/raid1/www/Hosts/bankrupt/TCR_Public/140818.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, August 18, 2014, Vol. 18, No. 229
Headlines
ALLBRITTON COMMUNICATIONS: S&P Withdraws 'B+' Corp. Credit Rating
AMBIENT CORPORATION: Suspends SEC Reporting Obligations
ANIXTER INC: Moody's Affirms 'Ba2' CFR, Outlook Negative
ARCE RIVERSIDE: Hole Avenue Property Valued at $3.3 Million
ARICENT TECHNOLOGIES: Moody's Affirms 'B2' Corp. Family Rating
AURORA DIAGNOSTICS: Conference Call Set to Discuss Q2 Results
AUXILIUM PHARMACEUTICALS: Bank Amendment No Impact on Moody's CFR
BAPTIST HOME: Sept. 10 Hearing on LS&A's "Nunc Pro Tunc" Bid
BERNARD L. MADOFF: Court Narrows Picard Suit v. Merkin et al.
CASH STORE: Obtains CCAA Stay Extension Until Sept. 30
BRUSH CREEK: Bank's SARE Determination Bid Taken Under Advisement
CHIQUITA BRANDS: Cutrale, Safra File Preliminary Proxy Materials
CLUBCORP CLUB: Sequoia Deal No Impact on Moody's 'B1' Rating
CONSTELLATION BRANDS: Casa Noble Deal No Impact on Moody's CFR
CSM BAKERY: Downsized Dividend No Impact on Moody's 'B2' CFR
DCCW PROPERTIES: Case Summary & 9 Unsecured Creditors
DETROIT, MI: Bankruptcy Judge Refuses to Ban Water Shutoffs
DIGITAL DOMAIN: DEO Wants Court Determination on Tax Credits
DOWDY ENTERPRISE: Case Summary & 3 Unsecured Creditors
DS SERVICES: Moody's Affirms 'B2' Corporate Family Rating
E H MITCHELL: Files Second Amended Disclosure Statement
E H MITCHELL: Sept. 4 Hearing on Trustee's Bod to Convert Case
EAGLE BULK: Confirmation & Plan Outline Hearing on Sept. 18
EAGLE BULK: Has Interim Authority to Obtain $25-Mil. in DIP Loans
EAGLE BULK: Can Employ Kurtzman Carson as Claims & Noticing Agent
EAGLE BULK: U.S. Court Issues Bankruptcy Stay Order
EPWORTH VILLA: Proposes Gable & Gotwals as Counsel
EXIDE TECHNOLOGIES: Targeted in Federal Criminal Probe of Plant
EXPEDIA INC: Moody's Rates Proposed Sr. Unsec. Note Issuance Ba1
FAGERDALA USA: Case Summary & 20 Largest Unsecured Creditors
FANNIE MAE & FREDDIE MAC: Updated Conservatorship Litigation Chart
FIRED UP: Has Access to Cash Collateral Until Oct. 31
FOREST CITY: Moody's Corrects Subordinated Debt Rating to (P)Caa2
FPL ENERGY: S&P Affirms 'B-' Rating on $100MM Sr. Secured Bonds
FUEL PERFORMANCE: Incurs $2 Million Net Loss in Second Quarter
G-I HOLDINGS: NY Housing Authority's Lawsuit Dismissed
GENERAL MOTORS: Attorneys Chosen for Ignition-Switch Plaintiffs
GULFPORT ENERGY: Moody's Rates $250MM Unsecured Notes 'B3'
HAAS ENVIRONMENTAL: Committee Sues to Challenge Lenders' Liens
HCA INC: Fitch Hikes Issuer Default Rating to 'BB-'
HOUSE OF MERCY: Case Summary & 20 Largest Unsecured Creditors
IBCS MINING: Hirschler Fleischer Approved as Bankruptcy Counsel
IBCS MINING: Taps Epiq Bankruptcy as Claims and Noticing Agent
IBCS MINING: U.S. Trustee Forms Two-Member Creditors Committee
IBCS MINING: Wants Baird to Handle Matters Related to Coal Mining
IBCS MINING: Seeks Court Approval for Mike Dean as CFO
IZEA INC: Posts $2 Million Net Income in Second Quarter
IRISH BANK: Foreign Representatives Balk at Designation Motion
J. CREW: Bank Debt Trades at 3% Off
J.M. HUBER: S&P Affirms 'BB+' CCR & Rates New $660MM Debt 'BB+'
JAMES RIVER: Wednesday Hearing on Lease Decision Extension
KID BRANDS: Wants to Pay Bonuses for Workers to Complete Sales
LEHMAN BROTHERS: Unsecured Creditors to Receive $4.6 Billion
LAKELAND INDUSTRIES: Amends Fiscal 2014 Annual Report
LIFE UNIVERSITY: Moody's Rates Series 2008 Revenue Bond 'Ba3'
LIGAND PHARMA: Lemelson Says Debt Issuance Solidifies Insolvency
LOVE CULTURE: Final DIP Hearing Adjourned to Aug. 18
MASCO CORP: Moody's Affirms 'Ba3' Corporate Family Rating
MICROCOAL INC: Case Summary & 3 Largest Unsecured Creditors
MILTON CHARLES AULT: $1.4MM Judgment for Glazers Affirmed
MONROE HOSPITAL: Has Interim Authority to Tap Financing
MONROE HOSPITAL: Can Employ UpShot as Claims & Noticing Agent
MONROE HOSPITAL: Section 341(a) Meeting Scheduled for Sept. 9
NIB ASSOCIATES: Case Summary & Unsecured Creditor
NISKA GAS: Moody's Lowers Sr. Unsecured Notes Rating to 'Caa1'
NMBFIL INC: Joins Bondex & Specialty Products in Chapter 11
NMBFIL INC: Voluntary Chapter 11 Case Summary
PAM CORP: Voluntary Chapter 11 Case Summary
PARAMOUNT RESOURCES: Moody's Hikes Corp. Family Rating to 'B2'
PETRON ENERGY: Registers 22 Million Shares for Resale
PHOENIX PAYMENT: Taps PMCM to Provide Restructuring Services
PHOENIX PAYMENT: Proposes Rust Consulting as Admin. Advisor
PHOENIX PAYMENT: Taps Raymond James as Investment Banker
PHYSICAL PROPERTY: Incurs HK$251,000 Net Loss in Second Quarter
PIER 35 EVENTS: Case Summary & 4 Largest Unsecured Creditors
PUERTO RICO: Prepa Given Until March 31 to Pay Principal
RAAM GLOBAL: Incurs $7.3 Million Net Loss in Second Quarter
ROUNDY'S SUPERMARKET: Bank Debt Trades at 5% Off
SAN JOAQUIN HILLS: Moody's Affirms 'B1' Revenue Bond Rating
SEAWORLD PARKS: S&P Lowers CCR to 'BB-'; Outlook Negative
SEVEN ARTS: Tangiers Investment Reports 8% Equity Stake
SMART TECHNOLOGIES: S&P Revises Outlook to Stable & Affirms B CCR
SOTERA DEFENSE: Moody's Withdraws Caa2 Corporate Family Rating
SPIRE CORP: Incurs $1.4 Million Net Loss in Second Quarter
TA TYS BAR: Voluntary Chapter 11 Case Summary
USG CORP: Moody's Raises Corporate Family Rating to 'B2'
VICTORY ENERGY: Delays Form 10-Q for Second Quarter
VISCOUNT SYSTEMS: Incurs C$1.2 Million Net Loss in Second Quarter
WALTER ENERGY: S&P Says Distressed Exchange Deal a "Default"
* BOND PRICING: For Week From August 11 to 15, 2014
*********
ALLBRITTON COMMUNICATIONS: S&P Withdraws 'B+' Corp. Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew all its ratings on
Arlington, Va.-based Allbritton Communications Co. at the
company's request. This includes the 'B+' corporate credit rating
and 'B+' issue-level rating on the company's senior unsecured
notes due May 2018.
"Allbritton recently completed the sale of its television stations
and cable news network to Hunt Valley, Md.-based Sinclair
Broadcast Group Inc.," said Standard & Poor's credit analyst Jawad
Hussain.
The company also tendered for and repaid in full the May 2018
senior notes.
AMBIENT CORPORATION: Suspends SEC Reporting Obligations
-------------------------------------------------------
Ambient Corporation has determined to effect a suspension of its
reporting obligations under Section 15(d) of the Securities
Exchange Act of 1934, as amended, by filing a Form 15 with the
Securities and Exchange Commission on Aug. 14, 2014. Accordingly,
Ambient will not be filing a quarterly report on Form 10-Q for the
recently completed fiscal quarter ended June 30, 2014.
The action was taken in the wake of Ambient's recent voluntary
filing with the U.S. Bankruptcy Court for the District of Delaware
seeking relief under Chapter 11 of Title 11 of the United States
Code. Ambient's Board has approved the suspension of its SEC
reporting obligations primarily as a cost reduction measure,
thereby allowing Company personnel and scarce resources to focus
exclusively on continuing to operate the business and on the
orderly sale of the Company's assets to maximize the bankruptcy
estate. Suspending and, ultimately, terminating Ambient's SEC
reporting obligations is expected to result in substantial legal,
accounting, and related cost savings associated with reporting
compliance and make those savings available for continued
operation of the business and the maximization of the bankruptcy
estate.
The Company is eligible to suspend its reporting obligations
because it has fewer than 300 record holders of its common stock.
Immediately upon the filing of the Form 15, certain reporting
obligations of the Company, such as its obligation to file Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current
Reports on Form 8-K, will immediately be suspended.
More information about Ambient's Chapter 11 filing is available on
the Internet at http://www.upshotservices.com/ambient
About Ambient Corporation
Headquartered in Newton, MA, Ambient Corporation (otc pink:AMBTQ)
-- http://www.ambientcorp.com/-- designs, develops and sells the
Ambient Smart Grid(R) communications and applications platform.
Ambient filed a Chapter 11 bankruptcy petition (Bankr. D. Del.
Case No. 14-11791) on July 28, 2014. Judge Kevin Gross presides
over the case.
The Debtor has tapped Bayard, P.A., in Wilmington, Delaware, as
counsel; Gavin/Solmonese LLC as financial advisor; and Upshot
Services, LLC, as claims and noticing agent.
The Debtor disclosed $1.75 million in assets and $3.54 million in
debt as of the bankruptcy filing.
ANIXTER INC: Moody's Affirms 'Ba2' CFR, Outlook Negative
--------------------------------------------------------
Moody's Investors Service affirmed the Ba2 Corporate Family Rating
of Anixter Inc., following the announcement by Anixter
International Inc., Anixter Inc.'s parent holding company
(collectively Anixter), that it is acquiring Tri-Ed for
approximately $420 million excluding fees and expenses. The
purchase price represents about 11.6x multiple of Tri-Ed's
adjusted EBITDA. Tri-Ed, with sales approximating $570 million and
adjusted EBITDA of about $36 million, is a North American
distributor of security and low-voltage technology products. In
related rating actions, Moody's assigned a speculative grade
liquidity rating of SGL-3 and changed the rating outlook to
negative from stable.
The following ratings were affected by this action:
Corporate Family Rating affirmed at Ba2;
Probability of Default Rating affirmed at Ba2-PD;
$200 million Sr. Unsec. Notes due 2015 affirmed at Ba3 (LGD4);
and,
$350 million Sr. Unsec. Notes due 2019 affirmed at Ba3 (LGD4).
Speculative grade rating of SGL-3 is assigned.
Ratings Rationale
Anixter's Ba2 Corporate Family Rating reflects its solid business
profile featuring a diverse product offering and wide range of
customers, as well as the stability of its operating performance
and free cash flow generation. Anixter is a global distributor of
over 450,000 products in over 50 countries. The company has a well
diversified customer base with no single customer accounting for
more than 3% of sales. Moody's anticipates adjusted EBITDA margins
to remain in the 7.5% - 7.75% range through 2015. Also, Anixter is
able to generate significant levels of free cash flow, generating
about $275 million in its last 12 months and adding back the one-
time dividend of $165 million in 4Q13.
However, the change in rating outlook to negative from stable
results from the increased credit risk as Anixter is pursuing an
aggressive strategy by using its liquidity to partially fund the
acquisition. Anixter is utilizing a separate $200 million term
loan allowed under the existing revolving credit facility due
2018, in addition to further facility drawdowns to fund the
acquisition. Broadening the use of the revolver to buying long-
term assets versus only funding working capital and letter of
credit needs -- also inhibits Anixter's financial flexibility.
That flexibility is paramount with $200 million of unsecured notes
maturing March 1, 2015, something the company has not yet publicly
addressed.
Also, debt leverage ratios worsen as a result of the all-debt
financing. Balance sheet debt increases by slightly more than 50%.
Moody's estimates pro forma debt-to-EBITDA ratio would stand
around 3.5x and debt-to-book capitalization will be near 60%.
These ratios are more indicative of lower rated entities. In
contrast at 2Q14, Anixter's debt-to-EBITDA is about 2.9x and debt-
to-book capitalization is approximately 54% (all ratios
incorporate Moody's standard adjustments).
The assignment of the speculative grade liquidity rating of SGL-3
reflects Moody's expectations that funds from operations should be
sufficient for normal operating requirements, working capital
needs, and capital expenditures. Constraining the liquidity
profile is the partial use of the revolving credit facility for
the acquisition with a looming maturity of $200 million.
A downgrade could ensue if Anixter's liquidity profile worsens,
failing to address its maturing notes. Additional negative rating
pressures could result if the company is unable to smoothly
integrate Tri-Ed, or financial performance deteriorates due to a
decline in the company's end markets that results in debt-to-
EBITDA remains near 4.0x (ratio incorporates Moody's standard
adjustments). Additional debt-financed acquisitions, sizeable
share repurchases, or special dividends that meaningfully increase
debt levels could adversely affect the ratings too.
Stabilization of the ratings outlook could ensue if Anixter
improves its liquidity profile, while validating Moody's
expectations that debt leverage metrics will improve over the long
term, and Anixter will successfully integrate Tri-Ed.
Anixter Inc., headquartered in Glenview, IL, is a global
distributor of communications products, electrical and electronic
wire and cable, fasteners and other small parts. End users include
manufacturers, natural resources companies, utilities and original
equipment manufacturers that use the company's products as
components in their end products. Revenues on a pro forma basis
inclusive of Tri-Ed for the 12 months ended July 4, 2014 total
approximately $6.8 billion.
ARCE RIVERSIDE: Hole Avenue Property Valued at $3.3 Million
-----------------------------------------------------------
Bankruptcy Judge Dennis Montali pegged the value of the real
property owned by debtors Arce Riverside, LLC, and Kera Riverside,
LLC, on Hole Avenue in Riverside, California, at $3,300,000 as of
the date of trial, August 4, 2014.
The Debtors appeared and were represented by counsel and presented
their appraiser, Tom Curtis, who testified by adopting the
Declaration of Appraiser David M. Rosenthal. There was no
objection to this procedure because Curtis and Mr. Rosenthal co-
authored the Appraisal Report submitted on behalf of Debtors.
Creditor Penn Equities, LLC appeared and was represented by
counsel and presented its appraiser, Jack Alexander and his
appraisal of the Property.
Creditor MIC Infinity Fund, LLC appeared and was represented by
counsel and presented its appraiser, Steven R. Fontes and his
appraisal of the Property.
Mr. Curtis valued the Property as of June 24, 2014, and concluded
that its "as is" market value was $3,850,000. Mr. Alexander
valued the Property as of February 25, 2014, and concluded that
the market value was $2,900,000. Mr. Fontes used a Date of Value
in between those of Messrs. Curtis and Alexander, April 23, 2014,
and concluded that the market value of the Property was
$3,200,000.
Pursuant to the agreement of all parties, the trial was to
determine the value of the Property for all purposes in the
administratively consolidated Chapter 11 cases, and in particular
in anticipation of the Debtors filing a plan of reorganization
based on that value.
A copy of the Court's Aug. 11 Memorandum Decision is available at
http://is.gd/j7B3JLfrom Leagle.com.
Arce Riverside, LLC, based in Redwood City, California, filed for
Chapter 11 protection (Bankr. N.D. Cal. Case No. 13-32456) on Nov.
12, 2013. Kera Riverside, LLC, also in Redwood City, filed a
Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-32457) on Nov.
12.
Judge Dennis Montali presides over Arce's case. Judge Hannah L.
Blumenstiel was first assigned to the Kera case. The cases were
then jointly administered before Judge Montali.
Chris D. Kuhner, Esq., at Kornfield, Nyberg, Bendes and Kuhner,
serves as counsel to the Debtors.
Arce and Kera each estimated $1 million to $10 million in both
assets and debts.
The petitions were signed by George Arce, managing member.
A list of Arce's two largest unsecured creditors is available for
free at http://bankrupt.com/misc/canb13-32456.pdf
A list of Kera's two largest unsecured creditors is available for
free at http://bankrupt.com/misc/canb13-32457.pdf
ARICENT TECHNOLOGIES: Moody's Affirms 'B2' Corp. Family Rating
--------------------------------------------------------------
Moody's Investors Service has affirmed the corporate family and
probability of default ratings ("CFR" and "PDR", respectively) of
B2 and B2-PD, respectively, of Aricent Technologies (Aricent).
Concurrently, the senior secured revolving credit facility and
first lien term loan ratings were lowered to B1 from Ba3 while the
second lien term loan rating was lowered to Caa1 from B3. The
rating outlook is stable.
This rating action follows the announcement that the remaining $69
million Holdco PIK note will be paid off with the proceeds from an
incremental first lien term loan. The assigned ratings are subject
to review of final documentation and no material change in the
terms and conditions of the transaction.
Ratings Rationale
Moody's downgrade of the instrument ratings reflects the change in
mix of debt (unchanged in total) with the subordinated PIK note
being refinanced with the most senior ranking debt. As the CFR and
PDR are affirmed and remain at B2 and B2-PD, respectively, the
first lien (upsized) and second lien debt have higher expected
loss as they no longer benefit from the loss absorption of the PIK
note upon repayment.
The B2 CFR reflects Aricent's size and scale relative to larger
and financially stronger information technology (IT) services
firms. The rating also considers Aricent's high financial leverage
of about 6 times adjusted debt to EBITDA, which Moody's believes
will likely remain elevated through 2015 given modest cash flow
prospects (over $20 million of annual free cash flow) and
potentially high investment costs to support sustained growth in
its core product engineering business.
At the same time, the B2 rating is supported by favorable industry
dynamics with the trend towards outsourced R&D engineering and
Aricent's recurring customer base of leading communications and
network infrastructure companies. High client retention rates and
good backlog visibility reinforces the value of low cost, offshore
R&D solutions in a functional area characterized by high
engineering costs.
The stable outlook reflects Moody's expectation that Aricent will
generate annual revenue and profit growth of at least mid single
digits through fiscal year ending March 2015. Moody's also
anticipates a free cash flow to debt ratio in the low single
digits, consistent with technology services peers in the B rating
category. The stable outlook incorporates Moody's expectation that
no significant dividends will be paid to the owners.
The ratings could be upgraded if Aricent were to demonstrate
double digit organic revenue growth, solid improvements in
operating margins over 15%, free cash flow to debt in the high
single digits, and adjusted debt to EBITDA of less than 4 times on
a sustained basis. Downward ratings pressure could arise if
Aricent's revenue declines, operating profit margins were to dip
into the mid single digits, liquidity deteriorates (e.g., negative
free cash flow), or adjusted debt to EBITDA were to exceed 7 times
on a sustained basis.
The following ratings were affirmed:
Corporate Family Rating -- B2
Probability of Default Rating -- B2-PD
The following ratings were lowered:
Senior Secured Revolving Credit Facility -- B1 (LGD3) from Ba3
(LGD2)
Senior Secured First Lien Term Loan -- B1 (LGD3) from Ba3 (LGD2)
Senior Secured Second Lien Term Loan -- Caa1 (LGD5) from B3
(LGD5)
The rating outlook is stable.
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.
With projected annual revenues of about $600 million, Aricent
Technologies is a global outsourced provider of R&D engineering
services and software solutions principally to the communications
industry. The company is majority owned by Kohlberg Kravis Roberts
(KKR).
AURORA DIAGNOSTICS: Conference Call Set to Discuss Q2 Results
-------------------------------------------------------------
Aurora Diagnostics Holdings, LLC, will hold a conference call to
review its results for the quarter ended June 30, 2014, on
Wednesday, Aug. 20, 2014, at 11:00 a.m. Eastern Time. The call
may be accessed by dialing (877) 561-2748 for U.S. callers or
(720) 545-0044 for international callers, reference conference ID#
85157883.
The Company will provide a live internet webcast of the conference
call, as well as an archived replay, all of which can be accessed
from the Company's Investor Relations page at www.auroradx.com.
In addition, a telephonic replay of the conference call will be
available through midnight on Wednesday, Aug. 27, 2014, and can be
accessed by dialing (855) 859-2056 (toll free) or (404) 537-3406.
Please reference conference ID# 85157883.
Aurora Diagnostics previously filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $2.92 million on $60.78 million of net revenue for the
three months ended June 30, 2014, as compared with a net loss of
$5.14 million on $62.97 million of net revenue for the same period
in 2013.
For the six months ended June 30, 2014, the Company reported a net
loss of $9.49 million on $117.82 million of net revenue as
compared with a net loss of $12.81 million on $123.94 million of
net revenue for the same period last year.
As of June 30, 2014, the Company had $331.09 million in total
assets, $392.83 million in total liabilities and a $61.74 million
members' deficit.
About Aurora Diagnostics
Aurora Diagnostics is a specialized laboratory company focused on
anatomic pathology at 21 primary community-based locations within
the United States. With 120 licensed physicians, Aurora
Diagnostics provides high-quality diagnostics and testing
information for the patients of its primary referral sources?
dermatologists, OB/GYN professionals, gastroenterologists,
urologists, general surgeons, oncologists, and over 60 community-
based hospitals. For additional information regarding Aurora
Diagnostics and the services it provides, please visit the company
website at www.auroradx.com.
Aurora Diagnostics reported a net loss of $73.01 million on
$248.16 million of net revenue for the year ended Dec. 31, 2013,
as compared with a net loss of $160.85 million on $277.88 million
of net revenue for the year ended Dec. 31, 2012.
* * *
In the Aug. 7, 2014, edition of the TCR, Standard & Poor's Ratings
Services raised its corporate credit rating on Palm Beach Gardens,
Fla.-based anatomic pathology services provider Aurora Diagnostics
Holdings LLC to 'CCC+' from 'CCC'. The outlook is stable.
AUXILIUM PHARMACEUTICALS: Bank Amendment No Impact on Moody's CFR
-----------------------------------------------------------------
Moody's Investors Service commented that the proposed amendment
and consent related to the term loan of Auxilium Pharmaceuticals,
Inc., will reduce financial flexibility but has no effect on
Auxilium's existing ratings or outlook. The unaffected ratings
include Auxilium's B3 Corporate Family Rating, Ba3 senior secured
term loan rating, and SGL-4 Speculative Grade Liquidity rating.
The rating outlook is negative.
Headquartered in Chesterbook, Pennsylvania, Auxilium
Pharmaceuticals, Inc. is a niche pharmaceutical company with a
focus on urological diseases and other specialty areas. Auxilium
reported $400 million of revenue in 2013 including revenue from
Actient Holdings LLC, acquired on April 26, 2013.
BAPTIST HOME: Sept. 10 Hearing on LS&A's "Nunc Pro Tunc" Bid
------------------------------------------------------------
The Bankruptcy Court will convene a hearing on Sept. 10, 2014, at
11:00 a.m., to consider The Baptist Home of Philadelphia's motion
to amend an order authorizing the employment Laura Solomon and
Associates as corporate and tax counsel. Objections, if any, are
due Sept. 3.
The Debtor is requesting that the employment of the LS&A would be
retroactive to the Petition Date. According to the Debtor, the
retention order includes findings by the Court that LS&A
represents no interest adverse to the Debtors' estates, LS&A is a
disinterested person as that term is defined under Section 101(14)
of the Bankruptcy Code, and LS&A's employment is necessary and in
the best interests of the Debtors' estates.
LS&A's aggregate fees and expenses for services rendered from the
Petition Date to the application date total $29,295. According to
the Debtor, barring LS&A from seeking compensation for such
services would work a significant hardship upon LS&A.
LS&A is a three-lawyer firm that has devoted significant time,
attention, and resources from the Petition Date through the
application Date to provide critical legal services to the
Debtors.
As reported in the Troubled Company Reporter on July 3, 2014, LS&A
is expected to:
(a) attend meetings of the Debtors' respective Boards of
Trustees, prepare Board resolutions, review and revise
minutes, preparing policies, and counseling the Debtors on
corporate best practices;
(b) review and update program-related materials, such as
applications, release forms, and other agreements;
(c) provide required notices to and otherwise communicating
with the Office of the Attorney General of the Commonwealth
of Pennsylvania and other regulatory authorities;
(d) negotiate, draft and review contracts with the Home's
vendors;
(e) provide legal advice with respect to employment and
resident issues;
(f) review the Debtors' IRS Forms 990, audited financial
statements, and ongoing financial disclosures to the
Debtors' creditors;
(g) review and update the Debtors' corporate compliance
programs; and
(h) provide legal and tax advice to the Debtors with respect to
fundraising.
LS&A will be paid at these hourly rates:
Laura N. Solomon, president $395
Gil A. Nusbaum, associate $295
LS&A will also be reimbursed for reasonable out-of-pocket expenses
incurred.
About The Baptist Home of Philadelphia
The Baptist Home of Philadelphia and The Baptist Home Foundation
sought Chapter 11 protection (Bankr. E.D. Pa. Case Nos. 14-13305
and 14-13306) in Philadelphia on April 25, 2014.
Baptist Home of Philadelphia is a Pennsylvania nonprofit
corporation that owns and operates a continuing care retirement
community known as "Deer Meadows Retirement Community", which is
located at 8301 Roosevelt Boulevard, Philadelphia, Pennsylvania.
Home offers 126 living accommodations, which vary in size, for
independent living and personal care. It presently also has 206
skilled nursing beds in the nursing and rehabilitation center that
offers short and long term care. It has 369 employees.
Baptist Home of Philadelphia disclosed $37,330,904 in assets and
$34,562,834 in liabilities as of the Chapter 11 filing.
The Debtors have tapped Cozen O'Connor as counsel and KPMG
Corporate Finance LLC as financial advisor and investment banker.
The U.S. Trustee appointed Wilmarie Gonzalez as patient care
ombudsman.
U.S. Bank National Association, the trustee with regard to the
secured bond indebtedness, hired Reed Smith LLP as counsel and
CohnReznick LLP as financial advisor.
Pepper Hamilton LLP represents the Official Committee of Unsecured
Creditors.
BERNARD L. MADOFF: Court Narrows Picard Suit v. Merkin et al.
-------------------------------------------------------------
Irving H. Picard, trustee for the liquidation of the estate of
Bernard L. Madoff Investment Securities LLC, commenced an
adversary proceeding to avoid and recover fraudulent transfers and
disallow and/or subordinate certain defendants' claims. The case
is captioned, IRVING H. PICARD, Trustee for the Liquidation of
Bernard L. Madoff Investment Securities LLC, Plaintiff, J. EZRA
MERKIN, GABRIEL CAPITAL, L.P., ARIEL FUND LTD., ASCOT PARTNERS,
L.P., ASCOT FUND LTD., GABRIEL CAPITAL CORPORATION, Defendants,
ADV. PROC. NO. 08-01789 (SMB)., 09-01182 (SMB) (Bankr. S.D.N.Y.).
The defendants are direct or indirect feeder funds that invested
in BLMIS and the persons that managed those funds. The defendants
have moved to dismiss the Trustee's 13-count complaint. They
argue that the complaint fails to plead that Merkin Defendants
actually knew that Madoff was running a Ponzi scheme or willfully
blinded himself to that fact. Even if the Merkin Defendants had
the requisite knowledge, the complaint fails to plead a basis for
imputing their knowledge to the Defendant Funds.
In an Aug. 12 Memorandum Decision available at http://is.gd/WQ8NrX
from Leagle.com, Bankruptcy Judge Stuart M. Bernstein ruled that
the defendants' motion is granted to the extent of dismissing
Counts One, Three through Eight and Eleven and Twelve, but is
otherwise denied.
