/raid1/www/Hosts/bankrupt/TCR_Public/140801.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, August 1, 2014, Vol. 18, No. 212
Headlines
AGFEED USA: Must File Proper Extension Motion, Jefferies Says
ALBERTSON'S HOLDINGS: Moody's Assigns B1 Corporate Family Rating
ALLONHILL LLC: Has Until Oct. 22 to Decide on Unexpired Leases
AMERICAN SPECTRUM: Three Subsidiaries Exit Chapter 11
B.S. QUARRIES: Has Access to Cash Collateral Until Aug. 9
B.S. QUARRIES: Flaster/Greenberg Approved as Bankruptcy Attorney
BANCO ESPIRITO: Reports EUR3.5B Net Loss, Shares Plummet
BBVA COMPASS: S&P Reinstates 'BB' Rating on Unit's Preferred Stock
CAESARS ENTERTAINMENT: Closes Tender Offers for Debt Securities
COMMUNITYONE BANCORP: Posts $2.8-Mil. Profit in Second Quarter
CONSOL ENERGY: Moody's Rates $200MM Senior Unsecured Notes 'B1'
CUBIC ENERGY: Amends Fiscal 2013 Financial Report
EL POLLO LOCO: Moody's Raises Corporate Family Rating to 'B2'
ESSAR STEEL: Granted Provisional Relief Under Chapter 15
EVERYWARE GLOBAL: Has $20-Mil. Financing Deal with Monomoy Capital
FRONTIER OILFIELD: Incurs $1.47-Mil. Net Loss in Q1 Ending Mar. 31
GFI GROUP: S&P Puts 'B' Counterparty Rating on CreditWatch Neg.
GLOBAL AVIATION: A&M to Be Paid on Hourly Basis
GLOBAL AVIATION: Court Approves Employee Incentive Plans
GOLDEN STATE MEDICAL: S&P Assigns 'B' CCR & Rates $160MM Debt 'B'
GREEN MOUNTAIN: Section 341(a) Meeting Scheduled for August 28
HBK MEDICAL: Involuntary Chapter 11 Case Summary
HELIA TEC: HSC's Motion to Convert Case to Chapter 7 Denied
HOSTESS BRANDS: Aug. 5 Hearing on Bid to Fix WA Labor Dept Claim
INNER CIRCLE: Case Summary & 10 Largest Unsecured Creditors
INTERFAITH MEDICAL: Secures Order in Aid of Confirmation
INT'L MANUFACTURING: Chapter 11 Trustee Hires FFWP as Counsel
INT'L MANUFACTURING: Ch.11 Trustee Names Gabrielson as Accountant
INT'L MANUFACTURING: Ch.11 Trustee Hires Diamond McCarthy
ISC8 INC: Reports $4.6-Mil. Net Loss for Q2 Ending Mar. 31
ISR GROUP: Changes Corporate Name to "Old Drone Co"
ISR GROUP: Mag. Judge's Report Adopted; "Sondesky" Suit Stayed
ISTAR FINANCIAL: Incurs $16.2 Million Net Loss in Second Quarter
INTERCEPT ENERGY: Reports $418-K Net Loss for Q1 Ending Mar. 31
JBI INC: MNP LLP Expresses Going Concern Doubt
KOGETO INC: Friedman LLP Raises Going Concern Doubt
LEVEL 3: Reports $51 Million Net Income in Second Quarter
LEVEL 3 ESCROW: Moody's Assigns '(P)B3' Rating on $600MM Notes
LV HARMON: Files List of Largest Unsecured Creditors
LV HARMON: Files Schedules of Assets and Liabilities
MAPE USA: Case Summary & 20 Largest Unsecured Creditors
MEDIASHIFT: Hein & Associates Raises Going Concern Doubt
N&B INDUSTRIES: Moody's Assigns B2 CFR & Rates $90MM Debt Caa1
N&B INDUSTRIES: S&P Assigns 'B' CCR & Rates $200MM Loan 'B+'
NEW BREED: S&P Puts 'B' CCR on CreditWatch Developing
NEWLEAD HOLDINGS: Announces Delivery of Handysize Vessel
NNN PARKWAY 400 26: Hearing on Dismissal Bid Continued to Aug. 7
NVA MERGER: S&P Assigns 'B' CCR on Acquisition by Ares Management
PALM DRIVE HEALTH: UST Appoints Two Members to Employee Panel
PCI PHARMA: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable
PENN ENGINEERING: Moody's Assigns 'B1' Corporate Family Rating
PUERTO RICO: Lenders to Utility Extend Payment Deadline
PURE BIOSCIENCE: Reports $2.05-Mil. Net Loss in Q3 Ending Apr. 30
PHI GROUP: 3rd Quarter 2012 Report Shows $178K Net Loss
QUICKSILVER RESOURCES: Plans to Offer $1.7BB Worth of Securities
QUIKSILVER INC: Bonds Drop on Turnaround Concerns
RITE AID: Darren Karst Appointed EVP and Chief Financial Officer
QUANTUM CORP: Inks Agreement with Starboard on Board Composition
RIVER CITY RENAISSANCE: Case Summary & Top Unsecured Creditors
SECURITY NATIONAL: Senior Lenders Propose Ch. 11 Plan
SGK VENTURES: Panel Files Amended Liquidation Plan
SUN BANCORP: Proposes to Appoint Several Executive Officers
THOMPSON CREEK: Les Mines No Longer Owns Shares as of July 9
THREE FORKS: BF Borgers Raises Going Concern Doubt
THREE FORKS: Incurs $725K Net Loss in Quarter Ended March 31
TRANSFIRST HOLDINGS: Moody's Affirms 'B2' Corporate Family Rating
TEREX CORPORATION: Moody's Rates Sec. Debt Ba1 & Affirms B1 CFR
UNIVERSAL HEALTH: Moody's Rates $300MM Sr. Secured Notes 'Ba1'
VERTELLUS SPECIALTIES: S&P Raises Rating to 'B-'; Outlook Positive
WASHINGTON MUTUAL: Liquidating Trust to Make $78-Mil. Payout
WILLIAM LYON: S&P Affirms 'B-' CCR & Removes From Watch Developing
WINDSTREAM CORPORATION: Moody's Affirms 'Ba3' Corp. Family Rating
WOLF MOUNTAIN: Court Approves Aug. 5 Auction of Property
WOLVERINE WORLD: Moody's Raises Corporate Family Rating to 'Ba2'
ZODIAC POOL: Seeks U.S. Bankruptcy Protection
ZODIAC POOL SOLUTIONS: Chapter 15 Case Summary
* No Deal Imminent on Argentine Debt Feud
* BOOK REVIEW: Risk, Uncertainty and Profit
*********
AGFEED USA: Must File Proper Extension Motion, Jefferies Says
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Jefferies Leveraged Credit Products, LLC and Claims Recovery
Group, LLC filed an Objection and Reservation of Rights to the
Supplement to the Motion of Debtors for Entry of a Fifth Order
Pursuant to Section 1121 (d) of the Bankruptcy Code Further
Extending the Exclusive Periods for the Filing of a Chapter 11
Plan and Solicitation of Acceptance Thereof filed by AgFeed USA,
LLC.
Lawrence J. Kotler, Esq., of Duane Morris, LLP in Delaware,
Wilmington, said the Supplement is just another motion seeking yet
another extension of time further extending the Debtor's exclusive
periods to file and solicit their plan.
However, unlike the previous five requests, the Supplement will
now deprive creditors and parties-in-interest with a right to
object to such a request, Mr. Kotler added.
Jefferies and Claims Recovery Group now ask the Court to deny the
relief requested in the Supplement in it entirety or require the
Debtors to file a proper motion seeking an extension of the
exclusive periods.
Jefferies and Claims Recovery Group are represented by:
Lawrence J. Kotler, Esq.
DUANE MORRIS, LLP
222 Delaware Avenue, Suite 1600
Wilmington, DE 19801-1659
Telephone: (302) 657-4900
Facsimile: (302) 657-4901
E-mail: ljkotler@duanemorris.com
- and -
Catherine B. Heitzenrater, Esq.
DUANE MORRIS, LLP
30 South 7th Street
Philadelphia, PA 19103-4196
Telephone: (215) 979-7342
Facsimile: (215) 979-1020
E-mail: cheitzenrater@duanemorris.com
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.
An 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.
In October 2013, AgFeed completed the sale of the U.S. operations
to three buyers for $79.45 million, including $53.4 million in
cash.
In November 2013, the Court authorized AgFeed to sell its Chinese
assets to Hong Kong firm Good Charm International Development Ltd.
in a deal that is expected to net the debtor $45 million once
several highly negotiated price adjustments are factored in. An
auction was held for the Chinese facilities on Nov. 20, although
no one emerged to top what was originally a $50.5 million bid.
The price was lowered by $3.45 million in view of what the
contract called "newly discovered" operational problems and
"deterioration of the performance" of feed mills.
On Dec. 18, 2013, the Debtors filed their initial plan and
disclosure statement. On May 9, 2014, they filed a First Amended
Chapter 11 Plan of Liquidation and corresponding disclosure
statement. The First Amended Plan has the support of the Official
Committee of Equity Security Holders.
The Debtors, as plan proponents, however, have yet to obtain a
hearing date to consider either of the disclosure statements,
according to a July 24, 2014 court filing by Jefferies Leveraged
Credit Products, LLC and Claims Recovery Group, LLC.
ALBERTSON'S HOLDINGS: Moody's Assigns B1 Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service assigned a Corporate Family Rating of B1
to and a Probability of Default Rating of B1-PD to Albertson's
Holdings LLC. Moody's also assigned a Ba3 rating to the company's
proposed senior secured $1,519 million term loan maturing 2019 and
the proposed senior secured $3,040 million term loan maturing
2021. Additionally Moody's assigned a B2 rating to the company's
proposed $1,625 million senior secured notes maturing 2022. The
outlook is stable.
The proceeds of the proposed new debt will be used to acquire
Safeway Inc. Excluding the 124 Safeway stores that are expected to
be acquired by New Albertson's Inc. ("NAI"), the acquisition will
add approximately 1,207 stores to Albertson's existing store base
of 631 stores. The acquisition is currently under regulatory
review and is expected to close in the fourth quarter of fiscal
2014. Moody's anticipates some store divestitures will be mandated
by the regulators as part of the approval of the transaction. This
is a first time rating of Albertson's. All ratings are subject to
satisfactory review of final documentation and closing of the
Safeway Inc. acquisition.
The transaction also anticipates $750 million in legacy Safeway
notes to be part of the capital structure. The legacy notes will
be secured by certain assets of Safeway, Inc. and its domestic
subsidiaries but will not be guaranteed obligations of Albertson's
or any of its operating subsidiaries. If the transaction closes as
anticipated these notes will be downgraded to B2 from their
current rating of Baa3.
"Although a transaction of this size comes with significant
execution and integration risks, the combination of Albertson's
and Safeway creates the second largest supermarket chain in the
U.S. with a large scale and significant opportunities to create
synergies and supply chain efficiencies that could enhance
profitability and top line growth", Moody's Senior Analyst Mickey
Chadha stated.
Ratings Rationale
The B1 Corporate Family Rating anticipates the closing of the
Safeway transaction and reflects the sizable scale and well
established regional brands of the combined company. Safeway has a
good store base with over ninety percent of its stores converted
to the Lifestyle format with modest capital expenditures required
for their maintenance. Ratings are also supported by the company's
significant store ownership and very good liquidity. Although
Albertson's proforma credit metrics will be weak at closing
Moody's expect them to improve significantly in the near to medium
term - debt/EBITDA and EBITA/interest including lease and pension
adjustments is expected to be about 5.75 times and about 1.75
times respectively within 18 months of closing of the transaction.
Management has vast experience in the food retailing space and has
demonstrated its ability to turnaround underperforming assets and
the ratings reflect Moody's expectation that operating performance
of the stores will improve as price investments lead to increased
traffic and volume. Operating efficiencies and strategic
initiatives to minimize costs are also expected to reduce expenses
and improve cash flow generation. The ratings also reflect the
execution and integration risks associated with the acquisition of
Safeway which is almost three times the size of Albertson's in
terms of revenues and the financial policy risk associated with
ownership by a financial sponsor.
The following ratings are assigned:
Corporate Family Rating at B1
Probability of Default Rating at B1-PD
Proposed $1,519 million senior secured term loan maturing 2019 at
Ba3 (LGD3)
Proposed $3,040 million senior secured term loan maturing 2021 at
Ba3 (LGD3)
Proposed $1,625 million senior secured notes maturing 2022 at B2
(LGD4)
Albertson's stable rating outlook incorporates Moody's expectation
that the company's identical store sales will continue to be
positive and margins will not meaningfully deteriorate. The
outlook also incorporates Moody's expectation that the company's
credit metrics will improve through increased EBITDA generation
and debt prepayments.
Ratings could be upgraded if debt/EBITDA approaches 5.0 times,
EBITA/interest is sustained above 1.75 times, financial policies
remain benign and liquidity remains very good.
Ratings could be downgraded if debt/EBITDA is sustained above 6.25
times and EBITA/interest is sustained below 1.5 times. Ratings
could also be downgraded if financial policies become aggressive
or if liquidity deteriorates or if the integration of the acquired
Safeway stores does not result in expected synergies and
improvement in overall profitability of the combined company.
The principal methodology used in this rating was the Global
Retail Industry published in June 2011. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Albertson's Holdings LLC is a holding company controlled by
Cerberus and currently owns Albertson's LLC a supermarket chain
operating 631 stores in 16 States. Combined with Safeway, Inc. the
company will have about 1,838 stores in 20 States under the
Albertson's, United Supermarkets, Market Street, Amigos, Safeway,
Vons, Pavilions, Carrs, Randalls and Tom Thumb banners. Proforma
revenues of the combined companies will be about $45 billion.
ALLONHILL LLC: Has Until Oct. 22 to Decide on Unexpired Leases
--------------------------------------------------------------
The Bankruptcy Court extended until Oct. 22, 2014, AllonHill LLC's
time to assume or reject any leases, subleases or other agreements
to which the Debtor is a party, that may be considered an
unexpired lease of nonresidential property.
As reported in the Troubled Company Reporter on July 16, 2014, in
the Schedules, the Debtor identified two unexpired leases to which
it is the lessee: (i) a lease of office space located at 1515
Arapahoe in Denver, Colorado, to which Exclusive Resorts, LLC
is the lessor; and (ii) a lease of office space located at 4700
South Syracuse in Denver, Colorado, to which Guardian/DDC, is the
lessor. Aside from the Debtor, the only other parties to the
Arapahoe Lease and the Syracuse Lease are Exclusive and Guardian,
respectively. On April 30, 2014, the Arapahoe Lease terminated
pursuant to its terms. The Syracuse Lease remains in effect.
About Allonhill LLC
Allonhill LLC, a professional services firm based in Denver,
Colorado, that previously provided loan due diligence and credit
risk management services for institutions that invest in, sell,
securitize or service mortgage loans, sought protection under
Chapter 11 of the Bankruptcy Code on March 26, 2014. The case is
In re Allonhill, LLC, Case No. 14-bk-10663 (Bankr. D. Del.).
The Debtor's General Counsel is HOGAN LOVELLS US LLP. The
Debtor's Local Counsel is Neil B. Glassman, Esq., Justin R.
Alberto, Esq., and Evan T. Miller, Esq., at BAYARD, P.A., in
Wilmington, Delaware. Upshot Services LLC serves as the Debtor's
Claims and Noticing Agent.
The Debtor disclosed $19,205,062 in assets and $32,918,294 in
liabilities as of the Chapter 11 filing.
Roberta A. DeAngelis, U.S. Trustee for Region 3, notified the
Bankruptcy Court that she was unable to appoint an official
committee of unsecured creditors in the case of Allonhill, LLC.
The U.S. Trustee explained that there were insufficient response
to the communication/contact for service on the committee.
AMERICAN SPECTRUM: Three Subsidiaries Exit Chapter 11
-----------------------------------------------------
American Spectrum Realty, Inc. on July 30 announced the approval
of a Joint Plan of Reorganization for three of its subsidiaries,
ASR-8 Centre LP, ASR-Parkway One & Two LP, and ASR-Fountainview
Place LP. The Subsidiaries filed voluntary petitions for
reorganization in response to foreclosure proceedings instituted
by creditors of debt secured by the Subsidiaries' assets,
consisting of four real property assets, in order to preserve the
value of the assets which the Company believed to be in excess of
the outstanding secured debt.
The loans on the four assets were acquired in 2013 by a private
equity firm. The private equity firm initiated foreclosure
proceedings which would have eliminated the substantial equity in
the properties and the ability of the Subsidiaries to pay their
vendors and other lien holders. The chapter 11 proceeding
successfully stayed the attempt until an arrangement was reached
to pay all creditors. During the pendency of the bankruptcy
proceedings, the Company completed the sale of the property held
by ASR-Fountainview Place and restructured the indebtedness
secured by the assets of the other Subsidiaries. The Plan will
pay all creditors (including vendors) in full.
About American Spectrum Realty
American Spectrum Realty, Inc. is a real estate investment company
that owns, through its operating partnership, interest in office,
industrial, self storage, retail properties, and apartments
throughout the United States. The company has been publicly
traded since 2001. American Spectrum Realty Management, LLC is a
wholly-owned subsidiary of the Company's operating partnership
that manages and leases all properties owned by American Spectrum
Realty, Inc. as well as third-party clients.
B.S. QUARRIES: Has Access to Cash Collateral Until Aug. 9
---------------------------------------------------------
The Bankruptcy Court authorized B.S. Quarries, Inc., to utilize
cash collateral in which lenders WM Capital Partners XXXIX, LLC
and HSK Funding, Inc. assert an interest.
The lenders consented to the use of cash collateral until Aug. 9,
2014.
As adequate protection from any diminution in value of the
lenders' collateral, the Debtor will grant the lenders replacement
lien upon the Debtor's postpetition cash collateral.
A further hearing to consider the motion is scheduled for Aug. 5,
at 11:00 a.m. Objections, if any, are due Aug. 1.
Previously, the Court authorized the use of cash collateral until
July 26.
About B.S. Quarries, Inc.
B.S. Quarries, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Pa. Case No. 14-02954) on June 25, 2014. Timothy
Smith signed the petition as president. The Debtor estimated
assets and liabilities of between $10 million to $50 million.
Flaster/Greenberg, P.C., serves as the Debtor's counsel. The case
is assigned to Judge John J Thomas.
B.S. QUARRIES: Flaster/Greenberg Approved as Bankruptcy Attorney
----------------------------------------------------------------
The Bankruptcy Court authorized B.S. Quarries, Inc., to employ
Harry J. Giacometti and Flaster/Greenberg P.C. as counsel.
In a separate filing, the Court extended until July 28, 2014, the
Debtor's time to file its schedules of assets and liabilities and
statement of financial affairs.
About B.S. Quarries, Inc.
B.S. Quarries, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Pa. Case No. 14-02954) on June 25, 2014. Timothy
Smith signed the petition as president. The Debtor estimated
assets and liabilities of between $10 million to $50 million.
Flaster/Greenberg, P.C., serves as the Debtor's counsel. The case
is assigned to Judge John J Thomas.
BANCO ESPIRITO: Reports EUR3.5B Net Loss, Shares Plummet
--------------------------------------------------------
Josie Cox, writing for The Wall Street Journal, reported that
shares in Banco Espirito Santo SA plummeted as much as 50% on July
31 while its bonds also plunged, suggesting the most resilient
shareholders are finally yanking their money out of the troubled
lender in a long-drawn-out Portuguese banking drama.
According to the Journal, late on July 31, Portugal's No. 2 lender
by assets, which brought in new management earlier this month,
reported a record EUR3.49 billion (US$4.68 billion) net loss for
the second quarter, after it found more exposure to its troubled
parent than it previously expected.
BBVA COMPASS: S&P Reinstates 'BB' Rating on Unit's Preferred Stock
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it corrected its
rating action by reinstating its issue rating of 'BB' to a
preferred stock issuance of a subsidiary of BBVA Compass
Bancshares Inc. The rating was incorrectly withdrawn on July 17,
2014. S&P is also updating the amount outstanding to $21 million
par value from $35 million par value.
RATINGS LIST
Rating reinstated
To From
Compass Loan Holdings Inc.
Class B noncumulative preferred BB NR
CAESARS ENTERTAINMENT: Closes Tender Offers for Debt Securities
---------------------------------------------------------------
Caesars Entertainment Corporation announced the completion of
Caesars Entertainment Operating Company, Inc.'s cash tender offers
to purchase any and all of the outstanding $791,767,000 aggregate
principal amount of CEOC's 5.625% Senior Notes due 2015 and any
and all of the outstanding $214,800,000 aggregate principal amount
of CEOC's 10.00% Second-Priority Senior Secured Notes due 2015.
The tender offers expired at 5:00 p.m., New York City time, on
July 25, 2014.
The Issuer received tenders from the holders of $44,345,000
aggregate principal amount of the 5.625% Notes and $103,016,000
aggregate principal amount of the 10.00% Notes by the Expiration
Time. The Issuer has accepted for purchase all of the Notes
validly tendered (and not validly withdrawn). The Issuer has paid
total consideration of $1,048.75 per $1,000 principal amount of
the 5.625% Notes and total consideration of $1,022.50 per $1,000
principal amount of the 10.00% Notes, plus any accrued and unpaid
interest from the last interest payment date to, but not
including, the payment date.
In addition, pursuant to the previously announced note purchase
agreements with a significant third-party holder and a subsidiary
of Caesars Growth Partners, LLC, CEOC purchased from the Selling
Holders approximately $740.5 million in aggregate principal amount
of the 5.625% Notes for a purchase price of $1,048.75 per $1,000
principal amount and approximately $106.6 million in aggregate
principal amount of the 10.00% Notes for a purchase price of
$1,022.50 per $1,000 principal amount, in each case, plus accrued
and unpaid interest to, but not including, the closing date.
As a result of the tender offers and the Note Purchases, the
Issuer has retired approximately 99.1% of the outstanding amount
of the 5.625% Notes and approximately 98.0% of the outstanding
amount of the 10.00% Notes.
The Issuer engaged Citigroup Global Markets Inc. to act as Dealer
Manager in connection with the tender offers for the Notes.
Payment of Existing Term Loans
As previously announced by Caesars Entertainment on July 25, 2014,
the escrow conditions were satisfied and the $1,750 million of new
term loans was assumed by CEOC and became incremental term loans
governed by and incorporated into CEOC's amended credit
facilities. In connection with the assumption of the B-7 Term
Loans and the consummation of the amendment to the credit
facilities, CEOC repaid approximately $16 million in aggregate
principal amount of B-1 term loans, approximately $13 million in
aggregate principal amount of B-3 term loans, approximately $578
million in aggregate principal amount of B-4 term loans,
approximately $54 million in aggregate principal amount of B-5
term loans and approximately $133 million in aggregate principal
amount of B-6 term loans under CEOC's existing credit facilities.
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.
Caesars Entertainment reported a net loss of $2.93 billion in
2013, as compared with a net loss of $1.50 billion in 2012. The
Company's balance sheet at March 31, 2014, showed $24.37 billion
in total assets, $26.65 billion in total liabilities and a $2.27
billion total deficit.
* * *
Caesars Entertainment carries a 'CCC' long-term issuer default
rating, with negative outlook, from Fitch.
As reported by the TCR on April 9, 2013, Moody's Investors Service
downgraded Caesars Entertainment Corporation's Corporate Family
Rating to Caa2.
"The downgrade of Caesars' ratings considers that its same store
EBITDA growth in 2012-2013 has failed to materialize to any
significant degree, and so Caesars' credit metrics have
deteriorated and its free cash flow deficit will be higher than
Moody's previous expectations," stated Moody's analyst Peggy
Holloway.
