/raid1/www/Hosts/bankrupt/TCR_Public/141009.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, October 9, 2014, Vol. 18, No. 281
Headlines
56 WALKER: Asks for Final Decree Closing Chapter 11 Case
71 CLINTON INC: Voluntary Chapter 11 Case Summary
ABDAC INC: Foreclosure Sale Postponed to Oct. 17
ACTIVECARE INC: To Restate Previously Filed Reports with SEC
AEROVISION HOLDINGS: Wants Plan Exclusivity Through January 2015
ALION SCIENCE: Adopts Fifth Amendment to Savings Plan
AMERICAN INT'L: Geithner Says Gov't Had Right to Avert Bankruptcy
AMERICAN INT'L: Failure Could Have Been Worse Than Lehman
APOLLO MEDICAL: Files Financial Statements of SCHC
APOLLO MEDICAL: CEO Reports 21.1% Equity Stake as of Oct. 3
ARMSTRONG ENERGY: S&P Affirms 'B-' CCR; Outlook Stable
AVALON OIL: Has $785K Net Loss in FY Ended March 31
AUTOMATED BUSINESS: Judge Lipp Denies PNC's Compliance Request
AXESSTEL INC: Michael Loh Holds 38.4% Equity Stake
AXESSTEL INC: Fan Shi Jie Has 8% Ownership as of Sept. 24
AZIZ CONVENIENCE: Seeks Court Approval to Use Cash Collateral
BANK OF THE CAROLINAS: TFO USA Reports 9.7% Equity Stake
BIOLIFE SOLUTIONS: Sees Preliminary Revenue of $1.2MM for Q3 2014
BERRY PLASTICS: Robert Steele Named to Board of Directors
BROOKLYN NAVY: S&P Affirms 'CCC' Rating on $100MM Taxable Bonds
BUCCANEER RESOURCES: Seeks Extension of Exclusive Periods
BURLINGTON STORES: S&P Affirms 'B' CCR on Secondary Offering
CAPITAL ONE: Fitch Affirms 'BB' Preferred Stock Rating
CBL & ASSOCIATES: Fitch Affirms 'BB' Preferred Stock Rating
CLIFFS NATURAL: S&P Lowers CCR to 'BB-'; Outlook Still Negative
COMMUNITYONE BANCORP: Inks 3-Year Contract with CEO
CONN'S INC: Exploring Strategic Alternatives
COUTURE HOTEL: Case Summary & 20 Largest Unsecured Creditors
CROWN HOLDINGS: Moody's Lowers Corporate Family Rating to Ba2
CSN HOUSTON: Total Enterprise Value Drops, Financial Analyst Says
DREIER LLP: Court Found Too Risky for Founder's Testimony
DYNEGY INC: Moody's Assigns B3 Rating on $5.1BB Senior Notes
EAST CLEVELAND, OHIO: City Defaults on Traffic Camera Bill
EDGENET INC: Liberty to Get $5-Mil. From Sale, to Support Plan
ELBIT IMAGING: HCSC Provides Coverage for ExAblate Procedure
ENTEGRA POWER: Reorganization Plans Declared Effective
FIFTH THIRD: Fitch Affirms 'BB+' Preferred Stock Rating
FISKER AUTOMOTIVE: Liquidation Plan Declared Effective
FL 6801 SPIRITS: Seeks Exclusive Periods Extension Thru Feb. 2
FOREST OIL: Amends Annual Report for 2013
FULLCIRCLE REGISTRY: To Issue 15 Million Common Shares
FREEDOM INDUSTRIES: No Probe on Former Officers for Part in Spill
GARLOCK SEALING: Removal Period Extended to March 31
GARLOCK SEALING: Says Committee Miscasts Solicitation Procedures
GARLOCK SEALING: Opposes Including Committee Attack in Disclosures
GENERAL MOTORS: Recalls Nearly 7,600 Chevy Caprices
GRAFIN PROPERTIES: Case Summary & 4 Unsecured Creditors
GREENPORT CROSSINGS: Owner Files for Bankruptcy
GT ADVANCED: 1st-Day Hearing Today; Judge Boroff Assigned to Case
GT ADVANCED: Proposes to Pay $25 Million to Critical Vendors
GT ADVANCED: To Limit Claims, Shares Trading to Protect NOLs
GT ADVANCED: Wants Foreign Creditors Reminded of Automatic Stay
GTA REALTY II: Case Summary & 9 Largest Unsecured Creditors
HAWAII OUTDOOR: Court Dismisses Chapter 11 Case
HCA INC: Fitch Assigns 'BB+' Rating on $1.5BB Proposed Sr. Notes
HCA INC: Moody's Assigns Ba2 Rating on $1.5BB Sr. Secured Notes
HCA INC: S&P Assigns 'BB' Rating on $1.5BB Sr. Secured Notes
HDGM ADVISORY: Owner's Ch 11 Filing Stops $5.8MM Payment to GPIF
HILL TOP: Gets 2-Yr. Extension of Construction Permits for Complex
HUNTINGTON BANCSHARES: Fitch Affirms 'BB' Preferred Stock Rating
INC RESEARCH: Moody's Puts B2 Corp. Family Rating for Upgrade
INT'L MANUFACTURING: Trustee Withdraws Bid to Employ Davis Wright
INSTITUTO MEDICO: Application to Employ Robert L. Roth Withdrawn
INTERNATIONAL TEXTILE: Appoints Current CEO to Board of Directors
J.C. PENNEY: Cuts Sales Forecast
JEFFERIES FINANCE: S&P Assigns 'B' Rating on Proposed $400MM Notes
JOHNSON PLATE: Case Summary & 20 Largest Unsecured Creditors
KANGADIS FOOD: Gets 4th Interim Order to Use Cash Collateral
KEYCORP: Fitch Affirms 'BB' Preferred Stock Rating
KLUM REALTY: Case Summary & 3 Largest Unsecured Creditors
LAKELAND INDUSTRIES: Arenal Capital No Longer a Shareholder
LATEX FOAM: Has Until Dec. 29 to Assume or Reject Property Leases
LEHMAN BROTHERS: Holders of Giants Stadium Claims Seek Payment
LIBERTY INTERACTIVE: Fitch Affirms 'BB' Issuer Default Rating
LJ/HAH HOLDINGS: S&P Assigns 'B' Corp. Credit Rating
LOGART INC: First Meeting of Creditors on Oct. 16 in Toronto
M&T BANK: Fitch Affirms 'BB' Preferred Stock Rating
MAGNACHIP SEMICONDUCTOR: NYSE Listing Extended to April 2015
MACKEYSER HOLDINGS: Deadline to Remove Actions Moved to March 15
MARKWEST ENERGY: Moody's Affirms Ba2 Corporate Family Rating
MASTERCRAFT SPECIALTIES: Case Summary & 20 Top Unsec. Creditors
MOJO ORGANICS: Incurs $1.29-Mil. Net Loss for Third Quarter
MUSCLEPHARM CORP: Exercises Purchase Option Under CoCrystal APA
MONROE HOSPITAL: Jim Summersett May Step Down as CEO in November
MUD KING: Counsel Hoover Slovacek Notifies Court of Address Change
MUD KING: Hearing on Approval of Plan Outline Reset for Oct. 23
NAARTJIE CUSTOM: Meeting of Creditors Set for Oct. 16
NATURAL RESOURCE: Moody's Assigns B3 Rating on New $125MM Notes
NEWCASTLE SHIPYARDS: Case Summary & 20 Top Unsecured Creditors
NII HOLDINGS: Affiliates' Case Summary & Top Unsecured Creditors
OKLAHOMA UNITED METHODIST: Proposes Disbursement Guidelines
OKLAHOMA UNITED METHODIST: Taps Secrest Hill as Special Counsel
ORECK CORP: Disclosure Statement Approved; Plan Hearing on Nov. 4
PITTSBURGH CORNING: Insurers Lose Plan Appeal in District Court
POSTMEDIA NETWORK: S&P Affirms 'B-' CCR & Rates C$140MM Notes 'B+'
PRIME TIME: Use of JPMorgan Cash Collateral Extended Until Dec. 26
PRO MACH: S&P Assigns 'B-' CCR & Rates $465MM 1st Lien Debt 'B-'
PROSPECT SQUARE: Has Until Oct. 31 to Use Lender's Cash Collateral
PULSE ELECTRONICS: Files Form 25 With SEC
REGIONS FINANCIAL: Fitch Raises Sub. Debt Rating From 'BB+'
RENA LANGE: German Fashion House Launches U.S. Bankruptcy
RENA LANGE (USA): Case Summary & 20 Largest Unsecured Creditors
RESPONSE BIOMEDICAL: Obtains Forbearance Until Oct. 31
REVEL AC: Judge Approves $110 Million Sale to Brookfield
RIVER CITY RENAISSANCE: U.S. Bank Opposes Bidding Procedures
ROCACEIA ENERGY: Sec. 341(a) Meeting of Creditors Set for Nov. 18
SAUGATUCK WESTPORT: Case Summary & 7 Unsecured Creditors
SCHLECHT CONSTRUCTION: Case Summary & 14 Top Unsecured Creditors
SHELBOURNE NORTH: Judge Approves Bankruptcy-Exit Plan
SEQUENOM INC: Buys Patents From Isis for $12.4 Million
SHOTWELL LANDFILL: Court Denies Bid to Scrap Stallings Ballots
SKYWAY CONVENIENCE: Case Summary & Unsecured Creditor
SL GREEN: Fitch Raises Preferred Stock Rating to 'BB'
SLC INN LLC: Case Summary & 20 Largest Unsecured Creditors
SMOOT GROUP: Voluntary Chapter 11 Case Summary
SOURCE HOME: Sale Would Leave Little for Unsecured Debts
SPECIALTY HOSPITAL: Has Until Dec. 17 to Assume or Reject Leases
SUNTRUST BANKS: Fitch Affirms 'BB-' Preferred Stock Rating
THOMAS M. COOLEY: Plans to Shutter Ann Arbor Campus
TRUMP ENTERTAINMENT: Taj Mahal Workers Protest Cuts to Benefits
TODD GRINDING: Case Summary & 20 Largest Unsecured Creditors
UNIVERSAL HEALTH CARE: Gets Approval of Deal With FDFS, BankUnited
VERIS GOLD: $12-Mil. DIP Financing From Wbox Approved
WEST TEXAS: Court Suspends Ruling on Bid to Appoint Trustee
ZIONS BANCORP: Fitch Affirms 'BB+' Subordinated Debt Rating
* ABI Consultant Predicts Continued Decline in Filings
* Change in Derivatives Proposed to Curb Damage from Bank Failure
* William Holder Joins Cornerstone Research as Senior Advisor
* Recent Small-Dollar & Individual Chapter 11 Filings
*********
56 WALKER: Asks for Final Decree Closing Chapter 11 Case
--------------------------------------------------------
56 Walker LLC asks the Bankruptcy Court to enter a final decree
closing its Chapter 11 case.
According to the Debtor, by order dated Jan. 29, 2014, the Court
confirmed the Debtor's Second Amended Plan of Reorganization.
On Aug. 11, the Court entered an order fixing and allowing secured
claims and authorizing distributions under Debtor's Third Amended
Liquidating Chapter 11 Plan which authorized distributions to
creditors, subject to a subsequent Court approval of the Debtor's
settlement with Project 56 Walker, LLC regarding the disputed
$1,700,000 sale proceeds reserve.
On Aug. 27, the Court approved the settlement with Project 56
Walker, LLC, thereby authorizing the disbursing agent to
effectuate the Plan distributions in accordance with the Plan
distribution order.
In this relation, the Debtor submitted that substantial
consummation of the Plan has now occurred. On or about Aug. 28,
DDWWW as disbursing agent for the Debtor, pursuant to the Plan,
made distributions to allowed holders of Administrative, Class 1,
2, and 3 Claims in accordance with the terms of the Plan
distribution order. On Sept. 12, the disbursing agent made
distributions to Class 4 Unsecured Creditors in accordance with
the Plan distribution order.
The Debtor is represented by:
Jonathan S. Pasternak, Esq.
Erica R. Feynman, Esq.
DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR, LLP
One North Lexington Avenue
White Plains, NY 10601
Tel: (914) 681-0200
About 56 Walker LLC
56 Walker LLC, the owner of a six-story building at 56 Walker
Street in the Tribeca section of Manhattan, returned to Chapter 11
(Bankr. S.D.N.Y. Case No. 13-11571) on May 13, 2013, this time
aiming for a $23 million sale to pay off about $14 million in
mortgages and $2 million in unsecured debt. The Debtor scheduled
assets of $23,000,000 and liabilities of $15,996,104.
Judge Shelley Chapman was initially assigned to the case but the
case was transferred to Judge Allan L. Gropper. Erica Feynman
Aisner, Esq., at Delbello Donnellan Weingarten Wise & Wiederkehr,
LLP, serves as the Debtor's counsel.
The previous Chapter 11 case began in September 2011 and was
dismissed in August 2012 when the bankruptcy judge refused to
approve a settlement.
On Jan. 29, 2014, Judge Allan L. Gropper of the U.S. Bankruptcy
Court for the Southern District of New York confirmed the Debtor's
Third Amended Liquidating Chapter 11 Plan, which contemplates the
sale of the Debtor's building at 56 Walker Street in the Tribeca
section of Manhattan for $18 million.
No trustee, examiner or creditors committee has been heretofore
appointed in this proceeding.
71 CLINTON INC: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: 71 Clinton, Inc.
71 Clinton Street
New York, NY 10002
Case No.: 14-12830
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Debtor's Counsel: David Carlebach, Esq.
LAW OFFICES OF DAVID CARLEBACH, ESQ.
55 Broadway, Suite 1902
New York, NY 10006
Tel: (212) 785-3041
Fax: (646) 355-1916
Email: david@carlebachlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Steven Rosenfeld, president.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
ABDAC INC: Foreclosure Sale Postponed to Oct. 17
------------------------------------------------
The foreclosure sale of ABDAC, Inc.'s property originally
scheduled for Sept. 19, 2014 at 10:00 a.m. is postponed to
Oct. 17, 2014 at 10:00 a.m.
Pursuant to a judgment of foreclosure and sale dated Jan. 6, 2014,
the Referee will sell at public auction in Courtroom #25 at the
Queens County General Courthouse, 88-11 Sutphin Blvd., Jamaica,
NY, the premises known as Block 12178, Lot 3.
The Referee may be reached at:
William F. Mackey, Jr., Esq.
LEVY & LEVY
12 Tulip Dr.
Great Neck, NY
The judgment of foreclosure and sale was entered in the case NYCTL
1998-2 TRUST AND THE BANK OF NEW YORK MELLON, AS COLLATERAL AGENT
AND CUSTODIAN FOR NYCTL 1998-2 TRUST, Pltf. vs. ABDAC, INC., et
al, Defts. Index #14343/2013, SUPREME COURT: QUEENS COUNTY.
ACTIVECARE INC: To Restate Previously Filed Reports with SEC
------------------------------------------------------------
ActiveCare, Inc., disclosed with the U.S. Securities and Exchange
Commission that it will amend its 2013 10-K and its 2014 10-Qs and
revise, where necessary, financial and related information in
those reports through filings with the SEC on or about Oct. 27,
2014.
The Audit Committee of the Board of Directors of ActiveCare, Inc.,
upon the recommendation of ActiveCare management and after
discussions with the Company's independent registered public
accounting firm, concluded that the Company's consolidated
financial statements for the fiscal year ended Sept. 30, 2013,
included in its annual report on Form 10-K, as well as the
Company's condensed consolidated financial statements for the
fiscal quarters ended Dec. 31, 2013, March 31, 2014, and 2013, and
June 30, 2014, and 2013 included in the Company's quarterly
reports on Form 10-Q for the periods then ended filed with the
Securities and Exchange Commission, included accounting errors,
and should no longer be relied upon.
It was determined that the Company's revenue recognition
accounting for chronic illness supplies shipped to distributors
should be corrected. Specifically, it was determined that it is
better practice to defer revenue recognition until the products
are shipped to the end users as opposed to the distributors, even
though the distributors had taken title to the products and there
were no significant rights of return. Due to the timing of the
revenue recognition, management estimates that 2013 revenue
reported in the 2013 10-K was overstated by $5.5 million and 2014
revenue reported in the 2014 10-Qs was understated by $1.2 million
for the nine months ended June 30, 2014. Actual cash flows
related to these transactions are not impacted. The consolidated
statements of income included in the Amended Reports will be
restated to properly reflect revenue, cost of revenue, gross
profit (deficit) and net loss and revisions will be made to the
other financial statements and the notes thereto in the Amended
Reports. The Company said the Amended Reports may also correct
certain other immaterial errors in connection with the
restatement.
About ActiveCare
South West Valley City, Utah-based ActiveCare, Inc., is organized
into three business segments based primarily on the nature of the
Company's products. The Stains and Reagents segment is engaged in
the business of manufacturing and marketing medical diagnostic
stains, solutions and related equipment to hospitals and medical
testing labs. The CareServices segment is engaged in the business
of developing, distributing and marketing mobile health monitoring
and concierge services to distributors and customers. The Chronic
Illness Monitoring segment is primarily engaged in the monitoring
of diabetic patients on a real time basis.
The Company's business plan is to develop and market products for
monitoring the health of and providing assistance to mobile and
homebound seniors and the chronically ill, including those who may
require a personal assistant to check on them during the day to
ensure their safety and well being.
ActiveCare incurred a net loss attributable to common stockholders
of $25.95 million the year ended Sept. 30, 2013, as compared with
a net loss attributable to common stockholders of $12.42 million
for the year ended Sept. 30, 2012. As of June 30, 2014, the
Company had $9.49 million in total assets, $10.96 million in total
liabilities and a $1.46 million total stockholders' deficit.
Tanner LLC, in Salt Lake City, Utah, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Sept. 30, 2013. The independent auditors noted that
the Company has incurred recurring losses, has negative cash flows
from operating activities, has negative working capital, and has
negative total equity. These conditions, among others, raise
substantial doubt about its ability to continue as a going
concern.
AEROVISION HOLDINGS: Wants Plan Exclusivity Through January 2015
----------------------------------------------------------------
Aerovision Holdings 1 requests before the Court to extend the
Debtor's exclusivity period to file a plan of reorganization,
through and including January 26, 2015, and its exclusive period
to solicit acceptances of its plan to March 27, 2015.
The Debtor has recently settled and consummated a substantial
controversy with creditor i3 Aircraft Holdings. The settlement
took many months to conclude where the required approval of
Federal Aviation Administration is necessary. The motion to
approve the settlement was submitted on September 22, 2014.
However, the Debtor is still in negotiations with another group of
contested Creditors, namely the Tiger Parties. The result of the
negotiations is of paramount importance to the direction of the
disclosure statement and plan in this case. Pending the result of
the negotiation, the Debtor is unable to adequately prepare a
plan.
Thus, the Debtor is still currently addressing the issues and
needs additional time further to negotiate.
Aerovision Holdings 1 is represented by:
Craig I. Kelley, Esq.
KELLEY & FULTON, P.L.
1665 Palm Beach Lakes Blvd.
The Forum - Suite 1000
West Palm Beach, FL 33401
Tel: (561) 491-1200
Fax: (561) 684-3773
About Aerovision Holdings I
Aerovision Holdings 1 Corp. filed a Chapter 11 petition (Bankr.
S.D. Fla. Case No. 13-24624) on June 21, 2013, in its home-town in
West Palm Beach, Florida. Mark Daniels signed the petition as
president. The Debtor estimated assets in excess of $10 million
and liabilities of $1 million to $10 million. Craig I. Kelley,
Esq., at Kelley & Fulton, PL, serves as the Debtor's counsel.
ALION SCIENCE: Adopts Fifth Amendment to Savings Plan
-----------------------------------------------------
Alion Science and Technology Corporation amended the Alion Science
and Technology Corporation Employee, Savings and Investment Plan
by adopting the Fifth Amendment to the Plan dated as of Sept. 30,
2014, according to a regulatory filing with the U.S. Securities
and Exchange Commission.
Alion Science maintains the Plan for the benefit of its employees
and employees of other adopting employers, and was last amended
and restated as of Oct. 1, 2011.
The Board of Directors of the Company has delegated authority to
amend the Plan to the undersigned officer, provided he determines
that the amendment would not materially increase costs of the Plan
to the Company or any Adopting Employer.
The Company had amended the Plan to change from semi-annual to
annual valuations for purposes of allocations of employer
contributions, distributions and other purposes of the Plan, to
the extent permitted by Section 411(d)(6) of the Internal Revenue
Code and related regulations.
Pursuant to the powers of amendment reserved under Section 15.1 of
the Plan, the Plan was amended by the Company as follows:
1. The first sentence of Section 2.5, the definition of
"Allocation Date," was amended to read:
"September 30 of each Plan Year."
2. The second sentence subsection (a) of Section 2.14, the
definition of "Current Market Value," was amended to
read:
"Current Market Value will generally be based upon an
appraisal performed as of a Valuation Date; provided,
however, that the ESOP Committee may order interim
valuations, which will be binding as of the relevant date
specified therein."
3. The second sentence of Section 2.68, the definition of
"Valuation Date," was amended to read:
"For Common Stock that is not readily tradeable on an
established securities market, the term "Valuation Date"
means the last day of the Plan Year (September 30) on which
Common Stock is valued by an independent appraiser which
meets the requirements of Section 170 of the Code and the
regulations thereunder, and such other interim Valuation
Dates as declared by the ESOP Committee."
About Alion Science
Alion Science and Technology Corporation, based in McLean,
Virginia, is an employee-owned company that provides scientific
research, development, and engineering services related to
national defense, homeland security, and energy and environmental
analysis. Particular areas of expertise include communications,
wireless technology, netcentric warfare, modeling and simulation,
chemical and biological warfare, program management.
Alion Science has been reporting losses for four consecutive years
from Sept. 30, 2010, to Sept. 30, 2013. In 2013, Alion Science
incurred a net loss of $36.59 million.
The Company's balance sheet at June 30, 2014, showed $606.59
million in total assets, $825.21 million in total liabilities,
$61.03 million in redeemable common stock, $20.78 million in
common stock warrants, $130,000 in accumulated other comprehensive
loss and a $300.56 million accumulated deficit.
Deloitte & Touche LLP, in McLean, Virginia, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Sept. 30, 2013. The independent auditors noted
that the Company does not expect to be able to repay its existing
debt at their scheduled maturities. The Company's financing
needs, its recurring net losses, and its excess of liabilities
over assets raise substantial doubt about its ability to continue
as a going concern, the auditors stated.
* * *
As reported by the TCR on Aug. 26, 2014, Standard & Poor's Ratings
Services raised its corporate credit rating on McLean, Va.-based
Alion Science and Technology Corp. to 'B-' from 'SD'.
"The rating action follows Alion's completed exchange offer and a
simultaneous refinancing transaction, whereby the company
refinanced nearly its entire capital structure, except for about
$24 million of 10.25% senior unsecured notes, which will mature in
February 2015," said Standard & Poor's credit analyst Jenny Chang.
In the May 23, 2014, edition of the TCR, Moody's Investors Service
affirmed, among other things, Alion Science & Technology
Corporation's ratings including the Caa2 Corporate Family Rating.
The affirmation of Alion's Caa2 corporate family rating reflects
the company's continued high leverage and weak interest coverage
metrics that are not anticipated to improve meaningfully in the
near-term, Moody's said.
AMERICAN INT'L: Geithner Says Gov't Had Right to Avert Bankruptcy
-----------------------------------------------------------------
Aaron M. Kessler, writing for The New York Times' DealBook,
reported that former Treasury Secretary Timothy F. Geithner
testified that the U.S. government had every legal authority to
act to save American International Group after the financial
institution was unable to find private investors to help it avert
bankruptcy in September 2008 and after a pair of Wall Street banks
rejected a proposal from the Fed that they make a loan to AIG.
According to the Journal, Mr. Geithner, who was president of the
New York Federal Reserve Bank at the time, said the legal
requirements for allowing the central bank to step in were more
than satisfied, given the situation.
Mr. Geithner's testimony is part of the trial in the lawsuit filed
by Maurice R. "Hank" Greenberg, who built AIG into a global
financial-services powerhouse during nearly 40 years at its helm,
challenging the historic 2008 government bailout of the company.
Mr. Greenberg has asked a federal judge in Washington to rule
that the government coerced AIG's board into harsh terms,
allegedly cheating shareholders including Mr. Greenberg in the
process.
Damian Paletta and Leslie Scism, writing for Daily Bankruptcy
Review, reported that at the ongoing trial, Mr. Geithner sparred
with trial lawyer David Boies over the government's handling of
AIG's bailout, with the two testily debating to what degree the
company was responsible for its fate.
The case is Starr International Co. v. U.S., 11-cv-00779, U.S.
Court of Federal Claims (Washington).
About AIG
With corporate headquarters in New York, American International
Group, Inc., is an international insurance company, serving
customers in more than 130 countries. AIG companies serve
commercial, institutional and individual customers through
property-casualty networks of any insurer. In addition, AIG
companies are providers of life insurance and retirement services.
At the height of the 2008 financial crisis, AIG experienced a
liquidity crunch when its credit ratings were downgraded below
"AA" levels by Standard & Poor's, Moody's Investors Service and
Fitch Ratings. AIG almost collapsed under the weight of bad bets
it made insuring mortgage-backed securities. The Company,
however, was bailed out by the Federal Reserve, but even after an
initial infusion of $85 billion, losses continued to grow. The
later rescue packages brought the total to $182 billion, making it
the biggest federal bailout in U.S. history. AIG sold off a
number of its businesses and other assets to pay down loans
received from the U.S. government.
AMERICAN INT'L: Failure Could Have Been Worse Than Lehman
---------------------------------------------------------
Damian Paletta and Leslie Scism, writing for Daily Bankruptcy
Review, reported that Timothy Geithner, president of the Federal
Reserve Bank of New York during the financial crisis, testified in
federal court that he thought the failure of American
International Group Inc. would have had catastrophic consequences
worse than Lehman Brothers and conceded that he once said the
government's rescue "wiped out" the company's shareholders.
According to the report, Mr. Geithner parried with trial lawyer
David Boies for more than three hours on Oct. 7 in the U.S. Court
of Federal Claims as part of a lawsuit into whether the
government's 2008 rescue of AIG cheated shareholders of $40
billion.
As previously reported by The Troubled Company Reporter, citing
The Wall Street Journal, Maurice R. "Hank" Greenberg, who built
AIG into a global financial-services powerhouse during nearly 40
years at its helm, is challenging the historic 2008 government
bailout of the company and has asked a federal judge to rule that
the government coerced AIG's board into harsh terms, allegedly
cheating shareholders including Mr. Greenberg in the process.
About AIG
With corporate headquarters in New York, American International
Group, Inc., is an international insurance company, serving
customers in more than 130 countries. AIG companies serve
commercial, institutional and individual customers through
property-casualty networks of any insurer. In addition, AIG
companies are providers of life insurance and retirement services.
At the height of the 2008 financial crisis, AIG experienced a
liquidity crunch when its credit ratings were downgraded below
"AA" levels by Standard & Poor's, Moody's Investors Service and
Fitch Ratings. AIG almost collapsed under the weight of bad bets
it made insuring mortgage-backed securities. The Company,
however, was bailed out by the Federal Reserve, but even after an
initial infusion of $85 billion, losses continued to grow. The
later rescue packages brought the total to $182 billion, making it
the biggest federal bailout in U.S. history. AIG sold off a
number of its businesses and other assets to pay down loans
received from the U.S. government.
APOLLO MEDICAL: Files Financial Statements of SCHC
--------------------------------------------------
Apollo Medical Holdings, Inc., filed a supplement with the
Securities and Exchange Commission to its current report dated
Aug. 13, 2014, to include the consolidated financial statements
and pro forma financial information. Those financial statements
and pro forma financial information are required as a result of
Apollo's July 22, 2014, acquisition of Southern California Heart
Centers, A Medical Corporation, a medical group that provides
professional medical services in Los Angeles County, California
pursuant to the terms of that certain Stock Purchase Agreement
dated July 21, 2014, by and among SCHC, the shareholders of SCHC
and a Company affiliate, SCHC Acquisition, A Medical Corporation,
solely owned by Dr. Warren Hosseinion, Apollo's chief executive
officer.
The acquisition was funded by an intercompany loan from Apollo
Medical Management, Inc., a wholly-owned subsidiary of the Company
contemporaneously entered into a management services agreement
with the Affiliate. As a result of the Affiliate's merger with
and into SCHC on the Closing Date, SCHC became the counterparty to
this management services agreement and is bound by its terms. AMM
will manage all non-medical services for SCHC and will have
exclusive authority over all non-medical decision making related
to the ongoing business operations of SCHC. Accordingly, AMM is
the primary beneficiary of SCHC, and its financial statements of
SCHC will be consolidated as a variable interest entity with those
of the Company from Closing Date. Accordingly, the Company was
the accounting acquirer for purposes of this transaction.
SCHC reported net income of $45,669 on $5.89 million of net
revenues for the year ended Dec. 31, 2013, compared to a net loss
of $319,977 on $5.68 million of net revenues for the year ended
Dec. 31, 2012.
SCHC's balance sheet at Dec. 31, 2013, showed $2.02 million in
total assets, $1.29 million in total liabilities and $728,436 in
total stockholders' equity.
A copy of the SCHC's financial statements is available at:
http://is.gd/zj5L6M
About Apollo Medical
Glendale, Calif.-based Apollo Medical Holdings, Inc., provides
hospitalist services in the Greater Los Angeles, California area.
Hospitalist medicine is organized around the admission and care of
patients in an inpatient facility such as a hospital or skilled
nursing facility and is focused on providing, managing and
coordinating the care of hospitalized patients.
Apollo Medical reported a net loss of $4.55 million for the year
ended Jan. 31, 2014, following a net loss of $8.90 million for the
year ended Jan. 31, 2013.
As of June 30, 2014, the Company had $8.80 million in total
assets, $11.79 million in total liabilities and a $2.99 million
total stockholders' deficit.
APOLLO MEDICAL: CEO Reports 21.1% Equity Stake as of Oct. 3
-----------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Warren Hosseinion, M.D., disclosed that as of
Oct. 3, 2014, he beneficially owned 10,445,609 shares of common
stock of Apollo Medical Holdings, Inc., representing 21.1 percent
of the shares outstanding. Dr. Hosseinion is chief executive
officer and director of the Company. A copy of the regulatory
filing is available for free at http://is.gd/9IS7sR
About Apollo Medical
Glendale, Calif.-based Apollo Medical Holdings, Inc., provides
hospitalist services in the Greater Los Angeles, California area.
Hospitalist medicine is organized around the admission and care of
patients in an inpatient facility such as a hospital or skilled
nursing facility and is focused on providing, managing and
coordinating the care of hospitalized patients.
Apollo Medical reported a net loss of $4.55 million for the year
ended Jan. 31, 2014, following a net loss of $8.90 million for the
year ended Jan. 31, 2013.
As of June 30, 2014, the Company had $8.80 million in total
assets, $11.79 million in total liabilities and a $2.99 million
total stockholders' deficit.
ARMSTRONG ENERGY: S&P Affirms 'B-' CCR; Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B-'
corporate credit rating on St. Louis-based Armstrong Energy Inc.
The outlook is stable. At the same time, S&P revised its recovery
rating on the company's senior secured notes to '3' from '4',
indicating S&P's expectation of meaningful (50%-70%) recovery in
the event of a payment default. S&P affirmed its 'B-' issue
rating on the senior secured notes.
The revision of the recovery rating is due to a revised assumption
for revolving credit facility borrowings. However, S&P's view of
the company's corporate credit rating remains consistent.
"The stable rating outlook on Armstrong Energy Inc. reflects our
expectation that credit measures will remain consistent with a
highly leveraged financial risk profile," said Standard & Poor's
credit analyst Chiza Vitta. "Specifically, we expect the company
will maintain adequate liquidity while maintaining or slightly
improving credit measures over the next 12 months."
S&P could lower the rating if Armstrong Energy's liquidity
deteriorates such that S&P views it to be "less than adequate."
This could occur if Armstrong Energy loses a major customer or if
the company has a prolonged disruption in its operations.
Although S&P considers an upgrade over the next 12 months
unlikely, it could raise the rating if financial measures improved
such that leverage fell and was sustained below 5x in accordance
with S&P's methodology for companies owned by financial sponsors.
Improved credit measures could come about as EBITDA grows along
with the business, particularly if the company is able to reduce
some of its long-term obligations in the process.
AVALON OIL: Has $785K Net Loss in FY Ended March 31
---------------------------------------------------
Avalon Oil & Gas, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K for the fiscal
year ended March 31, 2014.
Bernstein & Pinchuk LLP expressed substantial doubt about the
Company's ability to continue as a going concern, citing that the
Company has incurred significant losses from operations since its
inception and has a working capital deficiency.
The Company reported a net loss of $785,978 on $156,322 of oil and
gas sales for the fiscal year ended March 31, 2014, compared with
a net loss of $749,314 on $163,574 of oil and gas sales in the
prior year.
The Company's balance sheet at March 31, 2014, showed
$2.73 million in total assets, $1.52 million in total liabilities,
and stockholders' equity of $1.21 million.
A copy of the Form 10-K is available at:
http://is.gd/XgNOCm
Minneapolis, Minn.-based Avalon Oil & Gas, Inc. OTC BB: AOGN)
acquires oil & gas producing properties that have proven reserves
and established in-field drilling locations with a combination of
cash, debt, and equity.
AUTOMATED BUSINESS: Judge Lipp Denies PNC's Compliance Request
--------------------------------------------------------------
The Hon. Wendelin I. Lipp of the U.S. Bankruptcy Court for the
District of Maryland has denied as moot the motion of PNC Bank,
National Association, for entry of an order confirming compliance
with Federal Rule of Bankruptcy Procedure 4001(d) in connection
with the final order approving Automated Business Power Inc. et
al.'s use of cash collateral and providing adequate protection.
PNC Bank is the administrative agent and lender.
Judge Lipp also denied Eyal Halevy's Motion to Reconsider the
final order approving the Debtor's use of cash collateral and
providing adequate protection.
About Automated Business Power
Military supplier Automated Business Power, Inc., and Automated
Business Power Holding Co. filed their Chapter 11 petitions
(Bankr. D. Md. Case Nos. 13-27123 and 13-27125) on Oct. 8, 2013.
Automated Business Power has been engaged in the design and
production of advanced filed deployable uninterruptible power
supplies, AC-to-DC power supplier, DC-to-DC converters,
uninterruptible power systems, Power/Voice/Data cases, speakers,
speaker/voice systems and ancillary equipment tactical
transceivers, power amplifiers, SATCOM, and other communications
equipment.
The petitions were signed by Daniel Akman as president. The
Debtors estimated assets of at least $50 million and liabilities
of at least $10 million.
The Debtor is represented by Nelson C. Cohen, Esq., at Zuckerman
Spaeder LLP, in Washington, D.C. The Debtor tapped Dickinson
Wright and Michael R. Holzman as Special ESOP Plan Counsel.
PNC Bank is represented by James M. Smith, Esq., and Lisa Bittle
Tancredi, Esq., at Gebhardt & Smith LLP.
AXESSTEL INC: Michael Loh Holds 38.4% Equity Stake
--------------------------------------------------
In a Schedule 13D filed with the U.S. Securities and Exchange
Commission, Dato' Michael Loh Soon Gnee disclosed that as of
Sept. 24, 2014, he beneficially owned 22,895,168 shares of common
stock of Axesstel Inc. representing 38.4 percent of the shares
outstanding.
Dato' Loh is currently the executive chairman and chief executive
officer of:
* ASTI Holdings Limited (SGX:AITH.SI), a publicly-traded company
engaged in the business of researching, designing, developing
and manufacturing semiconductor equipment;
* Advanced Systems Automation Limited (SGX:ADSA.SI), a publicly-
traded provider of automated semiconductor backend process
equipment and precision engineering manufacturing services;
* Dragon Group International (SGX:DRGN.SI), a publicly-traded
investment holding company; chief executive officer of Eoplex,
Inc., a Silicon Valley HVPFTM Print-Forming process technology
company; and
* Dragon Technology Distribution Pte. Ltd., a pan-Asia company
with operating subsidiaries in the electronic components
distribution business.
On Sept. 24, 2014, Axesstel entered into Stock Purchase Agreement
with Dato' Loh, Dragon Group International Ltd., a company formed
under the laws of Singapore, and Mr. Shi Jie Fan pursuant to which
Axesstel purchased all of the outstanding ordinary shares of
Flexcomm Limited, a company formed under the laws of Hong Kong, in
exchange for 25,000,000 shares of Axesstel common stock. Under
the Stock Purchase Agreement, Dato' Loh received 16,895,168 shares
of common stock in exchange for 40,131,150 ordinary shares of
Flexcomm Limited.
On Sept. 24, 2014 Axesstel entered into a Subscription Agreement
with Dato' Loh, pursuant to which Axesstel sold 6,000,000 shares
of Axesstel common stock to Dato' Loh for an aggregate purchase
price of $1.2 million . Dato' Loh acquired the common stock under
the Subscription Agreement using personal funds.
A copy of the regulatory filing is available for free at:
http://is.gd/iGQRL5
About Axesstel
Axesstel Inc., based in San Diego, Calif., develops fixed wireless
voice and broadband access solutions for the worldwide
telecommunications market. The Company's product portfolio
includes fixed wireless phones, wire-line replacement terminals,
and 3G and 4G broadband gateway devices used to access voice
calling and high-speed data services.
Axesstel disclosed net income of $4.31 million for the year ended
Dec. 31, 2012, as compared with net income of $1.09 million in
2011. The Company's balance sheet at Sept. 30, 2013, showed
$9.23 million in total assets, $23.33 million in total liabilities
and a $14.10 million total stockholders' deficit.
AXESSTEL INC: Fan Shi Jie Has 8% Ownership as of Sept. 24
---------------------------------------------------------
Fan Shi Jie disclosed in a regulatory filing with the U.S.
Securities and Exchange Commission that as of Sept. 24, 2014, he
beneficially owned 4,785,056 shares of common stock of Axesstel,
Inc., representing 8 percent of the shares outstanding.
Mr. Fan is currently the general manager of Flexcomm Technologies
(Shenzhen) Limited, a company formed under the laws of the
Peoples' Republic of China, and a wholly-owned subsidiary of
Flexcomm Limited a company formed under the laws of Hong Kong.
A copy of the regulatory filing is available for free at:
http://is.gd/vKKXoN
About Axesstel
Axesstel Inc., based in San Diego, Calif., develops fixed wireless
voice and broadband access solutions for the worldwide
telecommunications market. The Company's product portfolio
includes fixed wireless phones, wire-line replacement terminals,
and 3G and 4G broadband gateway devices used to access voice
calling and high-speed data services.
Axesstel disclosed net income of $4.31 million for the year ended
Dec. 31, 2012, as compared with net income of $1.09 million in
2011. The Company's balance sheet at Sept. 30, 2013,
showed $9.23 million in total assets, $23.33 million in total
liabilities and a $14.10 million total stockholders' deficit.
AZIZ CONVENIENCE: Seeks Court Approval to Use Cash Collateral
-------------------------------------------------------------
Aziz Convenience Stores, LLC, asks the U.S. Bankruptcy Court for
the Southern District of Texas to approve the stipulation and
fourth interim order authorizing the use of cash collateral and
providing adequate protection to PlainsCapital Bank pursuant to a
proposed budget.
A full-text copy of the cash collateral budget is available for
free at http://is.gd/aWW8Fj
The parties agree that PlainsCapital has first-priority liens in
the Debtor's assets to secure payment of about $27.5 million in
debt and obligations.
As adequate protection for the use of cash collateral,
PlainsCapital is granted valid and automatically perfected first-
priority replacement liens and security interests in all of Aziz's
assets.
Aziz will keep insurance coverage on all collateral securing debts
owed to PlainsCapital.
If the adequate protection to PlainsCapital is insufficient,
PlainsCapital will be entitled to administrative expense with
priority over all administrative expenses and all other
protections allowable under Section 507(b) of the Bankruptcy Code
in an amount equal to the cash collateral used by the Debtor.
The interim hearing on the matter will be held Nov. 5, 2014, at
9:00 a.m. (CDT).
About Aziz Convenience
Aziz Convenience Stores, L.L.C., owner of convenience stores with
gas pumps in Texas, filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Tex. Case No. 14-70427) in its hometown in McAllen, Texas, on
Aug. 4, 2014, without stating a reason.
The Debtor owns properties in Mission, San Juan, Pharr, McAllen,
Sullivan City, Edinburg, La Joya, Donna, Alamo, Alton, Edinburg,
all in Texas. It appears that none of the Debtor's convenience
stores are on leased property as the schedule of unexpired leases
only shows the contract with Valero LP.
The Debtor is represented by William A Csabi, Esq., from
Harlingen, Texas. For his legal services, Mr. Csabi agreed to
accept $65,000 from the Debtor, with the $12,500 already paid
prepetition.
BANK OF THE CAROLINAS: TFO USA Reports 9.7% Equity Stake
--------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, TFO USA Limited disclosed that as of July 16, 2014,
it beneficially owned 44,953,688 shares of common stock of
Bank of the Carolinas Corporation representing 9.73 percent of the
shares outstanding. A copy of the regulatory filing is available
for free at http://is.gd/foB0Yg
About Bank of the Carolinas
Mocksville, North Carolina-based Bank of the Carolinas Corporation
was formed in 2006 to serve as a holding company for Bank of the
Carolinas. The Bank's primary market area is in the Piedmont
region of North Carolina.
Turlington and Company, LLP, in Lexington, North Carolina, 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 credit
losses that have eroded certain regulatory capital ratios. As of
Dec. 31, 2013, the Company is considered undercapitalized based on
their regulatory capital level. This raises substantial doubt
about the Company's ability to continue as a going concern.
The Company reported a net loss available to common stockholders
of $2.33 million in 2013, a net loss available to common
stockholders of $5.53 million in 2012 and a net loss available to
common stockholders of $29.18 million in 2011.
As of June 30, 2014, the Company had $427.82 million in total
assets, $423.04 million in total liabilities and $4.77 million in
total stockholders' equity.
BIOLIFE SOLUTIONS: Sees Preliminary Revenue of $1.2MM for Q3 2014
-----------------------------------------------------------------
BioLife Solutions, Inc., announced preliminary revenue of $1.2
million for the third quarter of 2014. Revenue from sales of
BioLife's core proprietary biopreservation media products was $1.2
million, representing 15% sequential growth over the second
quarter of 2014, and an increase of 24% over the same quarter in
2013.
For the nine months ending Sept. 30, 2014, preliminary core
product revenue was $3.5 million, an increase of 27% over the same
period in 2013. This growth is in line with management's goal of
25% - 35% annual core product revenue growth.
Mike Rice, BioLife's president and CEO, commented on the third
quarter by stating, "We experienced strong demand for
HypoThermosol and CryoStor in the quarter from our core markets as
well as our worldwide distribution partners. While we continue to
expect fluctuations in ordering patterns as our customers progress
through their clinical trials processes, we remain optimistic
about core product revenue growth over last year."
Rice continued, "We are also looking forward to the launch of our
beta customer program with biologistex CCM, our new joint venture
with SAVSU Technologies. We have a significant growth opportunity
in marketing the smart EVO controlled temperature containers for
biologics to our current customers and broader strategic markets.
We are also making good progress with manufacturing startup
operations in support of the multi-year contract manufacturing
agreement we executed with Somahlution during the third quarter."
A 2013 visiongain Translational Regenerative Medicine market
research report forecasts that the regenerative medicine market
comprised of cell and gene therapies and tissue-engineered
products will grow to more than $23 billion by 2024. BioLife
estimates that the Company's biopreservation media products are
now incorporated into the collection, storage, shipping, freezing,
and/or patient administration processes of at least 130 customer
clinical trials or novel cell-based regenerative medicine products
and therapies. Additional management estimates related to use of
BioLife products in customer clinical trials include:
* More than a dozen phase III trials
* More than 60 phase II trials
* Most large patient population disease states are covered by
BioLife customer trials including various cancers, heart
disease, vision loss, movement loss, stroke, and multiple
sclerosis
* Specific to cancer, BioLife has more than a dozen customers
working to commercialize cell-based immunotherapies
In December 2013, the IMARC Group published its Global Healthcare
Cold Chain Logistics Market Report & Forecast. This includes a
forecast that the demand for cold chain packaging and
instrumentation services will grow from $3.2 billion in 2013 to
$5.1 billion in 2018.
On Sept. 30, 2014, BioLife announced the formation of biologistex
CCMSM, a joint venture with SAVSU Technologies, to commercialize
and market SAVSU's state of the art smart EVO precision thermal
shipper for temperature sensitive biologics. More information can
be found here:
BioLife Solutions Forms biologistex CCM(SM) Joint Venture with
SAVSU Technologies to Market Intelligent, Controlled Temperature
Containers for Biologics.
About BioLife Solutions
Bothell, Washington-based BioLife Solutions, Inc., develops and
markets patented hypothermic storage and cryo-preservation
solutions for cells, tissues, and organs, and provides contracted
research and development and consulting services related to
optimization of biopreservation processes and protocols.
BioLife Solutions incurred a net loss of $1.08 million in 2013,
a net loss of $1.65 million in 2012, and a net loss of $1.95
million in 2011.
