notes was the same.
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.
The Company's 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.
SAND SPRING: Reorganization Plan Declared Effective
---------------------------------------------------
Sand Spring Capital III, LLC, et al., notified the U.S. Bankruptcy
Court for the District of Delaware that the effective date of its
Fourth Amended Joint Plan of Reorganization occurred on Oct. 21,
2013.
On Sept. 18, 2013, the Court entered an order confirming the Plan.
As reported in the Troubled Company Reporter on Oct. 22, 2013, the
Debtors filed a Memorandum of Law in support of confirmation of
the Debtors' Fourth Amended Joint Plan which provides that the
Plan is the result of extensive, arm's-length negotiations among
the Debtors and certain of the key parties-in-interest in the
cases, including the Committee of Equity Security Holders, Cantor
Group and numerous investors, the group commonly referred to as
the Louisiana Plaintiffs. The efforts by all parties to the
negotiations have resulted in the execution of two extensive
settlement agreements that have paved the way for a consensual
plan process.
The resulting Plan contemplates that all Secured, Priority,
Administrative, and General Unsecured Claims will be paid in full
in cash on or as soon as reasonably practicable following the
Effective Date. Thus, those Classes of Claims are unimpaired. In
contrast, Independent Fiduciary Indemnification Claims, Cantor
Indemnification Claims and Interests are impaired under the Plan,
and will receive this treatment:
i) as set forth in the Plan, each Holder of an Allowed
Independent Fiduciary Indemnification Claim will receive a release
from all Claims and Causes of Action that any of the Debtors may
have;
ii) Cantor Indemnification Claims will be satisfied from the
Indemnification Reserve. Cantor Indemnification Claims will be
deemed Allowed Claims for purposes of the Plan, and Cantor has
agreed that it will accept any award entered in the New York
Litigation as the recovery on such Allowed Claims;
iii) the Reorganized Funds will receive, subject to the
resolution of certain disputed Claims, their Ratable Portion of
the Cantor Derivative Claim Settlement Amount; and
iv) investors will receive their Ratable Portion of the
Reorganized Fund Interests on the Cantor Chapter 11 Settlement
Effective Date, and, in the event that they execute a Direct Claim
Release, their Ratable Portion of the Cantor Direct Claim
Settlement Amount.
A copy of the memorandum is available for free at:
http://bankrupt.com/misc/Sand-Spring_MemorandumBrief.pdf
On Aug. 30, the Debtors filed a plan supplement to their Third
Amended Joint Plan of Reorganization.
About Sand Spring
Nine funds advised by Commonwealth Advisors Inc. of Baton Rouge,
Louisiana, sought Chapter 11 protection on Oct. 25, 2011, after
failing to work out a reorganization plan acceptable to all
investors. Lead Debtor is Sand Spring Capital III, LLC (Bankr. D.
Del. Case No. 11-13393).
Robert S. Brady, Esq., Kenneth J. Enos, Esq., and Michael R.
Nestor, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington,
Delaware, serve as counsel to the Debtors. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent.
The funds were formed from 2005 to 2007 under Walter Morales,
president and chief investment manager, and attracted 456
investors, according to filings in U.S. Bankruptcy Court in
Wilmington, Delaware. Last year, investors filed class-action
and derivative suits alleging mismanagement, misrepresentation,
and breach of fiduciary duty.
According to Bloomberg News, the U.S. Securities and Exchange
Commission initiated a formal investigation in July 2009. The
funds were unable or unwilling to satisfy investors' redemption
demands, which would have required liquidation of "their
holdings in an illiquid market and at depressed prices."
The funds, Commonwealth and Morales negotiated a prepackaged
Chapter 11 plan, which was accepted by all classes of creditors
except one. Because third-party contributions required unanimous
approval, the funds said they filed in Chapter 11 so they could
have "further discussions with their investors with the oversight
of this court."
SAVIENT PHARMACEUTICALS: Auction Pushed Back Two Weeks to Dec. 10
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Savient Pharmaceuticals Inc., the developer of a
treatment for gout, initiated a Chapter 11 reorganization on Oct.
14 and this week received court approval to hold an auction on
Dec. 10, more than two weeks later than the company initially
wanted.
According to the report, assuming there is no competitive bidding,
an affiliate of US WorldMeds LLC will acquire the business for $55
million and $3 million in escrow. The purchase price will be
reduced by adjustments and the cost to cure contracts that are
behind in payment.
A hearing to approve sale is scheduled for Dec. 13.
About Savient Pharmaceuticals
Headquartered in Bridgewater, New Jersey, Savient Pharmaceuticals,
Inc. -- http://www.savient.com/-- is a specialty
biopharmaceutical company focused on developing and
commercializing KRYSTEXXA(R) (pegloticase) for the treatment of
chronic gout in adult patients refractory to conventional therapy.
Savient has exclusively licensed worldwide rights to the
technology related to KRYSTEXXA and its uses from Duke University
and Mountain View Pharmaceuticals, Inc.
The Company and its affiliate, Savient Pharma Holdings, Inc.,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Del. Case No. 13-12680) on Oct. 14, 2013.
The Debtors are represented by Kenneth S. Ziman, Esq., and David
M. Turetsky, Esq., at Skadden Arps Slate Meagher & Flom LLP, in
New York; and Anthony W. Clark, Esq., at Skadden Arps Slate
Meagher & Flom LLP, in Wilmington, Delaware. Cole, Schotz,
Meisel, Forman & Leonard P.A., also serves as the Company's
conflicts counsel, and Lazard Freres & Co. LLC serves as its
financial advisor.
U.S. Bank National Association, as Indenture Trustee and
Collateral Agent, is represented by Clark T. Whitmore, Esq., at
Maslon Edelman Borman & Brand, LLP, in Minneapolis, Minnesota.
The Unofficial Committee of Senior Secured Noteholders is
represented by Andrew N. Rosenberg, Esq., Elizabeth McColm, Esq.,
and Jacob A. Adlerstein, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison LLP, in New York; and Pauline K. Morgan, Esq., at Young,
Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware.
SCI REAL ESTATE: Court Dismisses 1st Amended Suit vs. Provasi
-------------------------------------------------------------
Bankruptcy Judge Peter H. Carroll granted Kenneth and Sharron
Provasi's Motion to Dismiss the first amended complaint filed by
the liquidating trustee for SCI Real Estate Investments, LLC, to
avoid alleged fraudulent transfers.
The judge said the Trustee failed to state a claim on which relief
can be granted. The Court gives the Trustee until Nov. 8, 2013 to
file a second amended complaint to cure deficiencies and to state
a plausible claim for relief on each of his eight causes of
action. Defendants must serve an answer on that complaint no
later than Dec. 6.
The case is WILLIAM HOFFMAN, acting solely in his capacity as
liquidating trustee in the cases of SCI REAL ESTATE INVESTMENTS,
LLC, et al., Plaintiff, v. KENNETH E. and SHARRON PROVASI, Husband
and Wife as Joint Tenants Defendants, Adv. No. 2:13-AP-01122-PC
(Bankr. C.D. Calif.). A copy of the Court's Sept. 18, 2013
Memorandum Decision is available at http://is.gd/BwbMfxfrom
Leagle.com.
About SCI Real Estate Investments
Los Angeles, California-based SCI Real Estate Investments LLC and
Secured California Investments Inc. filed voluntary Chapter 11
petitions (Bankr. C.D. Cal. Case Nos. 11-15975 and 11-15987) on
Feb. 11, 2011. By order entered on March 4, 2011, the SCI Inc.
case was reassigned to Judge Peter H. Carroll to be jointly
administered with SCI LLC.
Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP,
serves as the Debtors' bankruptcy counsel. Haskell & White LLP as
accountant. Kennerly, Lamishaw & Rossi LLP serves as special real
estate counsel. SCI LLC disclosed $55,431,222 in assets and
$69,514,028 in liabilities as of the Chapter 11 filing.
Peter C. Anderson, the U.S. Trustee for Region 16, appointed three
members to the official committee of unsecured creditors in the
Chapter 11 cases of SCI Real Estate Investments. Levene, Neale,
Bender, Yoo & Brill L.L.P., represents the Committee as its
general bankruptcy counsel.
On June 15, 2012, the Court confirmed the First Amended Joint
Chapter 11 Plan of Liquidation for SCI Real Estate Investments,
LLC and Secured California Investments, Inc. dated April 19, 2012.
Under the confirmed plan, William Hoffman is authorized as the
Liquidating Trustee to prosecute and settle all causes of action
owned by the trust.
SCOTTSDALE VENETIAN: Can Use ADOR Cash Collateral Until Nov. 30
---------------------------------------------------------------
In a third stipulated order, Bankruptcy Judge George B. Nielsen
authorized Scottsdale Venetian Village, LLC, to use cash
collateral of Arizona Department of Revenue during the period
Oct. 1, 2013 until Nov. 30, 2013.