Attorneys for Defendants J. Ezra Merkin & Gabriel Capital
Corporation:
Gary J. Mennitt, Esq.
Jonathan D. Perry, Esq.
Neil A. Steiner, Esq.
M. Katherine Stroker, Esq.
DECHERT LLP
1095 Avenue of the Americas
New York, NY 10036
Attorneys for Defendants Gabriel Capital, L.P. & Ariel Fund Ltd.:
Casey D. Laffey, Esq.
James C. McCarroll, Esq.
REED SMITH LLP
599 Lexington Avenue
New York, NY 10022
Attorneys for Defendant Ascot Partners, L.P.:
Judith A. Archer, Esq.
David L. Barrack, Esq.
Daniel M. Glosband, Esq.
Christopher R. Newcomb, Esq.
David B. Schwartz, Esq.
Joseph A. Schwartz, Esq.
Matthew T. Tulchin, Esq.
Jami Mills Vibbert, Esq.
FULBRIGHT & JAWORSKI L.L.P.
666 Fifth Avenue
New York, NY 10103
Attorneys for Ascot Fund Ltd.:
Douglas R. Hirsch, Esq.
Jennifer A. Rossan, Esq.
SADIS & GOLDBERG LLP
551 Fifth Avenue, 21st Floor
New York, NY 10176
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal &
Associates Florida General Partnership, Martin Rappaport
Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and
Steven Morganstern -- assert US$64 million in claims against Mr.
Madoff based on the balances contained in the last statements they
got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has commenced distributions to victims, with the fourth
and latest batch of distributions done in May 2014. Distributions
to eligible claimants have totaled almost $6 billion, which
includes $812.2 million in committed advances from the SIPC. More
than 1,100 victims have already recovered the full principal they
lost in the fraud.
As of May 2014, Mr. Picard has recovered or reached agreements to
recover $9.8 billion since his appointment in December 2008.
CASH STORE: Obtains CCAA Stay Extension Until Sept. 30
------------------------------------------------------
The Cash Store Financial Services Inc. has obtained an order from
the Ontario Superior Court of Justice (Commercial List) granting a
stay extension under its current Companies' Creditors Arrangement
Act proceedings to Sept. 30, 2014.
The Court also authorized the Company and its subsidiaries to
enter into an amendment to its amended and restated debtor-in-
possession financing agreement pursuant to which an aggregate
amount of up to $5 million will be available to the Company to
permit it to continue operations during the CCAA proceedings in an
effort to maximize enterprise value for all stakeholders. Further
DIP financing is required in order to continue going concern
operations and attempt to complete a sale of the Company's
business pursuant to the Court-approved Sale Process, under which
prospective purchasers have had the opportunity to submit a bid
for the Company's property.
Discussions and negotiations with potential bidders are ongoing
under the Sales Process. The Further Amended DIP Agreement will
provide the necessary liquidity throughout the stay extension to
continue to negotiate a sale transaction to achieve a value
maximizing going concern outcome.
The Court also approved the Sixth, Seventh and Eighth Reports of
the Monitor, FTI Consulting Canada Inc., dated June 6, 2014,
June 13, 2014, and July 21, 2014, respectively.
Cash Store Financial remains open for business. Cash Store will
continue to provide updates on its restructuring and the Cash
Store Transaction as matters advance.
About Cash Store Financial
Headquartered in Edmonton, Alberta, Cash Store Financial Services
Inc. (TSX: CSF) is a lender and broker of short-term advances and
provider of other financial services in Canada. Cash Store
Financial operates 510 branches across Canada under the banners
"Cash Store Financial" and "Instaloans". Cash Store Financial also
operates 27 branches in the United Kingdom.
Cash Store Financial is not affiliated with Cottonwood Financial
Ltd. or the outlets Cottonwood Financial Ltd. operates in the
United States under the name "Cash Store". Cash Store Financial
does not do business under the name "Cash Store" in the United
States and does not own or provide any consumer lending services
in the United States.
Cash Store Financial reported a net loss and comprehensive loss of
C$35.53 million for the year ended Sept. 30, 2013, as compared
with a net loss and comprehensive loss of C$43.52 million for the
year ended Sept. 30, 2012. As of Sept. 30, 2013, the Company had
C$164.58 million in total assets, C$165.90 million in total
liabilities and a C$1.32 million shareholders' deficit.
BRUSH CREEK: Bank's SARE Determination Bid Taken Under Advisement
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado, according
to minutes of proceeding dated July 31, 2014, determined the
Community Banks of Colorado's motion for determination that Brush
Creek Airport, LLC is a single asset real estate debtor is taken
under advisement.
Brush Creek Airport, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. D. Col. Case No. 14-14630) in Denver on April 10, 2014.
The Debtor has tapped Sender Wasserman Wadsworth, P.C., as
counsel. It estimated assets of $10 million to $50 million and
debt of $1 million to $10 million.
The U.S. Trustee for Region 20 was unable to appoint an official
committee of unsecured creditors in the Debtor's case because
there were too few unsecured creditors.
CHIQUITA BRANDS: Cutrale, Safra File Preliminary Proxy Materials
----------------------------------------------------------------
Maria Armental, writing for The Wall Street Journal, reported that
two Brazilian companies whose $625-million offer for Chiquita
Brands International Inc. was rebuffed filed preliminary proxy
materials with the U.S. Securities and Exchange Commission and
said they intend to take their case to the U.S. banana company's
shareholders. According to the report, Cutrale Group, one of the
world's largest orange-juice suppliers with plants in Brazil and
Florida, and investment firm Safra Group are asking shareholders
to vote against Chiquita's proposed merger with Ireland's Fyffes
PLC and to adjourn the special meeting of Chiquita shareholders on
Sept. 17.
* * *
The March 17, 2014 edition of The Troubled Company Reporter, it
was reported that Standard & Poor's Ratings Services revised its
rating outlook on Chiquita Brands International Inc. to positive
from stable. At the same time, S&P affirmed the 'B' corporate
credit rating, 'B' senior secured debt rating, and 'CCC+'
unsecured debt rating on the company.
The TCR, on Jan. 30, 2014, reported that Moody's Investors Service
changed the rating outlook for Chiquita Brands International Inc.
to stable from negative while affirming all ratings of the
company, including its B2 Corporate Family Rating (CFR) and B2-PD
Probability of Default Rating (PDR). Moody's also affirmed the
company's SGL-3 liquidity rating. The change in the outlook to
stable reflects Moody's expectation for continued improvement in
Chiquita's credit metrics, which have recently benefitted from
margin improvement largely as a result of cost saving initiatives.
The Aug. 14, 2014, edition of the TCR reported that Moody's
Investors Service views the proposed non-binding all cash bid from
Cutrale Group and Safra Group to acquire Chiquita Brands
International, Inc. favorably but it does not impact Chiquita's B2
CFR or developing outlook.
CLUBCORP CLUB: Sequoia Deal No Impact on Moody's 'B1' Rating
------------------------------------------------------------
Moody's Investors Service said that ClubCorp Club Operations Inc's
(B1 stable) affiliate's plan to acquire Sequoia Golf is a modest
credit positive but not likely result in changes to the company's
ratings, according to Moody's preliminary assessment of the
contemplated acquisition and post-closing capital structure.
ClubCorp is one of the largest owners and managers of private
golf, country, business, sports and alumni clubs in North America.
As of June 17, 2014, the company owned or operated 160 clubs (109
golf and country clubs and 51 business, sports, and alumni clubs)
in 25 states, the District of Columbia, and two foreign countries
with over 151,000 memberships. For the LTM period ended June 17,
2014, ClubCorp generated approximately $842 million of revenues.
ClubCorp Holdings, Inc. -- ClubCorp's parent -- trades on the NYSE
(ticker: MYCC). Sequoia Golf owns and leases 33 golf and country
clubs and manages an additional 17 properties in Atlanta, Houston,
and Denver.
CONSTELLATION BRANDS: Casa Noble Deal No Impact on Moody's CFR
--------------------------------------------------------------
Moody's Investors Service said that Constellation Brands'
announcement that it will acquire the Casa Noble tequila brand, a
small super premium player in the fast growing tequila market, is
a long term credit positive. However the transaction will have no
immediate impact on Constellation's Ba1 Corporate Family Rating or
stable outlook.
The principal methodology used in this rating was the Global
Alcoholic Beverage Industry published in October 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.
Headquartered in Victor, New York, Constellation Brands, Inc.
(Constellation) is a leading international producer and marketer
of beer, wine and spirits with annual sales expected to exceed $6
billion in its current fiscal year (ending February 2015).
CSM BAKERY: Downsized Dividend No Impact on Moody's 'B2' CFR
------------------------------------------------------------
Moody's Investors Service, Inc. said in a comment authored by
Brian Weddington, a Senior Credit Officer, that CSM Bakery
Solutions Limited's decision to downsize the proposed amounts of a
sponsor dividend and the related incremental term loans does not
affect the B2 Corporate Family Rating, the debt instrument ratings
or the negative outlook. CSM Bakery reduced the size of the
proposed senior secured term loans by $89 million; and the sponsor
dividend by $46 million.
CSM Bakery Solutions Limited produces and distributes bakery
products and ingredients for artisan and industrial bakeries, and
for in-store and out-of-home markets, mainly in Europe and North
America. CSM Bakery Solutions LLC is the US operating subsidiary
of CSM Limited and borrower under the loan facilities. The company
supplies customers with finished or semi-finished products and
bakery ingredients. In fiscal 2013, the company generated net
sales of approximately $3.5 billion. In July 2013, affiliates of
Rh"ne Capital purchased CSM Bakery Solutions Limited (formerly CSM
Bakery Supplies) from Netherlands-based CSM NV for an enterprise
value of EUR 1,050 million.
DCCW PROPERTIES: Case Summary & 9 Unsecured Creditors
-----------------------------------------------------
Debtor: DCCW Properties, Inc.
608 Water Oak
Plano, TX 75025
Case No.: 14-41746
Chapter 11 Petition Date: August 14, 2014
Court: United States Bankruptcy Court
Eastern District of Texas (Sherman)
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Email: eric@ealpc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Chinling Wu, president.
A list of the Debtor's nine largest unsecured creditors is
available for free at http://bankrupt.com/misc/txeb14-41746.pdf
DETROIT, MI: Bankruptcy Judge Refuses to Ban Water Shutoffs
-----------------------------------------------------------
Katy Stech, writing for Daily Bankruptcy Review, reported that
U.S. Bankruptcy Judge Steven Rhodes in Michigan said he doesn't
have the power to restore water to thousands of residents who were
recently cut off, rejecting a request from several nonprofits that
tried to force reform on the Detroit's water department through
the city's historic bankruptcy case. According to the report, in
court papers, Judge Rhodes said he can't ban future water shutoffs
or force the 700,000-resident city's water department to add
programs for poor residents because of restrictions within the
U.S. Bankruptcy Code.
About City of Detroit, Michigan
The City of Detroit, Michigan, weighed down by more than
$18 billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter 9
petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The City's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is
represented by David G. Heiman, Esq., and Heather Lennox, Esq., at
Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day,
in Los Angeles, California; and Jonathan S. Green, Esq., and
Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone
PLC, in Detroit, Michigan.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's
financial advisor.
DIGITAL DOMAIN: DEO Wants Court Determination on Tax Credits
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
convene a hearing on Aug. 20, 2014, at 10:00 a.m., to consider The
Florida Department of Economic Opportunity's motion for
determination that applications for tax credits are not property
of DDMG Estate, et al.'s estates; or (ii) in the alternative,
relief from the automatic stay to terminate non-vested tax credit
applications.
According to DEO, Debtors Digital Domain Holdings Corporation and
Digital Domain Media Group, Inc., each applied for two separate
tax credits totaling $19,909,359 from the State of Florida under
the Entertainment Industry Financial Incentive Program on these
dates: July 1, 2010; Dec. 13, 2010; Nov. 23, 2011; and Nov. 23,
2011.
The program is designed to provide tax credits to qualified
entities that create a finished film project in the State of
Florida, and who make "qualified expenditures" in the State of
Florida relating to the production.
DEO asserted that the mere act of filing a tax credit application
does not entitle an applicant to a tax credit. DEO added that the
Debtors have no equity in the tax credit applications and they are
not necessary for an effective reorganization under Section
362(d)(2).
DEO is represented by:
Stephen W. Spence, Esq.
Aaron C. Baker, Esq.
PHILLIPS, GOLDMAN & SPENCE, P.A.
1200 North Broom Street
Wilmington, DE 19806
Tel: (302) 655-4200
Fax: (302) 655-4210
Sean T. Cork, Esq.
SQUIRE PATTON BOGGS (US) LLP
200 South Biscayne Boulevard
Miami, FL 33131
Tel: +1-305-577-7000
Fax: +1-305-577-7001
E-mail: http://sean.cork@squirepb.com/
About Digital Domain
Port St. Lucie, Florida-based Digital Domain Media Group, Inc. --
http://www.digitaldomain.com/-- engaged in the creation of
original content animation feature films, and development of
computer-generated imagery for feature films and trans-media
advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on
Sept. 11, 2012, to sell its business for $15 million to
Searchlight Capital Partners LP, subject to higher and better
offers. The Company disclosed assets of $205 million and
liabilities totaling $214 million.
The Debtors also have sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent. An official committee of unsecured
creditors appointed in the case is represented by lawyers at
Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP.
At a bankruptcy auction, the principal part of the business was
purchased by a joint venture between Galloping Horse America LLC,
an affiliate of Beijing Galloping Horse Co., and an affiliate of
Reliance Capital Ltd., based in Mumbai. The $36.7 million total
value of the contact includes $3.6 million to cure defaults on
contracts and $2.9 million in reimbursement of payroll costs. As
the result of a settlement negotiated by the unsecured creditors'
committee with secured lenders, there will be some recovery for
the committee's constituency.
DOWDY ENTERPRISE: Case Summary & 3 Unsecured Creditors
------------------------------------------------------
Debtor: Dowdy Enterprise
8261 E Gelding Dr.
Scottsdale, AZ 85260
Case No.: 14-12567
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: August 14, 2014
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Hon. Madeleine C. Wanslee
Debtor's Counsel: Harold E. Campbell, Esq.
CAMPBELL & COOMBS, P.C.
1811 S. Alma School Rd. Ste. 225
Mesa, AZ 85210
Tel: 480-839-4828
Fax: 480-897-1461
Email: heciii@haroldcampbell.com
Total Assets: $1.22 million
Total Liabilities: $896,989
The petition was signed by Christina Dowdy, owner.
A list of the Debtor's three largest unsecured creditors is
available for free at http://bankrupt.com/misc/azb14-12567.pdf
DS SERVICES: Moody's Affirms 'B2' Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family Rating
(CFR) and a B2-PD Probability of Default Rating (PDR) for DS
Services of America, Inc. (DSSA), formerly known as DS Waters of
America, but changed the outlook to stable from positive. At the
same time, Moody's assigned an SGL-2 liquidity rating and affirmed
the Ba3 rating on the company's 1st lien term loan and B3 on its
2nd lien notes. The stabilization of the outlook is primarily
driven by Moody's expectation that the company will be more
aggressive from a financial policy perspective than originally
anticipated. As such, Moody's expects leverage and interest
coverage to remain appropriate for the B2 CFR for the foreseeable
future.
The following ratings were assigned at DS Services of America,
Inc.:
SGL-2 Speculative Grade Liquidity Rating.
The following ratings were affirmed at DS Services of America,
Inc.:
B2 Corporate Family Rating;
B2-PD Probability of Default Rating;
$320 million First Lien Term Loan due 2020 at Ba3 (LGD2); and
$350 million Second Lien Notes due 2021 at B3 (LGD5).
The rating outlook is stable.
Ratings Rationale
The B2 Corporate Family Rating reflects DSSA's elevated leverage
profile, moderate interest coverage, and material exposure to
macroeconomic variables, most notably employment rates.
Furthermore, DSSA is exposed to potentially volatile resin costs
and is pursuing an aggressive strategy to grow through
acquisitions that could expose the company to integration risks.
Moody's expects adjusted leverage to remain elevated in the near
term with some modest improvement over time as the company pursues
its strategy to invest excess cash in growth initiatives. The
rating gives positive consideration to DSSA's strong market
position in the fragmented US home and office delivery (HOD)
market, its portfolio of recognizable regional brands, relatively
high barriers to new competition entering the space, and
expectations for positive free cash flow during the next twelve to
eighteen months. In addition, Moody's views the company's presence
in the Office Coffee Services (OCS) and filtration markets
favorably, largely because of the product diversification
benefits. DSSA is understood to have a #3 position in both of
these markets and Moody's expect continued growth in OCS and
filtration over time.
The stable outlook reflects Moody's expectation for gradual
improvement in leverage metrics driven by moderate top-line and
EBITDA growth. It further anticipates no significant equity-
friendly events or large debt-financed acquisitions over the next
12 - 18 months.
The ratings could be upgraded if the company is able to achieve
sustained improvement in revenue and EBITDA growth and is able to
deleverage such that debt-to-EBITDA is sustained below 4.0 times.
Further, Moody's would expect the company to improve and maintain
its interest coverage above 1.7 times prior to an upgrade. The
ratings could be downgraded if leverage and interest coverage are
sustained above 5.5 times and below 1.0 time, respectively. Also,
the ratings could be downgraded if the company executes any large,
debt-financed acquisitions or engages in shareholder-friendly
initiatives prior to deleveraging.
The principal methodology used in this rating was the Global Soft
Beverage Industry 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.
DS Services of America, Inc. (DSSA), headquartered in Atlanta,
Georgia, is a leading beverage services provider delivering
directly to residential and commercial customers in the US. The
majority of the company's revenues come from the bottling and
direct delivery of drinking water in 3 and 5 gallon bottles to
homes and offices (HOD) and the rental of water dispensers, with a
lesser portion coming from office coffee services (OCS) and
filtration-related services. The company also sells private label
water to various retailers, sells water in smaller bottles, and
offers cups, flavored beverages, powdered sticks, and other
products such as Snapple to their customers. DSSA is majority
owned by private equity firm Crestview Partners following an
August 2013 LBO transaction where the company was purchased for
approximately $885 million. Revenues for the twelve month period
ended March 28, 2014 were nearly $935 million.
E H MITCHELL: Files Second Amended Disclosure Statement
-------------------------------------------------------
E. H. Mitchell & Company, L. L. C., filed on July 29, 2014, a
Second Amended Disclosure Statement explaining the Plan or
Reorganization.
According to the Second Amended Disclosure Statement, the Debtor
proposed to treat claims as:
1. Class 1 -- Secured Claim of First National Bank of Picayune
-- current approximate amount of $314,000 will be ammortized over
15 years at eight and one-half percent interest with monthly
payments of $3,070. Until paid in full, First National Bank of
Picayune will retain or continue to hold any prepetition mortgage,
lien or other encumbrance held on the day preceding this
bankruptcy filing.
2. Class 2 -- Undisputed Unsecured Claims of Alan Ezkovich,
Kathy Rickert, & CMC, Inc. -- The creditors will share pro rata
the sum of $17,000 per quarter with the first payment being made
on the 91st day after the order confirming the Debtor's Plan of
Reorganization becomes final and non-appealable.
Class 2 -- Unsecured Claims -- holders of Allowed Unsecured
Claims against Debtor will receive from the reorganized debtor
their pro rata share of payments made by the reorganized debtor on
any Allowed Claim 100% of the Allowed Claim paid quarterly based
on the amount of available cash flow from the prior quarter but
not less than $17,000 per quarter.
3. Class 3 -- Unsecured Claim of Standard Gravel Co., Inc. will
be treated pursuant to previous Court orders which continue in
full force and effect prepetition covenants permitting the Class
to offset payment from monthly rentals due to the Reorganized
Debtor sufficient to pay the Class monthly obligation over the
life of the extant mineral leases between the Debtor and Standard
Gravel Co., Inc.
4. Class 4 -- Disputed and Unliquidated Secured Claim of
Reginald J. Laurent -- the Class will be entitled to be paid its
pro rata share of $17,000 per quarter, commencing on the 91st day
after full payment to Classes 2 and 3.
5. Class 5 -- Disputed Secured Claim of Insider Steven Furr --
the security interest claimed to be held by the Class 5 creditor
remains in full force and effect, unless and until an order of a
court of record orders its cancellation. Class 5 will be
satisfied by the payment of $17,000, with the first payment due on
the 91st day after Classes 2, 3 and 4 have been fully satisfied or
the date any such order or judgment becomes final and non-
appealable, whichever is later.
6. Class 6 -- Unsecured Insider Claims -- will be satisfied by
the payment of $17,000, with the first payment due on the 91st day
after Class 5 has been fully satisfied.
7. Class 7 -- Interests in the Debtor will not receive any
distribution on account of their interests, but will be permitted
to retain ownership of their interests.
The Debtor will fund the plan obligations from business income and
the sale of some or all of its immoveable properties. Payments
will be made to Unsecured Creditors periodically until paid in
full or paid in advance based on unanticipated excess revenues or
the sale of properties.
On July 28, the Debtor filed a First Amended Disclosure Statement.
Copies of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/EHMITCHELL_145_2ds.pdf
http://bankrupt.com/misc/EHMITCHELL_148_2ds.pdf
About E. H. Mitchell & Company LLC
E. H. Mitchell & Company LLC sought protection under Chapter 11 of
the Bankruptcy Code on Oct. 8, 2013, (Case No. 13-12786, Bankr.
E.D. La.). The case is assigned to Judge Jerry A. Brown.
The Debtor is represented by Robert L. Marrero, Esq., at Robert
Marrero, LLC, in New Orleans, Louisiana. The Debtor disclosed
$300,027,297 in assets and $1,281,148 in liabilities.
The petition was signed by Michael Furr, secretary/member.
Henry G. Hobbs, Jr., Acting United States Trustee for Region 5,
has appointed three members to the official committee of unsecured
creditors.
E H MITCHELL: Sept. 4 Hearing on Trustee's Bod to Convert Case
--------------------------------------------------------------
The bankruptcy court has continued until Sept. 4, 2014, at 10:00
a.m., the hearing to consider the motion to dismiss or convert the
Chapter 11 case of E. H. Mitchell & Company, L.L.C., to on under
Chapter 7 of the Bankruptcy Code.
At the hearing, the Court will also consider the objection filed
by the Debtor, the reply of creditor Reginald James Laurent, and
opposition filed by creditor Ezkovich & Co., LLC. The hearing was
continued from July 30.
On July 21, 2014, Mr. Laurent submitted a supplemental memorandum
in support of the U.S. Trustee's motion to convert the Debtor's
case.
Creditor added statutory grounds to convert the Debtor's case
including, among other things:
1) substantial or continuing loss;
2) failure to produce party-in-interest Construction Materials
Consultants, Inc.'s financial records;
3) misrepresentation and gross mismanagement of the estate; and
4. the Debtor has exhibited an "inability to effectuate
substantial consummation of a confirmed plan."
As reported in the Troubled Company Reporter on May 29, 2014,
Mr. Laurent filed a motion for determination that the Debtor is
subject to Sec. 362(d)(3), the Debtor is a single asset real
estate (SARE) entity, and that the Petition was filed in bad
faith.
Mr. Laurent requested for the dismissal of the bankruptcy case for
cause because:
a. the Debtor has only one asset,
b. there are few unsecured creditors, and their claims
are small in comparison to those of secured creditor,
c. the Debtor has no employees,
d. the asset (property) is the subject of pending litigation
between debtor and secured creditor, and
e. the debtor's bankruptcy filing was meant to frustrate
the rights and remedies of the secured creditor.
Mr. Laurent contended that the Debtor's bankruptcy filing was
merely a litigation strategy, and that the case is a two-party
dispute that should be resolved outside of bankruptcy.
About E. H. Mitchell & Company LLC
E. H. Mitchell & Company LLC sought protection under Chapter 11 of
the Bankruptcy Code on Oct. 8, 2013, (Case No. 13-12786, Bankr.
E.D. La.). The case is assigned to Judge Jerry A. Brown.
The Debtor is represented by Robert L. Marrero, Esq., at Robert
Marrero, LLC, in New Orleans, Louisiana. The Debtor disclosed
$300,027,297 in assets and $1,281,148 in liabilities.
The petition was signed by Michael Furr, secretary/member.
Henry G. Hobbs, Jr., Acting United States Trustee for Region 5,
has appointed three members to the official committee of unsecured
creditors.
EAGLE BULK: Confirmation & Plan Outline Hearing on Sept. 18
-----------------------------------------------------------
Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern
District of New York scheduled a combined hearing to consider the
adequacy of the disclosure statement explaining Eagle Bulk
Shipping Inc.'s prepackaged plan of reorganization and the
confirmation of the same plan for Sept. 18, 2014. Any objections
to the approval of the disclosure statement and the confirmation
of the Plan must be filed on or before Sept. 5.
As previously reported by The Troubled Company Reporter, Eagle
Bulk has sought Chapter 11 protection with the support of the
majority of its lenders for a plan to cut $975 million in debt
from its balance sheet.
Under a proposed plan, Eagle Bulk's lenders, owed $1.2 billion,
would convert their debt into 99.5% of the new equity in the
reorganized company and receive a cash distribution, while current
equity would be canceled, with those equity holders receiving the
remaining 0.5% in new stock, along with seven-year warrants to
acquire another 7.5% of new equity.
As of August 7th, the Company has already received affirmative
votes for the Plan from lenders holding more than 85% of the loans
outstanding under its credit agreement, constituting more than
two-thirds of the total lenders thereunder, amounts sufficient
under applicable law for the Court to confirm the Plan.
Judge Lane also extended the deadline for the Debtor to file its
schedules of assets and liabilities and statement of financial
affairs until Sept. 3.
About Eagle Bulk Shipping
With headquarters in New York, Eagle Bulk Shipping Inc. (Nasdaq:
EGLE) claims to be a leading provider of ocean-borne
transportation services for a broad range of major and minor "dry
bulk" cargoes, including iron ore, coal, grain, cement, and
fertilizer, along worldwide shipping routes. Each of Eagle's 45
vessels is flagged in the Marshall Islands and owned by a separate
wholly-owned subsidiary organized as a limited liability company
under the Marshall Islands.
On Aug. 6, 2014, Eagle Bulk entered into a restructuring support
agreement with certain of its lenders regarding the terms of a
balance sheet restructuring that will reduce debt by $975 million.
To implement the restructuring, Eagle Bulk, the parent company,
commenced a voluntary "prepackaged" chapter 11 case (Bankr.
S.D.N.Y. Case No. No. 14-12303). The case has been assigned to
the Honorable Sean H. Lane. The Chapter 11 filing does not
include any of Eagle Bulk's operating or management subsidiaries.
The Company estimated $850 million to $950 million in assets and
debt of $1.21 billion as of the Petition Date.
The Company has tapped Milbank, Tweed, Hadley & McCloy LLP as
general bankruptcy counsel, Moelis & Company as financial advisor
and investment banking advisor, Alvarez & Marsal as restructuring
advisors, and PricewaterhouseCoopers LLP as its accountant and
auditor. Eagle Bulk's noticing agent is Kurtzman Carson
Consultants.
EAGLE BULK: Has Interim Authority to Obtain $25-Mil. in DIP Loans
-----------------------------------------------------------------
Jude Sean H. Lane of the U.S. Bankruptcy Court for the Southern
District of New York gave Eagle Bulk Shipping Inc. interim
authority to obtain up to $25,000,000 of postpetition financing
from Wilmington Trust (London) Limited, acting as sole agent and
security trustee, for a syndicate of banks, and arranged by
Goldman Sachs Lending Partners LLC, as sole bookrunner and sole
arranger.
The Debtor is also given interim authority to use cash collateral
securing its prepetition indebtedness. As of the Petition Date,
the Debtor was indebted in the aggregate amount of (a)
approximately $1.2 billion in principal amount, and (b) all
accrued and unpaid interest and fees.
The final hearing to consider the motion and final order is
scheduled for Sept. 18, 2014, at 10:00 a.m. (prevailing Eastern
Time). Objections are due Sept. 5.