The Company's balance sheet at June 30, 2014, showed $14.80
million in total assets, $1.40 million in total liabilities and
$13.39 million in total shareholders' equity.
BERRY PLASTICS: Robert Steele Named to Board of Directors
---------------------------------------------------------
Berry Plastics Group, Inc., announced the appointment of Robert A.
Steele to its Board of Directors. Mr. Steele replaces Joshua
(Josh) Harris who is stepping down from the Company's Board.
In 2011, Mr. Steele retired from Procter & Gamble as the company's
vice chairman Health Care. During his 35-year tenure with Procter
& Gamble, Mr. Steele served in a variety of executive leadership
positions, including vice chairman Global Health and Well-being,
Group President Global Household Care, and Group President of
North American Operations.
Mr. Steele is a board member of Keurig/Green Mountain Coffee,
where he serves on the Audit and Finance committee, and the
Compensation and Organizational Development committee. He was
previously a member of the board of directors of Beam Inc. and
Kellogg Company. Mr. Steele has a bachelor's degree in Economics
from College of Wooster and a MBA from Cleveland State University.
"On behalf of Berry Plastics and its Board of Directors, I extend
our sincere appreciation to Josh for his years of service to the
Company. At the same time, we are pleased to welcome Robert to
our Board," said Jon Rich, Chairman and CEO of Berry Plastics.
"Robert's in-depth knowledge of the global consumer goods market
is a great complement to the talents and expertise of our existing
Board members. This acumen will serve us well as we continue to
pursue and implement initiatives in support of our four-point
strategy of reducing our leverage, developing and introducing
innovative new products, growing internationally, and identifying
and pursuing value-added acquisitions."
Mr. Steele will participate in the Company's standard non-employee
director compensation plan as described in the Company's most
recent Proxy Statement filed with the Securities and Exchange
Commission on Jan. 27, 2014.
About Berry Plastics
Berry Plastics Corporation manufactures and markets plastic
packaging products, plastic film products, specialty adhesives and
coated products. At Jan. 2, 2010, the Company had more than 80
production and manufacturing facilities, primarily located in the
United States. Berry is a wholly-owned subsidiary of Berry
Plastics Group, Inc. Berry Group is primarily owned by affiliates
of Apollo Management, L.P., and Graham Partners. Berry, through
its wholly owned subsidiaries operates five reporting segments:
Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings
and Specialty Films. The Company's customers are located
principally throughout the United States, without significant
concentration in any one region or with any one customer.
On Dec. 3, 2009, Berry Plastics obtained control of 100 percent of
the capital stock of Pliant upon Pliant's emergence from
reorganization pursuant to a proceeding under Chapter 11 for a
purchase price of $602.7 million. Pliant is a leading
manufacturer of value-added films and flexible packaging for food,
personal care, medical, agricultural and industrial applications.
The acquired business is primarily operated in Berry's Specialty
Films reporting segment.
As of June 28, 2014, the Company had $5.41 billion in total
assets, $5.53 billion in total liabilities, $12 million in non-
controlling interest and a $130 million total stockholders'
deficit.
* * *
As reported by the TCR on Feb. 1, 2013, Moody's Investors Service
upgraded the corporate family rating of Berry Plastics to B2 from
B3 and the probability of default rating to B2-PD from B3-PD. The
upgrade of the corporate family rating to B2 from B3 reflects
the improvement in pro-forma credit metrics and management's
publicly stated goal to pursue a less aggressive, more balanced
financial profile.
In November 2011, Standard & Poor's Ratings Services affirmed the
'B-' corporate credit rating on Berry and its holding company
parent, Berry Plastics Group Inc. "The ratings on Berry reflect
the risks associated with the company's highly leveraged financial
profile and acquisition- driven growth strategy as well as its
fair business risk profile," said Standard & Poor's credit analyst
Cynthia Werneth.
BROOKLYN NAVY: S&P Affirms 'CCC' Rating on $100MM Taxable Bonds
---------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'CCC'
issue rating on U.S. electricity and steam producer Brooklyn Navy
Yard Cogeneration Partners L.P.'s (BNYCP) $100 million taxable
senior secured bonds due 2020. The recovery rating is '4',
indicating S&P's view that lenders can anticipate an average (30%
to 50%) recovery if a default occurs. The outlook remains
developing.
The rating affirmation reflects S&P's view that the project is
vulnerable to default in next 12 to 13 months without continued
equity support from its sponsor, EIF, which acquired the project
in March 2013. The project's liquidity remains weak and its cash
flows from operations are insufficient to cover its quarterly debt
service payments.
Despite stable operations since Hurricane Sandy, the shortfall in
debt service payments mainly stems from higher quarterly debt
service obligations that increased by about $3.6 million after
BNYCP drew on $70.6 million on letter of credits in the fourth
quarter of 2012. In 2013, the project covered a $15 million
shortfall with cash on hand. In 2014, it has met the shortfall
with equity contributions.
BNYCP is a 220 megawatt (MW) to 300 MW gas- and oil-fired
cogeneration facility in Brooklyn, N.Y., which can produce up to 1
million pounds of steam per hour. It receives stable revenue from
a power purchase agreement to provide low-cost electricity and
steam to a highly rated offtaker, Con Edison, under a long-term
contract through 2036.
"The developing outlook reflects our view that the project's
liquidity position will remain weak and that the project is
vulnerable to default in the next 12 to 13 months in absence of
continued equity support," said Standard & Poor's credit analyst
Dhaval Shah.
Although EIF has supported the project thus far and S&P continues
to believe that EIF has a vested interest to support the project,
there is no firm capital commitment or upfront equity infusion.
S&P will likely lower the rating if EIF does not support the
project with equity contribution to service debt, cash on hand
deteriorates to zero, and the project relies on the reserve fund
to pay debt obligations.
Following the repayment of bullet maturity in Nov. 2015, S&P will
likely raise the rating if the project's debt service coverage
ratio improves to 1x, which S&P's financial forecast suggests
could occur beginning in 2016.
BUCCANEER RESOURCES: Seeks Extension of Exclusive Periods
---------------------------------------------------------
Buccaneer Resources' original date for filing a chapter 11 plan
was scheduled to expire September 28, 2014. With this in view,
the Debtors, on September 26, requested that the exclusivity
period for filing a plan of reorganization be moved to October 28,
2014 and to solicit acceptance be moved to December 27, 2014.
The motion is grounded on several cases. Among others, the Debtors
pronounced that their cases are complex given that their creditor
matrix is comprised of 2,500 parties-in-interest, based in both
the United States and abroad.
The Debtors, in fact, are engaged in advanced discussions to sell
substantially all of their assets under chapter 11 plan. The
Debtors, AIX and key stakeholders are still working through the
parameters of a sale of substantially all of the Debtors' assets.
The Debtors seek an extension to enhance creditor recoveries under
their plan rather than to pressure any creditor. The Debtors have
consulted with major constituencies and stakeholders and will
continue to do so through the plan formation and solicitation
process.
Buccaneer Resources is represented by:
William R. Greendyke, Esq.
Jason L. Boland, Esq.
FULBRIGHT & JAWORSKI LLP
1301 McKinney Street, Suite 5100
Houston, TX 77010-3095
Telephone: (713) 651-5151
Facsimile: (713) 651-5246
E-mail: william.greendyke@nortonrosefulbright.com
jason.boland@nortonrosefulbright.com
About Buccaneer Energy
Buccaneer Resources, LLC, and eight affiliates, including
Buccaneer Energy Ltd. sought Chapter 11 bankruptcy protection in
Victoria, Texas (Bankr. S.D. Tex. Lead Case No. 14-60041) on
May 31, 2014.
Buccaneer Resources' primary business is the exploration for and
production of oil and natural gas in North America and their
operations are focused on both onshore and offshore activities in
the Cook Inlet of Alaska as well as the development of offshore
projects in the Gulf of Mexico and onshore oil opportunities in
Texas and Louisiana.
Founded in 2006, Buccaneer Energy, Ltd. is a publicly traded
independent oil and gas company listed on the Australian
Securities Exchange under the symbol "BCC". Although BCC is an
Australian listed entity, the company operates exclusively through
its eight U.S. subsidiary debtors, each of which are headquartered
in the U.S. and which maintain offices in Houston and Dallas,
Texas, and Kenai and Anchorage, Alaska.
CEO Curtis Burton was terminated in May 2014. Manning the
Debtors' operations is Conway MacKenzie senior managing director
John T. Young, who was appointed chief restructuring officer in
March 2014.
The bankruptcy cases are assigned to Judge David R Jones. The
Debtors have sought and obtained an order authorizing joint
administration of their Chapter 11 cases. The other debtors are
Buccaneer Energy Limited, Buccaneer Energy Holdings, Inc.,
Buccaneer Alaska Operations, LLC, Buccaneer Alaska, LLC, Kenai
Land Ventures, LLC, Buccaneer Alaska Drilling, LLC, Buccaneer
Royalties, LLC, and Kenai Drilling, LLC.
The Debtors have tapped Robert Andrew Black, Esq., Jason Lee
Boland, Esq., Robert Bernard Bruner, and William R Greendyke,
Esq., at Fulbright Jaworski LLP as counsel. Norton Rose Fulbright
Australia will render legal services related to cross-border
insolvency and general corporate and litigation matters to
Buccaneer Energy Ltd. Epiq Systems is the claims and notice
agent.
The U.S. Trustee for Region 7 on June 10, 2014, appointed five
creditors to serve on the official committee of unsecured
creditors. The Committee retained Greenberg Traurig, LLP as legal
counsel to the Committee, and Alvarez & Marsal North America, LLC
as financial advisors.
BURLINGTON STORES: S&P Affirms 'B' CCR on Secondary Offering
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
its 'B' corporate credit rating, on Burlington Stores Inc. and
revised the outlook to positive from stable.
"Our outlook revision follows the company's announcement of a
secondary offering of common stock that would reduce financial
sponsor Bain Capital's ownership," said Standard & Poor's credit
analyst Tobias Crabtree. "While Bain continues to own more than
40% of equity, further reductions could occur over the next year
resulting in an improved view of the company's financial policy
along with leverage approaching the mid-4x."
The company continues to benefit from stronger merchandising,
especially with regard to in-season purchases, and positive
operating leverage. Standard & Poor's forecasts that further
merchandise enhancements and good expense controls (along with new
store openings) will result in Burlington Stores' sales and EBITDA
growth of approximately 5% to 10% annually in 2014 and 2015.
Nonetheless, S&P's rating on Burlington incorporates its opinion
of its participation in the intensely competitive off-price
apparel and home goods industry. In addition, the rating reflects
S&P's view of the company's small size, substantial seasonality,
and weak operating measures when compared with its larger peers,
TJX Cos. Inc. and Ross Stores Inc. As a result of these factors,
S&P views the business risk profile as "weak" despite the positive
operating momentum.
S&P's rating also incorporates Bain Capital's significant, albeit
declining, ownership of the company and influence over financial
policies. Following the company's refinancing in August 2014, S&P
forecasts 2014 leverage will decline to the mid-4x area, interest
coverage will increase above 3x, and funds from operations to
total debt will be in the mid-teens because of EBITDA growth. For
2015, S&P expects additional EBITDA growth could lead to further
improvements in cash flow and leverage metrics, with leverage
declining below 4.5x. S&P forecasts total debt to remain
relatively constant as an increase in operating leases negates any
funded debt reduction.
The positive rating outlook reflects the potential for further
reductions in Bain Capital's ownership over the next year and
S&P's expectations for a continued improvement in credit measures
over this time period.
CAPITAL ONE: Fitch Affirms 'BB' Preferred Stock Rating
------------------------------------------------------
Fitch Ratings has affirmed Capital One Financial Corporation's
(COF) ratings at 'A-/F1'. The Rating Outlook remains Stable.
The rating action follows a periodic review of the large regional
banking group, which includes BB&T Corporation (BBT), Capital One
Finance Corporation (COF), Comerica Incorporated (CMA), Fifth
Third Bancorp (FITB), Huntington Bancshares Inc. (HBAN), Keycorp
(KEY), M&T Bank Corporation (MTB), PNC Financial Services Group
(PNC), Regions Financial Corporation (RF), SunTrust Banks Inc.
(STI), US Bancorp (USB), UnionBanCal Corporation (UBC), Wells
Fargo & Company (WFC), and Zions Bancorporation (ZION).
Company-specific rating rationales for the other banks are
published separately. For further discussion of the large
regional bank sector in general, refer to the special report
titled 'Large Regional Bank Periodic Review,' to be published
shortly.
KEY RATING DRIVERS - IDRS, VRs AND SENIOR DEBT
COF's ratings continue to be supported by good earnings
performance which has remained above the average of its large
regional peer group. This is largely due to COF's comparatively
higher net interest margin (NIM) given the company's higher
yielding asset mix compared to peer banks. Fitch believes COF's
good cost structure has also helped to support earnings.
This strength in earnings has, in part, been also boosted by
modest quarterly reserve releases. Fitch would also note that
COF's earnings have been noisy given merger costs and purchase
accounting adjustments impacting results over the last couple of
years. Nevertheless, earnings remain above peer banks and are a
rating strength of COF.
Fitch also views favourably the continued evolution of COF's
funding profile, which over the last several years has moved from
one almost entirely reliant on wholesale borrowings to now being
almost entirely reliant on core deposit funding. This evolution
has been achieved primarily via acquisition, with the latest
having been the ING Direct USA acquisition in 2011.
Additionally, this evolution of COF's funding profile is one of
the reasons ratings have remained largely stable through the
credit crisis and subsequently.
While Fitch would note that COF's capital ratios are near the
average of its large regional peer group. This is given COF's
ability to accrete capital via growth in retained earnings more
quickly than peers due to its earnings power noted above helps to
offset the lower capital ratios.
Given the challenging growth environment for COF -- and the rest
of the banking industry -- COF has been returning a significant
portion of earnings to shareholders via constant dividends and
higher buybacks. Fitch expects this to continue over a near-term
time horizon.
COF's credit quality metrics -- as well as those for the rest of
the industry -- have continued to improve. Fitch believes they
are likely at or near a cyclical trough. As such, Fitch would
expect some deterioration in credit metrics going forward
particularly as competition in auto lending and commercial &
industrial (C&I) lending -- two of COF's main businesses --
continues to intensify.
The rating action encompasses this potential and expected credit
deterioration. Additionally, Fitch would expect COF's credit
metrics to be above industry averages given its asset and customer
mix, which is partially offset in Fitch's mind by the higher yield
(discussed above) earned on those assets.
Finally, Fitch notes that COF's interest rate risk positioning is
relatively neutral, which Fitch views positively from a credit
perspective. That said, it remains to be seen if banks such as
COF with large online banking platforms experience materially
higher deposit repricing (deposit beta) pressures than those banks
with checking and savings deposits originated out of branches.
Should the deposit repricing pressure be higher than forecast, it
could diminish the company's asset sensitivity in a rising short-
term rate environment should that ever occur. While this is a
risk that is slightly unclear right now, Fitch does not believe it
is a ratings factor at this juncture.
RATING SENSITIVITIES - IDRS, VRs AND SENIOR DEBT
Fitch's ratings on COF have remained largely stable through the
credit crisis and subsequently. Fitch continues to believe that
COF's ratings are well situated relative to the company's large
regional peer group.
Fitch believes there is likely only modest upwards rating
potential for COF's ratings.
From a creditor's perspective, given COF's concentrated loan
portfolio in credit cards relative to higher rated peers, Fitch
would expect capital ratios to be higher than peer group averages.
While the superior earnings generation noted above helps to offset
this at COF's current rating level, for upwards rating momentum
COF would need to have a consistently more diversified loan
portfolio or to run a higher capital ratios.
Alternatively, should COF's asset quality metrics deteriorate
faster than industry averages or should funding costs (discussed
above) accelerate at a rate faster than industry averages, there
could be some negative pressure on ratings or the Rating Outlook
over a medium-to-longer term time horizon.
KEY RATING DRIVERS - HOLDING COMPANY
COF's IDR and VR are equalized with those of its operating
companies and banks, reflecting its role as the bank holding
company, which is mandated in the U.S. to act as a source of
strength for its bank subsidiaries. Ratings are also equalized
reflecting the very close correlation between holding company and
subsidiary default probabilities.
RATING SENSITIVITIES - HOLDING COMPANY
Should COF's holding company begin to exhibit signs of weakness,
demonstrate trouble accessing the capital markets, or have
inadequate cash flow coverage to meet near-term obligations, there
is the potential that Fitch could notch the holding company IDR
and VR from the ratings of the operating companies. That said,
Fitch views this as unlikely though for COF given the strength of
the holding company liquidity profile.
Fitch is now considering introducing a rating differential between
the holding company and bank in the U.S. due to structural changes
in the sector and the evolving regulatory landscape, as described
in the special report 'U.S. Bank HoldCos & OpCos: Evolving Risk
Profiles', dated March 27, 2014. Given Fitch's views that COF may
not receive a long-term debt requirement, its ratings may not be
impacted as a result of Fitch's evolving review regarding
notching.
KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR
COF has a Support Rating of '5' and Support Rating Floor of 'NF'.
In Fitch's view, COF is not systemically important and therefore,
the probability of support is unlikely. IDRs and VRs do not
incorporate any support.
RATING SENSITVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR
COF's Support Rating and Support Rating Floor are sensitive to
Fitch's assumption around capacity to procure extraordinary
support in case of need.
KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Subordinated debt and other hybrid capital issued by COF and by
various issuing vehicles are all notched down from COF or its bank
subsidiaries' VRs in accordance with Fitch's assessment of each
instrument's respective non-performance and relative loss severity
risk profiles.
RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID
SECURITIES
The ratings of subordinated debt and other hybrid capital issued
by COF and its subsidiaries are primarily sensitive to any change
in COF's VR.
KEY RATING DRIVERS - SUBSIDIARY AND AFFILIATED COMPANY
The IDRs and VRs of COF's bank subsidiaries benefit from the
cross-guarantee mechanism in the U.S. under FIRREA, and therefore
the IDRs and VRs of the subsidiary banks are equalized across the
group.
RATING SENSITIVITIES - SUBSIDIARY AND AFFILIATED COMPANY
The IDRs and VRs of the subsidiaries are equalized with those of
COF to reflect support from their ultimate parent. As such, they
are sensitive to changes in the parent's propensity to provide
support, which Fitch currently does not expect, or from changes in
COF's IDRs.
To the extent that one of COF's subsidiary or affiliated companies
is not considered to be a core business, Fitch could also notch
the subsidiary's rating from COF's IDR.
KEY RATING DRIVERS - LONG- AND SHORT-TERM DEPOSIT RATINGS
COF's uninsured deposit ratings are rated one notch higher than
the company's IDR and senior unsecured debt because U.S. uninsured
deposits benefit from depositor preference. U.S. depositor
preference gives deposit liabilities superior recovery prospects
in the event of default.
KEY RATING SENSITIVITIES - LONG- AND SHORT-TERM DEPOSIT RATINGS
The ratings of long- and short-term deposits issued by COF and its
subsidiaries are primarily sensitive to any change in COF's long-
and short-term IDRs.
Fitch has affirmed these ratings:
Capital One Financial Corporation
-- Long-term IDR at 'A-'; Outlook Stable;
-- Short-term IDR at 'F1';
-- Viability at 'a-';
-- Senior unsecured debt at 'A-';
-- Senior Shelf at 'A-'
-- Subordinated debt at 'BBB+';
-- Preferred stock at 'BB';
-- Support at '5';
-- Support Floor at 'NF'.
Capital One Bank (USA), National Association
-- Long-term IDR at 'A-'; Outlook Stable;
-- Short-term IDR at 'F1';
-- Viability at 'a-';
-- Senior unsecured debt at 'A-';
-- Subordinated debt at 'BBB+';
-- Short-term debt at 'F1';
-- Long-term deposits at 'A';
-- Short-term deposit at 'F1';
-- Support at '5';
-- Support Floor at 'NF'.
Capital One National Association
-- Long-term IDR at 'A-'; Outlook Stable;
-- Short-term IDR at 'F1';
-- Viability at 'a-';
-- Senior unsecured debt at 'A-';
-- Subordinated debt at 'BBB+';
-- Short-term debt at 'F1';
-- Long-term deposits at 'A';
-- Short-term deposit at 'F1';
-- Support at '5';
-- Support Floor at 'NF'.
Chevy Chase Bank, F.S.B
-- Long-term deposits at 'A'.
North Fork Bancorporation, Inc.
-- Subordinated debt at 'BBB+'
CBL & ASSOCIATES: Fitch Affirms 'BB' Preferred Stock Rating
-----------------------------------------------------------
Fitch Ratings assigns a credit rating of 'BBB-' to the $300
million senior unsecured notes due 2024 issued by CBL & Associates
Limited Partnership, a subsidiary of CBL & Associates Properties,
Inc. (NYSE: CBL). The notes have an annual coupon rate of 4.60%
and were priced at 99.975% of the principal amount to yield 4.603%
to maturity or 220 basis points (bps) over the benchmark rate.
CBL expects to use the net proceeds to reduce amounts outstanding
under the company's revolving credit facilities and for general
corporate purposes.
Fitch currently rates CBL as follows:
CBL & Associates Properties, Inc.
-- Issuer Default Rating (IDR) 'BBB-';
-- Preferred stock 'BB'.
CBL & Associates Limited Partnership
-- IDR 'BBB-';
-- Senior unsecured lines of credit 'BBB-';
-- Senior unsecured term loans 'BBB-';
-- Senior unsecured notes 'BBB-'.
The Rating Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect CBL's large, well-diversified portfolio of
predominantly regional mall assets, appropriate leverage and
fixed-charge coverage for the rating, and adequate financial
flexibility supported by a growing pool of unencumbered assets and
improving access to unsecured debt capital.
These strengths are tempered by challenging growth prospects in
CBL's lower-productivity malls, elevated secured leverage, and
execution risk associated with the company's asset repositioning
strategy over the next several years.
'ONLY GAME IN TOWN' STRATEGY
The average CBL property is located 26 miles from its nearest
major competitor and 90% of mall net operating income (NOI) is
derived from market-dominant or only game in town malls. This
middle-market strategy creates NOI stability and provides barriers
to entry given the modest populations in these regions generally
do not support multiple regional malls or major retail centers.
The company's ongoing redevelopment strategy also enhances asset
quality and deters new competition from entering respective
markets.
SOLID DIVERSITY BY GEOGRAPHY AND TENANT
St. Louis is CBL's largest market at only 8.1% of 2013 revenues,
while the top five markets generated 20.7%. Limited Brands is the
company's largest tenant, having generated 3.2% of annualized
revenues at June 30, 2014 with the top 10 generating only 20.2%.
Further, more than 71% of revenues are generated from tenants that
individually contribute less than 1% of annual revenue. This
granularity insulates CBL's cash flows from regional economic
weakness and credit risk at the tenant level.
UNDERPERFORMANCE RELATIVE TO 'CLASS A' PEERS
CBL's same-store NOI (SSNOI) growth underperformed its mall REIT
peers by 160 basis points (bps) on average over the past 10 years
(1% vs. 2.6%). Underperformance has been somewhat secular though,
as broader 'Class B' operators have underperformed 'Class A'
landlords by 260 bps during this span, highlighting the lower
growth prospects and recent operational challenges for lower-
productivity centers. Favorably though, CBL outperformed its 'B'
mall peers by 90 bps on average.
TENANT REPLACEMENT STRATEGY AUGMENTS GROWTH
Small-shop leasing spreads increased 10.5% during the first half
of 2014, driven by a 32.2% improvement on new leases and 3.1% on
renewals. CBL's tenant replacement strategy drove outsized growth
on new leases, replacing weaker-performing retailers on short-
term, percentage-heavy rents with tenants generating higher sales
productivity. Fitch views this strategy favorably despite the
downtime that can arise prior to new tenants occupying the space.
CBL's SSNOI growth was 1.9% in 2Q14, which was inline with
management's 1%-2% forecast. Fitch expects 1.5% SSNOI growth in
2014 driven by the commencement of new leases and contractual rent
escalators.
INVESTMENT-GRADE CREDIT METRICS
CBL's leverage was 6.7x at June 30, 2014, flat from 6.7x at both
Dec. 31, 2013 and 2012. Fitch expects that leverage will trend
toward 6.3x by 2016, driven by low single-digit SSNOI growth and
asset sales, including over-levered assets that are likely to be
conveyed to lenders.
Fixed-charge coverage was 2.2x for the trailing 12 months (TTM)
ended June 30, 2014 and is expected to remain around this level
over the next 12-24 months. Fitch defines fixed-charge coverage
as recurring operating EBITDA, less recurring capital expenditures
and straight-line rent adjustments, divided by total interest
incurred and preferred dividends. Projected credit metrics are
appropriate for the 'BBB-' rating.
ADEQUATE LIQUIDITY AND UNENCUMBERED ASSET PROFILE
CBL has adequate base case liquidity of 1.0x from July 1, 2014-
Dec. 31, 2016. Fitch defines liquidity coverage as sources of
liquidity divided by uses of liquidity. Sources of liquidity
include unrestricted cash, availability under the unsecured
revolving credit facility pro forma for the 2024 notes offering,
and projected retained cash flow from operating activities after
dividends. Uses of liquidity include pro-rata debt maturities,
expected recurring capital expenditures, and remaining development
costs.
The company's unencumbered asset coverage of unsecured debt at
June 30, 2014 (calculated using a stressed 9.0% cap rate on
June 30, 2014 unencumbered NOI) is adequate for the rating at
1.94x. Fitch expects that coverage will remain stable over the
next 12-24 months as the company continues to transition to an
unsecured-focused debt strategy.
RATING SENSITIVITIES
These factors may have a positive impact on CBL's ratings and/or
Outlook:
-- Fitch's expectation of leverage sustaining below 6.0x
(leverage at June 30, 2014 was 6.7x);
-- Fitch's expectation of fixed-charge coverage sustaining
above 2.5x (coverage for the TTM ended June 30, 2014 was
2.2x);
These factors may have a negative impact on the company's ratings
and/or Outlook:
-- Fitch's expectation of leverage sustaining above 7.0x;
-- Fitch's expectation of fixed-charge coverage sustaining
below 1.8x;
-- Reduced financial flexibility stemming from sustained high
secured leverage and/or significant utilization under lines
of credit;
-- Failure to maintain unencumbered asset coverage of unsecured
debt (based on a stressed 9% cap rate) around 2.0x;
-- Failure to execute the asset repositioning strategy as a
result of weaker liquidity in lower-tier properties.
CLIFFS NATURAL: S&P Lowers CCR to 'BB-'; Outlook Still Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Cliffs Natural Resources Inc. to 'BB-' from
'BBB-'. At the same time, S&P lowered its issue-level rating on
the company's senior unsecured notes to 'BB-' from 'BBB-' and
assigned a '4' recovery rating, indicating S&P's expectation for
average (30%-50%) recovery in the event of a payment default and
the subordinate position of the unsecured bonds in the capital
structure.
S&P also assigned its 'BB+' issue level rating, commensurate with
a '1' recovery rating, to the company's senior unsecured revolving
credit facility. The '1' recovery rating indicates S&P's
expectation for very high (90%-100%) recovery in the event of
default because S&P expects the revolving credit facility will be
secured by June 30, 2015.
The downgrade of Cliffs Natural Resources Inc. results from
several adverse factors that caused S&P to revise its business
risk assessment to "fair" and its financial risk assessment to
"aggressive," from S&P's previous assessments of "satisfactory"
and "significant," respectively.
"The negative outlook reflects the possibility of a downgrade
within the next 12 months if iron ore prices are sustained at
about $85/ton or lower and credit measures continue to
deteriorate," said Standard & Poor's credit analyst Amanda
Buckland. "The negative outlook also reflects our forecast that
Cliffs will need to seek covenant relief from bank lenders in the
first half of 2015."
S&P could lower the corporate credit rating by one or more notches
if iron ore prices are sustained around its base case price of
$85/ton or lower and Cliffs is unable to either reduce its cost
position or sell assets and use proceeds to reduce debt, because
this would lead S&P to revise its financial risk assessment to
"highly leveraged."
S&P could revise the outlook to stable if Cliffs can sustain debt
leverage below 5x. This could occur if iron ore prices stabilize
above $95/ton or if Cliffs reduces its costs or debt through debt
repayment from assets sales or other actions to raise capital.
Under a scenario with seaborne iron ore prices averaging $85/ton,
Cliffs would need to decrease average iron ore cash production
costs to about $58/ton, from our expectation that average cash
costs of production will be about $68/ton for full year 2014.
COMMUNITYONE BANCORP: Inks 3-Year Contract with CEO
---------------------------------------------------
CommunityOne Bancorp and its subsidiary, CommunityOne Bank, N.A.,
entered into an employment agreement with its President and Chief
Executive Officer, Robert L. Reid effective Oct. 1, 2014. The
Employment Agreement supersedes and replaces Mr. Reid's previous
employment agreement with the Company and the Bank, dated Oct. 21,
2011, and is substantially similar to that employment agreement.
The Agreement has a three-year term, but if not earlier
terminated, the Term may be extended for a one year period at each
anniversary of the Effective Date; provided that the Board of
Directors of the Company and the Bank will review whether such an
extension is appropriate, taking into consideration all relevant
factors, including Mr. Reid's performance during the previous
year, and either the Company and the Bank or Mr. Reid will provide
written notice at least 90 days prior to the anniversary that the
extension should not be granted. The Employment Agreement
provides Mr. Reid with the following compensation and benefits:
* Annual base salary of no less than $475,000, subject to
periodic adjustment by the Compensation and Nominating
Committee of the Board in its sole discretion;
* Annual cash bonus in a targeted amount of 40% of base salary,
with the actual amount to be paid based on the achievement of
corporate performance goals or other conditions established
by the Compensation and Nominating Committee of the Board;
* Participation in any long-term bonus or incentive plans
maintained by the Company for its senior executives;
* Participation in the Company's employee medical, dental and
life insurance plans and other customary benefit plans
(except that Mr. Reid is not eligible to receive medical,
dental or life insurance benefits coverage from the Company).
Mr. Reid's base salary has been set by the Compensation and
Nominating Committee at $500,000 annually, effective as of Oct. 1,
2014.
The Company and the Bank also entered into employment agreements
on the effective Date of Oct. 1, 2014, with David L. Nielsen,
chief financial officer; Beth S. DeSimone, general counsel; Angus
M. McBryde, III, treasurer; and Gregory P. Murphy, chief workout
officer.
These employment agreements are substantially similar to their
previous agreements. The base salaries are the same as in the
previous employment agreement with each Named Executive Officer,
but the target bonus percentages were reduced in each case to 35%
of base salary. Each employment agreement also has substantially
the same terms, including a renewal, termination, severance and
non-compete provisions as that provided in Mr. Reid's Employment
Agreement.
In addition to entering into employment contracts, the Board on
Oct. 1, 2014, granted Messrs. Reid, Nielsen, McBryde and Murphy
and Ms. DeSimone restricted stock and stock options under the 2012
Incentive Plan.
Additional information is available for free at:
http://is.gd/pJDvKj
About CommunityOne
CommunityOne Bancorp (formerly FNB United) is the North Carolina-
based bank holding company for CommunityOne Bank, N.A.
(community1.com), which offers a full range of consumer, mortgage
and business banking services, including loan, deposit, cash
management, wealth and online banking services through 55 branches
in 44 communities throughout the central, southern and western
regions of the state.
CommunityOne Bancorp incurred a net loss of $1.48 million in 2013,
a net loss of $40 million in 2012, and a $137.31 million net loss
in 2011.
CONN'S INC: Exploring Strategic Alternatives
--------------------------------------------
Lillian Rizzo, writing for Daily Bankruptcy Review, reported that
Conn's Inc., a publicly traded retailer of appliances, furniture
and electronics, said it is exploring strategic alternatives,
including a possible sale of the company. According to the
report, the Woodlands, Texas-based Conn's hired Bank of America
Merrill Lynch as its financial adviser and Vinson & Elkins LLP as
legal counsel to oversee the process.
COUTURE HOTEL: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Couture Hotel Corporation
fka Hugh Black-St Mary Enterprises, Inc
2645 LBJ Freeway
Dallas, TX 75234
Case No.: 14-34874
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Hon. Barbara J. Houser
Debtor's Counsel: Mark Sean Toronjo, Esq.
TORONJO & PROSSER LAW
10000 North Central Expressway, Suite 407
Dallas, TX 75231
Tel: 214-609-8787
Fax: 1-866-640-7043
Email: ecf@t-plaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by John Blomfield, secretary.
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Mansa Capital Deed of Trust $8,870,000
c/o Charles Kelley
700 Louisiana St.
Ste. 3400
Houston, TX 77002
ThyssenKrupp Elevator Corp. Services $200,876
American Express Credit Card $192,000
Moonlight Franchisor, Inc. Contract/Lease $175,000
Howard Johnson International Contract/Lease $105,326
AP Gas & Energy Solutions Utility $60,420
Value Place Franchise Services Contract/Lease $57,160
Howard Johnson International Contract/Lease $42,461
Micros Systems Inc. Contract/Lease $35,368
City of Farmers Branch Other taxes $35,149
FirstComp Insurance Insurance premiums $28,807
Colt Concrete & Asphalt Mechanic's Lien $22,391
Sysco Dallas Inc. Supplies $19,460
Travelliance Contract/Lease $19,374
Goody Goody Liquor Inc. Supplies $18,225
H&E Equipment Services Services $14,510
Brittany Blomfield Wages $11,800
For Rent Magazine Advertising $11,644
The Knowland Group Contract/Lease $8,173
Clark County Water Reclamation Utility $8,008
CROWN HOLDINGS: Moody's Lowers Corporate Family Rating to Ba2
-------------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating
of Crown Holdings, Inc. to Ba2 from Ba1 and the probability of
default rating to Ba2-PD from Ba1-PD. Moody's also assigned a Baa3
rating to the proposed $675 million senior secured term loan B due
October 2021 of Crown Americas, LLC. In addition, $75m was added
onto the exisiting term loan A due December 19, 2018. The ratings
outlook is stable. All other instrument ratings are detailed
below. Proceeds from the new debt raised will be used to help fund
the EMPAQUE acquisition and to pay the fees and expenses
associated with the transaction.
This concludes the review for downgrade that was started on
September 2, 2014, following the announcement by Crown that it
entered into an agreement to acquire EMPAQUE, a leading Mexican
manufacturer of aluminum cans and ends, bottle caps and glass
bottles for the beverage industry, from Heineken N.V. EMPAQUE,
based in Monterrey, Mexico, is a manufacturer of aluminum cans and
ends, bottle caps and glass bottles for the beverage industry and
a producer of sand for glass making and other applications. At
closing, affiliates of Heineken N.V. will enter into long-term
supply agreements with EMPAQUE for aluminum cans, bottle caps and
glass bottles. The company will pay an enterprise value of $1.225
billion in cash, subject to adjustment. The acquisition is subject
to customary closing conditions, including competition authority
approval, and is expected to close by year end 2014.
Moody's took the following actions:
Crown Holdings, Inc.
Downgraded corporate family rating to Ba2 from Ba1
Downgraded probability of default rating to Ba2-PD from Ba1-PD
Speculative Grade Liquidity Rating, unchanged at SGL-2
Crown Americas, LLC
Assigned $675 million senior secured Term Loan B due October
2021, Baa3 (LGD 2)
Downgraded $450 million senior secured US Revolving Credit
Facility due December 2018 to Baa3 (LGD 2) from Baa2 (LGD 2)
Downgraded $875 million senior secured Term Loan A (incl add-on
of $75 million) due December 2018 to Baa3 (LGD 2) from Baa2
(LGD 2)
Downgraded $362 million senior secured Farm Credit Term Loan due
December 2019 to Baa3 (LGD 2) from Baa2 (LGD 2)
Downgraded $700 million 6.25% senior unsecured notes due
February 2021 to Ba3 (LGD 5) from Ba2 (LGD 5)
Downgraded $1,000 million 4.50% senior unsecured notes due
January 2023 to Ba3 (LGD 5) from Ba2 (LGD 5)
Crown Cork & Seal Company, Inc.
Downgraded $63.5 million 7.50% senior unsecured notes due
December 2096 to B1 (LGD 6) from Ba3 (LGD 6)
Downgraded $350 million 7.375% senior unsecured notes due
December 2026 to B1 (LGD 6) from Ba3 (LGD 6)
Crown European Holdings S.A.
Downgraded $700 million European revolving credit facility due
December 2018 to Baa3 (LGD 2) from Baa2 (LGD 2)
Downgraded EUR700 million senior secured Term Loan A due
December 2018 to Baa3 (LGD 2) from Baa2 (LGD 2)
Downgraded EUR650 million 4.0% senior unsecured notes due July
2022 to Ba2 (LGD 3) from Ba1 (LGD 3)
Crown Metal Packaging Canada L.P.
Downgraded $50 million Canadian revolving credit facility due
December 2018 to Baa3 (LGD 2) from Baa2 (LGD 2)
The ratings outlook is stable.
The ratings are subject to the receipt and review of final
documentation.
Ratings Rationale
The downgrade of Crown's corporate family rating to Ba2 reflects
the projected deterioration in credit metrics resulting from the
proposed second debt financed acquisition within one year and the
increased risk inherent in integrating two sizeable acquisitions
at once. Proforma adjusted debt to EBITDA is over 5.0 times
(excluding synergies). Although the integration of the two
acquisitions will be managed by two different geographic teams
(Americas and Europe), both are sizeable organizations and
integration risk still increases accordingly. Crown generates
strong free cash flow and has pledged all free cash flow to debt
reduction over the intermediate term, but metrics are not expected
to return to a level commensurate with the Ba1 rating category
even in the absence of any negative operating variance.
The ratings outlook is stable. The stable outlook reflects an
expectation that Crown will dedicate sufficient free cash flow to
debt reduction to improve credit metrics to a level commensurate
with the rating category over the intermediate term.
The ratings could be downgraded if Crown fails to improve credit
metrics over the intermediate term, there is a deterioration in
the cushion under existing financial covenants, and/or a
deterioration in the competitive or operating environment.
Additionally, a significant acquisition or change in the asbestos
liability could also trigger a downgrade. Specifically, the rating
could be downgraded if adjusted debt to EBITDA remained above 4.5
times, EBIT interest coverage remained below 3.5 times and/or free
cash flow to debt declined below 8.0%.
The ratings could be upgraded if Crown achieves a sustainable
improvement in credit metrics within the context of a stable
operating and competitive environment and maintains adequate
liquidity including sufficient cushion under existing covenants.
Specifically, the ratings could be upgraded if adjusted debt to
EBITDA declined to below 3.8 times, EBIT interest coverage
improves to over 3.7 times, the EBIT margin remains in the double
digits, and free cash flow to total debt remains over 9%.
The principal methodology used in these ratings was Global
Packaging Manufacturers: Metal, Glass, and Plastic Containers
published in June 2009. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
CSN HOUSTON: Total Enterprise Value Drops, Financial Analyst Says
-----------------------------------------------------------------
CSN Houston's total enterprise value has dropped to about
$138 million, David Barron, writing for the Houston Chronicle,
reports, citing Steve Zelin, senior managing director of the
Blackstone Group, an investment and advisory firm retained by the
network's attorneys.
According to the Houston Chronicle, Mr. Zelin said on Monday that
CSN Houston was initially valued by the Astros, Rockets and
Comcast at $700 million, but the value has dropped as it faces a
potential bankruptcy court-administered sale to AT&T Teleholdings
and DirecTV Sports Networks.
A court document says that when considering the $100 million-plus
in unpaid rights fees for which the Astros and Rockets have agreed
to pass up immediate payment so that the sale can go through, plus
other commitments to debtors, CSN Houston's net enterprise value
is only about $22 million. About 96 of CSN Houston's 141 workers
will be laid off, the Houston Chronicle relates. CSN Houston's
attorneys said that if the Court doesn't approve the deal, the
company will be liquidated, the report states.
The teams, the Houston Chronicle relates, believe Comcast should
receive only $16 million to $23 million. The report says that
Comcast, citing the value of its affiliation agreement that will
be boosted by the Time Warner Cable merger in 2015, wants the full
amount and opposes the AT&T-DirecTV deal, which would result in
the rebranding of CSN Houston as Root Sports Houston.
About Houston Regional Sports Network
An involuntary Chapter 11 bankruptcy petition was filed against
Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet
Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013.
The involuntary filing was launched by three units of Comcast/NBC
Universal and a television-related company. The petitioners are:
Houston SportsNet Finance LLC, Comcast Sports Management Services
LLC, National Digital Television Center LLC, and Comcast SportsNet
California, LLC.
The petitioning creditors have filed papers asking the Bankruptcy
Judge to appoint an independent Chapter 11 trustee "to conduct a
fair and open auction process for the Network's business assets on
a going concern basis."
Houston Regional Sports Network is a joint enterprise among
affiliates of the Houston Astros baseball team, the Houston
Rockets basketball team, and Houston SportsNet Holdings, LLC --
"Comcast Owner" -- an affiliate of Comcast Corporation. The
Network has three limited partners -- Comcast Owner, Rockets
Partner, L.P., and Astros HRSN LP Holdings LLC. The primary
purpose of Houston Regional Sports Network is to create and
operate a regional sports programming service that produces,
exhibits, and distributes sports programming on a full-time basis,
including live Astros and Rockets games within the league-
permitted local territories.
Counsel for the petitioning creditors are Howard M. Shapiro, Esq.,
at Wilmer Cutler Pickering Hale and Dorr LLP; George W. Shuster,
Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; Vincent
P. Slusher, Esq., at DLA Piper; and Arthur J. Burke, Esq., at
Davis Polk & Wardwell LLP.
Judge Marvin Isgur presides over the case.
The Network was officially placed into Chapter 11 bankruptcy
pursuant to a Feb. 7 Order for Relief. It has won approval to
hire Haynes and Boone, Charles A. Beckham, Jr., Esq., Henry
Flores, Esq., Abigail Ottmers, Esq., and Christopher L. Castillo,
Esq., as counsel. It also hired Conway MacKenzie, Inc., as
financial advisor.
Harry Perrin, Esq., represents Astros owner Jim Crane. Alan
Gover, Esq., represents the Rockets.
The Astros are represented by Richard B. Drubel, Esq., Colleen A.
Harrison, Esq., and Jonathan R. Voegele, Esq., at Boies, Schiller
& Flexner LLP, in Hanover, NH; and Scott E. Gant, Esq., at Boies,
Schiller & Flexner in Washington, DC. Comcast Corporation and
NBCUniversal Media, LLC, are represented by Vincent P. Slusher,
Esq., Eli Burriss, Esq., Andrew Mayo, Esq., and Andrew Zollinger,
Esq., at DLA Piper; Arthur J. Burke, Esq., Timothy Graulich, Esq.,
and Dana M. Seshens, Esq., at Davis Polk & Wardwell LLP; and
Howard M. Shapiro, Esq., and Craig Goldblatt, Esq., at Wilmer
Cutler Pickering Hale and Dorr LLP. Attorney for McLane
Champions, LLC and R. Drayton McLane, Jr., are Wayne Fisher, Esq.,
at Fisher Boyd & Huguenard, LLP.
DREIER LLP: Court Found Too Risky for Founder's Testimony
---------------------------------------------------------
Sara Randazzo, writing for The Wall Street Journal, reported that
U.S. Bankruptcy Judge Stuart Bernstein in New York has ruled that
while Marc Dreier should testify at an upcoming trial involving
the law firm he founded, the imprisoned lawyer's testimony will
take place in a nearby federal court, after finding that the
bankruptcy court poses too much of threat.
To recall, Shiela Gowan, the lawyer winding down Mr. Dreier's law
firm wants the former lawyer to appear in a New York courtroom to
bolster their position in a $138 million lawsuit against an
investment firm that allegedly profited from Mr. Dreier's fraud.
A federal judge granted the request but the U.S. attorney's office
said Mr. Dreier would be better off giving video testimony as the
bankruptcy court, unlike in the local federal district court, has
no holding cells to allow private access to bathrooms and a
secured place to wait during breaks.
About Marc Dreier and Dreier LLP
Marc Dreier founded New York-based law firm Dreier LLP --
http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S.
Securities and Exchange Commission filed a suit, alleging that Mr.
Dreier made fraudulent offers and sales of securities in several
cities, selling fake promissory notes to hedge and other private
investment funds. The SEC asserted that Mr. Dreier also
distributed phony financial statements and audit opinions, and
recruited accomplices in connection with that scheme. Mr. Dreier,
currently in prison, was charged by the U.S. government for
conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No.
09-cr-00085).
Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul,
Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel.
The Debtor estimated assets of $100 million to $500 million, and
debts between $10 million and $50 million in its Chapter 11
petition.
Sheila M. Gowan, a partner with Diamond McCarthy, was appointed
Chapter 11 trustee for the Dreier law firm. Ms. Gowan is
represented by Diamond McCarthy LLP. Dickstein Shapiro LLP is the
trustee's special trial counsel.
Wachovia Bank National Association; the Dreier LLP Chapter 11
Trustee; and Steven J. Reisman as post-confirmation representative
of the bankruptcy estate of 360networks (USA) Inc. signed a
petition that put Mr. Dreier into bankruptcy under Chapter 7 on
Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier
pleaded guilty to fraud and other charges in May 2009. The
scheme to sell $700 million in fake notes unraveled in late 2008.
Mr. Dreier is serving a 20-year sentence in a federal prison in
Minneapolis.