ADOR, which asserts $294,582 in claims against the Debtor, has
consented to the Debtor's use of a limited amount of its cash
collateral. The Debtor, however, must provide adequate protection
in the form of postpetition security interests on all property of
the Debtor.
The Arizona Department of Revenue is represented by:
Barbara C. Klabacha, Esq.
Assistant Attorney General
1275 West Washington
Phoenix, AZ 85007
About Scottsdale Venetian
Scottsdale Venetian Village, LLC, operates the Days Hotel located
at 5101 N. Scottsdale Road, in Scottsdale, Arizona. The Company
also operates Papi Chulo's Mexican Grill & Cantina, located
immediately adjacent to the hotel. The hotel consists of 211
guest rooms and, among other things, facilities for meetings and
banquets.
Scottsdale Venetian Village filed a Chapter 11 petition (Bankr. D.
Ariz. Case No. 13-02150) on Feb. 19, 2013, in Phoenix, estimating
at least $10 million in assets and less than $10 million in
liabilities.
The Debtor is represented by John J. Hebert, Esq., and Wesley D.
Ray at Polsinelli Shughart, P.C., in Phoenix. Charles B. Foley,
CPA, PLLC serves as the Debtor's accountant.
The Plan of Reorganization provides for the payment of outstanding
obligations by the proceeds from the continued operation of Days
Hotel located at 5101 N. Scottsdale Road, in Scottsdale, Arizona,
and the adjacent Papi Chulo's Mexican Grill & Cantina.
SEVEN COUNTIES: Taps Bingham Greenebaum as Special Counsel
----------------------------------------------------------
Seven Counties Services, Inc. seeks authority from the U.S.
Bankruptcy Court for the Western District of Kentucky to employ
Bingham Greenebaum Doll LLP as special counsel, nunc pro tunc to
Apr. 9, 2013.
The Debtor wants to continue the employment of Bingham Greenebaum
as special counsel to provide counsel to the Debtor regarding the
Affirmative Action Plan.
Bingham Greenebaum is owed pre-petition fees in the amount of
$5,760 for services rendered prior to the petition date.
No promises have been received by Bingham Greenebaum as to
compensation from the Debtor in connection with this case other
than in accordance with the provisions of the Bankruptcy Code.
Within the year prior to the petition date, Bingham Greenebaum
earned and received renumeration from the Debtor in the amount of
$6,393. All payments received from the Debtor within the year
prior to the petition date were for current amounts then due, and
were made according to ordinary business terms.
Philip C. Eschels, Esq., partner of Bingham Greenebaum, 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.
Bingham Greenebaum can be reached at:
Philip C. Eschels, Esq.
BINGHAM GREENEBAUM DOLL LLP
101 South Fifth Street, Ste 3500
Louisville, KY 40202
Tel: (502) 587-3665
Fax: (502) 540-2219
E-mail: peschels@bgdlegal.com
About Seven Counties
Seven Counties Services Inc., a not-for-profit behavioral
services provider from Louisville, Kentucky, filed for Chapter 11
protection (Bankr. W.D. Ky. Case No. 13-31442) in the hometown
on April 4, 2013. The petition was signed by Anthony M. Zipple as
president/CEO. The Debtor scheduled assets of $45,603,716 and
scheduled liabilities of $232,598,880. Seiller Waterman LLC
serves as the Debtor's counsel. Judge Joan A. Lloyd presides over
the case.
Wyatt, Tarrant & Combs LLP represents the Debtor as special
counsel. Hall, Render, Killian, Heath & Lyman, PLLC, is special
counsel to represent and advise it in the implementation of its
new software system.
The agency generates more than $100 million a year in revenue and
employs a staff of 1,400 providing services at 21 locations and
120 schools and community centers.
SPIG INDUSTRY: U.S. Trustee Unable to Form Creditors Committee
--------------------------------------------------------------
Judy A. Robbins, U.S. Trustee for Region 4, notified the U.S.
Bankruptcy Court for the Western District of Virginia that she was
unable to appoint an official committee of unsecured creditors in
the Chapter 11 case of SPIG Industry, LLC.
The U.S. Trustee explained that the number of persons eligible or
willing to serve on such a committee is presently insufficient to
form an unsecured creditors committee.
The U.S. Trustee will appoint an unsecured creditors committee
upon the request of an adequate number of unsecured creditors.
About SPIG Industry, LLC
SPIG Industry, LLC, filed a Chapter 11 petition (Bankr. W.D. Va.
Case No. 13-71469) on Sept. 11, 2013. The Debtor is represented
by Robert Copeland, Esq., at Copeland Law Firm, P.C., in Abingdon,
Virginia.
SPIG INDUSTRY: Hearing on Bid to Employ Counsel Stayed
------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Virginia
stayed the hearing to consider SPIG Industry LLC's request to
employ Copeland Law Firm, P.C. as its counsel.
As reported in the Troubled Company Reporter on Oct. 23, 2013,
Judy A. Robbins, U.S. Trustee for Region 4, asked the Court to
stay the hearing on the Debtor's motion to employ counsel until
the Department of Justice attorneys are permitted to resume their
usual civil litigation functions.
According to the Trustee, he is a Justice Department official. On
Sept. 30, 2013, the appropriations act that had been funding the
Department of Justice expired and appropriations to the Department
lapsed. The Department does not know when funding will be
restored by Congress.
The Trustee noted that absent an appropriation, Department of
Justice attorneys and staff, including the U.S. Trustee's staff,
are prohibited from working, even on a voluntary basis, except in
very limited circumstances, including "emergencies involving the
safety of human life or the protection of property.
Objection on Copeland Employment
The U.S. Trustee is objecting to the proposed employment of Robert
T. Copeland, Esq., a member of the firm. The U.S. Trustee said
Mr. Copeland has established a pattern of, among other things,
taking actions and providing assistance to clients that brings
disrepute upon the bankruptcy system; advising clients regarding
actions that hinder, delay, or defraud creditors and trustees;
failing to properly assist clients in filing accurate documents,
and failing to properly prosecute their cases; all in violation of
certain applicable ethical rules. Additionally, Copeland's has
demonstrated an inability to comply with the duties imposed upon
him as counsel.
As reported in the TCR on Sept. 24, 2013, the Debtor proposes to
pay Mr. Copeland $300 per hour for his services. He will be
assisted by paralegals to be paid $75 per hour.
Mr. Copeland has 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 Debtor and its estate. The firm has received an advance
fee in the amount of $7,700, plus costs of $1,213 for the filing
fee on Sept. 11, 2013. Of the advance fee, $1,162 have been
charged and paid for prepetition services.
About SPIG Industry, LLC
SPIG Industry, LLC, filed a Chapter 11 petition (Bankr. W.D. Va.
Case No. 13-71469) on Sept. 11, 2013. The Debtor is represented
by Robert Copeland, Esq., at Copeland Law Firm, P.C., in Abingdon,
Virginia.
SPIN HOLDCO: S&P Lowers Rating on First Lien Debt to 'B'
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Plainview, N.Y.-based Spin Holdco Inc. (doing
business as CSC ServiceWorks). The outlook is stable.
At the same time, S&P lowered its issue level rating on Spin
Holdco's first-lien debt to 'B' from 'B+' and revised the recovery
rating to '3' from '2' following the upsizing of the first-lien
term loan. The '2' recovery rating indicates that lenders could
expect meaningful (50% to 70%) recovery in the event of a payment
default.
"The ratings on Spin Holdco reflect our view of financial policy
associated with its ownership by a financial sponsor that has
demonstrated an aggressive acquisition appetite and usage of debt,
notwithstanding its sizable equity and second-lien term loan
investments in the company," said Standard & Poor's credit analyst
Jerry Phelan. "The ratings also incorporate our view of the
company's participation in the mature outsourced laundry equipment
services business, an end-user customer base that we believe is
susceptible to high inflation and unemployment, the ability of
building owners and property managers to self-operate their
laundry facilities, and a tire inflation business that could see
demand weaken if fuel costs escalate."
Standard & Poor's assesses Spin Holdco's liquidity as "less than
adequate" due to the reduced cushion under the springing first-
lien net leverage covenant contained in the $75 million revolving
credit facility.
The outlook is stable. S&P believes Spin Holdco can realize
revenue and cost synergies from the AIR-serv and Mac-Gray
acquisitions and modestly strengthen credit ratios.
STREAMTRACK INC: State Court OKs Stipulation with ASC Recap
-----------------------------------------------------------
The Superior Court in the Judicial District of Danbury,
Connecticut, entered an order approving the stipulation of the
parties in the matter of ASC Recap LLC v. StreamTrack, Inc. Under
the Stipulation, the Company agreed to issue, as settlement of
liabilities owed by the Company to ASC in the aggregate amount of
$766,288, shares of common stock as follows:
(a) In one or more tranches as necessary, 3,740,000 shares of
common stock and an additional 200,000 shares of common
stock as a settlement fee.