In the April 10, 2014, edition of the TCR, Standard & Poor's
Ratings Services lowered its corporate credit ratings on Las
Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned
subsidiaries, Caesars Entertainment Operating Co. (CEOC) and
Caesars Entertainment Resort Properties (CERP), as well
as the indirectly majority-owned Chester Downs and Marina, to
'CCC-' from 'CCC+'. The downgrade reflects S&P's expectation that
Caesars' capital structure is unsustainable, and the amount of
cash the company will burn in 2014 and 2015 creates conditions
under which S&P believes a restructuring of some form is
increasingly likely over the near term absent an unanticipated
significantly favorable change in operating performance.
COMMUNITYONE BANCORP: Posts $2.8-Mil. Profit in Second Quarter
--------------------------------------------------------------
CommunityOne Bancorp reported net income of $2.79 million on
$18.26 million of total interest income for the second quarter of
2014 as compared with a net loss of $3.18 million on $18.13
million of total interest income for the second quarter of 2013.
The Company's balance sheet at June 30, 2014, showed $2.01 billion
in total assets, $1.92 billion in total liabilities and $92.69
million in total shareholders' equity.
"I am pleased to report solid progress on our goals for 2014 with
robust and accelerating loan growth, continued expense reductions
and further improvements in asset quality, all of which are ahead
of plan with good forward momentum," noted Brian Simpson, CEO.
"Overall, I continued to be very pleased with our performance and
loan growth is occurring in all lines of business," said Bob Reid,
president. "In June and early July, we enhanced our commercial
and real estate lending capability by opening loan production
offices in Raleigh and Winston Salem and hiring 4 additional
commercial bankers for our Greensboro market. Additionally, we
hired an experienced mortgage executive to lead our non-branch
mortgage channel, focusing on mortgage loan growth in the
Charlotte, Greensboro/Winston-Salem, and Raleigh markets."
A full-text copy of the press release is available for free at:
http://is.gd/t57hvd
Brian E. Simpson, chief executive officer, Robert L. Reid,
president, David L. Nielsen, chief financial officer, and Neil W.
Machovec, chief credit officer of CommunityOne Bancorp are
scheduled to provide certain investor presentations beginning on
July 29, 2014. A copy of the slide presentation prepared for use
by the Company for these presentations is available for free at:
http://is.gd/1EVT8K
About CommunityOne
CommunityOne Bancorp (formerly FNB United) is the North Carolina-
based bank holding company for CommunityOne Bank, N.A.
(community1.com), which offers a full range of consumer, mortgage
and business banking services, including loan, deposit, cash
management, wealth and online banking services through 55 branches
in 44 communities throughout the central, southern and western
regions of the state.
CommunityOne Bancorp incurred a net loss of $1.48 million in 2013,
a net loss of $40 million in 2012, and a $137.31 million net loss
in 2011.
CONSOL ENERGY: Moody's Rates $200MM Senior Unsecured Notes 'B1'
---------------------------------------------------------------
Moody's announced that the ratings of CONSOL Energy Inc.,
including the Ba3 corporate family rating and B1 senior unsecured
rating, are unchanged as a result of its offer to issue an
additional $200 million of its 5.875% senior notes due 2022.
CONSOL initially offered and sold $1.6 billion aggregate principal
amount of notes of the same series on April 16, 2014, and Moody's
assigned a B1 rating to the notes at that time. Moody's expects
the add-on notes to have identical terms, other than the issue
date and price, as the original notes. Moody's expects that the
proceeds of the offering will be used to fund the purchase of up
to $200 million principal amount of CONSOL's 8.25% senior notes
due 2020. The outlook on CONSOL's ratings remains negative.
CONSOL Energy Inc. is a major diversified fuel producer in the
Eastern US, engaged in production of natural gas and thermal and
metallurgical coal. CONSOL controls approximately 3 billion tons
of coal reserves in Northern and Central Appalachia. In 2013, the
company's continuing coal operations sold roughly 29 million tons
of coal, with roughly 30% directed towards international markets
and 59% sold to domestic utilities. CONSOL's gas division includes
conventional and coalbed methane (CBM) gas operations, as well as
rapidly growing production in Marcellus and Utica shales. CONSOL
controls 5.7 Tcfe of proved natural gas reserves, nearly 45% of
which are developed. In 2013, the company produced 172 net Bcfe of
natural gas, which accounted for roughly third of consolidated
EBITDA. In 2013 the company generated over $3 billion in revenues.
CUBIC ENERGY: Amends Fiscal 2013 Financial Report
-------------------------------------------------
Cubic Energy, Inc., filed with the U.S. Securities and Exchange
Commission its amended annual report on Form 10-K. A copy of the
amended Form 10-K is available for free at http://is.gd/qGe1Yy
The Company disclosed a net loss of $5.93 million on $3.84 million
of total revenues for the year ended June 30, 2013, as compared
with a net loss of $12.49 million on $6.93 million of total
revenues during the prior fiscal year.
The balance sheet at June 30, 2013, showed $18.03 million in total
assets, $31.2 million in total liabilities, all current, and a
$13.17 million total stockholders' deficit.
About Cubic Energy
Cubic Energy, Inc., headquartered in Dallas, Texas, is an
independent upstream energy company engaged in the development and
production of, and exploration for, crude oil and natural gas.
Its oil and gas assets and activities are concentrated in
Louisiana.
Cubic Energy incurred a net loss of $5.93 million for the year
ended June 30, 2013, as compared with a net loss of $12.49 million
for the year ended June 30, 2012, and a net loss of $10.28 million
for the year ended June 30, 2011.
As of March 31, 2014, the Company had $134.14 million in total
assets, $141.96 million in total liabilities, $988,000 in
redeemable common stock and a $7.81 million total stockholders'
deficit.
EL POLLO LOCO: Moody's Raises Corporate Family Rating to 'B2'
-------------------------------------------------------------
Moody's Investors Service upgraded El Pollo Loco, Inc.'s ("EPL")
Corporate Family Rating to B2 from B3 following the company's
successful IPO. At the same time, Moody's affirmed the company's
B3-PD Probability of Default Rating and the B1 rating on its $205
million senior secured first lien bank facility. The Caa2 rating
on EPL's second lien term loan will be withdrawn once it is
repaid. Moody's also assigned a Speculative Grade Liquidity rating
of SGL-2. The rating outlook is stable.
The upgrade of EPL's Corporate Family Rating ("CFR") to B2
reflects the company's successful $100 million IPO (net proceeds),
the proceeds of which will be used to repay in full the company's
$100 million second lien term loan due 2019. "EPL's credit metrics
will improve significantly after the company repays 35% of
reported debt", said Peter Trombetta, an Analyst at Moody's. "Pro
forma for the IPO, EPL's lease-adjusted leverage will improve to
4.6 times from about 6.0 times and its interest coverage will
improve to 3.2 times from 1.3 times", added Trombetta.
Ratings upgraded:
Corporate Family Rating to B2 from B3
Rating assigned:
Speculative Grade Liquidity rating of SGL-2
Ratings affirmed and LGD assessments revised:
Probability of Default Rating at B3-PD
$15 million senior secured first lien revolver expiring in 2018
at B1 (LGD3 from LGD2)
$190 million senior secured first lien term loan due 2018 at B1
(LGD3 from LGD2)
Ratings to be withdrawn when repaid:
$100 million senior secured second lien term loan due 2019 at
Caa2 (LGD5)
Ratings Rationale
Aside from the expected reduction in leverage following the IPO,
the upgrade also reflects Moody's expectations that the company's
operating performance, which has continued to outperform peers,
will remain strong as management continues to implement its growth
strategy. EPL's same store sales growth has been positive for each
of the past twelve quarters, outpacing most quick service and fast
casual restaurant competitors. Operating profit has improved more
than 75% from $24 million for the fiscal year ended December 29,
2010 to $45 million for the LTM period ended March 26, 2014. These
positive factors help mitigate the company's geographic
concentration (about 90% of the company's stores are located in
California) and its small size in terms of revenue.
EPL's stable rating outlook reflects Moody's expectations that the
company's earnings will continue to improve over the next 12 to 18
months as it grows organically and adds new/remodeled stores, and
that it will maintain a conservative financial policy, such that
debt/EBITDA and EBITA/cash interest expense are maintained below
5.5 times and above 2.0 times, respectively. The stable rating
outlook also includes Moody's expectation that EPL will maintain a
healthy liquidity profile during a period in which it plans to
ramp up spending on new/remodeled stores.
EPL's Probability of Default Rating of B3-PD, which is one notch
below the CFR, reflects Moody's assumption of a 65% family
recovery rate as is customary for capital structures including
senior bank debt only with maintenance covenants. The first lien
bank facilities are senior to EPL's lease rejection claims and
non-priority trade payables. The first lien bank facility is
subject to total leverage and senior leverage covenants, both of
which have good headroom.
EPL's SGL-2 reflects its good liquidity position, including its
cash balances of approximately $16 million at March 26, 2014 and
its undrawn $15 million revolver. Moody's expect the company will
generate about $20 million of free cash flow before growth capex
and dividends. The recently amended first lien credit agreement
allows the company to issue up to $41 million of dividends to
shareholders in place prior to the IPO over the life of its first-
lien loan due October 2018, which would be limited to an annual
$11 million (subject to leverage and liquidity tests).
EPL's ratings could be upgraded if the company maintains positive
same store sales growth -- including growth in both traffic and
average check -- and maintains a conservative financial policy. An
upgrade would also require sustained debt/EBITDA at about 4.0
times and retained cash flow around 15%. Successful expansion of
its geographic foot print would also be viewed as a credit
positive.
Ratings could be downgraded if EPL's operating results or
liquidity weakens, if the company experiences a period of negative
same store sales growth, or if debt/EBITDA rises above 5.5 times
or retained cash flow/debt is sustained below 10%. Independent of
any change to the CFR, the ratings on the first lien bank facility
could be downgraded if the mix of senior/junior debt changes such
that the first lien debt makes up a larger percentage of the debt
mix.
The principal methodology used in this rating was the Global
Restaurant Methodology published in June 2011. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
El Pollo Loco, Inc. ("EPL") headquartered in Costa Mesa,
California, is a quick-service restaurant chain specializing in
flame-grilled chicken and other Mexican-inspired entrees. As of
June 26, 2014, the company operated and franchised 401 restaurants
primarily around Los Angeles and throughout the Southwestern
United States, generating total revenues of approximately $320
million in the last twelve months ended
March 26, 2014. On July 24, 2014, EPL became a public company
after a successful IPO that raised $100 million of net proceeds.
Post-IPO, its prior two private equity owners, Trimaran Capital
Partners and FS Equity Partners control about 80% of the company.
EPL is listed on NASDAQ ("LOCO").
ESSAR STEEL: Granted Provisional Relief Under Chapter 15
--------------------------------------------------------
Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the
District of Delaware issued an order granting Essar Steel Algoma,
Inc., et al., provisional relief under Chapter 15 of the U.S.
Bankruptcy Code.
The Preliminary Order is enforced on an interim basis, including,
without limitation, staying the commencement and continuation of
any action against Essar Steel, Canada's second-largest integrated
steel producer, or their assets. While the Order is in effect,
Essar Steel's foreign representative is entitled to the full
protection and rights pursuant to Section 1519(a)(1) of the
Bankruptcy Code.
Essar Steel initiated a reorganization under Canada's Companies'
Creditors Arrangement Act on July 16, 2014, followed by a Chapter
15 petition in U.S. Bankruptcy Court in Delaware. The Sault Ste.
Marie, Ontario-based company has agreement with unsecured
noteholders on a consensual restructuring, Bill Rochelle, the
bankruptcy columnist for Bloomberg News, reported.
Mr. Rochelle said the company has more than $1.2 billion in debt.
An agreement with an ad hoc committee of holders of 70 percent of
the unsecured notes calls for them to receive 32.5 percent of the
claim in cash when the Canadian plan is implemented, while holders
will be given new secured notes for 55 percent of the old debt,
Mr. Rochelle added.
About Essar Steel
Robert J. Sandoval filed a petition under Chapter 15 of the U.S.
Bankruptcy Code for Essar Steel Algoma Inc., and its debtor
affiliates on July 16, 2014, following the companies' initiation
of a reorganization under Canada's Companies' Creditors
Arrangement Act. The lead case is Essar Steel Algoma Inc., Case
No. 14-11730 (D. Del.). Essar Steel operates one of Canada's
largest integrated steel manufacturing facilities. The Chapter 15
case is addigned to Judge Brendan Linehan Shannon.
Chapter 15 Petitioner's Counsel is Daniel J. DeFranceschi, Esq.,
and Amanda R. Steele, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware.
EVERYWARE GLOBAL: Has $20-Mil. Financing Deal with Monomoy Capital
------------------------------------------------------------------
Stephanie Gleason, writing for Daily Bankruptcy Review, reported
that EveryWare Global Inc. has reached a deal with private-equity
firm Monomoy Capital Partners LP to inject $20 million into the
cash-strapped maker of Anchor- and Oneida-branded kitchen
products.
Jamie Mason, writing for The Deal, reported that EveryWare was in
talks with its lenders Monomoy, its private equity owner, after
its forbearance agreement expired on July 29. According to The
Deal, citing sources, who asked not to be named, the deal with
Monomoy Capital is similar to the $20 million investment proposal
that the New York-based middle market PE firm provided the company
with earlier in July.
The company's stock, which trades on the Nasdaq under the symbol
EVRY, was trading down 11%, to $1.87, midday July 30 after closing
at $2.11 on July 29, The Deal said.
About EveryWare
EveryWare Global, Inc. is a global marketer of tabletop and food
preparation products for the consumer and foodservice markets,
with operations in the United States, Canada, Mexico, Latin
America, Europe and Asia. Its global platform allows it to market
and distribute internationally its total portfolio of products,
including bakeware, beverageware, serveware, storageware,
flatware, dinnerware, crystal, buffetware and hollowware; premium
spirit bottles; cookware; gadgets; candle and floral glass
containers; and other kitchen products, all under a broad
collection of widely-recognized brands.
FRONTIER OILFIELD: Incurs $1.47-Mil. Net Loss in Q1 Ending Mar. 31
------------------------------------------------------------------
Frontier Oilfield Services, Inc., filed its quarterly report on
Form 10-Q, disclosing a net loss of $1.47 million on $4.87 million
of revenues for the three months ended March 31, 2014, compared
with a net loss of $2.48 million on $9.1 million of revenue for
the same period in 2013.
The Company's balance sheet at March 31, 2014, showed $21.34
million in total assets, $18.53 million in total liabilities, and
stockholders' equity of $2.81 million.
A copy of the Form 10-Q is available:
http://is.gd/yXsiV6
Frontier Oilfield Services, Inc., is oilfield service company
engaged primarily in saltwater recovery and disposal and the
associated infrastructure. Earlier, it was involved in the
acquiring oil and gas production properties and leases. Its
primary focus is to secure additional capital through business
alliances with third parties or other debt/equity financing
arrangements to acquire companies or assets which will allow the
company to further operate in the oil field services industry with
an emphasis on acquiring companies involved in salt water and
drilling fluid transportation and disposal, wireline logging, well
perforating and frac tank sales and rentals.
GFI GROUP: S&P Puts 'B' Counterparty Rating on CreditWatch Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'B'
counterparty credit rating on GFI Group Inc. on CreditWatch with
negative implications and its 'B' issue-level rating on GFI's $240
million senior unsecured notes due 2018 on CreditWatch with
positive implications.
The CreditWatch actions follow the announcement that CME and GFI
have entered into definitive agreements on a two-step transaction
in which CME Group will first acquire all of the outstanding
shares of GFI Group in exchange for $4.55 per share in CME stock.
Immediately following the acquisition of GFI Group, a private
consortium of GFI Group management expects to acquire GFI's
wholesale brokerage and clearing business for $165 million plus
the assumption, at closing, of approximately $63 million of
unvested deferred compensation and other liabilities. Upon
closing of the transaction, CME will assume GFI's current $240
million senior unsecured notes.
"The CreditWatch negative on our counterparty credit rating on GFI
Group indicates that there is a 50% likelihood that we will lower
our rating on GFI upon the completion of the proposed
transaction," said Standard & Poor's credit analyst Sebnem
Caglayan.
This transaction would result in a meaningful weakening in GFI's
business risk profile because the surviving brokerage and clearing
business would be less diversified and its revenue would be mostly
transactional and dependent on levels of market activity. In
addition, although the financial terms of the transaction were not
disclosed, S&P believes it is likely that GFI management will use
external debt financing to fund the acquisition of the brokerage
business back from CME. The leverage profile, which will reflect
the smaller EBITDA base of the surviving business, will be an
important factor in S&P's assessment of GFI upon the completion of
the transaction.
The CreditWatch positive on the senior unsecured debt rating
indicates that there is a 50% likelihood that S&P will raise its
issue-level rating on GFI's senior unsecured debt upon the
completion of the transaction because the $240 million senior
unsecured notes would be assumed by a much higher rated entity.
S&P currently rates CME Group 'AA-'.
"Our rating on GFI already incorporates the company's position as
a small firm in the intensely competitive, low-margin, and
relatively narrow institutional agency brokerage business. Market
volumes that affect GFI, particularly over-the-counter (OTC)
derivative market volumes, generally declined across most asset
classes during 2013 and first-quarter 2014 compared with prior
comparable periods. OTC markets continued to confront regulatory,
market, and economic uncertainties, as well as continuing low
short-term interest rates globally and low volatility.
Accordingly, GFI's brokerage revenue was down 7.2%, and its net
clearing services revenue was only $4.4 million in 2013. First-
quarter 2014 brokerage revenues were down 2.0%, and net clearing
services revenue was only $1.4 million in the first quarter," S&P
noted.
"Risk stemming from evolving regulation is also a negative for our
counterparty credit rating on GFI, in our opinion," said
Ms. Caglayan.
At a minimum, new regulations, such as the Dodd-Frank Wall Street
Reform and Consumer Protection Act, swaps regulatory reform, and
European regulatory reform, continue to force GFI to incur various
charges as it continues to restructure in rapidly changing
business conditions and comply with increased regulation. As an
example, the decision to register as a designated contract market
and swap execution facility (SEF), as well as the additional
capital required for Amerex, which became regulated, has increased
GFI's regulatory capital requirements by approximately $15 million
to $20 million, and the company has spent considerable amounts to
set up the SEF. To the extent that regulation requires other OTC
derivatives, such as forwards and exotic options, be moved on to
electronic trading venues in the near future, GFI will need to
incur additional costs in order to maintain its current business.
S&P will continue to analyze the impact of the pending
transaction. S&P expects to ultimately resolve the CreditWatch
actions both on the counterparty credit and senior unsecured debt
ratings on GFI when the transaction is completed, which S&P
expects to happen in early 2015, or in the event that it is called
off.
GLOBAL AVIATION: A&M to Be Paid on Hourly Basis
-----------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the Official Committee of Unsecured Creditors of Global Aviation
Holdings Inc. and its debtor-affiliates to amend the employment
terms of Alvarez & Marsal North America, LLC.
According to modified terms of retention, the firm charges the
Committee for its financial advisory services on an hourly basis.
The hourly rates for the professionals principally involved in
this representation:
Professional Designation Rate
------------ ----------- ----
Kelly Stapleton Managing Director $725
Rich Newman Director $525
Christopher Petrocelli Analyst $325
The Debtors noted the firm incurred fees totaling about $15,000
for the period April 1, 2014 through April 30, 2014. The firm is
entitled to receive payment of $40,000 for that period. The
amended application will result in savings of approximately
$25,000 for the month of April alone, the Debtors pointed out.
The firm's professionals can be reached at:
Kelly Stapleton
Rich Newman
Christopher Petrocelli
ALVAREZ & MARSAL NORTH AMERICA LLC
600 Madison Avenue, 8th Floor
New York, NY 10022
Tel: +1 212 759 4433
Fax: +1 212 759 5532
E-mail: kstapleton@alvarezandmarsal.com
mnewman@alvarezandmarsal.com
As reported in the Troubled Company Reporter on Feb. 27, 2014,
under the original agreement, the firm was to receive payment of
$75,000 per month plus a success fee to be determined in
consultation with, and approved by, the Committee upon sale of
substantially all of the Debtor's assets or confirmation of a plan
of reorganization. Any additional services will be subject to
fees based on Alvarez & Marsal's standard hourly rates at the time
of such services unless otherwise agreed among the firm, the
Committee and the Debtors. The firm will also be reimbursed for
reasonable out-of-pocket expenses incurred.
The Committee selected the firm as financial advisors to the
Committee. The Committee requires Alvarez & Marsal to:
(a) advise the Committee on matters related to its interests
in the sale of the Debtor's assets;
(b) assist with a review of the Debtors' cost/benefit
evaluations with respect to the assumption or rejection of
executory contracts and unexpired leases;
(c) assist with a review of the business model, operations,
liquidity situation, properties, assets and liabilities,
financial condition and prospects of the Debtor;
(d) assist in the review of financial information distributed
by the Debtor to the Committee, its advisors and creditors
and others, including but not limited to, cash flow
projections and budgets, cash receipts and disbursement
analysis and analysis of various asset and liability
accounts;
(e) attend meetings with the Debtor, the Debtor's lenders and
creditors, the Committee and any other official committees
organized in these Chapter 11 cases, the U.S. Trustee,
other parties in interest and professionals hired by the
same, as requested;
(f) assist with a review of the Debtor's proposed key employee
retention and other critical employee benefit programs;
(g) assist in the review and preparation of information and
analysis necessary for the confirmation of a plan in these
Chapter 11 cases; and
(h) render other general business consulting or such other
assistance as the Committee or its counsel may deem
necessary, consistent with the role of a financial advisor
and not duplicative of services provided by other
professionals in these Chapter 11 cases.
Kelly Stapleton, managing director of Alvarez & Marsal, 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 Global Aviation Holdings
Global Aviation Holdings Inc. -- http://www.glah.com-- the parent
company of North American Airlines and World Airways, sought
Chapter 11 bankruptcy protection on Nov. 12, 2013. 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 a prior Chapter 11 reorganization in February 2013.
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 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.
In the 2013 case, the Debtors are represented by Kourtney Lyda,
Esq., at Haynes and Boone, LLP, in Houston, Texas; and Christopher
A. Ward, Esq., at Polsinelli PC, in Wilmington, Delaware.
The first lien agent is represented by Michael L. Tuchin, Esq., at
Klee, Tuchin, Bogdanoff & Stern LLP, in Los Angeles, California.
Wells Fargo Bank, National Association, agent to the second
lienholders and third lienholders, is represented by Mildred
Quinones-Holmes, Esq., at Thompson Hines LLP, in New York.
The Deal reported that World Airways Inc. ceased operations on
March 27, 2014, after its bankrupt parent was unable to secure
necessary funding to keep the charter operator airborne.
GLOBAL AVIATION: Court Approves Employee Incentive Plans
--------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware authorized Global Aviation Holdings Inc. and
its debtor-affiliates to implement incentive plans for employees
of:
a) North American Airlines Inc. assigned to the base of
operations at Dulles International Airport (IAD
Employee Incentive Plan);
b) North American's employees assigned to operations in
Peachtree City, Georgia (PTC Employee Incentive Plan);
and
c) Global Aviation Holdings Inc. et al.'s management team.
According to the Debtor, all incentive plans are designed to
provide incentives for vital employees and members of management
to perform all duties necessary to close on the sale of certain of
North American's assets to Omni Air International Inc. and
facilitate the wind-down of the Debtors' affairs.