The May 15, 2014, edition of The TCR said the Hon. Stuart M.
Bernstein of the U.S. Bankruptcy Court for the Southern District
of New York confirmed the second amended Chapter 11 plan of
liquidation filed by Sheila M. Gowan, the Chapter 11 trustee for
Dreier LLP, and the Official Committee of Unsecured Creditors.
DYNEGY INC: Moody's Assigns B3 Rating on $5.1BB Senior Notes
------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Dynegy Inc.'s
proposed $5.1 billion senior unsecured notes. The proceeds from
these senior unsecured notes along with a $350 million mandatory
convertible preferred stock issuance and a $650 million Dynegy
stock issuance, both of which were launched yesterday, will be
used to finance the $6.25 billion acquisition of 12,400 MW of coal
and gas fired generation from Duke Energy Inc and private equity
firm Energy Capital Partners. The transaction is expected to close
in Q1 2015. At the same time, Moody's raised its rating on
Dynegy's existing $800 million term loan and secured revolving
credit facility (which will be upsized to $1.425 billion from the
current $475 million when the transaction closes) to Ba3 from B1.
The upgrade reflects better recovery prospects on the secured debt
as it benefits from the addition of $5 billion of unsecured notes
to the capital structure. Dynegy's B2 corporate family rating
(CFR) and Illinois Power Generating Company's (IPG) B3 CFR are
affirmed and the rating outlook for both Dynegy and IPG is stable.
The equity and preferred stock offerings have a 15% greenshoe
option to them. If exercised, the additional cash will be used to
defray advisory, legal and other transaction expenses associated
with the acquisitions. In the absence of a greenshoe, cash on
Dynegy's balance sheet will be used to pay these expenses.
Ratings Rationale
Dynegy is acquiring the assets at a Debt/EBITDA multiple of about
7.0x (based on the projected average 2015-17 EBITDA under current
forward curves).
"This is significantly higher than Dynegy's current standalone
multiple of about 5.1x and so Dynegy's financial profile will be
weaker due to these acquisitions. However, the transactions are
transformative for Dynegy as they will result in a substantial
increase in scale and geographical diversification and an
improvement in the overall business profile", said Swami
Venkataraman, Moody's Vice President and Senior Credit Officer.
"While the transaction is heavily leveraged, the fact that Dynegy
is quite strongly positioned at its current B2 CFR, along with its
improved business risk profile, allows us to maintain its B2
rating despite the expected weaker financial profile", he said.
"Going forward, future M&A transactions will continue to be a
major driver of credit quality. However, the evolution of Dynegy's
policies on hedging, leverage, dividends and retail risk
management will also be key drivers", he added.
For the 2015-17 period, including Moody's adjustments for energy
and MISO capacity prices, Moody's expect Dynegy to have CFO pre-WC
coverage of interest and debt ranging between 2x-3x and 8-11%,
respectively. With no dividend payments to shareholders, retained
cash flow coverage ratios will be very similar to CFO pre-W/C
coverage ratios while Moody's expect free cash flow (FCF) coverage
of debt to range between 6-9%. These are Moody's base case ratios
and assume current market prices and MISO capacity prices at 2014
levels (unless bilaterally contracted at a specific price). They
do not consolidate Dynegy's Illinois Power Holdings subsidiary
(IPH), which is a ring-fenced non-recourse entity but do include
cash flows from the Brayton Point plant for the 2015-17 period. A
more conservative analysis uses the same merchant pricing
assumptions but consolidates IPH and also excludes all Brayton
Point cash flows. Under these assumptions, Moody's expect CFO pre-
W/C debt and interest coverage ratios in the range of 6-8% and
1.5x-2x, respectively and FCF coverage at 4-6%.
There has been a noticeable improvement in merchant market pricing
for both energy and capacity in 2014, likely driven by a
combination of the polar vortex of January 2014 as well as
upcoming coal plant retirements on account of the EPA MATS rule.
While the market has given up a significant portion of its gains
since May 2014, Moody's believe that industry conditions have
stabilized from the downward trend of the last few years. Natural
gas prices for 2015 have traded in a band between $4/MMBtu and
$4.5/MMBtu for the last two years. Reserve margins are expected to
tighten significantly in 2015-16 on account of plant retirements
in MISO, PJM and ISO-NE, all markets where Dynegy has a presence.
As a result, Moody's expect stable, if not improving, prices for
energy and capacity, a contrast to the sustained decline in power
prices over the past several years.
The Duke and ECP assets are mostly economically competitive. The
Duke coal plants had substantial capacity factors even in 2012
when fuel switching to gas was at its peak. These plants are
efficient 10,000 btu/kWh heat rate units and fully scrubbed. With
an average production cost of about $25/MWh, they are well
positioned to improve margins if gas prices rise. The plants use
both NAPP coal (25%) and ILB coal (75%). The ability to mainly use
ILB is a positive given its superior cost and supply profile. Both
portfolios have a number of efficient 7,000 heat rate CCGTs that
are well positioned from the perspective of both capacity and
energy markets. None of the major coal plants is at risk for
retirement due to MATS regulations, except for Brayton Point.
However, carbon exposure remains a longer term concern that could
increase the risk profile of Dynegy going forward.
Outlook
The stable outlook reflects Moody's stable outlook for the
merchant power sector, Dynegy's strong liquidity and lack of debt
maturities through 2020. Future M&A activity remains a key
variable that could affect the rating outlook going forward.
What Could Change Rating -- UP
Prospects for any upside movement in ratings will require a
substantial and sustained improvement in Dynegy's financial
profile, which would likely be predicated on a continued
improvement in merchant market conditions. Moody's would expect
CFO pre-WC coverage of interest and debt to be in excess of 2.5x
and 10%, respectively for ratings to be raised. As management
consolidates this acquisition, an upgrade would also require
policies on leverage, dividends and risk management consistent
with higher ratings.
What Could Change Rating -- DOWN
Downside risk could arise from future M&A transactions that
further weaken the financial profile or a renewed downturn for the
merchant industry. A downgrade could also result if Moody's expect
CFO pre-WC coverage of interest and debt to fall to a range of 1x-
1.5x and 5-8%, respectively, on a sustained basis. Ratings on
various debt tranches may also be affected if Dynegy were to
adjust its capital structure by issuing significant amounts of
secured debt in the future that substantively alters recovery
expectations
Issuer: Dynegy Inc.
Affirmations:
Probability of Default Rating, Affirmed B2-PD
Speculative Grade Liquidity Rating, Affirmed SGL-2
Corporate Family Rating, Affirmed B2
Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD4 from
a range of LGD5)
Upgrades:
Senior Secured Bank Credit Facility, Upgraded to Ba3 (LGD2),
from B1 (LGD3)
Assignments:
Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD4)
Outlook Actions:
Outlook, Remains Stable
Issuer: Illinois Power Generating Company
Affirmations:
Probability of Default Rating, Affirmed B3-PD
Speculative Grade Liquidity Rating, Affirmed SGL-2
Corporate Family Rating, Affirmed B3
Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD4)
Outlook Actions:
Outlook, Remains Stable
The principal methodology used in these ratings was Unregulated
Utilities and Power Companies published in August 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
EAST CLEVELAND, OHIO: City Defaults on Traffic Camera Bill
----------------------------------------------------------
Mark Gillispie and Michelle R. Smith at the Associated Press
reports that one of Ohio's poorest cities was dealt another
financial blow on October 1 when a federal judge stuck it with a
$638,000 judgment in favor of a Rhode Island company that supplied
the traffic cameras it hoped would provide a revenue boost.
AP says a Rhode Island judge handed down the default judgment
against East Cleveland, the impoverished Cleveland suburb where
oil baron John D. Rockefeller once summered, after the city failed
to answer the now-defunct company's original lawsuit and
subsequent motions or engage in settlement talks.
"No one from the city has responded to my emails or correspondence
I sent," AP quotes James Atchison, who represents the receiver
overseeing the Providence company's state insolvency case, as
saying. "We're more than happy to resolve, settle this matter."
According to the report, Mr. Atchison said in an interview on
September 30 that he's aware of East Cleveland's financial straits
and said the receiver would have accepted an amount lower than the
judgment. And he acknowledged that he could also ask the judge to
tack on interest and attorney fees that could swell the total to
around $1 million, the news agency relates.
AP says East Cleveland has been on hard financial times for years.
The report states that there are worries about a severe winter
because the city might not be able to buy road salt until it pays
the thousands of dollars owed from last winter. The Ohio auditor
declared a fiscal emergency in October 2012 because of the city's
ballooning deficit and put a state-appointed commission in charge
of East Cleveland's financial affairs, the report recalls.
According to the AP, East Cleveland law director Ronald Riley said
the city could not afford to hire local counsel in Rhode Island as
the court required, much less pay the receiver what the city owes.
Mr. Riley said he sent letters to the judge asking that he be
allowed to represent the city by himself but was rebuffed, the
report relays.
"There's no money," Mr. Riley, as cited by AP, said. "We're stuck.
There's no way of settling this."
EDGENET INC: Liberty to Get $5-Mil. From Sale, to Support Plan
--------------------------------------------------------------
The Bankruptcy Court authorized Edgenet, Inc., and Edgenet Holding
Corp. to:
i) pay $5,000,000 to Liberty Partners Lenders L.L.C., from the
proceeds of the sale of the Debtors' assets to EdgeAQ, LLC; and
ii) to enter into a Plan Support Agreement with Liberty
Partners, the Official Committee of Seller Note Holders and the
Owners' Representative.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, filed a
reservation of rights in response to the Debtors' motion. The
U.S. Trustee stated that there are a number of provisions in the
Plan Support Agreement and Term Sheet to which the U.S. Trustee
objects.
The Debtors, in their motion, stated that the PSA will form the
basis of the soon to be filed plan and disclosure statement, which
will bring a prompt resolution to the Chapter 11 cases. The PSA
would, among other things, impose obligations on each party
executing the PSA to support the plan process and vote in favor of
the plan (or in the Committee's case, provide a letter of
support).
About Edgenet Inc.
Edgenet, Inc., and Edgenet Holding Corp. are providers of cloud-
based content and applications that enable companies to sell more
products and services with greater ease across multiple channels
and devices. Edgenet has three business locations: Waukesha, WI,
Brentwood, TN, and its main office in Atlanta, GA.
Edgenet Inc. and Edgenet Holding filed for Chapter 11 bankruptcy
protection in Delaware (Lead Case No. 14-10066) on Jan. 14, 2014.
Edgenet Inc. estimated assets of at least $10 million and
liabilities of $100 million to $500 million.
Raymond Howard Lemisch, Esq., at Klehr Harrison Harvey Branzburg
LLP, in Wilmington, Delaware, serves as counsel to the Debtors;
Glass Ratner Advisory & Capital Group LLC is the financial
advisor; JMP Securities, LLC, is the investment banker, and Phase
Eleven Consultants, LLC, is the claims and noticing agent.
The U.S. Trustee did not form an official unsecured creditors
committee as no sufficient interest has been generated from
creditors.
Fred Marxer, Timothy Choate and Davis Carr, individuals and
holders of a segment of the promissory notes issued in 2004 that
have been referred to by Edgenet, Inc., et al., requested that the
Court issue an order appointing an official committee of Seller
Noteholders, or in the alternative, an official committee of
unsecured creditors, with members appointed from the Seller
Noteholders who agree to waive any continued security interest
arising from the Seller Notes.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed on
March 13, 2014, five noteholders to serve on the Official
Committee of Note Holders. In May, Bankruptcy Judge Brendan L.
Shannon denied Edgenet Inc., et al.'s motion to disband the
Noteholders Committee.
The Noteholders Committee has retained Morris James LLP's Jeffrey
R. Waxman, Esq.; and Cooley LLP's Cathey Hershcopf, Esq., and
Jeffrey L. Cohen, Esq., as co-counsel to the Committee.
An auction of the Debtors' assets was held on June 6, 2014, and
EdgeAQ, L.L.C., was declared the successful bidder. The
Bankruptcy Court approved the sale on June 12, and the sale closed
on June 16. Edgenet Inc. changed its name to El Wind Down, Inc.,
and Edgenet Holding Corporation to EHC Holding Wind Down Corp.
ELBIT IMAGING: HCSC Provides Coverage for ExAblate Procedure
------------------------------------------------------------
Elbit Imaging Ltd. said it was informed by InSightec Ltd. that
Health Care Service Corporation has published updates to their
Magnetic Resonance Imaging-guided Focused Ultrasound (MRgFUS)
coverage policy and is now providing benefits for InSightec's
ExAblate(R) procedure as a treatment option cleared by the Food
and Drug Administration for patients suffering from pain
associated with bone metastases.
HCSC is the second largest Blue Cross and Blue Shield (a national
federation of 37 independent, community-based and locally operated
Blue Cross(R) and Blue Shield(R) companies) commercial insurer in
the United States with over 13 million covered customers, and
represents one of the top insurers in the states of TX, OK, IL, NM
and MT.
Since receiving FDA approval, patients have been provided access
to ExAblate from insurers on a case-by-case basis. By formalizing
a favorable coverage policy, HCSC has made access to ExAblate a
viable option for many more patients and physicians.
The Company holds approximately 89% of the share capital of Elbit
Medical Technologies Ltd. (on a fully diluted basis) which, in
turn, holds approximately 33% of the share capital in InSightec
(on a fully diluted basis).
About Elbit Imaging Ltd.
Tel-Aviv, Israel-based Elbit Imaging Ltd. (TASE, NASDAQ: EMITF)
hold investments in real estate and medical companies. The
Company, through its subsidiaries, also develops shopping and
entertainment centers in Central Europe and invests in and manages
hotels.
Since February 2013, Elbit has intensively endeavored to come to
an arrangement with its creditors. Elbit has said it has been
hanging by a thread for more than five months. It has encountered
cash flow difficulties and this burdens its day to day activities,
and it certainly cannot make the necessary investments to improve
its assets. In light of the arrangement proceedings, and
according to the demands of most of the bondholders, as well as an
agreement that was signed on March 19, 2013, between Elbit and the
Trustees of six out of eight series of bonds, Elbit is prohibited,
inter alia, from paying off its debts to the financial creditors
-- and as a result a petition to liquidate Elbit was filed, and
Bank Hapoalim has declared its debts immediately payable,
threatening to realize pledges that were given to the Bank on
material assets of the Company -- and Elbit undertook not to sell
material assets of the Company and not to perform any transaction
that is not during its ordinary course of business without giving
an advance notice to the trustees.
Accountant Rony Elroy has been appointed as expert for examining
the debt arrangement in the Company.
In July 2013, Elbit Imaging's controlling shareholders, Europe-
Israel MMS Ltd. and Mr. Mordechay Zisser, notified the Company
that the Tel Aviv District Court has appointed Adv. Giroa Erdinast
as a receiver with regards to the ordinary shares of the Company
held by Europe Israel securing Europe Israel's obligations under
its loan agreement with Bank Hapoalim B.M. The judgment stated
that the Receiver is not authorized to sell the Company's shares
at this stage. Following a request of Europe-Israel, the Court
also delayed any action to be taken with regards to the sale of
those shares for a period of 60 days. Europe Israel and
Mr. Zisser have also notified the Company that they utterly reject
the Bank's claims and intend to appeal the Court's ruling.
Elbit Imaging reported a loss of NIS1.56 billion on
NIS360.59 million of total revenues for the year ended Dec. 31,
2013, as compared with a loss of NIS483.98 million on NIS418.48
million of total revenues in 2012.
As of June 30, 2014, the Company had NIS4.05 billion in total
assets, NIS3.16 billion in total liabilities and NIS889.58 million
shareholders' equity.
Brightman Almagor Zohar & Co., a member firm of Deloitte Touche
Tohmatsu, in Tel-Aviv, Israel, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2013.
ENTEGRA POWER: Reorganization Plans Declared Effective
------------------------------------------------------
Entegra Power Group LLC and its debtor-affiliates notified the
Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District
of Delaware that the effective date of the plan of reorganization
for the parent debtor occurred on Sept. 30, 2014, and for
subsidiaries took place on Oct. 2, 2014.
Professionals requesting for compensation for services rendered in
the Chapter 11 cases before the plan effective dates must be filed
with the Court on or before Nov. 17, 2014.
As reported in the Troubled Company Reporter on Oct. 2, 2014,
Judge Walsh confirmed the Debtors' Modified Prepackaged Plan of
Reorganization. A hearing on the approval of the Plan and the
Disclosure Statement was held on Sept. 19.
A black-lined version of the Plan, as modified Sept. 4, 2014, is
available for free at:
http://bankrupt.com/misc/Entegra_Plan_Blacklined_090414.pdf
A copy of the Debtors' memorandum of law in support of
confirmation of the Plan is available for free at:
http://bankrupt.com/misc/Entegra_Memo_Plan.pdf
About Entegra Power Group
Entegra Power Group LLC and its affiliates operate an independent
power company that owns one of the largest gas-fueled power plants
in the United States, located in El Dorado, Arkansas. In
addition, affiliate Gila River Energy Holdco LLC indirectly owns
one-half of another of the country's largest gas-fueled power
plants, in Gila Bend, Arizona. The Entegra entities market
electric power from the two facilities to wholesale customers in
the southeastern and southwestern United States.
Entegra, Gila, and 10 other affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 14-11859) on Aug. 4,
2014. The cases are pending before the Honorable Peter J. Walsh,
and the Debtors have requested that their cases be jointly
administered.
The Debtors have tapped Richards, Layton & Finger, P.A., as
counsel, and Prime Clerk LLC as claims and notice agent.
The Gila facility's direct owners are not debtors in the Chapter
11 cases, and the Gila Facility will not become property of the
Debtors' estates.
FIFTH THIRD: Fitch Affirms 'BB+' Preferred Stock Rating
-------------------------------------------------------
Fitch Ratings has affirmed Fifth Third Bancorp's (FITB) ratings at
'A/F1'. The Rating Outlook remains Stable. The affirmation
reflects the company's good earnings profile, solid capital and
liquidity profiles, and moderating credit trends.
The rating action follows a periodic review of the large regional
banking group, which includes BB&T Corporation (BBT), Capital One
Financial Corporation (COF), Comerica Incorporated (CMA), Fifth
Third Bancorp (FITB), Huntington Bancshares Inc. (HBAN), Keycorp
(KEY), M&T Bank Corporation (MTB), MUFG Americas Holdings
Corporation (MUFG), PNC Financial Services Group, Inc. (PNC),
Regions Financial Corporation (RF), SunTrust Banks Inc. (STI), US
Bancorp (USB), Wells Fargo & Company (WFC), and Zions
Bancorporation (ZION).
Company-specific rating rationales for the other banks are
published separately, and for further discussion of the large
regional bank sector in general, refer to the special report
titled 'Large Regional Bank Periodic Review,' to be published
shortly.
KEY RATING DRIVERS - IDR, Viability Rating (VR) and Senior Debt
Fitch affirmed FITB's Issuer Default Rating (IDR) reflecting the
company's good earnings profile, solid capital and liquidity
profiles, and moderating credit trends. FITB's earnings
historically have outpaced peer averages supported by strong
efficiency levels, and good fee-based revenues sources. Earnings
have been impacted recently due to litigation reserve builds and a
slowdown in mortgage refinancing revenues, somewhat offset by
reserve releases, which are expected to diminish over time. FITB
expects its full-year 2014 core return on assets ROA to be
approximately 1.15%, which appears attainable. Though this is
considerably lower than its pre-crisis average, it is still viewed
as good given the challenging interest rate environment.
FITB's management is viewed as in line with other large regional
banks, a management team with a high degree of depth and
experience. Strategic objectives are clearly articulated, and
FITB has done a good job in meeting financial targets.
FITB's capital profile remains solid with an estimated Tier 1
common ratio under Basel III of 9.3%, well above the fully phased-
in requirement of 7%, though a tad below large regional peer
averages. Historically FITB has managed capital conservatively
with above-average levels of tangible common equity relative to
peers. Fitch expects that FITB, along with its other large
regional banking peers, will manage capital conservatively in the
post-financial crisis environment.
FITB remains predominately core funded, with core deposits
(defined as total deposits less jumbo deposits) representing 82%
of total funding as of June 30, 2014. Similar to industry trends,
FITB's funding profile is strong, partially reflective of a weak
economic recovery. Further, holding company liquidity remains
robust with considerable cash balances, and no near-term
maturities until 2016.
Although the company's non-performing assets (NPAs) are elevated
from historical levels, actual losses have been manageable as of
late, and reserve levels are still relatively high. Further, a
large percentage of the accruing troubled debt restructurings
(included in NPAs) are current on principal and interest payments.
Excluding troubled debt restructurings (TDRs), FITB's level of
NPAs to loans and foreclosed real estate falls slightly below peer
averages.
FITB reported higher crisis-era losses than its peers, due to weak
economic conditions in Michigan before the crisis started, and its
exposure to Florida. Fitch notes that FITB did make some needed
decisions early on to mitigate risk, including some early exits of
homebuilder or developer lending, and brokered home equity, as
well as suspending non-owner-occupied CRE lending for a time.
RATING SENSITIVITIES - IDR, VR and Senior Debt
Given FITB's ratings at the higher end of the ratings spectrum for
the large regional banks, Fitch does not anticipate any further
ratings upward momentum over the near- to intermediate-term given
the high absolute levels. Further upward ratings movement would
be predicated on a material decline in overall problem asset
levels, combined with an above-average earnings profile. Further,
while FITB's capital profile is currently considered adequate in
light of its risk profile, any upgrade in ratings would likely
also be dependent on an above-average capital profile which would
provide more than ample loss cushion for unexpected losses.
Conversely, a reversal in FITB's superior earnings profile and
asset quality trends, combined with a material deterioration in
the liquidity and capital profile could pressure FITB's earnings.
FITB has also recently announced strategic initiatives to increase
its capital market offerings, in line with efforts at a couple of
other large regional banks. Although Fitch expects securities
business will remain relatively low relative to overall revenues
for FITB and the other large regional banks, an outsized reliance
on this more volatile income stream could be viewed negatively
from a ratings perspective.
The substantial unrealized gain in Vantiv is not included in
FITB's equity or capital; however, Fitch currently views the
ownership stake in Vantiv favorably. While Fitch expects FITB to
wind down its ownership in the company over time, Vantiv-related
items can impact quarterly earnings. A complete divestiture would
lessen the volatility in earnings; however, Vantiv-related
earnings contributed a healthy 16% of pretax income in 1H'14.
Without reinvestment or other organic opportunities, FITB's
earnings profile could be adversely affected following a complete
divestiture and, consequently, its earnings.
KEY RATING DRIVERS - HOLDING COMPANY
FITB's IDR and VR are equalized with those of its operating
companies and banks, reflecting its role as the bank holding
company, which is mandated in the U.S. to act as a source of
strength for its bank subsidiaries. Ratings are also equalized
reflecting the very close correlation between holding company and
subsidiary default probabilities.
RATING SENSITIVITIES - HOLDING COMPANY
Should FITB's holding company begin to exhibit signs of weakness,
demonstrate trouble accessing the capital markets, or have
inadequate cash flow coverage to meet near-term obligations, there
is the potential that Fitch could notch the holding company IDR
and VR from the ratings of the operating companies. This is
viewed as unlikely, though, for FITB given the strength of the
holding company liquidity profile.
Fitch is now considering introducing a rating differential between
the holding company and bank in the U.S. due to structural changes
in the sector and the evolving regulatory landscape, as described
in the special report 'U.S. Bank HoldCos & OpCos: Evolving Risk
Profiles', dated March 27, 2014. Given Fitch's views that FITB may
not receive a long-term debt requirement, its ratings may not be
affected as a result of Fitch's evolving review regarding
notching.
KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR
FITB has a Support Rating of '5' and Support Rating Floor of 'NF'.
In Fitch's view, FITB is not systemically important and therefore,
the probability of support is unlikely. IDRs and VRs do not
incorporate any support.
RATING SENSITVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR
FITB's Support Rating and Support Rating Floor are sensitive to
Fitch's assumption as to capacity to procure extraordinary support
in case of need.
KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Subordinated debt and other hybrid capital issued by FITB and by
various issuing vehicles are all notched down from FITB or its
bank subsidiaries' VRs in accordance with Fitch's assessment of
each instrument's respective non-performance and relative loss
severity risk profiles.
RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID
SECURITIES
The ratings of subordinated debt and other hybrid capital issued
by FITB and its subsidiaries are primarily sensitive to any change
in FITB's VR.
KEY RATING DRIVERS - LONG- AND SHORT-TERM DEPOSIT RATINGS
FITB's uninsured deposit ratings are rated one notch higher than
the company's IDR and senior unsecured debt because U.S. uninsured
deposits benefit from depositor preference. U.S. depositor
preference gives deposit liabilities superior recovery prospects
in the event of default.
KEY RATING SENSITIVITIES - LONG- AND SHORT-TERM DEPOSIT RATINGS
The ratings of long- and short-term deposits issued by FITB and
its subsidiaries are primarily sensitive to any change in FITB's
long- and short-term IDRs.
Fitch has affirmed these ratings:
Fifth Third Bancorp
-- Long-term IDR at 'A'; Outlook Stable;
-- Viability Rating at 'a';
-- Preferred stock at 'BB+';
-- Senior debt at 'A';
-- Subordinated debt at 'A-';
-- Short-term IDR at 'F1';
-- Short-term debt at 'F1';
-- Support at '5';
-- Support floor at 'NF'.
Fifth Third Bank
-- Long-term IDR at 'A'; Outlook Stable;
-- Viability Rating at 'a';
-- Senior debt at 'A';
-- Subordinated debt at 'A-';
-- Long-term deposits at 'A+';
-- Short-term IDR at 'F1';
-- Short-term deposits at 'F1';
-- Support at '5';
-- Support floor at 'NF'.
FISKER AUTOMOTIVE: Liquidation Plan Declared Effective
------------------------------------------------------
FA Liquidating Corp. (F/K/A Fisker Automotive, Inc.) and FAH
Liquidating Corp. (F/K/A Fisker Automotive Holdings, Inc.)
notified the U.S. Bankruptcy Court for the District of Delaware
that their Second Amended Chapter 11 Plan of Liquidation became
effective as of Aug. 13, 2014.
About Fisker Automotive
Fisker Automotive Holdings, Inc., developer of the Karma plug-in
hybrid electric sedan, filed a petition for Chapter 11 protection
(Bankr. D. Del. Case No. 13-13087) on Nov. 22, 2013.
Fisker estimated assets of more than $100 million and listed debt
of $500 million in its bankruptcy petition. The assets include an
assembly plant purchased for $21 million from General Motors Corp.
The plant never operated. The cars were assembled in Finland.
Fisker received a $529 million loan from the Department of
Energy's Advanced Technology Vehicles Manufacturing Loan Program
and drew down about $192 million before the department froze the
loan after Fisker failed to hit several development targets. The
company defaulted on its loan in April 2013.
Bankruptcy Judge Kevin Gross presides over the case. The Debtors
have tapped James H.M. Sprayregen, P.C., Esq., Anup Sathy, P.C.,
Esq., and Ryan Preston Dahl, Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, as co-counsel; Laura Davis Jones, Esq., James
E. O'Neill, Esq., and Peter J. Keane, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel;
Beilinson Advisory Group as restructuring advisors; and Rust
Consulting/Omni Bankruptcy, as notice and claims agent and
administrative advisor.
On Nov. 5, 2013, the Official Committee of Unsecured Creditors
was appointed. The members are: (a) David M. Cohen; (b) Sven
Etzelsberger; (c) Kuster Automotive Door Systems GmbH; (d) Magna
E-Car USA, LLC; (e) Supercars & More SRL; and (f) TK Holdings Inc.
The Committee is represented by William R. Baldiga, Esq., and
Sunni P. Beville, Esq., at Brown Rudnick LLP; and Mark Minuti,
Esq., at Saul Ewing LLP. Emerald Capital Advisors Corp. is the
financial advisors for the Committee.
Fisker sought bankruptcy protection to pursue a private sale of
its business to Hybrid Tech Holdings, LLC. The Committee,
however, wants a sale public sale, and has identified Wanxiang
America Corporation as stalking horse bidder.
Hybrid was initially under contract to buy Fisker in exchange for
$75 million of the $168.5 million government loan it acquired
immediately before the Debtor's Chapter 11 filing. Hybrid later
raised its offer by adding an additional $1 million cash and
agreeing to share proceeds from the sale of a facility in Delaware
it doesn't intend to operate. Hybrid also offered to pay real
estate taxes on the Delaware plant. Hybrid also will waive $90
million in deficiency claims that otherwise would dilute unsecured
creditors' recovery.
Wanxiang, as stalking horse bidder, initially offered $25.8
million in cash. However, Wanxiang has said it has raised its
offer by $10 million and is willing to go higher.
After the hearings on Jan. 10 and 13, the Court directed a public
auction, and capped Hybrid's credit bid to $25 million.
In response, Hybrid raised its offer to $55 million.
Hybrid is represented by Tobias Keller, Esq., and Peter
Benvenutti, Esq., at Keller & Benvenutti LLP, in San Francisco,
California.
Wanxiang, which bought A123 Systems, Inc., a manufacturer of
lithium-ion batteries used in electric vehicles such as the Fisker
Karma, in a bankruptcy auction early in 2013 for $256.6 million,
is represented in Fisker's case by Sidley Austin LLP's Bojan
Guzina, Esq., and Andrew F. O'Neill, Esq.; and Young Conaway
Stargatt & Taylor, LLP's Edmon L. Morton, Esq., Robert S. Brady,
Esq., and Kenneth J. Enos, Esq.
On Feb. 19, 2014, the Bankruptcy Court approved the sale of
Fisker's assets to Wanxiang America Corporation. The sale closed
on March 24. The sale to Wanxiang is valued at approximately $150
million, Fisker said in a news statement.
On March 27, 2014, the Court authorized Fisker Automotive Holdings
to change its name to FAH Liquidating Corp. and its affiliate,
Fisker Automotive Inc., to FA Liquidating Corp., following the
sale.
FL 6801 SPIRITS: Seeks Exclusive Periods Extension Thru Feb. 2
--------------------------------------------------------------
FL 6801 Spirits asks the Bankruptcy Court to extend the filing of
a reorganization plan and solicit acceptance of that plan. The
exclusive periods is requested to be set for February 2, 2015.
Before the commencement of the Chapter 11 case which was filed on
June 1, 2014, the Debtors pursued a sale of the Debtor's interest
in the luxury full-service, ocean front condominium hotel located
at the site of the old Carillon Hotel in Miami Beach, Florida. An
extensive marketing process was led by CBRE. A contract purchaser
was found but terminated the agreement as a matter of right after
the Home Owners Association filed state court litigation in
February 2014. However, the Debtors negotiated with the
Association for the purchase of the property.
360 Miami Hotel and Spa offered a $12 million stalking horse bid
for the Debtors' interest in the property. The Motion to approve
such sale was filed on May 28, 2014, but, Brown Rudnick, counsel
for the Association, filed its preliminary objection on June 19,
2014.
On July 1, 2014, the Court, with the consent of the Association,
approved bidding procedures and bid protections. Thus, on August
19, 2014, the Debtors conducted the auction and seven qualified
bidders competed.
Z Capital and North beach offered the highest bid in the amount of
$21.6 million and $21.5 million, respectively. 6801 Collins' bid
only reached $19 million.
On August 26, 2014, the Association filed a supplemental objection
for the sale. But, the Court encouraged the Debtors and the
Association to work toward a consensual resolution of the Sale.
The requested extension, the Debtors said, is necessary to provide
them with the time needed to either reach a resolution with the
Association or proceed with the Sale pursuant to the Sale order.
Moreover, an extension will provide the Debtors with sufficient
time to evaluate the claims that have been filed in the Chapter 11
cases, many of which was filed just one week before the September
12 claims bar date.
Collins Subsidiaries is represented by:
Albert Togut, Esq.
Frank A. Oswald, Esq.
Lara R. Sheikh, Esq.
Samantha J. Rothman, Esq.
TOGUT, SEGAL & SEGAL LLP
One Penn Plaza Suite 3335
New York, NY 10119
Tel: (212) 594-5000
About FL 6801 Spirits
FL 6801 Spirits LLC, a wholly owned subsidiary of Lehman Brothers
Holdings Inc. and three of its wholly owned subsidiaries filed
voluntary Chapter 11 petitions, seeking bankruptcy protection for
their condominium hotel property in Miami Beach. The affiliates
are FL 6801 Collins North LLC, FL 6801 Collins Central LLC, and FL
6801 Collins South LLC.
FL Spirits' Canyon Ranch Living Hotel and Spa is a luxury full-
service, ocean front condominium hotel located at the site of the
old Carillon Hotel in Miami Beach, Florida. The current operator
of the hotel, Canyon Ranch Living, is not a debtor, and operations
at the property are expected to continue without interruption.
FL Spirits and the three affiliates companies have sought joint
administration, with pleadings to be maintained at FL 6801's case
docket (Bankr. S.D.N.Y. Lead Case No. 14-11691).
FL Spirits has tapped Togut, Segal & Segal LLP as general
bankruptcy counsel, Shutts & Bowen LLP as special real estate
counsel, CBRE, Inc., as real estate broker, and Prime Clerk as
claims and notice agent.
Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Lehman's Chapter 11 plan became
effective on March 6, 2012.
FOREST OIL: Amends Annual Report for 2013
-----------------------------------------
Forest Oil Corporation filed with the U.S. Securities and Exchange
Commission an amendment to its annual report on Form 10-K for the
year ended Dec. 31, 2013. A copy of the Form 10-K/A is available
at http://is.gd/mwLxLy
Forest Oil also filed an amendment to its quarterly report on Form
10-Q for the quarter ended March 31, 2014. A copy of the Form 10-
Q/A is available at http://is.gd/uMPv8B
Moreover, Forest Oil filed an amendment to its quarterly report on
Form 10-Q for the quarter ended June 30, 2014. A copy of the Form
10-Q/A is available at: http://goo.gl/9t37VF
The Company reported net income of $73.9 million on $442 million
of total revenues for the year ended Dec. 31, 2013, compared with
a net loss of $1.29 billion on $606 million of total revenues last
year.
Forest Oil disclosed a net loss of $21.01 million on $65.2 million
of total revenues for the three months ended March 31, 2014,
compared with a net loss of $68.0 million on $118 million of total
revenues for the same period in 2013.
The Company disclosed a net loss of $82.7 million on $60.4 million
of total revenues for the three months ended June 30, 2014,
compared with net income of $33.44 million on $117 million of
total revenues for the same period in the prior year.
The Company's balance sheet at June 30, 2014, showed $997 million
in total assets, $1.04 billion in total liabilities, and a
stockholders' deficit of $45.64 million.
The Company obtained amendments to the credit facility as recently
as September 2013 and March 2014 in order to avoid breaching the
debt to EBITDA covenant. Forest believes that it could seek, and
the lenders under the credit facility would provide, another
amendment, or a waiver, of the covenant. Failing an amendment or
waiver, Forest believes it could sell assets to avoid breaching
the financial covenant. Alternatively, Forest could obtain a new
credit facility or other sources of financing. Forest may yet
undertake some or all of these actions prior to year end, if
necessary, though there is no assurance Forest could complete any
such actions as each involves factors that are outside its
control. However, inasmuch as Forest has not obtained a waiver or
amendment to the credit facility, or pursued any of the other
alternatives, there presently exists substantial doubt as to
Forest's ability to continue as a going concern through December
31, 2014, according to the regulatory filing.
About Forest Oil
Forest Oil is an independent oil and gas company engaged in the
acquisition, exploration, development, and production of oil,
natural gas, and natural gas liquids ("NGLs") primarily in North
America.
FULLCIRCLE REGISTRY: To Issue 15 Million Common Shares
------------------------------------------------------
Fullcircle Registry, Inc., filed with the U.S. Securities and
Exchange Commission a Form S-8 registration statement to register
15,000,000 shares of common stock for a proposed maximum aggregate
offering price of $300,000 issuable under the 2014 Non-Qualified
Employee/Consultant Stock Compensation Plan. A copy of the
prospectus is available at http://is.gd/d8fG13
About FullCircle Registry
Shelbyville, Kentucky-based FullCircle Registry, Inc., targets the
acquisition of small profitable businesses. FullCircle Registry,
Inc., has become a holding company with three subsidiaries. They
are FullCircle Entertainment, Inc., FullCircle Insurance Agency,
Inc. and FullCircle Prescription Services, Inc. Target companies
for future acquisition are those in search of exit plans for the
owners and are intended to continue autonomous operations as
current ownership is phased out over a period of 3-5 years.
FullCircle Registry reported a net loss of $448,102 on $1.88
million of revenues for the year ended Dec. 31, 2013, as compared
with a net loss of $369,784 on $1.86 million of revenues during
the prior year.
As of June 30, 2014, the Company had $5.75 million in total
assets, $6.06 million in total liabilities and a $306,851 total
stockholders' deficit.
Rodefer Moss & Co., PLLC, in New Albany, Indiana, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that FullCircle has suffered recurring losses from operations and
has a net working capital deficiency that raises substantial doubt
about the company's ability to continue as a going concern.
FREEDOM INDUSTRIES: No Probe on Former Officers for Part in Spill
-----------------------------------------------------------------
Ken Ward Jr., staff writer at the Charleston Gazette, reports that
there has been no investigation yet on whether Freedom Industries
Inc. could sue any of the Debtor's former officers over the events
that led to the January chemical leak into the Elk River, and
whether the Debtor is owed money for fraudulent transfers of funds
that could be used to pay creditors and to compensate victims of
the leak.
The Charleston Gazette relates that the investigations seem to be
on hold because the U.S. Bankruptcy Court for the Southern
District of West Virginia presses the Debtor to focus on the
clean-up, even though any recovered money could be used in that
project. As reported by the Troubled Company Reporter on Sept.
26, 2014, Tom Corrigan at Daily Bankruptcy Review reported that
the U.S. Bankruptcy Court for the Southern District of West
Virginia told the Debtor that it must prioritize its dwindling
resources to clean up the site of the contamination while holding
down its legal expenses.
The Charleston Gazette relates that in a separate legal action in
U.S. District Court, the attorneys for Kanawha Valley residents
and businesses have accused: (i) Gary Southern and Dennis P.
Farrell, two of the Debtor's former officials, for being partly
responsible for any damages suffered by leak victims due to their
roles in directing operations at the Debtor's facility; and
(ii) Eastman Chemical -- which supplied the Debtor with MCHM, one
of the major chemicals that leaked into the Elk -- for failing to
properly warn of the chemical's potential environmental and health
hazards.
The Official Committee of Unsecured Creditors doesn't think the
case would have to be frozen for six months or a year, but
remediation of the site was expected to be done by Nov. 14, 2014,
the Charleston Gazette states, citing Ronald E. Gold, Esq., at
Frost Brown Todd LLC, the attorney for the Committee.
The Department of Environmental Protection doesn't have enough
information yet to know how long the cleanup might take or how
much it might cost, the Charleston Gazette reports, citing DEP
lawyer Kevin Barrett.
About Freedom Industries
Freedom Industries Inc., is engaged principally in the business of
producing specialty chemicals for the mining, steel and cement
industries. The Debtor operates two production facilities located
in (a) Nitro, West Virginia; and (b) Charleston, West Virginia.
The company, connected to a chemical spill that tainted the water
supply in West Virginia, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan.
17, 2014. The case is assigned to Judge Ronald G. Pearson. The
petition was signed by Gary Southern, president.
The Debtor is represented by Mark E Freedlander, Esq., at McGuire
Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson,
Esq., at Barth & Thompson, in Charleston, West Virginia.
On Dec. 31, 2013, four companies merged under the umbrella of
Freedom Industries: Freedom Industries Inc., Etowah River Terminal
LLC, Poca Blending LLC and Crete Technologies LLC.
As reported in the Troubled Company Reporter on Feb. 20, 2014,
Kate White, writing for The Charleston Gazette, reported that the
Debtor disclosed $16 million in assets and $6 million in
liabilities when it filed for bankruptcy.
On Feb. 5, 2014, the U.S. Trustee appointed an official committee
of unsecured creditors. The Committee retained Frost Brown Todd
LLC as counsel.
On March 18, 2014, the Bankruptcy Court approved the hiring of
Mark Welch at MorrisAnderson in Chicago as Freedom's chief
restructuring officer.
GARLOCK SEALING: Removal Period Extended to March 31
----------------------------------------------------
U.S. Bankruptcy Judge J. Craig Whitley authorized Garlock Sealing
Technologies LLC, et al., to file notices of removal until
March 31, 2015.
As reported in the Troubled Company Reporter on Sept. 17, 2014,
Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, P.A., on
behalf of the Debtors, explained that the Debtors' motions on the
subject have been routine, and they have been brought for purposes
of efficient case administration.
The Debtors sought to further extend the deadline for removal and
avoid potential further and multiple filings extending the
deadline with respect to actions where the stay may be lifted.
About Garlock Sealing
Headquartered in Palmyra, New York, Garlock Sealing Technologies
LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more
than a century, Garlock has been helping customers efficiently
seal the toughest process fluids in the most demanding
applications.
On June 5, 2010, Garlock filed a voluntary Chapter 11 petition
(Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina,
to establish a trust to resolve all current and future asbestos
claims against Garlock under Section 524(g) of the U.S. Bankruptcy
Code. The Debtor estimated $500 million to $1 billion in assets
and up to $500 million in debts as of the Petition Date.
Affiliates The Anchor Packing Company and Garrison Litigation
Management Group, Ltd., also filed for bankruptcy.
Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A.,
represents the Debtor in their Chapter 11 effort. Garland S.
Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel
for asbestos matters.
The Official Committee of Asbestos Personal Injury Claimants in
the Chapter 11 cases is represented by Travis W. Moon, Esq., at
Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC,
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New
York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and
Jeanna Rickards Koski, Esq., in Washington, D.C. 20005.
Joseph W. Grier, III, the Court-appointed legal representative for
future asbestos claimants, has retained A. Cotten Wright, Esq., at
Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan
P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co-
counsel.
Judge George Hodges of the United States Bankruptcy Court for the
Western District of North Carolina on Jan. 10, 2014, entered an
order estimating the liability for present and future mesothelioma
claims against EnPro Industries' Garlock Sealing Technologies LLC
subsidiary at $125 million, consistent with the positions GST put
forth at trial.
GARLOCK SEALING: Says Committee Miscasts Solicitation Procedures
----------------------------------------------------------------
Garlock Sealing Technologies LLC, et al., in support of their
motion to approve solicitation and confirmation procedures and
schedule introduction, said that, among other things:
1. The First Amended Plan of Reorganization dated May 29, 2014,
proposes to pay each class of GST Asbestos Claimants in full (with
interest); and
2. The Debtors had proposed a robust, and expensive, program to
give notice to known and unknown GST Asbestos Claimants, including
Future GST Asbestos Claimants, of the opportunity to appear and
object to the Plan.
According to the Debtors, the Official Committee of Asbestos
Personal Injury Claimant Committee objected to Debtors'
procedures, wrongly characterizing precedent concerning temporary
allowance and miscasting the procedures Debtors have proposed.
As reported in the Troubled Company Reporter on Sept. 16, 2014,
the Debtors requested for an order:
(1) establishing procedures for solicitation and tabulation of
votes to accept or reject the First Amended Plan;
(2) approving forms of ballots;
(3) approving the form and content of notice, and the manner
of giving notice; and
(4) establishing dates and deadlines in connection with
confirmation of the Plan.
The Debtors' proposed criteria for temporary allowance that are
already embodied in the Court's estimation opinion entered on
Jan. 10, 2014, estimating the Debtors' aggregate liability --
finding $25 million to be a reasonable and reliable estimate of
Garlock's aggregate liability to pending mesothelioma claimants,
and $100 million to future mesothelioma claimants.
The Debtors do not seek a bar date for GST Asbestos Claims other
than Settled GST Asbestos Claims but the Debtors propose that
claimants, who wish to vote, file ballots that will serve as both
their proofs of claim and ballots.
Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, P.A., in
Charlotte, North Carolina -- gcassada@rbh.com -- explained that
the process will not initiate mass adjudication of contingent and
disputed GST Asbestos Claims. Instead, he noted, it will permit
temporary allowance of GST Asbestos Claims (and other claims) for
voting purposes only, enabling a vote on the Plan in the event the
Court determines that any class of claims is impaired or that the
vote is otherwise relevant to confirmation.
The Debtors also proposed a comprehensive notice program that will
afford due process to all claimants. The Debtors will give notice
of the Plan, the solicitation, and claimants' opportunity to
object to confirmation of the Plan. The Debtors will provide
notice by publication to unknown GST Asbestos Claimants.
The Debtors further proposed in the Confirmation Procedures Order
a schedule that would result in a Confirmation Hearing in July
2015. The Debtors propose that the Balloting Agent distribute
Solicitation Packages in the manner required by the Notice Program
on or before the date that is 30 calendar days after the date on
which the Court enters an order approving the adequacy of the
Disclosure Statement.
The Debtors request that the Court set the deadline for ballots to
be received by the Balloting Agent for 150 days after entry of the
Disclosure Statement Order. Prior to the Confirmation Hearing,
the Debtors would have the opportunity to file objections to the
temporary allowance for voting purposes of any claim, as not
meeting the criteria for temporary allowance in the Voting
Procedures, and notice a hearing no later than 45 days prior to
the Confirmation Hearing.