(b) Through the Initial Issuance and any required additional
issuances, that number of shares of common stock with an
aggregate value equal to (A) the sum of (i) the Claim
Amount and (ii) reasonable attorney fees and trade
execution fees in the amount of $75,000, divided by (B) the
Purchase Price (defined under the Stipulation as the market
price (defined as the lowest closing bid price of the
Company's common stock during the valuation period set
forth in the Stipulation) less the product of the Discount
(equal to 25 percent) and the market price. The parties
reasonably estimated that the fair market value of the
Settlement Shares and all other amounts to be received by
ASC is equal to approximately $1,100,000.
(c) If at any time during the valuation period the closing bid
price of the Company's common stock is below 90 percent of
the closing bid price on the day before an issuance date,
the Company will immediately cause to be issued to ASC
those additional shares as may be required to effect the
purposes of the Stipulation.
(d) Notwithstanding anything to the contrary in the
Stipulation, the number of shares beneficially owned by ASC
will not exceed 9.99 percent of the Company's outstanding
common stock.
Files Certificate of Designation
StreamTrack filed a Certificate of Designation of Series B
Preferred Stock with the Secretary of State of Wyoming. Pursuant
to the Series B Certificate of Designation, the Company designated
200,000 shares of its blank check preferred stock as Series B
Preferred Stock.
The Series B Preferred Stock will rank senior to the common stock,
Series A Preferred Stock and any subsequently created series of
preferred stock that does not expressly rank pari passu with or
senior to the Series B Preferred Stock. The Series B Preferred
Stock will not be entitled to dividends. In the event of a
liquidation, the Series B Preferred Stock will be entitled to a
payment of the Stated Value of $1.00 per share prior to any
payments being made in respect of the Junior Stock. Each share of
Series B Preferred Stock will entitle the holder to vote on all
matters voted on by holders of common stock as a single class.
With respect to any such vote, each share of Series B Preferred
Stock will entitle the holder to cast such number of votes equal
to 0.000255 percent of the total number of votes entitled to be
cast. Effective upon the closing of a Qualified Financing, all
issued and outstanding shares of Series B Preferred Stock will
automatically convert into common stock in an amount determined by
dividing the product of the number of shares being converted and
the Stated Value by the Conversion Price. The Conversion Price
will be equal to the price per share of the common stock sold
under the Qualified Financing. A "Qualified Financing" is defined
as the sale by the Company in a single offering of common stock or
securities convertible into common stock for gross proceeds of at
least $5,000,000.
On Oct. 31, 2013, the Company entered into amendment, waiver and
exchange agreements with Michael Hill (the Company's chief
executive officer and director) and Aaron Gravitz (the Company's
director). Under each Exchange Agreement, the Company issued to
each of Mr. Hill and Mr. Gravitz 100,000 shares of Series B
Preferred Stock in exchange for $100,000 in unpaid compensation.
In connection with the Exchange Agreements, the Company relied on
the exemptions from registration provided by Section 3(a)(9) and
4(a)(2) under the Securities Act of 1933, as amended.
About StreamTrack
Santa Barbara, California-based StreamTrack, Inc., is a digital
media and technology services company. The Company provides audio
and video streaming and advertising services through the
RadioLoyalty(TM) Platform to over a global group of over 1,500
internet and terrestrial radio stations and other broadcast
content providers.
The Company' balance sheet at May 31, 2013, showed $1.2 million in
total assets, $4 million in total liabilities, and a stockholders'
deficit of $2.8 million.
SUNTECH POWER: Wuxi Guolian Offers to Invest $150 Million
---------------------------------------------------------
Suntech Power Holdings Co., Ltd., has received an investment
letter of intent from Wuxi Guolian Development (Group) Co., Ltd.
to make an equity investment into the Company of not less than
US$150,000,000 in cash in connection with supporting a
comprehensive rehabilitation and restructuring of the financial
and operational affairs of the Company. In addition, it is
intended that Guolian would, upon satisfactory terms and
conditions, cause related solar and other businesses it owns to be
injected into the Company or enter into joint venture or similar
arrangements with the Company to take advantage of the Company's
global platform, distribution networks, and other synergies.
Guolian is an investment company based in Wuxi, Jiangsu Province,
China, with primary investments in finance and industry. The
industry investments include downstream solar companies, power
generation projects, textile industries, waste disposal
facilities, and related environmental protection and energy
projects. As of the end of 2012, the total assets and net assets
of Guolian were approximately US$6.7 billion and US$2.6 billion,
respectively.
Mr. Zhou Weiping, Suntech's CEO said, "Even though the investment
letter of intent is indicative only and is not a firm commitment,
this is an important step in the restructuring of the Company with
key stakeholders. While there will be substantial dilution for
existing shareholders, the successful implementation of these
efforts will preserve the Company's international platform,
rebuild the Company's operating assets, and rehabilitate the
Company's global brand."
Guolian had previously participated in the competitive bidding
process for Wuxi Suntech Power Co., Ltd., the Company's principal
operating subsidiary in China currently in administration. As
previously disclosed, Jiangsu Shunfeng Photovoltaic Technology
Co., Ltd., had on Oct. 8, 2013, been provisionally selected as the
strategic investor of Wuxi Suntech, and on Oct. 24, 2013, signed a
strategic cooperation agreement with Wuxi Suntech. Such strategic
investor will be officially selected pending approval during a
second creditor's meeting of Wuxi Suntech scheduled on Nov. 12,
2013, and then final confirmation by the Wuxi Intermediate
People's Court. Guolian's investment letter of intent refers to a
potential investment in Suntech Power Holdings Co. Ltd.
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.
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.
Suntech Power had involuntary Chapter 7 bankruptcy proceedings
initiated against it on Oct. 14, 2013 in U.S. Bankruptcy Court in
White Plains, New York (Bankr. S.D.N.Y. Case No. 13-bk-13350), by
holders of more than $1.5 million of defaulted securities under a
2008 $575 million indenture.
TEE INVESTMENT: Ch. 11 Trustee Taps Hartman & Hartman as Attorney
-----------------------------------------------------------------
Christina W. Lovato, the Chapter 11 trustee of Tee Investment
Company, Limited Partnership dba Lakeridge Apartments seeks
authorization from the U.S. Bankruptcy Court for the District of
Nevada to employ Hartman & Hartman as her attorney. The Trustee
seeks to employ Hartman & Hartman to represent her in connection
with this case for whatever purposes she deems necessary.
The Trustee will compensate Hartman & Hartman on an hourly basis
at the preferred rates charged by Hartman & Hartman's
professionals in trustee cases, to-wit:
Jeffrey L. Hartman $400
Associate/Contract Attorney $150
Legal Assistant $85
Hartman & Hartman will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Jeffrey L. Hartman, member Hartman & Hartman, 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 for the District of Nevada will hold a hearing on the
engagement on Nov. 13, 2013, at 11:00 a.m.
Hartman & Hartman can be reached at:
Jeffrey L. Hartman, Esq.
HARTMAN & HARTMAN
510 West Plumb, Ste B
Reno, NV 89509
Tel: (775) 324-2800
Fax: (775) 324-1818
E-mail: jlh@bankruptcyreno.com
About Tee Investment
Reno, Nevada-based Tee Investment Company, Limited Partnership,
dba Lakeridge Apartments, owns the property known as the Lakeridge
East Apartments, 6155 Plums Street, Reno, Nevada. The Debtor
filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case
No. 11-50615) on March 1, 2011. The Debtor estimated its assets
and debts at $10 million to $50 million.
Alan R. Smith, Esq., at the Law Offices of Alan R. Smith, in Reno,
Nev., represents the Debtor as counsel.
Affiliates Lakeridge Centre Office Complex, LP (Bankr. D. Nev.
10-53612), West Shore Resort Properties III, LLC (Bankr. D. Nev.
10-51101), and West Shore Resort Properties, LLC, and (Bankr. D.
Nev. 10-50506) filed separate Chapter 11 petitions.
Attorneys at Armstrong Teasdale represents Terrence S. Daly, the
court-appointed receiver for Tee Investment Company, Limited
Partnership, as counsel.
The First Amendment to the Debtor's First Amended Plan of
Reorganization provides that the amount of the WBCMT Secured Claim
will be the lesser of the value of the Property determined as of
the Confirmation Date (the "Value as of Confirmation Date") or the
WBCMT Note Balance, less all post-petition pre-confirmation
payments made to WBCMT. All existing membership interests are
canceled. Upon plan confirmation 100% of the membership interest
in the Reorganized Debtor will be issued to Blackwood Canyon, LLC.
TLO LLC: Files Plan, Seeks OK of TransUnion-Led Auction
-------------------------------------------------------
TLO LLC on Oct. 31, 2013, filed its proposed Plan of Liquidation
and the next day filed a motion to sell substantially all assets
to TransUnion Acquisition Corp. or to the winning bidder at the
auction.