About Eagle Bulk Shipping
With headquarters in New York, Eagle Bulk Shipping Inc. (Nasdaq:
EGLE) claims to be a leading provider of ocean-borne
transportation services for a broad range of major and minor "dry
bulk" cargoes, including iron ore, coal, grain, cement, and
fertilizer, along worldwide shipping routes. Each of Eagle's 45
vessels is flagged in the Marshall Islands and owned by a separate
wholly-owned subsidiary organized as a limited liability company
under the Marshall Islands.
On Aug. 6, 2014, Eagle Bulk entered into a restructuring support
agreement with certain of its lenders regarding the terms of a
balance sheet restructuring that will reduce debt by $975 million.
To implement the restructuring, Eagle Bulk, the parent company,
commenced a voluntary "prepackaged" chapter 11 case (Bankr.
S.D.N.Y. Case No. No. 14-12303). The case has been assigned to
the Honorable Sean H. Lane. The Chapter 11 filing does not
include any of Eagle Bulk's operating or management subsidiaries.
The Company estimated $850 million to $950 million in assets and
debt of $1.21 billion as of the Petition Date.
The Company has tapped Milbank, Tweed, Hadley & McCloy LLP as
general bankruptcy counsel, Moelis & Company as financial advisor
and investment banking advisor, Alvarez & Marsal as restructuring
advisors, and PricewaterhouseCoopers LLP as its accountant and
auditor. Eagle Bulk's noticing agent is Kurtzman Carson
Consultants.
EAGLE BULK: Can Employ Kurtzman Carson as Claims & Noticing Agent
-----------------------------------------------------------------
Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern
District of New York authorized Eagle Bulk Shipping Inc. to employ
Kurtzman Carson Consultants LLC as the claims and noticing agent.
Prior to the Petition Date, the Debtors provided KCC with a
retainer in the amount of $15,000.
According to the services agreement, KCC will charge at these
rates for these consulting services:
Discounted
Position Hourly Rate
-------- -----------
Executive Vice President Waived
Director/Senior Managing Consultant $170
Consultant/Senior Consultant $65 to $150
Technology/Programming Consultant $45 to $85
Project Specialist $45 to $90
Clerical $25 to $45
Weekend, holidays and overtime Waived
The firm will charge at these rates for its public securities and
solicitation services:
Discounted
Position Hourly Rate
-------- -----------
Solicitation Lead/Securities Director $210
Senior Securities Consultant $200
About Eagle Bulk Shipping
With headquarters in New York, Eagle Bulk Shipping Inc. (Nasdaq:
EGLE) claims to be a leading provider of ocean-borne
transportation services for a broad range of major and minor "dry
bulk" cargoes, including iron ore, coal, grain, cement, and
fertilizer, along worldwide shipping routes. Each of Eagle's 45
vessels is flagged in the Marshall Islands and owned by a separate
wholly-owned subsidiary organized as a limited liability company
under the Marshall Islands.
On Aug. 6, 2014, Eagle Bulk entered into a restructuring support
agreement with certain of its lenders regarding the terms of a
balance sheet restructuring that will reduce debt by $975 million.
To implement the restructuring, Eagle Bulk, the parent company,
commenced a voluntary "prepackaged" chapter 11 case (Bankr.
S.D.N.Y. Case No. No. 14-12303). The case has been assigned to
the Honorable Sean H. Lane. The Chapter 11 filing does not
include any of Eagle Bulk's operating or management subsidiaries.
The Company estimated $850 million to $950 million in assets and
debt of $1.21 billion as of the Petition Date.
The Company has tapped Milbank, Tweed, Hadley & McCloy LLP as
general bankruptcy counsel, Moelis & Company as financial advisor
and investment banking advisor, Alvarez & Marsal as restructuring
advisors, and PricewaterhouseCoopers LLP as its accountant and
auditor. Eagle Bulk's noticing agent is Kurtzman Carson
Consultants.
EAGLE BULK: U.S. Court Issues Bankruptcy Stay Order
---------------------------------------------------
Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern
District of New York issued an order stating that all persons, and
governmental units are stayed, restrained and enjoined from taking
any action whether inside or outside the United States to obtain
possession of property of Eagle Bulk Shipping Inc.'s estate
wherever located or to exercise control over property of the
estate, wherever located.
Persons and governmental units are also restrained from taking any
action to create, perfect, or enforce any lien against property of
the Debtor's estate. Creditors are also restrained from
commencing or continuing any judicial, administrative, or other
action or proceeding against the Debtor that was or could have
been commenced before the Petition Date, or recovering a claim
against the Debtor that arose before the Petition Date.
About Eagle Bulk Shipping
With headquarters in New York, Eagle Bulk Shipping Inc. (Nasdaq:
EGLE) claims to be a leading provider of ocean-borne
transportation services for a broad range of major and minor "dry
bulk" cargoes, including iron ore, coal, grain, cement, and
fertilizer, along worldwide shipping routes. Each of Eagle's 45
vessels is flagged in the Marshall Islands and owned by a separate
wholly-owned subsidiary organized as a limited liability company
under the Marshall Islands.
On Aug. 6, 2014, Eagle Bulk entered into a restructuring support
agreement with certain of its lenders regarding the terms of a
balance sheet restructuring that will reduce debt by $975 million.
To implement the restructuring, Eagle Bulk, the parent company,
commenced a voluntary "prepackaged" chapter 11 case (Bankr.
S.D.N.Y. Case No. No. 14-12303). The case has been assigned to
the Honorable Sean H. Lane. The Chapter 11 filing does not
include any of Eagle Bulk's operating or management subsidiaries.
The Company estimated $850 million to $950 million in assets and
debt of $1.21 billion as of the Petition Date.
The Company has tapped Milbank, Tweed, Hadley & McCloy LLP as
general bankruptcy counsel, Moelis & Company as financial advisor
and investment banking advisor, Alvarez & Marsal as restructuring
advisors, and PricewaterhouseCoopers LLP as its accountant and
auditor. Eagle Bulk's noticing agent is Kurtzman Carson
Consultants.
EPWORTH VILLA: Proposes Gable & Gotwals as Counsel
--------------------------------------------------
Central Oklahoma United Methodist Retirement Facility, Inc., is
seeking approval from the bankruptcy court to employ G. Blaine
Schwabe, III, Sidney K. Swinson, Mark D. G. Sanders, Brandon C.
Bickle, and the law firm Gable & Gotwals, P.C. as attorneys.
The hourly billing rates which G&G will charge Epworth Villa and
those attorneys likely to be providing services for this
engagement include:
Professional Category Hourly Rate
------------ -------- -----------
Graydon Dean Luthey Shareholder $300
Sidney K. Swinson Shareholder $340
G. Blaine Schwabe, III Of Counsel $385
Mark D.G. Sanders Shareholder $295
Brandon C. Bickle Associate $240
John (Jake) M. Krattiger Associate $240
On June 11, 2014, G&G received an advance payment retainer in the
amount of $150,000 from Epworth Villa as payment for services to
be rendered and expenses to be incurred in connection with the
bankruptcy case.
The Debtor believes that G&G is "disinterested" as that term
is defined in 11 U.S.C. Sec. 101(14), does not hold or represent
an interest adverse to the bankruptcy estate of Epworth Villa, has
not served as an examiner in connection with this bankruptcy case,
and does not represent a creditor in connection with this case.
About Epworth Villa
Central Oklahoma United Methodist Retirement Facility, Inc., an
Oklahoma not-for-profit corporation owns and operates Epworth
Villa, a continuous care retirement community for persons age 62
and older, located at 14901 N. Pennsylvania Avenue, Oklahoma City,
Oklahoma 73134.
In addition to independent living facilities, Epworth Villa offers
assisted living, memory care assisted living, nursing care
services, and a skilled nursing facility. Presently, Epworth
Villa includes 264 independent living units (cottages and
apartment homes), 118 assisted living units, with maximum capacity
of 130 beds, and 87 nursing beds that are dually certified for
skilled or long term patients with common areas, community centers
and other facilities. It is undergoing a $65 million renovation
and expansion project that is projected to be completed in the
spring of 2015.
On July 9, 2014, a judgment was entered in the amount of
$15 million against Epworth Villa by Judge Patricia Parrish of the
District Court of Oklahoma County, Oklahoma, in Case No. CJ-2011-
8387: William Hicks, individually and as Guardian Ad Litem for
Virginia Hicks v. Central Oklahoma United Methodist Retirement
Facility, Inc. d/b/a Epworth Villa Health Services. The state
court held a nonjury trial in the lawsuit, which was filed by a
resident who got a fractured wrist and bruises while at the
facility.
Epworth Villa filed a Chapter 11 bankruptcy petition (Bankr.
W.D. Okla. Case No. 14-12995) on July 18, 2014 to stay execution
of the judgment. Gable & Gotwals, P.C., serves as the Debtor's
counsel. Judge Sarah A. Hall presides over the case.
The Debtor estimated assets and debt of at least $100 million. As
of the date of commencement of the case, the current, aggregate
indebtedness of Epworth Villa to the Authority under promissory
notes payable to the Oklahoma County Finance Authority is
principal totaling $87,835,000, together with accrued interest of
$1,379,012. The Debtor says that the value of the collateral
exceeds the amount of the bond debt.
EXIDE TECHNOLOGIES: Targeted in Federal Criminal Probe of Plant
---------------------------------------------------------------
Peg Brickley, writing for The Wall Street Journal, reported that
Exide Technologies has been hit with a grand jury subpoena in
connection with a criminal investigation involving its Vernon,
Calif., lead-recycling plant. According to the report, in a
filing with the Securities and Exchange Commission, the battery
maker revealed the Aug. 8 subpoena seeks "documents relating to
materials transportation and air emissions." Exide itself and
"certain unidentified individuals" are targets of the
investigation" being conducted by the Justice Department in the
Central District of California, the Journal related, citing the
SEC filing.
About Exide Technologies
Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products.
Exide first sought Chapter 11 protection (Bankr. Del. Case No.
02-11125) on April 14, 2002 and exited bankruptcy two years after.
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl &
Jones LLP represented the Debtors in their successful
restructuring.
Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No.
13-11482) on June 10, 2013. Exide disclosed $1.89 billion in
assets and $1.14 billion in liabilities as of March 31, 2013.
Exide's international operations were not included in the filing
and will continue their business operations without supervision
from the U.S. courts.
For the new case, Exide has tapped Anthony W. Clark, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang
Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial
advisor; Sitrick and Company Inc. as public relations consultant
and GCG as claims agent. Schnader Harrison Segal & Lewis LLP was
tapped as special counsel.
The Official Committee of Unsecured Creditors is represented by
Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as
co-counsel. Zolfo Cooper, LLC serves as its bankruptcy
consultants and financial advisors. Geosyntec Consultants was
tapped as environmental consultants to the Committee.
Robert J. Keach of the law firm Bernstein Shur as fee examiner has
been appointed as fee examiner. He has hired his own firm as
counsel.
* * *
Exide related in a June 30, 2014 press release that it received a
non-binding proposal for a Plan of Reorganization (POR) from the
Unofficial Committee of Senior Secured Noteholders (UNC). The UNC
members hold a substantial majority of the Company's Debtor-in-
Possession (DIP) facility term loan and prepetition senior secured
notes. The UNC proposal contemplates, among other things, an
investment of $300 million in new equity capital backstopped by
certain members of the UNC. The Debtor says the proposal is
highly constructive and is the likely path it will follow in order
to emerge from chapter 11.
EXPEDIA INC: Moody's Rates Proposed Sr. Unsec. Note Issuance Ba1
----------------------------------------------------------------
Moody's Investors Service assigned a rating of Ba1 to Expedia,
Inc.'s proposed senior unsecured note issuance. The rating outlook
is stable.
The net proceeds from the debt issuance are expected to help fund
the acquisition of Wotif.com Holdings Limited (Wotif Group), an
Australian-based online travel company, for about US $658 million
and provide additional domestic liquidity.
Ratings Rationale
Moody's expects Expedia to maintain strong operating performance
(e.g., double digit percentage revenue and profit growth) over the
next several years with an online travel market that should exceed
the growth rates of the travel industry. Moody's believes that
Expedia enjoys certain barriers to entry including brand
awareness, a global network of hotel supplier relationships, and a
heavily invested technology infrastructure. Expedia's distribution
network continues to benefit from increasing online penetration of
travel expenditures, especially in international markets.
Moody's also expects that management will sustain its disciplined
financial policies with projected adjusted debt to EBITDA of less
than 3 times and free cash flow to debt in the mid 20% range. Pro
forma for the new debt and acquisition of the Wotif Group, Moody's
estimates debt leverage to be in the mid to high 2 times range (as
compared to 1.7 times as of June 30, 2014).
The Wotif acquisition is consistent with Moody's view that Expedia
will continue to acquire companies to support revenue growth in a
highly competitive and evolving travel space. With the Wotif Group
expanding Expedia's Asia Pacific footprint, this deal is similar
to Expedia's purchase of the majority of trivago, a European
metasearch company, for over $630 million in 2013. Moody's
believes Expedia will continue to build its global geographic
reach, technology capabilities, and travel and product offerings
to keep pace with formidable competitors (e.g., the Priceline
Group and Google) and preserve its leading global market position.
Event risk remains inherent with an ownership structure consisting
of the concentrated voting control of Barry Diller (about 56% of
the stock). However, Moody's believes that improving profits and
cash flow, benefiting from technology platform and marketing
investments, will lead to enhanced liquidity over the next several
years. This will likely enable Expedia to absorb some level of
heightened share buybacks or acquisition activity. Moody's will
continue to evaluate management's financial policies in light of
the possibility of buying back Liberty's ownership stake of over
17% and the potential for increased acquisition activity within a
consolidating online travel industry.
The stable outlook reflects Moody's expectation of double digit
annual revenue growth, operating margins above 15%, and free cash
flow greater than $600 million for full year 2014 and 2015.
Moody's anticipates higher levels of free cash flow in 2015 (more
than $800 million), as Expedia demonstrates increased operating
leverage from technology and sales and marketing investments
incurred over the past few years.
The ratings could be upgraded if Expedia maintains its leading
market share among third party, hotelier, and airline online
travel websites, continues to generate profitable organic revenue
growth with steady operating margins in excess of 20%, and adheres
to conservative financial policies, including Moody's adjusted
leverage of about 2x on a sustained basis. The ratings could be
lowered if Expedia's competitive position weakens materially
(e.g., revenue declines of 5% and operating margins below 10%), or
financial leverage as measured by debt to EBITDA adjusted for
leases increases over 3.5x for an extended period of time.
Rating assigned:
Senior unsecured notes at Ba1 (LGD4)
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.
Expedia, Inc., with projected annual revenues nearing $6 billion,
is a leading online travel agency (OTA) with properties which
include Expedia.com, Hotwire.com, Hotels.com, Egencia, and
trivago.
FAGERDALA USA: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Fagerdala USA - Lompoc, Inc.
11560 SW 67th Avenue, Suite 200W
Portland, OR 97223
Case No.: 14-34642
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: August 14, 2014
Court: United States Bankruptcy Court
District of Oregon
Judge: Hon. Trish M Brown
Debtor's Counsel: Douglas R Pahl, Esq.
PERKINS COIE LLP
1120 NW Couch St 10th Fl
Portland, OR 97209-4128
Tel: (503) 727-2087
Email: dpahl@perkinscoie.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Rex Hansen, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/orb14-34642.pdf
FANNIE MAE & FREDDIE MAC: Updated Conservatorship Litigation Chart
------------------------------------------------------------------
At http://bankrupt.com/gselitigationsummary201408.pdfeditors of
the Troubled Company Reporter and Class Action Reporter have
posted a chart, updated on Aug. 16, 2014, organizing information
about the 24 lawsuits complaining about how the Department of the
Treasury and the Federal Housing Finance Administration are
handling Fannie Mae and Freddie Mac's conservatorship proceedings.
Unaltered, this chart may be freely shared with anyone for any
purpose, notwithstanding that it is copyrighted by Bankruptcy
Creditors' Service, Inc., and Beard Group, Inc., and all rights
are reserved by the publishers. For additional information,
contact Peter A. Chapman at peter@beard.com by e-mail or (215)
945-7000 by telephone.
FIRED UP: Has Access to Cash Collateral Until Oct. 31
-----------------------------------------------------
U.S. Bankruptcy Judge Tony M. Davis authorized Fired Up, Inc.'s
use of cash collateral to pay its usual and necessary operating
expenses until Oct. 31, 2014.
The Court also ordered that, among other things:
1. The authority for use of cash collateral to pay professional
fees will be cumulative. In the event that the total professional
fees approved by the Court on an interim or final fee application
exceeds the amount then approved to be paid under the order, the
Debtor will move for additional authority to use cash collateral
within seven days from entry of such order.
2. The Debtor may exceed any line item on the budget by 25% so
long as it does not exceed the total allowance for cash collateral
for the month by more than 10%.
3. Any unused portion of the line item for professional fees
may be carried forward to subsequent months.
The objection filed by the Official Committee of Unsecured
Creditors is withdrawn provided however that the Committee's
rights to object to Debtor's use of cash collateral at a later
date is preserved.
As reported in the Troubled Company Reporter on July 2, 2014, to
date, the Debtor has received rough estimates of professional fees
incurred (although no amounts have been approved to this date) as:
a. April 2014 $167,000
b. May 2014 $195,000
Based upon these estimates, the Debtor requested aggregate
authority to pay $200,000 per month. The amount is based on the
average of the estimates for April and May plus a cushion of 10%.
The Debtor also requested authority to carry the unused portion of
any month's professional fee budget forward to subsequent months.
The Debtor has prepared a revised budget for the months of July
through October of 2014, a copy is available for free at:
http://bankrupt.com/misc/FiredUp_156_9_ordercashcollateral.pdf
The Debtor believes that these parties have an interest in cash
collateral and may be affected by the motion:
Creditor Debt Amount
-------- -----------
FRG Capital, LLC $13,436,864
General Electric Capital Corporation $514,005
GE Capital Franchise Corporation $55,201
$784,866
GE Capital Franchise Corporation $56,489
GE Capital Franchise Finance Corporation $473,907
Independent Bank $607,451
Prosperity Bank $1,185,251
Xerox
In addition to the contractual secured creditors, the Debtor owes
delinquent ad valorem taxes on personal property it owns in the
amount of approximately $64,000 and an unliquidated amount in
current obligations to 155 local taxing entities that are not yet
due. The Debtor also has a certificate of deposit which is
pledged to secure a letter of credit for the Debtor's non-
subscriber workman's compensation policy, well as two certificates
of deposit which are collateral for a former program with Wells
Fargo. The Debtor does not seek permission to use the Wells Fargo
cash collateral.
The various types of adequate protection which Debtor may provide,
include:
a. making periodic cash payments to the extent that the
creditor suffers a decrease in the value of its interest in such
property;
b. granting replacement liens in collateral to compensate the
creditor for any decrease in the value of the creditor's interest
in such property; or
c. granting other relief as will result in the realization of
the indubitable equivalent of the creditor's interest in
collateral.
The Debtor related that its original cash collateral motion
provided adequate protection to secured creditors in the form of
replacement liens.
Bankruptcy Judge Tony M. Davis previously issued a final order
authorizing the Debtor to use, sell or lease cash collateral to
pay its usual and necessary operating expenses until July 30,
2014. The authorization to use cash collateral will specifically
include payment of U.S. Trustee fees.
About Fired Up, Inc.
Fired Up, Inc., the Austin, Texas-based owner and operator of the
Johnny Carino's Italian restaurant chain, sought Chapter 11
bankruptcy protection (Bankr. W.D. Tex. Case No. 14-10447) on
March 27, 2014, in Austin. The Debtor is represented by attorneys
at Barron & Newburger, P.C., in Austin. It estimated assets and
debt of $10 million to $50 million.
As of the bankruptcy filing, Fired Up had 2,900 employees and
owned and operated 46 company-owned stores known as Johnny
Carino's Italian in seven states (Texas, Arkansas, Colorado,
Louisiana, Idaho, Kansas and Missouri) and 61 franchised or
licensed locations in 17 states and four other countries (Bahrain,
Dubai, Egypt and Kuwait).
The company began its own "out of court" reorganization in the
last quarter of 2013 by closing 20 unprofitable restaurants. The
company later opted to seek bankruptcy protection to tie up the
"loose ends" of its self-imposed "reorganization" that did not
appear capable of being tied up without litigation. In
particular, the provisions of the Bankruptcy Code with respect to
the rejection of burdensome leases and the ability to propose and
pay out its debts pursuant to a Plan without piecemeal prosecution
by random uncooperative creditors undermining same were
particularly attractive.
For the fiscal year ending June 27, 2012, the company reported
total revenues of $125.7 million, net income of $614,000, and
guest counts of 8.6 million. For the fiscal year ending June 26,
2013, the company reported total revenues of $120.8 million, a net
loss of $5.9 million, and guest counts totaling 8.5 million.
The Debtor disclosed $10,360,877 in assets and $36,139,375 in
liabilities.
Creed Ford III is the majority shareholder and has served as
president and CEO since 2008. Mr. Ford and Norman J. Abdallah
formed Fired Up in 1997 for the purpose of acquiring the then six-
unit Johnny Carino's Italian Kitchen chain from Brinker
International, Inc.
The U.S. Trustee appointed a seven-member Official Committee of
Unsecured Creditors. The Committee tapped Pachulski Stang Ziehl &
Jones LLP as its counsel, and FTI Consulting, Inc. as its
financial advisor.
FOREST CITY: Moody's Corrects Subordinated Debt Rating to (P)Caa2
-----------------------------------------------------------------
Moody's Investors Service upgraded the following Forest City
Enterprises Inc.'s shelf ratings by a notch; the outlook for the
ratings is stable
Senior Subordinate shelf upgraded to (P) Caa1 from (P) Caa2
Subordinate shelf upgraded to (P) Caa1 from (P) Caa2
Junior Subordinate shelf upgraded to (P) Caa1 from (P) Caa2
Perpetual convertible preferred stock shelf to (P) Caa1 from (P)
Caa2
Preferred stock shelf upgraded to (P) Caa1 from (P) Caa2
Ratings Rationale
On October 24, 2013, Moody's Investors Service upgraded the senior
unsecured debt rating of Forest City Enterprises, Inc. (Forest
City) to B2 from B3 following improvement in the firm's leverage
metrics. Following the narrower notching convention used for REITs
, Moody's should have taken action on Forest City's Senior
subordinated shelf, Subordinate shelf, Junior Subordinate shelf,
Perpetual convertible preferred stock shelf and the Preferred
stock shelf ratings when the senior debt rating was upgraded. The
rating actions corrects this prior oversight.
Moody's last rating action with respect to Forest City was on
October 24, 2013 when Moody's upgraded the senior debt rating and
changed the outlook from positive to stable.
The principal methodology used in this rating was Global Rating
Methodology for REITs and Other Commercial Property Firms
published in July 2010.
Forest City Enterprises, Inc. [NYSE: FCE] is a national real
estate company principally engaged in the ownership, development,
management and acquisition of commercial and residential real
estate and land throughout the United States. At June 30, 2014
Forest City's assets totaled $8.6 billion and its equity was $1.8
billion.
FPL ENERGY: S&P Affirms 'B-' Rating on $100MM Sr. Secured Bonds
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' rating on FPL
Energy National Wind Portfolio LLC's (Wind Portfolio) $100 million
senior secured bonds due 2019. At the same time, S&P revised the
recovery rating on Wind Portfolio's senior secured notes to '2'
from '5', indicating S&P's expectation of a substantial (70% to
90%) recovery if a default occurs. The outlook on the bonds
remains stable.
"The higher recovery expectation is a result of debt paydown at
National Wind and Wind Portfolio following the sale of Wyoming
wind farm," said Standard & Poor's credit analyst Trevor D'Olier-
Lees. The rating reflects S&P's view that Wind Portfolio's
financial performance will remain stable post the debt redemption
as it receives steady distributions from National Wind achieving a
stable consolidated debt service coverage averaging about 1.24x
through maturity.
Wind Portfolio continues to perform in line with S&P's base-case
projections through March 2014, receiving distributions from its
operating company, FPL Energy National Wind LLC. However, wind
volatility and high operating and maintenance (O&M) costs continue
to remain the key rating considerations at National Wind. Actual
wind production has been markedly below the management's pro forma
one-year P50 wind production estimate for the past two years. For
the 12 months ended March 2014, National Wind produced energy at
86% of the pro forma estimate.
S&P's base-case scenario includes reduced debt payments following
the debt redemption and a 15% increase in O&M expenses from the
revised management forecast, based on historical data. S&P has
relied on management's reduced projected revenues in its base
case, while maintaining an estimate of 97% availability because
the portfolio has demonstrated historically high availability
levels. Under this scenario, S&P expects Wind Portfolio's
coverage to be stable at about 1.24x until the debt matures.
The stable outlook on Wind Portfolio reflects S&P's view of its
stabilizing financial condition following National Wind's improved
financial profile post-Wyoming sale. S&P could lower the rating
if National Wind fails its distribution test and Wind Portfolio
draws on its debt service reserve. S&P could raise the rating if
the debt service coverage consistently tops 1.35x due to National
Wind's better performance.
FUEL PERFORMANCE: Incurs $2 Million Net Loss in Second Quarter
--------------------------------------------------------------
Fuel Performance Solutions, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $1.99 million on $454,667 of net revenues
for the three months ended June 30, 2014, as compared with a net
loss of $389,508 on $111,532 of net revenues for the same period
in 2013.
For the six months ended June 30, 2014, the Company reported a net
loss of $653,957 on $829,093 of net revenues as compared with a
net loss of $798,030 on $324,826 of net revenues for the same
period last year.
The Company's balance sheet at June 30, 2014, showed $3.02 million
in total assets, $2.60 million in total liabilities and $413,362
in total stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/UyeBSl
About Fuel Performance
Fuel Performance Solutions, Inc., was incorporated in Nevada on
April 9, 1996, by a team of individuals who sought to address the
challenges of reducing harmful emissions while at the same time
improving the operating performance of internal combustion
engines, especially with respect to fuel economy and engine
cleanliness. After the Company's incorporation, its initial focus
was product research and development, but over the past few years,
the Company's efforts have been directed to commercializing its
product slate, primarily DiesoLiFTTM and the PerfoLiFTTM BD-
Series, for use with diesel fuel and bio-diesel fuel blends, by
focusing on marketing, sales and distribution efforts in
conjunction with our distribution partners. On Feb. 5, 2014, the
Company changed its name from International Fuel Technology, Inc.,
to Fuel Performance Solutions, Inc.
Fuel Performance reported a net loss of $1.39 million on $704,189
of net revenues for the year ended Dec. 31, 2013, as compared with
a net loss of $1.92 million on $335,096 of net revenues during the
prior year.
MaloneBailey, LLP, in Houston, Texas, 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 suffered recurring loss from operations and has a
working capital deficit. This factor raises substantial doubt
about the Company's ability to continue as a going concern.
G-I HOLDINGS: NY Housing Authority's Lawsuit Dismissed
------------------------------------------------------
At the behest of G-I Holdings Inc., Bankruptcy Judge Rosemary
Gambardella in New Jersey dismissed, with prejudice, the New York
City Housing Authority's Complaint for Injunctive and Declaratory
Relief against the debtor.
NYCHA has not stated plausible claims in its Complaint sufficient
to withstand G-I's Motion to Dismiss the Complaint, the Judge
said.
NYCHA initiated the adversary proceeding against G-I on September
7, 2012, seeking injunctive and declaratory relief. Specifically,
NYCHA seeks to (1) obtain an affirmative mandatory injunction
pursuant to Rule 7001(7) ordering G-I to take all necessary action
to prevent future asbestos fiber release during removals of G-I's
asbestos-containing materials as required by New York State, New
York City and Federal law and for other equitable relief; (2)
obtain a declaration of rights that NYCHA's claims for past and
future relief are not subject to discharge under the Bankruptcy
Code; and (3) obtain a ruling that NYCHA's postpetition expenses
to prevent unsafe conditions from arising on the removal of G-I's
asbestos-containing products are administrative expenses under 11
U.S.C. Sec. 503(b).