About Garlock Sealing
Headquartered in Palmyra, New York, Garlock Sealing Technologies
LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more
than a century, Garlock has been helping customers efficiently
seal the toughest process fluids in the most demanding
applications.
On June 5, 2010, Garlock filed a voluntary Chapter 11 petition
(Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina,
to establish a trust to resolve all current and future asbestos
claims against Garlock under Section 524(g) of the U.S. Bankruptcy
Code. The Debtor estimated $500 million to $1 billion in assets
and up to $500 million in debts as of the Petition Date.
Affiliates The Anchor Packing Company and Garrison Litigation
Management Group, Ltd., also filed for bankruptcy.
Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A.,
represents the Debtor in their Chapter 11 effort. Garland S.
Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel
for asbestos matters.
The Official Committee of Asbestos Personal Injury Claimants in
the Chapter 11 cases is represented by Travis W. Moon, Esq., at
Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC,
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New
York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and
Jeanna Rickards Koski, Esq., in Washington, D.C. 20005.
Joseph W. Grier, III, the Court-appointed legal representative for
future asbestos claimants, has retained A. Cotten Wright, Esq., at
Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan
P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co-
counsel.
Judge George Hodges of the United States Bankruptcy Court for the
Western District of North Carolina on Jan. 10, 2014, entered an
order estimating the liability for present and future mesothelioma
claims against EnPro Industries' Garlock Sealing Technologies LLC
subsidiary at $125 million, consistent with the positions GST put
forth at trial.
GARLOCK SEALING: Opposes Including Committee Attack in Disclosures
------------------------------------------------------------------
Garlock Sealing Technologies LLC, et al., responded to the
objection filed by the Official Committee of Asbestos Personal
Injury Claimants to the adequacy of information in the Disclosure
Statement for First Amended Plan of Reorganization.
The Debtors said that the Committee did not dispute that adequacy
of information in the Disclosure Statement. The Committee
contended that the Disclosure Statement must include a notice that
the Committee will object to the Plan and recommended that GST
Asbestos Claimants vote against it.
The Committee, the Debtors relate, requested that the Debtors be
required to include in the Disclosure Statement a ten-page
disclosure from the Committee providing information that purports
to explain its positions.
According to the Debtors, the Committee must not be permitted to
include what amounts to a brief attacking the Court's estimation
opinion in the Disclosure Statement.
About Garlock Sealing
Headquartered in Palmyra, New York, Garlock Sealing Technologies
LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more
than a century, Garlock has been helping customers efficiently
seal the toughest process fluids in the most demanding
applications.
On June 5, 2010, Garlock filed a voluntary Chapter 11 petition
(Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina,
to establish a trust to resolve all current and future asbestos
claims against Garlock under Section 524(g) of the U.S. Bankruptcy
Code. The Debtor estimated $500 million to $1 billion in assets
and up to $500 million in debts as of the Petition Date.
Affiliates The Anchor Packing Company and Garrison Litigation
Management Group, Ltd., also filed for bankruptcy.
Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A.,
represents the Debtor in their Chapter 11 effort. Garland S.
Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel
for asbestos matters.
The Official Committee of Asbestos Personal Injury Claimants in
the Chapter 11 cases is represented by Travis W. Moon, Esq., at
Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC,
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New
York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and
Jeanna Rickards Koski, Esq., in Washington, D.C. 20005.
Joseph W. Grier, III, the Court-appointed legal representative for
future asbestos claimants, has retained A. Cotten Wright, Esq., at
Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan
P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co-
counsel.
Judge George Hodges of the United States Bankruptcy Court for the
Western District of North Carolina on Jan. 10, 2014, entered an
order estimating the liability for present and future mesothelioma
claims against EnPro Industries' Garlock Sealing Technologies LLC
subsidiary at $125 million, consistent with the positions GST put
forth at trial.
GENERAL MOTORS: Recalls Nearly 7,600 Chevy Caprices
---------------------------------------------------
Jeff Bennett, writing for The Wall Street Journal, reported that
General Motors Co. will recall about 7,600 Chevrolet Caprice
police vehicles for a transmission issue, putting the number of
total vehicles recalled by the company in North America at well
over 30 million. According to the report, the recall, posted by
the National Highway Traffic Safety Administration, covers certain
2011 through 2013 model year Caprices. The vehicles are police
patrol cruisers equipped with a specific transmission selector
lever that contains two pins that can become displaced, the report
said.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
On Dec. 15, 2011, Motors Liquidation Company was dissolved. On
the Dissolution Date, pursuant to the Plan and the Motors
Liquidation Company GUC Trust Agreement, dated March 30, 2011,
between the parties thereto, the trust administrator and trustee
-- GUC Trust Administrator -- of the Motors Liquidation Company
GUC Trust, assumed responsibility for the affairs of and certain
claims against MLC and its debtor subsidiaries that were not
concluded prior to the Dissolution Date.
* * *
The Troubled Company Reporter, on Sep. 29, 2014, reported that
Standard & Poor's Ratings Services raised its corporate credit
rating on U.S. automaker General Motors Co. (GM) to 'BBB-' from
'BB+', and revised the outlook to stable from positive. At the
same time, S&P raised its issue-level rating on GM's unsecured
debt to 'BBB-' from 'BB+' and simultaneously withdrew its '4'
recovery rating on that debt, because S&P do not assign recovery
ratings to the issues of investment-grade companies.
GRAFIN PROPERTIES: Case Summary & 4 Unsecured Creditors
-------------------------------------------------------
Debtor: Grafin Properties, LLP
77 Etna Road
Lebanon, nh 03766
Case No.: 14-11941
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
District of New Hampshire (Manchester)
Debtor's Counsel: Cheryl C. Deshaies, Esq.
CHERYL C. DESHAIES, ATTORNEY AT LAW
PO Box 648
Exeter, NH 03833
Tel: (603) 580-1416
Fax: 1-888-308-7131
Email: cdeshaies@deshaieslaw.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Amy E. Gamache, partner.
A list of the Debtor's four largest unsecured creditors is
available for free at http://bankrupt.com/misc/nhb14-11941.pdf
GREENPORT CROSSINGS: Owner Files for Bankruptcy
-----------------------------------------------
Greenport Crossings, LLC owner Harbalwant Singh has filed for
Chapter 11 bankruptcy protection after failing to cover the cost
of repairs to his gas station and convenience store, Route 66 Food
Mart, which was closed by a fire in April, Arthur Cusano at the
Register-Star reports, citing Columbia County Economic Development
head, Ken Flood.
Route 66 Food Mart may reopen under a different management,
Register-Star relates.
According to the Register-Star, Mr. Flood told CEDC board members
during a meeting on Tuesday that CEDC has sued Mr. Singh for money
loaned him. "We have sued Mr. Sigh personally and the bank is the
first in line for collateral," the report quoted Mr. Flood as
saying.
Mr. Singh, says the Register-Star, had agreed to a 20-year reduced
tax deal known as a PILOT (payment in lieu of taxes) with the
Industrial Development Agency in 2011 for a $2.5 million hotel
that was never constructed. Register-Star relates that the U.S.
Department of Agriculture Rural Development supported the cost of
the loan, which Kinderhook Bank had financed with an 80% guarantee
and which was not covered by the federal program. The cost of the
completed project was $2.5 million.
Saugerties, New York-based Greenport Crossings, LLC, which
operates a retail and gas station, filed for Chapter 11 bankruptcy
protection (Bankr. N.D.N.Y. Case No. 14-11249-1) on June 2, 2014.
The Debtor disclosed $2.57 million in total assets and $5.30
million in total liabilities. The Hon. Robert E. Littlefield Jr.
presides over the case. Christian H. Dribusch, Esq., at The
Dribusch Law Firm serves as the Debtor's counsel.
GT ADVANCED: 1st-Day Hearing Today; Judge Boroff Assigned to Case
-----------------------------------------------------------------
A hearing on the "first day" motions filed by GT Advanced
Technologies Inc. and its debtor-affiliates will be held Oct. 9,
2014 at 10:00 a.m. at the U.S. Bankruptcy Court for the District
of New Hampshire, 1000 Elm Street, 11th Floor, Courtroom 2,
Manchester, New Hampshire. Objections may be filed until 9:00
a.m. on Oct. 9 with service upon the Debtors.
Chief Bankruptcy Judge Bruce A. Harwood on Oct. 7 entered an order
recusing himself from presiding over the Debtors' Chapter 11
cases.
The minutes for the Judicial Council for the First Circuit meeting
on Oct. 7, 2014 was later posted, which provides that Chief Judge
Lynch has approved the request of the United States Bankruptcy
Court for the District of New Hampshire for the designation of
Honorable Henry J. Boroff of the U.S. Bankruptcy for the District
of Massachusetts to preside over the Debtors' Chapter 11 cases.
The Debtor on the Petition Date filed motions to:
-- establish a bar date for filing of proofs of claim;
-- implement procedures for the payment of professionals;
-- reject leases with JB Management, L.P., et al.;
-- implement procedures for the assumption or rejection of
contracts;
-- extend the deadline to file schedules;
-- pay prepetition wages and benefits;
-- prohibit utilities from discontinuing service;
-- enforce Sections 362 and 525 of the Bankruptcy Code;
-- establish procedures for limiting transfer of claims and
equity interests;
-- set procedures for the resolution and satisfaction of
reclamation claims;
-- continue their customer programs; and
-- continue their workers' compensation programs;
-- pay prepetition shipping and delivery charges; and
-- pay prepetition taxes and fees;
-- maintain their cash management system; and
-- pay the prepetition claims of critical vendors.
The Debtors also filed a motion to approve the joint
administration of their Chapter 11 cases for procedural purposes.
Moreover, the Debtors have filed an application to employ Kurtzman
Carson Consultants, LLC as notice, claims and balloting agent.
Prepetition Capital Structure
As of June 28, 2014, the GTAT Group's unaudited and consolidated
financial statements reflected assets totaling $1.5 billion and
liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had
approximately $85 million in cash, $84 million of which is
unencumbered.
On Sept. 28, 2012, GT issued $220 million aggregate principal
amount of 3.00% Convertible Senior Notes due 2017. The 2017 Notes
are senior unsecured obligations of GT, at a rate of 3.00% per
annum beginning on April 1, 2013. The 2017 Notes are governed by
an Indenture dated September 28, 2012 with U.S. Bank National
Association, as trustee. In connection with the offering of the
2017 Notes, GT entered into separate convertible note hedging
transactions and warrant transactions with multiple
counterparties. The 2017 Notes had a maturity date of October 1,
2017.
On Dec. 10, 2013, GT issued $214 million aggregate principal
amount of 3.00% Convertible Senior Notes due 2020. The 2020 Notes
are senior unsecured obligations of GT, at a rate of 3.00% per
annum beginning on June 15, 2014. The 2020 Notes are governed by
an Indenture dated December 10, 2013 with U.S. Bank National
Association, as trustee. The 2020 Notes had a maturity date of
December 15, 2020.
Domestic and international trade creditors hold approximately
$145 million in trade claims against GTAT.
About GT Advanced Technologies
GT Advanced Technologies Inc. -- http://www.gtat.com/-- is a
diversified technology company producing advanced materials and
innovative crystal growth equipment for the global consumer
electronics, power electronics, solar and LED industries.
Headquartered in Merrimack, New Hampshire, GT is a publicly held
corporation whose stock is traded on NASDAQ under the ticker
symbol "GTAT."
On Oct. 6, 2014, GT Advanced Technologies and 8 affiliates filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code (Bankr. D. N.H. Lead Case No. 14-11916).
GT says that it has sought bankruptcy protection due to a "severe
liquidity crisis."
The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as
attorneys and Kurtzman Carson Consultants LLC as claims and
noticing agent.
GT ADVANCED: Proposes to Pay $25 Million to Critical Vendors
------------------------------------------------------------
GT Advanced Technologies Inc. and its affiliated debtors ask the
U.S. Bankruptcy Court the District of New Hampshire for approval
to pay up to $25 million for the prepetition claims of certain
critical domestic and foreign vendors.
The aggregate amount of critical vendor payments made prior to
entry of the final order will not exceed $15 million and GTAT will
not make critical vendor payments exceeding $25 million under the
final order.
GTAT proposes making those prepetition payments to entities that
agree to supply goods and/or services postpetition to GTAT
according to the ordinary course trade terms (including pricing)
that existed before the Petition Date, or on such other terms that
are acceptable to GTAT.
GTAT says it relies on various third-party vendors to supply them
with raw materials, finished products and other goods that are
integral to its sapphire material and sapphire, polysilicon and
photovoltaic equipment businesses.
About GT Advanced Technologies
GT Advanced Technologies Inc. -- http://www.gtat.com/-- is a
diversified technology company producing advanced materials and
innovative crystal growth equipment for the global consumer
electronics, power electronics, solar and LED industries.
Headquartered in Merrimack, New Hampshire, GT is a publicly held
corporation whose stock is traded on NASDAQ under the ticker
symbol "GTAT."
As of June 28, 2014, the GTAT Group's unaudited and consolidated
financial statements reflected assets totaling $1.5 billion and
liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had
$85 million in cash, $84 million of which is unencumbered.
On Oct. 6, 2014, GT Advanced Technologies and 8 affiliates filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code (Bankr. D. N.H. Lead Case No. 14-11916).
GT says that it has sought bankruptcy protection due to a "severe
liquidity crisis."
The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as
attorneys and Kurtzman Carson Consultants LLC as claims and
noticing agent.
GT ADVANCED: To Limit Claims, Shares Trading to Protect NOLs
------------------------------------------------------------
GT Advanced Technologies Inc. and its affiliated debtors ask the
bankruptcy court to enter interim and final orders establishing
notification procedures and approving restrictions on certain
transfers of claims against and equity interests.
GTAT estimates that, as of December 31, 2014, GTAT will have NOLs
of approximately $152 million and certain other tax attributes.
A Section 382 change of ownership prior to the effective date of a
chapter 11 plan of reorganization would effectively eliminate
GTAT's ability to obtain meaningful benefit from its NOLs, causing
a significant loss of value to GTAT's estates.
Because an "ownership change" may negatively impact the Debtors'
utilization of their NOLs, the Debtors proposed these procedures:
* Any "substantial shareholder" -- entity that owns, at least
4.75% of all issued and outstanding shares of GT Stock --
must serve and file a declaration on or before the later of
(i) 10 days after the date of the interim order approving
the procedures and (ii) 10 days after becoming a substantial
shareholder.
* At least 20 days prior to effectuating any transfer of
the equity securities that would result in another entity
becoming a substantial shareholder, the parties to the
transaction must serve and file a notice of the intended
stock transaction.
* The Debtors (and the statutory committee) have 15 business
days after receipt of the stock transaction notice to object
to the proposed transaction.
* If the Debtors do not object, the proposed transaction may
proceed.
* Any transfer of the equity securities in violation of the
procedures will be null and void ab initio.
The Debtors are proposing similar procedures in connection with
the transfer of claims. Any "substantial claim holder" -- entity
that beneficially owns an aggregate dollar amount of claims
against the Debtors, or any entity controlled by such person or
Entity through which such person or Entity beneficially owns
Claims against the Debtors, of more than the threshold
Amount (presently at $20,615,000) -- must serve and file a
declaration on or before the later of (i) 10 days after the date
of the interim order approving the procedures and (ii) 10 days
after becoming a substantial shareholder.
About GT Advanced Technologies
GT Advanced Technologies Inc. -- http://www.gtat.com/-- is a
diversified technology company producing advanced materials and
innovative crystal growth equipment for the global consumer
electronics, power electronics, solar and LED industries.
Headquartered in Merrimack, New Hampshire, GT is a publicly held
corporation whose stock is traded on NASDAQ under the ticker
symbol "GTAT."
As of June 28, 2014, the GTAT Group's unaudited and consolidated
financial statements reflected assets totaling $1.5 billion and
liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had
$85 million in cash, $84 million of which is unencumbered.
On Oct. 6, 2014, GT Advanced Technologies and 8 affiliates filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code (Bankr. D. N.H. Lead Case No. 14-11916).
GT says that it has sought bankruptcy protection due to a "severe
liquidity crisis."
The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as
attorneys and Kurtzman Carson Consultants LLC as claims and
noticing agent.
GT ADVANCED: Wants Foreign Creditors Reminded of Automatic Stay
---------------------------------------------------------------
GT Advanced Technologies Inc. and its affiliated debtors ask the
U.S. Bankruptcy Court the District of New Hampshire to enter an
order enforcing the automatic stay and antidiscrimination
provisions of the Bankruptcy Code.
Proposed counsel, Daniel W. Sklar, Esq., at Nixon Peabody LLP,
tells the Court that GTAT is a global enterprise with operations
in Asia and throughout the United States. GTAT utilizes offshore
vendors for the manufacturing and production of the component
parts of equipment and goods that are ultimately sold by GTAT in
the United States and abroad. A substantial portion of GTAT's
revenue is generated outside the United States. Many of GTAT's
foreign creditors and contract counterparties do not transact
business on a regular basis with companies that have filed for
chapter 11, and are therefore unfamiliar with the scope of the
debtor in possession's authority to conduct its business. As a
result, these parties are unaware of the protections of the
automatic stay and other provisions that assist debtors in
possession during their restructuring efforts.
GTAT seeks an order from the Court that it may share with or
present to parties in foreign jurisdictions who are not familiar
with the Bankruptcy Code or its protections and who might
otherwise violate those protections.
About GT Advanced Technologies
GT Advanced Technologies Inc. -- http://www.gtat.com/-- is a
diversified technology company producing advanced materials and
innovative crystal growth equipment for the global consumer
electronics, power electronics, solar and LED industries.
Headquartered in Merrimack, New Hampshire, GT is a publicly held
corporation whose stock is traded on NASDAQ under the ticker
symbol "GTAT."
As of June 28, 2014, the GTAT Group's unaudited and consolidated
financial statements reflected assets totaling $1.5 billion and
liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had
$85 million in cash, $84 million of which is unencumbered.
On Oct. 6, 2014, GT Advanced Technologies and 8 affiliates filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code (Bankr. D. N.H. Lead Case No. 14-11916).
GT says that it has sought bankruptcy protection due to a "severe
liquidity crisis."
The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as
attorneys and Kurtzman Carson Consultants LLC as claims and
noticing agent.
GTA REALTY II: Case Summary & 9 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: GTA Realty II, LLC
184 Prince Street
New York, NY 10012
Case No.: 14-12840
Chapter 11 Petition Date: October 8, 2014
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. Robert E. Gerber
Debtor's Counsel: Mark A. Frankel, Esq.
BACKENROTH FRANKEL & KRINSKY, LLP
800 Third Avenue, 11th Floor
New York, NY 10022
Tel: (212) 593-1100
Fax: (212) 644-0544
Email: mfrankel@bfklaw.com
Total Assets: $18 million
Total Liabilities: $7.26 million
The petition was signed by Nancy Launi, G.T.A. Realty Corp.
president.
List of Debtor's nine Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Consolidated Edison Utility $10,000
Dominick Giordano Alleged Loan $300,000
110 Thompson St
New York, NY 10012
Harrison Morgan Investments LLC Alleged Loans $117,300
John Bivona, Esq. Legal Fees, Loans $825,000
40 Wall St., 17th fl
New York, NY 10005
Law Offices of Bruce A. Feldman Legal Fees $162,310
Margaux Levy Alleged Broker $207,500
Commission
NYC Department of Finance $102
NYS Dept of Tax & Finance $8,352
Robinson Brog et al. Legal Fees $12,443
HAWAII OUTDOOR: Court Dismisses Chapter 11 Case
-----------------------------------------------
The Hon. Robert J. Faris of the U.S. Bankruptcy Court for the
District of Hawaii dismissed the Chapter 11 bankruptcy case of
Hawaii Outdoor Tours, Inc., at the behest of First-Citizens Bank &
Trust Company.
In connection with the dismissal, the Court authorized the bank to
disburse $250,000 unsecured creditor fund by escrow, pending
adjudication of FCB's Third Omnibus Objection to Certain Unsecured
Scheduled Claims Listed on Debtor's Bankruptcy Schedules. All
other unsecured claims have been adjudicated as allowed, partially
allowed or disallowed claims.
A full-text copy of the dismissal order is available for free
at http://is.gd/FjgEw5
As reported in the Troubled Company Reporter on Sept. 5, 2014,
David C. Farmer, Chapter 11 Trustee of the case of Hawaii Outdoor,
objected to the motion of FCB to dismiss the Debtor's bankruptcy
case. The Chapter 11 Trustee told the Court that there is no
basis to dismiss the Debtor's case at this time. The Trustee
recommended that the Bank consent to move the hearing to a date,
which is Sept. 15, 2014, in the future to provide the Trustee and
his counsel time to complete his investigations. If the Bank
cooperates, a period of two months should be sufficient. Barring
any other objection, the Bank and the Trustee could submit an
order or go to a final hearing. Given the posture of the case and
the remaining tasks to complete, the Trustee urged the Court to
deny the Motion.
About Hawaii Outdoor Tours
Hawaii Outdoor Tours, Inc., operator of the Naniloa Volcanoes
Resort in Hilo, Hawaii, filed a Chapter 11 petition (Bankr. D.
Haw. Case No. 12-02279) in Honolulu on Nov. 20, 2012. Naniloa
Volcanoes is a 382-room hotel with a nine-hole golf course. The
64-acre property is subject to a 65-year lease, commencing Feb. 1,
2006, and provides for a total ground rent for the first 10 years
of $500,000 annually. The Debtor used a $10 million loan from
First Regional Bank and $10 million of its own cash to invest in
the property.
First-Citizens Bank & Trust Company, which acquired the First
Regional note from the Federal Deposit Insurance Corp., commenced
foreclosure proceedings in August. First-Citizens Bank asserts a
claim of $9.95 million. The Debtor believes that the value of the
hotel property exceeds the amount of the First-Citizens Bank note.
Just the bricks and mortar alone was valued in excess of
$35 million by First Regional's appraiser and the insurance
company.
Bankruptcy Judge Robert J. Faris oversees the case. Ramon J.
Ferrer, Esq., represents the Debtor as counsel.
In its schedules, the Debtor disclosed $52,492,891 in assets and
$11,756,697 in liabilities. The petition was signed by CEO
Kenneth Fujiyama.
Ted N. Petitt, Esq., represents secured creditor First-Citizens
Bank as counsel. Cynthia M. Johiro, Esq., represents the State of
Hawaii Department of Taxation as counsel.
Timothy J. Hogan, Esq., represents David C. Farmer, the Chapter 11
Trustee, as counsel.
Christopher J. Muzzi, Esq., at Tsugawa Biehl Lau & Muzzi, LLLC,
represents the Official Committee of Unsecured Creditors as
counsel.
The Bankruptcy Court, in the minutes of the hearing held Nov. 12,
2013, authorized the Chapter 11 trustee to sell hotel, assets and
assignments to the highest bidder.
Ken Direction Corporation, the parent company of Hawaii Outdoor
Tours, Inc., filed with the U.S. Bankruptcy Court for the District
of Hawaii on Nov. 5, 2013, a disclosure statement explaining its
proposed plan of reorganization for the Debtor, dated Nov. 4,
2013. According to the Disclosure Statement, the source of about
$14,000,000 in new funds will be the proceeds from the sale of
real estate owned by HPAC, LLC, an affiliated company of the
Proponent, to Shalom Amar Revocable Trust 2000 by way of a 1031
exchange.tion as counsel.
Timothy J. Hogan, Esq., represents David C. Farmer, the Chapter 11
Trustee, as counsel.
Christopher J. Muzzi, Esq., at Tsugawa Biehl Lau & Muzzi, LLLC,
represents the Official Committee of Unsecured Creditors as
counsel.
The Bankruptcy Court, in the minutes of the hearing held Nov. 12,
2013, authorized the Chapter 11 trustee to sell hotel, assets and
assignments to the highest bidder.
Ken Direction Corporation, the parent company of Hawaii Outdoor
Tours, Inc., filed with the U.S. Bankruptcy Court for the District
of Hawaii on Nov. 5, 2013, a disclosure statement explaining its
proposed plan of reorganization for the Debtor, dated Nov. 4,
2013. According to the Disclosure Statement, the source of about
$14,000,000 in new funds will be the proceeds from the sale of
real estate owned by HPAC, LLC, an affiliated company of the
Proponent, to Shalom Amar Revocable Trust 2000 by way of a 1031
exchange.
HCA INC: Fitch Assigns 'BB+' Rating on $1.5BB Proposed Sr. Notes
----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to HCA Inc.'s proposed
$1.5 billion proposed senior secured notes. Fitch expects that
the company will apply the proceeds of the proposed notes to
refinance certain of its existing senior secured debt. The Rating
Outlook is Stable. 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. At the same time, Fitch notes that the proposed
refinancing will allow the company to operate under the more
lenient terms of a recent amendment to the credit agreement
restriction on dividends and share repurchases.
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. At June 30,
2014, Fitch calculates leverage of 3.7x though the HCA, Inc.
level. A more restrictive RP covenant under certain of the senior
secured notes indentures places a stricter limit on RP capacity,
preventing the company from operating under the more lenient terms
of the amended covenant. Fitch expects the proceeds of the
proposed notes will be used to refinance the notes that require
the stricter covenant terms.
HOSPITAL INDUSTRY OPERATING TRENDS IMPROVING, 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.
HCA's ratings could be upgraded if the company maintains total
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 rates the following:
HCA, Inc.
-- Issuer Default Rating (IDR) 'BB-';
-- Senior secured credit facilities (cash flow and asset
backed) rated 'BB+';
-- Senior secured first lien notes rated 'BB+';
-- Senior unsecured notes rated 'BB-' .
HCA Holdings Inc.
-- IDR 'BB-';
-- Senior unsecured notes rated 'B'.
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.
HCA INC: Moody's Assigns Ba2 Rating on $1.5BB Sr. Secured Notes
---------------------------------------------------------------
Moody's Investors Service assigned a Ba2 (LGD 3) rating to the
proposed offering of an aggregate of $1.5 billion of senior
secured notes due 2019 and 2025 by HCA, Inc. Moody's understands
that the proceeds of the offerings will be used predominantly to
fund the redemption of the company's $1.4 billion of 7.25% senior
secured notes due 2020. HCA, Inc. is a wholly owned subsidiary of
HCA Holdings, Inc. (collectively HCA or the company).
HCA's existing ratings, including the company's Ba3 Corporate
Family Rating and Ba3-PD Probability of Default Rating, remain
unchanged as Moody's does not anticipate a meaningful change in
leverage from this refinancing transaction. The stable rating
outlook is also unchanged.
The following ratings have been assigned.
Issuer: HCA, Inc.
Senior secured notes due 2019, at Ba2 (LGD 3)
Senior secured notes due 2025, at Ba2 (LGD 3)
Ratings Rationale
HCA's Ba3 Corporate Family Rating reflects Moody's expectation
that HCA's scale and dominant market strength will allow the
company to continue to grow revenue and maintain healthy EBITDA
margins. HCA's scale and position as the largest for-profit
hospital operator in terms of revenue, aids its ability to
leverage investments and resources needed to adapt to changes in
the sector and weather industry challenges. While Moody's
anticipates that the company will continue to return capital to
shareholders in lieu of debt repayment, the rating agency expects
that HCA will generate sufficient cash to fund moderate sized
acquisitions with little detrimental impact on credit metrics.
Moody's expects that the company will operate with debt to EBITDA
in the range of 4.5 to 5.0 times.
Moody's could upgrade the ratings if HCA realizes continued
earnings growth or repays debt such that debt to EBITDA is
expected to be maintained below 4.0 times. Additionally, Moody's
would have to see the company maintain a conservative financial
profile prior to considering an upgrade, including limiting
increases in leverage for shareholder distributions or share
repurchases.
If the company experiences a deterioration in operating trends,
for example, negative trends in same-facility adjusted admissions
or same-facility revenue per adjusted admission, Moody's could
downgrade the ratings. Additionally, Moody's could downgrade the
ratings if the company incurs additional debt to fund shareholder
distributions or acquisitions so that debt to EBITDA was expected
to be sustained above 5.0 times.
The principal methodology used in this rating was Global
Healthcare Service Providers published in December 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
HCA Inc. is a wholly owned subsidiary of HCA Holdings, Inc.
(collectively HCA). Headquartered in Nashville, Tennessee, HCA is
the nation's largest acute care hospital company as measured by
revenue. A portion of the equity of HCA is still held by private
equity firms Bain Capital and KKR as well as members of
management. The company generated revenue in excess of $35
billion, net of the provision for doubtful accounts, in the twelve
months ended June 30, 2014.
HCA INC: S&P Assigns 'BB' Rating on $1.5BB Sr. Secured Notes
------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'BB'
issue-level rating (two notches above the 'B+' corporate credit
rating on the company) to Nashville, Tenn.-based HCA Inc.'s
proposed $1.5 billion senior secured notes, which S&P expects to
be issued in five- and ten and one half-year tranches. S&P
assigned the notes a '1' recovery rating, indicating its
expectation of very high (90% to 100%) recovery for lenders in the
event of a payment default. The notes will be drawn from HCA's
shelf registration filed under the SEC's well-known seasoned
issuer (WKSI) rules. HCA will use the proceeds to repay existing
senior secured debt. The issue-level ratings are the same as
S&P's existing senior secured ratings.
S&P's 'B+' corporate credit rating on HCA reflects its view that
the company faces competitive threats and reimbursement/pricing
pressures. These factors offset HCA's large, relatively
diversified portfolio of hospitals that are commonly located in
midsize to larger markets. The company's size and market presence
provides scale that helps contract negotiations with private
insurance companies. These factors are incorporated into S&P's
"fair" business risk assessment.
HCA's leverage has remained relatively stable over the past two
years. Leverage was 4.4x as of June 2014 as compared with 4.6x
two years earlier. While EBITDA has increased about 11% during
that time, debt has increased as well because dividends and share
repurchases consume most of the company's free cash flow. This is
consistent with an "aggressive" financial risk profile. S&P's
base case calls for leverage to remain between 4.5x-5.0x over the
intermediate term. Considerable risks remain to S&P's base case,
including a difficult reimbursement environment and the long term
risks of health reform. HCA's financial policy over the long term
has been shareholder friendly, characterized by dividends and
share repurchases that have absorbed all free cash flow, with
little to no allocation to permanent debt reduction.
RATINGS LIST
HCA Inc.
Corporate credit rating B+/Positive/--
New Ratings
HCA Inc.
Senior secured
Notes due 2019 BB
Recovery Rating 1
Notes due 2025 BB
Recovery Rating 1
HDGM ADVISORY: Owner's Ch 11 Filing Stops $5.8MM Payment to GPIF
----------------------------------------------------------------
Scott Olson at the Indianapolis Business Journal reports that
Harold Garrison, the owner of HDG Mansur, has filed for Chapter 11
bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of Indiana, preventing Cayman Islands-based
equity funds GPIF Equity Co. Ltd. and GPIF Finance Co. Ltd from
collecting the $5.8 million.
According to IBJ, the GPIF Parties had sued Mr. Garrison and HDG
Mansur's affiliates, HDG Mansur Investment Services Inc. and HDGM
Advisory Services LLC, accusing them of misappropriating $5.8
million in assets. IBJ relates that the judge awarded the damages
in August 2013. The report says that HDG Mansur countersued the
GPIF Parties, claiming that they owed it more than $20 million in
fees. HDG Mansur Investment and HDGM Advisory had provided GPIF
Parties advisory services, the report states.
The trial was set for Monday, but Francis J. Earley, Esq., at
Mintz Levin Cohn Ferris Glovsky and Popeo PC, the attorney for Mr.
Garrison, said in a court filing that his client's bankruptcy
effectively stays the trial.
A Friday court filing says that Mr. Garrison estimates his assets
to be between $50 million and $100 million and his liabilities
between $100 million and $500 million.
Mr. Early can be reached at:
MINTZ LEVIN COHN FERRIS GLOVSKY AND POPEO PC
Chrysler Center
666 Third Avenue
New York, NY 10017
Tel: (212) 692-6230
E-mail: FEarley@mintz.com
About HDGM Advisory Services
HDGM Advisory Services, LLC, and HDG Mansur Investment Services,
Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D. Ind.
Case No. 14-04797 and 14-04798) in Indianapolis, Indiana, on May
21, 2014. On May 28, 2014, the Hon. James M. Carr directed the
joint administration the cases of HDGM Advisory Services, LLC, and
HDG Mansur Investment Services, Inc., under the lead case -- HDGM
Advisory, Case No. 14-04797.
HDGH Advisory disclosed $20,257,001 in assets and $7,991, 590 in
liabilities as of the Chapter 11 filing. HDG Mansur disclosed
$20,454,819 in assets and $12,377,542 in liabilities. According
to a court filing, the Debtors don't have any secured creditors.
The cases are assigned to Judge James M. Carr.
The Debtors have tapped Michael W. Hile, Esq., Christine K.
Jacobson, Esq., and Henry Mestetsky, Esq., at Katz & Korin PC, as
counsel.
An affiliate of the Debtors, Hamilton Proper Partners Golf
Partnership, L.P., sought bankruptcy protection (Bankr. S.D. Ind.
Case No. 14-00461) on Jan. 24, 2014.
HILL TOP: Gets 2-Yr. Extension of Construction Permits for Complex
------------------------------------------------------------------
Gus Thomson, writing for the Auburn Journal, reports that Hoss
Bozorgzad, an Auburn entrepreneur who has been working on the Hill
Top Center project, has won a two-year extension, through Sept.
25, 2016, of the Placer County construction permits granted in
2008 that were due to expire this October, despite objections by
nearby residents Robert Chalfant and Rex Addison, and the Channel
Hill Environmental Coalition members.
Mr. Bozorgzad, says the Auburn Journal, will work with a group of
new investors to build the 93,000-square-foot Hill Top Center
complex -- which includes includes stores and restaurant space,
underground parking and an art gallery -- on a cliffside
overlooking Interstate 80 in Bowman.
According to the Auburn Journal, Mr. Chalfant had said that the
project needed to analyze issues like noise levels and dust during
construction because they were inadequately reviewed six years
ago, while Mr. Addison had written to the Planning Commission,
asking it to consider a better use of the land. As it already has
lots of wildlife on it, Mr. Addison suggested a park or wildlife
learning center, instead of a hotel that would benefit a handful
of investors, the Auburn Journal relates. "There are already five
or six hotels in the area that always have vacancies," the report
quoted Mr. Addison as saying.
Auburn, California-based Hill Top LLC filed for Chapter 11
bankruptcy protection (Bankr. E.D. Cal. Case No. 11-47056) on
Nov. 17, 2011, listing $496,686 in assets and $1,712,959 in
liabilities. C. Anthony Hughes, Esq., at Anthony Hughes LC serves
as the Debtor's bankruptcy counsel.
HUNTINGTON BANCSHARES: Fitch Affirms 'BB' Preferred Stock Rating
----------------------------------------------------------------
Fitch Ratings has affirmed Huntington Bancshares, Inc.'s (HBAN)
ratings at 'A-/F1'. The Rating Outlook remains Stable.
The rating action follows a periodic review of the large regional
banking group, which includes BB&T Corporation (BBT), Capital One
Financial Corporation (COF), Comerica Incorporated (CMA), Fifth
Third Bancorp (FITB), Huntington Bancshares Inc. (HBAN), Keycorp
(KEY), M&T Bank Corporation (MTB), MUFG Americas Holdings
Corporation (MUFG), PNC Financial Services Group, Inc. (PNC),
Regions Financial Corporation (RF), SunTrust Banks Inc. (STI), US
Bancorp (USB), Wells Fargo & Company (WFC), and Zions
Bancorporation (ZION).
Company-specific rating rationales for the other banks are
published separately, and for further discussion of the large
regional bank sector in general, refer to the special report
titled 'Large Regional Bank Periodic Review,' to be published
shortly.
KEY RATING DRIVERS - IDRS, VRs AND SENIOR DEBT
Fitch's affirmation of and Outlook for HBAN's IDR is supported by
the company's good earnings profile, solid capital, improved
funding profile and stable asset quality performance, which is in-
line with 'A-' rated regional peers. Notably, HBAN has improved
its risk profile through various actions over the last few years.
HBAN has delivered solid results with return on assets (ROA)
hitting an average of 1.13% and pre-provision net revenues
(PPNR)/Average Asset averaging 1.70% over the last five quarters
despite a difficult operating environment. Further, NIM
compression has been more manageable versus peers. Fitch also
believes many of these trends are sustainable, particularly given
the company's good loan growth and stable credit performance.
Over the last two years, HBAN has been focused on growing its
retail deposit base with much success reflected by the increase in
non-interest bearing deposits which accounts for 28%.
Nonetheless, much like peers, Fitch expects to experience a
certain level of deposit run-offs but should be somewhat
manageable.
Fitch notes that more recently the company's C&I loan growth has
outpaced its peers despite a relatively slow economic recovery.
To-date, credit performance has remained stable. Fitch remains
cautious regarding C&I lending across the industry which remains
very competitive.
Additionally, Fitch notes that HBAN has a sizeable indirect auto
business. Given the CFPB's focus on the indirect auto space,
Fitch believes there could be a potential disruption to the
current business model.
RATING SENSITIVITIES - IDRS, VRs AND SENIOR DEBT
HBAN's ratings are at the high-end given performance is in-line
with peers.
Although not expected, should HBAN's performance fall below
current levels such as ROA and NIM or credit measures weaken,
ratings would come under pressure. Additionally, aggressive
capital management would also be viewed negatively.
KEY RATING DRIVERS - HOLDING COMPANY
HBAN's IDR and VR are equalized with those of its operating
companies and banks, reflecting its role as the bank holding
company, which is mandated in the U.S. to act as a source of
strength for its bank subsidiaries. Ratings are also equalized
reflecting the very close correlation between holding company and
subsidiary default probabilities.
RATING SENSITIVITIES - HOLDING COMPANY
Should HBAN's holding company begin to exhibit signs of weakness,
demonstrate trouble accessing the capital markets, or have
inadequate cash flow coverage to meet near-term obligations, there
is the potential that Fitch could notch the holding company IDR
and VR from the ratings of the operating companies. This is
viewed as unlikely though for HBAN given the strength of the
holding company liquidity profile.
Fitch is now considering introducing a rating differential between
the holding company and bank in the U.S. due to structural changes
in the sector and the evolving regulatory landscape, as described
in the special report 'U.S. Bank HoldCos & OpCos: Evolving Risk
Profiles', dated March 27, 2014. Given Fitch's views that HBAN
may not receive a long-term debt requirement, its ratings may not
be impacted as a result of Fitch's evolving review regarding
notching.
KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR
HBAN has a Support Rating of '5' and Support Rating Floor of 'NF'.
In Fitch's view, HBAN is not systemically important and therefore,
the probability of support is unlikely. IDRs and VRs do not
incorporate any support.
RATING SENSITVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR
HBAN's Support Rating and Support Rating Floor are sensitive to
Fitch's assumption around capacity to procure extraordinary
support in case of need.
KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Subordinated debt and other hybrid capital issued by HBAN and by
various issuing vehicles are all notched down from HBAN or its
bank subsidiaries' VRs in accordance with Fitch's assessment of
each instrument's respective non-performance and relative loss
severity risk profiles.
RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID
SECURITIES
The ratings of subordinated debt and other hybrid capital issued
by HBAN and its subsidiaries are primarily sensitive to any change
in HBAN's VR.
KEY RATING DRIVERS - SUBSIDIARY AND AFFILIATED COMPANY
The IDRs and VRs of HBAN's bank subsidiaries benefit from the
cross-guarantee mechanism in the U.S. under FIRREA, and therefore
the IDRs and VRs of Huntington National Bank are equalized across
the group.
RATING SENSITIVITIES - SUBSIDIARY AND AFFILIATED COMPANY
As the IDRs and VRs of the subsidiaries are equalized with those
of HBAN to reflect support from their ultimate parent, they are
sensitive to changes in the parent's propensity to provide
support, which Fitch currently does not expect, or from changes in
HBAN's IDRs.
To the extent that one of HBAN's subsidiary or affiliated
companies is not considered to be a core business, Fitch could
also notch the subsidiary's rating from HBAN's IDR.
KEY RATING DRIVERS - LONG- AND SHORT-TERM DEPOSIT RATINGS
HBAN's uninsured deposit ratings are rated one notch higher than
the company's IDR and senior unsecured debt because U.S. uninsured
deposits benefit from depositor preference. U.S. depositor
preference gives deposit liabilities superior recovery prospects
in the event of default.
KEY RATING SENSITIVITIES - LONG- AND SHORT-TERM DEPOSIT RATINGS
The ratings of long- and short-term deposits issued by HBAN and
its subsidiaries are primarily sensitive to any change in HBAN's
long- and short-term IDRs.
Fitch has affirmed these ratings:
Huntington Bancshares, Incorporated
-- Long-term IDR at 'A-'; Outlook Stable;
-- Short-term IDR at 'F1';
-- Viability rating at 'a-';
-- Senior Unsecured at 'A-';
-- Subordinated debt at 'BBB+';
-- Preferred stock at 'BB';
-- Support at '5';
-- Support Floor at 'NF'.
Huntington National Bank
-- Long-term deposits at 'A' ;
-- Long-term IDR at 'A-'; Outlook Stable;
-- Viability rating at 'a-';
-- Senior unsecured at 'A-' ;
-- Subordinated debt at 'BBB+';
-- Short-term IDR at 'F1';
-- Short-term deposits at 'F1';
-- Support at5';
-- Support Floor at 'NF'.
Huntington Capital I, II
-- Preferred stock at 'BB+'.
Sky Financial Capital Trust I-IV
-- Preferred stock at 'BB+'.
INC RESEARCH: Moody's Puts B2 Corp. Family Rating for Upgrade
-------------------------------------------------------------
Moody's Investors Service placed the ratings of INC Research, LLC,
including the B2 Corporate Family Rating and the B2-PD Probability
of Default Rating, on review for possible upgrade. The ratings on
the senior secured credit facility and unsecured notes were also
placed on review for upgrade.
The rating review was prompted by strong fundamental performance
of the company in recent quarters, which has resulted in adjusted
debt to EBITDA declining to the mid-4.0x range. Further, strong
free cash generation has also resulted in a significant cash
balance of nearly $140 million at June 30. The review was also
prompted by the company's filing of an S-1 registration statement
which indicates the intention to refinance its existing senior
secured credit facilities and use equity proceeds and cash on hand
to repay INC Research's 11.5% senior notes. While a successful IPO
would further support upward rating momentum, an upgrade is not
necessarily contingent upon an IPO.
The rating review will consider recent financial performance
trends for INC Research, Moody's outlook for the contract research
organization (CRO) industry as a whole, the company's plan to
refinance its existing debt and reduce its interest costs and
progress toward an equity offering. The review of the instrument
ratings will also focus on the mix of secured versus unsecured
debt that is expected to ultimately reside in the capital
structure. If the company repays all of the unsecured notes, the
senior secured credit facility would be rated the same as the
Corporate Family Rating because it would constitute the vast
majority of liabilities in the capital structure.
The following ratings were placed on review for upgrade:
INC Research, LLC
Corporate Family Rating, at B2;
Probability of Default Rating, at B2-PD;
$75 million senior secured revolving credit facility, at Ba3
$300 million senior secured term loan, at Ba3
$300 million senior unsecured notes, at Caa1
Rating Rationale
The B2 Corporate Family Rating is constrained by INC Research's
modest size, both on an absolute basis as well as relative to
several much larger competitors within the highly competitive CRO
industry. The ratings are also constrained by project cancellation
risk that is inherent in the CRO industry, which can lead to
volatility in revenue and cash flow. The ratings are supported by
solid recent business wins, and strong industry-wide growth trends
which support a favorable business outlook for INC Research. The
ratings are also supported by Moody's expectation for good
liquidity and relatively conservative financial policies.
INC Research is a leading global CRO providing outsourced contract
research for pharmaceutical and biotechnology companies. INC's
main area of focus is late-stage clinical trials. The company is
privately held by Avista Capital Partners and Ontario Teachers'
Pension Plan. Net service revenues for the twelve months ended
June 30 2014 approximated $732 million.
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.
INT'L MANUFACTURING: Trustee Withdraws Bid to Employ Davis Wright
-----------------------------------------------------------------
Beverly N. McFarland, acting Chapter 11 trustee for International
Manufacturing Group, Inc., has withdrawn her motion to employ
Davis Wright Tremaine LLP as her special labor and employment law
counsel, effective Aug. 10, 2014.
As reported in the Troubled Company Reporter on Sept. 16, 2014,
the Chapter 11 trustee had sought approval to tap Davis Wright to
provide labor and employment law advice, including:
(a) assisting the trustee concerning employment law obligations
and policies with respect to IMG;
(b) assisting the Trustee with employment issues related to the
sale of IMG's business; and
(c) advising the Trustee regarding IMG's 401k plan.
Trustee Hires Teraoka & Partners
The Bankruptcy Court scheduled an Oct. 8 hearing on the trustee's
motion to employ Teraoka & Partners LLP as special labor and
employment law counsel.
The trustee related that she has discovered that the employee
files at IMG do not contain certain mandatory items as required by
state and federal law. There is also no employee manual to define
internal policies which is problematic to the trustee in managing
the employees and the business.
In addition, the trustee understands that, while the IMG 401k plan
is a separate entity outside of the bankruptcy, she still has an
obligation to determine what happens to the plan when the business
is sold.
Teraoka will:
a. assist the trustee concerning employment law obligations and
policies with respect to IMG;
b. assist the trustee with employment issues related to the
sale of IMG's business; and
c. advise the trustee regarding IMG's 401k plan.