The Plan proposes to pay holders of allowed claims and interests
from the proceeds derived from the sale of the Debtor's assets,
the recoveries from litigation involving or related to the life
insurance policy of the Debtor's founder, Hank Asher, and certain
other litigation claims as described in the Plan. A copy of the
disclosure statement explaining the terms of the Plan is available
for free http://bankrupt.com/misc/TLO_LLC_Plan_Outline.pdf
The proposed sale to TransUnion is subject to higher and better
offers. An auction may be held on Nov. 20, 2013, if competing and
qualified bids are submitted in accordance with the bidding
procedures order entered by the Court on Oct. 24. The Court has
scheduled a hearing to consider the sale for Nov. 22, at 9:30 a.m.
TransUnion, the stalking horse bidder, will acquire the assets for
$105,000,000 in cash plus the assumption of liabilities, absent
higher and better offers. The buyer has already deposited $10
million in cash in an escrow account. A copy of the sale motion
is available for free at:
http://bankrupt.com/misc/TLO_LLC_Sale_Motion.pdf
Scrivener's Error
The Bankruptcy Court entered, on Oct. 25, 2013, an ex parte order
granting TLO's ex parte motion to amend the Court's Oct. 24, 2013
order approving procedures in connection with the sale of
substantially all of the Debtor's assets, subject to higher and
better offers, to correct a scrivener's error in paragraph 5.
The Court orders:
"Paragraph [5] of this Court's Order [ECF No. 351] is amended to
reflect that the Debtor may cause the Sale Notice to be served
upon its existing clients who are parties to executory contracts
either by U.S. Mail postage prepaid or by E-mail, with a link to
the Sale Notice and other required documents.
"The Bidding Procedures attached to the Motion shall be deemed the
Bidding Procedures and shall replace Exhibit 2 attached to the
Bidding Procedures Order [ECF #351, Ex. 2].
"The Debtor is authorized to serve this version of the Bidding
Procedures on all parties and in the manner indicated in the
Bidding Procedures Order, or as set forth herein."
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.
TLO LLC: Access to Tech. Investors' Cash Collateral Until Jan. 31
-----------------------------------------------------------------
the U.S. Bankruptcy Court for the Southern District of Florida has
granted TLO, LLC, permission to continue using cash collateral of
Technology Investors, Inc., including cash or noncash proceeds of
assets that were not Cash Collateral on the Petition Date, up to
the amounts shown in the Budget attached to the Cash Collateral
Motion, through the earlier of Jan. 31, 2014, or the consummation
of a sale of substantially all of its assets. Upon written
agreement of the Lender, the Termination Date may be extended up
to two weeks without further Court Order.
As adequate protection, Lender is granted a valid, perfected first
priority, lien on all cash generated post-petition from the Pre-
petition Collateral and the proceeds therefrom to the same extent,
validity and priority as the liens on the Pre-petition Collateral,
except: (i) cash in the TLO Collateral Account; and (ii) cash
necessary to replenish the TLO Collateral Account and discharge
the Wells Fargo Obligations and, further, except to the extent of
post-petition financing otherwise approved by this Court. If,
notwithstanding the provision of the Adequate Protection Liens,
such Adequate Protection Liens do not provide adequate protection
for the diminution of the Lender's interests in the Pre-Petition
Collateral, then Lender will have a claim allowed under Sections
507(a)(2) and 507(b) of the Bankruptcy Code to the extent of such
diminution not covered by the Adequate Protection Liens and such
Section 507(b) Claim will be entitled to priority over every other
claim allowable under such Section 507(a)(2) except any claim by
Wells Fargo in connection with the Wells Fargo Obligations.
A copy of the Cash Collateral Order dated Oct. 25, 2013, is
available at http://bankrupt.com/misc/tlollc.doc363.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.
TLO LLC: Can Obtain Up to $1-Mil. in Additional Loans From CEOs
---------------------------------------------------------------
On Oct. 25, 2013, the U.S. Bankruptcy Court for the Southern
District of Florida entered an order granting TLO, LLC's emergency
motion for authorization to obtain additional post-petition
financing (the "Third DIP Loan") from the Debtor's current co-
Chief Executive Officers, Eliza Desiree Asher and Caroline Asher
Yoost, the daughters of the deceased found of the Debtor, Hank
Asher.
Ms. Asher and Ms. Yoost or their Irrevocable Trusts have each
agreed to loan an additional $500,000 (up to a maximum of
$1,000,000 in the aggregate) to the Debtor immediately, upon the
same terms as the DIP Loan and the Second DIP Loan. Technology
Investors, Inc., the Debtor's secured lender, has agreed to
subordinate its liens against the Debtor's assets, to the extent
valid and enforceable, to the liens granted to the Principals to
secure the Third DIP Loan. The liens of the Principals granted
hereunder will be senior to the any liens of the Lender in the
Debtor's assets.
A copy of the Order approving the Third DIP Loan is available at:
http://bankrupt.com/misc/tlollc.doc364.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.
TRAVEL LEADERS: S&P Assigns 'B+' Corp. Credit Rating; Outlook Pos.
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned Delaware-based Travel
Leaders Group LLC (TLG) a corporate credit rating of 'B+'. The
rating outlook is positive.
At the same time, S&P assigned TLG's proposed $185 million senior
credit facility an issue-level rating of 'BB-', with a recovery
rating of '2', indicating its expectation for substantial (70% to
90%) recovery for lenders in the event of a payment default. The
credit facility consists of a $15 million revolver due 2018 and a
$170 million term loan due 2019.
The company expects to use the proceeds from the new term loan to:
-- To recapitalize the company's ownership structure.
Following the completion of the transaction, management will
wholly own the company;
-- Fund a distribution to shareholders of $5.8 million;
-- Refinance $69 million of existing debt; and
-- Pay transaction-related fees and expenses.
S&P's 'B+' corporate credit rating on TLG reflects its view of the
company's financial risk profile as "aggressive" and its business
risk profile as "weak," according to its criteria.
"Our assessment of TLG's financial risk profile as aggressive
reflects our expectation for total lease-adjusted debt to EBITDA
to be in the low-4x area and for funds from operations to debt to
be in the high-teens percentage area through 2013. We expect
adjusted debt to EBITDA to improve to the high-3x area and for FFO
to debt to be in the high-teens area in 2014. We expect EBITDA
coverage of interest expense to be in the mid-4x area, pro forma
for the transaction. This is very good compared with the
aggressive financial risk assessment and supports a good level of
anticipated free cash flow generation the company can use to make
a modest level of acquisitions and repay debt. We believe TLG can
further improve leverage measures in 2015 through a combination of
EBITDA growth and debt repayment, supporting our positive rating
outlook," S&P said.
S&P's assessment of TLGs' business risk profile as weak reflects:
-- The company's reliance on volatile consumer and corporate
discretionary travel spending;
-- Event risk related to contagious illness, violence, extreme
weather, or terrorism that can lower travel volumes;
-- Limited geographic and business diversity compared with
other global leisure companies; and
-- Significant competition in the highly fragmented travel
leisure industry.
TRINITY COAL: Creditors Vote in Favor of Chapter 11 Plan
--------------------------------------------------------
Marie Beaudette, writing for DBR Small Cap, reported that most of
Trinity Coal Corp.'s creditors have voted to accept the company's
Chapter 11 restructuring plan, which would see it exit bankruptcy
protection under the control of its current owner, India's Essar
Global.
About Trinity Coal
Trinity Coal Corp. is a coal mining company that owns coal
deposits located in the Appalachian region of the eastern United
States, specifically, in Breathitt, Floyd, Knott Magoffin, and
Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo,
McDowell and Wyoming Counties in West Virginia.
Trinity's coal mining operations are organized into six distinct
coal mining complexes. Three complexes are located in Kentucky and
are referred to as Prater Branch Resources, Little Elk Mining and
Levisa Fork. The Kentucky Operations produced compliance and low
sulfur steam coal. Three complexes are located in West Virginia
and are referred to as Deep Water Resources, North Springs
Resources and Falcon Resources.
Trinity is a wholly owned subsidiary of privately held
multinational conglomerate Essar Global Limited.
Credit Agricole Corporate & Investment Bank, ING Capital LLC and
Natixis, New York Branch filed an involuntary petition for relief
under Chapter 11 against Trinity Coal Corporation and 15
affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three
entities say they are owed a total of $104 million on account
loans provided to Trinity.
On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and
Cecil I. Walker Machinery Co. filed an involuntary petition for
relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335)
against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit
Agricole, ING Capital and Natixis joined as petitioning creditors.
On March 4, 2013, the Debtors filed their consolidated answer to
involuntary petitions and consent to an order for relief and
reservation of rights, thereby consenting to the entry of an order
for relief in each of their respective Chapter 11 cases. An order
for relief in each of the Debtors was entered by the Court on
March 4, 2013, which converted the involuntary cases to voluntary
Chapter 11 cases.
Steven J. Reisman, Esq., L. P. Harrison 3rd, Esq., Jerrold L.