A copy of the Court's Aug. 12 Opinion is available at
http://is.gd/dYQPfcfrom Leagle.com.
The case is, NEW YORK CITY HOUSING AUTHORITY, Plaintiff, v. G-I
HOLDINGS, INC., Defendant, ADV. NO. 12-1903(RG) (Bankr. D.N.J.).
Counsel for the Consolidated Debtor, G-I Holdings, Inc.:
Dennis J. O'Grady, Esq.
Mark E. Hall, Esq.
RIKER, DANZIG, SCHERER, HYLAND & PERRETTI, LLP
One Speedwell Avenue
Headquarters Plaza
Morristown, NJ 07962-1981
Tel: 973-451-8485
E-mail: dogrady@riker.com
mhall@riker.com
- and -
Andrew J. Rossman, Esq.
Scott C. Shelley, Esq.
Jacob J. Waldman, Esq.
QUINN EMANUEL, URQUHART & SULLIVAN, L.P.
51 Madison Avenue, 22nd Floor
New York, NY 10010
Tel: 212-849-7000
Fax: 212-849-7100
E-mail: andrewrossman@quinnemanuel.com
scottshelley@quinnemanuel.com
jacobwaldman@quinnemanuel.com
- and -
Marc J. Kurzman, Esq.
CARMODY TORRANCE SANDAK, HENNESSEY L.L.P.
707 Summer Street, Suite 300
Stamford, CT 06901 US
Tel: 203-425-4200
Fax: 203-325-8608
Co-Counsel for New York City Housing Authority.
Jeffrey M. Pollock, Esq.
FOX ROTHSCHILD, L.L.P.
Princeton Pike Corporate Center
997 Lenox Drive, Building 3
Lawrenceville, NJ 08648-2311
Tel: 609-896-3600
Fax: 609-896-1469
E-mail: jmpollock@foxrothschild.com
- and -
Philip J. Goodman, Esq.
LAW OFFICES OF PHILIP J. GOODMAN, P.C.
280 N Old Woodward Ave Ste 407
Birmingham, MI 48009
Tel: (248) 647-9300
- and -
Christopher M. Placitella, Esq.
COHEN, PLACITELLA & ROTH, P.C.
127 Maple Avenue
Red Bank, NJ 07701
Tel: 732-747-9003
Toll Free: 888-375-7600
Fax: 732-747-9004
E-mail: cplacitella@cprlaw.com
About G-I Holdings
Based in Wayne, New Jersey, G-I Holdings, Inc., is a holding
company that indirectly owns Building Materials Corporation of
America, a manufacturer of premium residential and commercial
roofing products. The Company filed for bankruptcy after already
spending $1.5 billion paying asbestos claims from the 1967
acquisition of Ruberoid Co.
G-I Holdings, Inc., fka GAF Corporation, filed a chapter 11
petition (Bankr. D.N.J. Case No. 01-30135) on Jan. 5, 2001, and
continued to operate its business as a debtor-in-possession
pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code.
ACI, Inc., a subsidiary of G-I Holdings, filed a voluntary chapter
11 petition (Bankr. D.N.J. Case No. 01-38790) on Aug. 3, 2001.
On Oct. 10, 2001, the Bankruptcy Court entered an Order directing
the joint administration of the G-I Holdings and ACI bankruptcy
cases.
Dennis J. O'Grady, Esq., and Mark E. Hall, Esq., at Riker, Danzig,
Scherer, Hyland & Perretti, LLP, serve as co-counsel to the
Reorganized Debtors. Andrew J. Rossman, Esq., and Jacob J.
Waldman, Esq., at Quinn Emanuel, Urquhart & Sullivan, LLP, serve
as special counsel to Reorganized Debtors.
An Official Committee of Unsecured Creditors was appointed on
Jan. 18, 2001, by the U.S. Trustee to represent those individuals
who allegedly suffered injuries related to asbestos exposure from
products manufactured by the predecessors of G-I Holdings.
Lowenstein Sandler PC represents the Unsecured Creditors
Committee. On Oct. 10, 2001, the Bankruptcy Court appointed C.
Judson Hamlin as the Legal Representative, a fiduciary to
represent the interests of persons who hold present and future
asbestos-related claims against G-I. Keating, Muething & Klekamp,
P.L.L., is the principal counsel to the Legal Representative of
Present and Future Asbestos-Related Demands.
G-I Holdings is the successor-in-interest to GAF Corporation, an
entity named in approximately 500,000 asbestos-related lawsuits.
The Committee submitted that, as successor-in-interest to GAF, G-I
Holdings remained liable for roughly 150,000 asbestos-related
lawsuits filed, but unresolved, as of the Petition Date and for
unknown numbers of asbestos-related claims that would be filed in
the future.
In early 1994, GAF Building Materials Corporation, an indirect
subsidiary of GAF, formed a new corporation as a wholly-owned
subsidiary known as Building Materials Corporation of America.
Pursuant to that transaction, BMCA received substantially all of
the assets of GAF's roofing products business and expressly
assumed $204 million of asbestos-related liability, with G-I
indemnifying BMCA against any additional such liability. BMCA,
also an indirect subsidiary of G-I Holdings, is the primary
operating subsidiary and principal asset of G-I Holdings.
In early 2007, the Debtors, the Committee and the Legal
Representative commenced mediation under the auspices of former
United States District Judge Nicholas H. Politan in an effort to
resolve the asbestos-related lawsuits. Subsequently, the Parties
outlined the principal terms of a global settlement and endeavored
to complete a final global settlement with comprehensive
documentation in the form of a proposed Chapter 11 plan and its
ancillary documents. To preserve the status quo, the Parties
mutually agreed to request a stay of all litigation which would be
covered under the final global settlement from this Court and
other courts of competent jurisdiction. Although lengthy and
initially unsuccessful, the negotiations continued until the
parties reached a settlement culminating in an agreement in early
August 2008.
On Aug. 21, 2008, the Parties filed the Joint Plan of
Reorganization of G-I Holdings Inc. and ACI Inc. Pursuant to
Chapter 11 of the Bankruptcy Code that implemented the Global
Settlement of all asbestos-related lawsuits naming G-I Holdings
and any other related entities as defendant(s). The Joint Plan of
Reorganization provided for the creation of an asbestos trust
pursuant to Section 524(g) of the Bankruptcy Code, to which all
asbestos-related lawsuits against the Debtors now and in the
future would be channeled. Pursuant to the Global Settlement, the
Asbestos Trust would assume the Debtors' liability for asbestos-
related lawsuits, in exchange for cash on the effective date of
the Joint Plan of Reorganization in an amount not to exceed $215
million, and a note in the amount of $560 million issued by the
reorganized Debtors and secured by a letter of credit.
The Bankruptcy Court and Chief Judge Garrett Brown of the U.S.
District Court for the District of New Jersey, by Order dated Nov.
12, 2009, jointly approved the Debtors' Eighth Amended Joint Plan
of Reorganization.
GENERAL MOTORS: Attorneys Chosen for Ignition-Switch Plaintiffs
---------------------------------------------------------------
Jeff Bennett, writing for The Wall Street Journal, reported that
attorneys Steve Berman, Elizabeth Cabraser and Bob Hilliard were
chosen by the U.S. District Court in New York to represent the
plaintiffs in complaints against General Motors Co. over the auto
maker's recall of the Chevrolet Cobalt and other older models for
a defective ignition switch. According to the report, Mr. Berman
is a Seattle lawyer who represented 13 states in the tobacco
litigation that led to a $206 billion settlement in 1998 and was
co-lead counsel in the Toyota economic-loss cases. The Journal
said Ms. Cabraser served as co-lead counsel for the plaintiffs in
the Toyota injury cases in federal court, while Mr. Hilliard
represents about 600 people who have suffered some type of loss
tied to the faulty switches in GM cars.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
-- http://www.gm.com/-- is one of the world's largest automakers,
traces its roots back to 1908.
General Motors Co. was formed to acquire the operations of
General Motors Corp. through a sale under 11 U.S.C. Sec. 363
following Old GM's bankruptcy filing. The U.S. government
provided financing. The deal was closed July 10, 2009, and Old GM
changed its name to Motors Liquidation Co.
Old GM -- General Motors Corporation -- filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1,
2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. The Debtors tapped Weil, Gotshal & Manges LLP
Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as
counsel; and Morgan Stanley, Evercore Partners and the Blackstone
Group LLP as financial advisor. Garden City Group is the claims
and notice agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
On Dec. 15, 2011, Motors Liquidation was dissolved. On the
Dissolution Date, pursuant to the Plan and the Motors Liquidation
Company GUC Trust Agreement, dated March 30, 2011, between the
parties thereto, the trust administrator and trustee
-- GUC Trust Administrator -- of the Motors Liquidation Company
GUC Trust, assumed responsibility for the affairs of and certain
claims against MLC and its debtor subsidiaries that were not
concluded prior to the Dissolution Date.
GULFPORT ENERGY: Moody's Rates $250MM Unsecured Notes 'B3'
----------------------------------------------------------
Moody's Investors Service said that Gulfport Energy Corporation's
proposed $250 million unsecured note offering will not have any
impact on its credit ratings or stable outlook. These notes will
be issued as a tack-on to Gulfport's existing 7.75% notes that
were originally issued in 2012 and are due in 2020. Net proceeds
will be primarily used to repay outstanding borrowings under the
company's revolving credit facility.
Issuer: Gulfport Energy Corporation
Assignments:
$250 million Senior Unsecured Regular Bond/Debenture,
Assigned B3 (LGD4)
Ratings Rationale
The new notes will be issued under the same indenture governing
Gulfport's existing 7.75% notes, and both vintages will be
classified as a single class of debt. The notes are rated B3, one
notch below the B2 CFR given the substantial size of the borrowing
base credit facility in the capital structure, which has a first-
lien claim to Gulfport's assets. The unsecured notes have an
upstream guarantee from Gulfport's current and future restricted
subsidiaries as does the secured $275 million revolving credit
facility. The revolver borrowing base will not be cut as a part of
this note issuance.
The company should have good liquidity through mid-2015, which is
captured in the SGL-2 rating. Following this offering, the company
will have approximately $210 million of cash and an undrawn $275
million revolver. The company also owned 2.38 million shares of
Diamondback Energy, Inc. (B2 positive) as of June 30, 2014 that
could be quickly liquidated if needed. Gulfport will continue to
generate large negative free cash flow in the coming quarters and
therefore, revolver utilization will increase sharply in 2015.
Moody's expect the borrowing base to increase over time as a large
number of new wells are brought to production. The revolving
facility expires in June 2018, and has ample covenant headroom
that should provide full access through 2015.
Gulfport's B2 Corporate Family Rating (CFR) reflects its
significant development and execution risks surrounding its
aggressive drilling program at the emerging Utica Shale play, high
capital requirements and negative free cash flow through 2015,
very short reserve life in relation to proved developed (PD)
reserves, and increasing natural gas exposure. The B2 rating is
supported by Gulfport's substantial acreage position (183,500 net
acres) in some of the most productive areas of the Utica Shale,
strong production and reserves growth potential, low current
leverage and significant alternative liquidity.
The stable outlook reflects Gulfport's low leverage and good
alternative liquidity. Ongoing successful execution of the Utica
drilling program leading to significantly higher production and
reserves will be the primary catalyst for a rating upgrade. If
production can be sustained above 50,000 boe/d alongside a
retained cash flow to debt ratio in excess of 35% and a debt to PD
reserves ratio approaching or below $10 per boe, the ratings could
be upgraded. A ratings downgrade is possible if the company
acquires significant non-producing properties using debt or vastly
outspends cash flow leading to a debt to retained cash flow ratio
below 30%. Weak liquidity could also trigger a negative rating
action.
The principal methodology used in this rating was the Global
Independent Exploration and Production Industry Methodology
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.
Based in Oklahoma City, Oklahoma, Gulfport Energy Corporation is
an independent E&P company with principal producing properties
located in the Louisiana Gulf Coast and the Utica Shale in Eastern
Ohio.
HAAS ENVIRONMENTAL: Committee Sues to Challenge Lenders' Liens
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
Chapter 11 case of Haas Environmental, Inc., commenced a lawsuit
for and on behalf of the Debtor's estate, against People's United
Equipment Finance Corp. and Commercial Credit Group Inc., the
Debtor's Pre-Petition Secured Creditors.
The Committee's adversary proceeding seeks:
(a) a determination that the Debtor's unencumbered assets are
not encumbered by any liens or security interests granted to the
Pre-Petition Secured Creditors,
(b) disallowance and/or recharacterization as unsecured of
any claims filed by the Pre-Petition Secured Creditors pursuant to
Sec. 502 of the Bankruptcy Code to the extent that the claims
allege a security interest in or lien on any of the Unencumbered
Assets,
(c) recovery of the Debtor's post-petition payment of
interest, fees, costs, and expenses to the Defendants owing under
the loans to the Debtor by PUEFC and CCG to reduce the principal
owing to the Defendants pursuant to Sec. 506(b) of the Bankruptcy
Code to the extent that the payments relate to any of the
Unencumbered Assets,
(d) recovery of certain fraudulent transfers made to or for
the benefit of PUEFC, and
(e) other and further relief for the Committee on behalf of
the unsecured creditors of the Debtor's estate as may be just and
proper under the circumstances of the Chapter 11 Case.
The Unencumbered Assets include:
-- two deposit accounts Sovereign Bank, n/k/a Santander Bank,
containing roughly $134,800; and an account at TD Bank containing
roughly $32,100.
-- the following real estate:
1623 State Highway, 137 East, Armorel, AR 72310
7 Red Lion Road, Vincentown, NJ 08088
647 Market Street, Steubenville, OH
1210 Grandview Road, Glendale, West Virginia
-- motor vehicles
The Committee said it has standing to prosecute the Complaint by
virtue of, among other things, paragraph 8 of the Consent Order
Authorizing Use of Cash Collateral On An Interim Basis Through May
31, 2014 -- the Second Cash Collateral Order -- entered by the
Bankruptcy Court on February 26, 2014.
The Debtor entered into various loan agreements with PUEFC and CCG
prior to the Petition Date. The Debtor granted PUEFC a security
interest in and first lien on, inter alia, the Debtor's accounts
and assets, which include, but are not limited to, various
vehicles and equipment and the Debtor's deposit accounts at
certain banking institutions. The Debtor granted CCG a security
interest in and second lien on, inter alia, the accounts and
assets, which include, but are not limited to, various vehicles
and equipment and the Debtor's deposit accounts at certain banking
institutions, together with a first priority security interest on
certain vehicles and equipment.
The Debtor stipulated in the Second Cash Collateral Order that, as
of the Petition Date, the balance owed to PUEFC on the PUEFC Loans
was $3,402,245; and the balance owed to CCG on the CCG Loans was
$2,907,682.22.
With respect to the fraudulent transfer claims, the Committee
cited a certain loan transaction dubbed "Transfer and Assumption
Agreement" dated January 21, 2011 between the Debtor and Sochem
Industrial Services, L.L.C., a Louisiana limited liability company
which shares common ownership with the Debtor and conducts
operations from the Debtor's headquarters located at 7 Red Lion
Road, Southampton, New Jersey.
According to the Committee, it appears that the Debtor incurred
certain obligations to PUEFC in connection with the Sochem Loan
and the Debtor received less than a reasonabley equivalent value
in exchange for incurring obligations under the Sochem Loan. The
Debtor also made certain certain payments related to and arising
out of the Sochem Loan to PUEFC. The Committee alleges that the
Sochem Transfers constitute fraudulent transfers which are
avoidable under Bankruptcy Code Sections 544 and 548, as well as
applicable state fraudulent law, and are recoverable for the
benefit of the Debtor's estate.
Under the Debtor's Plan filed in May, the secured claim of PUEFC
in connection with the loans will be allowed in full and the
lender will retainits liens on the property securing the Loans.
The secured claim of CCG in connection with the loans will be
allowed in full and CCG will retain its liens on the property
securing the Loans.
About Haas Environmental, Inc.
Haas Environmental, Inc., filed a Chapter 11 petition (Bankr.
D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the
petition as president. Judge Kathryn C. Ferguson presides over
the case. The Debtor disclosed $10,127,069 in assets and
$11,595,611 in liabilities as of the Chapter 11 filing. Jerrold
N. Poslusny, Jr., Esq., at Cozen O'Connor, in Cherry Hill, New
Jersey, serves as the Debtor's counsel.
Mary E. Seymour, Esq., at Lowenstein Sandler LLP, serves as
counsel for the Official Committee of Unsecured Creditors.
EisnerAmper LLP serves as its financial advisor.
* * *
Haas Environmental filed a plan of reorganization and disclosure
statement by the May 27, 2014 deadline set by the Court in its
exclusivity extension order. One feature of the Plan is a so-
called new value contribution from sole shareholder Eugene Haas
using his personal funds in exchange for retaining his equity
interest in the Debtor. Those funds will be utilized to pay for
certain disbursements under the Plan. Upon the Plan effective
date, Mr. Haas will be deemed appointed as the plan administrator
and will be responsible for making distributions from the play
payment fund under the Plan. Management of the Debtor's
operations after the effective date will continue to be run by Mr.
Haas as its president.
Under the Plan, the unsecured creditor claims, estimated to be
$3.8 million, will be paid after higher priority claims are
satisfied. Holders of unsecured creditor claims are estimated to
recoup 9% to 11% of the Allowed amount.
HCA INC: Fitch Hikes Issuer Default Rating to 'BB-'
---------------------------------------------------
Fitch Ratings has upgraded HCA Inc.'s (HCA) Issuer Default Rating
(IDR) to 'BB-' from 'B+'. The Rating Outlook is revised to Stable
from Positive.
The ratings apply to $29 billion of debt outstanding at June 30,
2014.
Key Rating Drivers
-- HCA's financial flexibility has improved significantly in
recent years as a result of organic growth in the business as well
as proactive management of the capital structure. The company has
industry leading operating margins and generates consistent and
ample discretionary FCF (CFO less capital expenditures and
distributions to minority interests).
-- The sponsors of a 2006 LBO have directed HCA's financial
strategy for the last several years, but their ownership has been
steadily decreasing since a 2011 IPO and HCA recently appointed
four new independent members to the 13-member board, bringing the
total to seven.
-- Under the direction of the LBO sponsors, HCA's ratings were
constrained by shareholder-friendly capital deployment; the
company funded $7.4 billion in special dividends since 2010. Fitch
thinks that HCA will have a more consistent and conservative
approach to funding shareholder payouts under an independent
board.
-- Fitch forecasts that HCA will produce discretionary FCF of $1.5
billion in 2014, and expects the company to prioritize
acquisitions and capital investment as cash usages. At 4.1x, HCA's
total debt-to-EBITDA is at the low end of the group of publicly
traded hospital companies and Fitch does not believe that there is
a compelling financial incentive for the company to apply cash to
debt reduction.
-- HCA's organic growth in patient volumes has outpaced that of
the broader for-profit hospital industry over the past several
years. As one of largest operators of acute care hospitals in the
country, with a broad geographic footprint, HCA is well-positioned
to capture market share if patient volumes rebound in 2014-2015.
Solid Financial Flexibility
HCA's balance sheet flexibility has recently improved due to the
extension of some near-term debt maturities, the refinancing of
relatively high coupon secured notes, and a reduction in pricing
on a cumulative $5.1 billion in bank loans. Upcoming debt
maturities include $81 million of bank term loans and $900 million
of HCA Inc. unsecured notes maturing in 2015 and $1.2 billion bank
term loans and $1 billion unsecured notes maturing in 2016. Fitch
believes that HCA's operating outlook is amongst the best in the
for-profit hospital industry, affording the company good market
access to refinancing the 2015-2016 maturities.
Internal sources of liquidity could also address upcoming debt
maturities. At June 30, 2014, HCA's liquidity included $658
million of cash on hand, $1.7 billion of capacity on its bank
facility revolving loans and latest-12-month (LTM) discretionary
FCF of about $1.4 billion. HCA's LTM EBITDA-to-gross interest
expense was solid for the 'BB-' rating category at 3.9x and the
company had about a 40% EBITDA cushion under its bank facility
financial maintenance covenant, which requires debt net of cash
maintained below 6.75x EBITDA.
Fitch's 2014 operating forecast for HCA projects the company
generating $7.1 billion in EBITDA, $4.2 billion in cash from
operations (CFO) and about $1.5 billion in discretionary FCF,
assuming capital expenditures of $2.2 billion and minority
distributions of about $480 million. This is an approximately $200
million increase versus the 2013 level of discretionary FCF, with
growth provided by the combined effects of topline growth,
slightly higher assumed profitability and lower cash interest
expense following debt refinancing activity and reduction in
pricing on the bank term loans.
Evolving Capital Deployment Strategy
The sponsors of a 2006 LBO directed HCA's financial strategy for
the last several years. Following a series of public equity
offerings and share buybacks, the sponsors' ownership percentage
dropped below 30% and SEC regulations required the company to
appoint a majority of independent directors to the board during
2014. HCA has appointed four new independent members to the 13
member board, bringing the total number of independent directors
to seven. In addition, the company's CEO retired at the end of
2013, retaining his role as chairman of the board. The former CFO
assumed the CEO position and a new CFO was appointed from within
the company. Although Fitch does not expect a major departure in
strategic direction under an independent board or different CEO,
there may be some shifts in the company's capital deployment
strategy. Under the direction of the LBO sponsors, HCA managed its
capital structure in an aggressively shareholder-friendly manner,
paying out $7.4 billion in special dividends since 2010 that were
largely debt financed.
With the 2014 implementation of the health insurance coverage
expansion elements of the Affordable Care Act (ACA) encouraging
scale and consolidation in the hospital industry, Fitch believes
HCA is now more likely to prioritize acquisitions and capital
investment as a use of cash as opposed to debt reduction or
payments to shareholders. The company's recent acquisitions have
been small though; the last large transaction was in late 2011
when HCA acquired the 40% remaining ownership interest in the
Denver, CO HealthONE joint venture for $1.45 billion.
HCA could increase debt to fund further dividends to shareholders
or acquisitions. The debt agreements do not significantly limit
the ability to issue additional debt. The bank agreements include
a 3.75x first lien secured leverage ratio debt incurrence test and
a 6.75x net debt-to-EBITDA financial maintenance covenant. At June
30, 2014, Fitch estimates the HCA has incremental secured first-
lien debt capacity of about $8 billion and a 40% EBITDA cushion
under the 6.75x consolidated leverage ratio test.
A recent amendment to the bank agreement loosened the limit on
restricted payments (RP), including dividends and share
repurchases, allowing unlimited RPs as long as total debt at the
HCA, Inc. level is less than or equal to 4.25x EBITDA. A more
restrictive RP covenant under certain of the first lien notes
indentures places a stricter limit on RP capacity, until these
notes are retired or the covenant is amended, the stricter
covenant supersedes the more lenient bank agreement terms
Hospital Industry Operating Trends Imrproving, Aca A Boost,
Secular Headwinds Intact
The benefits of HCA's favorable business profile, with excellent
scale and decent geographic diversification, are evident in recent
operating trends, although the company has not been entirely
resilient to headwinds to organic growth in the hospital sector.
Facing a stiff comparison to a strong result in 2012 and weak
growth in lower acuity service lines, HCA's organic patient
volumes growth in 2013 was markedly softer than in recent periods,
with same hospital adjusted admissions growing 0.1%. This weak
volume metric still outperformed the peer group; same hospital
adjusted admissions across the Fitch-rated group of for-profit
hospital providers dropped 0.7% on average in 2013.
Operating trends were similarly weak in Q1'14, then improved
drastically in Q2'14, with most companies reporting better organic
volume growth, an improved payor mix with lower volumes of insured
patients, and a higher acuity case mix, which is supportive of
pricing growth and profitability. HCA reported organic volume
growth of 2.2%. Drivers of the improved trend include general
economic improvement in most geographies, the early influence of
the insurance expansion elements of the ACA, as well as an ongoing
skew toward a more acute (sicker) patient population. Fitch thinks
that management initiatives to create growth in more profitable
areas, including targeted expansion in outpatient services and
more acute service lines, were also a factor.
Growth in profitability in the quarter illustrated the power of
operating leverage for the hospital industry. Along with the
generally improved operating trends, profitability increased for
most for-profit hospital companies in Q2'14 versus the year ago
period. Excluding supplemental Medicaid payments received in
Q2'14, HCA's operating EBITDA margin expanded 30 bps versus the
prior year period, to 20.6%. While these results are encouraging,
it difficult to determine how much of the recent gains in
profitability will be sustainable. There are secular headwinds to
growth that remain intact, including general pressure on payment
rates and actions by patients and payors to limit relatively
expensive hospital care in less acute situations. Therefore, Fitch
does not expect the industry to maintain all of the profitability
gains realized in Q2'14, with operating margins at the end of 2014
projected to track only slightly better than 2013 levels.
Rating Sensitivities
Maintenance of a 'BB-' IDR contemplates HCA operating with total
debt-to-EBITDA below 4.5x, and with a FCF-margin of 4% or higher.
A downgrade of the IDR to 'B+' is unlikely in the near term, since
these targets afford HCA with significant financial flexibility to
increase acquisitions and organic capital investment, which Fitch
thinks will be the priorities for capital deployment going
forward.
An upgrade to a 'BB' IDR contemplates HCA maintaining debt
leverage below 4.0x. In addition to a commitment to operate with
lower leverage, improvement in organic operating trends in the
hospital industry would support a higher rating for HCA. Evidence
of an improved operating trend would include sustained positive
growth in organic patient volumes, improvement in the payor mix
with fewer numbers of uninsured patients and correspondingly lower
bad debt expense, and limited concern that profitability will
suffer from drops in reimbursement rates.
Debt Issue Ratings
Fitch has taken the following rating actions:
HCA, Inc.
-- IDR upgraded to 'BB-' from 'B+';
-- Senior secured credit facilities (cash flow and asset backed)
affirmed at 'BB+' (previously 'BB+/RR1', recovery ratings only
apply for entities rated 'B+' and below);
-- Senior secured first lien notes affirmed at 'BB+' (previously
'BB+/RR1);
-- Senior unsecured notes affirmed at 'BB-' (previously 'BB-/
RR3').
HCA Holdings Inc.
-- IDR upgraded to 'BB-' from 'B+';
-- Senior unsecured notes upgraded to 'B' from 'B-/RR6'.
Total debt at June 30, 2014 was approximately $29 billion and
includes a senior secured bank credit facility consisting of
approximately $5.5 billion in term loans maturing through May
2018, a $2 billion capacity cash flow revolving loan and a $2.5
billion capacity asset backed revolving loan (ABL facility), $11
billion of first-lien secured notes, $7.2 billion of HCA Inc.
unsecured notes, and $2.5 billion of HCA Holdings, Inc. unsecured
notes.
The secured debt rating is two notches above the IDR, illustrating
Fitch's expectation for superior recovery prospects in the event
of default. The first-lien obligations, including the bank debt
and the first-lien secured notes, are guaranteed by all material
wholly owned U.S. subsidiaries of HCA, Inc. that are 'unrestricted
subsidiaries' under the HCA Inc. unsecured note indenture dated
Dec. 16, 1993. Because of restrictions on the guarantor group as
stipulated by the 1993 indenture, the credit facilities and first-
lien notes are not 100% secured. At June 30, 2014, the subsidiary
guarantors of the first-lien obligations comprised about 49% of
consolidated total assets. The ABL facility has a first-lien
interest in substantially all eligible accounts receivable (A/R)
of HCA, Inc. and the guarantors, while the other bank debt and
first-lien notes have a second-lien interest in certain of the
receivables.
The HCA Inc. unsecured notes are rated at the same level as the
IDR despite the substantial amount of secured debt to which they
are subordinated, with secured leverage of 2.7x at June 30, 2014.
Fitch often notches ratings on unsecured debt obligations below
the IDR level when secured debt leverage is greater than 2.5x.
However, the strength and stability of HCA's cash flows supports
an expectation of at least average recovery for these lenders
relative to historical rates in an event of default, resulting in
a rating at the same level of the IDR. If HCA were to layer more
secured debt into the capital structure, such that secured debt
leverage is greater than 3.0x, it could result in a downgrade of
the rating on the HCA Inc. unsecured notes, to 'B+'.
The HCA Holdings Inc. unsecured notes are rated two-notches below
the IDR to reflect the substantial structural subordination of
these obligations, which are subordinate in right of payment to
all debt outstanding at the HCA Inc. level. At June 30, 2014,
leverage at the HCA Inc. and HCA Holdings Inc. level was 3.7x and
4.1x, respectively.
HOUSE OF MERCY: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: House of Mercy, Inc.
1021 Martin Luther King Drive
Ville Platte, LA 70586
Case No.: 14-50996
Chapter 11 Petition Date: August 14, 2014
Court: United States Bankruptcy Court
Western District of Louisiana (Lafayette)
Judge: Hon. Robert Summerhays
Debtor's Counsel: Thomas E. St. Germain, Esq.
WEINSTEIN LAW FIRM
1414 NE Evangeline Thruway
Lafayette, LA 70501
Tel: (337) 235-4001
Fax: (337) 235-4020
Email: ecf@weinlaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kerney Thomas, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/lawb14-50996.pdf
IBCS MINING: Hirschler Fleischer Approved as Bankruptcy Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Virginia
authorized IBCS Mining, Inc. et al., to employ Hirschler
Fleischer, PC, as bankruptcy counsel.
Robert S. Westermann, a shareholder at the firm, told the Court
that his hourly rate is $430, and the rates of other personnel
are:
Thomas J. Dillon, shareholder $460
C. Brabdon Spalding, partner $355
Rachel A. Greenleaf, associate $245
To the best of the Debtors' knowledge, Hirschler Fleischer is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firms can be reached at:
Robert S. Westermann, Esq.
Rachel A. Greenleaf, Esq.
HIRSCHLER FLEISCHER, P.C.
The Edgeworth Building
210 East Cary Street
P.O. Box 500
Richmond, VA 23218-0500
Tel: (804) 771-9500
Fax: (804) 644-0957
E-mail: rwestermann@hf-law.com
rhrenleaf@hf-law.com
About IBCS Mining
IBCS Mining is an independent company engaged in the sale of coal
to utility companies and other end users.
IBCS Mining, Inc., and affiliate IBCS Mining, Inc., Kentucky
Division, sought Chapter 11 bankruptcy protection (Bankr. W.D. Va.
Case Nos. 14-61215 and 14-61216) on June 27, 2014.
The Chapter 11 cases are assigned to Judge Rebecca B. Connelly.
The Debtors have tapped Hirschler Fleischer, P.C., in Richmond,
Virginia, as counsel. Epiq Bankruptcy Solutions, LLC, is the
claims and notice agent.
IBCS Mining disclosed $6,914,815 in assets and $7,279,157 in
liabilities as of the bankruptcy filing. IBCS Mining KD estimated
less than $50,000 in assets and less than $10 million in debt.
The Official Committee of Unsecured Creditors is comprised of
Virginia Community Bank and Environmental Design Consultants, Inc.
IBCS MINING: Taps Epiq Bankruptcy as Claims and Noticing Agent
--------------------------------------------------------------
IBCS Mining, Inc., et al., ask the Bankruptcy Court for permission
to employ Epiq Bankruptcy Solutions, LLC as claims, noticing and
balloting agent retroactive to the petition date.
Epiq will, among other things:
1. assist the Debtors with administrative tasks in the
preparation of their bankruptcy schedules of assets and
liabilities;
2. maintain copies of all proofs of claim and proofs of
interest filed;
3. create and maintain electronic database for creditors and
parties-in-interest information provided by the Debtors and by
creditors and parties-in-interest;
4. provide balloting services in connection with the
solicitation process for any chapter 11 plan for which a which
a disclosure statement has been approved by the Court; and
5. provide call center facility and services.
The Debtors requested that the fees and expenses incurred by Epic
in the performance of the services be treated as administrative
expenses of the Debtors' chapter 11 estates, and be paid in the
ordinary course of business without further application to or
order of the Court.
The Debtors did not provide Epiq a retainer.
About IBCS Mining
IBCS Mining is an independent company engaged in the sale of coal
to utility companies and other end users.
IBCS Mining, Inc., and affiliate IBCS Mining, Inc., Kentucky
Division, sought Chapter 11 bankruptcy protection (Bankr. W.D. Va.
Case Nos. 14-61215 and 14-61216) on June 27, 2014.
The Chapter 11 cases are assigned to Judge Rebecca B. Connelly.
The Debtors have tapped Hirschler Fleischer, P.C., in Richmond,
Virginia, as counsel.
IBCS Mining disclosed $6,914,815 in assets and $7,279,157 in
liabilities as of the bankruptcy filing. IBCS Mining KD estimated
less than $50,000 in assets and less than $10 million in debt.
The Official Committee of Unsecured Creditors is comprised of
Virginia Community Bank and Environmental Design Consultants, Inc.
IBCS MINING: U.S. Trustee Forms Two-Member Creditors Committee
--------------------------------------------------------------
Judy A. Robbins, U.S. Trustee for Region 4, appointed two
creditors to serve in an official unsecured creditors committee.
The Committee consists of:
1. R. Thomas Hopkins, VP
Virginia Community Bank
P.O. Box 888
Louisa, VA 23093
2. Timothy M. Campoy, president
Environmental Design Consultants, Inc.
43 Village Street
Pikeville, KY 41501
IBCS Mining, Inc., and IBCS Mining, Inc., Kentucky Division, filed
separate Chapter 11 bankruptcy petitions (Bankr. W.D. Va. Case
Nos. 14-61215 and 14-61216) on June 27, 2014. Edmund Scarborough
signed the petition as president. Hirschler Fleischer, P.C.,
serves as the Debtors' counsel. The Court on July 8, 2014,
authorized the joint administration of the cases. The cases are
assigned to Judge Kevin R. Huennekens. IBCS Mining estimated
assets and debts of at least $10 million. IBCS Mining Inc.
disclosed $6,914,815 in assets and $7,279,157 in liabilities.
About IBCS Mining
IBCS Mining is an independent company engaged in the sale of coal
to utility companies and other end users.
IBCS Mining, Inc., and affiliate IBCS Mining, Inc., Kentucky
Division, sought Chapter 11 bankruptcy protection (Bankr. W.D. Va.
Case Nos. 14-61215 and 14-61216) on June 27, 2014.
The Chapter 11 cases are assigned to Judge Rebecca B. Connelly.
The Debtors have tapped Hirschler Fleischer, P.C., in Richmond,
Virginia, as counsel. Epiq Bankruptcy Solutions, LLC, is the
claims and notice agent.
IBCS Mining disclosed $6,914,815 in assets and $7,279,157 in
liabilities as of the bankruptcy filing. IBCS Mining KD estimated
less than $50,000 in assets and less than $10 million in debt.
IBCS MINING: Wants Baird to Handle Matters Related to Coal Mining
-----------------------------------------------------------------
IBCS Mining, Inc., et al., ask the Bankruptcy Court for permission
to employ Baird & Baird, P.S.C., as special counsel nunc pro tunc
to the Petition Date.
Baird will represent the Debtors in connection with various
matters related to coal mining in Kentucky, including property,
business and regulatory law. Baird will (i) review contract
mining agreements; and (ii) advise the debtor with respect to, and
assist, in the negotiation and documentation of, loan and sale
transactions.
To the best of the Debtors' knowledge, Baird does not have an
interest materially adverse to the Debtor, their estate, or any
class of creditors or equity holders.
About IBCS Mining
IBCS Mining is an independent company engaged in the sale of coal
to utility companies and other end users.
IBCS Mining, Inc., and affiliate IBCS Mining, Inc., Kentucky
Division, sought Chapter 11 bankruptcy protection (Bankr. W.D. Va.
Case Nos. 14-61215 and 14-61216) on June 27, 2014.
The Chapter 11 cases are assigned to Judge Rebecca B. Connelly.
The Debtors have tapped Hirschler Fleischer, P.C., in Richmond,
Virginia, as counsel. Epiq Bankruptcy Solutions, LLC, is the
claims and notice agent.
IBCS Mining disclosed $6,914,815 in assets and $7,279,157 in
liabilities as of the bankruptcy filing. IBCS Mining KD estimated
less than $50,000 in assets and less than $10 million in debt.
The Official Committee of Unsecured Creditors is comprised of
Virginia Community Bank and Environmental Design Consultants, Inc.
IBCS MINING: Seeks Court Approval for Mike Dean as CFO
------------------------------------------------------
IBCS Mining, Inc., et al., ask the Bankruptcy Court to approve the
appointment of Michael Dean as chief financial officer.
Pursuant to the employment agreement, Mr. Dean will receive an
annual base salary of $240,000, well as incentive compensation.
In the event of a sale, the incentive bonus will equal 2.25% of
the gross proceeds of the sale. In the event of a confirmed plan
of reorganization, the incentive bonus will equal 2.25% of the
total monetary value derived by the bankruptcy estates from the
reorganization. The incentive compensation requires Mr. Dean's
involvement in the negotiation and preparation of any such sale or
proposed plan of reorganization.
About IBCS Mining
IBCS Mining is an independent company engaged in the sale of coal
to utility companies and other end users.
IBCS Mining, Inc., and affiliate IBCS Mining, Inc., Kentucky
Division, sought Chapter 11 bankruptcy protection (Bankr. W.D. Va.
Case Nos. 14-61215 and 14-61216) on June 27, 2014.
The Chapter 11 cases are assigned to Judge Rebecca B. Connelly.
The Debtors have tapped Hirschler Fleischer, P.C., in Richmond,
Virginia, as counsel. Epiq Bankruptcy Solutions, LLC, is the
claims and notice agent.
IBCS Mining disclosed $6,914,815 in assets and $7,279,157 in
liabilities as of the bankruptcy filing. IBCS Mining KD estimated
less than $50,000 in assets and less than $10 million in debt.
The Official Committee of Unsecured Creditors is comprised of
Virginia Community Bank and Environmental Design Consultants, Inc.
IZEA INC: Posts $2 Million Net Income in Second Quarter
-------------------------------------------------------
IZEA, Inc., filed with the U.S. Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing net income of $2.02
million on $1.96 million of revenue for the three months ended
June 30, 2014, as compared with a net loss of $893,470 on $1.71
million of revenue for the same period in 2013.
For the six months ended June 30, 2014, the Company reported net
income of $1.45 million on $3.92 million of revenue as compared
with a net loss of $1.77 million on $3.10 million of revenue for
the same period last year.
As of June 30, 2014, the Company had $12.18 million in total
assets, $13.27 million in total liabilities and a $1.09 million
total stockholders' deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/zlkz2G
About IZEA, Inc.
IZEA, Inc., headquartered in Orlando, Fla., believes it is a world
leader in social media sponsorships ("SMS"), a rapidly growing
segment within social media where a company compensates a social
media publisher to share sponsored content within their social
network. The Company accomplishes this by operating multiple
marketplaces that include its platforms SocialSpark,
SponsoredTweets and WeReward, as well as its legacy platforms
PayPerPost and InPostLinks.
IZEA reported a net loss of $3.32 million on $6.62 million
of revenue for the 12 months ended Dec. 31, 2013, as compared with
a net loss of $4.67 million on $4.95 million of revenue during the
prior year.
IRISH BANK: Foreign Representatives Balk at Designation Motion
--------------------------------------------------------------
Kieran Wallace and Eamonn Richardson, the duly appointed and
authorized foreign representatives of Irish Bank Resolution
Corporation Limited. objected to guarantor Dr. Joseph Sheehan's
motion to designate him as the purchaser of assets identified as
the "Blackrock Loan Assets."
The Foreign Representatives related that Dr. Sheehan continues to
possess his pre-existing rights to payoff or purchase the
Blackrock Loans consistent with the familiar loan sale process,
which is in its initial stages. The nominal gross loan balance of
the Blackrock Loans is approximately EUR EUR16,089,000.
The Foreign Representatives aver that the designation motion must
be denied because:
1. the loan sale deed has been terminated;
2. the designation motion is procedurally defective;
3. there is no contractual basis under the loan sale deed to
grant the requested relief to guarantor; and
4. there is no legal basis under Irish Law to grant the
requested relief to guarantor.
As reported in the Troubled Company Reporter on July 24, 2014,
Law360 reported that the Chapter 15 debtor urged a Delaware
bankruptcy judge to approve a $7.1 million deal selling the lease
of a Florida shopping mall to Tampa Bay Lightning owner Jeff Vinik
and reject a late $10 million bid from developer Liberty
Channelside LLC. According to the report, at a hearing in
Wilmington, IBRC sought the court's blessing for the two-track
bidding process it employed to auction its interests in the Tampa
mall -- Channelside Bay Plaza -- and the $7.1 million bid for it
received for the mall lease from Vinik's CBP Development LLC.
Liberty had challenged the bidding procedures and the sale itself
while floating a competing $10 million offer, and U.S. Bankruptcy
Judge Christopher S. Sontchi ruled that the developer had standing
to object to both motions, Law360 related. IBRC later filed a
response to Liberty's challenge and accused the developer of
gamesmanship for floating a late, $10 million offer for the
Florida shopping complex's lease after asking the court to strike
down a $7 million bid from Tampa Bay Lightning owner, Law360
further related.
About Irish Bank Resolution
Irish Bank Resolution Corp., the liquidation vehicle for what was
once one of Ireland's largest banks, filed a Chapter 15 petition
(Bankr. D. Del. Case No. 13-12159) on Aug. 26, 2013, to protect
U.S. assets of the former Anglo Irish Bank Corp. from being
seized by creditors. Irish Bank Resolution sought assistance
from the U.S. court in liquidating Anglo Irish Bank Corp. and
Irish Nationwide Building Society. The two banks failed and were
merged into IBRC in July 2011. IBRC is tasked with winding them
down and liquidating their assets. In February, when Irish
lawmakers adopted the Irish Bank Resolution Corp., IBRC was
placed into a special liquidation in the Irish High Court to
complete liquidation and distribution of the two banks' assets.
IBRC's principal asset as of June 2012 was a loan portfolio
valued at some EUR25 billion (US$33.5 billion). About 70 percent
of the loans were to Irish borrowers. Some 5 percent of the
portfolio was under U.S. law, according to a court filing. Total
liabilities in June 2012 were about EUR50 billion, according
to a court filing.
Most assets in the U.S. have been sold already. IBRC is involved
in lawsuits in the U.S.
IBRC was granted protection under Chapter 15 of the U.S.
Bankruptcy Code in December 2013.
Kieran Wallace and Eamonn Richardson of KPMG have been named the
special liquidators.
J. CREW: Bank Debt Trades at 3% Off
-----------------------------------
Participations in a syndicated loan under which J. Crew is a
borrower traded in the secondary market at 97.46 cents-on-the-
dollar during the week ended Friday, Aug. 15, 2014, according to
data compiled by LSTA/Thomson Reuters MTM Pricing and reported in
The Wall Street Journal. This represents an increase of 0.46 of
percentage points from the previous week, The Journal relates.
J. Crew pays 300 basis points above LIBOR to borrow under the
facility. The bank loan matures on Feb. 27, 2021 and carries
Moody's B1 rating and Standard & Poor's B rating. The loan is one
of the biggest gainers and losers among 264 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday.
J.M. HUBER: S&P Affirms 'BB+' CCR & Rates New $660MM Debt 'BB+'
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on J.M.
Huber Corp., including the 'BB+' corporate credit rating. The
outlook is stable.
At the same time, S&P assigned a 'BB+' issue-level rating to the
company's $300 million unsecured revolving credit facility and
$360 million unsecured term loan facility. The recovery rating on
this debt is '3' indicating S&P's expectation of meaningful
recovery (50% to 70%) in the event of payment default.
On June 27, 2014, Huber entered into a new $660 million credit
agreement consisting of a $360 million term loan facility and $300
million revolving credit facility. The first drawing under the
term loan facility for $125 million was made on June 27, 2014, and
the second drawing for a maximum $235 million can be made any time
up until Nov. 15, 2015, for the sole purpose of retiring the 2019
notes.
S&P characterizes Huber's business risk profile as "fair" and
financial risk profile as "intermediate," which results in an
anchor score of 'bb+'. There are no rating modifiers that affect
the rating.
"The rating on Huber reflects the company's significant exposure
to cyclical end markets like housing, construction, and industrial
which contribute to around 40% to 45% of the total revenues," said
Standard & Poor's credit analyst Henry Fukuchi. Huber's favorable
market position in many of its specialty chemicals businesses; its
good product, geographic and end-market diversity; and effective
cost-reduction programs mainly in the Huber's Engineered Woods
(HEW) segment offset some of these weaknesses. The ratings also
incorporate the company's prudent financial policies which S&P
believes will continue to support an "intermediate" financial risk
profile.
The company's HEW business, which manufactures oriented
strandboard (OSB), a plywood substitute used primarily in new
residential construction, continues to benefit from the upturn in
U.S. residential construction. S&P believes U.S. housing markets
will continue to strengthen during the next few years. While
prices have declined as the mothballed wood products industry
capacity was restarted, S&P thinks HEW has the potential to
generate significant free operating cash flow during the next few
years. In addition, despite economic weakness in Europe, CP Kelco
and Huber Engineered Materials (HEM) should continue to increase
sales moderately and maintain steady EBITDA margins in the 17% to
18% range. CP Kelco and HEM manufacture specialty ingredients to
enhance the performance, appeal, and processing of a broad range
of industrial and consumer products. These two businesses are
benefiting from an increasing focus on specialty products and on
new customers. In addition, CP Kelco stands to gain from tariffs
imposed on imported xanthan gum.
CP Kelco and HEM benefit from relatively stable end markets,
collaboration with customers in product formulation, and growth in
developing markets such as China. In addition, the company has
taken several actions to reduce operating costs and improve sales
mix during the past few years. As a result, EBITDA margins in
these businesses are high (17% to 18%) and should remain fairly
stable.
In OSB, Huber primarily manufactures specialty products that
perform better and command premium pricing compared with commodity
OSB. During the last recession, the company significantly reduced
operating costs in this business. As a result, the recent upturn
in volumes is significantly boosting its earnings and cash flow.
This business, which operated at close to break-even levels in
2011, generated almost $110 million of EBITDA in 2013 and S&P
expects it to generate $60 million to $70 million in 2014 due to
the price decline in the industry. S&P believes Huber's OSB
business has significant additional earnings potential as U.S.
housing markets continue to recover, but S&P thinks the business
will remain volatile. S&P currently expects U.S. housing starts
to be near 1.1 million in 2014 and 1.4 million in 2015, up from
0.8 million in 2012 and 0.9 million in 2013.
The stable outlook on Huber reflects S&P's expectation for
continued earnings stability at CP Kelco and HEM, as well as
further strengthening of U.S. residential construction markets
during the next year, which should result in improved earnings at
HEW. S&P expects Huber to balance its growth initiatives with
prudent leverage and maintain an "intermediate" financial risk
profile. At the current ratings, S&P expects Huber to maintain
FFO to total adjusted debt between 30% and 40% in the next few
years.
In view of Huber's current business mix, S&P would consider an
upgrade if the company's FFO to adjusted debt ratio exceeded 45%
on a sustainable basis, and S&P would need to believe that future
business conditions and financial policies would continue to
support this higher ratio. This could occur if revenues increase
around 8% and the EBITDA margins increase around 150 basis points
from current expectations.
S&P would lower the ratings if Huber's FFO to adjusted debt ratio
dropped below 30% with no clear prospects for recovery. S&P
believes this could occur if revenue declines by around 10% and
EBITDA margins decrease around 300 basis points from its current
expectations.
JAMES RIVER: Wednesday Hearing on Lease Decision Extension
----------------------------------------------------------
The Bankruptcy Court will convene a hearing on Aug. 20, 2014, at
4:00 p.m., to consider James River Coal Company. et al.'s motion
to extend their time to assume or reject the unexpired leases of
nonresidential real property from Aug. 5, until Nov. 3.
Objections, if any, are due Aug. 18.
As reported in the Troubled Company Reporter on Aug. 5, 2014, the
Debtors also requested confirmation that any lease proposed to
be assumed or rejected by the Debtors by a motion filed on or
before the extended deadline -- timely election motion -- will not
be deemed rejected under Section 365(d)(4) of the Bankruptcy Code
irrespective of whether the Court has entered an order granting or
denying that motion by the extended deadline, and that lease will
be assumed or rejected only upon further order of the Court
approving such assumption or rejection.
The Debtors operate a large, multifaceted business with operations
and financial interests throughout the Central Appalachia and the
Midwest coal regions of the United States. As part of their
operations, the Debtors estimate that, as of the Petition Date,
they were party to more than a thousand unexpired leases of
nonresidential real property. The Debtors have not yet had an
opportunity to identify or make final determinations regarding the
assumption or rejection of many of the Leases.
The Debtors said that, in light of the size, complexity and
demands of these cases, the number of Leases and their importance
to their operations, it would not be practical to require them to
make final determinations regarding the assumption or rejection of
the Leases on or before the present August 5, 2014 lease decision
deadline.
The Debtors also said it is essential for them to retain financial
and operational flexibility during this critical time. The
Debtors are currently engaged in extensive efforts to pursue and
effectuate one or more strategic restructuring transactions. The
auction -- as defined in the Strategic Transaction Bidding
Procedures approved by the Court in May 2014 -- is scheduled to
occur on Aug. 11, 2014 at 1:00 p.m. (prevailing Eastern Time). The
Debtors do not believe it would be prudent to assume or reject
Leases before selecting a Successful bid or bids, as those leases
may or may not be included in those successful bid(s).
In accordance with the notice, case management and administrative
procedures approved by the Court on April 10, 2014, if a motion to
extend the time for the Debtors to take any action is filed
consistent with the case management procedures before the
expiration of the period prescribed by the Bankruptcy Code, the
Bankruptcy Rules, the Local Rules of the United States Bankruptcy
Court for the Eastern District of Virginia or the provisions of
any order entered by the Court, that time will automatically be
extended until the Court acts on the motion, without the necessity
for the entry of a bridge order. The Debtors filed their
Extension request on Aug. 1.
The Debtor is represented by:
Marshall S. Huebner, Esq.
Brian M. Resnick, Esq.
Michelle M. McGreal, Esq.
DAVIS POLK & WARDWELL LLP
450 Lexington Avenue
New York, NY 10017
Tel: (212) 450-4000
Fax: (212) 607-7973
Tyler P. Brown, Esq.
Henry P. (Toby) Long, III, Esq.
Justin F. Paget, Esq.
HUNTON & WILLIAMS LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, VA 23219
Tel: (804) 788-8200
Fax: (804) 788-8218
About James River
James River Coal Company is a producer and marketer of coal in the
Central Appalachia ("CAPP") and the Midwest coal regions of the
United States. James River's principal business is the mining,
preparation and sale of metallurgical coal, thermal coal (which is
also known as steam coal) and specialty coal.
James River and 33 of its affiliates filed Chapter 11 bankruptcy
petitions (Bankr. E.D. Va. Case Nos. 14-31848 to 14-31886) in
Richmond, Virginia, on April 7, 2014. The petitions were signed
by Peter T. Socha as president and chief executive officer.
Judge Kevin R. Huennekens oversees the Chapter 11 cases.
On the petition date, James River Coal disclosed total assets of
$1.06 billion and total liabilities of $818.6 million.
The Debtors are represented by Tyler P. Brown, Esq., Henry P.
(Toby) Long, III, Esq., and Justin F. Paget, Esq. at Hunton &
Williams LLP of Richmond, VA and Marwill S. Huebner, Esq, Brian
M. Resnick, Esq., and Michelle M. McGreal, Esq. at Davis Polk &
Wardwell LLP of New York, NY. Kilpatrick Townsend & Stockton LLP
serves as the Debtors' special counsel. Perella Weinberg Partners
L.P. is the Debtors' financial advisor. Deutsche Bank Securities
Inc. serves as the Debtors' investment banker and M&G advisor.
Epiq Bankruptcy Solutions, LLC, acts as the debtors' notice,
claims and administrative agent.
The U.S. Trustee for Region 4 has appointed five creditors to the
Official Committee of Unsecured Creditors. Michael S. Stamer,
Esq., Alexis Freeman, Esq., and Jack M. Tracy II, Esq., at Akin
Gump Strauss Hauer & Feld LLP; and Jonathan L. Gold, Esq.,
Christopher L. Perkins, Esq., and Christian K. Vogel, Esq., at
LeClairRyan.
KID BRANDS: Wants to Pay Bonuses for Workers to Complete Sales
--------------------------------------------------------------
Sherri Toub, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that Kid Brands Inc. seeks
authority from the U.S. Bankruptcy Court in New Jersey to pay
bonuses to seven employees to help complete the retailer's pending
sale of its brands' intellectual property, inventory and accounts
receivable.
According to the report, Kid Brands proposes to pay bonuses
ranging from $140,000 in the aggregate, if the minimum threshold
of $14 million is achieved, to $360,000 in the aggregate if the
maximum threshold of $18 million or more is achieved. Kid Brands,
the report related, said achieving the thresholds for the bonus
payments will be "difficult," given that the proposed sale of the
brands' intellectual property to Crown Crafts is only about 9
percent of the threshold proceeds that must be achieved for the
first level of bonuses to be paid.
About Kid Brands
Based in Rutherford, New Jersey, Kid Brands, Inc., is a designer,
importer, marketer, and distributor of infant and juvenile
consumer products. Its operating subsidiaries consist of Kids
Line, LLC, CoCaLo, Inc., Sassy, Inc., and LaJobi, Inc. Providing
"everything but the baby" for a child's nursery, the company sells
infant bedding and accessories under the Kids Line and CoCaLo
brands; nursery furniture under the LaJobi brand; and baby care
items under the Kokopax and Sassy brands.
Citing their inability to raise capital due to contingent
liabilities and operational issues, Kid Brands and six of its U.S.
subsidiaries each filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No.
14-22582) on June 18, 2014. To preserve the value of their
assets, the Debtors are pursuing a sale of the assets pursuant to
section 363 of the Bankruptcy Code.
As of April 30, 2014, the Debtors had $32.40 million in total
assets and $109.1 million in total liabilities. As of the
Petition Date, unsecured debts totaled $54 million.
Judge Donald H. Steckroth oversees the cases. The Debtors have
sought and obtained an order directing joint administration of
their Chapter 11 cases.
Lowenstein Sandler LLP serves as the Debtors' counsel.
PricewaterhouseCoopers LLP is the Debtors' financial advisor. GRL
Capital Advisors acts as the Debtors' restructuring advisors.
GRL's Glenn Langberg served as the Debtors' chief restructuring
officer. Mr. Langberg also oversaw the bankruptcy and sales of
Big M Inc., operator of the Mandee and Annie Sez stores. Rust
Consulting/Omni Bankruptcy is the Debtors' claims and noticing
agent.
Salus Capital Partners LLC and Sterling National Bank have
committed to provide up to $49 million in DIP financing to the
Debtors.
LEHMAN BROTHERS: Unsecured Creditors to Receive $4.6 Billion
------------------------------------------------------------
William Alden, writing for The New York Times' DealBook, reported
that former employees, trading partners and others with claims
against Lehman Brothers are set to receive $4.62 billion under a
plan announced by the trustee overseeing the firm?s liquidation.
According to the report, the trustee, James W. Giddens, has
already sent more than $105 billion to former customers of the
firm, whose claims were paid in full. The planned distribution --
representing the first time these unsecured creditors will receive
cash -- is the latest development in the years-long process of
unwinding Lehman, whose bankruptcy filing in September 2008
touched off a global financial crisis. The amount set aside for
this latest group represents just 17 percent of the value of their
claims, the report said.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33
billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LAKELAND INDUSTRIES: Amends Fiscal 2014 Annual Report
-----------------------------------------------------
Lakeland Industries, Inc., amended its annual report on Form 10-K
for the year ended Jan. 31, 2014, originally filed with the U.S.
Securities and Exchange Commission on April 28, 2014, to refile
"Item 8. Financial Statements and Supplementary Data" in its
entirety for the purpose of furnishing the separate reports of the
other independent registered public accounting firms relied upon
by the Company's principal independent registered public
accounting firm for the audit of the Company's consolidated
financial statements for the years ended Jan. 31, 2014, and 2013.
The report of ACAL CONSULTORIA E AUDITORIA S/S on the 2014 and
2013 financial statements of Lakeland Brazil, S.A. contained a
departure from accounting principles generally accepted in the
United States of America as Lakeland Brazil, S.A. had not recorded
a liability pertaining to the VAT Tax Issue in Brazil discussed in
Note 10 to Lakeland Industries, Inc. and Subsidiaries consolidated
financial statements. The related liability was, however,
recorded as a corporate entry and thus included in the liabilities
of the Company in the consolidated financial statements. Warren
Averett LLC's opinion is not modified with respect to that matter.
Lakeland Industries reported a net loss of $119,501 on $91.38
million of net sales from continuing operations for the year ended
Jan. 31, 2014, as compared with a net loss of $26.28 million on
$95.11 million of net sales from continuing operations for the
year ended Jan. 31, 2013.
As of Jan. 31, 2014, Lakeland Industries had $83.74 million in
total assets, $36.74 million in total liabilities and $47 million
in total stockholders' equity.
During FY14, the Company successfully refinanced its long term
debt and alleviated substantial doubt of a going concern.
A full-text copy of the Form 10-K/A is available for free at:
http://is.gd/dCtEBn
About Lakeland Industries
Ronkonkoma, N.Y.-based Lakeland Industries, Inc., manufactures and
sells a comprehensive line of safety garments and accessories for
the industrial protective clothing market.
LIFE UNIVERSITY: Moody's Rates Series 2008 Revenue Bond 'Ba3'
-------------------------------------------------------------
Moody's Investors Service has affirmed the Ba3 rating on Life
University's Series 2008 Revenue Bonds issued by the Development
Authority of the City of Marietta. The outlook has been revised to
positive from stable.
Summary Rating Rationale
The positive outlook reflects ongoing revenue growth supporting
healthy debt service coverage. Preliminary FY 2014 operating
results show a 5% increase in operating revenue. In addition, cash
and investments have been trending upward.
The Ba3 rating reflects Life University's narrow market niche,
high operating leverage and limited financial resources. Credit
strengths include growing net tuition revenue and healthy cash
flow in support of debt service as well as improving liquidity.
Credit challenges include revenue and programmatic concentration,
high reliance on availability of student loans, and limited
financial resources.
Challenges
* Life University has a narrow market focus with the majority of
its students enrolled in its Chiropractic College, leaving it
vulnerable to changes in demand for chiropractic education and
chiropractic services.
* The university relies heavily on the ability and willingness
of students to borrow for their education, with a typical
chiropractic student at the university borrowing a little over
$50,000 per academic year.
* The university has a small revenue base, with $56 million of
operating revenues in FY 2013 and high operating leverage,
with debt to revenue of 1.24 times.
* Life's $16.3 million of expendable financial resources (based
on audited FY 2013 data) provide limited financial flexibility
relative to debt (0.24 times) and operations (0.30 times).
* The university receives limited donor support with three-year
average gift revenue of $1.2 million per year in fiscal years
2011-2013.
* With limited philanthropy and much of operating cash flow
consumed by debt service the university has limited methods to
finance capital improvements without debt. Capital spending in
FY 2012 through FY 2014 average 0.45 times.
Strengths
* Life University has experienced a sustained rebound in
enrollment following a sharp decline in 2003 related to
accreditation issues. Full-time equivalent enrollment has
grown 19% over the past five years contributing to a 41%
increase in net tuition revenue over between FY 2009-2013.
* The university has continued to display fiscal discipline. The
operating cash flow margin of 19.9% in FY 2013 provided 1.85
times debt service coverage.
* Life University's credit profile in enhanced by a mortgage
pledge of property for the entire campus located in Marietta
(18 miles northwest of downtown Atlanta), as well as a debt
service reserve fund.
* The university has an entirely fixed rate debt structure with
relatively level debt service.
Outlook
The positive outlook reflects the prospects for ongoing revenue
growth, strong operating cash flow and improvement in liquidity.
What Could Make The Rating Go UP
The rating could be upgraded with consistently strong cash flow
from operations, revenue growth, an increase in revenue or
programmatic diversity, and material financial resource growth
with limited additional debt.
What Could Make The Rating Go DOWN
A rating downgrade could be driven by diminished prospects for
revenue growth, weakening of liquidity, material increase in debt,
or deterioration of operating performance.
LIGAND PHARMA: Lemelson Says Debt Issuance Solidifies Insolvency
----------------------------------------------------------------
Lemelson Capital Management, a private investment management firm,
on Aug. 14 released a research note and audio interview by the
firm's Chief Investment Officer Emmanuel Lemelson, raising new and
escalated concerns about the going concern risk and bankruptcy
prospects of the troubled drug delivery company Ligand
Pharmaceuticals. The new concerns, raised in Lemelson's
Aug. 13, 2014 interview with the financial media outlet Benzinga,
follow Ligand's Aug. 11 announcement that it would issue $225
million of convertible senior debt, a portion of which would be
used to repurchase shares in private transactions from
shareholders.
Audio of the Aug. 13 interview is available at http://is.gd/Je7HLf
Lemelson Capital's Aug. 1 research note on Ligand is available at
http://is.gd/a82Mlb
In the Aug. 14 research note, Lemelson Capital amended previous
research reports on Ligand with even deeper concerns about the
company's projected forward revenues based on the Aug. 13
announcement by Amgen that the Phase 3 clinical trial for
Kyprolis(R) has failed to demonstrate improved overall survival in
use with relapsed multiple mylenoma patients. The failure of
Kyprolis(R) in this clinical trial will almost certainly severely
impair Ligand's already declining revenues.
"Ligand's announcements this week are ominous for many reasons,"
Lemelson said on Aug. 14. "First, Ligand's debt issuance appears
necessitated by the fact that large institutional shareholders are
expressing their intention to get out of the stock, which is
understandable given the company's rapidly deteriorating financial
condition," he said. "Second, the company has nominal tangible
equity of just $21,000 against an astounding market capitalization
of about $1.1 billion and is now assuming vast and costly debt at
a 15 percent upfront premium, which they appear to wrongly
represent as being offered at a very low 0.75% coupon," he added.
"And finally," Lemelson said, "Ligand has traded at an
extraordinarily overvalued multiple based largely on speculation
that Kyprolis(R) would show promise as a second-line therapy in
multiple mylenoma treatment, which now appears highly unlikely to
materialize."
In the interview with Benzinga and the Aug. 14 accompanying
research note, Lemelson addresses Ligand's insolvency, the details
of its remarkably costly debt offering, and the mounting prospect
for the company's bankruptcy.
Disclosure: Lemelson Capital is currently short shares of LGND
for its clients.
About Lemelson Capital Management:
Lemelson Capital Management, LLC -- http://www.lemelsoncapital.com
-- is a private investment management firm focused on deep value
and special situation investments. The firm's flagship fund, The
Amvona Fund, has been named repeatedly one of the world's top
performing hedge funds.
About Ligand Pharmaceuticals
La Jolla, California-based Ligand Pharmaceuticals Incorporated is
engaged in the development and commercialization of drugs in
partnership with other pharmaceutical companies, including
GlaxoSmithKline, Pfizer and Merck. Ligand has developed drug
formulation technologies to target a broad spectrum of diseases,
including hepatitis, Alzheimer's disease and diabetes.
LOVE CULTURE: Final DIP Hearing Adjourned to Aug. 18
----------------------------------------------------
The hearing to consider final approval of Love Culture Inc.'s
motion to obtain financing and use cash collateral has been
adjourned from Aug. 11, 2014 until Aug. 18 at 1:00 p.m.
The Official Committee of Unsecured Creditors at the end of July
conveyed objections to the proposed $12 million of DIP financing
from Salus Capital Partners, LLC.
Richard S. Kanowitz, Esq., at Cooley LLP, counsel to the
Committee, said, "Every action taken in this case by the Debtor
and Salus, the Debtor's senior secured prepetition lender and DIP
lender, has made clear that their sole objective is to liquidate
the Debtor's assets for the exclusive benefit of Salus. To achieve
Salus' goal, the Debtor has already sought and received approval
of a fast-track liquidation sale process, which is scheduled to be
substantially consummated within the first two weeks of this case
without conferring any benefit to the Debtor's unsecured
creditors. The proposed DIP Facility, if not modified
substantially as requested herein, will provide a windfall to
Salus, while the Debtor's estate and remaining creditors are left
to deal with an administratively insolvent estate in addition to
their unpaid prepetition claims. The liquidation sale of the
Debtor's inventory under the stalking horse agency agreement alone
is not likely to result in an administratively solvent estate.
The Committee has not been provided with a budget that projects
sufficient sale proceeds from the Debtor's remaining assets to
cover all projected administrative expenses."
DIP Facility
As of the Petition Date, the Debtor has outstanding secured debt
to Salus in the amount of $13,667,972. Lenders led by Salus have
agreed to provide the Debtor with postpetition financing and
access to cash collateral, which will provide the Debtor the
liquidity that it needs to continue to preserve the value of its
estate pending the sale of its assets pursuant to Section 363 of
the Bankruptcy Code.
Love Culture is the borrower and Jai Rhee is guarantor under the
DIP facility. Salus Capital is the administrative agent and
collateral agent. The DIP Credit Agreement contemplates a partial
roll-up of the Prepetition Obligations under the Prepetition
Facility into the DIP revolving facility. Interest under the
revolving loan is LIBO Rate plus the Applicable Margin, plus
another 2 percent interest in an event of default.
The Debtor is required to comply with certain sale and bidding
milestones:
* On or before July 24, 2014, the Bankruptcy Court will hold the
asset sale hearing and enter the asset sale procedures order.
* The borrower will conduct an auction and choose a winning
bidder for the right to conduct asset sales no later than July 28,
2014.
* The Bankruptcy Court must enter the asset sale order no later
than July 29, 2014, with the closing of the asset sale to occur no
later than July 30.
Committee's Objection
The Creditors Committee notes that the proposed DIP Facility is a
revolving credit facility of up to a nominal amount of
$12 million, a large portion of which will be used to roll up
Salus' prepetition revolver debt and to satisfy various fees
imposed by Salus in connection with the DIP Facility.
In exchange for its agreement to fund the DIP Facility, Salus
demands these:
(i) the Rollup of approximately $7.8 million, including but
not limited to a $390,000 termination fee and approximately
$210,000 in legal costs related to the prepetition revolver;
(ii) $900,000 in DIP fees and expenses, including but not
limited to an exit fee of $360,000 and Salus' professional fees of
$360,000;
(iii) first priority liens on substantially all of the Debtor's
assets, including the proceeds of avoidance actions, and any other
previously unencumbered assets, including proceeds of leasehold
interests and any augment inventory proceeds in connection with
the liquidation sale;
(iv) superpriority claims against the Debtor, with recourse to
all of the Debtor's assets, including the proceeds of Avoidance
Actions and any other previously unencumbered assets;
(v) a waiver of the estate's right to surcharge Salus
pursuant to Section 506(c) of the Bankruptcy Code for the cost of
liquidating its collateral in this Court or to exclude
postpetition proceeds from prepetition collateral for equitable
reasons; and
(vi) a limited and insufficient challenge period under the
facts, circumstances and limited budget of this case.
In addition, the Committee points out that pursuant to the terms
of the DIP Facility, the Debtor was forced to comply with overly
aggressive sale deadlines or risk default.
Moreover, the Committee points out that Salus is seeking fees and
expenses of $938,000, which is 23% of the new money and a far
greater percentage of incremental availability as limited by the
borrowing base. In addition to the $640,000 of prepetition fees
and expenses included in the rollup, Salus is also charging
postpetition interest and fees account of the DIP Facility:
DIP Monitoring Fee $100,000
DIP Interest Expense $118,000
Professional Fees $360,000
DIP Exit Fee $360,000
--------
Total DIP Fees and Expenses $938,000
The Creditors Committee is represented by:
Jay R. Indyke, Esq.
Richard S. Kanowitz, Esq.
Michael A. Klein, Esq.
COOLEY LLP
1114 Avenue of the Americas
New York, NY 01136
Tel: (212) 479-6000
Fax: (212) 479-6275
About Love Culture
Founded in 2007, Love Culture Inc. is a lifestyle brand and
shopping destination for fashion-forward women who are "hip,
trendy, stylish & always fun." The company, which offers fashion-
forward apparel and accessories catering to young women in the 18
to 35 demographic, leases commercial retail space in shopping
malls and outlet centers in twenty-seven states. As of the
bankruptcy filing, the company had 76 stores, 4 of which were in
New Jersey. The company also has operations located in Saudi
Arabia and the Philippines pursuant to two franchise agreements.
Love Culture filed a Chapter 11 bankruptcy petition (Bankr.
D.N.J. Case No. 14-24508) on July 16, 2014. Judge Novalyn L.
Winfield presides over the case.
Lowenstein Sander LLP acts as the Debtor's counsel.
PricewaterhouseCoopers LLP serves as the Debtor's financial
advisor. Epiq Systems is the Debtor's claims and noticing agent.
Consensus Advisory Service LLC and Consensus Securities LLC is the
investment banker.
The Company estimated assets and debt of $10 million to $50
million.
MASCO CORP: Moody's Affirms 'Ba3' Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service, changed Masco Corp.'s rating outlook to
positive from stable, based on Moody's expectation for continued
operating improvement resulting in credit metrics that may become
supportive of higher ratings. In a related rating action, Moody's
affirmed the company's Ba3 Corporate Family Rating and its Ba3-PD
Probability of Default Rating.
The following ratings/assessments were affected by this action:
Corporate Family Rating affirmed at Ba3;
Probability of Default Rating affirmed at Ba3-PD; and,
Senior unsecured notes affirmed at Ba3 (LGD4).
Speculative grade liquidity rating of SGL-1 is affirmed.
Ratings Rationale
The change in Masco's rating outlook to positive from stable
reflects Moody's expectations that Masco's operating profits and
cash flow generation will continue to grow, resulting in debt
credit metrics potentially supportive of higher ratings. Most of
the company's businesses are benefiting from higher volumes due to
sustained strength in repair and remodeling and new housing
construction, both main drivers of Masco's revenues. Better
pricing and past restructuring activities are also contributing to
stronger margins.
Moody's project Masco's operating profit, measured as adjusted
EBITA, could reach up to $1.0 billion for FY15, which would
translate into an adjusted EBITA margin of about 11.0% versus 9.6%
for LTM 2Q14. Operating margins and absolute levels of earnings
represent Masco's best performance since 2007. Moody's forecast
interest - defined as EBITA-to-interest expense -- could exceed
3.5x through the end of 2015 from 2.9x for LTM 2Q14, and debt-to-
EBITDA should improve to around 3.5x by FYE15 from 4.2x at June
30, 2014 (all ratios incorporate Moody's standard adjustments).
Masco's Ba3 Corporate Family Rating reflects its healthy liquidity
profile, the company's greatest credit strength, and its diverse
product offerings supporting both new housing and repair and
remodeling markets. Moody's expect Masco will continue to benefit
from the higher levels of new housing starts and repair and
remodeling activity, yielding a modest improvement in operating
margins from a combination of operating efficiencies, higher
volumes, and better pricing. Although Moody's project better debt
credit metrics that would support higher ratings, an upgrade is
not warranted at this time as risks remain. Masco needs to address
a wall of maturing debt, which includes $500 million of Notes due
in June 2015 and $1.0 billion of Notes due October 2016. These
maturities will need to be handled in conjunction with Masco's
sizeable debt service requirements and dividend payments, which
currently aggregate to about $350 million per year.
Positive rating actions could ensue if Masco continues with
conservative financial strategies and benefits from the strength
in its end markets, resulting in more robust credit metrics and
validating Moody's forecasts. Higher operating earnings and
improved free cash flow generation that translate into EBITA-to-
interest expense sustained above 3.5x or debt-to-EBITDA remaining
below 3.75x (all ratios incorporate Moody's standard adjustments),
could have a positive impact on the company's credit ratings.
Stabilization of the ratings could occur if Masco's end markets
contract, resulting in key credit metrics falling short of Moody's
expectations such that operating performance results in EBITA-to-
interest expense remains around 3.0x and debt-to-EBITDA is
sustained above 4.0x (all ratios incorporate Moody's standard
adjustments). Deterioration in the company's liquidity profile or
increased shareholder-friendly activities could result in
stabilization of the ratings as well.
Masco Corporation, headquartered in Taylor, MI, is among the
largest manufacturers in North America of a number of home
improvement and building products, including faucets, cabinets,
architectural coatings and windows, and installs insulation for
new home construction. Masco distributes products through multiple
channels including home builders, wholesale and retail
distribution chains. North American operations generated
approximately 80% of the total sales. Revenues for the 12 months
through June 30, 2014 totaled about $8.4 billion.
The principal methodology used in this rating was Global
Manufacturing Companies published in July 2014. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
MICROCOAL INC: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: MicroCoal Inc.
33560 East Pine Circle
Genoa, IL 60135
Case No.: 14-21193
Chapter 11 Petition Date: August 14, 2014
Court: United States Bankruptcy Court
District of Colorado (Denver)
Debtor's Counsel: David Warner, Esq.
SENDER WASSERMAN WADSWORTH, P.C.
1660 Lincoln St., Ste. 2200
Denver, CO 80264
Tel: 303-296-1999
Fax: 303-296-7600
Email: david.warner@sendwass.com
Total Assets: $20,350
Total Liabilities: $5.57 million
The petition was signed by Lawrence Siegel, CEO.
A list of the Debtor's three largest unsecured creditors is
available for free at http://bankrupt.com/misc/cob14-21193.pdf
MILTON CHARLES AULT: $1.4MM Judgment for Glazers Affirmed
---------------------------------------------------------
Milton Charles Ault III (aka Todd Ault) appeals from the amended
default judgment awarding Louis and Melanie Glazer $1,416,000 and
certain shares of stock. He contends the damages awarded exceeded
those demanded in the complaint, which only prayed for damages
according to proof at trial.
The Court of Appeals of California, Second District, Division
Three, in an Aug. 12 decision, held that, "A prayer for damages
according to proof is sufficient under Code of Civil Procedure
section 580 if a specific amount of damages is alleged in the body
of the complaint. Viewing the whole of the complaint, it contains
the particular amounts of damages awarded and otherwise, Ault
stipulated to litigate the rights to 2,600 shares of stock that
were interplead. Accordingly, we affirm the amended default
judgment as it is valid and not entered in excess of the trial
court's jurisdiction."
The Glazers' action against Ault and his codefendants sought
damages for breach of fiduciary duty and fraud, among other
things, in connection with investments Ault made on behalf of
plaintiffs. The complaint alleged that plaintiffs suffered
monetary damages as the result of $1.1 million in three lines of
credit granted to defendants:
-- a loan to defendants of $260,000 secured by a promissory
note;
-- $56,000 given to defendants to purchase worthless stock,
which purchase Ault had promised to unwind; and
-- $50,000 or 50,000 shares as consideration for an agreement
defendants allegedly breached to exchange 250,000 shares of
unrestricted stock for 250,000 shares of restricted stock in a
company called Patient Safety Technologies (PST), which stock
plaintiffs allegedly paid for but never received.
The complaint prayed for damages according to proof at trial.
The Plaintiffs obtained relief from the automatic stay in Ault's
Chapter 11 bankruptcy (case No. 8:09-bk-23696-ES). They then moved
for terminating sanctions against Ault as a discovery sanction.
The trial court granted the motion, struck Ault's answer, and
entered his default. By this time, the trial court had already
entered the defaults of other defendants.
On October 1, 2010, after briefing and argument about whether
plaintiffs' recovery was limited to $25,000 in damages because the
complaint prayed for damages according to proof, the trial court
entered a default judgment awarding plaintiffs $1,416,000, plus
attorney fees and costs, and directing defendants to "immediately
transfer and/or release to Plaintiffs" (a) 2,600 preferred shares
of PST stock, (b) 300,000 non-preferred shares of PST common
stock; (c) all shares of BOOM! Studios stock within defendants'
possession; and (d) 50,000 non-preferred shares of PST common
stock.
In January 2011, PST filed an interpleader action, depositing
$13,600 with the trial court representing dividends payable on
some of its stock named in the default judgment.
In September 2011, the parties and PST entered into a written
settlement agreement. Among other things, the settlement
agreement called for defendants to pay plaintiffs $750,000 in
increments over almost five years and to transfer the interplead
PST stock and 200,000 shares of BOOM! Entertainment stock to
plaintiffs. The settlement agreement contained an express waiver
by Ault.
The trial court entered an order retaining jurisdiction to enforce
the settlement agreement until the lawsuit was dismissed or
judgment was entered pursuant to the settlement agreement or
otherwise.
Eight months later, Ault moved to vacate the default judgment on
the ground it was void on its face because the damages awarded
exceeded those demanded in the complaint. Plaintiffs opposed the
motion on the basis of the valid default judgment and Ault's
waiver in the settlement agreement. In support, Melanie Glazer
declared that plaintiffs never received any money due under the
settlement agreement.
The trial court granted Ault's motion in part. The court ruled,
pursuant to Code of Civil Procedure section 473, subdivision (d)
authorizing it to correct mistakes in the judgment sua sponte,
that it could excise those items of damages in the judgment that
were greater than the amount demanded in the complaint. The court
voided the relief awarded in the default judgment concerning the
award to plaintiffs of certain shares of stock. The court did not
void the award of monetary damages or the award of 2,600 preferred
shares of PST stock.
The trial court rejected defendants' contention that the waiver in
the settlement agreement was "'as worthless as the underlying
default judgment.'" The court found that all of the settling
defendants signed the waiver and noted that the right to appeal is
waivable.
The court effectively invited plaintiffs to bring a motion for
specific relief, but plaintiffs have not done so.
After denying Ault's second motion to vacate the default judgment,
on November 29, 2012, the trial court entered an amended judgment
striking the relief awarding to plaintiffs certain shares of
stock. Ault's timely appeal followed.
The case is, LOUIS GLAZER et al., Plaintiffs and Respondents, v.
MILTON CHARLES AULT III, Defendant and Appellant, NO. B246821
(Calif. App.).
A copy of the Appeals Court's August 12, 2014 decision is
available at http://is.gd/LQq0vSfrom Leagle.com.
Counsel to Defendant and Appellant:
Arash Shirdel, Esq.
PACIFIC PREMIER LAW GROUP
200 E. Sandpointe Ave, Suite 500
Santa Ana, CA 92707
Tel: (949) 629-3690
Counsel to the Plaintiffs and Respondents:
Daniel C. Lapidus, Esq.
LAPIDUS & LAPIDUS, P.L.C.
177 South Beverly Drive
Beverly Hills, CA 90212
Tel: 310-550-8700
Fax: 310-943-2471
E-mail: dan@lapiduslaw.com
MONROE HOSPITAL: Has Interim Authority to Tap Financing
-------------------------------------------------------
Judge James M. Carr of the U.S. Bankruptcy Court for the Southern
District of Indiana, Indianapolis Division, gave Monroe Hospital,
LLC, interim authority to use cash collateral securing its
prepetition indebtedness. As of the Petition Date, the Debtor is
indebted in the amount of not less than $121,752,898 to MPT
Bloomington, LLC.
The Debtor is also given interim authority to to obtain up to
$4,000,000, from MPT Bloomington's affiliate, MPT Development
Services, Inc., as lender.
The DIP Documents require the Debtor to obtain, on or before
Sept. 3, 2014, one or more Court orders approving the procedures
for the sale of all or substantially all of the Debtor?s assets,
so that an auction will be conducted on or before Oct. 8. The
Debtor is further required to request, on or before Oct. 17, an
order of the Court approving the sale of all or substantially all
of the Debtor?s assets so that the sale closing must occur on or
before Nov. 7.
The final hearing on the DIP and Cash Collateral requests is
scheduled for Aug. 27, 2014, at 3:00 E.D.T. Objections are due
Aug. 25.
About Monroe Hospital
Monroe Hospital, LLC, since 2006, has operated a 32 licensed bed
private acute care medical surgical hospital in Bloomington,
Indiana. It leases the land on which the hospital is located from
MPT Bloomington, LLC.
Monroe Hospital, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Ind. Case No. 14-07417) in Indianapolis, Indiana on
Aug. 8, 2014.
The case is assigned to Judge James M. Carr.
The Debtor is represented by attorneys at Bingham Greenebaum Doll
LLP.
The Debtor's primary secured creditor is MPT. As of the Petition
Date, the Debtor believes that MPT holds a claim in an amount not
less than $121.8 million, which is secured by substantially all of
the Debtor's assets. In addition, the Debtor estimates that its
creditors hold general unsecured claims in excess of $13 million.
According to the docket, the deadline for governmental entities to
file proofs of claims is on Feb. 4, 2015. The Debtor's schedules
of assets and liabilities, statement of financial affairs and
other documents are due Aug. 22, 2014.
MONROE HOSPITAL: Can Employ UpShot as Claims & Noticing Agent
-------------------------------------------------------------
Judge James M. Carr of the U.S. Bankruptcy Court for the Southern
District of Indiana, Indianapolis Division, authorized Monroe
Hospital, LLC, to employ UpShot Services LLC as noticing, claims
and balloting agent.
UpShot's hourly-based services for its work in the Chapter 11 case
will be charged at these hourly rates:
Hourly Rate
-----------
Clerical $25
Case Assistant $50 to $65
Case Consultant $140 to $155
Case Manager $170
IT Manager $125 to $140
About Monroe Hospital
Monroe Hospital, LLC, since 2006, has operated a 32 licensed bed
private acute care medical surgical hospital in Bloomington,
Indiana. It leases the land on which the hospital is located from
MPT Bloomington, LLC.
Monroe Hospital, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Ind. Case No. 14-07417) in Indianapolis, Indiana on
Aug. 8, 2014.
The case is assigned to Judge James M. Carr.
The Debtor is represented by attorneys at Bingham Greenebaum Doll
LLP.
The Debtor's primary secured creditor is MPT. As of the Petition
Date, the Debtor believes that MPT holds a claim in an amount not
less than $121.8 million, which is secured by substantially all of
the Debtor's assets. In addition, the Debtor estimates that its
creditors hold general unsecured claims in excess of $13 million.
According to the docket, the deadline for governmental entities to
file proofs of claims is on Feb. 4, 2015. The Debtor's schedules
of assets and liabilities, statement of financial affairs and
other documents are due Aug. 22, 2014.
MONROE HOSPITAL: Section 341(a) Meeting Scheduled for Sept. 9
-------------------------------------------------------------
A meeting of creditors in the bankruptcy case of Monroe Hospital,
LLC, will be held on Sept. 9, 2014, at 10:00 a.m. EDT at Rm 416C
U.S. Courthouse, Indianapolis.
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.
About Monroe Hospital
Monroe Hospital, LLC, since 2006, has operated a 32 licensed bed
private acute care medical surgical hospital in Bloomington,
Indiana. It leases the land on which the hospital is located from
MPT Bloomington, LLC.
Monroe Hospital, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Ind. Case No. 14-07417) in Indianapolis, Indiana, on
Aug. 8, 2014. Joseph Roche signed the petition as president and
chief executive officer. The Debtor estimated assets of at least
$10 million and $100 million to $500 million in liabilities.
The case is assigned to Judge James M. Carr. The Debtor is
represented by attorneys at Bingham Greenebaum Doll
LLP. Upshot Services LLC acts as the Debtor's noticing, claims
and balloting agent.
NIB ASSOCIATES: Case Summary & Unsecured Creditor
-------------------------------------------------
Debtor: NIB Associates LLC
48-05 Metropolitan Avenue
Ridgewood, NY 11385
Case No.: 14-44184
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: August 14, 2014
Court: United States Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: Jonathan S Pasternak, Esq.
DELBELLO DONNELLAN WEINGARTEN
WISE & WIEDERKEHR, LLP
One North Lexington Avenu
White Plains, NY 10601
Tel: (914) 681-0200
Fax: (914) 684-0288
Email: jpasternak@ddw-law.com
Total Assets: $7.5 million
Total Liabilities: $7.1 million
The petition was signed by Isaac Mutzen, managing member.
The Debtor listed NYC Department of Finance, 345 Adams Street, 3rd
Floor, Attn: Legal Affairs Divis, Brooklyn, NY 11201-3719, as its
largest unsecured creditor holding a claim of $500,000.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/nyeb14-44184.pdf
NISKA GAS: Moody's Lowers Sr. Unsecured Notes Rating to 'Caa1'
--------------------------------------------------------------
Moody's Investors Service downgraded Niska Gas Storage Partners
LLC's Corporate Family Rating (CFR) to B3 from B2, Probability of
Default Rating to B3-PD from B2-PD, and its senior unsecured notes
rating to Caa1 from B3. Moody's affirmed the SGL-3 Speculative
Grade Liquidity Rating. The rating outlook remains stable.
"The downgrade reflects the sharply lower EBITDA and related
increase in debt to EBITDA above 7x for fiscal year 2015 that
results from a further compression in natural gas summer-winter
spreads to very low levels," said Paresh Chari, Moody's Analyst.
"We believe that leverage will remain elevated as the company
awaits an improvement in storage spreads, and continues to pay
distributions and interest, leaving little possibility of further
debt reduction."
Downgrades:
Issuer: Niska Gas Storage Canada ULC
Senior Unsecured Regular Bond/Debenture Apr 1, 2019, Downgraded
to Caa1 from B3
Issuer: Niska Gas Storage Partners LLC
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Corporate Family Rating, Downgraded to B3 from B2
Outlook Actions:
Issuer: Niska Gas Storage Partners LLC
Outlook, Remains Stable
Affirmations:
Issuer: Niska Gas Storage Partners LLC
Speculative Grade Liquidity Rating, Affirmed SGL-3
Ratings Rationale
Niska's B3 CFR is driven by very high leverage, cash flow
volatility from its natural gas arbitrage business, large
distributions to shareholders, a very weak natural gas spread
environment, and a limited and decreasing amount of revenue coming
from fee-based contracts. The rating recognizes that Niska has
historically not lost money on its arbitrage business, even though
recent cash flow has been materially reduced due to a narrowing of
the price of summer gas purchased versus the winter gas sold.
Niska's storage locations are also strategically important to the
natural gas industry.
In accordance with Moody's Loss Given Default methodology, the
US$575 million senior unsecured notes are rated Caa1, one notch
below the B3 CFR, because of the existence of the priority ranking
$400 million senior secured revolver.
The SGL-3 Speculative Grade Liquidity Rating reflects adequate
liquidity. At June 30, 2014, Niska had minimal cash and $190
million available, after $5 million in letters of credit, under
its $400 million senior secured borrowing base revolver, which
matures in June 2016. The revolver is available in the amount of
$200 million each to AECO Gas Storage Partnership and Niska Gas
Storage US, LLC. Moody's expect breakeven free cash flow from June
30, 2014 to June 30, 2015. Moody's expect Niska to remain
compliant with the fixed charge coverage ratio (1.1x) under its
revolver that governs the ability to draw more than 85% of the
revolver commitment through this period. The company has no major
debt maturities. Niska has little in the way of non-core assets
that could be sold.
The stable outlook reflects Moody's view that EBITDA will remain
around $90 million, that third-party term contracts continue to
comprise about 75% of natural gas storage capacity and that
Riverstone will remain supportive.
The rating could be downgraded if liquidity deteriorates or if
debt to EBITDA, when inventory borrowings are low, is likely to be
sustained above 7.5x.
The rating could be upgraded if debt to EBITDA, when inventory
borrowings are low, is likely to be sustained at 5x. An upgrade
would also be contingent on contracting at least 75% of storage
capacity and if there was a greater reliance on fee-based
contracts for revenue.
Niska is a Calgary, Alberta based natural gas storage master
limited partnership, which owns approximately 242 billion cubic
feet (Bcf) of storage capacity in depleted natural gas reservoirs.
The principal methodology used in this rating was Global Midstream
Energy 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.
NMBFIL INC: Joins Bondex & Specialty Products in Chapter 11
-----------------------------------------------------------
Medina, Ohio-based NMBFiL, Inc., filed a bare-bones Chapter 11
bankruptcy petition (Bankr. D. Del. Case No. 14-11942) on Aug. 15,
2014, without stating a reason.
The case is assigned to Judge Peter J. Walsh. Daniel J.
DeFranceschi, Esq., at Richards, Layton & Finger, in Wilmington,
Delaware, serves as counsel.
On May 31, 2010, Specialty Products Holding Corp. and Bondex
International, Inc., both of which are affiliates of Debtor
NMBFil, Inc., each filed a petition for relief under Chapter 11 of
the Bankruptcy Code. Debtor NMBFiL intends to file a motion
requesting that its Chapter 11 case be jointly administered with
the Initial Debtors' Chapter 11 cases for administrative purposes
only.
NMBFIL INC: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: NMBFiL, Inc.
aka Bondo Corporation
2628 Pearl Road
Medina, OH 45426
Case No.: 14-11942
Chapter 11 Petition Date: August 15, 2014
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Hon. Peter J. Walsh
Debtor's Counsel: Daniel J. DeFranceschi, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square, P.O. Box 551
Wilmington, DE 19899
Tel: 302 651-7700
Fax: 302-651-7701
Email: defranceschi@rlf.com
Debtor's JONES DAY
Special
Counsel:
Debtor's THE BLACKSTONE GROUP
Investment
Banker:
Debtor's EVERT WEATHERSBY HOUFF
Litigation
Counsel:
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Edward W. Moore, president.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
PAM CORP: Voluntary Chapter 11 Case Summary
-------------------------------------------
Debtor: Pam corp
1600 N. Collins
Richardson, TX 75080
Case No.: 14-33944
Chapter 11 Petition Date: August 14, 2014
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Hon. Harlin DeWayne Hale
Debtor's Counsel: John P. Lewis, Jr., Esq.
LAW OFFICE OF JOHN P. LEWIS, JR.
1412 Main St. Ste. 210
Dallas, TX 75202
Tel: (214) 742-5925
Fax: (214) 742-5928
Email: jplewisjr@mindspring.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by R. May, president.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
PARAMOUNT RESOURCES: Moody's Hikes Corp. Family Rating to 'B2'
--------------------------------------------------------------
Moody's Investors Service upgraded Paramount Resources Ltd.'s
Corporate Family Rating (CFR) to B2 from B3, Probability of
Default Rating to B2-PD from B3-PD and senior unsecured notes
rating to B3 from Caa1. The rating outlook remains positive.
Moody's affirmed the SGL-3 Speculative Grade Liquidity Rating.
"The upgrade to B2 and continuing positive outlook reflect Moody's
view that Paramount's production base will become significantly
larger and more liquids-rich in 2015 with imminent first sales gas
from the company's Musreau plant," said Paresh Chari, Moody's
Analyst. "Paramount's weak leverage metrics, operating efficiency
and margins will improve considerably through 2015 as production
and cash flow increases."
Issuer: Paramount Resources LTD
Upgrades:
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Corporate Family Rating, Upgraded to B2 from B3
Senior Unsecured Regular Bond/Debenture Dec 4, 2019, Upgraded to
B3(LGD5) from Caa1(LGD5)
Senior Unsecured Regular Bond/Debenture Dec 13, 2017, Upgraded
to B3(LGD5) from Caa1(LGD5)
Senior Unsecured Shelf, Upgraded to (P)B3 from (P)Caa1
Outlook Actions:
Outlook, Remains Positive
Affirmations:
Speculative Grade Liquidity Rating, Affirmed SGL-3
Rating Rationale
Paramount's B2 CFR is supported by liquids-rich production growth
expected with the completion of construction of the Musreau Deep
Cut plant and the ramp-up of production in the second half of 2014
and into 2015. The rating is further supported by the substantial
alternate liquidity from publicly listed equity investments, the
company's willingness and ability to issue equity to support
capital investment, and significant insider ownership (about 50
percent). The rating is constrained by the execution risk in
operating the Musreau Deep Cut plant and building two new
refrigeration plants, exposure to natural gas, and weak reserve
based leverage metrics.
The B3 senior unsecured notes are notched down from the B2
Corporate Family Rating due to the priority ranking debt in the
form of the C$700 million secured revolving credit facility, as
per Moody's Loss Given Default Methodology.
The SGL-3 Speculative Grade Liquidity Rating reflects adequate
liquidity. Pro forma for the July 2014 equity issue, Paramount
will have roughly C$500 million available, after C$48 million of
letters of credit, under the C$600 million Tranche A borrowing
base portion of its C$700 million senior secured revolving credit
facility. Tranche A matures on November 30, 2014 with a one year
term out. Moody's expect roughly C$600 million of negative free
cash flow from September 30, 2014 to September 30, 2015. Paramount
has the flexibility to raise funds from asset sales, equity
issuances, and/or by selling shares from its equity investments
(market value of C$757 million as of June 30, 2014), sources of
funds that it has accessed in the past.
The positive outlook reflects Moody's expectation that production
will increase significantly through 2015, considerably improving
leverage and margins.
The rating could be upgraded if Paramount executes on its
development plan increasing production towards 40,000 boe/d with
about 20% coming from condensate and oil, while maintaining
retained cash flow to debt above 30% and E&P debt to production
below US$35,000/boe.
The rating could be downgraded if Paramount's production decreases
materially or if debt funded negative free cash flow leads to
retained cash flow to debt falling below 15% or E&P debt to
production increasing above US$50,000/boe.
Paramount Resources LTD is a Calgary, Alberta-based exploration
and production company with principal properties in Alberta, and
about 20,000 barrels of oil equivalent (boe) per day of production
and roughly 79 million boe of total proved reserves.
The principal methodology used in this rating was the Global
Independent Exploration and Production Industry 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.
PETRON ENERGY: Registers 22 Million Shares for Resale
-----------------------------------------------------
Petron Energy II, Inc., filed a Form S-1 registration statement
with the U.S. Securities and Exchange Commission relating to the
resale of up to 22,000,000 shares of common stock of the Company,
par value $0.00001 per share, issuable to CPUS Income Group LLC
pursuant to that certain investment agreement. The investment
agreement permits the Company to "put" up to $10,000,000 in shares
of its common stock to CPUS over a period of up to 36 months. The
Company had previously drawn down $119,120 of the $10,000,000.
The Company will not receive any proceeds from the resale of these
shares of common stock. However, the Company will receive
proceeds from the sale of securities pursuant to its exercise of
the put right offered by CPUS. CPUS is deemed an underwriter for
the Company's common stock.
The selling stockholder may offer all or part of the shares for
resale from time to time through public or private transactions,
at either prevailing market prices or at privately negotiated
prices. CPUS is paying all of the registration expenses incurred
in connection with the registration of the shares except for
accounting fees and expenses and the Company will not pay any of
the selling commissions, brokerage fees and related expenses.
The Company's common stock is quoted on the OTCQB under the ticker
symbol 'PEII." On July 29, 2014, the closing price of the
Company's common stock was $0.0158 per share.
A copy of the prospectus is available for free at:
http://is.gd/o0rCfw
About Petron Energy
Dallas-based Petron Energy II, Inc., is engaged primarily in the
acquisition, development, production, exploration for and the sale
of oil, gas and gas liquids in the United States. As of Dec. 31,
2011, the Company is operating in the states of Texas and
Oklahoma. In addition, the Company operates two gas gathering
systems located in Tulsa, Wagoner, Rogers and Mayes counties of
Oklahoma. The pipeline consists of approximately 132 miles of
steel and poly pipe, a gas processing plant and other ancillary
equipment. The Company sells its oil and gas products primarily
to a domestic pipeline and to another oil company.
Petron Energy reported a net loss of $4.30 million in 2013
following a net loss of $8.32 million in 2012.
The Company's balance sheet at June 30, 2014, showed $3.38 million
in total assets, $5.39 million in total liabilities and a $2.01
million total stockholders' deficit.
KWCO, PC, in Odessa, TX, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2013. The independent auditors noted that the Company's
significant operating losses since inception raise substantial
doubt about its ability to continue as a going concern.
PHOENIX PAYMENT: Taps PMCM to Provide Restructuring Services
------------------------------------------------------------
Phoenix Payment Systems, Inc., seeks authority from the U.S.
Bankruptcy Court for the District of Delaware to employ PMCM, LLC,
to provide the Debtor with a chief restructuring officer and
certain additional PMCM Personnel to assist the CRO and (ii)
designate Michael E. Jacoby as the Debtor's CRO.
The engagement letter contemplated that the CRO and PMCM Personnel
will perform the following services:
(a) oversee the management of the Debtor, together with the
Debtor's chief executive officer;
(b) assume primary responsibility for communicating and
negotiating with The Bancorp Bank, with which the Debtor
had a significant relationship prior to the Petition Date;
(c) oversee any process that may involve raising outside
capital and/or pursuing the sale of substantially all of
the Debtor's assets;
(d) oversee the preparation, monitoring, and modifying the
Debtor's weekly cash flow forecast on a periodic basis to
determine and/or validate the sources and uses of cash,
availability, and timing and magnitude of financing
necessary to support the Debtor;
(e) oversee the preparation, monitoring and periodically
modifying the Debtor's business plan, and monthly financial
projections;
(f) provide oversight with regard to daily cash management
activities, including maximizing and forecasting
collections and availability, and assisting the Debtor with
prioritizing disbursements within the Debtor's availability
constraints;
(g) make recommendations regarding staffing levels, staffing
decisions, and personnel decisions of the Debtor employees
consisting with the Restructuring Plan;
(h) approve new merchant agreements;
(i) approve contracts and settlement agreements greater than a
mutually agreed to dollar threshold; and
(j) other duties as mutually agreed.
In light of the Debtor's Chapter 11 filing, it is expected that
the activities and services of the CRO and PMCM will be expanded
to include the following:
(a) Assist with the preparation of the various financial
reporting requirements that are typical in any bankruptcy
proceeding, including the Schedules, Statements of
Financial Affairs, and Monthly Operating Reports;
(b) Maintain the Compliance Report required by Bancorp in its
role as DIP Lender;
(c) Coordinate with the Debtor's Claims Agent;
(d) Assist with the resolution of disputed claims;
(e) Provide testimony in the Chapter 11 proceeding as needed,
including, if applicable, provide testimony at the
Section 341 meeting of creditors;
(f) Coordinate activities with the Debtor's investment banker
regarding marketing and negotiation efforts with Interested
Parties;
(g) Assist with evaluating Competing Bids; and
(h) Assist with preparation of a Plan of Reorganization or Plan
of Liquidation, as the case may be.
PMCM will be paid by the Debtor for the services of the Engagement
Personnel at their customary hourly billing rates which are as
follows:
Senior Managing Directors $495-$645
Managing Directors $395-$545
Directors $300-$425
Vice Presidents $265-$325
Senior Analysts/Associates $210-$295
Analysts/Associates $155-$245
Support Staff $55-$145
In addition to compensation for professional services rendered by
Engagement Personnel, PMCM will seek reimbursement for reasonable
and necessary expenses incurred in connection with the Chapter 11
Case.
Michael E. Jacoby, a Senior Managing Director of PMCM, LLC, and a
shareholder of its affiliate, Phoenix Management Services, assures
the Court that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
A hearing on the employment application is scheduled for Sept. 3,
2014, at 11:30 a.m. (EDT). Objections are due Aug. 22.
About Phoenix Payment
Founded in 2004, Phoenix Payment Systems, Inc., aka Electronic
Payment Systems, aka EPX, is an international payment processor
with corporate headquarters in Wilmington, Delaware, and
technology headquarters in Phoenix, Arizona. It provides
acceptance, processing, support, authorization and settlement
services for credit card, debit card and e-check payments.
Providing processing services at more than 8,700 locations
worldwide, PPS processed, in multiple currencies, 280 million
transactions in 2013 and expects to process 400 million in 2014.
Phoenix Payment Systems sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 14-11848) on Aug. 4,
2014, to quickly sell its assets.
As of the Petition Date, the Debtor had total outstanding
liabilities and other obligations of $16.6 million and 9.8 million
shares of outstanding preferred and common stock. Debt to secured
creditor The Bancorp Bank is estimated at $6.2 million.
Judge Mary F. Walrath presides over the case.
The Debtor's attorneys are Richard J. Bernard, Esq., at Foley &
Lardner LLP, in New York; and Mark D. Collins, Esq., Russell
Siberglied, Esq., Zachary I Shapiro, Esq., and Marisa A.
Terranova, Esq., at Richards Layton & Finger, P.A., in Wilmington,
Delaware. The Debtor's banker and financial advisor is Raymond
James & Associates, Inc., while Bederson, LLC, is the Debtor's
accountant. PMCM, LLC, provides advisory services and executive
leadership to the Debtor. The Debtor's claims and noticing agent
is Omni Management Group, LLC.
PHOENIX PAYMENT: Proposes Rust Consulting as Admin. Advisor
-----------------------------------------------------------
Phoenix Payment Systems, Inc., seeks authority from the U.S.
Bankruptcy Court for the District of Delaware to employ Rust
Consulting/Omni Bankruptcy as administrative advisor.
As administrative advisor, Rust Consulting will:
(a) gather data in conjunction with the preparation, and
assisting with the preparation, of the Debtor's Schedules
of Assets and Liabilities and Statements of Financial
Affairs;
(b) assist the Debtor in managing claims reconciliation and
objection process, flag for review by the Debtor those
proofs of claim subject to possible procedural objections,
those that are inconsistent with the Schedules, and those
that supersede scheduled liabilities, input the Debtor's
objection determination in the claims database, and prepare
exhibits for the Debtor's omnibus claims objections;
(c) provide balloting and solicitation services to the Debtor
in furtherance of confirmation of a plan or plans of
reorganization including assisting in the production of
solicitation materials, tabulating creditor ballots on a
daily basis, preparing voting results reports, drafting
certification of voting results, and providing court
testimony with respect to balloting, solicitation, and
tabulation matters;
(d) provide the Debtor with consulting and computer software
support regarding the reporting and information management
requirements of the bankruptcy administration process as it
relates to its Section 327 Services;
(e) educate and train the Debtor in the use of support software
and provide the Administrative Advisor's Standard Reports
as well as consulting and programming support for Debtor
requested reports, program modifications, database
modification, and/or other features in accordance with the
Administrative Advisor Agreement;
(f) provide a confidential data room;
(g) manage any distributions pursuant to a confirmed plan of
reorganization; and
(h) provide other balloting and administrative services as may
be requested from time to time by the Debtor in accordance
with the Administrative Advisor Agreement and that are not
otherwise allowed under the order approving the
Section 156(c) Application.
Under the Administrative Advisor Agreement, the Debtor paid the
Administrative Advisor a retainer of $10,000.
Paul H. Deutch, the executive managing director of Rust
Consulting/Omni Bankruptcy, assures the Court that his firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest adverse
to the Debtors and their estates.
A hearing on the Debtor's request to employ Omni Bankruptcy as
administrative advisor is scheduled for Sept. 3, 2014, at 11:30
a.m. (EDT). Objections are due Aug. 22.
About Phoenix Payment
Founded in 2004, Phoenix Payment Systems, Inc., aka Electronic
Payment Systems, aka EPX, is an international payment processor
with corporate headquarters in Wilmington, Delaware, and
technology headquarters in Phoenix, Arizona. It provides
acceptance, processing, support, authorization and settlement
services for credit card, debit card and e-check payments.
Providing processing services at more than 8,700 locations
worldwide, PPS processed, in multiple currencies, 280 million
transactions in 2013 and expects to process 400 million in 2014.
Phoenix Payment Systems sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 14-11848) on Aug. 4,
2014, to quickly sell its assets.
As of the Petition Date, the Debtor had total outstanding
liabilities and other obligations of $16.6 million and 9.8 million
shares of outstanding preferred and common stock. Debt to secured
creditor The Bancorp Bank is estimated at $6.2 million.
Judge Mary F. Walrath presides over the case.
The Debtor's attorneys are Richard J. Bernard, Esq., at Foley &
Lardner LLP, in New York; and Mark D. Collins, Esq., Russell
Siberglied, Esq., Zachary I Shapiro, Esq., and Marisa A.
Terranova, Esq., at Richards Layton & Finger, P.A., in Wilmington,
Delaware. The Debtor's banker and financial advisor is Raymond
James & Associates, Inc., while Bederson, LLC, is the Debtor's
accountant. PMCM, LLC, provides advisory services and executive
leadership to the Debtor. The Debtor's claims and noticing agent
is Omni Management Group, LLC.
PHOENIX PAYMENT: Taps Raymond James as Investment Banker
--------------------------------------------------------
Phoenix Payment Systems, Inc., seeks authority from the U.S.
Bankruptcy Court for the District of Delaware to employ Raymond
James & Associates, Inc., as its external investment banker.
Raymond James would provide investment banking services including,
without limitation, the following:
(a) reviewing and analyzing the Debtor's business, operations,
properties, financial condition, and prospects;
(b) evaluating the Debtor's debt capacity, advising the Debtor
generally as to available financing and assisting in the
determination of an appropriate capital structure;
(c) assisting the Debtor in evaluating potential Transaction
alternatives and strategies;
(d) assisting the Debtor in preparing documentation within its
area of expertise that is required in connection with a
Transaction;
(e) assisting the Debtor in identifying Interested Parties that
may be interested in participating in a Transaction;
(f) assisting or conducting negotiations regarding the
Transaction and its structure;
(g) advising the Debtor as to potential mergers or acquisitions
and the sale or other disposition of any of the Debtor's
assets or businesses;
(h) advising the Debtor on tactics and strategies for
negotiating with Stakeholders;
(i) advising the Debtor on the timing, nature, and terms of any
new securities, other considerations, or other inducements
to be offered to its Stakeholders in connection with any
Restructuring Transaction; and
(j) participating in the Debtor's board of director meetings as
determined by the Debtor to be appropriate, and, upon
request, providing periodic status reports and advise to
the board with respect to matters falling within the scope
of Raymond James' retention.
In consideration of Raymond James' agreement to provide services
to the Debtor, the Debtor proposes to compensate Raymond James
with a $50,000 monthly fee and transaction fees at the closing of
certain transactions.
At the closing of a Financing Transaction, Raymond James would be
paid a cash fee, in the amount of the lesser of (x) $500,000 or
(y) the sum of (i) 3.0% of the Aggregate Gross Proceeds of all
senior secured notes and bank debt raised and (ii) 6.0% of the
Aggregate Gross Proceeds of all second lien or junior secured debt
financing raised, unsecured, non-senior and subordinate debt
raised and all equity or equity-linked securities raised which
fees will be paid immediately out of the proceeds of the
placement.
The Debtor would pay Raymond James a cash fee in conjunction with
a Restructuring Transaction in an amount equal to $700,000. At
the closing of any Business Combination Transaction, the Debtor
would pay a cash fee out of proceeds as a cost of sale at the
closing of a Business Combination Transaction, equal to the sum of
(i) $500,000 and (ii) 5% of Consideration paid, payable or
received, in an amount between $8 million and $15 million, plus
7.5% of Consideration paid, payable or received, an amount between
$15 million and $20 million, plus 10% of Consideration paid,
payable or received, in an amount greater than $20 million.
Michael Pokrassa, a senior vice president of Raymond James &
Associates, Inc., assures the Court that his firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest adverse
to the Debtors and their estates.
A hearing on the employment application is scheduled for Sept. 3,
2014, at 11:30 a.m. (EDT). Objections are due Aug. 22.
About Phoenix Payment
Founded in 2004, Phoenix Payment Systems, Inc., aka Electronic
Payment Systems, aka EPX, is an international payment processor
with corporate headquarters in Wilmington, Delaware, and
technology headquarters in Phoenix, Arizona. It provides
acceptance, processing, support, authorization and settlement
services for credit card, debit card and e-check payments.
Providing processing services at more than 8,700 locations
worldwide, PPS processed, in multiple currencies, 280 million
transactions in 2013 and expects to process 400 million in 2014.
Phoenix Payment Systems sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 14-11848) on Aug. 4,
2014, to quickly sell its assets.
As of the Petition Date, the Debtor had total outstanding
liabilities and other obligations of $16.6 million and 9.8 million
shares of outstanding preferred and common stock. Debt to secured
creditor The Bancorp Bank is estimated at $6.2 million.
Judge Mary F. Walrath presides over the case.
The Debtor's attorneys are Richard J. Bernard, Esq., at Foley &
Lardner LLP, in New York; and Mark D. Collins, Esq., Russell
Siberglied, Esq., Zachary I Shapiro, Esq., and Marisa A.
Terranova, Esq., at Richards Layton & Finger, P.A., in Wilmington,
Delaware. The Debtor's banker and financial advisor is Raymond
James & Associates, Inc., while Bederson, LLC, is the Debtor's
accountant. PMCM, LLC, provides advisory services and executive
leadership to the Debtor. The Debtor's claims and noticing agent
is Omni Management Group, LLC.
PHYSICAL PROPERTY: Incurs HK$251,000 Net Loss in Second Quarter
---------------------------------------------------------------
Physical Property Holdings Inc. filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss and total comprehensive loss of HK$251,000 on
HK$243,000 of total operating revenues for the three months ended
June 30, 2014, as compared with a net loss and comprehensive loss
of HK$43,000 on HK$275,000 of total operating revenues for the
same period last year.
For the six months ended June 30, 2014, the Company reported a net
loss and comprehensive loss of HK$429,000 on HK$520,000 of total
operating revenues as compared with a net loss and total
comprehensive loss of HK$180,000 on HK$503,000 of total operating
revenues for the same period in 2013.
The Company's balance sheet at June 30, 2014, showed HK$9.50
million in total assets, HK$11.44 million in total liabilities,
all current, and a HK$1.93 million total stockholders' deficit.
Cash and cash equivalent balances as of June 30, 2014, was
HK$5,000.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/dGfj1A
About Physical Property
Located in Hong Kong, Physical Property Holdings Inc., through its
wholly-owned subsidiary, Good Partner Limited, owns five
residential apartments located in Hong Kong. The Company was
incorporated in the State of Delaware.
PIER 35 EVENTS: Case Summary & 4 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Pier 35 Events, Inc.
dba Travelocity Incentives
dba Travelocity Gift Cards
dba Travelocity Awards
85 Liberty Ship Way, Suite 208
Sausalito, CA 94965
Case No.: 14-31179
Nature of Business: E-commerce, marketing, incentive industry
Chapter 11 Petition Date: August 14, 2014
Court: United States Bankruptcy Court
Northern District of California (San Francisco)
Debtor's Counsel: Ruth Elin Auerbach, Esq.
LAW OFFICES OF RUTH ELIN AUERBACH
77 Van Ness Ave. #201
San Francisco, CA 94102
Tel: (415) 673-0560
Fax: (415) 673-0562
Email: attorneyruth@sbcglobal.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Peter Friend, president.
A list of the Debtor's four largest unsecured creditors is
available for free at http://bankrupt.com/misc/canb14-31179.pdf
PUERTO RICO: Prepa Given Until March 31 to Pay Principal
--------------------------------------------------------
Mary Williams Walsh, writing for The New York Times' DealBook,
reported that lenders to the Puerto Rico Electric Power Authority
(Prepa) gave it a breather instead of enforcing a looming deadline
on the lines of credit the company uses to buy fuel for its power
plants. According to the DealBook, the banks that provide the
credit line gave Prepa until March 31 to make good on principal
repayments that originally came due at the end of July. Prepa
said it would keep paying interest on the total amount due, $671
million, until then, the DealBook related.
In another news, Bill Rochelle, the bankruptcy columnist for
Bloomberg News, reported that the U.S. District Court in Puerto
Rico wants the government of Puerto Rico and bond funds affiliated
with Franklin Resources Inc. and Oppenheimer Rochester Funds to
make their cases on the constitutionality of the new Puerto Rico
law that allows government-owned entities to restructure debt
outside of federal bankruptcy court. The District Court told
Puerto Rico to file papers by Sept. 12 supporting its claim that
the law is constitutional so the bond funds can file opposing
papers by Oct. 6.
The lawsuit relating to the new law is Franklin California Tax-Fee
Trust v. Commonwealth of Puerto Rico, 14-cv-01518, U.S. District
Court, District of Puerto Rico (San Juan).
RAAM GLOBAL: Incurs $7.3 Million Net Loss in Second Quarter
-----------------------------------------------------------
RAAM Global Energy Company filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss attributable to the Company of $7.34 million on $33.42
million of total revenues for the three months ended June 30,
2014, as compared with net income attributable to the Company of
$1.51 million on $44.40 million of total revenues for the same
period in 2013.
For the six months ended June 30, 2014, the Company reported a net
loss attributable to the Company of $15.85 million on $64.56
million of total revenues as compared with a net loss attributable
to the Company of $929,000 on $81.80 million of total revenues for
the same period last year.
As of June 30, 2014, the Company had $400.47 million in total
assets, $365.56 million in total liabilties and $34.91 million in
total equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/ZHCBHC
About RAAM Global
RAAM Global Energy Company is a privately held company engaged
primarily in the exploration and development of oil and gas
properties and in the resulting production and sale of natural
gas, condensate and crude oil. The Company's production
facilities are located in the Gulf of Mexico, offshore Louisiana
and onshore Louisiana, Texas, Oklahoma, and California.
* * *
As reported by the TCR on Aug. 4, 2014, Standard & Poor's Ratings
Services lowered its corporate credit and senior secured ratings
on exploration and production company RAAM Global Energy Co. to
'CCC+' from 'B-'. The outlook is negative.
"The downgrade reflects our assessment that Lexington, Ky.-based
RAAM Global Energy Co. could have difficulty refinancing its $250
million senior secured notes due October 2015 due to weak
operating performance, largely due to unexpected production
declines on its Yegua wells that have resulted in weakening
liquidity and limited near-term growth potential," S&P said.
RAAM Global Energy carries a Caa1 Corporate Family Rating from
Moody's Investors Service.
ROUNDY'S SUPERMARKET: Bank Debt Trades at 5% Off
------------------------------------------------
Participations in a syndicated loan under which Roundy's
Supermarket Inc. is a borrower traded in the secondary market at
95.10 cents-on-the-dollar during the week ended Friday, Aug. 15,
2014, according to data compiled by LSTA/Thomson Reuters MTM
Pricing and reported in The Wall Street Journal. This represents
a drop of 4.08 of percentage points from the previous week, The
Journal relates. Roundy's Supermarket Inc. pays 475 basis points
above LIBOR to borrow under the facility. The bank loan matures
on Feb. 17, 2021 and carries Moody's B1 rating and Standard &
Poor's B rating. The loan is one of the biggest gainers and
losers among 264 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
SAN JOAQUIN HILLS: Moody's Affirms 'B1' Revenue Bond Rating
-----------------------------------------------------------
Moody's Investors Service affirms the B1 revenue bond of San
Joaquin Hills Transportation Corridor Agency (SJHTCA). The rating
outlook is stable.
Rating Rationale
The B1 rating reflects risks associated with the agency's very
high debt leverage and back-loaded debt structure; reliance on
steady annual rate increases to ensure sum sufficient debt service
coverage ratios (DSCRs) and weaker than standard bondholder
covenants. Moody's note some recent improvement in traffic growth
due to renewed service area economic growth following the
recession. While this growth combined with annual toll rote
increases has produced better that previously forecasted DSCRs,
Moody's would expect to see a longer track record of traffic
recovery before considering any upward rating revision.
Additionally, Moody's would consider the impact of a possible debt
restructuring later this year before considering any rating
action.
The agency's satisfactory liquidity levels are factored into the
stable outlook.
Outlook
The stable outlook reflects growth in traffic due to improving
economic conditions in the service area and also considers the
agency's demonstrated ability and willingness to increase toll
rates to maximize revenues, though continued needed increases may
be unsustainable given the toll road's already very high toll
rates and current usage patterns.
What Could Make The Rating Go Up
Strong and sustained growth in traffic and toll revenues that
produces DSCRs above one times without using reserves or F/ETCA
loans could have a positive rating impact. In addition, a clearer
picture of the possible debt restructuring later this year would
help inform the direction of the rating.
What Could Make The Rating Go Down
Weak traffic and toll revenue that requires use of reserves, or
toll rate increases that result in traffic diversion, would place
downward pressure on the rating.
Strengths
* Renewed traffic and revenue growth due to economic growth and
recovery in the service area
* Implementation of required annual toll rate increase to
maximize revenues as recommended by the consulting traffic
engineer, though this could pressure traffic and revenue
growth longer-term
* Satisfactory liquidity relative to operating expenses and a
cash funded debt service reserve fund (DSRF)
Challenges
* Very high debt leverage
* Back loaded and lumpy debt service schedule with annual debt
service that nearly doubles in FY 2025 and that relies on
accumulated Toll Stabilization Fund (TSF) balances rather than
annual operating revenues for coverage
* Weaker than average bondholder covenants and open flow of
funds
* Uncertainty related to a possible debt restructuring/
refinancing under consideration for later this year
Rating Methodology
The principal methodology used in this rating was Government Owned
Toll Roads published in October 2012.
SEAWORLD PARKS: S&P Lowers CCR to 'BB-'; Outlook Negative
---------------------------------------------------------
Standard & Poor's Rating Services lowered its corporate credit
rating on Florida-based theme park operator SeaWorld Parks &
Entertainment Inc. to 'BB-' from 'BB'. The rating outlook is
negative. At the same time, S&P lowered its issue-level rating on
the company's $1.6 billion senior secured credit facility to 'BB'
from 'BB+', in line with the lower corporate credit rating. The
'2' recovery rating on this debt is unchanged, reflecting S&P's
expectation for substantial (70% to 90%) recovery for lenders in
the event of a payment default.
"The downgrade reflects our revised forecast for 2014 EBITDA to
decline approximately 15% before stabilizing in 2015, and our
expectation that debt to EBITDA will increase to the mid-4x area
in 2014 and remain at this level in 2015," said Standard & Poor's
credit analyst Shivani Sood.
EBITDA fell 20% in the first half of the year, primarily because
of a 4.3% decrease in attendance and a 0.7% decrease in per capita
spending, as well as selling, general, and administrative expenses
(SG&A); cost of revenue; and other operating expenses that are
less flexible over a short period. Although inclement weather and
school calendars contributed to a portion of the operational
weakness, S&P believes that the more significant and ongoing
drivers are negative media reports that have specifically targeted
the company's use of Orca whales for entertainment purposes. S&P
believes that revenues, driven by lower attendance and per capita
spending, will remain weak through the remainder of the year.
This weakness, coupled with higher advertising and marketing
expenses in 2014 as SeaWorld combats the negative publicity and
lower attendance, will lead to the decline in 2014 EBITDA. S&P's
preliminary expectation is that these negative trends could
stabilize in 2015, resulting in relatively flat revenue and EBTIDA
compared with 2014 results, largely because the negative
attendance trend appears to be limited for now to the company's
California park and as the company begins to realize cost savings
from recently announced initiatives.
Given S&P's expectation for adjusted leverage to remain in the
mid-4x area through 2015, it is revising the financial risk score
on SeaWorld to "aggressive" from "significant". The downgrade
also reflects S&P's reassessment of SeaWorld's business risk
profile to "fair" from "satisfactory," as defined in S&P's
criteria, reflecting its belief that SeaWorld's EBTIDA will likely
be more volatile than we previously expected. SeaWorld has an
"adequate" liquidity profile, according to S&P's criteria, based
on the likely sources and uses of cash over the next 12 to 18
months and incorporating S&P's performance expectations.
The negative outlook reflects S&P's expectation that the company
still faces significant challenges regarding reputational risk and
potential improvements in operating performance beyond 2014.
S&P would consider lowering the rating if operating performance
deteriorates beyond its performance expectations, resulting in
leverage rising to the 5x area, or if S&P believes the
reputational damage to SeaWorld's brand is severe enough to
influence the company's competitive advantage in the future. S&P
would also contemplate a lower rating if SeaWorld were to borrow
to finance opportunistic share repurchases.
Higher ratings are unlikely at this time and would require a
meaningful improvement in EBITDA that sustains leverage below 4x.
This would likely result from a full recovery in public perception
of the brand such that the company regains attendance at its
California park and avoids attendance erosion at other SeaWorld
branded parks.
SEVEN ARTS: Tangiers Investment Reports 8% Equity Stake
-------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Tangiers Investment Group, LLC, disclosed that as of
July 14, 2014, it beneficially owned 13,480,000 shares of common
stock of Seven Arts Entertainment, Inc., representing 8.07 percent
of the shares outstanding. A full-text copy of the regulatory
filing is available for free at http://is.gd/vbhSdG
About Seven Arts
Los Angeles-based Seven Arts Entertainment, Inc. (OTC QB: SAPX)
was founded in 2002 as an independent motion picture production
and distribution company engaged in the development, acquisition,
financing, production and licensing of theatrical motion pictures
for exhibition in domestic (i.e., the United States and Canada)
and foreign theatrical markets, and for subsequent worldwide
release in other forms of media, including home video and pay and
free television.
The Company reported a net loss of $22.4 million on $1.5 million
of total revenue for the fiscal year ended June 30, 2013, compared
with a net loss of $11.2 million on $4.1 million of total revenue
for the fiscal year ended June 30, 2012.
The Hall Group, CPAs, in Dallas, Texas, expressed substantial
doubt about the Company's ability to continue as a going concern
following the financial results for the year ended June 30, 2013,
citing the Company's recurring losses from operations and net
capital deficiency.
As of Sept. 30, 2013, the Company had $15.58 million in total
assets, $23.93 million in total liabilities and a $8.35 million
total shareholders' deficit.
SMART TECHNOLOGIES: S&P Revises Outlook to Stable & Affirms B CCR
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Calgary,
Alta.-based interactive display producer SMART Technologies Inc.
to stable from positive. At the same time, Standard & Poor's
affirmed its 'B' long-term corporate credit rating on the company,
and its 'BB-' issue-level rating on SMART's US$125 million senior
secured term loan. The '1' recovery rating on the term loan is
unchanged.
"We base the outlook revision on our expectation that SMART's
earnings will meaningfully weaken in the near term due to
challenging market conditions in the company's core education
segment, a slower-than-expected ramp-up of its enterprise
business, and accelerated investment spending on growth
initiatives," said Standard & Poor's credit analyst David Fisher.
We expect depressed earnings will lead to materially weaker near-
term credit metrics.
SMART is facing significant headwinds in its education business,
with revenue and reported EBITDA in this segment down 19% and 36%,
respectively, in the first quarter ended June 30, 2014. S&P
previously expected education revenue to stabilize or fall
modestly in fiscal 2015, but demand for interactive displays has
been affected negatively by market saturation and competition for
budget dollars from other technologies -- most notably Wi-Fi and
personal computing devices -- as schools prepare to comply with
curriculum requirements.
Although the company's enterprise segment achieved strong revenue
growth in the first quarter, its earnings contribution remains
minimal and its key product -- the SMART Room System for Microsoft
Lync -- is ramping up more slowly than expected.
SMART plans to accelerate spending of about US$8 million on its
new interactive dry-erase board replacement product -- SMART kapp
-- and another US$3 million on its interactive flat panel (IFP)
product line. These investments will weigh on fiscal 2015
earnings, but should prove beneficial in fiscal 2016. S&P
understands that there is a rapid shift toward IFPs occurring, and
S&P believes it is very important for SMART to have a
comprehensive and competitive offering in this space.
The stable outlook reflects S&P's expectation that despite the
company's weak operating performance, SMART will maintain adequate
liquidity and credit metrics generally consistent with the rating,
with debt-to-EBITDA of about 6x in the next 12 months and
strengthening to below 5x in the next 18-24 months.
S&P could lower the rating if debt-to-EBITDA increases to more
than 6x and appears unlikely to fall to the 5x area within the
next 18-24 months. Should leverage remain elevated above 6x, S&P
believes the company would generate marginal or negative free
operating cash flow, which over time could lead to liquidity
challenges and make debt repayment difficult.
An upgrade is unlikely in the near term given S&P's limited
visibility into SMART's business prospects in the next few years,
particularly as it relates to the education segment, and the
company's significant earnings volatility.
SOTERA DEFENSE: Moody's Withdraws Caa2 Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service has withdrawn all ratings of Sotera
Defense Solutions, Inc.
Ratings withdrawn:
Corporate Family Rating, to WR from Caa2
Probability of Default Rating, to WR from Caa2-PD
Revolving Credit Facility, to WR from Caa2, LGD3
Term Loan, to WR from Caa2, LGD3
Ratings Rationale
Moody's has withdrawn the ratings of Sotera Defense Solutions,
Inc. because it believes it has insufficient or otherwise
inadequate information to support maintenance of the ratings.
SPIRE CORP: Incurs $1.4 Million Net Loss in Second Quarter
----------------------------------------------------------
Spire Corporation filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
attributable to common stockholders of $1.43 million on $3.84
million of total net sales and revenues for the three months ended
June 30, 2014, as compared with a net loss attributable to common
stockholders of $1.78 million on $3.57 million of total net sales
and revenues for the same period last year.
For the six months ended June 30, 2014, the Company reported a net
loss attributable to common stockholders of $4.55 million on $7.93
million of total net sales and revenues as compared with a net
loss attributable to common stockholders of $4.41 million on $6.81
million of total net sales and revenues for the same period during
the prior year.
As of June 30, 2014, the Company had $9.34 million in total
assets, $14.19 million in total liabilities and a $4.85 million
total stockholders' deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/SEmto2
About Spire Corp
Bedford, Massachusetts-based Spire Corporation currently develops,
manufactures and markets customized turn-key solutions for the
solar industry, including individual pieces of manufacturing
equipment and full turn-key lines for cell and module production
and testing.
Spire Corporation reported a net loss of $8.52 million in 2013, as
compared with a net loss of $1.85 million in 2012.
McGladrey LLP, in Boston, Massachusetts, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2013. The independent auditors noted that
the Company incurred an operating loss from continuing operations
of $8.4 million and cash used in operating activities of
continuing operations was $5.2 million. The Company's credit
agreement with a bank is due to expire on April 30, 2014. These
factors raise substantial doubt about its ability to continue as a
going concern.
TA TYS BAR: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Ta Tys Bar, Inc.
13918 W. Hillsborough Ave.
Tampa, Fl 33635
Case No.: 14-09460
Chapter 11 Petition Date: August 14, 2014
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Debtor's Counsel: Tom H Billiris, Esq.
TOM H. BILLIRIS, PA
PO Box 2006
Palm Harbor, FL 34682
Tel: 727-943-9466
Fax: 727-937-2458
Email: tombilliris@gmail.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $10 million to $50 million
The petition was signed by Alan L. Bitman, authorized agent.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
USG CORP: Moody's Raises Corporate Family Rating to 'B2'
--------------------------------------------------------
Moody's Investors Service, upgraded USG Corp.'s Corporate Family
Rating to B2 from B3, its Probability of Default Rating to B2-PD
from B3-PD, and changed the rating outlook to positive from
stable. The upgrades and outlook change are based on Moody's
expectations that USG's operating performance, driven mainly by
its gypsum business, will continue to improve, resulting in better
debt credit metrics.
The following ratings/assessments were affected by this action:
Corporate Family Rating upgraded to B2 from B3;
Probability of Default Rating upgraded to B2-PD from B3-PD;
Guaranteed senior unsecured notes upgraded to B1 (LGD3) from B2
(LGD3);
Senior unsecured (not guaranteed) notes upgraded to Caa1 (LGD5)
from Caa2 (LGD5); and,
Industrial revenue bonds with various maturities (not
guaranteed) upgraded to Caa1 (LGD5) from Caa2 (LGD5).
Speculative grade liquidity rating of SGL-2 is affirmed.
Ratings Rationale
The upgrade of USG's Corporate Family Rating to B2 from B3, and
the rating outlook to positive from stable reflect operating
performance better than Moody's anticipated previously. USG's
gypsum business will continue to benefit from the growth in the US
housing market -- the ongoing driver of USG's future operating
improvement - with higher volumes and better pricing. Moody's
estimates that new housing starts will be in the 975,000 -- 1.0
million range for 2014, and up to 1.1 million to 1.2 million in
2015 -- an almost 25% increase from the 2013 total of 929,000. USG
indicated in its most recent 10Q that its average selling price
for wallboard in the second quarter of 2014 was $167.31 per
thousand square feet, up 9% from $153.77 in the second quarter of
213. The strength in the gypsum business will more than offset
sluggish demand for USG's ceiling products.
We now project USG's EBITA margin improving to about 11% over the
next 12 to 18 months from 10% for the 12 months through June 30,
2014, which will translate into better debt credit metrics.
Interest coverage - defined as EBITA-to-interest expense -- could
exceed 2.0x through the end of 2015 from 1.6x for LTM 2Q14, and
debt-to-EBITDA should improve to below 4.5x by FYE15 from 5.0x at
June 30, 2014 (all ratios incorporate Moody's standard
adjustments).
The upgrades of USG's guaranteed senior unsecured notes to B1 from
B2, its senior unsecured (not guaranteed) notes to Caa1 from Caa2,
and industrial revenue bonds to Caa1 from Caa2 result directly
from the higher corporate family rating, a key driver in the loss
given default analysis.
Positive rating actions could ensue if USG continues to benefit
from the strength in its end markets, the domestic repair and
remodeling and new housing construction sectors, resulting in more
robust credit metrics and validates Moody's forecasts. Higher
operating earnings and improved free cash flow generation that
translate into EBITA-to-interest expense sustained near 2.5x,
debt-to-EBITDA remaining below 4.5x (all ratios incorporate
Moody's standard adjustments), or a better liquidity profile could
have a positive impact on the company's credit ratings.
Stabilization of the ratings could occur if USG's end markets
contract, resulting in key credit metrics falling short of Moody's
expectations. Operating performance that results in EBITA-to-
interest expense remaining around 1.75x, debt-to-EBITDA sustained
above 5.0x, (all ratios incorporate Moody's standard adjustments),
or deterioration in the company's liquidity profile could pressure
the ratings.
USG Corporation, headquartered in Chicago, IL, is a leading
producer and distributor of building materials in primarily North
America. The company manufactures and markets gypsum wallboard and
operates a specialty distribution business that sells to
professional contractors. USG also manufactures ceiling tiles and
ceiling grids used primarily for commercial applications. Revenues
for the 12 months through June 30, 2014 totaled approximately $3.6
billion.
The principal methodology used in this rating was the Global
Manufacturing Companies published in July 2014. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
VICTORY ENERGY: Delays Form 10-Q for Second Quarter
---------------------------------------------------
Victory Energy Corporation filed with the U.S. Securities and
Exchange Commission a Notification of Late Filing on Form 12b-25
with respect to its quarterly report on Form 10-Q for the period
ended June 30, 2014. The delay is associated with completing the
accounting and financial reporting of a significant disposition
and acquisition closed in June 2014 with sufficient time to allow
the required auditor review and filing of the Quarterly Report by
Aug. 14, 2014.
About Victory Energy
Austin, Texas-based Victory Energy Corporation is engaged in the
exploration, acquisition, development and exploitation of domestic
oil and gas properties. Current operations are primarily located
onshore in Texas, New Mexico and Oklahoma.
Victory Energy reported a net loss of $2.11 million on $735,413 of
total revenues for the year ended Dec. 31, 2013, as compared with
a net loss of $7.09 million on $326,384 of total revenues in 2012.
Weaver & Tidwell, LLP, in Fort Worth, Texas, 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 experienced recurring losses since its
inception and has an accumulated deficit. These conditions raise
substantial doubt regarding the Company's ability to continue as a
going concern.
VISCOUNT SYSTEMS: Incurs C$1.2 Million Net Loss in Second Quarter
-----------------------------------------------------------------
Viscount Systems, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss and comprehensive loss of C$1.24 million on C$1.35
million of sales for the three months ended June 30, 2014, as
compared with a net loss and comprehensive loss of C$707,338 on
C$1.04 million of sales for the same period in 2013.
For the six months ended June 30, 2014, the Company reported a net
loss and comprehensive loss of C$3.06 million on C$2.29 million of
sales as compared with a net loss and comprehensive loss of C$2.55
million on C$1.86 million of sales for the same period last year.
As of June 30, 2014, the Company had C$2.66 million in total
assets, C$7.27 million in total liabilities and a C$4.60 million
total stockholders' deficit.
"Management has determined that the Company will not need to raise
anymore capital to continue normal operations for the next twelve
months. If working capital becomes insufficient, the Company will
have to reduce spending in several key areas including research
and development and marketing. This would have a negative impact
on the growth prospects of the Company. In the event the Company
hits its sales targets, the Company will have sufficient working
capital for 2014. Management continues actively seeking new
investors and developing customer relationships. These factors
raise substantial doubt about the ability of the Company to
continue operations as a going concern," the Company stated in the
Quarterly Report.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/cGP1sJ
About Viscount Systems
Burnaby, Canada-based Viscount Systems, Inc., is a manufacturer,
developer and service provider of access control security
products.
The Company's bank credit facility was suspended on December 30,
2011 due to the bank's assessment of the Company's financial
position. Management has determined that the Company will need to
raise a minimum of C$500,000 by way of new debt or equity
financing to continue normal operations for the next twelve
months. Management has been actively seeking new investors and
developing customer relationships, however a financing arrangement
has not yet completed. Short-term loan financing is anticipated
from related parties, however there is no certainty that loans
will be available when required. These factors raise substantial
doubt about the ability of the Company to continue operations as a
going concern.
Dale Matheson Carr-Hilton LaBonte LLP expressed substantial doubt
about the Company's ability to continue as a going concern, citing
that the Company has an accumulated deficit of C$11.67 million for
the year ended Dec. 31, 2013. The Company requires additional
funds to meet its obligations and the costs of its operations.
The Company reported a net loss of C$3.08 million on
C$4.13 million of sales in 2013, compared with a net loss of
C$2.68 million on C$3.6 million of sales in 2012.
WALTER ENERGY: S&P Says Distressed Exchange Deal a "Default"
------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on U.S.-based coal producer Walter Energy Inc. to
'SD' from 'CCC+'. Concurrently, S&P lowered its issue-level
rating on the company's 9.875% senior unsecured notes due 2020 to
'D' from 'CCC-'.
S&P's rating action follows the completion of a distressed
exchange transaction. The company exchanged $25 million of its
9.875% senior unsecured notes due 2020 for 2.25 million shares of
its common stock. Pro forma for the exchange, the balance of
these notes will be $440 million.
S&P treats this transaction as tantamount to a default, given the
current distressed financial condition of the company and since
S&P believes the investors are receiving less than the original
promise of the original security. The company also indicated that
it may engage in additional exchanges if favorable opportunities
arise.
S&P will shortly reinstate the 'CCC+' corporate credit rating and
negative outlook, which in S&P's view capture Walter's business
and financial risks. S&P views the small size of the debt
exchange to have a minimal effect on the company's capital
structure, which we consider to be unsustainable absent a material
improvement in metallurgical coal markets.
* BOND PRICING: For Week From August 11 to 15, 2014
---------------------------------------------------
Company Ticker Coupon Bid Price Maturity Date
------- ------ ------ --------- -------------
Alion Science &
Technology Corp ALISCI 10.250 82.100 2/1/2015
Allen Systems
Group Inc ALLSYS 10.500 52.250 11/15/2016
Allen Systems
Group Inc ALLSYS 10.500 53.000 11/15/2016
Buffalo Thunder
Development
Authority BUFLO 9.375 41.500 12/15/2014
Caesars Entertainment
Operating Co Inc CZR 10.000 27.890 12/15/2018
Caesars Entertainment
Operating Co Inc CZR 10.750 44.000 2/1/2016
Caesars Entertainment
Operating Co Inc CZR 6.500 39.000 6/1/2016
Caesars Entertainment
Operating Co Inc CZR 12.750 30.950 4/15/2018
Caesars Entertainment
Operating Co Inc CZR 5.750 48.000 10/1/2017
Caesars Entertainment
Operating Co Inc CZR 10.000 27.725 12/15/2018
Caesars Entertainment
Operating Co Inc CZR 10.750 42.375 2/1/2016
Caesars Entertainment
Operating Co Inc CZR 10.000 30.125 12/15/2018
Caesars Entertainment
Operating Co Inc CZR 10.000 29.250 12/15/2018
Caesars Entertainment
Operating Co Inc CZR 10.750 42.375 2/1/2016
Caesars Entertainment
Operating Co Inc CZR 10.000 29.250 12/15/2018
Caesars Entertainment
Operating Co Inc CZR 10.000 30.125 12/15/2018
Champion
Enterprises Inc CHB 2.750 0.250 11/1/2037
Endeavour
International Corp END 12.000 48.500 6/1/2018
Endeavour
International Corp END 5.500 41.750 7/15/2016
Energy Conversion
Devices Inc ENER 3.000 0.125 6/15/2013
Energy Future
Competitive
Holdings Co LLC TXU 8.175 1.000 1/30/2037
Energy Future
Holdings Corp TXU 5.550 85.000 11/15/2014
Energy Future
Intermediate
Holding Co LLC /
EFIH Finance Inc TXU 10.000 9.500 12/1/2020
FairPoint
Communications
Inc/Old FRP 13.125 1.000 4/2/2018
Federal Home
Loan Banks FHLB 0.978 99.932 8/22/2023
Global Geophysical
Services Inc GGS 10.500 22.000 5/1/2017
Global Geophysical
Services Inc GGS 10.500 21.125 5/1/2017
Illinois Central
Railroad Co CNRCN 5.000 72.635 12/1/2056
James River Coal Co JRCC 7.875 12.500 4/1/2019
James River Coal Co JRCC 4.500 3.000 12/1/2015
James River Coal Co JRCC 10.000 4.375 6/1/2018
James River Coal Co JRCC 3.125 2.250 3/15/2018
James River Coal Co JRCC 10.000 11.000 6/1/2018
LBI Media Inc LBIMED 8.500 90.000 8/1/2017
Las Vegas Monorail Co LASVMC 5.500 10.000 7/15/2019
Lehman Brothers Inc LEH 7.500 13.500 8/1/2026
MF Global
Holdings Ltd MF 6.250 41.129 8/8/2016
MF Global
Holdings Ltd MF 1.875 44.500 2/1/2016
MModal Inc MODL 10.750 10.375 8/15/2020
MModal Inc MODL 10.750 10.125 8/15/2020
Momentive Performance
Materials Inc MOMENT 11.500 27.000 12/1/2016
Motors Liquidation Co MTLQQ 7.200 11.250 1/15/2011
Motors Liquidation Co MTLQQ 6.750 11.250 5/1/2028
Motors Liquidation Co MTLQQ 7.375 11.250 5/23/2048
NII Capital Corp NIHD 10.000 19.125 8/15/2016
NII Capital Corp NIHD 7.625 16.300 4/1/2021
NII Capital Corp NIHD 8.875 15.000 12/15/2019
OnCure Holdings Inc RTSX 11.750 48.875 1/15/2017
OnCure Holdings Inc RTSX 11.750 48.875 5/15/2017
Platinum Energy
Solutions Inc PLATEN 14.250 74.750 3/1/2015
Platinum Energy
Solutions Inc PLATEN 14.250 74.750 3/1/2015
Platinum Energy
Solutions Inc PLATEN 14.250 74.750 3/1/2015
Platinum Energy
Solutions Inc PLATEN 14.250 74.750 3/1/2015
Powerwave
Technologies Inc PWAV 1.875 0.125 11/15/2024
Powerwave
Technologies Inc PWAV 1.875 0.125 11/15/2024
Quicksilver
Resources Inc KWK 7.125 57.150 4/1/2016
Savient
Pharmaceuticals Inc SVNT 4.750 0.125 2/1/2018
TMST Inc THMR 8.000 12.000 5/15/2013
Terrestar
Networks Inc TSTR 6.500 10.000 6/15/2014
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 15.000 37.250 4/1/2021
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.250 14.000 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.250 14.500 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.500 14.250 11/1/2016
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 15.000 38.750 4/1/2021
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.250 13.500 11/1/2015
Texas Competitive
Electric Holdings
Co LLC / TCEH
Finance Inc TXU 10.500 13.875 11/1/2016
Tunica-Biloxi
Gaming Authority PAGON 9.000 60.750 11/15/2015
Western Express Inc WSTEXP 12.500 82.250 4/15/2015
Western Express Inc WSTEXP 12.500 83.625 4/15/2015
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
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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,
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Copyright 2014. All rights reserved. ISSN: 1520-9474.
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