To the best of the trustee's knowledge, Teraoka does not hold or
represent any interest materially adverse to the interests of the
estate or of any class of creditors or equity security holders.
Teraoka has agreed to undertake the matter at its standard hourly
rate. Thomas M. Gosselin, of counsel, will have the primary
responsibility in the engagement. Mr. Gosselin's hourly rate is
$450.
Teraoka will also bill the estate for all reasonable and necessary
out-of-pocket expenses incurred. Teraoka has agreed to bill
travel time between San Francisco and Sacramento at 50% of its
discounted hourly rates.
About International Manufacturing
Deepal Wannakuwatte, the mastermind of a $150 million Ponzi
scheme, put himself and his company, International Manufacturing
Group Inc., into Chapter 11 after he pleaded guilty to one count
of wire fraud and agreed to a 20-year prison sentence. The
bankruptcy filing was part of his plea bargain with federal
prosecutors. Mr. Wannakuwatte is the former owner of the
Sacramento Capitols tennis team.
International Manufacturing Group, Inc., filed a bare-bones
Chapter 11 bankruptcy petition (Bankr. E.D. Cal. Case No.
14-25820) in Sacramento, on May 30, 2014. The case is assigned to
Judge Robert S. Bardwil.
The Debtor has tapped Marc A. Caraska, in Sacramento, as counsel.
In June 2014, Beverly N. McFarland was appointed as Chapter 11
trustee for the Debtor. She has tapped Felderstein Fitzgerald
Willoughby & Pascuzzi LLP as her bankruptcy counsel; Diamond
McCarthy LLP as her special litigation counsel; Gabrielson &
Company as accountant; and Karen Rushing as bookkeeper outside the
ordinary course of business.
According to the docket, governmental entities have until Nov. 26,
2014, to file claims.
The U.S. Trustee for Region 7 appointed a three-member unsecured
creditors panel comprising of Byron Younger, Janine Jones, and
Steve Whitesides.
INSTITUTO MEDICO: Application to Employ Robert L. Roth Withdrawn
----------------------------------------------------------------
The Bankruptcy Court authorized Instituto Medico Del Norte Inc.,
to withdraw its application to employ Robert L. Roth, Esq., at
Hooper Lundy & Bookman, P.C., as special counsel.
On July 21, 2014, the Debtor requested for permission to employ
Mr. Roth to take care of appeal procedures before Medicare related
to the costs reports that are yearly filed by the Hospital with
the agency.
The U.S. Trustee objected to the application on July 31. The U.S.
Trustee sought for clarification that the Debtor does not retain
special counsel to take care of administrative determinations
appeals.
The Debtor, in response to the U.S. Trustee's objection, said that
it would withdraw the application until a negotiation process
comes to an end. If a final agreement is reached, a new
application for employment of special counsel will be filed.
About Instituto Medico
Instituto Medico del Norte, Inc., aka Centro Medico Wilma N.
Vazquez, aka Hospital Wilma N. Vazquez Skill Nursing Facility of
Centro Medico Wilma N. Vazquez, sought protection under Chapter 11
of the Bankruptcy Code on Oct. 30, 2013 (Bankr. D.P.R. Case No.
13-08961). The case is assigned to Judge Mildred Caban Flores.
The Debtor scheduled $20,843,692 in total assets and $20,107,642
in total liabilities. The Debtor, however, said its real property
has a book value of $16,000,000 and personal property is worth
$6,105,979.
The Debtor is represented by Fausto David Godreau Zayas, Esq., and
Rafael A. Gonzalez Valiente, Esq., at Latimer Biaggi Rachid &
Godreau, in San Juan, Puerto Rico. Luis B. Gonzalez & Co. CPA's
P.S.C. serves as accountant.
The U.S. Trustee for the District of Puerto Rico in December
appointed Dr. Carlos Mellado (b/t Lcda Dinorah Collazo Ortiz) as
patient care ombudsman.
INTERNATIONAL TEXTILE: Appoints Current CEO to Board of Directors
-----------------------------------------------------------------
The Board of Directors of International Textile Group, Inc.,
appointed Kenneth T. Kunberger, the Company's current president
and chief executive officer, as a director, according to a
regulatory filing with the U.S. Securities and Exchange
Commission.
The Company said there are no arrangements or understandings
between Mr. Kunberger and any other persons pursuant to which he
was selected as a director.
About International Textile
International Textile Group, Inc., is a global, diversified
textile manufacturer headquartered in Greensboro, North Carolina,
with current operations principally in the United States, China,
Mexico, and Vietnam. ITG's long-term focus includes the
realization of the benefits of its global expansion, including
reaching full production at ITG facilities in China and Vietnam,
and continuing to seek other strategic growth opportunities.
International Textile reported a net loss attributable to common
stock of the Company of $10.91 million in 2013, as compared with a
net loss attributable to common stock of the Company of $91.45
million in 2012.
As of June 30, 2014, International Textile had $335.38 million in
total assets, $437.38 million in total liabilities and a $101.99
million total stockholders' deficit.
J.C. PENNEY: Cuts Sales Forecast
--------------------------------
Suzanne Kapner, writing for The Wall Street Journal, reported that
J.C. Penney cut its forecast for sales in the current quarter, as
fewer shoppers who turned up at its stores actually bought
anything. According to the report, the company?s comments
undercut hopes for a turnaround at the struggling retailer and
highlighted the broader pressure on store chains this fall as
shoppers keep a tight grip on their wallets and turn up only when
lured by deep discounts.
About J.C. Penney
J.C. Penney Company, Inc. is one of the U.S.'s largest department
store operators with about 1,100 locations in the United States
and Puerto Rico.
* * *
The Troubled Company Reporter, on March 5, 2014, reported that
Standard & Poor's Ratings Services revised its outlook on J.C.
Penney Co. Inc. to stable from negative. At the same time, S&P
affirmed all other ratings, including the 'CCC+' corporate credit
rating, on the company.
The Troubled Company Reporter, on May 21, 2014, reported that
Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of
J.C. Penney Co., Inc. and J.C. Penney Corporation, Inc. at 'CCC'
and assigned a Positive Outlook.
On June 6, 2014, the Troubled Company Reporter said Standard &
Poor's Ratings Services assigned a 'B' issue level rating to J.C.
Penney Corp. Inc.'s $1.85 billion ABL revolving credit facility
and $500 million senior secured first-in last-out term loan with a
'1' recovery rating, indicating S&P's expectation for very high
(90%-100%) recovery in the event of a payment default. S&P
affirmed all other ratings, including the 'CCC+' corporate credit
rating on parent company J.C. Penney Co. Inc. The outlook is
stable.
On the same date, Moody's Investors Service rated J.C. Penney
Corporation, Inc.'s proposed asset based revolving credit facility
at B1 and its proposed asset based term loan at B2. At the same
time, Moody's affirmed J.C. Penney Company, Inc.'s Caa1 Corporate
Family Rating ("CFR"), Caa1-PD Probability of Default Rating, and
SGL-3 Speculative Grade Liquidity rating. The rating outlook
remains negative.
In September 2014, Moody's rated J.C. Penney's proposed senior
unsecured notes Caa2. At the same time, Moody's affirmed J.C.
Penney Company, Inc.'s Caa1 Corporate Family Rating ("CFR"), Caa1
- PD Probability of Default Rating, and SGL-3 Speculative Grade
Liquidity rating. The rating outlook remains negative.
Standard & Poor's, on the same month, assigned its 'CCC-' issue-
level rating and '6' recovery rating to J.C. Penney Corp. Inc.'s
proposed $350 million senior unsecured notes due 2019. The '6'
recovery rating indicates S&P's expectation for negligible
recovery (0%-10%) in a payment default scenario. The company
intends to use proceeds from the offering to repay debt. S&P
views the proposed offering and debt repayment as credit neutral
based upon expected debt levels being relatively unchanged.
Likewise, Fitch has assigned a rating of 'CCC/RR4' to J.C.
Penney's proposed issue of five-year $350 million senior unsecured
notes. The Rating Outlook is Positive.
On Oct. 1, 2014, Moody's affirmed J.C. Penney's Caa1 Corporate
Family Rating, Caa1 - PD Probability of Default Rating, and senior
unsecured notes. At the same time, Moody's changed J.C. Penney's
rating outlook to stable from negative. The change in outlook was
prompted by the successful closing of $400 million senior
unsecured notes which will be used to fund the partial tender
offer for J.C. Penney's $200 million 6.875% notes due October
2015, $200 million 7.675% notes due August 2016, and $285 million
7.95% notes due April 2017. At the same time, Moody's changed the
Speculative Grade Liquidity rating to SGL-2 from SGL-3 due to
improved operating performance and extension of the debt maturity
schedule.
JEFFERIES FINANCE: S&P Assigns 'B' Rating on Proposed $400MM Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services said it has revised its outlook
on the 'B+' issuer credit rating on Jefferies Finance LLC (JFIN)
to positive from stable. At the same time, S&P affirmed the
issuer credit rating and assigned a 'B' issue level rating to the
company's proposed $400 million senior unsecured note issuance due
2021.
JFIN's plan to issue $400 million of unsecured notes and draw $250
million of equity from its two joint-venture owners, Jefferies
Group LLC and Massachusetts Mutual Life Insurance Co.
(MassMutual), will help the company lower its leverage and improve
its liquidity," said Standard & Poor's credit analyst Brendan
Browne.
S&P expects the company's debt-to-equity ratio to be about 4.5x-
5.0x over the next two years, which is lower than the 5x-6x S&P
previously expected. While S&P still believes that JFIN has
higher leverage levels than many other nonbank financial
institutions involved in leveraged lending, we view this reduction
of its leverage as material.
The proceeds from the debt and equity raises will primarily be
used to support the company's leveraged loan origination and
syndication business. The company also purchases and originates
broadly-syndicated and middle-market leveraged loans to hold on
its balance sheet. In S&P's view, JFIN faces significant
liquidity risk in its syndication business because it commits to
extend loans with the expectation that it will be able to sell the
loans to third parties. This makes it important that JFIN has
adequate cash or debt facilities to fund all of the commitments,
particularly if a market disruption made it more difficult to
syndicate the loans. S&P believes that the $650 million of
proceeds will reduce the risk that JFIN would be unable to meet
its commitments if market conditions deteriorated.
Furthermore, the debt and equity raises will also allow the
company to defend or improve its market position in the loan
syndication industry. S&P believes that the company has been one
of the largest syndicators of leveraged loans of between $100
million and $500 million while competing with the large investment
banks that dominant the industry. JFIN works in conjunction with
Jefferies Group's investment banking unit, which has also
expanded.
S&P's positive outlook reflects JFIN's reduced leveraged, improved
liquidity, and strong recent operating results. S&P could raise
its ratings on JFIN and its debt if the company maintains leverage
of about 4.5x-5.0x, has adequate liquidity to fund all of its
commitments, and market conditions remain good.
The company's liquidity relative to its commitments will be
crucial to the rating. The company's liquid assets and funding
capacity usually exceed its outstanding commitments--but sometimes
fall below when the company commits to loans that it has a high
degree of confidence it will be able to sell in a relatively short
time frame. The frequency and magnitude by which JFIN's
commitments exceed its liquidity will influence the rating. If
JFIN's commitments frequently exceed its liquidity--especially by
a large degree-- S&P would be less likely to raise the rating and
could even conceivably lower it.
The market's flex will also impact S&P's rating. If terms become
significantly less flexible than they are currently, S&P would be
less likely to raise the rating, all other factors remaining
constant. Obviously the more flexible the terms on JFIN's
commitments, the less risk they present to its liquidity.
S&P would be less likely to raise the rating on JFIN if the
underwriting in the leveraged lending market worsens further,
particularly if borrower leverage levels rise.
JOHNSON PLATE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Johnson Plate & Tower Fabrication, Inc.
fka Bergen Southwest Steel
201 Los Mochis Dr.
Canutillo, TX 79835
Case No.: 14-31649
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
Western District of Texas (El Paso)
Judge: Hon. Christopher Mott
Debtor's Counsel: Wiley France James, III, Esq.
JAMES & HAUGLAND, P.C.
609 Montana Ave.
El Paso, TX 79902
Tel: (915) 532-3911
Fax: (915) 541-6440
Email: wjames@jghpc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Douglas Johnson, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/txwb14-31649.pdf
KANGADIS FOOD: Gets 4th Interim Order to Use Cash Collateral
------------------------------------------------------------
The Hon. Robert E. Grossman of the U.S. Bankruptcy Court for the
Eastern District of New York issued a fourth interim order
authorizing Kangadis Food Inc. dba The Gourmet Factory to use cash
collateral of Citibank N.A.
Judge Grossman directed the Debtor to provide adequate protection
for any diminution in the collateral as a result of the use of
cash collateral to Citibank in the form of a superpriority claim
pursuant to Section 364(c)(1) of the Bankruptcy Code.
A final hearing will be held on Nov. 24, 2014 at 10:00 a.m. before
Judge Grossman.
About Kangadis Food
Formed in 2003, Kangadis Food Inc. is an importer of olives and
other European delicacies, and a leading distributor of olive oil.
The Debtor sells its products under the brand names "Capatriti,"
"Porto," "Olio Villa," "Zorba," and "Kivotos". The company is
100% owned by the Kangadis family. The company says that for the
past six years, the popularity of its olive oil product sold under
the brand name "Capatriti" has grown over time, and it is one of
the leading brands in the New York metropolitan area.
As of its bankruptcy filing, Kangadis Food employs 51 people, and
operates from a 75,000 square foot facility located in Hauppauge,
New York, that serves as a warehouse, production facility, and
shipping center.
Kangadis Food Inc. filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 8-14-72649) in the Central Islip division, in
New York, on June 6, 2014. Themistoklis Kangadis signed the
petition as chief executive officer.
As of the Dec. 31, 2013, the Debtor, on an unaudited basis, had
total assets of $12,259,802 and total liabilities of $6,136,456,
which amount does not include any disputed claim relating to the
class action.
Judge Robert E. Grossman presides over the case. Silverman
Acampora LLP, in Jericho, New York, serves as the Debtor's
counsel.
KEYCORP: Fitch Affirms 'BB' Preferred Stock Rating
--------------------------------------------------
Fitch Ratings has affirmed KeyCorp (KEY) ratings at 'A-/F1'. The
Rating Outlook remains Stable.
The rating action follows a periodic review of the large regional
banking group, which includes BB&T Corporation (BBT), Capital One
Financial Corporation (COF), Comerica Incorporated (CMA), Fifth
Third Bancorp (FITB), Huntington Bancshares Inc. (HBAN), Keycorp
(KEY), M&T Bank Corporation (MTB), MUFG Americas Holdings
Corporation (MUFG), PNC Financial Services Group, Inc. (PNC),
Regions Financial Corporation (RF), SunTrust Banks Inc. (STI), US
Bancorp (USB), Wells Fargo & Company (WFC), and Zions
Bancorporation (ZION).
KEY RATING DRIVERS - IDRS, VRs AND SENIOR DEBT
Fitch's affirmation of KEY's IDR and Stable Outlook is supported
by the company's strong capital position, solid asset quality
performance, diversified revenue mix, and reduced risk profile.
Offsetting, the company's earnings measures are considered weaker
than most large regional banks as it consistently reports
financial returns that are below large regional peer averages.
Ratings incorporate KEY's strong capital position, which is
amongst the highest of its peer group with a TCE of 10.08% at 2Q14
and estimated Tier 1 Common ratio under Basel III of 10.73%.
Additionally, given the company's reduced risk profile over the
years, credit performance continues to be better than peers with
an average of NCOs of 0.25% and NPAs of 1.28% over the last five
quarters.
Fitch also notes that the company's diversified revenue base is
also viewed positively evidenced by noninterest income
contributing roughly 44% of total revenues, consistently above the
peer group average.
As mentioned earlier, profitability tends to fall on the lower-end
of the peer averages for the large regional group. Some of this
may be attributed to the company's above average operating costs
and lower loan yields given large component of commercial and
industrial (C&I) loans tied to LIBOR rates. ROA and PPNR
continues to be below large regional peers averages. However, an
adjust ROA, which excludes reserve releases, is much more in-line
with peer performance. NIM is also modest, albeit improving
compared to the previous year.
Incorporated in the affirmation is that profitability will trend
positively and pull to peer-averages over time. Further, the
company's cost savings initiatives should also lead to
improvements in profitability.
Fitch also notes that KEY still has about $4.2 billion in its exit
and discontinued operations portfolio (of which $2 billion relates
to 10 securitization trusts) in student loans. Given the
heightened political sensitivity to student lending, there may be
potential risks that arise which are not quantifiable at this
time.
The company also has a sizeable home equity book totaling $10.7
billion, of which 97% is within foot-print, at 2Q14. Although to
date, credit performance has been stable, Fitch believes this loan
book could be negatively impacted by higher interest rates. Fitch
will monitor the home equity portfolio's credit trends and the
impact it may have on future operating results under more
stressful conditions.
RATING SENSITIVITIES - IDRS, VRs AND SENIOR DEBT
Current ratings are at the high-end of rating potential given that
financial performance is marginally in-line with similarly rated
financial institutions.
Negative rating action could ensue should the company take a more
aggressive approach to capital management such as a rapid decline
of capital within a relatively short-time frame and/or a total
payout ratio exceeding 100%. Additionally, unexpected changes to
current business strategy or key executive management, a declining
trend in operating performance would also be viewed negatively.
KEY RATING DRIVERS - HOLDING COMPANY
KEY's IDR and VR are equalized with those of its operating
companies and banks, reflecting its role as the bank holding
company, which is mandated in the U.S. to act as a source of
strength for its bank subsidiaries. Ratings are also equalized
reflecting the very close correlation between holding company and
subsidiary default probabilities.
RATING SENSITIVITIES - HOLDING COMPANY
Should KEY's holding company begin to exhibit signs of weakness,
demonstrate trouble accessing the capital markets, or have
inadequate cash flow coverage to meet near-term obligations, there
is the potential that Fitch could notch the holding company IDR
and VR from the ratings of the operating companies. This is
viewed as unlikely though for KEY given the strength of the
holding company liquidity profile.
Fitch is now considering introducing a rating differential between
the holding company and bank in the U.S. due to structural changes
in the sector and the evolving regulatory landscape, as described
in the special report 'U.S. Bank HoldCos & OpCos: Evolving Risk
Profiles', dated March 27, 2014. Given Fitch's views that KEY may
not receive a long-term debt requirement, its ratings may not be
impacted as a result of Fitch's evolving review regarding
notching.
KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR
KEY has a Support Rating of '5' and Support Rating Floor of 'NF'.
In Fitch's view, KEY is not systemically important and therefore,
the probability of support is unlikely. IDRs and VRs do not
incorporate any support.
RATING SENSITVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR
KEY's Support Rating and Support Rating Floor are sensitive to
Fitch's assumption around capacity to procure extraordinary
support in case of need.
KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Subordinated debt and other hybrid capital issued by KEY and by
various issuing vehicles are all notched down from KEY or its bank
subsidiaries' VRs in accordance with Fitch's assessment of each
instrument's respective non-performance and relative loss severity
risk profiles.
RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID
SECURITIES
The ratings of subordinated debt and other hybrid capital issued
by KEY and its subsidiaries are primarily sensitive to any change
in KEY's VR.
KEY RATING DRIVERS - SUBSIDIARY AND AFFILIATED COMPANY
The IDRs and VRs of KEY's bank subsidiaries benefit from the
cross-guarantee mechanism in the U.S. under FIRREA, and therefore
the IDRs and VRs of KeyBank N.A. is equalized with the holding
company.
The IDRs and VRs of KEY's other major rated operating subsidiaries
are equalized with KEY's IDR reflecting Fitch's view that these
entities are core to KEY's business strategy and financial
profile. These entities include: KeyCorp Capital Inc. whose IDRs
would be sensitive to the same factors that might drive a change
in KEY's IDR.
RATING SENSITIVITIES - SUBSIDIARY AND AFFILIATED COMPANY
As the IDRs and VRs of the subsidiaries are equalized with those
of KEY to reflect support from their ultimate parent, they are
sensitive to changes in the parent's propensity to provide
support, which Fitch currently does not expect, or from changes in
KEY's IDRs.
To the extent that one of KEY's subsidiary or affiliated companies
is not considered to be a core business, Fitch could also notch
the subsidiary's rating from KEY's IDR.
KEY RATING DRIVERS - LONG- AND SHORT-TERM DEPOSIT RATINGS
KEY's uninsured deposit ratings are rated one notch higher than
the company's IDR and senior unsecured debt because U.S. uninsured
deposits benefit from depositor preference. U.S. depositor
preference gives deposit liabilities superior recovery prospects
in the event of default.
KEY RATING SENSITIVITIES - LONG- AND SHORT-TERM DEPOSIT RATINGS
The ratings of long- and short-term deposits issued by KEY and its
subsidiaries are primarily sensitive to any change in KEY's long-
and short-term IDRs.
Fitch has affirmed these ratings:
KeyCorp
-- Long-term IDR at 'A-'; Outlook Stable;
-- Short-term IDR at 'F1';
-- Viability at 'a-';
-- Senior debt at 'A-';
-- Subordinated debt at 'BBB+';
-- Preferred stock at 'BB';
-- Short-term debt at 'F1';
-- Support at '5';
-- Support Floor at 'NF'.
KeyBank NA
-- Long-term IDR at 'A-'; Outlook Stable;
-- Short-term IDR at 'F1';
-- Viability at 'a-';
-- Long-term deposits at 'A';
-- Senior debt at 'A-';
-- Subordinated debt at 'BBB+';
-- Short-term deposits at 'F1';
-- Support at '5';
-- Support Floor at 'NF'.
Key Corporate Capital, Inc.
-- Long-term IDR at 'A-'; Outlook Stable;
-- Short-term IDR at 'F1'.
KeyCorp Capital I - III
-- Preferred stock at 'BB+'
KLUM REALTY: Case Summary & 3 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Klum Realty Corp
1 Alpine Court
Spring Valley, NY 10977
Case No.: 14-23420
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Judge: Hon. Robert D. Drain
Debtor's Counsel: Barry N. Frank, Esq.
THE LAW FIRM OF BARRY N. FRANK & ASSOCIATES PC
440 West St., 3rd Floor
Fort Lee, NJ 07024
Tel: 201-482-0633
Fax: 201-482-0631
Email: bnfrankesq@gmail.com
Total Assets: $2.1 million
Total Liabilities: $2.96 million
The petition was signed by Giora Tamir, president.
A list of the Debtor's three largest unsecured creditors is
available for free at http://bankrupt.com/misc/nysb14-23420.pdf
LAKELAND INDUSTRIES: Arenal Capital No Longer a Shareholder
-----------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Arenal Capital Partners LP and Arenal Capital
Fund LP disclosed that as of Oct. 1, 2014, they ceased to hold any
shares of common stock of Lakeland Industries, Inc. The reporting
persons previously owned 335,185 shares of common stock of
Lakeland Industries representing 5.7 percent at Sept. 23, 2014.
On Oct. 1, 2014, the reporting persons sold the entire 335,185. A
copy of the regulatory filing is available at http://is.gd/ilAx4L
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.
The Company reported a net loss of $26.3 million on $95.1 million
of net sales for the year ended Jan. 31, 2013, as compared with a
net loss of $376,825 on $96.3 million of sales for the year ended
Jan. 31, 2012.
The Company's balance sheet at July 31, 2014, showed
$87.9 million in total assets, $40.9 million in total liabilities
and $46.9 million in total stockholders' equity.
In their report on the consolidated financial statements for the
year ended Jan. 31, 2013, Warren Averett, LLC, in Birmingham,
Alabama, expressed substantial doubt about Lakeland Industries'
ability to continue as a going concern. The independent auditors
noted that Company is in default on certain covenants of its loan
agreements at Jan. 31, 2013. "The lenders have not waived these
events of default and may demand repayment at any time.
Management is currently trying to secure replacement financing but
does not have new financing available at the date of this report."
LATEX FOAM: Has Until Dec. 29 to Assume or Reject Property Leases
-----------------------------------------------------------------
The Bankruptcy Court, according to Latex Foam International, LLC;
et al.'s case docket, extended until Dec. 29, 2014, the Debtors'
time to assume or reject unexpired lease of nonresidential real
property with Phoenix Holding, LLC (in Wichita Falls, Texas).
Commercial landlord CKB, LLC, has submitted a limited objection to
the Debtors' motion to extend time to assume or reject unexpired
lease of nonresidential real property dated Sept. 8, 2014.
Prior to the Petition Date, CKB, entered into a certain lease
agreement dated as of Dec. 31, 2001, as amended, with Debtors
Latex Foam International Holdings, Inc. and LFI, as tenants, to
occupy certain non-residential premises located at 510 River Road,
Shelton, Connecticut. CKB does not believe the Debtor will be
able to ultimately assume the lease, but is willing to defer that
determination for a later date and is hoping to negotiate a new
lease with the Debtor. In this connection, CKB said that it does
not oppose the extension of time being granted, subject to and
without waiving CKB's argument that the lease has otherwise been
terminated and not subject to assumption.
About Latex Foam
Headquartered in Shelton, Connecticut, Latex Foam International,
LLC manufactures foam mattresses and component mattresses. The
196-employee company produces mattress cores, toppers, and pillow
buns utilizing both the Talaway and Dunlop manufacturing
processes.
LFIH is a holding company for 100% of the equity interests in LFI,
PLB, and an inactive entity, Dunlop Latex Foam (Malaysia) SDN.
BHD.
LFI and four affiliates sought Chapter 11 bankruptcy protection
(Bankr. D. Conn. Lead Case No. 14-50845) in Bridgeport,
Connecticut, on May 30, 2014. David Fisher signed the petitions
as president. The Debtors are seeking joint administration of
their cases.
LFI disclosed $18,437,185 in assets and $30,342,926 in liabilities
as of the Chapter 11 filing.
Judge Alan H.W. Shiff presides over the cases.
James Berman, Esq., and Craig I. Lifland, Esq., at Zeisler and
Zeisler, serve as the Debtors' counsel.
On June 19, 2014, the U.S. Trustee appointed five creditors to
serve on the Official Committee of Unsecured Creditors. The
Committee tapped to retain Schafer and Weiner, PLLC as its
counsel, and Reid and Reige, P.C. as its local counsel.
LEHMAN BROTHERS: Holders of Giants Stadium Claims Seek Payment
--------------------------------------------------------------
Joseph Checkler, writing for Daily Bankruptcy Review, reported
that Giants Stadium LLC is urging a judge to allow $600 million-
plus in claims against Lehman Brothers Holdings Inc. related to
interest-rate swaps used to finance the East Rutherford, N.J.,
football stadium. According to the report, lawyers for holders of
claims once owned by the New York Giants football team said
Lehman's argument that the entity actually owes Lehman money is
wrong.
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 Sept. 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)
LIBERTY INTERACTIVE: Fitch Affirms 'BB' Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has affirmed all the ratings of Liberty Interactive
LLC (Liberty) and QVC, Inc. (QVC), including the companies' 'BB'
Issuer Default Ratings (IDRs).
Liberty announced plans to reattribute its e-commerce assets
(valued at $1.5 billion by the company) and $1 billion in cash
from the Liberty Interactive Tracking Stock (LINT) to the Liberty
Ventures Tracking Stock (LVNT). Approximately 68 million new
LVNTA/B shares will be issued as a dividend to LINT shareholders
as consideration ($2.5 billion total value as of date of
announcement). LINT will fund the $1 billion cash with borrowings
on the QVC secured revolver due 2018. Liberty has applied to
change the LINTA/B tracking stock symbol to QVCA/B. Following the
reattribution, QVCA/B sole material assets will be QVC and the 38%
interest in HSN, Inc. Plans to create a new Liberty Digital
Commerce Tracking Stock have been cancelled.
Pro forma the incremental debt at QVC, Fitch calculates QVC's
unadjusted gross leverage of 2.8x and Liberty's consolidated gross
unadjusted leverage of 4.5x (excludes TripAdvisor's debt and
EBITDA). While this exceeds Fitch's expected leverage levels for
the ratings, Fitch expects EBITDA growth, and potential debt
reduction from strong free cash flow (FCF) generation, to reduce
leverage back to the company's target of 2.5x within 15-18 months.
Fitch expects QVC to manage leverage to 2.5x over the longer term.
Currently, there is reduced near-term financial flexibility for
material debt-funded acquisitions and/or share repurchases. The
reattributed cash will be used by Liberty Ventures for additional
investments.
The IDRs for Liberty and QVC reflect the consolidated legal
entity/obligor credit profile, rather than the LINT/LVNT tracking
stock structure. Based on Fitch's interpretation of the Liberty
LLC bond indentures, the company could not spin out QVC without
consent of the bondholders, based on the current asset mix at
Liberty LLC. QVC generates 81% and 97% of Liberty LLC's revenues
and EBITDA, respectively. Any spinoff of QVC at this time would
likely trigger the 'substantially all' asset disposition
restriction within the Liberty LLC indentures.
The consolidated legal/obligor credit view may change over time if
the LVNT assets become a more meaningful portion of the
consolidated Liberty asset mix/equity value. At that point, Fitch
may adopt a more hybrid rating analysis, taking into consideration
the attribution of assets and liabilities within each tracking
stock. Fitch does not expect this to occur in the near or
intermediate term.
Key Rating Drivers
The ratings reflect Liberty's August 2014 spin-off of Liberty
TripAdvisor Holdings (LTRP), which holds a 22% equity/57% voting
interest in TripAdvisor Inc. (TRIP) and the BuySeasons Inc.
business. While Liberty consolidated TRIP into its financial
statements, Fitch excluded TRIP from its financial analysis.
While the loss of TRIP's value is unfavorable to the credit
profile, Fitch's ratings materially rely on QVC, with Liberty's
other investments, such as TRIP, viewed as incremental support to
the ratings. The ratings also incorporate Liberty's agreement to
sell Provide Commerce Inc. to FTD Companies, Inc., and decision to
reattribute the eCommerce companies to LVNT.
Fitch expects Liberty's FCF to be dedicated toward share
repurchases and acquisitions. Fitch recognizes there is a risk of
an acquisition of HSN Inc. However, depending on timing, how the
transaction is structured, and the company's commitment to
returning to leverage targets, ratings may remain unchanged.
The ratings reflect Fitch's expectation for Liberty's gross
unadjusted leverage to be managed at around 4x and QVC unadjusted
gross leverage to be managed at 2.5x.
Fitch rates both QVC's senior secured bank credit facility and the
senior secured notes 'BBB-' (two notches higher than QVC's IDR).
The secured issue ratings reflects what Fitch believes would be
QVC's standalone ratings.
Operating Performance
The ratings reflect the solid operating performance at QVC with
revenues and EBITDA for the latest 12 months (LTM) ending June 30,
2014 up 1.7% and 0.9%, respectively. During the same period, QVC
Japan endured revenue declines of 17.1%, while QVC Germany has
rebounded, with 3.7% growth. The geographic diversification of
QVC provides the credit cushion to withstand cyclical declines in
individual regions. The ratings incorporate the cyclicality
inherent in QVC's business/retail industry.
Fitch recognizes QVC's ability to manage product mix and adapt to
its customers shopping preferences. QVC has managed to grow
revenues over the last three years and manage Fitch calculated
EBITDA margins in the 20% to 22% range over that same timeframe.
Fitch believes that QVC will be able to continue to grow revenues
at least at GDP levels going forward. Fitch models low- to mid-
single-digit revenue growth at both QVC and Liberty consolidated.
QVC's EBITDA margin fluctuation is driven in part by the product
mix and will likely fluctuate over time as the product mix
changes. However, Fitch believes, over the next few years, QVC's
EBITDA margins will remain in this historical 20% to 22% range.
Liberty's e-commerce companies continue to see revenue growth with
revenues up 6.1% in the LTM ending June 30, 2014. However, EBITDA
continues to be pressured, down 40.4% due to ongoing pressures on
the businesses. While margins and EBITDA levels have been
negatively affected, they remain positive and contribute positive
cash flows to the consolidated credit. These businesses are
relatively small in size, accounting for approximately 3% of
consolidated Liberty EBITDA. Fitch does not ascribe a material
weight to the e-commerce businesses when assessing the
consolidated credit profile.
Liquidity and Maturities
Fitch believes liquidity at QVC will be sufficient to support
operations and its expansion into other markets. Acquisitions and
share buybacks are expected to be a primary use of FCF.
Fitch also believes that there is sufficient liquidity and cash
generation (from investment dividends and tax sharing between the
tracking stocks) to support debt service and disciplined
investment at LVNT. Fitch recognizes that in the event of a
liquidity strain at LVNT, QVC could provide funding to support
debt service (via intercompany loans), or the tracking stock
structure could be collapsed.
Fitch notes that cash can travel throughout all entities
relatively easily. Although the tracking stock structure adds a
layer of complexity, Liberty has in the past reattributed assets
and liabilities. Fitch believes that resources at QVC would be
used to support LVNT, and vice versa, if ever needed.
Fitch believes Liberty continues to carry meaningful liquidity
with $2.2 billion in cash (ex-TRIP, as of June 30, 2014 pro forma
$1 billion draw on QVC revolver), $1 billion of availability on
QVC's $2 billion revolver (expires March 2018, pro forma $1
billion draw), and $4.2 billion in other public holdings (ex-TRIP)
as of June 30, 2014. Fitch calculates FCF of $1.2 billion (ex-
TRIP) in the LTM period. Based on Fitch's conservative
projections, Fitch expects Liberty's FCF to be in the range of
$850 million for fiscal 2014.
Liberty's near-term maturities include $400 million of 1% HSN
exchangeable debentures that may be put to or redeemed by the
company in 2016. QVC's next maturity, other than its credit
facility in 2018, is $400 million aggregate principal of 3.125%
senior secured notes due in 2019. Further, the 7.375% senior
secured notes due 2020 become callable in April 2015 at 103.688%.
Fitch believes Liberty has sufficient liquidity to handle these
maturities and potential redemption. Other than the 2019 and 2020
notes, the remaining QVC notes' (including the new notes) call
provisions are limited to make-whole provisions ranging from 25
bps-50 bps.
RATING SENSITIVITIES
Positive Rating Actions: Fitch believes that the current financial
policy is consistent with the current ratings. If the company
were to manage to more conservative leverage targets, ratings may
be upgraded.
Negative Rating Actions: Conversely, changes to financial policy
(including more aggressive leverage targets) and asset mix changes
that weakened bondholder protection, could pressure the ratings.
While unexpected, revenue declines in excess of 10% that
materially drove declines in EBITDA and FCF and resulted in QVC
leverage exceeding 2.5x, with no credible plan to delever to
leverage targets, would likely pressure ratings.
Fitch has affirmed these ratings:
Liberty
-- IDR at 'BB';
-- Senior unsecured debt at 'BB'.
QVC
-- IDR at 'BB';
-- Senior secured debt at 'BBB-'.
The Rating Outlook is Stable.
LJ/HAH HOLDINGS: S&P Assigns 'B' Corp. Credit Rating
----------------------------------------------------
Standard & Poor's Ratings Services assigned Auburn Hills, Mich.-
based automotive supplier LJ/HAH Holdings Corp., parent company of
Henniges Automotive Holdings Inc., a 'B' corporate credit rating.
The outlook is stable.
S&P also assigned Henniges' $265 million term loan B due 2021 a
'B' issue-level rating, with a recovery rating of '3', indicating
S&P's expectation for meaningful (50%-70%) recovery for lenders at
default.
The company used proceeds of the term loan to repay Henniges'
prior term loan and revolving facility borrowings and to pay a
one-time dividend to the financial sponsor. Henniges has also
reset its asset-backed revolving credit facility, which S&P do not
rate, at $50 million.
S&P's 'B' corporate credit rating on LJ/HAH reflects the company's
small scale and narrow product scope as a supplier of sealing and
anti-vibration products in the highly cyclical global auto
industry. The industry is characterized by high fixed costs,
capital intensity, volatile raw material costs, and continuing
pricing pressure from customers and competitors. S&P believes
Henniges' revenue growth through 2014 and into 2015 will be
determined by the pace of auto production in North America,
especially demand for light trucks, and in China.
"We view Henniges' customer mix as concentrated; 70% of its 2013
revenues were attributable to just three automakers--General
Motors Co., Ford Motor Co., and Volkswagen AG. We expect market
share losses or sudden extended production cuts by any of these
automakers, although not likely in the near term, to significantly
affect Henniges' financial results. Also, Henniges' geographic
concentration of light-vehicle sales by region is high, as North
America accounts for 58% of revenues, but Asia only 18%. Henniges
estimates that it has the No. 2 market position in North America,
but we believe the company's small size and narrow geographical
diversity relative to its peer Cooper-Standard Holdings Inc. may
limit meaningful improvement in its competitive position," S&P
noted.
The company's product mix diversity is limited, supplying only
highly engineered sealing (82% of revenues) and anti-vibration
systems (14%). S&P believes other global auto industry
participants are able competitors; these include Cooper-Standard,
Toyoda Gosei (unrated), Hutchinson S.A. (unrated), Magna
International Inc., and SaarGummi Group (unrated). Some of these
competitors, in S&P's view, have a stronger market position and
better financial risk profiles than Henniges.
S&P estimates the company's adjusted EBITDA margins will be in the
low-double digits in 2014 to 2015, which is roughly average for
the supplier group. Margins should benefit from the launch of new
business wins, including the Ford F150 light truck, and operating
efficiencies derived from recent capacity rightsizing.
LOGART INC: First Meeting of Creditors on Oct. 16 in Toronto
------------------------------------------------------------
Logart Inc., based in Thornhill, Ontario, filed for bankruptcy in
Canada on Sept. 30, 2014. A first meeting of creditors will be
held on Oct. 16 at 3:00 p.m. at the offices of:
Albert Gelman Inc.
100 Simcoe Street, Suite 125
Toronto, ON M5H 3G2
On the Net: Http://www.albertgelman.com/
M&T BANK: Fitch Affirms 'BB' Preferred Stock Rating
---------------------------------------------------
Fitch Ratings has affirmed M&T Bank Corporation's (MTB) ratings at
'A-/F1'. The Rating Outlook remains Positive. The affirmation
and Outlook reflects the company's consistent and solid
performance during a difficult operating environment.
Additionally, Fitch views the company's strong franchise, veteran
management team, and good revenue diversification as rating
strengths.
The rating action follows a periodic review of the large regional
banking group, which includes BB&T Corporation (BBT), Capital One
Financial Corporation (COF), Comerica Incorporated (CMA), Fifth
Third Bancorp (FITB), Huntington Bancshares Inc. (HBAN), Keycorp
(KEY), M&T Bank Corporation (MTB), MUFG Americas Holdings
Corporation (MUFG), PNC Financial Services Group, Inc. (PNC),
Regions Financial Corporation (RF), SunTrust Banks Inc. (STI), US
Bancorp (USB), Wells Fargo & Company (WFC), and Zions
Bancorporation (ZION).
KEY RATING DRIVERS - IDRS, VRs AND SENIOR DEBT
MTB's rating affirmation and Positive Outlook mainly reflects the
consistency of the company's performance during a difficult
operating environment versus peers. Additionally, Fitch views the
company's solid franchise, credit performance, veteran management
team, and good revenue diversification as rating strengths.
Offsetting these positives, MTB capital levels tends to be lower
than peers. However, Fitch's believes the company's strong equity
generation, good asset quality performance through various credit
cycles, solid reserves when compared to net charge-offs (NCOs) and
moderate dividend payout help offset the below-average capital
position. Further, MTB has continued to build its capital
position from historical levels.
MTB's earnings profile is considered to be one of the strongest of
its peer group as results have not been supported by any reserve
release as the company's provision expense continues to exceed
NCOs. Further, MTB is one of the most consistent performers as
its earnings measures have seen less volatility than most of its
large regional peers.
Credit performance has also been solid, despite the company's
large exposure to commercial real-estate assets (40% of total
loans versus large regional peer average of 21%). MTB's NCO's and
NPAs have outperformed most peers in numerous economic downturns
evidence of the strong credit culture of the company.
Additionally, Fitch believes the company's reserve coverage also
provides good support given loss history.
Further, Fitch considers MTB's management team to be a rating
strength given the stable, average tenure of 20 plus years with
the company. Further, despite a history of acquisitions, board
composition has not changed dramatically. Fitch also notes that
the MTB's ownership includes roughly 17% held by management and
employees of the company which creates a strong alignment between
management and shareholders interest.
Although capital position is considered to be MTB's weak spot,
Fitch acknowledges the company's improved capital ratios from
historical levels such as TCE, leverage and Common Tier 1. The
company has continued to build its capital position. As of 2Q'14,
TCE and Tier 1 Common estimated (under Basel III) stood at 8.45%
(up 84bps compared to 2Q13) and approximately 9.24% (up 114bps
from 2Q13), respectively. Further, Fitch believes the company's
strong and consistent earnings and credit profile through various
credit cycles affords the leaner capital position.
RATING SENSITIVITIES - IDRS, VRs AND SENIOR DEBT
Fitch expects to resolve the Outlook following the removal of the
BSA/AML-related MOU or final approval to acquire Hudson City,
which would indicate sufficient improvement in its BSA/AML risk
management program. If the regulatory order or the acquisition is
still not completed within the next 12 months, Fitch may consider
revising the Outlook to Stable.
Positive rating momentum also hinges on MTB successful remediation
of its current BSA/AML deficiencies without any material
regulatory fines and/or restrictions. Additionally, Fitch would
expect MTB's capital position to continue to build while
maintaining strong earnings, solid reserves and good credit
performance.
Conversely, negative rating drivers would be a more aggressive
approach to capital management, and/or announcing an acquisition
in the near term given the sizeable Hudson City transaction. In
addition, unexpected changes to current business strategy or key
executive management would also be viewed negatively.
KEY RATING DRIVERS - HOLDING COMPANY
MTB's IDR and VR are equalized with those of its operating
companies and banks, reflecting its role as the bank holding
company, which is mandated in the U.S. to act as a source of
strength for its bank subsidiaries. Ratings are also equalized
reflecting the very close correlation between holding company and
subsidiary default probabilities.
RATING SENSITIVITIES - HOLDING COMPANY
Should MTB's holding company begin to exhibit signs of weakness,
demonstrate trouble accessing the capital markets, or have
inadequate cash flow coverage to meet near-term obligations, there
is the potential that Fitch could notch the holding company IDR
and VR from the ratings of the operating companies. This is
viewed as unlikely though for MTB, given the strength of the
holding company liquidity profile.
Fitch is now considering introducing a rating differential between
the holding company and bank in the U.S. due to structural changes
in the sector and the evolving regulatory landscape, as described
in the special report 'U.S. Bank HoldCos & OpCos: Evolving Risk
Profiles', dated March 27, 2014. Given Fitch's views that MTB may
not receive a long-term debt requirement, its ratings may not be
impacted as a result of Fitch's evolving review regarding
notching.
KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR
MTB has a Support Rating of '5' and Support Rating Floor of 'NF'.
In Fitch's view, MTB is not systemically important and therefore,
the probability of support is unlikely. IDRs and VRs do not
incorporate any support.
RATING SENSITVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR
MTB's Support Rating and Support Rating Floor are sensitive to
Fitch's assumption around capacity to procure extraordinary
support in case of need.
KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Subordinated debt and other hybrid capital issued by MTB and by
various issuing vehicles are all notched down from MTB or its bank
subsidiaries' VRs in accordance with Fitch's assessment of each
instrument's respective non-performance and relative loss severity
risk profiles.
RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID
SECURITIES
The ratings of subordinated debt and other hybrid capital issued
by MTB and its subsidiaries are primarily sensitive to any change
in MTB's VR.
KEY RATING DRIVERS - SUBSIDIARY AND AFFILIATED COMPANY
The IDRs and VRs of MTB's bank subsidiaries benefit from the
cross-guarantee mechanism in the U.S. under FIRREA, and therefore
the IDRs and VRs of Manufacturers and Traders Trust Co and
Wilmington Trust, N.A. (formerly M&T Bank, NA) are equalized
across the group.
The IDRs and VRs of MTB's other major rated operating subsidiaries
are equalized with MTB's IDR reflecting Fitch's view that these
entities are core to MTB's business strategy and financial
profile. These entities include: Wilmington Trust Corporation and
Wilmington Trust Company whose IDRs would be sensitive to the same
factors that might drive a change in MTB's IDR.
RATING SENSITIVITIES - SUBSIDIARY AND AFFILIATED COMPANY
As the IDRs and VRs of the subsidiaries are equalized with those
of MTB to reflect support from their ultimate parent, they are
sensitive to changes in the parent's propensity to provide
support, which Fitch currently does not expect, or from changes in
MTB's IDRs.
To the extent that one of MTB's subsidiary or affiliated companies
is not considered to be a core business, Fitch could also notch
the subsidiary's rating from MTB's IDR.
KEY RATING DRIVERS - LONG- AND SHORT-TERM DEPOSIT RATINGS
MTB's uninsured deposit ratings are rated one notch higher than
the company's IDR and senior unsecured debt because U.S. uninsured
deposits benefit from depositor preference. U.S. depositor
preference gives deposit liabilities superior recovery prospects
in the event of default.
KEY RATING SENSITIVITIES - LONG- AND SHORT-TERM DEPOSIT RATINGS
The ratings of long- and short-term deposits issued by MTB and its
subsidiaries are primarily sensitive to any change in MTB's long-
and short-term IDRs.