The Debtors said the implementation of the incentive plans is
critical to motivate employees whose services and knowledge will
be necessary to North American's continued operations and the
transition of such operations to Omni following the closing of the
sale. The Incentive Plans are designed to ensure that North
American is able to continue its operations without interruption
by encouraging employees to continue their very high level of
participation and support of North American's operations and
ensure that there are no disruptions to the operations that could
jeopardize the proposed sale to Omni.
The Debtors added they believe that the Incentive Plans are vital
to the success of the proposed sale to Omni and the orderly and
efficient wind-down of the Debtors' affairs for the benefit of
their creditors.
According to the Debtors, the IAD Employee Incentive Plan covers
71 employees and the IAD Incentive Bonus for such employees will
be approximately $220,000 assuming a 3-week payout. In addition,
the PTC Employee Incentive Plan covers 25 employees and the PTC
Incentive Bonus for such employees will be approximately $101,000
assuming a 3-week payout. The Employee Incentive Plans will
be funded with the amounts that have been allocated for the
"Incentive Plan Portion" in a certain forbearance stipulation
and such additional amounts of the proceeds of the proposed sale
to Omni that lenders Cerberus Business Finance LLC may consent
to be used to fund the Employee Incentive Plans.
Objections Filed
Prior to the hearing on the motion, the U.S. Trustee and Air Line
Pilots Association International (ALPA) filed objections.
Roberta A. DeAngelis, the United States Trustee for Region 3,
objected to the Debtors' incentive plans on grounds that they have
not satisfied their burden under Section 503(b)(1)(A) and 503(c)
to demonstrate, inter alia, that (i) payments under the incentive
plan are not retention payments, (ii) the incentive plan is
justified by the facts and circumstances of these cases, and (iii)
the incentive plan represents the "actual, necessary cost of
preserving the estate[s]."
ALPA objected to the Debtors' IAD Employee Plan to the extent it
seeks, without ALPA's consent, to pay bonuses to certain ALPA-
represented pilots but not others and to pay the bonuses only
under certain performance-based conditions. ALPA also objected to
the Management Incentive Plan because it is a retention plan
designed to enrich corporate insiders in violation of Section
503(c) of the Bankruptcy Code.
About Global Aviation Holdings
Global Aviation Holdings Inc. -- http://www.glah.com-- the parent
company of North American Airlines and World Airways, sought
Chapter 11 bankruptcy protection on Nov. 12, 2013. 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 a prior Chapter 11 reorganization in February 2013.
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 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.
In the 2013 case, the Debtors are represented by Kourtney Lyda,
Esq., at Haynes and Boone, LLP, in Houston, Texas; and Christopher
A. Ward, Esq., at Polsinelli PC, in Wilmington, Delaware.
The first lien agent is represented by Michael L. Tuchin, Esq., at
Klee, Tuchin, Bogdanoff & Stern LLP, in Los Angeles, California.
Wells Fargo Bank, National Association, agent to the second
lienholders and third lienholders, is represented by Mildred
Quinones-Holmes, Esq., at Thompson Hines LLP, in New York.
The Deal reported that World Airways Inc. ceased operations on
March 27, 2014, after its bankrupt parent was unable to secure
necessary funding to keep the charter operator airborne.
GOLDEN STATE MEDICAL: S&P Assigns 'B' CCR & Rates $160MM Debt 'B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Golden State Medical Supply Inc. (GSMS). The
outlook is stable. At the same time, S&P assigned a 'B' issue-
level rating with a '3' recovery rating to the new $160 million
first-lien credit facility, which includes an undrawn $15 million
revolving credit line. The '3' recovery rating indicates S&P's
expectation of meaningful (50%-70%) recovery in the event of a
payment default.
"Our business risk profile assessment reflects GSMS' relatively
small size, limited addressable market, niche position in a large
space that is dominated by three major distributors, and narrow
business focus on supplying generic drugs to the government
agencies," said credit analyst Maryna Kandrukhin.
The stable outlook on GSMS reflects S&P's expectation that it is
likely to sustain a debt-to-EBITDA ratio above 5.0x in the long
run. While S&P projects that the company's leverage will be
around 4.2x at the end of 2014, S&P thinks a short-term debt-to-
EBITDA ratio below 5.0x provides GSMS with additional room for
operating disruptions and adds spare capacity for an aggressive
financial policy that S&P expects from its financial sponsor.
Downside scenario
S&P could lower our rating if the company's operating performance
fell meaningfully short of our expectations resulting in zero-to-
negative free cash flow generation, a FFO-to-debt ratio in the
low-single digits, and interest coverage ratio approaching 1.5x.
Such a scenario could follow a loss of one or more large NMCs and
would encompass a revenue decline coupled with an EBITDA margin
contraction of at least 400 basis points.
Upside scenario
S&P could consider an upgrade if it become confident that GSMS'
financial policy is focused on permanent debt reduction and
sustained maintenance of leverage below 5x. While S&P projects
that the company's leverage will be around 4.2x at the end of
2014, it also expects its aggressive financial policy to result in
increased leverage in the long run which makes an upgrade unlikely
over the next year.
GREEN MOUNTAIN: Section 341(a) Meeting Scheduled for August 28
--------------------------------------------------------------
A meeting of creditors in the bankruptcy case of Green Mountain
Management, LLC, will be held on Aug. 28, 2014, at 11:00 a.m. at
Hearing Room 367, Atlanta.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Green Mountain Management, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Ga. Case No. 14-64287) on July 25, 2014.
The petition was signed by Daniel B. Cowart, sole member of
Georgia Flattop Partners, LLC, and chairman of Green Mountain
Management, LLC.
According to the docket, the Debtor's Chapter 11 plan and
disclosure statement are due Nov. 24, 2014.
The Debtor estimated $10 million to $50 million in assets and
debt. Georgia Flattop Partners, LLC is the managing member and
holders of 93% of the stock.
The case is assigned to Judge Barbara Ellis-Monro.
The Debtor is represented by Sage M. Sigler, Esq., at Alston &
Bird, LLP, in Atlanta.
HBK MEDICAL: Involuntary Chapter 11 Case Summary
------------------------------------------------
Alleged Debtor: HBK Medical, LLC
1928 Randolph Rd.
Charlotte, NC 28207
Case Number: 14-31305
Involuntary Chapter 11 Petition Date: July 30, 2014
Court: United States Bankruptcy Court
Western District of North Carolina (Charlotte)
Judge: Hon. Laura T. Beyer
Petitioner's Counsel: G. Martin Hunter, Esq.
301 S. McDowell Street, Suite 1014
Charlotte, NC 28204
Tel: 704.377.8764
Debtor's petitioner:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Pacifica Real Estate management fees $16,097
Investments, LLC
1355 Greenwood Cliff
Suite 300
Charlotte, NC 28204
HELIA TEC: HSC's Motion to Convert Case to Chapter 7 Denied
-----------------------------------------------------------
U.S. Bankruptcy Judge David R. Jones has denied HSC Holdings Co.
Ltd.'s motion to convert Helia Tec Resources, Inc.'s Chapter 11
case to one under Chapter 7. Judge Jones also denied HSC's motion
to appoint, in the alternative, a chapter 11 trustee.
HSC also requested the appointment of an examiner. The Court,
however, found no evidence was adduced to support the request nor
did the Debtor receive due process with respect to the request.
Accordingly, Judge Jones denied the request for the appointment of
an examiner.
The Court found a lack of sufficient cause to convert the Chapter
11 case to chapter 7. The Court concludes that HSC's request to
convert this case to a chapter 7 is driven by a litigation tactic
that would favor HSC, not what would serve the bests interests of
all creditors and the bankruptcy estate. Moreover, the Court
concludes that much of the "cause" asserted by HSC is simply one
side of the overwhelming non-substantive bickering that has
pervaded this case. Finally, while certainly not perfect, the
Debtor's proposed plan has a real possibility of being confirmed
within a reasonable time period, according to the bankruptcy
judge.
HSC, formerly known as GE&F Co., Ltd., is the parent company and
majority shareholder of Helia Tec Resources.
About Helia Tec Resources
Helia Tec Resources, Inc. filed a Chapter 11 petition (Bankr. S.
D. Tex. Case No. 13-36251) on Oct. 3, 2013 in Houston, Texas,
represented by Richard L. Fuqua, II, Esq., at Fuqua & Associates,
PC, in Houston, as counsel to the Debtor. The Debtor listed
$16.15 million in assets and $2.24 million in liabilities. The
petition was signed by Cary E. Hughes, president.
Judy A. Robbins, U.S. Trustee for Region 7, was unable to appoint
an official committee of unsecured creditors in the Debtor's case.
HOSTESS BRANDS: Aug. 5 Hearing on Bid to Fix WA Labor Dept Claim
----------------------------------------------------------------
The Bankruptcy Court will convene a hearing on Aug. 5, 2014, at
10:00 a.m., to consider Old HB, Inc., et al.'s motion for entry of
an order directing the estimation of the claim of the Department
of Labor and Industries of the State of Washington.
The Department of Labor and Industries of the State of Washington
submitted a supplemental memorandum of law in further support of
its objection to the Debtors' estimation motion.
According to the Department, the Debtors have no interest in the
proceeds of their prior surety, the clerical notice issued by the
Department following the Debtors' court-authorized election to
default as a self-insurer did not implicate the automatic stay,
and the motion is ill-founded and must be denied. Accordingly,
(i) the Debtors were required to comply with Washington's Workers'
Compensation Laws; (ii) the notice was a ministerial act not
barred by the automatic stay; (iii) the notice did not constitute
an act to obtain property of the estate; and (iv) the notice did
not constitute the commencement of an action against the Debtors.
The Department is represented by:
Robert W. Ferguson, Esq., attorney general
Daniel Radin, Esq., senior counsel
800 Fifth Avenue, Suite 2000
Seattle, WA 98104
Tel: (206) 587-5100
Fax: (206) 587-5150
- and -
Michael J. Venditto, Esq.
Mark D. Silverschotz, Esq.
Sarah K. Kam, Esq.
REED SMITH LLP
599 Lexington Avenue
New York, NY 10022
Tel: (212) 521-5400
Fax: (212) 521-5450
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. Hostess Brands disclosed
assets of $982 million and liabilities of $1.43 billion as of the
Chapter 11 filing.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814).
In the new Chapter 11 case, Hostess has hired Jones Day as
bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.
The official committee of unsecured creditors selected New York
law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom
Mayer and Ken Eckstein head the legal team for the committee.
Hostess Brands in mid-November 2012 opted to pursue the orderly
wind down of its business and sale of its assets after the Bakery,
Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a
nationwide strike. The Debtor failed to reach an agreement with
BCTGM on contract changes.
Hostess Brands sold its businesses and most of the plants to five
different buyers for an aggregate of $860 million. Hostess still
has some plants, depots and other facilities the buyers didn't
acquire.
The bankruptcy estate has changed its name to Old HB Inc.
INNER CIRCLE: Case Summary & 10 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Inner Circle 1420, LLC
t/a Lotus Lounge
1420 K Street, NW
Washington, DC 20005
Case No.: 14-00439
Chapter 11 Petition Date: July 30, 2014
Court: United States Bankruptcy Court
the District of Columbia (Washington, D.C.)
Judge: Hon. Martin Teel, Jr.
Debtor's Counsel: Richard H. Gins, Esq.
THE LAW OFFICE OF RICHARD H. GINS, LLC
4710 Bethesda Avenue, Suite 204
Bethesda, MD 20814
Tel: 301-718-1078
Fax: (240) 800-4448
Email: Richard@ginslaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael Rehman, member.
A list of the Debtor's 10 largest unsecured creditors is available
for free at http://bankrupt.com/misc/dcb14-00439.pdf
INTERFAITH MEDICAL: Secures Order in Aid of Confirmation
--------------------------------------------------------
U.S. Bankruptcy Judge Carla E. Craig has granted Interfaith
Medical Center, Inc.'s motion in aid of consummation of the Second
Amended Plan of Reorganization for Interfaith Medical Center,
Inc., dated June 5, 2014.
Under the order, the quitclaim deeds by which real property is
transferred pursuant to the Plan from the Debtor to the DASNY
designee, Liquidating Trust, and the IM Foundation, Inc., and the
terms and provisions of such quitclaim deeds, will not increase or
diminish any obligation of any party under the Plan, including the
Debtor, Reorganized Debtor, DASNY, the DASNY designee, the
Liquidating Trust, or the Disbursing Trust, respecting any lien,
Claim, interest, or encumbrance on such real property.
IM Foundation, Inc.'s acquisition of the Debtor's interest in 276
Nostrand Avenue, Brooklyn, New York (Block 1783, Lot 47),
consistent with section 6.8 of the Plan, will be implemented by
the vacatur of IMC's current quitclaim deed on 276 Nostrand
Avenue, made by the Foundation to IMC, dated September 1, 2009,
and recorded November 13, 2009 (City Register File Number
2009000372673), which deed is vacated.
Consistent with section 6.2 of the Plan, prior to the commencement
of mediation on any Postpetition Medical Malpractice Claim, the
Postpetition Mediator will file a notice of entry into mediation
with the Bankruptcy Court.
If a Prepetition or Postpetition Medical Malpractice Claim is not
resolved pursuant to the Mediation Procedures in section 6.2 of
the Plan, then the Postpetition Mediator or the Class 6 Mediator,
as applicable, shall promptly file a notice with the Court that
confirms the mediation was unsuccessful and serve it on the
claimant and her counsel, if any. The holder of the disputed
Prepetition or Postpetition Medical Malpractice Claim then will
have 30 days from the date of filing and service of the mediator's
notice to file with the Bankruptcy Court an opt out from having
its Claim estimated by the Bankruptcy Court. If such opt out is
timely filed, then the Claim will be estimated by the District
Court pursuant to Section 502(c) of the Bankruptcy Code.
Otherwise, the Claim will be estimated by the Bankruptcy Court.
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.
INT'L MANUFACTURING: Chapter 11 Trustee Hires FFWP as Counsel
-------------------------------------------------------------
Beverly N. McFarland, the Chapter 11 trustee of International
Manufacturing Group, Inc., seeks authorization from the U.S.
Bankruptcy Court for the Eastern District of California to employ
Felderstein Fitzgerald Willoughby & Pascuzzi LLP as her bankruptcy
counsel, effective June 24, 2014.
The Chapter 11 trustee requires Felderstein Fitzgerald to:
(a) advise and represent the Trustee with respect to bankruptcy
matters and proceedings in this Bankruptcy Case;
(b) assist the Trustee in obtaining the use of cash collateral
and potentially selling the Debtor's assets or business;
(c) assist the Trustee with the preparation of and confirmation
of a plan or plans of reorganization or liquidation; and
(d) advise and represent the Trustee with respect to possible
motions for relief from stay filed by the Debtor's secured
creditors.
Felderstein Fitzgerald will be paid at these hourly rates:
Steven H. Felderstein, managing partner $495
Thomas A. Willoughby, partner $495
Paul J. Pascuzzi, partner $475
Jason E. Rios, partner $405
Jennifer E. Niemann, counsel $395
Holly A. Estioko, associate $350
Karen L. Widder, legal assistant $195
Felderstein Fitzgerald will also be reimbursed for reasonable out-
of-pocket expenses incurred.
Thomas A. Willoughby, partner of Felderstein Fitzgerald, 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.
Felderstein Fitzgerald can be reached at:
Thomas A. Willoughby, Esq.
FELDERSTEIN FITZGERALD
WILLOUGHBY & PASCUZZI LLP
400 Capitol Mall, Suite 1750
Sacramento, CA 95814
Tel: (916) 329-7400
Fax: (916) 329-7435
E-mail: twilloughby@ffwplaw.com
About International Manufacturing
Deepal Wannakuwatte, the mastermind of a $150 million Ponzi
scheme, put himself and his company, International Manufacturing
Group Inc., into Chapter 11 after he pleaded guilty to one count
of wire fraud and agreed to a 20-year prison sentence. The
bankruptcy filing was part of his plea bargain with federal
prosecutors.
International Manufacturing Group, Inc., filed a bare-bones
Chapter 11 bankruptcy petition (Bankr. E.D. Cal. Case No.
14-25820) in Sacramento, on May 30, 2014. The case is assigned to
Judge Robert S. Bardwil.
According to the docket, governmental entities have until Nov. 26,
2014, to file claims.
The Debtor has tapped Marc A. Caraska, in Sacramento, as counsel.
Mr. Wannakuwatte is the former owner of the Sacramento Capitols
tennis team.
INT'L MANUFACTURING: Ch.11 Trustee Names Gabrielson as Accountant
-----------------------------------------------------------------
Beverly N. McFarland, the Chapter 11 trustee of International
Manufacturing Group, Inc., seeks authorization from the U.S.
Bankruptcy Court for the Eastern District of California to employ
Gabrielson & Company as accountant for the Trustee, effective June
25, 2014.
The Chapter 11 Trustee requires Gabrielson & Company to:
(a) assist the Trustee in reviewing and evaluating the
accounting and financial functions of Debtor's business
interests, including monitoring operating cash flows,
analysis of required monthly disbursements, preparation of
daily, weekly and monthly cash flow reports, short-term and
long-term operating budgets, as requested;
(b) assist the Trustee with tax matters, including review and
assistance with filing of all required federal, state and
local payroll tax returns and deposits, sales tax returns
and deposits, property tax returns and payments, income tax
returns and estimated payments, evaluation and examination
of pre-petition tax claims and communication with various
federal and state tax authorities;
(c) assist the Trustee and counsel, as requested, in the
forensic examination of Debtor's banking and other
financial records regarding receipts, disbursements and
transfers involving investor and other funds over several
years, including financial activities among multiple bank
accounts of related businesses and other entities, as
requested;
(d) assist the Trustee in the preparation of all required
financial and accounting reports to the Court and parties
in interest, including monthly operating reports and
support accounting analyses, and any required cash
collateral financial and cash reporting;
(e) assist the Trustee with preparation of other financial,
accounting and tax analyses, as required, to assist in the
administration of the bankruptcy case;
(f) consult and advise the Trustee with respect to preparation
of a plan of reorganization and any other tax and
accounting matters the Trustee believes are relevant to the
administration of these bankruptcy cases; and
(g) such other and further services and the Trustee may
require.
Gabrielson & Company will be paid at these hourly rates:
Michael R. Gabrielson, principal $325
Staff Accountant Personnel $150
Gabrielson & Company will also be reimbursed for reasonable out-
of-pocket expenses incurred.
Michael R. Gabrielson, principal of Gabrielson & Company, 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.
Gabrielson & Company can be reached at:
Michael R. Gabrielson
GABRIELSON & COMPANY
1605 School Street
Moraga, CA 94556
Tel: (925) 899-5798
About International Manufacturing
Deepal Wannakuwatte, the mastermind of a $150 million Ponzi
scheme, put himself and his company, International Manufacturing
Group Inc., into Chapter 11 after he pleaded guilty to one count
of wire fraud and agreed to a 20-year prison sentence. The
bankruptcy filing was part of his plea bargain with federal
prosecutors.
International Manufacturing Group, Inc., filed a bare-bones
Chapter 11 bankruptcy petition (Bankr. E.D. Cal. Case No.
14-25820) in Sacramento, on May 30, 2014. The case is assigned to
Judge Robert S. Bardwil.
According to the docket, governmental entities have until Nov. 26,
2014, to file claims.
The Debtor has tapped Marc A. Caraska, in Sacramento, as counsel.
Mr. Wannakuwatte is the former owner of the Sacramento Capitols
tennis team.
INT'L MANUFACTURING: Ch.11 Trustee Hires Diamond McCarthy
---------------------------------------------------------
Beverly N. McFarland, the Chapter 11 trustee of International
Manufacturing Group, Inc., seeks authorization from the U.S.
Bankruptcy Court for the Eastern District of California to employ
Diamond McCarthy LLP as her special litigation counsel.
The Chapter 11 Trustee requires Diamond McCarthy to:
(a) investigate the estate's potential litigation claims
against (i) transferees of preferences and fraudulent
transfers, (ii) insiders and affiliates of the Debtor and
(iii) third parties, including, without limitation,
auditors, legal counsel, brokers, financial institutions,
among others;
(b) prepare a written report (the "Book Report") detailing the
results of Diamond McCarthy's investigation, including
recommendations with respect to potential prosecution of
the estate's litigation claims;
(c) coordinate investigation and litigation activities with the
Trustee's other professionals, law enforcement, regulatory
and governmental entities, among others, and
(d) general litigation consultation and advice.
In addition to the litigation-specific matters, the Trustee may
request Diamond McCarthy to represent the Trustee as conflicts
counsel on any matter in which the Trustee's general counsel may
have potential conflict, if and when such a matter arises.
The Trustee's proposed employment of Diamond McCarthy is detailed
in the Agreement and consists of two compensation components, a
fixed fee component and an hourly fee component.
First, Diamond McCarthy will undertake the investigation and
assessment of the estate's potential litigation claims and prepare
the Book Report, a comprehensive written analysis of potential
claims, for a fixed fee of $150,000 plus reasonable out of pocket
expenses. The Fixed Fee is the only fee compensation Diamond
McCarthy shall receive for the Book Report and covers all of
Diamond McCarthy's professional fees for the investigation
analysis and preparation of the Book Report.
Second, should the Trustee ask Diamond McCarthy to provide
litigation advice or support apart from the Book Report, such as
assisting in a contested matter, claim objection or similar
action, Diamond McCarthy shall be compensated based on its
professional hourly rates, subject to a $495 per hour cap, plus
reasonable and necessary out of pocket expenses. In addition, the
Trustee may request Diamond McCarthy to represent the Trustee as
conflicts counsel on any matter in which the Trustee's general
counsel may have a potential conflict, if and when such a matter
arises.
Diamond McCarthy will be paid at these hourly rates:
Allan B. Diamond, partner $495
Christopher D. Sullivan, partner $495
Jason M. Rudd, partner $440
Michael Yoder, partner $325
Daniel Meyler, associate $260
Christopher D. Sullivan, Esq., a partner of Diamond McCarthy,
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.
Diamond McCarthy can be reached at:
Christopher D. Sullivan, Esq.
DIAMOND MCCARTHY LLP
150 California, Suite 2200
San Francisco, CA 94111
Tel: (415) 692-5200
Fax: (415) 263-9200
About International Manufacturing
Deepal Wannakuwatte, the mastermind of a $150 million Ponzi
scheme, put himself and his company, International Manufacturing
Group Inc., into Chapter 11 after he pleaded guilty to one count
of wire fraud and agreed to a 20-year prison sentence. The
bankruptcy filing was part of his plea bargain with federal
prosecutors.
International Manufacturing Group, Inc., filed a bare-bones
Chapter 11 bankruptcy petition (Bankr. E.D. Cal. Case No.
14-25820) in Sacramento, on May 30, 2014. The case is assigned to
Judge Robert S. Bardwil.
According to the docket, governmental entities have until Nov. 26,
2014, to file claims.
The Debtor has tapped Marc A. Caraska, in Sacramento, as counsel.
Mr. Wannakuwatte is the former owner of the Sacramento Capitols
tennis team.
ISC8 INC: Reports $4.6-Mil. Net Loss for Q2 Ending Mar. 31
----------------------------------------------------------
ISC8 Inc. filed its quarterly report on Form 10-Q, disclosing a
net loss of $4.6 million on $78,000 of revenues for the three
months ended March 31, 2014, compared with a net loss of $9.59
million on $102,000 of revenue for the same period in 2013.
The Company's balance sheet at March 31, 2014, showed $3.13
million in total assets, $12.66 million in total liabilities, and
a stockholders' deficit of $9.54 million.
A copy of the Form 10-Q is available at http://is.gd/aRS1Jf
About ISC8 Inc.
Costa Mesa, California-based ISC8 Inc. is engaged in the design,
development, manufacture and sale of a family of security
products, consisting of cyber security solutions for commercial
and U.S. government applications, secure memory products, some of
which utilize technologies that the Company has pioneered for
three-dimensional ("3-D") stacking of semiconductors, systems in a
package ("Systems in a Package" or "SIP"), and anti-tamper
systems.
The Company reported a net loss of $28.02 million on $501,000 of
revenues in fiscal year ended Sept. 30, 2013, compared with a net
loss of $19.7 million in fiscal year ended Sept 30, 2012.
Squar, Milner, Peterson, Miranda & Williamson, LLP, in their audit
report on the consolidated financial statements for the year ended
Sept. 30, 2013, expressed substantial doubt about the Company's
ability to continue as a going concern, citing that the Company
has negative working capital of $29.7 million and a stockholders'
deficit of $55.5 million.
As of Dec. 31, 2013, the Company had $3.81 million in total
assets, $10.22 million in total liabilities and a $6.41 million
total stockholders' deficit.
ISR GROUP: Changes Corporate Name to "Old Drone Co"
---------------------------------------------------
The Bankruptcy Court for the Western District of Tennessee has
authorized debtor ISR Group, Incorporated, to change the caption
of its case reflect its new corporate name, "Old Drone Co., Inc."
The Court's ruling followed a hearing set for June 26, 2014. The
Court entered its order on July 2.
By order dated June 17, 2014, the Court authorized the sale of
substantially all of the Debtor's assets, including the goodwill
associated with the name "ISR Group, Incorporated" to TCFI IG LLC.
The sale closed on June 18. Upon closing of the sale, the Debtor
has ceased operations and is focused on preparing a proposed plan
of liquidation to distribute the sale proceeds to creditors.
The Debtor has transferred the rights to the name "ISR Group,
Incorporated" to TCFI IG, LLC; hence, the Debtor must change its
corporate name. The Debtor said it has chosen "Old Drone Co.,
Inc." as its new corporate name and is taking steps to register
this new name with the appropriate governmental authorities.
All pleadings filed in the Debtor's case after the date of the
Order must contain a modified caption and identify the Debtor as
"Old Drone Co., Inc. f/k/a ISR Group, Incorporated."
Old Drone Co., Inc. f/k/a ISR Group, Incorporated is represented
by:
NELIGAN FOLEY LLP
Patrick J. Neligan, Esq.
Seymour Roberts, Jr., Esq.
John D. Gaither, Esq.
325 N. St. Paul, Suite 3600
Dallas, TX 75201
Telephone: 214-840-5300
Facsimile: 214-840-5301
E-mail: pneligan@neliganlaw.com
sroberts@neliganlaw.com
jgaither@neliganlaw.com
- and -
BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C.
E. Franklin Childress, Jr., Esq.
165 Madison Avenue, Suite 2000
Memphis, TN 38103
Telephone: 901-577-2147
Facsimile: 901-577-0845
E-mail: fchildress@bakerdonelson.com
ISR Group, Incorporated, filed a Chapter 11 bankruptcy petition
(Bankr. W.D. Tenn. Case No. 14-11077) on April 29, 2014. John
Stuecheli signed the petition as chief restructuring officer.
The Debtor estimated $10 million to $50 million in assets and
liabilities. Franklin Childress, Jr., Esq., at Baker Donelson
Bearman, serves as the Debtor's counsel. Judge Jimmy L Croom
presides over the case.
ISR Group Inc., a provider of services for military and civilian
users of drones, obtained Court permission to sell the business to
an affiliate of lender Trive Capital, mostly in exchange for $18.4
million in secured debt. Under a global settlement among the
company, the creditors' committee and the buyer, Trive is
providing $375,000 in cash exclusively for payment to creditors
with unsecured claims. The bankruptcy judge approved the
settlement on June 17, together with an agreement among
constituents supporting a Chapter 11 plan.
ISR GROUP: Mag. Judge's Report Adopted; "Sondesky" Suit Stayed
--------------------------------------------------------------
BARBIE SONDESKY and RONALD SONDESKY, on behalf of themselves and
all other similarly situated employees, Plaintiffs, v. ISR GROUP,
INC. and ALFRED LUMPKIN, Defendants, NO. 14-1077, (W.D. Tenn.) is
before the Court on the report and recommendation of the
magistrate judge, filed June 18, 2014, recommending that the May
29, 2014 motion of the Defendant, Alfred Lumpkin, seeking to stay
this action pending resolution of the Chapter 11 bankruptcy of
Defendant, ISR Group, Inc., be granted. According to the Court's
docket, no objections to the magistrate judge's report and
recommendation have been filed, and the time for objections has
now expired.
Accordingly, Chief District Judge J. Daniel Breen adopts the
magistrate judge's report and recommendation, and grants Mr.
Lumpkin's motion to stay proceedings.
The Court directed the parties to notify the Court within 30 days
following the resolution of Defendant's bankruptcy petition.
A copy of the Distric Court's July 17, 2014 is available at
http://is.gd/esuovDfrom Leagle.com.
Barbie Sondesky, Plaintiff, represented by Anne C. Martin --
amartin@bonelaw.com -- BONE MCALLESTER NORTON PLLC, Marshall T.
Cook -- mcook@bonelaw.com -- BONE MCALLESTER NORTON PLLC & Susan
R.High-McAuley -- shigh-mcauley@bonelaw.com -- BONE MCALLESTER
NORTON PLLC.
Ronald Sondesky, on behalf of themselves and all other similarly
situated employees, Plaintiff, represented by Anne C. Martin, BONE
MCALLESTER NORTON PLLC, Marshall T. Cook, BONE MCALLESTER NORTON
PLLC & Susan R. High-McAuley, BONE MCALLESTER NORTON PLLC.
Alfred Lumpkin, Defendant, represented by Angie C. Davis --
angiedavis@bakerdonelson.com -- BAKER DONELSON BEARMAN CALDWELL &
BERKOWITZ.
About ISR Group
ISR Group, Incorporated, filed a Chapter 11 bankruptcy petition
(Bankr. W.D. Tenn. Case No. 14-11077) on April 29, 2014. John
Stuecheli signed the petition as chief restructuring officer.
The Debtor estimated $10 million to $50 million in assets and
liabilities. Franklin Childress, Jr., Esq., at Baker Donelson
Bearman, serves as the Debtor's counsel. Judge Jimmy L Croom
presides over the case.
ISR Group Inc., a provider of services for military and civilian
users of drones, obtained Court permission to sell the business to
an affiliate of lender Trive Capital, mostly in exchange for $18.4
million in secured debt. Under a global settlement among the
company, the creditors' committee and the buyer, Trive is
providing $375,000 in cash exclusively for payment to creditors
with unsecured claims. The bankruptcy judge approved the
settlement on June 17, together with an agreement among
constituents supporting a Chapter 11 plan.
ISTAR FINANCIAL: Incurs $16.2 Million Net Loss in Second Quarter
----------------------------------------------------------------
iStar Financial Inc. reported a net loss allocable to common
shareholders of $16.20 million on $129.84 million of total
revenues for the three months ended June 30, 2014, as compared
with a net loss allocable to common shareholders of $26 million on
$99.91 million of total revenues for the same period in 2013.
For the six months ended June 30, 2014, the Company incurred a net
loss allocable to common shareholders of $42.77 million on $238.59
million of total revenues as compared with a net loss allocable to
common shareholders of $67.26 million on $194.02 million of total
revenues for the same period last year.
The Company's balance sheet at June 30, 2014, showed $5.47 billion
in total assets, $4.21 billion in total liabilities, $11.43
million in redeemable noncontrolling interests and $1.24 billion
in total equity.
A full-text copy of the press release is available for free at:
http://is.gd/E8CiVX
About iStar Financial
New York-based iStar Financial Inc. (NYSE: SFI) provides custom-
tailored investment capital to high-end private and corporate
owners of real estate, including senior and mezzanine real estate
debt, senior and mezzanine corporate capital, as well as corporate
net lease financing and equity. The Company, which is taxed as a
real estate investment trust, provides innovative and value added
financing solutions to its customers.
As of March 31, 2014, the Company had $5.48 billion in total
assets, $4.21 billion in total liabilities, $11.35 million in
redeemable noncontrolling interest and $1.26 billion in total
equity.
* * *
As reported by the TCR on June 26, 2014, Fitch Ratings has
affirmed the Issuer Default Rating (IDR) of iStar Financial Inc.
at 'B'. The 'B' IDR is driven by improvements in the company's
leverage, continued demonstrated access to the capital markets and
new sources of growth capital and material reductions in non-
performing loans (NPLs).
As reported by the TCR on Oct. 5, 2012, Standard & Poor's Ratings
Services affirmed its 'B+' long-term issuer credit rating on iStar
Financial.
In October 2012, Moody's Investors Service upgraded the corporate
family rating to B2 from B3. The current rating reflects the
REIT's success in extending near term debt maturities and
improving fundamentals in commercial real estate. The ratings on
the October 2012 senior secured credit facility takes into account
the asset coverage, the size and quality of the collateral pool,
and the term of facility.
INTERCEPT ENERGY: Reports $418-K Net Loss for Q1 Ending Mar. 31
---------------------------------------------------------------
Intercept Energy Services Inc. filed its quarterly report on Form
6-K, disclosing a net loss of $418,269 on $1.37 million of revenue
for the three months ended March 31, 2014, compared with a net
loss of $116,556 on $937,264 of revenue for the same period in
2013.
The Company's balance sheet at March 31, 2014, showed $5.27
million in total assets, $7.29 million in total liabilities, and a
stockholders' deficit of $2.02 million.
The Company incurred a net loss for the three months ended March
31, 2014 of $418,269 with a total accumulated deficit of
$18,816,778. There is doubt about the Company's ability to
continue as a going concern, according to the company's filing
with the U.S. Securities and Exchange Commission.
The Company said its continuation as a "going concern" is
dependent upon its ability to achieve profitable operations, upon
the continued financial support of its shareholders and upon its
ability to obtain additional financing or equity. While the
Company has been successful in securing financings in the past,
there is no assurance that it will be able to do so in the future,
the Company said.
A copy of the Form 10-Q is available at http://is.gd/uI5bcQ
Vancouver, Canada-based Intercept Energy Services Inc. is an
oilfield service company primarily focused on servicing oilfield
and gas companies, including their fracing operations, through its
wholly owned subsidiary, Intercept Rentals. The Company provides
an existing line of services and equipment to the oil & gas
industry with products that focus on efficiency and safety. The
Company's heating technology called the BIG HEAT, is a pending
propane powered Frac Water Heating System that provides a safer,
and more efficient heating method than the methods used by the oil
and gas companies and their fracking operations.
JBI INC: MNP LLP Expresses Going Concern Doubt
----------------------------------------------
JBI, Inc., filed with the U.S. Securities and Exchange Commission
an amendment to its annual report on Form 10-K for the year ended
Dec. 31, 2013. A copy of the document is available at
http://is.gd/rFIz9t
MNP LLP has expressed substantial doubt about the Company's
ability to continue as a going concern, citing that the Company
has experienced negative cash flows from operations since
inception and has accumulated a significant deficit.
The Company reported a net loss of $13.23 million on $693,125 of
revenues in 2013, compared to a net loss of $13.32 million on
$679,934 of revenues in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $9.29 million
in total assets, $5.44 million in total liabilities, and
stockholders' equity of $3.85 million.
Niagara Falls, N.Y.-based JBI, Inc., is clean energy company that
recycles waste plastic into liquid fuels. JBI's proprietary
Plastic2Oil technology can deliver economic and environmental
benefits by replacing refined fuels and diverting waste plastic
from landfills.
KOGETO INC: Friedman LLP Raises Going Concern Doubt
---------------------------------------------------
Kogeto Inc. reported a net loss of $19,229 on $nil of revenue in
2013, compared with a net loss of $149,097 on $nil of revenue in
2012.
Friedman LLP expressed substantial doubt about the Company's
ability to continue as a going concern, citing that the Company
has suffered recurring losses from operations.
The Company's balance sheet at Dec. 31, 2013, showed $1.73 million
in total assets, $199,638 in total liabilities, and stockholders'
equity of $1.53 million.
A copy of the Form 10-K is available at http://is.gd/q219dG
Kogeto, Inc., formerly Northeast Automotive Holdings, Inc., is a
wholesale automobile sales company exploiting the inefficiencies
and geographic differences in the used vehicle market by
purchasing high quality, late model used vehicles from dealers and
institutional sellers in Northeastern states and transporting the
vehicles for resale in the Pacific Northwest. It is involved only
in the wholesale purchase and sale of vehicles acting as a
middleman between various dealer and institutional sellers and
dealer purchasers. The Company generally sells vehicles only
through established third-party auctions, which act as a
marketplace for used vehicles.
LEVEL 3: Reports $51 Million Net Income in Second Quarter
---------------------------------------------------------
Level 3 Communications, Inc., reported net income of $51 million
on $1.62 billion of revenue for the three months ended June 30,
2014, as compared with a net loss of $24 million on $1.56 billion
of revenue for the same period in 2013.
The Company's balance sheet at June 30, 2014, showed $13.02
billion in total assets, $11.34 billion in total liabilities, and
$1.67 billion in stockholders' equity.
"Level 3 delivered another quarter of solid revenue and Adjusted
EBITDA growth," said Jeff Storey, president and CEO of Level 3.
"Our ability to help enterprise customers solve their evolving,
global telecommunications needs is a key differentiator in the
industry. During the second quarter, we also indicated our intent
to acquire tw telecom and the integration planning process is well
underway."
"We remain confident in our performance for the rest of year,"
said Sunit Patel, CFO of Level 3. "On a standalone basis, and
excluding the effects from the tw telecom acquisition, we are
reiterating our outlook for the full year 2014."
A full-text copy of the press release is available for free at:
http://is.gd/1ZeuLy
About Level 3 Communications
Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc., is a publicly traded international communications company
with one of the world's largest communications and Internet
backbones.
Level 3 incurred a net loss of $109 million in 2013, a net
loss of $422 million in 2012, and a net loss of $756 million in
2011.
* * *
In June 2014, Fitch Ratings upgraded the Issuer Default Rating
(IDR) assigned to Level 3 Communications, Inc. (LVLT) and its
wholly owned subsidiary Level 3 Financing, Inc. (Level 3
Financing) to 'B+' from 'B'.
"The upgrade of LVLT's ratings is supported by the continued
strengthening of the company's credit profile since the close of
the Global Crossing Limited (GLBC) acquisition, positive operating
momentum evidenced by expanding gross and EBITDA margins, and
ongoing revenue growth within the company's Core Network Services
(CNS) segment and its position to generate meaning FCF," Fitch
stated.
In June 2013, Standard & Poor's Ratings Services raised its
corporate credit rating on Level 3 to 'B' from 'B-'. "The upgrade
reflects improved debt leverage, initially from the acquisition of
the lower-leveraged Global Crossing in October 2011, and
subsequently from realization of the bulk of what the company
expects to eventually be $300 million of annual operating
synergies," said Standard & Poor's credit analyst Richard
Siderman.
LEVEL 3 ESCROW: Moody's Assigns '(P)B3' Rating on $600MM Notes
--------------------------------------------------------------
Moody's Investors Service assigned a provisional (P)B3 rating to
Level 3 Escrow II, Inc.'s (Escrow II) $600 million senior
unsecured 8-year notes and placed the notes on review for upgrade.
Escrow II is a wholly-owned indirect subsidiary of Level 3
Communications, Inc. (Level 3). Proceeds will be help fund the
acquisition of tw telecom (TWT; Ba3, ratings under review, down),
which was announced in June and is expected to close before year-
end. Level 3's B3 corporate family and probability of default
ratings (CFR and PDR, respectively), as well as all instrument
ratings (see listing below), remain unchanged and are on review
for upgrade.
At closing, it is expected that all of TWT's indebtedness will be
refinanced and that debt raised by Escrow II will be assumed, in
both cases, by Level 3 Financing, Inc. (Financing), which is also
an indirect wholly-owned subsidiary of Level 3. Since Escrow II's
unsecured notes will rank equally with Financing's unsecured
notes, Escrow II's notes are rated equivalently with senior
unsecured notes issued by Financing.
Per Moody's event risk policy, Level 3's ratings remain under
review for upgrade until all the facts are available and there is
certainty of the acquisition closing. Based on existing
information, Level 3's CFR is expected to be upgraded by one or
two notches and, depending on the proportions of secured and
unsecured debts, instrument ratings are expected to either remain
unchanged or be upgraded by one notch. Ratings for effectively
subordinated debts issued by Level 3 are expected to remain two
notches below the CFR irrespective of the CFR being upgraded one
notch or two. Pending normal regulatory and shareholder approvals,
the transaction is expected to close by year-end.
The $600 million Escrow II transaction is the first step in Level
3 accessing the market to fund both the cash component of its bid,
plus proceeds with which to refinance TWT's outstanding
indebtedness. With Level 3 having arranged a $3 billion back-stop
bridge facility, Moody's expects Level 3 to access the market
periodically prior to closing so that the bridge is not utilized.
In the interim before closing, the proceeds will be placed into an
escrow account with a third party bank and if the acquisition does
not close, Escrow II will repay the full principal.
The following summarizes the rating actions and Level 3's ratings:
Issuer: Level 3 Escrow II, Inc.
Outlook, Assigned Rating Under Review
Senior Unsecured Notes, Assigned (P) B3 (LGD4)
Issuer: Level 3 Communications, Inc.
Outlook, Unchanged at Rating Under Review
Corporate Family Rating, Unchanged at on Review for Possible
Upgrade, currently B3
Probability of Default Rating, Unchanged at on Review for
Possible Upgrade, currently B3-PD
Senior Unsecured Notes, Unchanged at on Review for Possible
Upgrade, currently Caa2 (LGD6, 92%)
Speculative Grade Liquidity Rating Unchanged at SGL-2 (good
liquidity)
Issuer: Level 3 Financing, Inc.
Outlook, Unchanged at Rating Under Review
Senior Secured Bank Credit Facility, Unchanged at on Review for
Possible Upgrade, currently Ba3 (LGD2)
Senior Unsecured Regular Bond/Debenture, Unchanged at on Review
for Possible Upgrade, currently B3 (LGD4)
Ratings Rationale
Since Moody's expect improved free cash generation and reduced
leverage, Level 3's ratings - which are anchored via its B3
corporate family rating (CFR) - are on review for upgrade
following the announcement that Level 3 will acquire TWT (pending
normal regulatory approvals, the transaction is expected to close
in the fourth quarter of 2014). Per Moody's event risk policy,
Level 3's ratings remain under review for upgrade until all the
facts are available and there is certainty of the acquisition
closing. Based on existing information, Level 3's CFR is expected
to be upgraded by one or two notches and, depending on the
proportions of secured and unsecured debts, instrument ratings are
expected to either remain unchanged or be upgraded by one notch.
Ratings for effectively subordinated debts issued by Level 3 are
expected to remain two notches below the CFR irrespective of the
CFR being upgraded one notch or two. Pending normal regulatory and
shareholder approvals, the transaction is expected to close by
year-end.
Absent the business combination, Level 3's B3 CFR is based on the
company's limited ability to generate free cash flow and the lack
of visibility with respect to current and future activity levels.
Level 3 has a reasonable business proposition as a facilities-
based provider of optical, Internet protocol telecommunications
services for business enterprises, however, owing to excess
capacity, exposure to legacy telecommunications services and
difficult foreign competitive dynamics, Moody's expect relatively
weak consolidated revenue and margin growth post-Global Crossing
Limited synergies. With no quantity or price metrics disclosed by
the company, visibility of current and future activity is very
limited, a credit negative.
Corporate Profile - Level 3 Communications Inc.
Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc. (Level 3) is a publicly traded international communications
company with one of the world's largest long-haul communications
and optical Internet backbones. Level 3's annual revenue is
approximately $6.4 billion and annual (Moody's adjusted) EBITDA is
$1.9 billion. Approximately 73% of revenue is generated in North
America, 15% in Europe, and 12% in Latin America.
Corporate Profile - tw telecom
With head offices in Littleton, Colorado, tw telecom inc. is a
competitive communications provider. The company provides managed
network services, Internet access, virtual private network, voice
and data services, and network security to enterprise
organizations and communications services companies throughout the
US. TWTC's footprint extends to 75 of the top 100 markets in the
US.
The principal methodology used in this rating was the Global
Communications Infrastructure Rating Methodology published in June
2011. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
LV HARMON: Files List of Largest Unsecured Creditors
----------------------------------------------------
LV Harmon, LLC filed with the U.S. Bankruptcy Court for the
District of Nevada a list of its largest unsecured creditors
disclosing:
Name of Creditor Nature of Claim Amount of Claim
---------------- --------------- ---------------
Wilmington Trust, National Term Loan $319,000,000
Association
Attn: Jeffrey Rose
50 South Sixth Street
Suite 1290
Minneapolis, MN 55402
Credit Suisse Term Loan $205,000,000
Eleven Madison Avenue
New York, NY 10010-3629
Edge Las Vegas Development Promissory Note $672,662
LLC
c/o Edge Group LLC
Attn: Reagan Silber, manager
200 Crescent Court Suite 1310
Dallas, TX 75201
Edge Star Partners LLC Promissory Note $672,662
c/o Edge Group LLC
Attn: Reagan Silber, manager
200 Crescent Court Suite 1310
Dallas, TX 75201
The Debtors did not file a list of their largest unsecured
creditors when they filed the petitions.
About LV Harmon LLC
LV Harmon LLC and four of its affiliates filed separate Chapter 11
bankruptcy petitions (Bankr. D. Nev. Case Nos. 14-14360 to
14-14364) on June 25, 2014. The petitions were signed by
Massimiliano Ferruzzi as authorized signatory. The Debtors
estimated assets of at least $100 million and liabilities of
between $500 million to $1 billion. Gordon Silver serves as the
Debtors' counsel. Judge August B. Landis presides over the case.
LV HARMON: Files Schedules of Assets and Liabilities
----------------------------------------------------
LV Harmon LLC filed with the U.S. Bankruptcy Court for the
District of Nevada its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $4,084,908
B. Personal Property $10,283
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $524,000,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-Priority
Claims $1,345,325
----------- -----------
Total $4,095,191 $525,345,325
A copy of the schedules is available for free at:
http://bankrupt.com/misc/LVHARMON_33_SAL.pdf
The Debtor is represented by:
Gerald M. Gordon, Esq.
Candace C. Clark, Esq.
GORDON SILVER
3960 Howard Hughes Pkwy., 9th Floor
Las Vegas, NV 89169
E-mails: ggordon@gordonsilver.com
cclark@gordonsilver.com
About LV Harmon LLC
LV Harmon LLC and four of its affiliates filed separate Chapter 11
bankruptcy petitions (Bankr. D. Nev. Case Nos. 14-14360 to
14-14364) on June 25, 2014. The petitions were signed by
Massimiliano Ferruzzi as authorized signatory. The Debtors
estimated assets of at least $100 million and liabilities of
between $500 million to $1 billion. Gordon Silver serves as the
Debtors' counsel. Judge August B. Landis presides over the case.
MAPE USA: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Mape USA, Inc.
315 Garfield Street South
Cambridge, MN 55008
Case No.: 14-43123
Chapter 11 Petition Date: July 30, 2014
Court: United States Bankruptcy Court
District of Minnesota (Minneapolis)
Judge: Hon. Michael E Ridgway
Debtor's Counsel: Michael L Meyer, Esq.
RAVICH MEYER KIRKMAN MCGRATH NAUMAN & TANSEY PA
4545 IDS Center
80 South Eighth St.
Mineapolis, MN 55402
Tel: 612-317-4745
Email: mlmeyer@ravichmeyer.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Giuseppe Pederzini, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/mnb14-43123.pdf
MEDIASHIFT: Hein & Associates Raises Going Concern Doubt
--------------------------------------------------------
MediaShift Inc. reported a net loss of $22.51 million on $6.95
million of revenue in 2013, compared with a net loss of $5.7
million on $12,780 of revenue in 2012.
Hein & Associates LLP expressed substantial doubt about the
Company's ability to continue as a going concern, citing that the
Company has suffered recurring losses from operations and has a
net capital deficiency.
The Company's balance sheet at Dec. 31, 2013, showed $2.99 million
in total assets, $8.46 million in total liabilities, and a
stockholders' deficit of $5.47 million.
A copy of the Form 10-K filed with the U.S. Securities and
Exchange Commission is available at http://is.gd/3v5v13
Newport Beach, California-based MediaShift, Inc. provides digital
technology and related solutions to service solutions to Wi-Fi and
private network providers, through its subsidiary Ad-Vantage
Networks, Inc. The Company transacts with companies in Canada,
New Zealand, England, Europe, and Australia.
N&B INDUSTRIES: Moody's Assigns B2 CFR & Rates $90MM Debt Caa1
--------------------------------------------------------------
Moody's Investors Service assigned first time ratings to N&B
Industries, Inc. ("N&B") and its subsidiary Nielsen & Bainbridge,
LLC. The ratings are being assigned in connection with the
proposed acquisition of The Home Decor Companies ("THDC").
The following ratings were assigned:
N&B Industries, Inc.
Corporate Family Rating of B2
Probability of Default rating of B2-PD
Nielsen & Bainbridge, L.L.C.
$30 million senior secured first lien revolver expiring 2019 at
B1 (LGD 3);
$200 million senior secured first lien term loan due 2020 at B1
(LGD 3);
$90 million senior secured second lien term loan due 2021 at
Caa1 (LGD 5)
The outlook is stable.
Ratings Rationale
The B2 Corporate Family Rating reflects the company's small scale,
high leverage, niche product categories and material execution
risk associated with a large acquisition. Moody's expects leverage
to decline only modestly, with earnings growth in the low single
digits and the modest level of free cash flow being used for
acquisitions instead of debt repayment. The rating also reflects
the company's diverse distribution channels - spanning mass,
discount, specialty and home improvement stores -- with
longstanding relationships with large retailers such as Wal-Mart,
Target, and Michael's Stores. While the acquisition of THDC helps
diversify the company's product offering beyond custom and ready-
made frames to include lighting, accent furniture, and other home
accessories, the product categories are still niche and vulnerable
to changes in consumer tastes and discretionary spending habits.
The rating outlook is stable and reflects Moody's expectation of
low-single-digit earnings growth and a good liquidity profile. The
stable outlook also reflects Moody's expectation that the company
will successfully integrate THDC without disruption to operating
performance.
The ratings could be downgraded if operating performance
meaningfully deteriorates for any reason, including supply chain
or manufacturing disruptions, or if liquidity weakens. Credit
metrics driving a potential downgrade include debt to EBITDA
approaching 6 times or sustained negative free cash flow.
The ratings could be upgraded if the company meaningfully
increases its scale, diversifies its product offerings, and
strengthens credit metrics such that debt to EBITDA is below 4.5
times for a sustained period.
N&B is an Austin, Texas-based designer, manufacturer and provider
of custom framing components and ready-made frames and home Decor
products to mass, home improvement, discount and specialty
retailers in North America and Europe. In 2014 the company signed
a definitive agreement to acquire The Home Decor Companies
("THDC"). THDC provides a broad range of home Decor products and
services to mass, home improvement, discount and specialty
retailers in North America. Pro forma for the acquisition, the
company's operating segments will include custom framing, ready-
made wall art, and home Decor, including lamps, accent furniture,
and soft goods such as pillows and throws. N&B is a portfolio
company of Kohlberg & Company, which acquired it in 2006. The
combined company had pro forma revenues of about $425 million for
the twelve months ended June 30, 2014.
The principal methodology used in this rating was the Global
Consumer Durables published in October 2010. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
N&B INDUSTRIES: S&P Assigns 'B' CCR & Rates $200MM Loan 'B+'
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Austin, Texas-based N&B Industries Inc. The
outlook is stable.
At the same time, S&P assigned its 'B+' issue-level rating to
N&B's proposed $200 million first-lien term loan due 2020. The
recovery rating is '2', reflecting S&P's expectations for
substantial (70% to 90%) recovery in the event of a payment
default. S&P also assigned its 'CCC+' issue-level rating to N&B's
proposed $90 million second-lien term loan due 2021. The recovery
rating is '6', reflecting S&P's expectations for negligible (0% to
10%) recovery in the event of a payment default. Nielsen &
Bainbridge LLC is the issuer of the first- and second-lien
facilities. The company will use the proceeds from these
facilities to acquire The Home Decor Companies and to refinance
N&B's existing credit facilities.
The ratings on N&B reflect Standard & Poor's view that the
company's financial risk profile is "highly leveraged" and that
the business risk profile is "vulnerable." N&B's financial risk
profile reflects its weaker credit metrics following the Home
Decor acquisition and financial sponsor ownership. The company's
business risk reflects its narrow business focus within a niche
and fragmented market, some channel concentration within the
specialty/independent stores segment, and the discretionary nature
of its products. However, S&P recognizes the proposed acquisition
allows for some growth internationally and in adjacent product
lines, which offsets some of these risks.
NEW BREED: S&P Puts 'B' CCR on CreditWatch Developing
-----------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on New Breed
Holding Co., including the 'B' corporate credit rating, on
CreditWatch with developing implications.
"The CreditWatch placement follows XPO Logistics Inc.'s (not
rated) announcement that it plans to buy New Breed for $615
million," said Standard & Poor's credit analyst Lisa Jenkins. "We
expect that all of New Breed's outstanding debt will be repaid as
part of the transaction." The transaction is subject to the
customary regulatory approvals, and the companies expect that it
will close during third-quarter 2014.
S&P plans to resolve the CreditWatch placement after the
transaction closes.
NEWLEAD HOLDINGS: Announces Delivery of Handysize Vessel
--------------------------------------------------------
NewLead Holdings Ltd. announced that the "Newlead Venetico," a
2012-built dry-bulk eco-type Handysize vessel of 32,500 dwt, was
delivered to NewLead's fleet on July 25, 2014.
The Newlead Venetico is trading on the spot market and is expected
to generate approximately $1.7 million EBITDA per year assuming
$1.73 million yearly OPEX.
The Newlead Venetico is the second of the two eco-type vessels,
the Company agreed to acquire in March 2014 for a total
acquisition price of $37.0 million, $18.5 million each, that have
each now been delivered to NewLead's fleet. The first vessel, the
Newlead Albion, was delivered to NewLead's fleet on May 19, 2014,
as previously announced.
The Company financed the Newlead Venetico through a combination of
cash and external financing. Specifically, in July 2014, the
Company paid a deposit of $925,000 in cash, and the remaining
balance was paid through a combination of cash, $3.7 million paid
by NewLead, and 75% financing, $13.875 million, in a transaction
arranged by Pareto Project Finance AS and supported by
institutional investors.
Mr. Michael Zolotas, Chairman and chief executive officer of
NewLead, stated, "We are pleased to announce the delivery of the
NewLead Venetico as scheduled. The Company's fleet is being
optimized with fuel efficient vessels with an anticipated longer
lifetime available for employment. The average fleet age is at
its lowest level since the successful completion of the Company's
restructuring in 2013. NewLead expects to take delivery of a
third eco-type, Handysize dry-bulk vessel, 2013 built by the end
of August 2014."
Michael Zolotas, added, "We are transforming the Company while
delivering on our commitments."
About NewLead Holdings Ltd.
Based in Athina, Greece, NewLead Holdings Ltd. --
http://www.newleadholdings.com/-- is an international, vertically
integrated shipping company that owns and manages product tankers
and dry bulk vessels. NewLead currently controls 22 vessels,
including six double-hull product tankers and 16 dry bulk vessels
of which two are newbuildings. NewLead's common shares are traded
under the symbol "NEWL" on the NASDAQ Global Select Market.
NewLead Holdings reported a net loss of $158.22 million on $7.34
million of operating revenues for the year ended Dec. 31, 2013, as
compared with a net loss of $403.92 million on $8.92 million of
operating revenues in 2012. The Company's balance sheet at
Dec. 31, 2013, showed $151.33 million in total assets, $292.68
million in total liabilities and a $141.34 million total
shareholders' deficit.
EisnerAmper LLP, in New York, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2013. The independent auditors noted that
the Company has incurred a net loss, negative operating cash
flows, a working capital deficiency, and shareholders' deficiency
and has defaulted under its credit facility agreements. Those
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
NNN PARKWAY 400 26: Hearing on Dismissal Bid Continued to Aug. 7
----------------------------------------------------------------
The Bankruptcy Court for the Central District of California, Santa
Ana Division, ordered the continuation of the hearing on the
motion to dismiss or convert to Chapter 7 the bankruptcy cases of
NNN Parkway 400 26, LLC, and its debtor-affiliates.
The Debtors opposed the motion, which was filed by the Office of
the United States Trustee; and asked the Court to continue the
hearing on the U.S. Trustee's Motion.
Bankruptcy Judge Theodor C. Albert initially held a hearing on the
U.S. Trustee's Motion on July 11. At the Debtors' behest, Judge
Albert agreed to continue the hearing to August 7, 2014, at 2:00
p.m. The U.S. Trustee's request will be heard concurrently with
the Debtors' motion for summary judgment in a pending adversary
proceeding entitled WBCMT 2007-C31 Amberpark Office Limited
Partnership v. NNN Parkway 400 2 et. al., Adv. No. 8:14-ap-01054-
TA.
In the event that the hearing on the summary judgment motion is
continued to some other date and time, Judge Albert said the
hearing on the U.S. Trustee's Motion will also be continued to
that same date and time, but the hearing on the Motion shall in no
event be heard later than August 31, 2014.
On August 7, the Court is scheduled to hold a hearing on the
Debtors' motion for summary judgment regarding the relative rights
of the Debtors' estates and WBMCT 2007-C31 Amberpark Office
Limited Partnership -- LNR -- in approximately $898,000 in funds
being held in the client trust account of counsel for the Debtors.
Evan D. Smiley, Esq., of Weiland, Golden, Smiley, Wang Ekvall &
Strok, LLP, counsel to the Debtors, said that if the Court grants
the summary judgment motion, then the Debtors will use those funds
to pay all administrative claims, including the U.S. Trustee's
fees, in full, and to make a substantial distribution to unsecured
creditors. The Debtors would then either dismiss their bankruptcy
cases or propose a plan of liquidation.
In the meantime, Mr. Smiley said, the Debtors have tried to obtain
the consent of LNR to use the funds on hand to bring the quarterly
fees owing to the U.S. Trustee current, but LNR has refused to
consent.
The Debtors believe that the funds are unencumbered. However,
given the aggressive tactics of LNR thus far, the Debtors said
they are unwilling to release such funds without a Court order. It
would be grossly unfair for LNR to obtain the dismissal or
conversion of these cases if it is later determined by the Court
that LNR has no right to the funds.
The Debtors said they are in the process of filing their monthly
operating reports for April and May 2014 and will have those on
file prior to the hearing on the U.S. Trustee's Motion.
Weidmayer + Co LLC filed a joinder to the Debtors' opposition to
the U.S. Trustee's Motion. Weidmayer is the former property
manager for the Debtors.
Weidmayer + Co, LLC is represented by:
Jams R. Felton, Esq.
REENBERG & BASS LLP
16000 Ventura Blvd., Suit 1000
Encino, CA 91436
Tel: 818-382-6200
E-mail: jfelton@greenbass.com
About NNN Parkway 400 26 LLC
NNN Parkway 400 26, LLC, filed a bare-bones Chapter 11 petition
(Bankr. C.D. Calif. Case No. 12-24593) in Santa Ana, California,
on Dec. 31, 2012. Dana Point, California-based NNN Parkway
estimated assets and debts of $10 million to $50 million. The
Hon. Judge Theodor Albert presides over the case. The Law
Office of Christine E. Baur, and David A. Lee, Esq., at Weiland,
Golden, Smiley, Wang Ekvall & Strok, LLP, represent the Debtor.
Pre-petition, the Debtors retained HighPoint Management Solutions,
LLC, a bankruptcy consulting company, as a manager of the Debtors,
and HighPoint's President, Mr. Mubeen Aliniazee, as the Debtors'
Restructuring Officer, to assist the Debtors in their compliance
with the Chapter 11 bankruptcy process.
The Debtors' primary asset is a commercial real property commonly
known as Parkway 400, which is a two-building office campus
totaling approximately 193,281 square feet located at 11720 Amber
Park Drive and 11800 Amber Park Drive, Alpharetta, Georgia. The
Debtors hold a concurrent ownership interest in the Property with
other tenant-in-common investors and the sponsor, NNN Parkway 400,
LLC.
In January 2014, Judge Albert issued an Amended Memorandum of
Decision denying confirmation of the Chapter 11 plan of NNN
Parkway 400 26 LLC and its 30 debtor affiliates, and granting the
lender relief from the automatic stay. A copy of Judge Albert's
Jan. 28, 2014 Amended Memorandum of Decision is available at
http://is.gd/36UOTofrom Leagle.com.
NVA MERGER: S&P Assigns 'B' CCR on Acquisition by Ares Management
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B' corporate credit
rating to NVA Merger Sub Inc. following Ares Management's
acquisition of the company. The outlook is stable.
At the same time, S&P assigned a 'B' issue-level rating to the
company's $330 million first-lien term loan and $70 million
revolver. The recovery rating is a '3' indicating S&P's
expectation of a meaningful (50%-70%) recovery in the event of
payment default.
S&P also assigned a 'CCC+' issue-level rating to the company's
$160 million second-lien term loan. The recovery rating is a '6'
indicating a negligible (0%-10%) recovery in the event of payment
default.
"The ratings on NVA partly reflect its narrow operating focus in
the highly fragmented animal health veterinary services market, a
market we believe is susceptible to economic cycles given the
discretionary nature of companion pet spending," said Standard &
Poor's credit analyst Tahira Wright. "Offsetting these risks are
the favorable industry trends that include lack of dependency on
third-party reimbursement, market shift to more intense medical
procedures and services, and large opportunities to acquire and
gain market share in the veterinary services space."
The ratings also reflect the company's high leverage. Standard &
Poor's expects the company to operate with leverage above 6x
through fiscal year 2015 and generate moderate free operating cash
flow. S&P expects its sponsor, Ares, to pursue an acquisitive
growth strategy not meaningfully reduce debt with free operating
cash flow.
S&P's stable rating outlook on NVA reflects its expectation that
the company will continue to operate with a highly leveraged
balance sheet through 2015 and beyond, despite S&P's expectation
of double-digit revenue growth and steady EBITDA margins.
PALM DRIVE HEALTH: UST Appoints Two Members to Employee Panel
-------------------------------------------------------------
Tracy Hope Davis, the U.S. Trustee for Region 17, appointed two
persons to serve in the Official Committee of Employees in the
Chapter 9 bankruptcy case of Palm Drive Health Care District.
The Committee consists of:
1. Innovasis
Attn: Garth Felix
P.O. Box 212
Springville, UT 84663
2. Spectron Corporation
c/o Ernie Hartman
5416 S. Yale Ave., Suite 650
Tulsa, OK 74135
The Debtor objected to the motion for appointment of an Official
Committee of Employees, which was brought by former employee Jason
Somerby. The Debtor said that the Court should let the normal
process run its course. The U.S. Trustee must be allowed to
exercise its statutory discretion to appoint a single, general
committee of unsecured creditors.
Creditor Marin General Hospital joined the Debtor in opposing the
motion. MGH concurs that a separate committee is not warranted
and would not likely facilitate effective administration of the
case.
Mr. Somerby argued that an employees committee is necessary given
the facts of the case, and appropriate given the claims of the
hospital employees. The employee claims, he argues, represent a
significant portion of the claims in the case which may conflict
with other claims in the case. The employee claims will be
affected by any plan of reorganization.
The court held a hearing on the matter for July 18.
MGH is represented by:
David I. Katzen, Esq.
David A. Schuricht, Esq.
KATZEN & SCHURICHT
1990 N. California Blvd., Suite 600
Walnut Creek, CA 94596-3744
Tel: (925) 831-8254 or 279-3080
Fax: (877) 779-3724;
E-mail: ksf@ksfirm.com
About Palm Drive Health Care District
Palm Drive Health Care District, owner and operator of the Palm
Drive Hospital, in Sebastopol, California, filed a petition under
Chapter 9 of the Bankruptcy Code (Bankr. N.D. Cal. Case No.
14-10510) amid a "sustained reduction in patient volume and
revenue." In its Chapter 9 petition filed April 7, 2014, in Santa
Rosa, California, the Debtor estimated $10 million to $50 million
in assets and liabilities. The Debtor is represented by Michael
A. Sweet, Esq., at Fox Rothschild LLP, as counsel.
PCI PHARMA: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to PCI Pharma Midco UK Ltd. (parent of Packaging
Coordinators). The outlook is stable.
At the same time, S&P assigned U.S.-based health care specialty
packaging and clinical trial outsourced services provider
Packaging Coordinators Inc.'s proposed $390 million first-lien
secured credit facility a 'B' issue-level rating (at the same
level as the corporate credit rating), with a recovery rating of
'3'. The '3' recovery rating indicates S&P's expectation for
meaningful (50%-70%) recovery for secured lenders in the event of
a payment default. The facility consists of a $50 million
revolving credit facility due 2019 (undrawn at closing) and a $340
million term loan due 2021.
Additionally, S&P assigned the company's proposed $120 million
second-lien secured credit facilities a 'CCC+' issue-level rating
(two notches below the corporate credit rating), with a recovery
rating of '6', indicating S&P's expectation for negligible (0%-
10%) recovery for secured lenders in the event of a payment
default.
The company will use the proceeds to repay existing debt and to
acquire Penn Pharma Group Ltd., a U.K.-based outsourced
pharmaceutical development and manufacturing services provider.
"The 'B' corporate credit rating reflects the company's very high
leverage at inception, modest discretionary cash flow, limited
operating history as a standalone entity, and narrow focus as a
provider in the competitive pharmaceutical packaging and
manufacturing outsourced services industry," said credit analyst
Tulip Lim. "Packaging Coordinators Inc. was carved out of
Catalent Pharma Solutions Inc.'s packaging business in June 2012
and the company acquired AndersonBrecon, a packaging services
provider, in May 2013, nearly tripling its revenue base. The
company plans on acquiring Penn Pharma Group Ltd., a U.K.-based
pharmaceutical development and manufacturing services provider in
the contemplated transaction."
The outlook is stable, reflecting S&P's expectation that revenue
will grow and that margins will be stable or improve modestly. It
also reflects S&P's expectation that the company will generate
moderately positive discretionary cash flow.
Upside Scenario
An upgrade is unlikely, given S&P's expectation that financial
policy will remain aggressive under sponsor-ownership. S&P could
consider raising the rating if the company convincingly
establishes a financial policy of maintaining leverage below 5x.
This would require the company to reduce debt by more than $50
million.
Downside Scenario
S&P could lower the rating if competition intensifies or the
company's customers increasingly begin to insource their packaging
needs. S&P could consider a downgrade if organic revenue were to
decline at a mid-single-digit rate or more, margins decline by 200
basis points or more, and discretionary cash flow generation
becomes minimal.
PENN ENGINEERING: Moody's Assigns 'B1' Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service assigned Penn Engineering &
Manufacturing Corp a B1 Corporate Family Rating ("CFR") and B2-PD
Probability of Default Rating ("PDR"). Concurrently, Moody's
assigned a B1 rating to the company's proposed $75 million senior
secured first lien revolving credit facility and $570 million
senior secured first lien term loan facility. The ratings outlook
is stable.
Proceeds from the financing are expected to fund an acquisition of
a fastener manufacturer that has not been publicly identified by
Penn and refinance the company's existing debt. Pro forma revenue
for the combined entity is anticipated to be approximately $400
million.
Ratings Rationale
The B1 CFR reflects the company's initially high debt balance
versus its revenue base and meaningful leverage of approximately
4.4 times pro forma for the acquisition, its relatively small
scale, end market segment concentration and significant
cyclicality. Moody's anticipates that the company will delever its
balance sheet with its good cash flows. The rating acknowledges
integration risks but these are not anticipated to be problematic
given the low level of overlap in its customer segments. Moody's
believe the B1 CFR will be supported on a go forward basis by the
company's ability to generate above average margins due to their
specialty fasteners being high value added to its customers. The
acquisition will expand Penn's global geographic footprint, and
expand its product breadth in the fasteners business.
Additionally, the acquisition will create cross selling
opportunities between the acquisition and Penn traditional
operations. In particular, is considered well positioned in the
fastener market serving the luxury automotive market while Penn
serves the automotive segments but is mostly concentrated in other
areas including network infrastructure, and consumer electronics.
Moody's consider the trends in consumer electronics to be an
opportunity given trends towards smaller electronic equipment that
requires Penn's smaller and stronger fasteners technology.
Ratings assigned to Penn:
Corporate Family Rating, B1;
Probability of Default Rating, B2-PD;
Proposed $75 million senior secured revolver due 2019, B1
(LGD-3);
Proposed $570 million senior secured first lien term loan
(aggregate of $220 million US tranche and $350 million European
tranche) due 2021, B1 (LGD-3).
The ratings outlook is stable.
The assigned ratings are subject to Moody's review of the final
terms and conditions of the proposed transaction.
Under the proposed credit facilities, Penn Engineering &
Manufacturing Corp. will be the U.S. borrower, the target will be
a foreign borrower, and Penn Engineering Fastening Technologies
(Europe) Ltd. will be the Irish borrower. The first lien revolver
and term loan are rated B1, equal to the Corporate Family Rating
as a result of its all bank debt structure that also results in
the B1 CFR and B2-PD ratings split. The ratings consider the
extended multi-country guarantee structure.
Penn's liquidity profile is good supported by expectations of
continued positive free cash flow generation, strong cash
balances, and ample availability under its proposed $75 million
revolving credit facility. Moody's believe this facility will be
more than sufficient to cover the company's expected cash needs
over the next 12 to 18 months. While the proposed term loan does
not contain financial covenants, the revolver is expected to
contain a springing Total Net Leverage Ratio test of 5.5 times
should revolver utilization exceed 25% of the facility size, or
$19 million. In addition has meaningful unsecured foreign assets
and some of these could be sold as alternate sources of liquidity
in the event of a downturn.
The stable outlook is supported by Penn's good liquidity profile
and expectations that strength in the end-markets the company
serves should continue to be supportive of its B1 credit profile
over the intermediate term. The outlook could come under pressure
if margins deteriorate or if the balance sheet were to weaken.
The ratings could be pressured downward if the company's liquidity
position deteriorates, or if expected debt / EBITDA was expected
to exceed 4.5 times or EBITA / interest were to fall below 2.5
times on a sustained basis. A weakening of the company's margins
could also result in ratings pressure.
The ratings are unlikely to be upgraded over the short term.
However, positive ratings traction could develop if the company
significantly improves its scale without a material reduction in
its EBITDA margins and/or it is expected that total debt / EBITDA
were to decrease below 3.25 times and were expected to improve
further. The ratings could also benefit were EBITA / interest to
exceed 5.5 times on a sustained basis while maintaining a good
liquidity profile.
The principal methodology used in this rating was the Global Heavy
Manufacturing Rating Methodology published in November 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Penn Engineering & Manufacturing Corp., headquartered in Danboro,
Pennsylvania, is a manufacturer of high performance, specialty
fasteners used in a diversified range of industries. Pro forma for
the acquisition the company generated approximately $400 million
in sales during the last twelve months ended June 30, 2014. Penn
has been majority owned by Tinicum Capital Partners II, LP since
2005.
PUERTO RICO: Lenders to Utility Extend Payment Deadline
-------------------------------------------------------
Michael Corkery, writing for The New York Times' DealBook,
reported that lenders to Puerto Rico Electric Power Authority
(PREPA) are giving the beleaguered utility another two weeks
before it has to make past-due payments on its lines of credit --
a roughly $250 million line from Citigroup and a $550 million line
from a syndicate of banks.
The agreement allows Prepa to delay until Aug. 14 certain payments
that were due last month, the report related. According to the
report, if Citigroup and the other lenders force Prepa to pay
immediately, it could trigger the authority?s restructuring and
increase the likelihood of losses for the banks.
PURE BIOSCIENCE: Reports $2.05-Mil. Net Loss in Q3 Ending Apr. 30
-----------------------------------------------------------------
Pure Bioscience, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, reporting a net loss
of $2.05 million on $261,000 of net product sales for the three
months ended Apr. 30, 2014, compared to a net loss of $1.53
million on $258,000 of net product sales for the same period last
year.
The Company's balance sheet at Apr. 30, 2014, showed $2.45 million
in total assets, $1.16 million in total liabilities, and
stockholders' equity of $1.3 million.
Since its inception, the Company has financed its operations
primarily through public and private offerings of securities, debt
financing, and revenue from product sales and license agreements.
The Company has a history of recurring losses, and as of Apr. 30,
2014, has incurred a cumulative net loss of $78.55 million.
The Company added that it does not have, and may never have,
significant cash inflows from product sales or from other sources
of revenue to fund its operations. As of Oct. 31, 2013, the
Company had $416,000 in cash and cash equivalents, and
$1.16 million of current liabilities, including $529,000 in
accounts payable.
A copy of the Form 10-Q is available at:
http://is.gd/NyEPyQ
About Pure Bioscience
El Cajon, Calif.-based Pure Bioscience, Inc., manufactures and
sells silver dihydrogen SDC-based disinfecting and sanitizing
products, which are registered by the Environmental Protection
Agency, or EPA, to distributors and end users. The Company also
manufactures and sells various SDC-based formulations to
manufacturers for use as a raw material in the production of
personal care and other products. Silver dihydrogen citrate, or
SDC, is a broad-spectrum, non-toxic antimicrobial.
In its audit report for the fiscal 2013 results, Mayer Hoffman
McCann P.C. expressed substantial doubt about the Company's
ability to continue as a going concern, citing that the Company
has experienced recurring losses, is dependent on future financing
to fund its planned expenditures and had an accumulated deficit of
approximately $70,171,000 at July 31, 2013.
The Company reported a net loss of $7,671,000 on $820,000 of net
product sales in 2013, compared with a net loss of $8,890,000 in
2012.
PHI GROUP: 3rd Quarter 2012 Report Shows $178K Net Loss
-------------------------------------------------------
PHI Group Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report for the period ended Sept. 30,
2012. A copy of the Form 10-Q, as amended, is available for free
at http://is.gd/TrVmO2
The late-filed Form 10-Q disclosed a net loss of $178,080 on $nil
of consulting and advisory fee income for the three months ended
Sept. 30, 2012, as compared with a net loss of $128,578 on
$175,000 of consulting and advisory fee income for the same period
in 2011.
As of Sept. 30, 2012, the Company had $1.15 million in total
assets, $10.38 million in total liabilities, all current, and a
$9.23 million total stockholders' deficit.
About PHI Group
Huntington Beach, Cal.-based PHI Group, Inc., through its wholly
owned and majority-owned subsidiaries, is engaged in a number of
business activities, the scope of which includes consulting and
merger and acquisition advisory services, real estate and
hospitality development, mining, natural resources, energy, and
investing in special situations. The Company invests in various
business opportunities within its chosen scope of business,
provides financial consultancy and M&A advisory services to U.S.
and foreign companies, and acquires selective target companies
under special situations to create additional long-term value for
its shareholders.
QUICKSILVER RESOURCES: Plans to Offer $1.7BB Worth of Securities
----------------------------------------------------------------
Quicksilver Resources Inc. disclosed in a regulatory filing with
the U.S. Securities and Exchange Commission that it may offer from
time to time common stock, preferred stock, depositary shares,
debt securities, guarantees of debt securities, warrants, purchase
contracts or units with a proposed maximum aggregate offering
price of $1.75 billion. The Company may offer the securities
separately or together, in separate series or classes and in
amounts, at prices and on terms described in one or more
offerings.
The Company's common stock is listed on the New York Stock
Exchange under the trading symbol "KWK."
The Company said it will provide the specific terms of the
securities in supplements to this prospectus.
A full-text copy of the Form S-3 registration statement is
available for free at http://is.gd/OxupVH
About Quicksilver
Quicksilver Resources Inc. is an exploration and production
company engaged in the development and production of long-lived
natural gas and oil properties onshore North America. Based in
Fort Worth, Texas, the company is widely recognized as a leader in
the development and production from unconventional reservoirs
including shale gas, and coal bed methane. Following more than 30
years of operating as a private company, Quicksilver became public
in 1999 and is listed on the New York Stock Exchange under the
ticker symbol KWK. The company has U.S. offices in Fort Worth,
Texas; Glen Rose, Texas; Steamboat Springs, Colorado; Craig,
Colorado and Cut Bank, Montana. The Company's Canadian
subsidiary, Quicksilver Resources Canada Inc., is headquartered in
Calgary, Alberta.
Quicksilver Resources posted net income of $161.61 million in 2013
following a net loss of $2.35 billion in 2012. The Company's
balance sheet at March 31, 2014, showed $1.25 billion in total
assets, $2.33 billion in total liabilities and a $1.07 billion
total stockholders' deficit.
* * *
As reported by the TCR on June 17, 2013, Moody's Investors Service
downgraded Quicksilver Resources Inc.'s Corporate Family Rating to
Caa1 from B3. "This rating action is reflective of Quicksilver's
revised recapitalization plan," stated Michael Somogyi, Moody's
Vice President and Senior Analyst. "Quicksilver's inability to
complete its recapitalization plan as proposed elevates near-term
refinancing risk given its weak operating profile and raises
concerns over the sustainability of the company's capital
structure."
In the June 27, 2013, edition of the TCR, Standard & Poor's
Ratings Services said it lowered its corporate credit rating on
Fort Worth, Texas-based Quicksilver Resources Inc. to 'CCC+' from
'B-'. "We lowered our corporate credit rating on Quicksilver
Resources because we do not believe the company will be able to
remedy its unsustainable leverage," said Standard & Poor's credit
analyst Carin Dehne-Kiley.
QUIKSILVER INC: Bonds Drop on Turnaround Concerns
-------------------------------------------------
Jonathan Schwarzberg, writing for The Deal, reported that
Quiksilver Inc. bond prices have dropped sharply this month, and
volume has been up notably this week as the clothing company
continues its quest to turn around its finances. According to the
report, the bond pricing may hint at a number of things, including
that investors may be wary of Quiksilver's ability to right the
ship in a challenging teen retail environment. However, the price
drop could also signal that investors are concerned that the
company could be a potential takeover target that would end up
putting additional debt on its books, The Deal noted.
Quiksilver's $279 million of 7.875% notes due Aug. 1, 2018 were
the 20th most traded high-yield issue on July 30, dropping to
92.5, The Deal said.
* * *
The Troubled Company Reporter, on July 16, 2014, reported that
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit rating on Huntington Beach, Calif.-based Quiksilver Inc.
and revised the outlook to negative from stable. The TCR, on June
10, 2014, reported that Moody's Investors Service revised
Quiksilver Inc.'s rating outlook to negative from stable. Moody's
also affirmed the company's B3 Corporate Family Rating and its
SGL-2 Speculative Grade Liquidity rating.
RITE AID: Darren Karst Appointed EVP and Chief Financial Officer
----------------------------------------------------------------
Rite Aid Corporation announced that Darren Karst, a highly
experienced retail finance executive, is joining the Company as
executive vice president and chief financial officer, effective
August 20. Mr. Karst succeeds Frank Vitrano, who has announced he
will retire in September, 2015. Until then, Vitrano retains the
chief administrative officer responsibilities for the Company's
information technology, real estate and indirect procurement
functions. He will also serve as a key resource in the
development and execution of new business and growth initiatives.
In his position, Mr. Karst will be responsible for all aspects of
the company's finance, accounting, treasury, tax, investor
relations, legal, risk management, internal assurance and asset
protection functions. He will report to Rite Aid's Chairman and
CEO John Standley.
"We are pleased to welcome Darren to the Rite Aid team," said
Standley. "He is a proven leader with a broad-based financial
background and a track record of success across a range of
operating and financial disciplines. I am confident Darren's deep
retail knowledge and experience will serve Rite Aid well as we
move forward."
"I would also like to acknowledge the pivotal role Frank Vitrano
has played in helping significantly improve Rite Aid's business
performance and results over the past six years," Standley added.
"We thank Frank for his dedication and hard work and we look
forward to continuing to work together on executing our strategy
to expand our health care offering and transform Rite Aid into a
growing retail health care company."
Karst joins Rite Aid from Roundy's, Inc. (NYSE:RNDY), a leading
Midwest grocer based in Milwaukee, Wis., where he has been the
executive vice president, chief financial officer and assistant
secretary since 2002. Prior to that, Karst was a partner at the
Yucaipa Companies, a private equity investment firm. He also held
executive financial positions within several Yucaipa portfolio
companies, including Chicago-based Dominick's, where he served as
the chief financial officer and a director.
Mr. Karst earned a bachelor's degree in business administration
and accounting from the University of Kansas in Lawrence. He is
also a certified public accountant.
In accordance with the terms of an employment agreement between
the Company and Mr. Karst, Mr. Karst will be employed by the
Company starting in August 2014. The employment agreement
provides for the following (with equity awards subject to the same
conditions as awards made to other senior executives of the
Company):
* Term of two years to be renewed automatically for additional
one year periods, subject to termination with notice
* Annual base salary of $790,000
* Eligibility for a target bonus equal to 75% of base salary
* Sign-on equity award on the Commencement Date consisting of
restricted stock valued at $2.0 million, vesting pro rata over
three years
* Eligibility to participate in the Company's long-term
incentive program with an award consisting of restricted stock
(vesting pro rata over three years), stock options (vesting
pro rata over four years) and performance units (cliff
vesting after three years) with a value of 200 percent of his
base salary to be granted on the Commencement Date
* Eligibility to participate in the Company's compensation and
benefit plans and programs as may be generally made available
to other executives of the Company
* Eligibility for severance compensation (subject to a release
of claims) in the event the Company terminates Mr. Karst's
employment agreement without Cause (as defined in the
employment agreement) or Mr. Karst terminates his employment
with the Company for Good Reason (as defined in the employment
agreement), which includes payment of an amount equal to two
times base salary and annual target bonus and vesting of
equity awards to the extent that the awards would have vested
had Mr. Karst remained employed for two years
* Customary non-competition and non-solicitation provisions
* reimbursement annually in an amount not to exceed $67,000 for
transportation, commuting, lodging and other relocation
expenses
About Rite Aid Corp.
Drugstore chain Rite Aid Corporation (NYSE: RAD) --
http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, is
one of the nation's leading drugstore chains with 4,573 stores as
of July 26, 2014.
Rite Aid disclosed net income of $118.10 million on $25.39 billion
of revenue for the year ended March 2, 2013, as compared with a
net loss of $368.57 million on $26.12 billion of revenue for the
year ended March 2, 2012.
The Company's balance sheet at May 31, 2014, showed $6.94 billion
in total assets, $8.99 billion in total liabilities and a $2.04
billion total stockholders' deficit.
* * *
As reported by the TCR on March 1, 2013, Moody's Investors Service
upgraded Rite Aid Corporation's Corporate Family Rating to B3 from
Caa1 and Probability of Default Rating to B3-PD from Caa1-PD. At
the same time, the Speculative Grade Liquidity rating was revised
to SGL-2 from SGL-3. This rating action concludes the review for
upgrade initiated on Feb. 4, 2013.
As reported by the TCR on Oct. 2, 2013, Standard & Poor's Ratings
Services said it raised its ratings on Rite Aid Corp., including
the corporate credit rating, which S&P raised to 'B' from 'B-'.
In the April 21, 2014, edition of the TCR, Fitch Ratings has
upgraded its ratings on Rite Aid Corporation (Rite Aid), including
its Issuer Default Rating (IDR) to 'B' from 'B-'. The upgrades
reflect the material improvement in the company's operating
performance, credit metrics and liquidity profile over the past 24
months.
QUANTUM CORP: Inks Agreement with Starboard on Board Composition
----------------------------------------------------------------
Quantum Corp. has entered into an agreement with Starboard Value
LP and its affiliates regarding the membership and composition of
Quantum's board of directors.
Under the agreement, Quantum will renominate Jeffrey Smith, CEO of
Starboard, and two other current Starboard-recommended directors -
- Louis DiNardo, president and CEO of Exar Corp., and Philip
Black, former president and CEO of Nexsan Technologies -- for
election at Quantum's 2014 Annual Meeting of Stockholders.
Quantum will also nominate an additional Starboard-recommended
director -- Dale Fuller, chairman of AVG Technologies N.V. -- for
election as a successor to Michael Brown, who, as previously
announced, is retiring from the board.
Also as part of the agreement, Starboard -- which beneficially
owns approximately 17 percent of the outstanding shares of
Quantum's common stock, including shares underlying Quantum's
convertible senior subordinated notes -- will vote all of its
shares in favor of each of the Quantum board's nominees at the
2014 Annual Meeting and in accordance with the board's
recommendation with respect to any other proposals being voted on
at the Annual Meeting, unless Institutional Shareholder Services
Inc. recommends otherwise regarding any such proposal. Starboard
will also be subject to certain standstill provisions for a period
ending prior to the 2015 Annual Meeting of Stockholders.
If Quantum does not achieve certain agreed upon objectives in its
fiscal 2015 business plan, Starboard will have the right to add
two additional directors to the board. Alternatively, if Quantum
achieves all the agreed upon objectives, the standstill provisions
of the agreement will remain in effect for a period ending prior
to the 2016 Annual Meeting of Stockholders.
"We are pleased that we were able to come to an agreement with
Starboard that we believe serves the best interests of Quantum and
all our stockholders," said Jon Gacek, president and CEO of
Quantum. "We look forward to continuing to work with Jeff, Lou
and Philip, and to the addition of Dale to our board, as we focus
on driving growth and profit by building on our leadership in
scale-out storage and data protection."
"We are pleased to continue our work constructively with Quantum
management and the other board members," said Smith, speaking on
behalf of Starboard. "We are confident that this settlement will
serve the best interests of Quantum by providing increased
accountability while enabling Quantum to deliver value for all
stockholders."
The full text of the settlement agreement is available at:
http://is.gd/P9kEpC
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Starboard Value LP and its affiliates
disclosed that as of July 28, 2014, they beneficially owned
44,243,875 shares of common stock of Quantum Corp representing
16.4% of the shares outstanding. A full-text copy of the
regulatory filing is available for free at http://is.gd/3rHeIe
About Quantum Corp.
Based in San Jose, California, Quantum Corp. (NYSE:QTM) --
http://www.quantum.com/-- is a storage company specializing in
backup, recovery and archive. Quantum provides a comprehensive,
integrated range of disk, tape, and software solutions supported
by a world-class sales and service organization.
Quantum Corporation incurred a net loss of $21.47 million on
$553.16 million of total revenue for the year ended March 31,
2014, as compared with a net loss of $52.17 million on $587.43
million of total revenue for the year ended March 31, 2013.
As of June 30, 2014, the Company had $351.21 million in total
assets, $439.81 million in total liabilities and a $88.59 million
stockholders' deficit.
RIVER CITY RENAISSANCE: Case Summary & Top Unsecured Creditors
--------------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
River City Renaissance, LC 14-34080
305 N. Thompson Street
Richmond, VA 23221
River City Renaissance III, LC 14-34081
2716 Monument Avenue
Richmond, VA 23220
Chapter 11 Petition Date: July 30, 2014
Court: United States Bankruptcy Court
Eastern District of Virginia (Richmond)
Judge: Hon. Keith L. Phillips
Debtors' Counsel: Robert H. Chappell, III, Esq.
SPOTTS FAIN PC
411 East Franklin Street, Suite 600
PO Box 1555
Richmond, VA 23218-1555
Tel: 804-788-1190
Fax: 804-241-3245
Email: rchappell@spottsfain.com
Estimated Estimated
Assets Liabilities
----------- -----------
River City Renaissance, LC $10MM-$50MM $10MM-$50MM
River City Renaissance III, LC $1MM-$10MM $1MM-$10MM
The petitions were signed by Billy G. Jefferson, Jr., president of
managing member.
List of River City Renaissance, LC's 15 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Billy G. Jefferson, Jr. Unknown
Chevron U.S.A., Inc. Unknown
City of Richmond Department of Trade Unknown
Public Utilities
CompassRock Real Estate LLC Trade Unknown
Dominion Trade Unknown
Foss VA 2010 Fund I, LLC Unknown
Foss VA 2011 Fund I, LLC Unknown
Historic Property Mgmt, Inc. Trade Unknown
River City Renaissance Manager, LC Unknown
River City Renaissance SCP, LC Unknown
River City Renaissance SCP Manager Unknown
River City Renaissance Tenant, LC Trade Unknown
Samuel Sinnenberg Personal Unknown
Injury Claim
The Jefferson Investor Group, LC Unknown
WJA, Inc. Unknown
List of River City Renaissance III, LC's 13 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Billy G. Jefferson, Jr. Unknown
Chevron U.S.A., Inc. Unknown
City of Richmond Department of Trade Unknown
Public Utilities
CompassRock Real Estate LLC Trade Unknown
Dominion Trade Unknown
Foss VA 2010 Fund I, LLC Unknown
Foss VA 2011 Fund I, LLC Unknown
Historic Property Mgmt, Inc. Trade Unknown
River City Renaissance III Unknown
Tenant, LC
River City Renaissance III Unknown
SCP, LC
River City Renaissance III Unknown
Manager, LC
River City Renaissance III Unknown
SCP Manager, LC
The Jefferson Investor Unknown
Group, LC
SECURITY NATIONAL: Senior Lenders Propose Ch. 11 Plan
-----------------------------------------------------
Bank of America, N.A., as agent for senior lenders of debtors
Security National Properties Funding III, LLC, et al., proposed a
Chapter 11 plan of reorganization for the Debtors that proposes
full payment to all holders of allowed claims, including all
general unsecured claims, except for senior lender claims,
intercompany claims, and claims of non-debtor affiliates.
Holders of senior lender claims will receive:
(1) New senior debt of $120,000,000, secured by all assets of
the Debtors.
(2) A new sub debt equal to 37.5% of the converted senior
lender debt, which means the difference between the total
allowed senior lender claim, including any postpetition
interest and fees allowed under Section 506(b) of the
Bankruptcy Code, and the New Senior Debt. The new sub debt
will be unsecured and paid pari passu with any
distributions to holders of New LLC interests.
(3) 100% of new LLC interests in Reorganized Debtor SNPF III
with a value equal to 62.5% of the Converted Senior Lender
Debt.
BofA is agent to a prepetition loan agreement, which provides for
a revolving credit facility in the principal amount of $200
million, of which $159.9 million in principal was owed as of the
Petition Date. BofA estimates that the Senior Lender Claims and
the Cost of Emergence, greatly exceed the value of the Debtors'
properties and other assets. Accordingly, there is no value in
the Debtors available for Distribution to Holders of Non-Debtor
Affiliate Claims or Equity Interests in SNPF III.
All equity interests in SNPF III will be canceled on the Effective
Date. The equity structure of all Debtors other than SNPF III
will remain the same.
The Plan provides for an exit facility in the maximum amount of
$10,000,000, which will fund, among other things, the Cost of
Emergence, which includes all Allowed Claims other than the Senior
Lender Claims, the Intercompany Claims, and the Non-Debtor
Affiliate Claims. The Senior Lenders have agreed to fund the Exit
Facility.
A full-text copy of the Disclosure Statement is available at
http://is.gd/E3LRPL
About Security National
Eureka, California-based Security National Properties Funding III
LLC owns and operates 33 commercial office, retail, industrial and
other properties. Security National and various affiliates filed
for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13277)
on Oct. 13, 2011. Judge Kevin Gross presides over the case.
Donna L. Culver, Esq., Robert J. Dehney, Esq., Justin K. Houser,
Esq., Andrew R. Remming, Esq., and Gregory W. Werkheiser, Esq., at
Morris, Nichols, Arsht & Tunnell, in Wilmington, Delaware, serve
as the Debtors' counsel. GCG Inc. serves as the Debtors' claims
and notice agent. The Debtors' scheduled assets total $24,758,433
while scheduled liabilities total $354,657,501.
The U.S. Trustee for Region 3 has been unable to form an official
committee of unsecured creditors.
SGK VENTURES: Panel Files Amended Liquidation Plan
--------------------------------------------------
The Official Committee of Unsecured Creditors of SGK Ventures,
LLC, on June 30, 2014, submitted an Amended Plan of Liquidation,
and an amended explanatory Disclosure Statement.
The Amended Disclosure Statement provides that all cash necessary
for the payments pursuant to the Plan will be obtained from
existing cash balances, or, in the case of payments to be made by
the Liquidating Trustee, from the proceeds of the Liquidating
Trust Assets.
Administrative Claims and Priority Tax Claims will be paid in
full on the later of the Effective Date of the Plan or when such
claims become Allowed. The range of estimated Administrative
Claims is $10,000 to $100,000 and the range of estimated Priority
Tax Claims is $250,000 to $350,000.
Based on current levels of cash and the Debtor's financial
projections, the Committee anticipates the Debtor having between
$22.9 million and $23.1 million of Cash as of July 1, 2014.
The amount of cash is more than sufficient to satisfy all of the
Debtor's Allowed Administrative Claims and Allowed Priority Tax
Claims in addition to Allowed Class 1 Other Priority Claims,
Allowed Class 2 Other Secured Claims, and Allowed Class 3
Convenience Claims. Furthermore, the Committee believes that this
amount of Cash will also be sufficient to:
(a) create a reserve for the alleged secured Disputed Class 5
NewKey Claims, in case they are Allowed as Allowed NewKey Secured
Claims; and
(b) make an initial distribution to Holders of Allowed Class
4 General Unsecured Claims.
The Committee's Plan provides that within 45 after the Effective
Date, the Liquidating Trustee will seek authority from the
Bankruptcy Court to make an initial distribution to Holders of
Allowed General Unsecured Claims. The Committee anticipates that
NewKey will object to any such distribution until its Claims have
been fully resolved. It is currently impossible to determine the
timing of any initial distribution to Allowed General Unsecured
Claims.
A copy of the Amended Disclosure Statement is available at:
http://bankrupt.com/misc/SGKVENTURES_750_amendedds_blackline.pdf
The Court continued the hearing to July 2, to consider adequacy of
information in the Committee's Disclosure Statement.
About Keywell L.L.C.
Keywell L.L.C., a supplier of scrap titanium and stainless steel,
filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 13-37603)
on Sept. 24, 2013. Mark Lozier signed the petition as president
and CEO.
Keywell LLC first filed schedules disclosing $22,515,017 in total
assets, and $35,025,633 in total liabilities. In its amended
schedules, Keywell disclosed $22,546,386 in total assets and
$39,361,793 in total liabilities. As reported in the Troubled
Company Reporter on May 12, 2014, the Debtor filed an amended
summary of schedules disclosing assets of $22,602,974 and
liabilities of $37,181,354.
Judge Eugene R. Wedoff presides over the case.
Howard L. Adelman, Esq., Chad H. Gettleman, Esq., Henry B. Merens,
Esq., Brad A. Berish, Esq., Mark A. Carter, Esq., Adam P.
Silverman, Esq., and Nathan Q. Rugg, Esq., at Adelman & Gettleman
Ltd. serve as the Debtor's counsel. Alan B. Patzik, Esq., Steven
M. Prebish, Esq., and David J. Schwartz, Esq., at Patzik, Frank &
Samotny Ltd. serve as the Debtor's special counsel. Eureka
Capital Markets, LLC, serves as the Debtor's investment banker,
while Conway MacKenzie, Inc., serves as its financial advisors.
The Debtor's lenders are represented by Steven B. Towbin, Esq.,
and Gordon E. Gouveia, Esq., at Shaw Fishman Glantz & Towbin LLC,
in Chicago, Illinois.
The United States Trustee for Region 11 appointed an Official
Committee of Unsecured Creditors. The panel has hired David A.
Agay, Esq., Sean D. Malloy, Esq., Scott N. Opincar, Esq., Joshua
A. Gadharf, Esq., and T. Daniel Reynolds, Esq., at McDonald
Hopkins LLC as counsel. Alvarez & Marsal North America, LLC,
serves as financial advisors to the Committee.
In December 2013, the Bankruptcy Court formally approved the sale
of the Debtor's assets to KW Metals Acquisition LLC for $15.8
million. The original offer was from Cronimet Holdings Inc. for
$12.5 million cash.
Keywell LLC changed its name and case caption to "SGK Ventures,
LLC" following the sale.
SUN BANCORP: Proposes to Appoint Several Executive Officers
-----------------------------------------------------------
Sun Bancorp, Inc., announced several proposed executive
appointments at its primary subsidiary, Sun National Bank.
"As we embark on the execution of our restructuring plan, we have
bolstered our executive management ranks in order to efficiently
deliver on multiple strategic initiatives," stated Thomas M.
O'Brien, president & CEO. "As we grow and build a best-in-class
bank, I am very pleased to announce these important proposed new
additions to our leadership."
The Bank said it has agreed to hire Nicos Katsoulis as its
executive vice president and chief lending officer, subject to
prior receipt of regulatory non-objections from the Federal
Reserve Board and the Office of the Comptroller of the Currency.
Mr. Katsoulis has been acting as consultant to the Bank and will
be appointed as an executive officer upon receipt by the Company
and the Bank of each of these regulatory non-objections. Mr.
Katsoulis has enjoyed a long and successful banking career, having
served as Chief Lending Officer at several banks and also as a
member of the Board of Directors of State Bancorp, Inc., and Chair
of its Loan Committee and Special Litigation Committee. He is a
graduate of the London School of Economics and Columbia
University's graduate business school.
The Bank is also announcing that it has agreed to hire Anthony J.
Morris as executive vice president and chief banking officer,
subject to OCC Regulatory Non-Objection. Mr. Morris is expected
to join the Bank from the CIT Group and brings more than 30 years
of banking leadership experience. He is expected to lead the
Bank's entire customer experience functions, including information
technology and the retail banking lines of business. Mr. Morris
will serve as a consultant to the Bank beginning on Aug. 4, 2014,
until his official appointment after receipt of OCC Regulatory
Non-Objection.
Flaviano Sabater will be joining the Bank on Aug. 4, 2014, as its
chief auditor. Mr. Sabater is a Certified Bank Auditor with more
than 30 years of bank internal audit experience.
Paul DeStefano has joined the Bank as its Director of Security.
Mr. DeStefano was a NYPD Detective Supervisor and subsequently has
served as security officer at several banks in the region.
The Bank has also engaged the services of Kenneth J. Sole and
Associates, an industry-leading Information Technology consulting
firm, to manage its day-to-day Information Technology functions.
"These new leaders will be joining their colleagues on the Bank's
management team in its unified commitment to bring the financial
performance and regulatory excellence that is at the heart of our
strategic plan," stated Mr. O'Brien. "I look forward to working
together with them and all of our employees to meeting these
goals."
The Bank has also announced that Margaret Sepp, the Bank's
Internal Auditor, will be promoted to Director of Bank Operations.
In her new role, Ms. Sepp will oversee all of the Bank's
operations departments including branch banking and loan
servicing. Ms. Sepp has a successful 11 year record at the Bank
and we all look forward to her assuming these new
responsibilities.
On July 29, 2014, Sun Bancorp distributed copies of the
presentation regarding the Company's financial performance that
members of the executive management team of the Company delivered
to analysts and investors on July 30, 2014, at the 15th Annual KBW
Community Bank Investor Conference. Copies of the slides used in
the presentation are available for free at http://is.gd/lLAsYD
About Sun Bancorp
Sun Bancorp, Inc. (NASDAQ: SNBC) is a bank holding company
headquartered in Vineland, New Jersey, with its executive offices
located in Mt. Laurel, New Jersey. Its primary subsidiary is Sun
National Bank, a full service commercial bank serving customers
through more than 60 locations in New Jersey.
On April 15, 2010, Sun National Bank entered into a written
agreement with the OCC which contained requirements to develop and
implement a profitability and capital plan which provides for the
maintenance of adequate capital to support the Bank's risk profile
in the current economic environment.
Sun Bancorp reported a net loss available to common shareholders
of $9.94 million in 2013, a net loss available to common
shareholders of $50.49 million in 2012, and a net loss available
to common shareholders of $67.50 million in 2011. The Company's
balance sheet at March 31, 2014, showed $3.03 billion in total
assets, $2.78 billion in total liabilities and $248.89 million in
total shareholders' equity.
THOMPSON CREEK: Les Mines No Longer Owns Shares as of July 9
------------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, Les Mines Opinaca Ltee and Goldcorp Inc.
disclosed that as of July 9, 2014, they ceased to own shares of
common stock of Thompson Creek Metals Company Inc. A full-text
copy of the Schedule 13G/A is available for free at:
http://is.gd/cTlm12
About Thompson Creek Metals
Thompson Creek Metals Company Inc. --
http://www.thompsoncreekmetals.com/-- is a diversified mining
company. It is a producer of molybdenum and has copper and gold
reserves. It produces molybdenum at its 100%-owned Thompson Creek
Mine in Idaho and Langeloth Metallurgical Facility in Pennsylvania
and its 75%-owned Endako Mine in northern British Columbia.
* * *
In May 2013, Standard & Poor's Ratings Services revised its
outlook on Thompson Creek to positive from negative and affirmed
its ratings, including its 'CCC+' long-term corporate credit
rating, on the company.
"We base the outlook revision on our expectations for reduced
liquidity strain and improving visibility on next year's free cash
flow generation and credit metrics," said Standard & Poor's credit
analyst George Economou.
The ratings on Thompson Creek reflect what Standard & Poor's views
as the company's highly leveraged financial risk profile, with a
heavy debt burden and negative free cash flow generation.
THREE FORKS: BF Borgers Raises Going Concern Doubt
--------------------------------------------------
Three Forks Inc. filed with the U.S. Securities and Exchange
Commission an amended annual report on Form 10-K for the year
ended Dec. 31, 2013. A copy of the Form 10-K, as amended, is
available for free at http://is.gd/JOzELf
BF Borgers CPA PC expressed substantial doubt about the Company's
ability to continue as a going concern, citing that the Company
has suffered significant operating losses.
The Company reported a net loss of $1.53 million on $894,128 of
total revenues in 2013, compared with a net loss of $981,287 on
$nil of revenues in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $6.37 million
in total assets, $3.24 million in total liabilities, and
stockholders' equity of $3.13 million.
Three Forks, Inc., based in Broomfield, Colorado, is engaged in
the acquisition, exploration, development, and production of oil
and gas properties. The Company currently has oil and gas
projects in Texas, Oklahoma, and Louisiana.
THREE FORKS: Incurs $725K Net Loss in Quarter Ended March 31
------------------------------------------------------------
Pure Bioscience, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, reporting a net loss
of $725,450 on $491,458 of total revenues for the three months
ended Mar. 31, 2014, compared with a net loss of $503,475 on $nil
of net product sales for the same period last year.
The Company's balance sheet at Mar. 31, 2014, showed $6.46 million
in total assets, $2.13 million in total liabilities, and
stockholders' equity of $4.33 million.
A copy of the Form 10-Q is available at http://is.gd/YnZ0xd
Three Forks, Inc., based in Broomfield, Colorado, is engaged in
the acquisition, exploration, development, and production of oil
and gas properties. The Company currently has oil and gas
projects in Texas, Oklahoma, and Louisiana.
TRANSFIRST HOLDINGS: Moody's Affirms 'B2' Corporate Family Rating
-----------------------------------------------------------------
Moody's Investors Service affirmed TransFirst Holdings, Inc.'s B2
Corporate Family Rating (CFR), B2-PD Probability of Default
Rating, and the Ba3 and Caa1 ratings for the company's first and
second lien credit facilities. The ratings have a stable outlook.
TransFirst plans to use cash on hand and net proceeds of $100
million of incremental first lien term loan to pay a dividend of
$145 million to its shareholders.
The proposed dividend recapitalization will increase TransFirst's
total debt to EBITDA (Moody's adjusted) by 0.9x to 6.3x. The
affirmation of the ratings reflects Moody's expectation that total
debt to EBITDA should decline to less than 6x by mid 2015, from
EBITDA growth and debt repayments required under the credit
agreement. The company has a track record of strong net revenue
and EBITDA growth driven by addition of new merchant accounts,
mainly through third party sales channels, low volume attrition
and operating leverage. Moody's expects net revenue growth to
remain in the high single digit percentages over the next 12 to 18
months.
The following ratings were affirmed:
Issuer: TransFirst Holdings, Inc.
Corporate Family Rating -- B2
Probability of Default Rating -- B2-PD
$50 million Senior Secured Revolving Credit Facility, due 2017
-- Ba3 (LGD3, previously LGD2)
$486 million (increased from $386 million outstanding) Senior
Secured 1st Lien Term Loan, due 2017 -- Ba3 (LGD3, previously
LGD2)
$225 million Senior Secured 2nd Lien Term Loan, due 2018 -- Caa1
(LGD5)
Outlook: Stable
Ratings Rationale
TransFirst's B2 Corporate Family Rating is characterized by the
company's high leverage, small operating scale and highly
competitive market for merchant acquiring and payment processing
services to small and medium size businesses. The rating also
reflects TransFirst's shareholder-friendly financial policies
under its financial sponsors.
The rating is supported by TransFirst's highly recurring revenues
derived from a diverse customer base and Moody's expectation that
annual free cash flow (before merchant portfolio acquisitions)
should exceed $50 million over the next 12 to 18 months.
The stable outlook reflects TransFirst's good growth prospects and
free cash flow over the next 12 to 18 months. Moody's expects the
company to maintain good liquidity comprising predictable free
cash flow and availability under its revolving credit facility.
TransFirst's ratings could be upgraded over time if the company
generates good earnings growth and if Moody's believes that the
company could maintain total debt-to-EBITDA below 4.5x and free
cash flow in the low teens percentages of total debt. Conversely,
the ratings could be downgraded if revenue or EBITDA decline, if
Moody's believes that total leverage is unlikely to remain below
6.5x (Moody's adjusted), or free cash flow weakens to the low
single digit percentages. Additionally, a meaningful deterioration
in liquidity could also trigger a downgrade.
New York-based TransFirst Holdings, Inc. is a merchant acquirer
and provides payment processing services to small and medium size
businesses in the U.S. TransFirst reported net revenues of
approximately $245 million in the twelve months ended June 30,
2014, and is owned by funds affiliated to private equity firm
Welsh, Carson, Anderson & Stowe.
The principal methodology used in this rating was Global Business
& Consumer Service Industry Rating Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
TEREX CORPORATION: Moody's Rates Sec. Debt Ba1 & Affirms B1 CFR
---------------------------------------------------------------
Moody's Investors Service rated Terex Corporation's new Senior
secured bank credit facility Ba1, and affirmed Terex's other debt
ratings including the Corporate Family Rating at B1, the senior
unsecured at B2, senior subordinated convertible notes at B3, and
the Speculative Grade Liquidity Rating at SGL-2. The rating
outlook for Terex Corporation and for Terex International
Financial Services Company were both changed to positive.
Ratings Rationale
The B1 Corporate Family rating and positive outlook reflect the
expectation for continued improvement in the company's credit
metrics and in the profitability of its few struggling operating
segments over the coming year. The Aerial Work Platforms (AWP)
unit has been, and is expected to be, highly profitable reporting
an operating margin of 15% for the first six months of 2014. The
company's AWP business recently provided almost 3 times the profit
contribution when compared to the crane segment, its next largest
contributor. The rating benefits from Moody's expectation for an
improvement in the profitability of Terex's Crane business.
Nonetheless, some of the company's other business segments have
experienced difficulty in rebounding since the economic downturn.
Terex continues to implement strategies to improve margins ranging
from new product introduction to more aggressive expense
management. These factors combined with Moody's expectation for a
modest improvement in overall economic growth in 2015 should help
improve the company's financial results. Terex has good liquidity
as Moody's expects positive cash flow, revolver availability of
approximately $520 million pro forma for the financing, good room
under its covenants, and an ability to sell foreign assets if
necessary to support its liquidity.
The new facility, comprised of a $600 million revolving credit and
a $500 million senior secured term loan due 2021, will refinance
Terex's existing secured debt. Borrowers on the $500 million term
loan will be Terex International Financial Services Company for
the Euro portion and Terex Corporation for the residual. The
material domestic subsidiaries will guarantee the debt while the
material foreign subsidiaries will provide a 65% stock pledge.
These ratings are subject to the review of final documentation.
Ratings on the current facilities will be withdrawn upon closing.
Assignments:
Issuer: Terex Corporation
Senior Secured Revolving Credit Facility, Assigned Ba1, LGD2-15%
Senior Secured Term Loan, Assigned Ba1, LGD2-15%
Issuer: Terex International Financial Services Co.
Senior Secured Term Loan, Assigned Ba1, LGD2-15%
Affirmations:
Issuer: Terex Corporation
Probability of Default Rating, Affirmed B1-PD
Speculative Grade Liquidity Rating, Affirmed SGL-2
Corporate Family Rating, Affirmed B1
Multiple Seniority Shelf Nov 1, 2015, Affirmed (P)B2
Senior Unsecured Regular Bond/Debenture May 15, 2021, Affirmed
B2
Senior Unsecured Regular Bond/Debenture Apr 1, 2020, Affirmed B2
4% Convertible Senior Sub Notes, Affirmed B3
Adjustments:
Issuer: Terex Corporation
Senior Unsecured Regular Bond/Debenture May 15, 2021, changed to
a range of LGD5, 70% from a range of LGD4, 69%
Senior Unsecured Regular Bond/Debenture Apr 1, 2020, changed to
a range of LGD5, 70% from a range of LGD4, 69%
Outlook Actions:
Issuer: Terex Corporation
Outlook, Changed To Positive From Stable
Issuer: Terex International Financial Services Co.
Outlook, Changed To Positive From Stable
What Could Change The Rating -- DOWN
The ratings could come under pressure or the ratings could be
downgraded if the company's cash flow turned negative, or if Debt
to EBITDA is anticipated to rise and be sustained at about 4.5
times. Contracting sales, inability to show steady improvement
with the struggling business units, a shrinking backlog, or
weakening margins could also create downwards rating pressure.
EBITDA to interest sustained under 2.5 times, could result in a
change in outlook or even the rating if deemed to be weakening
further. A weakening of its liquidity could also create negative
ratings pressure.
What Could Change The Rating -- UP
The ratings could be upgraded if the company's leverage improves
to under 3.5 times on a sustainable basis and anticipated to
improve further, along with expectations for EBITDA to interest
improving to over 3.5 times also on a sustained basis. Stable
margins in its AWP business (its best performing unit) would be an
important factor in positive ratings traction. It is also
important that the company make progress turning around its
struggling businesses.
The principal methodology used in this rating was the Global Heavy
Manufacturing Industry published in November 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Terex Corporation, headquartered in Westport, CT, is a diversified
global manufacturer with sales to construction, infrastructure,
quarrying, manufacturing, mining, shipping, transportation,
refining, energy and utility industries. It operates in five
segments: Aerial Work Platforms ("AWP"), Construction, Cranes,
Material Handling & Port Solutions, and Materials Processing. The
largest of these are the AWP and the Cranes segments. The revenues
for the LTM period through June 2014 were over $7 billion.
UNIVERSAL HEALTH: Moody's Rates $300MM Sr. Secured Notes 'Ba1'
--------------------------------------------------------------
Moody's Investors Service assigned a Ba1 (LGD 3) rating to
Universal Health Services, Inc.'s (UHS) proposed offering of $300
million in senior secured notes due 2019 and $300 million in
senior secured notes due 2022. Moody's understands that the
proceeds of the offerings will be used to refinance a portion of
UHS' existing debt. There is no change to UHS' current ratings,
including the Ba1 Corporate Family Rating and Ba1-PD Probability
of Default Rating. The stable rating outlook is also unchanged.
The following ratings have been assigned.
Senior secured notes due 2019 at Ba1 (LGD 3)
Senior secured notes due 2022 at Ba1 (LGD 3)
Ratings Rationale
UHS' Ba1 Corporate Family Rating reflects Moody's expectation of
continued EBITDA growth, stable cash flow and strong interest
coverage. Moody's believes the company will continue to operate
with modest leverage and remain disciplined with respect to the
use of incremental debt for acquisitions or shareholder
initiatives. However, Moody's expects that UHS will continue to be
acquisitive and invest in growth initiatives, which will limit
debt repayment. Moody's anticipates a challenging operating
environment in the acute care business in the near term,
characterized by pressure on reimbursement rates and weak volume
trends. However, the segment should begin to benefit from a
reduction in bad debt expense as uninsured individuals that have
gained coverage under the Affordable Care Act seek services in the
company's facilities. Further, the rating incorporates the benefit
of diversification provided by UHS' behavioral health segment,
which is reimbursed under a separate methodology from the acute
care operations, thereby lowering the risk of a regulatory change
that could impact the company as a whole.
An upgrade of the rating to investment grade is not likely in the
near term given Moody's expectation that the company's
reinvestment in growth through capital projects and acquisitions
will limit a meaningful improvement credit metrics from current
levels. Moody's could consider an upgrade if UHS can continue to
grow EBITDA, either through acquisitions that are funded out of
available cash flow or meaningful improvement in the acute care
business, and repay debt such that leverage is expected to be
sustained below 2.5 times. Additionally, UHS would need to make a
public commitment to an investment grade rating, including
maintaining a conservative financial policy and a disciplined
approach to capital deployment.
A decline in operating performance resulting in an expectation
that adjusted debt to EBITDA will remain above 3.0 times could
result in a downgrade of the ratings. Additionally, a significant
debt financed acquisition or shareholder initiative could result
in a downgrade.
The principal methodology used in this rating was the Global
Healthcare Services Providers published in December 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Universal Health Services, Inc., headquartered in King of Prussia,
Pennsylvania, owns and operates acute care hospitals and
behavioral health centers. Services provided by the hospitals
include general and specialty surgery, internal medicine,
obstetrics, emergency room care, radiology, oncology, diagnostic
care, coronary care, pediatric services, pharmacy services and
behavioral health services. UHS recognized approximately $7.5
billion of revenue after the provision for doubtful accounts for
the twelve months ended June 30, 2014.
VERTELLUS SPECIALTIES: S&P Raises Rating to 'B-'; Outlook Positive
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on U.S.-based
chemical maker Vertellus Specialties Inc. to 'B-' from 'CCC+'.
The outlook is positive.
"At the same time, we are raising the issue-level rating on the
company's $100 million asset-based revolving credit facility
maturing in 2019 to 'B+' from 'B'. The recovery rating on this
debt remains '1', indicating our expectation for a very high (90%
to 100%) recovery in the event of payment default. We assigned
our 'B-' rating to the company's $335 million first-lien term loan
due 2021. The recovery rating on this debt is '4', indicating our
expectation for average (30% to 50%) recovery in the event of
payment default. We also assigned our 'CCC' rating to the
company's $85 million second-lien term loan due 2022. The
recovery rating on this debt is '6', indicating our expectation of
negligible (0% to 10%) recovery in the event of payment default,"
S&P noted.
"The upgrade reflects our view that strengthening demand and
better pricing in the agriculture and nutrition segment combined
with recent operational improvements will allow the company to
continue to increase revenue and margins," said Standard & Poor's
credit analyst Pranay Sonalkar. These improving trends along with
the increasing contribution from Weifang should cause the company
to generate more than sufficient cash to meet its operating
requirements. Equally, the upgrade reflects S&P's view that on
completion of the refinancing the company will have a much
stronger maturity and liquidity profile.
The ratings on Vertellus reflect the company's "highly leveraged"
financial risk profile and "weak" business risk profile. S&P
selected the 'b-' anchor outcome instead of the 'b' anchor outcome
because S&P expects the company's credit measures will remain at
the higher end of the range that S&P deems appropriate for a
"highly leveraged" financial risk profile and hence makes it
comparatively weaker than other 'B' rated peers.
S&P's assessment of Vertellus' business risk profile reflects the
significant, albeit improving, supply/demand imbalance in the
pyridine industry offset by its strong market position in most of
its products, and good geographic and customer diversity.
Furthermore, the company has improved its operational efficiency
which has helped stabilize margins.
Vertellus is the largest global producer of pyridine and many
pyridine derivative chemicals. Pyridine production results in the
manufacture of co-product beta picoline, used mainly in human and
animal nutrition products such as vitamin B3, of which Vertellus
is the second-largest global producer. In specialty materials,
Vertellus is the largest producer of castor oil-based additives
used in coatings, DEET (an active ingredient in insect
repellents), and various niche products. However, these leading
market positions have not translated into strong pricing power
given industry supply/demand imbalance in some products and
lackluster economic conditions. The company has undertaken
several cost-reduction initiatives in recent years that have
helped stabilize margins. The company's profitability is average,
with 2013 EBITDA margins of about 12.2%, which S&P projects will
improve marginally to about 13% in 2015. The positive outlook is
based on S&P's expectation that the company's operational
improvements combined with strengthening industry conditions
should allow it to achieve higher levels of earnings and cash
flow, resulting in credit metrics more appropriate with a higher
rating. In S&P's upgrade to 'B-' it has assumed that the company
will complete the proposed refinancing resulting in a stronger
liquidity and maturity profile.
S&P could raise the ratings by one notch if adjusted debt to
EBITDA decreases to about 6x and remains consistent through the
business cycle. Furthermore, S&P would require an improvement in
business conditions resulting in an improved competitive position
and EBITDA margins of around 13%.
S&P could lower the ratings if operating performance were to
unexpectedly deteriorate, resulting in a 400 basis point decline
in EBITDA margins and a 15% reduction in revenues. In such a
scenario S&P would expect free cash flow to be substantially
negative and the company to have very weak interest coverage. At
this point, S&P would consider the capital structure to be
unsustainable. S&P could also lower the ratings if the company's
liquidity position were to deteriorate significantly such that its
sources over uses were below 1.0x and the company had limited
availability under its asset-based revolving credit facility.
WASHINGTON MUTUAL: Liquidating Trust to Make $78-Mil. Payout
------------------------------------------------------------
WMI Liquidating Trust, formed pursuant to the confirmed Seventh
Amended Joint Plan of Affiliated Debtors under Chapter 11 of the
United States Bankruptcy Code of Washington Mutual, Inc., on
July 30 filed its Quarterly Summary Report with the United States
Bankruptcy Court for the District of Delaware and announced that
it will make a cash distribution of approximately $78 million of
Runoff Notes to certain beneficiaries.
In accordance with the priority of payments described in Exhibit H
to the Plan, the Distribution will be allocated to claimants in
"Tranche 4" in the following amounts: $16 million to holders of
Senior Floating Rate Note Claims; $60 million to holders of PIERS
Claims; and $2 million to holders of General Unsecured Claims.
The Liquidating Trust intends to initiate the $78 million
Distribution on Friday, August 1, 2014. Additional information
regarding the Distribution will be reflected on the next Quarterly
Summary Report for the period ended June 30, 2014, which was filed
by the Liquidating Trust with the United States Bankruptcy Court
for the District of Delaware earlier on July 30.
Further information about WMI Liquidating Trust can be found at
http://www.wmitrust.com
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on September 25, 2008, by
U.S. government regulators. The next day, WaMu and its affiliate,
WMI Investment Corp., filed separate petitions for Chapter 11
relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu
owns 100% of the equity in WMI Investment.
WILLIAM LYON: S&P Affirms 'B-' CCR & Removes From Watch Developing
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit and senior unsecured debt ratings on William Lyon Homes
Inc. and removed the ratings from CreditWatch, where S&P had
placed them with developing implications on June 27, 2014. The
outlook is positive.
S&P also assigned its 'B-' senior unsecured debt rating to $250
million of senior notes due 2022 being offered through the
company's wholly owned subsidiary, WLH PNW Finance Corp.
"Our ratings on William Lyon Homes reflect our current view of the
company's 'vulnerable' business risk and 'highly leveraged'
financial risk profiles. William Lyon is a relatively small
homebuilder with a geographic concentration of operations in
California, Arizona, Nevada, and Colorado. The recently announced
agreement to acquire the homebuilding operations of Polygon
Northwest for $520 million also expands the company's presence to
Seattle and Portland. The acquisition improves William Lyon's
scale (its revenue increases by roughly one-half based on full-
year 2013 results) and geographic diversity (Polygon retains the
number two market position based on closings). The company's 10-
year land supply of more than 14,000 lots will also grow by an
additional 4,200 lots," S&P noted.
"The outlook is positive based on our view that the Polygon
Northwest acquisition improves the diversity and scale of the
company's operating platform while offering meaningful market
share in relatively stronger homebuilding markets," said Standard
& Poor's credit analyst Matthew Lyman.
S&P would consider raising the rating by one notch if William Lyon
successfully integrates the Polygon acquisition, strengthening its
business risk profile, while reducing debt to EBITDA below 5x and
debt to capital below 60%, while maintaining adequate liquidity
and covenant headroom. S&P would revise the outlook back to
stable if the acquisition does not yield the growth and
profitability benefits that S&P expects or if leverage remains
elevated through 2015.
WINDSTREAM CORPORATION: Moody's Affirms 'Ba3' Corp. Family Rating
-----------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of Windstream
Corporation, including its Ba3 Corporate Family Rating ("CFR"),
Ba3-PD Probability of Default Rating ("PDR"), SGL-3 Speculative
Grade Liquidity ("SGL") and all rated debt following the company's
announcement that it plans to spin off certain telecommunications
network assets into a publicly traded real estate investment trust
(REIT) through a tax free distribution to shareholders and
continue its communications business under the existing entity.
The outlook remains stable.
Moody's believes that the newly created REIT entity will have a
credit risk profile that is similar and inextricably linked to
Windstream and that the REIT, when or if it is rated by Moody's
could potentially have a corporate family rating that is
equivalent to senior unsecured debt at Windstream Corp., which is
currently rated B1. Moody's expects to apply the Global
Communications Infrastructure Methodology to the ratings of the
REIT entity.
Issuer: Windstream Corporation
Affirmations:
Probability of Default Rating, Affirmed Ba3-PD
Speculative Grade Liquidity Rating, Affirmed SGL-3
Corporate Family Rating, Affirmed Ba3
Senior Secured Bank Credit Facility Affirmed Ba2
Senior Unsecured Regular Bond/Debenture Affirmed B1
Outlook Actions:
Outlook, Remains Stable
Rating Rationale
The proposed transaction will improve Windstream's cash flow
profile from lower interest and tax costs but will create a new,
large, non-discretionary fixed charge at its holding company,
Windstream Holdings, Inc ("Holdco"). Moody's estimates that
Windstream's cash flows will improve by approximately $160 million
in 2015 with this transaction. Beyond 2015, Windstream is likely
to continue to achieve stronger cash flow results than its current
structure due to the lower dividend, interest and taxes which more
than offset the new lease payment. The improved free cash flow
profile will give Windstream the ability to continue to invest in
its business, a key constraint of its prior capital allocation
practice which Moody's believed had placed the company's ability
to invest at risk. Moody's estimates that leverage (Debt/EBITDA,
Moody's adjusted) will be approximately neutral as the additional
debt from the capitalization of the operating lease at a 5x rent
multiple will offset the reduction in external debt.
Through this transaction, Windstream will create some near term
flexibility to continue to invest at an appropriate level.
However, this transaction will effectively convert the current
common dividend payment, which is a discretionary use of cash,
into a non-discretionary fixed charge. This conversion will have a
tax benefit and create a net cash flow improvement, despite the
reduction in Windstream's future flexibility. Although the lease
payment will be contractually junior to most other obligations of
Windstream and Holdco, the strategic importance of the lease will
effectively make it one of the company's highest priority cash
payments.
This transaction will remove the future option of a dividend cut
and commit Windstream to the fixed lease payment for at least 15
years. Moody's believes that the transaction could amplify the
company's downside risk if it fails to execute a return to growth
since its ability to reallocate capital will be more limited going
forward. Although the transaction will improve Windstream's after
dividend free cash flow, the new lease payment in lieu of the
common dividend reduces the cash flow cushion for debt service
from the perspective of bondholders. In the downside scenario
where revenues and EBITDA continue to erode, the higher level of
fixed costs could lead to a higher probability of default and a
higher loss given default given the reduction in flexibility to
reallocate cash flows and the lower asset coverage from the
transfer of assets to the REIT.
The ratings for the debt instruments reflect both the probability
of default of Windstream, on which Moody's maintains a PDR of Ba3-
PD, and individual loss given default assessments. Moody's
currently rates Windstream's senior secured term loans and
revolver at Ba2. Windstream's secured debt benefits from a
collateral package that includes a pledge of assets and upstream
guarantees from subsidiaries representing approximately 20% of
total company cash flow. Also, the secured debt benefits from a
pledge of the equity interest in certain non-guarantor
subsidiaries. The ratings recognize that regulatory restrictions
that limit the collateral pledge for certain non-guarantor
subsidiaries. Windstream's senior unsecured notes are currently
rated B1 reflecting their junior position in the capital
structure.
Windstream is expected to repay approximately $3.2 billion of debt
with the distribution from the REIT. From a strictly contractual
standpoint, the new master lease (with HoldCo as the obligor) is
the most subordinate obligation in the capital structure. However,
Moody's believes that the strategic importance of the lease
justifies additional credit support and Moody's ranks it on an
equal basis to Windstream's unsecured debt.
Based on the final capital structure following the transaction,
the specific instrument ratings on existing debt could change.
Given the call protection on the unsecured notes, Moody's expects
Windstream to direct a large portion of the proceeds from the
exchange towards paying down the senior secured debt which could
result in an upgrade of any remaining senior secured debt.
However, Moody's expects the ratings on the unsecured notes to
remain unchanged under this scenario.
The stable outlook reflects Moody's view that Windstream will
maintain approximately flat adjusted EBITDA and stable cash flows
over the next few years despite the margin pressure discussed
above.
Moody's could raise Windstream's ratings if leverage were to be
sustained below 3.75x (Moody's adjusted) and free cash flow to
debt were in the mid single digits percentage range. Moody's could
lower the ratings further if leverage were to exceed 4.25x
(Moody's adjusted) or free cash flow turns negative, on a
sustained basis.
Windstream Corporation, Inc. is a pure-play wireline operator
headquartered in Little Rock, AR. The company was formed by a
merger of Alltel Corporation's wireline operations and Valor
Communications Group in July 2006. Windstream has continued to
grow through acquisitions and, following the acquisition of PAETEC
Holding Corp. ("PAETEC") in 2011, Windstream provides services in
48 states.
The principal methodology used in this rating was the Global
Telecommunications Industry published in December 2010. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
WOLF MOUNTAIN: Court Approves Aug. 5 Auction of Property
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Utah approved the
bidding procedures to govern the sale of certain real and personal
property of Wolf Mountain Products, L.L.C., including bidding
protections for the stalking horse bid.
The Debtors will sell the assets at an auction led by Hyponex
Corporation, or its assigns, on Aug. 5, 2014, at 10:00 a.m. at the
law offices of Anna W. Drake, P.C., 175 South Main Street, Suite
300, Salt Lake City, Utah.
A hearing to consider the successful bid and any backup bid will
be held on Aug. 7, at 10:00 a.m. Objections, if any, to the sale
motion is due Aug. 1, at 4:30 p.m.
As reported in the Troubled Company Reporter on July 25, 2014,
the Small Business Administration objected to the Debtor's sale
motion. According to SBA, the proposed bidding procedures require
competing bidders to bid on the whole package of assets and do not
allow competing bidders to bid on individual assets. The asset
package includes two separate parcels of real property that are
hundreds of miles apart and other assets that are not necessarily
related to the real properties. SBA has a lien on only one of the
real estate parcels, which lien is partially unsecured, and it
would be in SBA's best interests to allow competing bids on the
individual parcel. Requiring bids on the whole package of assets
may chill the bidding.
On July 3, 2014, the Debtor requested for authorization to sell
its assets in an auction led by Hyponex. The Debtor proposed to
sell the purchased assets to Hyponex for a gross purchase price of
$3,000,000, plus additional amounts, up to a maximum of $420,000,
that Hyponex may pay for the identified inventory (under the APA,
Hyponex is obligated to purchase up to 70,000 cubic yards of the
raw materials inventory from the Debtor at the price of $6 per
yard, provided the identified inventory meets Hyponex's required
specifications), payable in cash upon closing, subject to the
holdback amount.
The assets to be sold are:
A. the Debtor's and the estate's entire interest in the Lindon
Property, consisting of 6.25 acres of "light commercial" ground
just west of I-15 in Lindon, Utah, and the buildings, fixtures,
and appurtenances thereon;
B. the Debtor's and the estate's entire interest in the
Panguitch Property, consisting of 153.48 acres of land in
Panguitch, Utah, and the buildings, fixtures, and appurtenances
thereon, including, but not limited to, all buried wood and bark
fines located within the Panguitch Property;
C. the Debtor's and the estate's entire interest in certain
permits related to the Lindon Property and the Panguitch Property,
to the extent such permits are transferable;
D. the Debtor's and the estate's entire interest in the
Identified Inventory, consisting of no more than 70,000 cubic
yards of harvested buried wood and bark fines that (i) have been
extracted from the Panguitch Property, (ii) have been processed by
the Debtor, (iii) are being stored by the Debtor above ground at
the Lindon Property or the Panguitch Property, and (iv) fully
comply with Hyponex's specifications;
E. the Debtor's and the estate's entire interest in all water
rights or water shares appurtenant to or associated with the
Lindon Property and the Panguitch Property;
F. the Debtor's and the estate's entire interest in the
equipment, consisting of a Colorbiotics Colorizer 2nd Harvester
and a Power Screen conveyer; and
G. the Debtor's and the estate's entire interest in the
following intellectual property:
i) the registered trademark "Designer Soils," registered
with the United States Patent & Trademark Office and bearing
Registration No. 3,800,124 (registration date of June 8, 2010),
and
ii) the internet domain name "DESIGNERSOILS.COM" registered
on Dec. 10, 2007, with a current expiration date of Dec. 10, 2014.
If Hyponex is not the final purchaser of the purchased assets at
and the purchased assets are sold to a third party as part of a
competitive transaction, Hyponex will be entitled to a breakup fee
in the amount of $100,000.
The Debtor is represented by:
Anna W. Drake, Esq.
ANNA W. DRAKE, P.C.
175 South Main Street, Suite 300
Salt Lake City, UT 84111
Tel: (801) 328-9792
Fax: (801) 413-1620
E-mail: annadrake@att.net
About Wolf Mountain Products, L.L.C.
Wolf Mountain Products, L.L.C., filed a Chapter 11 petition
(Bankr. D. Utah Case No. 13-33869) in Salt Lake City on Dec. 12,
2013. Bryce J. Burns signed the petition as manager.
The Orem, Utah-based company disclosed $40,666,583 in assets and
$5,627,349 in liabilities as of the Petition Date. Anna W.
Drake, Esq., at the law firm of Anna W. Drake, P.C., in Salt Lake
City, serves as the Debtor's counsel. Judge Joel T. Marker
presides over the case.
The U.S. Trustee for Region 19 has selected three creditors to the
Official Committee of Unsecured Creditors for the case of the
Debtor.
WOLVERINE WORLD: Moody's Raises Corporate Family Rating to 'Ba2'
----------------------------------------------------------------
Moody's Investors Service upgraded Wolverine World Wide, Inc.'s
Corporate Family Rating to Ba2 from Ba3 and also upgraded the
Company's Probability of Default rating to Ba2-PD from Ba3-PD.
Moody's also upgraded the rating assigned to the Company's $375
million senior unsecured notes due 2020 to Ba3 from B2. The
Company's Speculative Grade Liquidity rating was affirmed at
SGL-1. The rating outlook is stable.
"The upgrade reflects Wolverine's continued meaningful reduction
in debt with net debt falling below $900 million at the end of the
second quarter of 2014, its lowest level since the October 2012
acquisition of the Performance+Lifestyle Group ("PLG")" said
Moody's Vice President Scott Tuhy. He added "Wolverine has now
substantially integrated the PLG acquisition and we expect the
Company will maintain stable to moderately growing earnings across
its large portfolio of brands as a whole for the near to
intermediate term". The upgrade also considers the positive impact
anticipated from the Company's recently-announced Strategic
Realignment Plan, which is expected to result in the closure of up
to 140 retail stores, mostly under the Stride Rite brand. The
initiative is likely to result in improved returns on capital and
incremental funding of the Company's continuing omni-channel
initiatives.
Upgrades:
Issuer: Wolverine World Wide Inc.
Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD
Corporate Family Rating, Upgraded to Ba2 from Ba3
Senior Unsecured Regular Bond/Debenture Oct 15, 2020, Upgraded
to Ba3 (LGD5) from B2 (LGD5)
Outlook Actions:
Issuer: Wolverine World Wide, Inc.
Outlook, Changed To Stable From Positive
Affirmations:
Issuer: Wolverine World Wide, Inc.
Speculative Grade Liquidity Rating, Affirmed SGL-1
Ratings Rationale
Wolverine's Ba2 Corporate Family Rating reflects its meaningful
scale in the global footwear industry with LTM revenues near $2.7
billion and its sizable portfolio of brands that have appeal to a
broad range of consumer needs. The ratings also reflect the
Company's meaningful scale in international markets across a
number of its brands. The ratings also reflect the Company's
moderate financial leverage, with adjusted debt/EBITDA near 4
times which Moody's expect will further improve through earnings
improvement and debt repayment. The rating also reflects that the
Company has made substantial progress integrating its October 2012
acquisition of the Performance+Lifestyle Group which was the
largest acquisition undertaken by the Company. The ratings are
constrained by the narrow product focus of the Company in the
footwear segment and that certain brands such as Sperry Top-Sider
have a greater degree of fashion risk.
The stable rating outlook reflects Moody's view that Moody's
expect to see stable sales and operating margins for the company
(excluding the adverse impact on revenues from store closures as
part of the Strategic Realignment Plan) and that the Company will
continue to maintain a moderate level of net funded debt.
Ratings could be upgraded if the Company were to make further
improvement deleveraging its balance sheet while demonstrated
meaningful progress growing sales and margins for its portfolio as
a whole. Over time, continued international expansion as well as
broadening its portfolio of brands would be a positive.
Quantitatively, ratings could be upgraded if adjusted debt/EBITDA
was sustained below 3.25 times and interest coverage was sustained
above 4 times.
Ratings could be downgraded if the Company were to see a
meaningful reversal in positive trends in revenue for its brands
as a whole, or if the Company were to undertake more aggressive
financial policies such as a sizable debt-financed acquisition.
Quantitatively, ratings could be downgraded if Moody's expected
adjusted debt/EBITDA to be sustained above 4 times or interest
coverage fell below 3.25 times.
The principal methodology used in this rating was the Global
Apparel Companies published in May 2013. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Wolverine World Wide, Inc. is a marketer of branded casual, active
lifestyle, work, outdoor sport, athletic, children's and uniform
footwear and apparel. The Company's portfolio of brands includes:
Merrell, Sperry Top-Sider, Hush Puppies, Saucony, Wolverine, Keds,
Stride Rite, Sebago, Cushe, Chaco, Bates, HYTEST, and Soft Style.
The Company also is the global footwear licensee of the popular
brands Cat and Harley-Davidson. The Company's products are carried
by leading retailers in the U.S. and globally in over 200
countries and territories.
ZODIAC POOL: Seeks U.S. Bankruptcy Protection
---------------------------------------------
Zodiac Pool Solutions SAS, the Paris-based swimming pool and spa
manufacturer, filed for bankruptcy protection in the U.S. as part
of its debt-restructuring effort now under way in the UK.
Patrick Fitzgerald, writing for The Wall Street Journal, reported
that the company, which has more than $1.3 billion in debt, ran
into financial trouble in 2008 and has been closing facilities and
selling assets, including it WaterPik and boat businesses, to stay
afloat. But those efforts haven't been enough to refinance a big
chunk of debt coming due in the next 14 months, the Journal said.
Zodiac is seeking to extend the maturity of some of that debt to
2019 through a restructuring that is being conducted through a
U.K. process called a "scheme of arrangement," which is somewhat
akin to Chapter 11 reorganization in the U.S., the Journal
related.
ZODIAC POOL SOLUTIONS: Chapter 15 Case Summary
----------------------------------------------
Chapter 15 Petitioner: Francois Mirallie
Chapter 15 Debtors:
Entity Case No.
------ --------
Zodiac Pool Solutions SAS 14-11818
aka Zodiac Marine & Pool SAS
aka Marine Participations France SAS
1 Eversholt Street, 3rd Floor, Office 310
Eutson, London NW1 2DN
United Kingdom
Zodiac Pool Solutions North America, Inc. 14-11819
Zodiac Pool Systems, Inc. 14-11820
Type of Business: Manufacturer and distributor of products for
swimming pools and spas.
Chapter 15 Petition Date: July 31, 2014
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Hon. Kevin J. Carey
Chapter 15 Petitioner's: Curtis S. Miller, Esq.
Counsel: MORRIS NICHOLS ARSHT & TUNNELL LLP
1201 N. Market St.
Wilmington, DE 19801
Tel: 302-351-7412
Fax: 302-425-3080
Email: cmiller@mnat.com
- and -
Daniel Guyder, Esq.
Jonathan Cho, Esq.
ALLEN & OVERY LLP
1221 Avenue of the Americas
New York, New York 10020
Tel: (212) 610-6300
Fax: (212) 610-6399
Email: daniel.guyder@allenovery.com
jonathan.cho@allenovery.com
Estimated Assets: $500 million to $1 billion
Estimated Liabilities: More than $1 billion
* No Deal Imminent on Argentine Debt Feud
-----------------------------------------
Nicole Hong, Ken Parks and Matt Day, writing for The Wall Street
Journal, reported that Argentina's default on $29 billion in debt
brought a stock-market selloff and finger pointing by the
Argentine government and creditors, but investors held out hope
that a resolution to the crisis could be reached.
According to the report, the main source of the optimism: efforts
by banks in Argentina and the U.S., including J.P. Morgan Chase &
Co., to strike a deal to help Argentina pay off the debt it owes a
small group of hedge funds and resume interest payments to other
bondholders.
On July 31, Argentina's dollar-denominated bonds due in 2033,
which were among the bonds in default, fell to near 90 cents on
the dollar, from 96 cents late July 30, the Journal said.
Argentina's benchmark Merval stock index fell 8.4%. In the black
market, the peso fell to 12.65 per dollar from 12.30 on July 30,
the report related.
* BOOK REVIEW: Risk, Uncertainty and Profit
-------------------------------------------
Author: Frank H. Knight
Publisher: Beard Books
Softcover: 381 pages
List Price: $34.95
Review by Gail Owens Hoelscher
Order your personal copy today at http://is.gd/al9gqP
The tenets Frank H. Knight sets out in this, his first book,
have become an integral part of modern economic theory. Still
readable today, it was included as a classic in the 1998 Forbes
reading list. The book grew out of Knight's 1917 Cornell
University doctoral thesis, which took second prize in an essay
contest that year sponsored by Hart, Schaffner and Marx. In it,
he examined the relationship between knowledge on the part of
entrepreneurs and changes in the economy. He, quite famously,
distinguished between two types of change, risk and uncertainty,
defining risk as randomness with knowable probabilities and
uncertainty as randomness with unknowable probabilities. Risk,
he said, arises from repeated changes for which probabilities
can be calculated and insured against, such as the risk of fire.
Uncertainty arises from unpredictable changes in an economy,
such as resources, preferences, and knowledge, changes that
cannot be insured against. Uncertainty, he said "is one of the
fundamental facts of life."
One of the larger issues of Knight's time was how the
entrepreneur, the central figure in a free enterprise system,
earns profits in the face of competition. It was thought that
competition would reduce profits to zero across a sector because
any profits would attract more entrepreneurs into the sector and
increase supply, which would drive prices down, resulting in
competitive equilibrium and zero profit.
Knight argued that uncertainty itself may allow some
entrepreneurs to earn profits despite this equilibrium.
Entrepreneurs, he said, are forced to guess at their expected
total receipts. They cannot foresee the number of products they
will sell because of the unpredictability of consumer
preferences. Still, they must purchase product inputs, so they
base these purchases on the number of products they guess they
will sell. Finally, they have to guess the price at which their
products will sell. These factors are all uncertain and
impossible to know. Profits are earned when uncertainty yields
higher total receipts than forecasted total receipts. Thus,
Knight postulated, profits are merely due to luck. Such
entrepreneurs who "get lucky" will try to reproduce their
success, but will be unable to because their luck will
eventually turn.
At the time, some theorists were saying that when this luck runs
out, entrepreneurs will then rely on and substitute improved
decision making and management for their original
entrepreneurship, and the profits will return. Knight saw
entrepreneurs as poor managers, however, who will in time fail
against new and lucky entrepreneurs. He concluded that economic
change is a result of this constant interplay between new
entrepreneurial action and existing businesses hedging against
uncertainty by improving their internal organization.
Frank H. Knight has been called "among the most broad-ranging
and influential economists of the twentieth century" and "one of
the most eclectic economists and perhaps the deepest thinker and
scholar American economics has produced." He stands among the
giants of American economists that include Schumpeter and Viner.
His students included Nobel Laureates Milton Friedman, George
Stigler and James Buchanan, as well as Paul Samuelson. At the
University of Chicago, Knight specialized in the history of
economic thought. He revolutionized the economics department
there, becoming one the leaders of what has become known as the
Chicago School of Economics. Under his tutelage and guidance,
the University of Chicago became the bulwark against the more
interventionist and anti-market approaches followed elsewhere in
American economic thought. He died in 1972.
*********
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 by e-mail.
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 the nation's bankruptcy courts. The
list includes links to freely downloadable of these small-dollar
petitions in Acrobat PDF documents.
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.
*********
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, 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 2014. 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 ***