Bregman, Esq., and Dienna Ching, Esq., at CURTIS, MALLET-PREVOST,
COLT & MOSLE LLP, in New York, N.Y.; and John W. Ames, Esq., C.R.
Bowles, Jr., Esq., and Bruce Cryder, Esq., at BINGHAM GREENEBAUM
DOLL LLP, in Lexington, Ky., represent the Debtors as counsel.
Attorneys at Foley & Lardner LLP, in Chicago, Ill., represent the
Official Committee of Unsecured Creditors as counsel. Sturgill,
Turner, Barker & Maloney, PLLC, in Lexington, Ky., represents the
Official Committee of Unsecured Creditors as local counsel.
Judge Tracey N. Wise approved on Oct. 3, 2013, the adequacy of the
Disclosure Statement explaining the Joint Chapter 11 Plan of
Trinity Coal. With this development, the Debtors are now
permitted to solicit acceptances of their Plan.
TWN INVESTMENT: Dec. 5 Hearing on Motion to Convert Case
--------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
will convene a hearing on Dec. 5, 2013, at 10 a.m., to consider
the motion to convert TWN Investment Group LLC's Chapter 11 case
to one under Chapter 7 of the Bankruptcy Code.
Edwina E. Dowell, Esq., on behalf of August B. Landis, Acting U.S.
Trustee for Region 17, asked that the Court to convert the
Debtor's case on the ground that the Court has granted relief from
stay to the Debtor's secured creditor, East West bank, and the
Debtor's real property will likely be foreclosed.
My Dowell also related that the Debtor's latest Monthly Operating
Report shows that it has only $431 in the bank. There is nothing
left for the Debtor to reorganize. In addition, a Chapter 7
trustee must investigate the past actions of the Debtor's
principals and East West Bank to determine if there have been any
improprieties with respect to deposits made by individuals, and
any other matters.
About TWN Investment Group
TWN Investment Group, LLC, filed a Chapter 11 petition in its
home-town in San, Jose California (Bankr. N.D. Calif. Case No.
13-50821) on Feb. 13, 2013. The Company disclosed assets of $58.2
million and liabilities of $53.4 million in its schedules.
The Company owns partially developed real estate located at 909-
9999 Story Road, in San Jose. The property is the company's sole
assets and secures a $48.1 million debt to East West Bank.
The Debtor is represented by Charles B. Greene, Esq., at the Law
Offices of Charles B. Greene, in San Jose.
Rene Lastreto II, Esq., at Lang Richert & Patch, represents the
Committee.
TWN INVESTMENT: East West Permitted to Foreclose Properties
-----------------------------------------------------------
The Hon. Stephen L. Johnson of the U.S. Bankruptcy Court for the
Northern District of California lifted the automatic stay in the
Chapter 11 case of TWN Investment Group, LLC to permit East West
Bank to enforce its remedies to foreclose upon and obtain
possession of the Debtor's properties in accordance with
applicable nonbankruptcy law.
As reported in the Troubled Company Reporter on Oct. 1, 2013, East
West requested for relief from stay with respect to these
properties -- 969, 979, 989, and 999 Story Road, San Jose,
California.
EWB has a filed claim in the amount of $47,389,057. EWB's
appraisal indicates that the property has a value of $33,800,000
retail and $27,700,000 bulk sale.
According to Curtis C. Jung, Esq., at Jung & Yuen, LLP, on behalf
of EWB, the bank is entitled to relief of stay because, among
other things:
1. there is no "equity cushion" in the property sufficient
to adequately protect EWB and its interest in the property;
2. the property is not necessary for an effective
reorganization; and
3. the Debtor's payments are not a bar to relief under
Section 362(d)(2) of the Bankruptcy Code.
About TWN Investment Group
TWN Investment Group, LLC, filed a Chapter 11 petition in its
home-town in San, Jose California (Bankr. N.D. Calif. Case No.
13-50821) on Feb. 13, 2013. The Company disclosed assets of $58.2
million and liabilities of $53.4 million in its schedules.
The Company owns partially developed real estate located at 909-
9999 Story Road, in San Jose. The property is the company's sole
assets and secures a $48.1 million debt to East West Bank.
The Debtor is represented by Charles B. Greene, Esq., at the Law
Offices of Charles B. Greene, in San Jose.
Rene Lastreto II, Esq., at Lang Richert & Patch, represents the
Committee.
USEC INC: S&P Affirms 'CCC' Corp. Credit Rating; Outlook Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC' corporate
credit rating on USEC Inc. following a final evaluation of the
company's credit profile. The outlook remained negative. S&P
subsequently withdrew all of its corporate credit and issue-level
ratings on USEC as requested by the company.
Prior to being withdrawn, USEC's rating reflected S&P's view of
the company's business risk as "vulnerable", its financial risk as
"highly leveraged", and its liquidity as "less than adequate". In
S&P's opinion, risks include the company's ability to successfully
transition its enrichment process to centrifugation as well as
funding uncertainty related to USEC's loan guarantee application
with the Department of Energy. USEC is a Bethesda, Md.-based
uranium enrichment company.
VELTI INC: Meeting to Form Creditors' Panel on Nov. 12
------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on Nov. 12, 2013 at 10:00 a.m. in
the bankruptcy cases of Velti 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.
VELTI INC: Obtained Interim $6.3-Mil. DIP Loan Approval
-------------------------------------------------------
Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District
of Delaware gave Velti Inc., et al., interim authority to obtain
$6,326,000 in postpetition financing from U.S. Bank, National
Association, as administrative agent for GSO Credit-A Partners,
LP, GSO Palmetto Opportunistic Investment Partners LP and GSO
Coastline Partners LP.
The Interim DIP Loan will be divided between Velti, Inc., and
Air2Web, Inc., (collectively "Debtor Borrowers") and Velti
Limited, Velti DR Limited, and Mobile Interactive Group Limited,
each a private limited company organized under the laws of England
and Wales, (collectively "Non-Debtor Borrowers"). The Debtor
Borrowers will receive $2,158,000, while the U.K. non-debtor
affiliates will receive $4,168,000.
The DIP Loan is composed of a term loan in the aggregate amount of
at least $10 million of new money and $15 million of aggregate
principal amount of loans outstanding under the Debtors'
prepetition credit agreement.
The DIP Loans will bear interest at the rate of 12% per annum,
payable in cash in arrears on a monthly basis. After the
occurrence and during the continuance of any event of default,
interest on all DIP Loans and all other outstanding amounts under
the DIP Documentation will bear interest at a rate equal to 2.0%
per annum above the otherwise applicable rate, to the fullest
extent permitted under applicable law.
The DIP Facility will mature on the date that is the earliest to
occur of (i) 30 days after entry of the Interim Order if the Final
Order has not been entered on or prior to that date, (ii) Dec. 31,
2013, provided that, subject to the satisfaction of certain
requirements, the Borrowers may elect once to extend that date by
an additional 30 days to Jan. 30, 2014; (iii) the effective date
of a chapter 11 plan; (iv) the closing date of the sale of the
Debtors' Mobile Marketing Business Unit; and (v) the acceleration
of the DIP Loans.
As security of the DIP Obligations, the DIP Lender is granted an
allowed senior administrative expense claims; valid and fully-
perfected first priority lien on and security interest in all of
the Debtors' assets; and valid and fully-perfected junior lien on
and security interests in all of the Debtors' assets that are
subject to valid and perfected prepetition liens. The DIP Claim
and Liens are subject to a carve-out.
Carve-out means (a) any fees payable to (i) the Clerk of the
Bankruptcy Court and (ii) the Office of the U.S. Trustee, and (b)
up to $750,000 of allowed and unpaid fees and expenses of
professionals retained by order of the Bankruptcy Court, incurred
after the occurrence of a carve-out event, and (c) allowed,
accrued and unpaid fees and out-of-pocket expenses incurred on or
prior to the occurrence of a carve-out event and that are
consistent with a budget.
A full-text copy of the Interim DIP Order with budget is available
for free at http://bankrupt.com/misc/VELTIdipord1105.PDF
The final hearing is scheduled for Dec. 2, 2013, at 9:30 a.m.
(Eastern Standard Time). Objections are due Nov. 25.
About Velti Inc.
Velti Inc., a provider of technology for marketing on mobile
devices, sought Chapter 11 protection (Bankr. D. Del. Case No. 13-
bk-12878) on Nov. 4, 2013.
Velti Inc., a San Francisco-based unit of Velti Plc, listed assets
of as much $50 million and debt of as much as $100 million in
Chapter 11 documents filed this week. Its Air2Web Inc. unit,
based in Atlanta, also sought creditor protection.
Velti Plc, which trades on the Nasdaq Stock Market, isn't part of
the bankruptcy process. Operations in the U.K., Greece, India,
China, Brazil, Russia, the United Arab Emirates and elsewhere
outside the U.S. didn't seek protection and business there will
continue as usual.
The Debtors are represented by Stuart M. Brown, Esq., at DLA PIPER
LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq. --
richard.chesley@dlapiper.com -- Matthew M. Murphy, Esq. --
matt.murphy@dlapiper.com -- and Chun I. Jang, Esq. --
chun.jang@dlapiper.com -- at DLA PIPER LLP (US), in Chicago,
Illinois.
U.S. Bank, National Association, as administrative agent for GSO
Credit-A Partners, LP, GSO Palmetto Opportunistic Investment
Partners LP and GSO Coastline Partners LP, extended $25 million of
postpetition financing to the Debtors. The DIP Lenders, which are
also the Prepetition Lenders, are represented by Sandy Qusba, Esq.
-- squsba@stblaw.com -- and Hyang-Sook Lee, Esq. --
slee@stblaw.com -- at Simpson Thacher & Bartlett LLP, in New York.
VELTI INC: Has Interim Authority to Use Cash Collateral
-------------------------------------------------------
Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District
of Delaware gave Velti Inc., et al., interim authority to use cash
collateral to continue to operate their business.
As adequate protection, the Prepetition Lenders and Agent are
granted adequate protection liens and superpriority claims,
subject and subordinate only to the DIP Liens, a carve-out, and
the non-primed liens. Carve-out means (a) any fees payable to (i)
the Clerk of the Bankruptcy Court and (ii) the Office of the U.S.
Trustee, and (b) up to $750,000 of allowed and unpaid fees and
expenses of professionals retained by order of the Bankruptcy
Court, incurred after the occurrence of a carve-out event, and (c)
allowed, accrued and unpaid fees and out-of-pocket expenses
incurred on or prior to the occurrence of a carve-out event and
that are consistent with a budget.
A full-text copy of the Interim DIP Order with budget is available
for free at http://bankrupt.com/misc/VELTIdipord1105.PDF
The final hearing is scheduled for Dec. 2, 2013, at 9:30 a.m.
(Eastern Standard Time). Objections are due Nov. 25.
About Velti Inc.
Velti Inc., a provider of technology for marketing on mobile
devices, sought Chapter 11 protection (Bankr. D. Del. Case No. 13-
bk-12878) on Nov. 4, 2013.
Velti Inc., a San Francisco-based unit of Velti Plc, listed assets
of as much $50 million and debt of as much as $100 million in
Chapter 11 documents filed this week. Its Air2Web Inc. unit,
based in Atlanta, also sought creditor protection.
Velti Plc, which trades on the Nasdaq Stock Market, isn't part of
the bankruptcy process. Operations in the U.K., Greece, India,
China, Brazil, Russia, the United Arab Emirates and elsewhere
outside the U.S. didn't seek protection and business there will
continue as usual.
The Debtors are represented by Stuart M. Brown, Esq., at DLA PIPER
LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq.,
Matthew M. Murphy, Esq., and Chun I. Jang, Esq., at DLA PIPER LLP
(US), in Chicago, Illinois.
U.S. Bank, National Association, as administrative agent for GSO
Credit-A Partners, LP, GSO Palmetto Opportunistic Investment
Partners LP and GSO Coastline Partners LP, extended $25 million of
postpetition financing to the Debtors. The DIP Lenders, which are
also the Prepetition Lenders, are represented by Sandy Qusba,
Esq., and Hyang-Sook Lee, Esq., at Simpson Thacher & Bartlett LLP,
in New York.
VELTI INC: Seeks to Sell Mobile Marketing Business Unit
-------------------------------------------------------
Velti Inc., et al., seek authority from the U.S. Bankruptcy Court
for the District of Delaware to sell substantially all assets of
Velti Inc., Air2Web Inc. and Air 2Web Interactive, Inc., including
as related to the mobile marketing business unit, to GSO MMBU
Acquisition LLC pursuant to a stalking horse purchase agreement.
The Stalking Horse Purchaser has agreed to purchase the MMBU
Assets for (a) the assumption of certain liabilities, (b) a
reduction in an amount equal to $26.25 million in the aggregate
amounts outstanding under the DIP Financing Agreement, (c) a
reduction in an amount equal to $3.75 million of the aggregate
amount outstanding under the prepetition credit agreement, and (d)
cash in an amount equal to $1,250,000 for payment of cure coss for
assumed executory contracts and certain other costs and expenses.
To maximize the value of the MMBU Assets, the Debtors propose to
conduct an auction on Dec. 9, 2013, at 10:00 a.m. Interested
bidders must submit qualified bids on or before Dec. 3. A hearing
to approve the sale of the MMBU Assets will be held on or before
Dec. 16. The closing of the sale of the Purchased Assets pursuant
to the Successful Bid must occur by no later than Dec. 20.
About Velti Inc.
Velti Inc., a provider of technology for marketing on mobile
devices, sought Chapter 11 protection (Bankr. D. Del. Case No. 13-
bk-12878) on Nov. 4.
Velti Inc., a San Francisco-based unit of Velti Plc, listed assets
of as much $50 million and debt of as much as $100 million in
Chapter 11 documents filed this week. Its Air2Web Inc. unit,
based in Atlanta, also sought creditor protection.
Velti Plc, which trades on the Nasdaq Stock Market, isn't part of
the bankruptcy process. Operations in the U.K., Greece, India,
China, Brazil, Russia, the United Arab Emirates and elsewhere
outside the U.S. didn't seek protection and business there will
continue as usual.
The Debtors are represented by Stuart M. Brown, Esq., at DLA PIPER
LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq.,
Matthew M. Murphy, Esq., and Chun I. Jang, Esq., at DLA PIPER LLP
(US), in Chicago, Illinois.
U.S. Bank, National Association, as administrative agent for GSO
Credit-A Partners, LP, GSO Palmetto Opportunistic Investment
Partners LP and GSO Coastline Partners LP, extended $25 million of
postpetition financing to the Debtors. The DIP Lenders, which are
also the Prepetition Lenders, are represented by Sandy Qusba,
Esq., and Hyang-Sook Lee, Esq., at Simpson Thacher & Bartlett LLP,
in New York.
VERTIS HOLDINGS: Seeks Another Three Months for Liquidating Plan
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that although Vertis Inc. sold most of its assets in
January, the Baltimore-based advertising and marketing services
provider still isn't ready to file a liquidating Chapter 11 plan.
According to the report, the company filed papers this week for a
fourth time seeking to extend its exclusive right to propose a
plan. If approved at a Dec. 11 hearing, the new deadline will be
Feb. 3, about two months short of the maximum permitted under the
U.S. Bankruptcy Code.
Quad/Graphics Inc. bought the business for a net purchase price
that worked out to be $170 million, the buyer said. The sale
created a $20 million fund to wind down the remainder of the
bankruptcy. By this month, about $10 million is left.
Vertis was in bankruptcy twice before. The prior bankruptcy in
late 2010 required less than a month to complete. That plan
eliminated $700 million in debt. In the new bankruptcy, Vertis
listed assets of $837.8 million and debt totaling $814 million.
Liabilities included $68.6 million on a revolving credit and
$427.7 million on a secured term loan.
Through the first bankruptcy in 2008, Vertis merged with American
Color Graphics Inc., also in Chapter 11 at the time. The first
reorganization reduced combined debt by almost $1 billion.
About Vertis
Vertis Holdings Inc. -- http://www.thefuturevertis.com/--
provides advertising services in a variety of print media,
including newspaper inserts such as magazines and supplements.
Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821),
returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to
sell the business to Quad/Graphics, Inc., for $258.5 million,
subject to higher and better offers in an auction.
As of Aug. 31, 2012, the Debtors' unaudited consolidated financial
statements reflected assets of approximately $837.8 million and
liabilities of approximately $814.0 million.
Bankruptcy Judge Christopher Sontchi presides over the 2012 case.
Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal,
and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised
by Blackstone Advisory Partners, Arnold & Porter LLP and Foley &
Lardner LLP, special counsel for antitrust advice. Kurtzman
Carson Consultants LLC is the Debtors' claims agent.
Quad/Graphics is a global provider of print and related
multichannel solutions for consumer magazines, special interest
publications, catalogs, retail inserts/circulars, direct mail,
books, directories, and commercial and specialty products,
including in-store signage. Headquartered in Sussex, Wis. (just
west of Milwaukee), the Company has approximately 22,000 full-time
equivalent employees working from more than 50 print-production
facilities as well as other support locations throughout North
America, Latin America and Europe.
Vertis first filed for bankruptcy (Bankr. D. Del. Case No.
08-11460) on July 15, 2008, to complete a merger with American
Color Graphics. ACG also commenced separate bankruptcy
proceedings. In August 2008, Vertis emerged from bankruptcy,
completing the merger.
Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its
assets and debts of more than $1 billion. Affiliates also filed
separate Chapter 11 petitions -- American Color Graphics, Inc.
(Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr.
S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case
No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No.
10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and
Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The
bankruptcy court approved the prepackaged Chapter 11 plan on
Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The
plan reduced Vertis' debt by more than $700 million or 60%.
GE Capital Corporation, which serves as DIP Agent and Prepetition
Agent, is represented in the 2012 case by lawyers at Winston &
Strawn LLP. Morgan Stanley Senior Funding Inc., the agent under
the prepetition term loan, and as term loan collateral agent, is
represented by lawyers at White & Case LLP, and Milbank Tweed
Hadley & McCloy LLP.
On Jan. 16, 2013, Quad/Graphics completed the acquisition of
Vertis Holdings for a net purchase price of $170 million. This
assumes the purchase price of $267 million less the payment of
$97 million for current assets that are in excess of normalized
working capital requirements.
VISUAL CONTROLS/CHAMP: Case Summary & 20 Top Unsecured Creditors
----------------------------------------------------------------
Debtor: Visual Controls/Champ Inc.
75 Cascade Blvd.
Milford, CT 06460
Case No.: 13-32133
Chapter 11 Petition Date: November 6, 2013
Court: United States Bankruptcy Court
District of Connecticut (New Haven)
Judge: Hon. Julie A. Manning
Debtor's Counsel: Stephen M. Kindseth, Esq.
ZEISLER & ZEISLER
10 Middle Street, 15th Floor
Bridgeport, CT 06604
Tel: (203) 368-4234
Fax: 203-367-9678
Email: skindseth@zeislaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Paul Featherston, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/ctb13-32133.pdf
WAFERGEN BIO-SYSTEMS: Inks Pact to Liquidate Subsidiary
-------------------------------------------------------
WaferGen Bio-systems, Inc., WaferGen Biosystems (M) Sdn. Bhd., a
subsidiary of the Company, and Malaysian Technology Development
Corporation Sdn. Bhd. entered into an agreement to liquidate WGBM.
Pursuant to the terms of the Agreement, certain promissory notes,
which were issued in August 2013 by the Company in favor of WGBM
in consideration of WGBM's cancellation of the Company's
obligations under a term loan owing to WGBM, will be divided in
increments of $100,000 each, of which the Company will receive 14
and MTDC the remaining 52. At any time prior to their maturity
date, the Company may issue MTDC shares of the Company's common
stock with a value, based on the average closing price in the
preceding 30 days, equal to the face value of their notes. The
remaining net assets of WGBM of approximately $300,000 will be
distributed 22.42 percent to the Company and 77.78 percent to
MTDC.
As a result of the liquidation of WGBM, the Company will be
required to record Malaysia Notes with an aggregate face value of
$5.2 million as debt, net of debt discount initially estimated to
be approximately $3 million, on its balance sheet, with an
offsetting reduction in derivative liabilities and temporary
equity.
About WaferGen Bio-systems
Fremont, California-based WaferGen Bio-systems, Inc., engages in
the development of systems for gene expression quantification,
genotyping and stem cell research. Since 2008, the Company's
primary focus has been on the development, manufacture and
marketing of its SmartChip System, a genetic analysis platform
used for profiling and validating molecular biomarkers in the life
sciences and pharmaceutical drug discovery industries.
The Company's balance sheet at March 31, 2013, showed $7.1 million
in total assets, $9.3 million in total liabilities, and a
stockholder's deficit of $2.2 million. The Company reported a net
loss of $8.2 million on $586,000 of revenue in 2012, net loss of
$13.1 million on $523,000 of revenue in 2011.
As reported in the TCR on April 11, 2013, SingerLewak LLP, in San
Jose, California, expressed substantial doubt about WaferGen Bio-
systems' ability to continue as a going concern, citing the
Company's operating losses and negative cash flows since
inception.
WALLDESIGN INC: Has Joint Plan With Creditors Committee
-------------------------------------------------------
Walldesign Inc. will seek approval of the disclosure statement
explaining its proposed Chapter 11 Plan of Liquidation on Nov. 20,
2013, at 10:00 a.m.
Walldesign on Oct. 18, 2013, filed a disclosure statement
explaining its proposed Chapter 11 plan. A copy of the document
is available for free at:
http://bankrupt.com/misc/Walldesign_Inc_Plan_Outline_101813.pdf
The Debtor and the statutory committee of unsecured creditors have
prepared a Joint Plan after extensive review and analysis of all
options available to the estate's creditors.
The Plan provides for the liquidation of assets of the estate.
The Debtor and the Committee seek to make payments under the Plan
to holders of allowed administrative claims and other holders of
classes entitled to distributions of all cash on hand, together
with net proceeds realized from the litigation of claims held by
the estate and liquidation of any other assets.
Under the Plan, secured creditors Comerica and VFS are unimpaired
and will be paid from the liquidation of their collateral.
Unsecured creditors are impaired and will receive interests in the
liquidation trust created under the Plan. The disclosure
statement did not provide for an estimated recovery for unsecured
creditors.
Claims vs. Bello
The Creditors Committee has begun an investigation of potential
claims against Michael Bello and other insiders. Mr. Bello was
the CEO and sole shareholder of the Debtor.
The Committee says that distributions that Bello received from the
Debtor total in excess of $20 million during the four years
preceding the Petition Date. As the Debtor was insolvent,
undercapitalized and/or unable to pay its debts as they became due
during the period, the Committee intends to recover such
distributions for the benefit of the Debtor's estates.
The Committee has sought approval to retain the law firm of Landau
Gottfried & Berger LLP as special litigation attorneys to further
investigate and, as appropriate, prosecute claims against Bello
and other insiders on a contingent fee basis. Upon approval of
the retention, the Committee will file a complaint against Bello
and other insiders, as well as other third parties.
Recoveries from the Joint Plan will be funded from the proceeds of
the Committee's litigation against Bello and other insiders.
Objections to Disclosures
The Painters Joint Trusts, which are priority unsecured creditors,
opposes approval of the Disclosure Statement in its present form.
The Trusts say the Disclosure Statement and the Plan (i) do not
adequately distinguish between non-tax priority unsecured claims,
as required by the various sections of 11 U.S.C. Sec. 507; and
(ii) do not provide sufficient information to allow priority
unsecured creditors to estimate the sums they can expect to
receive from the Estate. The Trusts also say the Debtor claims to
reject the collective bargaining agreement which grants valuable
rights to the Trusts, as third-party beneficiaries,
notwithstanding the fact that the Debtor has not presented any
evidence of compliance with 11 U.S.C. Sec. 1113, the exclusive
statutory source of legal requirements for postpetition
termination of collective bargaining agreements.
The Painters Joint Trusts are represented by:
Daryl E. Martin, esq.
CHRISTENSEN JAMES & MARTIN
7440 West Sahara Ave.
Las Vegas, NV 89117
Telephone: (702) 255-1718
Facsimile: (702) 255-0871
E-mail: dem@cjmlv.com
About Walldesign
Walldesign Inc., incorporated in 1983, has been in the business of
installing drywall, insulation, plaster and providing related
services to single and multi-family construction projects
throughout California, Nevada and Arizona for over 20 years.
Customers include some of the largest homebuilders in the United
States, such as Pulte, DR Horton, K. Hovnanian, Toll Brothers and
KB Homes. In fiscal 2011, Walldesign generated more than $43.5
million in annual revenues.
Walldesign, based in Newport Beach, California, said the global
credit crisis that occurred in the third quarter of 2008 had a
severe negative impact on its business: capital for construction
projects dried up, buyers vacated the market for new homes and
profit margins on new jobs eroded. Although it has significantly
downsized its operations in an effort to remain profitable in the
recessionary conditions, cash flow problems arose during this
process. These problems slowed payments to vendors, precipitating
collection lawsuits forcing it to seek Chapter 11 protection
(Bankr. C.D. Calif. Case No. 12-10105) on Jan. 4, 2012.
Judge Robert N. Kwan presides over the case. Marc J. Winthrop,
Esq., Sean A. O'Keefe, Esq., and Jeannie Kim, Esq., at Winthrop
Couchot, serve as the Debtor's counsel. In its petition, the
Debtor estimated $10 million to $50 million in assets and debts.
The petition was signed by Michael Bello, chief executive officer.
Brian Weiss of BSW & Associates serve as the Debtor's Chief
Restructuring Officer.
An official committee of unsecured creditors has been appointed in
the case. The Committee tapped Jones Day as its counsel.
WEST CORP: Files Form 10-Q, Posts $46.1 Million Net Income in Q3
----------------------------------------------------------------
West Corporation filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing 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 during
the prior year.
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 a year ago.
The Company's balance sheet at Sept. 30, 2013, showed $3.48
billion in total assets, $4.26 billion in total liabilities and a
$782.60 million total stockholders' deficit.
Bankruptcy Warning
"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 the quarterly report.
A copy of the Form 10-Q is available for free at:
http://is.gd/hStOmh
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.
* Non-Recourse Underwater Mortgages Are Valid Claims
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in Chicago handed down an
11-page opinion this week to state the obvious: a non-recourse
subordinate mortgage completely under water nonetheless represents
an unsecured claim under Section 1111(b)(1)(A) of the Bankruptcy
Code.
According to the report, the Chapter 11 case involved real
property worth less than the $8.9 million first mortgage. The $2.5
million second mortgage was non-recourse, meaning the mortgage
holder outside of bankruptcy could look only to the property and
would have no claim against the owner for a deficiency. The debtor
argued that the holder of the concededly valid second mortgage had
no claim whatsoever.
The debtor advanced several theories, rejected in the Nov. 4
opinion for the three-judge panel by U.S. Circuit Judge William J.
Bauer, including the notion that neither the state nor Section
1111(b) gave the mortgage holder a deficiency claim against the
debtor.
Judge Bauer surveyed the plain language of the statue, along with
legislative history, to conclude that Section 1111(b) affords the
mortgage holder an unsecured claim.
Judge Bauer said the bankrupt was unable to cite any court opinion
saying the mortgage holder had no claim at all.
The case is In re Brookfield Commons No. 1 LLC, 13-2241, U.S.
Court of Appeals for the Seventh Circuit (Chicago).
* Late Claim Doesn't Invalidate Underlying Mortgage
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in St. Louis joined two
other circuit courts in ruling that the failure to file a timely
claim doesn't invalidate the underlying mortgage.
According to the report, in a Chapter 13 case, the last day for
filing claims was in January. The home mortgage lender, owed
$210,000, didn't file a claim until August. The individual
bankrupts conceded that the mortgage was otherwise valid and
enforceable.
The bankruptcy judge, upheld by the Bankruptcy Appellate Panel,
rejected the bankrupts' argument that the lien was invalid because
the claim was untimely. The bankrupts relied on the plain language
of Section 506(d) of the Bankruptcy Code.
Writing for three judges on the St. Louis appeals court, U.S.
Circuit Judge Michael J. Melloy noted in his Nov. 4 opinion that
the plain-meaning argument had some appeal, although it is
overcome by the U.S. Supreme Court's Dewsnup opinion, holding that
mortgages ride through bankruptcy.
U.S. Courts of Appeal in Chicago and Richmond, Virginia have
already issued opinions saying that a late-filed claim doesn't
invalidate the underlying mortgage.
The case is Shelton v. Citimortgage Inc. (In re Shelton), 12-3555,
U.S. Court of Appeals for the Eighth Circuit (St. Louis).
* Rollover IRA Remains an Exempt Asset in Bankruptcy
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that an investment retirement account created by a
rollover from an existing IRA is an exempt asset under Section
522(b)(3)(C) of the Bankruptcy Code, according to a Nov. 4 opinion
from the U.S. Bankruptcy Appellate Panel in St. Louis.
According to the report, an individual in Chapter 7 held an
annuity in an IRA worth $236,000. The trustee unsuccessfully
argued in bankruptcy court that it wasn't an exempt asset because
the entire purchase price for the annuity was paid in one lump sum
by rolling over another IRA.
U.S. Bankruptcy Judge Arthur B. Federman, writing for the three-
judge panel, upheld the lower court by ruling that the annuity in
the IRA was exempt.
Judge Federman said neither the Internal Revenue Service nor any
court had ever said a rollover IRA didn't qualify under Section
408 of the IRS Code, governing what qualifies as an IRA.
Because the IRA qualified under Section 408, it was an exempt
asset under Bankruptcy Code Section 522, Judge Federman said.
The case is Running v. Miller (In re Miller), 13-6026, U.S.
Bankruptcy Appellate Panel for the Eighth Circuit (St. Louis).
* Fitch: ACA Enrollment Extension Could Dent Insurance Industry
---------------------------------------------------------------
Extending the enrollment period for Americans seeking health
coverage under the Patient Protection and Affordable Care Act
could cause pricing and logistical implications for U.S. health
insurers, according to Fitch Ratings. Fitch believes an extension
would be a negative for health insurers. Pressure on insurers to
extend existing policies is also in focus, but is likely less
problematic than extending the enrollment period.
An extension would enable consumers to put off any decision about
purchasing healthcare beyond the current deadline, potentially
increasing the portion of those who wait until they need the
insurance to buy it. The open enrollment period for health
insurance plans offered in the insurance exchanges began on Oct. 1
and the process has been plagued with technical problems on
websites including www.healthcare.gov. The current deadline for
enrollment is March 31, 2014, although plans will take effect on
Jan. 1 for those who sign up earlier.
Allowing more time would also result in a bevy of logistical
issues regarding pricing and state participation that could raise
short-term risk for insurers as well as delay the positive
benefits of ACA for hospitals.
Under normal circumstances, insurers set premium rates in advance
of the enrollment period based on estimates of the cost of care
during that enrollment period. To the extent that the enrollment
period is lengthened, those cost of care estimates could deviate
more from the original estimates. Insurers would like to be able
to price for this risk, but it is unclear as to whether they would
be able to.
Additionally, insurers in some states are being encouraged by
state insurance regulators to extend existing policies for three
months beyond their Jan. 1, 2014 expiration date due to
technological problems with the exchanges' websites. Fitch views
this as less problematic for health insurers than an extension of
the current enrollment period as long as benefits and premiums on
the extended policies are unchanged from current levels and the
extension is effective for only a relatively short period.
Nevertheless, such extensions could result in a short-term
increase in risk levels of business sourced through the exchanges
under the assumption that the consumers whose policies are
extended are likely to have better risk profiles than early users
of exchange-sourced insurance. The financial results of insurers
whose enrollment is disproportionally weighted towards exchange-
sourced business could be adversely affected by the extension.
Fitch also believes an extension would be negative for hospitals
because it would delay the realization of the positive benefits of
reform, which are higher patient volumes and lower bad debt
expense related to treating the uninsured.
* BOOK REVIEW: The Oil Business in Latin America: The Early Years
-----------------------------------------------------------------
Author: John D. Wirth Ed.
Publisher: Beard Books
Softcover: 282 pages
List price: $34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at
http://is.gd/DvFouR
This book grew out of a 1981 meeting of the American Historical
Society. It highlights the origin and evolution of the state-
owned petroleum companies in Argentina, Mexico, Brazil, and
Venezuela.
Argentina was the first country ever to nationalize its
petroleum industry, and soon it was the norm worldwide, with the
notable exception of the United States. John Wirth calls this
phenomenon "perhaps in our century the oldest and most
celebrated of confrontations between powerful private entities
and the state."
The book consists of five case studies and a conclusion, as
follows:
* Jersey Standard and the Politics of Latin American Oil
Production, 1911-30 (Jonathan C. Brown)
* YPF: The Formative Years of Latin America's Pioneer State
Oil Company, 1922-39 (Carl E. Solberg)
* Setting the Brazilian Agenda, 1936-39 (John Wirth)
* Pemex: The Trajectory of National Oil Policy (Esperanza
Duran)
* The Politics of Energy in Venezuela (Edwin Lieuwen)
* The State Companies: A Public Policy Perspective (Alfred
H. Saulniers)
The authors assess the conditions at the time they were writing,
and relate them back to the critical formative years for each of
the companies under review. They also examine the four
interconnecting roles of a state-run oil industry and
distinguish them from those of a private company. First, is the
entrepreneurial role of control, management, and exploitation of
a nation's oil resources. Second, is production for the private
industrial sector at attractive prices. Third, is the
integration of plans for military, financial, and development
programs into the overall industrial policy planning process.
Finally, in some countries is the promotion of social
development by subsidizing energy for consumers and by promoting
the government's ideas of social and labor policy and labor
relations.
The author's approach is "conceptual and policy oriented rather
than narrative," but they provide a fascinating look at the
politics and development of the region. Mr. Brown provides a
concise history of the early years of the Standard Oil group and
the effects of its 1911 dissolution on its Latin American
operations, as well as power struggles with competitors and
governments that eventually nationalized most of its activities.
Mr. Solberg covers the many years of internal conflict over oil
policy in Argentina and YPF's lack of monopoly control over all
sectors of the oil industry. Mr. Wirth describes the politics
and individuals behind the privatization of Brazil's oil
industry leading to the creation of Petrobras in 1953. Mr. Duran
notes the wrangling between provinces and central government in
the evolution of Pemex, and in other Latin American countries.
Mr. Lieuwin discusses the mixed blessing that oil has proven for
Venezuela., creating a lopsided economy dependent on the ups and
downs of international markets. Mr. Saunders concludes that many
of the then-current problems of the state oil companies were
rooted in their early and checkered histories." Indeed, he says,
"the problems of the past have endured not because the public
petroleum companies behaved like the public enterprises they
are; they have endured because governments, as public owners,
have abdicated their responsibilities to the companies."
John D. Wirth is Gildred Professor of Latin American Studies at
Standford University.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
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related conferences are encouraged. Send announcements to
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On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
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Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
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Editors.
Copyright 2013. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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*** End of Transmission ***