/raid1/www/Hosts/bankrupt/TCR_Public/150514.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, May 14, 2015, Vol. 19, No. 134
Headlines
22ND CENTURY: Incurs $4.11 Million Net Loss in First Quarter
ACCIPITER COMMUNICATIONS: Cash Use Hearing Continued Until July 7
ALEXZA PHARMACEUTICALS: Posts $404,000 Net Loss in 1st Quarter
ALTEGRITY INC: Committee Addresses UST Comments on Capstone Hiring
AMERICAN APPAREL: Announces $10 Million At-the-Market Offering
AMERICAN APPAREL: Incurs $26.4 Million Net Loss in First Quarter
AP GAMING: S&P Raises Sr. Secured Issue Level Rating to B+
ARRIS GROUP: Moody's Affirms Ba3 CFR & Rates New Debt Ba3
ARRIS GROUP: S&P Affirms BB Rating on Pace Acquisition Plans
BALDWINSVILLE HOSPITALITY: Case Summary & 20 Top Unsec. Creditors
BANKRATE INC: S&P Keeps 'B+' Corp Credit Rating on Watch Neg.
BUILDERS FIRSTSOURCE: Posts $7.07 Million Net Loss in First Quarter
CAESARS ENTERTAINMENT: Files March 31 Quarterly Report
CANBRIAM ENERGY: S&P Raises Sr. Unsecured Debt to 'B-'
CHICAGO, IL: Moody's Cuts $8.1BB GO Debt Rating to Ba1
COLLAVINO CONSTRUCTION: Files Schedule F Non-Priority Claims
CROSBY NATIONAL: Wins Interim Authority to Use Cash Collateral
CUI GLOBAL: Posts $4.07 Million Net Loss in First Quarter
DTZ U.S. BORROWER: Moody's Affirms B1 Rating on 1st Lien Term Loans
ECOTALITY INC: Seeks Chapter 7 Conversion
ELEPHANT TALK: Reports $2.12 Million Net Loss in First Quarter
EVERYWARE GLOBAL: Ceases SEC Reporting, To Exit Ch. 11 in June
FEDERATION EMPLOYMENT: Panel Hires Pachulski Stang as Counsel
FINJAN HOLDINGS: Posts $4.2 Million Net Loss in First Quarter
FRESH PRODUCE: McCabe Wants Adequate Protection, Rent Payment
GASTAR EXPLORATION: S&P Lowers Sr. Secured Note Rating to CCC+
GEORGETOWN MOBILE: Proposes Bunch & Brock as Counsel
GEORGETOWN MOBILE: Taps Dellavalle as Mobile Home Park Manager
GEORGETOWN MOBILE: Taps Magnum Capital as Consultants
GEORGETOWN MOBILE: Taps Thayer Group as Consultants
GT ADVANCED: Extends Solicitation Period for DIP Facility
HALCON RESOURCES: To Issue 40 Million Shares Under Incentive Plan
HEALTHWAREHOUSE.COM INC: Posts $281,000 Net Loss in First Quarter
HEI INC: Wins Court Approval to Sell Miscellaneous Assets
HEXION INC: Employment Agreement with Douglas Johns Okayed
HRG GROUP: Fitch Affirms 'B' Long-term Issuer Default Ratings
HUBBARD RADIO: Moody's Assigns B1 Rating to Proposed $360MM Loan
HUBBARD RADIO: S&P Rates New $370MM Refinanced Secured Loans BB-
IDERA PHARMACEUTICALS: Posts $12.5 Million Net Loss in 1st Qtr.
IMAGEWARE SYSTEMS: Posts $2.3 Million Net Loss in First Quarter
INFINITY ENERGY: Extends Maturity of $1M Note to April 2016
JAMES RIVER: Hires Michael Wilson as Local Conflicts Counsel
KRONOS WORLDWIDE: Fitch Affirms 'BB-' Issuer Default Ratings
L BRANDS: S&P Affirms 'BB+' Corp. Credit Rating, Outlook Stable
LIGHTSQUARED INC: Ergen Says Plan Unfairly Favors Hedge Funds
LITTLE GIANT: Voluntary Chapter 11 Case Summary
LOUDOUN HEIGHTS: Gets Court Approval to Sell 313-Acre Property
MAGNETATION LLC: Final Hearing on $135 Million Loan on June 10
MAGNETATION LLC: Seeks to Assume Technology License Agreement
MAGNETATION LLC: Taps Donlin Recano as Claims & Noticing Agent
MAGNUM HUNTER: S&P Lowers CCR to 'CCC-' on Decreased Liquidity
MECHEL OAO: Ernst & Young Expresses Going Concern Doubt
MERRILL CORP: S&P Hikes Corp. Credit Rating to 'B+'
MUD KING: Gets Court Approval of Chapter 11 Reorganization Plan
MUSCLEPHARM CORP: Posts $7.47 Million Net Loss in First Quarter
NII HOLDINGS: Posts $309-Mil. Operating Loss in First Quarter
NII HOLDINGS: Posts $310M Net Loss in March 31 Quarter
NORTEL NETWORKS: Canadian, US Courts Rule on $7.3-Bil. Cash Fight
OHCMC-OSWEGO LLC: June 24 Hearing on Turnover of Rental Payments
ONE SOURCE: Creditors' Panel Hires Brinkman Portillo as Counsel
ONE SOURCE: Creditors' Panel Hires Culhane Meadows as Counsel
PARADIGM ACQUISITION: Moody's Assigns 'B2' CFR, Outlook Stable
PARADIGM ACQUISITION: S&P Assigns 'B' LT Corp. Credit Rating
PARK FLETCHER: Filbert Orton's Bid for Third Party Manager Denied
PATRIOT COAL: To Limit Trading to Protect NOLs
PATRIOT COAL: To Sell Assets via Sec. 363 Sale or Under Plan
PATRIOT COAL: Wants Until June 26 to File Schedules
PORTER BANCORP: Files March 31 Quarterly Report
PPL ENERGY: S&P Assigns 'BB' Rating on $600 Unsec. Notes Due 2025
PRE-PAID LEGAL: Moody's Affirms B1 CFR, Outlook Stable
PRE-PAID LEGAL: S&P Lowers $325MM First Lien Debt Rating to B+
PROJECT BARBOUR: Moody's Assigns B3 CFR, Outlook Stable
PROJECT BARBOUR: S&P Assigns 'B' Corp. Credit Rating & Neg. Outlook
PROTOM INTERNATIONAL: Case Summary & 20 Top Unsecured Creditors
PROTOM INTERNATIONAL: In Ch. 11 to Quickly Sell Assets
RAAM GLOBAL: Moody's Lowers Corporate Family Rating to Ca
RADIOSHACK CORP: Standard General Wins Auction of Brand
REICHHOLD HOLDINGS: Retiree Committee Taps Stahl as Counsel
ROADRUNNER ENTERPRISES: Engages Harris as Real Estate Broker
ROSETTA RESOURCES: S&P Puts Ratings on Watch Pos. Over Noble Deal
SABINE PASS: Amends Q1 Form 10-Q for Additional Information
SAN JUAN RESORT: Has Deal With Banco Popular on Cash Use
SCIENTIFIC GAMES: Files March 31 Quarterly Report
SIMPLY WHEELZ: Resolves Bid for Taylor Ford to Turnover Vehicles
SOLAR POWER: Enters Into Redomicile Merger With Unit
SRP PLAZA: Has Deal With U.S. Bank to Use Cash Collateral
SUMMIT MATERIALS: Moody's Affirms 'B3' Corporate Family Rating
TRACK GROUP: Edison Initiates Analyst Coverage
TRANS ENERGY: Incurs $12.5 Million Net Loss in 2014
TRANSGENOMIC INC: Dolphin Offshore Reports 7% Stake as of April 23
TRIDENT GOLD: OSC Grants Temporary Management Ceased Trade Order
TROCOM CONSTRUCTION: NY City Contractor Enters Bankruptcy
TROCOM CONSTRUCTION: Proposes to Use $427,000 of Cash Collateral
TROCOM CONSTRUCTION: Wants 30-Day Extension for Schedules
ULTIMATE NUTRITION: Has Until July 15 to Decide on Unexired Leases
ULTIMATE NUTRITION: LaQuerre Michaud Approved as Accountants
UNI-PIXEL INC: Posts $5.68 Million Net Loss in First Quarter
VAIL RESORTS: S&P Withdraws Ratings at Issuer's Request
VERMILLION INC: Incurs $4 Million Net Loss in First Quarter
VIGGLE INC: Reports $20.6 Million Net Loss in Third Quarter
WALTER ENERGY: Continues Discussions with Debtholders
WARNER MUSIC: Posts $18 Million Net Income in Second Quarter
WPCS INTERNATIONAL: Issues 96,831 Common Shares
ZOGENIX INC: Incurs $22.9 Million Net Loss in First Quarter
[^] Recent Small-Dollar & Individual Chapter 11 Filings
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22ND CENTURY: Incurs $4.11 Million Net Loss in First Quarter
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22nd Century Group, Inc. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $4.11 million on $616,000 of revenue from sale of products for
the three months ended March 31, 2015, compared with a net loss of
$5.31 million on $448,000 of revenue from sale of products for the
same period in 2014.
As of March 31, 2015, the Company had $18.3 million in total
assets, $6.39 million in total liabilities and $11.9 million in
total shareholders' equity.
As of March 31, 2015, the Company had positive working capital of
approximately $4.67 million compared to positive working capital of
approximately $8.03 million at Dec. 31, 2014, a decrease of
approximately $3.36 million. The decrease in the Company's working
capital position was mainly a result of the cash used in the
Company's operating activities.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/uC8gW7
About 22nd Century
Clarence, New York-based 22nd Century Group, Inc., through its
wholly-owned subsidiary, 22nd Century Ltd, is a plant
biotechnology company using technology that allows for the level
of nicotine and other nicotinic alkaloids (e.g., nornicotine,
anatabine and anabasine) in tobacco plants to be decreased or
increased through genetic engineering and plant breeding.
22nd Century reported a net loss of $15.6 million on $529,000 of
revenue for the year ended Dec. 31, 2014, compared to a net loss of
$26.2 million on $7.27 million of revenue during the prior year.
ACCIPITER COMMUNICATIONS: Cash Use Hearing Continued Until July 7
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The U.S. Bankruptcy Court, according to minutes of hearing held on
April 28, 2015, continued until July 7, 2015, at 9:30 a.m., the
hearing to consider Accipiter Communications, Inc.'s motion for
continued use of use cash collateral.
The Debtor has sought approval to use cash collateral to construct
and operate a telecommunications network in rural areas located in
certain portions of Maricopa and Yavapai Counties.
The Debtor and the United States, on behalf of the Rural Utilities
Service of the U.S. Department of Agriculture, has submitted
stipulated orders authorizing the use of cash collateral.
As of the Petition Date, the Debtor was obligated and indebted to
RUS in an aggregate principal amount totaling $20,755,214, plus
accrued interest. As adequate protection for any diminution in the
value of RUS's collateral, the Debtor will grant the lender:
a. Interest on the prepetition indebtedness continues to accrue
at the rate provided under the Prepetition Credit Agreement, and
the Debtor must pay on a current and ongoing basis, as it comes due
after the Petition Date, all such interest.
b. The lender is granted replacement liens in all postpetition
collateral to secure any postpetition diminution of the cash
collateral, subject to carve out on certain expenses.
c. The Debtor may not use cash collateral with respect to any
payments to the Debtor's directors, officers, employees, and agents
in connection with any retention agreements, retention bonuses,
stay bonuses, or severance agreements unless they have been
disclosed to the Prepetition Lender, provided for in the budget,
and approved by the Court.
About Accipiter Communications
Accipiter Communications, Inc., a Phoenix-based company that
provides telecommunications services to unserved or underserved,
mostly rurally-situated residences and businesses in central
Arizona, filed a Chapter 11 bankruptcy petition (Bankr. D. Ariz.
Case No. 14-04372) in its hometown on March 28, 2014.
Accipiter provides telecommunications services to 1,409
residential subscribers and 231 business subscribers, including an
elementary school, an enforcement agency, a fire station, two
municipal water supply facilities, and a bank.
The Debtor is able to provide telecommunications services to rural
customers only by participating in two federal programs: revenue
subsidies from the federal Universal Service Fund, which is
administered under the authority of the Federal Communications
Commission, and capital debt financing provided under a rural
telecommunications loan program administered by the Rural
Utilities Service, an agency of the U.S. Department of
Agriculture.
As of the Petition Date, the Debtor owed $20.8 million in
aggregate principal to the RUS. The Debtor believes there is
approximately $414,000 in prepetition general unsecured claims
held by trade vendors or other parties against the Debtor. The
Debtor is a privately held company, with 55.4% of the stock held
by Lewis van Amerongen. In its schedules, the Debtor listed
$31.3 million in assets and $21.6 million in liabilities.
The bankruptcy case is assigned to Judge George B. Nielsen Jr.
The Debtor has tapped Perkins Coie LLP as counsel.
Ilene J. Lashinsky, U.S. Trustee for Region 14, appointed these
three creditors to serve in the Official Committee of Unsecured
Creditors. The Committee retained Stinson Leonard Street LLP as
counsel.
The Debtor filed its proposed Plan of Reorganization on Aug. 27,
2014.
ALEXZA PHARMACEUTICALS: Posts $404,000 Net Loss in 1st Quarter
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Alexza Pharmaceuticals, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $404,000 on $705,000 of total revenue for the three
months ended March 31, 2015, compared to a net loss of $10.73
million on $2.16 million of total revenue for the same period a
year ago.
As of March 31, 2015, the Company had $43.17 million in total
assets, $94.83 million in total liabilities and a $51.66 million
total stockholders' deficit.
"We have concluded that due to our need for additional capital, and
the uncertainties surrounding our ability to raise such funding,
substantial doubt exists as to our ability to continue as a going
concern," the Company states in the report.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/t9WqCt
About Alexza
Mountain View, California-based Alexza Pharmaceuticals, Inc., was
incorporated in the state of Delaware on Dec. 19, 2000, as FaxMed,
Inc. In June 2001, the Company changed its name to Alexza
Corporation and in December 2001 became Alexza Molecular Delivery
Corporation. In July 2005, the Company changed its name to Alexza
Pharmaceuticals, Inc.
The Company is a pharmaceutical development company focused on the
research, development, and commercialization of novel proprietary
products for the acute treatment of central nervous system
conditions.
Alexza Pharmaceuticals reported a net loss of $36.7 million in 2014
compared to a net loss of $39.6 million in 2013.
Ernst & Young LLP, in Redwood City, California, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2014, citing that the Company has recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
ALTEGRITY INC: Committee Addresses UST Comments on Capstone Hiring
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Justin R. Alberto, co-counsel to the Statutory Committee of
Unsecured Creditors in the Chapter 11 cases of Altegrity, Inc., et
al., certified that the April 20 objection deadline in relation to
the motion to retain Capstone Advisory Group, LLC and Capstone
Valuation Services, LLC, as financial advisor has passed and no
formal responses to the application were filed.
The Committee, however, received informal comments from the Office
of the U.S. Trustee, the Debtors and the Ad Hoc Group of
Unaffiliated Second and Third Lien Bondholders. Following
discussions with the parties, the Committee has reached agreements
with the U.S. Trustee, Debtors and the Ad Hoc Group on certain
changes to the engagement letter and original proposed order. A
copy of the revised proposed order is available for free at
http://bankrupt.com/misc/Altegrity_417_cert_Capstone.pdf
As reported in the Troubled Company Reporter on April 27, 2015, the
Committee has tapped Capstone to:
a. review any critical vendor agreements that are entered into
between the Debtors and a stipulated critical vendor;
b. advise and assist the Committee with respect to any
debtor-in-possession financing arrangements and use of cash; and
c. review cash disbursements on an on-going basis for the
period
subsequent to the commencement of the cases.
Capstone will charge a fixed monthly fee plus seek reimbursement
for its out-of-pocket expenses. The fixed monthly fee will be
earned as:
a. Feb. 25, 2015, until February 28, -- $14,285;
b. March 1, until March 31 -- $100,000;
c. April 1,until April 30 -- $100,000;
d. Thereafter -- $75,000/month.
Upon confirmation, Capstone will also earn and subsequently be paid
a success fee of 1% of the gross recovery value allocated to the
general unsecured class.
The hourly rates for Capstone for the period until Dec. 31, are:
Executive Directors $625 - $895
Managing Directors $475 - $640
Directors $425 - $475
Consultants $250 - $375
Support Staff $125 - $325
The rates for the Capstone professionals anticipated to be assigned
to the engagement until Dec. 31, and their hourly rates are:
Chris Kearns $895
Duncan Pickett $725
Bruce Bingham $820
Jeffrey Dunn $640
Will Russo $625
Salman Tajuddin $510
Chau Hoang $440
Cory Griffin $250
To the best of the Committee's knowledge Capstone is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Altegrity Inc.
Altegrity Inc. provides background investigations for the U.S.
government; employment background and mortgage screening for
commercial customers; technology-driven legal services and
software for data management; and investigative, analytic,
consulting, due diligence, and security services. Altegrity is
principally owned by investment funds affiliated with Providence
Equity Partners.
Altegrity Inc. and 37 of its affiliates filed Chapter 11
Bankruptcy petitions (Bankr. D. Del. Lease Case No. 15-10226) on
Feb. 8, 2015.
Jeffrey S. Campbell signed the petitions as president and chief
financial officer. The Debtors disclosed total assets of $1.7
billion and total liabilities of $2.1 billion as of June 30, 2014.
M. Natasha Labovitz, Esq., Jasmine Ball, Esq., and Craig A.
Bruens,Esq., at Debevoise & Plimpton LLP serve as the Debtors'
counsel. Joseph M. Barry, Esq., Ryan M. Bartley, Esq., and Edmon
L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP, act as
the Debtors' Delaware and conflicts counsel. Stephen Goldstein and
Lloyd Sprung, at Evercore Group, LLC, are the Debtors' investment
bankers. Kevin M. McShea and Carrianne J. M. Basler, at
Alixpartners LLP serve as the Debtors' restructuring advisors.
Prime Clerk LLC is the Debtors' claims and noticing agent.
PricewaterhouseCoopers LLP serves as the Debtors' independent
auditors.
The Bankruptcy Court has scheduled for May 5, 2015, the hearing to
consider the approval of the disclosure statement explaining the
Debtor's plan, which proposes to liquidate the US Investigations
Services. Land Line relates that USIS lost key federal background
check contracts.
The U.S. Trustee for Region 3 appointed six creditors to serve on
the official committee of unsecured creditors.
AMERICAN APPAREL: Announces $10 Million At-the-Market Offering
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American Apparel, Inc. has commenced a $10 million "at-the-market"
offering program.
Under the program, the Company may, from time to time and at its
discretion, offer and sell shares of its common stock having an
aggregate gross sales price of up to $10 million through Cowen and
Company, LLC, which will serve as sales agent. The Company intends
to use the net proceeds generated through the program for working
capital and general corporate purposes.
Sales of common stock under the program will be made directly on
the NYSE MKT, on any other existing trading market for the
Company's common stock or to or through a market maker. In
addition, with the Company's prior written approval, sales may be
made in negotiated transactions.
The common stock will be offered under the Company's effective
shelf registration statement (including a prospectus) filed with
the Securities and Exchange Commission. A prospectus supplement
related to the offering has been filed with the Securities and
Exchange Commission. Any offer, solicitation or sale will be made
only by means of the prospectus supplement and the accompanying
prospectus. Current and potential investors should read the
prospectus forming part of the registration statement, and the
prospectus supplement relating to the program and other documents
the company has filed with the Securities and Exchange Commission
for more complete information about the Company and the program.
A copy of the prospectus supplement and accompanying prospectus
relating to these securities may be obtained by contacting Cowen
and Company, LLC, c/o Broadridge Financial Services, 1155 Long
Island Avenue, Edgewood, NY 11717, Attention: Prospectus
Department, via telephone at 631-274-2806 or via facsimile at
631-254-7140.
About American Apparel
American Apparel is a vertically-integrated manufacturer,
distributor, and retailer of branded fashion basic apparel based
in downtown Los Angeles, California. As of Sept. 30, 2014,
American Apparel had approximately 10,000 employees and operated
245 retail stores in 20 countries including the United States and
Canada. American Apparel also operates a global e-commerce site
that serves over 60 countries worldwide at
http://www.americanapparel.com. In addition, American Apparel
operates a leading wholesale business that supplies high quality
T-shirts and other casual wear to distributors and screen
printers.
Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being. Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece. The deal allows the investors to purchase additional
27.4 million shares at the same price.
American Apparel reported a net loss of $68.81 million in 2014, a
net loss of $106.29 million in 2013 and a net loss of $37.27
million in 2012.
As of March 31, 2015, the Company had $271.28 million in total
assets, $415.59 million in total liabilities and a $144.3 million
total stockholders' deficit.
* * *
The TCR reported on Nov. 21, 2013, that Moody's Investors Service
downgraded American Apparel Inc.'s corporate family rating to
Caa2. The clothing retailer's probability of default was also
lowered one level and the outlook is negative.
As reported by the TCR on Sept. 2, 2014, Standard & Poor's Ratings
Services lowered its corporate credit rating on Los Angeles-based
American Apparel Inc. to 'CCC-' from 'CCC'. The outlook is
negative.
AMERICAN APPAREL: Incurs $26.4 Million Net Loss in First Quarter
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American Apparel, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $26.4 million on $124 million of net sales for the three months
ended March 31, 2015, compared to a net loss of $5.46 million on
$137 million of net sales for the same period in 2014.
As of March 31, 2015, the Company had $271 million in total assets,
$416 million in total liabilities, and a $144 million total
stockholders' deficit.
Paula Schneider, chief executive officer, commented, "American
Apparel is an iconic brand with a loyal customer following and
tremendous global brand awareness. The new executive management
team and board of directors is committed to driving shareholder
value and has implemented the initial phase of a multi-year
strategic turnaround plan designed to improve operating and
financial results over the long-term. Key areas of focus under the
plan include infrastructure, operational and financial planning,
expense control, design/product development, retail store
productivity, e-commerce and wholesale optimization, e-commerce
analytics, speed-to-market, and brand building. In the first
quarter, we launched a program to improve the profile of our
inventory by significantly reducing slow-moving merchandise. While
we knew this would have a temporary negative impact on sales and
margins, it should improve store merchandising, working capital and
liquidity going forward. We also launched a merchandising
turnaround plan to start replenishing stores with new styles and
product. Also in the quarter, we began the arduous but vital task
of reorganizing and restructuring a number of critical business
processes, including product development, merchandise planning,
operational and financial planning, inventory management,
procurement, and demand planning. We are dedicated to this process
and in the early stages of the strategic turnaround that will
require time."
As of March 31, 2015, the Company had $20.9 million in cash, $35.1
million outstanding on its asset-backed revolving credit facility
and $11.2 million of availability for additional borrowing under
the facility. As of May 6, 2015, the Company had $5.2 million of
availability for additional borrowings under the facility.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/BViW85
About American Apparel
American Apparel is a vertically-integrated manufacturer,
distributor, and retailer of branded fashion basic apparel based
in downtown Los Angeles, California. As of Sept. 30, 2014,
American Apparel had approximately 10,000 employees and operated
245 retail stores in 20 countries including the United States and
Canada. American Apparel also operates a global e-commerce site
that serves over 60 countries worldwide at
http://www.americanapparel.com. In addition, American Apparel
operates a leading wholesale business that supplies high quality
T-shirts and other casual wear to distributors and screen
printers.
Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being. Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece. The deal allows the investors to purchase additional
27.4 million shares at the same price.
American Apparel reported a net loss of $68.81 million in 2014, a
net loss of $106.29 million in 2013 and a net loss of $37.27
million in 2012.
* * *
The TCR reported on Nov. 21, 2013, that Moody's Investors Service
downgraded American Apparel Inc.'s corporate family rating to
Caa2. The clothing retailer's probability of default was also
lowered one level and the outlook is negative.
As reported by the TCR on Sept. 2, 2014, Standard & Poor's Ratings
Services lowered its corporate credit rating on Los Angeles-based
American Apparel Inc. to 'CCC-' from 'CCC'. The outlook is
negative.
AP GAMING: S&P Raises Sr. Secured Issue Level Rating to B+
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Standard & Poor's Ratings Services raised its issue-level rating on
Las Vegas-based gaming equipment supplier AP Gaming Holdings LLC's
subsidiary AP Gaming I LLC's senior secured debt to 'B+' from 'B'
and revised the recovery rating to '2' from '3'. The '2'
recovery rating reflects our expectation for "substantial" (70% to
90%; lower half of the range) recovery for lenders in a payment
default. The higher recovery rating reflects S&P's assessment that
the additional value from the acquisition of gaming equipment
supplier Cadillac Jack Inc. more than offsets the incremental term
loan debt.
The company's senior secured credit facility consists of a $40
million revolver (including $15 million in expected incremental
revolving credit commitments) due 2018, and a $405 million term
loan (including $250 million in expected additional commitments)
due 2020.
AP Gaming plans to use the additional term loan proceeds, along
with proceeds from a $115 million senior secured payment-in-kind
(PIK) note and a $12 million seller note issued by its parent and
capital provided by funds affiliated with Apollo (the company's
ultimate owner), to fund the acquisition of Cadillac Jack and to
pay transaction fees and expenses.
S&P said, "Our 'B' corporate credit rating and stable outlook on AP
Gaming are unchanged. We lowered the rating on AP Gaming to 'B'
upon the announcement that it was acquiring Cadillac Jack because
we expect adjusted debt to EBITDA to weaken and be sustained above
5x. In addition, we expect adjusted funds from operations to debt
to remain in the high-single-digit percent area through 2016. The
acquisition did not change our assessment of AP Gaming's business
risk profile as "weak" given the relatively small scale and scope
of the combined company, compared to competitors such as Scientific
Games or IGT, and its concentration within Class II and Native
American gaming. Nevertheless, the acquisition does provide some
additional geographic diversity, and we expect the combined company
will generate above average EBITDA margins relative to other
companies in the leisure sector.
RECOVERY ANALYSIS
Key analytical factors:
S&P's recovery analysis incorporates the expected additional
financing to complete the Cadillac Jack acquisition. This financing
consists of an incremental $250 million in term loan proceeds, $15
million in incremental revolving credit facility commitments, $115
million in senior secured PIK notes, and a $12 million promissory
note issued at AP Gaming's parent.
S&P said, "Our simulated default scenario contemplates a default in
2018 reflecting a significant decline in cash flow as a result from
the loss of market share to either an existing incumbent operator
or a new competitor that offers better technology or more desirable
games; a significant and prolonged contraction in consumer
spending; and/or a significant slowdown in the construction of new
gaming properties, coupled with one of the other factors.
"We assume a reorganization following the default, using an
emergence EBITDA multiple of 5.5x to value the company. We assume
the revolving credit facility is 85% drawn at the time of
default."
Simulated default assumptions:
Simulated year of default: 2018
EBITDA at emergence: around $62 mil.
EBITDA multiple: 5.5x
Simplified waterfall:
Net enterprise value (after 5% admin. costs): $325 mil.
Secured debt: around $447 mil.
-- Recovery expectations: 70%-90% (lower half of the range)
Note: All debt amounts include six months of prepetition interest.
RATINGS LIST
AP Gaming Holdings Inc.
Corporate Credit Rating B/Stable/--
AP Gaming I LLC
Upgraded; Recovery Rating Revised
To From
$40 million revolver due 2018
Senior Secured B+ B
Recovery Rating 2L 3L
$405 million term loan due 2020 B+ B
Recovery Rating 2L 3L
ARRIS GROUP: Moody's Affirms Ba3 CFR & Rates New Debt Ba3
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Moody's Investors Service affirmed Arris Group Inc.'s Ba3 corporate
family rating and Ba3-PD probability of default rating and affirmed
the Ba3 ratings on its existing first lien debt. Moody's also
assigned a Ba3 rating to the proposed Term Loan A-1 which will be
used to finance, along with stock and cash on hand, Arris's $2.1
billion acquisition of Pace Plc. At closing, it is anticipated that
the corporate family, probability of default and speculative grade
liquidity ratings will be transferred to a new UK based entity
being set up to be a borrower on the new loan and to effect the
acquisition. The outlook is stable.
At closing, the new term loan will share collateral with the
existing first lien debt including a pledge of acquired Pace stock.
At closing, all the loans will all be rated Ba3. Subsequently,
after certain conditions are met, all the loans are anticipated to
receive, and share in a pledge of, certain Pace assets. If the
loans receive a pledge of the Pace assets, there could be upward
pressure on the loan rating. Prior to that time, a portion of
Pace's payables are considered senior to the first lien debt with
regards to Pace's operations. The ratings on the debt instruments
are determined in conjunction with Moody's Loss Given Default
Methodology and reflect the first lien's relative position to other
obligations of the company including its sizable payables.
The affirmation of the Ba3 corporate family rating reflects the
improved market position and solid capital structure the company is
anticipated to have post-closing. Leverage is not expected to be
materially impacted by the transaction. Leverage was approximately
2.6x as of March 31, 2015. The rating also reflects the size and
scope of the transaction and its inherent integration challenges
including the potential loss of revenues from overlapping
customers. In addition, some softness is expected in 2015 as cable
industry consolidation uncertainties dampen near term capital
expenditures. Nevertheless, if the company is successful with the
integration and can realize cost and product synergies, the
transaction could materially improve the company's business and
financial profile over the medium term. The ratings could be raised
if the company is able to successfully integrate the Pace
acquisition and is expected to maintain leverage below 3x through
industry cycles. The ratings could face downward pressure if
revenues and profitability decline and leverage is expected to
remain above 4x for an extended period.
The SGL-1 liquidity ratings reflect the very good liquidity of the
company based on a $250 million revolver ($247 available as of
March 31, 2015), cash and short term investments on hand ($629
million as of March 31, 2015 and expected cash in excess of $600 at
closing) and expected free cash flow generation of well over $300
million over the next year.
Assignments:
Issuer: New Arris (UK)
-- Senior Secured Bank Credit Facility (Local Currency), Assigned
Ba3 (LGD3)
Affirmations:
Issuer: Arris Group, Inc.
-- Corporate Family Rating, Affirmed Ba3
-- Probability of Default Rating, Affirmed Ba3-PD
-- Senior Secured Bank Credit Facilities, Affirmed Ba3 (LGD3)
-- Speculative Grade Liquidity Rating, Affirmed SGL-1
Outlook Actions:
Issuer: Arris Group, Inc.
-- Outlook, Remains Stable
The principal methodology used in these ratings was Global
Communications Equipment Industry published in June 2008. Other
methodologies used include Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada and EMEA published in
June 2009.
ARRIS Group, Inc. is one of the largest providers of equipment to
the broad cable television industry. ARRIS Group had revenues of
$5.3 billion in 2014.
ARRIS GROUP: S&P Affirms BB Rating on Pace Acquisition Plans
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on Suwanee, Ga.-based Arris Group Inc. The outlook is
stable.
U.S. customer premise equipment (CPE) and data communications
solutions provider Arris Group Inc. is acquiring U.K.-based Pace
plc for approximately $2.1 billion funded with a combination of
cash and equity. The company expects to issue an $800 million
delayed draw term loan to fund a portion of the transaction.
S&P said, "At the same time, we affirmed our issue-level ratings on
the company's first-lien credit facilities at 'BB'. The recovery
ratings remain '3', indicating our expectation for meaningful (50%
to 70%; upper end of the range) recovery in the event of a payment
default.
"We also assigned our 'BB' issue-level rating to the company's
proposed $800 million first-lien delayed draw term loan A, with a
recovery rating of '3', indicating our expectation for meaningful
(50% to 70%; upper end of the range) recovery in the event of a
payment default.
"The rating affirmation reflects our view that the acquisition of
Pace will bring improved scale and a broader client base, offset by
modest revenue overlap and reduced, although still substantial,
client concentration," said Standard & Poor's credit analyst Jenny
Chang.
"Our rating also reflects gross leverage increasing to the mid- to
high-2x area from about low-2x at Dec. 31, 2014, pro forma for the
acquisition, excluding potential cost synergies. Over the coming
year, we expect the company to reduce leverage through a
combination of EBITDA growth and debt reduction as it did following
the acquisition of Motorola Home," S&P said.
"The stable outlook reflects our expectation that the company will
be fairly successful in integrating the two comparable businesses
despite moderate near-term revenue loss and softness in cable and
telecommunications companies' capital spending. We also expect
Arris will maintain flat to slightly lower EBITDA margins initially
but that they will improve as the company realizes
some cost savings over the coming two years.
"An upgrade is currently constrained by significant customer
concentration and earnings volatility. Over the longer term, we
could raise the rating if the company achieves consistent revenue
growth and sustained EBITDA margin improvement, or if the company
maintains a financial policy we view as moderate, such that
leverage is sustained below 2x.
"We could lower the rating if the company's business environment
weakens, or if Arris pursues more aggressive financial policies,
including significant debt-financed acquisitions or shareholder
returns, such that leverage exceeds the mid-3x area."
BALDWINSVILLE HOSPITALITY: Case Summary & 20 Top Unsec. Creditors
-----------------------------------------------------------------
Debtor: Baldwinsville Hospitality, LLC
131 Downer Street
Baldwinsville, NY 13027
Case No.: 15-30699
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: May 12, 2015
Court: United States Bankruptcy Court
Northern District of New York (Syracuse)
Debtor's Counsel: Thomas F Turturo, Esq.
TULLY RINCKEY, PLLC
507 Plum Street, Suite 103
Syracuse, NY 13204
Tel: 315-492-4700
Email: tturturo@tullylegal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Piyush Shah, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/nynb15-30699.pdf
BANKRATE INC: S&P Keeps 'B+' Corp Credit Rating on Watch Neg.
-------------------------------------------------------------
Standard & Poor's Ratings Services said it kept all of its ratings,
including the 'B+' corporate credit rating, on North Palm Beach,
Fla.-based Bankrate Inc. on CreditWatch, where S&P placed them with
negative implications on Sept. 14, 2015.
Bankrate announced that it has received the majority noteholder
consent needed to execute on an amendment to the indenture. Under
the proposed amendment, Bankrate will have until June 24, 2015 (or,
if the Second Consent Payment is made, July 14, 2015) to deliver
their audited third-quarter 2014, full-year 2014, and first-quarter
2015 financials.
"We aim to resolve the CreditWatch placement after receiving the
results of the SEC investigation and the company's internal
review," said Standard & Poor's credit analyst Heidi Zhang.
If the conclusion of the SEC investigation and subsequent financial
restatements result in a material impact on the previous financial
statements or significant fines, S&P could lower the ratings
further.
If the SEC investigation is concluded with minimal impact on the
company, S&P could affirm the ratings on the company. On the other
hand, if the investigation goes beyond the June 24, 2015 deadline
to produce audited financial statements outlined in the
supplemental indenture to the senior notes, S&P could also consider
suspending the rating until the audited financial statements can be
provided.
BUILDERS FIRSTSOURCE: Posts $7.07 Million Net Loss in First Quarter
-------------------------------------------------------------------
Builders Firstsource, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $7.07 million on $371 million of sales for the three months
ended March 31, 2015, compared with a net loss of $3.38 million on
$346 million of sales for the same period last year.
As of March 31, 2015, the Company had $625 million in total assets,
$591 million in total liabilities, and $34.0 million in total
stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/2UFJrm
About Builders FirstSource
Headquartered in Dallas, Texas, Builders FirstSource --
http://www.bldr.com/-- is a supplier and manufacturer of
structural and related building products for residential new
construction. The Company operates 56 distribution centers and 56
manufacturing facilities in nine states, principally in the
southern and eastern United States. Manufacturing facilities
include plants that manufacture roof and floor trusses, wall
panels, stairs, aluminum and vinyl windows, custom millwork and
pre-hung doors. Builders FirstSource also distributes windows,
interior and exterior doors, dimensional lumber and lumber sheet
goods, millwork and other building products.
Builders Firstsource reported net income of $18.2 million on $1.60
billion of sales for the year ended Dec. 31, 2014, compared to a
net loss of $42.7 million on $1.48 billion of sales in 2013.
* * *
As reported by the TCR on May 15, 2013, Standard & Poor's Ratings
Services Inc. said it raised its corporate credit rating on
Dallas-based Builders FirstSource to 'B' from 'CCC'. "The upgrade
acknowledges U.S.-based building materials manufacturer and
distributor Builders FirstSource's 'strong' liquidity based on the
company's proposed recapitalization," said Standard & Poor's credit
analyst James Fielding.
In the May 13, 2014, edition of the TCR, Moody's Investors Service
upgraded Builders FirstSource's Corporate Family Rating to 'B3'
from 'Caa1'. The upgrade reflects Moody's expectation that BLDR's
operating performance will continue to benefit from improved
housing construction, repair and remodeling.
CAESARS ENTERTAINMENT: Files March 31 Quarterly Report
------------------------------------------------------
Caesars Entertainment Corporation filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $6.79 billion on $1.25 billion of net revenues for
the three months ended March 31, 2015, compared to a net loss of
$383 million on $2.03 billion of net revenues for the same period a
year ago.
As of March 31, 2015, the Company had $12.5 billion in total
assets, $9.60 billion in total liabilities and $2.93 billion in
total stockholders' equity.
"We are a highly-leveraged company and had $7.2 billion in face
value of debt outstanding as of March 31, 2015, subsequent to the
deconsolidation of CEOC effective January 15, 2015. As a result, a
significant portion of our liquidity needs are for debt service,
including significant interest payments. Our estimated
consolidated debt service obligation for the remainder of 2015 is
$551 million, consisting of $46 million in principal maturities and
$505 million in required interest payments. Our estimated
consolidated debt service obligation for 2016 is $642 million,
consisting of $62 million in principal maturities and $580 million
in required interest payments," the Company states in the report.
CEC is primarily a holding company with no independent operations,
employees, or material debt issuances of its own. CEC has
ownership interests in CEOC, CERP and CGP LLC; however, CEC's
relationship with its main operating subsidiaries does not allow
for the subsidiaries to provide dividends to CEC nor does CEC have
a requirement to fund its subsidiaries' operations.
Going Concern
Caesars Entertainment is a defendant in litigation and other
noteholder disputes relating to certain CEOC transactions dating
back to 2010. The Company said, these matters, if resolved against
it, raise substantial doubt about its ability to continue as a
going concern.
The Company is subject to currently pending or threatened
litigation and demands for payment by certain creditors asserting,
among other things, that CEC is obligated under the former parent
guarantee of certain CEOC defaulted debt. The Litigation pending
against CEOC, and in certain cases against CEC and its other
subsidiaries, has been stayed due to the Chapter 11 bankruptcy
process; however, certain Litigation and the Demands against CEC
are continuing outside of the Chapter 11 bankruptcy process. The
Company believes that the Litigation claims and Demands against CEC
are without merit and intends to defend itself vigorously. At the
present time, Caesars believes it is not probable that a material
loss will result from the outcome of these matters. The Noteholder
Disputes are in their very preliminary stages and discovery has
only recently begun in several of them including the Unsecured Note
Lawsuits.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/lYEt68
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.,
is one of the world's largest casino companies. Caesars casino
resorts operate under the Caesars, Bally's, Flamingo, Grand
Casinos, Hilton and Paris brand names. The Company has its
corporate headquarters in Las Vegas. Harrah's announced its
re-branding to Caesar's in mid-November 2010.
In January 2015, Caesars Entertainment and subsidiary Caesars
Entertainment Operating Company, Inc., announced that holders of
more than 60% of claims in respect of CEOC's 11.25% senior secured
notes due 2017, CEOC's 8.5% senior secured notes due 2020 and
CEOC's 9% senior secured notes due 2020 have signed the Amended and
Restated Restructuring Support and Forbearance Agreement, dated as
of Dec. 31, 2014, among Caesars Entertainment, CEOC and the
Consenting Creditors. As a result, The RSA became effective
pursuant to its terms as of Jan. 9, 2015.
Appaloosa Investment Limited, et al., owed $41 million on account
of 10% second lien notes in the company, filed an involuntary
Chapter 11 bankruptcy petition against CEOC (Bankr. D. Del. Case
No. 15-10047) on Jan. 12, 2015. The bondholders are represented by
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP.
CEOC and 172 other affiliates -- operators of 38 gaming and resort
properties in 14 U.S. states and 5 countries -- filed Chapter 11
bankruptcy petitions (Bank. N.D. Ill. Lead Case No. 15-01145) on
Jan. 15, 2015. CEOC disclosed total assets of $12.3 billion and
total debt of $19.8 billion as of Sept. 30, 2014.
Delaware Bankruptcy Judge Kevin Gross entered a ruling that the
bankruptcy proceedings will proceed in the U.S. Bankruptcy Court
for the Northern District of Illinois.
Kirkland & Ellis serves as the Debtors' counsel. AlixPartners is
the Debtors' restructuring advisors. Prime Clerk LLC acts as the
Debtors' notice and claims agent. Judge Benjamin Goldgar presides
over the cases.
The U.S. Trustee has appointed seven noteholders to serve in the
Official Committee of Second Priority Noteholders and nine members
to serve in the Official Unsecured Creditors' Committee.
The U.S. Trustee appointed Richard S. Davis as Chapter 11
examiner.
* * *
The Troubled Company Reporter, on April 27, 2015, reported that
Fitch Ratings has affirmed and withdrawn the Issuer Default Ratings
(IDR) and issue ratings of Caesars Entertainment Operating Company
(CEOC). These actions follow CEOC's Chapter 11 filing on Jan. 15,
2015. Accordingly, Fitch will no longer provide ratings or
analytical coverage for CEOC.
In addition, Fitch has affirmed the IDR and issue rating of
Chester Downs and Marina LLC (Chester Downs) and the ratings have
been simultaneously withdrawn for business reasons.
CANBRIAM ENERGY: S&P Raises Sr. Unsecured Debt to 'B-'
------------------------------------------------------
Standard & Poor's Ratings Services raised its issue-level rating on
Calgary, Alta.-based Canbriam Energy Inc.'s senior unsecured notes
due 2019 to 'B-' from 'CCC+'. At the same time, Standard & Poor's
revised its recovery rating on the debt to '4' from '5'. The 'B-'
corporate credit rating and stable outlook on Canbriam are
unchanged.
S&P said, "The issue-level upgrade reflects our view that
Canbriam's senior unsecured noteholders could expect average
(30%-50%; lower end of scale) recovery in our default scenario.
"The increase in the company's year-end 2014 proven reserves has
bolstered recovery prospects for its unsecured lenders," said
Standard & Poor's credit analyst Aniki Saha-Yannopoulos.
The ratings on Canbriam reflect Standard & Poor's assessment of the
company's small gas-focused reserves and production base, regional
focus in the Altares development area in the Montney play in
British Columbia, significant negative free cash flow while the
company executes its growth strategy, and weak credit measures. "We
believe offsetting these weaknesses are Canbriam's competitive
full-cycle cost profile and our expectation of increasing
production, which will increase cash flow as the company's
production rises with a 20% weight toward natural gas liquids
(NGLs) and condensate."
Canbriam is an exploration and production company focused on
unconventional natural gas and liquids (condensate and NGLs)
production from the Altares development area in the Montney play in
British Columbia.
The stable outlook reflects S&P's view Canbriam's production growth
trajectory, although positive, is weaker than S&P had forecast,
limiting the company's cash flow. However, due to management's
ability to reduce capital expenditures, S&P projects Canbriam to
keep its debt-to-EBITDA below 4x in 2015.
"We could lower the ratings if we expect the company's liquidity to
be constrained significantly, for example due to a borrowing base
reduction, such that it hampers ongoing production. We could also
lower the ratings if funds from operations (FFO)-to-debt falls
below 10%, which could happen if Canbriam's production and cash
flow are significantly lower than forecast.
"We might consider a positive action if we expect the company to
increase its production level in line with its other 'B' rated
peers while improving its FFO-to-debt above 30%, which we view as
highly unlikely with current prices. We might also consider a
positive action if Canbriam demonstrates less reliance on its
financial sponsors."
CHICAGO, IL: Moody's Cuts $8.1BB GO Debt Rating to Ba1
------------------------------------------------------
Moody's Investors Service downgraded to Ba1 from Baa2 the rating on
the City of Chicago, IL's $8.1 billion of outstanding general
obligation (GO) debt; $542 million of outstanding sales tax revenue
debt; and $268 million of outstanding and authorized motor fuel tax
revenue debt.
Moody's have also downgraded the following ratings on debt secured
by net revenues of Chicago's water and sewer enterprises: to Baa1
from A2 on $38 million of outstanding senior lien water revenue
bonds; to Baa2 from A3 on $2.3 billion of outstanding second lien
water revenue bonds; to Baa2 from A3 on $35 million of outstanding
senior lien sewer revenue bonds; and to Baa3 from Baa1 on $1.5
billion of outstanding second lien sewer revenue bonds.
Moody's have also downgraded to Ba2 from Baa3 the rating on $6
million of outstanding MetraMarket Certificates of Participation
(COPs), Series 2010A, and to Ba3 from Ba1 the rating on $3 million
of outstanding Fullerton/Milwaukee COPs, Series 2011A.
Finally, Moody's have affirmed the Speculative Grade (SG) short
term rating on $112 million of Chicago's outstanding Sales Tax
Revenue Refunding Bonds, Series 2002.
The outlook on all long term ratings remains negative.
The Ba1 rating on Chicago's GO debt incorporates expected growth in
the city's highly elevated unfunded pension liabilities. Based on
the Illinois Supreme Court's May 8 overturning of the statute that
governs the State of Illinois' (A3 negative) pensions, Moody's
believe that the city's options for curbing growth in its own
unfunded pension liabilities have narrowed considerably. Whether or
not the current statutes that govern Chicago's pension plans stand,
Moody's expect the costs of servicing Chicago's unfunded
liabilities will grow, placing significant strain on the city's
financial operations absent commensurate growth in revenue and/or
reductions in other expenditures. The magnitude of the budget
adjustments that will be required of the city are significant.
Furthermore, Chicago's tax base is highly leveraged by the debt and
unfunded pension obligations of the city, as well as those of
overlapping governments. Balanced against the city's many credit
challenges are several attributes, the greatest of which is the
city's broad legal authority to tap into its large and diverse tax
base for increased revenue.
The Ba1 rating on Chicago's sales tax and motor fuel tax debt
reflects the absence of legal segregation of pledged revenue from
the general operations of the city. This lack of separation caps
the ratings at the city's GO rating, despite sound maximum annual
debt service (MADS) coverage provided by pledged revenue.
The Baa1 rating on Chicago's senior lien water revenue bonds
reflects the water enterprise's large and diverse service area that
extends well beyond city boundaries; the Chicago City Council's
unlimited rate setting authority; and sound debt service coverage.
These credit attributes are balanced against challenges including
an elevated debt ratio and the water system's status as an
enterprise of the city, a connection which Moody's believe links
the system's credit profile to that of the city's GO. The Baa2
rating on the city's second lien water revenue bonds is based on
the credit characteristics of the senior lien water revenue bonds
and the subordinate lien pledge of net water system revenue. The
Baa2 rating on Chicago's senior lien sewer revenue bonds reflects
similar credit characteristics as the senior lien water revenue
bonds and also incorporates the sewer system's relatively smaller
service area, the boundaries of which are conterminous with those
of the city. The Baa3 rating on the city's second lien sewer
revenue bonds is based on the credit characteristics of the senior
lien sewer revenue bonds and the subordinate pledge of net sewer
system revenue.
The Ba2 rating on the MetraMarket COPs, Series 2010A, reflects the
tax increment financing (TIF) district's moderate equalized
assessed valuations (EAV) and sound debt service coverage provided
by pledged revenue. The Ba3 rating on the Fullerton/Milwaukee COPs,
Series 2011A, reflects the TIF district's small size, negative
trend in incremental EAV growth, and the COPs' subordinate lien on
pledged TIF revenue, which is first used to pay debt service on
certain series of the city's GO debt. The ratings on both series of
COPs incorporate the relationship of the TIFs with the city's GO
credit profile.
The SG short term rating on the Sales Tax Revenue Refunding Bonds,
Series 2002, is based on the credit fundamentals inherent in the
city's Ba1 long term sales tax rating and the conditional liquidity
support associated with the bonds.
Moody's negative outlook reflects its expectation that Chicago's
credit challenges will continue, both in the near term and in the
long term. Immediate credit challenges include potential draws on
liquidity associated with rating triggers embedded in the city's
letters of credit (LOCs), standby bond purchase agreement (SBPA),
lines of credit, direct bank loans, and swaps. The current rating
actions give the counterparties of these transactions the option to
immediately demand up to $2.2 billion in accelerated principal and
accrued interest and associated termination fees. Of this amount,
the GO and sales tax revenue rating actions trigger $1.7 billion of
potential payments; the second lien water revenue rating action
triggers $99 million of potential payments; and the second lien
sewer revenue rating action triggers $355 million of potential
payments.
The negative outlook also reflects Moody's expectation that
Chicago's credit quality will weaken as unfunded liabilities of the
Municipal, Laborer, Police, and Fire pension plans grow and exert
increased pressure on the city's operating budget. In the near
term, Chicago's administration must comply with a 179% contribution
increase to its Police and Fire pension plans in 2016.
Developments involving the Municipal and Laborer plans present
longer term risks to the city's credit profile. In Moody's opinion,
the Illinois Supreme Court's May 8 ruling raises the risk that the
statute governing Chicago's Municipal and Laborer pension plans
will eventually be overturned. If so, the city's obligation to fund
the Municipal and Laborer plans would likely revert to that which
existed before the statute took effect in January 2015. Under the
prior funding requirements, the city's pension contributions were
well below the plans' actuarial requirements. Therefore, if the
Municipal and Laborer statute is overturned, and no other
adjustments are made to plan revenues and/or expenditures, Moody's
believe the plans will continue to extinguish assets to pay
annuitants. As the plans move toward insolvency, the city's credit
standing will continue to deteriorate, given Moody's view that the
state may eventually implement legislation forcing Chicago to pay
annuitants directly. Annuitant payments would materially exceed
current employer contribution levels. In Moody's view, Chicago's
ability and willingness to fund annuitant payments, should they be
required of the city, is uncertain.
What could make the ratings go up (or revise the outlook to
stable):
- City or state actions that halt the growth of the city's
unfunded pension liabilities
- Revenue growth and/or reductions in other operating
expenditures that enable the city to accommodate increased
pension costs into annual operating budgets
- Demonstrated legal separation of pledged revenue from the
city's general operations (sales tax and motor fuel tax
ratings)
What could make the ratings go down:
- Determination by a court of law that the current statute
governing the city's Municipal and Laborer plans is
unconstitutional
- Continued growth in the debt and/or unfunded pension
liabilities of the city and/or overlapping governments
- Narrowing of the city's fund balances and liquidity
The City of Chicago, with a 2010 US Census population of 2.7
million, is the largest city in the State of Illinois and the third
most populous city in the US. Chicago's water enterprise serves an
estimated population of 5.3 million in northeast Illinois
consisting of residents of the city as well as 125 suburban
communities. Chicago's sewer enterprise serves 2.7 million city
residents.
Chicago's GO bonds are secured by a pledge to levy a tax unlimited
as to rate and amount to pay debt service. The city's outstanding
CP bank bonds are secured by the city's GO full faith and credit
pledge but do not benefit from a dedicated levy.
Chicago's sales tax revenue bonds are secured by a senior lien
pledge on both receipts of the city's local home rule sales tax
revenue and the city's share of state sales tax collections.
Chicago's motor fuel tax revenue bonds are secured by a senior lien
pledge on 75% of the city's annual allocation of state motor fuel
taxes as well as additional revenues pledged by the city that
primarily consist of dock licensing fees collected from tour boats
operating on the Chicago River.
Chicago's senior lien water revenue bonds are secured by a senior
lien on the net revenue of the city's water enterprise. Chicago's
second lien water revenue bonds are secured by a second lien on the
net revenue of the city's water enterprise. Chicago's senior lien
sewer revenue bonds are secured by a senior lien on the net revenue
of the city's sewer enterprise. Chicago's second lien sewer revenue
bonds are secured by a second lien on the net revenue of the city's
sewer enterprise.
The MetraMarket COPs, Series 2010A, and the Fullerton/Milwaukee
COPs, Series 2011A, are secured by a pledge of payments made by the
city on developers' notes to finance redevelopment in the
respective TIF districts. Neither series of COPs is an obligation
of the City of Chicago. The city's payments on the respective
development notes have been assigned to the trustees by the
developers as security on the COPs.
The principal methodology used in the general obligation rating was
US Local Government General Obligation Debt published in January
2014. The principal methodology used in the special tax rating was
US Public Finance Special Tax Methodology published in January
2014. The principal methodology used in the water and sewer revenue
debt rating was US Municipal Utility Revenue Debt published in
December 2014. The methodologies used in the short-term rating were
Variable Rate Instruments Supported by Conditional Liquidity
Facilities published in March 2015 and US Public Finance Special
Tax Methodology published in January 2014.
The tax increment revenue COPs ratings were reviewed by evaluating
factors believed to be relevant to the credit profile of the issuer
such as i) the business risk and competitive position of the issuer
versus others within its industry or sector, ii) the capital
structure and financial risk of the issuer, iii) the projected
performance of the issuer over the near to intermediate term, iv)
the issuer's history of achieving consistent operating performance
and meeting budget or financial plan goals, v) the nature of the
dedicated revenue stream pledged to the bonds, vi) the debt service
coverage provided by such revenue stream, vii) the legal structure
that documents the revenue stream and the source of payment, and
viii) the issuer's management and governance structure related to
payment.
COLLAVINO CONSTRUCTION: Files Schedule F Non-Priority Claims
------------------------------------------------------------
Collavino Construction Company Inc. filed with the U.S. Bankruptcy
Court for the Southern District of New York its schedule F -
creditors holding unsecured non-priority claims. A full-text copy
of the Debtor's schedule F is available for free at
http://is.gd/AnOUPh
About Collavino Construction
Family-owned The Collavino Group owns entities that operate in
various sectors of the construction industry in the New York-New
Jersey metropolitan area, Canada, and the Detroit metropolitan
area. With over half a century's experience in the construction
industry, the Collavino Group performs contracts in both the
public and private sectors as a general contractor, design-build
consultant, construction manager and prime subcontractor for
cast-in-place and precast concrete works.
Pursuant to World Trade Center Contract No. WTC-1001.04-1,
Collavino Construction Company Limited ("CCCL") contracted with
The Port Authority of New York and New Jersey on the public
construction project known as the Reconstruction of One World
Trade Center - Freedom Tower. Collavino Construction Company Inc.
("CCCI"), a subsidiary of CCCL, provides all the necessary labor
to CCCL in connection with the performance of work on the WTC
Project.
As a result of, among other things, delays to the progress of work
caused by conditions beyond the control of CCCL and CCCI, and the
Port Authority's unilateral election to terminate the contract
with CCCL for convenience, effective as of Jan. 18, 2013, CCCL
incurred a multi-million dollar damage claim against the Port
Authority on the WTC Project.
CCCI sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
14-12908) in Manhattan on Oct. 17, 2014, estimating $1 million to
$10 million in assets and debt. CCCL sought Chapter 11 protection
(Bankr. S.D.N.Y. Case No. 15-10344) on Feb. 18, 2015.
Collavino Construction Company Limited disclosed $88,418,514 in
assets and $6,274,097 in liabilities as of the Chapter 11 filing.
Judge Shelley C. Chapman presides over the cases. The Court has
entered an order approving joint administration of the two cases.
The Debtors have tapped Cullen and Dykman LLP as counsel, and
Peckar & Abramson, P.C., as special litigation counsel.
CCCI obtained an order extending by 90 days (a) the exclusive
period during which only the Debtor may file a plan through and
including May 15, 2015, and (b) the exclusive period to solicit
acceptances of a Chapter 11 plan for the Debtor through and
including July 14, 2015.
CROSBY NATIONAL: Wins Interim Authority to Use Cash Collateral
--------------------------------------------------------------
Bankruptcy Judge Russell F. Nelms granted the request of The Crosby
National Golf Club LLC to use cash collateral and provide partial
adequate protection.
The Debtor, in its motion, explained that it needs to use cash
collateral, which consists of proceeds from the Debtor's real
property and improvements. Further, the Debtor has urgent needs for
authority to use cash collateral to continue operations, administer
this bankruptcy case, and preserve the value of its business. It
needs the funds to pay payroll, utilities, maintenance and
janitorial services for the golf course and club, and other
ordinary operating expenses necessary to maximize the value of the
estate, and to administer the present case in an orderly manner.
The Debtor is without sufficient funds, other than cash collateral.
In the absence of immediate authority to use cash collateral, the
Debtor's ability to reorganize and preserve the value of its assets
will be immediately and irreparably jeopardized.
The Debtor is a borrower under a Loan Agreement dated October 14,
2014 with Texas Capital Bank, National Association and the related
Deed of Trust, Security Agreement Financing Statement, and
Assignment of Rents purportedly granting Texas Capital a security
interest in the real property and improvements of the Debtor,
including proceeds from such real property and improvements. Texas
Capital asserts an outstanding principal balance on the Note of
approximately $3,100,000.
The Debtor expects Texas Capital to assert that its lien against
the proceeds from the real property and improvements results in all
income and proceeds in the Debtor's possession constituting the
cash collateral of Texas Capital within the meaning of Section
363(a) of the Bankruptcy Code.
As adequate protection the Debtor proposes to provide Texas Capital
with valid and automatically perfected first priority replacement
liens and security interests pursuant to 11 U.S.C. Sec. 361(2), in
the Debtor's assets to the same extent, validity, and priority of
Texas Capital's pre-petition liens on and security interests in the
Prepetition Collateral. In addition, the Debtor proposes to only
use the purported Cash Collateral in accordance with the attached
budget, to maintain insurance on the Prepetition Collateral to the
same extent as existed prepetition, and to grant Texas Capital a
superpriority administrative expense claim to the extent there is a
failure of adequate protection.
Crosby HOA Objects
An objection to the request was filed by The Crosby Estate at
Rancho Santa Fe Master Association (Crosby HOA), a creditor and
party in interest in the present case. It argues that the Crosby
HOA did not object to the Debtor's emergency use of cash collateral
per se. It is questionable why the Debtor needs to provide any
adequate protection at all to its lender to secure any diminution
in value that might be occasioned by the Debtor's use. Any further
adequate protection represented by a replacement lien should not be
granted in all assets. It should be limited to the same types of
property to which the Bank's lien presently attaches -- a matter
not disclosed in detail in the Motion. In addition, the proposed
budget is in need of clarification. It should provide more detail
in order for the Court and parties in interest to determine the
appropriateness of the Budget items, particularly on an emergency
basis. Approval of the Motion or any budget item should not be
deemed approval of payment of any item that may otherwise require
separate approval of the Court. The Debtor should disclose its
current cash position and advise the Court how it anticipates the
shortfall will be covered. Finally, the Debtor should not be
allowed to remain in Chapter 11 for any prolonged period if it is
consistently operating at a loss on a post-petition basis.
The Crosby HOA has sued the Golf Course in an effort to control
gate access to the Golf Club and control the Golf Club's ability to
host and generate revenue from private functions.
The Debtor has indicated that the lawsuit and the related actions
by the Crosby HOA have reduced the Golf Club's revenue from private
functions, negatively impacted membership retention and sales, and
fractured the Golf Club's membership, and in the last two and a
half years, the Debtor has incurred more than $1.5 million in legal
costs for this and other membership litigation.
Interim Court Order Issued
The Bankruptcy Court on April 30 signed on an "Agreed Interim Order
Granting Use Of Cash Collateral And Providing Partial Adequate
Protection". Unless otherwise agreed to in writing by Texas
Capital, the Debtor's right to use Cash Collateral will expire on
the earliest to occur of: (a) 11:59 p.m. Central time on May 30,
2015, (b) the Final Hearing Date, or (c) the occurrence of an Event
of Default.
The Debtor, on behalf of itself and as representatives of its
bankruptcy estate, or any other party who otherwise has standing,
will have 60 days from entry of the Interim Order to file and serve
on Texas Capital any challenge to the validity, priority,
perfection and extent (but not the amount) of any of Texas
Capital's liens and security interests, or any claims to avoid any
pre-petition exercise or enforcement of Texas Capital's lien
rights. If the United States Trustee appoints an official committee
of unsecured creditors in these cases, such Committee shall have 90
days from its appointment within which to file any such challenge
to the validity, priority, perfection or extent of Texas Capital's
security interest and liens, or any claims to avoid any
pre-petition exercise or enforcement of Texas Capital's lien
rights. If no such challenge is timely filed by either the Debtor,
the Committee, if applicable, or another party in interest who
otherwise has the standing to assert such a challenge, the Debtor,
its estate and/or the Committee, respectively, shall be prohibited
and forever barred from challenging the validity, priority,
perfection and extent (but not the amount) of Texas Capital's liens
and security interests.
The Court is slated to hold a final hearing on the motion on May
15, 2015 at 9:30 a.m.
The Crosby National Golf Club, LLC is represented by:
Hudson M. Jobe, Esq.
Timothy A. York, Esq.
QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER, P.C.
2001 Bryan Street, Suite 1800
Dallas, TX 75201
Tel: (214) 871-2100
Fax: (214) 871-2111
Email: hjobe@qslwm.com
tyork@qwslm.com
Texas Capital Bank is represented by:
Matthew T. Ferris, Esq.
WINSTEAD PC
500 Winstead Building
2728 N. Harwood Street
Dallas, TX 75201
Tel: 214-745-5170
Fax: 214-745-5390
Email: mferris@winstead.com
Crosby Estate at Ranch Santa Fe Master Association is represented
by:
Jay H. Ong, Esq.
Joe J. Wielebinski, Esq.
Thomas D. Berghman, Esq.
Munsch Hardt Kopf & Harr, PC
Frost Bank Tower 401 Congress Avenue, Suite 3050
Austin, TX 78701-4071
Tel: 512-391-6124
Fax: 512-226-7105
Email: jong@munsch.com
jwielebinski@munsch.com
tberghman@munsch.com
About The Crosby National Golf Club, LLC
The Crosby National Golf Club, LLC, commenced a Chapter 11
bankruptcy case (Bankr. N.D. Tex. Case No. 15-41545) in Ft. Worth,
Texas, on April 16, 2015, without stating a reason. The Debtor
estimated $10 million to $50 million in assets and debt. The case
is assigned to Judge Russell F. Nelms.
The Debtor owns and operates the Crosby National Golf Club which is
located within the Crosby Estates at Rancho Santa Fe. The Golf Club
has been continuously operated as a for-profit, private
eighteen-hole golf course and has been known at all times as the
Crosby National Golf Club. It is a California limited liability
company and its managing member is Escalante - Crosby National
L.P., a Colorado limited partnership.
The Debtor is represented by Hudson M. Jobe, Esq., and Timothy A.
York, Esq., at Quilling, Selander, Lownds, Winslett & Moser, P.C.
in Dallas, Texas.
The Crosby Estate at Rancho Santa Fe Master Association (The Crosby
HOA) is the master association for the gated residential community
and development located in San Diego County including the Debtor's
golf club, commonly known as The Crosby National Golf Club. The
Debtor and the Crosby HOA have been engaged in disputes and
resulting litigation pending in the Superior Court, State of
California, County of San Diego, relating to the Debtor's
operations of the Club and various rights and obligations of the
parties under the Development documents and related agreements. It
is represented in the Debtor's case by Joe J. Wielenbinski, Esq.,
Jay H. Ong, Esq. and Thomas D. Berghman, Esq. at Munsch Hardt Kopf
& Harr, P.C. in Dallas, Texas.
Texas Capital holds a valid, perfected, secured Claim against the
Debtor. A minimum aggregate amount of approximately $3.1 million is
owed on the Texas Capital Claim. It is represented by Matthew T.
Ferris, Esq. at Winstead PC in Dallas, Texas.
CUI GLOBAL: Posts $4.07 Million Net Loss in First Quarter
---------------------------------------------------------
CUI Global, Inc. filed with the Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a consolidated net
loss of $4.07 million on $16.85 million of total revenue for the
three months ended March 31, 2015, compared to a consolidated net
loss of $488,000 on $16.89 million of total revenue for the same
period a year ago.
As of March 31, 2015, the Company had $91.8 million in total
assets, $30.7 million in total liabilities and $61.1 million in
total stockholders' equity.
As of March 31, 2015, CUI Global held Cash and cash equivalents of
$9.6 million and investments of $5.5 million. Operations,
acquisitions, investments, patents, equipment, land and buildings
have been funded through cash and cash equivalent and matured short
term investments on hand.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/OVFLFQ
About CUI Global
Tualatin, Ore.-based CUI Global, Inc., formerly known as Waytronx,
Inc., is a platform company dedicated to maximizing shareholder
value through the acquisition, development and commercialization
of new, innovative technologies.
CUI Global reported a consolidated net loss of $2.80 million in
2014, a consolidated net loss of $943,000 in 2013 and a
consolidated net loss of $2.52 million in 2012.
DTZ U.S. BORROWER: Moody's Affirms B1 Rating on 1st Lien Term Loans
-------------------------------------------------------------------
Moody's Investors Service affirmed DTZ's ratings (corporate family
rating at B2; first lien term loans and first-lien revolver at B1;
second lien term loan at B3) and revised the outlook to negative
from stable. The negative outlook reflects the potential for
increased financial leverage, as well as integration risks
associated with the property services firm's announced plans to
merge with Cushman & Wakefield (C&W).
The following ratings were affirmed with a negative outlook:
-- DTZ UK Guarantor Limited - corporate family rating at B2
-- DTZ U.S. Borrower, LLC co-issuer with DTZ Aus Holdco Pty
Limited - first lien term loans at B1; first lien revolver
at B1; second lien term loan at B3
Moody's notes that DTZ's planned merger with Cushman & Wakefield is
a large transaction that carries substantial integration risk,
particularly given that DTZ is still digesting its recent
acquisition of Cassidy Turley. DTZ will be challenged with meshing
the two firms' corporate cultures and retention of employees who
are key to driving its services-based businesses forward. Brett
White, Executive Chairman of DTZ, will be CEO of the combined
company that will operate under the C&W brand.
Moody's further commented that this is a substantial transaction
that could result in leverage increasing from already high existing
levels. Moody's will be closely monitoring DTZ's plan for accessing
the external capital needed to finance this merger.
Despite these credit concerns, Moody's notes that DTZ and C&W's
merger does offer credit positive aspects as well. DTZ is enhancing
its size and scale, establishing its position as one of the leading
providers of commercial real estate services across a highly
fragmented industry. DTZ's annualized revenues will increase to
more than $5 billion pro forma, up from about $3 billion currently.
The two firms also have complementary strengths across their
service platforms and geographies, positioning it for potential
market share gains.
DTZ's ratings could be upgraded if the company were to permanently
reduce leverage as defined by Net Debt/Recurring EBITDA (including
Moody's standard adjustments for pensions and operating leases),
demonstrate growth in free cash flow and retained cash flow as % of
debt, and grow operating margins.
The ratings could be downgraded should leverage increase
meaningfully from current levels or if operating margins were to
decline. Alternatively, another large acquisition or integration
issues associated with recent and pending acquisitions would also
result in a ratings downgrade.
Moody's last rating action for DTZ was on October 10, 2014, when
the ratings were assigned with a stable outlook.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 2014.
DTZ is a global property services business that provides a full
array of real estate solutions to occupiers, owners, investors, and
developers worldwide. The company's primary services include
facilities management, property management, leasing, capital
markets, and other advisory and property services.
ECOTALITY INC: Seeks Chapter 7 Conversion
-----------------------------------------
ECOtality, Inc., and its debtor affiliates ask the U.S. Bankruptcy
Court for the District of Arizona to convert their Chapter 11 cases
to cases under Chapter 7 of the Bankruptcy Code.
At an auction conducted on October 8, 2013, Blink Acquisition LLC,
submitted the highest and best bids for the sale of substantially
all of the Debtors' assets, which has an aggregate purchase price
of $4.335 million.
The Debtors, in consultation with the Official Committee of
Unsecured Creditors, filed the Joint Chapter 11 Plan of Liquidation
on July 1, 2014, which they believed would represent the most
appropriate value-maximizing vehicle for creditor recoveries based
on the information available at that time. Following Blink's
objection to the Liquidating Plan and associated court filings (and
threatened litigation) by Blink, the Debtors, the Creditors'
Committee and Blink reached an agreement, to pursue confirmation of
a plan of reorganization premised upon the preservation and sharing
of certain of the Debtors' tax attributes.
On October 28, 2014, the Debtors filed the Joint Chapter 11 Plan of
Reorganization, premised primarily on Blink's commitment to make
payments totaling $1,000,000 in cash for the benefit of creditors.
After filing the Plan of Reorganization, the parties negotiated the
various transactional documents necessary to implement the
Reorganization Plan and that would ultimately be filed as part of
the Plan Supplement. During negotiations, Blink, as Plan
Contributor, asserted, among other things, that it might be unable
to make cash payments in the total amount of $725,000, as
previously agreed and, as a result, offered to secure the $725,000
cash obligation through certain convertible preferred stock in
Blink's parent affiliate, Car Charging Group, Inc. Blink
represented that CCGI would issue three shares of Series B
convertible preferred stock, each of which would be convertible to
CCGI common stock for the benefit of unsecured creditors at certain
dates after consummation of the Reorganization Plan. A form of the
Certificate of Designations of Preferences, Rights and Limitations
of Series B Convertible Preferred Stock was filed as part of the
Plan Supplement on December 5, 2014, and later revised and re-
filed on December 19, 2014.
On January 5, 2015, shortly after the Court entered the
Confirmation Order, Blink informed counsel for the Debtors and the
Creditors' Committee that, during the last week of December 2014,
while the parties were negotiating the terms of the Confirmation
Order, CCGI had issued a new class of preferred shares that, among
other things, (a) would have priority in payment over the Plan of
Reorganization Preferred Stock and (b) could be redeemed in an
amount up to $25 million at any time after the second anniversary
of the issuance of the Conflicting Preferred Stock. Because the
Conflicting Preferred Stock is in irreconcilable conflict with the
terms of the Plan of Reorganization Preferred Stock, the parties
were unable to consummate the Plan of Reorganization.
Under these circumstances, the Creditors' Committee filed a motion
to vacate the Confirmation Order to give the Debtors' estates an
opportunity to move forward with the Liquidating Plan or another
viable alternative. The Creditors' Committee, among other things,
also sought a finding that Blink fraudulently procured a
confirmation order that could not go effective. Blink then raised
procedural objections to the Motion to Vacate, mainly that the
issues therein should be presented in an adversary complaint.
However, when the Creditors' Committee requested that Blink simply
stipulate to allowing the Motion to Vacate to serve as a complaint
to initiate an adversary proceeding, Blink flatly rejected that
request. The Creditors' Committee then commenced an adversary
proceeding, Adv. Pro. No. 15-00076, on February 2, 2015, raising
the same allegations contained in the Motion to Vacate.
At the hearing held on February 6, 2015, the Court consolidated the
Motion to Vacate and the Adversary Proceeding and also shortened
the statutory response deadlines for cause.
The Debtors' liability coverage for their directors and officers
expired on April 11, 2015. Despite the Debtors' requests, the
insurance carrier is unwilling to grant further extensions of the
Debtors' liability policy. Consequently, the Debtors anticipate
that their directors and officers will resign by no later than
April 11.
Given the Debtors' current cash position and the substantial
administrative expenses that have accrued since entry of the
Confirmation Order, the Debtors believe that their estates are at,
or near, administrative insolvency and will be unable to pay
administrative expenses as they come due if no viable settlement
can be reached with Blink in the very near future. Moreover,
absent a viable settlement, the Debtors anticipate that they likely
would not be able to satisfy in full both administrative expense
and priority claims under any alternative chapter 11 plan for
confirmation purposes or the Plan of Reorganization, even if
modified. Particularly in light of the continuing litigation
between the Creditors' Committee and Blink that currently is in the
early stages of discovery and briefing due to Blink's continued to
efforts to stall, the Debtors anticipate that administrative
expenses will only continue to mount to the detriment of creditors
awaiting a disposition on the Confirmation Order.
The Debtors' counsel, Jared G. Parker, Esq., at Parker Schwartz,
PLLC, in Phoenix, Arizona, cited the following as reasons to
support the Debtors' conversion request: (1) the Debtors have
discretion to convert their Chapter 11 cases to cases under Chapter
7; and (2) Section 1112(b) mandates conversion of the Chapter 11
cases for cause, namely the continuing diminution of the estates
and the absence of a reasonable likelihood of rehabilitation, as
well as the Debtors' inability to consummate the confirmed plan of
reorganization.
Susie Herrmann, Chief Financial Officer of ECOtality, Inc.,
submitted a declaration in support of the Debtors' conversion
motion, stating that absent a viable settlement with Blink, she
anticipates that the Debtors may not be able to satisfy in full
both administrative expense and priority claims under any
alternative chapter 11 plan for confirmation purposes or the Plan
of Reorganization, even if modified.
Ms. Herrmann echoes the Debtors' forecast that should the insurance
carrier's liability policy not be renewed or extended, the Debtors'
directors and officers will resign, leaving the Debtors without a
board or management.
The Creditors' Committee objects to the conversion motion,
requesting that the Court appoint a Chapter 11 Trustee instead.
The Committee's counsel, Carolyn J. Johnsen, Esq., at Dickinson
Wright, PLLC, in Phoenix, Arizona, argues that Debtors are ignoring
a settlement solution that addresses the problem with the stock
issuance, (b) infuses a large amount of cash immediately that can
be used to pay administrative creditors, and (c) preserves the
potential distribution to unsecured creditors. The Debtors are
ignoring the cost factor in converting the case and the effect it
will assuredly have on the pursuit of the litigation against Blink
and CCGI if necessary, and this result can be avoided by the
appointment of a Chapter 11 Trustee, Ms. Johnsen further argues.
Blink UYA, LLC, joins in the Committee's objection to the motion to
convert and confirms the Committee's representation to the Court
that intense negotiations are proceeding to resolve the claims
brought by the Committee against Blink and its parent, CCGI.
* * *
On April 9, U.S. Bankruptcy Judge Madeleine C. Wanslee approved a
stipulated amendment to findings of fact, conclusions of law, and
order approving the Debtors' disclosure statement and confirming
the Debtors' joint Chapter 11 plan of reorganization.
The Effective Date of the Plan is April 10, 2015.
Blink and CCGI are authorized and directed to release to the
Liquidating Trustee the sum of $210,000 currently being held in
trust by counsel. The adversary proceeding brought by the
Committee against Blink and CCGI and pending as adversary
proceeding number 2:15-ap-00076-MCW is dismissed with prejudice.
The Debtors are represented by:
Charles R. Gibbs, Esq.
AKIN GUMP STRAUSS HAUER & FELD LLP
1700 Pacific Avenue
Dallas, TX 75201
Tel: (214) 969-2800
Fax: (214) 969-4343
Email: cgibbs@akingump.com
-- and --
David P. Simonds, Esq.
Arun Kurichety, Esq.
AKIN GUMP STRAUSS HAUER & FELD LLP
2029 Century Park East, Suite 2400
Los Angeles, CA 90067
Tel: (310) 229-1000
Fax: (310) 229-1001
Email: dsimonds@akingump.com
akurichety@akingump.com
-- and --
Jared G. Parker, Esq.
PARKER SCHWARTZ, PLLC
7310 N. 16th St., Suite 330
Phoenix, AZ 85020
Tel: (602) 282-0476
Fax: (602) 282-0478
Email: jparker@psazlaw.com
The Creditors' Committee is represented by:
Carolyn J. Johnsen, Esq.
Robert A. Shull, Esq.
Nicole F. Bergstrom, Esq.
DICKINSON WRIGHT, PLLC
1850 North Central Avenue, Suite 1400
Phoenix, AZ 85004
Tel: (602) 285-5000
Fax: (602) 285-5100
Email: cjjohnsen@dickinsonwright.com
rshull@dickinsonwright.com
nbergstrom@dickinsonwright.com
Blink is represented by:
Daniel E. Garrison, Esq.
Jessica Kenney Bonteque, Esq.
ANDANTE LAW GROUP, PLLC
Scottsdale Financial Center I
4110 North Scottsdale Road, Suite 330
Scottsdale, AZ 85251
Tel: (480) 421-9449
Fax: (480) 522-1515
Email: dan@andantelaw.com
jessica@andantelaw.com
-- and --
Michael E. Baum, Esq.
Brendan G. Best, Esq.
SCHAFER AND WEINER, PLLC
40950 Woodward Ave., Ste. 100
Bloomfield Hills, MI 48304
Tel: (248) 540-3340
Fax: (248) 282-2100
Email: mbaum@schaferandweiner.com
About Ecotality Inc.
Headquartered in San Francisco, California, ECOtality, Inc.
(Nasdaq: ECTY) -- http://www.ecotality.com/-- is a provider of
electric transportation and storage technologies.
ECOtality Inc. along with affiliates including lead debtor
Electric Transportation Engineering Corp. sought Chapter 11
protection (Bankr. D. Ariz. Lead Case No. 13-16126) on Sept. 16,
2013, with plans to sell the business at an auction.
The cases are assigned to Chief Judge Randolph J. Haines. The
Debtors' lead counsel are Charles R. Gibbs, Esq., at Akin Gump
Strauss Hauer & Feld LLP, in Dallas, Texas; and David P. Simonds,
Esq., and Arun Kurichety, Esq., at Akin Gump Strauss Hauer & Feld
LLP, in Los Angeles, California. The Debtors' local counsel is
Jared G. Parker, Esq., at Parker Schwartz, PLLC, in Phoenix,
Arizona. FTI Consulting, Inc. serves as the Debtors' crisis
manager and financial advisor. The Debtors' claims and noticing
agent is Kurtzman Carson Consultants LLC.
ECOtality estimated assets of $10 million to $50 million and debt
of $100 million to $500 million. Unlike most companies in
bankruptcy, ECOtality has no secured debt. It simply ran out of
money. There's $5 million owing on convertible notes, plus
liability on leases. Part of pre-bankruptcy financing took the
form of a $100 million cost-sharing grant from the U.S. Energy
Department. In view of the San Francisco-based company's
financial problems, the government cut off the grant when
$84.8 million had been drawn.
On Sept. 24, 2013, the Office of the United States Trustee for
Region 14 appointed a committee of unsecured creditors.
In October 2013, the bankruptcy judge cleared ECOtality to sell
most of the business to Car Charging Group Inc. for $3.3 million.
Two other buyers purchased other assets for $1 million in total.
The Troubled Company Reporter, on April 29, 2015, reported that
ECOtality's Joint Plan of Reorganization became effective, and the
Company emerged from Chapter 11 protection.
ELEPHANT TALK: Reports $2.12 Million Net Loss in First Quarter
--------------------------------------------------------------
Elephant Talk Communications Corp. filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $2.12 million on $5.01 million of revenues for the
three months ended March 31, 2015, compared to a net loss of $5.22
million on $5.38 million of revenues for the same period in 2014.
As of March 31, 2015, the Company had $43.1 million in total
assets, $35.5 million in total liabilities and $7.61 million in
total stockholders' equity.
Cash balance of the company at March 31, 2015, was $995,000 which
was negatively impacted by an increase of the accounts receivable
of $5.98 million following the increase of $3.13 million that
already occurred in the fourth quarter 2014, totaling an accounts
receivable increase of $9.12 million over the six months ended
March 31, 2015.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/3gsUh2
About Elephant Talk
Lutz, Fla.-based Elephant Talk Communications, Inc. (OTC BB: ETAK)
-- http://www.elephanttalk.com/-- is an international provider of
business software and services to the telecommunications and
financial services industry.
Elephant Talk reported a net loss of $21.9 million in 2014, a net
loss of $25.5 million in 2013 and a net loss of $23.1 million in
2012.
EVERYWARE GLOBAL: Ceases SEC Reporting, To Exit Ch. 11 in June
--------------------------------------------------------------
EveryWare Global, Inc. disclosed that it intends to cease filing
reports with the Securities and Exchange Commission effective May
13, 2015.
As a result of EveryWare's voluntary filing for protection under
Chapter 11 of the U.S. Bankruptcy Code on April 7, 2015, the
Company's common stock was delisted from the Nasdaq Stock Market
effective at the opening of trading on April 27, 2015 and the
deregistration of its common stock under Section 12(b) of the
Securities Exchange Act of 1934 (Exchange Act) became effective as
of May 8, 2015. The Company is eligible under SEC rules and
regulations to cease reporting under Section 13(a) and Section
15(d) of the Exchange Act and intends to file a Form 15 with the
SEC. Upon filing the Form 15, the Company will immediately cease
filing periodic reports with the SEC. The Company currently
anticipates that it will make available its quarterly financial
statements for the three months ended March 31, 2015 on its website
when available.
The Company anticipates that it will emerge from Chapter 11
proceedings on or around June 5, 2015. Following emergence from
bankruptcy, it is expected that the only holders of the Company's
common stock will be the Company's secured lenders and certain
stockholders affiliated with the Company. It is expected that all
other current holders of the Company's common stock will receive
cash in lieu of a distribution of new common stock in an amount
equal to $0.06 per common share. Pursuant to the terms of the plan
of reorganization, as supplemented, the Company's existing common
stockholders (other than certain affiliated stockholders) will
receive cash in lieu of their pro rata portion of 1.5% of the
Company's new common stock. Out-of-the-money options and warrants
will be cancelled pursuant to the plan of reorganization. The plan
of reorganization remains subject to confirmation of the U.S.
Bankruptcy Court for the District of Delaware. The Plan, as
supplemented, as well as further information regarding the
Company's Chapter 11 cases are available free of charge on the
Company's restructuring website at
https://cases.primeclerk.com/everyware
About EveryWare Global
Headquartered in Lancaster, Ohio, EveryWare (Nasdaq:EVRY) is a
marketer of tabletop and food preparation products for the consumer
and foodservice markets, with operations in the United States,
Canada, Mexico and Asia. The company has more than 1,500 personnel
throughout the United States. Sales and marketing functions are
managed from executive offices in Lancaster, Ohio, with staff
located in Melville, New York, New York City, and Oneida, New
York.
The primary operating subsidiaries, Oneida Ltd. and Anchor Hocking,
LLC, were founded in 1848 and 1873, respectively. In 2011,
investment funds affiliated with the Monomoy Capital Partners
completed their acquisition of these companies and, in March 2012,
integrated them under the EveryWare brand. In May 2013, a merger
was completed where EveryWare became a wholly-owned subsidiary of
ROI Acquisition Corp. ("ROI"), a special purpose acquisition
company sponsored by affiliates of the Clinton Group, Inc., and ROI
was renamed EveryWare Global Inc.
As of Sept. 30, 2014, EveryWare reported assets of $238 million and
liabilities of $380 million.
EveryWare Global, Inc., commenced a Chapter 11 bankruptcy case to
implement a prepackaged financial restructuring that converts $248
million of the long-term debt to 96% of the common stock of the
company post-emergence.
EveryWare Global filed its Chapter 11 petition (Bankr. D. Del.) on
April 7, 2015, and 12 affiliated debtors filed petitions on April
8, 2015. The cases are pending before Judge Laurie Selber
Silverstein, and the debtors are seeking joint administration under
Case No. 15-10743.
The Debtors tapped Kirkland & Ellis LLP, as general bankruptcy
counsel; Pachulski Stang Ziehl & Jones LLP, as local bankruptcy
counsel; Jefferies LLC, as financial advisor; Alvarez & Marsal
North America, LLC, to provide a CRO and Interim VP of Finance; and
Prime Clerk LLC as claims and noticing agent.
* * *
Judge Silverstein will convene a combined hearing on the adequacy
of EveryWare Global, Inc., et al.'s Disclosure Statement and
confirmation of the joint prepackaged Chapter 11 plan of
reorganization on May 20, 2015, at 2:00 p.m., prevailing Eastern
Time. Any objections to the Disclosure Statement or confirmation
of the Plan must be filed by May 8 and any replies to the
objections must be filed by
May 13.
FEDERATION EMPLOYMENT: Panel Hires Pachulski Stang as Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of Federation
Employment and Guidance, Services, Inc. dba FEGS seeks
authorization from the Hon. Robert E. Grossman of the U.S.
Bankruptcy Court for the Eastern District of New York to retain
Pachulski Stang Ziehl & Jones LLP as counsel to the Committee, nunc
pro tunc to April 6, 2015.
The Committee requires Pachulski Stang to:
(a) assist, advise, and represent the Committee in its
consultations with the Debtor regarding the administration
of this case;
(b) assist, advise, and represent the Committee in analyzing
the Debtor's assets and liabilities, investigating the
extent and validity of liens and participating in and
reviewing any proposed asset sales, any asset dispositions,
financing arrangements and cash collateral stipulations or
proceedings;
(c) assist, advise, and represent the Committee in connection
with the transfers of any programs operated by the Debtor
to different agencies;
(d) assist, advise, and represent the Committee in any manner
relevant to reviewing and determining the Debtor's rights
and obligations under leases and other executory contracts;
(e) assist, advise, and represent the Committee in
investigating the acts, conduct, assets, liabilities, and
financial condition of the Debtor, the Debtor's operations
and the desirability of the continuance of any portion of
those operations, and any other matters relevant to these
cases or to the formulation of a plan;
(f) assist, advise, and represent the Committee in its
participation in the negotiation, formulation, and drafting
of a plan of liquidation or reorganization;
(g) advise the Committee on the issues concerning the
appointment of a trustee or examiner under section 1104 of
the Bankruptcy Code;
(h) assist, advise, and represent the Committee in
understanding its powers and its duties under the
Bankruptcy Code and the Bankruptcy Rules and in performing
other services as are in the interests of those represented
by the Committee;
(i) assist, advise, and represent the Committee in the
evaluation of claims and on any litigation matters,
including avoidance actions and claims against directors
and officers and any other party; and
(j) provide other services to the Committee as may be necessary
in this case.
Pachulski Stang will be paid at these hourly rates:
Robert J. Feinstein, Partner $995
Ilan D. Scharf, Partner $650
Jason H. Rosell, Of Counsel $525
Denise A. Harris, Paralegal $295
Partners $575-$1,145
Associates and Of Counsel $525-$925
Paralegals $275-$325
The hourly rates set forth are Pachulski Stang's standard hourly
rates for work of this nature. However, in this case, at the
request of the Committee, Pachulski Stang has agreed to discount
its standard hourly rates by 15% and to impose a blended rate cap
of $500 per hour across all attorneys and paraprofessionals,
subject to Pachulski Stang's ability to seek approval of its full
rates upon approval of the Committee based on results achieved.
Pachulski Stang will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Ilan D. Scharf, partner of Pachulski Stang, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
The Court for the Eastern District of New York will hold a hearing
on the application on May 19, 2015, at 10:00 a.m. Objections were
due May 12, 2015.
Pachulski Stang can be reached at:
Ilan D. Scharf, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
780 Third Avenue, 34th Floor
New York, NY 10017-2024
Tel: (212) 561-7700
Fax: (212) 561-7777
E-mail: ischarf@pszjlaw.com
About FEGS
Established in 1934 amidst the Great Depression, Federation
Employment & Guidance Service, Inc. ("FEGS") is a not-for-profit
provider of various health and social services to more than 120,000
individuals annually in the areas of behavioral health,
disabilities, housing, home care, employment/workforce, education,
youth and family services. At its peak, FEGs' network of programs
operated over 350 locations throughout metropolitan New York and
Long Island and employed 2,217 highly skilled professionals.
FEGS sought Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case
No. 15-71074) in Central Islip, New York on March 18, 2015.
The Chapter 11 plan and disclosure statement are due by July 16,
2015.
The Debtor filed applications to hire Garfunkel, Wild, P.C., as
general bankruptcy counsel; Togut, Segal & Segal, LLP, as
co-counsel; JL Consulting LLC as Restructuring Advisor, as
restructuring advisor; and Rust Consulting/Omni Bankruptcy as
claims and noticing agent.
FINJAN HOLDINGS: Posts $4.2 Million Net Loss in First Quarter
-------------------------------------------------------------
Finjan Holdings, Inc. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $4.2 million on $0 of revenues for the three months ended
March 31, 2015, compared to a net loss of $2 million on $0 of
revenues for the same period in 2014.
As of March 31, 2015, the Company had $16.5 million in total
assets, $2.19 million in total liabilities, and $14.3 million in
total stockholders' equity.
As of March 31, 2015, the Company had approximately $15 million of
cash and cash equivalents and $13.2 million of working capital. The
decrease in our cash and cash equivalents of approximately $2.5
million from Dec. 31, 2014, is primarily attributable to
approximately $4.2 million used in operations, net of the $2
million receivable.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/ShV2mx
About Finjan
Finjan, formerly known as Converted Organics, is a leading online
security and technology company which owns a portfolio of patents,
related to software that proactively detects malicious code and
thereby protects end-users from identity and data theft, spyware,
malware, phishing, trojans and other online threats. Founded in
1997, Finjan is one of the first companies to develop and patent
technology and software that is capable of detecting previously
unknown and emerging threats on a real-time, behavior-based basis,
in contrast to signature-based methods of intercepting only known
threats to computers, which were previously standard in the online
security industry.
Finjan reported a net loss of $10.47 million on $4.99 million of
revenues for the year ended Dec. 31, 2014, compared to a net loss
of $6.07 million on $0 of revenues in 2013.
FRESH PRODUCE: McCabe Wants Adequate Protection, Rent Payment
-------------------------------------------------------------
The Philip J. McCabe Revocable Trust (McCabe) asks the Bankruptcy
Court to require debtor Fresh Produce Retail, LLC, to provide
adequate protection and immediate payment of all unpaid
post-petition rent.
The debtor and McCabe entered in a lease agreement that governed
approximately 3,200 square foot of retail space with a prominent
street and front view. The debtor defaulted and failed to make its
$21,620.79 February payment as demanded by McCabe.
McCabe asserts that the debtors' failure to pay post-petition rent
to McCabe must be considered. The Debtors have already deposited
the April rent in the Registry. The Debtor will not, however,
stipulate to release even the post-petition portion of the April
rent. Nevertheless, there is no reason not to actually pay those
funds over to McCabe since the Debtors have no claim to those funds
and such funds are required by law. There can be no "cause" for
deferring payment to a party such McCabe who is forced to provide
services to the Debtor. The Debtors propose to use and occupy the
Property owned by McCabe without any firm commitment to pay rent or
any other form of adequate protection. The Debtors' statements
regarding any post-petition rent to be paid, to whom, and for how
much are at best ambiguous. As to McCabe, the Debtors refuse to
commit to release funds held in the Registry for the April rent and
has made no commitment to timely pay May or other post-petition
rents. In order to assure that the property rights and interests of
McCabe are protected and that it is adequately protected for the
Debtors' intended use of the Property.
McCabe also notes that the Debtors' Sale Motion and related
documents indicate that the Debtors will continue to occupy and use
the Property until the asset sale is completed, either via the
proposed liquidator proposal or some other yet to be unveiled
proposal. The accelerated pace of the proposed asset sale, McCabe
contends, requires that the Court enforce the clear language of 11
U.S.C. Sec. 365(d) (3) and the adequate protection mandates of 11
U.S.C Sec. 363(e) and require the immediate commencement of
post-petition rent to McCabe so that an unpaid 'gap' landlord
creditor such as McCabe is not intentional created by the Debtors'
proposed and lender supported section 363 asset sale/liquidation
process.
The Philip J. McCabe Revocable Trust is represented by:
Michael J. Guyerson, Esq.
J. Brian Fletcher, Esq.
ONSAGER GUYERSON FLETCHER JOHNSON
1801 Broadway, #900
Denver, CO 80202
Tel: 303-512-1123
Fax: 303-512-1129
Email: mguyerson@OGFJ-law.com
jbfletcher@OGFJ-law.com
McCabe is the owner of a four star-rated 119 room luxury
destination hotel resort, spa and retail shopping space located at
699 Fifth Ave South, Naples, Florida known as the Inn on Fifth.
About Fresh Produce Holdings, LLC
Fresh Produce Holdings, LLC (Holdings) and five separate entities
filed Chapter 11 petitions in the United States Bankruptcy Court
for the District of Colorado on April 4, 2015. Holdings is the
parent company, and the various related or subsidiary entities
include: Fresh Produce Retail, LLC, Fresh Produce Sportswear, LLC,
Fresh Produce of St. Armands, LLC, FP Brogan-Sanibel Island, LLC,
and Fresh Produce of Coconut Point, LLC (Debtors). All of the cases
are jointly administered under Case No. 15-13485.
Boulder, Colorado-based Fresh Produce --
http://www.freshproduceclothes.com/-- designs, develops and
markets women's apparel and accessories. The company says its
collections of tops, pants, skirts and dresses feature a signature
garment dye process with more than 80 percent produced in the
United States. It says products are available in 26 company-owned
boutiques located across the United States, as well as 400
independent retail locations.
The Debtor estimated $10 million to $50 million in assets and debt
in its Chapter 11 petition.
The Debtor is represented by Michael J. Pankow, Esq., at Brownstein
Hyatt Farber Schreck, in Denver.
The bankruptcy case is assigned to Judge Sidney B. Brooks.
The Debtor's subsidiary earlier commenced bankruptcy cases on April
2, 2015: FP Brogan-Sanibel Island, LLC (Case No. 15-13420), Fresh
Produce Coconut Point, LLC (Case No. 15-13421), Fresh Produce of
St. Armands, LLC (Case No. 15-13417), Fresh Produce Retail, LLC
(15-13415), and Fresh Produce Sportswear, LLC (15-13416).
GASTAR EXPLORATION: S&P Lowers Sr. Secured Note Rating to CCC+
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered the issue level rating
on Gastar Exploration Inc.'s senior secured notes to 'CCC+' from
'B-' (one notch below the corporate credit rating). S&P also
revised the recovery rating on the company's senior secured notes
to '5' from '4'. The '5' recovery rating on the company's secured
notes indicates S&P's expectation of modest (10% to 30%, lower half
of the range) recovery in the event of default.
"The lower recovery expectation reflects our lower estimate of the
company's enterprise value, based on an updated, company-provided
PV10 valuation of proved reserves, incorporating our recovery price
deck assumptions," said S&P.
The ratings on oil and gas exploration company Gastar Exploration
Inc. reflect Standard & Poor's assessment of the company's
"vulnerable" business risk, "highly levered" financial risk, and
"adequate" liquidity. The ratings incorporate its participation in
the volatile and capital-intensive oil and gas industry, the
company's relatively small production and reserve base, and a
decent reserve life and good reserve replacement history. The
ratings also include S&P's expectation that funds from operations
(FFO) to debt will be about 15% and S&P's expectation that the
company will slightly outspend cash flows in 2015.
S&P updated recovery analysis on Gastar Exploration Inc. includes
the following assumptions:
-- S&P's simulated default scenario for Gastar assumes a
sustained period of low commodity prices (consistent with the
conditions of past defaults in this sector).
-- S&P based its valuation of Gastar's reserves on a company-
provided year–end 2014 PV10 report, using Standard & Poor's
recovery price deck assumptions of $50 per barrel for WTI
crude oil, $3.50 per million British thermal units for Henry
Hub natural gas, and natural gas liquids priced at the
company's historical percentage realization to WTI.
-- S&P's recovery analysis for Gastar also incorporates the
company's $200 million borrowing base on its senior secured
reserve-based loan facility, which we assume will be fully
drawn at default.
S&P understands that claims on collateral relating to Gastar's
secured notes would be subordinated to the claims relating to the
reserve-based loan (RBL) facility, in a default scenario.
Simulated year of default: 2018
S&P's simplified waterfall follows:
Net enterprise value (after 5% in administrative costs): $250
million
First-priority RBL claims: $205 million
Recovery expectations: N/A
Collateral available to senior secured notes: $45 million
Senior secured notes claims: $340 million
Recovery expectation: 10% to 30% (low end of the range)
Note: All debt amounts include six months of prepetition
interest.
N/A--Not applicable.
RATINGS LIST
Corporate Credit Rating B-/Stable/--
Issue Rating Lowered; Recovery Rating Revised
To From
Gastar Exploration Inc.
Senior Secured CCC+ B-
Recovery Rating 5 4
GEORGETOWN MOBILE: Proposes Bunch & Brock as Counsel
----------------------------------------------------
Georgetown Mobile Estates, LLC, is asking the U.S. Bankruptcy Court
for the Eastern District of Kentucky for approval to employ Matthew
B. Bunch, and other attorneys of the law firm of Bunch & Brock,
Lexington, Kentucky, as bankruptcy counsel.
Bunch & Brock will seek compensation based upon its normal hourly
billing rates in effect for the period in which services are
performed and will seek reimbursement of necessary and reasonable
out-of-pocket expenses.
Bunch & Brock's current customary hourly rates for professionals,
subject to change from time to time, is $450 per hour for W. Thomas
Bunch, $350 per hour for W. Thomas Bunch II, $350 per hour for
Matthew B. Bunch, $300 per hour for Caryn Belobraidich, $250 per
hour for Peter J. W. Brackney, $90 per hour for law clerk and $75
for paralegal or clerical services.
Mr. Bunch, in an affidavit, attests that Bunch & Brock does not
hold or represent any interest adverse to the Debtor, and that
Bunch & Brock and each of its attorneys is a "disinterested person"
within the meaning of Sec. 101(14) of the Bankruptcy Code.
About Georgetown Mobile Estates
Georgetown Mobile Estates, LLC, is a Kentucky corporation with
headquarters in Georgetown, Scott County, Kentucky. Originally
incorporated on Jan. 23, 2006, the Company operates a mobile home
park in three areas on the county line of Scott and Fayette,
Kentucky. The park can take up to 504 customers and, historically,
had an occupancy rate of 92%.
Georgetown Mobile Estates filed a Chapter 11 bankruptcy petition
(Bankr. E.D. Ky. Case No. 15-50945) in Lexington, Kentucky, on May
11, 2015, to take back control of the mobile home park from a
receiver. Daniel E. Sexton, the present owner, signed the
petition.
The bankruptcy case is assigned to Judge Tracey N. Wise.
The Debtor estimated $10 million to $50 million in assets and
debt.
The Debtor tapped Bunch & Brock of Lexington, Kentucky, as counsel,
Randy Reynolds of Magnum Capital Consultants, LLC, as financial
advisor; Bradford Burgess of The Thayer Group as financial advisor;
and Glen Dellavalle of Dellavalle Management Group as manager of
business operations.
GEORGETOWN MOBILE: Taps Dellavalle as Mobile Home Park Manager
--------------------------------------------------------------
Georgetown Mobile Estates, LLC, is asking the U.S. Bankruptcy Court
for the Eastern District of Kentucky for approval to employ
Dellavalle Management Group to manage and operate on a day to day
basis all of the Debtor's business operation on-site.
The Debtor has selected Dellavalle Management as its operations
manager because of the firm's extensive experience and knowledge in
the management of businesses throughout central Kentucky.
Dellavalle Management will seek regular compensation based upon its
flat monthly fee of $4,800 plus out-of-pocket expenses to manage
and operate the Debtor's business on a day to day basis.
Glen Dellavalle, president, attests that Dellavalle Management does
not hold or represent any interest adverse to the Debtor, and that
Dellavalle Management and each of its consultants is a
"disinterested person" within the meaning of Sec. 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Glen Dellavalle
President
DELLAVALLE MANAGEMENT GROUP
3151 Beaumont Center Circle
Lexington, KY 40513
About Georgetown Mobile Estates
Georgetown Mobile Estates, LLC, is a Kentucky corporation with
headquarters in Georgetown, Scott County, Kentucky. Originally
incorporated on Jan. 23, 2006, the Company operates a mobile home
park in three areas on the county line of Scott and Fayette,
Kentucky. The park can take up to 504 customers and, historically,
had an occupancy rate of 92%.
Georgetown Mobile Estates filed a Chapter 11 bankruptcy petition
(Bankr. E.D. Ky. Case No. 15-50945) in Lexington, Kentucky, on May
11, 2015, to take back control of the mobile home park from a
receiver. Daniel E. Sexton, the present owner, signed the
petition.
The bankruptcy case is assigned to Judge Tracey N. Wise.
The Debtor estimated $10 million to $50 million in assets and
debt.
The Debtor tapped Bunch & Brock of Lexington, Kentucky, as counsel,
Randy Reynolds of Magnum Capital Consultants, LLC, as financial
advisor; Bradford Burgess of The Thayer Group as financial advisor;
and Glen Dellavalle of Dellavalle Management Group as manager of
business operations.
GEORGETOWN MOBILE: Taps Magnum Capital as Consultants
-----------------------------------------------------
Georgetown Mobile Estates, LLC, is asking the U.S. Bankruptcy Court
for the Eastern District of Kentucky for approval to employ Magnum
Capital Consultants LLC as financial consultants.
The Debtor has engaged Magnum in the Chapter 11 case to render
financial consulting services relating to the refinance and exit
financing decisions for the administration of the case and the
various financial issues that arise in connection with this case.
The Debtor has selected Magnum as a financial consultant because of
the firm's extensive experience and knowledge in refinancing of the
company by recommending; reviewing new operating procedures of on
site management; setting new operating expenses for efficiency and
cost effectiveness; secure exit financing; and any other reasonable
request of the Debtor's counsel to assist in their efforts on the
company's behalf.
The Debtor has not paid any money to Magnum Capital. Daniel E.
Sexton of the Debtor signed a contract to employ Magnum in August
2014 but that contract has been terminated and any fees earned have
been waived pursuant to a waiver executed on May 8, 2015. No funds
are due and owing to Magnum. On May 8, 2015, the Debtor signed a
new consulting agreement.
Pursuant to the agreement, Magnum will receive a retainer of
$5,000. Commencing on June 1, 2015, Magnum will receive an hourly
fee of $300, plus out of pocket expenses not to exceed $500 per
month, and 3 percent for placing a new exit financing.
Randy Reynolds, president of Magnum Capital, attests that Magnum
does not hold or represent any interest adverse to the Debtor, and
that Magnum and each of its consultants is a "disinterested person"
within the meaning of Sec. 101(14) of the Bankruptcy Code.
The firm can be reached at:
Randy Reynolds
President
MAGNUM CAPITAL CONSULTANTS, LLC
411 Kentucky Hwy 1743
Cynthiana, KY 41031
Tel: (859) 298-1779
About Georgetown Mobile Estates
Georgetown Mobile Estates, LLC, is a Kentucky corporation with
headquarters in Georgetown, Scott County, Kentucky. Originally
incorporated on Jan. 23, 2006, the Company operates a mobile home
park in three areas on the county line of Scott and Fayette,
Kentucky. The park can take up to 504 customers and, historically,
had an occupancy rate of 92%.
Georgetown Mobile Estates filed a Chapter 11 bankruptcy petition
(Bankr. E.D. Ky. Case No. 15-50945) in Lexington, Kentucky, on May
11, 2015, to take back control of the mobile home park from a
receiver. Daniel E. Sexton, the present owner, signed the
petition.
The bankruptcy case is assigned to Judge Tracey N. Wise.
The Debtor estimated $10 million to $50 million in assets and
debt.
The Debtor tapped Bunch & Brock of Lexington, Kentucky, as counsel,
Randy Reynolds of Magnum Capital Consultants, LLC, as financial
advisor; Bradford Burgess of The Thayer Group as financial advisor;
and Glen Dellavalle of Dellavalle Management Group as manager of
business operations.
GEORGETOWN MOBILE: Taps Thayer Group as Consultants
---------------------------------------------------
Georgetown Mobile Estates, LLC, is asking the U.S. Bankruptcy Court
for the Eastern District of Kentucky for approval to employ The
Thayer Group as financial consultants.
The Debtor has engaged The Thayer Group in the Chapter 11 case to
render financial consulting services relating to the refinance and
exit financing decisions for the administration of the case and the
various financial issues that arise in connection with this case.
The Debtor has selected The Thayer Group as its financial
consultant because of the firm's extensive experience and knowledge
in the reorganization of Company by recommending new corporate
structure; preparing new corporate legal documents for filing with
the Secretary of State and for Company's records; setting new
operating expenses for efficiency and cost effectiveness; making
recommendations on negotiations with creditors; assisting with
filing actions on each creditor's claim for validity; and any other
reasonable request of the Debtor's counsel to assist in their
efforts on the Company's behalf.
The Debtor has not paid any money to The Thayer Group. Daniel E.
Sexton of the Debtor signed a contract to employ The Thayer Group
in February 2015 but that contract has been terminated and any fees
earned have been waived pursuant to a Waiver executed on May 8,
2015. No funds are due and owing to The Thayer Group. On May 8,
2015, the Debtor signed a new consulting agreement.
Pursuant to the new consulting agreement, the Thayer Group will
receive a retainer of $5,000. Then commencing on June 1, 2015, the
firm will receive an hourly fee of $300; out of pocket expenses not
to exceed $500 per month; and 1 percent of savings in settlements
with banks, individuals or companies holding liens or judgments
against the Company or Daniel E. Sexton, Jr.
Bradford Burgess attests that The Thayer Group does not hold or
represent any interest adverse to the Debtor, and that The Thayer
Group and each of its consultants is a "disinterested person"
within the meaning of Sec. 101(14) of the Bankruptcy Code.
The firm can be reached at:
Bradford Burgess
President
THE THAYER GROUP
3423 Redcoach Trail
Lexington, KY 40517
About Georgetown Mobile Estates
Georgetown Mobile Estates, LLC, is a Kentucky corporation with
headquarters in Georgetown, Scott County, Kentucky. Originally
incorporated on Jan. 23, 2006, the Company operates a mobile home
park in three areas on the county line of Scott and Fayette,
Kentucky. The park can take up to 504 customers and, historically,
had an occupancy rate of 92%.
Georgetown Mobile Estates filed a Chapter 11 bankruptcy petition
(Bankr. E.D. Ky. Case No. 15-50945) in Lexington, Kentucky, on May
11, 2015, to take back control of the mobile home park from a
receiver. Daniel E. Sexton, the present owner, signed the
petition.
The bankruptcy case is assigned to Judge Tracey N. Wise.
The Debtor estimated $10 million to $50 million in assets and
debt.
The Debtor tapped Bunch & Brock of Lexington, Kentucky, as counsel,
Randy Reynolds of Magnum Capital Consultants, LLC, as financial
advisor; Bradford Burgess of The Thayer Group as financial advisor;
and Glen Dellavalle of Dellavalle Management Group as manager of
business operations.
GT ADVANCED: Extends Solicitation Period for DIP Facility
---------------------------------------------------------
GT Advanced Technologies Inc. on May 13 announced the third
extension of the solicitation period in connection with its
previously announced proposed debtor-in-possession term loan
facility. Following the extension, the solicitation period will
expire at 5:00 p.m., New York City time, on June 3, 2015.
The solicitation process is being conducted in connection with a
commitment letter, dated March 17, 2015 between the Company and
certain holders of the Convertible Notes. The Company was
authorized to undertake the solicitation process pursuant to an
order of the Bankruptcy Court entered on April 2, 2015. On April
29, 2015, the Company and the Backstop Lenders entered into a
second amendment to the Commitment Letter by which, among other
things, the Backstop Lenders agreed to an extension of their
commitment to provide the DIP Loan Facility to an outside date of
June 15, 2015, subject to certain terms and conditions as described
more fully in the Form 8-K filed by the Company on April 30, 2015.
The Company anticipates that the DIP Loan Facility will provide for
loans in an initial aggregate principal amount of $95.0 million,
and will provide for, or permit, a letter of credit facility
providing for the issuance of letters of credit with the aggregate
face amounts outstanding not to exceed $15.0 million.
The opportunity to participate in the DIP Loan Facility is limited
to those holders of the Company's Convertible Notes as of March 13,
2015 that are (i) qualified institutional buyers, as such term is
defined in Rule 144A under the Securities Act of 1933, as amended,
(ii) institutional accredited investors within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act or (iii) an
entity in which all of the equity investors are such institutional
accredited investors. Eligible Holders can contact Kurtzman Carson
Consultants by telephone at (917) 281-4800, or by e-mail at
GTATInfo@kccllc.com, for more information.
The Company anticipates using the proceeds of the DIP Facility to
fund working capital requirements, pay costs, fees and expenses
incurred in connection with the DIP Loan Facility and the
transactions contemplated thereby and pay other costs and expenses
with respect to the administration of the Company's and certain of
its subsidiaries' Chapter 11 cases.
Except as set forth above, all other terms of the solicitation and
the DIP Loan Facility remain the same. All holders of the
Company's Convertible Notes who have previously submitted their
commitment to participate in the solicitation do not need to
re-submit such commitment or take any other action in response to
the extension of the solicitation period.
About GT Advanced Technologies
Headquartered in Merrimack, New Hampshire, GT Advanced Technologies
Inc. -- http://www.gtat.com/-- produces materials and equipment
for the electronics industry. On Nov. 4, 2013, GTAT announced a
multiyear supply deal with Apple Inc. to produce sapphire glass
material for use in consumer electronics products.
Under the deal, Apple would provide GTAT with a prepayment of
approximately $578 million paid in four installments and, starting
in 2015, GTAT would reimburse Apple for the prepayment over a
five-year period.
GT is a publicly held corporation whose stock was traded on NASDAQ
under the ticker symbol "GTAT." GTAT was de-listed from the NASDAQ
stock exchange in October 2014.
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 eight 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
sought bankruptcy protection due to a severe liquidity crisis
brought about by its issues with Apple.
The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as
attorneys and Kurtzman Carson Consultants LLC as claims and
noticing agent.
The U.S. Trustee has named seven members to the Official Committee
of Unsecured Creditors. The Committee' professionals are Kelley
Drye as its bankruptcy counsel; Devine, Millimet & Branch,
Professional Association as local counsel; EisnerAmper LLP as
financial advisors; and Houlihan Lokey Capital, Inc. as investment
banker.
GTAT has reached a settlement with Apple. The settlement gives
Apple an approved claim for $439 million secured by more than 2,000
sapphire furnaces that GT Advanced owns and has four years to sell,
with proceeds going to Apple. In addition, Apple gets
royalty-free, non-exclusive licenses for GTAT's technology.
HALCON RESOURCES: To Issue 40 Million Shares Under Incentive Plan
-----------------------------------------------------------------
Halcon Resources Corporation filed with the Securities and Exchange
Commission a Form S-8 registration statement to register
40,000,000 shares of its common stock to be issued under the
Company's First Amended and Restated 2012 Long-Term Incentive Plan.
The proposed maximum aggregate offering price is $54.4 million. A
copy of the prospectus is available for free at:
http://is.gd/nGi1bQ
About Halcon Resources
Halcon Resources Corporation acquires, produces, explores and
develops onshore liquids-rich assets in the United States. This
independent energy company operates in the Bakken/Three Forks, El
Halcon and Tuscaloosa Marine Shale formations.
As of March 31, 2015, Halcon had $5.8 billion in total assets,
$4.49 billion in total liabilities, $126 million in redeemable
noncontrolling interest, and $1.18 billion in total stockholders'
equity.
* * *
As reported by the TCR on Jan. 27, 2015, Moody's Investors Service
downgraded Halcon's Corporate Family Rating to 'Caa1' from 'B3' and
the Probability of Default Rating to 'Caa1-PD' from 'B3-PD'. The
downgrade reflects growing risk for Halcon's business profile
because of high financial leverage and limited liquidity as its
existing hedges roll-off and stop contributing to its borrowing
base over the next 12-18 months.
The TCR reported on May 6, 2015, that Standard & Poor's Ratings
Services lowered its corporate credit rating on Houston-based
Halcon Resources Corp. to 'SD' from 'CCC+'. "The downgrade follows
Halcon's announcement that it has concluded an agreement with
holders of portions of its senior unsecured notes to exchange the
notes for common stock," said Standard & Poor's credit analyst Ben
Tsocanos.
HEALTHWAREHOUSE.COM INC: Posts $281,000 Net Loss in First Quarter
-----------------------------------------------------------------
HealthWarehouse.com, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss attributable to common stockholders of $281,000 on $1.61
million of net sales for the three months ended March 31, 2015,
compared to a net loss attributable to common stockholders of
$380,000 on $1.71 million of net sales for the same period a year
ago.
As of March 31, 2015, the Company had $1.39 million in total
assets, $4.87 million in total liabilities, and a $3.48 million
total stockholders' deficiency.
Bankruptcy Warning
"The Company recognizes it will need to raise additional capital in
order to fund operations, meet its payment obligations and execute
its business plan. There is no assurance that additional financing
will be available when needed or that management will be able to
obtain financing on terms acceptable to the Company and whether the
Company will become profitable and generate positive operating cash
flow. If the Company is unable to raise sufficient additional
funds, it will have to develop and implement a plan to further
extend payables, attempt to extend note repayments, attempt to
negotiate the preferred stock redemption and reduce overhead until
sufficient additional capital is raised to support further
operations. There can be no assurance that such a plan will be
successful. If the Company is unable to obtain financing on a
timely basis, the Company could be forced to sell its assets,
discontinue its operation and /or seek reorganization under the
U.S. bankruptcy code," the Company states in the report.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/JLqfr2
About HealthWarehouse.com
HealthWarehouse.com, Inc., headquartered in Florence, Kentucky,
is a U.S. licensed virtual retail pharmacy ("VRP") and healthcare
e-commerce company that sells brand name and generic prescription
drugs as well as over-the-counter medical products.
Healthwarehouse.com reported a net loss attributable to common
stockholders of $2.08 million on $6.12 million of net sales for the
year ended Dec. 31, 2014, compared with a net loss attributable to
common stockholders of $7.3 million on $10.23 million of net sales
in 2013.
Marcum LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2014, citing that the Company has incurred significant losses and
needs to raise additional funds to meet its obligations and sustain
its operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
HEI INC: Wins Court Approval to Sell Miscellaneous Assets
---------------------------------------------------------
Bankruptcy Judge Kathleen H. Sanberg granted the request of Hei,
Inc. to sell miscellaneous assets.
The Debtor explained that the sale will allow the Debtor to
maximize proceeds for the benefit of the estate. The proposed
procedure would minimize transaction costs by keeping professional
costs to a minimum and eliminating the need for the Debtor to bring
multiple motions to sell assets of low value, increasing net
recovery for unsecured creditors. Moreover, the Debtor believes
that attempting to sell these assets will minimize the cost of
disposal as the landlord has not agreed to the abandonment of some
of these assets.
Hei, Inc. is represented by:
James L. Baillie, Esq.
James C. Brand, Esq.
Sarah M. Olson, Esq.
FREDRIKSON & BYRON, P.A.
200 South Sixth Street, Suite 4000
Minneapolis, MN 55402-1425
Tel: 612-492-7000
Email: jbaillie@fredlaw.com
jbrand@fredlaw.com
solson@fredlaw.com
About HEI Inc.
HEI, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D. Minn.
Case No. 15-40009) in Minneapolis, Minnesota, on Jan. 4, 2015. It
is represented by James L. Baillie, Esq., James C. Brand, Esq. and
Sarah M. Olson, Esq. at Fredrikson & Byron, P.A. in Minneapolis,
MN; Alliance Management as business and financial consultant; and
Winthrop & Weinstine, P.A., as special counsel. The case is
assigned to Judge Kathleen H. Sanberg.
The deadline for governmental entities to file claims is July 6,
2015.
On Jan. 9, 2015, the Office of the United States Trustee appointed
an Official Committee of Unsecured Creditors comprised of: (a)
Teamvantage Molding LLC; (b) Watson-Marlow, Inc.; and (c) the
Vergent Products. The United States Trustee has designated Cathy
Longtin of Teamvantage Molding LLC as acting chairperson, and the
Committee selected Ms. Longtin as permanent chairperson.
Hei, Inc. continues to operate its business as debtor in
possession. No trustee or examiner has been appointed in the
Debtor's chapter 11 case.
HEXION INC: Employment Agreement with Douglas Johns Okayed
----------------------------------------------------------
The Compensation Committee of Hexion Holdings LLC, the indirect
parent of Hexion Inc., approved the terms of employment for Douglas
A. Johns, to serve as executive vice president and general counsel
of the Company effective May 9, 2015, according to a document filed
with the Securities and Exchange Commission.
Mr. Johns, who has been employed by Momentive Performance Materials
Inc. since December 2006, has served as executive vice president
and general counsel for the Company since Oct. 1, 2010, under a
shared services agreement with MPM. His change of employment to
Hexion Inc. has been anticipated since October 2014 when MPM
emerged from bankruptcy and named a senior management team
independent from the Registrant.
Mr. Johns began his career as a trial lawyer at the U.S. Department
of Justice and was in private practice before joining the General
Electric Company in 1991, where he served as senior counsel for
global regulatory and environmental matters and Senior Business
Counsel at GE Plastics' European headquarters in Bergen Op Zoom,
The Netherlands from 2001 to 2004. From 2004 to December 2006 he
served as general counsel for GE Advanced Materials, a division of
GE. When GE divested this business to form MPM in December 2006,
Mr. Johns joined MPM as general counsel and Secretary and served in
that capacity until Oct. 24, 2014.
Mr. Johns' terms of employment provide, among other things, that he
will (i) receive an annual base salary of $497,320, (ii) be
eligible for a merit increase effective July 1, 2015, (iii) be
eligible to receive annual cash incentive compensation awards with
a target opportunity equal to 70% of his annual base salary, (iv)
be eligible to receive a service-based award under the Momentive
Performance Materials Holdings LLC Long-Term Cash Incentive Plan,
(v) receive severance equal to 18 months of base salary in the
event of a termination of his employment without cause, (vi)
receive relocation benefits under the Company's relocation policy
and (vii) be eligible for the Company's standard health and welfare
benefits and a pro-ration of his annual vacation days. In
addition, the Compensation Committee waived the termination of the
equity awards held by Mr. Johns in Hexion Holdings LLC and agreed
that the put/call rights and obligations related to the common
units of Hexion Holdings LLC equity purchased by Mr. Johns
continue, so long as he remains an employee of the Company. Mr.
Johns will receive service credit for his prior years of service
with MPM and GE as it relates to his benefits.
About Hexion Inc.
Hexion Inc., formerly known as Momentive Specialty Chemicals, Inc.,
headquartered in Columbus, Ohio, is a producer of thermoset resins
(epoxy, formaldehyde and acrylic). The company is also a supplier
of specialty resins for inks and specialty coatings sold to a
diverse customer base as well as a producer of commodities such as
formaldehyde, bisphenol A, epichlorohydrin, versatic acid and
related derivatives.
Hexion reported a net loss of $148 million in 2014 following a net
loss of $634 million in 2013. As of Dec. 31, 2014, Hexion had
$2.67 billion in total assets, $5.02 billion in total liabilities
and a $2.35 billion total deficit.
* * *
The TCR reported on Oct. 3, 2014, that Standard & Poor's Ratings
Services lowered its corporate credit rating on Momentive
Specialty by one notch to 'CCC+' from 'B-'. "The downgrade
follows MSC's significant use of cash in the first half of 2014 and
our expectation that lackluster cash flow from operations and
elevated capital spending will cause free operating cash flow to be
significantly negative in 2014 and 2015," said Standard & Poor's
credit analyst Cynthia Werneth.
As reported by the TCR on Dec. 15, 2014, Moody's Investors Service
lowered the Corporate Family Rating of Momentive to 'Caa1' from
'B3'. "Due to elevated leverage, heavy capital spending on new
capacity in 2014 and 2015, and the lack of meaningful improvement
in financial performance, Moody's have lowered Momentive
Specialty's rating," stated John Rogers, senior vice president at
Moody's.
HRG GROUP: Fitch Affirms 'B' Long-term Issuer Default Ratings
-------------------------------------------------------------
Fitch Ratings has affirmed the long-term Issuer Default Rating
(IDR) of HRG Group, Inc. (HRG) at 'B' and revised the Rating
Outlook to Stable from Positive.
Fitch has also affirmed HRG's senior secured debt at 'BB-/RR2' and
senior unsecured debt at 'B/RR4'. The debt level affirmations are
inclusive of the additional $160 million of senior secured notes
and $140 million of senior unsecured notes issued by HRG on May 11,
2015.
KEY RATING DRIVERS
The revision of the Outlook to Stable from Positive follows the
completion of several transactions by HRG and recent asset
performance challenges at certain subsidiaries, which in
combination have moderated Fitch's view of potential upward rating
momentum over the outlook horizon. These events include two debt
issuances which have resulted in higher leverage (debt/equity), and
reduced dividends from subsidiaries, which has resulted in weaker
dividend coverage of holding company interest expenses.
The rating affirmations and Stable Outlook are supported by modest
leverage levels relative to the current ratings and the performance
and dividend capacity of HRG's underlying businesses, particularly
Spectrum Brands, Inc. (Spectrum Brands) and Fidelity & Guaranty
Life Holdings, Inc. (FGL), rated 'BB-' and 'BB', respectively.
Rating constraints include the potential for opportunistic
acquisitions or other activities which could alter HRG's risk
profile, as well as the concentrated and less liquid nature of
HRG's portfolio of investments. HRG is exploring the sale of all or
part of FGL, which would free up capital, but would also further
concentrate the company's investment portfolio on Spectrum Brands,
at least until further acquisitions are made.
The company tacked on $100 million to its senior secured debt on
April 9, 2015. A second transaction to issue another $300 million
in debt was announced on May 11, 2015. The transaction is comprised
of $160 million in senior secured debt and $140 million in senior
unsecured debt. Proceeds of the senior secured debt transaction are
expected to be used for working capital and general corporate
purposes, while proceeds of the unsecured debt transaction, plus
existing cash, will be used to fund additional investment in
Spectrum Brands. Pro forma for the most recent debt issuance, Fitch
calculates that HRG's debt/equity was 2.15x at March 31, 2015, up
from 1.13x at FY 2014.
At 0.66x, HRG's upstream dividend coverage of holding company
interest expenses was below 1.0x in the LTM ending March 31, 2015,
driven by increased holding company interest expenses and reduced
dividend upstream from certain portfolio companies. This offsets
improvements over the past two years which were due to higher
one-time dividend distributions by the company's subsidiaries. The
FY 2014 coverage ratio of 1.7x was elevated due to large
nonrecurring distributions from FGL as well as Compass Production
Partners (Compass). Fitch views a sustained reduction in interest
coverage below 1.0x as a potential negative rating driver. Until
upstream dividends are restored, HRG is effectively using holding
company cash and investments to service interest expenses, which
incrementally erodes capitalization levels.
Leucadia National Corp. ('BBB-', Outlook Stable) has accumulated an
ownership stake in HRG equal to approximately 23% of outstanding
shares. The increased diversity in HRG's ownership group is viewed
positively by Fitch. In particular, the percentage of shares owned
by Harbinger Capital Partners LLC and its affiliates has been
reduced to 17%, down significantly from prior amounts. The
concentration of ownership in a hedge fund operated by the (now
former) CEO of HRG was historically viewed as a rating constraint.
The affirmation of HRG's senior secured debt at 'BB-/RR2' reflects
Fitch view of the notes benefitting from superior recovery
prospects, which results in a two-notch uplift from HRG's IDR.
The affirmation of HRG's senior unsecured debt at 'B/RR4' reflects
Fitch view of the notes benefitting from average recovery
prospects, which results in equalization with HRG's IDR.
RATING SENSITIVITIES
The revision of the Outlook to Stable reflects Fitch's view of
limited upward rating momentum over the outlook horizon. Even so,
the following developments could result in potential long-term
upward rating momentum in HRG's IDR:
-- Prudent deployment of balance sheet cash and further
diversification of investments;
-- Improvement in parent company interest coverage to over 1.5x
on a sustained basis;
-- Leverage (debt-to-equity) at the parent level maintained
below current levels.
The following drivers could result in downward pressure on HRG's
IDR:
-- Increase in risk appetite in the company's future cash
deployment;
-- Significant increase in parent company leverage;
-- A sustained reduction in interest coverage below 1.0x;
-- Deterioration in operating performance at any of HRG's
significant subsidiaries which results in a material decline
in their value, dividend capacity and/or credit ratings.
The senior secured debt rating of 'BB-/RR2' is sensitive to
potential changes in the company's IDR. Furthermore, the secured
debt rating is sensitive to changes in the level of available asset
coverage.
The senior unsecured debt rating of 'B/RR4' is sensitive to
potential changes in the company's IDR. Furthermore, the unsecured
debt rating is sensitive to changes in the level of available asset
coverage.
HRG is a publicly traded investment holding company with
consolidated assets of $31.5 billion at March 31, 2015. HRG was
established as a permanent capital vehicle to obtain controlling
equity interests in established, dividend-paying businesses that
operate across a diversified set of industries. The company
currently operates in four business segments: consumer products
through its 59% ownership in Spectrum Brands; insurance through
Front Street Re, and its 81% ownership in FGL; energy through an
oil & gas MLP, Compass, of which it owns 99.8%; and asset
management thorough several majority and minority-interest owned
firms.
Fitch has affirmed the following ratings:
HRG Group, Inc.
-- Long-term IDR at 'B', Outlook to Stable from Positive;
-- Senior unsecured notes at 'B/RR4';
-- Senior secured notes to 'BB-/RR2'.
HUBBARD RADIO: Moody's Assigns B1 Rating to Proposed $360MM Loan
----------------------------------------------------------------
Moody's Investors Service assigned B1 to Hubbard Radio, LLC's
proposed $360 million 1st lien term loan and $10 million 1st lien
revolving credit facility. Moody's affirmed the B1 Corporate Family
Rating and B2-PD Probability of Default Rating. Proceeds from the
new debt instruments will be used to refinance existing credit
facilities. Moody's also affirmed the SGL - 2 Speculative Grade
Liquidity (SGL) Rating. The outlook is stable.
Assigned:
Issuer: Hubbard Radio, LLC
-- $360 million 1st Lien Senior Secured Term Loan due 2022:
Assigned B1, LGD3
-- $10 million 1st Lien Senior Secured Revolving Credit
Facility due 2020: Assigned B1, LGD3
Affirmed:
-- Corporate Family Rating: Affirmed B1
-- Probability-of-Default Rating: Affirmed B2-PD
-- Speculative Grade Liquidity Rating: Affirmed SGL - 2
Unchanged (to be withdrawn upon repayment):
-- $421 million 1st Lien Senior Secured Term Loan due 2019:
Unchanged B1, LGD3 (to be withdrawn upon repayment)
-- $10 million Senior Secured Revolving Credit Facility due
2016: Unchanged B1, LGD3 (to be withdrawn upon repayment)
Outlook Actions:
-- Outlook is Stable
Hubbard's B1 corporate family rating reflects moderately high
debt-to-EBITDA of 4.9x pro forma for the proposed refinancing
(including Moody's standard adjustments) as of March 31, 2015.
Management is taking advantage of favorable credit markets and the
refinancing of credit facilities is credit positive given the
extension of maturities as well as the potential benefit from lower
pricing. Ratings incorporate the lead rankings of the company's
stations in their markets, the mature and cyclical nature of radio
advertising demand, as well as revenue concentration in two
markets, although improved due to the addition of 10 stations
following the completed Sandusky acquisition in 2013. Since the
initial funding in April 2011, the company has successfully
assimilated acquisitions and consistently reduced debt balances, in
the absence of M&A activity, resulting in improved leverage
compared to its initial 5.6x in 2011. While other radio operators
have seen their leverage increase or remain elevated due to
declining ad demand in their markets or competition, Hubbard has
improved its credit profile largely through debt repayment despite
weak ad demand in certain key markets since the beginning of 2014.
The company has maintained lead rankings in its markets which
supports good EBITDA margins of 35% or more (including Moody's
standard adjustments). Ratings incorporate ongoing media
fragmentation and the cyclical nature of radio advertising demand
evidenced by the revenue declines suffered by radio broadcasters
during the 2009 recession and the sluggish growth following the
downturn. Ratings are constrained by revenue concentration with the
company's Chicago and Washington D.C. stations accounting for
roughly 50% of 2014 revenue. The company's leading brands have
withstood heightened competition from large radio broadcasters,
especially in Washington, D.C. and Chicago, but continued
competitive pressure could negatively impact station profitability
beyond the near term. Looking forward, Moody's expect Hubbard's
consolidated revenue to be generally flat allowing the company to
improve debt to-EBITDA from current levels over the next 12 months
with good free cash flow generation of more than $30 million (or 8%
of debt balances). Despite the potential for the funding of
additional dividends, Moody's believes management will continue to
reduce debt balances gaining operational and financial flexibility.
Liquidity is good and supplemented by a minimum $10 million to $15
million of balance sheet cash and an undrawn $10 million revolver
due 2020 pro forma for the proposed refinancing.
Despite weak add demand in the Chicago market since the beginning
of 2014, the stable outlook reflects Moody's view that Hubbard will
generate generally flat consolidated revenue over the next 12
months with stations in key markets, Chicago and Washington, D.C.,
remaining leaders in their formats. The outlook also incorporates
Moody's expectation for the company to maintain debt-to-EBITDA
ratios below 5.0x (including Moody's standard adjustments) with
good liquidity including free cash flow-to-debt of more than 8%
over the next 12 months and potential dividends to be paid from
excess cash. Ratings could be downgraded if the company is unable
to maintain core revenue due to weak advertising demand in one or
more of Hubbard's key markets or due to increased competition
resulting in the loss of lead rankings or EBITDA margin erosion. A
downgrade could also be considered if debt financed acquisitions,
dividends or weak performance were to result in debt-to-EBITDA
being sustained above 5.0x or if liquidity deteriorates. Although
improved since the Sandusky acquisition, lack of scale and
significant revenue concentration constrain ratings; however,
Moody's could consider a rating upgrade if the company continues to
use free cash flow to reduce debt balances resulting in
debt-to-EBITDA ratios being sustained comfortably below 3.25x with
free cash flow-to-debt ratios expected to remain above 15%;
liquidity would also need to remain good.
The principal methodology used in these ratings was Global
Broadcast and Advertising Related Industries published in May 2012.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Formed in 2011, Hubbard Radio, LLC is a family controlled and
privately held media company that owns and operates radio stations
in seven top 30 markets, including Chicago, Washington, D.C.,
Minneapolis/St. Paul, St. Louis, Cincinnati, Seattle, and Phoenix.
Headquartered in St. Paul, MN, the company is affiliated with
Hubbard Broadcasting Inc., a television and radio broadcasting
company that was started in 1923. Net revenue totaled $215 million
for the 12 months ended March 31, 2015.
HUBBARD RADIO: S&P Rates New $370MM Refinanced Secured Loans BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' issue-level
rating and '2' recovery rating to St. Paul, Minn.-based Hubbard
Radio LLC's proposed $370 million senior secured credit facility.
The '2' recovery rating indicates S&P's expectation for substantial
(70%-90%; lower end of the range) recovery of principal for
debtholders in the event of a payment default. The senior secured
credit facility consists of a $10 million revolving credit facility
due 2020 and a $360 million term loan B due 2022. The corporate
credit rating on the company remains 'B+' with a stable outlook.
The company plans to use the proceeds to refinance its existing
senior secured credit facility. The transaction does not affect
Hubbard's adjusted leverage ratio (4.8x as of March 31, 2015) or
S&P's expectation for leverage to moderate to the low- to mid-4x
area in 2015.
RATINGS LIST
Hubbard Radio LLC
Corporate Credit Rating B+/Stable/--
New Ratings
Hubbard Radio LLC
Senior Secured
$10 mil. revolving credit facility due 2020 BB-
Recovery Rating 2L
$360 mil. term loan B due 2022 BB-
Recovery Rating 2L
IDERA PHARMACEUTICALS: Posts $12.5 Million Net Loss in 1st Qtr.
---------------------------------------------------------------
Idera Pharmaceuticals, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
applicable to common stockholders of $12.5 million on $34,000 of
alliance revenue for the three months ended March 31, 2015,
compared with a net loss applicable to common stockholders of $9.14
million on $3,000 of alliance revenue for the same period a year
ago.
As of March 31, 2015, the Company had $120 million in total assets,
$7.04 million in total liabilities, and $113 million in total
stockholders' equity.
As of March 31, 2015, the Company had approximately $117 million in
cash, cash equivalents and investments, a net increase of $68.3
million from Dec. 31, 2014. Net cash used in operating activities
totaled $12.7 million during the three months ended March 31, 2015,
reflecting a $12.5 million net loss, as adjusted for non-cash
income and expenses, including stock-based compensation,
depreciation and amortization. Net cash used in operating
activities also reflects changes in the Company's prepaid expenses
and accounts payable, accrued expenses and other liabilities.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/hCz4cY
About Idera
Cambridge, Massachusetts-based Idera Pharmaceuticals, Inc., is a
clinical stage biotechnology company engaged in the discovery and
development of novel synthetic DNA- and RNA-based drug candidates
that are designed to modulate immune responses mediated through
Toll-like Receptors, or TLRs. The Company has two drug
candidates, IMO-3100, a TLR7 and TLR9 antagonist, and IMO-8400, a
TLR7, TLR8, and TLR9 antagonist, in clinical development for the
treatment of autoimmune and inflammatory diseases.
Idera Pharmaceuticals reported a net loss attributable to common
stockholders of $39.2 million in 2014, a net loss applicable to
common stockholders of $21.09 million in 2013 and a net loss
applicable to common stockholders of $22.5 million in 2012.
IMAGEWARE SYSTEMS: Posts $2.3 Million Net Loss in First Quarter
---------------------------------------------------------------
Imageware Systems, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $2.33 million on $991,000 of revenues for the three months ended
March 31, 2015, compared to a net loss of $1.69 million on $1.06
million of revenues for the same period a year ago.
As of March 31, 2015, the Company had $13.83 million in total
assets, $4.77 million in total liabilities and a $9.06 million in
total stockholders' equity.
At March 31, 2015, the Company's principal sources of liquidity
consisted of cash and cash equivalents of $8,393,000 and accounts
receivable, net of $435,000. As of March 31, 2015, the Company had
positive working capital of $6,990,000, which included $1,694,000
of deferred revenue. The Company has a history of recurring
losses, and as of March 31, 2015, the Company has incurred a
cumulative net loss of approximately $138,814,000.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/2KROY2
About ImageWare Systems
Headquartered in San Diego, California, ImageWare Systems, Inc.,
is a leader in the emerging market for software-based identity
management solutions, providing biometric, secure credential, law
enforcement and enterprise authorization. Its "flagship" product
is the IWS Biometric Engine. Scalable for small city business or
worldwide deployment, the Company's biometric engine is a multi-
biometric platform that is hardware and algorithm independent,
enabling the enrollment and management of unlimited population
sizes. The Company's identification products are used to manage
and issue secure credentials, including national IDs, passports,
driver licenses, smart cards and access control credentials. Its
law enforcement products provide law enforcement with integrated
mug shot, fingerprint LiveScan and investigative capabilities.
The Company also provides comprehensive authentication security
software.
Imageware Systems incurred a net loss of $9.84 million in 2013, a
net loss of $10.2 million in 2012 and a net loss of $3.18 million
in 2011.
INFINITY ENERGY: Extends Maturity of $1M Note to April 2016
-----------------------------------------------------------
Infinity Energy Resources, Inc., on Dec. 27, 2013, borrowed
$1,050,000 under an unsecured credit facility with a private,
third-party lender. The facility is represented by a promissory
note.
Effective April 7, 2015, the Company and the lender agreed to
extend the maturity date of the Note from April 7, 2015, to the
earlier of (i) April 7, 2016 or (ii) the payment in full of the
Investor Note issued to the Company by Hudson Bay Master Fund, Ltd.
in the principal amount of $9,550,000. All other terms of the Note
remain the same. The extension to the New Maturity Date closed on
May 8, 2015.
The Note may be prepaid without penalty at any time. The Note is
subordinated to all existing and future senior indebtedness, as
such terms are defined in the Note.
In connection with the loan, the Company granted the lender a
warrant exercisable to purchase 1,000,000 shares of its common
stock at an exercise price of $1.00 per share. In connection with
the extension of the maturity date of the Note to the New Maturity
Date, the Company (i) issued the lender 200,000 shares of
restricted common stock; (ii) decreased the exercise price of the
Warrant to $0.50 per share and extended the term of the Warrant to
a period commencing on the New Maturity Date and expiring on the
third anniversary of that date; and (iii) paid $50,000 toward
amounts due under the Note. The Company issued no additional
warrants to the lender in connection with the extension of the Note
to the New Maturity Date. If the Company fails to pay the Note on
or before its New Maturity Date, the number of shares issuable
under the Warrant increases to 13,333,333 and the exercise price
drops to $0.075 per share. All other terms of the Warrant remain
the same.
About Infinity Energy
Overland Park, Kansas-based Infinity Energy Resources and its
subsidiaries, are engaged in the acquisition and exploration of
oil and gas properties offshore Nicaragua in the Caribbean Sea.
In its report on the consolidated financial statements for the year
ended Dec. 31, 2014, RBSM, LLP, expressed substantial doubt about
the Company's ability to continue as a going concern, citing that
the Company has suffered recurring losses, has no on-going
operations, and has a significant working capital deficit.
The Company reported a net loss of $3.68 million for the year ended
Dec. 31, 2014, compared with a net loss of $2.43 million during the
prior year.
The Company's balance sheet at Dec. 31, 2014, showed $9.66 million
in total assets, $12.7 million in total liabilities, and a
stockholders' deficit of $3.06 million.
JAMES RIVER: Hires Michael Wilson as Local Conflicts Counsel
------------------------------------------------------------
James River Coal Company and its debtor-affiliates seek
authorization from the Hon. Kevin R. Huennekens of the U.S.
Bankruptcy Court for the Eastern District of Virginia to employ
Michael Wilson PLC as special bankruptcy counsel to the Debtors,
retroactive to March 26, 2015.
By orders dated May 9, 2014, the Court authorized the Debtors to
retain Davis Polk & Wardwell LLP, as lead bankruptcy counsel, and
Hunton & Williams LLP, as local counsel, in these cases.
Subsequently, on Oct. 30, 2014, the Court authorized the Debtors to
retain Togut, Segal & Segal LLP as special counsel to investigate,
analyze and prosecute Avoidance Claims on behalf of the Debtors'
estates. As a result of certain conflicts of interest, Hunton is
unable to represent the Debtors with respect to a number of the
Avoidance Claims. Accordingly, the Debtors seek to employ the
Wilson Firm to act as local conflicts counsel with respect to the
Avoidance Claims.
The Debtors have agreed to compensate the Wilson Firm on an hourly
basis at Mr. Wilson's normal hourly rate of $275 per hour, subject
to any prior agreements, including the contingency fee agreement
with the Togut Firm.
Wilson Firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Michael G. Wilson, principal of the Wilson Firm, 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.
Wilson Firm can be reached at:
Michael G. Wilson, Esq.
MICHAEL WILSON PLC
12733 Storrow Rd.
Henrico, VA 23233
Tel: (804) 614-8301
E-mail: mike@mgwilsonlaw.com
About James River
James River Coal Company is a producer and marketer of coal in the
Central Appalachia ("CAPP") and the Midwest coal regions of the
United States. James River's principal business is the mining,
preparation and sale of metallurgical coal, thermal coal (which is
also known as steam coal) and specialty coal.
James River and 33 of its affiliates filed Chapter 11 bankruptcy
petitions (Bankr. E.D. Va. Case Nos. 14-31848 to 14-31886) in
Richmond, Virginia, on April 7, 2014. The petitions were signed By
Peter T. Socha as president and chief executive officer. Judge
Kevin R. Huennekens oversees the Chapter 11 cases.
On the petition date, James River Coal disclosed total assets of
$1.06 billion and total liabilities of $818.6 million.
The Debtors are represented by Tyler P. Brown, Esq., Henry P.
(Toby) Long, III, Esq., and Justin F. Paget, Esq. at Hunton &
Williams LLP of Richmond, VA and Marwill S. Huebner, Esq, Brian M.
Resnick, Esq., and Michelle M. McGreal, Esq. at Davis Polk &
Wardwell LLP of New York, NY. Kilpatrick Townsend & Stockton LLP
serves as the Debtors' special counsel. Perella Weinberg Partners
L.P. is the Debtors' financial advisor. Deutsche Bank Securities
Inc. serves as the Debtors' investment banker and M&G advisor.
Epiq Bankruptcy Solutions, LLC, acts as the debtors' notice, claims
and administrative agent.
The U.S. Trustee for Region 4 has appointed five creditors to the
Official Committee of Unsecured Creditors. Michael S. Stamer,
Esq., Alexis Freeman, Esq., and Jack M. Tracy II, Esq., at Akin
Gump Strauss Hauer & Feld LLP; and Jonathan L. Gold, Esq.,
Christopher L. Perkins, Esq., and Christian K. Vogel, Esq., at
LeClairRyan.
The Debtors, in August 2014, won authority to sell the Hampden
Mining Complex (including the assets of Logan & Kanawha Coal
Company, LLC), the Hazard Mining Complex (other than the assets of
Laurel Mountain Resources LLC) and the Triad Mining Complex for $52
million plus the assumption of certain environmental and other
liabilities, to a unit of Blackhawk Mining. The Buyer is
represented by Mitchell A. Seider, Esq., and Charles E. Carpenter,
Esq., at Latham & Watkins LLP.
KRONOS WORLDWIDE: Fitch Affirms 'BB-' Issuer Default Ratings
------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of
Kronos Worldwide, Inc. (NYSE: KRO) and its wholly owned subsidiary,
Kronos International, Inc., at 'BB-'. The Rating Outlook is Stable.
KEY RATING DRIVERS
Fitch's ratings reflect the company's strong market position (top 5
globally) in the titanium dioxide (TiO2) industry, adequate
liquidity and modest debt levels combined with earnings volatility
in the TiO2 industry.
LEADERSHIP POSITION
Management believes that it is the largest producer of TiO2 in
Europe with about 18% market share (approximately one half of its
sales volume is directed to markets in Europe). In North America,
the company estimates that it has a 17% market share. Overall,
Kronos is one of the top 5 producers of TiO2 globally, with roughly
8% of worldwide production capacity during 2014.
TiO2 INDUSTRY
TiO2 is used in pigments to provide whiteness, brightness, opacity
and durability. The industry is fairly concentrated with about 54%
of the global market accounted for by the top five manufacturers.
The titanium feedstock industry is also highly concentrated with
the top two producers accounting for about 40% of supply.
The TiO2 market is subject to volatile stocking and de-stocking
trends as customers substitute lower quality pigments when prices
rise beyond their ability to pass through. TiO2 producers tend to
produce at capacity while prices are rising and then need to
curtail production and drop prices to move inventory when pricing
overshoots. Low global capacity utilization, lower raw material
costs, and strong regional competition are putting pressure on TiO2
selling prices.
Kronos' operating capacity averaged 92% during 2014, 86% during
2013 and 85% during 2012. Given the low global capacity utilization
and lower raw material costs for TiO2, prices have been declining
since 4Q'12. In the case of Kronos, average TiO2 selling prices
fell 14% during 4Q'12, 19% during all of 2013 and declined further
by 6% during 2014. The company's average TiO2 selling prices were
11% lower during 1Q'15 compared with 1Q'14, and the average selling
price at the end of the 1Q'15 was 7% lower than at the end of 2014.
Fitch expects excess global capacity will continue to put pressure
on TiO2 selling prices in the near term.
MODEST DEBT LEVELS
Total debt as of March 31, 2015 was $348.6 million, including a
$346.5 million term loan that matures in February, 2020. The term
loan facility requires an annual amortization of $3.5 million.
The term loan is collateralized by, among other things, a first
priority lien on 100% of the common stock of certain of Kronos
Worldwide's U.S. wholly-owned subsidiaries, 65% of the common stock
of its Canadian subsidiary and certain first-tier European
subsidiaries, and a $395.7 million unsecured promissory note issued
by Kronos Worldwide's wholly-owned subsidiary, Kronos
International, Inc. to Kronos Worldwide. The facility is also
collateralized by a second priority lien on all of the U.S. assets
which collateralize the company's North American revolving credit
facility. The term loan has no ongoing financial maintenance
covenants.
ADEQUATE LIQUIDITY POSITION
As of March 31, 2015, Kronos had cash of $121.4 million (of which
$57.9 million was held by non-U.S. subsidiaries), $94.8 million of
borrowing availability under its North American revolving credit
facility, and EUR71 million ($77 million) of borrowing capacity
under its EUR120 million European revolving credit facility. Kronos
has no major debt maturities until 2020 and has $3.5 million of
required annual amortization under its term loan facility.
The $125 million, five year, asset based revolver at Kronos
Worldwide is secured by receivables and inventory in North America.
The facility has a 1.1:1.0 minimum fixed charge covenant at such
times as availability is less than 10% but no other maintenance
financial covenants. At March 31, 2015, the facility was undrawn
and $94.8 million was available. The facility matures in June
2017.
The EUR120 million revolver is secured by the accounts receivable
and inventory of the borrowers (European operating subsidiaries of
Kronos International). The facility expires in September 2017 and
has a net secured debt to EBITDA maximum covenant of 0.7x and net
debt to equity minimum covenant of 0.50 to 1 which is calculated at
the operating subsidiary level. At March 31, 2015, the facility was
undrawn and EUR71 million of the facility was available.
FREE CASH FLOW
Kronos has reported negative free cash flow (FCF) during the past
three years. During 2014, the company reported negative FCF of $43
million after $61.2 million of capital expenditures and $69.5
million of dividends. This compares to negative FCF of $6.7 million
during 2013 and negative $67.4 million during 2012. Fitch expects
Kronos will again be slightly FCF negative in 2015 after $69.5
million of dividends and $72 million of planned capital
expenditures during the year.
MODEST LEVERAGE LEVELS
Kronos' revenues and earnings have been quite volatile over the
past decade, and the company's credit metrics have followed this
pattern. In 2014, the company reported EBITDA of $196.5 million
(11.9% EBITDA margin) compared with negative $41.7 million of
EBITDA reported during 2013 and $410.9 million (20.8%) during 2012.
Debt to EBITDA at year-end 2014 was 1.8x and FFO adjusted leveraged
settled at 2.2x. Interest coverage during 2014 was 11.6x while FFO
interest coverage was 12.0x. Fitch expects these credit metrics
will be relatively stable during 2015.
KEY ASSUMPTIONS
-- Revenues will be slightly lower in 2015, driven primarily
lower TiO2 selling prices;
-- Operating EBITDA of at least $180 million in 2015 compared
with $196.5 million during 2014;
-- Credit metrics during 2015 will be relatively stable compared
with 2014;
-- Slightly negative FCF generation after $69.5 million of
dividends and approximately $72 million of capex;
-- Liquidity of at least $200 million (combination of cash and
availability under its North American and European revolving
credit facilities).
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Expectation of sustained total debt to EBITDA above 3x;
-- Liquidity less than $200 million;
-- Cash of less than $50 million;
-- Significant and consistent negative FCF after capital
expenditures and dividends.
Positive: Not anticipated over the next 12 months.
Fitch has affirmed the following ratings and assigned the following
recovery ratings for Kronos Worldwide Inc.:
-- IDR at 'BB-';
-- ABL revolver at 'BB+/RR1';
-- Senior secured term loan at 'BB-/RR4'.
Fitch has affirmed the following ratings and assigned the following
recovery ratings for Kronos International, Inc.:
-- IDR at 'BB-'
-- Senior secured revolving credit facility at 'BB+/RR1'
The Rating Outlook is Stable.
In accordance with Fitch's updated Recovery Rating (RR)
methodology, Fitch is now providing RRs to issuers with IDRs in the
'BB' category. The Recovery Rating (RR) of '1' for Kronos Worldwide
Inc.'s and Kronos International, Inc.'s secured revolving credit
facilities support a rating of 'BB+', and reflects outstanding
recovery prospects in a distressed scenario. Kronos Worldwide
Inc.'s senior secured term loan is assigned an RR4, reflecting
average recovery prospects.
L BRANDS: S&P Affirms 'BB+' Corp. Credit Rating, Outlook Stable
---------------------------------------------------------------
Standard & Ratings Services affirmed all of its ratings, including
its 'BB+' corporate credit rating, on Ohio-based L Brands Inc. The
outlook is stable.
"We revised our assessment of L Brands' financial risk profile to
"intermediate" from "significant" to reflect the company's improved
credit profile as a result of performance gains and repayment of
$213 million notes that were due in November 2014," said credit
analyst Mariola Borysiak. "Total debt to EBITDA improved to 2.1x
at Jan. 31, 2015, from 2.4x one year earlier and funds from
operations (FFO) to total debt strengthened to 30.7% from 26.3%
during the same period. We forecast these ratios will remain at
about the current levels and the company will continue to generate
healthy levels of free operating cash flow. We also believe
management will remain aggressive with its shareholder returns,
including share buybacks and special dividends."
The stable outlook on L Brands reflects S&P's view that despite
S&P's expectation for profit growth, the company's financial
policies will remain aggressive as the company remains committed to
shareholder friendly activities. S&P believes L Brands will manage
its credit ratios around the existing levels with debt leverage
remaining in the low- to mid-2x area.
S&P said, "Although unlikely, we could lower the rating if
aggressive shareholder-friendly activities or performance erosion
cause debt leverage to approach the high-3x area and FFO/debt to
decline below 20%. For example, we calculate that more than $4
billion of incremental debt would likely trigger a negative rating
action."
"An upgrade is unlikely over the next 12 to 18 months because we
believe the company's financial policies will remain aggressive as
it remains committed to return cash to shareholders in the form of
a special dividend and share repurchases. An upgrade would be
predicated on our belief that the company's debt leverage remains
below 3x and sustains FFO/total debt above 30%."
LIGHTSQUARED INC: Ergen Says Plan Unfairly Favors Hedge Funds
-------------------------------------------------------------
Tiffany Kary, writing for Bloomberg News, reported that
LightSquared Inc.'s bankruptcy plan gives hedge funds that invested
in the broadband company a leg up while blocking telecommunications
firms from competing with it, a fund owned by Dish Network Corp.
Chairman Charles Ergen said in court papers appealing the plan.
According to the report, Ergen sai in his filing that
LightSquared's reorganization was drafted by "sophisticated hedge
funds that have taken a commercial bet that the spectrum owned by
LightSquared might one day be usable and therefore worth many
billions of dollars."
The fund, SP Special Opportunities LLC, is challenging specific
wording in the plan that bars creditors from taking actions that
could impede LightSquared's ability to get a license for the use of
its airwaves, the report related.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
Financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
* * *
Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the
Southern District of New York on Jan. 20, 2015, approved the
Second amended specific disclosure statement explaining
Lightsquared Inc., et al.'s second amended joint plan, after
determining that the disclosures contain adequate information
within the meaning of Section 1125(a) of the Bankruptcy Code.
As previously reported by The Troubled Company Reporter, the
Debtors, in December, filed a joint plan and disclosure statement,
which contemplate, among other things, (A) new money investments
by
the New Investors in exchange for a combination of preferred and
common equity, (B) the conversion of the Prepetition LP Facility
Claims into new second lien debt obligations, (C) the repayment in
full, in cash, of the Inc. Facility Prepetition Inc. Facility
NonSubordinated Claims immediately following confirmation of the
Plan, (D) the payment in full, in cash, of LightSquared's general
unsecured claims, (E) the provision of $1.25 billion in new money
working capital for the Reorganized Debtors, (F) the assumption of
certain liabilities, (G) the resolution of all inter-Estate
disputes, and (H) the contribution by Harbinger of the Harbinger
Litigations.
Judge Chapman commenced a hearing on March 9, 2015, to consider
confirmation of the amended joint plan filed by Lightsquared Inc.
and its debtor-affiliates together with Fortress Credit
Opportunities Advisor LLC, Harbinger Capital Partners LLC, and
Centerbridge Partners LP. Judge Chapman, in later March, approved
LightSquared Inc.'s Chapter 11 reorganization plan, capping a
bankruptcy odyssey for Philip Falcone's ambitious wireless venture
that filed for bankruptcy nearly three years ago.
U.S. Bankruptcy Judge Shelley C. Chapman in New York, in late
March, approved LightSquared Inc.'s Chapter 11 reorganization plan,
capping a bankruptcy odyssey for Philip Falcone's ambitious
wireless venture that filed for bankruptcy nearly three years ago.
LITTLE GIANT: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Little Giant Enterprises LLC
5710 Martin Grove Drive
Liliburn, GA 30047
Case No.: 15-01901
Chapter 11 Petition Date: May 12, 2015
Court: United States Bankruptcy Court
Northern District of Alabama (Birmingham)
Debtor's Counsel: Max A. Moseley, Esq.
KUMAR, PRABHU, PATEL & BANERJEE, LLC
1117 Perimeter Center West
Atlanta, GA 30338
Tel: 205-835-5803
Email: mmoseley29@hotmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Sydney Wormsby, manager.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
LOUDOUN HEIGHTS: Gets Court Approval to Sell 313-Acre Property
--------------------------------------------------------------
Loudoun Heights LLC received court approval to sell a real property
located in Loudoun County, Virginia, to a nonprofit organization.
U.S. Bankruptcy Judge Brian Kenney approved the sale of the
property to Virginia Conservation Legacy Fund Inc., a nonprofit
organization that seeks to conserve the state's natural resources.
Virginia Conservation offered $250,000 for the property, which
includes a 313-acre of unimproved land and a 60-foot wide private
access easement from Harper's Ferry Road to the property.
The 313-acre property was conveyed to Loudoun Heights by Robert and
Dee Leggett Foundation pursuant to an operating agreement, which
permits the foundation to buy back the property.
The foundation previously sought court approval to exercise its
right to repurchase the property. The foundation dropped its bid
after the bankruptcy judge approved the sale.
A copy of Judge Kenney's ruling is available without charge at
http://is.gd/lNbkgR
Loudoun Heights initially proposed to sell the property to Mosby
Ridge Estates LLC, which offered $313,000 for the property.
Despite the higher offer, the deal received objections from the
foundation and from M&T Bank, Loudoun Heights' largest unsecured
creditor that granted access easement to the company.
Both argued that the company's bankruptcy plan requires the sale of
the property to a nonprofit charitable organization willing to
donate it to the Commonwealth of Virginia.
The foundation prefers to have the property sold to Virginia
Conservation, which has committed to donate it for use as a state
park, court filings show.
In April, Mosby withdrew its offer after Virginia Conservation
resolved a dispute with two Virginia residents over timber rights
for the property.
Loudoun Heights also received an objection from Loudoun County
Attorney's Office which demanded payment of real estate taxes, and
from the Virginia residents who accused the company of "improperly
attempting to extinguish [their] timber rights fee interest in the
property," according to court filings.
About Loudoun Heights
Loudoun Heights, LLC, filed a Chapter 11 petition (Bankr. E.D. Va.
Case No. 13-15588) on Dec. 16, 2013. The Debtor disclosed total
assets of $13.1 million and total debt of $4.84 million. The
petition was signed by Joe Bane as sole manager. Frank Bredimus,
Esq., at Law Office of Frank Bredimus, serves as the Debtor's
counsel. Judge Brian F. Kenney presides over the case.
As reported in the Troubled Company Reporter on April 22, 2014, the
Debtor in early April filed an amended disclosure statement
explaining its proposed plan of reorganization. According to the
disclosure statement, all classes of creditors will be paid in
full. The proceeds from the sale of the Debtor's assets will be
sufficient to pay the Claims of all secured, priority unsecured and
general unsecured creditors, and court-approved professionals.
The Debtor expects $4.37 million to $9.92 million in revenue from
the sale of all assets.
MAGNETATION LLC: Final Hearing on $135 Million Loan on June 10
--------------------------------------------------------------
Magnetation LLC will ask the U.S. Bankruptcy Court for the District
of Minnesota at a hearing on June 10, 2015, at 10:00 a.m. for final
approval to use cash collateral and obtain $135 million of
superpriority senior secured debtor in possession term loan, of
which $63.7 million represents additional incremental liquidity and
approximately $71.3 million represents roll-ups of certain
prepetition indebtedness.
Further, the Ad Hoc Senior Secured Note Holder Committee, which
holds more than 70% of the principal amount of the prepetition
notes senior secured notes, has already agreed to participate as
lenders under the DIP Financing and to backstop the DIP Financing.
All other prepetition noteholders will have the opportunity to
become DIP Lenders in accordance with the solicitation procedures.
Wilmington Trust, National Association, is acting as administrative
agent and as collateral agent for the DIP Financing.
The bankruptcy judge entered an interim order on May 7 authorizing
the Debtors to obtain $55 million (which includes the roll up) of
the DIP Financing, and approving the proposed solicitation
procedures. A copy of the Interim DIP Order is available at:
http://bankrupt.com/misc/Magnetation_Interim_DIP_Order.pdf
The DIP Financing will bear interest at a fixed rate of 12% per
annum, paid in kind, with interest increasing to 14% upon an event
of default. There will be a backstop fee equal to 4% of the
aggregate principal amount of the DIP financing, a commitment fee
equal to 3% of the aggregate principal amount, and fees payable to
the administrative agent including a $25,000 annual administration
fee.
The DIP Facility will mature even months after entry of the Interim
Order, subject to a three-month extension with the consent of all
DIP Lenders. Unless waived by the Required Lenders (i.e. the DIP
lenders holding more than 50% of the outstanding principal amount)
or otherwise ordered by the Court, the occurrence of any of the
following will be an Event of Default under the DIP Credit
Agreement:
(a) Chief Restructuring Officer: The Debtors shall not have hired
a Chief Restructuring Officer that is acceptable to the Required
Lenders on or before the 15th day after the Petition Date.
(b) Restructuring Support Agreement: The Debtors shall not have
entered into a restructuring support agreement (the "RSA") with the
Required Lenders giving effect to the Plan Term Sheet in form and
substance acceptable to the Required Lenders on or before the 25th
day after the Petition Date.
(c) Motion to Approve a Restructuring Support Agreement: The
Debtors will not have filed with the Court a motion to approve the
RSA (the "RSA Motion") on or before the 40th day after the Petition
Date.
(d) Final Order: The Court will not have entered the Final Order
on or before the 45th day after the Petition Date.
(e) Approval of Restructuring Support Agreement: The Court will
not have entered an order approving the RSA Motion on or before the
75th day after the Petition Date.
(f) Filing of Disclosure Statement and Plan: The Debtors will not
have filed with the Court a plan of reorganization and a disclosure
statement in form and substance acceptable to the Lenders on or
before the 90th day after the Petition Date.
(g) Approval of Disclosure Statement or Filing of Sale Motion: At
the election of the Required Lenders, either (i) the Disclosure
Statement will not have been approved by the Court or, in the
alternative, (ii) the Debtors will not have filed a motion with the
Court seeking approval of a sale of all, or substantially all, of
the Debtors' assets on terms acceptable to the Required Lenders
pursuant to section 363 of the Bankruptcy Code (the "363 Sale"), in
either case on or before the 120th day after the Petition Date.
(h) Confirmation of Plan or Approval of 363 Sale Motion: At the
election of the Required Lenders, either (i) the Plan will not have
been confirmed by the Court or, in the alternative, (ii) an order
approving the 363 Sale will not have been entered by the Court, in
either case on or before the 175th day after the Petition Date.
(i) Consummation: The effective date of the Plan will not have
occurred on or before the 190th day after the Petition Date.
A full-text copy of the DIP Financing Motion, which includes the
DIP Credit Agreement, is available at:
http://bankrupt.com/misc/Magnetation_M_DIP_Loan.pdf
About Magnetation LLC
Magnetation LLC -- http://www.magnetation.com/-- is a joint
venture between Magnetation, Inc. (50.1% owner) and AK Iron
Resources, LLC, an affiliate of AK Steel Corporation (49.9% owner).
Magnetation LLC recovers high-quality iron ore concentrate from
previously abandoned iron ore waste stockpiles and tailings basins.
Magnetation LLC owns iron ore concentrate plants located in
Keewatin, MN, Bovey, MN and Grand Rapids, MN, and an iron ore
pellet plant in Reynolds, IN.
Magnetation LLC and four subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Minn. Lead Case No. 15-50307) in Duluth,
Minnesota, on May 5, 2015, after reaching a deal with secured
noteholders on a balance sheet restructuring. The cases are
assigned to Chief Judge Gregory F Kishel.
The Debtors have tapped Davis Polk & Wardwell LLP and Lapp, Libra,
Thomson, Stoebner & Pusch, Chtd., as attorneys; Blackstone Advisory
Partners LP as financial advisor; and Donlin, Recano & Company,
Inc., as the claims agent.
The Debtor's exclusive period for filing a plan and disclosure
statement ends Sept. 2, 2015.
MAGNETATION LLC: Seeks to Assume Technology License Agreement
-------------------------------------------------------------
Magnetation LLC was formed in October 2011 as a joint venture
between Magnetation, Inc. and AK Iron Resources, LLC, a
wholly-owned subsidiary of AK Steel Corporation.
The Debtors' primary business is the production of iron ore
concentrate from tailings, and the processing of that iron ore
concentrate into iron pellets for sale as a raw input for the
production of steel. The heart of this process, and what sets the
Debtors apart from other producers in the industry, is the
proprietary technology, know-how and other intellectual property
licensed from Mag Inc. under a technology license agreement dated
as of October 4, 2011 (as amended on May 16, 2013). Three of the
Debtors' four plants exist solely to implement the Magnetation
Process, while the fourth plant, which provides the Debtors with
the majority of their revenue, is supplied by the outputs of the
Iron Ore Plants.
Mag LLC and its affiliated debtors ask the Bankruptcy Court for
approval to assume the Technology License Agreement.
Clinton E. Cutler, Esq., at Fredrikson & Byron, P.A., avers that
the burdens on the Debtors under the Technology License Agreement
are insignificant in comparison to the benefits.
According to Mr. Cutler, the Technology License Agreement grants
Mag LLC a non-exclusive license to use the Magnetation Process
within the United States of America, and its territories and
possessions. The term of the Technology License Agreement is
linked to the term of the operating agreement under which Mag LLC
is organized, which is to be perpetual, subject to limited
termination provisions included therein. The only payments due
under the Technology License Agreement are pass-through payments to
the State of Minnesota based on the royalties that Mag Inc. is
obligated to pay as a licensor of technology under a royalty
agreement among itself, the Office of the Commissioner of Iron
Range Resources and Rehabilitation, an agency of the State of
Minnesota, and the Minnesota Department of Employment and Economic
Development, a department of the State of Minnesota. The Debtors
estimate that these payments total approximately $860,000 per
quarter. There are no prepetition defaults under the Technology
License Agreement that would need to be cured. Thus, at no
additional cost, upon assumption, the Debtors will secure the
primary means with which to operate their business as they navigate
through chapter 11.
About Magnetation LLC
Magnetation LLC -- http://www.magnetation.com/-- is a joint
venture between Magnetation, Inc. (50.1% owner) and AK Iron
Resources, LLC, an affiliate of AK Steel Corporation (49.9% owner).
Magnetation LLC recovers high-quality iron ore concentrate from
previously abandoned iron ore waste stockpiles and tailings basins.
Magnetation LLC owns iron ore concentrate plants located in
Keewatin, MN, Bovey, MN and Grand Rapids, MN, and an iron ore
pellet plant in Reynolds, IN.
Magnetation LLC and four subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Minn. Lead Case No. 15-50307) in Duluth,
Minnesota, on May 5, 2015, after reaching a deal with secured
noteholders on a balance sheet restructuring. The cases are
assigned to Chief Judge Gregory F Kishel.
The Debtors have tapped Davis Polk & Wardwell LLP and Lapp, Libra,
Thomson, Stoebner & Pusch, Chtd., as attorneys; Blackstone Advisory
Partners LP as financial advisor; and Donlin, Recano & Company,
Inc., as the claims agent.
The Debtor's exclusive period for filing a plan and disclosure
statement ends Sept. 2, 2015.
MAGNETATION LLC: Taps Donlin Recano as Claims & Noticing Agent
--------------------------------------------------------------
Magnetation LLC and its affiliated debtors ask for court approval
to hire Donlin, Recano & Company as claims, noticing and balloting
agent.
Although the Debtors have not yet filed their schedules of assets
and liabilities, they anticipate that there will be thousands of
entities to be noticed. In view of the number of anticipated
claimants and the complexity of the Debtors' businesses, the
Debtors submit that the appointment of a claims, noticing and
balloting agent is both necessary and in the best interests of both
the Debtors' estates and their creditors.
Prior to the Petition Date, the Debtors provided Donlin Recano a
retainer in the amount of $20,000 and paid prepetition fees and
expenses in the amount of $30,000.
For its professional services, Donlin Recano will charge the
Debtors at these rates:
Position Hourly Rate
-------- -----------
Senior Bankruptcy Consultant $170
Consultant $115
Case Manager/Analyst $40 to $70
Technology/Programming Consultant $60 to $110
Clerical $25
For first day preparation, Schedules/SOFA preparation and
solicitation, the firm will charge the Debtors at these rates:
Position Hourly Rate
-------- -----------
Senior Bankruptcy Consultant $190
Consultant $125
Case Manager/ Analyst $40 to $70
Technology/Programming Consultant $60 to $110
Clerical $25
For its noticing services, Donlin Recano will waive fees for fax
and e-mail noticing. With respect to claims docketing and
management, the firm will waive fees for Web hosting and Website
development but will charge $0.06 per credit per month for data
storage. The firm 24/7 global call center will charge the Debtor
at its standard hourly rates.
Donlin Recano represents that it is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code with
respect to the matters upon which it is to be engaged.
The firm can be reached at:
DONLIN, RECANO & COMPANY, INC.
Re: Magnetation LLC, et al.
P.O. Box 899
Madison Square Station
New York, NY 10010
Toll Free Tel:1-800-903-3727
About Magnetation LLC
Magnetation LLC -- http://www.magnetation.com-- is a joint venture
between Magnetation, Inc. (50.1% owner) and AK Iron Resources, LLC,
an affiliate of AK Steel Corporation (49.9% owner). Magnetation
LLC recovers high-quality iron ore concentrate from previously
abandoned iron ore waste stockpiles and tailings basins.
Magnetation LLC owns iron ore concentrate plants located in
Keewatin, MN, Bovey, MN and Grand Rapids, MN, and an iron ore
pellet plant in Reynolds, IN.
Magnetation LLC and four subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Minn. Lead Case No. 15-50307) in Duluth,
Minnesota, on May 5, 2015, after reaching a deal with secured
noteholders on a balance sheet restructuring. The cases are
assigned to Chief Judge Gregory F Kishel.
The Debtors have tapped Davis Polk & Wardwell LLP and Lapp, Libra,
Thomson, Stoebner & Pusch, Chtd., as attorneys; Blackstone Advisory
Partners LP as financial advisor; and Donlin, Recano & Company,
Inc., as the claims agent.
The Debtor's exclusive period for filing a plan and disclosure
statement ends Sept. 2, 2015.
MAGNUM HUNTER: S&P Lowers CCR to 'CCC-' on Decreased Liquidity
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Houston-based U.S. oil and gas exploration and production
company Magnum Hunter Resources Corp. to 'CCC- from 'CCC+'. At the
same time, S&P lowered its issue-level rating on the company's
second-lien term loan to 'CCC' from 'B-' and its issue-level rating
on Magnum's senior unsecured debt to 'C' from 'CCC-'. The outlook
is negative.
S&P said, "The recovery rating on the second-lien debt is '2',
reflecting our expectation of substantial (70% to 90%, lower half
of the range) recovery to creditors in the event of a default. The
recovery rating on the senior notes debt is '6', reflecting our
expectation of negligible (0% to 10%) recovery to creditors in
the event of a default."
"The rating action reflects our expectation that Magnum Hunter's
liquidity sources, including cash on hand, availability under the
revolver, and internally generated cash flows, will be insufficient
to cover interest payments and capital spending over the next six
months," said Standard & Poor's credit analyst Christine Besset.
In addition, in accordance with the recent amendment and waiver to
the company's first-lien credit facility, Magnum is required to
raise, by May 29, 2015, $65 million of net cash proceeds from the
issuance of equity, asset sales, or entry into a joint venture in
order not to trigger an event of default under its bank debt. As a
result, S&P has revised its assessment on the company's liquidity
to "weak" and S&P believes that the company is likely to default in
2015 barring any favorable development such as asset sales or any
other liquidity-enhancing transactions.
Standard & Poor's views Magnum's business profile as "vulnerable"
and financial risk as "highly leveraged."
S&P said, "We could lower the rating if a default appeared
inevitable. We could revise the outlook to stable if the company
strengthens its liquidity position, such as via asset sales or
entering into a joint venture."
MECHEL OAO: Ernst & Young Expresses Going Concern Doubt
-------------------------------------------------------
Mechel OAO filed with the U.S. Securities and Exchange Commission
its annual report on Form 20-F for the year ended Dec. 31, 2014.
Ernst & Young LLC expressed substantial doubt about the Company's
ability to continue as a going concern, citing that the Group has
significant debt that it does not have the ability to repay without
its refinancing or restructuring, has not complied with certain
covenants of its major loan agreements with banks and is dependent
upon reaching agreements with its banks to refinance or restructure
its debt obligations.
The Company reported a net loss of $4.36 billion on $6.4 billion of
net revenue in 2014, compared with a net loss of $2.92 billion on
$8.5 billion of net revenue in 2013.
The Company's balance sheet at Dec. 31, 2014, showed $6.71 billion
in total assets, $9.36 billion in total liabilities and total
stockholders' deficit of $2.64 billion.
A copy of the Form 20-F is available at:
http://is.gd/eUNeb0
Mechel, which is one of the world's leading mining and metals
companies, lost over 75% of its market value last year as it
struggles to repay the remaining debt in excess of US$6 billion
to lenders, including Russia's state-run VTB, as well as the
country's first and third largest banks -- Sberbank and
Gazprombank, Sputnik recounts. Mechel OAO is a Russian metals
and mining group.
MERRILL CORP: S&P Hikes Corp. Credit Rating to 'B+'
---------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on St. Paul, Minn.-based Merrill Corp. to 'B+' from 'B'. The
outlook is stable.
At the same time, S&P assigned its 'BB-' issue-level rating and '2'
recovery rating to the company's $560 million senior secured credit
facility, which consists of a $50 million first-lien revolving
credit facility due 2020 and a $510 million first-lien term loan
due 2022. The '2' recovery rating indicates S&P's expectation for
substantial (70%-90%; lower half of the range) recovery of
principal in the event of a payment default.
"The upgrade on Merrill Corp. reflects our view of the company's
financial risk profile as 'aggressive' due to its improved
financial policy and our expectation for adjusted debt leverage to
remain below 5x over the next few years," said Standard & Poor's
credit analyst Thomas Hartman.
"In our opinion, the company has made good progress in its
transition from a traditional print-based document solutions
provider to a technology-enabled platform for content sharing,
regulated communications, and compliance services," he added.
The stable rating outlook on Merrill Corp. reflects S&P's
expectation that adjusted debt leverage will remain below 5.0x over
the next few years. It also reflects S&P's expectation that
operating performance will continue to improve as increased
investment leads to mid-single-digit percent organic growth and
an EBITDA margin expansion of 200 basis points to 300 basis points
over the next few years.
S&P said, "We could lower the rating if a failure to execute on
investment initiatives or volatility in the M&A markets leads to
lower-than-expected revenue growth that does not sufficiently
offset the increased operational expenditures, resulting in EBITDA
margins declining to the mid- to low-teens percentage range and
sustained debt leverage above 5x. We could also consider a
downgrade if the company reverses its trend of debt-reduction and
initiates any shareholder-rewarding programs that increase
leverage.
"While unlikely, we could raise the rating if the company improves
the diversity of its revenue sources, increases the percentage of
revenue that is recurring, and increases operating efficiency. This
would likely lead to low-double-digit revenue and EBITDA growth. We
could also raise the rating if the company continues to reduce
adjusted debt leverage well below 4x and we believe that the
financial sponsors will monetize their investments, reducing their
ownership stakes to the point that no group has effective control
of the business."
MUD KING: Gets Court Approval of Chapter 11 Reorganization Plan
---------------------------------------------------------------
Mud King Products, Inc. on May 13 reported that it received court
approval of its Chapter 11 Plan of Reorganization on April 21,
2015. The Plan provides for the Company to continue operations and
pay all of its creditors one hundred cents on the dollar. The Plan
includes the dismissal of the litigation commenced by National
Oilwell Varco against the Company. The Plan also provides for a
complete release of any claims held by NOV against the Company and
all employees who were parties to the litigation.
Mud King is a Houston, Texas-based oilfield services company that
distributes replacement pump parts for mud pumps, handling tools,
and other drilling parts.
Mud King was represented by Edward L. Rothberg and Melissa A.
Haselden of Hoover Slovacek, LLP, as its Chapter 11 bankruptcy
counsel, and Suzanne Lehman Johnson of Muskat, Martinez & Mahony,
LLP, as its special litigation counsel in defending against trade
secret claims in the NOV litigation.
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.
MUSCLEPHARM CORP: Posts $7.47 Million Net Loss in First Quarter
---------------------------------------------------------------
MusclePharm Corporation filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $7.47 million on $41.32 million of net revenue for the three
months ended March 31, 2015, compared to net income of $2.73
million on $50.2 million of net revenue for the same period in
2014.
As of March 31, 2015, the Company had $67.9 million in total
assets, $46.9 million in total liabilities, and $20.96 million in
total stockholders' equity.
"We were very pleased with the fundamentals of our business in the
first quarter and the positive momentum we have built in continued
revenue contributions, positive cash flow and sustainable margins,"
said Brad Pyatt, MusclePharm's chairman and chief executive
officer. "While our year-over-year revenue was down slightly, due
largely to the timing of our key Arnold Classic sales event, we
closed the quarter with $17.1 million in sales backlog orders and
we are on track for strong revenue growth for the remainder of the
year driven by the continued strengthening of our core products,
new product releases, expanding our distribution network and
entering into new retail outlets. At the same time, we are
actively managing our cash position, with strong increases in cash
flow this quarter, and managing our operating expenses, with
initiatives in place to keep costs in line for the remainder of the
year. We believe we are well positioned for continued top line
growth as we approach our goal of profitability and long-term
shareholder value creation."
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/BvVbOO
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 Corporation reported a net loss of $13.8 million in
2014, a net loss of $17.7 million in 2013 and a net loss of $19
million in 2012.
NII HOLDINGS: Posts $309-Mil. Operating Loss in First Quarter
-------------------------------------------------------------
NII Holdings, Inc., on May 7 announced its consolidated financial
results for the first quarter of 2015, which include the Company's
operations in Mexico that were sold to AT&T on April 30, 2015. The
Company reported 165,000 total net subscriber additions for the
quarter driven by growth on its 3G networks in both Brazil and
Mexico. The Company ended the quarter with 9.3 million total
subscribers, a 2 percent increase from a year ago. Financial
results for the first quarter of 2015 included consolidated
operating revenues of $764 million, a 20 percent decrease compared
to the first quarter of 2014; a consolidated adjusted OIBDA loss of
$21 million, which excludes the impact of non-cash asset
impairments, restructuring charges and other unusual items; and a
consolidated operating loss of $165 million. For the first quarter
of 2015, the Company generated a net loss from continuing
operations of $309 million. Capital expenditures were $27 million
for the quarter. The Company ended the first quarter with $774
million in consolidated cash, cash equivalents and short-term
investments.
"I am pleased to report improvements in our operational performance
during the first quarter, including a return to subscriber growth
in Mexico, continued subscriber growth in Brazil and an increase in
OIBDA driven by lower customer acquisition costs. Despite these
improvements, weak macroeconomic conditions and lower local
currency exchange rates continued to weigh down our reported
results for the quarter," said Steve Shindler, NII Holdings' chief
executive officer. "We expect the macroeconomic environment and
its impact on foreign exchange rates to continue to affect our
businesses in Brazil and Argentina for the rest of 2015. Our focus
for the remainder of the year will be to continue to build our 3G
subscriber base in Brazil and deliver local currency revenue growth
by offering innovative service plans that meet the needs of our
customers. To support that effort, we will continue to invest in
our Brazilian operations, including modernizing our IT systems and
maintaining the quality of our 3G networks. We will also continue
to pursue cost savings strategies to reduce the impact of some of
the economic challenges we're facing in our markets."
NII Holdings' consolidated average monthly service revenue per
subscriber (ARPU) was $22 for the first quarter of 2015, down from
$29 in the same quarter last year. Approximately $4 of the decline
in consolidated ARPU was due to weaker foreign currency exchange
rates and the remainder was related to an increase in the mix of
prepaid customers in Mexico who generally contribute lower average
revenue per user compared to postpaid customers. The Company also
reported consolidated average monthly churn of 3.55 percent for the
period, compared to 3.43 percent in the first quarter of 2014.
Consolidated cost per gross addition (CPGA) was $151 for the first
quarter of 2015, a $139 decrease from the year ago period,
primarily due to a higher mix of prepaid gross subscriber additions
in Mexico and an increase in new postpaid subscribers in Brazil who
use their own handsets rather than purchasing a new one from the
Company.
"The previously announced closing of the sale of Nextel Mexico to
AT&T will provide us with the funding we need to continue to grow
and effectively compete in Brazil while we continue to seek
strategic options for our business in Argentina," said Juan
Figuereo, NII Holdings' executive vice president and chief
financial officer. "We also recently received permission from the
bankruptcy court to solicit creditor approval of our proposed
reorganization plan which, if approved by our creditors and
confirmed by the bankruptcy court, would allow us to emerge from
Chapter 11 by mid-year. While we are encouraged by these
developments, we believe the key to enhancing the value of our
business is to deliver better financial results, and we will remain
focused on achieving that goal."
In light of the pending bankruptcy proceedings under Chapter 11 of
the Bankruptcy Code, the Company will not host a financial results
conference call this quarter. Additional details regarding the
Company's results and bankruptcy proceedings are included in the
Company's Quarterly Report on Form 10-Q for the first quarter that
was filed with the Securities and Exchange Commission this morning.
Additional operational and financial details are also available
under the Investor Relations link at
www.nii.com
In addition to the financial results prepared in accordance with
accounting principles generally accepted in the United States
(GAAP) provided throughout this press release and in the attached
financial table, NII Holdings has presented consolidated adjusted
OIBDA, ARPU, and CPGA. These measures are non-GAAP financial
measures and should be considered in addition to, but not as
substitutes for, the information prepared in accordance with GAAP.
Reconciliations from GAAP results to these non-GAAP financial
measures are provided in the notes to the attached financial table.
To view these
NII HOLDINGS: Posts $310M Net Loss in March 31 Quarter
------------------------------------------------------
NII Holdings, Inc. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q for the quarterly
period ended March 31, 2015.
NII Holdings reported $764 million in operating revenues from
service and other revenues, and handset and accessory revenues, for
the three months ended March 31, 2015. Operating revenues were
$956 million for the same period ended March 31, 2014.
Net loss, NII Holdings said, was $310 million for the three months
ended March 31, 2015; from $376 million for the same period in
2014.
Total assets were $4.90 billion as of March 31, 2015, against
liabilities, not subject to compromise, of $2.81 billion and
liabilities subject to compromise of $4.59 billion.
A copy of the Form 10-Q report is available at http://is.gd/K02xlg
About NII Holdings
NII Holdings Inc. [OTC: NIHDQ] through its subsidiaries provides
wireless communication services for businesses and consumers in
Brazil, Mexico and Argentina. NII Holdings has the exclusive right
to use the Nextel brand in its markets pursuant to a trademark
license agreement with Sprint Corporation and offers unique
push-to-talk ("PTT") services associated with the Nextel brand in
Latin America.
NII Holdings and its affiliated debtors sought bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 14-12611) in Manhattan
on Sept. 15, 2014. The Debtors' cases are jointly administered and
are assigned to Judge Shelley C. Chapman.
The Debtors have tapped Jones Day's Scott J. Greenberg, Esq., and
Michael J. Cohen, Esq., as counsel and Prime Clerk LLC as claims
and noticing agent.
The U.S. Trustee for Region 2 appointed five creditors of NII
Holdings to serve on the official committee of unsecured
creditors. The panel is represented by Kenneth H. Eckstein, Esq.
and Adam C. Rogoff, Esq. of Kramer Levin Naftalis & Frankel LLP.
Kurtzman Carson Consultants LLC is the panel's information agent.
* * *
On Nov. 24, 2014, the Debtors filed a first plan support
agreement. On Dec. 22, 2014, the Debtors filed a plan of
reorganization.
On Jan. 26, 2015, the Debtors reached agreement for the sale of
their operations in Mexico, operated by non-debtor Comunicaciones
Nextel de Mexico, S.A. de C.V., to an affiliate of AT&T for $1.875
billion, subject to (a) the approval of the Court and (b)
regulatory approvals in Mexico.
As a result of the sale transaction, the Debtors on March 13,
2015, filed the First Amended Plan. The sale transaction was
approved on March 23, 2015.
NORTEL NETWORKS: Canadian, US Courts Rule on $7.3-Bil. Cash Fight
-----------------------------------------------------------------
Peg Brickley, writing for The Wall Street Journal, reported that
the question of how to divide $7.3 billion raised in the
international bankruptcy of Nortel Networks Corp. was answered on
May 12 by two judges, one in the U.S. and one in Canada.
According to the report, Justice Frank Newbould of the Ontario
Superior Court of Justice in Toronto and Judge Kevin Gross of the
U.S. Bankruptcy Court in Wilmington, Del., agreed on the outcome: a
modified pro rata split of the money.
"In this case, insolvency practitioners, academics, international
bodies, and others have watched as Nortel's early success in
maximizing the value of its global assets through cooperation has
disintegrated into value-erosive adversarial and territorial
litigation described by many as scorched earth litigation," the
Canadian judge wrote, the Journal cited.
The ruling rests on equitable principles, and spurns the legalistic
theories painstakingly advanced by Nortel Canada, Nortel U.S. and
other contenders for the cash, Judge Gross said, the Journal
further cited.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation and
its various affiliated entities provided next-generation
technologies, for both service provider and enterprise networks,
support multimedia and business-critical applications. Nortel did
business in more than 150 countries around the world. Nortel
Networks Limited was the principal direct operating subsidiary of
Nortel Networks Corporation.
On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent
Nortel Networks Corporation, NNI's direct corporate parent Nortel
Networks Limited and certain of their Canadian affiliates
commenced a proceeding with the Ontario Superior Court of Justice
under the Companies' Creditors Arrangement Act (Canada) seeking
relief from their creditors. Ernst & Young was appointed to serve
as monitor and foreign representative of the Canadian Nortel
Group. That same day, the Monitor sought recognition of the CCAA
Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No.
09-10164) under Chapter 15 of the U.S. Bankruptcy Code.
That same day, NNI and certain of its affiliated U.S. entities
filed voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10138).
In addition, the High Court of England and Wales placed 19 of
NNI's European affiliates into administration under the control of
individuals from Ernst & Young LLP. Other Nortel affiliates have
commenced and in the future may commence additional creditor
protection, insolvency and dissolution proceedings around the
world.
On May 28, 2009, at the request of administrators, the Commercial
Court of Versailles, France, ordered the commencement of secondary
proceedings in respect of Nortel Networks S.A. On June 8, 2009,
Nortel Networks UK Limited filed petitions in U.S. Bankruptcy
Court for recognition of the English Proceedings as foreign main
proceedings under Chapter 15.
U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and
15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at
Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as
Chapter 15 petitioner's counsel.
In the Chapter 11 case, James L. Bromley, Esq., and Howard S.
Zelbo, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New
York, serve as the U.S. Debtors' general bankruptcy counsel; Derek
C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in
Wilmington, serves as Delaware counsel. The Chapter 11 Debtors'
other professionals are Lazard Freres & Co. LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims and notice
agent.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors in respect of the U.S. Debtors.
An ad hoc group of bondholders also was organized. An Official
Committee of Retired Employees and the Official Committee of Long-
Term Disability Participants tapped Alvarez & Marsal Healthcare
Industry Group as financial advisor. The Retiree Committee is
represented by McCarter & English LLP as Delaware counsel, and
Togut Segal & Segal serves as the Retiree Committee. The
Committee retained Alvarez & Marsal Healthcare Industry Group as
financial advisor, and Kurtzman Carson Consultants LLC as its
communications agent.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated
assets of $11.6 billion and consolidated liabilities of $11.8
billion. The Nortel Companies' U.S. businesses are primarily
conducted through Nortel Networks Inc., which is the parent of
majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI
had assets of about $9 billion and liabilities of $3.2 billion,
which do not include NNI's guarantee of some or all of the Nortel
Companies' about $4.2 billion of unsecured public debt.
Since the commencement of the various insolvency proceedings,
Nortel has sold its business units and other assets to various
purchasers. Nortel has collected roughly $9 billion for
distribution to creditors. Of the total, $4.5 billion came from
the sale of Nortel's patent portfolio to Rockstar Bidco, a
consortium consisting of Apple Inc., EMC Corporation,
Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In
Motion Limited, and Sony Corporation. The consortium defeated a
$900 million stalking horse bid by Google Inc. at an auction. The
deal closed in July 2011.
Nortel has filed a proposed plan of liquidation in the U.S.
Bankruptcy Court. The Plan generally provides for full payment on
secured claims with other distributions going in accordance with
the priorities in bankruptcy law.
The trial on how to divide proceeds among creditors in the U.S.,
Canada, and Europe commenced on Sept. 22, 2014.
OHCMC-OSWEGO LLC: June 24 Hearing on Turnover of Rental Payments
----------------------------------------------------------------
U.S. Bankruptcy Judge Carol Doyle is set to hold a hearing on June
24 to consider the motion filed by PNC Bank NA to compel
OHCMC-Oswego LLC to turn over more than $43,000 it earned from
renting out a property in Oswego, Illinois.
PNC Bank said the company violated the terms of its liquidating
plan when it failed to turn over to the bank the payments it
received during the period Feb. 28 to Oct. 31, 2014.
Last year, OHCMC-Oswego sold the property pursuant to its
liquidating plan, which required the company to pay PNC Bank from
the sale proceeds. The sale was completed on Oct. 31, 2014,
according to court filings.
About OHCMC-Oswego
OHCMC-Oswego, LLC, is an Illinois limited liability company that
was formed on July 12, 2005 to, inter alia, acquire, develop and
sell a series of real estate developments. It is wholly owned by
Oliver-Hoffman Corporation. Its principal place of business is
located at 3108 S. Rt. 59, Ste. 124-373, Naperville, Illinois.
OHCMC-Oswego filed a Chapter 11 bankruptcy petition (Bankr. N.D.
Ill. Case No. 14-05349) in Chicago on Feb. 19, 2014, with plans to
sell its assets. Camille O. Hoffmann signed the petition as
president of managing and sole member. The Debtor disclosed
$92,268 plus an unknown amount in assets and $56,782,127 in
liabilities. The Hon. Carol A. Doyle presides over the case. The
Debtor is represented by David C. Gustman,, Esq., at Freeborn &
Peters LLP.
The U.S. Bankruptcy Court confirmed the Debtor's Modified Plan of
Liquidation dated June 30, 2014, which contemplates a sale of the
Debtors' assets.
No trustee, examiner or creditors' committee has been appointed in
the case.
ONE SOURCE: Creditors' Panel Hires Brinkman Portillo as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of One Source
Industrial Holdings, LLC, and One Source Industrial LLC seeks
authorization from the Hon. Russell F. Nelms of the U.S. Bankruptcy
Court for the Northern Division of Texas to retain Brinkman
Portillo Ronk, APC as counsel to the Committee, effective March 31,
2015.
The Committee requires Brinkman Portillo to:
(a) provide legal advice as necessary with respect to the
Committee's powers and duties as an official committee
appointed under 11 U.S.C. section 1102;
(b) assist the Committee in investigating the acts, conduct,
assets, liabilities, and financial condition of the Debtor,
the operation of the Debtor's business, potential claims,
and any other matters relevant to the case, to the sale of
assets or the formulation of a plan of reorganization;
(c) participate in the formulation of a Plan;
(d) provide legal advice as necessary with respect to any
disclosure statement and Plan filed in this case and with
respect to the process for approving or disapproving
disclosure statements and confirming or denying
confirmation of a Plan;
(e) prepare on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers;
(f) appear in Court to present necessary motions, applications,
and pleadings, and otherwise protecting the interests of
those represented by the Committee;
(g) assist the Committee in requesting the appointment of a
trustee or examiner, should such action be necessary; and
(h) perform other legal services as may be required and that
are in the best interests of the Committee and creditors.
Brinkman Portillo will be paid at these hourly rates:
Daren R. Brinkman, Partner $575
Laura J. Portillo, Partner $495
Kevin C. Ronk, Partner $390
Associate Attorneys $330
Paralegals and Law Clerks $175
Brinkman Portillo will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Daren Brinkman, partner of Brinkman Portillo, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
The U.S. Trustee for Region 6 filed with the Court an objection to
the Committee's employment of Brinkman Portillo as counsel to the
Committee.
The U.S. Trustee claims that prior to the United States Trustee
appointing an official committee of unsecured creditors, the law
firm Brinkman Portillo Ronk, APC contacted creditors via telephone
without a prior client relationship. Improper solicitation of
clients constitutes cause for denying the Applicant's employment
under 11 U.S.C. section 1103(b). The U.S. Trustee said the
Applicant failed to disclose adequately its improper attempts to
solicit a committee on its employment application. Cause exists to
deny Applicant’s employment.
The U.S. Trustee requested the Court to deny Brinkman Portillo's
employment.
The U.S. Trustee is represented by:
Erin Marie Schmidt, Esq.
Office of the United States Trustee
1100 Commerce St. Room 976
Dallas, TX 75242
Tel: (214) 767-1075
E-mail: Erin.Schmidt2@usdoj.gov
Brinkman Portillo can be reached at:
Daren R. Brinkman, Esq.
BRINKMAN PORTILLO RONK, APC
9500 Ray White Road, Second Floor
Ft. Worth, TX 76244
Tel: (682) 226-7437
About One Source Industrial
One Source Industrial Holdings, LLC, and One Source Industrial LLC
are both limited liability companies that are part of a corporate
family of affiliated companies.
One Source Industrial Holdings holds equipment utilized by various
related entities which provide rental equipment and industrial
services to businesses in the oil and gas, refining,
manufacturing, pipeline, shipping, and construction industries.
The types of equipment possessed by One Source include, e.g.,
hazardous material transportation vehicles, frac tanks, tank
trailers, barrel mix tank and vacuum tankers, air machines, and
waste and other industrial boxes and tanks. Industrial provides
executive management, accounting, and overhead services for
Holdings.
One Source Holdings sought Chapter 11 bankruptcy protection (Bankr.
N.D. Tex. Case No. 14-44996) in Ft. Worth, Texas, on Dec. 16, 2014.
One Industrial sought Chapter 11 bankruptcy protection (Bankr.
N.D. Tex. Case No. 15-400038) on Jan. 4, 2015. Holdings' case is
assigned to Judge Russell F. Nelms.
The Debtor disclosed $12,036,897 in assets and $15,890,063 in
liabilities as of the Chapter 11 filing.
The Debtors are represented by J. Robert Forshey, Esq., and Suzanne
K. Rosen, Esq., at Forshey & Prostok, LLP, in Ft. Worth, Texas.
The Debtors tapped EJC Ventures LP as financial consultant.
The U.S. Trustee appointed five creditors to serve on the official
committee of unsecured creditors.
ONE SOURCE: Creditors' Panel Hires Culhane Meadows as Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of One Source
Industrial Holdings, LLC, and One Source Industrial LLC seeks
authorization from the Hon. Russell F. Nelms of the U.S. Bankruptcy
Court for the Northern Division of Texas to retain Culhane Meadows
PLLC as counsel to the Committee, effective as of March 31, 2015.
The Committee requires Culhane Meadows to:
(a) provide legal advice as necessary with respect to the
Committee's powers and duties as an official committee
appointed under 11 U.S.C. section 1102;
(b) assist the Committee in investigating the acts, conduct,
assets, liabilities, and financial condition of the Debtor,
the operation of the Debtor's business, potential claims,
and any other matters relevant to the case, to the sale of
assets or the formulation of a plan of reorganization;
(c) participate in the formulation of a Plan;
(d) provide legal advice as necessary with respect to any
disclosure statement and Plan filed in this case and with
respect to the process for approving or disapproving
disclosure statements and confirming or denying
confirmation of a Plan;
(e) prepare on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers;
(f) appear in Court to present necessary motions, applications,
and pleadings, and otherwise protecting the interests of
those represented by the Committee;
(g) assist the Committee in requesting the appointment of a
trustee or examiner, should such action be necessary; and
(h) perform other legal services as may be required and that
are in the best interests of the Committee and creditors.
Culhane Meadows will be paid at these hourly rates:
Lynnette R. Warman, Partner $400
Richard Grant, Partner $325
Paralegals and Law Clerks $175
Culhane Meadows will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Lynnette R. Warman, partner of Culhane Meadows, 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.
Culhane Meadows can be reached at:
Lynnette Warman, Esq.
CULHANE MEADOWS, PLLC
The Crescent, Suite 700
100 Crescent Court
Dallas, TX 75201
Tel: (214) 693-6525
Fax: (214) 361-6690
Email: lwarman@culhanemeadows.com
About One Source Industrial
One Source Industrial Holdings, LLC, and One Source Industrial LLC
are both limited liability companies that are part of a corporate
family of affiliated companies.
One Source Industrial Holdings holds equipment utilized by various
related entities which provide rental equipment and industrial
services to businesses in the oil and gas, refining,
manufacturing, pipeline, shipping, and construction industries.
The types of equipment possessed by One Source include, e.g.,
hazardous material transportation vehicles, frac tanks, tank
trailers, barrel mix tank and vacuum tankers, air machines, and
waste and other industrial boxes and tanks. Industrial provides
executive management, accounting, and overhead services for
Holdings.
One Source Holdings sought Chapter 11 bankruptcy protection (Bankr.
N.D. Tex. Case No. 14-44996) in Ft. Worth, Texas, on Dec. 16, 2014.
One Industrial sought Chapter 11 bankruptcy protection (Bankr.
N.D. Tex. Case No. 15-400038) on Jan. 4, 2015. Holdings' case is
assigned to Judge Russell F. Nelms.
The Debtor disclosed $12,036,897 in assets and $15,890,063 in
liabilities as of the Chapter 11 filing.
The Debtors are represented by J. Robert Forshey, Esq., and Suzanne
K. Rosen, Esq., at Forshey & Prostok, LLP, in Ft. Worth, Texas.
The Debtors tapped EJC Ventures LP as financial consultant.
The U.S. Trustee appointed five creditors to serve on the official
committee of unsecured creditors.
PARADIGM ACQUISITION: Moody's Assigns 'B2' CFR, Outlook Stable
--------------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating and
B2 Probability of Default rating to Paradigm Acquisition Corp. This
is the first time Moody's has assigned ratings to Paradigm. Moody's
also assigned a B1 (LGD 3) ratings to the company's proposed first
lien senior secured credit facilities, including a $222 million
first lien term loan and $25 million first lien revolving credit
facility. The proceeds from the senior secured credit facilities,
along with unsecured subordinated debt and an equity contribution
from Summit Partners, L.P. and its affiliates will fund Summit's
buyout of the company from the current owner Lightyear Capital and
pay transaction fees and expenses. The rating outlook is stable.
All ratings are subject to review of final documentation.
Moody's assigned the following ratings:
-- Corporate Family Rating, B2
-- Probability of Default Rating, B2-PD
-- $25 million senior secured first lien revolving credit
facility, rated B1 (LGD 3)
-- $222 million senior secured first lien term loan, rated B1
(LGD 3)
-- The rating outlook is stable.
The B2 Corporate Family Rating reflects Paradigm's high financial
leverage following close of the acquisition. The rating also
reflects the company's modest absolute size based on revenues, and
relatively high customer concentration within the niche sub-segment
of the worker's compensation case management industry. With
revenues of $253 million, Paradigm is small when compared to many
other corporate issuers. The rating is supported by the company's
leading market position, its high barriers to entry, strong
customer retention and modest regulatory or reimbursement risk.
Moody's anticipates that the company's solid free cash flow will
allow Paradigm to reduce leverage over time through a combination
of organic EBITDA growth and debt repayment.
The stable outlook incorporates Moody's expectation that the
company will reduce leverage as it grows its core business and
pursues cross selling opportunities, but that it will remain
relatively small and highly levered.
The ratings could be downgraded if the company's operating
performance deteriorates, perhaps as a result of increased
competition in the space. Ratings could also be downgraded if free
cash flow turns negative, or if it is unable to reduce debt to
EBITDA to below 6.0x over the next 12-18 months.
An upgrade is unlikely in the near-term given the company's very
high financial leverage. However, the ratings could be upgraded
over the intermediate term if the company achieves greater scale
and if debt to EBITDA is sustained below 5.0x.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 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.
Paradigm is the leading nationwide provider of outsourced
catastrophic worker's compensation case management services for
insurance companies and self-insured employers. The company's
product offerings include acute and ongoing catastrophic, and case
management services for traumatic brain injuries, spinal cord
injuries, amputations, burns, wounds, and chronic pain.
PARADIGM ACQUISITION: S&P Assigns 'B' LT Corp. Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned Paradigm
Acquisition Corp. (Paradigm) its 'B' long-term corporate credit
rating. The outlook is stable.
Summit Partners L.P. is acquiring Paradigm for $518 million.
S&P said, "We also assigned the company's planned $247 million
first-lien senior secured credit facilities our 'B' debt ratings
with '3' recovery ratings in the higher range. The first-lien
senior secured credit facilities include a five-year $25
million revolver (to be unfunded at transaction close) and a
seven-year $222 million term loan B. The '3' recovery rating
indicates our expectation that lenders could expect meaningful
recovery (50%-70%) in the event of a payment default. We did not
assign ratings to the company's planned seven-and-a-half year $73
million unsecured subordinated debt that will be issued to Summit
Partners' affiliated funds.
"The 'B' rating on Paradigm is based on the company's weak business
risk profile (BRP) and highly leveraged financial risk profile
(FRP). The BRP assessment is based on the company's highly focused
niche business scope, its small size/scale, pricing/underwriting
risks associated with some of its contracts, insourcing and
competitive threats, and a concentrated client base. Conversely,
the company has a good market position in its niche, and historical
and forecasted revenue and earnings trends are positive. The FRP
assessment is based on the company's financial sponsor ownership
and very aggressive financial policies. Following Summit's
acquisition of Paradigm, the company's key credit metrics will be
very weak, with pro-forma leverage of 6.6x (on the basis of our
adjustments) and EBITDA interest coverage of 2.1x for the 12 months
ended March 31, 2015."
Paradigm is the holding company whose primary operating subsidiary
is Walnut Creek, Calif.-based Paradigm Management Services LLC. The
organization conducts business as Paradigm Outcomes.
Paradigm is an outsourcing provider of catastrophic/complex case
management for the workers' compensation insurance industry. Its
client base includes insurance companies, state workers'
compensation funds, self-funded employers, government entities, and
insurance brokers. The company focuses solely on
catastrophic/complex cases with high-severity injuries and/or
chronic conditions. The company's case-management strategy involves
assembling a team of medical experts to design and coordinate a
care plan for an injured worker. The company's main
product/services are what it calls its outcome plans (92% of 2014
revenues), followed by complex large loss (6%), and pain management
(2%). Paradigm directly and indirectly competes against insurance
carriers (which are also clients) and workers' compensation
specialists such as Genex Services, One Call Care Management,
Coventry Workers Comp Services, Corvel Corp., and Broadspire
Services Inc.
"The stable outlook reflects our view that Paradigm has a
differentiated business model that should increasingly gain
traction among clients and support double-digit revenue/earnings
growth and gradual deleveraging in 2015-2016. We assume that free
operating cash flows will be used toward debt repayment and
possibly small "tuck-in" acquisitions. We forecast revenues and
adjusted EBITDA of $290 million-$295 million and $45 million-$50
million in 2015, respectively; and $335 million-$350 million and
$54 million-$58 million in 2016, respectively. We forecast
debt/EBITDA to improve to 5.5x-6.0x by year-end 2015 and less than
5.0x by year-end 2016. In addition, EBITDA interest coverage will
remain in the 2.0x-3.0x range in 2015-2016. The free
operating cash flow-to-debt ratio will remain approximately 10%-15%
in 2015-2016," said S&P.
"We would consider a downgrade if the company raises debt or its
business deteriorates such that leverage increases to more than
6.5x and/or EBITDA interest coverage falls to less than 2x.
Business deterioration could result from higher-than-normal
unprofitability of the company's guaranteed pricing contracts or
the loss of one or two key clients. We would also consider a
downgrade if the company's liquidity becomes constrained such that
liquidity sources are projected to fall to less than 1.2x required
liquidity uses.
"An upgrade is unlikely in 2015-2016 based on the company's very
aggressive financial policies. However, we would consider an
upgrade in the long term if the company were to substantially grow
and diversify its business on a profitable basis while lowering
leverage to less than 5x on a sustained basis."
PARK FLETCHER: Filbert Orton's Bid for Third Party Manager Denied
-----------------------------------------------------------------
U.S. Bankruptcy Judge Jefrrey Graham denied approval to the motion
by lender Filbert Orton EAT, LLC, to compel the employment of a
third party manager to manage the property of Park Fletcher Realty,
LLC.
"For the reasons stated in open court, the Court hereby denies the
Motion," Judge Graham ruled, following a hearing on April 13.
Filbert Orton says that prepetition, the Debtor was in default on a
secured debt, and, as a result, the lender petitioned for the
appointment of a receiver. The Debtor sought bankruptcy protection
on Feb. 15, 2015, three days after an order appointing a receiver
was entered.
The Lender wanted Aspen Management named as manager, claiming that
the Debtor is either intentionally or negligently mismanaging the
property.
"The books and records are handled by a high school graduate. The
budget provided by the Debtor attached to its motion to use cash
collateral is riddled with errors and misinformation. By way of
example, the Debtor's budget appears to show gross rent of
approximately $425,000 a month. However, an alleged rent roll
received from the Debtor post-petition shows rent in the range of
$220,000 a month. It is also apparently the case that the Debtor
is renting space to the sole managing member's own companies which
may in fact not be paying rent. As such, the alleged rent roll may
not accurately reflect the actual rent being collected, but rather
phantom rent being “booked” to the insider's own companies,"
the Lender said in its Motion to Compel.
The Lender is represented by:
PLUNKETT COONEY, P.C.
David A. Lerner, Esq.
38505 Woodward Ave., Ste. 2000
Bloomfield Hills, MI 48304
Tel: (248) 901-4010
E-mail: dlerner@plunkettcooney.com
About Park Fletcher Realty
Park Fletcher Realty, LLC, is engaged in the business of owning and
operating a portfolio consisting of 15 multi-tenant and 2 single
tenant industrial flex and office-warehouse building containing a
combined rentable area of 807,986 square feet situated on a
non-contiguous 65.114 acre site.
Park Fletcher filed a Chapter 11 bankruptcy petition (Bank. S.D.
Ind. Case No. 15-00843) on Feb. 15, 2015. The petition was signed
by Shawn Williams as managing member. KC Cohen, Esq., at KC Cohen,
Lawyer, PC, serves as the Debtor's counsel. Park Fletcher Realty
LLC disclosed $15,201,760 in assets and $13,187,177 in liabilities
as of the Chapter 11 filing. Judge Jeffrey J. Graham presides over
the case.
PATRIOT COAL: To Limit Trading to Protect NOLs
----------------------------------------------
Patriot Coal Corp. and its subsidiaries ask the Bankruptcy Court
for approval to establish notification and hearing procedures
regarding the trading of equity securities in Patriot or of any
beneficial interest therein to establish notification and hearing
procedures regarding the trading of equity securities in Patriot or
of any beneficial interest therein.
The Debtors have incurred, and are currently incurring, significant
net operating losses, amounting to $1.2 billion as of the tax year
ending Dec. 31, 2014 and translating to potential tax savings of
$480 million. The Debtors' NOLs consist of losses generated in any
given or prior tax year, which the Debtors can "carry forward" to
up to 20 subsequent tax years to offset future taxable income,
thereby reducing future aggregate tax obligations. NOLs also may
be utilized to offset taxable income generated by transactions
completed during these chapter 11 cases.
Because an "ownership change" may negatively impact the Debtors'
utilization of their NOLs, the Debtors proposed these procedures:
* Any "substantial shareholder" -- entity that has direct or
indirect beneficial ownership of more than approximately 26,925
shares of common stock (representing 4.5 percent of all issued and
outstanding common stock) -- must serve and file a declaration on
or before the later of (i) 30 days after the date of the interim
order approving the procedures and (ii) 10 days after becoming a
substantial shareholder.
* Prior to effectuating any transfer of the equity securities
that would result in another entity becoming a substantial
shareholder, the parties to such transaction must serve and file a
notice of the intended stock transaction.
* The Debtors have 30 calendar 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.
About Patriot Coal
Patriot Coal Corporation is a producer and marketer of coal in the
United States. Patriot and its subsidiaries control 1.4 billion
tons of proven and probable coal reserves -- including owned and
leased assets in the Central Appalachia basin (in West Virginia and
Ohio) and Southern Illinois basin (in Kentucky and Illinois) -- and
their operations consist of eight active mining complexes in West
Virginia.
Patriot Coal first sought Chapter 11 protection on July 9, 2012,
and, on Dec. 18, 2013, won approval of its bankruptcy-exit plan
from the U.S. Bankruptcy Court for the Eastern District of
Missouri. The plan turned over most of the ownership of the
company to bondholders that include New York hedge fund Knighthead
Capital Management LLC. The linchpins of the plan were a global
settlement among the Debtors, the United Mine Workers of America,
and two third parties -- Peabody Energy Corporation and Arch Coal,
Inc. -- and a commitment by a consortium of creditors, led by
Knighthead, to backstop two rights offerings that funded the plan.
Patriot Coal Corporation and its subsidiaries commenced new Chapter
11 cases (Bankr. E.D. Va. Lead Case No. 15-32450) in Richmond,
Virginia, on May 12, 2015. The cases are assigned to Judge Keith
L. Phillips.
The Debtors tapped Kirkland & Ellis LLP as counsel; Kutak Rock
L.L.P., as co-counsel; Centerview Partners LLC as investment
bankers; Alvarez & Marsal North America, LLC, as restructuring
advisors; and Prime Clerk LLC, as claims and administrative agent.
Patriot Coal estimated more than $1 billion in assets and debt.
PATRIOT COAL: To Sell Assets via Sec. 363 Sale or Under Plan
------------------------------------------------------------
Patriot Coal Corp. has arranged a $100 million loan that will
finance its second stint in Chapter 11 bankruptcy while it
completes a sale of certain of its assets.
Raymond E. Dombrowski, Jr., explains in court filings that over the
past several months, Patriot engaged in multiple efforts to sell
assets, and intend to continue negotiations with potential buyers
postpetition.
First, Patriot had extensive negotiations with purchasers
interested in one of their underground mining complexes known as
Federal. These discussions led to significant indications of
interest for a sale of Federal. Patriot and its lenders agreed to
postpone this transaction until it could be confirmed whether a
sale outside of a chapter 11 case would obtain the greatest
possible value for the asset. The Debtors intend to resume as soon
as practicable postpetition the marketing process for Federal.
Second, also over the past several months, Patriot had extensive
negotiations regarding the purchase of certain reserves at its Huff
Creek mine. These discussions led to an agreement in principle for
a transaction slated to close by April 30, 2015. It was agreed
that Patriot could retain 50% of the Huff Creek asset sale proceeds
for general corporate purposes, and the other 50% would be used to
cash collateralize its letters of credit. In the last week of
April, however, a series of complications arose that precluded
consummation of this transaction, and Patriot's consequent
inability to utilize these expected sale proceeds was a further
material strain on liquidity.
Finally, and perhaps most significantly, in recent weeks Patriot
has been engaged in extensive negotiations with a strategic party
interested in effectuating a transaction acquiring essentially all
of Patriot's operating assets (excluding Federal) and many of its
reserves (including Huff Creek). Discussions with this potential
acquirer are in a highly advanced stage, with the parties having
exchanged a series of proposals and counterproposals, and progress
is underway towards drafting a term sheet and related
documentation.
The Debtors intend to continue these negotiations in earnest
postpetition and, as soon as practicable, hope to file with the
Court a motion to approve bidding procedures for one or more
transactions, possibly accompanying a motion to approve one or more
stalking horse bidders, to sell assets pursuant to Section 363 or
under a chapter 11 plan. Throughout this marketing process, the
Debtors also will continue their ongoing analysis of whether a
standalone plan of reorganization or some combination of section
363 sales and a plan will maximize value for stakeholders.
Importantly, the aforementioned strategic party does not have
employees represented by the UMWA or any union, and thus far has
expressed an unwillingness to enter into a transaction that would
involve assuming various legal liabilities related to, among other
things, the Debtors' collective bargaining agreements with the
UMWA. The Debtors will explore all possible transactional
solutions that do not involve having to reject the CBAs -- and,
most critically, these explorations will include active, direct,
and comprehensive negotiations with the UMWA that seek a consensual
outcome for all affected parties. If such consensual resolution is
not achievable, however, the Debtors may not be able to avoid
commencing, as they did during the 2012-13 Restructuring,
proceedings under Sections 1113 and 1114 of the Bankruptcy Code.
$100MM Financing
In connection with these potential transactions, the Debtors have
secured a fully committed $100 million debtor-in-possession
facility from a subset of their prepetition lenders that control a
majority of the Debtors' prepetition term loan debt and second lien
notes. The DIP Facility is secured by the collateral securing the
Debtors' prepetition secured credit facilities plus unencumbered
property, including nonresidential real property leases. Subject to
Court approval, the Debtors will have approximately $30 million in
cash available on their balance sheet through a new term loan, and
$70 million in additional borrowing capacity upon final approval,
the latter subject to the achievement of certain milestones.
The DIP facility has a termination date of Nov. 30, 2015. However,
the Debtors are required to achieve certain milestones, the failure
of which to satisfy would constitute an event of default. Failure
of which to satisfy would constitute an Event of Default
thereunder, including, milestones relating to filing a plan of
reorganization, reaching agreements with the Debtors' prepetition
unions or otherwise commencing section 1113 and/or 1114
proceedings, filing a motion for a sale of the Debtors' assets, and
confirmation and consummation of a Plan.
As adequate protection of the interests of the lenders owed $38
million under prepetition ABL revolving facility, the proposed
interim order approving the DIP financing provides that unless
otherwise agreed-to by Deutsche Bank AG, New York Branch, as
Prepetition ABL Agent, or ordered by the Court, the use of cash
collateral will terminate after seven days of the Debtors' failure
to achieve any of these milestones (the "ABL/LC Milestones"):
(i) entry into a binding stalking horse asset purchase agreement
for the sale of at least four mines and related assets through an
auction to be consummated through a chapter 11 plan by June 30,
2015;
(ii) entry of a Court order approving the winning bidder at the
auction by Sept. 18, 2015; and
(iii) closing/effective date of the Plan by Nov. 30, 2015;
Cantor Fitzgerald Securities, as postpetition administrative agent,
may extend the ABL/LC Milestones in its sole discretion for a
period up to but no more than four weeks, and any such extension
will be binding on the Prepetition ABL Agent and Prepetition ABL
Lenders.
First Day Motions
The Debtors on the Petition Date filed motions:
-- jointly administer their Chapter 11 cases;
-- continue to operate their cash management system;
-- continue to perform under coal sale contracts;
-- pay prepetition claims of trade claimants;
-- extend the deadline to file schedules and statements;
-- continue their surety bond program;
-- pay prepetition wages and benefits to employees;
-- honor prepetition obligations to customers;
-- renew their insurance programs;
-- pay prepetition taxes and fees;
-- prohibit utilities from discontinuing service; and
-- limit trading of equity securities to protect NOLs.
A copy of the affidavit in support of the first day motions is
available for free at:
http://bankrupt.com/misc/Patriot_C_1st_Day_Affidavit.pdf
About Patriot Coal
Patriot Coal Corporation is a producer and marketer of coal in the
United States. Patriot and its subsidiaries control 1.4 billion
tons of proven and probable coal reserves -- including owned and
leased assets in the Central Appalachia basin (in West Virginia and
Ohio) and Southern Illinois basin (in Kentucky and Illinois) -- and
their operations consist of eight active mining complexes in West
Virginia.
Patriot Coal first sought Chapter 11 protection on July 9, 2012,
and, on Dec. 18, 2013, won approval of its bankruptcy-exit plan
from the U.S. Bankruptcy Court for the Eastern District of
Missouri. The plan turned over most of the ownership of the
company to bondholders that include New York hedge fund Knighthead
Capital Management LLC. The linchpins of the plan were a global
settlement among the Debtors, the United Mine Workers of America,
and two third parties -- Peabody Energy Corporation and Arch Coal,
Inc. -- and a commitment by a consortium of creditors, led by
Knighthead, to backstop two rights offerings that funded the plan.
Patriot Coal Corporation and its subsidiaries commenced new Chapter
11 cases (Bankr. E.D. Va. Lead Case No. 15-32450) in Richmond,
Virginia, on May 12, 2015. The cases are assigned to Judge Keith
L. Phillips.
The Debtors tapped Kirkland & Ellis LLP as counsel; Kutak Rock
L.L.P., as co-counsel; Centerview Partners LLC as investment
bankers; Alvarez & Marsal North America, LLC, as restructuring
advisors; and Prime Clerk LLC, as claims and administrative agent.
Patriot Coal estimated more than $1 billion in assets and debt.
PATRIOT COAL: Wants Until June 26 to File Schedules
---------------------------------------------------
Patriot Coal Corp. and its subsidiaries ask the Bankruptcy Court to
extend by an additional 31 days, until June 26, 2015, the deadline
by which the Debtors must file their schedules of assets and
liabilities, schedules of current income and expenditures,
schedules of executory contracts and unexpired leases, and
statements of financial affairs.
Prior to the filing of the Chapter 11 cases, the Debtors focused on
preparing for the chapter 11 filing, preparing the business to
transition into chapter 11, and negotiating with the Debtors'
significant creditor constituencies. Such efforts made it
difficult for the Debtors to prepare the Schedules and Statements.
Although the Debtors have commenced the process that will enable
them to prepare and finalize what will be voluminous Schedules and
Statements, the Debtors anticipate that they will require at least
45 days after the Petition Date to complete the Schedules and
Statements.
About Patriot Coal
Patriot Coal Corporation is a producer and marketer of coal in the
United States. Patriot and its subsidiaries control 1.4 billion
tons of proven and probable coal reserves -- including owned and
leased assets in the Central Appalachia basin (in West Virginia and
Ohio) and Southern Illinois basin (in Kentucky and Illinois) -- and
their operations consist of eight active mining complexes in West
Virginia.
Patriot Coal first sought Chapter 11 protection on July 9, 2012,
and, on Dec. 18, 2013, won approval of its bankruptcy-exit plan
from the U.S. Bankruptcy Court for the Eastern District of
Missouri. The plan turned over most of the ownership of the
company to bondholders that include New York hedge fund Knighthead
Capital Management LLC. The linchpins of the plan were a global
settlement among the Debtors, the United Mine Workers of America,
and two third parties -- Peabody Energy Corporation and Arch Coal,
Inc. -- and a commitment by a consortium of creditors, led by
Knighthead, to backstop two rights offerings that funded the plan.
Patriot Coal Corporation and its subsidiaries commenced new Chapter
11 cases (Bankr. E.D. Va. Lead Case No. 15-32450) in Richmond,
Virginia, on May 12, 2015. The cases are assigned to Judge Keith
L. Phillips.
The Debtors tapped Kirkland & Ellis LLP as counsel; Kutak Rock
L.L.P., as co-counsel; Centerview Partners LLC as investment
bankers; Alvarez & Marsal North America, LLC, as restructuring
advisors; and Prime Clerk LLC, as claims and administrative agent.
Patriot Coal estimated more than $1 billion in assets and debt.
PORTER BANCORP: Files March 31 Quarterly Report
-----------------------------------------------
Porter Bancorp, Inc. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
attributable to common shareholders of $409,000 on $9.2 million of
interest income for the three months ended March 31, 2015, compared
to a net loss attributable to common shareholders of $976,000 on
$9.89 million of interest income for the same period a year ago.
As of March 31, 2015, Porter Bancorp had $1 billion in total
assets, $975.73 million in total liabilities and $33.97 million in
total stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/3Vbu8S
About Porter Bancorp
Porter Bancorp, Inc., is a bank holding company headquartered in
Louisville, Kentucky. Through its wholly-owned subsidiary PBI
Bank, the Company operates 18 full-service banking offices in
12 counties in Kentucky.
Porter Bancorp reported a net loss of $11.2 million in 2014, a net
loss of $1.58 million in 2013 and a net loss of $32.93 million in
2012. As of Dec. 31, 2014, Porter Bancorp had $1.01 billion in
total assets, $985 million in stockholders' equity and $33.5
million in total stockholders' equity.
Crowe Horwath, LLP, in Louisville, Kentucky, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2014, citing that the Company has incurred
substantial losses in 2014, 2013 and 2012, largely as a result of
asset impairments resulting from the re-evaluation of fair value
and ongoing operating expenses related to the high volume of other
real estate owned and non-performing loans. In addition, the
Company's bank subsidiary is not in compliance with a regulatory
enforcement order issued by its primary federal regulator
requiring, among other things, increased minimum regulatory capital
ratios as well as being involved in various legal proceedings in
which the Company disputes material factual allegations against the
Company. Additional losses, adverse outcomes from legal
proceedings or the continued inability to comply with the
regulatory enforcement order may result in additional adverse
regulatory action. These events raise substantial doubt about the
Company's ability to continue as a going concern.
PPL ENERGY: S&P Assigns 'BB' Rating on $600 Unsec. Notes Due 2025
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' issue-level
rating and '3' recovery rating to PPL Energy Supply LLC's $600
million senior unsecured notes due 2025. The '3' recovery rating on
the proposed notes indicates S&P's expectation of meaningful
(50% to 70%; upper half of the range) recovery if a payment default
occurs.
The entity intends to use net proceeds to repay borrowing
outstanding under its revolving credit facility.
PPL Energy Supply will shortly merge with RJS Power Holdings LLC to
form a merchant power company, to be known as Talen Energy Corp.,
which will have about 14 gigawatts of generating capacity. The
corporate credit rating on PPL Energy Supply is BB/Watch Neg/--;
RJS is rated B+/Watch Pos/--.
RATINGS LIST
PPL Energy Supply LLC
Corp credit rating BB/Watch Neg/--
New Ratings
PPL Energy Supply LLC
$600 mil sr unsecd notes due 2025 BB/Watch Neg
Recovery rating 3H
PRE-PAID LEGAL: Moody's Affirms B1 CFR, Outlook Stable
------------------------------------------------------
Moody's Investors Service affirmed Pre-Paid Legal Services, Inc.'s
B1 corporate family rating and B1-PD probability of default rating.
The rating on the company's proposed to be amended first lien
senior secured bank credit facility, consisting of a $30 million
revolving credit facility due 2018 and an upsized $295 million term
loan due 2020, was raised to Ba2 from Ba3. The rating on the
proposed to be amended $175 million second lien term loan due 2021
was affirmed at B3. The ratings outlook is stable.
Pre-Paid Legal's proposed amendment to its credit facilities
includes a $70 million upsize to the first lien term loan, as well
as a revision of financial covenant levels in both credit
agreements to allow for more flexibility given an increase in debt.
The transaction proceeds will be used to pay a $75 million dividend
to the company's existing shareholders.
An increase in the company's debt to fund a dividend reflects its
aggressive financial policies and results in pro forma
Moody's-adjusted debt-to-EBITDA rising to approximately 4.8x, which
is high for a B1 rated company of this size and operational scope,
from about 4.1x at March 31, 2015. Pro forma adjusted EBITA to
interest coverage is also expected to weaken to approximately 2.2x
from about 2.5x at the end of the first quarter 2015. Nonetheless,
the corporate family rating was affirmed to reflect Moody's
expectations that, despite the increase in debt, the company will
use its solid free cash flow generated to steadily repay debt, much
as it has in the past. Moody's estimates that this will result in
considerable strengthening of these credit metrics over the next 12
to 18 months. Moody's also expects continued stabilization in the
company's membership base to lead to slow revenue growth.
The rating revision for the first lien debt reflects the trending
changes in Pre-Paid Legal's capital structure. Since its 2013
refinancing, and despite the increase in the first lien term loan
currently proposed, the company has decreased proportion of first
lien versus second lien debt in its capital structure, which
results in a higher recovery rate on the first lien term loan given
the loss absorption provided by the second lien instrument. Moody's
expects that first lien debt will decrease modestly over the near
term, given the required term loan amortization of 5% per year as
well the company's track record of applying free cash flow towards
first lien debt repayments.
The following rating actions have been taken:
-- Corporate family rating, affirmed at B1;
-- Probability of default rating, affirmed at B1-PD;
-- $30 million first lien senior secured revolving credit
facility due 2018, raised to Ba2 (LGD2) from Ba3 (LGD3);
-- Proposed to be amended and upsized $295 million first lien
senior secured term loan due 2019, raised to Ba2 (LGD2) from
Ba3 (LGD3);
-- Proposed to be amended $175 million second lien senior
secured term loan due 2020, affirmed at B3 (LGD5);
All ratings are subject to the execution of the transaction as
currently proposed and Moody's review of final documentation. The
instrument ratings are subject to change should the proposed
capital structure get modified.
The B1 corporate family rating reflects Moody's expectation of
continued gradual stabilization in memberships and revenues
stemming from the company's efforts on marketing and retention
strategies. While the current dividend transaction reflects the
company's aggressive financial policies and results in an increased
pro forma leverage, the rating reflects Moody's expectation that
Pre-Paid Legal will apply its free cash flow towards debt repayment
over the next 12 to 18 months, improving leverage and interest
coverage metrics towards the pre-transaction levels. The rating is
supported by a predictable revenue stream from a large member base,
the company's steady free cash flow generation and willingness to
prepay debt, as well as stable financial performance during the
recent economic downturn. The rating also incorporates potential
legal and regulatory risks associated with the multilevel marketing
business model, a moderately small revenue base of approximately
$400 million, and continued associate attrition.
The company has a good liquidity profile, supported by its solid
free cash flow generative capabilities, $31 million cash balance
and full availability under its $30 million revolving credit
facility due 2018 at March 31, 2015.
The stable outlook reflects Moody's expectation of continued modest
growth in memberships and revenues over the next 12 to 18 months
that should lead to improving earnings generation over a longer
time horizon.
The ratings could be upgraded if (i) revenue and memberships grow
solidly over a period of two to three years; (ii) financial
strength metrics materially improve; and (iii) legal and regulatory
risks remain manageable in Moody's assessment. Specifically, if
adjusted debt-to-EBITDA and free cash flow to debt improve and are
sustained below 3.0x and above 12%, respectively, upward rating
pressure may occur.
The ratings could be downgraded if memberships and revenues
decline, resulting in deteriorating operating performance and
stress on key financial strength metrics including debt-to-EBITDA,
free cash flow to debt, or EBITA to interest coverage.
Specifically, debt-to-EBITDA of above 5.0x, EBITA to interest
sustained below 2.0x, or a material deterioration in free cash flow
would cause negative rating pressure. An acceleration of aggressive
financial policies, including increases in debt to fund dividend
payments, or legal or regulatory developments that have a material
adverse effect on the company's business model or financial
position could also pressure the ratings.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 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.
Pre-Paid Legal (d/b/a LegalShield), headquartered in Ada, Oklahoma,
designs, underwrites and markets legal expense plans to families
and small businesses in the United States and Canada. The company
sells the majority of its membership plans through a multi-level
marketing program. As of December 2014, Pre-Paid Legal had a base
of nearly 290,000 sales associates, and served about 1.4 million
members. The company also markets identity theft protection and
restoration services through its exclusive provider Kroll Advisory
Solutions. Pre-Paid Legal is privately owned by affiliates of
MidOcean Partners ("MidOcean"), a private equity firm. In the last
twelve months ending March 31, 2015, the company generated
approximately $400 million in revenues.
PRE-PAID LEGAL: S&P Lowers $325MM First Lien Debt Rating to B+
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issue-level ratings
on Oklahoma-based Pre-Paid Legal Services Inc.'s $325 million
senior secured first-lien credit facility (composed of a $30
million revolver and a pro forma $295 first-lien term loan) to 'B+'
from 'BB-', following a proposed add-on transaction that increases
the existing first-lien term loan by $70 million. S&P revised the
recovery rating on the first-lien debt to '2' (indicating S&Pr
expectation of substantial recovery [70%-90%, on the low end of the
range] in a payment default scenario) from '1'.
S&P said, "We also affirmed the 'B-' issue-level rating on the
company's $175 million secured second-lien term loan. The recovery
rating on the second-lien debt is unchanged at '5', indicating our
expectation of modest recovery (10%-30%, on the low end of the
range) in a payment default scenario.
"We expect the company to use proceeds from the proposed
transaction, together with on-balance-sheet cash, to fund a
shareholder dividend. As a result of the transaction, we estimate
adjusted leverage increases to the high-4x area from the low-4x
area at year-end Dec. 31, 2014.
"Our 'B' corporate credit rating on the company remains unchanged.
The outlook is stable. For the latest corporate credit rating
rationale, see Standard & Poor's summary analysis on Pre-Paid Legal
published March 28, 2014.
RATINGS LIST
Pre-Paid Legal Services Inc.
Corporate credit rating B/Stable/--
Issue Rating Lowered; Recovery Rating Revised
To From
Pre-Paid Legal Services Inc.
Senior secured
$30 mil. revolver B+ BB-
Recovery rating 2L 1
$295 mil. term loan B+ BB-
Recovery rating 2L 1
Issue Rating Affirmed; Recovery Rating Unchanged
Pre-Paid Legal Services Inc.
Senior secured
$175 mil. term loan B-
Recovery rating 5L
PROJECT BARBOUR: Moody's Assigns B3 CFR, Outlook Stable
-------------------------------------------------------
Moody's Investors Service assigned to Project Barbour Holdings
Corporation a B3 Corporate Family Rating and a B3-PD Probability of
Default Rating. Project Barbour Holdings Corporation's legal name
is expected to change to Blue Coat Holdings, Inc. ("Blue Coat")
upon the completion of Blue Coat Systems, Inc.'s proposed
acquisition by funds affiliated with Bain Capital, from Thoma Bravo
LLC, in an all-cash transaction valued at approximately $2.4
billion. Moody's also assigned a B1 rating to the $1.15 billion of
senior secured credit facilities and a Caa2 rating to the $570
million of senior unsecured notes that are being issued by Blue
Coat to fund the acquisition and refinance Blue Coat Systems,
Inc.'s existing indebtedness. The ratings have a stable outlook.
The B3 CFR principally reflects Blue Coat's very high initial
leverage of approximately 8x (Moody's adjusted), its narrow product
portfolio and reliance on one-time product sales that comprise a
high proportion of product revenues. Although leverage is expected
to decline from earnings growth, