/raid1/www/Hosts/bankrupt/TCR_Public/131118.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, November 18, 2013, Vol. 17, No. 320
Headlines
6056 SYCAMORE: Case Summary & 5 Largest Unsecured Creditors
AFA FOODS: Beef Co. Can Try to Reverse Win in Tainted Meat Case
AGFEED INDUSTRIES: Says It Has a Plan Draft, Potential Buyer
ALLENS INC: Wants Until Dec. 26 to File Schedules of Assets
ALLIED DEFENSE: Suspending Filing of Reports with SEC
ALVARION LTD: Dec. 2 Hearing Set for Creditors' Settlement Plan
AMBAC FINANCIAL: Reports $231-Mil. Net Profit in Third Quarter
AMERICAN AIRLINES: Delta Airlines Mulls Bid for Airport Slots
AMERICAN APPAREL: Gets Waiver Under Credit Facility Obligation
AMERICAN APPAREL: Comparable Sales for October 2013 Dropped 1%
AMERICAN AXLE: Inks $200MM Underwriting Pact with J.P. Morgan
AMES DEPARTMENT: Creditors Wait 12 Years for 1% Distribution
ANACOR PHARMACEUTICALS: Incurs $16.8MM Net Loss in Third Quarter
APPLIED MINERALS: Incurs $3.8 Million Net Loss in Third Quarter
ATP OIL: Court Denied Bid to Strike 3 Counts in 2 ORRI Cases
BANCO PONTUAL: Bank With $450M Debt Gets Ch. 15 Protection
BEAZER HOMES: Posts $11.9 Million Net Income in Fourth Quarter
BEMARMARA CONSULTING: Chapter 15 Case Summary
BENTLEY PREMIER: Ch. 11 Trustee Hires Gollob Morgan as Accountant
BENTLEY PREMIER: Chapter 11 Trustee Hires Marc Powell as Manager
BENTLEY PREMIER: Ch. 11 Trustee Taps Searcy & Searcy as Attorney
BION ENVIRONMENTAL: Incurs $1.5 Million Net Loss in 1st Quarter
BLUESTEM BRANDS: S&P Assigns 'B' CCR & Rates $200MM Loan 'B'
BOMBARDIER INC: Fitch Affirms BB IDR, Outlook Revised to Negative
BOMBARDIER INC: S&P Corrects Preferred Shares Rating to 'B'
BP AUTOMOTIVE: 5th Cir. Remands Dispute With RML Entities
BRIGHTSTAR CORP: S&P Retains 'BB-' CCR on CreditWatch Postive
CABLEVISION SYSTEMS: S&P Puts 'BB' CCR on CreditWatch Negative
CAESARS ENTERTAINMENT: Bank Debt Trades at 6% Off
CALMENA ENERGY: In Default of Certain Debt Covenants
CENTERPLATE INC: S&P Assigns 'B' Rating to $420MM Secured Debt
CENTURYLINK INC: Fitch Rates Proposed Sr. Unsecured Notes BB+
CENTURYLINK INC: S&P Assigns 'BB' Rating to New Sr. Notes Due 2023
CHINA NATURAL: Says It Has a Plan Draft, Potential Buyer
CHINA PRECISION: Wei Xiao Appointed as Director
CLEAR CHANNEL: Incurs $101.8 Million Net Loss in Third Quarter
CLEAR CHANNEL: Bank Debt Trades at 3% Off
CLG LLC: Voluntary Chapter 11 Case Summary
CONCHO RESOURCES: Posts $30.4 Million Net Income in Third Quarter
COOPER-BOOTH: Gets Extension to File Restructuring Plan
CROSSOVER FINANCIAL: 5th Amended Plan Outline Due Nov. 20
DAYCO LLC: S&P Rates $425MM Secured Loan 'B+' CCR, Outlook Neg.
DESERT HOT SPRINGS, CA: On Verge of Bankruptcy, Says Goldman
DETROIT, MI: Fees for $350 Million Loan to Be Disclosed
DETROIT, MI: Union Asks Judge for Direct Appeal in Bankruptcy Case
DETROIT, MI: DRCEA Members Gather to Discuss Health-Care Extension
DIOCESE OF GALLUP, NM: Goes Bankrupt From Sexual-Abuse Claims
DONNER METALS: Survival Hinges on Sale of Interest Resolution
DREIER LLP: Top NY Court Ends Malpractice Case Against Ex-Attys
DUMA ENERGY: Director John Brewster Resigns
DUNLAP OIL: Canyon Asks Court to Convert Bankr. Cases to Ch. 7
DUNLAP OIL: Pineda Asks to Promptly End Automatic Stay
DUNLAP OIL: Says CCB & Pineda's Bid to Delay Confirmation Improper
E.W. SCRIPPS: S&P Assigns BB- Corp. Credit Rating; Outlook Stable
EASTMAN KODAK: Professional Fees Cut $8.2-Mil. to $235.8 Mil.
EHCC LLC: Case Summary & Unsecured Creditor
ELBIT IMAGING: Nov. 21 Voting Deadline Set for Refinancing
ENDEAVOUR INTERNATIONAL: BlackRock Held 10.2% Stake at Oct. 31
ENDURANCE INTERNATIONAL: S&P Rates $150MM Incremental Loan 'B'
ENERGY TRANSFER: Fitch Rates $400MM Sr. Secured Notes 'BB+'
ENERGY TRANSFER: S&P Assigns 'BB' Rating to $400MM Sr. Sec. Notes
ERF WIRELESS: Willow Creek Held 9.9% Equity Stake at Oct. 31
EVERTEC INC: Bank Debt Trades at 3% Off
EXCEL MARITIME: Court Okays Hiring of Marsoft Inc as Expert
FAIRMONT GENERAL: Files Schedules of Assets and Liabilities
FANNIE MAE: Reports Net Income of $8.7 Billion in Third Quarter
FIBERTOWER CORP: Exclusive Period Extension Approved
FONTAINEBLEAU LAS VEGAS: Fight on Failed $3-Bil. Resort Nears Deal
FOX TROT CORP: Files Schedules of Assets and Liabilities
FOX TROT CORP: Gets Final OK to Tap Frost Brown as Bankr. Counsel
FREESEAS INC: Issues Add'l 2 Million Settlement Shares to Crede
FRESH & EASY: Plots Real Estate Sale to Fortress Unit
FRESH & EASY: Drawbridge Tapped to Buy Real Estate
FURNITURE BRANDS: Taps Retail Consulting as Estate Advisor
GALLUP DIOCESE: Voluntary Chapter 11 Case Summary
GETTY IMAGES: Bank Debt Trades at 11% Off
GLOBAL AVIATION: Meeting to Form Creditors' Panel on Nov. 22
GLOBAL AVIATION: Case Stalled by Back-to-Back Bankruptcies
GLOBAL AVIATION: Interim Financing Approved
GLOBAL AVIATION: Bankruptcy Proceeds in Delaware for Now
GLOBALSTAR INC: Amends COFACE Senior Debt Facility Agreement
GMX RESOURCES: Sues Emerald Oil for Misuse of Confidential Info
GORDON PROPERTIES: Settlement With Owners Association Denied
GREENCROFT OBLIGATED: Fitch Rates New $43.5MM Revenue Bonds 'BB+'
GYMBOREE CORP: Bank Debt Trades at 3% Off
HAMPTON ROADS: Posts $2.8 Million Net Income in Third Quarter
HAWKER BEECHCRAFT: Nyanjom's Bid to Strike Defenses Rejected
HEARTLAND DENTAL: S&P Rates $160MM Incremental Term Loan 'B'
HELIOS FINANCE: Fitch Affirms 'C' Rating on Class B-4 Notes
HIGHER SOURCE AVIATION: Case Summary & 20 Top Unsecured Creditors
HILAND PARTNERS: S&P Retains 'B-' Rating on $550MM Senior Notes
IGLESIA PUERTA: Seeks Cash Collateral Use to Continue to Operate
IGLESIA PUERTA: Files Schedules of Assets and Liabilities
IGLESIA PUERTA: Employs James & Haugland as Bankruptcy Counsel
IMAGEWARE SYSTEMS: Extends Employments of Executives Until 2014
INDEMNITY INSURANCE: A.M. Best Downgrades FSR to 'E'
INTELLIGRATED INC: S&P Retains 'B' Rating on 1st-Lien Term Loan
INTERFAITH MEDICAL: Hospital and Creditors Sent to Mediation
INTERLEUKIN GENETICS: Amends Participation Agreement with RHSC
INTERNAP NETWORK: S&P Assigns 'B' CCR; Outlook Stable
IZEA INC: Incurs $975,000 Net Loss in Third Quarter
JAMES RIVER: Incurs $25.5 Million Net Loss in Third Quarter
JEFFERSON COUNTY: Fitch to Rate 3 Warrant Series 'BB+'
JOHNSON PROPERTY: Voluntary Chapter 11 Case Summary
LEAGUE ASSETS: Orange Capital Makes Binding Cash Offer
LEO MOTORS: Appoints Kang as Co-CEO and Co-Chairman
LIBERTY HARBOR: Accused of Forum Shopping in Ch. 11 Case
LIGHTSQUARED INC: Discontent with Dish Network Chairman Detailed
LONGVIEW POWER: Files Chapter 11 Debt Restructuring Plan
LOZIER PROPERTIES: Voluntary Chapter 11 Case Summary
LTV STEEL: USW Set to Meet President Obama at Cleveland Facility
MCCLATCHY CO: Posts $7.3 Million Net Income in Third Quarter
MCDERMOTT INTERNATIONAL: Downgraded on 3 Weak Quarters in 2013
MGM RESORTS: Incurs $31.8 Million Net Loss in Third Quarter
MERRIMACK PHARMACEUTICALS: Incurs $39.8MM Loss in 3rd Quarter
MJW PROPERTIES: Case Summary & Unsecured Creditor
MOMENTIVE PERFORMANCE: Posts $67-Mil. Net Loss in Third Quarter
MOMENTIVE SPECIALTY: Amends 2012 Form 10-K
MONARCH COMMUNITY: Treasury Approves Preferred Stock Exchange
MONTEREY CHECKER: District Court Won't Hear Ownership Dispute
MORGANS HOTEL: Files Form 10-Q, Incurs $14.4MM Net Loss in Q3
MOTORS LIQUIDATION: Wilmington Files GUC Trust Report & Budgets
MURRAY ENERGY: S&P Rates Proposed $1.02-Bil. First Lien Loan 'BB-'
MUSCLEPHARM CORP: Terminates License Agreement with MPS
NATIONAL HOLDINGS: B. Riley Held 5.2% Equity Stake at Oct. 24
NEONODE INC: Incurs $3.3 Million Net Loss in Third Quarter
NNN PARKWAY CORPORATE: Case Summary & 20 Top Unsecured Creditors
NORCRAFT COS: S&P Raises CCR to 'B+' & Removes Rating from Watch
NORTEL NETWORKS: Allocation Trial Being Delayed Until April 28
NUPATHE INC: Capital Raising Failure May Result in Debt Default
ONE CALL: S&P Affirms 'B' CCR & Removes Rating from CreditWatch
ORCHARD SUPPLY: Plan Set for Dec. 20 Confirmation
ORTHODONTIC CENTERS: Court Reopens Zeh Lawsuit to Enforce Accord
OVERSEAS SHIPHOLDING: Ex-Officials Ask Judge to Toss Suit
PETRON ENERGY: Incurs $468,900 Net Loss in Third Quarter
PHYSIOTHERAPY HOLDINGS: Files Prepack Plan, Has December Hearing
PHYSIOTHERAPY HOLDINGS: Seeks to Use Cash Collateral
PHYSIOTHERAPY HOLDINGS: Employs Kurtzman Carson as Claims Agent
ORCHARD SUPPLY: Amended Plan Filed; Disclosure Statement Approved
ORMET CORP: Emergency Wind Down Approved
OVERSEAS SHIPHOLDING: Ex-Officials Ask Judge to Toss Suit
POST HOLDINGS: S&P Lowers CCR to 'B' on Increased Leverage
PRESSURE BIOSCIENCES: Incurs $716,000 Net Loss in 3rd Quarter
QUAD/GRAPHICS INC: S&P Revises Outlook on 'BB' Rating to Negative
QUALITY DISTRIBUTION: Posts $2.7 Million Net Income in Q3
QUALITY HOME: S&P Assigns 'CCC' Rating to $70MM Second Lien Loan
QUANTUM FUEL: Seamans Capital Held 8.3% Equity Stake at Nov. 7
QUENTIN HIGH: Voluntary Chapter 11 Case Summary
QUINCE ENTERPRISES: Case Summary & 2 Largest Unsecured Creditors
RADIAN GROUP: Declares Regular Quarterly Dividend on Common Stock
RAM OF EASTERN: Hearing on Plan Confirmation Continued to Nov. 25
REAL MEX: Z Capital Partners Becomes Largest Shareholder
RESIDENTIAL CAPITAL: More Than 95% of Voting Creditors Accept Plan
REVSTONE INDUSTRIES: Committee Contests Company Lawyers' Fees
ROTECH HEALTHCARE: Objects to $1MM Baker & McKenzie Fees
RURAL/METRO CORP: Plan Voting Deadline Set for Dec. 9
SADLER LAW FIRM: Voluntary Chapter 11 Case Summary
SCICOM DATA: Taps HLB Tautges as Accountant; U.S. Trustee Objects
SEQUENOM INC: Incurs $28.1 Million Net Loss in Third Quarter
SITEVOICE LLC: Case Summary & 5 Largest Unsecured Creditors
SOPHIA HOLDING: S&P Revises Outlook to Negative & Affirms 'B' CCR
SPECIALTY PRODUCTS: Fine-Tunes Plan; Says Rival Plan Unconfirmable
SPECIALTY PRODUCTS: Asbestos Creditors Get OK to Sue Parent
STONE ENERGY: S&P Keeps B- Unsec. Note Rating Over $400MM Add-on
SUNTECH POWER: Chinese Asset Sale to Shunfeng May Be Blocked
SWJ MANAGEMENT: Gets Exclusive Plan Filing Right Thru April 2014
TALLGRASS DEVELOPMENT: S&P Affirms 'B+' Corporate Credit Rating
TANDEM TRANSPORT: Immaterial Modifications to Reorganization Plan
TC GLOBAL: McDreamy Didn't Get Asia Rights in Purchase, Suit Says
TEXAS AFFORDABLE HOUSING: S&P Raises SPUR Rating to 'BB'
TOYS R US: Bank Debt Trades at 3% Off
TRAVELPORT HOLDINGS: Files Form 10-Q, Incurs $27MM Loss in Q3
UNI-PIXEL INC: Reports $5.3 Million Net Loss in Third Quarter
US INVESTIGATIONS: Bank Debt Trades at 2% Off
VALENCE TECHNOLOGY: Battery Maker Confirms Chapter 11 Plan
VELO HOLDINGS: NY Court Won't Halt Arkansas AG's Probe
VIGGLE INC: R. Sillerman Discloses 82.9% Equity Stake
VITESSE SEMICONDUCTOR: Extends Maturity of Whitebox Loan to 2016
WALKER LAND: Case Summary & 20 Largest Unsecured Creditors
WESTERN REFINING: S&P Affirms 'B+' CCR; Outlook Remains Stable
WHITE STAR: Voluntary Chapter 11 Case Summary
WHITE/REACH BRANNON: Case Summary & 18 Top Unsecured Creditors
WILTON HOLDINGS: S&P Lowers CCR to 'B-' on Increased Leverage
WINSTAR COMMUNICATIONS: $4.5-Mil. Attys' Fees OK'd in Fraud Deal
WORLDWIDE MIXED: Involuntary Chapter 11 Case Summary
* Asbestos Claims Bill Would Ax Fraud, Not Privacy, Attys Say
* Fairholme Offers to Buy Parts of Fannie, Freddie
* JPMorgan Gets Map to Descend Stability Board Surcharge Plateau
* Fitch: AMR/US Air Antitrust Settlement Positive for Industry
* Big Banks' Use of Bailouts Show Need for New Rules, Senators Say
* Consumers Union Renews Call for Student Loan Reforms
* House Measure Seeks to Crack Down on Asbestos Trust Fraud
* Jury Is Still Out on Impact of New Bankruptcy Fee Rules
* Wall Street Bid on Cross-Border Swaps Quashed by U.S. Regulator
* RealtyTrac Says Foreclosure Activity Increases 2% in October
* Melissa Coopersmith Joins Tiger Group as Managing Director
* Federal Bankruptcy Judge Appointed for Nevada
* BOND PRICING -- For Week From Nov. 11 to 15, 2013
*********
6056 SYCAMORE: Case Summary & 5 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: 6056 Sycamore Terrace LLC
2730 Vista Roble Drive
Auburn, CA 95603-7923
Case No.: 13-34541
Chapter 11 Petition Date: November 14, 2013
Court: United States Bankruptcy Court
Eastern District of California (Sacramento)
Judge: Hon. Michael S. McManus
Debtor's Counsel: C. Anthony Hughes, Esq.
1395 Garden Highway, Ste. 150
Sacramento, CA 95833
Tel: 916-485-1111
Total Assets: $1.78 million
Total Liabilities: $3.34 million
The petition was signed by Hossein F. Bozorgzad, managing member.
A list of the Debtor's five largest unsecured creditors is
available for free at http://bankrupt.com/misc/caeb13-34541.pdf
AFA FOODS: Beef Co. Can Try to Reverse Win in Tainted Meat Case
---------------------------------------------------------------
Law360 reported that the Delaware bankruptcy judge presiding over
the Chapter 11 proceedings of AFA Foods Inc. -- which sought court
protection amid the "pink slime" filler controversy -- on Nov. 13
allowed a Nebraska beef company to attempt to overturn a judgment
in Maine federal court in a tainted meat dispute with the debtor.
According to the report, U.S. Bankruptcy Judge Mary F. Walrath
said she would lift the automatic stay to permit Greater Omaha
Packaging Co. Inc. to present what it says is new evidence in a
dispute with a bankrupt AFA unit.
About AFA Foods
King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the
largest processors of ground beef products in the United States.
AFA had seven facilities capable of producing 800 million pound of
ground beef annually. Revenue in 2011 was $958 million.
Yucaipa Cos. acquired the business in 2008 and currently owns 92%
of the common stock and all of the preferred stock.
AFA Foods, AFA Investment Inc. and other affiliates filed for
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on
April 2, 2012, after recent changes in the market for its ground
beef products and the impact of negative media coverage related to
boneless lean beef trimmings (BLBT) affected sales.
Judge Mary Walrath presides over the case. Laura Davis Jones,
Esq., Timothy P. Cairns, Esq., and Peter J. Keane, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware; Tobias
S. Keller, Esq., at Jones Day, in San Francisco; and Jeffrey B.
Ellman, Esq., and Brett J. Berlin, Esq., at Jones Day, in Atlanta,
Georgia, represent the Debtors. FTI Consulting Inc. serves as the
Debtors' financial advisors and Imperial Capital LLC serves as
marketing consultants. Kurtzman Carson Consultants LLC serves as
noticing and claims agent.
As of Feb. 29, 2012, the Debtors' books and records on a
consolidated basis, reflected approximately $219 million in assets
and $197 million in liabilities. AFA Foods, Inc., disclosed
$615,859,574 in assets and $544,499,689 in liabilities as of the
Petition Date.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven
members to the official committee of unsecured creditors in the
Debtors' cases. The Committee has obtained approval to hire
McDonald Hopkins LLC as lead counsel and Potter Anderson & Corroon
LLP serves as co-counsel. The Committee also obtained approval to
retain J.H. Cohn LLP as its financial advisor.
AFA, in its Chapter 11 case, sold plants and paid off the first-
lien lenders and the loan financing the Chapter 11 effort.
Remaining assets are $14 million cash and the right to file
lawsuits.
General Electric Capital Corp. and Bank of America Corp. provided
about $60 million in DIP financing. The loan was paid off in
July 2012.
In October 2012, the Bankruptcy Court denied a settlement that
would have released Yucaipa Cos., the owner and junior lender to
AFA Foods, from claims and lawsuits the creditors might otherwise
bring, in exchange for cash to pay unsecured creditors' claims
under a liquidating Chapter 11 plan. Under the deal, Yucaipa
would receive $11.2 million from the $14 million, with the
remainder earmarked for unsecured creditors. Asset recoveries
above $14 million would be split with Yucaipa receiving 90% and
creditors 10%. Proceeds from lawsuits would be divided roughly
50-50.
AGFEED INDUSTRIES: Says It Has a Plan Draft, Potential Buyer
------------------------------------------------------------
Marie Beaudette, writing for DBR Small Cap, reported that AgFeed
Industries Inc. canceled an auction for the stock in the unit that
holds its Chinese assets after no other bidders stepped up to
challenge a $50.5 million offer from China's Ningbo Tech-Bank Co.
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.
ALLENS INC: Wants Until Dec. 26 to File Schedules of Assets
-----------------------------------------------------------
Allens, Inc., and All Veg, LLC, ask the U.S. Bankruptcy Court for
the Western District of Arkansas to enter an order extending the
time within which the Debtors must file its schedules and
statements of financial affairs to and through Dec. 26, 2013.
The Debtors tell the Court although they began compiling the
information prior to the Petition Date, negotiations with
creditors, preparation of the petition and "first day motions,"
and operation of its business will preclude Debtors from
finalizing the Schedules before the fourteen-day deadline.
About Allens Inc.
Siloam Springs, Arkansas-based Allens, Inc., a maker of canned and
frozen vegetables in business since 1926, filed for bankruptcy on
Oct. 28, 2013, seeking to sell some divisions or reorganize as a
new company (Case No. 13-bk-73597, Bankr. W.D. Ark.).
The Debtors' proposed counsel are Stan D. Smith, Esq., Lance R.
Miller, Esq., and Chris A. McNulty, Esq., at MITCHELL, WILLIAMS,
SELIG, GATES & WOODYARD, P.L.L.C., in Little Rock, Arkansas; and
Nancy A. Mitchell, Esq., Maria J. DiConza, Esq., and Matthew L.
Hinker, Esq., at GREENBERG TRAURIG, LLP, in New York.
ALLIED DEFENSE: Suspending Filing of Reports with SEC
-----------------------------------------------------
The Allied Defense Group, Inc., filed a Form 15 with the U.S.
Securities and Exchange Commission to voluntarily terminate the
registration of its preferred share purchase rights and common
stock, $0.10 par value per share. As of Nov. 7, 2013, there we no
holders of the Securities. As a result of the Form 15 filing, the
Company is no longer obligated to file periodic reports with the
SEC.
About The Allied Defense Group
The Allied Defense Group, Inc., based in Baltimore, Maryland,
previously conducted a multinational defense business focused on
the manufacture and sale of ammunition and ammunition related
products for use by the U.S. and foreign governments. Allied's
business was conducted by two wholly owned subsidiaries: MECAR
sprl, formerly MECAR S.A., and ADG Sub USA, Inc., formerly MECAR
USA, Inc.
Plan of Dissolution and Liquidation
On June 24, 2010, the Company signed a definitive purchase and
sale agreement with Chemring Group PLC pursuant to which Chemring
agreed to acquire substantially all of the assets of the Company
for $59,560 in cash and the assumption of certain liabilities. On
Sept. 1, 2010, the Company completed the asset sale to Chemring
contemplated by the Agreement. Pursuant to the Agreement,
Chemring acquired all of the capital stock of Mecar for
approximately $45,810 in cash, and separately Chemring acquired
substantially all of the assets of Mecar USA for $13,750 in cash
and the assumption by Chemring of certain specified liabilities of
Mecar USA. A portion of the purchase price was paid through the
repayment of certain intercompany indebtedness owed to the Company
that would otherwise have been cancelled at closing. $15,000 of
the proceeds of the sale was deposited into escrow to secure the
Company's indemnification obligations under the Agreement.
In conjunction with the Agreement, the Board of Directors of the
Company unanimously approved the dissolution of the Company
pursuant to a Plan of Complete Liquidation and Dissolution. The
Company's stockholders approved the Plan of Dissolution on
Sept. 30, 2010. In response to concerns of certain of the
Company's stockholders, the Company agreed to delay the filing of
a certificate of dissolution with the Delaware Secretary of State.
The Company filed a certificate of dissolution with the Delaware
Secretary of State on Aug. 31, 2011. In connection with this
filing, the Company's stock transfer agent has ceased recording
transfers of the Company's stock and the Company's stock is no
longer publicly traded.
ALVARION LTD: Dec. 2 Hearing Set for Creditors' Settlement Plan
---------------------------------------------------------------
Alvarion Ltd. (in receivership) on Nov. 13 disclosed that the
District Court of Tel Aviv - Yaffo held a hearing regarding the
creditors' plan of settlement which was submitted to the Court on
November 6, 2013.
Under the plan, the Company's creditors will receive NIS6.25
million of the proceeds from the sale of the Company's assets as
stipulated in the asset sale agreement and will be issued Company
shares constituting 15% of the Company's share capital. The
proposed creditors' plan of settlement is subject to certain
conditions, including approval by a creditors' meeting and the
continued listing of the Company on NASDAQ and the Tel Aviv Stock
Exchange after January 13, 2014. In order to meet this condition
and remain listed, the Company must emerge from bankruptcy
proceedings and demonstrate compliance with all applicable
requirements for initial listing on NASDAQ by that date.
The Court has scheduled another hearing to further discuss the
proposed creditors' plan of settlement for December 2, 2013.
Separately, the Court approved payments totaling NIS12.2 million
to Silicon Valley Bank, a secured lender, as well as advance
payments to the Company's employees, defined as senior
preferential creditors. These payments were made from proceeds
already received from the operation and sale of the Company's
assets.
About Alvarion
With headquarters in Tel Aviv, Israel, Alvarion Ltd. provides
optimized wireless broadband solutions addressing the
connectivity, coverage and capacity challenges of telecom
operators, smart cities, security, and enterprise customers.
The Company reported a net loss of $55.9 million on $49.9 million
of revenue in 2012, compared with a net loss of $33.8 million on
$69.5 million of revenue in 2011.
In July 2013, Alvarion said it has agreed to the appointment of a
receiver and won't contest an attempt by Silicon Valley Bank to
secure a winding up order from theDistrict Court of Tel-Aviv -
Yaffo.
Mr. Yoav Kfir, CPA, has been named as the company's receiver.
The District Court of Tel Aviv -- Yaffo's on July 21, 2013,
approved an operating plan to allow the normal business operation
of the company.
AMBAC FINANCIAL: Reports $231-Mil. Net Profit in Third Quarter
--------------------------------------------------------------
Ambac Financial Group, Inc. on Nov. 13 reported a third quarter
2013 net profit of $231.0 million and operating earnings of
$193.4 million, as compared to a net profit of $157.5 million and
operating earnings of $113.6 million for the third quarter of
2012. For the third quarter of 2013, the Company is also
reporting earnings per diluted share of $4.98.
Key drivers of third quarter 2013 results were
-- Net earned premiums of $70.9 million
-- Net investment income of $52.1 million
-- Other than temporary impairment losses of $38.0 million
-- Net change in fair value of credit derivatives of $31.2
million
-- Derivative products revenue of $12.4 million
-- Income from Variable Interest Entities ("VIEs") of $55.1
million
-- Loss and loss expenses (net benefit) of ($154.3) million
-- Interest and operating expenses of $56.9 million
-- Insurance intangible amortization of $37.5 million
"We are making good progress on our two strategic priorities -
realizing the maximum return on our investment in Ambac Assurance
and seeking to diversify and grow our business focus and broaden
our revenue base," said Diana Adams, President and Chief Executive
Officer. "We are committed to driving value through the execution
of these strategies and to providing transparency regarding our
progress and performance."
Following the Company's emergence from bankruptcy on May 1, 2013,
the consolidated financial statements reflect the application of
fresh start reporting incorporating, among other things, the
discharge of debt obligations, issuance of new common stock, and
fair value adjustments. The financial results of the Company
relating to periods from May 1, 2013 are referred to as
"Successor" and the financial results relating to periods through
April 30, 2013 are referred to as "Predecessor".
In addition to the reorganization items, the following
significantly affect the comparability of third quarter results:
Investment Income: The amortized cost basis of Ambac's investment
securities were adjusted to fair value as of the Fresh Start
Reporting Date, resulting in an overall increase in the
portfolio's amortized cost and elimination of the net unamortized
discount on the portfolio, which impacted the net investment
income of Successor Ambac.
Interest Expenses: Surplus notes issued by Ambac Assurance
Corporation and the Segregated Account of Ambac Assurance and the
related accrued interest on such notes were adjusted to fair value
as of the Fresh Start Reporting Date. This resulted in an overall
increase in the combined carrying value of debt and accrued
interest expense. Discounts to the face value of debt are
accreted into interest expense based on the original projected
cash flows of the instruments. As a result of Fresh Start, the
unamortized discounts on surplus notes have decreased and the
future cash flows have been re-projected, both of which impacted
the amount of discount accretion recognized in interest expense
for Successor Ambac.
Operating Expenses - Deferred Acquisition Costs: Deferred
acquisition costs have been written off as of the Fresh Start
Reporting Date and accordingly amortization of such costs will not
be reflected in Successor Ambac's net income.
Operating Expenses - Insurance Intangible Asset: Insurance and
reinsurance assets and liabilities continue to be measured in
accordance with existing accounting policies and an intangible
asset was recorded representing the difference between the fair
value and carrying value of these insurance and reinsurance assets
and liabilities as of the Fresh Start Reporting Date. As a
result, the carrying values of our financial guarantee insurance
and reinsurance contracts have not been adjusted. The intangible
asset is amortized into expense using the level yield method based
on par exposure of the related financial guarantee insurance or
reinsurance contracts.
Goodwill: Represents the excess of the reorganization value over
the fair value of identified tangible and intangible assets of
Successor Ambac. Goodwill will be assessed for impairment on an
annual basis, and more frequently if certain indicators of
impairment exist.
GAAP Financial Results
Net Premiums Earned
Net premiums earned include normal net premiums, and accelerated
premiums, which result from calls and other policy accelerations
recognized during the period. For the third quarter of 2013, net
premiums earned were $70.9 million, as compared to $113.1 million
in the third quarter of 2012. Normal premium earnings were $51.2
million in the third quarter of 2013 as compared to $78.7 million
in the third quarter of 2012. Accelerated premium earnings were
$19.7 million in the third quarter of 2013 as compared to $34.4
million in the third quarter of 2012. Structured finance net
premiums earned were adversely affected by the write-off of
premiums receivable on certain distressed structured finance
credits that were deemed uncollectible.
Net Investment Income
Net investment income for the third quarter of 2013 was $52.1
million, as compared to $84.1 million for the third quarter of
2012. The decline in net investment income was driven primarily
by Fresh Start adjustments that increased the overall amortized
cost basis and decreased the effective yield of the portfolio for
Successor Ambac.
The Company continues to shift the Financial Guarantee investment
portfolio away from tax-exempt municipal securities toward higher
yielding assets, including Ambac Assurance-wrapped securities
purchased as part of the Company's loss remediation strategy.
Financial Services investment income continues to decline, as the
investment agreement portfolio runs off and the balance of
investment assets declines accordingly.
Net Other-Than-Temporary Impairments
Net other-than-temporary impairments of invested assets recognized
in earnings increased to $38.0 million for the three months ending
September 30, 2013 from $0.4 million for the three months ending
September 30, 2012. Third quarter 2013 net other-than-temporary
impairments relate to the Company's intent to sell certain
securities that are in an unrealized loss position as of September
30, 2013. Net other-than-temporary impairments for the third
quarter of 2012 were primarily related to investments in RMBS,
including those guaranteed by Ambac Assurance.
Net Change in Fair Value of Credit Derivatives
The gain attributable to the change in fair value of credit
derivatives for the three months ending September 30, 2013 was
$31.2 million as compared to $27.4 million for the three months
ending September 30, 2012. The change in fair value of credit
derivatives for both periods includes improvement in reference
obligation prices, gains associated with runoff of the portfolio
and credit derivative fees earned, net of the impact of the Ambac
Assurance credit valuation adjustment. The reduction in the Ambac
CVA resulted in losses within the overall change in fair value of
credit derivative liabilities of $3.4 million for the three months
ending September 30, 2013, and $45.5 million for the three months
ending September 30, 2012.
Derivative Products
The derivative products portfolio has been positioned to generate
gains in a rising interest rate environment in order to provide a
hedge against the impact of rising rates on certain exposures
within the financial guarantee insurance portfolio. Derivative
products revenue for the three months ending September 30, 2013
was $12.4 million as compared to a net loss of $36.0 million for
the three months ending September 30, 2012. Derivative products
revenue during the third quarter of 2013 was driven by mark-to-
market gains in the portfolio caused by rising interest rates
during the periods, partially offset by the impact of the Ambac
CVA. The net loss for the three months ending September 30, 2012
primarily resulted from a realized loss related to the negotiated
termination of a derivative asset. Inclusion of the Ambac CVA in
the valuation of financial services derivatives resulted in losses
within derivative products revenue of $1.1 million for the three
months ending September 30, 2013, compared to losses of $5.3
million for the three months ending September 30, 2012.
Income on Variable Interest Entities (VIEs)
VIE income for the three months ending September 30, 2013 was
$55.1 million, as compared to $6.1 million for the three months
ending September 30, 2012. VIE income in the third quarter of
2013 was primarily attributable to the impact of an increase in
the Ambac CVA on the fair value of certain VIE note liabilities
that include significant projected financial guarantee claims.
Income on VIEs for the third quarter of 2012 reflects the positive
change in the fair value of net assets of VIEs during the period.
Loss and Loss Expenses, and Loss Reserves
Loss and loss expenses for the third quarter of 2013 were a net
benefit of $154.3 million, as compared to a net benefit of $18.7
million for the three months ending September 30, 2012. Third
quarter 2013 results were driven by lower estimated losses in
first and second lien RMBS and student loans, partially offset by
higher estimated losses in the municipal finance portfolio.
During the third quarter of 2013, loss and loss expenses paid, net
of recoveries and reinsurance from all policies, were $6.3 million
as compared to $637.0 million during the third quarter of 2012.
The amount of actual claims paid during the period was impacted by
the claims payment moratorium imposed on March 24, 2010 as part of
the rehabilitation proceedings for the Segregated Account. On
September 20, 2012, in accordance with certain rules published by
the rehabilitator of the Segregated Account, the Segregated
Account commenced paying 25% of each permitted policy claim that
arose since the commencement of the claims payment moratorium. T
he resumption of 25% partial claims payments in the third quarter
of 2012 was the key driver of the amount of claims paid during
that period. At September 30, 2013, a total of $3.9 billion of
presented claims remain unpaid because of the Segregated Account
rehabilitation proceedings and related court orders.
Loss reserves (gross of reinsurance and net of subrogation
recoveries) at September 30, 2013 were $5.4 billion as compared to
$5.5 billion at June 30, 2013.
Reserves as of September 30, 2013, are net of $2.4 billion of
estimated representation and warranty breach remediation
recoveries. Ambac Assurance is pursuing remedies and enforcing
its rights, through lawsuits and other methods, to seek redress
for breaches of representations and warranties and fraud related
to various RMBS transactions.
Expenses
Underwriting and operating expenses consist of gross operating
expenses, plus the amortization of previously deferred insurance
acquisition costs. All deferred acquisition costs were written
off in Fresh Start and accordingly no amortization is reported in
Successor Ambac.
Gross operating expenses for the three months ended September 30,
2013 were $24.3 million as compared to $26.1 million for the three
months ending September 30, 2013. The decrease was primarily due
to lower compensation and consulting expenses.
At the Fresh Start Reporting Date, an insurance intangible asset
was recorded which represents the difference between the fair
value and aggregate carrying value of the insurance and
reinsurance assets and liabilities. The insurance intangible
asset is amortized using the level yield method based on par
exposure of the related financial guarantee insurance or
reinsurance contracts. The insurance intangible amortization
expense for the three months ending September 30, 2013 was $37.5
million.
Interest expense was $31.8 million for the three months ending
September 30, 2013, as compared to $23.3 million for the three
months ending September 30, 2012. Interest expense includes
accrued interest and accretion of the discount on surplus notes
issued by Ambac Assurance and the Segregated Account, plus
interest expense relating to investment agreements, and a secured
borrowing transaction. As a result of Fresh Start, the
unamortized discounts on surplus notes have decreased by resetting
the carrying value to fair value at the Fresh Start Reporting
Date, and future cash flows on the surplus notes have been re-
projected. Both of these items have impacted the amount of
discount accretion recognized in interest expense for Successor
Ambac. Accretion of surplus note discounts included within
overall interest expense was $12.1 million for the three months
ending September 30, 2013, as compared to $2.9 million for the
three months ending September 30, 2012.
Balance Sheet
As a result of the application of Fresh Start, Successor Ambac
re-measured all tangible and intangible assets and all
liabilities, other than deferred taxes and liabilities associated
with post-retirement benefits, at fair value, and recorded
goodwill representing the excess of reorganization value of
Successor Ambac over the fair value of net assets being re-
measured. Total assets at September 30, 2013 were $28.6 billion,
an increase of approximately $1.1 billion from $27.5 billion at
June 30, 2013. The increase is primarily the result of higher VIE
assets and fair value of invested assets. Total liabilities at
September 30, 2013 were $27.7 billion, an increase of
approximately $0.8 billion from $26.9 billion at June 30, 2013.
The increase was primarily the result of higher variable interest
entity liabilities, partially offset by lower loss and loss
expense reserves, unearned premium reserves, and derivative
liabilities.
The fair value of the consolidated investment portfolio was $6.7
billion at September 30, 2013, up $0.1 billion from $6.6 billion
at June 30, 2013. The fair value of the financial guarantee
investment portfolio was $6.3 billion at September 30, 2013, up
$0.1 billion from $6.2 billion at June 30, 2013.
Overview of Ambac Assurance Statutory Results
During the third quarter of 2013, Ambac Assurance generated
statutory net income of $127.7 million. Third quarter 2013
statutory results were primarily driven by net investment income
of $95.4 million and premiums earned of $75.3 million, partially
offset by net loss and loss expenses of $43.0 million.
As of September 30, 2013, Ambac Assurance reported policyholder
surplus of $501.7 million, up from $393.7 million at June 30,
2013. The increase in policyholder surplus from June 2013 was
primarily due to statutory net income in the third quarter of
2013, as more fully described above.
Ambac Assurance's claims-paying resources amounted to
approximately $5.9 billion as of September 30, 2013, up
approximately $0.1 billion from $5.8 billion at June 30, 2013.
This excludes Ambac Assurance UK Limited's claims-paying resources
of approximately $1.1 billion. The increase in Ambac Assurance's
claims paying resources was primarily attributable to net
investment income and improvements in the valuation of investments
carried at fair value, partially offset by reductions in expected
future installment premiums.
Non-GAAP Financial Data
Operating Earnings were $193.4 million for the three months ending
September 30, 2013 as compared to $113.6 million for the three
months ending September 30, 2012.
Adjusted Book Value was ($498.4) million as of September 30, 2013,
as compared to ($538.1) million at June 30, 2013.
Adjusted Book Value of ($538.1) million as of June 30, 2013
reflects a ($113.2) million revision to the previously reported
amount of ($424.9) million in Ambac's second quarter 2013
Form 10-Q. The revision relates to a previously omitted
adjustment associated with conforming the Adjusted Book Value
treatment of a newly consolidated VIE to that of other VIEs.
The Adjusted Book Value increase from June 30, 2013 to September
30, 2013 of $39.7 million was driven by Operating Earnings for the
three months ended September 30, 2013 partially offset by
reductions in unearned premiums in excess of expected losses
previously recognized in Adjusted Book Value. The reductions in
unearned premiums in excess of expected losses recognized in
Adjusted Book Value occurred due to premiums earned in the third
quarter 2013 and to higher expected losses on certain financial
guarantee contracts as of September 30, 2013.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010.
Ambac's bond insurance unit, Ambac Assurance Corp., is being
restructured by state regulators in Wisconsin. AAC is domiciled
in Wisconsin and regulated by the Office of the Commissioner of
Insurance of the State of Wisconsin. The parent company is not
regulated by the OCI.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.
The Blackstone Group LP is the Debtor's financial advisor.
Kurtzman Carson Consultants LLC is the claims and notice agent.
KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
Bankruptcy Judge Shelley C. Chapman entered an order confirming
the Fifth Amended Plan of Reorganization of Ambac Financial Group,
Inc. on March 14, 2012. The Plan provides for the full payment of
secured claims and 8.5% to 13.2% recovery for general unsecured
claims. The second modified version of the confirmed Plan was
declared effective on May 1, 2013, with Ambac obtaining bankruptcy
court approval of a $100+ million claims settlement with the
Internal Revenue Service.
Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).
AMERICAN AIRLINES: Delta Airlines Mulls Bid for Airport Slots
-------------------------------------------------------------
Delta Air Lines on Nov. 13 urged the U.S. Department of Justice to
consider all airlines, including those that serve small- and
medium-sized communities, in the process for divesting airport
slots and assets related to the proposed settlement of litigation
challenging the merger of American Airlines and US Airways.
Delta would like the opportunity to bid for slots and facilities
at Washington-Reagan National Airport as well as Dallas Love
Field, where it currently provides competition with daily nonstop
flights to its international hub in Atlanta. Without gate access,
Delta could no longer provide Love Field service.
Small- and medium-sized communities nationwide could experience a
reduction or elimination of flights to key airports if the
divestiture is limited to low-cost carriers, which typically do
not provide service to small communities.
With a flexible fleet that includes smaller aircraft designed for
small markets, Delta would provide service to small and medium-
sized communities from impacted markets, particularly at Reagan
National Airport, similar to its operation at New York-LaGuardia,
where more than 50 percent of Delta's destinations are small- and
medium-sized communities. Other airlines expressing an interest
in slots at Reagan National do not operate aircraft which will
enable twice-daily flights to most medium-sized cities.
Delta believes that DOJ should not predetermine what communities
will receive service with Reagan National slots or Love Field
gates, and that it shouldn't exclude any airline from the
opportunity to bid for them.
The proposed settlement, announced on Nov. 12, is awaiting
approval by the Federal District Court in the District of Columbia
as well as the judge overseeing American's bankruptcy proceeding.
It includes a provision to divest slots and airport assets held by
American or US Airways at several airports.
The settlement agreement authorized the DOJ, in consultation with
six states and the District of Columbia, to decide which airlines
can bid for the divested slots and facilities, but it does not
restrict the bidding to any class or category of airline.
All Airlines
Law360 reported that Delta Air Lines Inc. on Nov. 13 implored the
U.S. Department of Justice to consider all airlines when deciding
the divestment of airport slots and assets in response to
Tuesday's proposed settlement of a lawsuit challenging the merger
of US Airways Group Inc. and bankrupt American Airlines parent AMR
Corp.
According to the report, the proposed settlement is awaiting
approval by the Federal District Court in the District of Columbia
and the judge overseeing American Airlines' bankruptcy proceeding.
In a separate report, Law360 said that a top U.S. Department of
Justice antitrust official voiced skepticism on Nov. 14 of Delta
Air Lines Inc.'s bid for airport slots set to be divested as part
of a merger settlement with US Airways Group Inc. and bankrupt
American Airlines parent AMR Corp.
According to the report, Deputy Assistant Attorney General Renata
Hesse told reporters after speaking at the American Bar
Association's Antitrust Fall Forum however said that the DOJ
wouldn't stop an interested carrier from vying for the slots.
About Delta Air Lines
Delta Air Lines serves more than 160 million customers each year.
Delta was named by Fortune magazine as the most admired airline
worldwide in its 2013 World's Most Admired Companies airline
industry list, topping the list for the second time in three
years. With an industry-leading global network, Delta and the
Delta Connection carriers offer service to 314 destinations in 58
countries on six continents. Headquartered in Atlanta, Delta
employs nearly 80,000 employees worldwide and operates a mainline
fleet of more than 700 aircraft. The airline is a founding member
of the SkyTeam global alliance and participates in the industry's
leading trans-Atlantic joint venture with Air France-KLM and
Alitalia. Including its worldwide alliance partners, Delta offers
customers more than 15,000 daily flights, with hubs in Amsterdam,
Atlanta, Cincinnati, Detroit, Minneapolis-St. Paul, New York-
LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City
and Tokyo-Narita. Delta is investing more than $3 billion in
airport facilities and global products, services and technology to
enhance the customer experience in the air and on the ground.
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.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
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.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN APPAREL: Gets Waiver Under Credit Facility Obligation
--------------------------------------------------------------
Due to the decrease in American Apparel, Inc.'s adjusted EBITDA in
the third quarter of 2013, it has received a waiver of its
obligation under its credit facility with Capital One to maintain
a minimum fixed charge coverage ratio and a maximum leverage ratio
for the twelve-month period ending September 30, 2013, and the
Company is in discussions with respect to a waiver or amendment
for future periods. Further information with respect to the
foregoing will be included in our Quarterly Report on Form 10-Q
for the quarter ended September 30, 2013.
The Company reported financial results for its third quarter ended
September 30, 2013.
Financial Performance Summary for the Three and Nine Months Ended
September 2013
-- For the three months ended September 30, 2013, net sales
increased 1% to $164.5 million on a 2% increase in comparable
store sales and a 2% increase in wholesale net sales.
-- For the three months ended September 30, 2013, adjusted
EBITDA was $3.8 million vs. $13.3 million in the 2012 third
quarter.
-- For the nine months ended September 30, 2013, net sales
increased 5% to $464.8 million on a 5% increase in comparable
store sales and 6% increase in wholesale net sales.
-- For the nine months ended September 30, 2013, adjusted
EBITDA was $11.0 million vs. $18.8 million in the nine months
ended September 30, 2012.
-- A substantial majority of the decrease in adjusted EBITDA
for each period was a result of transition and start-up costs
associated with the conversion to the company's new distribution
center.
Operating Results - Third Quarter 2013
Comparing the third quarter 2013 to the corresponding period last
year, net sales increased 1% to $164.5 million on a 2% increase in
comparable store sales in the retail and online business and a 2%
increase in net sales in the wholesale business.
Gross profit of $84.6 million for the third quarter 2013
represented a decrease of 1% from $85.2 million reported for the
third quarter 2012. Gross margin decreased from 52.5% for the
quarter ended September 30, 2012 to 51.4% for the quarter ended
September 2013. The decrease in the gross margin was primarily
due to higher distribution costs associated with transition to our
new center.
Operating expenses of $89.1 million for the third quarter 2013
represented an increase of 11% from $80.6 million for the third
quarter 2012. As a percent of revenue, operating expenses
increased from 49.7% for the quarter ended September 2012 to 54.2%
for the quarter ended September 2013. The increase in operating
expenses was due to higher salaries, wages and benefits primarily
as a result of the transition to our new distribution center in La
Mirada, California. The Company also experienced in the third
quarter of 2013, and expects to continue to incur, higher computer
and leased equipment expenses.
Adjusted EBITDA in the third quarter of 2013 decreased to $3.8
million from $13.3 million in the third quarter of 2012.
Other income for the third quarter 2013 was $3.2 million as
compared with other expense of $23.1 million in the prior year
quarter. The $26.3 million change in non-operating expenses was
primarily the result of a an unrealized gain on the change in fair
value of the Company's warrants of $12.9 million for the quarter
ended September 2013 as compared with an unrealized loss of $13.3
million in the prior year quarter.
Income tax provision in the third quarter 2013 was $0.2 million
versus $0.5 million in the 2012 third quarter. In accordance with
U.S. GAAP, we have discontinued recognizing potential tax benefits
associated with current operating losses.
Net loss for the third quarter of 2013 was $1.5 million, or $0.01
per common share, compared to net loss for the third quarter of
2012 of $19.0 million, or $0.18 per common share. The 2013 third
quarter includes a non-cash/non-operating gain of $12.9 million
($0.12 per common share) associated with a decrease in the fair
value of outstanding warrants. The 2012 third quarter includes a
non-cash/non-operating charge of $13.3 million ($0.13 per common
share) for the increase in the fair value of warrants. Excluding
the non-cash and non-operating items from both periods, the net
loss for the third quarter 2013 would have been $14.4 million, or
$0.13 per share, compared to $5.7 million, or $0.05 per share, in
the third quarter 2012.
Fully-diluted weighted average shares outstanding were 110.4
million in the third quarter of 2013 versus 106.2 million for the
third quarter of 2012. As of November 8, 2013 there were
approximately 110.4 million shares outstanding.
Company Outlook and EBITDA Guidance Reconciliation
In connection with the second quarter earnings release, the
Company issued adjusted EBITDA guidance for 2013 in the range from
$46 million to $51 million and this implied adjusted EBITDA
guidance for the first nine months of 2013 at the mid-point of
approximately $24 million.
The Company believes the transition to its new distribution center
has negatively impacted adjusted EBITDA through a combination of
lower sales and gross profit as well as higher distribution and
operating expenses. Most of the transition and start-up issues
have been addressed and the new distribution facility is presently
shipping deliveries on time. The Company also is experiencing
reductions in the distribution labor costs it incurred to help
address distribution center transition issues, and it has targeted
additional reductions throughout the remainder of the fourth
quarter. Additionally, the Company has increased production of
its top-selling styles in the fourth quarter to meet customer
demand. However, the Company is unable to predict with certainty
the timing and magnitude of the remaining cost reductions at its
distribution center or of production increases to meet customer
demand. The Company is therefore unable to provide updated
guidance for the fourth quarter and full year 2013 at this time
and note that prior guidance should no longer be relied upon.
The Company does not anticipate that the transition and start-up
costs associated with the conversion of its new distribution
center will negatively affect financial performance in 2014, and
will look to provide a full year 2014 outlook in the Company's
fourth quarter and full year 2013 financial results press release.
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of September 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being. Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece. The deal allows the investors to purchase additional
27.4 million shares at the same price.
The Company incurred a net loss of $37.27 million in 2012, as
compared with a net loss of $39.31 million in 2011. The Company's
balance sheet at June 30, 2013, showed $335.32 million in total
assets, $392.67 million in total liabilities and a $57.35 million
total stockholders' deficit.
* * *
American Apparel carries a Caa1 Corporate Family Rating from
Moody's Investors Service and a 'B-' corporate credit rating from
Standard & Poor's Ratings Services.
AMERICAN APPAREL: Comparable Sales for October 2013 Dropped 1%
--------------------------------------------------------------
American Apparel, Inc., announced preliminary sales for the month
of October 2013. On a preliminary basis, total net sales were
$59.5 million, an increase of 1 percent over prior year.
Comparable sales decreased 1 percent, including a 3 percent
decrease in comparable store sales in the retail store channel and
a 12 percent increase in net sales in the online channel.
Wholesale net sales increased 8 percent for the month.
Dov Charney, chairman and CEO, commented, "Although disappointed
with the negative comparable performance of our retail stores in
October, we are encouraged by the strength in our online and
wholesale businesses, which grew sales 12% and 8%, respectively.
As October came to a close, we began to feel some encouraging
incremental sales momentum in some markets. We are beginning to
breathe a sigh of relief that we are overcoming some of the
challenges we were experiencing at our new distribution center and
we are pleased that our stores and customers are now being shipped
product in a timely fashion. While we are aware of a weaker
consumer spending environment that has impacted traffic levels
across the retail sector, our retail team is working around the
clock to produce results for shareholders for the Christmas
season."
A copy of the press release is available for free at:
http://is.gd/d7K9kT
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of September 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being. Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece. The deal allows the investors to purchase additional
27.4 million shares at the same price.
The Company incurred a net loss of $37.27 million in 2012, as
compared with a net loss of $39.31 million in 2011. The Company's
balance sheet at June 30, 2013, showed $335.32 million in total
assets, $392.67 million in total liabilities and a $57.35 million
total stockholders' deficit.
* * *
American Apparel carries a Caa1 Corporate Family Rating from
Moody's Investors Service and a 'B-' corporate credit rating from
Standard & Poor's Ratings Services.
AMERICAN AXLE: Inks $200MM Underwriting Pact with J.P. Morgan
-------------------------------------------------------------
American Axle & Manufacturing, Inc., a wholly owned subsidiary of
American Axle & Manufacturing Holdings, Inc., and the subsidiary
guarantors, entered into an underwriting agreement with J.P.
Morgan Securities LLC, as the representative of the several
underwriters, to sell $200 million aggregate principal amount of
5.125 percent senior notes due 2019 in an offering registered
pursuant to the Securities Act of 1933, as amended.
The Notes will be guaranteed on a senior unsecured basis by the
Company and certain of AAM's current and future subsidiaries. The
issuance of the Notes is expected to close on Nov. 12, 2013. The
offering is being made pursuant to AAM's effective registration
statement on Form S-3 (Registration Statement No. 333-175508)
previously filed with the Securities and Exchange Commission. A
copy of the Underwriting Agreement is available for free at:
http://is.gd/Byhe0g
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.
As of June 30, 2013, the Company had $3 billion in total assets,
$3.11 billion in total liabilities and a $101.6 million total
stockholders' deficit.
* * *
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.
AMES DEPARTMENT: Creditors Wait 12 Years for 1% Distribution
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that creditors of Ames Department Stores Inc. have some
hope of a tiny recovery, 12 years after a bankruptcy filing by
what was then the largest regional discount retailer in the U.S.
According to the report, under most favorable circumstances, the
distribution will be less than 1 percent and may not occur until
claims are reduced substantially.
Ames initiated a Chapter 11 reorganization in August 2001 with
more than 450 stores in 19 states. Sales were about $4 billion in
fiscal 2001. The balance sheet showed assets of $1.9 billion and
debt totaling $1.56 billion.
A decline in sales forced Rocky Hill, Connecticut-based Ames to
liquidate its remaining stores less than a year after the initial
bankruptcy filing. The ensuing 11 years have been devoted to
cleaning up the estate to enable confirmation of a liquidating
Chapter 11 plan.
With all creditor classes voting in favor, the bankruptcy judge in
Manhattan signed a confirmation order on Nov. 13 approving the
liquidating plan.
The remaining creditor body is composed of holders of $251 million
in senior unsecured notes and no less than $111 million in claims
of general unsecured creditors. Noteholders and general creditors
will be treated alike under the plan.
There are more than $1 billion in unsecured claims outstanding.
Claims must be reduced before creditors can receive much of a
distribution. Realizing even 1 percent also requires success in a
pending lawsuit, according to the court-approved disclosure
statement.
Most of the funds produced in store-closing sales went to pay
secured debt and $120 million in bills run up in the first year of
bankruptcy.
Ames has about $4.3 million in cash and an escrow fund of $5.9
million to pay professional fees.
BankruptcyData reports that according to the Court-confirmed Third
Amended Chapter 11 Plan, "Upon the Effective Date, the Debtors
shall be liquidated in accordance with the Plan and applicable
law, and the Debtors' operations shall become the responsibility
of the Plan Administrator, who shall thereafter have
responsibility for the management, control, and operation of the
Debtors and who may use, acquire, and dispose of property free and
clear of any restrictions of the Bankruptcy Code or Bankruptcy
Rules, in each instance in consultation with the Plan Committee.
The Plan Administrator shall act as the Debtors' liquidating agent
and shall be authorized and obligated, as such, to take any and
all actions necessary or appropriate to implement the Plan or wind
down the Debtors, in each instance in consultation with the Plan
Committee."
About Ames Department Stores
Rocky Hill, Connecticut-based Ames Department Stores was founded
in 1958. At its peak, Ames operated 700 stores in 20 states,
including the Northeast, Upper South, Midwest and the District of
Columbia. In April 1990, Ames filed for bankruptcy protection
under Chapter 11 of the U.S. Bankruptcy Code. In Ames I, the
retailer closed 370 stores and emerged from chapter 11 on Dec. 30,
1992.
Ames filed a second bankruptcy petition under Chapter 11 (Bankr.
S.D.N.Y. Case No. 01-42217) on Aug. 20, 2001. Togut, Segal
& Segal LLP; Weil, Gotshal & Manges; and Storch Amini Munves PC;
Cadwalader, Wickersham & Taft LLP. When the Company filed for
protection from their creditors, they reported $1,901,573,000 in
assets and $1,558,410,000 in liabilities. The Company closed all
of its 327 department stores in 2002.
ANACOR PHARMACEUTICALS: Incurs $16.8MM Net Loss in Third Quarter
----------------------------------------------------------------
Anacor Pharmaceuticals reported a net loss of $16.81 million on
$3.61 million of total revenues for the three months ended
Sept. 30, 2013, as compared with a net loss of $14.44 million on
$2.47 million of total revenues for the same period during the
prior year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss of $45.98 million on $8.74 million of total revenues as
compared with a net loss of $43.61 million on $7.45 million of
total revenues for the same period a year ago.
As of Sept. 30, 2013, the Company had $44.88 million in total
assets, $27.92 million in notes payable and a $12.22 million total
stockholders deficit.
Cash, cash equivalents, short-term investments and restricted
investments totaled $39.3 million, including restricted
investments of $4.7 million, at Sept. 30, 2013.
"We had an eventful third quarter -- we filed an NDA for
tavaborole, our most advanced product candidate, and received
acceptance for filing from the FDA. In addition, in October we
negotiated a $142.5 million settlement of our disputes with
Valeant Pharmaceuticals, which will provide us with significant
flexibility as we pursue our business plan," said David Perry,
chief executive officer of Anacor Pharmaceuticals.
A copy of the press release is available for free at:
http://is.gd/pkB6jr
About Anacor Pharmaceuticals
Palo Alto, Calif.-based Anacor Pharmaceuticals (NASDAQ: ANAC) is a
biopharmaceutical company focused on discovering, developing and
commercializing novel small-molecule therapeutics derived from its
boron chemistry platform. Anacor has discovered eight compounds
that are currently in development. Its two lead product
candidates are topically administered dermatologic compounds -
tavaborole, an antifungal for the treatment of onychomycosis, and
AN2728, an anti-inflammatory PDE-4 inhibitor for the treatment of
atopic dermatitis and psoriasis.
As reported in the TCR on Mar 25, 2013, Ernst & Young LLP, in
Redwood City, California, in its report on the Company's financial
statements for the year ended Dec. 31, 2012, expressed substantial
doubt about the Company's ability to continue as a going concern,
citing the Company's recurring losses from operations and its need
for additional capital.
The Company's balance sheet at June 30, 2013, showed
$56.97 million in total assets, $49.56 million in total
liabilities, $4.95 million of redeemable common stock, and
stockholders' equity of $2.46 million.
APPLIED MINERALS: Incurs $3.8 Million Net Loss in Third Quarter
---------------------------------------------------------------
Applied Minerals, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $3.86 million on $6,773 of revenues for the three
months ended Sept. 30, 2013, as compared with a net loss of $2.51
million on $666 of revenues for the same period last year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss of $9.55 million on $44,737 of revenues as compared with
a net loss of $5.88 million on $152,296 of revenues for the same
period during the prior year.
The Company's balance sheet at Sept. 30, 2013, showed $16.90
million in total assets, $13.25 million in total liabilities and
$3.64 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/cCNtpi
About Applied Minerals
New York City-based Applied Minerals, Inc. (OTC BB: AMNL) is a
leading global producer of halloysite clay used in the development
of advanced polymer, catalytic, environmental remediation, and
controlled release applications. The Company operates the Dragon
Mine located in Juab County, Utah, the only commercial source of
halloysite clay in the western hemisphere. Halloysite is an
aluminosilicate clay that forms naturally occurring nanotubes.
Applied Minerals incurred a net loss of $9.73 million in 2012 as
compared with a net loss of $7.43 million in 2011.
Bankruptcy Warning
"The Company has had to rely mainly on cash flow generated from
the sale of stock and convertible debt to fund its operations. If
the Company is unable to fund its operations through the
commercialization of its minerals at the Dragon Mine, it may have
to file bankruptcy, as there is no assurance of the foregoing,"
the company said in its annual report for the year ended Dec. 31,
2012.
ATP OIL: Court Denied Bid to Strike 3 Counts in 2 ORRI Cases
------------------------------------------------------------
In two adversary cases involving ATP Oil & Gas Corporation, Judge
Marvin Isgur ruled on the Plaintiffs' move to (1) strike Counts I,
II, and III of ATP Oil's Counterclaim as redundant, and (2)
dismiss Count IV of ATP's Counterclaim for failure to state a
claim upon which relief can be granted.
The cases are:
* MACQUARIE INVESTMENTS LLC, Plaintiff(s), v. ATP OIL & GAS
CORPORATION, et al, Defendant(s), Adv. No. 12-03516 (Bankr.
S.D. Texas)
* KEBA ENERGY LLC, Plaintiff(s), v. ATP OIL & GAS CORPORATION,
et al, Defendant(s), Adv. No. 12-03517 (Bankr. S.D. Texas)
Under Count I, ATP requested a declaratory judgement that the
overriding royalty interest in certain gas and oil producing
properties or ORRIs constitute property of its bankruptcy estate.
Count II seeks declaratory judgment that the conveyances and
related agreements constitue executory contracts and unexpired
leases and the Hydrocarbons produced from the Leases constitute
property of ATP's bankruptcy estate.
Count III seeks declaratory judgment that the Plaintiffs' ORRI are
not excluded from ATP's bankruptcy estate.
In a Sept. 18, 2013 Memorandum of Law, Judge Isgur denied the
request to strike the first three Counts. He said the Plaintiffs
failed to show that the Counts would cause prejudice or delay the
judicial decision making process.
Count IV, on the other hand, asserted that the proceeds that the
Plaintiffs received from ATP pursuant to its ORRIs should be
disgorged because those proceeds are property of ATP's bankruptcy
estate. At an April 4, 2013 hearing, the Court granted leave to
re-plead Count IV in order to properly request substantive relief.
However, ATP has failed to file any amendment to Count IV. Thus,
Judge Isgur says, the motion to dismiss Count IV is granted.
A copy of Judge Isgur's Sept. 18 Memorandum of Law on one of the
cases is available at http://is.gd/iJzpaGfrom Leagle.com.
BANCO PONTUAL: Bank With $450M Debt Gets Ch. 15 Protection
----------------------------------------------------------
Law360 reported that a Florida bankruptcy judge on Nov. 13
approved a petition for Chapter 15 protection sought by Brazilian
bank Banco Pontual S.A., which owes about $450 million to more
than a hundred creditors including the Central Bank of Brazil.
According to the report, Chapter 15 protection is the "most
efficient discovery tool of investigation" and will help the bank
pursue its investigation into assets in the U.S. by giving it
needed subpoena powers, the bank's counsel, Gregory S. Grossman of
Astigarraga Davis Mullins & Grossman PA, told the bankruptcy
court.
The case is In re Banco Pontual SA, 13-bk-35298, U.S. Bankruptcy
Court, Southern District Florida (Miami). Judge Laurel M Isicoff
oversees the case. The Chapter 15 Debtor is represented by
Gregory S Grossman, Esq., at Astigarraga Davis Mullins & Grossman
PA, in Miami, Florida. Valdor Faccio serves as judicial
administrator or trustee of Banco Pontual.
BEAZER HOMES: Posts $11.9 Million Net Income in Fourth Quarter
--------------------------------------------------------------
Beazer Homes USA, Inc., reported net income of $11.94 million on
$438.33 million of total revenue for the three months ended
Sept. 30, 2013, as compared with a net loss of $66.23 million on
$370.93 million of total revenue for the same period a year ago.
For the fiscal year ended Sept. 30, 2013, the Company reported a
net loss of $33.86 million on $1.28 billion of total revenue as
compared with a net loss of $145.32 million on $1 billion of total
revenue during the prior fiscal year.
As of Sept. 30, 2013, showed $1.98 billion in total assets, $1.74
billion in total liabilities and $240.55 million in total
stockholders' equity.
The Company said it closed out its fiscal year with improved
fourth quarter results highlighted by positive net income of $11.9
million and 21.4 percent homebuilding gross margins. Adjusted
EBITDA was $41.5 million for the quarter, up from $15.1 million in
the fourth quarter of fiscal 2012.
"We finished 2013 with solidly improved operating and financial
results," said Allan Merrill, CEO of Beazer Homes. "In the fourth
quarter, we reported our first net profit from operations in many
years, realizing the benefits of our path-to-profitability
strategies and the impact of an improved homebuilding market. For
the full year, with continued improvements in average sales price,
sales per community per month and homebuilding gross margins, we
achieved adjusted EBITDA that was more than triple the amount
reported for fiscal 2012."
A copy of the press release is available for free at:
http://is.gd/myintP
Inks New Rights Agreement
Beazer Homes is party to a Section 382 Rights Agreement dated
Nov. 12, 2010, between the Company and American Stock Transfer &
Trust Company, LLC. The Old Rights Agreement expires according to
its terms on Nov. 12, 2013. On Dec. 4, 2012, the Company's Board
of Directors approved the adoption and execution of a new Section
382 Rights Agreement, to become effective at the close of business
on Nov. 12, 2013, in an effort to continue to protect stockholder
value by preserving the Company's ability to use its net operating
loss carryforwards. As previously reported, the New Rights
Agreement was approved by a vote of the Company's stockholders at
the annual meeting of stockholders held on Feb. 1, 2013.
On Nov. 6, 2013, the Company and the Rights Agent executed the New
Rights Agreement. Like the Old Rights Agreement, the New Rights
Agreement is intended to act as a deterrent to any person
acquiring beneficial ownership of 4.95 percent or more of the
Company's outstanding common shares within the meaning of Section
382 of the Internal Revenue Code, as amended, and applicable
Treasury Regulations, other than pursuant to a Qualified Offer or
with the approval of the Company's Board of Directors.
Stockholders who beneficially own 4.95 percent or more of the
Company's outstanding common shares as of the close of business on
the effective date of the New Rights Agreement will not qualify as
an Acquiring Person so long as they are not at that time
considered an Acquiring Person under the Rights Agreement and do
not acquire any additional common shares at a time when they still
beneficially own 4.95 percent or more of the outstanding common
shares.
A full-text copy of the Form 8-K is available for free at:
http://is.gd/FkNpBY
About Beazer Homes
Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/--
headquartered in Atlanta, is one of the country's 10 largest
single-family homebuilders with continuing operations in Arizona,
California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada,
New Jersey, New Mexico, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed
on the New York Stock Exchange under the ticker symbol "BZH."
Beazer Homes incurred a net loss of $145.32 million for the fiscal
year ended Sept. 30, 2012, a net loss of $204.85 million for the
fiscal year ended Sept. 30, 2011, and a net loss of $34.04 million
for the fiscal year ended Sept. 30, 2010.
* * *
Beazer carries a 'B-' issuer credit rating, with "negative"
outlook, from Standard & Poor's.
In the Jan. 30, 2013 edition of the TCR, Moody's Investors Service
raised Beazer Homes USA, Inc.'s corporate family rating to 'Caa1'
from 'Caa2' and probability of default rating to 'Caa1-PD' from
'Caa2-PD'. The ratings upgrade reflects Moody's increasing
confidence that Beazer's credit metrics, buoyed by a stregthening
housing market, will gradually improve for at least the next two
years and that the company may be able to return to a modestly
profitable position as early as fiscal 2014.
As reported by the TCR on Sept. 10, 2012, Fitch Ratings has
upgraded the Issuer Default Rating (IDR) of Beazer Homes USA, Inc.
(NYSE: BZH) to 'B-' from 'CCC'. The upgrade and the stable
outlook reflect Beazer's operating performance so far this year,
its robust cash position, and moderately better prospects for the
housing sector during the remainder of this year and in 2013. The
rating is also supported by the company's execution of its
business model, land policies, and geographic diversity.
BEMARMARA CONSULTING: Chapter 15 Case Summary
---------------------------------------------
Chapter 15 Petitioner: JUDr.lng. Helena Horova
Chapter 15 Debtor: Bemarmara Consulting a.s.
aka Baest a.s.
Cernoleska 1930
256 01 Benesov
Czech Republic
Chapter 15 Case No.: 13-13037
Chapter 15 Petition Date: November 15, 2013
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Hon. Kevin Gross
Chapter 15 Debtor's Counsel: Michael G. Busenkell, Esq.
GELLERT SCALI BUSENKELL & BROWN, LLC
913 N. Market St., 10th Floor
Wilmington, DE 19801
Tel: 302.425.5812
Fax: 302.425.5814
Email: mbusenkell@gsbblaw.com
Estimated Assets: $500,000 to $1 million
Estimated Debts: $500,000 to $1 million
BENTLEY PREMIER: Ch. 11 Trustee Hires Gollob Morgan as Accountant
-----------------------------------------------------------------
Jason R. Searcy, the Chapter 11 trustee of Bentley Premier
Builders LLC, asks for permission from the U.S. Bankruptcy Court
for the Eastern District of Texas to employ Gollob, Morgan, Peddy
& Co., P.C. as certified public accountants for the estate.
The Trustee requires Gollob Morgan to:
(a) prepare monthly operating reports;
(b) prepare of financial statements;
(c) perform tax consulting and rendering tax advice;
(d) prepare Income Tax Returns; and
(e) any and all other general accounting needs which may arise.
Gollob Morgan will be paid at these hourly rates:
Partners $320
Managers $205
Senior Accountants $165
Staff Accountants $130
Paraprofessionals $100
Gollob Morgan will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Robert W. Peddy, partner of Gollob Morgan, 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.
Gollob Morgan can be reached at:
Robert W. Peddy
GOLLOB, MORGAN, PEDDY & CO., P.C.
1001 ESE Loop 323, Ste. 300
Tyler, TX 75701
Tel: (903) 534-0088
Fax: (903) 581-3915
E-mail: bob@gmpcpa.com
About Bentley Premier
Bentley Premier Builders, LLC, is a Texas limited liability
company in the business of real estate development and building
custom houses. It filed a Chapter 11 petition (Bankr. E.D. Tex.
Case No. 13-41940) on Aug. 6, 2013 in Sherman, Texas. Judge
Brenda Rhoades presides over the case. Gerald P. Urbach, Esq.,
and Jason A. Katz, Esq., at Hiersche, Hayward, Drakeley & Urbach,
P.C., in Addison, Texas, serve as counsel. The Debtor disclosed
$35,793,857 in assets and $30,428,782 in liabilities as of the
Chapter 11 filing.
BENTLEY PREMIER: Chapter 11 Trustee Hires Marc Powell as Manager
----------------------------------------------------------------
Jason R. Searcy, the Chapter 11 trustee of Bentley Premier
Builders LLC, asks for permission from the U.S. Bankruptcy Court
for the Eastern District of Texas to employ Marc Powell as
business manager for the Debtor's ongoing business operations.
Mr. Powell will manage and control all aspects of the sale of
lots, development of real property, and construction of homes.
Mr. Powell's compensation will be:
(a) $11,000 per month to be paid every two weeks;
(b) gasoline allowance of $400 per month;
(c) cell phone allowance of $100 per month; and
(d) commission for each Debtor's lots sold and closed during
his term of employment in the amount of 3% if no other
realtor or broker is involved and 1.5% if another realtor
or broker is involved in the sale.
However, if the sale contract is executed during the term of Mr.
Powell's employment and the closing of the sale does not occur
until after Mr. Powell's employment ceased, then Mr. Powell will
still be entitled to the commission in the amounts set forth
herein.
Mr. Powell 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 Bentley Premier
Bentley Premier Builders, LLC, is a Texas limited liability
company in the business of real estate development and building
custom houses. It filed a Chapter 11 petition (Bankr. E.D. Tex.
Case No. 13-41940) on Aug. 6, 2013 in Sherman, Texas. Judge
Brenda Rhoades presides over the case. Gerald P. Urbach, Esq.,
and Jason A. Katz, Esq., at Hiersche, Hayward, Drakeley & Urbach,
P.C., in Addison, Texas, serve as counsel. The Debtor disclosed
$35,793,857 in assets and $30,428,782 in liabilities as of the
Chapter 11 filing.
BENTLEY PREMIER: Ch. 11 Trustee Taps Searcy & Searcy as Attorney
----------------------------------------------------------------
Jason R. Searcy, the Chapter 11 trustee of Bentley Premier
Builders, LLC, asks for permission from the U.S. Bankruptcy Court
for the Eastern District of Texas to employ Searcy & Searcy, P.C.
as attorneys.
The Trustee requires Searcy & Searcy to:
(a) advise and consult with the Trustee concerning questions
arising in the conduct of the administration of the estate
and concerning the Trustee's rights and remedies with
regard to the estate's assets and claims of secured,
preferred and unsecured creditors and other parties in
interest;
(b) appear for, prosecute, defend and represent the Trustee's
interest in suits or legal matters arising in or related to
this case; and specifically to appear for and represent
the Trustee with respect to liquidation of non-exempt real
and personal property, review of proofs of claim filed in
the case and prepare subsequent objections that are
necessary; and
(c) assist in the preparation of such pleadings, motions,
notices and orders as are required for the orderly
administration of this estate.
Searcy & Searcy will be paid at these hourly rates:
Jason R. Searcy $400
Joshua P. Searcy $250
Callan C. Searcy $200
Paraprofessionals $100
Searcy & Searcy will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Jason R. Searcy, shareholder and partner of Searcy & Searcy,
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.
Searcy & Searcy can be reached at:
Jason R. Searcy, Esq.
SEARCY & SEARCY, P.C.
446 Forest Square
P.O. Box 3929
Longview, TX 75606
Tel: (903) 757-3399
Fax: (903) 757-9559
E-mail: jsearcy@jrsearcylaw.com
About Bentley Premier
Bentley Premier Builders, LLC, is a Texas limited liability
company in the business of real estate development and building
custom houses. It filed a Chapter 11 petition (Bankr. E.D. Tex.
Case No. 13-41940) on Aug. 6, 2013 in Sherman, Texas. Judge
Brenda Rhoades presides over the case. Gerald P. Urbach, Esq.,
and Jason A. Katz, Esq., at Hiersche, Hayward, Drakeley & Urbach,
P.C., in Addison, Texas, serve as counsel. The Debtor disclosed
$35,793,857 in assets and $30,428,782 in liabilities as of the
Chapter 11 filing.
BION ENVIRONMENTAL: Incurs $1.5 Million Net Loss in 1st Quarter
---------------------------------------------------------------
Bion Environmental Technologies, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss of $1.50 million on $0 of revenue for
the three months ended Sept. 30, 2013, as compared with a net loss
of $2.45 million on $0 of revenue for the same period last year.
The Company's balance sheet at Sept. 30, 2013, showed $7.31
million in total assets, $11.13 million in total liabilities,
$21,900 in series B redeemable convertible preferred stock and a
$3.84 million total deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/vB0cF2
About Bion Environmental
Bion Environmental Technologies Inc.'s patented and proprietary
technology provides a comprehensive environmental solution to a
significant source of pollution in US agriculture, large scale
livestock facilities known as Confined Animal Feeding Operations.
Bion's technology produces substantial reductions of nutrient
releases (primarily nitrogen and phosphorus) to both water and air
(including ammonia, which is subsequently re-deposited to the
ground) from livestock waste streams based upon the Company's
operations and research to date (and third party peer review).
Bion Environmental incurred a net loss of $8.24 million for the
year ended June 30, 2013, as compared with a net loss of $6.46
million during the prior year.
GHP HORWATH, P.C., in Denver, Colorado, issued a "going concern"
qualification on the consolidated financial statements for the
year ended June 30, 2013. The independent auditors noted that
the Company has not generated significant revenue and has suffered
recurring losses from operations. These factors raise substantial
doubt about its ability to continue as a going concern.
BLUESTEM BRANDS: S&P Assigns 'B' CCR & Rates $200MM Loan 'B'
------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned a 'B'
corporate credit rating to Bluestem Brands Inc. The outlook is
stable, reflecting S&P's expectation that the company will
continue to grow its merchandise sales at a healthy pace and at
the same time manage its customer credit portfolio prudently.
At the same time, S&P assigned a 'B' issue-level rating, with a
'3' recovery rating to the company's proposed $200 million term
loan B due 2018. The '3' recovery rating indicates S&P's
expectation of meaningful (50%-70%) recovery of principal in the
event of a payment default.
The company has stated that it will use the proceeds from the term
loan B, along with cash, to fund approximately $347 million
dividend to its preferred and common shareholders.
"The ratings on Eden Prairie, Minn.-based Bluestem Brands Inc.
reflect our assessment of the company's "vulnerable" business risk
profile and "aggressive" financial risk profile," said credit
analyst Mariola Borysiak.
The stable outlook reflects S&P's expectation that the company
will continue to grow its merchandise sales at a healthy pace and
at the same time, manage its credit portfolio prudently. S&P also
assumes that the agreements with SCUSA function well and that
there are no significant changes to the mechanisms or economics.
S&P could lower the ratings if total debt to EBITDA (including its
preferred equity adjustment) increases toward 6x. S&P believes
that under this scenario EBITDA would decline about 16% from its
projected 2013 level because of unsuccessful marketing efforts to
acquire new customers and/or higher than expected charge offs,
which reduce profit sharing in the credit portfolio.
S&P is not likely to consider a higher rating in the next year
given the company's very aggressive financial policies in S&P's
view and likelihood for future debt financed dividends. However,
an upgrade would be predicated on Bluestem's ability to improve
its credit profile such that it sustains a normalized total debt-
to-EBITDA ratio in the low-4x area. S&P would also factor its
assessment of the likelihood for future debt-financed dividends
into any positive rating action.
BOMBARDIER INC: Fitch Affirms BB IDR, Outlook Revised to Negative
-----------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating (IDR) and
long-term ratings for Bombardier Inc. (BBD) at 'BB'. The Rating
Outlook has been revised to Negative from Stable. A full list of
ratings follows at the end of this release.
Key Rating Drivers:
The revision of the Rating Outlook to Negative reflects concerns
that BBD's credit metrics may be weak longer than expected.
Debt/EBITDA at Sept. 30, 2013 was 6.3x and has remained above 6x
since January 2013 when BBD issued $2 billion of new debt that was
used to support liquidity during a period of significant capital
spending at Bombardier Aerospace (BA). Fitch anticipated leverage
would remain elevated through much of 2013 but would begin to
decline near the end of the year as BA got beyond its peak program
spending and as the regional aircraft and lighter business jet
markets eventually began to recover. However, these markets remain
difficult. In addition, there were development delays on the
CSeries prior to first flight, and Bombardier Transportation (BT)
has experienced execution challenges. These developments could
extend the negative cash cycle and prevent leverage from improving
as soon as originally expected by Fitch.
First flight for the CSeries was achieved in September 2013, nine
months after the original target date. Entry into service is now
anticipated not sooner than late 2014, and additional delays are
possible. The CSeries is the largest and most important
development program at BA, and the company's ability to recoup its
investment and establish a competitive position in the 100-149
seat category will require effective execution, satisfactory
performance of new technologies included in the aircraft, and
sufficient orders. There are currently 177 firm orders for the
CSeries compared to BBD's target of 300 orders by the time the
CSeries enters service. The level of new orders prior to entry
into service will be important for the success of the aircraft and
BBD's ability to develop a viable market for the aircraft. Other
development programs include the Learjet 85 scheduled for first
flight by the end of 2013 and the Global 7000 and 8000 aircraft
scheduled for entry into service in 2016 and 2017, respectively.
Free cash flow was negative $1.9 billion through the first nine
months of 2013, including adjustments for changes in off-balance
sheet factoring facilities. Cash flow typically is strong in the
last quarter which would reduce the negative FCF for the full
year. The biggest driver of negative FCF is high capital spending
for development programs at BA, primarily for the CSeries, but BA
is also investing in several new or upgraded business jet programs
involving large, medium and light aircraft. The negative impact of
capital spending is exacerbated by low customer advances at BA.
Although BA's backlog is at a solid level, many of the orders are
for CSeries aircraft or fleet business jets which will be
delivered over several years. Fitch anticipates FCF will be
negative again in 2014 but at an improved, smaller level than 2013
as capital spending declines. However, an improvement in FCF will
depend on BBD's ability to avoid significant further delays in its
CSeries and other aircraft development programs and to improve
overall margins.
FCF also includes the impact of pension contributions which BBD
estimated could amount to $458 million in 2013. At the end of
2012, the net pension obligation was $2.5 billion, including $736
million of unfunded plans. Funded plans were 80% funded. BBD
estimates the net obligation at Sept. 30, 2013 declined by $663
million due to a higher discount rate and positive asset returns.
Other rating concerns include margin pressure. At BA, weak demand
in the smaller end of the business jet market is making pricing
difficult, but demand is better for large business jets. Margins
will also be pressured in the medium term by the CSeries due to
higher costs associated with initial production. Orders for
regional jets and turboprops have been low as the market shifts
toward larger aircraft. For business jets, BA has received less
than half the number of orders received for the first nine months
of 2012, but the figures don't include a large order that would be
booked upon completion of the pending sale of BBD's FlexJet
business for approximately $185 million.
BT has targeted 8% EBIT margins by 2014 but has experienced
continuing execution challenges on certain contracts which
contributed to a segment margin of 6.5% during the first nine
months of 2013. These challenges are being gradually addressed but
remain a risk. BT operates in more stable markets than BA, partly
reflecting significant revenue from government customers.
Government spending on rail transportation is under some pressure,
but BT's orders and backlog have been steady.
Rating concerns are mitigated by BBD's diversification and strong
market positions in the aerospace and transportation businesses
and BA's portfolio of commercial aircraft and large business jets.
The company has continued to refresh its aircraft portfolio which
should position it to remain competitive.
BBD's liquidity at Sept. 30, 2013 included approximately $2.6
billion of cash and availability under a $750 million bank
revolver that matures in 2016. In addition, BT has a EUR500
million revolver that matures in 2015. Both facilities are unused.
BA and BT also have LC facilities. The bank facilities contain
various leverage and liquidity requirements for both BA and BT
which remained in compliance at Sept. 30, 2013. Minimum required
liquidity at the end of each quarter is $500 million at BA and
EUR600 million at BT. BBD does not disclose required levels for
other covenants.
In addition to the two committed facilities, BBD uses other
facilities including a performance security guarantee (PSG)
facility that is renewed annually as well as bilateral agreements
and bilateral facilities with insurance companies. BA uses
committed sale and leaseback facilities ($242 million outstanding
at Sept. 30, 2013) to help finance its trade-in inventory of used
business aircraft. In addition, BT uses off-balance-sheet, non-
recourse factoring facilities in Europe under which $1.2 billion
was outstanding.
Liquidity is offset by current debt maturities that totaled $216
million at Sept. 30, 2013. In addition to long term debt, BBD had
$784 million of other current financial liabilities including
refundable government advances, sale and leaseback obligations,
lease subsidies and other items. BBD also has contingent
liabilities related to aircraft sales and financing and to foreign
currency risk. BA's contingent liabilities have been generally
stable or slightly lower, except trade-in commitments for used
aircraft. These commitments have increased due to the growth in
orders for larger business jets.
Rating Sensitivities:
A positive rating action is unlikely while FCF is negative and
leverage is high. However, longer term developments that may,
individually or collectively, lead to higher ratings include:
-- Orders and deliveries improve at BA;
-- The CSeries program is executed successfully;
-- BT improves project execution and builds stronger margins;
-- FCF improves materially as development spending for aerospace
programs begins to wind down.
Future developments that may, individually or collectively, lead
to a negative rating action include:
-- FCF does not improve significantly in 2014;
-- The CSeries encounters further material delays or increased
costs, or future orders are insufficient to support profitable
production levels;
-- Commercial and business jet markets experience an extended
period of weak demand;
-- Liquidity is insufficient to carry BBD through the current
development cycle at BA.
Fitch has affirmed BBD's ratings as follows:
-- IDR at 'BB';
-- Senior unsecured revolving credit facility at 'BB';
-- Senior unsecured debt at 'BB';
-- Preferred stock at 'B+'.
The Rating Outlook is Negative.
The ratings affect approximately $7.3 billion of debt at Sept. 30,
2013. The amount includes sale and leaseback obligations and is
adjusted for $347 million of preferred stock which Fitch gives 50%
equity interest. The debt amount excludes adjustments for interest
swaps reported in long-term debt as the adjustments are expected
to be reversed over time.
BOMBARDIER INC: S&P Corrects Preferred Shares Rating to 'B'
-----------------------------------------------------------
Standard & Poor's Ratings Services said it corrected its global
scale preferred share rating on Bombardier Inc.'s series 2 and 4
cumulative redeemable preferred shares by lowering the rating to
'B' from 'B+'. S&P's Canada scale preferred share rating of 'P-4'
is unaffected. In accordance with S&P's criteria, when the
corporate credit rating is non-investment-grade, S&P rates the
preferred stock at least three notches (one rating category) below
the corporate credit rating. Due to an error, S&P inadvertently
did not revise the global rating on the preferred shares
contemporaneously with the lowering of the corporate credit rating
on Bombardier on Nov 14, 2012. Accordingly, S&P is revising the
global rating at this time.
RATINGS LIST
Bombardier Inc.
Corporate credit rating BB/Negative/--
Ratings Lowered
To From
Preferred stock
Global scale
C$300 mil. cumulative pref ser 2 B B+
C$200 mil cumulative pref ser 4 B B+
BP AUTOMOTIVE: 5th Cir. Remands Dispute With RML Entities
---------------------------------------------------------
BP RE, L.P., filed for Chapter 11 bankruptcy relief and, along
with BP Automotive, L.P., filed an adversary complaint in the
bankruptcy court alleging various state-law tort and contract
claims against various RML entities -- RML Waxahachie Dodge,
L.L.C.; RML-McLarty-Landers Automotive Holdings, L.L.C.; RML
Waxahachie Ford, L.L.C.; and RLJ-McLarty-Landers Automotive Group.
The court eventually granted defendants' motion to remove BP
Automotive, L.P., from the case.
The claims related to negotiations between BPRE and RML over the
sale and lease of a car dealership and the related property. The
bankruptcy court entered a final judgment denying relief, and on
appeal, the district court, reviewing the findings of fact for
clear error and conclusions of law de novo, affirmed.
Appealing the judgment of the district court, BPRE argues, on the
merits, that RML breached a lease agreement; that undisputed
evidence shows that defendants committed fraud; and that several
findings were against the great weight of the evidence.
Procedurally, BPRE contends that the bankruptcy court (1) failed
to rule on some of BPRE's claims; (2) relied on evidence not in
the record and failed to apply the proper legal standards; (3)
erred in denying a jury trial; and (4) lacked constitutional
authority to enter a final, appealable judgment.
Because the bankruptcy court lacked Article III authority to enter
final judgment on BPRE's claims, the United States Court of
Appeals for the Fifth Circuit vacated the district court's
judgment and remanded to the district court. The Fifth Circuit
did not reach the merits of BPRE's appeal.
Circuit Judge Jerry E. Smith, who penned the opinion, said,
"Because no party disputes that BPRE's claims are not core
proceedings, the bankruptcy court has the authority conferred by
[Sec.] 157(c)(1) to issue proposed findings of fact and
conclusions of law as to BPRE's state-law claims that are related
to the bankruptcy estate in the event the district court elects to
refer the matter to the bankruptcy court for that limited purpose.
. . . We impose no limitations on what actions the district court
may take on remand that are consistent with this opinion."
The case is, BP RE, L.P., Appellant, v. RML WAXAHACHIE DODGE,
L.L.C.; RML-McLARTY-LANDERS AUTOMOTIVE HOLDINGS, L.L.C; RML
WAXAHACHIE FORD, L.L.C; RML WAXAHACHIE GMC, L.L.C.; RLJ-McLARTY-
LANDERS AUTOMOTIVE GROUP, Appellees, No. 12-51270 (5th Cir.).
A copy of the Fifth Circuit's Nov. 11 opinion is available at
http://is.gd/L0gDhsfrom Leagle.com.
BRIGHTSTAR CORP: S&P Retains 'BB-' CCR on CreditWatch Postive
-------------------------------------------------------------
Standard & Poor's Ratings Services said that the 'BB-' corporate
credit rating and all other ratings on Miami-based Brightstar
Corp. remain on CreditWatch, where S&P placed them with positive
implications on Oct. 21, 2013. Based on the proposed guarantee
for the deal, S&P is likely to raise the ratings on Brightstar's
senior unsecured debt to 'BB+' at the close of the transaction.
The CreditWatch placement followed Brightstar Corp.'s announcement
of a definitive agreement for SoftBank Corp. to invest
$1.26 billion in Brightstar, which will result in SoftBank's
majority ownership of Brightstar.
As S&P stated in the initial CreditWatch listing, if the
transaction closes as proposed, S&P expects to raise the corporate
credit rating on Brightstar by one notch to 'BB' from 'BB-', with
a stable outlook.
S&P also listed two potential outcomes regarding Brightstar's
senior unsecured debt ratings, depending upon the terms of
Softbank's proposed guarantee of Brightstar's debt. S&P stated
that if the guarantee meets Standard & Poor's criteria, it would
equalize the ratings on Brightstar's senior unsecured debt with
the ratings on SoftBank Corp.'s senior unsecured debt. At this
point, S&P has completed its preliminary assessment of the
guarantee and determined that the guarantee meets its criteria.
As a result, upon closing of the transaction as proposed and
subject to review of the final guarantee documents, S&P would
equalize the ratings on Brightstar's senior unsecured debt with
the ratings on SoftBank Corp.'s senior unsecured debt and raise
the ratings on Brightstar's senior unsecured debt to 'BB+' from
'B+'. S&P would not assign a recovery rating to this debt, in
this case, since there are no recovery ratings on Japanese
companies.
S&P expects to resolve the CreditWatch placement by December, when
the transaction is expected to close.
RATINGS LIST
Brightstar Corp.
Corporate Credit Rating BB-/Watch Pos/--
Senior Unsecured B+/Watch Pos
Recovery Rating 5
CABLEVISION SYSTEMS: S&P Puts 'BB' CCR on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'BB'
corporate credit rating, and all other ratings, on Bethpage, N.Y.-
based cable and telecommunications company Cablevision Systems
Corp. on CreditWatch with negative implications.
"The negative CreditWatch listing reflects our view that
Cablevision may not be able to improve operating performance
sufficiently to achieve financial metrics in 2014 that are
commensurate with current ratings," said Standard & Poor's credit
analyst Richard Siderman.
Specifically, Cablevision would need to improve the year-to-date
operating performance of its core cable operations to enable
consolidated debt leverage, currently around an annualized 5.8x,
to moderate to, and be sustained at, the 5x level that S&P views
as minimally supportive of the current 'BB' corporate credit
rating.
In resolving the CreditWatch, S&P will assess the prospects that
Cablevision can strengthen cable performance sufficiently to
improve financial metrics to levels commensurate with current
ratings. Specifically, S&P would lower ratings if it did not
believe the company was on track to improve leverage to 5x and
funds from operations to debt to the high-teens area in 2014. S&P
believes that level of operational improvement would require at
least low- to mid-single-digit percent growth in cable revenues
along with a mid-30% cable segment EBITDA margin.
CAESARS ENTERTAINMENT: Bank Debt Trades at 6% Off
-------------------------------------------------
Participations in a syndicated loan under which Caesars
Entertainment Inc. is a borrower traded in the secondary market at
94.32 cents-on-the-dollar during the week ended Friday, Nov. 15,
2013, according to data compiled by LSTA/Thomson Reuters MTM
Pricing and reported in The Wall Street Journal. This represents
an increase of 0.47 percentage points from the previous week, The
Journal relates. Caesars Entertainment Inc pays 525 basis points
above LIBOR to borrow under the facility. The bank loan matures on
Jan. 1, 2018, and carries Moody's B3 rating and Standard & Poor's
B- rating. The loan is one of the biggest gainers and losers
among 205 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.
-- http://www.caesars.com/-- is one of the world's largest casino
companies, with annual revenue of $4.2 billion, 20 properties on
three continents, more than 25,000 hotel rooms, two million square
feet of casino space and 50,000 employees. Caesars casino resorts
operate under the Caesars, Bally's, Flamingo, Grand Casinos,
Hilton and Paris brand names. The Company has its corporate
headquarters in Las Vegas.
Harrah's announced its re-branding to Caesar's on mid-November
2010.
The Company incurred a net loss of $1.49 billion on $8.58 billion
of net revenues for the year ended Dec. 31, 2012, as compared with
a net loss of $666.70 million on $8.57 billion of net revenues
during the prior year. The Company's balance sheet at Sept. 30,
2013, showed $26.09 billion in total assets, $27.59 billion in
total liabilities and a $1.49 billion total deficit.
* * *
Caesars Entertainment carries a 'CCC' long-term issuer default
rating, with negative outlook, from Fitch and a 'Caa1' corporate
family rating with negative outlook from Moody's Investors
Service.
As reported in the TCR on Feb. 5, 2013, Moody's Investors Service
lowered the Speculative Grade Liquidity rating of Caesars
Entertainment Corporation to SGL-3 from SGL-2, reflecting
declining revolver availability and Moody's concerns that Caesars'
earnings and cash flow will remain under pressure causing the
company's negative cash flow to worsen.
In the May 7, 2013, edition of the TCR, Standard & Poor's Ratings
Services said that it lowered its corporate credit ratings on Las
Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned
subsidiary Caesars Entertainment Operating Co. (CEOC) to 'CCC+'
from 'B-'.
"The downgrade reflects weaker-than-expected operating performance
in the first quarter, and our view that Caesars' capital structure
may be unsustainable over the next two years based on our EBITDA
forecast for the company," said Standard & Poor's credit analyst
Melissa Long.
CALMENA ENERGY: In Default of Certain Debt Covenants
----------------------------------------------------
Calmena Energy Services Inc. on Nov. 13 reported financial results
for the third quarter ended September 30, 2013.
Selected Financial Information
2013 Headlines
-- For the three and nine months ended September 30,
2013, the Company recorded revenue of $13.8 million and $81.4
million and EBITDAS of negative $4.7 million and negative $2.5
million respectively compared to revenue of $39.7 million and
$123.0 million and EBITDAS of $2.4 million and $14.2 million
respectively for the comparable periods in 2012. The
largest decrease in revenue and EBITDAS was realized in Latin
America and resulted from the terminations of drilling rig
contracts in Brazil during the fourth quarter of 2012 and the
second quarter of 2013 and in Mexico during the second quarter of
2013. Additionally, in the second quarter of 2013, several
onetime charges totaling $2.3 million for relocating a drilling
rig from Colombia to Texas, disputed customer invoices in Colombia
and Libya and a labor settlement in Libya affected both revenue
and EBITDAS.
-- As part of the ongoing process to identify, examine
and consider a range of strategic alternatives available to the
Company with a view to enhancing shareholder value the Company
completed several transactions and used the cash proceeds to
reduce corporate debt:
-- In April 2013, Calmena completed the disposition
of its wireline technologies service line for cash proceeds of
$12.1 million.
-- During the second quarter of 2013 Calmena divested
of certain Canadian contract drilling assets for total proceeds of
$3.4 million. Proceeds were comprised of $1.4 million in cash and
$2.0 million in settlement of other payables.
-- In July 2013, Calmena completed the disposition of
its remaining Canadian contract drilling assets for cash proceeds
of $15.0 million.
-- Net debt(i) as at September 30, 2013 was $32.3
million.
-- Due to current business conditions and the
interruption in drilling activity in Mexico, Calmena has
determined that it is currently in default of certain debt
covenants under the credit facilities held with its senior lender.
Accordingly, Calmena and its senior lender have entered into an
agreement pursuant to which the senior lender has agreed to
forbear from demanding repayment or enforcing its security under
the Credit Facilities prior to the earlier of December 13, 2013 or
a default as defined in the Agreement. The Credit Facilities
consist of a revolving demand operating facility with a maximum
borrowing capacity of $10.0 million (subject to a borrowing
restriction based on the carrying amount of Calmena's
Canadian and US trade receivables), and a revolving extendible
facility with a maximum borrowing capacity and current amount
outstanding of $22.5 million. Calmena also owes $15.5 million to
secured lenders under facilities that are subordinated and
postponed to the senior lender. Under the terms of the Agreement,
Calmena shall continue to be able to draw on the operating
facility, with no further draws being available on the extendible
facility. The interest rate under the Credit Facilities
has been increased by 2% per annum to the Bank's prime rate plus
4%.
Outlook
In Canada, activity in our Frac Fluids Management and Equipment
Rentals business improved in September after a slow start to the
third quarter. Management is encouraged by this momentum and as
we approach the seasonally more active winter period, anticipates
this trend will continue.
In the US, the Company's directional services business did not
experience the normal seasonal increase in activity in the third
quarter of 2013. Currently, the directional business anticipates
improving activity levels in the fourth quarter.
Mexico contract drilling is beginning to show signs of recovery.
The curtailment of Mexico drilling operations in the second
quarter by Pemex resulted in the termination of all of our
drilling contracts which has had a material negative impact on
Calmena's overall financial performance. Calmena's six Mexican
rigs remained idle until early October, when our first rig was re-
activated. That curtailment in activity resulted from a budget
impasse between Pemex and the Government of Mexico which has since
been resolved. Pemex is currently tendering ten large multi-year
integrated project management contracts, as part of an aggressive
capital program, which we expect will be awarded later in 2013 and
should result in increased demand for rigs in the first quarter of
2014. Management expects utilization to improve with these
positive market developments. EBITDAS from our Mexican contract
drilling business was $12.7 million in 2012.
Calmena's Brazilian rigs are not currently contracted. The Company
continues to explore strategic opportunities to re-contract or
divest of these rigs.
In early October, Calmena received notice from its customer in
Libya of its intent to renew the drilling contracts for the
Company's two rigs. One rig re-commenced operations in mid-
October and we are currently mobilizing the second rig.
Negotiations continue to finalize longer term contractual
commitments for both rigs.
Management has undertaken cost reduction measures across the
Company to reflect current activity levels. In parallel with
initiatives to manage costs and rejuvenate Calmena's businesses,
our strategic review process is ongoing. Management continues to
explore strategic alternatives to monetize under-utilized assets,
and consider business combination opportunities.
About Calmena Energy Services Inc.
Calmena is a diversified energy services company that provides
well construction services to its customers operating in Canada,
the United States, Latin America and the Middle East and North
Africa. The common shares of Calmena trade on the Toronto Stock
Exchange under the symbol "CEZ".
CENTERPLATE INC: S&P Assigns 'B' Rating to $420MM Secured Debt
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B'
rating to Spartanburg, S.C.-based Centerplate Inc.'s proposed
$420 million senior secured facility (composed of a $75 million
revolver and $345 million of term debt). The co-borrower is KPLT
Holdings Inc. The recovery rating on this debt is '3', indicating
S&P's expectation of meaningful recovery (50%-70%) in a payment
default scenario.
S&P expects the company to use proceeds from the proposed
transaction to refinance about $297 million of outstanding debt
under its existing senior secured credit facility and to pay down
about $40 million of its mezzanine debt. S&P estimates this
transaction is largely leverage neutral and that the company will
be able to lower its overall cost of capital. S&P believes the
company's multiyear customer contracts support relatively stable
operating performance, with low-single-digit organic sales growth
and EBITDA margins near current levels expected over the next
year. S&P estimates leverage will be near 5.5x and the ratio of
funds from operations to total debt at about 12% over the next
year. This is line with the indicative financial ratios for a
"highly leveraged" financial profile, which include leverage above
5x.
The ratings on Centerplate reflect S&P's view that the company
continues to have a "highly leveraged" financial risk profile,
based on the company's aggressive financial policy (including its
ownership by a financial sponsor), positive cash flow generation,
and adequate liquidity. The ratings also reflect S&P's view that
the company's business risk profile will remain "weak", which is
supported by the company's low-value-added nature (particularly
for sports facilities) and the cyclicality of demand for the
company's services, in addition to a very competitive operating
environment.
RATINGS LIST
Centerplate Inc.
Corporate credit rating B/Stable/--
New Ratings
Centerplate Inc.
KPLT Holdings Inc.
Senior secured
$345 mil. term loan B
Recovery rating 3
$75 mil. revolver B
Recovery rating 3
CENTURYLINK INC: Fitch Rates Proposed Sr. Unsecured Notes BB+
-------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to CenturyLink, Inc.'s
proposed offering of senior unsecured notes due 2023. Proceeds,
along with cash on hand and revolver borrowings, are expected to
be used to repay $800 million of senior unsecured notes maturing
in 2018 issued by Qwest Communications International, Inc. (QCII).
CenturyLink has launched a concurrent tender offer for any and all
2018 QCII notes. QCII is a wholly owned subsidiary of CenturyLink.
CenturyLink's Issuer Default Rating (IDR) is 'BB+'. The Rating
Outlook is Stable.
Key Rating Drivers:
The following factors support CenturyLink's ratings:
-- Fitch's ratings are based on the expectation that CenturyLink
will demonstrate steady improvement in its revenue profile
over the next couple of years;
-- Consolidated free cash flows (FCFs) are expected to strengthen
with a reduction in the dividend, and liquidity is expected to
remain relatively strong;
-- CenturyLink's execution risks related to the integration of
Qwest Communications International, Inc. (Qwest) and Savvis,
Inc. (Savvis) are nearly behind the company.
The following concerns are embedded in CenturyLink's ratings:
-- CenturyLink's change in financial policy in early 2013, which
incorporates the maintenance of net leverage of up to 3.0x,
less restrictive than its previous mid-2x target;
-- The decline of CenturyLink's traditional voice revenues,
primarily in the consumer sector, from wireless substitution
and moderate levels of cable telephony substitution. Although
such revenues are declining in the revenue mix and are being
replaced by broadband and business services revenues, these
latter sources have lower margins.
Fitch expects CenturyLink's consolidated revenues to continue to
show lower rates of decline in 2013 and 2014. Revenues are slow in
returning to stability due to lower rates of growth than
previously expected in certain strategic areas, including high-
speed data, advanced business services, as well as the managed
hosting, and cloud computing services offered by Savvis Inc. In
the longer term, revenue growth from these services is expected to
contribute to stability.
In February 2013, CenturyLink initiated a $2 billion common stock
repurchase program, accompanied by a dividend reduction. The
company plans to repurchase $2 billion in common stock by February
2015, primarily funded from FCF. Annual FCF improves by
approximately $450 million as a result of a reduction in the
common stock dividend of approximately 25%, but on a net basis,
cash returned to shareholders will increase.
On a gross debt basis, CenturyLink's leverage for the last 12
months ending Sept. 30, 2013 was approximately 2.8x, consistent
with the 2.7x to 2.8x range Fitch expects over the next several
years. Debt reduction in 2013 and 2014 is expected to be modest.
Additionally, there will be some pressure on EBITDA as there are
lower incremental merger-related cost savings in 2013 than in
2012.
CenturyLink's total debt was $20.6 billion at Sept. 30, 2013.
Financial flexibility is provided through a $2 billion revolving
credit facility, which matures in April 2017. As of Sept. 30,
2013, approximately $1.8 billion was available on the facility.
CenturyLink also has a $160 million uncommitted revolving letter
of credit facility.
The principal financial covenants in the $2 billion revolving
credit facility limit CenturyLink's debt to EBITDA for the past
four quarters to no more than 4.0x and EBITDA to interest plus
preferred dividends (with the terms as defined in the agreement)
to no less than 1.5x. Qwest Corporation (QC) has a maintenance
covenant of 2.85x and an incurrence covenant of 2.35x. The
facility is guaranteed by Embarq, Qwest Communications
International Inc. and Qwest Services Corporation (QSC).
In 2013, Fitch expects CenturyLink's FCF (defined as cash flow
from operations less capital spending and dividends) to range from
$1 billion to $1.3 billion. Expected FCF levels reflect capital
spending within the company's guidance of approximately $3
billion. Within the capital budget, areas of focus for investment
primarily include continued spending on fiber-to-the-tower, data
center/hosting, broadband expansion and enhancement, as well as
spending on IPTV, the company's facilities based video program.
Fitch believes CenturyLink has the financial flexibility to manage
upcoming maturities due to its FCF and credit facilities. Long-
term debt maturities remaining in 2013 are nominal. In 2014,
approximately $0.7 billion matures.
Going forward, Fitch expects CenturyLink and QC will be
CenturyLink's only issuing entities. CenturyLink has a universal
shelf registration available for the issuance of debt and equity
securities.
Rating Sensitivities:
Fitch does not expect a positive rating action over the next
several years based on its assessment of the competitive risks
faced by CenturyLink and expectations for leverage.
A negative rating action could occur if:
-- Consolidated leverage through, but not limited to, operational
performance, acquisitions, or debt-funded stock repurchases,
is expected to be 3.5x or higher; and
-- For QC or Embarq, leverage trends toward 2.5x or higher (based
on external debt).
CENTURYLINK INC: S&P Assigns 'BB' Rating to New Sr. Notes Due 2023
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' issue-level
rating and '4' recovery rating to Monroe, La.-based
telecommunications provider CenturyLink Inc.'s proposed senior
notes due 2023 (amount to be determined). The '4' recovery rating
indicates S&P's expectation for average (30%-50%) recovery in the
event of payment default.
The company intends to use net proceeds, together with available
cash or borrowings under its revolving credit facility, to tender
for the $800 million of senior notes due 2018 at wholly-owned
subsidiary Qwest Communications International Inc.
The 'BB' corporate credit rating on CenturyLink is unchanged and
the outlook remains stable. The transaction is unlikely to affect
the company's credit measures, including leverage, which was about
3.4x as of Sept. 30, 2013. The ratings incorporate S&P's
expectation that leverage could rise to the high-3x area longer
term because of lower EBITDA.
RATINGS LIST
CenturyLink Inc.
Corporate Credit Rating BB/Stable/--
New Rating
CenturyLink Inc.
Senior Secured Notes Due 2023 BB
Recovery Rating 4
CHINA NATURAL: Says It Has a Plan Draft, Potential Buyer
--------------------------------------------------------
Marie Beaudette, writing for DBR Small Cap, reported that China
Natural Gas Inc. said it has prepared a draft creditor-payment
plan and has a deal with a potential buyer interested in some of
its Chinese assets.
About China Natural
Headquartered in Xi'an, Shaanxi Province, P.R.C., China Natural
Gas, Inc., was incorporated in the State of Delaware on March 31,
1999. The Company through its wholly owned subsidiaries and
variable interest entity, Xi'an Xilan Natural Gas Co., Ltd., and
subsidiaries of its VIE, which are located in Hong Kong, Shaanxi
Province, Henan Province and Hubei Province in the People's
Republic of China ("PRC"), engages in sales and distribution of
natural gas and gasoline to commercial, industrial and residential
customers through fueling stations and pipelines, construction of
pipeline networks, installation of natural gas fittings and parts
for end-users, and conversions of gasoline-fueled vehicles to
hybrid (natural gas/gasoline) powered vehicles at 0ptmobile
conversion sites.
On Feb. 8, 2013, an involuntary petition for bankruptcy was filed
against the Company by three of the Company's creditors, Abax
Lotus Ltd., Abax Nai Xin A Ltd., and Lake Street Fund LP (Bankr.
S.D.N.Y. Case No. 13-10419). The Petitioners claimed that they
have debts totaling $42,218,956.88 as a result of the Company's
failure to make payments on the 5% Guaranteed Senior Notes issued
in 2008. Adam P. Strochak, Esq., at Weil, Gotshal & Manges, LLP,
in Washington, D.C., represents the Petitioners as counsel.
China Natural Gas, Inc., sought dismissal of the involuntary
petition but in July 2013, it consented to the entry of an
order for relief under Chapter 11 of the U.S. Code.
The last regulatory filing listed assets as of June 30 of $29.5
million and liabilities totaling $82.5 million.
CHINA PRECISION: Wei Xiao Appointed as Director
-----------------------------------------------
The Board of Directors of China Precision Steel, Inc., appointed
Wei Hong Xiao to serve as a director of the Company, effective as
of Nov. 1, 2013, to fill the vacancy created by the departure of
Mr. Che Kin Lui.
Mr. Wei Hong Xiao, age 70, has served as professor, Department of
Technology, China Iron and Steel Association since 1998. Prior to
1998 he served in various positions including engineer, senior
engineer, vice head of division, head of division, deputy director
and director, at Ministry of Metallurgical Industry. He holds a
Masters Degree in Metal Physics and a Bachelors Degree in Physics
and Chemistry from the Beijing Iron and Steel Institute.
Mr. Xiao is not related to any of the Company's executive officers
or directors, nor has he been a party to any transaction requiring
disclosure pursuant to Item 404(a) of Regulation S-K.
About China Precision
China Precision Steel Inc. is a niche precision steel processing
company principally engaged in the production and sale of high
precision cold-rolled steel products and provides value added
services such as heat treatment and cutting medium and high
carbon hot-rolled steel strips. China Precision Steel's high
precision, ultra-thin, high strength (7.5 mm to 0.05 mm) cold-
rolled steel products are mainly used in the production of
automotive components, food packaging materials, saw blades and
textile needles. The Company primarily sells to manufacturers in
the People's Republic of China as well as overseas markets such
as Nigeria, Thailand, Indonesia and the Philippines. China
Precision Steel was incorporated in 2002 and is headquartered in
Sheung Wan, Hong Kong.
China Precision incurred a net loss of $68.93 million on $36.52
million of sales revenues for the year ended June 30, 2013, as
compared with a net loss of $16.94 million on $142.97 million of
sales revenues during the prior fiscal year. As of June 30, 2013,
the Company had $119.92 million in total assets, $67.01 million in
total liabilities, all current, and $52.91 million in total
stockholders' equity.
Moore Stephens, Certified Public Accountants, in Hong Kong, issued
a "going concern" qualification on the consolidated financial
statements for the year ended June 30, 2013. The independent
auditors noted that the Company has suffered a very significant
loss in the year ended June 30, 2013, and defaulted on interest
and principal repayments of bank borrowings that raise substantial
doubt about its ability to continue as a going concern.
CLEAR CHANNEL: Incurs $101.8 Million Net Loss in Third Quarter
--------------------------------------------------------------
Clear Channel Communications, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss attributable to the Company of $101.85
million on $1.58 billion of revenue for the three months ended
Sept. 30, 2013, as compared with a net loss attributable to the
Company of $50.56 million on $1.58 billion of revenue for the same
period during the prior year.
For the nine months ended Sept. 30, 2013, the Company reported
a net loss attributable to the Company of $297.65 million on $4.58
billion of revenue as compared with a net loss attributable to the
Company of $233.21 million on $4.55 billion of revenue for the
same period last year.
As of Sept. 30, 2013, the Company had $15.23 billion in total
assets, $23.60 billion in total liabilities and a $8.37 billion
total shareholders' deficit.
"Strategically and financially, our third quarter results reflect
the growing strength of our Media + Entertainment business, while
we continue to make meaningful progress in moving Outdoor forward
internationally and in the Americas," said Bob Pittman, chairman
and chief executive officer. "At Media+Entertainment, we
outperformed the entire radio sector in revenue growth, including
in our major markets. Increasingly, our radio business is
benefiting from our strategic approach to advertising that sets us
apart in the marketplace."
A copy of the Form 10-Q is available for free at:
http://is.gd/l24Svr
About Clear Channel Communications
San Antonio, Texas-based Clear Channel Communications, Inc., an
indirect subsidiary of CC Media Holdings, Inc. (OTCBB: CCMO), is
one of the leading global media and entertainment companies
specializing in radio, digital, outdoor, mobile, live events, and
on-demand entertainment and information services for local
communities and providing premier opportunities for advertisers.
CC Media Holdings Inc. -- http://www.ccmediaholdings.com/-- is a
global media and entertainment company. Its businesses include
radio and outdoor displays.
* * *
In May 2013, Moody's Investors Service said that Clear Channel's
upsize of the term loan D to $4 billion from $1.5 billion will not
impact the Caa1 facility rating assigned. Clear Channel's
Corporate Family Rating is unchanged at Caa2. The outlook remains
stable.
In May, Standard & Poor's Ratings Services also announced that its
issue-level rating on San Antonio, Texas-based Clear Channel's
senior secured term loan remains unchanged at 'CCC+' following the
company's upsize of the loan to $4 billion from $1.5 billion. The
rating on parent company CC Media Holdings remains at 'CCC+' with
a negative outlook, which reflects the risks surrounding the long-
term viability of the company's capital structure.
CLEAR CHANNEL: Bank Debt Trades at 3% Off
-----------------------------------------
Participations in a syndicated loan under which Clear Channel
Communications is a borrower traded in the secondary market
at 96.75 cents-on-the-dollar during the week ended Friday,
November 15, 2013, according to data compiled by LSTA/Thomson
Reuters MTM Pricing and reported in The Wall Street Journal. This
represents a decrease of 0.176 percentage points from the previous
week, The Journal relates. Clear Channel Communications pays 365
basis points above LIBOR to borrow under the facility. The bank
loan matures on Jan. 30, 2016, and carries Moody's Caa1 rating and
Standard & Poor's CCC+ rating. The loan is one of the biggest
gainers and losers among 205 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About Clear Channel Communications
San Antonio, Texas-based Clear Channel Communications, Inc., an
indirect subsidiary of CC Media Holdings, Inc. (OTCBB: CCMO), is
one of the leading global media and entertainment companies
specializing in radio, digital, outdoor, mobile, live events, and
on-demand entertainment and information services for local
communities and providing premier opportunities for advertisers.
CC Media Holdings Inc. -- http://www.ccmediaholdings.com/-- is a
global media and entertainment company. Its businesses include
radio and outdoor displays.
As of June 30, 2013, the Company had $15.29 billion in total
assets, $23.58 billion in total liabilities and a $8.28 billion
total shareholders' deficit.
* * *
In May 2013, Moody's Investors Service said that Clear Channel's
upsize of the term loan D to $4 billion from $1.5 billion will not
impact the Caa1 facility rating assigned. Clear Channel's
Corporate Family Rating is unchanged at Caa2. The outlook remains
stable.
In May, Standard & Poor's Ratings Services also announced that its
issue-level rating on San Antonio, Texas-based Clear Channel's
senior secured term loan remains unchanged at 'CCC+' following the
company's upsize of the loan to $4 billion from $1.5 billion. The
rating on parent company CC Media Holdings remains at 'CCC+' with
a negative outlook, which reflects the risks surrounding the long-
term viability of the company's capital structure.
CLG LLC: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: CLG, LLC
18441 K, Highway
Blackwater, MO 65322
Case No.: 13-21552
Chapter 11 Petition Date: November 14, 2013
Court: United States Bankruptcy Court
Western District of Missouri (Jefferson City)
Judge: Hon. Dennis R. Dow
Debtor's Counsel: Gwendolyn Froeschner Hart, Esq.
SHURTLEFF, FROESCHNER & BUNN LLC
25 N. 9th St.
Columbia, MO 65201
Tel: 573-449-3874
Fax: 573-875-5055
Email: gwenf@tranquility.net
Total Assets: $1.19 million
Total Liabilities: $12.12 million
The petition was signed by Charles Garavitt, officer.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
CONCHO RESOURCES: Posts $30.4 Million Net Income in Third Quarter
-----------------------------------------------------------------
Concho Resources Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $30.42 million on $652.92 million of total operating revenues
for the three months ended Sept. 30, 2013, as compared with net
income of $5.98 million on $465.34 million of total operating
revenues for the same period a year ago.
For the nine months ended Sept. 30, 2013, the Company posted net
income of $145.21 million on $1.68 billion of total operating
revenues as compared with net income of $356.40 million on $1.34
billion of total operating revenues for the same period during the
prior year.
The Company's balance sheet at Sept. 30, 2013, showed $9.53
billion in total assets, $5.88 billion in total liabilities and
$3.64 billion in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/LVWnTM
About Concho Resources Inc.
Concho Resources Inc. is an independent oil and natural gas
company engaged in the acquisition, development and exploration of
oil and natural gas properties. The Company's operations are
focused in the Permian Basin of Southeast New Mexico and West
Texas. For more information, visit Concho?s website at
www.concho.com.
* * *
As reported by the TCR on May 22, 2013, Moody's Investors Service
upgraded Concho Resources Inc.'s Corporate Family Rating to Ba2
from Ba3.
"The upgrade to Ba2 reflects Concho Resources' strong cash
margins, relatively high proportion of oil in the production mix,
and continued growth in production and reserves," said Arvinder
Saluja, Moody's Assistant Vice President-Analyst.
Concho Resources Inc. carries a BB+ corporate credit rating
from Standard & Poor's.
COOPER-BOOTH: Gets Extension to File Restructuring Plan
-------------------------------------------------------
Marie Beaudette, writing for DBR Small Cap, reported that a
bankruptcy judge has granted convenience-store supplier Cooper-
Booth Wholesale Co. a two-month extension to file a Chapter 11
restructuring plan as it negotiates payment terms with its
creditors.
About Cooper-Booth Wholesale
Cooper-Booth Wholesale Company, L.P. and two affiliates sought
Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 13-14519) in
Philadelphia on May 21, 2013, after the U.S. government seized the
Company's bank accounts to recover payments made by a large
customer caught smuggling Virginia-stamped cigarettes into New
York.
Serving the mid-Atlantic region, Cooper is one of the top 20
convenience store wholesalers in the country. Cooper supplies
cigarettes, snacks, beverages and other food items from Hershey's,
Lellogg's, Bic, and Mars to convenience stores. Cooper has been
in the wholesale distribution business since 1865 when the Booth
Tobacco Company was incorporated in Lancaster, Pennsylvania. The
Company has been family owned and operated for three generations.
Aris J. Karalis, Esq., and Robert W. Seitzer, Esq., at Maschmeyer
Karalis, P.C., in Philadelphia, serve as the Debtors' bankruptcy
counsel. Executive Sounding Board Associates, Inc., is the
financial advisor. SSG Advisors, LLC, serves as investment
bankers. Blank Rome LLP represents the Debtor in negotiations
with federal agencies concerning the seizure warrant.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
three members to the Official Unsecured Creditors' Committee in
the Chapter 11 case.
Cooper Booth disclosed $58,216,784 in assets and $35,054,482 in
liabilities as of the Chapter 11 filing. As of the Petition Date,
the Debtors' total consolidated funded senior debt obligations
were approximately $10.7 million and consisted of, among other
things, $7.72 million owing on a revolving line of credit
facility, $2.83 million owing on a line of credit for the purchase
of equipment, and $166,000 due on a corporate VISA Card. PNC Bank
asserts that a letter of credit facility is secured by all
personal property owned by Wholesale. Unsecured trade payables
totaled $22.8 million as of May 21, 2013.
CROSSOVER FINANCIAL: 5th Amended Plan Outline Due Nov. 20
---------------------------------------------------------
At a hearing held Nov. 6, 2013, the U.S. Bankruptcy Court for the
District of Colorado denied the adequacy of the information
contained in Corrected Fourth Amended Disclosure Statement
explaining Crossover Financial I, LLC's Fourth Amended Plan of
Reorganization dated Aug. 21, 2013.
The Court ordered the Debtor to file, on or before Nov. 20, 2013,
a Fifth Amended Disclosure Statement. Creditors will file with
the Court and serve upon the Debtor objections to the Fifth
Amended Disclosure Statement on or before Nov. 27, 2013.
As reported in the TCR on Oct. 10, 2013, according to the
Corrected Fourth Amended Disclosure Statement, the Fourth Amended
Plan addresses the objections to the Third Amended Plan. "While
not altering the proposed distributions to creditors, the Fourth
Amended Plan provides for the conveyance of the assets of the
estate, primarily the real estate, to the Liquidating Trust and
withdraws the proposed sale to Rivers Development, Inc. Under the
new Plan, the Liquidating Trustee will determine the best method
for selling the property, which includes the authority to propose
an auction procedure, in the exercise of the Liquidating Trustee's
reasonable business judgment."
A copy of the Corrected Fourth Amended Disclosure Statement is
available at:
http://bankrupt.com/misc/CROSSOVER_FINANCIAL_4ds_corrected.pdf
About Crossover Financial I
Crossover Financial I, LLC, based in Elizabeth, Colorado, was
formed on Aug. 12, 2005. Mitchell B. Yellen is the manager and
sole member. The Company was formed for the purpose of raising
funds through a Private Placement Memorandum to be loaned to an
entity known as HPR, LLC, in connection with the acquisition and
development of 440 acres of real property located near Monument,
Colorado.
HPR consisted of three members: Colorado Commercial Builders, Inc.
(37.5%); DJT, LLC (20.0%); and Yellen Family Partnership, LLLP
(42.5%). Mitchell Yellen held an interest in the Yellen Family
Partnership, LLLP.
The project stalled primarily as a result of a collapse in the
residential real estate development market in 2007 and potential
developers pulled out of the project. There has been no
further development activity on the Real Property since 2007.
Faced with the prospect of a lengthy foreclosure proceeding, the
Debtor entered into to an agreement with HPR whereby the Real
Property was transferred to the Debtor by way of a deed-in-lieu
of foreclosure. Upon acquiring the Real Property, the Debtor
attempted to bring in additional developers to continue the
project but those efforts were unsuccessful.
The Company filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case
No. 11-24257) on June 15, 2011. Judge Sidney B. Brooks presides
over the case.
Stephen C. Nicholls, Esq., at Nicholls & Associates, P.C., in
Denver, serves as bankruptcy counsel. In its petition, the Debtor
estimated assets and debts of $10 million to $50 million. The
petition was signed by Mitchell B. Yellen. Karen McClaflin of
Home Source Realty, LLC, Colorado acts as real estate broker for
the Estate.
An official unsecured creditors committee has not been appointed.
DAYCO LLC: S&P Rates $425MM Secured Loan 'B+' CCR, Outlook Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Amherst, N.Y.-based automotive supplier Dayco LLC
(formerly known as Mark IV LLC) and revised its outlook on the
company to negative from stable.
S&P also assigned its 'B+' issue-level and '4' recovery ratings to
the proposed $425 million senior secured term loan, to be issued
by Dayco Products LLC, a subsidiary company of Dayco LLC. A '4'
recovery rating indicates S&P's expectation for average (30%-50%)
recovery in the event of a payment default.
The rating on Dayco reflects the company's "weak" business risk
profile and "aggressive" financial risk profile. The business
risk assessment incorporates S&P's assumption of the volatile
industry demand and fierce competition, which more than offset the
company's fair end-market diversity and profitability; S&P's
forecast for the company's EBITDA margins is in the low double-
digits. S&P views Dayco's financial risk profile as "aggressive."
"Notwithstanding the proposed debt-financed dividend, we believe
the company could return leverage to less than 5x, with low but
positive free cash flow generation over the next two years
(excluding the impact of factoring)," said credit analyst Robyn
Shapiro.
S&P believes that Dayco's asset sales in recent years have
narrowed its product focus and previously lowered debt.
Eventually, S&P expects the company to use the proceeds to expand
the business platforms for its powertrain products, possibly
through acquisitions over the next few quarters.
Dayco is exposed to high fixed costs and severe pricing pressures
endemic to the global auto supplier industry. However, S&P
expects Dayco's customer diversity (no single customer exceeds 10%
of sales) to partly offset the company's exposure to weak
automotive production volumes in Europe, especially in Italy, a
major market for Dayco. Still, given Europe's weak economy, S&P
expects some ongoing pressure even in the company's relatively
resilient aftermarket segment (partly because of fewer miles
driven). The company's plant consolidations and cost-reduction
initiatives in Europe should help mitigate this somewhat. In
general, S&P believes light vehicle production and miles driven
are the primary macro drivers for industry demand.
In S&P's base-case scenario, for fiscal 2015 we assume sales flat
to slightly down year over year for original equipment
manufacturers in Europe (about one-third of overall sales). In
North America, S&P assumes that the pace of stabilizing auto
production, a softening recovery in the commercial truck segment,
and industrial demand with aftermarket growth in the low single-
digits will determine Dayco's revenue growth in this region in
fiscal 2015. Over the long term, S&P expects Dayco to maintain
steady market share and improve penetration in Europe, especially
in the higher-margin aftermarket segment.
Although S&P don't assume this in our base-case scenario, Dayco
could begin using cash--even if not at the same levels that
contributed to Mark IV's bankruptcy filing--if auto production
levels drop suddenly (as it did in late 2008 and early 2009) amid
the economic uncertainties in the U.S. and Europe and a slower-
than-anticipated ramp-up in the company's new facilities in China
and Poland.
Based on S&P's estimates, the company's credit measures should
remain in line with its rating expectations by the end of fiscal
2015. S&P estimates debt to EBITDA will be about 5x by the end of
fiscal 2015. Dayco's ownership group consists of prepetition
lenders represented in the six-person board of directors. S&P
views this as an evolving situation that likely won't persist over
the long term. As a result, S&P do not factor any significant
changes in Dayco's current strategies or financial policies into
its rating analysis.
As the company uses the existing cash proceeds for other strategic
expansion plans, it has reinstated accounts receivable factoring
programs in the U.S. as working capital needs rise. S&P includes
the factored accounts receivable as debt in its analysis.
The rating outlook is negative, reflecting at least a one-third
chance of a lower rating over the next 12 months. The outlook
also reflects the increased pro forma leverage and the possibility
that improving but still weak and uncertain global macroeconomic
conditions could forestall deleveraging over the coming year. S&P
could consider a downgrade if Dayco's free operating cash flow
generation is negative for several quarters--excluding temporary
fluctuations caused by any change in accounts receivables sold
through factoring programs--or if S&P believes leverage will
remain higher than 5x on a sustained basis. S&P could also lower
the rating if it forecasts a decline in headroom of less than 15%
under the financial maintenance covenant in the proposed credit
agreement.
S&P could revise the outlook to stable within the next 12 months
if the company successfully maintains its low-double-digit EBITDA
margins, generates positive free operating cash flow, and reduces
leverage to less than 5x. S&P would also look for "adequate"
liquidity, with headroom under the financial maintenance covenant
in the proposed credit agreement.
DESERT HOT SPRINGS, CA: On Verge of Bankruptcy, Says Goldman
------------------------------------------------------------
Goldman Small Cap Research, a stock market research firm focused
on the small cap and micro-cap sectors, notes that the town of
Desert Hot Springs, California is on the verge of a bankruptcy
filing after a new finance director discovered a $3 million
shortfall in its budget of $13.5 million. This is not music to
the ears of its citizens or its creditors but it is a story not
unfamiliar to the senior management of INSCOR, Inc.
As is the case with municipalities such as Detroit, San
Bernardino, Stockton, and many others, unmanageable and
unreasonable pension costs/obligations are the culprits.
Nationwide, these unfunded retiree health care and Other
Post-Employment Benefits (OPEB) figures total an estimated $1.5
trillion in unfunded liabilities.
While it may be too late for most of these other cities to utilize
the INSCOR initiatives, a number of cities and towns that are on
the edge of their own financial issues have finally become
proactive and are seeking alternatives such as the INSCOR program
in order to stave off a fiscal crisis.
Cities that still have an opportunity to stem the OPEB bleeding in
its tracks can engage in the solution used by Fortune 500
companies and offered by INSCOR that is tailored toward the 67,000
governmental and agency markets in the U.S. The INSCOR "FIT"
(Financed Insurance Trust) combines the procurement of
specifically-designed life insurance on active employees using
funds borrowed from the financial sector, or bond issuance, and
secured by the insurance policies themselves. This method
generates substantial cash flow to fund these OPEB liabilities at
reduced costs to the municipalities.
As a result, a FIT OPEB plan can provide a cash stream to support
each year's OPEB obligations, and fund future OPEB liabilities
with fewer spending increases, tax increases, or reduction in
benefits. Plus, with interest rates at historical lows, some
municipalities can benefit from very low initial costs.
With few options, let alone low-cost alternatives to the problem
available, INSCOR appears poised to leverage the current panic and
effect real change in government financial management, thus
generating significant revenue for itself. In fact, investors may
begin to see the fruit of the Company's marketing efforts in this
segment via new contracts, beginning early next year. Clearly,
new business would have a significant and positive impact on these
shares. In anticipation of these wins, and with the backdrop of
additional municipal fiscal crisis stories, we expect investors
will bid these shares up ahead of potentially favorable news.
About Goldman Small Cap Research
Led by former Piper Jaffray analyst and mutual fund manager Rob
Goldman, Goldman Small Cap Research --
http://www.goldmanresearch.com-- produces sponsored and non-
sponsored small cap and micro cap stock research reports,
articles, daily stock market blogs, and popular investment
newsletters. Goldman Small Cap Research is not in any way
affiliated with Goldman Sachs & Co.
About INSCOR, Inc.
INSCOR, Inc. -- http://www.ins-cor.com-- specializes in educating
and marketing the FIT OPEB plan to municipalities and corporations
as a low-cost solution to funding retiree and other employee
benefits. A FIT plan variation also works for affluent
individuals, entertainers and professional athletes -- whether for
estate planning or funding cash flow needs. INSCOR's "FIT"
(Financed Insurance Trust) strategy uses a combination of
favorable financing terms, innovative uses of specific life
insurance products and trusts -- all of which result in minimum
levels of out-of-pocket costs for producing significant future
funding and revenue stream opportunities.
DETROIT, MI: Fees for $350 Million Loan to Be Disclosed
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Detroit was ordered to make public disclosure of fees
to be paid to Barclays Plc for arranging a $350 million loan to be
used partly to terminate swaps.
According to the report, at a hearing on Nov. 14, the bankruptcy
judge denied the city's request to keep the fees secret, pointing
to Michigan's Freedom of Information Act. It made no difference,
the judge said, that the bank and Detroit want the cost kept
secret for the bank's competitive reasons.
Bond insurers were among those wanting the judge to unseal the fee
letter.
About Detroit, Michigan
The city of Detroit, Michigan, weighed down by more than
$18 billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter 9
petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The city's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
Detroit is represented by David G. Heiman, Esq., and Heather
Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett,
Esq., at Jones Day, in Los Angeles, California; and Jonathan S.
Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield
Paddock and Stone PLC, in Detroit, Michigan.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP.
DETROIT, MI: Union Asks Judge for Direct Appeal in Bankruptcy Case
------------------------------------------------------------------
Robert Snell, writing for The Detroit News, reported that the
city's largest union wants Detroit's bankruptcy judge to allow a
direct appeal to the 6th U.S. Circuit Court of Appeals regardless
of whether the city is ruled eligible for Chapter 9 relief, citing
public interest in the case and the likelihood of a precedent-
setting ruling.
According to the report, the request from the American Federation
of State, County and Municipal Employees, if granted, threatens to
slow down the biggest municipal bankruptcy case in U.S. history.
The case is expected to have broad implications on the nation's
municipal bond market and sanctity of public pension funds.
The request coincided with a Nov. 13 deadline imposed by U.S.
Bankruptcy Judge Steven Rhodes, who wants unions, retirees and
pension funds to file briefs about whether he should consider
labor or bankruptcy law standards for good-faith negotiations, the
report said.
The request is unusual and could signal that one of the most
powerful groups trying to kick Detroit out of bankruptcy court
thinks the city will be eligible for bankruptcy relief, Douglas
Bernstein, a Bloomfield Hills attorney and expert on municipal
bankruptcy, told The Detroit News.
"You would wonder if AFSCME is presuming they are not going to
prevail" in the fight against Detroit receiving Chapter 9 relief,
Bernstein said, the report cited.
About Detroit, Michigan
The city of Detroit, Michigan, weighed down by more than
$18 billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter 9
petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The city's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
Detroit is represented by David G. Heiman, Esq., and Heather
Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett,
Esq., at Jones Day, in Los Angeles, California; and Jonathan S.
Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield
Paddock and Stone PLC, in Detroit, Michigan.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP.
DETROIT, MI: DRCEA Members Gather to Discuss Health-Care Extension
------------------------------------------------------------------
Lippitt O'Keefe, PLLC on Nov. 14 disclosed that more than 2,500
members of the Detroit Retired City Employees Association (DRCEA)
gathered at two special meetings this week to receive the
information on the City of Detroit's agreement to extend current
health-care benefits for retirees through next February.
Speaking to overflow crowds, Shirley V. Lightsey, DRCEA president,
and Ryan Plecha from Lippitt O'Keefe, PLLC, the DRCEA's chief
counsel, told retirees that the association working with the
Official Retiree Committee and the Retired Detroit Police and Fire
Fighters Association will negotiate with the city in an effort to
strengthen health-care benefits for 2014 and beyond.
"We have to start the negotiation process immediately in order to
have a final agreement in place before current benefits expire on
February 28th," said Ms. Lightsey. "The plan proposed by the city
is totally inadequate for our membership, but we will work
together with the city to reach a plan that will be fair to both
parties involved."
The DRCEA and other plaintiffs negotiated the extension of health-
care benefits in exchange for withdrawing their lawsuit
challenging the city's proposed health-care plans. Current
health-care coverage and retirement benefits will continue
uninterrupted while the city and the court-appointed retirement
committee continue negotiations prior to the deadline.
Mr. Plecha also gave retirees a summary of the DRCEA's involvement
in the bankruptcy case and eligibility trial. "We feel very
strongly about the rights of city retirees," he said. "The
testimony of city retirees is very difficult to disregard. We are
prepared to take this case to the highest court if that's what it
takes to ensure that the pensions of former city employees are
preserved."
The DRCEA, through its attorneys, had been advocating for general
city retirees even before the city filed for bankruptcy on
July 18, 2013. In fact, the DRCEA has made multiple requests to
the city to discuss and negotiate retiree issues.
"Unfortunately, the DRCEA's requests went unanswered and the city
filed bankruptcy," Mr. Plecha noted. "Ironically, the city then
said that it was impractical to negotiate with retirees in hopes
of satisfying the requirements to be a debtor in Chapter 9.
"The cross-examination of Mr. Orr and the direct-examination of
Ms. Lightsey made it clear that the city did not negotiate with
the retirees and that they had no real desire to do so. Instead
the city attempted to blame the unions for not accepting
invitations from the city to represent retirees.
"Michigan law is clear -- unions do not represent retirees because
they are no longer members of the bargaining unit. It is important
to note that the DRCEA is not a union, despite often being lumped
together with the unions. The DRCEA is an association dedicated
to advocating for and representing retiree issues, but the city
did not even ask for or give the DRCEA an opportunity to present
its position."
The DRCEA -- http://www.drcea.org-- was founded in 1960 and over
the past 53 years has played an active role in improving and
protecting retiree pensions and benefits. The DRCEA maintains a
watch on the city administration, mayor, city council and GRS
board of trustees, continually monitoring actions that may affect
pension and other retirement benefits.
Today, there are approximately 12,100 City of Detroit non-uniform
retirees of whom approximately 65 percent are dues-paying members
of the DRCEA. In addition to those dues-paying members, it has
always been available to assist all retirees with retirement-
related issues, regardless of whether they are members of the
DRCEA.
DIOCESE OF GALLUP, NM: Goes Bankrupt From Sexual-Abuse Claims
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Diocese of Gallup, New Mexico, is the ninth
Catholic diocese to seek protection in Chapter 11 bankruptcy.
According to the report, the Gallup diocese principally
encompasses American Indian reservations for seven tribes in
northwestern New Mexico and northeastern Arizona. It is the
poorest diocese in the U.S., according to papers filed Nov. 12
with the U.S. Bankruptcy Court in Albuquerque, New Mexico.
So far, the diocese has been sued 13 times for sexual abuse
committed by priests. Other claims have been lodged, although no
lawsuits are yet filed, Bishop James S. Wall said in a court
filing.
The bishop previously said bankruptcy will be "the most merciful
and equitable way for the diocese to address its responsibility."
The abuse mostly occurred in the 1950s and early 1960s, the bishop
said.
For early years there is no insurance. Although there was coverage
for 1965 to 1977, that insurance company became insolvent and was
placed in receivership.
The Gallup church didn't separately incorporate the parishes,
increasing the odds that parish assets will be answerable for
abuse claims because property is held in the bishop's name.
To counter arguments that parish property is in the bankruptcy,
the bishop described how each parish is a "separate ecclesiastical
entity," where liabilities of one parish can't be paid from assets
of another.
To demonstrate how parish assets are held in trust, the bishop
said he had filings made shortly before bankruptcy in land records
saying that parish property is held in trust.
The petition shows assets and debt both less than $1 million.
The case is In re Roman Catholic Church of the Diocese of Gallup,
13-bk-13676, U.S. Bankruptcy Court, District of New Mexico
(Albuquerque).
DONNER METALS: Survival Hinges on Sale of Interest Resolution
-------------------------------------------------------------
David Patterson, Chairman of Donner Metals Ltd., on Nov. 14
disclosed that it has mailed the notice of meeting and information
circular for its annual and special general meeting of
shareholders to be held in Montreal on December 10, 2013.
In addition to the usual corporate matters, three special
resolutions will be considered at the 2013 AGM:
-- approval of the sale of the Company's interests in
five Matagami joint ventures under an option and joint
venture agreement with Glencore Canada Corporation;
-- approval of a change of the province in which the head
and registered office of the Company is situated from British
Columbia to Quebec;
-- approval of a consolidation of the share capital of
the Company.
Sale of Interest Resolution
The Company has received an offer to purchase its interest in the
five joint ventures it has for total consideration of $2,395,200.
Pursuant to the terms of an option and joint venture agreement,
Glencore Canada Corporation holds a right of first refusal to
purchase the Company's interest in the joint ventures, which right
Glencore has exercised subject to certain closing arrangements
being implemented and conditions satisfied.
The Company intends to use the proceeds from the Sale of the
Company's interests to repay $1.0 million of the currently
outstanding balance of $3.53 million under the Loan to Ressources
Quebec Inc., a subsidiary of Investissement Quebec, Societe de
developpement de la Baie-James, Capital croissance PME and Fonds
regional de solidarite FTQ Nord-du-Quebec. If the Sale of
Interest Resolution put forward at the 2013 AGM is not approved
and the Company is unable to satisfy its obligations under the
Loan or repay the Loan when due, the Company may not be able to
continue as a going concern. This would put the Company under
severe financial hardship and may result in a forced sale or
liquidation of its assets through bankruptcy, for example. The
Company intends to service the remaining outstanding balance of
the Loan (that is, $1.53 million owed to Ressources Quebec and
$1.0 million owed to the other lenders) and the interest thereon
from cash it will have on hand and from the receipt of, if, as and
when the Company does receive them, any tax receivable that is due
and owing to Company from the Government of Quebec, which includes
refundable tax credits and mining duties refunds.
A Special Committee established by the Company's Board of
Directors and the Company's Board have unanimously determined that
the proposed Sale of Interest Transaction is in the best interest
of the Company. Assuming the proposed sale of Donner's interests
in the joint ventures is approved at the 2013 AGM, the Company
intends to begin the process to acquire, explore and develop
mineral exploration properties, with a focus on gold properties,
in Quebec. The Company believes that shareholder support of the
proposal is, at this time, the only pathway for shareholders as a
whole to see future value in their shares.
Relocation Resolution
The Company's head and registered office is currently located in
Vancouver, British Columbia. However, as the key management and a
majority of the proposed directors of the Company are resident of
the Province of Quebec, the Board of Directors believes that it is
in the Company's best interests to change the province in which
the Company's head and registered office is situated from British
Columbia to Quebec. In addition, the contemplated future
activities of the Company will take place in the Province of
Quebec and there are an important number of Quebec-based
shareholders.
Share Consolidation Resolution
This resolution is to effect that, subject to obtaining all
required regulatory and shareholder approvals, the Company's
issued and outstanding share capital be consolidated on the basis
of one (1) post-consolidation common share for every sixty (60)
pre-consolidation common shares. The Board of Directors of the
Company is of the opinion that the current share capital structure
of the Company is too large for the growth strategy of the Company
and therefore has determined that it would be in the best
interests of the Company to reduce the number of outstanding
common shares by way of the Share Consolidation.
In order for the Sale of Interest Resolution, the Relocation
Resolution and the Share Consolidation Resolution to be effective,
the approval of not less than 66 2/3% of the votes cast by the
Shareholders present in person or represented by proxy at the 2013
AGM must be obtained.
Full details of the three special resolutions have been included
in the Circular. Shareholders of record as of 5:00 p.m. (Eastern
Time) on October 21, 2013 are reminded to vote their proxy FOR the
resolutions at the 2013 AGM either in person or by proxy. A copy
of the Circular is available under the Company's profile at
http://www.sedar.com
About Donner Metals
Donner Metals Ltd. -- http://www.donnermetals.com/-- is a
Canada-based development and exploration company focused on base
and precious metal projects in Quebec. Donner's flagship project
is a partnership with Xstrata Canada Corporation in the Matagami
Mining Camp covering both the existing development of a new mine
and on-going exploration activities. The project is located in
the Abitibi region of central Quebec and it is supported by
Xstrata's existing mine infrastructure and an operating 2,950 tons
per day mill. The Company is a fully vested partner with Xstrata
in five joint venture areas covering 4,737 square kilometers. It
also holds property interests in the Voisey's Bay area in Labrador
and an ownership interest in Knight Resources Ltd. Donner's focus
is on exploration for zinc, copper and nickel deposits. Effective
July 19, 2013, Sandstorm Metals & Energy Ltd raised its interest
to 15.81% from 5.429% in Donner Metals Ltd.
DREIER LLP: Top NY Court Ends Malpractice Case Against Ex-Attys
---------------------------------------------------------------
Law360 reported that New York's top court on Nov. 14 affirmed the
dismissal of malpractice claims against Steven Fox and Paul Traub,
two lawyers who struggled to pay a bankrupt business part of an
insurance settlement tied to the 9/11 terrorist attacks after that
money got caught up in the infamous Dreier LLP meltdown.
According to the report, the New York State Court of Appeals,
without comment, rejected a motion by Cosmetics Plus Group Ltd. to
revive claims dismissed in August 2011 by New York City trial
Judge Judith J. Gische.
About Marc Dreier and Dreier LLP
Marc Dreier founded New York-based law firm Dreier LLP --
http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S.
Securities and Exchange Commission filed a suit, alleging that Mr.
Dreier made fraudulent offers and sales of securities in several
cities, selling fake promissory notes to hedge and other private
investment funds. The SEC asserted that Mr. Dreier also
distributed phony financial statements and audit opinions, and
recruited accomplices in connection with that scheme. Mr. Dreier,
currently in prison, was charged by the U.S. government for
conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No.
09-cr-00085).
Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul,
Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel.
The Debtor estimated assets of $100 million to $500 million, and
debts between $10 million and $50 million in its Chapter 11
petition.
Sheila M. Gowan, a partner with Diamond McCarthy, was appointed
Chapter 11 trustee for the Dreier law firm. Ms. Gowan is
represented by Jason Porter, Esq., at Diamond McCarthy LLP.
Wachovia Bank National Association; the Dreier LLP Chapter 11
Trustee; and Steven J. Reisman as post-confirmation representative
of the bankruptcy estate of 360networks (USA) Inc. signed a
petition that put Mr. Dreier into bankruptcy under Chapter 7 on
Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier
pleaded guilty to fraud and other charges in May 2009. The
scheme to sell $700 million in fake notes unraveled in late 2008.
Mr. Dreier is serving a 20-year sentence in a federal prison in
Minneapolis.
DUMA ENERGY: Director John Brewster Resigns
-------------------------------------------
The board of directors of Duma Energy Corp. accepted the
resignation of John E. Brewster, Jr., as a director of the Company
effective on Nov. 1, 2013.
As a result of the resignation of Mr. Brewster, the Company's
current directors and executive officers are as follows:
Name Position
---- --------
Jeremy G. Driver Chief Executive Officer and a director
Charles F. Dommer President
Kent P. Watts Chairman and a director;
Chris Herndon Director
Pasquale V. Scatturo Director
Sarah Berel-Harrop Secretary, Treasurer and Chief Financial
Officer
About Duma Energy
Corpus Christi, Tex.-based Duma Energy Corp. --
http://www.duma.com/-- formerly Strategic American Oil
Corporation, is a growth stage oil and natural gas exploration and
production company with operations in Texas, Louisiana, and
Illinois. The Company's team of geologists, engineers, and
executives leverage 3D seismic data and other proven exploration
and production technologies to locate and produce oil and natural
gas in new and underexplored areas.
Duma Energy incurred a net loss of $4.57 million for the year
ended July 31, 2012, compared with a net loss of $10.28 million
during the prior fiscal year. For the nine months ended April 30,
2013, the Company incurred a net loss of $39.23 million on $5.10
million of revenues. As of April 30, 2013, the Company had
$25.78 million in total assets, $15.47 million in total
liabilities and $10.30 million in total stockholders' equity.
DUNLAP OIL: Canyon Asks Court to Convert Bankr. Cases to Ch. 7
--------------------------------------------------------------
Canyon Community Bank, N.A., asks the U.S. Bankruptcy Court for
the District of Arizona to convert the Dunlap Oil Company, Inc.,
and Quail Hollow Inn, LLC's cases to a Chapter 7 for these
reasons:
(1) the Debtors' proposed Plan is not confirmable;
(2) there is a substantial or continuing loss to or diminution
of the estate and there is an absence of a reasonable likelihood
of rehabilitation;
(3) the Debtors have grossly mismanaged the estate;
(4) Quail Hollow has used substantial cash collateral in an
unauthorized manner;
(5) the Debtors have insufficient cash or credit available to
operate their business and pay their obligations as they become
due,
(6) the Debtors' principals continue to receive payments since
the filing of the Chapter 11 proceeding, while movant, and the
other creditors of Debtors, watch the estate dissipate, and
(7) the Debtors' inability to timely pay taxes owed after the
date of the order for relief.
CCB is a secured creditor of Dunlap and is an unsecured creditor
of Quail Hollow.
A copy of the Motion is available at:
http://bankrupt.com/misc/dunlap.doc414.pdf
About Dunlap Oil and Quail Hollow Inn
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought
Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and
12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a
Willcox, Arizona-based operator of 14 gasoline services stations.
QOH owns the 89-room outside corridor Best Western Plus Quail
Hollow hotel in Willcox. The two companies are owned and operated
by the Dunlap family.
The Hon. Brenda Moody Whinery presides over the case. John R.
Clemency, Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy,
P.A., serve as the Debtors' counsel. Peritus Commercial Finance
LLC serves as financial advisor. Quail Hollow Inn also hired
Sally M. Darcy of McEvoy Daniels & Darcy P.C. for the limited
purpose of handling any claims, issues, and/or disputes between
QHI and Best Western International, Inc. The Debtors' lead
counsel, Gallagher & Kennedy, P.A., has a conflict precluding its
representation of the Debtor in matters relating to Best Western.
QOH declared assets of at least $1 million and debts exceeding
$10 million. DOC estimated assets and debts of $10 million to
$50 million.
The petitions were signed by Theodore Dunlap, president.
Ilene J. Lashinsky, the U.S. Trustee for Region 14, has appointed
three creditors to serve on an Official Committee of Unsecured
Creditor for the Chapter 11 bankruptcy case of Dunlap Oil Company.
The Committee tapped Nussbaum Gillis & Dinner, P.C. as its
counsel.
Pineda Grantor Trust II, successor-in-interest to Compass Bank, is
represented by Steven N. Berger, Esq., and Bradley D. Pack, Esq.,
at Engelman Berger, P.C.
Canyon Community Bank NA is represented by Pat P. Lopez III, Esq.,
Rebecca K. O'Brien, Esq., and Jeffrey G. Baxter, Esq., at Rusing
Lopez & Lizardi, P.L.L.C.
DUNLAP OIL: Pineda Asks to Promptly End Automatic Stay
------------------------------------------------------
Pineda Grantor Trust II asks the U.S. Bankruptcy Court to enter an
order immediately terminating the automatic stay with respect to
all of Pineda's liens on Dunlap Oil Company, Inc., and Quail
Hollow Inn, LLC's property, both real and personal so that Pineda
may obtain the appointment of a receiver and take such other
actions as are necessary to protect its security interest.
Pineda also asks the Court to terminate Debtors' continuing
authority to use cash collateral, citing that the Debtors have
failed to meet the burden of proving that the creditor's interest
is adequately protected. 11 U.S.C. Section 363(p)(1).
Alternatively, Pineda asks the Bankruptcy Court to convert the
Debtors' cases to one under Chapter 7 of the Bankruptcy Code.
Pineda explains: "QHI's undisclosed, unauthorized transfer of at
least $177,000 of Pineda's cash collateral [to a "related party" -
- presumably Dunlap Oil Company] constitutes an extraordinary
violation of the cash collateral orders entered by this Court and
its duties as a debtor-in-possession. It is also likely avoidable
as a fraudulent transfer and/or an unauthorized post-petition
transfer. Whether or not the funds have been returned, the fact
that the Debtors' management transferred them in the first place
demonstrates their inability and untrustworthiness to continue
managing this estate and their creditors' cash collateral.
"Pineda's interest in its remaining collateral is not adequately
protected.
". . . . the operating reports filed by the Debtors since the
close of that hearing [on Pineda's motions for stay relief stay
and on confirmation of the Debtors' Plan] firmly establish that
reorganization is impossible, and that creditors will only be
harmed by the Debtors' continuing management of their business.
There is cause for immediate stay relief under the circumstances
of this case.
"Stay relief is also appropriate under 11 U.S.C. Section 62(d)(2),
as Debtors agree there is no equity in the properties securing
Pineda's claim, and the Debtors have failed to meet their burden
of proving those properties are necessary for an effective
reorganization."
A copy of the Pineda's Emergency Motion for Immediate Stay Relief
and termination of cash collateral authority; and alternative
motion to convert to Chapter 7 for cause is available at:
http://bankrupt.com/misc/dunlap.doc412.pdf
About Dunlap Oil and Quail Hollow Inn
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought
Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and
12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a
Willcox, Arizona-based operator of 14 gasoline services stations.
QOH owns the 89-room outside corridor Best Western Plus Quail
Hollow hotel in Willcox. The two companies are owned and operated
by the Dunlap family.
The Hon. Brenda Moody Whinery presides over the case. John R.
Clemency, Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy,
P.A., serve as the Debtors' counsel. Peritus Commercial Finance
LLC serves as financial advisor. Quail Hollow Inn also hired
Sally M. Darcy of McEvoy Daniels & Darcy P.C. for the limited
purpose of handling any claims, issues, and/or disputes between
QHI and Best Western International, Inc. The Debtors' lead
counsel, Gallagher & Kennedy, P.A., has a conflict precluding its
representation of the Debtor in matters relating to Best Western.
QOH declared assets of at least $1 million and debts exceeding
$10 million. DOC estimated assets and debts of $10 million to
$50 million.
The petitions were signed by Theodore Dunlap, president.
Ilene J. Lashinsky, the U.S. Trustee for Region 14, has appointed
three creditors to serve on an Official Committee of Unsecured
Creditor for the Chapter 11 bankruptcy case of Dunlap Oil Company.
The Committee tapped Nussbaum Gillis & Dinner, P.C. as its
counsel.
Pineda Grantor Trust II, successor-in-interest to Compass Bank, is
represented by Steven N. Berger, Esq., and Bradley D. Pack, Esq.,
at Engelman Berger, P.C.
Canyon Community Bank NA is represented by Pat P. Lopez III, Esq.,
Rebecca K. O'Brien, Esq., and Jeffrey G. Baxter, Esq., at Rusing
Lopez & Lizardi, P.L.L.C.
DUNLAP OIL: Says CCB & Pineda's Bid to Delay Confirmation Improper
------------------------------------------------------------------
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, filed a
preliminary response to the motion to convert to Chapter 7 of
Canyon Community Bank and the emergency motion for immediate stay
relief and termination of cash collateral authority and
alternative motion to convert case to Chapter 7 for cause filed by
Pineda Grantor Trust II.
The Debtors assert: "First and foremost, there is no alleged
"emergency" relating to either of the Motions.
"In light of the ample evidence introduced at the confirmation
proceedings in support of feasibility, coupled with Pineda and
CCB's almost non-existent attempts to refute that evidence during
the confirmation proceedings, this Court should confirm the Plan
(a Plan that is embraced by most of the creditors in the Case, and
a Plan that preserves the livelihoods of over 100 employees) and
allow the Debtors to move forward with their reorganization
efforts.
"The Debtors have been hamstrung by the ongoing status of this
Bankruptcy Case that could have been removed months ago upon
conclusion of the confirmation hearing -- and confirmation will
also head off further filings by Pineda and CCB attempting to
reargue their ongoing, unsupported, positions. Based on the
evidence admitted at trial, the Debtors have established all of
the elements for Plan confirmation, and should be given the chance
to proceed with what will be a successful reorganization in the
classic sense of the Bankruptcy Code. CCB's and Pineda's efforts
to delay confirmation, and their efforts to elongate the
confirmation proceedings, are improper and will only be
eliminated by the Court's entry of an order confirming the Plan.
"In light of the facts and circumstances reflected in the record
of this Case (rather than those positions erroneously asserted by
Pineda and CCB without evidentiary support), this Court should
confirm the Plan and allow the Debtors to proceed with making Plan
payments, complete the transfer of certain properties back to the
secured creditors, provide one hundred-plus employees with
security for continued employment, and fulfill the goals of the
Bankruptcy Code through a successful reorganization."
About Dunlap Oil and Quail Hollow Inn
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought
Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and
12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a
Willcox, Arizona-based operator of 14 gasoline services stations.
QOH owns the 89-room outside corridor Best Western Plus Quail
Hollow hotel in Willcox. The two companies are owned and operated
by the Dunlap family.
The Hon. Brenda Moody Whinery presides over the case. John R.
Clemency, Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy,
P.A., serve as the Debtors' counsel. Peritus Commercial Finance
LLC serves as financial advisor. Quail Hollow Inn also hired
Sally M. Darcy of McEvoy Daniels & Darcy P.C. for the limited
purpose of handling any claims, issues, and/or disputes between
QHI and Best Western International, Inc. The Debtors' lead
counsel, Gallagher & Kennedy, P.A., has a conflict precluding its
representation of the Debtor in matters relating to Best Western.
QOH declared assets of at least $1 million and debts exceeding
$10 million. DOC estimated assets and debts of $10 million to
$50 million.
The petitions were signed by Theodore Dunlap, president.
Ilene J. Lashinsky, the U.S. Trustee for Region 14, has appointed
three creditors to serve on an Official Committee of Unsecured
Creditor for the Chapter 11 bankruptcy case of Dunlap Oil Company.
The Committee tapped Nussbaum Gillis & Dinner, P.C. as its
counsel.
Pineda Grantor Trust II, successor-in-interest to Compass Bank, is
represented by Steven N. Berger, Esq., and Bradley D. Pack, Esq.,
at Engelman Berger, P.C.
Canyon Community Bank NA is represented by Pat P. Lopez III, Esq.,
Rebecca K. O'Brien, Esq., and Jeffrey G. Baxter, Esq., at Rusing
Lopez & Lizardi, P.L.L.C.
E.W. SCRIPPS: S&P Assigns BB- Corp. Credit Rating; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned Cincinnati-based TV
broadcaster and newspaper publisher E.W. Scripps Co. a corporate
credit rating of 'BB-'. The outlook is stable.
At the same time, S&P assigned the company's proposed $275 million
senior secured credit facility a preliminary 'BB+' issue-level
rating (two notches higher than the corporate credit rating), with
a preliminary recovery rating of '1', indicating S&P's expectation
for very high (90% to 100%) recovery for debtholders in the event
of a payment default. The senior secured credit facility consists
of a five-year $75 million revolving credit facility and a seven-
year $200 million term loan B.
The company will use proceeds of the term loan to refinance its
existing debt.
The 'BB-' preliminary corporate credit rating on E.W. Scripps
reflects the company's "weak" business risk profile and an
"intermediate" financial risk profile according to S&P's criteria.
The business risk profile is weak because of the company's below
average margins in the television and newspaper business, the
company's high corporate expenses, and unfavorable secular trends
affecting print publishing. This is partially offset by its
presence in large TV markets and significant political advertising
as a percentage of revenue in election and Olympic years. S&P
assess E.W. Scripps' financial risk profile as "intermediate" as
it expects debt to average-eight-quarter EBITDA to be in the mid-
2x area over the intermediate term. The financial risk profile
also reflects the company's moderate financial policy, good cash
flow generation, strong liquidity with high cash balance of
approximately $200 million as of Sept. 30, 2013, and S&P's
expectation that cash balances will remain healthy over the
intermediate term.
E.W. Scripps owns 19 TV stations geographically diversified in
large TV markets reaching roughly 13% of U.S. TV households and
accounts for 55% of total revenues and 87% of total EBITDA. The
company is highly concentrated in one broadcast network affiliate,
with close to 70% of its total TV stations in the underperforming
ABC Network (a unit of the Walt Disney Co.). The company has
widely diverging competitive rankings in local news, with No. 1 or
No. 2 positions in only a few of its markets. Strong news ratings
are important to attract political advertising.
EASTMAN KODAK: Professional Fees Cut $8.2-Mil. to $235.8 Mil.
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the 27 professional firms for Eastman Kodak Co. and
its creditors' committee will be paid a total of $235.8 million
for services during the 20-month bankruptcy reorganization, if the
judge adopts the recommendation of the fee examiner.
According to the report, Richard Stern, a New York lawyer, was
tapped by the bankruptcy judge to review and negotiate with
professionals on their requested fees. In his report filed on Nov.
14, Stern said he negotiated $2.4 million in reductions on top of
$5.8 million in cuts the firms made even before filing fee
requests.
The bankruptcy judge in New York will hold a hearing on Nov. 19 to
pass on fees. Rochester, New York-based Kodak sought Chapter 11
relief in January 2012 and emerged from reorganization in
September.
Analyzing the fee applications, Stern said that $156 million, or
65 percent, were incurred by four professional firms working for
Kodak. In turn, 70 percent of their fees were for merger and
acquisitions projects or other non-bankruptcy work.
Other firms working for Kodak were responsible for 17 percent of
total fees, Stern said.
The largest reduction, about $2.1 million, was taken by Sullivan &
Cromwell LLP, principal lawyers for Kodak. Stern recommends the
firm be paid $62.5 million.
Stern is with Luskin Stern & Eisler LLP.
Unsecured creditors with $1.6 billion to $2.2 billion in claims
were projected in the disclosure statement describing Kodak's
reorganization plan to recover 4 percent to 5 percent.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.
Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras. Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies
with strong balance sheets and an awareness of Kodak's liquidity
challenges.
In recent years, Kodak had been working to transform itself from
a business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies. Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent.
The Official Committee of Unsecured Creditors has tapped Milbank,
Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
Unofficial Second Lien Noteholders Committee.
The Retirees Committee has hired Haskell Slaughter Young &
Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper,
LLC, as Bankruptcy Consultants and Financial Advisors; and the
Segal Company, as Actuarial Advisors.
Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato,
Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners
II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth
S. Grossman; and Paul Martin.
Kodak completed the $527 million sale of digital-imaging
technology on Feb. 1, 2013. Kodak intends to reorganize by
focusing on the commercial printing business.
At the end of April 2013, Kodak filed a reorganization plan
offering 85 percent of the stock to holders of the remaining
$375 million in second-lien notes. The other 15 percent is for
unsecured creditors with $2.7 billion in claims and retirees who
have a $635 million claim from the loss of retirement benefits.
U.S. Bankruptcy Judge Allan Gropper confirmed the plan on August
20, 2013. Kodak and its affiliated debtors officially emerged
from bankruptcy protection on Sept. 3, 2013.
Mark S. Burgess, Matt Doheny, John A. Janitz, George Karfunkel,
Jason New and Derek Smith became members of Kodak's new board of
directors as of Sept. 3, 2013. Existing directors James V.
Continenza, William G. Parrett and Antonio M. Perez will continue
their service as members of the new board.
EHCC LLC: Case Summary & Unsecured Creditor
-------------------------------------------
Debtor entities filing separate Chapter 11 cases:
Debtor Case No.
------ --------
EHCC, LLC 13-37444
4620 Beverly Blvd.
Los Angeles, CA 90004
AEHCC, LLC 13-37442
4620 West Beverly Blvd.
Los Angeles, CA 90004
Chapter 11 Petition Date: November 14, 2013
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Debtors' Counsel: Steven T Gubner, Esq.
EZRA BRUTZKUS & GUBNER
21650 Oxnard St, Ste 500
Woodland Hills, CA 91367
Tel: 818-827-9000
Fax: 818-827-9099
Email: sgubner@ebg-law.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petitions were signed by Edward S. Ahn, managing member.
EHCC listed LA County Tax Collector as its largest unsecured
creditor holding a claim of $8,292.
A list of AEHCC's two largest unsecured creditors is available for
free at http://bankrupt.com/misc/cacb13-37442.pdf
ELBIT IMAGING: Nov. 21 Voting Deadline Set for Refinancing
----------------------------------------------------------
Elbit Imaging Ltd. on Nov. 14 disclosed that the deadline for
voting on the proposal set forth below, in continuance of the
meeting of its unsecured financial creditors including the holders
of its Series A-G and Series 1 notes that took place on Wednesday,
November 7, 2013, is Thursday, November 21, 2013 at 12:00 p.m.
The sole item on the agenda of the Meeting is a resolution to
either approve or reject the principal terms of a proposed
refinancing agreement to be executed between Bank Hapoalim B.M.
and the Company.
As announced at September 18, 2013, the Company's proposed
restructuring of its unsecured financial debt pursuant to the
adjusted plan of arrangement described in the Company's press
release dated September 18, 2013 (and which was submitted to the
Tel-Aviv Jaffa District Court in file No. 42576-02-13; the
"Arrangement"), included, among other things, a condition
precedent that an understanding will have been reached between the
Company and the Bank with respect to the restructuring of the
Company's secured debt under that certain loan agreement between
the Bank and the Company. As announced on October 20, 2013, the
Arrangement was approved by creditors representing approximately
97% of the unsecured financial debt of the Company. Accordingly,
the Proposed Refinancing was scheduled to be voted on at the
Meeting with the objective to satisfy the aforementioned condition
precedent.
The principal terms of the Proposed Refinancing are as follows:
-- Loan Amount: The outstanding balance of the Bank's loan
(principal) as of the date hereof is approximately US$59 million.
Pursuant to that certain assignment by way of a pledge in favor of
the Bank of loan proceeds the Company is entitled to receive from
a subsidiary of Park Plaza Hotels Limited on or before
December 31, 2013 in the amount of approximately EUR9.36 million
(approximately US$12.6 million), the Bank is entitled to credit
the Assigned Proceeds either on the account of the Company's
existing loan or on account of payment of credit facilities and
other banking services that were provided to the Company's wholly
owned subsidiary, Elbit Fashion Ltd., by the Bank. Nonetheless,
the Assigned Proceeds will be credited in full on the account of
the loan of the Company. Accordingly, the balance of the Company's
debt to the Bank under the loan (principal), after payment of the
Assigned Proceeds, will be in the amount of approximately US$47
million.
-- Interest: The loan will bear interest of LIBOR + 3.8% (to be
paid on a quarterly basis) + 1.3% (which shall accrue and be paid
in a single installment on the maturity date of the loan
principal).
-- Maturity Date: The loan principal will be repaid in a single
installment at the third anniversary of the Closing Date (as
defined below) of the Arrangement.
-- The Company's Shares: The Bank shall be allotted ordinary
shares of the Company as follows: 4.1. At the date upon which the
Company shall issue the shares and new notes (Series H and I) to
its unsecured financial creditors pursuant to the Arrangement, the
Company shall issue to the Bank 16,594,036 ordinary shares of the
Company, which shall constitute 3% of the Company's paid-up and
issued capital, immediately after the closing of the Arrangement;
4.2. If and in the event that the Company shall prepay the loan to
the Bank in full prior to the elapse of 60 (sixty) calendar days
from the earlier of: (i) the date upon which the Court's approval
of the Arrangement shall have been awarded; or (ii) December 31,
2013 (such earlier date shall be referred to herein as the
"Determination Date"), the Bank shall not be entitled to any of
the shares so issued and accordingly, shall return those shares to
the Company without any consideration;
4.3. If and in the event that the Company shall prepay the loan to
the Bank at any time during the period commencing 60 (sixty)
calendar days from the Determination Date and ending 150 (one
hundred and fifty) calendar days from the Determination Date, the
Bank shall return to the Company, without any consideration,
8,423,368 shares out of the shares issued to the Bank as
aforementioned;
4.4. If and in the event that the Company shall prepay the loan to
the Bank at any time after 150 (one hundred and fifty) calendar
days from the Determination Date, the Bank shall be entitled to
retain all the shares issued to it by the Company, with no further
requirement to return any of those shares.
-- Collaterals:[1] In addition to the collaterals which currently
exist in favor of the Bank in respect of the above loan (i.e., a
pledge on approximately 29% of the shares of Plaza Centers N.V.,
the Assigned Proceeds and the share capital of Elbit Fashion
Ltd.), the Bank shall receive a pledge on the Company's residual
rights in its hotels in Romania and Belgium (subject to exceptions
as specified in Section 6 below) to secure all of the Company's
debts to the Bank, as specified below: 5.1. A first-ranking fixed
charge on the entire share capital of BEA Hotels Eastern Europe
B.V. (a Dutch company through which the Company indirectly holds
approximately 77% of the rights in the Radisson Blu hotel in
Bucharest, Romania) ("BHEE") and the rights associated therewith,
as well as on the rights to proceeds under shareholders loans
provided to BHEE; and
5.2. A first-ranking fixed charge on the entire share capital of
Astrid Hotel Holdings B.V. (a dutch company through which the
company indirectly holds all of the rights in two hotels in
antwerp:Radisson Astrid and Park Inn) ("AHH") and the rights
associated therewith, as well as on the rights to proceeds under
shareholders loans provided to AHH.
The Company will undertake to provide the Bank with all of the
data that shall be required thereby in connection with the
holdings in the hotels in Romania and in Belgium (and specifically
with respect to the existing debts and liabilities in respect of
such hotels), and not to increase the sum of the existing debts
and liabilities vis-…-vis third parties in connection with the
said hotels (with the exception of the provisions of Section 6.1
below).
-- Exceptions to the Collaterals:
6.1. So long as the Company, its subsidiaries and companies
directly and indirectly controlled by it meet all of their debts
and liabilities vis-a-vis the Bank, as shall be defined in the
definitive agreement to be entered into between the Company and
the Bank, the proceeds specified below that shall be received from
the pledged assets shall be used by the Company and its
Subsidiaries for their on-going operations, at their discretion,
and shall not be used to prepay the debt contemplated in the loan
to the Bank (subject to the provisions of Section 6.2 below):
6.1.1. Net cash flow from the refinancing of the Radisson Blu
hotel in Bucharest, Romania, up to EUR 24 million (over and above
the debt which currently exists); and
6.1.2. Net cash flow which derives from current operations of the
pledged hotels.
6.2. Notwithstanding the provisions of Section 6.1, in the event
that the Company shall sell, as a willing seller (other than in
the framework of mandatory disposition), all or any of its rights
in the pledged assets, the Company will undertake to prepay the
Bank the amounts as specified below:
6.2.1. Sale of the Company's rights in the Bucharest hotel - in
the case of the sale of all of the rights or the sale of the
control of the asset, the Company will undertake to prepay the
Bank an amount of US$32 million; in the case of the sale of part
of the rights in the asset, after which the Company retains
control over the asset - a proportionate share of such amount. The
balance of the net cash flow from the sale (if any) will be used
by the Company and/or its Subsidiaries for their on-going
operations.
6.2.2. Sale of the Company's rights in its hotels in Belgium - in
the case of the sale of all of the rights or the sale of the
control of the assets, the Company will undertake to prepay the
Bank an amount of US$5 million; in the case of the sale of part of
the rights in the assets, after which the Company retains control
of the assets -- a proportionate share of such amount. The
balance of the net cash flow from the sale (if any) will be used
by the Company and/or its Subsidiaries for their on-going
operations.
6.2.3. In the case of a sale of Plaza Centers' shares which are
held by the Company - the Company will undertake that the full net
cash flow attributed to the shares held by the Company and pledged
to the Bank will be used to prepay the loan to the Bank.
-- Terms and Conditions of the Loan of Elbit Fashion Ltd.: The
Bank shall extend the existing credit line and the standby letter
of credit of Elbit Fashion Ltd. until December 31, 2014.
-- Financial Covenants: The agreement shall include a financial
covenant whereby if and in the event that the ratio between the
Company's debt to the Bank and the total value of the collaterals
(Plaza Centers' shares that are pledged to the Bank and the
Company's residual rights in the hotels in Belgium and in Romania
[i.e., the value of the hotels according to the assessor's
appraisal as specified below, net of the debt attributed to the
said hotels]) shall exceed the threshold of 85%, then the Bank
shall have the right to accelerate the loan provided by the Bank
to the Company. The said ratio shall be checked on a quarterly
basis. The Company shall provide the Bank with external
valuations of the pledged hotels, addressed to the Bank and
carried out by an assessor who is acceptable to the Bank, once a
year in the framework of the annual statements. The examination
of the said covenant, which shall be made in the annual statement
and in each one of the three quarters thereafter, shall be based
on the Annual Valuations (unless the quarterly financial
statements include an asset's impairment below the Annual
Valuations), and on the prices of Plaza Centers' shares on the
London Stock Exchange, as being on each one of the measurement
dates on the last day of each quarter.
-- Balance of Contractual Interest to Loan Amount: Subject to
the provisions below, the balance of the contractual interest
amounts that the Company shall owe the Bank on the Closing Date
will be added to the loan principal.
-- Credit for Default Interest: The Bank shall credit the
Company for any and all default interest collected or accrued
thereby from the date on which the loan was accelerated by the
Bank.
-- Prepayment at the Company's Discretion: The Company shall be
entitled to prepay the loan without prepayment fines or fees.
Prepayment without such fines or fees will be made on the interest
payment date only, provided, however, that Company shall have the
right to prepay the loan to the Bank at any time up and until 150
(one hundred and fifty) calendar days from the Determination Date
even if such date is not an interest payment date, and in such
event, the Company shall pay the Bank a prepayment fee at the
amount equal to the economic damage suffered by the Bank as a
result from the prepayment of the loan prior to the consecutive
interest payment date.
-- Mandatory Prepayment: If and in the event that the Company
shall prepay its debt to the noteholders, in whole or any part
thereof, from the Company's internal sources (i.e., other than
from a raising of capital and/or alternative debt), then the
Company shall prepay the Bank an amount equal to the amount paid
to the noteholders on such date multiplied by the ratio between
the Company's debt to the Bank and the Company's total debt to the
Bank and to the noteholders as of such date.
-- Prepayment in the Case of a Distribution: In the case of a
distribution as defined in the Israeli Companies Law, 5759-1999,
including payment of a dividend in any manner to the Company's
shareholders, the Company shall prepay the Bank an amount equal to
the amount paid to the noteholders on such date multiplied by the
ratio between the Company's debt to the Bank and the total debt of
the Company to the Bank and to the noteholders as of such date.
-- Waiver of Breaches and Claims: The Bank shall waive all and
any claims and demands with respect to any existing breaches
and/or grounds for acceleration of loans that the Bank has
provided to the Company and to its Subsidiaries and any claim
available thereto against the Company until this date.
-- The Company and the Subsidiaries shall waive all and any
claim or demand against the Bank in respect of the debt of the
Company and the Subsidiaries to the Bank, including all of the
components thereof and/or in respect of the credit provided to any
of them by the Bank and/or in connection with the validity of the
collaterals created by any of them in favor of the Bank.
-- Subject to and after approval by the Company's unsecured
financial creditors of these principles, the Company and the Bank
shall enter into and sign a detailed definitive agreements and
pledge documents, which shall reflect the general principles
specified above, by and no later than November 30, 2013, subject
to agreed extensions between the Bank and the Company. The
definitive agreements and the pledge documents as aforesaid shall
take effect concurrently and in conjunction with the effectiveness
of the Arrangement.
[1] It is clarified that the specification of collaterals below
does not include securities and/or pledges existing in favor of
the Bank in respect of loans to subsidiaries, which shall remain
in full effect and unchanged, and that the collaterals as
aforesaid are in addition thereto.
It is hereby noted that the Arrangement is subject to certain
other conditions precedent. For further details, please see the
Company's announcement of September 18, 2013.
In addition, it should be noted that certain claims regarding the
requisite majority were raised in the Meeting. Nonetheless it is
the Company's view that pursuant to Section 7.6 of the Arrangement
(as approved by creditors representing approximately 97% of the
unsecured financial debt of the Company) approval of the Proposed
Refinancing requires the approval of holders of a simple majority
of the aggregate voting power participating in the Meeting
(excluding abstentions). It is hereby noted, further, that during
the Meeting, certain creditors raised concerns as to the financial
strength of Plaza Centers and hence, the strengthening of the
Bank's collaterals bearing in mind that the value of its existing
collateral over Plaza Center's shares could decrease dramatically
if and in the event Plaza Centers shall suffer cash-flow crunch or
credit crunch and will not be able to pay its short term
obligations to its own noteholders. As announced earlier on
Nov. 14 by Plaza Centers, the board of directors of Plaza Centers
has concluded that it will withhold payment on the upcoming
maturities of the bonds and approach the creditors of Plaza with a
restructuring plan in a formalized restructuring process within a
few days.
About Elbit Imaging
Tel-Aviv, Israel-based Elbit Imaging Ltd. (TASE, NASDAQ: EMITF)
hold investments in real estate and medical companies. The
Company, through its subsidiaries, also develops shopping and
entertainment centers in Central Europe and invests in and manages
hotels.
Elbit Imaging disclosed a loss of NIS455.50 million on NIS671.08
million of total revenues for the year ended Dec. 31, 2012, as
compared with a loss of NIS247.02 million on NIS586.90 million of
total revenues for the year ended Dec. 31, 2011.
Brightman Almagor Zohar & Co., in Tel-Aviv, Israel, expressed
substantial doubt about Elbit Imaging's ability to continue as a
going concern following the financial results for the year ended
Dec. 31, 2012.
The Certified Public Accountants noted that in the period
commencing Feb. 1, 2013, through Feb. 1, 2014, the Company is to
repay its debenture holders NIS 599 million (principal and
interest). "Said amount includes NIS 82 million originally
payable on Feb. 21, 2013, that its repayment was suspended
following a resolution of the Company's Board of Directors. The
Company's Board also resolved to suspend any interest payments
relating to all the Company's debentures. In addition, as of
Dec. 31, 2012, the Company failed to comply with certain financial
covenants relating to bank loans in the total amount as of such
date of NIS 290 million.
As of June 30, 2013, the Company had NIS5.80 billion in total
assets, NIS5.19 billion in total liabilities and NIS613.57 million
in shareholders' equity.
Since February 2013, Elbit has intensively endeavoured to come to
an arrangement with its creditors. Elbit has said it has been
hanging by a thread for more than five months. It has encountered
cash flow difficulties and this burdens its day to day activities,
and it certainly cannot make the necessary investments to improve
its assets. In light of the arrangement proceedings, and according
to the demands of most of the bondholders, as well as an agreement
that was signed on March 19, 2013, between Elbit and the Trustees
of six out of eight series of bonds, Elbit is prohibited, inter
alia, from paying off its debts to the financial creditors -- and
as a result a petition to liquidate Elbit was filed, and Bank
Hapoalim has declared its debts immediately payable, threatening
to realize pledges that were given to the Bank on material assets
of the Company -- and Elbit undertook not to sell material assets
of the Company and not to perform any transaction that is not
during its ordinary course of business without giving an advance
notice to the trustees.
Accountant Rony Elroy has been appointed as expert for examining
the debt arrangement in the Company.
In July 2013, Elbit Imaging's controlling shareholders, Europe-
Israel MMS Ltd. and Mr. Mordechay Zisser, notified the Company
that the Tel Aviv District Court has appointed Adv. Giroa Erdinast
as a receiver with regards to the ordinary shares of the Company
held by Europe Israel securing Europe Israel's obligations under
its loan agreement with Bank Hapoalim B.M. The judgment stated
that the Receiver is not authorized to sell the Company's shares
at this stage. Following a request of Europe-Israel, the Court
also delayed any action to be taken with regards to the sale of
those shares for a period of 60 days. Europe Israel and Mr.
Zisser have also notified the Company that they utterly reject the
Bank's claims and intend to appeal the Court's ruling.
ENDEAVOUR INTERNATIONAL: BlackRock Held 10.2% Stake at Oct. 31
--------------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, BlackRock, Inc., disclosed that as of
Oct. 31, 2013, it beneficially owned 4,808,263 shares of
common stock of Endeavour International Corp. representing 10.21
percent of the shares outstanding. A copy of the regulatory
filing is available for free at http://is.gd/BrW26O
About Endeavour International
Houston-based Endeavour International Corporation (NYSE: END)
(LSE: ENDV) is an oil and gas exploration and production company
focused on the acquisition, exploration and development of energy
reserves in the North Sea and the United States.
For the year ended Dec. 31, 2012, the Company incurred a net loss
of $126.22 million, as compared with a net loss of $130.99 million
during the prior year. As of June 30, 2013, the Company had $1.54
billion in total assets, $1.41 billion in total liabilities,
$43.70 million in series C convertible preferred stock and $85.12
million in stockholders' equity.
* * *
As reported by the TCR on March 5, 2013, Moody's Investors Service
downgraded Endeavour International Corporation's Corporate Family
Rating to Caa3 from Caa1. Endeavour's Caa3 CFR reflects its weak
liquidity, small production and proved reserve scale, geographic
concentration and the uncertainties regarding its future
performance given the inherent execution risks related to its
offshore North Sea operations for a company of its size.
In the Feb. 22, 2013, edition of the TCR, Standard & Poor's
Ratings Services lowered its corporate credit rating on Houston,
Texas-based Endeavour International Corp. (Endeavour) to 'CCC+'
from 'B-'. The rating action reflects S&P's expectation that
Endeavour could have insufficient liquidity to meet its needs due
to the delay in production from its Rochelle development.
ENDURANCE INTERNATIONAL: S&P Rates $150MM Incremental Loan 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' issue-level
rating to Burlington, Mass.-based Endurance International Group
Inc.'s $150 million incremental first-lien term loan, with a
recovery rating of '3', indicating S&P's expectation of meaningful
(50%-70%) recovery in the event of a payment default.
Proceeds from the incremental term loan, together with $74 million
of cash from the balance sheet, will be used to retire the
remaining $215 million outstanding under the company's existing
second-lien term loan (recently reduced from $315 million with
$100 million of IPO proceeds) and to pay the transaction's fees
and expenses, resulting in a modest improvement in leverage.
The company also expects to lower the applicable margins on its
first-lien term loan. While S&P views the reduced interest
expense as having a positive credit impact, the expected
incremental cash flow is modest and does not materially affect
financial measures.
S&P's 'B' corporate credit rating, stable outlook, and the ratings
on the company's existing $884 million first-lien loan and
$85 million revolver (upsized to $125 million as a part of this
transaction) remain unchanged.
The rating on Endurance reflects the company's "weak" business
risk profile and "highly leveraged" financial risk profile. S&P's
business risk assessment is based on Endurance's highly
competitive industry conditions with low barriers to entry,
partially offset by low industry penetration rates and the
company's positive cash flow generation. S&P expects some
improvement in leverage metrics, but Endurance's aggressive growth
strategy may result in spikes in leverage.
RATINGS LIST
Endurance International Group Inc.
Corporate Credit Rating B/Stable/--
New Rating
Endurance International Group Inc.
Senior Secured
$150 mil. Incremental First-Lien
Term Loan B
Recovery Rating 3
ENERGY TRANSFER: Fitch Rates $400MM Sr. Secured Notes 'BB+'
-----------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to Energy Transfer
Equity, L.P.'s (ETE) $400 million senior secured notes due 2023.
ETE's Issuer Default Rating (IDR) is 'BB'. The Rating Outlook is
Stable. ETE will use the note proceeds to fund the tender of up to
$400 million of 7.500% senior notes due 2020.
ETE has launched syndication of a new $900 million senior secured
term loan facility due 2019 and expects to use the proceeds to
refinance its existing $900 million 'BB+' rated senior secured
term loan due 2017. The closing of the new term loan is expected
to occur in early December 2013. The ETE notes, term loan, and
credit facility are secured by its ownership interests in Energy
Transfer Partners, L.P (ETP; IDR rated 'BBB-' with a Stable
Outlook) and Regency Energy Partners LP (RGP; IDR 'BB' Rating
Watch Negative).
ETE currently owns the general partner (GP) and approximately 49.6
million ETP (limited partner [LP]) units and 50.2 million ETP
Class H units, which track the underlying economics of the GP and
incentive distributions of Sunoco Logistics Partners, L.P. (SXL;
IDR rated 'BBB' with a Stable Outlook). ETE also owns the GP
interest and 26.3 million RGP LP units.
Key Rating Drivers:
Rating Rationale: ETE's rating and Stable Outlook reflect the
considerable scale of its consolidated operations, the quality and
diversity of assets held by its operating master limited
partnerships (MLPs), and strengthened credit metrics. On April 30,
2013, ETE sold its 60% interest in the holding company for Sunoco,
Inc. (SUN) and Southern Union Co. (SUG) to ETP and applied the
$1.4 billion cash proceeds to reduce debt. Fitch expects ETE's
adjusted debt-to-EBITDA, which measures ETE parent company debt
against the distributions it receives from its affiliates, to
approximate 3.2x in 2013 and, absent new debt financing,
approaching 2.0x by 2016 as affiliate distributions increase.
Increased Scale and Diversity: A series of merger transactions and
asset sales has resulted in a larger, more diversified, and
generally financially stronger family of Energy Transfer
companies. On a consolidated basis, the percentage of
contractually supported fee-based margins has increased. For ETP,
which currently provides nearly 90% of ETE's cash flow, commodity
price exposure has been reduced. Also, ETE's and ETP's
organizational structures have been simplified.
ETE and ETP have announced that they are in active discussions
regarding the transfer of Trunkline LNG to ETE in exchange for the
redemption of ETP LP units held by ETE. ETE also anticipates that
the Lake Charles Liquefaction project, currently being developed
by ETE and ETP on a 60/40 ownership basis would be contributed to
Trunkline LNG at the closing of project construction and related
financing arrangements which are anticipated in mid-2015.
Management expects that the export facility will be project-
financed and its debt non-recourse to ETE.
ETP's Outlook is Stable: Fitch expects ETP to manage its credit
metrics and those at ETP affiliate, Panhandle Eastern Pipeline Co.
LP (PEPL) at levels to maintain their current ratings. ETP's
adjusted pro forma consolidated debt/EBITDA should end 2013 at
approximately 4.2x, which is down from 4.6x in 2012. ETP is
ramping down its aggressive capital expansion program with several
projects coming on line in 2013 and 2014. ETP's adjusted
debt/EBITDA should approximate 4.0x in 2014 and 2015.
Liquidity is Adequate: ETE is finalizing a new $600 million five-
year revolving credit facility that will replace its $200 million
secured credit facility that matures on June 15, 2015. At Sept.
30, 2013, no debt was outstanding under the revolver. The revolver
currently has a maximum permitted leverage of 5.5x, a minimum
fixed charge coverage of 1.5x, and a minimum loan to value ratio
of 2.0x. ETE's operating affiliates have significant operating
flexibility with adequate liquidity and the ability to fund their
planned growth with capital market transactions. ETE has little
need to finance unless as part of an acquisition, to initiate an
organic growth project not financed at the MLPs, or to refinance
maturing debt.
Rating Sensitivities:
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
ETE
-- Parent company debt to EBITDA maintained below 1.5x;
-- Improving credit profiles at ETP and RGP, the providers of
cash for ETE.
Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:
ETE
-- Increasing leverage above 4.5x;
-- Weakening credit profiles at ETP and RGP.
ENERGY TRANSFER: S&P Assigns 'BB' Rating to $400MM Sr. Sec. Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'BB'
issue-level rating and '4' recovery rating to Energy Transfer
Equity L.P.'s (ETE) issuance of up to $400 million of senior
secured notes due 2024. The partnership intends to use note
proceeds to help fund a tender offer of up to $400 million of its
2020 notes. As of Sept. 30, 2013, ETE had about $3.8 billion of
reported debt on a stand-alone basis. Dallas, Texas-based ETE is
a large publicly traded U.S. midstream energy company.
RATINGS LIST
Energy Transfer Equity L.P.
Corporate credit rating BB/Stable/--
New Rating
Energy Transfer Equity L.P.
$400 mil sr secd notes due 2024 BB
Recovery rating 4
ERF WIRELESS: Willow Creek Held 9.9% Equity Stake at Oct. 31
------------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Willow Creek Capital Group, LLC, and Brian Innes
disclosed that as of Oct. 31, 2013, they beneficially owned
4,399,346 shares of common stock of ERF Wireless, Inc.,
representing 9.99 percent of the shares outstanding. A copy of
the regulatory filing is available at http://is.gd/RWrUl5
About ERF Wireless
Based in League City, Texas, ERF Wireless, Inc., provides secure,
high-capacity wireless products and services to a broad spectrum
of customers in primarily underserved, rural and suburban parts of
the United States.
The Company incurred a consolidated net loss of $3.75 million for
the nine months ended Sept. 30, 2012, as compared with a
consolidated net loss of $2.32 million for the same period a year
ago. The Company's balance sheet at June 30, 2013, showed $6.80
million in total assets, $10.69 million in total liabilities and a
$3.88 million total shareholders' deficit.
EVERTEC INC: Bank Debt Trades at 3% Off
---------------------------------------
Participations in a syndicated loan under which Evertec Inc. is a
borrower traded in the secondary market at 97.30 cents-on-the-
dollar during the week ended Friday, November 15, 2013, according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents an increase of 0.40
percentage points from the previous week, The Journal relates.
Getty Images Inc. pays 350 basis points above LIBOR to borrow
under the facility. The bank loan matures on Oct. 14, 2019. The
bank debt carries Moody's B2 rating and Standard & Poor's B
rating. The loan is one of the biggest gainers and losers among
212 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
As reported in the Troubled Company Reporter on March 22, 2013,
Moody's Investors Service assigned a B1 rating to EVERTEC Group,
LLC's proposed Senior Secured Credit Facilities. Moody's also
placed the B2 corporate family and B2-PD Probability of Default
ratings under review for upgrade, based on EVERTEC's plan for a
primary issuance of shares through an Initial Public Offering.
EXCEL MARITIME: Court Okays Hiring of Marsoft Inc as Expert
-----------------------------------------------------------
Excel Maritime Carriers Ltd. and its debtor-affiliates sought and
obtained authorization from the Hon. Robert D. Drain of the U.S.
Bankruptcy Court for the Southern District of New York to employ
Marsoft Inc. as maritime expert, nunc pro tunc to Sept. 5, 2013.
Prior to the commencement of these chapter 11 cases, Marsoft Inc.
provided the Debtors with a forward-looking analysis of the dry
bulk market and per-vessel freight rate and collateral value
projections for the Debtors' fleet for use in developing the
Debtors' financial projections and estimating post-confirmation
enterprise value. Marsoft Inc. provides the Debtors with per-
vessel freight rate data, which are inputs necessary to the
development of the Debtors' financial operating projections. In
addition, Marsoft Inc. provides the Debtors with projected
collateral values for the Debtors' fleet, which is one of several
factors considered by the Debtors and its advisors in estimating
the Debtors' total enterprise value as a going concern. The
Debtors seek to update Marsoft Inc.'s prepetition analysis based
on the latest market outlook and current rate and price
projections for the Debtors' fleet.
The Debtors are authorized to pay a single flat fee of $25,000 to
Marsoft Inc., without further application to or order by this
Court, in accordance with the following procedures:
(a) Marsoft Inc. shall serve an invoice for the Fee by
overnight delivery upon: (i) counsel to the Debtors,
Skadden, Arps, Slate, Meagher & Flom LLP, Four
Times Square, New York, NY 10036, Attn: Jay M. Goffman and
Mark A. McDermott; (ii) the office of the U.S. Trustee,
U.S. Federal Office Building, 201 Varick Street, Suite
1006, New York, NY 10014, Attn: Paul K. Schwartzberg; and
(iii) counsel to the Creditors' Committee, Akin Gump
Strauss Hauer & Feld LLP, One Bryant Park, Bank of America
Tower, New York, NY 10036-6745, Attn: Michael S. Stamer and
1700 Pacific Avenue, Suite 4100, Dallas, TX 75201-
4624, Attn: Sarah Link Schultz;
(b) if any Notice Party objects to the compensation sought,
such party shall, by no later than the 10th day
following service of the invoice, file with the Court and
serve upon Marsoft Inc., a written notice of objection to
the Fee, setting forth the nature of the objection and the
amount of the Fee at issue;
(c) at the expiration of the 10 day period, the Debtors shall
promptly pay 100% of the Fee to which no objection has been
served in accordance with paragraph (b);
(d) if an objection to the Fee is filed, the Debtors shall
withhold payment of that portion of the Fee to which the
objection is directed and promptly pay the remainder of the
Fee;
(e) if the parties to an objection are able to resolve their
dispute following the service of an objection to the Fee,
and if Marsoft Inc. serves upon all of the Notice Parties
a statement indicating that the objection is withdrawn and
describing in detail the terms of the resolution, then the
Debtors shall promptly pay, in accordance with paragraph
(c), that portion of the Fee which is no longer subject to
an objection; and
(f) all objections that are not resolved by the parties shall
be preserved and presented to this Court at the next
hearing.
Marsoft Inc. will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Arlie Sterling, president of Marsoft Inc., 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.
Marsoft Inc. can be reached at:
Arlie Sterling
MARSOFT INC.
155 Federal Street, Suite 1000
Boston, MA 02110
Tel: +1 (617) 369-7800
E-mail: info@marsoft.com
About Excel Maritime
Based in Athens, Greece, Excel Maritime Carriers Ltd. --
http://www.excelmaritime.com/-- is an owner and operator of dry
bulk carriers and a provider of worldwide seaborne transportation
services for dry bulk cargoes, such as iron ore, coal and grains,
as well as bauxite, fertilizers and steel products. Excel owns a
fleet of 40 vessels and, together with 7 Panamax vessels under
bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax,
21 Panamax, 2 Supramax and 5 Handymax vessels) with a total
carrying capacity of approximately 3.9 million DWT. Excel Class A
common shares have been listed since Sept. 15, 2005, on the New
York Stock Exchange (NYSE) under the symbol EXM and, prior to that
date, were listed on the American Stock Exchange (AMEX) since
1998.
The company blamed financial problems on low charter rates.
The balance sheet for December 2011 had assets of $2.72 billion
and liabilities totaling $1.16 billion. Excel owes $771 million
to secured lenders with liens on almost all assets. There is $150
million owing on 1.875 percent unsecured convertible notes.
Excel Maritime filed a Chapter 11 petition (Bankr. S.D.N.Y. Case
No. 13-23060) on July 1, 2013, in New York after signing an
agreement where secured lenders owed $771 million support a
reorganization plan filed alongside the petition. The Debtor
disclosed $35,642,525 in assets and $1,034,314,519 in liabilities
as of the Chapter 11 filing.
Excel, which sought bankruptcy with a number of affiliates, has
tapped Skadden, Arps, Slate, Meagher & Flom LLP, as counsel;
Miller Buckfire & Co. LLC, as investment banker; and Global
Maritime Partners Inc., as financial advisor.
A five-member official committee of unsecured creditors was
appointed by the U.S. Trustee. The Creditors' Committee is
represented by Michael S. Stamer, Esq., Sean E. O'Donnell, Esq.,
and Sunish Gulati, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York; and Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer
& Feld LLP, in Dallas, Texas. Jefferies LLC serves as the
Committee's investment banker.
The Debtors' Chapter 11 plan filed on July 15, 2013, proposes to
implement a reorganization worked out before a July 1 bankruptcy
filing. The plan will give ownership to secured lenders owed $771
million, although the lenders will allow current owner Gabriel
Panayotides to keep control, at least initially. Unsecured
creditors with claims totaling $163 million will receive a $5
million, eight percent note for a predicted recovery of 3 percent.
Holders of $150 million in unsecured convertible notes make up the
bulk of the unsecured-claim pool.
FAIRMONT GENERAL: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
Fairmont General Hospital Inc. filed with the U.S. Bankruptcy
Court for the Northern District of West Virginia its schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $19,705,006.41
B. Personal Property 28,863,857.25
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $17,251,838.52
E. Creditors Holding
Unsecured Priority
Claims 1,153,925.13
F. Creditors Holding
Unsecured Non-priority
Claims 36,368,601.54
-------------- --------------
TOTAL $48,568,863.66 $54,774,365.19
A full-text copy of the Fairmont General's schedules may be
accessed for free at: http://is.gd/qD9goG
About Fairmont General
Fairmont General Hospital Inc. and Fairmont Physicians, Inc.,
which operate a 207-bed acute-care facility in Fairmont, West
Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D.
W.Va. Case No. 13-01054) on Sept. 3, 2013, listing between
$10 million and $50 million in both assets and debts.
The fourth-largest employer in Marion County, West Virginia, filed
for bankruptcy as it looks to partner with another hospital or
health system.
The Debtors are represented by Rayford K. Adams, III, Esq., and
Casey H. Howard, Esq., at Spilman Thomas & Battle, PLLC, in
Winston-Salem, North Carolina; David R. Croft, Esq., at Spilman
Thomas & Battle, PLLC, in Wheeling, West Virginia, and Michael S.
Garrison, Esq., at Spilman Thomas & Battle, PLLC, in Morgantown,
West Virginia. The Debtors' financial analyst is Gleason &
Associates, P.C. The Debtors' claims and noticing agent is Epiq
Bankruptcy Solutions.
UMB Bank is represented by Nathan F. Coco, Esq., and Suzanne Jett
Trowbridge, Esq., at McDermott Will & Emery LLP.
The Committee of Unsecured Creditors is represented by Andrew
Sherman, Esq., and Boris I. Mankovetskiy, Esq., at Sills Cummis &
Gross P.C. and Kirk B. Burkley, Esq., Bernstein Burkley, P.C. The
Committee's local counsel can be reached at:
Janet Smith Holbrook, Esq.
HUDDLESTON BOLEN LLP
611 Third Avenue
P.O. Box 2185
Huntington, WV 25722
Tel: (304)-691-8330
E-mail: jholbrook@huddlestonbolen.com
FANNIE MAE: Reports Net Income of $8.7 Billion in Third Quarter
---------------------------------------------------------------
Federal National Mortgage Association filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing net income of $8.74 billion on $29.06 billion of
total interest income for the quarter ended Sept. 30, 2013, as
compared with net income of $1.81 billion on $31.66 billion of
total interest income for the same period during the prior year.
For the nine months ended Sept. 30, 2013, Fannie Mae reported net
income of $77.52 billion on $88.22 billion of total interest
income as compared with net income of $9.65 billion on $98.62
billion of total interest income for the same period last year.
As of Sept. 30, 2013, Fannie Mae had $3.28 trillion in total
assets, $3.26 trillion in total liabilities and $11.61 billion in
total equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/Fxqu8U
About Fannie Mae
Federal National Mortgage Association, aka Fannie Mae, is a
government-sponsored enterprise that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold.
The U.S. Department of the Treasury owns Fannie Mae's senior
preferred stock and a warrant to purchase 79.9 percent of its
common stock, and Treasury has made a commitment under a senior
preferred stock purchase agreement to provide Fannie with funds
under specified conditions to maintain a positive net worth.
Conservatorship
Fannie Mae has operated under the conservatorship of the Federal
Housing Finance Agency since Sept. 6, 2008. Fannie Mae has not
received funds from Treasury since the first quarter of 2012. The
funding the company has received under the senior preferred stock
purchase agreement with the U.S. Treasury has provided the company
with the capital and liquidity needed to maintain its ability to
fulfill its mission of providing liquidity and support to the
nation's housing finance markets and to avoid a trigger of
mandatory receivership under the Federal Housing Finance
Regulatory Reform Act of 2008. For periods through March 31,
2013, Fannie Mae has requested cumulative draws totaling $116.1
billion. Under the senior preferred stock purchase agreement, the
payment of dividends cannot be used to offset prior Treasury
draws. Accordingly, while Fannie Mae has paid $35.6 billion in
dividends to Treasury through March 31, 2013, Treasury still
maintains a liquidation preference of $117.1 billion on the
company's senior preferred stock.
In August 2012, the terms governing the company's dividend
obligations on the senior preferred stock were amended. The
amended senior preferred stock purchase agreement does not allow
the company to build a capital reserve. Beginning in 2013, the
required senior preferred stock dividends each quarter equal the
amount, if any, by which the company's net worth as of the end of
the preceding quarter exceeds an applicable capital reserve
amount. The applicable capital reserve amount is $3.0 billion for
each quarter of 2013 and will be reduced by $600 million annually
until it reaches zero in 2018.
The amount of remaining funding available to Fannie Mae under the
senior preferred stock purchase agreement with Treasury is
currently $117.6 billion. Fannie Mae is not permitted to redeem
the senior preferred stock prior to the termination of Treasury's
funding commitment under the senior preferred stock purchase
agreement.
FIBERTOWER CORP: Exclusive Period Extension Approved
----------------------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court approved
FiberTower's motion to extend the exclusive period during which
the Debtors have the exclusive right to solicit votes on a plan
until December 31, 2013.
As previously reported , "At the October 29 Hearing, the Court
granted the Disclosure Statement Motion and approved the
Disclosure Statement and the Debtors' proposed solicitation
procedures relating to the Plan (subject to certain changes to be
made to the Disclosure Statement)....Following the October 29
Hearing, the Debtors, the Ad Hoc Committee and the Committee
commenced discussions with respect to certain issues relating to
the Plan and the Standing Motion. Such discussions remain ongoing
as of the date of this Motion. As a consequence of such continuing
discussions, the Debtors have not filed an amended Disclosure
Statement or solicited votes on the Plan...the Debtors filed the
Plan prior to the deadline established in the Exclusivity Bridge
Order. The Exclusivity Period, however, with respect to soliciting
votes on the Plan expires on November 15, 2013. The Debtors submit
that expiration of the Exclusivity Period would be unjust under
the circumstances, when, among other things, (i) the Court has
approved the Disclosure Statement and solicitation procedures
relating to the Plan and scheduled the Confirmation Hearing and
(ii) the Debtors, the Ad Hoc Committee and the Committee are in
the midst of discussions relating to the Plan and the Standing
Motion."
About FiberTower Corp.
FiberTower Corporation, FiberTower Network Services Corp.,
FiberTower Licensing Corp., and FiberTower Spectrum Holdings
LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos.
12-44027 to 12-44031) on July 17, 2012, together with a plan
support agreement struck with prepetition secured noteholders.
FiberTower is an alternative provider of facilities-based backhaul
services, principally to wireless carriers, and a national
provider of millimeter-band spectrum services. Backhaul is the
transport of voice, video and data traffic from a wireless
carrier's mobile base station, or cell site, to its mobile
switching center or other exchange point. FiberTower provides
spectrum leasing services directly to other carriers and
enterprise clients, and also offer their spectrum services through
spectrum brokerage arrangements and through fixed wireless
equipment partners.
FiberTower's significant asset is the ownership of a national
spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum
licenses, including over 740 MHz in the top 20 U.S. metropolitan
areas and, in the aggregate, roughly 1.72 billion channel pops
(calculated as the number of channels in a given area multiplied
by the population, as measured in the 2010 census, covered by
these channels). FiberTower believes the Spectrum Portfolio
represents one of the largest and most comprehensive collections
of millimeter wave spectrum in the U.S., covering areas with a
total population of over 300 million.
As of the Petition Date, FiberTower provides service to roughly
5,390 customer locations at 3,188 deployed sites in 13 markets
throughout the U.S. The fixed wireless portion of these hybrid
services is predominantly through common carrier spectrum in the
11, 18 and 23 GHz bands. FiberTower's biggest service markets are
Dallas/Fort Worth and Washington, D.C./Baltimore, with additional
markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit,
Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco
and Tampa.
As of June 30, 2012, FiberTower's books and records reflected
total combined assets, at book value, of roughly $188 million and
total combined liabilities of roughly $211 million. As of the
Petition Date, FiberTower had unrestricted cash of roughly $23
million. For the six months ending June 30, 2012, FiberTower had
total revenue of roughly $33 million. With the help of FTI
Consulting Inc., FiberTower's preliminary valuation work shows
that the Company's enterprise value is materially less than $132
million -- i.e., the approximate principal amount of the 9.00%
Senior Secured Notes due 2016 outstanding as of the Petition Date.
The preliminary valuation work is based upon the assumption that
FiberTower's spectrum licenses will not be terminated. Fibertower
Spectrum disclosed $106,630,000 in assets and $175,501,975 in
liabilities as of the Chapter 11 filing.
Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at
Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at
Hogan Lovells and Willkie Farr and Gallagher LLP serve as special
FCC counsel. FTI Consulting serve as financial advisor. BMC
Group Inc. serve as claims and noticing agent. The petitions were
signed by Kurt J. Van Wagenen, president.
Wells Fargo Bank, National Association -- as indenture trustee and
collateral agent to the holders of 9.00% Senior Secured Notes due
2016 owed roughly $132 million as of the Petition Date -- is
represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad
Hoc Committee of Holders of the 9% Secured Notes Due 2016 is
represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya,
Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad
Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark
Elmore, Esq., at Haynes and Boone, LLP, as local counsel.
U.S. Bank, National Association -- in its capacity as successor
indenture trustee and collateral agent to holders of the 9.00%
Convertible Senior Secured Notes due 2012, owed $37 million as of
the Petition Date -- is represented by Michael B. Fisco, Esq., at
Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq.,
at McGuire Craddock & Strother PC as local counsel.
William T. Neary, the U.S. Trustee for Region 6 appointed five
members to the Official Committee of Unsecured Creditors in the
Debtors' cases. The Committee is represented by Otterbourg,
Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman
& Leonard, P.A. Goldin Associates, LLC serves as its financial
advisors.
On March 15, 2013, the Court entered an order authorizing the
Debtors to sell assets that are primarily utilized by the Debtors
to provide wireless backhaul services in the State of Ohio to
Cellco Partnership (dba Verizon Wireless) free and clear for $1.5
million.
In May 2013, FiberTower sought and obtained Court authority to
sell their telecommunications equipment and employ American
Communications, LLC, as telecommunications equipment reseller.
According to the Debtors, the telecommunications equipment, which
was a part of their backhaul business, is no longer necessary in
the conduct of their business. They, however, believe that the
equipment may have resale value that would benefit their estates.
FONTAINEBLEAU LAS VEGAS: Fight on Failed $3-Bil. Resort Nears Deal
------------------------------------------------------------------
Law360 reported that a Florida bankruptcy judge said on Nov. 13
that he was leaning toward approving a settlement agreement in
rancorous Chapter 7 proceedings over the failed $2.9 billion
Fontainebleau Las Vegas resort and casino project.
According to the report, U.S. Bankruptcy Judge A. Jay Cristol said
he was almost ready to wrap up the 4-1/2-year case, but he
instructed the draft order for the $176 million deal to be
delivered first to the attorney for one contractor who objected to
bar orders in the agreement and granted him a 48-hour window to
object to the draft order.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- was
planned as a hotel-casino on property along the Las Vegas Strip.
Its developer, Fontainebleau Las Vegas Holdings LLC and
affiliates, filed for Chapter 11 protection (Bankr. S.D. Fla. Lead
Case No. 09-21481) on June 9, 2009.
Scott L Baena, Esq., at BilzinSumbergBaena Price & Axelrod LLP,
represented the Debtors in their restructuring effort. Kurtzman
Carson Consulting LLC served as the Debtors' claims agent.
Attorneys at Genovese Joblove& Battista, P.A., and Fox
Rothschild, LLP, represented the Official Committee of Unsecured
Creditors. Fontainebleau Las Vegas LLC estimated more than
$1 billion in assets and debts, while each of Fontainebleau Las
Vegas Capital Corp. and Fontainebleau Las Vegas Holdings LLC
estimated less than $50,000 in assets.
In February 2010, Icahn Enterprises L.P. acquired Fontainebleau
for roughly $150 million. The bankruptcy case was subsequently
converted to Chapter 7. Soneet R. Kapila has been named the
trustee for the Chapter 7 case of Fontainebleau Las Vegas.
FOX TROT CORP: Files Schedules of Assets and Liabilities
--------------------------------------------------------
Fox Trot Corporation filed with the U.S. Bankruptcy Court for the
Eastern District of Kentucky its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $15,910,000.00
B. Personal Property 9,660,806.02
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $3,217,583.77
E. Creditors Holding
Unsecured Priority
Claims 0.00
F. Creditors Holding
Unsecured Non-priority
Claims 695,451.43
-------------- -------------
TOTAL $25,570,806.02 $3,913,035.20
A full-text copy of the Fox Trot Corp.'s schedules may be accessed
for free at: http://is.gd/gQvbcE
Fox Trot Corporation sought protection under Chapter 11 of the
Bankruptcy Code on Oct. 12, 2013 (Case No. 13-52471, Bankr. E.D.
Ky.). The case is assigned to Judge Gregory R. Schaaf. Frost
Brown Todd LLC serves as bankruptcy counsel.
FOX TROT CORP: Gets Final OK to Tap Frost Brown as Bankr. Counsel
-----------------------------------------------------------------
Fox Trot Corporation obtained final authority from the U.S.
Bankruptcy Court for the Eastern District of Kentucky, Lexington
Division, to employ Frost Brown Todd LLC as bankruptcy counsel.
As reported in the Troubled Company Reporter on Oct. 24, 2013,
these Frost Brown professionals are expected to take primary roles
in representing the Debtor and will be paid these hourly rates:
Robert V. Sartin, Esq. $450
Adam R. Kegley, Esq. $350
Robin B. White, Esq. $415
H. Derek Hall, Esq. $180
Christy L. Hruska, Esq. $275
Natalie W. Kissinger, paralegal $115
Shelby Bryant, paralegal $135
The firm will also be reimbursed of its reasonable out-of-pocket
expenses.
Fox Trot Corporation sought protection under Chapter 11 of the
Bankruptcy Code on Oct. 12, 2013 (Case No. 13-52471, Bankr. E.D.
Ky.). The case is assigned to Judge Gregory R. Schaaf. Frost
Brown Todd LLC serves as bankruptcy counsel.
FREESEAS INC: Issues Add'l 2 Million Settlement Shares to Crede
---------------------------------------------------------------
FreeSeas Inc. issued and delivered to Crede 2,000,000 settlement
shares pursuant to the terms of the Exchange Agreement approved by
the Supreme Court of the State of New York, County of New York, on
Oct. 9, 2013, in the matter entitled Crede CG III, Ltd. v.
FreeSeas Inc., Case No. 653328/2013.
The total number of shares of Common Stock to be issued to Crede
pursuant to the Exchange Agreement will equal the quotient of (i)
$11,850,000 divided by (ii) 78 percent of the volume weighted
average price of the Company's Common Stock, over the 75-
consecutive trading day period immediately following the first
trading day after the Court approved the Order, rounded up to the
nearest whole share. About 5,059,717 of the Settlement Shares
were issued and delivered to Crede on Oct. 10, 2013, and an
aggregate of 28,758,540 Settlement Shares were issued and
delivered to Crede between Oct. 11, 2013, and Nov. 4, 2013.
A copy of the Form 6-K is available for free at:
http://is.gd/p7Dmwi
About FreeSeas Inc.
Headquartered in Athens, Greece, FreeSeas Inc., formerly known as
Adventure Holdings S.A., was incorporated in the Marshall Islands
on April 23, 2004, for the purpose of being the ultimate holding
company of ship-owning companies. The management of FreeSeas'
vessels is performed by Free Bulkers S.A., a Marshall Islands
company that is controlled by Ion G. Varouxakis, the Company's
Chairman, President and CEO, and one of the Company's principal
shareholders.
The Company's fleet consists of six Handysize vessels and one
Handymax vessel that carry a variety of drybulk commodities,
including iron ore, grain and coal, which are referred to as
"major bulks," as well as bauxite, phosphate, fertilizers, steel
products, cement, sugar and rice, or "minor bulks." As of
Oct. 12, 2012, the aggregate dwt of the Company's operational
fleet is approximately 197,200 dwt and the average age of its
fleet is 15 years.
Freeseas disclosed a net loss of US$30.88 million in 2012, a net
loss of US$88.19 million in 2011, and a net loss of US$21.82
million in 2010. The Company's balance sheet at Dec. 31, 2012,
showed US$114.35 million in total assets, $106.55 million in
total liabilities and US$7.80 million in total shareholders'
equity.
RBSM LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2012. The independent auditors noted that the Company has
incurred recurring operating losses and has a working capital
deficiency. In addition, the Company has failed to meet
scheduled payment obligations under its loan facilities and has
not complied with certain covenants included in its loan
agreements. It has also failed to make required payments to
Deutsche Bank Nederland as agreed to in its Sept. 7, 2012,
amended and restated facility agreement and received notices of
default from First Business Bank. Furthermore, the vast majority
of the Company's assets are considered to be highly illiquid and
if the Company were forced to liquidate, the amount realized by
the Company could be substantially lower that the carrying value
of these assets. These conditions, among others, raise
substantial doubt about the Company's ability to continue as a
going concern.
FRESH & EASY: Plots Real Estate Sale to Fortress Unit
-----------------------------------------------------
Jacqueline Palank, writing for Daily Bankruptcy Review, reported
that with Yucaipa Cos. on tap to buy its U.S. grocery stores,
Tesco PLC's Fresh & Easy Neighborhood Market Inc. is looking to
offload its real estate to an affiliate of hedge fund giant
Fortress Investment Group LLC for $41.5 million.
According to the report, Fresh & Easy on Nov. 13 filed papers
asking the U.S. Bankruptcy Court in Wilmington, Del., to let it
put the Fortress affiliate's offer for real estate in Arizona,
California and Nevada to the test at a Dec. 12 auction.
Rival bids for the assets, which include about 20 buildings
ranging from 14,000 to 17,000 square feet and one 44,000- square-
foot building, would be due Dec. 10, court papers show, the report
said.
The sale comes as Fresh & Easy is gearing up for a Nov. 19 auction
of its grocery stores and will help British retailer Tesco
complete its exit from the U.S. grocery market following several
years of struggle, the report related.
Tesco founded Fresh & Easy in 2006 to sell healthy food at
affordable prices, and the chain quickly grew to operate 200
stores in Arizona, California and Nevada by 2012, the report
further related. Tesco invested more than $610 million in the
business in its first two years to help fund its rapid growth.
About Fresh & Easy Neighborhood Market Inc.
Fresh & Easy Neighborhood Market Inc., and its affiliate filed
Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-12569 and
13-12570) on Sept. 30, 2013. The petitions were signed by James
Dibbo, chief financial officer. Judge Kevin J. Carey presides
over the case.
Fresh & Easy owes $738 million to Cheshunt, England-based Tesco,
the U.K.'s biggest retailer. Fresh & Easy never made a profit and
lost an average of $22 million a month in the 12 months ended in
February, according to court papers.
Jones Day serves as lead bankruptcy counsel. Richards, Layton &
Finger, P.A., serves as local Delaware counsel. Alvarez & Marsal
North America, LLC, serves as financial advisors, and Alvarez &
Marsal Securities, LLC, serves as investment banker. Prime Clerk
LLC acts as the Debtors' claims and noticing agent. Gordon
Brothers Group, LLC, and Tiger Capital Group, LLC, serves as the
Debtors' consultant. The Debtors estimated assets of at least $100
million and liabilities of at least $500 million.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five
creditors to serve in the Official Committee of Unsecured
Creditors in the Chapter 11 cases of Fresh & Easy Neighborhood
Market Inc., et al.
FRESH & EASY: Drawbridge Tapped to Buy Real Estate
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Fresh & Easy Neighborhood Market Inc. will sell
virtually all the assets in December if the bankruptcy court in
Delaware goes along with procedures for disposing of the
supermarket chain's real estate and leases.
According to the report, Fresh & Easy began bankruptcy at the end
of September with 167 stores in the western U.S. It also owned 61
non-operating locations and leased 36 non-operating stores. There
will be an auction on Nov. 19 to determine if the offer from Ron
Burkle's Yucaipa Cos. is the best bid for about 150 markets plus a
production facility in Riverside, California.
The bankruptcy court will consider approving procedures for an
auction to sell the right to transfer leases at the locations
Yucaipa isn't buying. If the judge goes along, that auction will
occur Dec. 12.
In papers filed this week, Fresh & Easy wants to hold a second
auction on Dec. 12 to sell 53 parcels of real property in
California, Arizona and Nevada that aren't being purchased by
Yucaipa and aren't covered by the upcoming lease sale.
The real property includes 20 parcels with buildings and 33 that
are vacant land.
If the judge goes along, an affiliate of Drawbridge Special
Opportunities Fund will make the first bid of $41.5 million for
the real estate. Fresh & Easy says it's been marketing the
property for nine months. If the judge approves, competing bids
would be due Dec. 10.
Fresh & Easy wants the bankruptcy judge to schedule a hearing on
Nov. 22 for approval of sale procedures for the real property. The
U.S. Trustee is against accelerating the hearing on sale
procedures. She says it would afford parties only five or six days
to object. She also sees no reason the real property must be
auctioned the same day as lease rights.
Fresh & Easy is owned by Cheshunt, England-based Tesco Plc. If
Yucaipa ends up buying the operating stores, a Tesco affiliate
will lend Yucaipa $120 million and take back warrants to buy as
much as 10 percent of the equity in the reorganized supermarket
chain. Tesco would also keep 22.5 percent of the equity in the
reorganized business.
About Fresh & Easy Neighborhood
Fresh & Easy Neighborhood Market Inc., and its affiliate filed
Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-12569 and
13-12570) on Sept. 30, 2013. The petitions were signed by James
Dibbo, chief financial officer. Judge Kevin J. Carey presides
over the case.
Fresh & Easy owes $738 million to Cheshunt, England-based Tesco,
the U.K.'s biggest retailer. Fresh & Easy never made a profit and
lost an average of $22 million a month in the 12 months ended in
February, according to court papers.
Jones Day serves as lead bankruptcy counsel. Richards, Layton &
Finger, P.A., serves as local Delaware counsel. Alvarez & Marsal
North America, LLC, serves as financial advisors, and Alvarez &
Marsal Securities, LLC, serves as investment banker. Prime Clerk
LLC acts as the Debtors' claims and noticing agent. Gordon
Brothers Group, LLC, and Tiger Capital Group, LLC, serves as the
Debtors' consultant. The Debtors estimated assets of at least $100
million and liabilities of at least $500 million.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five
creditors to serve in the Official Committee of Unsecured
Creditors in the Chapter 11 cases of Fresh & Easy Neighborhood
Market Inc., et al.
FURNITURE BRANDS: Taps Retail Consulting as Estate Advisor
----------------------------------------------------------
Furniture Brands International, Inc. and its debtor-affiliates
ask for permission from the U.S. Bankruptcy Court for the District
of Delaware to employ Retail Consulting Services, Inc. dba RCS
Real Estate Advisors as real estate advisor, nunc pro tunc to Oct.
25, 2013.
The Debtors require Retail Consulting to:
(a) prepare a lease portfolio book for the Debtors showing (i)
current lease terms, (ii) sales, (iii) profits, and (iv)
occupancy cost and asset contribution percentages relative
to sales;
(b) create a site ranking report by contribution, revenues, and
occupancy costs, as appropriate;
(c) perform a rejection claim analysis;
(d) analyze the Debtors' real estate assets;
(e) assist the Debtors in developing real estate goals and
parameters to determine asset closures, assets to keep
under renegotiated terms, and assets to hold;
(f) negotiate with landlords with respect to rent reductions,
term modifications, lease extensions, and any other
modification deemed necessary for the Debtors';
(g) work with landlords and the Debtors to document accurately
all lease modification proposals and provide timely status
reports reflecting current progress;
(h) attend and participate in Court hearings, Committee
meetings, and meetings with the Debtors and their counsel
when requested to do so by the Debtors;
(i) negotiate waivers, reductions, or payout terms for
prepetition cure amounts due to landlords in the case of
lease assumptions and conduct negotiations with respect
to mitigating rejection claims in the case of lease
rejections;
(j) dispose by sale or otherwise all properties designated by
the Debtors, the "Disposition Properties", on an exclusive
right to sell basis, and with respect to such properties:
-- review all pertinent documents and consult with the
Debtors' counsel;
-- market the Disposition Properties pursuant to a
marketing plan and budget that is subject to the
Debtors' prior approval;
-- communicate with parties who have expressed an interest
in a Disposition Property and use best efforts to locate
additional parties who may have an interest in the
property;
-- respond to and provide information necessary to
negotiate with and solicit offers from prospective
purchasers and settlements from landlords and make
recommendations to the Debtors as to the advisability of
accepting particular offers or settlements;
-- provide guidance to the Debtors with respect to methods
to resolve issues pertaining to the Disposition
Properties;
-- work with the attorneys responsible for the
implementation of the proposed transaction, reviewing
documents, negotiating and assisting in resolving
problems which may arise; and
-- appear in court, as appropriate, during the term of the
retention to testify or to consult with the Debtors in
connection with the marketing or disposition of a
Disposition Property.
Retail Consulting will be compensated under the terms and
conditions of the engagement letter, as described in Section III
thereof. Retail Consulting's compensation will not be based upon
time and effort expended but, instead, on per-transaction result-
oriented basis.
Retail Consulting will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Ivan L. Friedman, president and CEO of Retail Consulting, assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
The Court for the District of Delaware will hold a hearing on the
motion on Nov. 22, 2013, at 2:00 p.m. Objections, if any, are due
Nov. 15, 2013, at 4:00 p.m.
Retail Consulting can be reached at:
Ivan L. Friedman
460 West 34th Street
New York, NY 10001
Tel: (212) 239-1100
Fax: (212) 268-5484
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.
GALLUP DIOCESE: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Roman Catholic Church of the Diocese of Gallup,
a New Mexico corporation sole
711 South Puerco Drive
Gallup, NM 87301
Case No.: 13-13676
Type of Business: Religious
Chapter 11 Petition Date: November 12, 2013
Court: United States Bankruptcy Court
New Mexico (Albuquerque)
Judge: Hon. David T. Thuma
Debtor's Counsel: Susan Gayle Boswell, Esq.
QUARLES & BRADY LLP
One S. Church Ave., Suite 1700
Tucson, AZ 85701
Tel: 520-770-8713
Fax: 520-770-2222
Email: susan.boswell@quarles.com
- and -
Elizabeth Sarah Fella, Esq.
QUARLES & BRADY LLP
One S. Church Ave., Suite 1700
Tucson, AZ 85701
Tel: 520-770-8755
Fax: 520-770-2228
Email: elizabeth.fella@quarles.com
- and -
Stephanie L Schaeffer, Esq.
WALKER & ASSOCIATES, P.C.
500 Marquette NW Suite 650
Albuquerque, NM 87102
Tel: 505-766-9272
Email: sschaeffer@walkerlawpc.com
- and -
Thomas D Walker, Esq.
WALKER & ASSOCIATES, P.C.
500 Marquette Ave NW Ste 650
Albuquerque, NM 87102-5309
Tel: 505-766-9272
Email: twalker@walkerlawpc.com
- and -
Lori Lee Winkelman, Esq.
QUARLES & BRADY LLP
One S. Church Ave., Suite 1700
Tucson, AZ 85701
Tel: 520-770-8726
Fax: 602-420-5033
Email: lori.winkelman@quarles.com
Debtor's Robert P. Warburton, Esq.
Special STELZNER LAW FIRM
Counsel: PO Box 528
Albuquerque, NM 87103
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Bishop James S. Wall, Bishop of Gallup.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
GETTY IMAGES: Bank Debt Trades at 11% Off
-----------------------------------------
Participations in a syndicated loan under which Getty Images Inc
is a borrower traded in the secondary market at 88.23 cents-on-
the-dollar during the week ended Friday, November 15, 2013,
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. This represents an increase
of 0.94 percentage points from the previous week, The Journal
relates. Getty Images Inc pays 350 basis points above LIBOR to
borrow under the facility. The bank loan matures on Oct. 14,
2019. The bank debt carries Moody's B2 rating and Standard &
Poor's B rating. The loan is one of the biggest gainers and
losers among 212 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
About Getty Images
Headquartered in Seattle, Wash., Getty Images is a leading creator
and distributor of still imagery, video and multimedia products,
as well as a recognized provider of other forms of premium digital
content, including music. The company was founded in 1995 and
provides stock images, music, video and other digital content
through several web sites, nota0bly gettyimages.com,
istockphoto.com, and thinkstock.com. In October 2012, The Carlyle
Group completed the acquisition of a controlling indirect interest
in Getty Images in a transaction valued at approximately $3.3
billion (up from the $2.4 billion transaction value of the prior
LBO in 2008). The Carlyle Group owns approximately 51% of the
company with a trust representing certain Getty family members
owning approximately 49%. Revenues totaled $897 million for the 12
months ended June 30, 2013.
* * *
As reported in the Troubled Company Reporter on Sept. 5, 2013,
Moody's Investors Service placed the ratings of Getty Images on
review for downgrade based on weaker than expected results through
2Q2013 and Moody's revised expectations for the next 12 months.
According to Moody's, Corporate Family Rating of Issuer: Getty
Images, Inc. and Abe Investment Holdings, Inc., currently B2, is
placed on review for possible downgrade.
GLOBAL AVIATION: Meeting to Form Creditors' Panel on Nov. 22
------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on Nov. 22, 2013 at 10:00 a.m. in
the bankruptcy cases of Global Aviation Holdings Inc., et al. The
meeting will be held at:
The Sheraton Suites
Conference Room
422 Delaware Ave.
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.
About Global Aviation Holdings
Global Aviation Holdings Inc. -- http://www.glah.com-- is the
parent company of North American Airlines and World Airways.
North American Airlines, founded in 1989, operates passenger
charter flights using B767-300ER aircraft. Founded in 1948, World
Airways -- http://www.woa.com-- operates cargo and passenger
charter flights using B747-400 and MD-11 aircraft.
The parent of World Airways Inc. and North American Airlines Inc.
implemented the prior Chapter 11 reorganization in February.
The new case is In re Global Aviation Holdings Inc., 13-12945,
U.S. Bankruptcy Court, District of Delaware (Wilmington). The
prior case was In re Global Aviation Holdings Inc., 12-40783,
U.S. Bankruptcy Court, Eastern District New York (Brooklyn).
Peachtree City, Georgia-based Global blamed the new bankruptcy on
decreased flying for the government that reduced revenue for the
first nine months of this year to $354 million from $486 million
in the same period of 2012.
The 2013 petition shows assets and debt both exceeding $500
million. In the first bankruptcy, Global listed $589.8 million in
assets and debt of $493.2 million.
GLOBAL AVIATION: Case Stalled by Back-to-Back Bankruptcies
----------------------------------------------------------
Steven Church, writing for Bloomberg News, reported that Global
Aviation Holdings Inc.'s latest bankruptcy stalled when a U.S.
judge said she can't act on the company's petition for court
protection because the air charter service still hasn't finished
its first bankruptcy.
According to the report, U.S. Bankruptcy Judge Mary Walrath ended
the initial hearing for the company's second bankruptcy after a
few minutes on Nov. 13 so lawyers could try to figure out if
there's a way to pursue the new case in Wilmington, Delaware,
instead of returning to Brooklyn, New York.
At the request of the company, the biggest provider of private air
charter services to the U.S. military, Judge Walrath agreed to put
off the initial hearing to Nov. 14 unless the judge overseeing the
first case decides to take over the new one as well, the report
related.
"We prefer not to think about that," Christopher Ward, an attorney
for the company, said in court, the report cited.
After emerging from bankruptcy in February, Global Aviation
"continued to encounter various financial and operational hurdles,
including decreased demand for military cargo and passenger
services resulting from government budget constraints," the
company said in court documents filed on Nov. 12, the report
further related.
Charter air service operator Global Aviation Holdings Inc. filed
for Chapter 11 protection on Nov. 12, 2013, along with its two
airlines, World Airways and North American Airlines. The case is
In re: Global Aviation Holdings Inc. 13-12945. U.S. Bankruptcy
Court District of Delaware (Wilmington).
GLOBAL AVIATION: Interim Financing Approved
-------------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court approved
Global Aviation Holdings' motion, on an interim basis, (I)
authorizing post-petition financing; (2) authorizing the use of
cash collateral; (3) granting security interests and super-
priority claims; (4) providing adequate protection; (5) modifying
the automatic stay and (6) granting related relief.
As previously reported, "The DIP Credit Agreement provides for a
total revolving credit commitment in the amount of $51,000,000,
consisting of the sum of the existing senior obligations as of the
Petition Date plus $12,000,000. The existing senior obligations
are the 'Obligations' as defined under the first lien credit
facility. The Debtors are authorized to immediately borrow,
pursuant to the DIP Credit Agreement, an aggregate amount not to
exceed $36,000,000 in accordance with the Budget and the terms of
the Interim Order and subject to certain Permitted Variances
described in the Interim Order."
About Global Aviation Holdings
Global Aviation Holdings Inc. -- http://www.glah.com-- is the
parent company of North American Airlines and World Airways.
North American Airlines, founded in 1989, operates passenger
charter flights using B767-300ER aircraft. Founded in 1948, World
Airways -- http://www.woa.com-- operates cargo and passenger
charter flights using B747-400 and MD-11 aircraft.
The parent of World Airways Inc. and North American Airlines Inc.
implemented the prior Chapter 11 reorganization in February.
The new case is In re Global Aviation Holdings Inc., 13-12945,
U.S. Bankruptcy Court, District of Delaware (Wilmington). The
prior case was In re Global Aviation Holdings Inc., 12-bk-40783,
U.S. Bankruptcy Court, Eastern District New York (Brooklyn).
Peachtree City, Georgia-based Global blamed the new bankruptcy on
decreased flying for the government that reduced revenue for the
first nine months of this year to $354 million from $486 million
in the same period of 2012.
The new petition shows assets and debt both exceeding $500
million. In the first bankruptcy, Global listed $589.8 million in
assets and debt of $493.2 million.
GLOBAL AVIATION: Bankruptcy Proceeds in Delaware for Now
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Global Aviation Holdings Inc. won court approval for
an interim $36 million loan, albeit one day later than intended.
According to the report, the operator of the largest charter
service for the U.S. military filed its second Chapter 11
reorganization on Nov. 12 in Delaware, intending for the judge to
grant interim loan approval the next day.
On arriving in court Nov. 13, U.S. Bankruptcy Judge Mary Walrath
told the airline she was barred from acting on the new case
because the first bankruptcy was still open in Brooklyn, New York.
Walrath said she wouldn't proceed without permission from the
Brooklyn judge who approved the prior reorganization plan
implemented in February.
Bankruptcy Judge Carla Craig in Brooklyn didn't give Global
everything it wanted, although enough for the case to proceed in
Delaware.
Consequently, Judge Walrath on Nov. 14 was able to give interim
loan approval and schedule a final hearing for Dec. 9 where the
loan from existing first-lien lenders is scheduled to increase to
$52 million, including pre-bankruptcy debt that becomes a post-
bankruptcy obligation.
On Nov. 14, Judge Craig didn't give Peachtree City, Georgia-based
Global carte blanche to proceed in Delaware. Instead, she is
allowing the case to move ahead in Delaware until she holds a
hearing on Nov. 20 and decides if she'll give up the new case
altogether.
In the new bankruptcy, the parent of World Airways Inc. and North
American Airlines Inc. is encumbered with $165.2 million in
secured debt. The first layer is $39 million owing to first-lien
lenders, followed by second-lien creditors owed $85 million and
$41.2 million owing on a third lien.
The second- and third-lien debt arose from the prior bankruptcy.
Holders of that debt own about 66 percent of the stock, Global
said in a court filing. From the first bankruptcy, unions control
25 percent of the stock.
Global flies 14 aircraft and took immediate steps to terminate
leases for six.
About Global Aviation Holdings
Global Aviation Holdings Inc. -- http://www.glah.com-- is the
parent company of North American Airlines and World Airways.
North American Airlines, founded in 1989, operates passenger
charter flights using B767-300ER aircraft. Founded in 1948, World
Airways -- http://www.woa.com-- operates cargo and passenger
charter flights using B747-400 and MD-11 aircraft.
The parent of World Airways Inc. and North American Airlines Inc.
implemented the prior Chapter 11 reorganization in February.
The new case is In re Global Aviation Holdings Inc., 13-12945,
U.S. Bankruptcy Court, District of Delaware (Wilmington). The
prior case was In re Global Aviation Holdings Inc., 12-bk-40783,
U.S. Bankruptcy Court, Eastern District New York (Brooklyn).
Peachtree City, Georgia-based Global blamed the new bankruptcy on
decreased flying for the government that reduced revenue for the
first nine months of this year to $354 million from $486 million
in the same period of 2012.
The new petition shows assets and debt both exceeding $500
million. In the first bankruptcy, Global listed $589.8 million in
assets and debt of $493.2 million.
GLOBALSTAR INC: Amends COFACE Senior Debt Facility Agreement
------------------------------------------------------------
Globalstar, Inc. on Nov. 13 reported financial results for the
three-month period ended September 30, 2013.
Third Quarter Financial Review
Jay Monroe, Chairman and CEO of Globalstar, commented, "The third
quarter marked a momentous time for Globalstar as the Company
achieved milestones across our operating, financial and regulatory
efforts. In August, we placed the final satellite from our
February launch into service, completing the MSS industry's first
second-generation Low Earth Orbit ("LEO") constellation years
ahead of the competition. This event not only physically restores
quality Duplex service but also symbolizes our perseverance in the
face of great challenges over the past few years. We have
experienced both a material increase in network usage and the
acquisition of a growing number of new subscribers as the
combination of restored service and attractive pricing drives
increased demand. The introduction of the SPOT Global Phone
helped total Duplex equipment revenue grow 80%. We are succeeding
in expanding MSS into the nascent consumer market. Major Duplex
data points including ARPU, minutes of use, service revenue,
equipment revenue and gross subscriber additions are rebounding
and provide strong evidence of our future financial performance.
The FCC's recent release of proposed new rules permitting
Globalstar to offer mobile broadband services is the culmination
of a nearly year-long effort that, once concluded, should greatly
enhance Globalstar's future profitability while meaningfully
increasing the nation's spectrum available for terrestrial
broadband service and reduce acute Wi-Fi congestion. We look
forward to working through the comment cycle in collaboration with
all stakeholders to obtain a favorable FCC order."
Revenue
Revenue was $22.5 million for the third quarter of 2013 compared
to $20.5 million for the third quarter of 2012, an increase of
10%, which was due to increases in both service revenue and
subscriber equipment sales.
Service revenue was $17.1 million for the third quarter of 2013
compared to $15.4 million for the third quarter of 2012, an
increase of $1.7 million, or 11%. The primary driver of this
increase was growth in Duplex revenue, which increased $1.2
million, or 25%. The growth in Duplex service revenue was due
primarily to higher usage, an increase in revenue-generating
subscribers and the continued migration of subscribers to higher
rate plans that reflect improved network performance. These
factors drove a 29% increase in Duplex ARPU to $24.50. Third
quarter 2013 service revenue growth also reflected SPOT revenue
growth, which increased 6% as revenue-generating subscribers
increased. SPOT ARPU increased 13% to $10.64 due in part to
deactivations of non-revenue generating subscribers beginning in
the first quarter of 2013. As previously announced, the Company
initiated a process to deactivate certain suspended (non-paying)
subscribers in its subscriber base beginning in 2013;
approximately 36,000 subscribers were deactivated during the first
quarter. If suspended subscribers were excluded from the 2012
subscriber count, average subscribers for the third quarter of
2013 would have increased by 8%. Simplex service revenue
increased 27% due to a 24% increase in the average subscriber
base. These increases were offset slightly by a decrease in other
service revenue of $0.5 million due primarily to the timing and
amount of service revenue recognized from engineering contracts in
the third quarter of 2013 compared to the third quarter of 2012.
Subscriber equipment revenue was $5.5 million in the third quarter
of 2013, an increase of 6% from the third quarter of 2012. Duplex
equipment revenue increased 80% from the third quarter of 2012
which was driven by the success of SPOT Global Phone sales.
Comparing the third quarter of 2013 to the same period in 2012,
Simplex equipment sales decreased $0.6 million and SPOT equipment
sales decreased $0.1 million. Simplex sales were impacted by the
change in the mix of products sold during the third quarter of
2013 compared to the third quarter of 2012. SPOT sales were
impacted by the delayed introduction of SPOT Gen 3(TM).
Net Loss
Net loss increased during the third quarter of 2013 reflecting the
substantial impact of multiple aggregating non-cash items
resulting from the Company's debt transactions and related
derivative instruments. The Company reported a net loss of $205.0
million for the third quarter of 2013 compared to $41.2 million
for the third quarter of 2012. Increased net loss was due
primarily to the impact of non-cash derivative losses driven by a
significant increase in the Company's stock price from June 30,
2013 to September 30, 2013. The increased net loss was due also
to the recognition of a non-cash loss on extinguishment of debt of
$63.6 million resulting from transactions executed in connection
with the Amended and Restated Loan Agreement with Thermo, which
was completed in July 2013 as a condition precedent to closing the
Amended and Restated COFACE Facility. Also contributing to the
increased net loss was higher interest expense as the amount of
interest being capitalized decreased and note conversion activity
increased, in addition to higher depreciation expense as the
Company placed additional satellites into service.
Adjusted EBITDA
Adjusted EBITDA was $2.5 million for the third quarter of 2013
compared to $3.1 million in the third quarter of 2012. This
decrease was due to an increase in total operating expenses of
$2.6 million (excluding EBITDA adjustments) offset partially by an
increase in revenue of $2.0 million. The increase in operating
expenses was due to strategic investments made for sales and
marketing initiatives, including new product launches and the
expansion of the Company's distribution network, as well as
investments in its gateway infrastructure in anticipation of
increased Duplex demand.
Financing Update
During the third quarter, Globalstar successfully completed the
amendment and restatement of its COFACE Facility Agreement. The
amended agreement provides for a material improvement to the debt
amortization schedule and covenant levels with a total deferral of
$235 million of principal payments through 2019.
Operational and Regulatory Update
Second-Generation Constellation
-- As previously announced, all satellites launched on
February 6, 2013 have been placed into service, successfully
completing the Company's second-generation constellation and fully
restoring its Duplex capabilities.
Regulatory Reform for Terrestrial Spectrum Authority
-- On November 1, 2013, the FCC voted unanimously to release
proposed rules that would permit Globalstar to provide low-power
terrestrial mobile broadband services over 22 MHz of spectrum,
including 11.5 MHz of Globalstar's licensed S?band spectrum at
2483.5-2495 MHz, as well as the adjacent 10.5 MHz of unlicensed
spectrum at 2473?2483.5 MHz. The comment period is 75 days
following the publication of the proposal in the Federal Register
with reply comments due 30 days thereafter.
Mr. Monroe concluded, "With both the refinancings and
constellation restoration now in the rear view mirror, we are
fully engaged in leveraging our restored duplex service capability
to re-acquire and retain high-value subscribers. We can now
dedicate 100% of our operational focus to driving revenue by
investing in aggressive customer acquisition and retention
strategies and continuing to develop and launch exciting new
products like the new consumer asset tracking device, SPOT
Trace(TM). And finally, let me reiterate how pleased we are with
the proposed new rules issued by the FCC last week. These rules
are extremely positive for our future plans and hold enormous
potential for both consumers and the Company in the months and
years ahead."
About Globalstar
Covington, Louisiana-based Globalstar Inc. provides mobile
satellite voice and data services. Globalstar offers these
services to commercial and recreational users in more than 120
countries around the world. The Company's products include mobile
and fixed satellite telephones, simplex and duplex satellite data
modems and flexible service packages.
Globalstar reported a net loss of $25.1 million on $19.3 million
of revenue for the three months ended March 31, 2013, compared
with a net loss of $24.5 million on $16.7 million of revenue for
the same period last year. The Company's balance sheet at June
30, 2013, showed $1.37 billion in total assets, $953.44 million in
total liabilities and $421.25 million in total stockholders'
equity.
The Company said in its Form 10-Q for the quarter ended March 31,
2013, "We currently lack sufficient resources to meet our existing
contractual obligations over the next 12 months. As a result,
there is substantial doubt that we can continue as a going
concern. In order to continue as a going concern, we must obtain
additional external financing; amend the Facility Agreement and
certain other contractual obligations; and restructure the 5.75%
Notes."
GMX RESOURCES: Sues Emerald Oil for Misuse of Confidential Info
---------------------------------------------------------------
Stephanie Gleason, writing for DBR Small Cap, reported that oil
and gas company GMX Resources Inc. has filed a lawsuit against one
of its competitors, which it alleges was provided with
confidential information during its bankruptcy auction process and
has since used that information to poach a drilling lease from it.
GMX Resources Inc. -- http://www.gmxresources.com/-- is an
independent natural gas production company headquartered in
Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas &
Louisiana, 24 proved developed non-producing reservoirs, 48 proved
undeveloped locations and several hundred other development
locations. GMXR has 9,000 net acres on the Sabine Uplift of East
Texas. GMXR has 7 producing wells in New Mexico.
GMX filed a Chapter 11 petition in its hometown (Bankr. W.D. Okla.
Case No. 13-11456) on April 1, 2013, so secured lenders can buy
the business in exchange for $324.3 million in first-lien notes.
GMX listed assets for $281.1 million and liabilities totaling
$458.5 million.
GMX missed a payment due in March 2013 on $51.5 million in second-
lien notes. Other principal liabilities include $48.3 million in
unsecured convertible senior notes.
The DIP financing provided by senior noteholders requires court
approval of a sale within 75 days following approval of sale
procedures. The lenders and principal senior noteholders include
Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors
Inc. and Whitebox Advisors LLC.
David A. Zdunkewicz, Esq., at Andrews Kurth LLP, represents the
Debtors as counsel.
Looper Reed is substituted as counsel for the Official Committee
of Unsecured Creditors in place of Winston & Strawn LLP, effective
as of April 25, 2013. The Committee tapped Conway MacKenzie,
Inc., as financial advisor.
GORDON PROPERTIES: Settlement With Owners Association Denied
------------------------------------------------------------
Bankruptcy Judge Robert G. Mayer denied approval of a settlement
between Gordon Properties LLC and Condominium Services Inc. with
First Owners' Association of Forty Six Hundred Condominium, Inc.
Debtor Condominium Services Inc. or CSI managed the Owners
Association for many years before being terminated in 2006.
Litigation followed among the parties, which covered certain
issues like breach of fiduciary duties.
To resolve their dispute, the parties negotiated a settlement that
provided that they would dismiss all pending litigation with
prejudice and dismiss all appeals. A bankruptcy court order
relating to the number of seats Gordon Properties may hold on the
Association board would be vacated without prejudice to any unit
owner contesting the qualification of any particular individual to
sit on the board. CSI would pay the Association $225,000 in
satisfaction of an judgment favoring the Association. The
Association would pay Gordon Properties $377,000 in satisfaction
of a claim for damages for automatic stay violation. Moreover,
the Association would not object to a dismissal of the Debtors'
cases and would vote to accept a plan of reorganization in the
cases.
In denying approval of the Settlement, Judge Mayer noted that the
Settlement was not approved by the required majority of the
Association's board of directors. The manner in which the board
handled the settlement approval at a Jan. 15, 2013 meeting is also
flawed, the judge noted. The process that the board followed, he
added, was not an open, fair and honest process. He cited that
the Gordon Properties-affiliated directors interfered with the
Association's ability to choose counsel of its own choice.
Furthermore, Judge Mayer opined that the terms of the Settlement
are not fair to the Association. "While all pending litigation
would be dismissed with prejudice, there are no release provisions
in the settlement agreement. Gordon Properties did not intend to
release any of the directors from its claims."
The court also raises concern that the Settlement provides for the
Association to support a plan in the Debtors' cases when no plan
has been proposed and no suggestion of its contents has been
proferred.
The court says it cannot approve the settlement because it
requires the court to vacate its order determining the number of
seats that a non-natural unit owner may have on the board of
directors. "That matter is on appeal to the District Court and
this court generally cannot affect orders on appeal. That is the
province of the District Court," Judge Mayer said.
A copy of Judge Mayer's Sept. 19, 2013 Memorandum Opinion is
available at http://is.gd/1dGZGrfrom Leagle.com.
About Gordon Properties
Alexandria, Va.-based Gordon Properties, LLC, owns 40 condominium
units in a high-rise apartment building with both residential and
commercial units and two commercial units adjacent to the high-
rise building. Gordon Properties' ownership of these condos
represents about a 20% interest in the Forty Six Hundred
Condominium project -- http://foa4600.org/-- in Alexandria.
Gordon Properties also owns one of the adjacent commercial units,
a restaurant. Gordon Properties sought Chapter 11 protection
(Bankr. E.D. Va. Case No. 09-18086) on Oct. 2, 2009, and is
represented by Donald F. King, Esq., at Odin, Feldman & Pittleman
PC in Fairfax, Va. Gordon Properties disclosed $11,149,458 in
assets and $1,546,344 in liabilities.
Condominium Services filed its chapter 11 petition (Bankr. E.D.
Va. 10-10581) on Jan. 26, 2010. It scheduled one creditor, the
condominium association, with a disputed claim of $436,802.00.
The association filed a proof of claim asserting a claim of
$453,533.12. A second proof of claim was filed by the Internal
Revenue Service for $1,955.45. According to its schedules, if
both claims are allowed, it has a net deficit of about $426,900.
CSI is wholly owned by Gordon Properties.
In February 2012, Judge Mayer denied the motion of the association
to substantively consolidate the chapter 11 bankruptcy cases of
Gordon Properties and Condominium Services, Inc., the condominium
management company.
Gordon Properties and CSI opposed the motion. The two cases were
previously administratively consolidated.
Stephen E. Leach has been appointed as examiner in the Debtor's
case. Leach Travell Britt, PC, represents the examiner as
counsel.
GREENCROFT OBLIGATED: Fitch Rates New $43.5MM Revenue Bonds 'BB+'
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to the expected issuance
of $43.5 million of Indiana Finance Authority revenue bonds series
2013A issued on behalf of Greencroft Obligated Group (GOG).
The 2013 bonds will be issued in fixed rate mode. Bond proceeds
will be used to refund the organization's currently outstanding
series 1998, series 1999, series 2000 and series 2008 bonds; fund
construction and various renovations; finance a swap termination
payment; fund a debt service reserve fund; and pay costs of
issuance. The bonds are expected to sell via negotiation the week
of Dec. 9, 2013.
The Rating Outlook is Stable.
SECURITY
Bonds will be secured by a mortgage and gross revenue pledge in
addition to a debt service reserve fund.
Key Rating Drivers:
Long Operating History: Greencroft Obligated Group has a long
history of operating in each of its three service areas dating
back to 1967, which Fitch views favorably and as a key credit
strength. Fitch believes GOG is a unique service provider in that
its unit make-up consists of a fairly even mix of independent
living units (ILU), assisted living units (ALU) and skilled
nursing facility (SNF) beds, thus providing a full continuum of
care in a somewhat competitive marketplace.
Light Liquidity: As of June 30, 2013 (fiscal year-end; unaudited),
GOG had $23.3 million of unrestricted cash and investments, which
translated into 211.4 days cash on hand, 4.4x pro forma cushion
ratio, and 35% cash to debt. After the 2013 debt issuance and in
conjunction with GOG's capital improvement plan (CIP), days cash
on hand and cash to debt are projected to decrease to 156.2 days
and 23.2%, respectively. GOG's light balance sheet indicators are
a primary credit concern.
Relationship With Greencroft Communities: Each member of GOG
(Greencroft Goshen, Southfield Village, and Hamilton Grove) are
affiliate entities of Greencroft Retirement Communities (GRC;
sponsored by Mennonite Health Services), which serves as manager
and provides various benefits such as financial planning,
budgeting, and management expertise. The tight relationship dates
back to the founding of each affiliate and each obligated group
member has entered into an affiliation contract with GRC into
perpetuity, which Fitch views as an additional credit strength.
Low Turnover Entrance Fee Coverage: Pro forma maximum annual debt
service (MADS) coverage including entrance fee receipts is weak at
1.1x and 1.4x in fiscal 2011 and 2012, respectively. However,
revenue only MADS coverage has ranged between 1.2x and 1.5x
annually in each of the last four years, which Fitch views
positively.
Capital Improvement Plan: Management intends to construct a two-
story 66-bed healthcare addition at its Greencroft Goshen (Goshen)
campus, which is anticipated to cost approximately $16.5 million.
The project will be funded from a combination of debt,
philanthropy, and equity, and is expected to be completed by Feb.
2015.
Improving Independent Living Occupancy: GOG's ILU occupancy has
steadily improved to 92.1% in 2013 from 87.5% in 2010. Fitch views
the positive trend favorably, which has been enhanced by focused
marketing efforts at each community.
Rating Sensitivities:
Maintenance of Profitability and Occupancy: Fitch expects
profitability and SNF occupancy to be sustained at current levels.
Top-line revenue and/or SNF occupancy erosion that significantly
impacts GOG's operating and coverage metrics would be viewed
negatively.
Execution of Project: Fitch expects GOG's healthcare expansion
project to be on time and on budget. Any significant deterioration
to GOG's financial profile over the medium term would be viewed
unfavorably.
Credit Profile:
Greencroft Obligated Group is a type-C continuing care retirement
community (CCRC) in Indiana that consists of Greencroft Goshen -
located in Goshen, Southfield Village (Southfield) - located in
South Bend, and Hamilton Grove (Hamilton) - located in New
Carlisle, totaling 410 ILUs, 188 ALUs, and 385 SNFs. In fiscal
2013 year ended June 30th (unaudited), GOG had total revenues of
$41.5 million. Each obligated group affiliate is a part of and
managed by GRC, which provides a continuum of care for three
additional CCRCs for nearly 2,000 residents. GOG provides no
financial support or guarantees to any non-obligated members of
GRC.
Long Operating History & Relationship with GRC:
GOG has a long history of operating in each of its three core
markets dating back to 1967, which Fitch views as a key credit
strength. Nearly of equal importance is GOG's strong relationship
with GRC. Specifically, each member of GOG (Greencroft Goshen,
Southfield Village, and Hamilton Grove) is an affiliate entity of
GRC, which manages all GRC affiliates including each OG member.
The tight relationship dates back to the founding of each
affiliate and each obligated group member has entered into an
affiliation contract with GRC into perpetuity. Management states
that the management fee paid to GRC is subordinate to debt
service, which provides additional financial flexibility.
Fitch believes GOG is a unique service provider in that its unit
make-up consists of a good mix of ILUs, ALUs and SNFs, thus
providing a full continuum of care in a somewhat competitive
marketplace. Further, Fitch views GOG's diverse mix of services is
a credit strength as the organization's AL and SNF resident
service revenue helps generate relatively consistent levels of
profitability that support good revenue-only MADS coverage that's
averaged 1.3x over the past four fiscal years.
Light Balance Sheet Metrics:
Fitch views GOG's balance sheet as a key credit concern that
provides little financial cushion at the 'BB+' rating level. At
June 30, 2013 (fiscal year-end), GOG has $23.3 million of
unrestricted cash and investments, which translated into 211.4
days cash on hand, 4.4x pro forma cushion ratio, and 35% cash to
debt. Additionally, pro forma days cash on hand and cash to debt
are projected to decrease (as of June 2013) to 156.2 days and
23.2%, respectively after an equity contribution of $6.1 million
towards the healthcare expansion project is planned to be made
over time. Any significant deterioration to GOG's balance sheet
may result in negative rating pressure.
Low Debt Service Coverage:
Pro forma turnover entrance fee MADS debt service coverage has
averaged 1.3x over the past four years and was 1.4x in 2013. Fitch
views the organization's relatively low debt service coverage as a
primary credit concern that's reflective of an eroding top-line
revenue trend. Specifically, resident service revenue has
decreased to $41.5 million in 2013 from $43.2 million in 2010 as
GOG has observed mixed utilization patterns within its AL and SNF
services. Fitch believes it's imperative for GOG to sustain and
improve from current AL and SNF occupancies in order to generate
better debt service coverage metrics. Despite the additional
cushion provided by the subordination of management fee in meeting
the rate covenant, GOG has little room for negative operating
variance at the current rating level.
Capital Improvement Plan:
A portion of the series 2013 bonds will be used to fund a two-
story addition to the SNF at the Goshen campus, which will house
up to 66 residents. As part of the construction, management
intends to make parking lot renovations and create a new entryway.
The total cost of the project is approximately $16.5 million,
which is expected to be funded from $6.1 million of GOG equity, $3
million from philanthropy ($1.2 million already received), and the
remainder from bond proceeds. Fitch believes the project is
necessary to maintain GOG's competitive position in the market as
it will provide needed modernization to Goshen's healthcare
services, which is expected to ultimately bolster SNF
marketability and occupancy over the long term.
Debt Profile:
After the series 2013 issuance, GOG will have two outstanding
series of debt, 2013A and 2013B. The 2013A bonds will be fixed-
rate while the 2013B bonds will be variable-rate, directly placed
with Huntington Bank (Huntington; rated 'A-/F1' by Fitch). The
series 2013B bonds will have an outstanding swap with Huntington.
Disclosure:
Greencroft Obligated Group covenants to provide annual and
quarterly disclosure through the EMMA system.
GYMBOREE CORP: Bank Debt Trades at 3% Off
-----------------------------------------
Participations in a syndicated loan under which Gymboree Corp is a
borrower traded in the secondary market at 97.25 cents-on-the-
dollar during the week ended Friday, November 15, 2013 according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents an increase of 0.32
percentage points from the previous week, The Journal relates.
Gymboree Corp pays 350 basis points above LIBOR to borrow under
the facility. The bank loan matures on Feb. 23, 2018. The bank
debt carries Moody's B2 and Standard & Poor's B- rating. The loan
is one of the biggest gainers and losers among 204 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday.
Headquartered in San Francisco, California, The Gymboree
Corporation sells infant and toddler apparel. The company designs
and distributes infant and toddler apparel through its stores
which operates under the "Gymboree", "Gymboree Outlet", "Janie and
Jack" and "Crazy 8" brands in the United States, Canada and
Australia. The company is owned by affiliates of Bain Capital
Partners LLC.
* * *
As reported in the Troubled Company Reporter on May 9, 2013,
Moody's Investors Service confirmed The Gymboree Corporation's
Corporate Family Rating at B3, concluding the review for downgrade
that began on December 13, 2012. The rating outlook is negative.
HAMPTON ROADS: Posts $2.8 Million Net Income in Third Quarter
-------------------------------------------------------------
Hampton Roads Bankshares, Inc., reported net income of $2.89
million on $19.02 million of total interest income for the three
months ended Sept. 30, 2013, as compared with a net loss of $4.83
million on $19.93 million of total interest income for the same
period during the prior year.
For the nine months ended Sept. 30, 2013, the Company reported net
income of $5.16 million on $58.14 million of total interest income
as compared with a net loss of $17.16 million on $62.20 million of
total interest income for the same period last year.
The Company's balance sheet at Sept. 30, 2013, showed $1.98
billion in total assets, $1.80 billion in total liabilities and
$184.99 million in total shareholders' equity.
"I am pleased with the Company's performance in the third
quarter," said Douglas Glenn, president and chief executive
officer. "We are focused on ensuring that our business model
meets the needs of our customers in an evolving banking
environment and on continuing to position our Company for future
growth through the implementation of our One Bank Strategy. This
quarter represents yet another building block in our long-term
foundation."
A copy of the press release is available for free at:
http://is.gd/4vzvLT
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and 15 ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company reported a net loss of $98 million in 2011, compared
with a net loss of $210.35 million in 2010.
HAWKER BEECHCRAFT: Nyanjom's Bid to Strike Defenses Rejected
------------------------------------------------------------
Kansas District Judge Julie A. Robinson tossed the Plaintiff's
Motion to Strike Portions of Defendant's Answer and Affirmative
Defenses in the employment discrimination action, HAROLD M.
NYANJOM, Plaintiff, v. HAWKER BEECHCRAFT CORPORATION, Defendant,
Case No. 12-1461-JAR-KGG (D. Kan.), pursuant to a November 12,
2013 Memorandum and Order available at http://is.gd/ryXcYofrom
Leagle.com.
The lawsuit was originally filed in the U.S. District Court for
the Southern District of New York; it was transferred December 11,
2012. The case was stayed pending resolution of Hawker
Beechcraft's bankruptcy from January 22, 2013 until May 29, 2013,
after the District Court was advised that the Plaintiff,
proceeding pro se and in forma pauperis, had been granted relief
from the bankruptcy court to pursue his cause of action before the
Kansas Court.
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kansas, manufactures business jets, turboprops and piston
aircraft for corporations, governments and individuals worldwide.
Hawker Beechcraft reported a net loss of $631.90 million on
$2.43 billion of sales in 2011, compared with a net loss of
$304.30 million on $2.80 billion of sales in 2010.
Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3,
2012, having already negotiated a plan that eliminates $2.5
billion in debt and $125 million of annual cash interest expense.
When it filed for bankruptcy, Hawker was 49%-owned by affiliates
of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The
Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in
total assets, $3.73 billion in total liabilities and a $956.90
million total deficit. Other claims include pensions underfunded
by $493 million.
Hawker's legal representative is Kirkland & Ellis LLP, its
financial advisor is Perella Weinberg Partners LP and its
restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy
Solutions LLC is the claims and notice agent.
Sidley Austin LLP serves as legal counsel and Houlihan Lokey
Howard & Zukin Capital Inc. serves as financial advisor to the DIP
Agent and the Prepetition Agent.
Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of
senior secured prepetition lenders holding 70% of the loans.
Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee
of holders of the 8.500% Senior Fixed Rate Notes due 2015 and
8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker
Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes
Company. The members of the Ad Hoc Committee -- GSO Capital
Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims
or manage accounts that hold claims against the Debtors' estates
arising from the purchase of the Senior Notes. Deutsche Bank
National Trust Company, the indenture trustee for senior fixed
rate notes and the senior PIK-election notes, is represented by
Foley & Lardner LLP.
An Official Committee of Unsecured Creditors appointed in the case
has selected Daniel H. Golden, Esq., and the law firm of Akin Gump
Strauss Hauer & Feld LLP as legal counsel. The Committee's
financial advisor is FTI Consulting, Inc.
On June 30, 2012, Hawker filed its Plan, which proposed to
eliminate $2.5 billion in debt and $125 million of annual cash
interest expense. The plan would give 81.9% of the new stock to
holders of $1.83 billion of secured debt, while 18.9% of the new
shares are for unsecured creditors. The proposal has support from
68% of secured creditors and holders of 72.5% of the senior
unsecured notes.
In July 2012, Hawker disclosed it was in exclusive talks with
China's Superior Aviation Beijing Co. for the purchase of Hawker's
corporate jet and propeller plane operations out of bankruptcy for
$1.79 billion.
In October 2012, Hawker unveiled that those talks have collapsed
amid concerns a deal with Superior wouldn't pass muster with a
U.S. government panel and other cross-cultural complications.
Sources told The Wall Street Journal that Superior encountered
difficulties separating Hawker's defense business from those units
in a way that would make both sides comfortable the deal would get
U.S. government clearance. The sources told WJS the defense
operations were integrated in various ways with Hawker's civilian
businesses, especially the propeller plane unit, in ways that
proved difficult to untangle.
Thereafter, Hawker said it intends to emerge from bankruptcy as an
independent company. On Oct. 29, 2012, Hawker filed a modified
reorganization plan and disclosure materials. Hawker said the
plan was supported by the official creditors' committee and by a
"substantial majority" of holders of the senior credit and a
majority of holders of senior notes. Hawker said it will either
sell or close the jet-manufacturing business.
The revised plan still offers 81.9% of the new stock in return for
$921 million of the $1.83 billion owing on the senior credit.
Unsecured creditors are to receive the remaining 18.9% of the new
stock. Holders of the senior credit will receive 86% of the new
stock. The senior credit holders are projected to have a 43.1%
recovery from the plan. General unsecured creditors' recovery is
a projected 5.7% to 6.3%. The recovery by holders of $510 million
in senior notes is predicted to be 9.2% to 10%.
HEARTLAND DENTAL: S&P Rates $160MM Incremental Term Loan 'B'
------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B'
corporate credit rating on Effingham, Ill.-based dental service
organization Heartland Dental Care LLC, and revised the rating
outlook to negative from stable.
At the same time, S&P assigned Heartland's $160 million
incremental term loan B its 'B' credit rating (the same as the
corporate credit rating), with a recovery rating of '3',
indicating its expectation for meaningful (50% to 70%) recovery of
principal in the event of payment default.
S&P also lowered its credit rating on Heartland's existing first-
lien debt to 'B' from 'B+', and revised its recovery rating to '3'
from '2' because the size of this debt class will increase
relative to its estimate of Heartland's value in the event of
default.
S&P affirmed its 'CCC+' credit rating (two notches below the
corporate credit rating) on Heartland's second-lien term loan.
The recovery rating remains '6', indicating S&P's expectation for
negligible (0 to 10%) recovery of principal in the event of
payment default.
"The outlook revision reflects the combination of underperformance
in 2013 and the leveraged acquisition of My Dentist. We were
expecting the company's expansion to be internally funded, with no
margin erosion; however, actual margins in the second and third
quarter of 2013 trended lower and DCF turned negative," said
credit analyst Gail Hessol. "We have revised our base-case
expectations, prompted by the underperformance and acquisition."
"Our negative outlook reflects the potential for leverage to
remain elevated, given some risk to achieving our base-case
forecast. In particular, weaker margins because of new offices
could preclude the overall margin improvement that we expect.
Also, higher-than-expected spending on acquisitions could impede
deleveraging. We could lower our rating if Heartland fails to
generate free operating cash flow (after capital expenditures) or
we expect covenant headroom to decline below 15%," S&P noted.
S&P could revise the outlook to stable if Heartland stabilizes
profit margins, consistently generates discretionary cash flow,
maintains covenant headroom of at least 15%, and S&P is confident
that adjusted leverage will decline below 7x.
HELIOS FINANCE: Fitch Affirms 'C' Rating on Class B-4 Notes
-----------------------------------------------------------
Fitch Ratings has taken the following rating action on HELIOS
Finance Limited Partnership 2007-S1:
-- Class B-4 affirmed at 'Csf'; RE revised to 10% from 0%.
Key Rating Drivers:
The affirmation of the class B-4 notes at 'Csf' reflects Fitch's
expectation of inevitable default. The revised recovery estimate
is based on current loss and recovery performance. Payments to
investors in accordance with the terms of the documents continue
to be made.
The ratings reflect the quality of Wells Fargo, N.A's retail auto
loan originations, the strength of its servicing capabilities, and
the sound financial and legal structure of the transaction.
Rating Sensitivity:
As the class B-4 is significantly impaired and principal payments
are insufficient to pay the outstanding balance, any changes to
expected principal payments may impact the current recovery
estimate.
HIGHER SOURCE AVIATION: Case Summary & 20 Top Unsecured Creditors
-----------------------------------------------------------------
Debtor: Higher Source Aviation, Inc.
NP Corpserve NC, LLC
701 Green Valley Road
Greensboro, NC 27408
Case No.: 13-10733
Chapter 11 Petition Date: November 15, 2013
Court: United States Bankruptcy Court
Western District of North Carolina (Asheville)
Judge: Hon. George R. Hodges
Debtor's Counsel: Rodney Kight, Jr., Esq.
KIGHT LAW OFFICE PC
56 College Street, Suite 302
Asheville, NC 28801
Tel: (828) 255-9881
Fax: (828) 255-9886
Email: info@kightlaw.com
Total Assets: $2.08 million
Total Liabilities: $5.86 million
The petition was signed by William Gardner, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/ncwb13-10733.pdf
HILAND PARTNERS: S&P Retains 'B-' Rating on $550MM Senior Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'B-' issue-level
rating and '5' recovery rating on Hiland Partners L.P. and Hiland
Partners Finance Corp.'s $550 million 7.25% senior unsecured notes
due 2020 are unchanged after the partnership announced its
proposal to issue a $200 million add-on to the notes. The notes
will total $750 million.
The recovery rating of '5' indicates S&P's expectation of modest
(10% to 30%) recovery if a payment default occurs. The
partnership intends to use net proceeds to repay borrowings
outstanding under its credit facility. As of Sept. 30, 2013,
Hiland had about $762 million in debt.
Enid, Okla.-based Hiland Partners L.P. is a privately owned
midstream energy partnership that specializes in natural gas
gathering and processing and crude oil logistics in the Bakken
Shale and Mid-Continent regions of the U.S. S&P's corporate
credit rating on Hiland is 'B', and the outlook is stable.
RATINGS LIST
Hiland Partners L.P.
Corporate Credit Rating B/Stable/--
Hiland Partners L.P.
Hiland Partners Finance Corp.
Senior Unsecured Notes Due 2020 B-
Recovery Report 5
IGLESIA PUERTA: Seeks Cash Collateral Use to Continue to Operate
----------------------------------------------------------------
Iglesia Puerta del Cielo, Inc., seeks authority from the U.S.
Bankruptcy Court for the Western District of Texas, El Paso
Division, to use cash collateral to pay reasonable and necessary
operating expenses, including, but not limited to, salaries and
payroll, supplies, routine repair and maintenance expenses, taxes,
and insurance, to minimally preserve and optimally increase the
value of the real estate and the Debtor.
As adequate protection, Evangelical Christian Credit Union, as
prepetition lender, will be granted a replacement lien in cash.
The Debtor believes that the aggregate value of the Lender's
alleged cash collateral will not diminish as a result of the use
of cash.
Iglesia Puerta del Cielo, Inc., a domestic non-profit corporation
that provides religious services to third parties, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.
Tex. Case No. 13-31911) on Nov. 12, 2013. The case is assigned to
Judge Christopher Mott. Wiley F. James, III, Esq., at James &
Haugland, P.C., in El Paso, Texas, represents the Debtor.
IGLESIA PUERTA: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Iglesia Puerta del Cielo, Inc., filed with the U.S. Bankruptcy
Court for the Western District of Texas, El Paso Division,
schedules of assets and liabilities disclosing:
Assets Liabilities
----------- -----------
A. Real Property $16,915,000
B. Personal Property 4,393,181
C. Property Claimed as Exempt N/A
D. Creditors Holding Secured Claims $9,428,705
E. Creditors Holding Unsecured
Priority Claims 0
F. Creditors Holding Unsecured
Nonpriority Claims 192,750
----------- -----------
$21,308,181 $9,621,455
Full-text copies of the Schedules dated Nov. 12 are available for
free at http://bankrupt.com/misc/IGLESIAsal1112.pdf
Iglesia Puerta del Cielo, Inc., a domestic non-profit corporation
that provides religious services to third parties, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.
Tex. Case No. 13-31911) on Nov. 12, 2013. The case is assigned to
Judge Christopher Mott. Wiley F. James, III, Esq., at James &
Haugland, P.C., in El Paso, Texas, represents the Debtor.
IGLESIA PUERTA: Employs James & Haugland as Bankruptcy Counsel
--------------------------------------------------------------
Iglesia Puerta del Cielo, Inc., seeks authority from the U.S.
Bankruptcy Court for the Western District of Texas, El Paso
Division, to employ James & Haugland, P.C., as bankruptcy counsel.
The primary attorneys and paralegal within J&H who will represent
the Debtor and their current standard hourly rates are as follows:
Wiley F. James, III $300
Corey W. Haugland $300
James T. Wall $200
Aldo R. Lopez $170
Janet J. Sinclair, legal assistant $95
The firm will also be reimbursed for any necessary out-of-pocket
expenses.
Mr. James, a shareholder at James & Haugland, P.C., assures the
Court that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
Mr. James disclosed that J&H holds $20,000 as a retainer for pre-
bankruptcy negotiations, preparation of Chapter 11 pleadings and
as security against postpetition fees and expenses. J&H drew down
$20,000 from that retainer for prepetition services.
The firm may be reached at:
JAMES & HAUGLAND, P.C.
609 Montana Avenue
El Paso TX 79902
Tel: (915) 532-3911
Fax: (915) 541-6440
Iglesia Puerta del Cielo, Inc., a domestic non-profit corporation
that provides religious services to third parties, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.
Tex. Case No. 13-31911) on Nov. 12, 2013. The case is assigned to
Judge Christopher Mott. Wiley F. James, III, Esq., at James &
Haugland, P.C., in El Paso, Texas, represents the Debtor.
IMAGEWARE SYSTEMS: Extends Employments of Executives Until 2014
---------------------------------------------------------------
ImageWare Systems, Inc., entered into amendments to employment
agreements with Messrs. James Miller (chairman of the Board of
Directors and chief executive officer), Wayne Wetherell (chief
financial officer), David Harding (chief technical officer), and
Charles AuBuchon (vice president of Business Development). Under
the terms of the Amendments, the term of each executive officer's
employment agreement was extended until Dec. 31, 2014.
About ImageWare Systems
Headquartered in San Diego, California, ImageWare Systems, Inc.,
is a leader in the emerging market for software-based identity
management solutions, providing biometric, secure credential, law
enforcement and enterprise authorization. Its "flagship" product
is the IWS Biometric Engine. Scalable for small city business or
worldwide deployment, the Company's biometric engine is a multi-
biometric platform that is hardware and algorithm independent,
enabling the enrollment and management of unlimited population
sizes. The Company's identification products are used to manage
and issue secure credentials, including national IDs, passports,
driver licenses, smart cards and access control credentials. Its
law enforcement products provide law enforcement with integrated
mug shot, fingerprint LiveScan and investigative capabilities.
The Company also provides comprehensive authentication security
software.
Imageware Systems incurred a net loss of $10.19 million in 2012,
as compared with a net loss of $3.18 million in 2011. The
Company's balance sheet at March 31, 2013, showed $7.61 million in
total assets, $6.68 million in total liabilities and $927,000 in
total shareholders' equity.
INDEMNITY INSURANCE: A.M. Best Downgrades FSR to 'E'
----------------------------------------------------
A.M. Best Co. has removed from under review with negative
implications and downgraded the financial strength rating to E
(Under Regulatory Supervision) from B (Fair) and issuer credit
rating to "rs" from "bb" of Indemnity Insurance Corporation, RRG
(IIC) (Wilmington, DE).
The rating actions follow the issuance of a Rehabilitation and
Injunction Order by the Court of Chancery of the State of Delaware
on November 7, 2013. The Rehabilitation and Injunction Order
placed IIC in receivership and appointed the Insurance
Commissioner of the State of Delaware as receiver.
INTELLIGRATED INC: S&P Retains 'B' Rating on 1st-Lien Term Loan
---------------------------------------------------------------
Standard & Poor's Rating Services said that its 'B' issue-level
rating and '3' recovery rating on Ohio-based Intelligrated Inc.'s
first-lien term loan due 2018 remain unchanged after the company
announced that it will seek to add $40 million to its existing
$215 million first-lien term loan, bringing the total issue amount
to $255 million. The '3' recovery rating reflects our expectation
for meaningful recovery prospects (50%-70%) in the event of a
payment default.
The 'CCC+' issue-level and '6' recovery rating on the company's
existing $90 million second-lien credit facility due 2020 remain
unchanged. The '6' recovery rating indicates S&P's expectation of
negligible (0%-10%) recovery in a payment default scenario. The
company expects to use the proceeds to fund potential future
acquisitions and capital investments.
The 'B' corporate credit rating and stable rating outlook on
Intelligrated remain unchanged. Although Intelligrated's credit
metrics are somewhat stronger than S&P's expectations for the
rating, it believes this allows the company some flexibility to
weather weaker demand or operating performance. S&P considers
total debt (adjusted to include operating leases) to EBITDA of
about 5x-6x and funds from operations to debt of 10%-12% over the
business cycle. S&P's "weak" business risk profile assessment
incorporates its view of the company's narrow focus in North
America's highly fragmented material-handling market.
Intelligrated designs, manufactures, installs, and services
automated material-handling systems (conveyor belts, sortation
products, and warehouse control software) for a variety of end
markets, some of which include retail distribution, food and
beverage, parcel handling, direct to consumer and e-commerce).
RATINGS LIST
Intelligrated Inc.
Corporate Credit Rating B/Stable/--
RATINGS UNCHANGED
Intelligrated Inc.
$255 mil. first-lien term loan due 2018* B
Recovery Rating 3
$90 mil. second-lien term loan due 2020 CCC+
Recovery Rating 6
* This includes the $40 million add-on.
INTERFAITH MEDICAL: Hospital and Creditors Sent to Mediation
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Interfaith Medical Center Inc., a hospital in
Brooklyn, New York, found itself in the middle of the New York
City mayoral campaign. The parties in the case now find themselves
in mediation.
According to the report, Interfaith acceded to demands by the
state Department of Health and decided to shut down, even though
the 287-bed acute-care hospital said the closing "will have
serious consequences for the provision of health care" in the
Bedford-Stuyvesant section of Brooklyn, where the facility is
located.
Then, Bill de Blasio, a candidate for mayor, interceded in
bankruptcy court opposing demands by state regulators that the
institution close in September. De Blasio won the election and
will become the city's mayor in January.
This week, the bankruptcy judge in Brooklyn sent the parties to
mediation with one of her sister judges.
IM Foundation Inc. also has objected to closing. The foundation
said it has a plan to continue operating the hospital.
About Interfaith Medical Center
Headquartered in Brooklyn, New York, Interfaith Medical Center,
Inc., operates a 287-bed hospital on Atlantic Avenue in Bedford-
Stuyvesant and an ambulatory care network of eight clinics in
central Brooklyn, in Crown Heights and Bedford-Stuyvesant.
The Company filed for Chapter 11 protection (Bankr. E.D. N.Y.
Case No. 12-48226) on Dec. 2, 2012. The Debtor disclosed
$111,872,972 in assets and $193,540,998 in liabilities as of the
Chapter 11 filing. Liabilities include $117.9 million owing to
the New York State Dormitory Authority on bonds secured by the
assets.
Alan J. Lipkin, Esq., at Willkie Farr & Gallagher LLP, serves as
bankruptcy counsel to the Debtor. Nixon Peabody LLP is the
special corporate and healthcare counsel. CohnReznick LLP serves
as financial advisor. Donlin, Recano & Company, Inc. serves as
administrative agent.
The Official Committee of Unsecured Creditors tapped Alston & Bird
LLP as its counsel, and CBIZ Accounting, Tax & Advisory of New
York, LLC as its financial advisor.
Eric M. Huebscher, the patient care ombudsman, tapped the law firm
of DiConza Traurig LLP, as his counsel.
INTERLEUKIN GENETICS: Amends Participation Agreement with RHSC
--------------------------------------------------------------
Interleukin Genetics, Inc., on Feb. 25, 2013, entered into a
Preferred Participation Agreement with Renaissance Health Services
Corporation, for itself and on behalf of certain of its affiliates
and subsidiaries. Pursuant to this agreement, affiliates of RHSC
agreed to reimburse the Company a fixed price for each PST(R)
genetic test that the Company processed for a customer of
affiliates of RHSC. In addition, if during the term of the
agreement the Company offered the PST(R) test to any other person
or party for a lower price, such lower price would then be
applicable to tests processed for a customer of those affiliates
of RHSC for the remainder of the term of the agreement. The
pricing arrangement was subject to the satisfaction of certain
milestones, including that (1) within a specified timeframe, RHSC
affiliates were to develop and offer dental benefit plans for
which a significant portion of such affiliate's clients are
eligible that provided for use of the PST(R) test and
reimbursement of the test at the agreed upon price and (2) prior
to a specified date, RHSC affiliates were to have sold policies
for Reimbursed Dental Plans for the year beginning Jan. 1, 2014.
The Company agreed that for a one year period beginning on the
date on which RHSC affiliates first offered a Reimbursed Dental
Plan, it would make the PST(R) test available solely to RHSC
affiliates and not to any other third party or person.
Effective Nov. 1, 2013, the Company entered into an Amended and
Restated Preferred Participation Agreement with RHSC, for itself
and on behalf of certain of its affiliates and subsidiaries.
Pursuant to this amended agreement, affiliates of RHSC have agreed
to reimburse the Company a fixed price for each PST(R) genetic
test that the Company processes for a customer of affiliates of
RHSC. In addition, if during the term of the agreement the
Company offers the PST(R) test to any other person or party for a
lower price, that lower price will then be applicable to tests
processed for a customer of such affiliates of RHSC for the
remainder of the term of the agreement. RHSC and its affiliates
will continue to receive the preferred pricing (or any lower
market price during the term) only for so long as affiliates of
RHSC continue to: (a) work to develop and to offer Reimbursed
Dental Plans for which a significant portion of employees of
RHSC's affiliates' customers are eligible; and (b) exercise their
commercially-reasonable best efforts to maximize the number of
customers that offer a Reimbursed Dental Plan. In addition, under
the terms of the amended agreement, the Company is no longer
obligated to make the PST(R) test available solely to RHSC
affiliates and not to any other third party or person. This
amended agreement has a term of three years beginning Feb. 25,
2013, unless terminated earlier (1) upon the mutual written
agreement of the Company and RHSC, (2) if either party became the
subject of bankruptcy, insolvency, liquidation or other similar
proceedings, or (3) in the event of an uncured breach of the
amended agreement by either party.
Delta Dental of Michigan, Inc., an affiliate of RHSC, owns
approximately 8.9 percent of the Company's outstanding common
stock, and Goran Jurkovic, the senior vice president and chief
financial officer for DDMI, is a member of the Company's board of
directors.
About Interleukin
Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized
health company that develops unique genetic tests to provide
information to better manage health and specific health risks.
Interleukin Genetics disclosed a net loss of $5.12 million in
2012, as compared with a net loss of $5.02 million in 2011. The
Company's balance sheet at June 30, 2013, showed $12.24 million in
total assets, $8.45 million in total liabilities and $3.78 million
in total shareholders' equity.
Grant Thornton LLP, in Boston, Massachusetts, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company incurred a net loss of $5,120,084 during the year
ended December 31, 2012, and as of that date, the Company's total
liabilities exceeded its total assets by $13,623,800. These
conditions, among other factors, raise substantial doubt about the
Company's ability to continue as a going concern.
Bankruptcy Warning
"We have retained a financial advisor and are actively seeking
additional funding, however, based on current economic conditions,
additional financing may not be available, or, if available, it
may not be available on favorable terms. In addition, the terms
of any financing may adversely affect the holdings or the rights
of our existing shareholders. For example, if we raise additional
funds by issuing equity securities, further dilution to our then-
existing shareholders will result. Debt financing, if available,
may involve restrictive covenants that could limit our flexibility
in conducting future business activities. We also could be
required to seek funds through arrangements with collaborators or
others that may require us to relinquish rights to some of our
technologies, tests or products in development. Our common stock
was delisted from the NYSE Amex in 2010 and is currently trading
on the OTCQBTM. As a result, our access to capital through the
public markets may be more limited. If we cannot obtain
additional funding on acceptable terms, we may have to discontinue
operations and seek protection under U.S. bankruptcy laws,"
the Company said in its quarterly report for the ended March 31,
2013.
INTERNAP NETWORK: S&P Assigns 'B' CCR; Outlook Stable
-----------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B'
corporate credit rating to Atlanta-based Internap Network Services
Corp. The outlook is stable.
S&P also assigned its 'B' issue-level rating to the company's
$350 million senior secured credit facilities. The proposed
facilities consist of a $300 million term loan due 2019 and a
$50 million revolving credit facility due 2018. The '3' recovery
rating on this debt indicates S&P's expectation for meaningful
(50% to 70%) recovery for lenders in the event of a payment
default. The company will use proceeds to acquire iWeb Group
Inc., refinance existing indebtedness, add liquidity to the
balance sheet, and pay transaction fees.
"The ratings reflect our assessment of the company's 'highly
leveraged' financial risk profile and 'weak' business risk
profile," said Standard & Poor's credit analyst Michael Weinstein.
Pro forma for the proposed iWeb transaction, S&P expects the
company's adjusted leverage (including approximately $115 million
of debt for the present value of operating leases) to be about 6x
by the end of 2013 under S&P's base-case scenario, and for the
company to generate negative FOCF. S&P also expects moderate
revenue and EBITDA growth over the next couple of years, fueled
primarily by increased utilization of existing facilities and a
secular trend toward outsourcing IT functions.
The stable rating outlook reflects S&P's expectation that leverage
will remain above 5x, with negative FOCF through at least the end
of 2014. While S&P believes Internap will benefit from increased
IT outsourcing, including favorable supply-demand dynamics in its
core markets, deleveraging and growth prospects for the company
are constrained by its noncore IP services and partner-controlled
colocation segments.
S&P could lower the rating if an unfavorable shift in the supply-
demand dynamics in its core data center markets over the next
couple of years results in an EBITDA decline, with leverage rising
above 7x on a sustained basis. Alternatively, if the company
issues additional debt for an acquisition that does not have as
favorable profit characteristics as its core business, S&P could
lower the rating if leverage spikes above 7x and prospects for
positive FOCF become more limited.
An upgrade would require an assessment that company's financial
policy, including potential future acquisitions, would support
improved credit quality, including modest positive FOCF generated
on an ongoing basis, and leverage declining to the mid-4x area,
also on a sustained basis.
IZEA INC: Incurs $975,000 Net Loss in Third Quarter
---------------------------------------------------
Izea, Inc., filed with the U.S. Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a net loss of
$975,302 on $1.56 million of revenue for the three months ended
Sept. 30, 2013, as compared with a net loss of $951,570 on $1.05
million of revenue for the same period during the prior year.
For the nine months ended Sept. 30, 2013, the Company incurred a
net loss of $2.75 million on $4.66 million of revenue as compared
with a net loss of $3.70 million on $3.87 million of revenue for
the same period last year.
The Company's balance sheet at Sept. 30, 2013, showed $3.39
million in total assets, $4.68 million in total liabilities and a
$1.28 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/mvbfLs
About IZEA, Inc.
IZEA, Inc., headquartered in Orlando, Fla., believes it is a world
leader in social media sponsorships ("SMS"), a rapidly growing
segment within social media where a company compensates a social
media publisher to share sponsored content within their social
network. The Company accomplishes this by operating multiple
marketplaces that include its platforms SocialSpark,
SponsoredTweets and WeReward, as well as its legacy platforms
PayPerPost and InPostLinks.
IZEA reported a net loss of $4.67 million in 2012 as compared with
a net loss of $3.97 million in 2011.
Cross, Fernandez & Riley, LLP, in Orlando, Florida, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has incurred recurring operating
losses and had a negative working capital and an accumulated
deficit at Dec. 31, 2012. These conditions raise substantial
doubt about the Company's ability to continue as a going concern
without raising sufficient additional financing.
JAMES RIVER: Incurs $25.5 Million Net Loss in Third Quarter
-----------------------------------------------------------
James River Coal Company filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $25.51 million on $150.16 million of total revenue
for the three months ended Sept. 30, 2013, as compared with a net
loss of $20.55 million on $288.10 million of total revenue for the
same period during the prior year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss of $14.99 million on $503.61 million of total revenue as
compared with a net loss of $61.97 million on $867.44 million of
total revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2013, showed $1.06
billion in total assets, $818.69 million in total liabilities and
$247.34 million in total shareholders' equity.
Peter T. Socha, chairman and chief executive officer commented:
"The mines are doing great. They have continued to exceed our
expectations for both cost control and capital control. They have
done an incredible job of adjusting to the soft market conditions
and the high levels of uncertainty and concern that surround the
coal industry of Central Appalachia. We have made another set of
painful, but necessary, production adjustments this week. This
involved idling four additional mines in eastern Kentucky. We are
hopeful that these idlings can be reversed in the first half of
2014. The coal markets have stabilized during the past several
weeks. Prices are still very low, but they are finally moving in a
better direction. Finally, we are making progress, but have not
finished our project to deleverage our balance sheet and improve
our liquidity."
A copy of the Form 10-Q is available for free at:
http://is.gd/R8LSnt
About James River
Headquartered in Richmond, Virginia, James River Coal Company
(NasdaqGM: JRCC) -- http://www.jamesrivercoal.com/-- mines,
processes and sells bituminous steam and industrial-grade coal
primarily to electric utility companies and industrial customers.
The company's mining operations are managed through six operating
subsidiaries located throughout eastern Kentucky and in southern
Indiana.
James River reported a net loss of $138.90 million in 2012,
as compared with a net loss of $39.08 million in 2011.
* * *
In the May 24, 2013, edition of the TCR, Moody's Investors Service
downgraded James River Coal Company's Corporate Family Rating to
Caa2 from Caa1.
"While the company continues to take actions to reposition
operations and shore up its balance sheet, we expect external
factors will preclude James River from maintaining credit measures
and liquidity consistent with the Caa1 rating level," said Ben
Nelson, Moody's lead analyst for James River Coal Company.
As reported by the TCR on Nov. 19, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Richmond, Va.-based
James River Coal Co. to 'CCC' from 'SD' (selective default).
"We raised our rating on James River Coal because we understand
that the company has stopped repurchasing its debt at deep
discounts, for the time being," said credit analyst Megan
Johnston.
JEFFERSON COUNTY: Fitch to Rate 3 Warrant Series 'BB+'
------------------------------------------------------
Fitch Ratings expects to assign the following ratings to Jefferson
County, AL's (the county) warrants:
-- $375 million senior lien sewer revenue current interest
warrants, series 2013-A 'BB+';
-- $55.7 million senior lien sewer revenue capital appreciation
warrants, series 2013-B 'BB+';
-- $69.3 million senior lien sewer revenue convertible capital
appreciation warrants, series 2013-C 'BB+';
-- $750.2 million subordinate lien sewer revenue current interest
warrants, series 2013-D 'BB';
-- $71.9 million subordinate lien sewer revenue capital
appreciation warrants, series 2013-E 'BB';
-- $416.3 million subordinate lien sewer revenue convertible
capital appreciation warrants, series 2013-F 'BB'.
The final ratings are contingent upon the receipt by Fitch of
executed documents and legal opinions conforming to information
already received and reviewed; the final pricing of the warrants;
and confirmation of the county's plan of adjustment (the plan) -
including the further amended financing plan and debt structure
from this issuance - by the bankruptcy court overseeing the case
that would allow the county to emerge from chapter 9 bankruptcy
protection by the end of the year.
The county expects to sell the warrants in a negotiated sale the
week of Nov. 18. Proceeds will be used to refund and retire the
county's sewer system (the system) outstanding warrants, which are
currently in default; pay the premium for an insurance policy
relating to the senior lien warrants; pay the costs associated
with debt service reserve letters of credit for the senior and
subordinate lien warrants; provide funding for certain accounts;
and pay costs of issuance.
The Rating Outlook is Stable.
Security:
The senior lien warrants are secured by a pledge of gross system
revenues. The subordinate lien warrants are secured by a pledge of
system revenues after payment of the senior lien warrants.
Key Rating Drivers:
Prior Bankruptcy Triggers Sufficiently Mitigated: The onerous
regulatory requirements, risky financing structures, and
corruption - among other things - that led to the county's filing
for chapter 9 bankruptcy protection in Nov. 2011 and the need to
seek concessions for a significant portion of system obligations
appears to be either actually or effectively eliminated. General
concerns remain regarding pressures the system faces post
bankruptcy, but these concerns are not anticipated to affect
system operations or debt repayment going forward beyond what is
contemplated at the currently expected rating level.
Out-Year Financial Concerns: System cash flows appear sufficient
to generate favorable debt service coverage (DSC) and meet capital
demands from surplus revenues over the next 10 years. However,
projected cash flow shortfalls for capital beginning in fiscal
2024 (despite anticipated sound DSC) are a significant concern.
VERY HIGH DEBT BURDEN: System debt levels will remain high even
with a substantial reduction in system obligations resulting from
the county's plan to emerge from chapter 9 bankruptcy protection.
Further, the anemic amortization of the proposed financing will
leave the system's debt burden elevated for decades even without
additional borrowings.
Adopted Adjustments But Possible Challenges: The approved rate
structure (ARS) adopted by the county commission, which calls for
annual rate adjustments through the life of the warrants, is a key
credit positive as it provides more certainty to the projected
cash flows. However, rates are already high and ongoing
adjustments contemplated under the ARS could spark increased
political concerns, litigation, and elasticity in usage, any of
which might erode actual financial results.
Strong and Diverse Service Area: The service territory is broad
and has grown into a diverse economy over the previous decades
with a stable population base. Major sectors now include finance,
medical and education along with the county's more traditional
manufacturing roots. Unemployment continues to post favorable
results, although income levels in the county remain meaningfully
lower than the U.S.
Rating Sensitivities:
Hindrances to Implementing the Ars: Any litigation or political
action which limits or repeals the ARS would be viewed as
materially weakening the system's ability to operate and meet its
obligation to warrant holders. Downward rating pressure would be
expected to follow in turn.
Divergence Between Forecasted and Actual Results: Operating and/or
capital pressures from regulatory or other actions that impair the
system's ability to achieve at least forecasted financial results
over the next 10 years could weaken the system's credit quality
given the system's limited ability to support additional
requirements without further straining its rate base.
Credit Profile:
Current Offering Part Of Plan for Emerging from Bankruptcy:
The county is located in the north central portion of Alabama and
has an estimated population of around 660,000 people. Beginning in
2008, a series of events occurred which led to the county's
insolvency and filing for chapter 9 bankruptcy protection on Nov.
9, 2011 (the filing date). Since the county's bankruptcy filing
there has been significant litigation between and amongst the
county, county creditors, and other stakeholders. However, in
recent months the county has filed its plan with the bankruptcy
court for confirmation after reaching concession agreements with
the majority of the county's creditors to reduce system
obligations. The current financing is a component of the plan and
entails achieving $1.7 billion in proceeds which, along with other
items, will retire and eliminate $3.1 billion in system
obligations.
System Causes Contributing to Bankruptcy Sufficiently Mitigated:
Fitch believes the events that ultimately led to the county's
bankruptcy filing have been addressed and any threat of a
subsequent bankruptcy filing is sufficiently mitigated because of
the plan and the supporting components of the plan, as well as the
internal changes to county operations. Consequently, the expected
ratings on the system warrants solely reflect the credit risks of
the system that exist post-bankruptcy.
The initial cause of the county's bankruptcy stems from the
system's consent decree (the CD) between the county and the U.S.
Environmental Protection Agency in 1996. Originally estimated to
cost between $250 million and $1.2 billion, debt obligations
ballooned to over $3.1 billion by the time of the filing date. The
escalation in costs and the financial products used to pay for
capital projects were attributable at least in part to corruption
by government officials and private individuals and firms, several
of which were convicted of criminal offenses. With the collapse in
the financial markets in 2008 and because of the county's
extensive use of variable-rate products and third-party agreements
(including swaps and liquidity facilities) to finance the CD, the
county experienced rapid increases in interest costs as well as
the acceleration of principal on numerous obligations for which it
was unable to pay.
The system's new debt structure will be 100% fixed rate with no
swap contracts following the issuance of the 2013 warrants and
defeasance of the system's prior obligations. The elimination of
interest rate variability and exposure to third-party credit risks
provide greater clarity as to the system's obligations going
forward and the revenues needed to support these obligations.
New Governance Structure:
In 2009 the Alabama Legislature approved a change in the county's
governing structure such that county commissioners now serve
purely legislative roles and the executive function is vested in a
county manager. The county commissioners previously retained both
legislative as well as executive duties, with each commissioner
managing at least one of the county's departments directly. The
new governing structure should help to alleviate possible
conflicts of interest and avoid the lack of balanced spending
oversight previously experienced.
Projected Cashflow Shortfalls for Capital:
The system projects solid financial results for fiscals 2014-2023
as rate increases are implemented. Net revenues are forecasted to
cover DSC on combined senior and subordinate lien warrants by
1.6x-1.8x through fiscal 2018 and then increase to above 2.0x
during fiscals 2019-2023. Equally positive, surplus revenues net
of operating fund deposits during fiscals 2014-2023 are projected
to total $670 million. These surplus revenues, combined with $160
million of certain existing cash balances, are sufficient to meet
all expected and identified capital needs during this 10-year
period.
A back-loaded debt structure is a key reason anticipated financial
performance through fiscal 2023 is favorable. Debt service
expenses from this transaction are projected to increase nearly
70% in fiscal 2024 from the prior year to over $140 million and
then continue to escalate 3% annually through fiscal 2040. This
large jump in debt service costs is concerning not only because
total DSC drops to 1.25x but because the elevated carrying costs
significantly erode surplus revenues necessary to fund ongoing
system maintenance, without identification of additional capital
funding sources.
Fitch is primarily concerned about the system's practical ability
to increase rates above those contemplated in the ARS to cover the
projected $1.1 billion shortfall in meeting basic ongoing capital
expenses during fiscals 2024-2040. Fitch further believes the risk
of enhanced discharge requirements prior to fiscal 2040 is likely.
To the extent these regulations translate into additional capital
and/or operating expenses system financial projections will be
strained even further.
Significant Leverage Remains:
System leverage ratios will remain excessively high despite the
tremendous reduction in system obligations negotiated with
creditors under the plan. Overall, the system's key debt ratios
subsequent to this transaction will remain 6x-7x greater than
Fitch's national medians for 'A' category and above credits. Other
system debt metrics are similarly poor. No additional debt is
programmed into the system's forecasted cash flows yet leverage
ratios will remain notably weak for many years into the future
given the generally ascending debt service requirements and anemic
rate of principal amortization on these warrants - just 8% matures
in 20 years.
Shift Away From Ars Would Be Credit Negative:
Implementation of the ARS is a key credit factor supporting the
rating on the 2013 warrants. Fitch believes there is a strong
likelihood the ARS will be implemented as envisioned given the
adoption of the ARS by the county commission and the critical role
the ARS plays in ensuring the success of the plan. However, the
ARS is not without opposition. Resistance by one of the current
five county commissioners and the state attorney general, as well
as the historical opposition to and litigation of system rate
adjustments, raises the specter of possible stakeholder attempts
to overturn the ARS and/or momentum at the commissioner level to
bar the adopted rates from taking effect at some point in the
future. Fitch cautions that any action that impairs the ARS as
adopted almost assuredly would be viewed as a material weakening
in the system's credit profile, with corresponding negative rating
action expected to follow.
The adopted ARS calls for 7.89% annual rate increases beginning
Nov. 2013 through fiscal 2018. These rate adjustments will push
residential wastewater user charges for 6,000 gallons of flow to
an estimated 2.3% of median household income (MHI) by fiscal 2018
- well above Fitch's 1% of MHI for individual utilities. Annual
3.49% hikes are included for fiscals 2019-2053 - the final
maturity of the warrants - which will place added strain on the
local rate base.
Diverse Service Area:
The system provides retail sanitary sewer collection, treatment
and disposal service to county residents as well as a small number
of people within two surrounding counties. The service area is
broad and has grown over prior decades to become a major regional
financial and medical player. The county's employment base is
anchored by the University of Alabama at Birmingham, the largest
employer in the county with some 23,000 workers. County
unemployment trends are favorable, and for July 2013 the county's
unemployment rate was 6.0% compared to 7.7% for the U.S. Somewhat
offsetting this positive, personal wealth levels are about 15%
weaker than the U.S.
Fitch hosted a conference to discuss the expected ratings assigned
to Jefferson County, AL sewer bonds ('BB+/BB', Outlook Stable) and
GO warrants ('BBB-', Outlook Stable). Fitch analysts Doug Scott
and Larry Levitz shared share their insights on key rating drivers
including:
-- The role of anticipated financing in the county's emergence
from bankruptcy;
-- New governance structure, revenue constraints and downsized
government operations;
-- Importance of the approved rate structure and overall rate
pressures;
-- The very high sewer system debt position.
JOHNSON PROPERTY: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Johnson Property Group, LLC
2121 Wooddale Boulevard
Baton Rouge, LA 70806-1442
Case No.: 13-11588
Chapter 11 Petition Date: November 15, 2013
Court: United States Bankruptcy Court
Middle District of Louisiana (Baton Rouge)
Judge: Hon. Douglas D. Dodd
Debtor's Counsel: Barbara B. Parsons, Esq.
13702 Coursey Boulevard, Building 3
Baton Rouge, LA 70817
Tel: 225-751-1751
Fax: 225-751-1998
Email: bparsons@steffeslaw.com
- and -
William E. Steffes, Esq.
STEFFES, VINGIELLO & MCKENZIE, LLC
13702 Coursey Boulevard, Building 3
Baton Rouge, LA 70817
Tel: 225-751-1751
Fax: 225-751-1998
Email: bsteffes@steffeslaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Soundra Temple-Johnson, managing
member.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
LEAGUE ASSETS: Orange Capital Makes Binding Cash Offer
------------------------------------------------------
Orange Capital, LLC on Nov. 14 disclosed that it has submitted an
offer letter to League Assets Corp. and PricewaterhouseCoopers,
the court appointed "Monitor", to purchase the 3,872,863 units of
Partners REIT owned by IGW Public LP, a subsidiary of League. In
addition, Orange has also offered to purchase League's right,
title and interest in the Partners REIT Management Agreement.
Highlights of Orange's Offer include:
-- $6.00 all-cash purchase price, a 10% premium to Partners
REIT current unit price
-- Upfront payment of the termination fee owed to League under
the Partners REIT management agreement on March 31, 2014
-- Intention to offer employment to League's dedicated Partners
REIT employees
-- Aggregate proceeds of approximately $27 million to the
League estate
"We believe our Offer is an attractive one, as it provides
immediate substantial liquidity to the League estate and
significantly improves the probability of a successful
restructuring. Orange is in a position to transact quickly as our
Offer is subject only to customary closing conditions," commented
Daniel Lewis, Orange's Managing Partner.
Orange's Offer provides significant benefits to League's
stakeholders, including:
-- Removes all uncertainty surrounding the value of the
Partners REIT units
-- Eliminates the risk to League from any adverse outcome of
the strategic review process by the independent trustees of
Partners REIT as advised by National Bank of Canada
-- Provides for 100% cash consideration not subject to
financing
-- Eliminates the need for League to obtain substantial, and
expensive, DIP financing
-- Addresses concerns by certain League creditors that have the
Partners REIT units pledged as collateral
Partners REIT is a highly-levered public company that had been
significantly over-distributing relative to its actual adjusted
funds from operations. The unit price is down over 30% year to
date and there are numerous factors that are likely to further
erode the value of League's interest in Partners REIT. Last
evening, Partners REIT announced that the distribution would be
reduced by approximately 22%. In addition, given Partners REIT
excessive financial leverage, unitholders, including League, are
likely to be diluted by the issuance of new Partners REIT units.
Finally, League, as manager of Partners REIT, is in a highly
complex CCAA proceeding that is likely to have a continued
negative effect on the equity value of Partners REIT. In light of
all these factors we feel that our all-cash Offer is compelling.
Partners REIT is engaged in a strategic review process that is
highly unlikely to yield an en-bloc offer at an all-cash premium
given the REIT's over-levered structure, the current state of the
REIT market, concern over liquidity of secondary market real
estate, the recent distribution cut and the aggressive existing
valuation at the current unit price. We understand that given
this risk, Partners REIT is seeking other "strategic proposals"
including vend-in transactions, combination transactions,
strategic alliances, new equity issues and recapitalizations, none
of which would offer liquidity to the League estate.
Orange has informed both the Monitor and League that it is open to
discussing its Offer in detail in order to come to an agreement
quickly for the benefit of the League estate and the secured
creditors.
Advisors
Orange has engaged Trimaven Capital Advisors Inc. as its financial
advisor and Norton Rose Fulbright Canada LLP as its legal advisor
in connection with the Offer.
About Orange Capital LLC
Orange Capital, LLC is a New York based investment firm. The firm
is a value oriented investor in event-driven securities. The firm
allocates across the capital structure on an opportunistic basis.
Orange Capital was co-founded in 2005 by Daniel Lewis and Russell
Hoffman. Prior to founding the firm, Orange Capital's portfolio
manager, Daniel Lewis, was a director with Citigroup's Global
Special Situations Group.
About Trimaven Capital Advisors Inc.
Trimaven Capital Inc. is an independently owned real estate
investment bank based in Toronto. Trimaven offers clients highly
specialized advice in mergers and acquisitions, including hostile
and special situations, corporate finance, private equity and real
estate asset advisory. Trimaven's clients include public, private
and corporate owners of real estate as well as investment
management firms and hedge funds. With a reputation and expertise
built over 40 years of experience as owners, managers and
advisors, Trimaven is known for its deep industry knowledge,
quality advice, and transaction execution capabilities.
Trimaven's principals are accomplished advisors with significant
transactional experience. Prior to forming Trimaven, the
principals advised on over $30 billion of transactions during
their tenures at other top-tier firms.
About League Assets Corp.
League Assets Corp. -- http://www.league.ca-- is a privately
owned real estate investment firm. The firm specializes in
acquiring, developing, re-developing, and syndicating high-income
investment properties with a particular focus on the residential,
industrial, and commercial sectors. It creates passive
investments providing monthly cash flows, equity buildup, capital
appreciation, and preferential tax treatment to its clients. The
firm makes its investments in the real estate markets of Canada.
It seeks to achieve 15% return on investment for its member-
partners. The firm obtains external research from organizations
to complement its in-house research. League Assets Corp. was
founded in 2004 and is based in Victoria, British Columbia with an
additional office in Vancouver British Columbia.
LEO MOTORS: Appoints Kang as Co-CEO and Co-Chairman
---------------------------------------------------
Leo Motors, Inc., appointed Dr. Shi Chul (Robert) Kang as its co-
chief executive officer and to serve as co-chairman of its Board
of Directors.
Dr. Kang holds a Ph. D. degree in marketing and has worked in
international advertising and corporate marketing areas for more
than 30 years. He began his career at Oricom, the largest
advertising agency in Korea and a McCann Ericson affiliate. He
founded Ad Express and On&Off and managed the firms for 11 years.
He served as president of Pico North Asian, a multinational global
event marketing company in Hong Kong. Dr. Kang previously served
as the Company's CEO and interim CFO from 2008 to 2011.
Currently, he is working as the chairman of Talent Donation
Consultant Association and Head Professor of Business Consultant
Starter School of the City Government of Seoul. Dr. Kang will
focus on business development and financing of Leo Motors. Dr.
Kang received his BS in literature from Korea University, his MA
in advertising from University of Oregon, and his Ph. D. in
marketing from Dongguk University in Korea.
About Leo Motors
Headquartered in Hanam City, Gyeonggi-do, Republic of Korea, Leo
Motors, Inc., a Nevada corporation, is currently engaged in the
research and development of multiple products, prototypes and
conceptualizations based on proprietary, patented and patent
pending electric power generation, drive train and storage
technologies.
In 2011, the Company determined its investment in Leo B&T Inc. an
investment account was impaired and recorded an expense of
$4.5 million. During the 2012 year the Company had a net non
operating income largely from the result of the forgiveness of
debt for $1.3 million.
The Company reported a net loss of $1.9 million on $25,605 of
revenues in 2012, compared with a net loss of $5.4 million on
$920,587 of revenues in 2011. The Company's balance sheet at
June 30, 2013, showed $1.51 million in total assets, $1.87 million
in total liabilities and a $353,800 total deficit.
In its audit report on the consolidated financial statements for
the year ended Dec. 31, 2012, John Scrudato CPA, in Califon, New
Jersey, expressed substantial doubt about Leo Motors' ability to
continue as a going concern, citing the Company's significant
losses since inception of $16.2 million and working capital
deficit of $632,161.
LIBERTY HARBOR: Accused of Forum Shopping in Ch. 11 Case
--------------------------------------------------------
Law360 reported that a management company with a stake in the $350
million of Jersey City, N.J., real estate that's at the center of
Liberty Harbor Holding LLC's Chapter 11 reorganization plan
accused the developer on Nov. 12 of failing to provide key details
on litigation over the property's ownership and of playing "ping-
pong" with its claims.
According to the report, Liberty Harbor filed for bankruptcy last
year, when its owner, Peter Mocco, claimed a series of ongoing
lawsuits were hindering his ability to redevelop $350 million
worth of land in Jersey City.
About Liberty Harbor
Jersey City, New Jersey-based Liberty Harbor Holding, LLC, along
with two affiliates, sought Chapter 11 protection (Bankr. D.N.J.
Lead Case No. 12-19958) in Newark on April 17, 2012. Each of the
Debtors is solely owned by Peter Mocco.
Liberty, as of April 16, 2012, had total assets of $350.08
million, comprising of $350 million of land, $75,000 in accounts
receivable and $458 cash. The Debtor says that it has
$3.62 million of debt, consisting of accounts payable of $73,500
and unsecured non-priority claims of $3,540,000. The Debtor's
real property consists of Block 60, Jersey City, NJ 100% ownership
Lots 60, 70, 69.26, 61, 62, 63, 64, 65, 25H, 26A, 26B, 27B, 27D.
Affiliates that filed separate petitions are: Liberty Harbor II
Urban Renewal Co., LLC (Case No. 12-19961) and Liberty Harbor
North, Inc. (Case No. 12-19964). The three cases are
administratively consolidated.
Judge Novalyn L. Winfield presides over the case. Wasserman,
Jurista & Stolz, P.C. serves as insolvency counsel and Scarpone &
Vargo serves as special litigation counsel. The petition was
signed by Peter Mocco, managing member.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed three
creditors to the Official Committee of Unsecured Creditors in the
Chapter 11 cases of the Debtor.
LIGHTSQUARED INC: Discontent with Dish Network Chairman Detailed
----------------------------------------------------------------
Liz Hoffman, writing for The Wall Street Journal, reported that
two Dish Network Corp. directors in charge of evaluating a
potential Dish bid for a telecommunications firm took issue with
how their committee was treated by Dish Chairman Charlie Ergen,
who stands to profit personally from the deal, according to new
documents filed in a lawsuit against Dish.
Steven Goodbarn and Gary Howard, selected to serve on a Dish
special committee earlier this year, conditionally recommended
Dish's $2.22 billion bid for LightSquared Inc. in July, according
to court documents and previous reporting by The Wall Street
Journal. But the men still had questions about Mr. Ergen's
personal investment in LightSquared's debt when they were told
July 21 to stop their work as a committee, according to testimony
and communications cited this week in litigation in state court in
Clark County, Nev.
The discontent with the disbandment of the committee was earlier
reported by the Journal. The documents filed last week shed new
light on the dust-up between the two-person committee and Mr.
Ergen. The filing comes in a shareholder lawsuit over Dish's
handling of the LightSquared bid and peels back the curtain on the
weeks leading up to late July, when Dish dissolved the special
committee and Mr. Howard resigned from the Dish board.
A Dish spokesman said on Nov. 14: "The plaintiff's reckless filing
is based upon numerous factual inaccuracies. We intend to
vigorously defend ourselves, and expect to be vindicated on the
merits."
The spokesman said he was speaking for the board and declined to
make any directors available for comment, the Journal said. Mr.
Howard, who has since resigned from the board, wasn't immediately
reached for comment.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
LONGVIEW POWER: Files Chapter 11 Debt Restructuring Plan
--------------------------------------------------------
Peg Brickley, writing for Dow Jones Business News, reported that
Longview Power LLC is proposing to get out of bankruptcy by way of
a Chapter 11 plan that drops $1 billion in debt from its balance
sheet and provides money to cover the cost of fixing the problem-
plagued plant.
According to the report, outlined in papers on Nov. 13 in the U.S.
Bankruptcy Court in Wilmington, Del., Longview's restructuring
proposal has the support of senior lenders who have agreed to swap
some of their debt for equity in a reorganized company.
Some of them have signed up to provide a $150 million loan to fund
Longview's exit from Chapter 11, as well as fix the plant and keep
it running, saving some 650 jobs in the process, the report
related.
The new loan and the Chapter 11 plan marks a way out for Longview
not just from bankruptcy but from a looming cash crunch, the
report said. With some $58 million worth of letter of credit
borrowing power locked up in a dispute with contractors, and a
plant running at partial capacity, Longview has warned of possible
irreparable harm if the financing does not go through.
The company is pushing for a Feb. 10, 2014, confirmation hearing
on the Chapter 11 exit plan, the report added. Terms of the
turnaround financing call for Longview to emerge from bankruptcy
in early March.
About Longview Power LLC
Longview Power LLC is a special purpose entity created to
construct, own, and operate a 695 MW supercritical pulverized
coal-fired power plant located in Maidsville, West Virginia, just
south of the Pennsylvania border and approximately 70 miles south
of Pittsburgh. The project is owned 92% by First Reserve
Corporation (First Reserve or sponsor), a private equity firm
specializing in energy industry investments, through its affiliate
GenPower Holdings (Delaware), L.P., and 8% by minority interests.
Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case.
13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery
L. Keffer, the Company's chief executive officer, president,
treasurer and secretary. The Debtor estimated assets and debts of
more than $1 billion. Judge Brendan Linehan Shannon presides over
the case. Kirkland & Ellis LLP and Richards, Layton & Finger,
P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC
acts as the Debtors' investment bankers. Alvarez & Marsal North
America, LLC, is the Debtors' restructuring advisors. Ernst &
Young serves as the Debtors' accountants. The Debtors' claims
agent is Donlin, Recano & Co. Inc.
Roberta A. DeAngelis, U.S. Trustee for Region 3, disclosed that as
of September 11, 2013, a committee of unsecured creditors has not
been appointed in the case due to insufficient response to the
U.S. Trustee's communication/contact for service on the committee.
LOZIER PROPERTIES: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Lozier Properties, LLC
695 Industrial Blvd
New Albany, IN 47150
Case No.: 13-92615
Chapter 11 Petition Date: November 15, 2013
Court: United States Bankruptcy Court
Southern District of Indiana (New Albany)
Judge: Hon. Basil H. Lorch III
Debtor's Counsel: David M. Cantor, Esq.
SEILLER WATERMAN LLC
462 4th Street Ste 2200
Louisville, KY 40202
Tel: 502-584-7400
Email: cantor@derbycitylaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Eric Lozier, sole member.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
LTV STEEL: USW Set to Meet President Obama at Cleveland Facility
----------------------------------------------------------------
The United Steelworkers (USW) was set to welcome President Barack
Obama on Nov. 14 to ArcelorMittal Cleveland, a 100 year-old
integrated steel facility that nearly closed in 2002 as a result
of LTV Steel's bankruptcy and yet survives as the most efficient
steelmaking operation in North America and one of the most
efficient in the world.
USW International President Leo W. Gerard called the example of
ArcelorMittal Cleveland proof that American workers, and
Steelworkers in particular, can excel in global competition when
the rules of trade are fair and enforced.
"Unchecked free trade cost millions of American manufacturing jobs
over the past 20 years, including tens of thousands in the steel
industry," Mr. Gerard said. "Good-paying manufacturing jobs are
necessary to a healthy American economy."
USW District 1 Director David McCall said that in Cleveland,
workers fought to keep the plant viable in the face of bankruptcy
court liquidation and their hard work and solidarity are the keys
to the plant's turnaround.
"At ArcelorMittal and elsewhere, Steelworkers throughout North
America are better trained and working more safely and efficiently
than ever before," Mr. McCall said. "Given a level playing field,
there's no question that American workers can outperform their
foreign competition."
The USW represents 850,000 men and women employed in metals,
mining, pulp and paper, rubber, chemicals, glass, auto supply and
the energy-producing industries, along with a growing number of
workers in public sector and service occupations.
About The LTV Corporation
Headquartered in Cleveland, Ohio, The LTV Corp. operated as a
domestic integrated steel producer. The Company along with 48
subsidiaries filed for Chapter 11 protection on Dec. 29, 2000
(Bankr. N.D. Ohio, Case No. 00-43866). On Aug. 31, 2001, the
Company disclosed $4,853,100,000 in total assets and
$4,823,200,000 in total liabilities.
By order dated Feb. 28, 2002, the Court approved the sale of
substantially all of the Debtors' integrated steel assets to WLR
Acquisition Corp. n/k/a International Steel Group, Inc., for
roughly $80 million, plus assumption of certain environmental and
other obligations. ISG also purchased inventories which were
located at the integrated steel facilities for $52 million. The
sale of the Debtors' integrated steel assets to ISG closed in
April 2002, and a second closing related to the purchase of the
inventory occurred in May 2002.
On Dec. 31, 2002, substantially all of the assets of the Pipe
and Conduit Business, consisting of LTV Tubular Company, a
division of LTV Steel Company, Inc., and Georgia Tubing
Corporation, were sold to Maverick Tube Corporation for cash of
roughly $120 million plus the assumption of certain environmental
and other obligations.
On Oct. 16, 2002, the Debtors announced that they intended to
reorganize the Copperweld Business as a stand-alone business. The
LTV Corporation no longer exercised any control over the business
or affairs of the Copperweld Business. A separate plan of
reorganization was developed for the Copperweld Business. On
Aug. 5, 2003, the Copperweld Business filed a disclosure statement
for the Joint Plan of Reorganization of Copperweld Corporation and
certain of its debtor affiliates. On Oct. 8, 2003, the Court
approved the Second Amended Disclosure Statement. On Nov. 17,
2003, the Court confirmed the Second Amended Joint Plan, as
modified, and on Dec. 17, 2003, the Plan became effective and the
common stock was canceled. Because LTV received no distributions
under the Second Amended Plan, its equity in the Copperweld
Business is worthless and has been canceled.
In November 2002, the Debtors paid the DIP Lenders the remaining
balance due for outstanding loans and in December 2002, the
remaining letters of credit were canceled or cash collateralized.
Consequently, the Debtors have no remaining obligation to the DIP
Lenders. Pursuant to a February 2003 Court order, LTV Steel
continued the orderly liquidation and wind down of its businesses.
On Oct. 8, 2003, the Court entered an Order substantively
consolidating the Chapter 11 estates of LTV Steel and Georgia
Tubing Corporation for all purposes.
In November and December 2003, approximately $91.9 million was
distributed by LTV Steel to other Debtors pursuant to an
Intercompany Settlement Agreement that was approved by the Court
on Nov. 17, 2003. On Dec. 23, 2003, the Court authorized LTV
Steel and Georgia Tubing to make distributions to their
administrative creditors and, after the final distribution, to
dismiss their Chapter 11 cases and dissolve.
On March 31, 2005, the Court entered an order that among other
things: (a) approved a distribution and dismissal plan for LTV
and certain other debtors; (b) authorized The LTV Corporation
and LTV Steel to take any and all actions that are necessary or
appropriate to implement the distribution and dismissal plan;
(c) established March 31, 2005, as the record date for identifying
shareholders of LTV that are entitled to any and all shareholder
rights with respect to the distribution and dismissal plan and the
eventual dissolution of LTV; and (d) authorized The LTV
Corporation to establish and fund a reserve account for the
conduct of post-dismissal activities and the payment of post-
dismissal claims.
LTV is in the process of liquidating, and its stock is worthless.
On March 28, 2007, the Official Committee of Administrative
Claimants filed a motion with the Court requesting an order to
approve the appointment of a Chapter 11 trustee. On April 11,
2007, April 12, 2007, and May 1, 2007, certain of LTV's former
officers and directors filed motions to convert the case to
Chapter 7. On June 28, 2007, the ACC filed a motion to withdraw
the Chapter 11 Trustee Motion; the Court granted the ACC's
withdrawal motion on Aug. 1, 2007. An evidentiary hearing on the
Chapter 7 Trustee Motion was held in August 2007. The Court has
not yet issued its order.
MCCLATCHY CO: Posts $7.3 Million Net Income in Third Quarter
------------------------------------------------------------
The McClathcy Company filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $7.26 million on $293.61 million of net revenues for the
quarter ended Sept. 29, 2013, as compared with net income of $5.09
million on $306.33 million of net revenues for the quarter ended
Sept. 23, 2012.
For the nine months ended Sept. 29, 2013, the Company reported net
income of $6.27 million on $897.50 million of net revenues as
compared with net income of $29.87 million on $933.14 million of
net revenues for the nine months ended Sept. 23, 2012.
The Company's balance sheet at Sept. 29, 2013, showed $2.60
billion in total assets, $2.54 billion in total liabilities and
$60.25 million in stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/5IamHX
About The McClatchy Company
Sacramento, Cal.-based The McClatchy Company (NYSE: MNI)
-- http://www.mcclatchy.com/-- is the third largest newspaper
company in the United States, publishing 30 daily newspapers, 43
non-dailies, and direct marketing and direct mail operations.
McClatchy also operates leading local Web sites in each of its
markets which extend its audience reach. The Web sites offer
users comprehensive news and information, advertising, e-commerce
and other services. Together with its newspapers and direct
marketing products, these interactive operations make McClatchy
the leading local media company in each of its premium high growth
markets. McClatchy-owned newspapers include The Miami Herald, The
Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City
Star, The Charlotte Observer, and The News & Observer (Raleigh).
The McClatchy incurred a net loss of $144,000 in 2012, as compared
with net income of $54.38 million in 2011.
* * *
McClatchy carries a 'Caa1' corporate family rating from Moody's
Investors Service. In May 2011, Moody's changed the rating
outlook from stable to positive following the company's
announcement that it closed on the sale of land in Miami for
$236 million. The outlook change reflects Moody's expectation
that McClatchy will utilize the net proceeds to reduce debt,
including its underfunded pension position, which will reduce
leverage by approximately half a turn and lower required
contributions to the pension plan over the next few years.
McClatchy Co. carries a 'B-' Corporate Credit Rating from
Standard & Poor's Ratings Services.
MCDERMOTT INTERNATIONAL: Downgraded on 3 Weak Quarters in 2013
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that McDermott International Inc. moved a grade deeper
into junk on Nov. 14 when Moody's Investors Service lowered the
corporate rating one level to Ba2, two steps below investment
grade.
According to the report, Moody's downgraded the Houston-based
company as the result of "weak performance" in the past three
quarters. Revenue of $2.14 billion during the first three quarters
of 2013 resulted in a net loss of $192.9 million.
During the last three years, the closing high for McDermott was
$25.73 on April 7, 2011, and the closing low was $6.73 on Aug. 7.
On Nov. 14, the stock rose 1.5 percent to $8.18 in New York
trading.
MGM RESORTS: Incurs $31.8 Million Net Loss in Third Quarter
-----------------------------------------------------------
MGM Resorts International filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss attributable to the Company of $31.85 million on $2.46
billion of revenues for the three months ended Sept. 30, 2013, as
compared with a net loss attributable to the Company of $181.15
million on $2.25 billion of revenues for the same period during
the prior year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss attributable to the Company of $118.27 million on $7.29
billion of revenues as compared with a net loss attributable to
the Company of $543.86 million on $6.86 billion of revenues for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2013, showed $25.65
billion in total assets, $17.83 billion in total liabilities and
$7.82 billion in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/PLdDDn
About MGM Resorts
MGM Resorts International (NYSE: MGM) --
http://www.mgmresorts.com/-- has significant holdings in gaming,
hospitality and entertainment, owns and operates 15 properties
located in Nevada, Mississippi and Michigan, and has 50 percent
investments in four other properties in Nevada, Illinois and
Macau.
MGM Resorts reported a net loss attributable to the Company of
$1.76 billion in 2012 as compared with net income attributable to
the Company of $3.11 billion in 2011.
Bankruptcy Warning
"We have a significant amount of indebtedness maturing in 2015 and
thereafter. Our ability to timely refinance and replace such
indebtedness will depend upon the foregoing as well as on
continued and sustained improvements in financial markets. If we
are unable to refinance our indebtedness on a timely basis, we
might be forced to seek alternate forms of financing, dispose of
certain assets or minimize capital expenditures and other
investments. There is no assurance that any of these alternatives
would be available to us, if at all, on satisfactory terms, on
terms that would not be disadvantageous to us, or on terms that
would not require us to breach the terms and conditions of our
existing or future debt agreements."
"Our ability to comply with these provisions may be affected by
events beyond our control. The breach of any such covenants or
obligations not otherwise waived or cured could result in a
default under the applicable debt obligations and could trigger
acceleration of those obligations, which in turn could trigger
cross defaults under other agreements governing our long-term
indebtedness. Any default under our senior credit facility or the
indentures governing our other debt could adversely affect our
growth, our financial condition, our results of operations and our
ability to make payments on our debt, and could force us to seek
protection under the bankruptcy laws," the Company said in its
annual report for the year ended Dec. 31, 2012.
* * *
As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings
Services raised its corporate credit rating on MGM Resorts
International to 'B-' from 'CCC+'. In March 2012, S&P revised
the outlook to positive from stable.
"The revision of our rating outlook to positive reflects strong
performance in 2011 and our expectation that MGM will continue to
benefit from the improving performance trends on the Las Vegas
Strip," S&P said.
In March 2012, Moody's Investors Service affirmed its B2 corporate
family rating and probability of default rating. The affirmation
of MGM's B2 Corporate Family Rating reflects Moody's view that
positive lodging trends in Las Vegas will continue through 2012
which will help improve MGM's leverage and coverage metrics,
albeit modestly. Additionally, the company's declaration of a $400
million dividend ($204 million to MGM) from its 51% owned Macau
joint venture due to be paid shortly will also improve the
company's liquidity profile. The ratings also consider MGM's
recent bank amendment that resulted in about 50% of its
$3.5 billion senior credit facility being extended one year from
2014 to 2015.
As reported by the TCR on Oct. 15, 2012, Fitch Ratings has
affirmed MGM Resorts International's (MGM) Issuer Default Rating
(IDR) at 'B-' and MGM Grand Paradise, S.A.'s (MGM Grand Paradise)
IDR at 'B+'.
MERRIMACK PHARMACEUTICALS: Incurs $39.8MM Loss in 3rd Quarter
-------------------------------------------------------------
Merrimack Pharmaceuticals, Inc., reported a net loss of $39.76
million on $6.85 million of collaboration revenues for the three
months ended Sept. 30, 2013, as compared with a net loss of $23.32
million on $11.32 million of collaboration revenues for the same
period during the prior year.
As of Sept. 30, 2013, the Company had $224.24 million in total
assets, $240.87 million in total liabilities and a $16.26 million
total stockholders' deficit.
A copy of the press release is available for free at:
http://is.gd/Z7x8wo
About Merrimack
Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a
biopharmaceutical company discovering, developing and preparing to
commercialize innovative medicines consisting of novel
therapeutics paired with companion diagnostics. The Company's
initial focus is in the field of oncology. The Company has five
programs in clinical development. In it most advanced program,
the Company is conducting a pivotal Phase 3 clinical trial.
Merrimack Pharmaceuticals disclosed a net loss of $91.75 million
in 2012, following a net loss of $79.67 million in 2011. The
Company incurred a $50.15 million net loss in 2010.
MJW PROPERTIES: Case Summary & Unsecured Creditor
-------------------------------------------------
Debtor: MJW Properties, LLC
1853 Old Route 9
Windsor, MA 01270
Case No.: 13-31264
Chapter 11 Petition Date: November 15, 2013
Court: United States Bankruptcy Court
District of Massachusetts (Springfield)
Judge: Hon. Henry J. Boroff
Debtor's Counsel: Steven Weiss, Esq.
SHATZ, SCHWARTZ & FENTIN, P.C.
1441 Main Street, Suite 1100
Springfield, MA 01103
Tel: (413) 737-1131
Email: sweiss@ssfpc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Matthew J. White, manager.
The Debtor listed the Town of Cummington as its largest unsecured
creditor holding a claim for real estate taxes amounting to
$2,000.
MOMENTIVE PERFORMANCE: Posts $67-Mil. Net Loss in Third Quarter
---------------------------------------------------------------
Momentive Performance Materials Inc. on Nov. 13 reported results
for the third quarter ended September 30, 2013. Results for the
third quarter of 2013 include:
-- Net sales of $604 million compared to $571 million in the
prior year period.
-- Operating income of $7 million versus operating loss of $(7)
million in the prior year period. Third quarter 2013 operating
income improved versus third quarter 2012 due to improved gross
margins and a $10 million decrease in selling, general and
administrative expenses.
-- Net loss of $(67) million compared to a net loss of $(81)
million in the prior year period, which reflected the improved
operating income partially offset by a $6 million increase in
interest costs.
-- Segment EBITDA of $55 million compared to $51 million in the
prior year period. Segment EBITDA is a non-GAAP financial measure
and is defined and reconciled to net loss later in this release.
"While we posted year-over-year gains in Segment EBITDA, we
continue to operate in a slow-growth environment amid continued
global economic volatility," said Craig O. Morrison, Chairman,
President and CEO. "Our overall third quarter 2013 Segment EBITDA
also reflected the impact of seasonality that we have historically
experienced. Third quarter 2013 silicones Segment EBITDA totaled
$55 million compared to $44 million in the prior year period,
reflecting modest improvement in North American sales and the
impact of our cost reduction and productivity initiatives,
partially offset by decreased pricing and mix shift. The results
of our quartz business continued to reflect cyclically weak demand
for semiconductor capital goods."
"Our aggressive cost reduction initiatives helped offset continued
soft demand from ongoing economic volatility. We also continue to
aggressively focus on the remaining cost reduction initiatives and
anticipate fully realizing $10 million of total pro forma savings
that are remaining from the Shared Services Agreement and the
incremental restructuring actions over the next 12 to 15 months."
Liquidity and Capital Resources
At September 30, 2013, the Company had approximately $3.2 billion
of long-term debt compared to $3.1 billion at December 31, 2012.
In addition, at September 30, 2013, the Company had $245 million
in liquidity, including $92 million of unrestricted cash and cash
equivalents (of which $84 million is maintained in foreign
jurisdictions) and $153 million of borrowings available under its
secured revolving credit facilities (without triggering the
financial maintenance covenant under the ABL Facility).
On September 30, 2013, the Company was in compliance with all
covenants under the credit agreements governing its secured
revolving credit facilities and under the indentures governing the
notes. Based on the Company's current assessment of its operating
plan and the general economic outlook, the Company believes that
its cash flow from operations and available cash and cash
equivalents, including available borrowings under its new secured
revolving credit facilities, will be adequate to meet its
liquidity needs for at least the next twelve months.
Covenants under our Secured Credit Facilities and the Notes
The instruments that govern the Company's indebtedness contain,
among other provisions, restrictive covenants (and incurrence
tests in certain cases) regarding indebtedness, dividends and
distributions, mergers and acquisitions, asset sales, affiliate
transactions, capital expenditures and the maintenance of certain
financial ratios (depending on certain conditions). Payment of
borrowings under the Company's secured revolving credit facilities
and notes may be accelerated if there is an event of default as
determined under the governing debt instrument. Events of default
under the credit agreements governing the secured revolving credit
facilities include the failure to pay principal and interest when
due, a material breach of a representation or warranty, most
covenant defaults, events of bankruptcy and a change of control.
Events of default under the indentures governing the notes include
the failure to pay principal and interest, a failure to comply
with covenants, subject to a 30-day grace period in certain
instances, and certain events of bankruptcy.
The ABL Facility does not have any financial maintenance covenants
other than a minimum fixed charge coverage ratio of 1.0 to 1.0
that would only apply if the Company's availability under the ABL
Facility at any time is less than the greater of (a) 12.5% of the
lesser of the borrowing base and the total ABL Facility
commitments at such time and (b) $27 million. The fixed charge
coverage ratio under the credit agreement governing the ABL
Facility is generally defined as the ratio of (a) Adjusted EBITDA
minus non-financed capital expenditures and cash taxes to (b) debt
service plus cash interest expense plus certain restricted
payments, each measured on a LTM basis. The Company does not
currently meet such minimum ratio, and therefore the Company does
not expect to allow availability under the ABL Facility to fall
below such levels.
In addition, the financial maintenance covenant in the credit
agreement governing the Cash Flow Facility provides that beginning
in the third quarter of 2014, the first full quarter following the
one year anniversary of our entry into the Cash Flow Facility, at
any time that loans are outstanding under the facility, the
Company will be required to maintain a specified net first-lien
indebtedness to Adjusted EBITDA ratio, referred to as the "Senior
Secured Leverage Ratio." Specifically, the ratio of our "Total
Senior Secured Net Debt" (as defined in the credit agreement) to
trailing twelve-month Adjusted EBITDA (as adjusted per the credit
agreement) may not exceed 5.25 to 1 as of the last day of the
applicable quarter (beginning with the last day of the third
quarter of 2014). Although the Company was not required to meet
such ratio requirement, as of September 30, 2013, the Company had
a Senior Secured Leverage Ratio of 4.75 to 1.0 under the Cash Flow
Facility.
In addition to the financial maintenance covenants described
above, the Company is also subject to certain incurrence tests
under the credit agreements governing the secured revolving credit
facilities and the indentures governing the notes that restrict
the Company's ability to take certain actions if the Company is
unable to meet specified ratios. For instance, the indentures
governing the notes contain an incurrence test that restricts the
Company's ability to incur indebtedness or make investments, among
other actions, if the Company does not maintain an Adjusted EBITDA
to Fixed Charges ratio (measured on a LTM basis) of at least 2.00
to 1.00. The Adjusted EBITDA to Fixed Charges ratio under the
indentures is generally defined as the ratio of (a) Adjusted
EBITDA to (b) net interest expense excluding the amortization or
write-off of deferred financing costs, each measured on a LTM
basis. The restrictions on the Company's ability to incur
indebtedness or make investments under the indentures that apply
as a result, however, are subject to exceptions, including
exceptions that permit indebtedness under the secured revolving
credit facilities. Based on its forecast, the Company believes
that its cash flow from operations and available cash and cash
equivalents, including available borrowing capacity under the
secured revolving credit facilities, will be sufficient to fund
operations and pay liabilities as they come due in the normal
course of business for at least the next 12 months.
On September 30, 2013, the Company was in compliance with all
covenants under the credit agreements governing our secured
revolving credit facilities and under the indentures governing the
notes.
About Momentive Performance
Momentive Performance Materials, Inc., produces silicones and
silicone derivatives, and develops and manufactures products
derived from quartz and specialty ceramics. As of Dec. 31, 2008,
the Company had 25 production sites located worldwide, which
allows it to produce the majority of its products locally in the
Americas, Europe and Asia. Momentive's customers include
companies in industries, such as Procter & Gamble, 3M, Goodyear,
Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot
and Lowe's.
Momentive Performance disclosed a net loss of $365 million on
$2.35 billion of net sales for the year ended Dec. 31, 2012, as
compared with a net loss of $140 million on $2.63 billion of net
sales in 2011. As of June 30, 2013, the Company had $2.87 billion
in total assets, $4.11 billion in total liabilities and a $1.23
billion total deficit.
* * *
As reported by the TCR on May 14, 2012, Moody's Investors Service
lowered Momentive Performance Materials Inc.'s Corporate Family
Rating (CFR) and Probability of Default Rating (PDR) to Caa1 from
B3. The action follows the company's weak first quarter results
and expectations for a slower than expected recovery in volumes in
2012.
In the Aug. 15, 2012, edition of the TCR, Standard & Poor's
Ratings Services lowered all of its ratings on MPM by two notches,
including the corporate credit rating to 'CCC' from 'B-'. The
outlook is negative.
"The likelihood that earnings and cash flow will remain very weak
for the next several quarters prompted the downgrade," explained
credit analyst Cynthia Werneth. "In our view, leverage is
unsustainably high, with total adjusted debt to EBITDA above 15x
as of June 30, 2012."
MOMENTIVE SPECIALTY: Amends 2012 Form 10-K
------------------------------------------
The Audit Committee of the Board of Directors, along with senior
management of Momentive Specialty Chemicals Inc., in consultation
with the Company's independent registered public accountants,
concluded that the consolidated financial statements as of and for
the year ended Dec. 31, 2012, included in the Company's annual
report on Form 10-K for the fiscal year ended Dec. 31, 2012,
should no longer be relied upon because of an error in the 2012
financial statements related to the valuation allowance on
deferred tax assets.
During the third quarter of 2013, management identified an error
within the calculation and recording of a valuation allowance on
deferred tax assets related to the Company's Netherlands
subsidiary as of Dec. 31, 2012. As a result, management has re-
evaluated the calculation of the valuation allowance and the
related recording of that valuation allowance that occurred in the
fourth quarter of 2012 and corrected certain financial statement
line items relating to taxes based on this re-evaluation. The
error did not impact the financial statements for the years ended
Dec. 31, 2011, and 2010 or for any of the periods included in the
Company's quarterly reports on Forms 10-Q for the quarters ended
Sept. 30, 2012, June 30, 2012, or March 31, 2012, because the
recording of the valuation allowance happened in the fourth
quarter of 2012. The error had an immaterial balance sheet impact
on the Company's quarterly reports on Form 10-Q for the quarters
ended June 30, 2013, and March 31, 2013. Accordingly, the impact
of the error with respect to the financial statements referred to
above, other than with respect to the year ended Dec. 31, 2012,
was not material. Additionally, the restatement had no impact on
the Company's revenues, total debt, liquidity, net operating cash
flows from operations or Segment EBITDA.
As restated, the Company's net income for the year ended Dec. 31,
2012, was $343 million as compared to net income of $324 million
as originally reported.
A copy of the Amended Form 10-K is available for free at:
http://is.gd/5bZEBy
About Momentive Specialty
Momentive Specialty Chemicals, Inc., headquartered in Columbus,
Ohio, is a leading producer of thermoset resins (epoxy,
formaldehyde and acrylic). The company is also a supplier of
specialty resins for inks and specialty coatings sold to a diverse
customer base as well as a producer of commodities such as
formaldehyde, bisphenol A, epichlorohydrin, versatic acid and
related derivatives.
The Company's balance sheet at June 30, 2013, showed $3.47 billion
in total assets, $5.06 billion in total liabilities and a $1.58
billion total deficit.
* * *
Momentive Specialty carries a 'B-' issuer credit rating from
Standard & Poor's Ratings Services. It has 'B3' corporate family
and probability of default ratings from Moody's Investors Service.
As reported in the Oct. 27, 2010 edition of TCR, Moody's Investors
Service assigned a 'Caa1' rating to the guaranteed senior secured
second lien notes due 2020 of Momentive Specialty (formerly known
as Hexion Specialty Chemicals Inc.). Proceeds from the notes were
allocated for the repayment of $533 million of guaranteed senior
secured second lien notes due 2014. "With this refinancing Hexion
will have refinanced or extended the maturities on the vast
majority of the debt that was originally slated to mature prior to
2015. There is less than $600 million of this debt remaining,
which should be much easier to for the company to refinance as its
credit metrics improve further," stated John Rogers, Senior Vice
President at Moody's.
MONARCH COMMUNITY: Treasury Approves Preferred Stock Exchange
-------------------------------------------------------------
Monarch Community Bancorp, Inc., the parent company of Monarch
Community Bank, has entered into an exchange agreement pursuant to
which the U.S. Department of Treasury has agreed to exchange 6,785
shares of Monarch's Fixed Rate Cumulative Perpetual Preferred
Stock, Series A and a warrant to purchase up to 52,192.40 shares
of Monarch's common stock for approximately 2,272,600 shares of
Monarch's common stock (such number of shares will be adjusted
slightly to reflect actual accrued dividends on the date the
exchange closes). In connection with the exchange, the Department
of Treasury has agreed to sell the Monarch common stock issued in
the exchange to third party purchasers for an aggregate purchase
price of approximately $4,545,200. To complete these sales,
Monarch, the Department of Treasury and each third party purchaser
will enter into a securities purchase agreement pursuant to which,
among other things, the purchasers will pay $2.00 per common share
for the common shares acquired from the Department of Treasury,
and Monarch will agree to recognize the transfer of the shares and
reimburse any expenses the Department of Treasury's incurs in
consummating the sale of the shares. This exchange agreement
finalizes the negotiated settlement between Monarch and Treasury
in which Treasury agreed to allow Monarch to retire its $6.785
million TARP preferred stock and warrants at a 55 percent
discount.
As Monarch has previously reported, Monarch has raised and is
currently holding in escrow pending closing $16.5 million in
investor funds which will be used to purchase approximately
8,250,000 shares of Monarch Community Bancorp's newly issued
common stock at $2.00 per share. Approximately $4,545,200 of
these investor funds will be used to purchase from the Department
of Treasury the newly issued common shares issued under the
exchange agreement, with the balance used to purchase newly issued
common shares directly from Monarch. Completion of the exchange
arrangements with Treasury was one of the conditions to closing
the $16.5 million funding. Monarch anticipates that the remaining
conditions will be satisfied and the closing will conclude in the
next 15 to 20 days.
"We are pleased that we have successfully concluded our
negotiations with Treasury, and express our appreciation to the
U.S. Department of Treasury for its efforts during this process,"
stated Richard J. DeVries, president and CEO of Monarch Community
Bancorp and Monarch Community Bank. "The conclusion of these
negotiations triggers our ability to move forward with the closing
of the capital raise," the funds from which will be used to
support the ongoing growth of the bank, and to raise our Tier 1
and Total Risk Based Capital Ratios to approximately 10.0% and
17.5%, respectively. These post-capital raise ratios are well
above the FDIC and State of Michigan Consent Order requirements of
9.0% and 11.0%, respectively, and we believe the achievement of
these capital ratios will mark the completion by the bank of all
Consent Order requirements."
About Monarch Community
Coldwater, Michigan-based Monarch Community Bancorp, Inc., was
incorporated in March 2002 under Maryland law to hold all of the
common stock of Monarch Community Bank, formerly known as Branch
County Federal Savings and Loan Association. The Bank converted
to a stock savings institution effective Aug. 29, 2002. In
connection with the conversion, the Company sold 2,314,375 shares
of its common stock in a subscription offering.
Monarch Community incurred a net loss of $353,000 in 2012 as
compared with a net loss of $353,000 in 2011.
Plante & Moran, PLLC, in Grand Rapids, Michigan, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Corporation has suffered recurring losses from operations
and as of December 31, 2012 did not meet the minimum capital
requirements as established by its regulators, which raises
substantial doubt about the Corporation's ability to continue as a
going concern.
MONTEREY CHECKER: District Court Won't Hear Ownership Dispute
-------------------------------------------------------------
District Judge Lucy H. Koh in San Jose, California, granted the
defendants' request to dismiss the case, SAL J. CARDINALLI,
Plaintiff, v. SUPERIOR COURT OF CALIFORNIA FOR THE COUNTY OF
MONTEREY, a California State court, et al. Defendants, Case No.
5:12-CV-06356-LHK (N.D. Calif.). Judge Koh said the Plaintiff
does not provide adequate grounds to establish federal subject
matter jurisdiction.
Sal Cardinalli brings this action against his two brothers, John
Cardinalli, Jr. and Stephen Cardinalli; his father, John
Cardinalli, Sr.; his nephews Vincent Cardinalli and John T.
Cardinalli III; the John T. Cardinalli, Jr. and Angela Cardinalli
Living Trust and the Stephen P. Cardinalli and Francesca
Cardinalli Living Trust; the Salinas Yellow Cab Co., LLC; and
Yellow Cab, Monterey Airporter, Inc., for declaratory relief,
intentional interference with economic expectancy, conspiracy to
defraud, and fraudulent conveyance. Plaintiff also brings claims
against John Cardinalli, Jr.; Stephen Cardinalli; and John
Cardinalli, Sr. for partition of real property and unpaid
reasonable rental value of property.
The case arises out of a dispute about a family business. In
1976, Plaintiff Sal Cardinalli and Defendants John Cardinalli,
Jr.; Stephen Cardinalli; and John Cardinalli, Sr. purchased
Monterey Checker Transportation, Inc., a Monterey-based taxicab
company. Each party owned a 25% share of MCT. Plaintiff alleges
that, beginning in September 2002, Defendants froze Plaintiff out
of "any meaningful participation in the management, operation,
control, or rental" of MCT and its related real estate. Plaintiff
claims, for example, that Defendants have allowed taxicabs to dump
toxic waste on the real estate owned by MCT and have refused to
pay Plaintiff rental payments owed to Plaintiff as part of his
share in MCT despite Plaintiff's "demand[s] that he be afforded
the rights and privileges of an owner."
In October 2004, Plaintiff brought a state court action against
MCT, Defendants John Cardinalli and Stephen Cardinalli, their
wives, and New Hope, Inc. for declaratory relief, accounting,
partition, breach of fiduciary duty, and an allegation for the
involuntary dissolution of the corporation. Cardinalli v.
Cardinalli, H032309, 2010 WL 5176852 at *1-2, 4 (Cal. Ct. App.
Dec. 21, 2010) (unpublished). On March 26, 2007, the state court
found for Plaintiff as to his involuntary dissolution claim but
denied his remaining claims. In particular, the court ordered
that Plaintiff's 25% share in MCT be liquidated and that Plaintiff
be reimbursed for $283,750. The California Court of Appeal
affirmed this decision on December 21, 2010. The judgment became
final in March 2011.
Two months after the state court's judgment became final, MCT
filed for Chapter 11 bankruptcy (Bankr. N.D. Cal. Case No.
11-54837). MCT's filing for Chapter 11 bankruptcy triggered an
automatic stay as to all litigation concerning MCT's debts, so
Plaintiff could not sue MCT to collect his state court judgment.
Plaintiff therefore moved to dismiss the bankruptcy petition "on
the ground of fraud" and for "substantive consolidation." The
bankruptcy court denied both of Plaintiff's motions.
Subsequently, Plaintiff and MCT stipulated to convert the Chapter
11 reorganization to a Chapter 7 liquidation. The bankruptcy
court granted the stipulation in October 2011. Plaintiff then
entered into a stipulation with the trustee overseeing MCT's
Chapter 7 liquidation to lift the automatic stay as to the
Defendants so that Plaintiff could file an action against
Defendants in state court. The bankruptcy court granted this
stipulation to lift the automatic stay in May 2012). The
bankruptcy court found that Plaintiff's state law claims against
Defendants "[did] not in any way effect [sic] the bankruptcy
proceedings."
Plaintiff filed an action in the Superior Court of Monterey County
in April 2012. Plaintiff alleged 11 claims including conspiracy
to defraud, intentional interference with economic expectancy, and
partition of real property. The state court dismissed all 11 of
Plaintiff's claims and denied Plaintiff leave to amend for all of
his claims except for conspiracy to defraud. Plaintiff then filed
a motion for reconsideration, which the court denied. Finally,
the court dismissed Plaintiff's first amended complaint without
leave to amend as to all eleven of Plaintiff's causes of action.
Plaintiff appealed the trial court's judgment to the California
Court of Appeal, where the action is now pending.
After receiving decisions from the bankruptcy court and state
trial court, Plaintiff filed the instant case in the District
Court on December 14, 2012, alleging state law claims to "hedge
his bets" against an adverse ruling by the Court of Appeal.
Defendants move to dismiss Plaintiff's complaint due to lack of
subject matter jurisdiction and for failure to state a claim.
Judge Koh noted that because Plaintiff has not pleaded that his
state law claims against Defendants have any effect on MCT's
bankruptcy proceeding, Plaintiff's claims lack "related to"
jurisdiction under Section 1334, and thus the Court lacks subject
matter jurisdiction in this case.
A copy of Judge Koh's Nov. 7, 2013 Order is available at
http://is.gd/pM2AOvfrom Leagle.com.
Monterey Checker Transportation, Inc., dba Yellow Cab Company,
filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No.
11-54837) on May 20, 2011, listing under $1 million in both assets
and debts. A copy of the petition is available at
http://bankrupt.com/misc/canb11-54837.pdffrom Leagle.com.
MORGANS HOTEL: Files Form 10-Q, Incurs $14.4MM Net Loss in Q3
-------------------------------------------------------------
Morgans Hotel Group Co. filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss attributable to common stockholders of $14.36 million on
$58.26 million of total revenues for the three months ended Sept.
30, 2013, as compared with a net loss attributable to common
stockholders of $18.51 million on $44.03 million of total revenues
for the same period last year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss attributable to common stockholders of $47.72 million on
$171.62 million of total revenues as compared with a net loss
attributable to common stockholders of $51.55 million on $135.12
million of total revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2013, showed $572.83
million in total assets, $745.70 million in total liabilities,
$6.31 million in redeemable noncontrolling interest and $179.18
million total deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/vc9Y0G
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company incurred a net loss attributable to common
stockholders of $66.81 million in 2012, a net loss attributable to
common stockholders of $95.34 million in 2011, and a net loss
attributable to common stockholders of $89.96 million in 2010.
MOTORS LIQUIDATION: Wilmington Files GUC Trust Report & Budgets
---------------------------------------------------------------
Pursuant to the Amended and Restated Motors Liquidation Company
GUC Trust Agreement dated as of June 11, 2012, and between the
parties thereto, as amended, Wilmington Trust Company, in its
capacity as trust administrator and trustee of the Motors
Liquidation Company GUC Trust, is required to file certain GUC
Trust Reports with the Bankruptcy Court for the Southern District
of New York. In addition, pursuant to a Bankruptcy Court Order
Authorizing the GUC Trust Administrator to Liquidate New GM
Securities for the Purpose of Funding Fees, Costs and Expenses of
the GUC Trust and the Avoidance Action Trust, dated March 8, 2012,
the GUC Trust Administrator is required to file certain quarterly
variance reports as described in the third sentence of Section 6.4
of the GUC Trust Agreement with the Bankruptcy Court.
On Nov. 7, 2013, the GUC Trust Administrator filed the GUC Trust
Report required by Section 6.2(c) of the GUC Trust Agreement and
the Budget Variance Report for the quarter ended Sept. 30, 2013.
A copy of the Bankruptcy Court filing is available at:
http://is.gd/GSUUKe
Pursuant to the GUC Trust Agreement and the Liquidation Order, the
GUC Trust Administrator is required to provide on an annual basis
the projected budgets for certain categories of expenses, other
than Reporting and Transfer Costs, to FTI Consulting, Inc., in its
capacity as the trust monitor of the GUC Trust, to the DIP Lenders
and to certain additional parties specified in the Liquidation
Order. copies of the calendar-year 2014 budgets for Wind-Down
Costs and for Reporting and Transfer Costs are available for free
at http://is.gd/Ht1imx
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
On Dec. 15, 2011, Motors Liquidation Company was dissolved. On
the Dissolution Date, pursuant to the Plan and the Motors
Liquidation Company GUC Trust Agreement, dated March 30, 2011,
between the parties thereto, the trust administrator and trustee
-- GUC Trust Administrator -- of the Motors Liquidation Company
GUC Trust, assumed responsibility for the affairs of and certain
claims against MLC and its debtor subsidiaries that were not
concluded prior to the Dissolution Date.
MURRAY ENERGY: S&P Rates Proposed $1.02-Bil. First Lien Loan 'BB-'
------------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'BB-'
issue-level rating to St. Clairsville, Ohio-based coal producer
Murray Energy Corp.'s proposed $1.02 billion first-lien term loan.
The recovery rating is '1', indicating S&P's expectation of a very
high (90%-100%) recovery in the event of a payment default. S&P
also assigned its 'B-' issue-level rating to the company's
$400 million second-lien term loan that is also part of the
refinancing. The recovery rating is '5', indicating S&P's
expectation of a modest (10%-30%) recovery.
At the same time, S&P affirmed its 'B' corporate credit rating on
the company and its 'B-' issue-level rating on its $350 million
second-lien senior secured notes due 2021. The recovery rating on
the notes is '5', indicating S&P's expectation of a modest
(10%-30%) recovery. S&P removed all ratings from CreditWatch with
negative implications, where they were placed on Oct. 29, 2013.
The company expects to use proceeds from the new first-lien term
loan and new second-lien term loan to repay its existing
$350 million first-lien term loan, finance the cash consideration
for the Consol assets acquisition, and pay for transaction related
fees and expenses. S&P expects to withdraw the issue-level rating
on the $350 million first-lien term loan when the transaction
closes. Murray will also have an unrated $200 million asset-based
revolving credit facility upsized from $50 million as part of this
transaction.
"The stable outlook reflects our view that the acquisition of the
Consol assets will improve Murray's business profile by expanding
the company's size and scope while increasing the base of
accessible customers. This upside is tempered by the execution
risk associated with integrating the new operations as well as the
uncertainty related to the magnitude of the assumed legacy
liabilities and their associated expenses. Although we believe
that the U.S. thermal coal industry will continue to contract over
the long term, we expect some improvement in demand in the near
term as the economy gains momentum," said Standard & Poor's credit
analyst Chiza Vitta.
S&P would consider a downgrade if liquidity deteriorated. S&P
would also consider a lower rating if funds from operations (FFO)
interest coverage fell to less than 2x. This could occur if the
integration of Consol assets resulted in cost overruns or took
longer than expected to reach the expected levels of
profitability.
An upgrade would likely require leverage sustained at less than 5x
with an FFO to debt ratio of more than 12%. The rate at which
credit measures could improve would likely depend on Murray
successfully meeting its profitability targets for the Consol
assets, as well as a concurrent improvement in demand for thermal
coal.
MUSCLEPHARM CORP: Terminates License Agreement with MPS
-------------------------------------------------------
MusclePharm Corporation has sent a termination notice to
MusclePharm Sportswear LLC, thereby terminating, effective
immediately, the Sportswear License Agreement that was entered
into in June 2011 between the Company and MPS.
Accordingly, the Company no longer has any affiliation with MPS
and its principle owner, Drew Ciccarelli. The Company has
demanded that MPS dissolve its company and stop using the name
"MusclePharm" and/or "MusclePharm Sportswear LLC" in any manner or
any fashion within 30 days.
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100 percent free of banned substances. MusclePharm is sold in
over 120 countries and available in over 5,000 U.S. retail
outlets, including GNC and Vitamin Shoppe. MusclePharm products
are also sold in over 100 online stores, including
bodybuilding.com, Amazon.com and Vitacost.com.
The Company reported a net loss of $23.28 million in 2011,
compared with a net loss of $19.56 million in 2010. The Company's
balance sheet at June 30, 2013, showed $23.25 million in total
assets, $10.64 million in total liabilities and $12.61 million in
total stockholders' equity.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Berman & Company,
P.A., in Boca Raton, Florida, expressed substantial doubt about
the Company's ability to continue as a going concern. The
independent auditors noted that the Company has a net loss of
$23,280,950 and net cash used in operations of $5,801,761 for the
year ended Dec. 31, 2011; and has a working capital deficit of
$13,693,267, and a stockholders' deficit of $12,971,212 at
Dec. 31, 2011.
NATIONAL HOLDINGS: B. Riley Held 5.2% Equity Stake at Oct. 24
-------------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, Bryant Riley and his affiliates disclosed
that as of Oct. 24, 2013, they beneficially owned 6,361,158 shares
of common stock of National Holdings Corporation representing 5.2
percent of the shares outstanding. A copy of the regulatory
filing is available for free at http://is.gd/lgVn7r
About National Holdings
New York, N.Y.-based National Holdings Corporation is a financial
services organization, operating primarily through its wholly
owned subsidiaries, National Securities Corporation, Finance
Investments, Inc., and EquityStation, Inc. The Broker-Dealer
Subsidiaries conduct a national securities brokerage business
through their main offices in New York, New York, Boca Raton,
Florida, and Seattle, Washington.
The Company incurred a net loss of $1.93 million for the year
ended Sept. 30, 2012, compared with a net loss of $4.71 million
during the prior year. The Company's balance sheet at June 30,
2013, showed $23.43 million in total assets, $11.81 million in
total liabilities and $11.62 million in total stockholders'
equity.
Sherb & Co., LLP, in Boca Raton, Florida, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Sept. 30, 2012. The independent auditors noted that
the Company has incurred significant losses and has a working
capital deficit as of Sept. 30, 2012, that raise substantial doubt
about the Company's ability to continue as a going concern.
Bankruptcy Warning
"Our independent public accounting firm has issued an opinion on
our consolidated financial statements that states that the
consolidated financial statements were prepared assuming we will
continue as a going concern and further states that our recurring
losses from operations, stockholders' deficit and inability to
generate sufficient cash flow to meet our obligations and sustain
our operations raise substantial doubt about our ability to
continue as a going concern. Our future is dependent on our
ability to sustain profitability and obtain additional financing.
If we fail to do so for any reason, we would not be able to
continue as a going concern and could potentially be forced to
seek relief through a filing under the U.S. Bankruptcy Code," the
Company said in its annual report for the year ended Sept. 30,
2012.
NEONODE INC: Incurs $3.3 Million Net Loss in Third Quarter
----------------------------------------------------------
Neonode Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $3.34 million on $1.07 million of net revenues for the three
months ended Sept. 30, 2013, as compared with a net loss of $2.14
million on $1.67 million of net revenues for the same period
during the prior year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss of $10.03 million on $2.70 million of net revenues as
compared with a net loss of $7.15 million on $4.81 million of net
revenues for the same period last year.
As of Sept. 30, 2013, the Company had $13.38 million in total
assets, $4.80 million in total liabilities and $8.58 million total
stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/fUEnzO
About Neonode Inc.
Lafayette, Calif.-based Neonode Inc. (OTC BB: NEON)
-- http://www.neonode.com/-- provides optical touch screen
solutions for hand-held and small to midsize devices.
The Company incurred a net loss of $9.28 million in 2012, a net
loss of $17.14 million in 2011 and a $31.62 million net loss in
2010.
NNN PARKWAY CORPORATE: Case Summary & 20 Top Unsecured Creditors
----------------------------------------------------------------
Debtor: NNN Parkway Corporate Plaza 3, LLC
1551 N. Tustin Ave., Suite 200
Santa Ana, CA 92705
Case No.: 13-19322
Chapter 11 Petition Date: November 14, 2013
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Hon. Theodor Albert
Debtor's Counsel: Scott H McNutt, Esq.
188 The Embarcadero Ste 800
San Francisco, CA 94105
Tel: 415-995-8475
Fax: 415-995-8487
Email: smcnutt@ml-sf.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Todd Mikles, authorized agent.
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Daymark Properties Realty Inc $1,336,887
1551 N. Tustin Ave
Ste 200
Santa Ana CA 92705
Voit Real Estate Services $303,635
2237 Douglas Blvd, Sute 100
Roseville CA 95661
City of Roseville $77,229
Environmental Utilities
Air Systems of Sacramento Inc $63,732
SBM Management Services LP $27,538
Terracare Associates $23,848
Cassidy Turley PM SF Inc $21,064
Full Service Maintenance Inc $10,901
Pinnacle Capital Mortgage Corp $10,578
Cassidy Turley Midwest Inc $7,087
SimplexGrinnell $6,944
Darryl K. Bryant $5,255
Reeves Construction Inc $3,521
Nielsen Associates Architects $3,265
Simplex Time Recorder Co $2,881
Pacific Gas & Electric Company $2,227
Electrical Systems of CA $2,076
Bayer Protective Services Inc $1,935
Plant Domaine $1,817
CEI Roofing California $1,448
NORCRAFT COS: S&P Raises CCR to 'B+' & Removes Rating from Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Norcraft Cos. L.P. to 'B+' from 'B' and removed
the rating from CreditWatch where it was placed with positive
implications on Oct. 24, 2013. The outlook is stable. At the
same time, S&P affirmed its 'BB-' issue-level rating on its
$150 million senior secured term loan B. The recovery rating is
'2', indicating S&P's expectation of substantial (70% to 90%)
recovery in the event of default.
S&P also removed its 'B' issue-level rating on the company's
$240 million second-lien notes from CreditWatch and subsequently
withdrew it.
The upgrade reflects a reduction in Norcraft's leverage following
the successful completion of an IPO of its common stock, which
raised $102.4 million of net proceeds. These proceeds plus the
issuance of a new $150 million senior secured term loan B are
being used to refinance its existing $240 million of 10.25% senior
secured second-lien notes due 2015.
"The rating outlook is stable and reflects our view that industry
fundamentals are recovering, resulting in our expectation of
better operating performance and consequently improved credit
measures," said Standard & Poor's credit analyst Maurice Austin.
S&P expects pro forma leverage of 4.5x at the close of the
transaction, improving to about 4x by the end of 2013. This
reflects S&P's expectation that sales and EBITDA will grow over
the next year as housing starts increase--but growth in sales from
the remodeling sector, which accounts for most of Norcraft's sales
and profits, will lag new construction sales until a broader
economic recovery takes place.
S&P could lower the rating if Norcraft experiences weaker than
expected end market demand resulting in a decline in volumes such
that total leverage remains above 5x on a sustained basis. This
could occur if 2014 sales growth is less than expected in
conjunction with a 400 basis point decline in gross margins.
At this time, an upgrade seems less likely given Norcraft's
aggressive financial risk profile and projected leverage levels of
about 4x debt to EBITDA. Also, S&P views the rating on Norcraft
as constrained at the current level because of the majority
ownership of the company by private equity.
NORTEL NETWORKS: Allocation Trial Being Delayed Until April 28
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that although Nortel Networks Inc. generated $9 billion
from liquidation of assets, a dispute over allocation is
preventing distributions to creditors. The allocation trial is
being delayed once again.
According to the report, originally, the judges in the U.S. and
Canada scheduled the trial to begin Jan. 6. The date was pushed
back to March 31, with an understanding the examinations of
witnesses would end by Dec. 31.
In papers filed in the U.S. Bankruptcy Court on Nov. 14, the
companies and their creditors' committees on both sides of the
border are asking the judges to push the trial back about a month,
to April 28. They have been unable to complete examinations and
recover documents from third parties.
Mediation failed to resolve the allocation dispute, prompting the
U.S. and Canadian courts to schedule trial next year on how to
divide proceeds among creditors in the U.S., Canada and Europe.
U.S. Bankruptcy Judge Kevin Gross previously said the allocation
dispute is keeping the case "tied up in knots seemingly forever."
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation and
its various affiliated entities provided next-generation
technologies, for both service provider and enterprise networks,
support multimedia and business-critical applications. Nortel did
business in more than 150 countries around the world. Nortel
Networks Limited was the principal direct operating subsidiary of
Nortel Networks Corporation.
On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent
Nortel Networks Corporation, NNI's direct corporate parent Nortel
Networks Limited and certain of their Canadian affiliates
commenced a proceeding with the Ontario Superior Court of Justice
under the Companies' Creditors Arrangement Act (Canada) seeking
relief from their creditors. Ernst & Young was appointed to serve
as monitor and foreign representative of the Canadian Nortel
Group. That same day, the Monitor sought recognition of the CCAA
Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No.
09-10164) under Chapter 15 of the U.S. Bankruptcy Code.
That same day, NNI and certain of its affiliated U.S. entities
filed voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10138).
In addition, the High Court of England and Wales placed 19 of
NNI's European affiliates into administration under the control of
individuals from Ernst & Young LLP. Other Nortel affiliates have
commenced and in the future may commence additional creditor
protection, insolvency and dissolution proceedings around the
world.
On May 28, 2009, at the request of administrators, the Commercial
Court of Versailles, France, ordered the commencement of secondary
proceedings in respect of Nortel Networks S.A. On June 8, 2009,
Nortel Networks UK Limited filed petitions in U.S. Bankruptcy
Court for recognition of the English Proceedings as foreign main
proceedings under Chapter 15.
U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and
15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at
Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as
Chapter 15 petitioner's counsel.
In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb
Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors'
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The United States Trustee appointed an Official Committee of
Unsecured Creditors in respect of the U.S. Debtors. An ad hoc
group of bondholders also was organized.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, and Christopher M. Samis, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, represent the Official
Committee of Unsecured Creditors.
An Official Committee of Retired Employees and the Official
Committee of Long-Term Disability Participants tapped Alvarez &
Marsal Healthcare Industry Group as financial advisor. The
Retiree Committee is represented by McCarter & English LLP as
Delaware counsel, and Togut Segal & Segal serves as the Retiree
Committee. The Committee retained Alvarez & Marsal Healthcare
Industry Group as financial advisor, and Kurtzman Carson
Consultants LLC as its communications agent.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated
assets of $11.6 billion and consolidated liabilities of $11.8
billion. The Nortel Companies' U.S. businesses are primarily
conducted through Nortel Networks Inc., which is the parent of
majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI
had assets of about $9 billion and liabilities of $3.2 billion,
which do not include NNI's guarantee of some or all of the Nortel
Companies' about $4.2 billion of unsecured public debt.
Since the commencement of the various insolvency proceedings,
Nortel has sold its business units and other assets to various
purchasers. Nortel has collected roughly $9 billion for
distribution to creditors. Of the total, $4.5 billion came from
the sale of Nortel's patent portfolio to Rockstar Bidco, a
consortium consisting of Apple Inc., EMC Corporation,
Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In
Motion Limited, and Sony Corporation. The consortium defeated a
$900 million stalking horse bid by Google Inc. at an auction. The
deal closed in July 2011.
Nortel has filed a proposed plan of liquidation in the U.S.
Bankruptcy Court. The Plan generally provides for full payment on
secured claims with other distributions going in accordance with
the priorities in bankruptcy law.
Judge Gross and the court in Canada scheduled trials in 2014 on
how to divide proceeds among creditors in the U.S., Canada, and
Europe.
NUPATHE INC: Capital Raising Failure May Result in Debt Default
---------------------------------------------------------------
NuPathe Inc. on Nov. 14 reported financial results for the quarter
ended September 30, 2013, as well as recent operational
highlights.
"We have made substantial progress in securing a partner to
maximize the commercial potential of Zecuity," said Armando Anido,
chief executive officer of NuPathe. "In addition, we remain on
track to have Zecuity launch supplies manufactured by year-end.
We believe this puts us in a good position to secure a commercial
partner. While we have made significant progress on the
partnership and manufacturing fronts, in order to extend our cash
runway, we are limiting and delaying certain sales and marketing
activities. As a result, we will not commercialize Zecuity by
year-end, but we intend to launch as expeditiously as possible
after securing a partner and funding."
Quarterly and Recent Highlights
-- The Company progressed commercial manufacturing
activities for Zecuity(R), including entering into a commercial
supply and license agreement with LTS Lohmann Therapy Systems
Corp. for the drug product in Zecuity, as well as significant
progression of key process validation steps.
-- In September, NuPathe initiated dosing of patients for
a Phase 1 study of Zecuity in adolescents with a history of
migraine attacks. This open label, single-dose study will assess
the safety, pharmacokinetics, and tolerability of Zecuity in
adolescent migraine patients. This study is part of the Company's
post-marketing requirements.
-- In September, the United States Patent and Trademark
Office (USPTO) issued a notice of allowance for U.S. Patent
application 13/407,434. This application relates to Zecuity's
two-stage iontophoretic delivery sequence to transdermally deliver
sumatriptan. Once issued, this patent will provide additional
protection for Zecuity and will be the sixth patent covering
Zecuity to be listed in the U.S. Food & Drug Administration's
(FDA) Orange Book.
-- In September, NuPathe relocated its principal offices
to 7 GreatValley Parkway, Suite 300, Malvern, Pennsylvania.
Zecuity Launch Update
NuPathe is actively seeking partnerships to maximize the
commercial potential of Zecuity. The Company's goal is to secure
a commercial partner prior to the launch of Zecuity and to build
its commercial infrastructure to complement that of a partner,
which may include the hiring and deployment of its own specialty
sales force. Until such time as the Company is able to secure a
commercial partner and/or additional capital, the Company is
limiting and delaying certain expenditures required for the
commercialization of Zecuity. As a result, NuPathe will not
launch Zecuity in the fourth quarter of 2013. The timing of the
launch of Zecuity will be dependent upon the completion of a
commercial partnership for Zecuity and/or obtaining the additional
capital required for launch. Although the Company is limiting
certain commercialization expenditures, expenditures required to
validate the manufacturing process for Zecuity continue and
Zecuity launch supplies are expected to be manufactured by the end
of 2013. NuPathe believes that the availability of launch
supplies is important to the completion of a commercial
partnership and/or funding transaction and to an expeditious
launch thereafter. However, there is no assurance that the
Company will be able to secure a commercial partner or the
additional required capital on acceptable terms or otherwise.
Third Quarter 2013 Financial Results
NuPathe reported a net loss applicable to common stockholders of
$7.8 million, or $0.25 per diluted share, for the third quarter of
2013, compared with a net loss applicable to common stockholders
of $6.2 million, or $0.42 per diluted share, for the third quarter
of 2012. Total operating expenses for the third quarter of 2013
were $7.6 million, compared with $5.7 million in the third quarter
of 2012.
Research and development expenses were $3.9 million in the third
quarter of 2013, compared with $2.2 million in the third quarter
of 2012. The increase was largely attributable to higher expenses
related to manufacturing scale-up. This was partially offset by
reduced compensation expenses in the 2013 period due to a lower
headcount. Selling, general and administrative expenses were $3.7
million in the third quarter of 2013, in-line with $3.5 million
for the same period in 2012.
Net cash used in operating activities for the nine months ended
September 30, 2013, was $12.0 million, primarily the result of
spending for normal operating activities, manufacturing scale-up
and commercialization activities conducted in preparation of the
launch of Zecuity. During this period NuPathe also used $2.7
million of cash in investing activities, primarily for the
purchase of commercial manufacturing equipment for Zecuity, and
received $2.4 million of cash from financing activities, primarily
from the exercise of outstanding common stock warrants.
As of September 30, 2013, NuPathe had $10.3 million in cash and
cash equivalents and working capital of $2.9 million, compared
with $22.6 million in cash and cash equivalents and working
capital of $19.8 million as of December 31, 2012. Management
estimates that the Company's existing cash and cash equivalents
will be sufficient to fund operations and debt service obligations
through January of 2014. The additional capital that the Company
will require to fund operations and debt service obligations
beyond that point and launch Zecuity will depend largely upon the
timing, scope, terms and structure of a commercial partnership for
Zecuity. To address its capital needs, the Company is considering
a range of possible transactions including corporate
collaborations, partnerships and other strategic transactions;
debt and equity financings and other funding transactions.
However, there is no assurance that the Company will be able to
complete any such transaction or obtain the additional required
capital on acceptable terms or otherwise. If the Company is
unable to obtain the necessary capital, it will need to pursue a
plan to license or sell its assets and/or seek bankruptcy
protection. Additionally, failure to obtain the necessary capital
in a timely manner could result in the Company's breach or
default under important agreements resulting in, among other
things, the potential: acceleration of payments under the
Company's 2012 term loan and the ability of the lender to proceed
against the collateral securing the loan, including the exercise
of control over the Company's cash and investment accounts
pursuant to the account control agreements; acceleration of
payments under the Company's office lease; and termination of
agreements on which the Company relies for the manufacture of
Zecuity or pursuant to which the Company obtains valuable rights.
NuPathe, based in Conshohocken, Pa., is developing drugs to treat
neurological disorders such as migraines, Parkinson's disease,
schizophrenia and bipolar disorder.
ONE CALL: S&P Affirms 'B' CCR & Removes Rating from CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B'
corporate credit rating on Parsippany, N.J.-based One Call Care
Management Inc. and removed it from CreditWatch with negative
implications, where S&P placed it on Oct. 30, 2013, following the
news that One Call was being acquired by Apax Partners. The
outlook is negative.
At the same time, S&P assigned its 'B' issue-level ratings to the
newly formed intermediate holding company, Opal Acquisition Inc.'s
planned five-year $100 million revolver (to be undrawn at
transaction close) and seven-year $825 million first-lien term
loan. The recovery ratings on these debt issues are '3'
indicating S&P's expectations for a meaningful (50%-70%) recovery
in the event of a payment default. In addition, S&P assigned its
'CCC+' issue-level rating to Opal Acquisition's planned eight-year
$420 million second-lien term loan. The recovery rating on this
debt issue is '6' indicating S&P's expectations for a negligible
recovery (0%-10%) in the event of a payment default.
S&P is also lowering its issue-level rating on the existing senior
secured facility to 'B' from 'B+' and removing it from CreditWatch
negative, where S&P placed it on Oct. 30, 2013. S&P revised the
recovery rating to '3' from '2'. The '3' recovery rating
indicates S&P's expectations for a meaningful (50%-70%) recovery
in the event of a payment default
"The negative outlook primarily reflects that One Call will have
greater financial risk post-transaction than we previously
incorporated into the rating, with lease-adjusted leverage
increasing to 8.1x, as of pro-forma Sept. 30, 2013. Our leverage
calculation accounts for pro-forma EBITDA that includes a full
year of recent acquisition results (3i, TechHealth) and realized
cost synergies related to those acquisitions," said credit analyst
James Sung. "Our previous outlook had assumed that the company's
financial policy would tolerate peak leverage of roughly 6.5x (or
slightly more than the company's leverage of 6.2x in August 2012
when it acquired MSC Care Management). However, we are
comfortable with the company's higher leverage because we view it
as temporary. The company plans to lower leverage to below 6.5x
by year-end 2014 and we believe this is reasonably achievable
because of the company's positive revenue and earnings trends and
the generally good cash flow generation."
The negative outlook reflects the potential for one notch
downgrade over the next 12 months if the company is unable to
execute its deleveraging plan and lower leverage to below 6.5x,
which S&P considers to be the company's sustainable leverage per
the 'B' rating. The negative outlook also reflects the merger
overhang related to the potential One Call-Align transaction, of
which financial terms are still preliminary. S&P plans to discuss
with this transaction in more detail with the One Call management
team and Apax Partners over the next several months.
S&P would consider a stable outlook if the company is able to
execute its business strategy in terms of growing revenues by a
mid- to high-single-digit growth rate in 2014 and improving its
EBITDA margins toward the high end of the 15%-20% range. In
addition, the company would need to pay down debt according to
plan and maintain leverage below 6.5x on a sustained basis.
Moreover, if the company merges with Align Networks, leverage
neutral financing along with a successful integration, would also
be factors supporting a stable outlook.
ORCHARD SUPPLY: Plan Set for Dec. 20 Confirmation
-------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that creditors of Orchard Supply Hardware Stores Corp.
won't be waiting 12 years like Ames creditors before receiving a
distribution.
According to the report, unsecured creditors of former hardware
store owner Orchard will take home somewhat more than Ames
creditors.
This week, the bankruptcy judge in Delaware approved disclosure
materials allowing Orchard's creditors to vote on a liquidating
Chapter 11 plan. The confirmation hearing for approval of the plan
will take place Dec. 20.
The plan is based on a settlement between the creditors' committee
and secured term-loan lenders. The settlement assured payment of
costs of the Chapter 11 case, with something remaining for
unsecured creditors.
The disclosure statement informs unsecured creditors, with claims
ranging from $25 million to $35 million, why they can expect a
recovery of 2.1 percent to 3 percent.
Holders of senior notes, with claims of $130.7 million, are
predicted to have a 74 percent to 86 percent recovery.
By settling, the committee gave up the right to sue lenders over
the validity of a $127 million term loan.
Lowe's Cos. completed a $205 million acquisition of 72 of Orchard
Supply's 91 stores. There was $118 million owing on an asset-
backed loan coming ahead of the term-loan lenders.
The settlement called for paying off bankruptcy financing from
sale proceeds, with term lenders receiving the remainder after
Orchard Supply retained $25 million.
The retained funds provide full payment of the costs of the
bankruptcy case and claims entitled to priority, with the
remainder for term lenders.
The settlement also created a trust for unsecured creditors funded
with $500,000 from the company. After term lenders recover 90
percent of their claims, the next $1.5 million is for the
creditors' trust.
From proceeds of lease sales at the 19 stores Lowe's didn't
purchase, the creditors' trust receives the first $250,000, with
the remainder for term lenders.
At the outset of bankruptcy, Orchard had 89 stores in California
and two in Oregon.
About Orchard Supply
San Jose, Calif.-based Orchard Supply Hardware Stores Corporation
operates neighborhood hardware and garden stores focused on paint,
repair and the backyard. It was spun off from Sears Holdings
Corp. in 2012.
Orchard Supply and two affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 13-11565) on June 16, 2013, to
facilitate a restructuring of the company's balance sheet and a
sale of its assets for $205 million in cash to Lowe's Companies,
Inc., absent higher and better offers. In addition to the $205
million cash, Lowe's has agreed to assume payables owed to nearly
all of Orchard's supplier partners.
Bankruptcy Judge Christopher S. Sontchi oversees the case.
Michael W. Fox signed the petitions as senior vice president and
general counsel. The Debtors disclosed total assets of
$441,028,000 and total debts of $480,144,000.
Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington,
Delaware; and Richard A. Chesley, Esq., Chun I. Jang, Esq., and
Daniel M. Simon, Esq., at DLA Piper LLP (US), in Chicago,
Illinois, are the Debtors' counsel. Moelis & Company LLC serves
as the Debtors' investment banker. FTI Consulting, Inc., serves
as the Debtors' financial advisors. A&G Realty Partners, LLC,
serves as the Debtors' real estate advisors. BMC Group Inc. is
the Debtors' claims and noticing agent.
The Official Committee of Unsecured Creditors appointed in case
has retained Pachulski Stang Ziehl & Jones LLP as counsel, and
Alvarez & Marsal as financial advisors.
Lowe's Cos. completed the $205 million acquisition of 72 of
Orchard Supply's 91 stores.
The Company changed its name to OSH 1 Liquidating Corporation and
reduced the size and simplified the structure of the Board of
Directors effective as of Aug. 20, 2013.
ORTHODONTIC CENTERS: Court Reopens Zeh Lawsuit to Enforce Accord
----------------------------------------------------------------
Senior District Judge Thomas B. Russell in Louisville, Kentucky,
granted the request filed by Orthodontic Centers of America, Inc.,
and Orthodontic Centers of Kentucky, Inc. to reopen the lawsuit
launched J. Steven Zeh and to enforce a settlement agreement.
The Court, however, denied OCI's request for payment of attorney's
fees.
The Court denied a similar motion filed by plaintiffs Dr. Steven
Zeh and related entities to reopen the case. In that motion, Zeh
moved to enforce the settlement agreement by (1) declaring any
payment obligation of Zeh under the parties' Settlement Agreement
was terminated when OCI filed for bankruptcy in March 2006; and
(2) barring any further attempts by Defendant or its successors to
enforce the Settlement Agreement against Zeh.
In the case, J. STEVEN ZEH, D.M.D., P.S.C., et. al, Plaintiffs, v.
ORTHODONTIC CENTERS OF AMERICA, INC. and ORTHODONTIC CENTERS OF
KENTUCKY, INC. Defendants, Civil Action No. 3:01-CV-00408-TBR
(W.D. Ky), an order was issued July 23, 2004 wherein the Court
retained jurisdiction over this matter for purposes of enforcement
of the Settlement Agreement and Release, the Security Agreement,
and the Amended Management and Business Services Agreement.
OCI asserts that Zeh has breached the Settlement Agreement by
failing to make the required monthly installment payments and
invokes its right to accelerate all payments due under the
Settlement Agreement. OCI requests the Court enter judgment in its
favor for the remainder of the amount owed under the Settlement
Agreement, plus pre and post judgment interest thereon, and
reasonable attorneys' fees incurred in connection with this
matter.
OCI states Zeh made the required monthly payment through March
2006, but then stopped making further payments despite multiple
demands from OCI for payment. As required by the Settlement
Agreement, OCI has provided Zeh with notice of default.
Nevertheless, Zeh has failed and refused to make any payment under
the Settlement Agreement since March 2006.
Zeh, however, points out that in March 2006 OCI filed for Chapter
11 bankruptcy protection in U.S. Bankruptcy Court for the Eastern
District of Louisiana. Zeh said Paragraph 10 of the Settlement
Agreement provides: "10. Termination of Obligations. Plaintiffs'
obligation to make payment of the Monthly payments and Defendants'
obligation to provide services in accordance with this Agreement,
the MBSCA, and the Amended MBSA shall cease in the event either
Defendant becomes a debtor in a proceeding under the United States
Bankruptcy Code. The parties acknowledge that this agreement was
reached as a result of mediation conducted by Hon. Thomas B.
Russell, United States District Judge. It is the intention of both
parties that this provision terminating Plaintiffs' obligations be
enforceable if either or both Defendants become debtors in a
bankruptcy proceeding. Because this Settlement Agreement resolves
some claims which would have a special status in a bankruptcy
proceeding, because of the parties' interest, because all parties
were represented by counsel in arms-length negotiations, and
because of Judge Russell's approval, this Paragraph is believed to
be enforceable."
Zeh argues that pursuant to that paragraph Zeh's obligation to
make payments and OCI's obligation to provide services ended in
2006 when OCI became a "debtor in a proceeding under the United
States Bankruptcy Code."
OCI contends that the bankruptcy termination or "ipso facto"
clauses are unenforceable as a matter of law. OCI argues the
Bankruptcy Code itself expressly prohibits these types of clauses,
citing Sections 541(c)(1) and 365(e) of the Bankruptcy Code.
The Court agrees with OCI that the fact that Paragraph 10 declares
the parties "believe" it to be enforceable does not make it
enforceable. The Bankruptcy Code expressly prohibits these clauses
and does not delineate an exception to this prohibition for
clauses the parties "believe" to be enforceable. Notably, the
Bankruptcy Court's Confirmation Order expressly preserved OCI's
ability to pursue claims existing before the bankruptcy.
A full-text copy of the District Court's Nov. 8, 2013 Memorandum
Opinion and Order is available at http://is.gd/KHBI1kfrom
Leagle.com.
Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/--
provides a full range of operational, purchasing, financial,
marketing, administrative and other business services, as well
as capital and proprietary information systems to approximately
200 orthodontic and dental practices representing approximately
almost 400 offices. The Debtor's client practices provide
treatment to patients throughout the United States and in Japan,
Mexico, Spain, Brazil and Puerto Rico.
The Debtor and its debtor-affiliates filed for Chapter 11
protection on March 14, 2006 (Bankr. E.D. La. Case No.
06-10179). Three debtor-affiliates also filed for bankruptcy
protection on June 1, 2006 (Bankr. E.D. La. Case No. 06-10503).
William H. Patrick, III, Esq., at Heller Draper Hayden Patrick &
Horn, LLC, represents the Debtors. Patrick S. Garrity, Esq., and
William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC
represent the Official Committee of Unsecured Creditors. Carmen
H. Lonstein, Esq., at Bell Boyd & Lloyd LLC and Robin B. Cheatham,
Esq., at Adams and Reese LLP represent the Official Committee of
Equity Security Holders. When the Debtors filed for protection
from their creditors, they listed $545,220,000 in total assets and
$196,337,000 in total debts.
OCA emerged from Chapter 11 in early 2007 under a confirmed
Chapter 11 plan that transferred ownership of the debtors to
Silver Point Capital, reduced senior debt obligations by
$43 million, and put a new $25 million working capital facility
in place for the Reorganized Debtors.
OVERSEAS SHIPHOLDING: Ex-Officials Ask Judge to Toss Suit
---------------------------------------------------------
Patrick Fitzgerald, writing for Daily Bankruptcy Review, reported
that the former top decision-makers of Overseas Shipholding Group
Inc. are asking a federal judge to toss an investors' lawsuit
seeking to hold them accountable for mistakes that forced the
shipping company to restate more than decade's worth of financial
results.
According to the report, lawyers for Morten Arntzen, Overseas
Shipholding's ex-chief executive, and Myles R. Itkin, the ex-
finance chief through the years of the restated financials, asked
U.S. District Court Judge Shira A. Scheindlin to dismiss the
securities suit because the former executives didn't intend any
wrongdoing when they signed off on the inaccurate reports.
Investors filed a new lawsuit against the two executives after the
judge dismissed a previous suit earlier this year, the report
said.
Lawyers for the former executives said court filing on Nov. 12 the
investors continue to "rely primarily on the same allegations that
this court has already rejected," and the new suit fails to offer
any evidence that Messrs. Arntzen and Itkin intended to commit
fraud, the report related.
Investors sued the former executives and their advisers after the
initial announcement of the pending restatement sent the company's
share prices reeling, the report further related. Bankruptcy
followed revelations in October 2012 the company's financial
reports from 2009 through the present were not trustworthy.
An internal investigation later found that the company's tax
issues date back to 2000, the report added. In August, the
shipper said it may owe $460 million or more to the Internal
Revenue Service.
About Overseas Shipholding Group, Inc.
Overseas Shipholding Group, Inc., headquartered in New York, is
one of the largest publicly traded tanker companies in the world,
engaged primarily in the ocean transportation of crude oil and
petroleum products. OSG owns or operates 111 vessels that
transport oil and petroleum products throughout the world.
Overseas Shipholding Group and 180 affiliates filed voluntary
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on
Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67
billion in liabilities. Greylock Partners LLC Chief Executive
John Ray serves as chief reorganization officer. James L.
Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb
Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C.
Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr.,
at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel.
Chilmark Partners LLC serves as financial adviser. Kurtzman
Carson Consultants LLC is the claims and notice agent.
The Export-Import Bank of China, owed $312 million used for the
construction of five tankers, is represented by Louis R. Strubeck,
Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski
LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at
Fulbright & Jaworski in New York; and John Knight, Esq., and
Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark
Partners, LLC serves as financial and restructuring advisor.
Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve
as co-counsel to the official committee of unsecured creditors.
FTI Consulting, Inc., is the financial advisor and Houlihan Lokey
Capital, Inc., is the investment banker.
PETRON ENERGY: Incurs $468,900 Net Loss in Third Quarter
--------------------------------------------------------
Petron Energy II, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $468,921 on $76,403 of oil and gas sales for the
three months ended Sept. 30, 2013, as compared with a net loss of
$330,223 on $78,808 of oil and gas sales for the same period
during the prior year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss of $2.17 million on $204,037 of oil and gas sales as
compared with a net loss of $7.35 million on $274,384 of oil and
gas sales for the same period last year.
The Company's balance sheet at Sept. 30, 2013, showed $3.27
million in total assets, $4.79 million in total liabilities and a
$1.51 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/lCCTSq
About Petron Energy
Dallas-based Petron Energy II, Inc., is engaged primarily in the
acquisition, development, production, exploration for and the sale
of oil, gas and gas liquids in the United States. As of Dec. 31,
2011, the Company is operating in the states of Texas and
Oklahoma. In addition, the Company operates two gas gathering
systems located in Tulsa, Wagoner, Rogers and Mayes counties of
Oklahoma. The pipeline consists of approximately 132 miles of
steel and poly pipe, a gas processing plant and other ancillary
equipment. The Company sells its oil and gas products primarily
to a domestic pipeline and to another oil company.
KWCO, PC, in Odessa, TX, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2012. The independent auditors noted that the Company's
significant operating losses since inception raise substantial
doubt about its ability to continue as a going concern.
PHYSIOTHERAPY HOLDINGS: Files Prepack Plan, Has December Hearing
----------------------------------------------------------------
Physiotherapy Holdings, Inc., et al., filed a plan of
reorganization and an accompanying disclosure statement with the
U.S. Bankruptcy Court for the District of Delaware together with
their Chapter 11 petitions.
The Debtors, prior to the Petition Date, through extensive and
good-faith negotiations with their Bridge Loan Lenders, the
Ad Hoc Committee of Senior Noteholders and certain of their
Shareholders, achieved agreement on a consensual restructuring
transaction to be implemented swiftly through a prepackaged
Chapter 11 plan of reorganization that will achieve the Debtors'
restructuring goals by:
(a) reducing the Debtors' total funded indebtedness, including
interest, by approximately 62%, from approximately $375
million as of October 10, 2013 to approximately $144
million;
(b) providing the Debtors' with reasonable, long term financing
and access to incremental commitments that will enable the
Debtors to support their go-forward business needs; and
(c) providing for the establishment and funding of a litigation
trust to consolidate and coordinate prosecution of certain
claims and Causes of Action of the Contributing Claimants.
The Plan contemplates, among other things, the occurrence of the
following transactions:
* The Bridge Loan Credit Agreement will be refinanced pursuant
to an amended and restated 3-year term loan facility, with
any non-participating lenders under the Bridge Loan Facility
to be paid in full in Cash.
* The 11.875% Senior Notes due 2019 will be fully equitized,
with Holders of Senior Notes Claims receiving the right to
their pro rata share of 100% of the new common equity of
Reorganized Physiotherapy Associates Holdings, Inc., as well
as certain interests in a litigation trust.
* All of the Debtors' trade creditors and other holders of
general unsecured claims will continue to be paid in full in
the ordinary course of business and will be unaffected by the
restructuring transactions.
* All existing equity interests in the Company, other than
Intercompany Interests, will be cancelled.
* A Litigation Trust will be established and funded on the
Effective Date to pursue all actions and causes of action
held by the Debtors and their Estates, the Consenting
Noteholders with respect to no less than $150 million of face
value of the Senior Notes and the Consenting Shareholders
against certain persons and entities, such as officers of any
of the Debtor between January 2010 and April 2012, including,
but not limited to, Richard Binstein, Edwin Bode, Dan
Connors, Andrew DeVoe, Peter Grabaskas, and Peter Limeri.
* Contributed Claims that may be asserted against potential
defendants and witnesses. The Contributed Claims will not
include the rights of any of the Contributing Claimants or
Released Parties to receive the distributions, if any, to
which they are entitled under the Plan and the Confirmation
Order. The Contributed Claims will also not include any
actions or causes of action existing against any of the
released parties.
* The Litigation Trust will be established for the benefit of
the Consenting Shareholders and Holders of Allowed Senior
Notes Claims. Net proceeds from the Litigation Trust will be
distributed as follows: (1) 50% to the Consenting
Shareholders; and (2) 50% to the Holders of Senior Notes as
of the Distribution Record Date, which will be the Effective
Date.
The status, voting rights and the estimated percentage recoveries
of each Class of allowed Claims or Interests under the Plan are as
follows:
Class Claim/Interest Status % Recovery
----- -------------- ------ ----------
1 Priority Non-Tax Unimpaired 100%
2 Other Secured Claims Unimpaired 100%
3 Bridge Loan Credit
Agreement Claims Impaired 100%
4 Senior Notes Claims Impaired 40.3%
5 General Unsecured Claims Unimpaired 100%
6 Intercompany Claims Unimpaired 100%
7 Subordinated Claims Impaired 0%
8 Non-Subordinated Contribution
and Reimbursement Claims Unimpaired 100%
9 Intercompany Interests Unimpaired 0%-100%
10 Interests Impaired 0%
Prior to the Petition Date, the Bridge Loan Lenders and all
holders of Senior Notes -- the only holders of claims or interests
entitled to vote to accept or reject the Plan -- unanimously voted
to accept the Plan, with 100% of the holders of claims arising
under the Bridge Loan Facility and approximately 99.71% of the
holders of claims arising under the Senior Notes Indenture in
dollar amount casting ballots voting to accept the Plan.
The Debtors propose a combined Disclosure Statement and
Confirmation Hearing on Dec. 17, 2013. Objections to the
Disclosure Statement and Plan Confirmation are due Dec. 12.
A full-text copy of the Plan, dated Nov. 12, 2013, is available
for free at http://bankrupt.com/misc/PHYSIOTHERAPYplan1112.pdf
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/PHYSIOTHERAPYds1112.pdf
Dec. 17 Hearing
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that on Nov. 14, the bankruptcy judge in Delaware
scheduled a confirmation hearing on Dec. 17 for approval of the
plan. The court also gave the company interim authority to use
cash representing collateral for secured lenders' claims.
At the confirmation hearing, the judge must first determine
whether disclosure materials provided creditors with enough
information so they could vote intelligently on the plan. The
remainder of the hearing will deal with whether the plan
complies with technicalities of bankruptcy law.
There will be a hearing on Dec. 6 for final approval to use
lenders' cash.
About the Debtor
Physiotherapy Holdings, Inc., and its affiliates sought protection
under Chapter 11 of the Bankruptcy Code on Nov. 12, 2013 (Bankr.
D.Del. Case No. 13-12965). The Debtors are the largest pure-play
provider of outpatient physical therapy services in the United
States with a national footprint of 581 outpatient rehabilitation
and orthotics & prosthetics clinics located in 29 states plus the
District of Columbia.
The Debtor is represented by Domenic E. Pacitti, Esq., and Michael
W. Yurkewicz, Esq. -- myurkewicz@klehr.com -- at KLEHR HARRISON
HARVEY BRANZBURG, LLP, in Wilmington, Delaware; Morton Branzburg,
Esq. -- mbranzburg@klehr.com -- at KLEHR HARRISON HARVEY BRANZBURG
LLP, in Philadelphia, Pennsylvania; and Jonathan S. Henes, P.C.,
Esq. -- jonathan.henes@kirkland.com -- Nicole L. Greenblatt, Esq.
-- nicole.greenblatt@kirkland.com -- and David S. Meyer, Esq. --
david.meyer@kirkland.com -- at KIRKLAND & ELLIS LLP, in New York.
The Ad Hoc Committee of Senior Noteholders is represented by
Michael L. Tuchin, Esq. -- mtuchin@ktbslaw.com -- and David A.
Fidler, Esq. -- dfidler@ktbslaw.com -- at Klee, Tuchin, Bogdanoff
& Stern LLP, in Los Angeles, California.
U.S. Bank, National Association, as Bridge Loan Agent, is
represented by Stacey Rosenberg, Esq. -- stacey.rosenberg@lw.com -
- at Latham & Watkins LLP, in Los Angeles, California.
The Bank of New York Mellon Trust Company, N.A., as Senior Notes
Indenture Trustee, is represented by Eric A. Schaffer, Esq. --
eschaffer@reedsmith.com -- at Reed Smith, in Pittsburgh,
Pennsylvania.
The Consenting Shareholders are represented by Michael J. Sage,
Esq. -- michael.sage@dechert.com -- Matthew L. Larrabee, Esq. --
matthew.larrabee@dechert.com -- and Nicole B. Herther-Spiro, Esq.
-- nicole.hertherspiro@dechert.com -- at Dechert LLP, in New York.
PHYSIOTHERAPY HOLDINGS: Seeks to Use Cash Collateral
----------------------------------------------------
Physiotherapy Holdings, Inc., et al., seek authority from the U.S.
Bankruptcy Court for the District of Delaware to use cash
collateral to fund and support, among other obligations, (i)
working capital requirements; (ii) general corporate purposes; and
(iii) the costs and expenses of administering the Chapter 11
cases.
As adequate protection, U.S. Bank National Association, as
administrative agent and collateral agent for prepetition lenders,
will be granted replacement liens upon and security interests in
all of the Debtors' property. To the extent that the Replacement
Liens are insufficient protection against the diminution in value
of their interests in the Prepetition Collateral, the Agent will
be granted an allowed superpriority administrative expense claim.
The Replacement Liens will be senior to all other liens and will
be junior and subordinate only to (i) the Carve-out and (ii) the
Permitted Liens.
The Carve-Out means (i) all unpaid fees required to be paid to the
Clerk of the Court and to the U.S. Trustee; (ii) fees and expenses
of up to $25,000 incurred by a trustee under Section 726(b) of the
Bankruptcy Code; (iii) all reasonable fees and expenses of
professionals employed by the Debtors incurred at any time before
the delivery of a carve-out trigger notice; (iv) all reasonable
fees and expenses of professionals retained by any committee that
are incurred prior to the delivery of a carve-out trigger notice;
and (v) all fees incurred by professionals employed by the Debtors
and any committee not exceeding $100,000 incurred on or after the
delivery of the trigger date.
Physiotherapy Holdings, Inc., and its affiliates sought protection
under Chapter 11 of the Bankruptcy Code on Nov. 12, 2013 (Bankr.
D.Del. Case No. 13-12965). The Debtors are the largest pure-play
provider of outpatient physical therapy services in the United
States with a national footprint of 581 outpatient rehabilitation
and orthotics & prosthetics clinics located in 29 states plus the
District of Columbia.
The Debtor is represented by Domenic E. Pacitti, Esq., and Michael
W. Yurkewicz, Esq., at KLEHR HARRISON HARVEY BRANZBURG, LLP, in
Wilmington, Delaware; Morton Branzburg, Esq., at KLEHR HARRISON
HARVEY BRANZBURG LLP, in Philadelphia, Pennsylvania; and Jonathan
S. Henes, P.C., Esq., Nicole L. Greenblatt, Esq., and David S.
Meyer, Esq., at KIRKLAND & ELLIS LLP, in New York.
U.S. Bank, National Association, as Bridge Loan Agent, is
represented by Stacey Rosenberg, Esq., at Latham & Watkins LLP, in
Los Angeles, California.
PHYSIOTHERAPY HOLDINGS: Employs Kurtzman Carson as Claims Agent
---------------------------------------------------------------
Physiotherapy Holdings, Inc., et al., seek authority from the U.S.
Bankruptcy Court for the District of Delaware to employ Kurtzman
Carson Consultants LLC as claims and noticing agent, to be paid
the following hourly rates:
Clerical Services $28 to $42
Project Specialist $56 to $98
Technology/Programming Consultant $70 to $140
Consultant $87 to $140
Senior Consultant $157 to $192
Director $195
The firm will also be reimbursed for any necessary out-of-pocket
expenses.
Evan Gershbein, senior vice president of Kurtzman Carson
Consultants LLC, assures the Court that his firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest adverse
to the Debtors and their estates.
Physiotherapy Holdings, Inc., and its affiliates sought protection
under Chapter 11 of the Bankruptcy Code on Nov. 12, 2013 (Bankr.
D.Del. Case No. 13-12965). The Debtors are the largest pure-play
provider of outpatient physical therapy services in the United
States with a national footprint of 581 outpatient rehabilitation
and orthotics & prosthetics clinics located in 29 states plus the
District of Columbia.
The Debtor is represented by Domenic E. Pacitti, Esq., and Michael
W. Yurkewicz, Esq., at KLEHR HARRISON HARVEY BRANZBURG, LLP, in
Wilmington, Delaware; Morton Branzburg, Esq., at KLEHR HARRISON
HARVEY BRANZBURG LLP, in Philadelphia, Pennsylvania; and Jonathan
S. Henes, P.C., Esq., Nicole L. Greenblatt, Esq., and David S.
Meyer, Esq., at KIRKLAND & ELLIS LLP, in New York.
ORCHARD SUPPLY: Amended Plan Filed; Disclosure Statement Approved
-----------------------------------------------------------------
BankruptcyData reported that Orchard Supply Hardware Stores filed
with the U.S. Bankruptcy Court First Amended Chapter 11 Plan of
Liquidation and related Disclosure Statement.
According to the Disclosure Statement, "On or before the Effective
Date, the Debtors, on their own behalf and on behalf of the
beneficiaries, shall execute the GUC Trust Agreement, in a form
reasonably acceptable to the Creditors Committee, and all other
necessary steps shall be taken to establish the GUC Trust....On
the Effective Date, $500,000 will be paid from the Debtors'
Estates to the GUC Trust for the benefit of holders of Allowed
General Unsecured Claims whose prepetition debts were not assumed
by the Purchaser under the Final APA. The GUC Trust shall handle
reconciliation of Claims for General Unsecured Claims only, with
the GUC Trustee selected by the Creditors Committee. In addition,
the first $250,000 of any proceeds from the Designation Rights
Sale shall be paid to the GUC Trust on the Effective Date (or such
later time as they may be monetized). In the event that the
holders of Senior Secured Term Loan Claims receive a total Cash
Distribution providing a net recovery of 90% of the Senior Secured
Term Loan Claims, the next $1,500,000 of proceeds available for
distribution from the Debtors' estates shall be paid to the GUC
Trust. The holders of Senior Secured Term Loan Claims shall
receive all proceeds of the Sale in excess of the $1,500,000
described above, any proceeds of GOB Sales commenced prior to the
closing of the sale to the Purchaser under the Final APA, and all
proceeds of the Designation Rights Sale in excess of $250,000
until the holders of the Senior Secured Term Loan Claims receive a
net recovery of 100%."
The Disclosure Statement continues, "If no plan can be confirmed,
the Debtors' chapter 11 cases may be converted to cases under
chapter 7 of the Bankruptcy Code, pursuant to which a trustee
would be appointed to liquidate the assets of the Debtors for
distribution in accordance with the priorities established by the
Bankruptcy Code. The Debtors believe that liquidation under
chapter 7 would result in smaller distributions being made to
creditors than those provided for in the Plan because of (i) the
likelihood that the assets of the Debtors would have to be sold or
otherwise disposed of in a less orderly fashion over a shorter
period of time, (ii) additional administrative expenses involved
in the appointment of a trustee and (iii) additional expenses and
claims, some of which would be entitled to priority, which would
be generated during the liquidation and from the rejection of
leases and other executory contracts in connection with a
cessation of the Debtors' operations."
The Court subsequently approved the Disclosure Statement and
scheduled a Dec. 20, 2013 hearing to consider the Plan.
About Orchard Supply
San Jose, Calif.-based Orchard Supply Hardware Stores Corporation
operates neighborhood hardware and garden stores focused on paint,
repair and the backyard. It was spun off from Sears Holdings
Corp. in 2012.
Orchard Supply and two affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 13-11565) on June 16, 2013, to
facilitate a restructuring of the company's balance sheet and a
sale of its assets for $205 million in cash to Lowe's Companies,
Inc., absent higher and better offers. In addition to the $205
million cash, Lowe's has agreed to assume payables owed to nearly
all of Orchard's supplier partners.
Bankruptcy Judge Christopher S. Sontchi oversees the case.
Michael W. Fox signed the petitions as senior vice president and
general counsel. The Debtors disclosed total assets of
$441,028,000 and total debts of $480,144,000.
Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington,
Delaware; and Richard A. Chesley, Esq., Chun I. Jang, Esq., and
Daniel M. Simon, Esq., at DLA Piper LLP (US), in Chicago,
Illinois, are the Debtors' counsel. Moelis & Company LLC serves
as the Debtors' investment banker. FTI Consulting, Inc., serves
as the Debtors' financial advisors. A&G Realty Partners, LLC,
serves as the Debtors' real estate advisors. BMC Group Inc. is
the Debtors' claims and noticing agent.
The Official Committee of Unsecured Creditors appointed in case
has retained Pachulski Stang Ziehl & Jones LLP as counsel, and
Alvarez & Marsal as financial advisors.
Lowe's Cos. completed the $205 million acquisition of 72 of
Orchard Supply's 91 stores.
The Company changed its name to OSH 1 Liquidating Corporation and
reduced the size and simplified the structure of the Board of
Directors effective as of Aug. 20, 2013.
ORMET CORP: Emergency Wind Down Approved
----------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court approved on
an interim basis Ormet's motion, pursuant to Sections 105, 363,
365 and 503(c) of the Bankruptcy Code, for (a) an interim plan to
wind down the Debtors' businesses and protections for certain
employees implementing the wind down, (b) authorizing the Debtors
to modify employee benefit plans consistent with the wind down
plan and (c) authorizing the Debtors to take any and all actions
necessary to implement the wind down plan.
The order asserts, "The Debtors have established sound business
justifications for approval of the Interim Winddown Plan,
including compliance with the Budget. Business justifications for
implementing the Interim Winddown Plan include that:
(i) the ongoing administration of the Debtors' chapter 11
estates, including the sale of the Burnside Refinery,
requires, and will continue to require, intensive planning,
staffing and funding to ensure a proper, safe and orderly
wind down thereof;
(ii) an immediate shutdown followed by a liquidation, as opposed
to an orderly wind down, could, among other things, risk
the safety of employees, irreparably damage production
equipment, result in the failure to dispose, or improper
disposal of waste materials and could force the Debtors to
incur significant administrative expenses; and
(iii) these consequences would dissipate the value of the
Debtors' assets and harm creditor recoveries in these
Chapter 11 cases."
About Ormet Corp.
Aluminum producer Ormet Corporation, along with affiliates, filed
for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on
Feb. 25, 2013, with a deal to sell the business to a portfolio
company owned by private investment funds managed by Wayzata
Investment Partners LLC.
Headquartered in Wheeling, West Virginia, Ormet --
http://www.ormet.com/-- is a fully integrated aluminum
manufacturer, providing primary metal, extrusion and thixotropic
billet, foil and flat rolled sheet and other products.
Ormet disclosed assets of $406.8 million and liabilities totaling
$416 million. Secured debt of about $180 million includes $139.5
million on a secured term loan and $39.3 million on a revolving
credit.
Affiliates that separately filed Chapter 11 petitions are Ormet
Primary Aluminum Corporation; Ormet Aluminum Mill Products
Corporation; Specialty Blanks Holding Corporation; and Ormet
Railroad Corporation.
Ormet emerged from a prior bankruptcy in April 2005. Lender
Wayzata Investment Partners LLC is among existing owners. Others
are UBS Willow Fund LLC and Fidelity Leverage Company Stock Fund.
In the 2013 case, Ormet is represented in the case by Morris,
Nichols, Arsht & Tunnell LLP's Erin R. Fay, Esq., Robert J.
Dehney, Esq., Daniel B. Butz, Esq.; and Dinsmore & Shohl LLP's Kim
Martin Lewis, Esq., Patrick D. Burns, Esq. Kurtzman Carson
Consultants is the claims and notice agent. Evercore's Lloyd
Sprung and Paul Billyard serve as investment bankers to the
Debtor.
An official committee of unsecured creditors was appointed in the
case in March 2013. The Committee is represented by Rafael X.
Zahralddin, Esq., Shelley A. Kinsella, Esq., and Jonathan M.
Stemerman, Esq., at Elliott Greenleaf; and Sharon Levine, Esq., S.
Jason Teele, Esq., and Cassandra M. Porter, Esq., at Lowenstein
Sandler LLP.
OVERSEAS SHIPHOLDING: Ex-Officials Ask Judge to Toss Suit
---------------------------------------------------------
Patrick Fitzgerald, writing for Daily Bankruptcy Review, reported
that the former top decision-makers of Overseas Shipholding Group
Inc. are asking a federal judge to toss an investors' lawsuit
seeking to hold them accountable for mistakes that forced the
shipping company to restate more than decade's worth of financial
results.
According to the report, lawyers for Morten Arntzen, Overseas
Shipholding's ex-chief executive, and Myles R. Itkin, the ex-
finance chief through the years of the restated financials, asked
U.S. District Court Judge Shira A. Scheindlin to dismiss the
securities suit because the former executives didn't intend any
wrongdoing when they signed off on the inaccurate reports.
Investors filed a new lawsuit against the two executives after the
judge dismissed a previous suit earlier this year, the report
said.
Lawyers for the former executives said court filing on Nov. 12 the
investors continue to "rely primarily on the same allegations that
this court has already rejected," and the new suit fails to offer
any evidence that Messrs. Arntzen and Itkin intended to commit
fraud, the report related.
Investors sued the former executives and their advisers after the
initial announcement of the pending restatement sent the company's
share prices reeling, the report further related. Bankruptcy
followed revelations in October 2012 the company's financial
reports from 2009 through the present were not trustworthy.
An internal investigation later found that the company's tax
issues date back to 2000, the report added. In August, the
shipper said it may owe $460 million or more to the Internal
Revenue Service.
About Overseas Shipholding Group, Inc.
Overseas Shipholding Group, Inc., headquartered in New York, is
one of the largest publicly traded tanker companies in the world,
engaged primarily in the ocean transportation of crude oil and
petroleum products. OSG owns or operates 111 vessels that
transport oil and petroleum products throughout the world.
Overseas Shipholding Group and 180 affiliates filed voluntary
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on
Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67
billion in liabilities. Greylock Partners LLC Chief Executive
John Ray serves as chief reorganization officer. James L.
Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb
Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C.
Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr.,
at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel.
Chilmark Partners LLC serves as financial adviser. Kurtzman
Carson Consultants LLC is the claims and notice agent.
The Export-Import Bank of China, owed $312 million used for the
construction of five tankers, is represented by Louis R. Strubeck,
Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski
LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at
Fulbright & Jaworski in New York; and John Knight, Esq., and
Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark
Partners, LLC serves as financial and restructuring advisor.
Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve
as co-counsel to the official committee of unsecured creditors.
FTI Consulting, Inc., is the financial advisor and Houlihan Lokey
Capital, Inc., is the investment banker.
POST HOLDINGS: S&P Lowers CCR to 'B' on Increased Leverage
----------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its ratings on
St. Louis-based Post Holdings Inc., including its corporate credit
rating, to 'B' from 'B+' reflecting the expected increase in
leverage following this debt issuance. Concurrent with the
downgrade of the company's corporate credit rating, S&P lowered
its ratings on the company's existing $1.375 billion senior
unsecured notes due 2022 to 'B' from 'B+'. The recovery rating
remains '4', indicating S&P's expectations for average recovery
(30% to 50%) in the event of a payment default. S&P assigned its
'B' issue-level rating to the company's proposed $450 million
senior unsecured notes due 2021, with a recovery rating of '4',
indicating its expectations for average recovery (30% to 50%) in
the event of a payment default.
Pro forma for this debt issuance, S&P estimates that Post's
adjusted debt outstanding will be about $2 billion, including
roughly $121 million of preferred stock treated as debt.
"The downgrade reflects S&P's estimate that Post's pro forma
(including estimated EBITDA for the company's four recent
acquisitions) leverage will increase to nearly 7x for the 12
months ended June 30, 2013. Including this issuance, since
October 2012, the company has raised over $1 billion in new debt
and has announced over $719 million worth of acquisitions. We had
expected Post to reduce leverage under 5x to maintain the 'B+'
rating," said credit analyst Bea Chiem. "The company's
significant increase in debt and more aggressive acquisition
strategy supports a financial risk profile more consistent with
its currently "highly leveraged" profile as opposed to
"aggressive", which the company needed to achieve in order to
maintain the 'B+' rating."
The stable outlook reflects S&P's expectation that Post's leverage
will remain close to or below pro forma levels, despite probable
additional acquisitions during the next 12 months, and that Post
will maintain adequate liquidity and continue to generate good
free operating cash flow.
S&P could consider lowering the ratings if leverage increases
significantly beyond 7x, or if the company is unable to maintain
adequate liquidity. S&P believes this could occur if Post issues
additional debt or makes acquisitions that do not contribute
meaningful EBITDA, or if operating performance weakens
substantially.
S&P could consider an upgrade if Post can improve its financial
risk profile to "aggressive", including reducing and sustaining
leverage in the 4x to 5x range and FFO to total debt above 12%.
S&P estimates that this could occur if the company can increase
its EBITDA base significantly with acquisitions while not further
increasing debt levels.
PRESSURE BIOSCIENCES: Incurs $716,000 Net Loss in 3rd Quarter
-------------------------------------------------------------
Pressure Biosciences, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss applicable to common shareholders of $716,152 on $420,762
of total revenue for the three months ended Sept. 30, 2013, as
compared with a net loss applicable to common shareholders of
$925,827 on $391,616 of total revenue for the same period during
the prior year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss applicable to common shareholders of $3.28 million on
$1.14 million of total revenue as compared with a net loss
applicable to common shareholders of $3.26 million on $1.02
million of total revenue for the same period last year.
The Company's balance sheet at Sept. 30, 2013, showed $1.29
million in total assets, $2.96 million in total liabilities and a
$1.67 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/re6pOF
About Pressure Biosciences
Pressure BioSciences, Inc., headquartered in South Easton,
Massachusetts, holds 14 United States and 10 foreign patents
covering multiple applications of pressure cycling technology in
the life sciences field.
Pressure Biosciences disclosed a net loss applicable to common
shareholders of $4.40 million on $1.23 million of total revenue
for the year ended Dec. 31, 2012, as compared with a net loss
applicable to common shareholders of $5.10 million on $987,729 of
total revenue for the year ended Dec. 31, 2011.
Marcum LLP, in Boston, Massachusetts, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that
the Company has had recurring net losses and continues to
experience negative cash flows from operations. These conditions
raise substantial doubt about its ability to continue as a going
concern.
QUAD/GRAPHICS INC: S&P Revises Outlook on 'BB' Rating to Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its 'BB' rating outlook
on Sussex, Wis.-based printing company Quad/Graphics Inc. to
negative from stable.
The outlook revision follows the company's release of third-
quarter results, in which, pro forma for the acquisition of Vertis
Holdings Co., revenue decreased 7% year over year and the adjusted
EBITDA margin declined by more than two percentage points to 12.8%
from 14.9% in the third quarter of 2012. The significant drop in
both metrics stems from pricing pressures within the industry, but
also from obstacles to the integration of Vertis. S&P expects
that pricing will continue to be highly competitive given the
fragmentation of and open capacity in the printing industry.
Additionally, efforts to restore Vertis' revenue to pre-bankruptcy
levels along with costs related to deferred equipment maintenance
at Vertis are delaying Quad from realizing the full benefits of
the acquisition. Accordingly, the outlook revision to negative
reflects declining fundamentals for Quad and the increased risk
that the EBITDA margin will remain below 10%.
The outlook is negative, reflecting S&P's view that the intense
pricing pressure within the printing industry in combination with
obstacles to integrating Vertis are significantly affecting Quad's
operating performance, particularly its EBITDA margin.
S&P could lower its rating if it becomes increasingly convinced
that revenue declines will exceed a mid-single-digit percentage
rate or that EBITDA will decline faster than the low-single-digit
percentage rate that S&P expects. S&P could also lower its rating
if it concludes that leverage will exceed 3.5x. S&P views the 10%
EBITDA margin as an important threshold. A drop in the EBITDA
margin below 10%, without any prospect of a sustainable return
above that level, could prompt a downgrade.
While a revision of the outlook to stable is unlikely, this could
occur if the EBITDA margin reverses its downward trajectory and
begins to show stabilization above 10%.
QUALITY DISTRIBUTION: Posts $2.7 Million Net Income in Q3
---------------------------------------------------------
Quality Distribution, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $2.76 million on $235.67 million of total operating
revenues for the three months ended Sept. 30, 2013, as compared
with net income of $8.86 million on $222.07 million of total
operating revenues for the same period during the prior year.
For the nine months ended Sept. 30, 2013, the Company incurred a
net loss of $19.24 million on $704.38 million of total operating
revenues as compared with net income of $44.36 million on $626.72
million of total operating revenues for the same period last year.
The Company's balance sheet at Sept. 30, 2013, showed $465.05
million in total assets, $503.19 million in total liabilities and
a $38.13 million total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/ihCebV
About Quality Distribution
Quality Distribution, LLC, and its parent holding company, Quality
Distribution, Inc., are headquartered in Tampa, Florida. The
company is a transporter of bulk liquid and dry bulk chemicals.
The company's 2010 revenues are approximately $686 million.
Apollo Management, L.P., owns roughly 30 percent of the common
stock of Quality Distribution, Inc.
Quality Distribution reported net income of $50.07 million for the
year ended Dec. 31, 2012, as compared with net income of $23.43
million in 2011.
Bankruptcy Warning
According to the Company's annual report for the period ended
Dec. 31, 2012, the Company had consolidated indebtedness and
capital lease obligations, including current maturities, of $418.8
million as of Dec. 31, 2012. The Company must make regular
payments under the ABL Facility and its capital leases and semi-
annual interest payments under its 2018 Notes.
The Company's 2018 Notes issued in the quarter ended Dec. 31,
2010, carry high fixed rates of interest. In addition, interest
on amounts borrowed under the Company's ABL Facility is variable
and will increase as market rates of interest increase. The
Company does not presently hedge against the risk of rising
interest rates. The Company's higher interest expense may reduce
its future profitability. The Company's future higher interest
expense and future redemption obligations could have other
important consequences with respect to the Company's ability to
manage its business successfully, including the following:
* it may make it more difficult for the Company to satisfy its
obligations for its indebtedness, and any failure to comply
with these obligations could result in an event of default;
* it will reduce the availability of the Company's cash flow to
fund working capital, capital expenditures and other business
activities;
* it increases the Company's vulnerability to adverse economic
and industry conditions;
* it limits the Company's flexibility in planning for, or
reacting to, changes in the Company's business and the
industry in which the Company operates;
* it may make the Company more vulnerable to further downturns
in its business or the economy; and
* it limits the Company's ability to exploit business
opportunities.
The ABL Facility matures August 2016. However, the maturity date
of the ABL Facility may be accelerated if the Company defaults on
its obligations.
"If the maturity of the ABL Facility and/or such other debt is
accelerated, we may not have sufficient cash on hand to repay the
ABL Facility and/or such other debt or be able to refinance the
ABL Facility and/or such other debt on acceptable terms, or at
all. The failure to repay or refinance the ABL Facility and/or
such other debt at maturity would have a material adverse effect
on our business and financial condition, would cause substantial
liquidity problems and may result in the bankruptcy of us and/or
our subsidiaries. Any actual or potential bankruptcy or liquidity
crisis may materially harm our relationships with our customers,
suppliers and independent affiliates."
* * *
As reported in the TCR on June 28, 2013, Moody's Investors Service
upgraded Quality Distribution, LLC's Corporate Family Rating to B2
from B3 and Probability of Default Rating to B2-PD from B3-PD.
The upgrade of Quality's CFR to B2 was largely driven by the
expectation that credit metrics will improve over the next twelve
to eighteen months, through a combination of EBITDA growth and
debt paydowns, to levels consistent with the B2 rating level. The
company is in the process of integrating the bolt-on acquisitions
made in its Energy Logistics business sector since 2011.
QUALITY HOME: S&P Assigns 'CCC' Rating to $70MM Second Lien Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'CCC' issue-level
rating to Skokie, Ill.-based Quality Home Brands Holdings LLC's
(QHB's) proposed $70 million second-lien term loan due 2018. The
'6' recovery rating indicates S&P's expectations for negligible
(0% to 10%) recovery in the event of a payment default. QHB
intends to refinance all of its existing debt with new term loans
and holding company debt, as well as a new asset-based credit
facility. The proposed capital structure also includes a
$50 million asset-based lending facility (ABL) due 2018 (unrated),
$160 million first-lien credit facility due 2018 (rated 'CCC+'),
and a $40 million unsecured HoldCo facility due 2019 (unrated).
Key credit factors in S&P's assessment of QHB's "vulnerable"
business risk profile include its narrow product focus, highly
fragmented and competitive industry, and significant exposure to
the weak U.S. housing industry, which have weakened the company's
operating performance over the past few years. S&P views the
company's financial profile as "highly leveraged" based on its
significant debt burden and very aggressive financial policy. S&P
estimates pro forma credit metrics are close to existing metrics,
including an adjusted total debt to EBITDA ratio for the 12 months
ended Sept. 27, 2013, at about 10x (including convertible
preferred equity, which S&P treats as debt for ratio calculation
purposes) and funds from operations (FFO) to adjusted total debt
of about 3%. QHB's very weak credit measures correspond to
indicative ratios for a highly leveraged financial risk profile,
including debt to EBITDA of over 5x and FFO to total debt of less
than 12%. S&P expects credit metrics to improve slightly through
2014 primarily because of improved EBITDA levels from increased
sales volume and cost saving initiatives offset by continued
uncertainty surrounding the housing industry or possible further
shift in sales mix to lower-margin items.
Ratings List
Quality Home Brands Holdings LLC
Corporate Credit Rating B-/Stable/--
New Ratings
Quality Home Brands Holdings LLC
Senior secured
$70 mil. second-lien term loan due 2018 CCC
Recovery Rating 6
QUANTUM FUEL: Seamans Capital Held 8.3% Equity Stake at Nov. 7
--------------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, Seamans Capital Management, LLC, disclosed
that as of Nov. 7, 2013, it beneficially owned 1,330,100 shares of
common stock of Quantum Fuel Systems Technologies, Inc.,
representing 8.3 percent of the shares outstanding. Seamans
Capital previously reported beneficial ownership of 1,156,500
common shares or 7.2 percent equity stake as of Nov. 5, 2013. A
copy of the regulatory filing is available for free at:
http://is.gd/RCSPK4
About Quantum Fuel
Lake Forest, Cal.-based Quantum Fuel Systems Technologies
Worldwide, Inc. (Nasdaq: QTWW) develops and produces advanced
vehicle propulsion systems, fuel storage technologies, and
alternative fuel vehicles. Quantum's portfolio of technologies
includes electronic and software controls, hybrid electric drive
systems, natural gas and hydrogen storage and metering systems and
other alternative fuel technologies and solutions that enable fuel
efficient, low emission, natural gas, hybrid, plug-in hybrid
electric and fuel cell vehicles.
Quantum Fuel disclosed a net loss attributable to stockholders of
$30.91 million in 2012 and a net loss attributable to common
stockholders of $38.49 million in 2011. The Company's balance
sheet at March 31, 2013, showed $58.40 million in total assets,
$49.77 million in total liabilities and $8.62 million in total
stockholders' equity.
Haskell & White LLP, in Irvine, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company does not have sufficient existing sources of
liquidity to operate its business and service its debt obligations
for a period of at least twelve months. These conditions, along
with the Company's working capital deficit and recurring operating
losses, raise substantial doubt about the Company's ability to
continue as a going concern.
QUENTIN HIGH: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Quentin High, Inc.
3614 Quentin Road
Brooklyn, NY 11234
Case No.: 13-46819
Chapter 11 Petition Date: November 14, 2013
Court: United States Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: David Carlebach, Esq.
40 Exchange Place, Suite 1306
New York, NY 10005
Tel: (347) 329-1241
Fax: (646) 355-1916
Email: david@carlebachlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Yehuda Nelkenbaum, president.
Pending bankruptcy cases filed by affiliates:
Debtor Case No. Petition Date
------ -------- -------------
New York Double Inc. 13-44343 07/16/13
Eastern
New York Spot, Inc. 12-48530 12/18/12
Eastern
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
QUINCE ENTERPRISES: Case Summary & 2 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Quince Enterprises, LLC
40530 Morningstar Road
Rancho Mirage, CA 92270
Case No.: 13-28613
Chapter 11 Petition Date: November 14, 2013
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Hon. Scott C Clarkson
Debtor's Counsel: Douglas A Plazak, Esq.
POB 1300
Riverside, CA 92502
Tel: 951-682-1771
Fax: 951-686-2415
Email: dplazak@rhlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Suresh C. Shah, managing member.
A list of the Debtor's two largest unsecured creditors is
available for free at http://bankrupt.com/misc/cacb13-28613.pdf
RADIAN GROUP: Declares Regular Quarterly Dividend on Common Stock
-----------------------------------------------------------------
Radian Group Inc. on Nov. 13 disclosed that the company's Board of
Directors approved a regular quarterly dividend on its common
stock in the amount of $0.0025 per share, payable on December 5,
2013, to stockholders of record as of November 25, 2013.
About Radian
Headquartered in Philadelphia, Radian Group Inc. --
http://www.radian.biz-- provides private mortgage insurance and
related risk mitigation products and services to mortgage lenders
nationwide through its principal operating subsidiary, Radian
Guaranty Inc. These services help promote and preserve
homeownership opportunities for homebuyers, while protecting
lenders from default-related losses on residential first mortgages
and facilitating the sale of low-downpayment mortgages in the
secondary market.
* * *
As reported by the Troubled Company Reporter on March 4, 2013,
Standard & Poor's Ratings Services said that it has affirmed all
of its ratings on Radian Group Inc. At the same time, S&P revised
the outlook to stable from negative. S&P also assigned its 'CCC+'
senior unsecured debt rating to the company's proposed
$350 million convertible senior notes.
As reported by the Troubled Company Reporter on Oct. 17, 2012,
Standard & Poor's Rating Services raised its long-term issuer
credit ratings on Radian Group Inc. (RDN) to 'CCC+' from 'CCC-'
and MGIC Investment Corp. (MTG) to 'CCC+' from 'CCC'. The
financial strength ratings for both RDN's and MTG's respective
operating companies are unchanged. The outlook on both companies
is negative.
"The outlook for each company is negative, reflecting the
continuing risk of significant adverse reserve development; the
current trajectory of operating performance; and the expected
impact ongoing losses will have on their capital positions," S&P
said in October 2012. "We expect operating performance to
deteriorate for the rest of the year for both companies,
reflecting the affect of normal adverse seasonality on new notices
of delinquency and cure rates, and the lack of greater improvement
in the job markets."
RAM OF EASTERN: Hearing on Plan Confirmation Continued to Nov. 25
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina granted Ram of Eastern North Carolina, LLC's motion
continuing to Nov. 25, 2013, at 11:00 a.m., the hearing to
consider the confirmation of the Debtor's Plan of Reorganization.
The Court conditionally approved the Disclosure Statement on
Aug. 29.
As reported in the Troubled Company Reporter on July 3, 2013,
the Debtor's Plan contemplates the continuation of its business
activities. Payments under the Plan will be made through income
earned through the operation of the Debtor's business, and through
deeding certain properties to its secured creditors.
Allowed Secured Claims are claims secured by property of the
Debtor's bankruptcy estate to the extent allowed as secured claims
under Section 506 of the Bankruptcy Code. If the value of the
collateral or setoffs securing the creditor's claim is less than
the amount of the creditor's allowed claim, the deficiency will be
classified as a deficiency claim.
Aug 29 is the last day for filing written objections to the
Disclosure Statement and the confirmation of the Plan. If no
objection to the Disclosure Statement is filed, the conditional
approval of the Disclosure Statement will become final.
A full-text copy of the Disclosure Statement dated June 20, 2013,
is available for free at:
http://bankrupt.com/misc/RAMOFEASTERNds0620.pdf
The Disclosure Statement was filed by George M. Oliver, Esq. --
gmo@ofc-law.com -- and Ciara L. Rogers, Esq. -- clr@ofc-law.com --
at Oliver Friesen Cheek, PLLC, in New Bern, North Carolina, on
behalf of the Debtor.
Marjorie K. Lynch, Bankruptcy Administrator, by and through Brian
C. Behr, Esq., objected to the Debtor's Plan and Disclosure
Statement, stating, among other things, the Debtor has to satisfy
13 requirements set forth in Section 1129 of the Bankruptcy Code.
About RAM of Eastern North Carolina
RAM of Eastern North Carolina, LLC, formerly Grantham Crossing,
LLC, filed a Chapter 11 petition (Bankr. E.D.N.C. Case No.
13-01125) in Wilson, North Carolina, on Feb. 21, 2013.
The Debtor, which owns commercial and residential rental
properties in Craven and Carteret Counties, North Carolina,
disclosed $11.7 million in total assets and $7.70 million in total
liabilities in its schedules.
George M. Oliver, Esq., at Oliver Friesen Cheek, PLLC, serves as
bankruptcy counsel to the Debtor.
REAL MEX: Z Capital Partners Becomes Largest Shareholder
--------------------------------------------------------
Z Capital Partners, L.L.C., a private equity firm that makes
controlling investments in companies in need of revitalization or
restructuring, on Nov. 13 disclosed that it has acquired an equity
stake of a non-strategic minority holder and increased its equity
ownership of Real Mex Restaurants, the largest full service,
casual dining Mexican restaurant chain in the United States. As a
result of this transaction, Z Capital is now the largest
shareholder of Real Mex.
Concurrent with this transaction, the Company disclosed that James
J. Zenni, Founder, President and Chief Executive Officer of Z
Capital, has been named Chairman of the Real Mex Board of
Directors.
"We are thrilled to become the largest shareholder of Real Mex,"
said Mr. Zenni. "Since Charly Robinson was appointed as CEO, Real
Mex has improved operations and efficiencies and the management
team is laser focused on the current turnaround strategy to drive
profitability and enhance customer relationships. We remain
dedicated to supporting Real Mex and are confident that, with
Charly and his talented management team, the Company is positioned
for future growth and success."
"This is an exciting transaction for all of us at Real Mex," said
Charly Robinson, President and CEO of Real Mex. "Z Capital has
been a dedicated partner since their initial investment in the
Company and is deeply committed to the Company's vision to
revitalize the Real Mex brands. With the support of a seasoned
financial sponsor we are continuing to develop our brands and
expand into new markets."
Mr. Robinson continued, "We are pleased to name Mr. Zenni Chairman
of the Real Mex Board. Real Mex will benefit from Mr. Zenni's
operational expertise and leadership experience and we look
forward to his contributions."
About Real Mex
Based in Cypress, California, Real Mex Restaurants, Inc., owns and
operates restaurants, primarily through its major subsidiaries El
Torito Restaurants, Inc., Chevys Restaurants, LLC, and Acapulco
Restaurants, Inc. It has 178 restaurants, with 149 in California.
There are also 30 franchised locations. It acquired Chevys Inc.
for $90 million through confirmation of Chevy's Chapter 11 plan in
2004.
Real Mex Restaurants and 16 of its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 11-13122 to 11-
13138) on Oct. 4, 2011. Judge Brendan Linehan Shannon oversees
the case. Judge Peter Walsh was initially assigned to the case.
The Debtors are represented by Mark Shinderman, Esq., Fred
Neufeld, Esq., and Haig M. Maghakian, Esq., at Milbank, Tweed,
Hadley & McCloy LLP; and Laura Davis Jones, Esq., and Curtis A.
Helm, Esq., at Pachulski Stang Ziehl & Jones LLP as counsel. The
Debtors' financial advisors are Imperial Capital, LLC. The
Debtors' claims, noticing, soliciting and balloting agent is Epiq
Bankruptcy Solutions, LLC.
Assets are $272.2 million while debt totals $250 million,
according to the Chapter 11 petition. The petitions were signed
by Richard P. Dutkiewiez, chief financial officer and executive
vice president.
The Court has approved that certain asset purchase agreement
between the Debtors and RlvI Opco LLC dated as of Feb. 10, 2012,
for the sale of substantially all of the Debtors' assets.
Counsel to GE Capital Corp., the DIP Agent and the Prepetition
First Lien Secured Agent, are Jeffrey G. Moran, Esq., and Peter P.
Knight, Esq., at Latham & Watkins LLP; and Kurt F. Gwynne, Esq.,
at Reed Smith LLP as counsel.
Counsel to the Prepetition Secured Second Lien Trustee are Mark F.
Hebbeln, Esq., and Harold L. Kaplan, Esq., at Foley & Lardner LLP.
Counsel to the Majority Prepetition Second Lien Secured
Noteholders are Adam C. Harris, Esq., and David M. Hillman, Esq.,
at Schulte Roth & Zabel LLP; and Russell C. Silberglied, Esq., at
Richards Layton & Finger.
Z Capital Management LLC, which holds nearly 70% of the Opco term
loan, is represented by Derek C. Abbott, Esq., and Chad A. Fights,
Esq., at Morris Nichols Arsht & Tunnell LLP; and Lee R. Bogdanoff,
Esq., and Whitman L. Holt, Esq., at Klee Tuchin Bogdanoff & Stern
LLP.
The Official Committee of Unsecured Creditors tapped Kelley Drye &
Warren LLP as its counsel; Cole, Schotz, Meisel, Forman & Leonard
P.A. as its co-counsel, and Duff & Phelps Securities, LLC as its
financial advisor.
Early this year, the Bankruptcy Court authorized Real Mex to sell
substantially all of their assets to RM Opco, LLC, an entity
formed by a group of its bondholders. Pursuant to the Jan. 27,
2012 purchase agreement, the purchaser made a written offer to
acquire the assets in exchange for (i) an $80,000 credit bid, (ii)
$53,569,000 in cash, and (iii) the assumption of the assumed
liabilities.
RESIDENTIAL CAPITAL: More Than 95% of Voting Creditors Accept Plan
------------------------------------------------------------------
Joseph Checkler, writing for Daily Bankruptcy Review, reported
that Residential Capital LLC said more than 95% of voting
creditors accepted its liquidation proposal, as the company
prepares to ask a judge to approve that plan.
According to the report, in court on Nov. 14, a lawyer for ResCap
said that of the 1,432 votes cast, only 64 voted no to the
proposal.
Morrison & Foerster LLP's Gary S. Lee, ResCap's lead lawyer, told
Judge Martin Glenn of U.S. Bankruptcy Court in Manhattan that out
of nearly 150 classes of creditors voting on the liquidation plan,
one small class rejected it, the report related.
The hearing presaged a multiday trial set for next week over
whether Judge Glenn should approve the plan, but part of the
process will include Phase II of a trial between ResCap and hedge
funds holding its junior unsecured notes, the report said.
Judge Glenn said he expects to rule on Phase I of that trial, a
fight over whether the hedge funds are entitled to interest on
their notes accrued after ResCap filed for bankruptcy and whether
their notes "are oversecured," which would entitle them to more
money, the report added.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities at March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
ResCap sold most of the businesses for a combined $4.5 billion.
The Bankruptcy Court in November 2012 approved ResCap's sale of
its mortgage servicing and origination platform assets to Ocwen
Loan Servicing, LLC and Walter Investment Management Corporation
for $3 billion; and its portfolio of roughly 50,000 whole loans to
Berkshire Hathaway for $1.5 billion.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
REVSTONE INDUSTRIES: Committee Contests Company Lawyers' Fees
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that for Revstone Industries LLC, acrimony between the
company and creditors isn't abating.
According to the report, the bankruptcy judge in Delaware warned
last month that a Chapter 11 trustee is warranted for the maker of
truck-engine parts if there is "acrimony and deadlock between
debtors and stakeholders." This week, the official creditors'
committee lodged a formal objection to about $1.85 million in fees
and expenses sought for the three months ended May 31 by
Revstone's chief lawyers from Pachulski Stang Ziehl & Jones LLP.
The committee isn't protesting so much against the amount of the
fees, even though U.S. Bankruptcy Judge said in October that the
Revstone is "staggering" under a burden of "well over $15 million
in accrued professional fees." The judge added, "it is not
immediately apparent to the Court how these estates can carry the
freight associated with contested confirmation of competing
plans."
The committee is concerned about which Revstone company pays the
fees.
From its analysis of Pachulski's fee request, the committee says
the firm was performing services for the two main companies in
bankruptcy, Revstone and Metavation, and non-bankrupt affiliates.
The committee doesn't want Revstone to pay fees for Metavation and
affiliates. Before anything is paid, the committee wants Pachulski
to recast the fee request by breaking out the company for which
each service was performed.
The committee calculates that 32 percent of the fees, or about
$550,000, were on behalf of companies other than Revstone.
David Bertenthal, a Pachulski lawyer, didn't respond to a message
seeking comment, Bloomberg said.
The bankruptcy court in Delaware ended Revstone's exclusive right
to file a reorganization plan. The creditors' committee answered
by filing a plan in July. Two weeks later, Revstone filed its own
plan. After several postponements, a hearing to consider approval
of disclosure materials on the competing plans is on the calendar
for Dec. 11.
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. Stuart Maue is fee examiner.
Mark L. Desgrosseilliers, Esq., at Womble Carlyle Sandridge &
Rice, LLP, represents the Official Committee of Unsecured
Creditors in Revstone's case.
ROTECH HEALTHCARE: Objects to $1MM Baker & McKenzie Fees
--------------------------------------------------------
Law360 reported that the reorganized Rotech Healthcare Inc. in
Delaware bankruptcy court on Nov. 12 filed an objection to Baker &
McKenzie LLP's request for more than $1 million in fees, saying
the firm hadn't provided the estate with any value during the
bankruptcy proceedings.
According to the report, the medical equipment supplier said in
its objection that Baker & McKenzie, which acted for several
months as counsel to the company's equity committee, wasted time
and money drawing the bankruptcy proceedings into unnecessary
litigation and should therefore not be reimbursed for any of its
fees.
About Rotech Healthcare
Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/-- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services. The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.
The Company reported a net loss of $14.76 million in 2011, a net
loss of $4.20 million in 2010, and a net loss of $21.08 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed
$255.76 million in total assets, $601.98 million in total
liabilities, and a $346.22 million total stockholders' deficiency.
On April 8, 2013, Rotech Healthcare and 114 subsidiary companies
filed petitions seeking relief under chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre-
arranged plan negotiated with secured lenders.
Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt &
Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the
healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP
is the special healthcare regulatory counsel; Barclays Capital
Inc. is the financial advisor; Alix Partners, LLP is the
restructuring advisor; and Epiq Bankruptcy Solutions LLC is the
claims agent.
Prepetition term loan lender and DIP lender Silver Point Capital
and other consenting noteholders are represented by Wachtell,
Lipton, Rosen & Katz, and Richards Layton & Finger PA.
The Official Committee of Unsecured Creditors tapped Otterbourg,
Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll &
Rooney PC as Delaware counsel; and Grant Thornton LLP as financial
advisor.
The U.S. Trustee at the end of April appointed an official
committee of equity holders. Members include Alden Global
Recovery Master Fund LP, Varana Capital Master LP, Wynnefield
Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and
Kenneth S. Grossman P.C. Pension Plan. The Equity Panel is
represented by Bayard, P.A. as Delaware counsel.
Rotech on Aug. 29 disclosed that the Bankruptcy Court has approved
the Second Amended Joint Plan of Reorganization, along with $358
million of exit financing commitments received from Wells Fargo
and certain existing holders of the 10.5% Senior Second Lien
Secured Notes. The reorganization plan was confirmed at a court
hearing in Delaware and was supported by the Statutory Committee
of Unsecured Creditors. Creditors entitled to vote overwhelmingly
voted in favor of the reorganization plan.
Under the reorganization plan, the Company's existing common stock
will be cancelled and substantially all of the new common stock of
reorganized Rotech will be distributed to holders of the 10.5%
Senior Second Lien Secured Notes. Trade suppliers are to be paid
in full, if they agree to continue providing credit. The existing
$23.5 million term loan would be paid in full, and the $230
million in 10.75 percent first-lien notes will be amended.
The Company, on Sept. 27, 2013, implemented the reorganization
plan approved when a bankruptcy judge in Delaware signed a
confirmation order on Aug. 29.
RURAL/METRO CORP: Plan Voting Deadline Set for Dec. 9
-----------------------------------------------------
Rural/Metro Corp. is slated to seek confirmation of its First
Amended Joint Chapter 11 Plan of Reorganization next month.
The voting deadline to accept or reject the Plan is 5:00 p.m. on
Dec. 9, 2013. Entities holding in excess of 51% of the Debtors'
secured debt and entities holding in excess of 66.66% of the
Debtors' unsecured notes support confirmation of the Plan and urge
all holders of claims whose votes are being solicited to accept
the Plan.
The court approved the explanatory disclosure statement following
a hearing on Nov. 5. A copy of the document is available for free
at http://bankrupt.com/misc/Rural_Metro_1st_Amended_DS.pdf
The Plan was largely worked out prepetition. 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. Holders of other unsecured claims aggregating $40
million are slated to have a 25% recovery in the form of cash or
stock. Equity holders won't recover anything.
Approval of the disclosure statement was nearly uncontested. The
Debtors negotiated the terms of a consensual Plan with their
largest institutional stakeholders and the official committee of
unsecured creditors.
According to reports, the confirmation hearing is slated for
Dec. 16.
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.
SADLER LAW FIRM: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Sadler Law Firm, L.L.P.
1900 West Loop South, Suite 700
Houston, TX 77027
Case No.: 13-37078
Chapter 11 Petition Date: November 14, 2013
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Hon. David R Jones
Debtor's Counsel: Michael J Durrschmidt, Esq.
HIRSCH & WESTHEIMER, P.C.
1415 Louisiana, 36th Floor
Houston, TX 77002
Tel: 713-220-9165
Fax: 713-223-9319
Email: mdurrschmidt@hirschwest.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Randall K. Sadler, president.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
SCICOM DATA: Taps HLB Tautges as Accountant; U.S. Trustee Objects
-----------------------------------------------------------------
SCICOM Data Services, Ltd. seeks authority from the U.S.
Bankruptcy Court for the District of Minnesota to employ the
accounting firm of HLB Tautges Redpath, Ltd. to perform various
accounting services, consisting of: (a) preparing federal and
state tax returns for the Debtor's 2013 fiscal year (ended June
30, 2013) and preparing final federal and state tax returns; (b)
conducting ERISA-required audits for both the 2013 plan year
(ended June 30, 2013) and 2014 plan year for the Debtor's defined
benefit pension plan, employee stock ownership plan, and 401(k)
plan; and (c) preparing Form 5500 for the Pension Plan for the
2013 and 2014 plan years.
The Debtor is facing opposition from Daniel M. McDermott, the
United States Trustee for Region 12, who recommends that the court
deny approval of Tautges' employment.
According to papers filed in Court, HLB Tautges' compensation for
the Accounting Services is on a flat-fee basis. The Debtor paid
the flat fees in full prior to the Filing Date, and neither the
Debtor nor HLB Tautges anticipate that any additional fees will be
incurred during HLB Tautges' provision of the Accounting Services.
Because HLB Tautges' flat fees were paid before the case was
filed, and the Debtor does not anticipate paying or seeking to pay
any estate funds to HLB Tautges during the case, court approval of
HLB Tautges' services and compensation may not be required. Out
of an abundance of caution, however, and in the interests of full
disclosure, the Debtor requests that the Court approve HLB
Tautges' employment and compensation.
HLB Tautges has not yet commenced the Accounting Services, but
will do so shortly upon receipt of information from the Debtor
that is required to complete the services.
Therefore, the Debtor proposes that: (a) the flat fees totaling
$42,300 ($9,000 for the tax return preparation and $33,300 for the
audits and Form 5500 preparation) paid to HLB Tautges prior to the
Filing Date for the Accounting Services be approved, without need
for a fee application by HLB Tautges upon completion of the
Accounting Services; and (b) in accordance with paragraph 9 of the
Court's Instructions for Filing a Chapter 11 Case, if any
Potential Additional Services become necessary (i) HLB Tautges be
authorized to schedule a hearing on its applications for allowance
of fees and reimbursement of expenses for the Potential Additional
Services not more than once every 90 days; (ii) HLB Tautges be
allowed to submit bills to the Debtor for Potential Additional
Services provided, with copies to the Committee of Unsecured
Creditors and the Office of the United States Trustee; and (iii)
the Debtor be authorized to pay up to 80% of fees and 100% of
costs on a monthly basis for Potential Additional Services
provided by HLB Tautges, subject to later court approval under
Section 330 of the Bankruptcy Code.
The Firm's Mark C. Gibbs assures the Court that HLB Tautges is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code and as required by Section 327(a) and
referenced by Section 328(c).
U.S. Trustee Objects
Trial Attorney for the U.S. Trustee, Michael R. Fadlovich, Esq.,
contends that it is not clear that Tautges does not represent an
interest adverse to the estate. The Application proposes that
Tautges will undertake work for the Debtor's pension plan, but the
pension plan is a separate legal entity that the Debtor owes in
excess of $13 million. A professional cannot represent an interest
adverse to the estate and also be employed by the Debtor under
Section 327(a). As a result, Tautges cannot do work for both the
Debtor and the pension plan and is therefore disqualified from
being employed by the Debtor, he says.
The U.S. Trustee also recommends that the proposed employment not
be approved because it is not clear under the flat fee retainer
agreement that the proposed fees would be reasonable for the
amount of work required, relates Mr. Fadlovich. The proposed
order includes the provision that the fees paid in the sum of
$42,300 are approved and that no further hearing on their
propriety or allowance is required. Since nothing now in the
record establishes that the fees proposed are reasonable or
necessary, this provision is improper, he asserts. The court
should not pre-approve the payment and allowance of the flat fee,
particularly without a showing that the charges are reasonable and
necessary, as required by Section 330(a), he adds.
The U.S. Trustee also objects to the Debtor's apparent attempt at
circumventing the fee application process established in Section
330 by entering a flat fee retainer agreement and paying the fee
prepetition. If a professional such as an accounting firm is to
represent a bankruptcy estate, it should be required to fully
comply with the procedures for getting paid, as contemplated by
Congress, notes Mr. Fadlovich. The assertion that the fees paid
prepetition were "earned upon payment" does not entitled Tautges
to avoid the requirement of keeping track of professionals' time
and filing a fee application which shows that the time spent and
work performed was reasonable and necessary.
"If Tautges is allowed to be employed as proposed, then the fee
application process in chapter 11 cases becomes meaningless,"
argues Mr. Fadlovich.
Counsel for the U.S. Trustee may be reached at:
U.S. Trustee's Office
Suite 1015 U.S. Courthouse
300 South Fourth Street
Minneapolis, MN 55415
Telephone: (612) 334-1350
About SCICOM
Headquartered in Minnetonka, Minnesota, SCICOM provides data
processing solutions that transform critical data into effective
customer communications, on any platform, at any time. SCICOM's
business focus has been employee benefits, retirement and
investment services, and statement processing.
SCICOM Data Services, Ltd., filed a Chapter 11 petition (Bankr. D.
Minn. Case No. 13-43894) on Aug. 6, 2013, in Minneapolis,
Minnesota, with a deal to sell assets to Venture Solutions without
an auction.
Arden Hills, MN-based Venture Solutions is a provider of print and
digital transactional Communications and is a subsidiary of Taylor
Corporation.
Judge Michael E. Ridgway presides over the case. The Debtor has
tapped Fredrikson & Byron, P.A., as counsel; Lighthouse Management
Group, Inc., as financial consultant; and Shenehon Company as
valuation expert.
The Debtor disclosed $13,254,128 in assets and $17,801,787 in
liabilities as of the Chapter 11 filing. The petition was signed
by Timothy L. Johnson, senior vice president and CFO.
Daniel M. McDermott, the U.S. Trustee for Region 12, appointed
three creditors to serve in the Official Committee of Unsecured
Creditors in the Chapter 11 case of Scicom Data Services, Ltd.
SEQUENOM INC: Incurs $28.1 Million Net Loss in Third Quarter
------------------------------------------------------------
Sequenom, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $28.14 million on $43.95 million of total revenues for the
three months ended Sept. 30, 2013, as compared with a net loss of
$30.23 million on $22.85 million of total revenues for the same
period during the prior year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss of $88.53 million on $117.30 million of total revenues as
compared with a net loss of $84.27 million on $56.02 million of
total revenues for the same period last year.
The Company's balance sheet at Sept. 30, 2013, showed $164.82
million in total assets, $195.85 million in total liabilities and
a $31.02 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/jT2yjY
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a
life sciences company committed to improving healthcare through
revolutionary genetic analysis solutions. Sequenom develops
innovative technology, products and diagnostic tests that target
and serve discovery and clinical research, and molecular
diagnostics markets. The company was founded in 1994 and is
headquartered in San Diego, California.
Sequenom disclosed a net loss of $117.02 million in 2012, a net
loss of $74.13 million in 2011 and a net loss of $120.84 million
in 2010.
SITEVOICE LLC: Case Summary & 5 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: SiteVoice, LLC
20789 Pima Road, Ste. 210
Scottsdale, AZ 85255
Case No.: 13-19935
Chapter 11 Petition Date: November 15, 2013
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Hon. Randolph J. Haines
Debtor's Counsel: Jared G. Parker, Esq.
PARKER SCHWARTZ, PLLC
7310 N 16th St Ste. 330
Phoenix, AZ 85020
Tel: 602-282-0477
Fax: 602-282-0478
Email: jparker@psazlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Douglas Bean, member.
A list of the Debtor's five largest unsecured creditors is
available for free at http://bankrupt.com/misc/azb13-19935.pdf
SOPHIA HOLDING: S&P Revises Outlook to Negative & Affirms 'B' CCR
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its outlook on
Fairfax, Va.-based Sophia L.P. to negative from stable and
affirmed the 'B' corporate credit rating.
At the same time, S&P assigned a 'CCC+' issue-level rating and a
'6' recovery rating to holding company Sophia Holding Finance L.P.
and co-issuer Sophia Holding Finance Inc.'s proposed $400 million
senior unsecured PIK toggle notes, which the company will use to
fund a dividend to private equity sponsor Hellman & Friedman LLC
and other investors. The '6' recovery rating indicates S&P's
expectation of negligible (0%-10%) recovery in the event of a
payment default.
In addition, S&P affirmed the 'B+' issue-level rating on Sophia
L.P.'s outstanding first-lien debt. The recovery rating is '2',
indicating substantial (70%-90%) recovery in the event of a
payment default. S&P also affirmed the 'CCC+' issue-level rating
on Sophia L.P.'s unsecured notes, with a recovery rating of '6',
indicating its expectation of negligible (0%-10%) recovery in the
event of a payment default.
"The ratings reflect Sophia's 'fair' business risk profile,
characterized by its heavy exposure to the U.S. higher education
market and competition with other well-capitalized companies in
selected domains," said Standard & Poor's credit analyst Jacob
Schlanger.
The company's "highly leveraged" financial risk profile is
unchanged and incorporates an already high leverage structure,
which will rise with the proposed debt-financed dividend recap.
Partially offsetting these issues is the company's market leading
position in the higher education market with a broad suite of
products that enable the company to provide comprehensive
solutions, as well as a stable customer base with a large
proportion of recurring revenues. S&P considers management and
governance to be "fair."
The outlook is negative. With the proposed financing, S&P expects
leverage to rise to about 8x from 6.3x as of Sept. 30, 2013.
S&P's current rating incorporates its expectation that EBITDA
growth will result in modest de-leveraging in the near term. S&P
could lower the rating if a lack of EBITDA growth or other actions
to reduce debt resulted in leverage remaining in the high-7x area.
If revenues and EBITDA growth result in leverage in the mid-7x
area, S&P may revise the outlook to stable.
SPECIALTY PRODUCTS: Fine-Tunes Plan; Says Rival Plan Unconfirmable
------------------------------------------------------------------
Specialty Products Holding Corp. and Bondex International, Inc.,
filed early this month an amended version to their proposed joint
plan of reorganization.
A copy of the First Amended Plan of Reorganization filed Nov. 1,
2013, is available for free at:
http://bankrupt.com/misc/Specialty_Bondex_1st_Amended_Plan.pdf
The Debtors' Plan provides for an asbestos trust to be established
and funded with cash to pay present and future asbestos-related
claims. The funding for the trust will be provided by SPHC,
Bondex and their ultimate parent, RPM International Inc.
Because the unsecured creditors may be impaired under this Plan,
and the asbestos personal injury claimants may also be determined
to be impaired, the Debtors will solicit acceptances of the Plan
from the unsecured creditors and the asbestos personal injury
claimants.
The current iteration of the Plan contains blanks as to the
estimated recovery for holders of general unsecured claims.
Unsecured creditors will have the same percentage recovery as
current and future asbestos personal injury claimants.
Under the Plan, equity interests of RPM International Inc. in SPHC
will be reinstated.
Competing Plan
RPM International, the parent of the Debtors, has issues with
respect to a competing plan filed by asbestos personal injury
claimants for SPHC.
As reported in the Oct. 25, 2013 edition of the TCR, the Official
Committee of Asbestos Personal Injury Claimants and the
Future Claimants' Representative have proposed a Chapter 11 plan
for SPHC. The Third Amended Plan, filed Oct. 15, 2013, provides
that: (i) SPHC will be separated from non-Debtor direct or
indirect parent Bondex International; (ii) Reorganized SPHC will
be managed and/or sold for the benefit of holders of all Claims
that are not paid in Cash, subordinated, cancelled or otherwise
treated pursuant to the Plan; (iii) all of SPHC's causes of action
will survive; (iv) Asbestos PI Trust Claims against SPHC will be
channeled to an Asbestos PI Trust; and (v) current SPHC equity
interests will be cancelled, annulled, and extinguished.
RPM says that notwithstanding the latest changes to the Plan,
"numerous deficiencies" continue to pervade the Third Amended Plan
and the accompanying disclosure statement.
RPM notes that while the Asbestos Claimants' Third Amended Plan is
a plan of reorganization only for SPHC, it provides for
distributions to holders of asbestos claims against Bondex and
other entities that are merely alleged liabilities of SPHC, and
not allowed claims, pari passu with the actual asbestos
liabilities of SPHC.
RPM says that the disclosure statement should not be approved
because the Plan itself is patently unconfirmable because, among
other things:
-- It does not satisfy the Bankruptcy Code's requirements for
specifying the treatment of each class of impaired claims.
-- It violates the Code's requirement that only substantially
similar claims may be placed in the same class by putting claims
against Bondex and other entities that are merely alleged
liabilities of SPHC in the same class with the actual asbestos
liabilities of SPHC.
-- It discriminates unfairly by providing nothing whatsoever to
International on account of its equity interest in SPHC while
using that equity interest to pay claims against Bondex and other
entities that are merely alleged liabilities of SPHC, rather than
allowed claims against SPHC.
RPM is represented by:
Robert J. Dehney, Esq.
Gregory W. Werkheiser, Esq.
Curtis S. Miller, Esq.
Justin Kirk Houser, Esq.
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 North Market Street, 16th Floor
P.O. Box 1347
Wilmington, DE 19899-1347
Tel: (302) 658-9200
Fax: (302) 658-3989
E-mail: rdehney@mnat.com
gwerkheiser@mnat.com
cmiller@mnat.com
jhouser@mnat.com
- and -
Robinson B. Lacy, Esq.
Mark F. Rosenberg, Esq.
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, New York 10004-2498
Tel: (212) 558-3879
Fax: (212) 291-9088
E-mail: lacyr@sullcrom.com
rosenbergm@sullcrom.com
About Specialty Products
Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM,
Inc., is a wholly owned subsidiary of RPM International Inc. The
Company is the holding company parent of Bondex International,
Inc., and the direct or indirect parent of certain additional
domestic and foreign subsidiaries. The Company claims to be a
leading manufacturer, distributor and seller of various specialty
chemical product lines, including exterior insulating finishing
systems, powder coatings, fluorescent colorants and pigments,
cleaning and protection products, fuel additives, wood treatments
and coatings and sealants, in both the industrial and consumer
markets.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 10-11780) on May 31, 2010. Gregory M. Gordon, Esq.,
Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve
as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary
I. Shapiro, Esq., at Richards Layton & Finger, serve as co-
counsel. Logan and Company is the Company's claims and notice
agent. The Company estimated its assets and debts at $100 million
to $500 million.
The Company's affiliate, Bondex International, Inc., filed a
separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779),
estimating its assets and debts at $100 million to $500 million.
On May 20, 2013, the Bankruptcy Court entered an order estimating
the amount of the Debtors' asbestos liabilities, and a related
memorandum opinion in support of the estimation order. The
Bankruptcy Court estimated the current and future asbestos claims
associated with Bondex International, Inc. and Specialty Products
Holding at approximately $1.17 billion. The estimation hearing
represents one step in the legal process in helping to determine
the amount of potential funding for a 524(g) asbestos trust.
SPECIALTY PRODUCTS: Asbestos Creditors Get OK to Sue Parent
-----------------------------------------------------------
Law360 reported that creditors with asbestos-related claims
against bankrupt Specialty Products Holdings Corp. won permission
on Nov. 13 to sue parent RPM International Inc. over transactions
that allegedly transferred 75 percent of the debtors' assets to
RPM while leaving the liabilities behind.
According to the report, at a hearing in Wilmington, U.S.
Bankruptcy Judge Peter J. Walsh granted standing to the committee
of asbestos personal injury claimants and the representative for
future asbestos claimants, who requested the go-ahead ahead to sue
RPM and others on the estate's behalf.
About Specialty Products
Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM,
Inc., is a wholly owned subsidiary of RPM International Inc. The
Company is the holding company parent of Bondex International,
Inc., and the direct or indirect parent of certain additional
domestic and foreign subsidiaries. The Company claims to be a
leading manufacturer, distributor and seller of various specialty
chemical product lines, including exterior insulating finishing
systems, powder coatings, fluorescent colorants and pigments,
cleaning and protection products, fuel additives, wood treatments
and coatings and sealants, in both the industrial and consumer
markets.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 10-11780) on May 31, 2010. Gregory M. Gordon, Esq.,
Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve
as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary
I. Shapiro, Esq., at Richards Layton & Finger, serve as co-
counsel. Logan and Company is the Company's claims and notice
agent. The Company estimated its assets and debts at $100 million
to $500 million.
The Company's affiliate, Bondex International, Inc., filed a
separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779),
estimating its assets and debts at $100 million to $500 million.
On May 20, 2013, the Bankruptcy Court entered an order estimating
the amount of the Debtors' asbestos liabilities, and a related
memorandum opinion in support of the estimation order. The
Bankruptcy Court estimated the current and future asbestos claims
associated with Bondex International, Inc. and Specialty Products
Holding at approximately $1.17 billion. The estimation hearing
represents one step in the legal process in helping to determine
the amount of potential funding for a 524(g) asbestos trust.
STONE ENERGY: S&P Keeps B- Unsec. Note Rating Over $400MM Add-on
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'B-' issue-level
rating (one notch below the corporate credit rating) on Lafayette,
La.-based exploration and production company Stone Energy Corp.'s
unsecured notes due 2022 is unchanged following the company's
proposed $400 million add-on. The recovery rating on this debt is
'5', indicating S&P's expectation of modest (10% to 30%) recovery
in the event of a payment default. S&P's 'B' corporate credit
rating and stable outlook on Stone Energy remain unchanged.
Stone is using proceeds from this proposed add-on to repay its
$375 million of 8.625% unsecured notes due 2017.
"The ratings on Stone Energy Corp. reflect our view of the
company's significant exposure to the Gulf of Mexico, which we
consider to have higher operating risks than onshore plays, given
the steep production decline curves in this region. The rating
also reflects its small reserve size of 773 billion cubic feet
equivalent at year-end 2012, which we consider to be in line with
its 'B' rated peers," said Standard & Poor's credit analyst Marc
Bromberg.
S&P's ratings incorporate its assessment of the company's
"vulnerable" business risk profile, "aggressive" financial risk
profile, and "adequate" sources of liquidity. S&P's ratings also
reflect its view of the company's exposure to robust crude oil
prices, low cost position, and healthy credit protection measures.
Ratings List
Stone Energy Corp.
Corporate Credit Rating B/Stable/--
Stone Energy Corp.
$700 mil. unsecured notes due 2022 B-
Recovery Rating 5
SUNTECH POWER: Chinese Asset Sale to Shunfeng May Be Blocked
------------------------------------------------------------
Wayne Ma, writing for Daily Bankruptcy Review, reported that
Suntech Power Holdings Co., once the world's largest solar-panel
maker, might be blocked from selling its Chinese assets to a
smaller rival to pay back creditors in China.
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. The Chapter 7 Petitioners are
Trondheim Capital Partners, L.P., Michael Meixler, Longball
Holdings, LLC, and Jiangsu Liquidators, LLC. They are represented
by Jay Teitelbaum, Esq., at TEITELBAUM & BASKIN LLP, in White
Plains, New York.
SWJ MANAGEMENT: Gets Exclusive Plan Filing Right Thru April 2014
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey extended
SWJ Management LLC's exclusive right to file a plan of
reorganization through April 2014 and its exclusive right to
solicit acceptances of that plan through June 2014.
About SWJ Management LLC
New York-based SWJ Management LLC filed for Chapter 11 (Bankr.
S.D.N.Y. Case No. 13-12123) on June 28, 2013. Judge Allan L.
Gropper oversaw the case. The Law Offices of David Carlebach,
Esq., serves as the Debtor's counsel. In its petition, the Debtor
estimated $50 million to $100 million in both assets and debts.
The petition was signed by Richard Annunziata, managing member.
An affiliate, Ridgewood Realty of LL, SK Mulberry Contract, filed
a separate Chapter 11 petition (Case No. 12-14085) on Sept. 28,
2012.
On Sept. 4, 2013, Judge Allan Gropper granted the transfer of
SWJ's case to the U.S. Bankruptcy Court for the District of New
Jersey.
No official unsecured creditors committee has been appointed in
the Debtor's case.
TALLGRASS DEVELOPMENT: S&P Affirms 'B+' Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Tallgrass Development L.P. In addition, S&P
affirmed its 'BB-' rating on subsidiary Tallgrass Operations LLC's
term loan B facility. The company is upsizing the amount of the
term loan loan by $150 million, which brings the total amount of
debt outstanding to about $620 million. The recovery rating on
this debt remains '2', indicating prospects for substantial (70%
to 90%) recovery of principal in the event of a payment default.
The ratings on Tallgrass Development L.P. reflect its "fair"
business risk profile and "aggressive" financial risk profile.
Overland Park, Kan.-based Tallgrass Development is increasing the
size of its term loan facility to about $620 million to continue
its capital spending on the Pony Express pipeline and other growth
projects through the remainder of 2013 and 2014.
S&P's assessment of a "fair" business risk profile is based on its
view that the company's asset holdings, geographic diversity, and
scale are relatively small on a wholly owned basis. In addition,
Tallgrass Development is highly dependent on distributions from
REX (50% owned) and TEP (63% owned) for the majority of its
EBITDA. The Pony Express pipeline will not contribute
meaningfully to Tallgrass Development's EBITDA until the second
half of 2014.
Tallgrass Development's financial risk profile remains aggressive
based on S&P's projected 2014 total debt of about $740 million,
total debt to EBITDA of about 3x to 3.5x, and EBITDA interest
coverage of about 9x.
The subordinated distributions from REX and TEP represent the
majority (greater than 70%) of Tallgrass Development's projected
EBITDA. S&P continues to expect Tallgrass Development to have
this level of reliance on subordinated distributions through 2014.
Although the company is dependent on REX and TEP for a majority of
its EBITDA, REX does have a "strong" business risk profile with
90% of its cash flows contracted through 2019. REX's operational
strength factors favorably into S&P's assessment of Tallgrass
Development's business risk.
Tallgrass reduced its debt significantly earlier this year when it
contributed the Tallgrass Interstate Gas Transmission (TIGT) and
Tallgrass Midstream LLC (TMID) assets to the newly formed master
limited partnership (MLP). After the MLP's IPO, Tallgrass was
able to use its share of the proceeds to pay down its term loan B
facility.
S&P expects Tallgrass Development's debt to EBITDA to remain
around 3x to 3.5x on a stand-alone basis. This level of debt
leverage depends significantly on the continued robust level of
distributions received from REX and TEP. The company's debt
leverage on a proportionately consolidated basis is still
relatively high, with debt to EBITDA of about 8.5x to 9x before
the Pony Express project starts to contribute meaningful EBITDA.
Liquidity
In S&P's assessment, Tallgrass Development's liquidity is
"adequate" under its criteria. Pro forma for the upsized term
loan facility, S&P anticipates that sources of liquidity will
exceed uses by about 8.3x at the end of 2013. Tallgrass
Development also has adequate revolving facility covenant headroom
in S&P's base-case projections.
S&P anticipates that Tallgrass Development will remain in
compliance with its revolving facility covenants, with at least a
15% cushion. The term loan credit facility includes covenants on
a maximum total leverage ratio of 5.25x with step-downs.
The company's liquidity sources include:
-- Anticipated funds from operations (FFO) of about $200
million during the next 12 months.
-- The full amount available under its $200 million senior
secured revolving credit facility maturing in 2017.
The company's liquidity uses include:
-- Maintenance and growth capital spending of about $680
million through the end of 2014.
-- S&P do not anticipate that Tallgrass Development will
distribute any cash flows to its equity owners through 2014.
Recovery analysis
S&P's issue rating on Tallgrass Operations LLC's $620 million term
loan facility is 'BB-'. S&P's '2' recovery rating on this debt
indicates its expectation for substantial (70% to 90%) recovery in
a payment default scenario. For the complete recovery analysis,
see the recovery report to be published on RatingsDirect.
OUTLOOK
The stable outlook on Tallgrass Development reflects S&P's view
that the company's EBITDA and cash flows will remain relatively
predictable, and that debt leverage will be about 3x to 3.5x, and
that liquidity will remain adequate in S&P's assessment.
S&P could lower the rating if Tallgrass Development's total debt
to EBITDA approaches 5x or the liquidity position becomes
constrained. S&P would also consider lowering the rating if the
subordinated distributions from REX and TEP appear to be at risk
of curtailment.
S&P is unlikely to raise the rating in the near term because of
the small scale of Tallgrass Development's wholly owned assets,
its limited geographic focus, risks associated with the Pony
Express pipeline and other expansion projects, and its dependency
on distributions that are subordinated to debt payments at other
divisions. S&P would also consider the ratings relationship
between Tallgrass Development and REX. S&P could consider raising
the rating if the company successfully completes the Pony Express
pipeline and other projects without significant cost overruns and
without delays. An increase in the rating would also depend on
significant unimpeded distributions to Tallgrass Development from
REX and TEP.
TANDEM TRANSPORT: Immaterial Modifications to Reorganization Plan
-----------------------------------------------------------------
Consolidated Transport Systems, Inc., et al., at the end of last
month filed immaterial modifications to their Amended Joint Plan
of Reorganization. The document contains immaterial modifications
to the Amended Joint Plan of Reorganization dated July 5, 2013.
A copy of the document, which was filed Oct. 28, 2013, is
available for free at:
http://bankrupt.com/misc/Tandem_Transport_Amended_Plan.pdf
As reported in the TCR on July 19, 2013, the Plan provides that
the Debtors' obligations will be satisfied in full over time by
the Debtors' cash flow from operations, the disposition of the
Debtors' tractor fleet, and exit financing. A copy of the
explanatory disclosure statement is available for free at
http://bankrupt.com/misc/Consolidated_Transport_AMendedDS.pdf
About Consolidated Transport,
Tandem Transport et al.
Michigan City, Indiana-based trucking company Consolidated
Transport Systems, Inc., filed a Chapter 11 petition (Bankr. N.D.
Ind. Case No. 12-32940) on Aug. 16, 2012. Walter G & Carolyn Bay
owns 87.3% of the privately held Debtor.
Tandem Transport Corp., and two affiliates Transport Investment
Corporation, and Tandem Eastern, Inc., sought Chapter 11
protection (Bankr. N.D. Ind. Case Nos. 12-33135 to 12-33137) on
Aug. 31, 2012.
The Companies and their predecessors have provided for-hire
freight services throughout the United States since 1945. The
largest portion (75%) of the Companies' business consists of
hauling building materials, with the balance consisting of
transporting steel (20%) and other miscellaneous freight such as
stone, salt, and machinery (5%). The bulk of the Companies' loads
are received and delivered east of the Mississippi River, although
they have general commodities authority for the lower 48 states.
The Companies have intrastate authority for the states of Georgia,
Illinois, Indiana, Kentucky, Michigan, Missouri, North Carolina,
Ohio, Tennessee and Texas.
The Companies operate as a combined enterprise. Consolidated owns
the fleet of roughly 275 tractors and 330 trailers. It also
employs office staff of 66 employees. The corporate headquarters
is located in Michigan City, Indiana, while their executive office
is located in St. Louis, Michigan. Transport is the operating
company which provides logistics to customers and also brokers
freight. Eastern employs 246 drivers, while Investment employs 10
mechanics.
Consolidated initiated its chapter 11 proceeding to prevent any
actions by equipment lenders such as repossession of equipment
that would threaten the Companies' operations and viability while
they restructure their respective operations. Transport,
Investment and Eastern filed for chapter 11 to obtain the
necessary breathing room provided by the Bankruptcy Code, as well
as a single forum to allow them to effectively restructure their
operations.
Consolidated disclosed $17,207,923 in assets and $11,559,933 in
liabilities as of the Chapter 11 filing and affiliate, Tandem
Eastern, Inc., disclosed $40,652 in assets and $56,119 in
liabilities. Transport Investment estimated less than $50,000 in
assets and up to $50 million in liabilities. Two other entities
that filed are Transport Investment Corporation and Tandem
Eastern, Inc.
Judge Harry C. Dees, Jr. presides over the cases. Jeffrey J.
Graham, Esq., and Jerald I. Ancel, Esq., at Taft Stettinius &
Hollister LLP, in Indianapolis, Indiana, serve as the Debtors'
counsel. O'Keefe & Associates Consulting, LLC, as financial
advisors, The petition was signed by Jeffrey T. Gross, president.
TC GLOBAL: McDreamy Didn't Get Asia Rights in Purchase, Suit Says
-----------------------------------------------------------------
Law360 reported that an affiliate of bankrupt TC Global Inc. on
Nov. 13 launched an adversary suit against the debtor and the new
Tully's Coffee Shops owner in Washington bankruptcy court,
alleging a breach of a licensing agreement allowing the affiliate
to market the Tully's brand in Asia.
According to the report, Tully's Coffee Asia Pacific Partners LP
contends that pursuant to a January sale order authorizing the
sale of TC Global's assets to Global Baristas LLC, a company
controlled by "Grey's Anatomy" actor Patrick Dempsey, aka
"McDreamy," it still has the sole exclusive over the Asia unit.
About TC Global
Headquartered in Seattle, Washington, TC Global, Inc., dba Tully's
Coffee -- http://www.tullyscoffeeshops.com/-- is a specialty
coffee retailer and wholesaler. Through company owned, licensed
and franchised specialty retail stores in Washington, Oregon,
California, Arizona, Idaho, Montana, Colorado, Wyoming and Utah,
throughout Asia with Tully's Coffee International, and with its
global alliance partner Tully's Coffee Japan, Tully's premium
coffees are available at 545 branded retail locations globally.
TC Global Inc. filed a Chapter 11 petition (Bankr. W.D. Wash. Case
No. 12-20253-KAO) on Oct. 10, 2012.
The Debtor is represented by attorneys at Bush Strout & Kornfeld
LLP, in Seattle.
The Debtor disclosed assets of $4.9 million and debt totaling
$3.7 million, including $2.6 million in unsecured claims.
The Seattle-based chain has 57 company-owned stores and 12
franchised. There are another 71 franchises in grocery stores,
schools and airports. Tully's will close nine stores following
bankruptcy.
A Bloomberg report discloses that Tully's sold the wholesale and
distribution business in 2009, generating $40 million that allowed
a $5.9 million distribution to shareholders.
TEXAS AFFORDABLE HOUSING: S&P Raises SPUR Rating to 'BB'
--------------------------------------------------------
Standard & Poor's Ratings Services has raised its underlying
rating (SPUR) on Texas State Affordable Housing Corp.'s (South
Texas Affordable Housing Corp. portfolio) series 2002A insured
multifamily housing revenue bonds by three notches to 'BB (sf)'
from 'B (sf)'. The outlook is stable.
The raised rating reflects Standard & Poor's view of:
-- The project's improved debt service coverage of 1.27x
maximum annual debt service (MADS),
-- The occupancy above 90% at all six properties, and
-- The debt service reserve fund sized at 12 months' MADS.
The above strengths are partially offset by Standard & Poor's view
of these weaknesses:
-- The continued default on payment for the series 2002B, C,
and D bonds; and
-- The use of a liability insurance provider that Standard &
Poor's does not rate.
"The stable outlook reflects our view of improved operating
zerformance and high occupancy rates at the properties," said
Standard & Poor's credit analyst Raymond S. Kim. "Sustained
improvement in financial performance could lead to either a
raising of the rating or a revision of the outlook to positive.
However, if the owner is unable to either control property
expenses or cover expenses with rent increases, we may lower the
rating."
The South Texas Affordable Housing Corp. portfolio encompasses six
properties comprising 1,476 total units in Houston, San Antonio,
and Corpus Christi.
TOYS R US: Bank Debt Trades at 3% Off
-------------------------------------
Participations in a syndicated loan under which Toys R Us is a
borrower traded in the secondary market at 97.15 cents-on-the-
dollar during the week ended Friday, November 15, 2013, according
to data compiled by LSTA/Thomson Reuters MTM Pricing and reported
in The Wall Street Journal. This represents a decrease of 0.42
percentage points from the previous week, The Journal relates.
Toys R Us pays 450 basis points above LIBOR to borrow under the
facility. The bank loan matures on July. 25, 2019. The bank debt
carries Moody's B3 rating and Standard & Poor's B+ rating. The
loan is one of the biggest gainers and losers among 212 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
Toys "R" Us, Inc., headquartered in Wayne, New Jersey, is the
world's largest dedicated toy retailer, with annual revenues of
around $11 billion.
TRAVELPORT HOLDINGS: Files Form 10-Q, Incurs $27MM Loss in Q3
-------------------------------------------------------------
Travelport Limited filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $27 million on $511 million of net revenue for the three months
ended Sept. 30, 2013, as compared with a net loss of $40 million
on $489 million of net revenue for the same period during the
prior year.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss of $140 million on $1.59 billion of net revenue as
compared with a net loss of $72 million on $1.54 billion of net
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2013, showed
$3.16 billion in total assets, $4.53 billion in total liabilities
and a $1.36 billion total deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/7sDcQM
About Travelport Holdings
Headquartered in Atlanta, Georgia, Travelport provides transaction
processing services to the travel industry through its global
distribution system business, which includes the group's airline
information technology solutions business. During FYE2011, the
group reported revenues and adjusted EBITDA of US$2 billion and
US$507 million, respectively.
Travelport Limited incurred a net loss of $236 million in 2012, as
compared with net income of $172 million in 2011.
* * *
As reported by the TCR on Oct. 10, 2011, Standard & Poor's Ratings
Services lowered its long-term corporate credit ratings on travel
services provider Travelport Holdings Limited (Travelport
Holdings) and indirect subsidiary Travelport LLC (Travelport) to
'SD' (selective default) from 'CC'.
The downgrades follow the implementation of a capital
restructuring, which was necessary because of the Travelport
group's high leverage, weak liquidity, and the upcoming maturity
of its $693 million (as of end-June 2011) PIK loan in March 2012.
"According to our criteria, we view this restructuring as a
distressed exchange and tantamount to a default (see 'Rating
Implications Of Exchange Offers And Similar Restructurings,
Update,' published May 12, 2009, on RatingsDirect on the Global
Credit Portal)," S&P related.
In May 2012, Moody's Investors Service affirmed the Caa1 corporate
family rating (CFR) and probability of default rating (PDR) of
Travelport LLC.
UNI-PIXEL INC: Reports $5.3 Million Net Loss in Third Quarter
-------------------------------------------------------------
Uni-Pixel, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $5.29 million on $0 of revenue for the three months ended
Sept. 30, 2013, as compared with a net loss of $2.04 million on $0
of revenue for the same period during the prior year.
For the nine months ended Sept. 30, 2013, the Company incurred a
net loss of $9.04 million on $5.07 million of revenue as compared
with a net loss of $6.12 million on $74,124 of revenue for the
same period last year.
As of Sept. 30, 2013, Uni-Pixel had $60.22 million in total
assets, $6.50 million in total liabilities and $53.71 million in
total shareholders' equity.
Cash and cash equivalents totaled $46.6 million at Sept. 30, 2013,
as compared to $13 million at Dec. 31, 2012.
"In Q3, we made significant progress towards the worldwide market
introduction of our InTouch Sensors," said Reed Killion, president
and CEO of UniPixel. "During the quarter we continued to focus
our efforts on the production level process qualification and data
collection to achieve ISO 9000 and 14000 certifications. The
progress we have made has been monitored and supported by our
Preferred Price and Capacity Licensees. We've recently installed
semi-automated testers to augment testing until we have automatic
roll-to-roll electronic testers up and running at the Kodak
Rochester facility and our Texas facility."
A copy of the Form 10-Q is available for free at:
http://is.gd/Q7nnFp
Receives Orders for InTouch Sensors
UniPixel has received its first purchase order from their lead PC
OEM partner for its revolutionary InTouch SensorsTM, a pro-cap,
multi-touch screen solution designed for smartphones, tablets,
notebooks, all-in-one devices and large screens.
UniPixel has accepted the order under the preferred price and
capacity license agreement between the PC OEM and UniPixel as
previously announced in December of 2012. UniPixel expects to
ship an initial commercial run of InTouch Sensors in the fourth
quarter of 2013.
"Our first InTouch Sensors order marks another major milestone in
the successful global market introduction of our InTouch sensor
technology," said UniPixel president and CEO Reed Killion. "Over
the last several months we've been working diligently with Kodak,
our licensees and manufacturing partners to qualify our front end
and back end processes to ensure we meet customer expectations.
We continue to make significant progress with Kodak and other
partners in product design, prototyping, capacity build out and
qualifying our production processes.
"The multi-million dollar milestone payment UniPixel received
under its preferred price and capacity license agreement has
helped fund the build-out of InTouch Sensor production lines and
allowed us to leverage our PC OEM's world-class resources around
supply chain management, operations, engineering and production
core competencies."
InTouch Sensors offer the unique advantages of metal mesh touch-
sensors based on an additive, roll-to-roll, flexible electronics
process as compared to the traditional subtractive ITO-based and
subtractive ITO replacement-based touch-sensor solutions. These
advantages include higher touch sensitivity, improved touch
distinction, better durability, significantly higher conductivity,
extensibility to a greater number of sizes and form factors, and
faster sensing speeds.
The UniBoss additive manufacturing process is more efficient and
sustainable, promising lower production costs contrasted with
standard ITO-based touch technology due to lower material costs,
fewer steps in the manufacturing process and a more simplified
supply chain.
About Uni-Pixel Inc.
The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.
"As of December 31, 2012, we had a cash balance of approximately
$13.0 million and working capital of $12.8 million. We project
that current cash reserves will sustain our operations through at
least December 31, 2013, and we are not aware of any trends or
potential events that are likely to adversely impact our short
term liquidity through this term. We expect to fund our
operations with our net product revenues from our commercial
products, cash and cash equivalents supplemented by proceeds from
equity or debt financings, and loans or collaborative agreements
with corporate partners, each to the extent necessary," according
to the Company's annual report for the year ended Dec. 31, 2012.
Uni-Pixel incurred a net loss of $9.01 million in 2012, as
compared with a net loss of $8.56 million in 2011.
US INVESTIGATIONS: Bank Debt Trades at 2% Off
---------------------------------------------
Participations in a syndicated loan under which US Investigations
Services, Inc. is a borrower traded in the secondary market at
97.60 cents-on-the-dollar during the week ended Friday, November
15, 2013, according to data compiled by LSTA/Thomson Reuters MTM
Pricing and reported in The Wall Street Journal. This represents
a decrease of 0.30 percentage points from the previous week, The
Journal relates. US Investigations pays 450 basis points above
LIBOR to borrow under the facility. The bank loan matures on
February 26, 2019. The bank debt was not rated by Moody's and
Standard & Poor. The loan is one of the biggest gainers and
losers among 212 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
US Investigations Services, Inc., with corporate headquarters in
Falls Church, Virginia, is a leading provider of security-
clearance background investigation and employment screening
services to government agencies and commercial customers in the
United States. Revenues for the 2008 fiscal year which ended
September 30, 2009 were about $890 million, adjusted for certain
one-time revenue items.
VALENCE TECHNOLOGY: Battery Maker Confirms Chapter 11 Plan
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Valence Technology Inc. won approval from the
bankruptcy court for a Chapter 11 reorganization plan where the
developer of storage batteries will emerge from bankruptcy
reorganization owned by secured lender Berg & Berg Enterprises
LLC.
According to the report, the plan, originally filed in August, has
Berg taking the new stock in exchange for $50 million of the $69.1
million it's owed. The plan was approved at a Nov. 13 confirmation
hearing, according to court records.
The other $19.1 million owing to Berg would become a new loan not
paid until after other creditors. Unsecured creditors are to be
paid in full on their $5.2 million in claims, with half on
emergence from bankruptcy and the remaining half one year later.
BankruptcyData reported that Valence Technology's common stock,
which traded over the counter with the symbol VLNCQ, was cancelled
effective November 13, 2013.
"As Valence emerges from Chapter 11, we are a stronger, better
capitalized and more competitive company with a solid foundation
for future growth," says chief executive officer and president, T.
Joseph Fisher.
About Valence Technology
Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 12-11580) on July 12, 2012, in its home-town in
Austin. Founded in 1989, Valence develops lithium iron magnesium
phosphate rechargeable batteries. Its products are used in hybrid
and electric vehicles, as well as hybrid boats and Segway personal
transporters.
The Debtor disclosed debt of $82.6 million and assets of
$31.5 million as of March 31, 2012. The Debtor disclosed
$24,858,325 in assets and $78,520,831 in liabilities as of the
Chapter 11 filing. Chairman Carl E. Berg and related entities own
44.4 percent of the shares. ClearBridge Advisors LLC owns 5.5
percent.
Judge Craig A. Gargotta presides over the case. The Company is
being advised by Sabrina L. Streusand at Streusand, Landon &
Ozburn, LLP with respect to bankruptcy matters. The petition was
signed by Robert Kanode, CEO.
On Aug. 8, 2012, the U.S. Trustee for Region 7 appointed five
creditors to serve on the Official Committee of Unsecured
Creditors of the Debtor. Brinkman Portillo Ronk, PC, serves as
its counsel.
As reported in the TCR on Nov. 1, 2013, most of the Texas battery
maker's creditors have voted to accept the bankruptcy repayment
plan that would give real-estate mogul Carl Berg full ownership of
the Company.
VELO HOLDINGS: NY Court Won't Halt Arkansas AG's Probe
------------------------------------------------------
Bankruptcy Judge Martin Glenn denied, without prejudice, the
request of Velo ACU LLC and the Reorganized Debtors to enforce the
Plan of Reorganization and the Confirmation Order Injunctions
against the Arkansas Attorney General.
ACU LLC is a holding company formed pursuant to the Velo Holdings
Reorganization Plan, which became effective on February 4, 2013.
Before the Petition Date, several state attorneys general,
including the Arkansas Attorney General, initiated investigations
into two Velo affiliates: Vertrue and Adaptive. The Velo
affiliates engaged in direct and third party marketing to
consumers to offer identity-theft protection and lifestyle and
shopping products. Aside from attracting customers through its
marketing efforts, Vertrue and Adaptive also gained customers
"organically," meaning that the customers independently sought out
the affiliates' services.
Pursuant to The Modified First Amended Joint Plan, Vertrue and
Adaptive's credit and identify-theft business and their lifestyle
and shopping business -- "ACU Business" -- were placed into a
"harvest," meaning that the entities ceased all marketing
practices and terminated relationships with third party marketers,
focusing their efforts on continuing to derive revenue from their
existing customers. The ACU Business continues to gain organic
customers, though, and continues to service its previously-
enrolled customers, so the ACU Business still generates revenue.
This revenue will be used to pay distributions pursuant to the
Plan. Current Chief Executive Officer of the reorganized debtors
(and former Chief Restructuring Officer of the ACU Business) Alan
M. Jacobs oversees the harvest.
In 2010, the Arkansas AG issued an investigative demand that
sought information about Vertrue and its affiliates. The Debtors
responded by producing over 10,000 pages of documents along with
narrative responses.
On May 28, 2013, the Arkansas Attorney General issued a new civil
investigative demand. Arkansas did not file a proof claim in the
bankruptcy, nor did it object to the Plan. The 2013 CID seeks (1)
a list of all Arkansas Residents whom Velo billed from February 1,
2013, to the present, (2) the names of all membership programs for
each person billed, (3) the names of the membership programs in
which each person was enrolled, and (4) a complete list of Velo's
marketing partners from February 1, 2013, to the present.
Velo opposed the CID, arguing that the ACU Business no longer
conducts any marketing and that the CID violates the Court's
injunctions pursuant to the Plan and the Court's Confirmation
Order.
The Arkansas AG responded that it does not believe that either the
Plan or the Confirmation Order enjoins Arkansas from investigating
conduct from February 1, 2013, to the present.
In declining Velo's request, Judge Glenn noted that at this stage,
Arkansas has only issued the CID. It has not brought a claim, nor
has it expressed any intention of bringing a claim. Instead,
Arkansas has declared that it is only investigating post-
confirmation conduct, and if it decides to bring a claim, that
claim will be restricted to post-confirmation conduct. Thus,
Arkansas' investigation does not run afoul of the Plan or
Confirmation Order injunctions.
According to Judge Glenn, the threat remains, though, that
Arkansas could impermissibly expand the scope of its
investigation. Velo's motion is therefore denied without
prejudice to renewal if Arkansas does attempt to bring a claim
against Velo premised on Velo's prepetition conduct.
A copy of the Court's Nov. 8, 2013 Memorandum Opinion and Order is
available at http://is.gd/NaIwlVfrom Leagle.com.
Counsel for the Debtors is:
Shmuel Vasser, Esq.
DECHERT LLP
1095 Avenue of the Americas
New York, NY 10036-6797
Tel: 212-698-3691
E-mail: shmuel.vasser@dechert.com
Counsel for Reorganized Velo Holdings Inc. is:
Ana Alfonso, Esq.
WILLKIE FARR & GALLAGHER LLP
787 Seventh Avenue
New York, NY 10019-6099
Tel: 212-728-8244
Fax: 212-728-9244
E-mail: aalfonso@willkie.com
About Velo Holdings
V2V Corp. is a premier direct marketing services company,
providing individuals and businesses with access to a wide-variety
of consumer benefits in the United States, Canada, and the United
Kingdom. V2V was founded in 1989 as a membership services company
that marketed its membership programs exclusively via
telemarketing and, after having nearly a decade of continued
growth, went public in 1996. In 2007, V2V was acquired by a
consortium of private equity firms led primarily by investing
affiliates of One Equity Partners.
Norwalk, Connecticut-based Velo Holdings Inc. and various
affiliates, including V2V, filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Case Nos. 12-11384 to 12-11386 and 12-11388 to 12-11398)
on April 2, 2012. The debtor-affiliates are V2V Holdings LLC,
Coverdell & Company, Inc., V2V Corp., LN Inc., FYI Direct Inc.,
Vertrue LLC, Idaptive Marketing LLC, My Choice Medical Holdings
Inc., Adaptive Marketing LLC, Interactive Media Group (USA) Ltd.,
Brand Magnet Inc., Neverblue Communications Inc., and Interactive
Media Consolidated Inc.
Judge Martin Glenn presides over the case. Lawyers at Dechert LLP
serve as the Debtors' counsel. The Debtors' financial advisors
are Alvarez & Marsal Securities LLC. The Debtors' investment
banker is Alvarez & Marsal North America, LLC.
Quinn Emanuel Urquhart & Sullivan, LLP, serves as the Debtors'
special counsel. Epiq Bankruptcy Solutions serves as the
Debtors' claims agent. Velo Holdings estimated $100 million to
$500 million in assets and $500 million to $1 billion in debts.
The petitions were signed by George Thomas, general counsel.
Lawyers at Willkie Farr & Gallagher LLP represent Barclays, the
First Lien Prepetition Agent and the DIP Agent. The First Lien
Prepetition Agent and DIP Agent also has hired FTI Consulting,
Inc. Sidley Austin LLP represents the Second Lien Prepetition
Agent.
Tracy Hope Davis, U.S. Trustee for Region 2, appointed three
unsecured creditors to serve on the Official Committee of
Unsecured Creditors of Velo Holdings Inc., et al.
Velo Holdings Inc. was given signature by the bankruptcy judge on
a Jan. 23 confirmation order approving the reorganization plan for
the direct marketer.
VIGGLE INC: R. Sillerman Discloses 82.9% Equity Stake
-----------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Robert F.X. Sillerman disclosed that as of
Oct. 25, 2013, he beneficially owned 111,561,913 shares of common
stock of Viggle Inc. representing 82.9 percent of the shares
outstanding. Mr. Sillerman previously reported beneficial
ownership of 109,561,913 common shares or 82.6 percent equity
stake as of Sept. 16, 2013. A copy of the regulatory filing is
available for free at http://is.gd/yDDXBh
About Viggle
New York City-based Viggle Inc. is a loyalty marketing company.
The Company has developed a loyalty program for television that
gives people real rewards for checking into the television shows
they are watching on most mobile operating system. Viggle users
can redeem their points in the app's rewards catalog for items
such as movie tickets, music, or gift cards.
Viggle incurred a net loss of $91.40 million on $13.90 million of
revenues for the year ended June 30, 2013, as compared with a net
loss of $96.51 million on $1.73 million of revenues during the
prior year. The Company's balance sheet at June 30, 2013, showed
$16.77 million in total assets, $54.15 million in total
liabilities and a $37.37 million total stockholders' deficit.
BDO USA, LLP, in New York, issued a "going concern" qualification
on the consolidated financial statements for the year ended
June 30, 2013. The independent auditors noted that the Company
has suffered recurring losses from operations and at June 30,
2013, has deficiencies in working capital and equity that raise
substantial doubt about its ability to continue as a going
concern.
VITESSE SEMICONDUCTOR: Extends Maturity of Whitebox Loan to 2016
----------------------------------------------------------------
Vitesse Semiconductor Corporation, on Nov. 5, 2013, entered into a
Third Amendment to Loan Agreement with Whitebox VSC Ltd., as
lender and agent. The Amendment amends the Company's existing
Loan Agreement with Whitebox entered into on Aug. 23, 2007, as
amended on Oct. 16, 2009, and as further amended on Feb. 4, 2011.
The Amendment extends the maturity dates of each of the Company's
outstanding Term A Loan in the principal amount of $7.9 million
and Term B Loan in the principal amount of $9.3 million issued
pursuant to the Loan Agreement from Feb. 4, 2014, and Oct. 30,
2014, respectively, to Aug. 31, 2016, and also provides that the
Term Loan will bear interest in cash at 9.0 percent per annum
payable quarterly in arrears.
The Amendment provides the Company the right to optionally prepay
the Term Loan in whole or in part, at any time and from time to
time, subject to the payment of a prepayment fee. The prepayment
fee is 5.0 percent of the aggregate principal amount repaid with
respect to prepayments made prior to Oct. 30, 2014, 3.0 percent
with respect to prepayments made on or after Oct. 30, 2014, but
prior to Oct. 30, 2015, and 2.0 percent with respect to any
prepayment made on or after Oct. 30, 2015. The Loan Agreement
continues to require that the Company prepay the Term Loan upon
the occurrence of certain prepayment events, but provides the
Company with greater flexibility to sell assets and use the
resulting proceeds for purposes other than repaying the Term Loan
after repayment of our 8.0 percent convertible second lien
debentures due October 2014.
The Amendment also provides the Company the right, so long as no
event of default exists under the Loan Agreement, to purchase,
repay, redeem or defease any or all of the 8.0 percent Debentures,
and requires that we maintain an unrestricted cash balance of $8
million and achieve minimum quarterly revenues of $10 million.
The Loan Agreement continues to provide the lenders with the right
to convert the Term B Loan into shares of the Company's Common
Stock at a conversion price of $4.95 per share through Oct. 30,
2014. After that date, the Term B Loan will not be convertible
into common stock.
In connection with the Company's entry into the Amendment, the
Company paid the lenders a consent fee of $308,000.
A copy of the Third Amendment is available for free at:
http://is.gd/DS6Q5Y
Purchase of 8.0 Percent Debentures
On Nov. 5, 2013, the Company entered into letter agreements with
each of Whitebox Multi Strategy Partners, LP, Whitebox
Concentrated Convertible Arbitrage Partners, LP, Pandora Select
Partners, LP, and Whitebox Special Opportunities Fund Series B
Partners, LP, which hold 8.0 percent Debentures. Pursuant to
these letter agreements, the Holders agreed to sell to the
Company, and the Company agreed to purchase from the Holders,
$13,650,324 principal amount of 8.0 percent Debentures at a
purchase price of 107 percent of the principal amount of 8.0
percent Debentures acquired by the Company plus accrued and unpaid
interest thereon, for an aggregate purchase price of $14,715,049.
The Company's purchase of the 8.0 percent Debentures was
consummated on Nov. 6, 2013, following which there remains
outstanding approximately $32.8 million principal amount of 8.0
percent Debentures.
About Vitesse
Based in Camarillo, California, Vitesse Semiconductor Corporation
(Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs,
develops and markets a diverse portfolio of semiconductor
solutions for Carrier and Enterprise networks worldwide.
In October 2009, Vitesse completed a debt restructuring
transaction that resulted in the conversion of 96.7 percent of the
Company's 2024 Debentures into a combination of cash, common
stock, Series B Preferred Stock and 2014 Debentures. With respect
to the remaining 3.3 percent of the 2024 Debentures, Vitesse
settled its obligations in cash. Additionally, Vitesse repaid $5
million of its $30 million Senior Term Loan, the terms of which
were amended as part of the debt restructuring transactions.
Vitesse incurred a net loss of $1.11 million in 2012, a net loss
of $14.81 million in 2011, and a net loss of $20.05 million in
2010. As of June 30, 2013, the Company had $104.55 million in
total assets, $84.77 million in total liabilities and $19.78
million in total stockholders' equity.
WALKER LAND: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Walker Land & Cattle, LLC
1070 Riverwalk Drive, Suite 200
Idaho Falls, ID 83402
Case No.: 13-41437
Chapter 11 Petition Date: November 15, 2013
Court: United States Bankruptcy Court
District of Idaho (Pocatello)
Judge: Hon. Jim D Pappas
Debtor's Counsel: Robert J Maynes, Esq.
MAYNES TAGGART, PLLC
POB 3005
Idaho Falls, ID 83403-3005
Tel: (208) 552-6442
Fax: (208) 524-6095
Email: mayneslaw@hotmail.com
Estimated Assets: $50 million to $100 million
Estimated Debts: $10 million to $50 million
The petition was signed by Roland N. (Rollie) Walker, manager.
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
03 Zone Co., Inc. $151,951
AGRI-Stor Company $95,434
American Pump, Co. $57,778
Conrad and Bischoff, Inc. $351,236
P.O. Box 50106
Idaho Falls, ID 83405
Crop Production Serv., Inc. $435,736
Idaho Falls Terminal
3030 E. 49th N. Telford Rd.
Idaho Falls, ID 83401
Crop Production Serv., Inc. $889,496
Blackfoot ID-Terminal
P.O. Box 1070
Blackfoot, ID 83221
Dorothy M. Walker FLP $100,000
Helena Chemical, Co. $367,076
225 Schilling Blvd. Ste. 300
Collierville, TN 38017
Lyle Shupe $55,000
Maupin Welding $79,125
Nature's Way, Inc. $164,089
Northwestern Mutual Life $36,922
Parkinson Seed Farm, Inc. $147,950
Rain for Rent, Inc. $60,334
Reynolds Farms $83,389
Rocky Mountain Power $587,787
1033 NE 6th Ave
Portland, OR 97256
State Insurance Fund $59,500
The Roland L. Walker & $555,925
Dorothy M Walker
3533 Sun Circle
Idaho Falls, ID 83404
Vista Valley AG, Inc. $472,994
P.O. BOx 626
Ririe, ID 83443
Walker Produce Co., Inc. $659,752
1070 Riverwalk Dr., Ste.200
Idaho Falls, ID 83402
WESTERN REFINING: S&P Affirms 'B+' CCR; Outlook Remains Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Western Refining Inc. The outlook remains
stable. S&P also assigned its 'BB-' issue-level rating and a '2'
recovery rating to Western's proposed $550 million term loan B due
2020. At the same time, S&P lowered the rating on Western's
$350 million, 6.25% senior unsecured notes due 2021 to 'B+' from
'BB-' and revised the recovery rating to '4' from '2'. The '4'
recovery rating indicates expectations of average (30% to 50%)
recovery in the event of a payment default. S&P also lowered the
rating on Western's $215.5 million, 5.75% convertible notes due
2014 to 'B' from 'BB-' and revised the recovery rating to '5' from
'2'. The '5' recovery rating indicates expectations of modest
(10% to 30%) recovery in the event of payment default.
At the same time, S&P affirmed the 'B+' corporate credit rating on
Northern Tier Energy LLC. The outlook remains stable.
"The rating action is based on our belief that the increased scale
and improved geographic diversity that the transaction provides to
Western's credit profile is tempered by higher financial leverage
and the pro forma corporate structure, where Western will receive
only a partial interest in a subordinated distribution payment
from Northern Tier," said Standard & Poor's credit analyst Michael
Grande. That said, S&P recognizes that the investment in Northern
Tier and the current organizational structure gives Western some
flexibility in the future allocation of assets, which could result
in different capital structures and credit profiles. S&P
considers Western's future financial strategy and the effect it
may have on the corporate structure and credit measures to be key
rating factors.
Western is partly financing the acquisition with a $550 million
term loan B and could receive between $110 million and
$120 million of distributions from Northern Tier in 2014, based on
our forecast. As a result, S&P estimates Western's pro forma
financial leverage could be in the 1.9x area, a full turn higher
than its previous estimates.
The transaction does not change S&P's view of Northern Tier's
credit profile because its organizational and governance structure
is not changing. S&P's assessment of the Northern Tier's
"vulnerable" business risk profile partly hinges on its reliance
on one refinery--and the risks of unplanned downtime, regional
economic downturns, supply shocks, cost increases, and margin
volatility--for most of its cash flow to service its obligations.
S&P also sees some added risk from its variable master limited
partnership (MLP) formation. In S&P's view, this structure puts
added pressure on the partnership to manage distributions, which
could prove challenging given the highly cyclical nature of the
refining business. These risks are only partly mitigated by
Northern Tier's favorable presence in the Midwest market. The
region has historically generated higher refining margins than
other regions (due in part to access to lower-priced Canadian and
Bakken crude oil). Also, because regional demand for refined
products exceeds local supply, Northern Tier has earned a premium
on the finished products it sells.
WHITE STAR: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: White Star Line, LLC
714 State Highway 248, Suite 520
Branson, MO 65616
Case No.: 13-13032
Chapter 11 Petition Date: November 14, 2013
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Debtor's Counsel: Michael G. Busenkell, Esq.
GELLERT SCALI BUSENKELL & BROWN, LLC
913 N. Market St., 10th Floor
Wilmington, DE 19801
Tel: 302-425-5812
Fax: 302-425-5814
Email: mbusenkell@gsbblaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by John Joslyn, managing member.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
WHITE/REACH BRANNON: Case Summary & 18 Top Unsecured Creditors
--------------------------------------------------------------
Debtor: White/Reach Brannon Rd., LLC
201 West Short Street, Suite 500
Lexington, KY 40507
Case No.: 13-52749
Chapter 11 Petition Date: November 14, 2013
Court: United States Bankruptcy Court
Eastern District of Kentucky (Lexington)
Debtor's Counsel: Amelia M. Adams, Esq.
DELCOTTO LAW GROUP PLLC
200 North Upper Street
Lexington, KY 40507
Tel: (859) 231-5800
Email: aadams@dlgfirm.com
- and -
Laura Day DelCotto, Esq.
DELCOTTO LAW GROUP PLLC
200 North Upper St
Lexington, KY 40507
Tel: (859) 231-5800
Fax: (859) 281-1179
Email: ldelcotto@dlgfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Stephen Reach, managing member.
A list of the Debtor's 18 largest unsecured creditors is available
for free at http://bankrupt.com/misc/kye13-52749.pdf
WILTON HOLDINGS: S&P Lowers CCR to 'B-' on Increased Leverage
-------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Woodridge, Ill.-based Wilton Holdings Inc. to
'B-' from 'B'. The outlook is stable.
S&P also lowered its issue-level rating on the $400 million senior
secured term loan due 2018 to 'B-' from 'B'. The '3' recovery
rating on this term loan is unchanged and indicates S&P's
expectation for meaningful (50% to 70%) recovery in the event of
payment default.
The amount of adjusted debt (including preferred stock)
outstanding as of Sept. 30, 2013, is about $1.1 billion.
"The downgrade reflects Wilton's continued weak operating
performance, which has resulted in credit metrics below our
expectations. We estimate pro forma adjusted leverage has
increased to about 11x (adjusted for the Simplicity Creative
acquisition)," said credit analyst Stephanie Harter. "As such, we
believe Wilton will be challenged to meaningfully reduce adjusted
leverage given its growing accrued liabilities, unless the company
is able to improve operating performance, which could be affected
by consumer spending and a demand shift to non-food and paper
crafts."
The stable outlook reflects S&P's view that Wilton will stabilize
its operating performance, including some slight margin
improvement due to new products in the grocery and food crafting
segments and expected lower operating costs in 2014, and will
maintain adequate liquidity including covenant cushion of at least
15%.
S&P could lower its ratings if business conditions, liquidity, or
credit protection measures weaken such that covenant cushion
declines to below 10%. For covenant cushion to decline to below
10%, S&P estimates EBITDA would have to fall more than 20% from
current levels (assuming existing debt levels remain constant).
Although unlikely to happen in the near term, S&P could raise the
rating if Wilton shows improvement in operating performance
resulting in significantly increased levels of EBITDA and free
cash flow, enabling the company to significantly reduce leverage
while maintaining adequate liquidity.
WINSTAR COMMUNICATIONS: $4.5-Mil. Attys' Fees OK'd in Fraud Deal
----------------------------------------------------------------
Law360 reported that a New York federal judge on Nov. 13 granted
final approval of a $10 million settlement in a securities fraud
class action over Grant Thornton's audit of now-bankrupt Internet
service provider Winstar Communications Inc., awarding $4.5
million in attorneys' fees to plaintiffs' counsel.
According to the report, District Judge George B. Daniels approved
the settlement proposed in July, in which Grant Thornton agreed to
pay $10 million in order to settle claims brought by lead
plaintiffs Italian private bank Banca Intermobiliare, Detroit-
based Drye Custom Pallets Inc. and Robert Ahearn.
The case is Gould, et al v. Winstar, Inc., et al., Case No. 1:01-
cv-03014 (S.D.N.Y.).
About Winstar Communications, Inc.
Based in New York, Winstar Communications, Inc., provided
broadband services to business customers. The company and its
debtor-affiliates filed for chapter 11 protection on April 18,
2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-01462). As
part of their chapter 11 restructuring strategy, the Debtors sold
their domestic telecom assets to IDT Winstar Acquisition, Inc.
IDT later sold the Winstar Assets to GVC Networks, LLC, resulting
in the creation of GVCwinstar, a wholly owned subsidiary of GVC
Networks.
On Jan. 24, 2002, the Bankruptcy Court converted the Debtors'
cases to a Chapter 7 liquidation proceeding. Christine C. Shubert
serves as the Debtors' Chapter 7 trustee. The Chapter 7
trustee is represented by Fox Rothschild LLP and Kaye Scholer LLP.
When the Debtors filed for bankruptcy, they listed $4,975,437,068
in total assets and $4,994,467,530 in total debts.
In early 2009, the U.S. Court of Appeals for the Third Circuit
affirmed a ruling that required an Alcatel-Lucent SA unit to
return to the Chapter 7 trustee a $188.2 million loan payment it
accepted in 2000. As a business partner to the telecommunications
company, Lucent Technologies Inc. was an "insider" under U.S.
bankruptcy law and owes Winstar's trustee the money, the appeals
court said.
WORLDWIDE MIXED: Involuntary Chapter 11 Case Summary
----------------------------------------------------
Alleged Debtor: Worldwide Mixed Martial Arts Sports, Inc.
aka Worldwide Mixed Martial Arts Sports, Inc.
("WMMA") and its subsidiary Worldwide MMA, USA,
Inc ("WUSA") and its parent WMMA Holdings, Inc.
("WHLD")
4 Pineview Lane
Boonton, NJ 07005
Case Number: 13-35006
Involuntary Chapter 11 Petition Date: November 14, 2013
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Hon. Rosemary Gambardella
Petitioner's Counsel: not indicated
Worldwide Mixed's petitioners:
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Lawrence C May Consulting $802,000
Mackenzie Mergers and Acquisitions
1503 Island Way
Weston, FL 33326
Edward M Daspin Consulting $25,000
Consultants For Business & Industry
4 Pineview Lane
Boonton, NJ 07005
Luigi Agostini Employee $603,650
PO BOX 27537
Providence, RI 02907
* Asbestos Claims Bill Would Ax Fraud, Not Privacy, Attys Say
-------------------------------------------------------------
Law360 reported that the benefits for future claimants seeking
compensation from asbestos bankruptcy trusts provided under a bill
the U.S. House of Representatives greenlighted on Nov. 13 would
outweigh the potential privacy issues opponents say come with it,
attorneys say.
According to the report, the Furthering Asbestos Claim
Transparency Act, H.R. 982, was approved 221-199. If enacted, it
would require asbestos trusts set up under Section 524(g) of the
U.S. Bankruptcy Code for insolvent companies that have been
hammered with personal injury and wrongful death claims to
disclose information on the individuals who file the claims.
The bill would impose new disclosure requirements on trusts
charged with paying claims connected to asbestos exposure for
bankrupt companies despite staunch opposition from victims and
Democrats, the report said.
Proponents say the bill will put a damper on trusts making
payments to people who already have received compensation from
other trusts and non-bankrupt companies through the tort system or
to fraudsters, the report added.
* Fairholme Offers to Buy Parts of Fannie, Freddie
--------------------------------------------------
Nick Timiraos, writing for The Wall Street Journal, reported that
Fairholme Capital Management LLC said on Nov. 13 it would like to
buy parts of bailed-out mortgage-finance giants Fannie Mae and
Freddie Mac from the government in a recapitalization valued at
$52 billion.
According to the report, the proposal faces very long odds, given
recent statements of top Obama administration and regulatory
officials. But it could raise the profile of the needed mortgage-
market overhaul that has only recently begun to attract attention
from Congress.
Bruce Berkowitz, Fairholme's chief investment officer, made the
offer in a letter sent late on Nov. 13 to the firms' federal
regulator, the report related.
Fairholme, a Miami-based mutual-fund company, sued the U.S.
earlier this year over its bailout of Fannie and Freddie, the
report pointed out.
The firm said it would lead a group of investors that has already
acquired "preferred" shares of Fannie and Freddie in purchasing,
recapitalizing and operating the mortgage-guarantee businesses of
the companies as state-regulated bond insurers, the report added.
About Fannie Mae
Federal National Mortgage Association, aka Fannie Mae, is a
government-sponsored enterprise that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold.
The U.S. Department of the Treasury owns Fannie Mae's senior
preferred stock and a warrant to purchase 79.9 percent of its
common stock, and Treasury has made a commitment under a senior
preferred stock purchase agreement to provide Fannie with funds
under specified conditions to maintain a positive net worth.
As of June 30, 2013, Fannie Mae had $3.28 trillion in total
assets, $3.26 trillion in total liabilities and $13.24 billion in
total equity.
Fannie Mae has operated under the conservatorship of the Federal
Housing Finance Agency since Sept. 6, 2008. Fannie Mae has not
received funds from Treasury since the first quarter of 2012. The
funding the company has received under the senior preferred stock
purchase agreement with the U.S. Treasury has provided the company
with the capital and liquidity needed to maintain its ability to
fulfill its mission of providing liquidity and support to the
nation's housing finance markets and to avoid a trigger of
mandatory receivership under the Federal Housing Finance
Regulatory Reform Act of 2008. For periods through March 31,
2013, Fannie Mae has requested cumulative draws totaling $116.1
billion. Under the senior preferred stock purchase agreement, the
payment of dividends cannot be used to offset prior Treasury
draws. Accordingly, while Fannie Mae has paid $35.6 billion in
dividends to Treasury through March 31, 2013, Treasury still
maintains a liquidation preference of $117.1 billion on the
company's senior preferred stock.
In August 2012, the terms governing the company's dividend
obligations on the senior preferred stock were amended. The
amended senior preferred stock purchase agreement does not allow
the company to build a capital reserve. Beginning in 2013, the
required senior preferred stock dividends each quarter equal the
amount, if any, by which the company's net worth as of the end of
the preceding quarter exceeds an applicable capital reserve
amount. The applicable capital reserve amount is $3.0 billion for
each quarter of 2013 and will be reduced by $600 million annually
until it reaches zero in 2018.
The amount of remaining funding available to Fannie Mae under the
senior preferred stock purchase agreement with Treasury is
currently $117.6 billion. Fannie Mae is not permitted to redeem
the senior preferred stock prior to the termination of Treasury's
funding commitment under the senior preferred stock purchase
agreement.
About Freddie Mac
Based in McLean, Virginia, the Federal Home Loan Mortgage
Corporation, known as Freddie Mac (OTCBB: FMCC) --
http://www.FreddieMac.com/-- was established by Congress in
1970 to provide liquidity, stability and affordability to the
nation's residential mortgage markets. Freddie Mac supports
communities across the nation by providing mortgage capital to
lenders. Over the years, Freddie Mac has made home possible for
one in six homebuyers and more than five million renters.
Freddie Mac is under conservatorship and is dependent upon the
continued support of Treasury and the Federal Housing Finance
Agency acting as conservator to continue operating its
business.
* JPMorgan Gets Map to Descend Stability Board Surcharge Plateau
----------------------------------------------------------------
Jim Brunsden, writing for Bloomberg News, reported that global
regulators put JPMorgan Chase & Co. and HSBC Holdings Plc at the
pinnacle of a list of 29 too-big-to-fail banks that face tougher
capital rules than other lenders. The companies were also handed
a map to plot their descent.
According to the report, for the first time since it started
compiling a roster of lenders whose collapse would threaten the
global economy, the Basel Committee on Banking Supervision also
disclosed the thresholds for how it determined the level of extra
capital requirements that such banks should face. The move will
enable lenders to find ways to move down to a lower surcharge
category or exit the list altogether.
The capital surcharges for globally systemic lenders add an extra
layer of safety beyond beefed-up standards known as Basel III that
emerged in the wake of the 2008 collapse of Lehman Brothers
Holdings Inc., the report related. Regulators said the additional
buffers were vital to protect taxpayers and prevent crises from
cascading through the financial system.
"I think the Basel committee would be quite happy in this instance
for banks to change their scores by becoming smaller, less
interconnected, less complex," said Patricia Jackson, head of
prudential advisory at Ernst & Young LLP in London, the report
added. "It's also a shot across the bows in the sense that if
they become more complex, larger, relative to others they go up
the list."
* Fitch: AMR/US Air Antitrust Settlement Positive for Industry
--------------------------------------------------------------
Fitch currently rates US Airways at 'B+/Positive Outlook' while
AMR is rated at 'D' as it remains in bankruptcy.
The settlement agreement between the Department of Justice and AMR
Corp./US Airways Group, Inc. (US) is a positive for the two
companies and for the industry as a whole, according to Fitch
Ratings.
A successful merger of US and AMR continues the trend of improved
U.S. airline credit profiles over the last five years that have
been driven by a more sustainable industry structure. The
strongest carriers have also benefitted from disciplined capacity
management practices, higher passenger yields and better revenue
fundamentals. Concessions included in the DOJ settlement are
viewed as relatively minor considering the scale of the merger,
and leave intact much of the benefit expected from a combined
US/AMR route structure.
As part of the settlement, the combined companies will divest 52
slot pairs at Washington Reagan airport (DCA), where US Airways
currently has an estimated 55% market share. Slot pairs refer to
the right to take off or land at a given time, and are separate
from gates. Despite the divestiture, the merged airline is
expected to hold a greater market share at that airport than US
Airways had on a stand-alone basis, maintaining a competitive
advantage in the D.C. market. The company has agreed to use all of
its DCA commuter slot pairs to service small and medium sized
communities, but the agreement appears flexible in defining the
communities to be served, allowing the company to focus on its
more lucrative routes.
Other conditions in the settlement are essentially in line with
plans announced prior to the DOJ's lawsuit. These include the
agreement to maintain the company's primary hubs for at least
three years and to continue providing daily service to markets
where that level of service currently exists.
Fitch currently rates US Airways at 'B+/Positive Outlook' while
AMR is rated at 'D' as it remains in bankruptcy. Ratings will be
reviewed following the official close of the merger and American's
exit from bankruptcy, which is expected in early December.
* Big Banks' Use of Bailouts Show Need for New Rules, Senators Say
------------------------------------------------------------------
Jesse Hamilton & Cheyenne Hopkins, writing for Bloomberg News,
reported that big banks' disproportionate reliance on U.S. aid
after the credit crisis reinforces the need for additional steps
to ensure the end of too big to fail, Senators Sherrod Brown and
David Vitter said.
According to the report, Brown and Vitter, co-sponsors of a plan
to impose a 15 percent capital requirement on the biggest lenders,
commented after the release on Nov. 14 of a Government
Accountability Office study that showed such firms made greater
use of bailout programs introduced after markets collapsed in
2008.
The GAO findings represent the first of two reports responding to
a request by Brown, an Ohio Democrat, and Vitter, a Louisiana
Republican, to put a dollar figure on the benefit derived from
U.S. aid by the largest bank holding companies, the report
related. The number sought by the lawmakers, who say the big
banks have grown by $2 trillion since the crisis, will be included
in a second report next year, the GAO said.
"If big banks want to continue risky practices, they should do so
with their own equity on the line," Brown said in a statement, the
report cited. The GAO's work "underscores the need to pass our
legislation to ensure that these types of bailouts will not happen
in the future by imposing sensible capital requirements."
Larger bank holding companies, which rely on short-term funding
markets, made greater use of aid programs during the crisis than
did smaller banks mainly funded by deposits, the GAO said, the
report further related. Aid use measured as the percentage of
total assets supported by programs was higher for banks with more
than $50 billion in assets, according to the report.
* Consumers Union Renews Call for Student Loan Reforms
------------------------------------------------------
Consumers Union, the policy division of Consumer Reports, called
on Congress on Nov. 13 to adopt a number of reforms urgently
needed to restore fairness to the student loan system. The
consumer group spelled out its reform agenda in a policy brief
highlighting recent research on the mounting student loan debt
crisis and stories from consumers struggling to finance college
and pay off record-high debt. Congress is preparing to debate the
reauthorization of the Higher Education Act in 2014.
"Millions of Americans are facing a mountain of debt with no end
in sight after graduating from college," said Suzanne Martindale,
staff attorney for Consumers Union and the author of the policy
brief. "It's time for Congress to adopt reforms that help
students find the most affordable options for financing college
and provide borrowers with reasonable safeguards and flexible
repayment options to manage their obligations responsibly."
Americans now owe over $1 trillion in student loan debt, more than
what is owed on credit cards. Tuition has increased over 500
percent since 1985 at public colleges, which admit the majority of
students nationwide. At the same time, average family incomes are
lower than they were a decade ago, making it increasingly
impossible for many families to pay for college without loans.
Currently two-thirds of college students graduate with student
loan debt, averaging $26,600.
The federal government is the largest student lender, with roughly
85 percent of the market, but banks and financial companies also
offer student loans. Private student loans can come with high,
variable interest rates, and unlike federal loans, they do not
come with guaranteed flexible repayment options. Unfortunately,
students and their families often receive confusing financial aid
letters from colleges that fail to explain differences between
grants and loans, or between federal and private loans. As a
result, borrowers may not realize until after graduation the full
extent of the debt burdens and responsibilities they face.
"The student loan debt crisis is growing each year and threatens
the futures of countless families and ultimately our economy,"
said Pamela Banks, senior policy counsel for Consumers Union.
"Struggling borrowers across the country are counting on Congress
to help bring some fairness to our broken student loan system."
Consumers Union's "Degrees of Debt" policy brief highlights a
number of problems borrowers encounter along with the reforms
needed to provide needed relief, including:
Confusing student loan offers: Consumers Union focus groups of
students and their parents show that many find it difficult to
understand their options for financing college and are frustrated
by the confusing financial aid application process can be.
Consumers Union is urging Congress to require schools to provide
students and their families with clear, easy-to-understand
financial aid offer letters that plainly show the differences
between the kinds of aid available and an estimate of what their
monthly payment will be once they graduate.
Borrowing too much or borrowing the wrong kinds of loans: Students
and their families often fail to understand the difference between
federal and private loans and end up borrowing more than they need
or at too high a cost. Schools should provide students with pre-
loan counseling to review loan costs and eligibility requirements
so they can identify the most affordable financial aid options.
Difficulty refinancing or reducing monthly payments: Many
borrowers struggling to keep up with their payments, especially
those with private loans, are unable to obtain flexible repayment
options. Consumers Union is calling on Congress to require all
lenders to offer flexible, affordable and manageable repayment
options, including income-based repayment plans, deferments and
forbearances, as well as acceptance of partial payments.
Unfair fees or issues with how payments are processed: Some
borrowers get hit with unexpected fees, such as late fees even
though they have set up automatic payments, or fees to get a
temporary suspension of payments. Others complained to Consumers
Union that they were unable to reduce their principal even though
they were making payments in excess of what was due on a monthly
basis. Fees should be reasonable and lenders should be required
to apply excess payments to the balance instead of to interest.
Trouble with loan servicers: Many consumers who shared their
stories with Consumers Union expressed frustration with loan
servicers who gave inconsistent answers, failed to maintain
accurate records, or simply refused to work with them to resolve
outstanding issues. Congress and the CFPB should require student
loan servicers to establish clear procedures and a single point of
contact for questions and complaints. Complaint handling,
resolution and appeals should be centralized and monitored by
regulators.
Unfair or deceptive practices: Many student loan borrowers told
Consumers Union about unfair or deceptive practices, such as
schools marketing high-cost career college programs despite
knowing that graduation or job placement rates are low, or
aggressive and harassing debt collection practices. Consumers
Union is pressing Congress and the CFPB to prohibit deceptive
marketing, abusive collection and servicing practices, and other
fraudulent practices. The Department of Education should issue a
strong "gainful employment" rule to prevent students and taxpayers
from subsidizing low-performing career colleges.
No relief from overwhelming debt: Many borrowers who shared their
story with Consumers Union expressed despair at being unable to
keep up with student loan payments or to save up for anything
else. Others discussed their struggles with bankruptcy, with
their student loans still hanging over them. Congress should
enable student loan borrowers to obtain loan discharges or
cancellations in certain circumstances, including long-term
economic hardship.
* House Measure Seeks to Crack Down on Asbestos Trust Fraud
-----------------------------------------------------------
Dionne Searcey, writing for The Wall Street Journal, reported that
the U.S. House of Representatives passed a measure on Nov. 13
aimed at cracking down on fraud in the multibillion-dollar system
of asbestos bankruptcy trusts.
According to the report, the measure, called the Furthering
Asbestos Claim Transparency Act of 2013, would amend federal
bankruptcy law to require dozens of asbestos trusts to publicize
quarterly details of their claim payouts.
The bill, sponsored by Rep. Blake Farenthold (R., Texas), comes as
a growing portion of asbestos legal action moves out of the
courtroom and into the trust system, the report related. Dozens
of trusts have been created by a special bankruptcy provision that
allows solvent companies inundated by asbestos lawsuits to shed
liabilities by setting aside money in trusts to pay claims.
At the end of 2010, the trusts collectively had paid out about 3.3
million claims valued at $17.5 billion, the report said, citing a
government study.
Nearly all the trusts process individual claims in secret,
treating them as legal settlements, the report pointed out. But
several recent court cases have revealed that some victims and
their lawyers have filed claims blaming one company exclusively
for their disease then gone on to tap other trusts and other
solvent companies in court as well. Publicizing details about
claims would cut down on this, preserving money for future
victims, the bill's supporters say.
* Jury Is Still Out on Impact of New Bankruptcy Fee Rules
---------------------------------------------------------
Jacqueline Palank, writing for The Wall Street Journal, reported
that a government effort to crack down on the fees corporate
bankruptcy lawyers charge quietly took effect this month, though
time will tell how attorneys and judges alike react to the new
rules.
According to the report, attorneys representing large corporate
debtors in Chapter 11 are now subject to additional disclosures
about their billing rates and practices. Department of Justice
officials who monitor bankruptcy filings for fraud and abuse are
encouraging the disclosures in their review of legal fees, which
in many corporate restructurings add up to many millions of
dollars.
The new rules apply only to attorney fees in large Chapter 11
cases filed on or after Nov. 1, the report related. In the cases
that would be eligible, it will be at least a few weeks until the
first requests for payment come rolling into the bankruptcy court,
which must approve all professional fees on a company's tab.
"You haven't really seen the effect of what's going to happen
yet," Christopher Ward, the co-chair of Polsinelli's bankruptcy
practice, told the Journal's Bankruptcy Beat.
However, Mr. Ward said the new fee guidelines were a "very hot
topic of conversation" among restructuring pros at a widely
attended bankruptcy conference in Atlanta, held Oct. 30 to Nov. 2,
the report further related. That conversation included debate as
to whether bankruptcy judges will accept the new fee guidelines,
which aren't automatically legally binding but rather will
influence when and how government watchdogs, called U.S. trustees,
object to fee requests.
* Wall Street Bid on Cross-Border Swaps Quashed by U.S. Regulator
-----------------------------------------------------------------
Silla Brush & Robert Schmidt, writing for Bloomberg News, reported
that the top U.S. derivatives regulator moved to close off large
banks' ability to avoid new regulation by arranging trades in
America and then booking the deals in overseas affiliates.
According to the report, the guidance, released on Nov. 14 by the
Commodity Futures Trading Commission, undermines a legal
interpretation Wall Street had found buried in a footnote, number
513, in an agency policy document. Banks relied on the footnote to
keep swap deals off electronic platforms and away from the
agency's rules that were put in place in the wake of the financial
meltdown.
The Nov. 14 two-page guidance, while not mentioning the footnote,
effectively closes the loophole, the report said. It tells
traders that if they are based in the U.S. and arrange, negotiate
or execute a deal -- even on behalf of an overseas affiliate --
they must comply with the CFTC regulations.
Lawyers said the new policy gives the CFTC a greater reach to
police the swaps market and makes it harder for banks to keep
trades away from tough U.S. regulations, passed in the 2010 Dodd-
Frank Act, the report related. CFTC Chairman Gary Gensler has
fought for more than four years to extend his agency's reach,
arguing that U.S. taxpayers could be on the hook for overseas
blow-ups due to the global nature of the business.
The new guidance "significantly expands the CFTC's cross-border
jurisdiction," said Annette L. Nazareth, a partner at the Davis
Polk & Wardwell LLP law firm in Washington, the report added. "It
also immediately throws into doubt the viability of many trading
arrangements used by banks worldwide."
* RealtyTrac Says Foreclosure Activity Increases 2% in October
--------------------------------------------------------------
RealtyTrac(R) on Nov. 14 released its U.S. Foreclosure Market
Report(TM) for October, which shows foreclosure filings -- default
notices, scheduled auctions and bank repossessions -- were
reported on 133,919 U.S. properties in October, a 2 percent
increase from the previous month but a 28 percent decrease from a
year ago. The report also shows one in every 978 U.S. housing
units with a foreclosure filing during the month.
High-level findings from the report:
-- There were a total of 30,023 scheduled judicial
foreclosure auctions (NFS) nationwide in October, up 10 percent
from the previous month and up 7 percent from a year ago -- the
16th consecutive month where judicial foreclosure auctions
increased from a year ago.
-- States with the biggest annual increases in scheduled
judicial foreclosure auctions included Maryland (up 177 percent),
Delaware (up 142 percent), New York (up 98 percent), New Jersey
(up 97 percent), Pennsylvania (up 58 percent), Connecticut (up 35
percent), and Florida (up 32 percent).
-- There were a total of 58,939 U.S. properties that
started the foreclosure process for the first time in October, up
2 percent from the previous month but still down 34 percent from a
year ago -- the 15th consecutive month where foreclosure starts
have decreased on an annual basis.
-- Foreclosure starts were up from the previous month in
22 states, including Colorado (up 124 percent), Florida (up 36
percent), and Illinois (up 30 percent).
-- There were a total of 37,775 bank repossessions (REO)
nationwide in October, down 1 percent from the previous month and
down 29 percent from a year ago -- the 11th consecutive month
where bank repossessions have decreased annually.
-- Bank repossessions increased from a year ago in 15
states, including Oklahoma (up 59 percent), Maryland (up 54
percent), Virginia (up 47 percent), Ohio (up 30 percent), and
Washington (up 30 percent).
-- States with the five highest foreclosure rates in
October were Florida, Nevada, Maryland, Ohio and Illinois.
-- Among the nation's 20 largest metro areas, the highest
foreclosure rates were in Miami, Tampa, Chicago, Baltimore and
Riverside-San Bernardino, Calif. The biggest annual increases in
foreclosure activity were in Baltimore (up 296 percent for 13th
consecutive month with an annual increase), Washington, D.C. (up
48 percent for fifth consecutive month with an annual increase),
New York (up 20 percent for 16th consecutive month with an annual
increase), Philadelphia (up 15 percent for eighth consecutive
month with an annual increase), and Miami (up 7 percent for first
annual increase after two consecutive months of annual decreases).
"The backlog of delayed judicial foreclosures continues to make
its way through the pipeline, with many of these properties now
being scheduled for the public auction after starting the
foreclosure process last year or earlier this year," said
Daren Blomquist, vice president at RealtyTrac. "Lenders are
likely moving these properties more rapidly to the public auction
given that there is strong demand from institutional buy-to-rent
investors at the auction and that rising home prices mean more of
the loan losses can be recouped, either by selling to an investor
at the auction or by repossessing the property and reselling as
bank owned."
Local broker quotes "Some people who defaulted three years ago are
just now being contacted by the bank to begin the foreclosure
process. This explains some of the recent rise in bank
repossessions in Oklahoma," said Sheldon Detrick, CEO of
Prudential Detrick/Alliance Realty covering the Oklahoma City and
Tulsa markets. "When home prices were heading downward banks
would sometimes send default notices to homeowners but allow them
to stay in the home without making payments if the homeowner would
maintain the home and keep it in good condition. Now that the
economy is improving and home prices are rising, banks are
attempting to restructure the loan or begin the foreclosure
process."
"Homeowners and homebuyers are now able to negotiate home sales
together without a bank being involved. It's the way real estate
should be, and it's nice to be back to a more normal real estate
market again," said Rich Cosner, President of Prudential
California Realty, covering Orange, Riverside and San Bernardino
counties in Southern California.
"The increase in Reno-area foreclosure activity is likely the
result of lenders pushing through some foreclosures before the new
Nevada Homeowner Bill of Rights took effect in October," said
Craig King, COO of Chase International, covering the Reno and Lake
Tahoe markets. "Despite that increase, we're making steady
progress away from the problems that plagued the real estate
industry in Northern Nevada. Short sales and foreclosures used to
be 85 percent of the market and equity sales used to be 15, and
now it's exactly flipped."
"The October foreclosure numbers provide evidence that Ohio has
worked through much of the backlog of foreclosure activity here,
and now we are seeing lenders taking far quicker action in
initiating the foreclosure process on mortgages in default," said
Michael Mahon, Executive Vice President/Broker for HER Realtors
covering Cincinnati, Dayton and Columbus, Ohio. "Low market
inventory levels and increasing home prices are also prompting
lenders to initiate the foreclosure process much more quickly."
Florida, Nevada and Maryland post top state foreclosure rates
Florida foreclosure activity in October increased 22 percent from
the previous month, driven primarily by a 36 percent month-over-
month increase in foreclosure starts, helping the state regain the
nation's highest foreclosure rate after two months in the second
spot. A total of 26,962 Florida properties had foreclosure
filings during the month, one in every 332 housing units.
Nevada foreclosure activity in October dropped 39 percent from the
previous month off a 21-month high in September, but the state
still posted the nation's second highest foreclosure rate: one in
every 407 housing units with a foreclosure filing. New
legislation called the Nevada Homeowner Bill of Rights that
changes the foreclosure process in the state took effect in
October.
Maryland posted the nation's third highest state foreclosure rate
in October, up from the No. 4 spot in September, thanks to a 10
percent monthly increase and 201 percent year-over-year increase
in foreclosure activity -- the 16th consecutive month where
Maryland foreclosure activity has increased on an annual basis.
One in every 516 Maryland housing units had a foreclosure filing
in October.
Other states with foreclosure rates among the nation's 10 highest
in October were Ohio (one in every 525 housing units with a
foreclosure filing), Illinois (one in every 552 housing units),
Utah (one in every 695 housing units), South Carolina (one in
every 729 housing units), Delaware (one in every 748 housing
units), Connecticut (one in every 752 housing units), and Georgia
(one in every 897 housing units).
Miami, Tampa, Chicago, Baltimore and Riverside post top metro
foreclosure rates Among the nation's 20 largest metropolitan
statistical areas, Miami posted the highest foreclosure rate: one
in every 264 housing units with a foreclosure filing. Miami
foreclosure activity in October increased 7 percent from a year
ago boosted by a 51 percent jump in scheduled foreclosure
auctions.
Scheduled foreclosure auctions increased 40 percent year-over-year
in Tampa, Fla., helping that metro area post the nation's second
highest foreclosure rate among the 20 largest metro areas in
October: one in every 302 housing units with a foreclosure filing.
Chicago foreclosure activity dropped annually for the 11th
consecutive month, but a 30 percent month-over-month jump in
foreclosure starts helped the metro area's foreclosure rate rank
third highest among the 20 largest metro areas nationwide in
October. On in every 427 Chicago-area housing units had a
foreclosure filing during the month.
Baltimore foreclosure activity increased 296 percent from a year
ago -- the 13th consecutive month with an annual increase -- and
the metro area's foreclosure rate of one in every 490 housing
units with a foreclosure filing ranked fourth highest among the
nation's 20 largest metros in October.
Despite a 60 percent annual decrease in foreclosure activity in
October, the inland California metro area of Riverside-San
Bernardino posted a foreclosure rate that was above the national
average and fifth highest among the nation's 20 largest metros:
one in every 531 housing units with a foreclosure filing.
Report methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of
the total number of properties with at least one foreclosure
filing entered into the RealtyTrac database during the month --
broken out by type of filing. Some foreclosure filings entered
into the database during the month may have been recorded in
previous months. Data is collected from more than 2,200 counties
nationwide, and those counties account for more than 90 percent of
the U.S. population. RealtyTrac's report incorporates documents
filed in all three phases of foreclosure: Default -- Notice of
Default (NOD) and Lis Pendens (LIS); Auction -- Notice of
Trustee's Sale and Notice of Foreclosure Sale (NTS and NFS); and
Real Estate Owned, or REO properties (that have been foreclosed on
and repurchased by a bank). The report does not count a property
again if it receives the same type of foreclosure filing multiple
times within the estimated foreclosure timeframe for the state
where the property is located.
About RealtyTrac Inc.
RealtyTrac -- http://www.realtytrac.com-- is the nation's leading
source of comprehensive housing data, with more than 1.5 million
active default, foreclosure auction and bank-owned properties, and
more than 1 million active for-sale listings on its website, which
also provides essential housing information for more than 100
million homes nationwide. This information includes property
characteristics, tax assessor records, bankruptcy status and sales
history, along with 20 categories of key housing-related facts
provided by RealtyTrac's wholly-owned subsidiary, Homefacts(R).
RealtyTrac's foreclosure reports and other housing data are relied
on by the Federal Reserve, U.S. Treasury Department, HUD, numerous
state housing and banking departments, investment funds as well as
millions of real estate professionals and consumers, to help
evaluate housing trends and make informed decisions about real
estate.
* Melissa Coopersmith Joins Tiger Group as Managing Director
------------------------------------------------------------
Melissa Coopersmith has joined Tiger Group as Managing
Director/National Sales, based in the asset valuation, advisory
and disposition services firm's New York office.
In her new role, Ms. Coopersmith will oversee the company's
national sales efforts, leading a team that includes Michael Aho,
who covers the New York-New Jersey-Pennsylvania area and the
Southeastern United States; Jason Rae, who handles the Northeast,
as well as Canada and the Chicago market; and Rick Briggs, who
covers the Western states. Also included in this team is Los
Angeles-based Michelle Salazar, who works with insolvency
professionals across North America.
Ms. Coopersmith brings more than 15 years of brand marketing,
corporate strategy and sales experience to her new role at Tiger
Group. She comes to the firm from BMC Group, a leading global
provider of financial, legal and corporate information management
services for investment banks, private equity firms, government
agencies, insurance carriers, healthcare providers, and Fortune
1000 corporations, where she was Senior Vice President, Business
Development since 2010. In that role, she worked extensively with
companies in the restructuring industry.
From 2004 to 2010, she worked at WebMD, the online provider of
health and medical information, most recently as National Director
of Strategic Partnerships and Cause Marketing, where she focused
on developing partnerships with major consumer packaged goods
companies. Prior to that, she served as manager of Advertising
Partnerships at IAC, Interactive Corp., a media and Internet
company and as a Sales Development Assistant Manager at Fox News
parent News Corp. Ms. Coopersmith began her career with ESPN in
1998 as a Sales Planner/Analyst.
A resident of Riverdale, N.Y., Ms. Coopersmith earned a Bachelor
of Science degree from West Virginia University in 1998. She is a
member of the Turnaround Management Association and American
Bankruptcy Institute.
"I'm really excited to have Melissa on our team," said Chief
Operating Officer Michael McGrail. "She is a seasoned sales
professional who has built solid relationships in the insolvency
industry. Her understanding of the entire sales process, from
marketing and planning to execution, makes her a perfect fit for
Tiger."
About Tiger Group
Tiger Group -- http://www.TigerGroup.com-- provides asset
valuation, advisory and disposition services to a broad range of
retail, wholesale, and industrial clients. Tiger operates main
offices in Boston, Los Angeles and New York.
* Federal Bankruptcy Judge Appointed for Nevada
-----------------------------------------------
Chief Judge Alex Kozinski of the United States Court of Appeals
for the Ninth Circuit announced on Nov. 8 the appointment of
August B. Landis to serve as a judge of the U.S. Bankruptcy Court
for the District of Nevada.
Mr. Landis, 50, is currently the acting U.S. trustee for Region
17, which encompasses the District of Nevada and the Eastern and
Northern districts of California.
"We are very pleased to welcome Mr. Landis to the bankruptcy bench
in Nevada. He brings considerable knowledge and experience, both
as a trustee and practitioner, to his new position," Judge
Kozinski said.
Mr. Landis will fill a judgeship left vacant by the retirement of
Judge Linda B. Riegle, who continues to serve the court as a
recalled judge. Scheduled to take the oath of office on November
27, 2013, he will maintain chambers in Las Vegas.
Mr. Landis has served in the U.S. Trustee Program of the U.S.
Department of Justice since 2005 and has been the acting U.S.
trustee for Region 17 since 2010. He is responsible for the
management, operational performance, and legal positions advanced
by the regional office located in San Francisco and six field
offices located in Las Vegas, Reno, Oakland, San Jose, Sacramento
and Fresno.
Prior to his government service, Mr. Landis engaged in private
practice as an associate attorney at Whitfield & Eddy, P.L.C., in
Des Moines, Iowa, from 1990 to 1995, and as a member attorney from
1996 to 2005. He handled commercial and bankruptcy litigation from
case inception through resolution by arbitration, mediation,
settlement or trial. Mr. Landis also worked as an associate at
Neiman, Neiman, Stone & Spellman, P.C., in Des Moines, from 1987
to 1989, representing debtors, creditors, and as a Chapter 7 panel
trustee in contested matters and adversary proceedings.
A native of Springfield, Illinois, Mr. Landis received his B.S.
degree in business administration from Drake University in 1984
and his J.D. in 1987 from Drake Law School, where he served as a
staff member of the Drake Law Review. While in law school, he
received American Jurisprudence awards for excellence in torts in
1984 and conflicts of law in 1987.
The U.S. Bankruptcy Court for the District of Nevada received
14,483 filings in fiscal year 2013. The court is authorized four
bankruptcy judges.
Judges of the U.S. Court of Appeals for the Ninth Circuit have
statutory responsibility for selecting and appointing bankruptcy
judges in the nine western states that comprise the Ninth Circuit.
The court uses a comprehensive merit selection process for the
initial appointment and for reappointments. Bankruptcy judges
serve a 14-year, renewable term, at a salary of $160,080, and
handle all bankruptcy-related matters under the U.S. Bankruptcy
Code.
* BOND PRICING -- For Week From Nov. 11 to 15, 2013
---------------------------------------------------
Company Ticker Coupon Bid Price Maturity Date
------- ------ ------ --------- -------------
AES Eastern Energy LP AES 9.67 4.125 1/2/2029
AES Eastern Energy LP AES 9 1.75 1/2/2017
Alion Science &
Technology Corp ALISCI 10.25 60.639 2/1/2015
B456 Systems Inc AONE 3.75 24 4/15/2016
Buffalo Thunder
Development
Authority BUFLO 9.375 36 12/15/2014
California Baptist
Foundation CALBAP 7.8 4 11/15/2013
Cengage Learning
Acquisitions Inc TLACQ 10.5 18.625 1/15/2015
Cengage Learning
Acquisitions Inc TLACQ 12 13.875 6/30/2019
Cengage Learning
Acquisitions Inc TLACQ 13.25 1.375 7/15/2015
Cengage Learning
Acquisitions Inc TLACQ 10.5 18.625 1/15/2015
Cengage Learning
Acquisitions Inc TLACQ 13.25 1.375 7/15/2015
Cengage Learning
Holdco Inc TLACQ 13.75 1.375 7/15/2015
Champion
Enterprises Inc CHB 2.75 0.375 11/1/2037
Energy Conversion
Devices Inc ENER 3 7.875 6/15/2013
Energy Future
Competitive
Holdings Co LLC TXU 8.175 15 1/30/2037
Energy Future
Holdings Corp TXU 5.55 34.275 11/15/2014
Federal Home
Loan Banks FHLB 3.5 99.375 8/21/2023
James River Coal Co JRCC 7.875 28.594 4/1/2019
James River Coal Co JRCC 4.5 29.6 12/1/2015
James River Coal Co JRCC 10 52.5 6/1/2018
James River Coal Co JRCC 10 41.383 6/1/2018
James River Coal Co JRCC 3.125 24.25 3/15/2018
LBI Media Inc LBIMED 8.5 30 8/1/2017
Lehman Brothers
Holdings Inc LEH 1 19.125 8/17/2014
Lehman Brothers
Holdings Inc LEH 1 19.125 8/17/2014
Lehman Brothers Inc LEH 7.5 16.1 8/1/2026
MF Global Holdings Ltd MF 6.25 46.033 8/8/2016
MF Global Holdings Ltd MF 1.875 41.9 2/1/2016
Mashantucket Western
Pequot Tribe MASHTU 6.5 13.25 7/1/2036
Overseas Shipholding
Group Inc OSG 8.75 93.45 12/1/2013
Patriot Coal Corp PCX 3.25 2 5/31/2013
Powerwave
Technologies Inc PWAV 1.875 0.75 11/15/2024
Residential
Capital LLC RESCAP 6.875 35.875 6/30/2015
SLM Corp SLMA 4.086 99.75 11/21/2013
Savient
Pharmaceuticals Inc SVNT 4.75 1 2/1/2018
School Specialty
Inc/Old SCHS 3.75 36.125 11/30/2026
Sorenson
Communications Inc SRNCOM 10.5 72 2/1/2015
Sorenson
Communications Inc SRNCOM 10.5 72 2/1/2015
THQ Inc THQI 5 25.688 8/15/2014
TMST Inc THMR 8 16.125 5/15/2013
Terrestar Networks Inc TSTR 6.5 10 6/15/2014
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.25 8 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 15 27.25 4/1/2021
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.25 6.5 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.5 8.875 11/1/2016
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 15 29.2 4/1/2021
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.25 8.5 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.5 8.375 11/1/2016
Trico Marine
Services Inc/
United States TRMA 8.125 3.93 2/1/2013
USEC Inc USU 3 19.8 10/1/2014
Verso Paper
Holdings LLC /
Verso Paper Inc VRS 8.75 31 2/1/2019
Verso Paper
Holdings LLC /
Verso Paper Inc VRS 11.375 44 8/1/2016
WCI Communities
Inc/Old WCI 4 0.375 8/5/2023
Western Express Inc WSTEXP 12.5 62 4/15/2015
Western Express Inc WSTEXP 12.5 62 4/15/2015
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2013. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-241-8200.
*** End of Transmission ***