Fitch has affirmed these ratings with a Positive Outlook:
M&T Bank Corporation
-- Long-term IDR at 'A-'; Outlook Positive;
-- Short-term IDR at 'F1';
-- Viability at 'a-';
-- Preferred stock at 'BB';
-- Support at '5'
-- Support floor 'NF'.
Manufacturers and Traders Trust Co
-- Long-term IDR at 'A-'; Outlook Positive;
-- Short-term IDR at 'F1';
-- Viability at 'a-';
-- Senior unsecured debt at 'A-';
-- Subordinated debt at 'BBB+'
-- Long-term deposits at 'A';
-- Short-term deposits at 'F1';
-- Support at '5';
-- Support floor 'NF'.
Wilmington Trust, N.A. (formerly M&T Bank, NA)
-- Long-term IDR at 'A-'; Outlook Positive;
-- Short-term IDR at 'F1';
-- Viability at 'a-';
-- Long-term deposits at 'A';
-- Short-term deposits at 'F1';
-- Support at '5';
-- Support floor 'NF'.
Wilmington Trust Corporation
-- Long-term IDR at 'A-'; Outlook Positive;
-- Subordinated debt at 'BBB+';
-- Short-term IDR at 'F1';
-- Viability at 'a-';
-- Support at '5';
-- Support floor at `NF'.
Wilmington Trust Company
-- Long-term IDR at 'A-'; Outlook Positive
-- Short-term IDR at 'F1';
-- Viability at 'a-';
-- Support at '5';
-- Support floor at 'NF'.
M&T Capital Trust I - III
-- Preferred stock at 'BB+'.
Provident Bankshares Corp.
-- Preferred stock at 'BB'.
Provident Bank of Maryland
-- Subordinated debt at 'BBB+'.
Provident (MD) Capital Trust I
-- Preferred stock at 'BB+'.
MAGNACHIP SEMICONDUCTOR: NYSE Listing Extended to April 2015
------------------------------------------------------------
MagnaChip Semiconductor Corporation, a Korea-based designer and
manufacturer of analog and mixed-signal semiconductor products, on
Oct. 7 disclosed that it has received an extension for continued
listing and trading of the Company's common stock on the New York
Stock Exchange.
The extension provides the Company an additional trading period up
to April 1, 2015, during which it can file its Annual Report on
Form 10-K for the year ended Dec. 31, 2013 with the Securities and
Exchange Commission, subject to reassessment on an ongoing basis.
The NYSE will continue to closely monitor the Company's
restatement process and timing, and could initiate accelerated
trading suspension prior to the end of the six-month trading
period extension if that process fails to progress satisfactorily
during the extension. In addition, in the event the Company does
not complete its 2013 Form 10-K filing with the SEC by April 1,
2015, the NYSE will move forward with the initiation of suspension
and delisting procedures.
As previously reported, the delay in filing the 2013 Form 10-K is
a result of the Company's ongoing internal investigative process
and restatement of certain prior period financial statements.
About MagnaChip Semiconductor
Headquartered in South Korea, MagnaChip --
http://www.magnachip.com/-- is a Korea-based designer and
manufacturer of analog and mixed-signal semiconductor products for
high-volume consumer applications. MagnaChip believes it has one
of the broadest and deepest ranges of analog and mixed-signal
semiconductor platforms in the industry, supported by its 30-year
operating history, a large portfolio of registered and pending
patents, and extensive engineering and manufacturing process
expertise.
* * *
As reported by the Troubled Company Reporter-Asia on Aug. 22,
2014, Moody's Investors Service downgraded MagnaChip Semiconductor
Corporation's corporate family rating as well as the senior
unsecured rating on its $225 million, 6.625% notes due 2021, to
Caa1 from B2. Moody's said the ratings outlook is negative.
MACKEYSER HOLDINGS: Deadline to Remove Actions Moved to March 15
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware signed off
on an order extending the deadline for MacKeyser Holdings, LLC to
remove lawsuits involving the company.
Pursuant to the court order, MacKeyser has until March 15, 2015,
to file a notice of removal of lawsuits that have not been halted
by the automatic stay, or 30 days after entry of an order
terminating the stay with respect to any lawsuit sought to be
removed.
About MacKeyser Holdings, LLC
MacKeyser Holdings, LLC and its operating affiliates -- American
Optical Services, LLC, and Exela Hearing Services, LLC -- manage
integrated eye care and hearing systems providers with over 80
optical retail, optometry and ophthalmology locations in 14
states. Within certain of the Company's locations, dedicated
audiology and dispensing staff conduct diagnostics, fitting and
dispensing of hearing systems.
MacKeyser Holdings, LLC, American Optical Services, Inc. and their
affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
Nos. 14-11528 to 14-11550) on June 20, 2014. David R. Hurst,
Esq., and Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, PA. The Debtors' financial advisor is GlassRatner
Advisory & Capital Group. The investment banker is Hammond Hanlon
Camp LLC. The noticing and claims management agent is American
Legal Claim Services, LLC.
In its petition, MacKeyser Holdings estimated $50 million to $100
million in both assets and liabilities.
The petitions were signed by Thomas J. Allison, authorized
officer.
The U.S. Trustee for Region 3 has appointed three creditors
to serve on the official committee of unsecured creditors.
MARKWEST ENERGY: Moody's Affirms Ba2 Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service affirmed MarkWest Energy Partners,
L.P.'s (MarkWest) Ba2 Corporate Family Rating (CFR) and SGL3
Speculative Grade Liquidity rating. MarkWest Energy Finance
Corporation's Ba3 rated senior unsecured notes were also affirmed.
The outlook remains stable.
Outlook Actions:
Issuer: MarkWest Energy Partners, L.P.
Outlook, Remains Stable
Affirmations:
Issuer: MarkWest Energy Partners, L.P.
Probability of Default Rating, Affirmed Ba2-PD
Speculative Grade Liquidity Rating, Affirmed SGL-3
Corporate Family Rating (Local Currency), Affirmed Ba2
Multiple Seniority Shelf (Local Currency) Oct 25, 2015, Affirmed
(P)Ba3
Senior Unsecured Regular Bond/Debenture (Local Currency) Jul 15,
2023, Affirmed Ba3
Senior Unsecured Regular Bond/Debenture (Local Currency) Jun 15,
2022, Affirmed Ba3
Senior Unsecured Regular Bond/Debenture (Local Currency) Nov 1,
2020, Affirmed Ba3
Senior Unsecured Regular Bond/Debenture (Local Currency) Feb 15,
2023, Affirmed Ba3
Senior Unsecured Regular Bond/Debenture (Local Currency) Aug 15,
2021, Affirmed Ba3
Ratings Rationale
MarkWest's Ba2 Corporate Family Rating (CFR) reflects high
leverage as MarkWest continues its very large growth-based capital
expenditure program, which is funded about 40/60 with debt and
equity, and which will result in significant EBITDA growth through
2016. MarkWest's rating is also influenced by the risks inherent
in the MLP business model, which encompasses aggressive growth
targets, high unit holder distributions, and reliance on debt and
equity capital markets access. MarkWest's rating also considers
the company's liquidity, which features a revolving credit
facility whose usage is sometimes constrained by financial
covenants and is too small to meet the company's funding
requirements over the next 12 months, resulting in a high reliance
on equity and debt capital markets to fund growth capital. The
rating is supported by the scale and diversification of MarkWest's
midstream natural gas assets and by its position as a significant
midstream infrastructure provider in the rapidly developing
Marcellus Shale. The rating also considers MarkWest's high
percentage of fee-based contracts as it expands in the Marcellus
and Utica Shales, reducing exposure to volatile commodity prices.
MarkWest's SGL-3 rating indicates adequate liquidity. MarkWest is
able to fund its core needs, including operating and interest
expense, modest maintenance capital and distributions from
internally generated cash flow, but is reliant on ongoing access
to equity and debt capital markets in addition to its revolver to
fund growth capital. MarkWest maintains a $1.3 billion committed
credit facility that matures in March 2019 and had $150 million of
drawings and $11 million of letters of credit as of July 30, 2014.
While the full amount of the credit facility is available for
short term borrowings that are repaid prior to quarter-end, usage
for longer-term borrowings that straddle a quarter-end is
sometimes restricted by the total debt to EBITDA financial
covenant of 5.5x through December 31, 2014, after which it
declines 5.25x. Taking this restriction into account, the revolver
availability at July 30, 2014 was only $645 million. MarkWest is
therefore highly reliant on access to the capital markets to fund
its growth projects. MarkWest is expected to be compliant with all
three of its covenants through 2015. Alternate liquidity is
excellent as MarkWest has significant assets in the Marcellus and
the Utica that are not pledged as security that could be sold or
joint ventured if necessary.
The Ba3 rating on the senior unsecured notes is one notch below
the Ba2 CFR and reflects the priority ranking of the $1.3 billion
secured revolver consistent with Moody's Loss Given Default
Methodology.
The stable outlook assumes that MarkWest's leverage will decline
towards 4x in 2015, from 5.1X at June 30, 2014. The ratings could
be upgraded if the partnership's leverage is sustainable below 4x
and its exposure to commodity prices remains below 30%. An upgrade
would also be contingent on a liquidity profile that is not
reliant on ongoing access to equity capital markets but one,
rather, that has at least 12 months of committed available
liquidity to fund expected operations, including distributions and
all capital expenditures. MarkWest's rating could be downgraded if
leverage remains above 5.0x, possibly due to deteriorating
operating performance, a material leveraging transaction, or lower
than anticipated or delayed returns on growth projects.
MarkWest Energy Partners is a Denver-based publicly traded master
limited partnership engaged primarily in natural gas and natural
gas liquids gathering and processing and other midstream
activities with principal operations in the Marcellus and Utica
shales and in the US mid-continent.
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.
MASTERCRAFT SPECIALTIES: Case Summary & 20 Top Unsec. Creditors
---------------------------------------------------------------
Debtor: Mastercraft Specialties, Inc.
800 Maple Street
Red Lion, PA 17356
Case No.: 14-04682
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
Middle District of Pennsylvania (Harrisburg)
Judge: Hon. Mary D France
Debtor's Counsel: Lawrence V. Young, Esq.
CGA LAW FIRM
135 North George Street
York, PA 17401
Tel: 717 848-4900
Fax: 717 843-9039
Email: lyoung@cgalaw.com
hlocke@cgalaw.com
Total Assets: $2.61 million
Total Liabilities: $4.70 million
The petition was signed by Joel Persing, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/pamb14-04682.pdf
MOJO ORGANICS: Incurs $1.29-Mil. Net Loss for Third Quarter
-----------------------------------------------------------
MOJO Organics, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing a net
loss of $1.29 million on $85,760 of revenues for the three months
ended Sept. 30, 2014, compared with a net loss of $711,948 on
$186,391 of revenues for the same period last year.
The Company's balance sheet at Sept. 30, 2014, showed $1.18
million in total assets, $428,718 in total liabilities and
stockholders' equity of $753,020.
The Company has not yet established an ongoing source of revenues
sufficient to cover its operating costs and allow it to continue
as a going concern. For the nine months ended Sept. 30, 2014, the
Company incurred a net loss from continuing operations of $3.94
million. As of Sept. 30, 2014, the Company had accumulated losses
of $17.06 million, which includes accumulated losses from
discontinued operations of $8.58 million. The ability of the
Company to continue as a going concern is dependent upon its
ability to successfully obtain and retain customers in order to
achieve profitable operations, according to the regulatory filing.
A copy of the Form 10-Q is available at:
http://is.gd/5cxRzS
MOJO Organics, Inc., is engaged in the product development,
production, marketing, and distribution of CHIQUITA TROPICALS, a
fruit juice. CHIQUITA TROPICALS are produced under license
agreement from Chiquita Brands L.L.C. Mojo Organics, Inc. is
headquartered in Jersey City, New Jersey.
MUSCLEPHARM CORP: Exercises Purchase Option Under CoCrystal APA
---------------------------------------------------------------
MusclePharm Corporation submitted an Option Exercise Notice to
CoCrystal Pharma, Inc. (f/k/a BioZone Pharmaceuticals, Inc.) and a
third party escrow agent pursuant to requirements of an Asset
Purchase Agreement entered into by and between the Company,
CoCrystal, and certain of CoCystal's subsidiaries, according to a
regulatory filing with the U.S. Securities and Exchange
Commission.
Pursuant to the Notice, the Company purchased 250,000 shares of
the Company's common stock, which were being held in escrow, for
an aggregate purchase price of $2,500,000, which was wired to the
Escrow Agent.
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100 percent free of banned substances. MusclePharm is sold in
over 120 countries and available in over 5,000 U.S. retail
outlets, including GNC and Vitamin Shoppe. MusclePharm products
are also sold in over 100 online stores, including
bodybuilding.com, Amazon.com and Vitacost.com.
MusclePharm reported a net loss after taxes of $17.71 million in
2013, a net loss after taxes of $18.95 million in 2012, and a net
loss of $23.28 million in 2011.
As of June 30, 2014, the Company had $66.93 million in total
assets, $28.83 million in total liabilities, and $38.09 million in
total stockholders' equity.
MONROE HOSPITAL: Jim Summersett May Step Down as CEO in November
----------------------------------------------------------------
Monroe Hospital LLC interim CEO Jim Summersett would step down if
Prime Healthcare Services acquires the hospital in November, the
Herald-Times reports.
The Herald-Times relates that Prime Healthcare, where Mr.
Summersett also serves as regional CEO, would bring in a full-time
administrator to run Monroe Hospital.
Citing Mr. Summersett, the Herald-Times states that Monroe
Hospital must improve its billing practices and drive up patient
volume through better marketing of its emergency department to
become financially strong, the Herald-Times reports.
"It starts in the emergency department, which is the front door to
any hospital and an excellent way to build patient volume. Prime
is spending a lot of time focusing on the quality and efficiency
of our emergency department, because there's an old saying that
the product always comes before promotion. Once we're satisfied
that the emergency services are operating to Prime's standards, we
will launch a campaign to let the community know how strong our
emergency services are at Monroe Hospital," the Herald-Times
quoted Mr. Summersett as saying.
Mr. Summersett, according to the Herald-Times, said that Monroe
Hospital is averaging only 30 patients a day in its emergency
department, but he hopes to see that figure climb to 70 to 80 a
day in the coming months. To be on solid financial footing, the
hospital has to consistently fill 20 to 25 beds a night, the
report states, citing Mr. Summersett.
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. In its schedules, the Debtor disclosed
$14,327,739 in total assets and $136,386,925 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.
MUD KING: Counsel Hoover Slovacek Notifies Court of Address Change
------------------------------------------------------------------
Hoover Slovacek LLP, counsel for Mud King Products, Inc., notified
the Bankruptcy Court that it has moved to a new office. Effective
Aug. 25, 2014, the new address for Mazelle S. Krasoff, Esq., at
Hoover Slovacek LLP is:
Galleria Tower II
5051 Westheimer, Suite 1200
Houston, TX 77056
The firm also said that all e-mail addresses, phone and fax
numbers will remain the same for Ms. Krasoff.
About Mud King Products
Mud King Products, Inc., filed a Chapter 11 petition (Bank. S.D.
Tex. Case No. 13-32101) on April 5, 2013. The petition was signed
by Erich Mundinger as vice president. The Debtor disclosed
$18,959,158 in assets and $3,351,216 in liabilities as of the
Chapter 11 filing. Annie E Catmull, Esq., Melissa Anne Haselden,
Esq., Mazelle Sara Krasoff, Esq., and Edward L Rothberg, Esq., at
Hoover Slovacek, LLP, represent the Debtor in its restructuring
effort. Judge Karen K. Brown presides over the case.
The U.S. Trustee was unable to appoint an official committee of
unsecured creditor.
MUD KING: Hearing on Approval of Plan Outline Reset for Oct. 23
---------------------------------------------------------------
The Bankruptcy Court rescheduled until Oct. 23, 2014, at 2:00
p.m., the hearing to consider adequacy of information in the
disclosure statement explaining Mud King Products, Inc.'s proposed
Reorganization Plan.
As reported in the TCR on July 23, 2014, according to the
Disclosure Statement, the key provisions of the Plan are:
(1) Administrative Claims will be paid in cash in full;
(2) Priority Claims will be paid in full in cash when due;
(3) Allowed Claim of Ad Valorem taxing authorities will be
paid when due;
(4) Allowed Secured Claim of Ford Motor Credit will be paid
pursuant to its contractual terms;
(5) Allowed Claims of $50,000 or less will be paid in cash in
full;
(6) Allowed General Unsecured Claims of Greater than $50,000
will receive a pro rata share of equal quarterly payments
for a period of twenty quarters until such claims are paid
in full, with simple interest at the rate of 5% per annum
accruing from the Effective Date;
(7) Allowed Employee Indemnification Claims will be paid in
full in cash;
(8) Holders of Class 6 Equity Interest will retain their
Interests held on the date of the filing of the bankruptcy
case with the prohibition of payment of dividends until
Class 1, 2, 3, 4 and 5 are paid as provided in the Plan.
To the extent that the Court determines that NOV should hold an
Allowed Claim, the NOV Claim would be treated in either Class 3 or
Class 4 of this Plan, as appropriate. On September 21, 2012,
National Oilwell Varco (NOV) initiated a lawsuit n Harris County
District Court against Mud King and various other defendants for
misappropriation of trade secret and related actions.
As of the Effective Date, the management of the Reorganized Debtor
will continue to receive salaries as follows: Nigel Brassington -
$237,070 annually and Djoni Handoyo Layanto - $148,494 annually.
Lee Wilson will continue as operations manager at an annual salary
of $110,000.
A copy of the Disclosure Statement dated July 1, 2014, is
available for free at http://bankrupt.com/misc/MUDKING_302_ds.pdf
About Mud King Products
Mud King Products, Inc., filed a Chapter 11 petition (Bank. S.D.
Tex. Case No. 13-32101) on April 5, 2013. The petition was signed
by Erich Mundinger as vice president. The Debtor disclosed
$18,959,158 in assets and $3,351,216 in liabilities as of the
Chapter 11 filing. Annie E Catmull, Esq., Melissa Anne Haselden,
Esq., Mazelle Sara Krasoff, Esq., and Edward L Rothberg, Esq., at
Hoover Slovacek, LLP, represent the Debtor in its restructuring
effort. Judge Karen K. Brown presides over the case.
The U.S. Trustee was unable to appoint an official committee of
unsecured creditor.
NAARTJIE CUSTOM: Meeting of Creditors Set for Oct. 16
-----------------------------------------------------
The U.S. Trustee will convene a meeting of creditors in the
Chapter 11 case of Naartjie Custom Kids, Inc., on Oct. 16, 2014,
at 1:30 p.m. The meeting will be held at 405 South Main Street,
Suite 250, Salt Lake City, Utah.
The court document provides that the deadlines to file proof of
claim are: (a) Jan. 15, 2015 for all creditors except governmental
units; and (b) March 11, 2015, for governmental units.
About Naartjie Custom Kids
Naartjie Custom Kids, Inc., which designs, manufactures and sells
children's clothing, accessories and footwear for ages newborn
through 10 years old, sought protection under Chapter 11 of the
Bankruptcy Code on Sept. 12, 2014 (Bankr. D. Utah Case No. 14-
29666). The case is assigned to Judge William T. Thurman.
The Debtor's counsel is Annette W. Jarvis, Esq., Jeffrey M.
Armington, Esq., Benjamin J. Kotter, Esq., and Michael F. Thomson,
Esq., at Dorsey & Whitney LLP, in Salt Lake City, Utah.
NATURAL RESOURCE: Moody's Assigns B3 Rating on New $125MM Notes
---------------------------------------------------------------
Moody's assigned a B3 rating to the Natural Resource Partners
L.P.'s (NRP, Partnership) proposed $125 million add-on to their
existing 9.125% senior notes due 2018, originally issued in
September 2013 at a principal amount of $300 million. Moody's also
changed the ratings outlook to negative from stable. At the same
time, Moody's affirmed all existing ratings, including the
corporate family rating (CFR) of B1, probability of default rating
(PDR) of B1-PD, and senior unsecured rating of B3. The speculative
grade liquidity rating of SGL-3 was also affirmed.
Issuer: Natural Resource Partners L.P.
Outlook, Changed To Negative From Stable
Assignments:
Issuer: Natural Resource Partners L.P.
Senior Unsecured Regular Bond/Debenture (Local Currency),
Assigned B3, LGD5
Affirmations:
Issuer: Natural Resource Partners L.P.
Probability of Default Rating, Affirmed B1-PD
Speculative Grade Liquidity Rating, Affirmed SGL-3
Corporate Family Rating, Affirmed B1
Senior Unsecured Regular Bond/Debenture (Local Currency) Oct 1,
2018, Affirmed B3, (LGD5 changed from LGD6)
Ratings Rationale
The proceeds of the add-on will be used to finance NRP's
acquisition of non-operated working interests in oil and gas
properties from an affiliate of Kaiser-Francis Oil Company for
$340 million. The remainder of the purchase price is expected to
be financed with $101 million from a common units offering
proposed on October 6, 2014, and NRP's existing oil and gas credit
facility. In connection with the acquisition agreement, NRP
received a firm commitment to expand the borrowing base of the oil
and gas credit facility from $20 million at June 30, 2014 to $150
million. The acquisition of oil and gas assets from Kaiser-Francis
is expected to close in November 2014.
On October 2, 2014, NRP announced that it has closed the
acquisition of VantaCore Partners LP, a privately held limited
partnership specializing in the construction materials industry,
for $205 million. The acquisition was funded in part by issuing
approximately $36 million in common units. NRP funded the
remaining $169 million through borrowings under NRP (Operating)
LLC's $300 million revolving credit facility.
These two acquisitions represent NRP's latest steps in
diversifying its business away from coal properties. Pro-forma for
VantaCore and Kaiser-Francis acquisitions, NRP owns and controls
2.3 billion tons of coal reserves across three US coal basins, 795
million tons of aggregate reserves, interests in approximately
1500 oil and gas wells, interest in soda ash operations, and over
11 million mineral acres. While in 2012 roughly 95% of NRP's
EBITDA was derived from coal-related businesses, the proportion is
expected to fall below 55% in 2015 with the remainder derived from
oil and gas, aggregates and industrial minerals.
Recent debt-financed acquisitions coupled with weakness in the US
coal industry have resulted in increase in the company's leverage,
with Debt/ EBITDA, as adjusted expected to be in 4x -- 4.5x in
2015, up from 3.0x as of the end of 2012. The ratings are
pressured by the increase in leverage, as well as risks stemming
from the changing business model and the need to integrate the
recently acquired operating assets.
Nevertheless, the B1 CFR also reflects the improved diversity of
the business, and continues to be supported by NRP's substantive
reserve base. The ratings continue to be constrained by the
relatively high degree of exposure to Central Appalachia (CAPP)
and metallurgical coal with fair amount of customer concentration,
and the risks surrounding future limited partner distributions
which limit the extent of free cash flows available for debt
repayment.
The B3 rating on the senior unsecured notes reflects their
effective subordination relative to the company's revolvers ($300
million secured revolver and $150 million oil and gas reserve-
based revolver) and roughly $815 million in debt located at the
NRP operating subsidiary.
The Speculative Grade Liquidity rating of SGL-3 reflects Moody's
expectation that the company will have adequate liquidity over the
next twelve months. As of June 30, 2014, the company had about $70
million cash on hand and roughly $303 million available under its
revolving credit facilities, which include $300 million secured
revolving credit facility maturing in April 2016, and the oil and
gas reserve-based revolving credit facility maturing in August
2018. Pro-forma for the proposed transactions, Moody's expect the
company to have roughly $50 million in cash and $150 million
available under its revolvers.
Moody's expects the company to generate sufficient operating cash
flows to largely finance its MLP distributions. Moody's expect
headroom under the company's revolver's financial covenants to be
limited, which could restrict availability in stressed market
conditions. The company's ability to divest assets is limited by
its debt agreements.
The negative outlook reflects Moody's expectation that Debt/
EBITDA, as adjusted, will approach 4.5x over the next twelve
months.
Although an upgrade in the near term is unlikely, factors that
could result in an improved outlook or ratings would be a
sustainable improvement in operating performance, sustained
meaningful free cash flows after MLP distributions, and meaningful
debt reduction. If the company can maintain consolidated leverage
(gross debt to adjusted EBITDA) below 3.5x and good liquidity, an
upgrade could be considered.
Factors that would negatively impact the ratings would be
deterioration in credit metrics (margins and cash flow) due to a
decline in coal production or average realized prices. Lower
ratings could also result from debt-financed acquisitions, special
distributions, or a material impairment in liquidity. A downgrade
would be considered if Debt/ EBITDA were expected to track above
4.5x.
Natural Resource Partners L.P. ("NRP"), is a limited partnership
formed in April 2002 and is headquartered in Houston, Texas. NRP
engages principally in the business of owning, managing and
leasing a diversified portfolio of mineral properties in the
United States, including interests in coal, trona and soda ash,
oil and gas, construction aggregates, frac sand and other natural
resources. For the six months ended June 30, 2014, NRP recognized
approximately $107.7 million (63%) of revenues from coal-related
sources, and $63.1 million (37%) of revenues from non-coal-related
sources. As of June 30, 2014, the company owned or controlled
approximately 2.3 billion tons of proven and probable coal
reserves and generated approximately $348 million of revenues for
the last twelve months.
The principal methodology used in this rating was Global Mining
Industry published in August 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.
NEWCASTLE SHIPYARDS: Case Summary & 20 Top Unsecured Creditors
--------------------------------------------------------------
Debtor: Newcastle Shipyards, LLC
aka Keith Marine, Inc
fdba Newcastle Marine of Flagler County, Inc.
195 Comfort Road
Palatka, FL 32177
Case No.: 14-04941
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
Middle District of Florida (Jacksonville)
Debtor's Counsel: Peter N. Hill, Esq.
WOLFF HILL MCFARLIN & HERRON PA
1851 West Colonial Drive
Orlando, FL 32804
Tel: 407-648-0058
Fax: 407-648-0681
Email: phill@whmh.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $10 million to $50 million
The petition was signed by Kevin Keith, manager.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/flmb14-04941.pdf
NII HOLDINGS: Affiliates' Case Summary & Top Unsecured Creditors
----------------------------------------------------------------
Four affiliates of NII Holdings, Inc., filed Chapter 11 bankruptcy
petitions on Oct. 8, 2014:
Debtor Case No.
------ --------
McCaw International (Brazil), LLC 14-12843
fka McCaw International (Brazil), Ltd.
1875 Explorer Street, Suite 1000
Reston, VA 20190
Nextel International (Uruguay), LLC 14-12844
NII Mercosur, LLC 14-12845
Airfone Holdings, LLC -
Chapter 11 Petition Date: October 8, 2014
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Debtors' Counsel: Scott Greenberg, Esq.
JONES DAY
222 East 41st Street
New York, NY 10017
Tel: (212) 326-3939
Fax: (212) 755-7306
Email: sgreenberg@jonesday.com
- and -
David G. Heiman, Esq.
Carl E. Black, Esq.
JONES DAY
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Tel: (216) 586-3939
McCaw International's Estimated Assets: $100MM to $500MM
McCaw International's Estimated Debts: $1MM to $10MM
The petitions were signed by Daniel E. Freiman, manager of NII
International Mobile S.a.r.l.
On Sept. 15, 2014, these affiliated entities filed petitions in
this Court under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
NII Holdings, Inc. 14-12611
Nextel International (Services), Ltd. 14-12612
NII Capital Corp. 14-12613
NII Aviation, Inc. 14-12614
NII Funding Corp. 14-12615
NII Global Holdings, Inc. 14-12616
NII International Holdings S.a r.l. 14-12617
NII International Services S.a r.l. 14-12618
NII International Telecom S.C.A. 14-12619
The Initial Debtors' Chapter 11 cases have been consolidated for
procedural purposes only and are being administered jointly under
Case No. 14-12611.
In connection with the filing of their petitions, the New Debtors
said they will file a motion requesting that the Court consolidate
their Chapter 11 cases with the Initial Debtors for procedural
purposes only.
In connection with the filing of the new petitions, the New
Debtors said they will file a motion for an order directing that
certain orders in the jointly administered Chapter 11 cases of NII
Holdings, Inc., Case No. 14-12611, be made applicable to their
Chapter 11 cases. On Sept. 15, 2014, NII Holdings, Inc., and
certain of its affiliates filed a motion requesting a waiver of
the requirement for filing a list of creditors pursuant to
Sections 342, and 521(a) of title 11 of the United States Code,
Rules 1007(a) and 2002(a) and 2002(f) of the Federal Rules of
Bankruptcy Procedure, and Rule 1007-1 of the Local Bankruptcy
Rules for the Southern District of New York.
OKLAHOMA UNITED METHODIST: Proposes Disbursement Guidelines
-----------------------------------------------------------
Central Oklahoma United Methodist Retirement Facility Inc. dba
Epworth Villa asks the U.S. Bankruptcy Court for the Western
District of Oklahoma for an order to implement cash collateral and
construction payments, and approval of procedures for disbursement
requests.
The Debtor relates that on Aug. 14, 2014, the Court entered its
order authorizing payment of prepetition claims of construction
contractors and suppliers, which authorized Epworth Villa to pay
the prepetition claims of construction contractors and suppliers
with respect to its construction project. The relief ordered by
the Court in the construction payments order was authorized
pursuant to, among other authorities cited in the Debtor's motion.
The Debtor notes it is proceeding with the renovation and
expansion of its facilities, as authorized by the cash collateral
order and the construction payments order. These activities
necessitate the submission of construction disbursement
requests to BancFirst, the Indenture Trustee for payment of
charges for labor and materials incurred in connection with the
renovation and expansion of the Debtor's facilities.
Upon submission of the first disbursement request after
commencement of this case, the Trustee considered, and ultimately
required, the Debtor to obtain an endorsement to the existing loan
policy of title insurance advancing the effective date of the
policy to the date of the post-Petition Date disbursement request.
The premium expense for such an endorsement was $38,052, the
Debtor says.
According to the Debtor, the Trustee's requirement for an
endorsement modifying the effective date of the underlying loan
policy of title insurance was predicated upon language in a
Construction Disbursement and Monitoring Agreement dated Dec. 1,
2012.
A full-text copy of the Construction Disbursement and Monitoring
Agreement is available for free at http://is.gd/y6U7l5
About Central Oklahoma United Methodist
Central Oklahoma United Methodist Retirement Facility, Inc., dba
Epworth Villa, sought protection under Chapter 11 of the
Bankruptcy Code on July 18, 2014 (Case No. 14-12995, Bankr. W.D.
Okla.). The case is before Judge Sarah A. Hall.
The Debtor's counsel is Brandon Craig Bickle, Esq., Sidney K.
Swinson, Esq., and Mark D.G. Sanders, Esq., at Gable & Gotwals,
P.C., in Tulsa, Oklahoma; and G. Blaine Schwabe, III, Esq., at
Gable & Gotwals, P.C., in Oklahoma City, Oklahoma.
The Debtor reported $117,659,919 in total assets, and $107,972,621
in total liabilities.
OKLAHOMA UNITED METHODIST: Taps Secrest Hill as Special Counsel
---------------------------------------------------------------
Central Oklahoma United Methodist Retirement Facility, Inc. dba
Epworth Villa seeks authorization from the U.S. Bankruptcy Court
for the Western District of Oklahoma to employ James K. Secrest,
II, W. Michael Hill, Jeffrey Fields, Seth A. Caywood, and Secrest
Hill Butler & Secrest, P.C. as special counsel.
Epworth Villa desires to employ Hill, Fields, Caywood, and Secrest
Hill in this Chapter 11 bankruptcy case as its special counsel to
continue their representation of Epworth Villa in the following
matters pending in Oklahoma County District Court:
Adams, et al. v. Epworth Villa - Case No. CJ-2013-562
Savage, et al. v. Epworth Villa - Case No. CJ-2013-1920
Mashburn v. Epworth Villa - Case No. CJ-2013-5069
W. Michael Hill, partner of Secrest Hill, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
Secrest Hill can be reached at:
W. Michael Hill, Esq.
SECREST HILL BUTLER & SECREST, P.C.
7134 South Yale, Suite 900
Tulsa, OK 74136
Tel: (918) 494-5905
Fax: (918) 494-2847
E-mail: wmhill@secresthill.com
About Central Oklahoma United Methodist
Central Oklahoma United Methodist Retirement Facility, Inc., dba
Epworth Villa, sought protection under Chapter 11 of the
Bankruptcy Code on July 18, 2014 (Case No. 14-12995, Bankr. W.D.
Okla.). The case is before Judge Sarah A. Hall.
The Debtor's counsel is Brandon Craig Bickle, Esq., Sidney K.
Swinson, Esq., and Mark D.G. Sanders, Esq., at Gable & Gotwals,
P.C., in Tulsa, Oklahoma; and G. Blaine Schwabe, III, Esq., at
Gable & Gotwals, P.C., in Oklahoma City, Oklahoma.
ORECK CORP: Disclosure Statement Approved; Plan Hearing on Nov. 4
-----------------------------------------------------------------
The Hon. Keith M. Lundin of the U.S. Bankruptcy Court for the
Middle District of Tennessee approved the adequacy of the amended
Disclosure Statement explaining the Joint Plan of Liquidation
filed by Oreck Corporation and the Official Committee of Unsecured
Creditors.
A hearing on confirmation of the plan will be held Nov. 4, 2014,
at 9:00 a.m. (Central Time). Objections, if any, must be filed no
later than 5:00 p.m. (Central Time) on Oct. 27, 2014.
Creditors must cast their votes for the plan no later than 5:00
p.m. (Eastern Time) on Oct. 27, 2014. Ballots must be submitted
either by mail, overnight courier, or personal delivery to:
BMC Group, Inc.
Attn: Oreck Corporation
P.O. Box 3020
Chanhassen, MN 55317
As reported in the Troubled Company Reporter, according to the
Disclosure Statement, under the Plan, among other things, each
holder of an Allowed General Unsecured Claim will receive in full
and final satisfaction, settlement, release and discharge and in
exchange for such Allowed General Unsecured Claim, its Pro Rata
share of the Committee funds available for distribution by each
Debtor.
The Plan cancels all interests in the Debtors. Holders of
interests will receive no distributions under the Plan and are
deemed to have rejected the Plan.
According to the Disclosure Statement dated Aug. 13, 2014, the
Plan proposed that, among other things:
-- Each holder of an allowed general unsecured claim will
receive in full and final satisfaction, its pro rata share of the
liquidating trust assets;
-- Each holder of an allowed convenience claim will receive in
full and final satisfaction, cash in the amount of 50% of its
allowed convenience claim, up to a maximum amount of $1,000; and
-- Holders of interests will receive no distributions under the
Plan and are deemed to have rejected the Plan because the Plan
cancels all interests in the Debtors.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/Oreck_1438_DS_aug13.PDF
About Oreck Corp.
Oreck Corporation and eight affiliates sought Chapter 11
protection (Bankr. M.D. Tenn. Lead Case No. 13-04006) in
Nashville, Tennessee, on May 6, 2013, with plans to sell the
business as a going concern.
Oreck has been in the business of manufacturing, marketing and
selling vacuum cleaners and related products since the late 1960s.
The corporate offices are located in Nashville, and the
manufacturing and call center is located in Cookeville, Tennessee.
Oreck has 70 employees in Nashville, 250 employees at its plant in
Cookeville and 325 employees operating 96 company-owned and
managed retail stores. The Debtor disclosed $18,013,249 in assets
and $14,932,841 plus an unknown amount in liabilities as of the
Chapter 11 filing.
William L. Norton III, Esq., and Alexandra E. Dugan, Esq., at
Bradley Arant Boult Cummings LLP, serve as counsel to the Debtor.
BMC Group Inc. is the claims and notice agent. Sawaya Segalas &
Co., LLC serves as financial advisor.
The U.S. Trustee appointed six creditors to the Official Committee
of Unsecured Creditors. Daniel H. Puryear, Esq., at Puryear Law
Group, and Sharon L. Levine, Esq., and Kenneth A. Rosen, Esq., at
Lowenstein Sandler LLP represent the Committee. The Committee
tapped to retain Gavin/Solmonese LLC as its financial advisor.
In July 2013, Royal Appliance Mfg. Co. (RAM), a subsidiary of the
TTI Group, finalized the purchase of Oreck Corp.'s assets. The
Bankruptcy Court approved the sale on July 16, 2013.
Royal, the maker of Dirt Devil floor-care products, won the
auction for Oreck Corp. The second-place bidder was the Oreck
family, which sold the business in a $272 million transaction in
2003. The Oreck family made the first bid at auction at
$21.9 million, including $14.5 million cash.
The terms of Royal's winning bid weren't disclosed publicly,
according to a Bloomberg News report. Royal was acquired in 2003
by Hong Kong-based Techtronic Industries Co., the maker of Hoover
vacuum cleaners.
PITTSBURGH CORNING: Insurers Lose Plan Appeal in District Court
---------------------------------------------------------------
Chief District Judge Joy Flowers Conti in Pennsylvania affirmed
the bankruptcy court's May 24, 2013 order:
-- confirming the Modified Third Amended Plan of
Reorganization of debtor Pittsburgh Corning Corporation, and
-- issuing an asbestos permanent channeling injunction under
11 U.S.C. Sec. 524(g).
Mt. McKinley Insurance Company and Everest Reinsurance Company
object to the Plan and filed a brief seeking reversal of the
confirmation order.
Pittsburgh Corning, the Official Committee of Asbestos Creditors,
the Legal Representative for Future Asbestos Claimants, PPG
Industries, Inc., and Corning Incorporated support the Plan.
The plan parties filed a motion for an order affirming the
bankruptcy court's confirmation order and a joint brief in
response to Mt. McKinley's brief.
Certain Underwriters at Lloyd's, London, and Certain London Market
Companies filed a separate brief urging affirmance.
The key feature of the Plan is the creation of the "Pittsburgh
Corning Asbestos PI Trust" which will resolve and pay asbestos
personal injury claims asserted against it. Pittsburgh Corning,
PPG, Corning, and certain insurers will contribute assets to fund
the trust. In return, the Plan calls for the bankruptcy court to
issue a permanent injunction under 11 U.S.C. Sec. 524(g)
channeling "Asbestos PI Trust Claims" to the trust and enjoining
recovery of such claims against "Asbestos Protected Parties." The
Plan channels asbestos claims against Pittsburgh Corning to the
trust. With respect to PPG and Corning, however, the Plan
channels only asbestos claims arising out of exposure to Unibestos
or other asbestos products manufactured, sold, or distributed by
Pittsburgh Corning. Claims against PPG or Corning arising out of
exposure to asbestos through PPG or Corning products not related
to Pittsburgh Corning are not channeled.
Fully funded, the trust will control assets worth more than
$3 billion. These assets include 100% of the stock of the
reorganized Pittsburgh Corning and $290 million in insurance
payments or settlements between Pittsburgh Corning and its
insurers.
PPG will contribute approximately $825 million in a series of cash
payments, 1,388,889 shares of PPG common stock or its cash
equivalent, its 50% stake in Pittsburgh Corning, and its 50% stake
in Pittsburgh Corning Europe.
Corning will contribute between $240 million and $290 million in
cash, its 50 percent stake in Pittsburgh Corning, and its 50
percent stake in Pittsburgh Corning Europe.
Forty-eight insurers will contribute cash pay-ments totaling in
aggregate approximately $1.7 billion.
As part of the trust funding agreement, PPG and Corning will
relinquish certain insurance claims against the participating
insurers.
The trust will have three trustees selected by the ACC and FCR.
The trust will also have an advisory committee of five members.
The initial members of the advisory committee are members of law
firms representing asbestos claimants. The advisory commit-tee
members have a fiduciary responsibility to the present holders of
channeled asbestos claims. The FCR has a fiduciary role
representing the interests of future claimants.
The trust will resolve channeled asbestos claims according to the
terms of the trust distribution procedures.
A copy of Judge Conti's Sept. 30 Memorandum Opinion is available
at http://is.gd/BMWCcYfrom Leagle.com.
About Pittsburgh Corning
Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000,
to address numerous claims alleging personal injury from exposure
to asbestos. At the time of the bankruptcy filing, there were
about 11,800 claims pending against the Company in state court
lawsuits alleging various theories of liability based on exposure
to Pittsburgh Corning's asbestos products and typically requesting
monetary damages in excess of $1 million per claim.
Judge Thomas Agresti handles the bankruptcy case. Reed Smith LLP
serves as counsel and Deloitte & Touche LLP as accountants to the
Debtor.
The United States Trustee appointed a Committee of Unsecured Trade
Creditors on April 28, 2000. The Bankruptcy Court authorized the
retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to
the Committee of Unsecured Trade Creditors, and Pascarella &
Wiker, LLP, as financial advisor.
The U.S. Trustee also appointed a Committee of Asbestos Creditors
on April 28, 2000. The Bankruptcy Court authorized the retention
of these professionals by the Committee of Asbestos Creditors: (i)
Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell &
Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as
special insurance counsel; (iv) Legal Analysis Systems, Inc., as
Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L.
Tersigni Consulting, P.C. as financial advisor, and (vi) Professor
Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered.
On Feb. 16, 2001, the Court approved the appointment of Lawrence
Fitzpatrick as the Future Claimants' Representative. The
Bankruptcy Court authorized the retention of Meyer, Unkovic &
Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP, as
his special counsel, and Analysis, Research and Planning
Corporation as his claims consultant.
In 2003, a plan of reorganization was agreed to by various
parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court
issued an order denying the confirmation of that plan, citing that
the plan was too broad in addressing independent asbestos claims
that were not associated with Pittsburgh Corning.
On Jan. 29, 2009, an amended plan of reorganization (the Amended
PCC Plan) -- which addressed the issues raised by the Court when
it denied confirmation of the 2003 Plan -- was filed with the
Bankruptcy Court.
As reported by the TCR on April 25, 2012, Pittsburgh Corning,
which is a joint venture between Corning Inc. and PPG Industries
Inc., filed another amendment to its reorganization plan designed
to wrap up a Chapter 11 begun 12 years ago.
PCC's balance sheet at Sept. 30, 2012, showed $29.41 billion
in total assets, $7.52 billion in total liabilities and
$21.88 billion in total equity.
POSTMEDIA NETWORK: S&P Affirms 'B-' CCR & Rates C$140MM Notes 'B+'
------------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B-' long-
term corporate credit rating on Toronto-based Postmedia Network
Inc. The outlook is stable.
"We base the affirmation on Postmedia's plans to acquire Montreal-
based Sun Media Corp.'s English-language newspaper assets from
Quebecor Media Inc. for C$316 million, less C$10 million in real
estate disposals to be completed before closing," said Standard &
Poor's credit analyst Lori Harris.
At the same time, Standard & Poor's assigned its 'B+' issue-level
rating (two notches above the corporate credit rating on
Postmedia), and '1' recovery rating, to the company's proposed
C$140 million senior secured first-lien notes due 2017. A '1'
recovery rating indicates our expectation of very high (90%-100%)
recovery in the event of default. S&P understands that proceeds
of the notes will help finance the proposed Sun Media acquisition.
In addition, Standard & Poor's lowered its issue-level rating on
the company's US$275 million senior secured second-lien notes due
2018 to 'CCC' (two notches below the corporate credit rating) from
'CCC+', and revised its recovery rating on the debt to '6' from
'5'. A '6' recovery rating indicates S&P's expectation of
negligible (0%-10%) recovery in the event of default.
"The rating action on the second-lien debt reflects the weaker
recovery prospects for lenders in the event of default given the
increased amount of first-lien debt and lowering of our EBITDA
multiple to 3.5x from 4.0x, which was used in the calculation of
the enterprise value," Ms. Harris added.
The ratings on Postmedia reflect Standard & Poor's view of the
company's "vulnerable" business risk profile and "highly
leveraged" financial risk profile, which result in an anchor score
of 'b-'. Modifiers did not have an impact on the anchor score.
On Oct. 6, 2014, Postmedia entered into a definitive agreement to
purchase Sun Media's English language newspaper assets from
Quebecor Media Inc. for C$316 million (less C$10 million in real
estate disposals to be completed before closing), representing a
3.6x EBITDA multiple.
The company plans to use the net proceeds of the proposed C$140
million senior secured first-lien notes, along with a C$186
million equity contribution, to finance the acquisition. S&P
expects the transaction to close in early 2015 upon regulatory
approvals, including from the Competition Bureau. Sun Media
generated C$487 million in revenue for the last 12 months ended
June 30, 2014; hence, the acquisition is substantial for Postmedia
as it represents about a 70% increase in revenue. S&P views the
proposed Sun Media acquisition positively, as it will boost the
company's revenue base and provide for cost-saving opportunities,
while also lowering debt leverage given the expected use of a
significant amount of equity to finance the transaction.
Upon closing, Postmedia will acquire 175 English-language
newspapers across Canada, specialty publications, digital
properties, and printing facilities. Papers include the Sun
dailies in Toronto, Ottawa, Calgary, Edmonton, and Winnipeg; more
than 160 community papers; and the 24 Hours commuter papers in
Toronto and Vancouver.
The stable outlook on Postmedia reflects Standard & Poor's belief
that the company's operating performance, albeit weakened, will
still meet S&P's expectations in the next year, including
generating sufficient free cash flow to cover loan amortization
requirements and EBITDA of at least C$100 million (excluding the
Sun Media acquisition and restructuring charges). In addition,
S&P believes that management will successfully integrate the Sun
Media newspaper publishing business in fiscal 2016.
The key driver of a downgrade would be a weakening of Postmedia's
liquidity position. S&P could lower the ratings should there be
significant deterioration in the company's operations that leads
to negative free cash flow and "less-than-adequate" liquidity.
This could result from continued weakness in print advertising
revenue or difficulties integrating Sun Media.
Given challenging industry conditions, Standard & Poor's is not
contemplating an upgrade in the next year. However, S&P could
raise the ratings on the company if Postmedia's revenue base and
EBITDA margin stabilize following the Sun Media acquisition,
online advertising growth is solid, and adjusted leverage is below
4x on a sustainable basis.
PRIME TIME: Use of JPMorgan Cash Collateral Extended Until Dec. 26
------------------------------------------------------------------
U.S. Bankruptcy Judge Madeleine C. Wanslee signed off an agreed
order extending Prime Time International Company's authorization
to use cash collateral until December.
To recall, the Court on April 14, 2014, entered a final order
authorizing the use of cash collateral.
The terms of the final order were extended in a stipulated order
extending authorization of the Debtors' use of cash collateral and
amending the final order. The new agreement entered between the
Debtor and lender JPMorgan Chase Bank, N.A., provides that, among
other things:
A. Paragraph 4 of the final order will be amended so that
Dec. 26, 2014, replaces the Sept. 26, 2014, termination date set
forth in Paragraph 4 of the final order, as extended.
B. The budget referenced in Paragraph 3 of the final order will
be supplemented by the budget, which is the controlling budget
covering Sept. 27, until Dec. 26.
C. Except as modified herein, the terms and provisions of the
final order, as extended, remains in full force and effect.
A copy of the budget is available for free at:
http://bankrupt.com/misc/PrimeTimeIntl_255_stipcashcoll.pdf
The Debtors, on the Petition Date, owed $3,503,704 as a result of
loans provided by JPMorgan Chase. The Debtors wanted to use the
cash collateral as they do not have sufficient available sources
of working capital and financing to carry on the normal course
operation of their businesses without use of the cash collateral.
About Prime Time International
Prime Time International Company, formerly known as Single Stick
Inc., manufactures and distributes cigarettes and little cigars.
PTIC has two wholly-owned subsidiaries: USA Tobacco, which
distributes PTIC's products, and 21st Century Brands, LLC, which
distributes non-tobacco consumer products.
Annual sales are $40 million and the company's products are in
100,000 convenience stores in North America. The company has
direct accounts with each of the top 25 largest convenience store
distributors in the United States.
Prime Time and its two subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Ariz. Lead Case No. 14-03518) in Phoenix on
March 15, 2014.
The Debtors have tapped Greenberg Traurig as attorneys, Odyssey
Capital Group, LLC, as financial advisors, and Schian Walker,
P.L.C., as conflicts counsel.
The Debtors disclosed $26.78 million in total assets and
$23.37 million in total liabilities as of Jan. 31, 2014.
PRO MACH: S&P Assigns 'B-' CCR & Rates $465MM 1st Lien Debt 'B-'
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned U.S.-based packaging
solutions provider Pro Mach Group Inc. its 'B-' corporate credit
rating. The outlook is stable.
At the same time, S&P assigned the company's proposed $465 million
first-lien credit facilities (consisting of a $60 million revolver
due 2019 and a $405 million term loan due 2021) its 'B-' issue-
level rating, with a '3' recovery rating. The '3' recovery rating
indicates S&P's expectation for a meaningful (50%-70%) recovery in
a default scenario.
S&P also lowered its ratings on the company's subsidiary, Pro Mach
Inc., including its corporate credit rating to 'B' from 'B+'. The
rating remains on CreditWatch, where S&P placed the rating with
negative implications on Sept. 19, 2014. Pending the completion
of the proposed transaction, S&P will lower the rating on Pro Mach
Inc. to 'B-' and subsequently withdraw all ratings on this entity.
Affiliates of private equity firm AEA Investors L.P. recently
announced it plans to acquire Pro Mach Group Inc. The rating on
Pro Mach Group Inc. reflects the company's participation in the
highly fragmented and competitive integrated packaging solutions
industry. The company mainly operates in North America, and its
business is characterized by its relatively narrow scope of
operations and limited end market diversity. S&P also expects the
company's credit measures will gradually improve over the next 12-
18 months through a combination of debt reduction and some profit
expansion. However, S&P forecasts that adjusted total debt to
EBITDA will remain higher than 6.5x and funds from operations
(FFO) to debt will remain below 10% over that period.
The downgrade of subsidiary Pro Mach Inc. reflects S&P's
assessment of the company's "highly leveraged" financial risk
profile. S&P's leverage calculation includes the payment-in-kind
(PIK) preferred stock at the parent holding company. S&P
considers the preferred stock as an obligation of the company, as
it is being converted into debt with the proposed new transaction.
Upon closing of the proposed transaction, S&P will lower Pro Mach
Inc.'s rating to 'B-' and subsequently withdraw all ratings at
this subsidiary.
PROSPECT SQUARE: Has Until Oct. 31 to Use Lender's Cash Collateral
------------------------------------------------------------------
The Bankruptcy Court, in a fifth interim order, authorized
Prospect Square 07 A, LLC, et al., to use cash collateral in which
secured lender MSCI 2007-IQ16 Retail 9654, LLC, holds an interest.
The Debtor is authorized to use cash collateral until Oct. 31,
2014, subject to a 5% expense line item deviation.
As adequate protection from any diminution in value of the
lender's collateral, the Debtor will grant the lender postpetition
liens on all postpetition real income from the project; any and
all insurance proceed from the project; all income of the Debtors
on any and all assets.
The Debtors will also make adequate protection payment of (i)
$29,002 for real estate taxes; and (ii) $1,426 for insurance
premiums.
A copy of the budget is available for free at:
http://bankrupt.com/misc/ProspectSquare07_164_ordercashcoll.pdf
About Prospect Square
Prospect Square 07 A, LLC, and related entities sought Chapter 11
bankruptcy protection from creditors (Bankr. D. Colo. Lead Case
No. 14-10896) in Denver on Jan. 29, 2014.
Prospect Square 07 A is a Single Asset Real Estate as defined in
11 U.S.C. Sec. 101(51B) with principal assets located at 9690
Colerain Avenue, Cincinnati, Ohio. The Debtor listed $16 million
in assets and more than $12 million in liabilities. Lee M.
Kutner, Esq., at Kutner Brinen Garber, P.C., in Denver, serves as
the Debtors' counsel.
Lender MSCI 2007-IQ16 Retail 9654, LLC, is represented by James T.
Markus, Esq., and Jeffery O. McAnallen, Esq., at Markus Williams
Young & Zimmermann LLC.
The U.S. Trustee for Region 19 said that no committee of unsecured
creditors for the case was formed since there were too few
creditors who are willing to serve on the committee.
PULSE ELECTRONICS: Files Form 25 With SEC
-----------------------------------------
Pulse Electronics Corporation on Oct. 6, 2014, filed a Form 25
with the U.S. Securities and Exchange Commission to voluntarily
delist its common stock from the New York Stock Exchange.
As reported by the TCR on Oct. 3, 2014, Pulse Electronics' board
of directors decided to delist from the NYSE and deregister its
common stock with the SEC as it believes that the savings that
will benefit the company and its shareholders outweigh the
advantages of continuing as a NYSE listed and SEC reporting
company.
Delisting from the NYSE is expected to become effective 10 days
after the filing date of the Form 25.
About Pulse Electronics
San Diego, California-based Pulse Electronics Corporation --
http://www.pulseelectronics.com/-- is a global producer of
precision-engineered electronic components and modules, operating
in three business segments: Network product group; Power product
group; and Wireless product group. As of Dec. 28, 2012, Pulse had
$188 million in total assets.
As reported by the TCR on Juy 8, 2013, the Company dismissed
KPMG LLP as its independent registered public accounting
firm. Grant Thornton LLP was hired as replacement.
Pulse Electronics reported a net loss of $27.02 million on $355.67
million of net sales for the year ended Dec. 27, 2013, as compared
with a net loss of $32.09 million on $373.16 million of net sales
for the year ended Dec. 28, 2012.
The Company's balance sheet at June 27, 2014, showed $180.44
million in total assets, $247.24 million in total liabilities and
a $66.79 million total shareholders' deficit.
REGIONS FINANCIAL: Fitch Raises Sub. Debt Rating From 'BB+'
-----------------------------------------------------------
Fitch Ratings has upgraded Regions Financial Corporation's (RF)
ratings to 'BBB' from 'BBB-' and revised the Rating Outlook to
Stable from Positive. The upgrade was supported by asset quality
improvement, a strong capital profile, and a generally recovering
overall risk profile.
The rating action follows a periodic review of the large regional
banking group, which includes BB&T Corporation (BBT), Capital One
Financial Corporation (COF), Comerica Incorporated (CMA), Fifth
Third Bancorp (FITB), Huntington Bancshares Inc. (HBAN), Keycorp
(KEY), M&T Bank Corporation (MTB), MUFG Americas Holdings
Corporation (MUFG), PNC Financial Services Group, Inc. (PNC),
Regions Financial Corporation (RF), SunTrust Banks Inc. (STI), US
Bancorp (USB), Wells Fargo & Company (WFC), and Zions
Bancorporation (ZION).
Company-specific rating rationales for the other banks are
published separately, and for further discussion of the large
regional bank sector in general, refer to the special report
titled 'Large Regional Bank Periodic Review,' to be published
shortly.
KEY RATING DRIVERS - IDR, VR and Senior
Fitch upgraded RF's ratings to 'BBB' from 'BBB-' and revised the
Outlook to Stable from Positive. The upgrade was supported by
asset quality improvement, a strong capital profile, and a
generally recovering overall risk profile. RF's ratings remain
relatively low as compared to its peer group despite the upgrade.
The upgrade and Stable Outlook incorporate Fitch's expectations of
an improving earnings profile over time.
RF has reported meaningful asset quality improvement over the past
12 months with non-performing assets, inclusive of accruing
troubled debt restructurings, falling from almost 6% to roughly 3%
at June 30, 2014. This has been accomplished through loan sales,
and improving borrower performance. Similarly net charge-offs
(NCOs) have fallen significantly from crisis levels. While Fitch
does not expect the low level of NCOs in 2Q'14 to be sustainable,
RF has still reported meaningful asset quality improvement over
the past couple years.
The upgrade of RF's ratings also reflects the bank's strong
capital profile. RF reports the second highest estimated Tier 1
common ratio (under Basel III) among the Large Regional Bank Peer
Group. RF's estimated Common Equity Tier 1 ratio on a fully
phased-in basis under Basel III was approximately 11% at June 30,
2014, well above the 7% requirement (absent any D-SIB buffer).
Fitch expects that RF will attempt to distribute some of this
excess capital to shareholders; however, these distributions will
be constrained by regulatory stress testing, and as such, RF's
capital ratios will likely stay elevated over the near term.
In addition to a solid capital profile, RF's ratings and Outlook
reflect a good liquidity position. In addition to having one of
the lowest loan-to-deposit ratios, RF's has a very low reliance on
wholesale funding and a high level of liquid assets. Further,
over the past 10 quarters, RF has meaningfully grown capital in
excess of balance sheet growth.
Offsetting these strengths, RF's ratings are constrained by a
relatively weaker earnings profile. While reported results are
roughly in line with peer averages, Fitch notes that much of the
earnings performance reflects large reserve releases. RF reported
just $37 million in provision expenses in 1H'14, as compared to
$149 million in NCOs. Fitch expects the level of reserve releases
to continue to diminish, which may ultimately pressure earnings as
RF provides for new loan growth.
RATING SENSITIVITIES - IDR, VR AND SENIOR
Ratings could be positively affected by further improvement in
core earnings combined with the maintenance of capital at above
peer levels. Over the past four quarters, RF's return on assets
on average has improved materially as opposed to the prior couple
years, and RF has been one of the few banks to report some
stability or even improvement in its net interest margin as higher
cost time deposits have rolled off. Fitch views further upward
momentum in RF's ratings over the long-term given the strength of
its franchise, de-risking of balance sheet the financial crisis,
and various improvements made in its risk management program.
Conversely, a sustained reversal of moderating credit trends,
combined with a large decrease in capital, would likely pressure
ratings; although a downgrade is viewed as less likely given RF's
recent progress in addressing many of its many challenges.
RF has reported significant automobile lending growth over the
past year, with auto loan balances increasing 29% from June 30,
2013. While this asset class still only represents 4% of total
loans, this growth, combined with a pretty big drop in auto yields
relative to peers, warrants monitoring given the competitive
dynamics of the market, and the significant growth. RF had re-
entered the indirect auto lending market in October 2010, after
having exited it in Oct. 2008. Indications of excessive risk
taking or material weakening in credit quality could apply
downward ratings pressure.
When RF sold Morgan Keegan (MK) to Raymond James in 2012, RF
agreed to indemnify Raymond James for all litigation matters
related to pre-closing activities. The carrying amount of the
indemnification obligation at June 30, 2014 totaled $224 million.
There is very limited visibility into the ultimate outcome of this
or other pending litigation facing RF, and Fitch's ratings of RF
do not currently incorporate a charge in excess of what the
indemnification obligation covers. A charge in excess that
meaningful erodes RF's capital profile could apply negative
ratings pressure.
Fitch also notes that similar to some of its peers, RF is
attempting to grow its capital markets and investment banking
activities once again. Given its past issues with MK, Fitch will
monitor its growth and product offerings for any rating
implications.
KEY RATING DRIVERS - HOLDING COMPANY
RF's Issuer Default Rating (IDR) and Viability Rating (VR) are
equalized with those of its operating companies and banks,
reflecting its role as the bank holding company, which is mandated
in the U.S. to act as a source of strength for its bank
subsidiaries. Ratings are also equalized reflecting the very
close correlation between holding company and subsidiary default
probabilities.
RATING SENSITIVITIES - HOLDING COMPANY
Should RF's holding company begin to exhibit signs of weakness,
demonstrate trouble accessing the capital markets, or have
inadequate cash flow coverage to meet near-term obligations, there
is the potential that Fitch could notch the holding company IDR
and VR from the ratings of the operating companies. This is
viewed as unlikely though for RF given the strength of the holding
company liquidity profile.
Fitch is now considering introducing a rating differential between
the holding company and bank in the U.S. due to structural changes
in the sector and the evolving regulatory landscape, as described
in the special report 'U.S. Bank HoldCos & OpCos: Evolving Risk
Profiles', dated March 27, 2014. Given Fitch's views that RF may
not receive a long-term debt requirement, its ratings may not be
impacted as a result of Fitch's evolving review regarding
notching.
KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR
RF has a Support Rating of '5' and Support Rating Floor of 'NF'.
In Fitch's view, RF is not systemically important and therefore,
the probability of support is unlikely. IDRs and VRs do not
incorporate any support.
RATING SENSITVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR
RF's Support Rating and Support Rating Floor are sensitive to
Fitch's assumption around capacity to procure extraordinary
support in case of need.
KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Subordinated debt and other hybrid capital issued by RF and by
various issuing vehicles are all notched down from RF or its bank
subsidiaries' VRs in accordance with Fitch's assessment of each
instrument's respective non-performance and relative loss severity
risk profiles.
RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID
SECURITIES
The ratings of subordinated debt and other hybrid capital issued
by RF and its subsidiaries are primarily sensitive to any change
in RF's VR.
KEY RATING DRIVERS - LONG- AND SHORT-TERM DEPOSIT RATINGS
RF's uninsured deposit ratings are rated one notch higher than the
company's IDR and senior unsecured debt because U.S. uninsured
deposits benefit from depositor preference. U.S. depositor
preference gives deposit liabilities superior recovery prospects
in the event of default.
KEY RATING SENSITIVITIES - LONG- AND SHORT-TERM DEPOSIT RATINGS
The ratings of long- and short-term deposits issued by RF and its
subsidiaries are primarily sensitive to any change in RF's long-
and short-term IDRs.
Fitch has taken these ratings actions:
Regions Financial Corporation
-- Long-term IDR upgraded to 'BBB' from 'BBB-'; Outlook Stable
-- Senior debt upgraded to 'BBB' from 'BBB-';
-- Short-term IDR upgraded to 'F2' from 'F3';
-- Subordinated debt upgraded to 'BBB-' from 'BB+';
-- Viability rating upgraded to 'bbb' from 'bbb-';
-- Preferred stock upgraded to 'B+' from 'B';
-- Support affirmed at '5';
-- Support floor affirmed at 'NF'.
Regions Bank
-- Long-term IDR upgraded to 'BBB' from 'BBB-'; Outlook Stable;
-- Long-term deposits upgraded to 'BBB+' from 'BBB';
-- Short-term deposits affirmed at 'F2';
-- Short-term IDR upgraded to 'F2' from 'F3';
-- Senior debt upgraded to 'BBB' from 'BBB-';
-- Subordinated debt upgraded to 'BBB-' from 'BB+';
-- Viability rating upgraded to 'bbb' from 'bbb-';
-- Support affirmed at '5';
-- Support floor affirmed at 'NF'.
AmSouth Bank
AmSouth Bancorporation
-- Subordinated debt upgraded to 'BBB-' from 'BB+'.
RENA LANGE: German Fashion House Launches U.S. Bankruptcy
---------------------------------------------------------
Jacqueline Palank, writing for The Wall Street Journal, reported
that German fashion house Rena Lange placed its U.S. arm into
Chapter 11 bankruptcy this week, following the parent's insolvency
filing in Munich. According to the report, the nearly-century-old
fashion house says its parent?s insolvency prevented it from
shipping merchandise to the U.S. without prepayment, but Rena
Lange (USA) ran out of money last month.
RENA LANGE (USA): Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Rena Lange (USA), Inc.
dba Mabrun;
dba St. Emile
dba Gloriette
430 West 14th Street, Suite 201
New York, NY 10014
Case No.: 14-12831
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Debtor's Counsel: Wayne M. Greenwald, Esq.
WAYNE M. GREENWALD, P.C.
475 Park Avenue South, 26th Floor
New York, NY 10016
Tel: (212) 983-1922
Fax: (212) 983-1965
Email: grimlawyers@aol.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Tracy Welch, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/nysb14-12831.pdf
RESPONSE BIOMEDICAL: Obtains Forbearance Until Oct. 31
------------------------------------------------------
Response Biomedical Corp. has entered into a forbearance to the
loan agreement with Silicon Valley Bank under its outstanding term
loan dated Feb. 11, 2014. Under the terms of the Forbearance
Agreement, SVB will grant a forbearance under which it will agree
not to exercise its rights in respect of a breach of a financial
covenant under the terms of the loan agreement until Oct. 31,
2014.
The Company said it continues to be current with all principal and
interest payments due on all outstanding indebtedness and
management expects to continue discussions with SVB to revise the
financial covenants under the Loan Agreement. There can be no
assurance that the Company and SVB will be able to reach mutually
acceptable terms for revising the covenants.
In the event that the parties are unable to agree on revisions to
the covenants and the Forbearance Agreement is not extended, SVB
would be entitled to exercise any of its rights under the Loan
Agreement.
A copy of the Forbearance Agreement is available at:
http://is.gd/dM2Zua
About Response Biomedical
Based in Vancouver, Canada, Response Biomedical Corporation
develops, manufactures and sells diagnostic tests for use with its
proprietary RAMP(R) System, a portable fluorescence immunoassay-
based diagnostic testing platform. The RAMP(R) technology
utilizes a unique method to account for sources of error inherent
in conventional lateral flow immunoassay technologies, thereby
providing the ability to quickly and accurately detect and
quantify an analyte present in a liquid sample. Consequently, an
end-user on-site or in a point-of-care setting can rapidly obtain
important diagnostic information. Response Biomedical currently
has thirteen tests available for clinical and environmental
testing applications and the Company has plans to commercialize
additional tests.
Response Biomedical reported a net loss and comprehensive loss of
$5.99 million in 2013, a net loss and comprehensive loss of $5.28
million in 2012 and a net loss and comprehensive loss of $5.37
million in 2011. The Company's balance sheet at June 30, 2014,
showed C$13.73 million in total assets, C$16.07 million in total
liabilities and a C$2.33 million total shareholders' deficit.
PricewaterhouseCoopers LLP, in Vancouver, British Columbia, issued
a "going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2013. The independent
auditors noted that the Company has incurred recurring losses from
operations and has an accumulated deficit at Dec. 31, 2013, which
raises substantial doubt about its ability to continue as a going
concern.
REVEL AC: Judge Approves $110 Million Sale to Brookfield
--------------------------------------------------------
Joseph Checkler, writing for The Wall Street Journal, reported
that U.S. Bankruptcy Judge Gloria Burns in New Jersey has approved
the sale of Atlantic City's Revel Casino to private-equity firm
Brookfield Capital Partners LP for $110 million.
According to the report, Judge Burns thanked Glenn Straub, the
Florida developer who was the casino's stalking horse bidder with
a $90 million bid, but rejected his arguments that he didn't get a
fair chance to top the bid. Judge Burns said the sale was
properly conducted and was fair, the report related.
About Revel AC
Revel AC, Inc. -- http://www.revelresorts.com/-- owns and
operates Revel, a Las Vegas-style, beachfront entertainment resort
and casino located on the Boardwalk in the south inlet of Atlantic
City, New Jersey.
Revel AC Inc. and five of its affiliates sought bankruptcy
protection (Bankr. D.N.J. Lead Case No. 14-22654) on June 19,
2014, to pursue a quick sale of the assets.
The Chapter 11 cases are assigned to Judge Gloria M. Burns. The
Debtors' Chapter 11 cases are jointly consolidated for procedural
purposes.
Revel AC estimated assets ranging from $500 million to $1 billion,
and the same amount of liabilities.
White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors'
Counsel, and Moelis & Company, LLC, is the investment banker. The
Debtors' solicitation and claims agent is Alixpartners, LLP.
The prepetition first lenders are represented by Cadwalader,
Wickersham & Taft LLP. The prepetition second lien lenders are
represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. The
DIP agent is represented by Milbank, Tweed, Hadley & McCloy LLP.
This is Revel AC's second trip to bankruptcy. The company first
sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13-
16253) on March 25, 2013, with a prepackaged plan that reduced
debt by $1.25 billion. Less than two months later on May 15,
2013, the 2013 Plan was confirmed and became effective on May 21,
2013.
RIVER CITY RENAISSANCE: U.S. Bank Opposes Bidding Procedures
------------------------------------------------------------
U.S. Bank NA asked a bankruptcy court to deny approval of the
bidding process proposed by River City Renaissance LC, saying it
is "fundamentally flawed."
In a filing with the U.S. Bankruptcy Court for the Eastern
District of Virginia, the bank said the bidding procedures "do not
provide sufficient clarity on a number of critical issues."
According to U.S. Bank, the bidding process doesn't include
criteria for selecting "qualified bidders" as well as a sale
agreement form that all potential buyers must execute upon
closing.
The bank also complained that the bidding process doesn't provide
for an auction should more than one offer for the properties be
received by the company.
Meanwhile, CompassRock Real Estate LLC, the court-appointed
receiver for the properties, said it will cooperate with River
City in the sale of the properties on condition that it won't be
forced to accept additional work which "is not reasonably related
to its receivership duties."
River City earlier proposed a bidding process for potential
suitors to buy its assets, which include 29 residential apartment
buildings in Richmond, Virginia. In connection with the sale, the
company hired real estate firm Morton G. Thalhimer, Inc. to market
the properties.
The bidding process, River City said, was "designed to achieve the
highest and best recovery" for the company and its creditors. The
company drew support from creditor Chevron, U.S.A.
U.S. Bank is represented by:
Robbin S. Rahman, Esq.
Kilpatrick Townsend & Stockton LLP
1100 Peachtree Street, Suite 2800
Atlanta, GA 30309
Tel: (404) 815-6323
Fax: (404) 815-6555
E-mail: rrahman@kilpatricktownsend.com
-- and --
Mark D. Taylor, Esq.
VLP Law Group
1776 I Street, NW, Ninth Floor
Washington, DC 20006
Tel: (202) 759-4890
E-mail: mtaylor@vlplawgroup.com
CompassRock is represented by:
R. Timothy Bryan, Esq.
Phillip K. Wang, Esq.
Duane Morris LLP
505 9th Street, N.W., Suite 1000
Washington, DC 20004-2166
Tel: (202) 776-7824
Fax: (202) 478-1885
E-mail: TBryan@duanemorris.com
PWang@duanemorris.com
About River City Renaissance
Richmond, Virginia-based, River City Renaissance, LC, and River
City Renaissance III, LC, sought Chapter 11 protection (Bankr.
E.D. Va. Case Nos. 14-34080 and 14-34081) in Richmond, Virginia,
on July 30, 2014. The cases are assigned to Judge Keith L.
Phillips. Robert H. Chappell, III, Esq., at Spotts Fain PC,
represents the Debtors in their cases. River City Renaissance
estimated $10 million to $50 million in assets and debts.
Renaissance III estimated less than $10 million in assets and
debts. The Debtors have tapped Spotts Fain PC as counsel.
ROCACEIA ENERGY: Sec. 341(a) Meeting of Creditors Set for Nov. 18
-----------------------------------------------------------------
A meeting of creditors in the bankruptcy case of Quality Lease and
Rental Holdings, LLC, will be held on Nov. 18, 2014, at 10:00 a.m.
at Houston, 515 Rusk Suite 3401. Creditors have until Feb. 17,
2015, to submit their proofs of claim.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Quality Lease and Rental Holdings, LLC and three of its affiliates
filed Chapter 11 bankruptcy petitions (Bankr. S.D. Tex. Lead Case
No. 14-60074) on Oct. 1, 2014. Christopher Williams signed the
petitions as manager of Rocaceia, LLC. Quality Lease and Rental
estimated assets of $10 million to $50 million and liabilities of
$50 million to $100 million. Hawash Meade Gaston Neese & Cicack
LLP serves as the Debtors' counsel. Judge David R. Jones presides
over the jointly administered cases.
SAUGATUCK WESTPORT: Case Summary & 7 Unsecured Creditors
--------------------------------------------------------
Debtor: Saugatuck Westport Properties, LLC
3 Park Street
Norwalk, CT 06851
Case No.: 14-51553
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
District of Connecticut (Bridgeport)
Judge: Hon. Alan H.W. Shiff
Debtor's Counsel: John R. Hall, Esq.
124 East Avenue
Norwalk, CT 06851
Tel: 203-299-3131
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Colleen Pickwick, manager.
A list of the Debtor's seven largest unsecured creditors is
available for free at http://bankrupt.com/misc/ctb14-51553.pdf
SCHLECHT CONSTRUCTION: Case Summary & 14 Top Unsecured Creditors
----------------------------------------------------------------
Debtor: Schlecht Construction, Inc.
9407 NE Vancouver Mall Drive, Ste 201
Vancouver, WA 98662
Case No.: 14-45418
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
Western District of Washington (Tacoma)
Judge: Hon. Brian D Lynch
Debtor's Counsel: Timothy J Dack, Esq.
TIMOTHY J. DACK, ATTORNEY AT LAW
1014 Franklin Street, Suite 102
PO Box 61645
Vancouver, WA 98666
Tel: 360-694-4227
Email: bkfile@dackoffice.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Larry N. Schlecht, president.
A list of the Debtor's 14 largest unsecured creditors is available
for free at http://bankrupt.com/misc/wawb14-45418.pdf
SHELBOURNE NORTH: Judge Approves Bankruptcy-Exit Plan
-----------------------------------------------------
Jacqueline Palank, writing for Daily Bankruptcy Review, reported
that Judge Janet Baer in Chicago has approved a plan to pay off
creditors of Shelbourne North Water Street L.P., and hands the
Chicago Spire project over to a new investor who hopes to get it
off the ground.
As previously reported by the TCR, Shelbourne obtained approval
from the bankruptcy court of a deal for Atlas Apartment Holdings
LLC to provide $135 million to finance the Debtor's reorganization
plan. The Disclosure Statement provides that the Debtor expects
to pay in full allowed claims, except claims held by the
Shelbourne affiliates, without interest. Excluding the claims of
the Shelbourne Affiliates, claims totaling approximately $120
million have been filed against the bankruptcy estate.
Subject to the terms and conditions of the Plan investment
agreement, Atlas or its affiliates and the Tier One Capital
Provider will provide funding, which will not in any event exceed
$135,000,000 which will be used to pay:
(i) all amounts necessary to confirm the Plan, including all
amounts required to pay allowed claims as set forth in the
Plan and amount to be held in escrow for disputed claims;
(ii) any origination fee;
(iii) all third-party closing costs, expenses of the Debtor,
Atlas, the Tier One Capital provider and certain third
parties, reasonably approved by Atlas and the Tier One
Capital Provider; and
(iv) an aggregate $5 million cash payment to Chicago Spire
LLC, Shelbourne Lakeshore, Ltd., and Garrett Kelleher.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/ShelbourneNorth_299_2DS.pdf
About Shelbourne North Water Street L.P.
A group of creditors filed an involuntary Chapter 11 petition
against Chicago, Illinois-based Shelbourne North Water Street L.P.
(Bankr. D. Del. Case No. 13-12652) on Oct. 10, 2013. The case is
assigned to Judge Kevin J. Carey.
The petitioners are represented by Zachary I Shapiro, Esq., and
Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A.,
in Wilmington, Delaware.
The Debtor consented on Nov. 8, 2013, to being in Chapter 11
reorganization.
FrankGecker LLP represents the Debtor in its restructuring
effort.
SEQUENOM INC: Buys Patents From Isis for $12.4 Million
------------------------------------------------------
Sequenom, Inc., on Sept. 30, 2014, entered into a Patent Purchase
Agreement with Isis Innovation Limited, pursuant to which
Sequenom, subject to certain reserved rights retained by Isis,
acquired patents and patent applications from Isis related to
noninvasive prenatal testing for use in the United States, Canada,
Japan, Australia, Hong Kong and Europe, and received an
irrevocable, perpetual, fully-paid, exclusive license (with the
right to sublicense) to certain know-how and related intellectual
property related to noninvasive prenatal testing for use in the
Territory.
Within 10 days of the execution of the Purchase Agreement,
Sequenom will pay to Isis an up-front payment equal to $9,250,000,
plus an additional $3,200,000 as the final royalty payment due to
Isis under that certain Exclusive License of Technology Agreement,
dated Oct. 14, 2005, between Sequenom and Isis, as amended.
Additionally, Sequenom has agreed to waive $2,100,000 in paid
legal fees that Isis owned to Sequenom. Under the terms of the
Purchase Agreement, Sequenom has also agreed to pay Isis
additional payments based on net revenues of covered products sold
by Sequenom from July 1, 2014, through the expiration of the last
to expire of the Purchased Patents if such sales exceed designated
milestones.
Pursuant to the terms of the Purchase Agreement, Sequenom and Isis
have agreed to terminate the Exclusive License Agreement,
effective immediately, and in connection therewith Sequenom and
Isis have released each other from all of their contractual and
other obligations arising out of or in connection with the
Exclusive License Agreement. Sequenom previously relied on the
Exclusive License Agreement for an exclusive in-license from Isis
for patent rights used for the development and commercialization
of prenatal laboratory-developed tests.
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a
life sciences company committed to improving healthcare through
revolutionary genetic analysis solutions. Sequenom develops
innovative technology, products and diagnostic tests that target
and serve discovery and clinical research, and molecular
diagnostics markets. The company was founded in 1994 and is
headquartered in San Diego, California.
Sequenom incurred a net loss of $107.40 million in 2013, a net
loss of $117.02 million in 2012 and a net loss of $74.13
million in 2011.
As of June 30, 2014, the Company had $131.60 million in total
assets, $180.92 million in total liabilities and a $49.31 million
total stockholders' deficit.
SHOTWELL LANDFILL: Court Denies Bid to Scrap Stallings Ballots
--------------------------------------------------------------
Bankruptcy Judge Stephani W. Humrickhouse denied LSCG Fund 18,
LLC's motion to scrap the ballots of David Stallings and Capital
Properties of Raleigh VI, LLC. The Court, in its findings, said
that LSCG has not shown that the Stallings and Capital Properties
ballots were cast in bad faith. Additionally, after considering
the relationship among the Debtor and Stallings and Capital
Properties, the Court finds that neither Stallings nor Capital
Properties would be deemed insiders.
About Shotwell Landfill, Inc.
Raleigh, North Carolina-based Shotwell Landfill, Inc., filed a
Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-02590) in Wilson
on April 19, 2013. Blake P. Barnard, Esq., William P. Janvier,
Esq., and Samantha Y. Moore, Esq., at the Janvier Law Firm, PLLC,
in Raleigh, N.C., represent the Debtor as counsel. William W.
Pollock, Esq., at Ragsdale Liggett PLLC, in Raleigh, N.C.,
represents the Debtor as special counsel.
The Debtor, in its amended schedules, disclosed $23,235,236 in
assets and $10,049,020 in liabilities.
Shotwell Landfill appointed Doug Gurkins as restructuring officer.
* * *
Judge Stephani W. Humrickhouse has terminated the exclusivity
period within which the affiliate debtors of Shotwell Landfill
Inc., may file a chapter 11 plan and disclosure statement. On
August 25, 2014, secured creditor LSCG Fund 18, LLC, filed with
the Bankruptcy Court a Second Amended Consolidated Chapter 11 Plan
of Liquidation for Shotwell Landfill et al. The Plan states that
the Debtors' creditors are best served if the landfill located at
4724 Smithfield Road, Wendell, North Carolina 27591, and all of
the Debtors' property are managed, marketed, and liquidated.
Within six months of the confirmation date (or at a later time as
a liquidation trustee will determine only after consultation and
approval by LSCG and the Unsecured Creditors' Committee), the
Liquidation Trustee will conduct an auction of the property,
including the Landfill.
SKYWAY CONVENIENCE: Case Summary & Unsecured Creditor
-----------------------------------------------------
Debtor: Skyway Convenience, Inc.
1037 Tapoco Road
Robbinsville, NC 28771
Case No.: 14-20102
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
Western District of North Carolina (Bryson City)
Judge: Hon. George R. Hodges
Debtor's Counsel: Benson T. Pitts, Esq.
PITTS, HAY & HUGENSCHMIDT, P.A.
137 Biltmore Avenue
Asheville, NC 28801
Tel: 828-255-8085
Fax: 828-251-2760
Email: ben@phhlawfirm.com
Total Assets: $1.06 million
Total Liabilities: $935,411
The petition was signed by Nina M. Yeargin, president.
The Debtor listed U.S. Small Business Administration as its
largest unsecured creditor holding a claim of $355,098.
A full-text copy of the petition is available at:
http://bankrupt.com/misc/ncwb14-20102.pdf
SL GREEN: Fitch Raises Preferred Stock Rating to 'BB'
-----------------------------------------------------
Fitch Ratings has upgraded the credit ratings for SL Green Realty
Corp. (NYSE: SLG) and its subsidiaries SL Green Operating
Partnership, L.P., and Reckson Operating Partnership L.P.:
SL Green Realty Corp.
-- Issuer Default Rating (IDR) to 'BBB-' from 'BB+';
-- Senior unsecured notes to 'BBB-' from 'BB+' (as co-obligor);
-- Perpetual preferred stock to 'BB' from 'BB-'.
SL Green Operating Partnership, L.P.
-- IDR to 'BBB-' from 'BB+';
-- Unsecured revolving credit facility to 'BBB-' from 'BB+';
-- Senior unsecured notes to 'BBB-' from 'BB+';
-- Exchangeable senior notes to 'BBB-' from 'BB+';
-- Junior subordinated notes to 'BB+' from 'BB'.
Reckson Operating Partnership, L.P.
-- IDR to 'BBB-' from 'BB+';
-- Senior unsecured notes to 'BBB-' from 'BB+' (as co-obligor
for certain issuances);
-- Exchangeable senior debentures to 'BBB-' from 'BB+'.
The Rating Outlook has been revised to Stable from Positive.
KEY RATINGS DRIVERS
The upgrades reflect the company's credit strengths, including its
high-quality New York office portfolio, manageable lease maturity
and debt expiration schedules, growing unencumbered asset pool and
the company's improving credit metrics. These positive rating
elements are also supported by expectations for further
strengthening in SLG's fixed-charge coverage ratio. These
positive elements are balanced by concerns regarding the Midtown
Manhattan office leasing environment, which remains somewhat
dependent on the growth of large financial institutions and
supporting industries such as law and accounting firms.
APPROPRIATE LEVERAGE
SLG's leverage ratio is consistent with a 'BBB-' rating for a REIT
owning primarily Midtown Manhattan office assets, as the company's
leverage ratio (excluding the effects of consolidating 388-390
Greenwich Street) was 7.1x as of June 30, 2014, down from 7.4x and
7.6x as of Dec. 31, 2013 and 2012. Leverage was 8.5x as of June
30, 2014 when including the debt and net operating income (NOI)
from 388-390 Greenwich Street. Leverage has been aided by the
incremental NOI from repositioning and leasing of assets within
the company's growth portfolio, which consists of value-add
properties purchased over the past few years. Fitch expects that
leverage will decline modestly from current levels due to
incremental NOI from the company's redevelopment/growth portfolio.
Fitch defines leverage as net debt divided by recurring operating
EBITDA, including Fitch's estimate of recurring cash distributions
from joint ventures.
APPROPRIATE FIXED-CHARGE COVERAGE
The company's fixed-charge coverage ratio was 2.1x for the 12
months ended June 30, 2014 and Dec. 31, 2013, up from 1.6x in
2012. The improvement in coverage has been driven by the
reduction in free rent periods offered to tenants, combined with
slightly lower leverage and improved funding costs. Fitch expects
coverage to improve slightly as growth in cash flow is partially
offset by a slowly recovering Manhattan leasing environment in
which landlords will continue to offer attractive tenant
improvement packages. Fixed-charge coverage is defined as
recurring operating EBITDA - including Fitch's estimate of
recurring cash distributions from joint ventures - less recurring
capital expenditures and straight-line rents, divided by interest
incurred and preferred stock distributions.
STRONG, ALBEIT RELATIVELY CONCENTRATED TENANT BASE
The company's portfolio has a modest degree of tenant
concentration, with the top 10 representing 35% of annual base
rent. This compares to 32% for the top 20 tenants for Boston
Properties, and 23% for Vornado. Despite the concentration, the
largest tenant, Citigroup, Inc. (rated 'A' IDR with a Stable
Outlook by Fitch) contributes 11.2% of SLG's share of annual cash
rent. The top three tenants, and all five of SLG's Fitch-rated
top 10 tenants have investment grade ratings.
MANAGEABLE LEASE EXPIRATION PROFILE
The company has a manageable lease expiration schedule with only
25% of consolidated Manhattan rents expiring over the next five
years. While approximately 52% of the company's consolidated
suburban property rents expire over the next five years, the
suburban portfolio represents a limited portion of the company's
total assets and only 9% of annualized cash rent.
LADDERED DEBT MATURITIES
Further supporting the ratings is the company's manageable debt
maturity schedule. Over the next five years, 2017 is the largest
year of debt maturities with 19.9% of pro rata debt expiring, with
no other year greater than 14%. The 2017 maturities are primarily
made up of $1.1 billion of non-recourse mortgage debt and $355
million of unsecured debt. In addition, the company's ratios
under its unsecured credit obligation financial covenants do not
hinder the company's financial flexibility at this point in time.
SOLID UNENCUMBERED ASSET COVERAGE OF DEBT
The ratings are further supported by SLG's unencumbered asset
value coverage of unsecured debt, which gives the company
financial flexibility as a source of contingent liquidity.
Consolidated unencumbered asset coverage of net unsecured debt
(calculated as annualized second quarter 2014 unencumbered
property net operating income divided by a stressed 7%
capitalization rate) results in coverage of 2x. This ratio is
adequate for the current rating, particularly given that Midtown
Manhattan assets are highly sought after by secured lenders and
foreign investors, resulting in stronger contingent liquidity
relative to most asset classes in other markets. Fitch expects
this ratio will improve modestly as the company unencumbers
additional assets with relatively high debt yields.
STRONG MANAGEMENT TEAM
The ratings also point to the strength of SLG's management team
given their knowledge of the Manhattan office sector, and their
ability to maintain occupancy and liquidity throughout the
downturn. This expertise has also been demonstrated by the
company's ability to identify off-market acquisition
opportunities, and its maintenance and growth of portfolio
occupancy and balance sheet liquidity throughout the downturn and
into the current cycle.
MIDTOWN LEASING CONCERNS
Offsetting these strengths are Fitch's concerns regarding the
uncertain Midtown Manhattan leasing environment. While the New
York City leasing environment has strengthened over the last few
years, the company continues to incur significant costs in the
form of tenant improvements, leasing commissions and free-rent
incentives as tenant inducements, which has placed pressure on
fixed charge coverage. A downturn in space demands from the
financial services industry, which accounts for 36% of SLG's share
of base rental revenue, may result in reduced cash flows or values
of SLG's properties. Further, emerging competitive pressure from
the Hudson Yards development and newer and redeveloped downtown
assets (i.e. Brookfield Place and World Financial Center assets)
could result in larger tenants vacating Midtown. Despite these
headwinds, SLG had maintained strong leasing volume.
LIQUIDITY COVERAGE SHORTFALL
The company has weak liquidity under Fitch's base case analysis.
For the period July 1, 2014 to Dec. 31, 2016, the company's
sources of liquidity (cash, availability under its unsecured
revolving credit facility, and Fitch's expectation of retained
cash flows from operating activities after dividends and
distributions) covered uses of liquidity (pro rata debt
maturities, Fitch's expectation of recurring capital expenditures,
and non-discretionary development expenditures) by 0.8x. This
stressed analysis assumes that no additional capital is raised to
repay obligations; SLG has demonstrated good access to a variety
of capital sources over time, mitigating refinance risk. Under a
scenario where the company refinances 80% of the secured debt it
does not intend to repay at maturity, liquidity coverage improves
to 1.1x, which would be adequate for the rating.
The company's liquidity is also strengthened by its conservative
common dividend policy, which enables it to retain substantial
operating cash flow. Fitch expects SLG's projected AFFO payout
ratio to center around 45%, which is low relative to the broader
equity REIT universe and provides the company with additional
financial flexibility, particularly as it will need to fund over
$300 million of capital costs related to recently-signed renewal
leases for Viacom and Citibank prior to year-end 2016.
JUNIOR SUBORDINATED NOTES NOTCHING
The one-notch differential between SLG's IDR and junior
subordinated notes (trust preferred securities) is consistent with
Fitch's criteria for corporate entities with an IDR of 'BBB-'.
Based on Fitch Research on 'Treatment and Notching of Hybrids in
Nonfinancial Corporate and REIT Credit Analysis', available on
Fitch's Web site, these securities are senior to SLG's perpetual
preferred stock but subordinate to SLG's corporate debt. Holders
of such notes have the ability to demand full repayment of
principal and interest in the event of unpaid interest.
PREFERRED STOCK NOTCHING
The two-notch differential between SLG's IDR and preferred stock
rating is consistent with Fitch's criteria for corporate entities
with an IDR of 'BBB-'. Based on Fitch Research on 'Treatment and
Notching of Hybrids in Nonfinancial Corporate and REIT Credit
Analysis', also available at Fitch website, these preferred
securities are deeply subordinated and have loss absorption
elements that would likely result in poor recoveries in the event
of a corporate default.
STABLE OUTLOOK
The Stable Outlook is driven by Fitch's expectation that SLG will
maintain a strategy and leverage and coverage metrics consistent
with a 'BBB-' IDR. While these quantitative metrics are nominally
weaker than most REIT issuers with investment-grade ratings, it
considers that Midtown Manhattan office assets consistently trade
at lower capitalization rates and are more liquid and financeable
in economic downturns than typical office assets.
RATING SENSITIVITIES
These may have a positive impact on SLG's Outlook or Ratings:
-- Fitch's expectation of leverage sustaining below 7x for
several quarters. (leverage was 8.5x as of June 30, 2014 and
7.1x excluding the effects of 388-390 Greenwich Street);
-- Fitch's expectation of fixed-charge coverage sustaining
above 2.25x for several quarters (coverage was 2.1x for the
12 months ended June 30, 2014);
-- Growth in the size of the unencumbered pool.
These may have a negative impact on SLG's ratings and/or Outlook:
-- Fitch's expectation of leverage sustaining above 8.0x for
several quarters;
-- Fitch's expectation of fixed charge coverage sustaining
below 1.5x for several quarters;
-- A sustained liquidity shortfall (base-case liquidity
coverage was 0.7x for July 1, 2014 to Dec. 31, 2016).
SLC INN LLC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: SLC Inn, LLC
200 Admiral Byrd Road
Salt Lake City, UT 84116
Case No.: 14-30634
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
District of Utah (Salt Lake City)
Judge: Hon. William T. Thurman
Debtor's Counsel: Blake D. Miller, Esq.
MILLER GUYMON, PC
165 South Regent Street
Salt Lake City, UT 84111
Tel: (801)363-5600
Fax: (801)363-5601
Email: miller@millerguymon.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Wolter Mehring, authorized
representative.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/utb14-30634.pdf
SMOOT GROUP: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: The Smoot Group, LLC
859 Cartwright Pass
Fayetteville, GA 30214
Case No.: 14-12276
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
Northern District of Georgia (Newnan)
Judge: Hon. W. Homer Drake
Debtor's Counsel: Prince A. Brumfield, Esq.
PRINCE A. BRUMFIELD, JR.
4288-A Memorial Drive
Decatur, GA 30032-1212
Tel: (404) 296-5758
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Marcos Smoot, president.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
SOURCE HOME: Sale Would Leave Little for Unsecured Debts
--------------------------------------------------------
Katy Stech, writing for Daily Bankruptcy Review, reported that
bankruptcy lawyers who are preparing to sell Source Home
Entertainment's manufacturing division, which makes 60% of U.S.
retailers' checkout-counter displays, said there won't be much
left from the sale for unsecured creditors who are owed money by
the Florida company. According to the report, in a proposed
payout plan, Source Home Entertainment lawyers said unsecured
creditors should expect to be repaid less than 1% of what they are
owed by the company, which filed for bankruptcy after shutting
down its magazine- and book-distribution business -- its biggest
division -- and laying off more than 5,000 workers in late May.
About Source Home Entertainment
and Source Interlink
Headquartered in Bonita Springs, Florida, Source Home
Entertainment, LLC, manufactures front-end retail checkout
displays and is a leading distributor of books, periodicals, and
other printed material. Its distribution network spans over
32,500 retail locations in the U.S. and abroad.
In the twelve months ended April 30, 2014, Source Home generated
revenues totaling approximately $600 million on a consolidated
basis. As of March 31, 2014, Source Home had assets (not
including goodwill or intangibles) of $205 million and liabilities
of approximately $290 million. Source Interlink Distribution, LLC
disclosed $82,729,238 in assets and $104,521,951 in liabilities.
Source Home, Source Interlink Manufacturing, LLC, and other
affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case
No. 14-11553) on June 23, 2014, to sell their front-end retail
display fixtures business to lenders, absent higher and better
offers. The Debtors are winding down their books distribution
business.
The Debtors have tapped Kirkland & Ellis LLP as general bankruptcy
and corporate counsel; Young Conaway Stargatt & Taylor, LLP, as
co-counsel, FTI Consulting, Inc., as crisis and turnaround
advisor; and Kurtzman Carson Consultants, LLC, as claims agent.
Stephen Dube has been designated by the Debtors to act as chief
restructuring officer and Joshua Korsower to act as chief
financial officer.
The United States Trustee for Region 3 appointed seven creditors
to serve on the Official Committee of Unsecured Creditors. The
Committee is represented by Lowenstein Sandler LLP, and Duane
Morris LLP. The Committee tapped PricewaterHouseCoopers LLP as
its financial advisor.
SPECIALTY HOSPITAL: Has Until Dec. 17 to Assume or Reject Leases
----------------------------------------------------------------
U.S. Bankruptcy Judge S. Martin Teel, Jr. signed off an agreed
order extending the time of Specialty Hospital of Washington, LLC,
et al., to assume or reject unexpired leases of nonresidential
real property.
Pursuant to the agreement with Capitol Hill Group, the landlord
with respect to the Debtors' Capitol Hill facility, among other
things:
1. the Debtors' time to assume, assume and assign, or reject
the unexpired leases is extended until Dec. 17, 2014, so long as
the budget approved in connection with the Debtors' postpetition
financing provides for payment of monthly base rent to CHG;
2. the Debtors will continue to pay the monthly base rent under
the CHG Lease until the CHG Lease is assumed and assigned or
rejected;
3. entry of the order will be subject to and without prejudice
to the Debtors' right to request further extensions of the time to
assume, assume and assign, or reject the unexpired leases;
provided, however, that no further extension of the time to
assume, assume and assign, or reject the CHG Lease will be granted
absent the express written consent of Capitol Hill Group.
The Debtors related that pursuant to the approved postpetition
financing, DCA Acquisitions, LLC will continue to provide funding
to the Debtors to pay the monthly base rent under the CHG Lease in
accordance with the approved budget.
Previously, CHG filed a limited objection to the Debtor's motion
for extension of time to assume or reject unexpired leases of
nonresidential real property. CHG requested that any order
granting the motion to extend be contingent on the continued
timely payment of monthly base rent.
Further, CHG requested that any order granting the motion to
extend be contingent upon the Debtors' postpetition lender's
continued consent to payments of the monthly base rent to CHG.
The Debtors operate two long-term acute care hospitals and two
nursing home facilities in Washington, D.C. CHG leases
approximately 166,979 square feet of space to SHW to operate
hospital located at 700 Constitution Avenue, N.E., Washington,
D.C, pursuant to a lease dated Dec. 23, 2004.
SHW is substantially in arrears under its lease. Over the years,
CHG has made substantial accommodations to SHW, by covering
utilities, real property taxes, and other expenses payable by SHW
under the Lease, and amending the Lease so that such prior
arrearages could be paid over time as part of the rent.
About Specialty Hospital
Specialty Hospital of America LLC operates nursing home
facilities and long-term acute care hospitals.
On April 23, 2014, an involuntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 14-
10935) was filed against Specialty Hospitals of Washington, LLC
("SHDC").
Capitol Hill Group and five other alleged creditors who signed the
involuntary bankruptcy petition are represented by Stephen W.
Spence, Esq., at Phillips, Goldman & Spence, in Wilmington,
Delaware. Capitol Hill Group claims to be owed $1.66 million on a
lease for non-residential real property while another creditor,
Metropolitan Medical Group, LLC, claims $837,000 for physician
services. The petitioners assert $2.69 million in total claims.
On May 9, 2014, the Delaware court transferred the case to
Washington, D.C. (Bankr. D.C. Case No. 14-00279).
On May 21, 2014, SHDC filed an answer and consent for relief under
Chapter 11. Also on May 21, six affiliates of SHDC, including
Specialty Hospital of America, LLC filed for Chapter 11
protection. The U.S. Bankruptcy Court entered an order directing
the joint administration the cases under Specialty Hospital of
Washington, LLC, Case No. 14-00279.
The Debtors announced plans to sell all of their assets in
exchange for a $15 million debtor-in-possession loan from Silver
Point Capital, which will allow the Debtors to continue operating
through the bankruptcy process.
Specialty Hospital of America estimated between $10 million and
$50 million in assets and between $50 million and $100 million in
liabilities in its bankruptcy petition.
The Debtors are represented by Pillsbury Winthrop Shaw Pittman LLP
as counsel. Alvarez and Marsal Healthcare Industry Group, LLC,
serves as the Debtorsv financial advisor. Cain Brothers &
Company, LLC, is the Debtorsv investment banker.
The U.S. Trustee has named three members to the Official Committee
of Unsecured Creditors.
SUNTRUST BANKS: Fitch Affirms 'BB-' Preferred Stock Rating
----------------------------------------------------------
Fitch Ratings has affirmed SunTrust Banks Inc.'s (STI) ratings at
'BBB+'. The Rating Outlook remains Positive. The affirmation and
Positive Outlook reflect the company's balanced and diverse
business mix, improving asset quality, and good capital profile.
Further, although STI's earnings still lag peer averages, they
reflect a generally improving trend.
The rating action follows a periodic review of the large regional
banking group, which includes BB&T Corporation (BBT), Capital One
Financial Corporation (COF), Comerica Incorporated (CMA), Fifth
Third Bancorp (FITB), Huntington Bancshares Inc. (HBAN), Keycorp
(KEY), M&T Bank Corporation (MTB), MUFG Americas Holdings
Corporation (MUFG), PNC Financial Services Group, Inc. (PNC),
Regions Financial Corporation (RF), SunTrust Banks Inc. (STI), US
Bancorp (USB), Wells Fargo & Company (WFC), and Zions
Bancorporation (ZION).
KEY RATING DRIVERS - IDR, VR and Senior Debt
STI's ratings were affirmed and the Positive Outlook maintained
reflecting the company's balanced and diverse business mix,
improving asset quality, and good capital profile. Further,
although STI's earnings still lag peer averages, they reflect a
generally improving trend. STI also appears to have addressed a
great deal of legacy mortgage-related litigation risk.
STI's balanced risk profile incorporates a diverse business mix,
and a good degree of noninterest income. The risk appetite is a
key rating attribute underlying the company's outlook. The
company has a balanced consumer and commercial banking franchise,
as well as a national mortgage banking franchise and a sizable
wealth and investment management business. STI has an attractive
franchise with the number one share of deposits in Georgia, and
the number three share in both Florida and Tennessee. The
franchise includes many states with favorable demographic trends
in the Southeast and Mid-Atlantic.
Credit quality metrics continue to improve from their peak in mid-
to late 2009. Similar to others in the industry, STI has reported
improvement in non-performing assets (NPAs), net charge-offs
(NCOs), non-performing loan (NPL) inflows and delinquencies for
quite some time now. Although STI's NPAs remain elevated from
historical levels, Fitch observes that the vast majority of STI's
NPAs are accruing troubled debt restructurings (TDRs) with over
95% current, the highest level amongst the peer group. A large
percentage of these TDRs are residential mortgage-related loans
that will remain as such for the lifetime of the loan. Lastly,
there is very little credit risk in the securities portfolio.
The company's capital ratios are considered appropriate, with an
estimated Common Equity Tier 1 under Basel III of 9.7% on a fully
phased-in basis at June 30, 2014, just slightly below the large
regional bank peer average, although well above the 7% threshold
(absent any D-SIFI buffer). STI is targeting a capital ratio in
the 8% range over the long term, which appears acceptable in light
of its balanced business profile. Other measures of capital,
including Fitch Core Capital and tangible capital, also lag peer
averages, though are still considered acceptable given the
diversity in the company's business mix.
STI's earnings performance remains below large regional bank peer
averages, though it does reflect an improving trend over the past
several years. The improvement in reported earnings has come
largely from lower provision expenses. While earnings have
benefitted from reserve releases, the level for STI has been below
peer averages. Fitch views STI's modest reserve release favorably
given heightened regulatory scrutiny regarding reserve releases,
loan growth and NCOs that are likely at a cyclical low and will
likely increase over the near to intermediate term.
It would also appear as though STI has now addressed a great deal
of mortgage-related risk with several settlements with the
government; however, though there is little visibility into
ultimate legal risk for STI or the industry, as the government
appears to be increasing its vigor with regard to pursuing crisis-
related activities. STI appears to have addressed repurchase risk
from the GSEs and issues emanating from FHA lending and HAMP
modification programs, though STI could still be exposed to some
residual repurchase risk from private-label securitizations or
sales. Fitch has limited visibility into legal risk for STI or
the industry, although with approximately $15 billion in CET1
under Basel III, Fitch expects any related fine or PLS repurchase
risk would be manageable in the context of capital.
STI's liquidity profile remains stable, despite an increase in the
loan to deposit ratio over the last few years. Compared with
large regional peers, STI's LTD ratio is the highest. Fitch views
this somewhat negatively given less relative reliance on deposits
to fund loan growth. As the economy recovers and loan growth
returns to more normalized levels, STI may face higher relative
funding costs with this funding profile. However, Fitch notes
that other liquidity metrics, such as the amount of liquid assets
and reliance on wholesale borrowings, are roughly in line with
peer averages.
RATING SENSITIVITIES - IDR, VR and Senior Debt
Continued improvement in STI's earnings profile, combined with the
maintenance of capital at current levels, may support a rating
upgrade over the next 12 months. In addition, additional
enhancements to its risk management program along with continued
refinements to the company's risk appetite may support upward
ratings momentum.
Conversely, a meaningful deterioration in asset quality may prompt
negative rating action, though this is viewed as a low likelihood.
Fitch notes that loan growth over the past 12 months has been
measured at 6%. However, growth in C&I and non-owner-occupied CRE
has exceeded peer averages. STI has sought to reduce its
concentration to residential mortgage with growth in C&I and CRE.
Increased loan diversification is generally viewed favorably, but
Fitch will continue to monitor the loan growth and performance of
newly originated C&I and CRE loans for any asset deterioration
after greater seasoning.
Given 30% of STI's loans are residential mortgages or home equity
products, Fitch notes STI is levered to any meaningful declines or
sustained improvements in the residential housing market.
Although home prices are expected to modestly improve on average
across the country, Fitch believes home prices in certain regions
are at risk of potential declines given the recent rate of price
increases is not supported by underlying economic fundamentals in
some areas. As such, this bears monitoring for any credit rating
implications if there are meaningful declines in STI's portfolio.
STI's ratings would also be sensitive to any additional charges
related to legacy mortgage lending, given Fitch's view that STI
has already addressed a great deal of legacy mortgage-related
risk. An outsized charge that impairs capital may negatively
impact the company's ratings. Though as previously stated, this
is viewed as a low likelihood given the capital base.
KEY RATING DRIVERS - HOLDING COMPANY
STI's IDR and VR are equalized with those of its operating
companies and banks, reflecting its role as the bank holding
company, which is mandated in the U.S. to act as a source of
strength for its bank subsidiaries. Ratings are also equalized
reflecting the very close correlation between holding company and
subsidiary default probabilities.
RATING SENSITIVITIES - HOLDING COMPANY
Should STI's holding company begin to exhibit signs of weakness,
demonstrate trouble accessing the capital markets, or have
inadequate cash flow coverage to meet near-term obligations, there
is the potential that Fitch could notch the holding company IDR
and VR from the ratings of the operating companies. This is
viewed as unlikely though for STI given the strength of the
holding company liquidity profile.
Fitch is now considering introducing a rating differential between
the holding company and bank in the U.S. due to structural changes
in the sector and the evolving regulatory landscape, as described
in the special report 'U.S. Bank HoldCos & OpCos: Evolving Risk
Profiles', dated March 27, 2014. Given Fitch's views that STI may
not receive a long-term debt requirement, its ratings may not be
impacted as a result of Fitch's evolving review regarding
notching.
KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR
STI has a Support Rating of '5' and Support Rating Floor of 'NF'.
In Fitch's view, STI is not systemically important and therefore,
the probability of support is unlikely. IDRs and VRs do not
incorporate any support.
RATING SENSITVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR
STI's Support Rating and Support Rating Floor are sensitive to
Fitch's assumption around capacity to procure extraordinary
support in case of need.
KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Subordinated debt and other hybrid capital issued by STI and by
various issuing vehicles are all notched down from STI or its bank
subsidiaries' VRs in accordance with Fitch's assessment of each
instrument's respective non-performance and relative loss severity
risk profiles.
RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID
SECURITIES
The ratings of subordinated debt and other hybrid capital issued
by STI and its subsidiaries are primarily sensitive to any change
in STI's VR.
KEY RATING DRIVERS - LONG- AND SHORT-TERM DEPOSIT RATINGS
STI's uninsured deposit ratings are rated one notch higher than
the company's IDR and senior unsecured debt because U.S. uninsured
deposits benefit from depositor preference. U.S. depositor
preference gives deposit liabilities superior recovery prospects
in the event of default.
KEY RATING SENSITIVITIES - LONG- AND SHORT-TERM DEPOSIT RATINGS
The ratings of long- and short-term deposits issued by STI and its
subsidiaries are primarily sensitive to any change in STI's long-
and short-term IDRs.
Fitch has taken these rating actions:
These ratings are affirmed:
SunTrust Banks, Inc.
Long-term IDR at 'BBB+'; Outlook Positive;
Short-term IDR at 'F2';
Viability Rating at 'bbb+';
Preferred stock at 'BB-';
Senior debt at 'BBB+';
Subordinated debt at 'BBB';
Short-term debt at 'F2';
Support at 5;
Support Floor at 'NF'.
SunTrust Bank
Long-term IDR at 'BBB+'; Outlook Positive;
Short-term IDR at 'F2';
Viability Rating at 'bbb+';
Long-term deposits at 'A-';
Market-linked securities at 'A-emr';
Senior notes at 'BBB+';
Short-term deposits at 'F2';
Subordinated debt at 'BBB';
Short-term debt at 'F2';
Support at 5;
Support Floor at 'NF'.
SunTrust Capital I
SunTrust Capital III
National Commerce Capital Trust I
Preferred stock at 'BB'.
SunTrust Preferred Capital I
Preferred stock at 'BB-'.
THOMAS M. COOLEY: Plans to Shutter Ann Arbor Campus
---------------------------------------------------
Jennifer Smith, writing for The Wall Street Journal, reported that
Western Michigan University Thomas M. Cooley Law School, which is
among the largest in the country by number of students, is
shutting down its campus in Ann Arbor, Mich. According to the
report, the move follows the announcement this summer that Cooley
planned to halt first-year enrollment at Ann Arbor, the smallest
of its five campuses.
* * *
The Troubled Company Reporter, on Aug. 22, 2014, reported that
Standard & Poor's Ratings Services lowered its issuer credit
rating (ICR) to 'BB+' from 'BBB-' on Thomas M. Cooley Law School,
Mich. In addition, S&P assigned its 'BB+' long-term rating to the
Michigan Finance Authority's series 2014 limited obligation
revenue bonds issued on behalf of the law school. The outlook is
negative.
TRUMP ENTERTAINMENT: Taj Mahal Workers Protest Cuts to Benefits
---------------------------------------------------------------
Katy Stech, writing for Daily Bankruptcy Review, reported that the
union for some 1,140 workers at Atlantic City, N.J.'s Trump Taj
Mahal casino who are rallying to save their health-care and
pension benefits are now fighting in two places: in the courtroom
and on the streets. According to the report, several hundred
protesters plan to block a major traffic intersection near the
Atlantic City Expressway to draw attention to pressure that
workers who are unionized through Unite Here Local 54 face, said
union spokesman Ben Begleiter.
About Trump Entertainment Resorts
Trump Entertainment Resorts Inc., owner of the Atlantic City
Boardwalk casinos that bear the name of Donald Trump, returned to
Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on
Sept. 9, 2014, with plans to close the Trump Plaza by next week,
and, absent union concessions, the Taj Mahal by Nov. 13.
TER and its affiliated debtors own and operate two casino hotels
located in Atlantic City, New Jersey. TER said it will close the
Trump Taj Mahal Casino Resort by Sept. 16, and, absent union
concessions, the Trump Plaza Hotel and Casino by Nov. 13.
The Debtors have sought an order authorizing the joint
administration of their Chapter 11 cases and the consolidation
thereof for procedural purposes only. Judge Kevin Gross presides
over the Chapter 11 cases.
The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as
counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan
Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as
noticing and claims agent.
TER estimated $100 million to $500 million in assets as of the
bankruptcy filing.
The Debtors as of Sept. 9, 2014, owe $285.6 million in principal
plus accrued but unpaid interest of $6.6 million under a first
lien debt issued under their 2010 bankruptcy-exit plan. The
Debtors also have trade debt in the amount of $13.5 million.
The U.S. Trustee for Region 3 on Sept. 23 appointed seven
creditors of Trump Entertainment Resorts, Inc., to serve on the
official committee of unsecured creditors.
TODD GRINDING: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Todd Grinding Co.
PO Box 580
Dryden, MI 48428-0580
Case No.: 14-32717
Chapter 11 Petition Date: October 7, 2014
Court: United States Bankruptcy Court
Eastern District of Michigan (Flint)
Judge: Hon. Daniel S. Opperman
Debtor's Counsel: Anthony James Miller, Esq.
SCHNEIDER MILLER, PC
645 Griswold, Suite 3900
Detroit, MI 48226
Tel: 313-237-0850
Fax: 586-281-3770
Email: amiller@schneidermiller.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $0 to $50,000
The petition was signed by Elisabeth R. Todd, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/mieb14-32717.pdf
UNIVERSAL HEALTH CARE: Gets Approval of Deal With FDFS, BankUnited
------------------------------------------------------------------
The bankruptcy trustee of Universal Health Care Group, Inc.
received court approval for a deal that would resolve the
company's dispute with the Florida Department of Financial
Services and BankUnited, N.A.
The court order signed by U.S. Bankruptcy Judge K. Rodney May
approves a settlement, which involves the coordination of
litigation efforts between the bankruptcy trustee and FDFS, the
receiver for Universal Health Care, Inc. and Universal Health Care
Insurance Company, Inc.
Judge May overruled an objection from a group of former employees
who were terminated as a result of the company's plant shutdowns.
The group, represented by Florida-based Kwall Showers & Barack,
P.A., asserts an administrative expense claim against the company.
About Universal Health Care Group
Universal Health Care Group, Inc., owns an insurance company and
three health-maintenance organizations that provide managed care
services for government sponsored health care programs, focusing
on Medicare and Medicaid.
Universal Health was founded in 2002 by Dr. A.K. Desai and grew
its operations of offering Medicare plans to more than 37,000
members to over 20 states.
Universal Health filed a Chapter 11 bankruptcy protection (Bankr.
M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida
regulators moved to put two of the company's subsidiaries in
receivership. Universal Health Care estimated assets of up to
$100 million and debt of less than $50 million in court filings in
Tampa, Florida.
Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in
Tampa, serves as counsel to the Debtor.
Soneet R. Kapila has been appointed the Chapter 11 Trustee in the
Debtor's case. He is represented by Roberta A. Colton, Esq., at
Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, PA.
Dennis S. Jennis, Esq., and Jennis & Bowen, P.L., serve as special
conflicts counsel and E-Hounds, Inc., serves as a forensic imaging
consultant to the Chapter 11 trustee.
VERIS GOLD: $12-Mil. DIP Financing From Wbox Approved
-----------------------------------------------------
Veris Gold Corp. disclosed that on Oct. 3, 2014 the Supreme Court
of British Columbia made an order authorizing the Company and its
subsidiaries to enter into a debtor-in-possession financing
agreement with Wbox 2014-1 Ltd. pursuant to which an aggregate
amount of up to US$12 million will be available to support the
continued operations during the Companies' Creditors Arrangement
Act ("CCAA") proceedings. In the Company's proceedings under
Chapter 15 of the U.S. Bankruptcy Code, the DIP Order was
recognized and enforced by the United States Bankruptcy Court ?
District of Nevada pursuant to an order made Oct. 6, 2014.
Continued protection under the CCAA and the U.S. Proceedings,
together with the new financing available under the DIP Agreement
will provide the Company with additional time and stability to
progress with its restructuring plan under CCAA. The Company
continues to operate its gold producing mines and processing plant
at Jerritt Canyon located in Elko County, Nevada.
The DIP Agreement is for a six-month term with an optional
extension period of three additional months and can be drawn on up
to four times. The DIP Lender has a super-priority charge over
all of the Company assets pursuant to the DIP Order and the
Recognition Order.
The Company has been operating under the protection of the CCAA
and the U.S. Bankruptcy Code since June 9, 2014.
All inquiries regarding Veris' CCAA proceedings should be directed
to the Monitor, Ernst & Young, Inc.: Mr. Rocky Ho at (604) 891-
8425. Information about the CCAA proceedings, including copies of
all court orders and the Monitor's reports, is available on the
Monitor's Web site http://www.ey.com/ca/verisgold
About Veris Gold Corp.
Veris Gold Corp. is a growing mid-tier North American gold
producer in the business of developing and operating gold mines in
geo-politically stable jurisdictions. The Company's primary
assets are the permitted and operating Jerritt Canyon processing
plant and gold mines located 50 miles north of Elko, Nevada, USA.
The Company's primary focus is on the re-development of the
Jerritt Canyon mining and processing plant. The Company also
holds a portfolio of precious metals properties in British
Columbia and the Yukon Territory, Canada, including the Ketza
River Property.
WEST TEXAS: Court Suspends Ruling on Bid to Appoint Trustee
-----------------------------------------------------------
The Bankruptcy Court, according to West Texas Guar, Inc.'s case
docket, suspended the ruling on the motion to appoint a trustee in
the Debtor's case.
The motion to appoint trustee was filed by 2B Farms, Inc., B&B
Harlan Farms, Bill and Lisa Barnes Joint Venture, James Bridwell,
Circle B. Farms, Inc., Danny Cook, David Cook, Brad Cude, Joe D.
Barnes Farm Company, Key Farms, Inc., Harvey Dell Knight Jr.,
Rustin Knight, Chad Raines, Short Farms, Tommy Mason.
On Sept. 17, certain petitioning creditors, responded to the
Debtor's objection to the second motion for the appointment of a
trustee, stating that they were not moving to appoint a trustee
merely because they dislike Scopia Windmill Fund, LP acting by and
through its investment manager Scopia Capital Management, LLC --
supermajority shareholder and employer of both of the Debtor's two
remaining directors.
The Debtor, in its objection, stated that, among other things:
1. a trustee must not be appointed pursuant to Section
1104(a)(1) of the Bankruptcy Code;
2. the harm of appointing a trustee outweighs any perceived
benefits.
Bankruptcy courts, the Debtor points out, are generally reluctant
to displace the management and control of the Debtor's business
unless extraordinary circumstances warrant it.
Scopia Windmill Fund, LP, joined in the response of the Debtor.
The Debtor is represented by:
Samuel M. Stricklin, Esq.
Tricia R. DeLeon, Esq.
Lauren C. Kessler, Esq.
BRACEWELL & GIULIANI LLP
1445 Ross Avenue, Suite 3800
Dallas, TX 75202-2711
Tel: (214) 468-3800
Fax: (214) 468-3888
E-mail: sam.stricklin@bgllp.com
tricia.deleon@bgllp.com
lauren.kessler@bgllp.com
About West Texas Guar
Representatives of 24 farms filed an involuntary Chapter 11
bankruptcy petition (Bankr. N.D. Tex. Case No. 14-50056) on March
14, 2014, against West Texas Guar Inc. The farmers claim they are
owed nearly $4 million for seed they've delivered on the 2013
harvest but haven't been paid for. Guar is a seed crop that has a
variety of uses in human and animal food production, textiles and
fracking for oil and gas wells.
Judge Robert L. Jones oversees the case. The farmers are
represented by R. Byrn Bass, Jr., Esq., Attorney at Law.
WTG is represented by Samuel M. Stricklin, Esq., Tricia R. DeLeon,
Esq., and Lauren C. Kessler, Esq., at Bracewell & Giuliani LLP, in
Dallas, Texas. The Debtor disclosed in amended schedules
$19,226,923 in assets and $29,331,352 in liabilities as of the
Chapter 11 filing.
WTG and Scopia Windmill Fund LP filed a Joint Plan of
Reorganization and Disclosure Statement on August 25, 2014. On
Sept. 23, WTG filed a Second Amended Joint Plan. In support of
the plan, Scopia Windmill Fund LP, Scopia Capital Management LLC,
Scopia Holdings LLC, Corcapital Group LLC, and the Debtor executed
the attached Term Sheet for Proposed Purchase/Restructuring
Transaction that provides the basic terms for a transaction that
would be implemented through a confirmed plan of reorganization
for the Debtor.
The capital structure of the reorganized Debtor is Senior Secured
Term Loan of $8 million and Junior Secured Term Loan of $1.5
million, both of which will be issued by Scopia, and CorCapital
Preferred Interests of $7.1 million. 10% of the outstanding
fully-diluted total common interest of the Reorganized Debtor will
be issued to Scopia in full and complete satisfaction of Scopia's
claims against the Debtor in the amount of approximately $6
million plus accrued interest. As additional consideration for
providing the $8 million Senior Secured Term Loan, Scopia will be
provided with warrants exercisable for 12% of the fully diluted
total common interests of Reorganized WTG at a price of $l.
ZIONS BANCORP: Fitch Affirms 'BB+' Subordinated Debt Rating
-----------------------------------------------------------
Fitch Ratings has affirmed Zions Bancorporation's (Zions) Issuer-
Default Ratings (IDRs) at 'BBB-/F3'. The Rating Outlook has been
revised to Stable from Positive.
The rating action follows a periodic review of the large regional
banking group, which includes BB&T Corporation (BBT), Capital One
Finance Corporation (COF), Comerica Incorporated (CMA), Fifth
Third Bancorp (FITB), Huntington Bancshares Inc. (HBAN), Keycorp
(KEY), M&T Bank Corporation (MTB), PNC Financial Services Group
(PNC), Regions Financial Corporation (RF), SunTrust Banks Inc.
(STI), US Bancorp (USB), UnionBanCal Corporation (UBC), Wells
Fargo & Company (WFC), and Zions Bancorporation (ZION).
Company-specific rating rationales for the other banks are
published separately, and for further discussion of the large
regional bank sector in general, refer to the special report
titled 'Large Regional Bank Periodic Review,' to be published
shortly.
KEY RATING DRIVERS - IDRs, VIABILITY RATINGS (VR) & SENIOR DEBT
The affirmation of Zions' ratings is reflective of a good
franchise largely spanning many western U.S. states and Texas as
well as continued improvements in asset quality metrics. However,
Fitch continues to note that Zions' ratings remain at the lower
end of their potential range for reasons discussed below.
Fitch has revised the Rating Outlook for Zions' ratings to Stable
from Positive. The Outlook revision is largely due to continued
underperformance relative to peer banks.
Additionally, Fitch believes Zions' difficulty managing the
Federal Reserve's CCAR process last year relative to other banks
who navigated it more successfully also helps to support the
Outlook revision to Stable.
In the wake of this, Zions re-submitted its capital plan to the
Federal Reserve and received approval for the re-submitted plan in
late July 2014. The company then raised $525 million of common
equity.
While Fitch notes that the equity raise helps to provide a cushion
to creditors for unexpected loss, it is also somewhat necessary
given the company's comparatively concentrated loan portfolio by
both product and geography.
As previously noted, Zions' earnings profile remains below many
banks in its large regional peer group, and is a key factor
keeping the rating at the lower end of its potential range.
Fitch believes some of the earnings lag is due to Zions' running a
higher cost decentralized operating model than peers as well as
growing regulatory expenses and less of a benefit from scale due
to Zions' comparatively smaller asset size. Fitch would also note
the earnings lag is in part due to an abundance of liquidity
impacting the company's net interest margin (NIM).
While Fitch does not expect much of a change or benefit in the
first two components of the earnings lag, Fitch does note that
Zions' balance sheet is very asset sensitive and positioned for
rising rates, particularly in an up 300 basis point scenario.
That said, Fitch would also note that this interest rate
positioning is comparatively more aggressive than some peer banks,
particularly given Zions' significant commercial deposit base. On
balance, Fitch believes that banks with more commercial deposits
may be more sensitive to deposit repricing pressures in a rising
rate scenario than banks that are more consumer deposit funded
institutions.
Helping to support Zions' ratings is continued improvements in the
company's asset quality metrics alongside the rest of the banking
industry. That said, Fitch believes that asset quality metrics
for Zions -- as well as the rest of the industry -- are nearing or
at a cyclical trough, and Fitch would expect some reversion in
asset quality metrics over a medium-to-intermediate term time
horizon. The expectation for this reversion is already
incorporated in Zions' current ratings.
RATING SENSITIVITIES - IDRs, VRs AND SENIOR DEBT
As previously noted, Zions ratings are at the lower end of their
potential rating range given the many challenges the company has
endured over the last few years.
With the Rating Outlook revision to Stable from Positive, Fitch is
indicating that Zions' ratings are well situated over a near-to-
intermediate term time horizon.
Over a longer-term time horizon, should the company's risk
management processes and procedures continue to season, and should
its earnings performance approach peer averages all while holding
capital ratios at least constant (including the recent equity
raise), there could be some very modest upwards rating momentum.
While Fitch does not see much downward rating pressure to Zions'
ratings, should the company's asset quality metrics deteriorate at
a rate that is faster than peer averages over a medium-to-long-
term time horizon, or should the company have additional
governance and/or risk management issues, there could be pressure
on the Rating Outlook.
KEY RATING DRIVERS - HOLDING COMPANY
Zions' IDR and VR are equalized with those of its operating
companies and banks, reflecting its role as the bank holding
company, which is mandated in the U.S. to act as a source of
strength for its bank subsidiaries. Ratings are also equalized
reflecting the very close correlation between holding company and
subsidiary default probabilities.
RATING SENSITIVITIES - HOLDING COMPANY
Should Zions' holding company begin to exhibit signs of weakness,
demonstrate trouble accessing the capital markets, or have
inadequate cash flow coverage to meet near-term obligations, there
is the potential that Fitch could notch the holding company IDR
and VR from the ratings of the operating companies.
Fitch is now considering introducing a rating differential between
the holding company and bank in the U.S. due to structural changes
in the sector and the evolving regulatory landscape, as described
in the special report 'U.S. Bank HoldCos & OpCos: Evolving Risk
Profiles', dated March 27, 2014. Given Fitch's views that Zion may
not receive a long-term debt requirement, its ratings may not be
impacted as a result of Fitch's evolving review regarding
notching.
KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR
Zions has a Support Rating of '5' and Support Rating Floor of
'NF'. In Fitch's view, Zions is not systemically important and
therefore, the probability of support is unlikely. IDRs and VRs
do not incorporate any support.
RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR
Zions Support Rating and Support Rating Floor are sensitive to
Fitch's assumption around capacity to procure extraordinary
support in case of need.
KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Subordinated debt and other hybrid capital issued by Zions and by
various issuing vehicles are all notched down from Zions' or its
bank subsidiaries' VRs in accordance with Fitch's assessment of
each instrument's respective non-performance and relative loss
severity risk profiles.
RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID
SECURITIES
The ratings of subordinated debt and other hybrid capital issued
by Zions and its subsidiaries are primarily sensitive to any
change in Zions' VR.
KEY RATING DRIVERS - SUBSIDIARY AND AFFILIATED COMPANY
The IDRs and VRs for Zions bank subsidiaries benefit from the
cross-guarantee mechanism in the U.S. under FIRREA, and therefore
the IDRs and VRs of Zions' main bank subsidiaries are equalized
across the group.
RATING SENSITIVITIES - SUBSIDIARY AND AFFILIATED COMPANY
As the IDRs and VRs of the subsidiaries are equalized with those
of Zions to reflect support from their ultimate parent, they are
sensitive to changes in the parent's propensity to provide
support, which Fitch currently does not expect, or from changes in
Zions' IDRs.
To the extent that one of Zions' subsidiary or affiliated
companies is not considered to be a core business, Fitch could
also notch the subsidiary's rating from Zions' IDR.
KEY RATING DRIVERS - LONG- AND SHORT-TERM DEPOSIT RATINGS
Zions uninsured deposit ratings are rated one notch higher than
the company's IDR and senior unsecured debt because U.S. uninsured
deposits benefit from depositor preference. U.S. depositor
preference gives deposit liabilities superior recovery prospects
in the event of default.
KEY RATING SENSITIVITIES - LONG- AND SHORT-TERM DEPOSIT RATINGS
The ratings of long- and short-term deposits issued by Zions and
its subsidiaries are primarily sensitive to any change in Zions
long- and short-term IDRs.
Fitch has affirmed these ratings:
Zions Bancorporation
-- Long-term Issuer Default Rating (IDR) at 'BBB-';
-- Short-term IDR at 'F3';
-- Viability at 'bbb-';
-- Senior unsecured debt at 'BBB-';
-- Subordinated debt at 'BB+';
-- Short-term debt at 'F3';
-- Preferred stock at 'B';
-- Support at '5';
-- Support Floor at 'NF'.
Zions First National Bank
Amegy Bank N.A.
California Bank & Trust
Commerce Bank of Oregon (The)
Commerce Bank of Washington (The)
National Bank of Arizona
Nevada State Bank
Vectra Bank Colorado NA
-- Long-term IDR at 'BBB-';
-- Short-term IDR at 'F3';
-- Viability at 'bbb-';
-- Long-term deposits at 'BBB';
-- Short-term deposit at 'F2';
-- Support at '5';
-- Support Floor at 'NF'.
Zions Institutional Capital Trust A
-- Preferred Stock at 'B+'
The Rating Outlook has been revised to Stable.
* ABI Consultant Predicts Continued Decline in Filings
------------------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that Ed Flynn, an executive in the federal
bankruptcy court system for more than 30 years, predicted a
"continuing decline in bankruptcy filings" even as "many financial
indicators point to a fairly high number of people who are still
in financial distress" after the economy recovered from the
recession. According to the report, citing an article in this
month's edition of the ABI Journal, Mr. Flynn said bankruptcies
seem to have been depressed permanently by some 30 percent as a
result of changes to law in late 2005. Without those amendments,
there might have been more than 2 million bankruptcies in the
years 2009 through 2011, Flynn said, the report related.
* Change in Derivatives Proposed to Curb Damage from Bank Failure
-----------------------------------------------------------------
Peter Eavis, writing for The New York Times' DealBook, reported
that regulators and large banks are expected to agree on a change
to derivatives that is intended to contain the damage caused by
the crash of a large bank. According to the report, many in the
industry are promoting the change as evidence that banks and
regulators are substantially reducing the threat that large banks
pose to the financial system and the wider economy.
* William Holder Joins Cornerstone Research as Senior Advisor
-------------------------------------------------------------
Cornerstone Research, a provider of economic and financial
consulting and expert testimony, on Oct. 8 disclosed that
William W. Holder, dean of the Leventhal School of Accounting at
the University of Southern California, has joined the firm as a
senior advisor. He is also the Alan Casden Dean's Chair and
Professor of Accounting. Professor Holder has extensive
experience as an expert witness in high-profile trials involving
questions of accounting.
"Bill Holder is one of the foremost experts on accounting issues
that arise in legal and regulatory matters," said Cornerstone
Research President and CEO Michael E. Burton. "His expertise and
reputation in financial accounting and reporting, auditing,
governmental accounting, and cost accounting are a major addition
to the firm's outstanding network of experts."
Professor Holder has served on several governance and standard-
setting bodies for the accounting profession, including as a
member of the Governmental Accounting Standards Board (GASB), on
committees of the American Accounting Association, and on the
Board of Directors (chair of the Audit Committee) of the American
Institute of CPAs (AICPA). At the invitation of the Congressional
Subcommittee on Capital Markets, Insurance, and Government-
Sponsored Enterprises, he provided testimony on corporate
accounting practices during the Sarbanes-Oxley Act hearings.
The accounting profession has bestowed many honors on Professor
Holder for his service and lifetime achievements, including the
AICPA's Gold Medal Award for Distinguished Service, the
organization's highest honor for a CPA. He has won numerous
outstanding teaching awards, including Best Professor in the
University of Southern California master's degree program.
Professor Holder is the author or coauthor of six books on
accounting, and his research has been widely published in
journals, including the Accounting Review, the Journal of
Accountancy, Financial Executive, and the CPA Journal.
"I'm pleased to continue as an expert working with Cornerstone
Research in the role of senior advisor," said Professor Holder.
"I've been impressed by Cornerstone Research's high standards,
rigorous methodology, and the level of support they provide."
About Cornerstone Research
Cornerstone Research -- http://www.cornerstone.com/-- provides
high-quality economic and financial consulting and expert
testimony in all phases of complex litigation and regulatory
proceedings. The firm works with an extensive network of
prominent faculty and industry practitioners to identify the best-
qualified expert for each assignment. Staff consultants bring
specialized knowledge and experience as well as a commitment to
produce outstanding results. Currently marking its 25th
anniversary, Cornerstone Research has more than 500 staff, and
offices in Boston, Chicago, London, Los Angeles, Menlo Park,
New York, San Francisco, and Washington.
* Recent Small-Dollar & Individual Chapter 11 Filings
-----------------------------------------------------
In re Steven M. Dicterow and Catrina L. Dicterow
Bankr. C.D. Cal. Case No. 14-15864
Chapter 11 Petition filed September 29, 2014
In re Restaurant Ventures, Inc
Bankr. C.D. Cal. Case No. 14-15866
Chapter 11 Petition filed September 29, 2014
See http://bankrupt.com/misc/cacb14-15866.pdf
represented by: Michael R. Totaro, Esq.
TOTARO & SHANAHAN
E-mail: tsecfpacer@aol.com
In re Edward L Fuller
Bankr. C.D. Cal. Case No. 14-12175
Chapter 11 Petition filed September 30, 2014
In re Lucerne Valley, LLC
Bankr. C.D. Cal. Case No. 14-28450
Chapter 11 Petition filed September 29, 2014
See http://bankrupt.com/misc/cacb14-28450.pdf
represented by: Edmond Nassirzadeh, Esq.
NASS LAW FIRM
E-mail: ed@nasslawfirm.com
In re SoCal Sleep Centers LLC
Bankr. C.D. Cal. Case No. 14-28581
Chapter 11 Petition filed September 30, 2014
See http://bankrupt.com/misc/cacb14-28581.pdf
represented by: Maureen Jaroscak, Esq.
In re Tsawhawbitts Meadows Ranch Trust
Bankr. D. Colo. Case No. 14-23335
Chapter 11 Petition filed September 30, 2014
See http://bankrupt.com/misc/cob14-23335.pdf
represented by: Phillip Jones, Esq.
WILLIAMS, TURNER & HOLMES, P.C.
E-mail: pjones@wth-law.com
In re Austin's Nursery, Inc.
Bankr. W.D. La. Case No. 14-81039
Chapter 11 Petition filed September 30, 2014
See http://bankrupt.com/misc/lawb14-81039.pdf
represented by: Bradley L. Drell, Esq.
GOLD, WEEMS, BRUSER, SUES & RUNDELL
E-mail: bdrell@goldweems.com
In re Alevista, Inc.
Bankr. D. Mass. Case No. 14-14571
Chapter 11 Petition filed September 30, 2014
See http://bankrupt.com/misc/mab14-14571.pdf
represented by: Gary W. Cruickshank, Esq.
LAW OFFICE OF GARY W. CRUICKSHANK
E-mail: gwc@cruickshank-law.com
In re Alternatives Direct Group, LLC
Bankr. E.D. Mich. Case No. 14-55442
Chapter 11 Petition filed September 30, 2014
See http://bankrupt.com/misc/mieb14-55442.pdf
represented by: Robert N. Bassel, Esq.
E-mail: bbassel@gmail.com
In re Michelle Marie Mull
Bankr. W.D. Mo. Case No. 14-43341
Chapter 11 Petition filed September 30, 2014
In re Cesar Ponce-Ortiz
Bankr. D. Nev. Case No. 14-16613
Chapter 11 Petition filed September 30, 2014
In re Ralph T. Pescrillo
Bankr. W.D.N.Y. Case No. 14-12268
Chapter 11 Petition filed September 30, 2014
In re Thomas R Christopherson
Bankr. N.D. Ohio Case No. 14-16253
Chapter 11 Petition filed September 30, 2014
In re Jose R. Vallenilla Villafane and Emery Carrero Sepulveda
Bankr. D.P.R. Case No. 14-08117
Chapter 11 Petition filed September 30, 2014
In re Sustainable Buildings, LLC
Bankr. M.D. Tenn. Case No. 14-07782
Chapter 11 Petition filed September 30, 2014
See http://bankrupt.com/misc/tnmb14-07782.pdf
represented by: Steven L. Lefkovitz
LAW OFFICES LEFKOVITZ & LEFKOVITZ
E-mail: slefkovitz@lefkovitz.com
In re Broadway and Kolb Properties, LLC
Bankr. D. Ariz. Case No. 14-15054
Chapter 11 Petition filed October 2, 2014
See http://bankrupt.com/misc/azb14-15054.pdf
represented by: Charles R. Hyde, Esq.
LAW OFFICES OF C.R. HYDE
E-mail: crhyde@gmail.com
In re Jorge Garcia
Bankr. N.D. Cal. Case No. 14-31440
Chapter 11 Petition filed October 2, 2014
In re Paula Denese Wright
Bankr. M.D. Fla. Case No. 14-04841
Chapter 11 Petition filed October 2, 2014
In re Trinity Endodontics of Greater Lakeland, P.A.
Bankr. M.D. Fla. Case No. 14-11698
Chapter 11 Petition filed October 2, 2014
See http://bankrupt.com/misc/flmb14-11698.pdf
represented by: Eric J. Olson, Esq.
ERIC J. OLSON, ESQ., ATTORNEY AT LAW
E-mail: eolson@ejopa.com
In re Nelson I. Hammell
Bankr. S.D. Fla. Case No. 14-32152
Chapter 11 Petition filed October 2, 2014
In re John R. Hock and Doreen T. Zic-Hock
Bankr. S.D. Fla. Case No. 14-32157
Chapter 11 Petition filed October 2, 2014
In re Mario M. Wakins
Bankr. N.D. Ga. Case No. 14-69311
Chapter 11 Petition filed October 2, 2014
In re Jones Mark Gresham and Candy A. Gresham
Bankr. S.D. Ga. Case No. 14-11864
Chapter 11 Petition filed October 2, 2014
In re Lauren Tratar
Bankr. N.D. Ill. Case No. 14-35941
Chapter 11 Petition filed October 2, 2014
In re New Vision Christian Church Ministries
Bankr. E.D.N.C. Case No. 14-05712
Chapter 11 Petition filed October 2, 2014
See http://bankrupt.com/misc/nceb14-05712.pdf
represented by: John G. Rhyne, Esq.
JOHN G. RHYNE, ATTORNEY AT LAW
E-mail: johnrhyne@johnrhynelaw.com
In re B3 Ventures, LLC
Bankr. W.D. Pa. Case No. 14-24008
Chapter 11 Petition filed October 2, 2014
See http://bankrupt.com/misc/pawb14-24008.pdf
represented by: David Z. Valencik, Esq.
CALAIARO VALENCIK
E-mail: dvalencik@c-vlaw.com
In re Barry Lee Frager
Bankr. M.D. Tenn. Case No. 14-07889
Chapter 11 Petition filed October 2, 2014
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com by e-mail.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to the nation's bankruptcy courts. The
list includes links to freely downloadable of these small-dollar
petitions in Acrobat PDF documents.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
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Copyright 2014. All rights reserved. ISSN: 1520-9474.
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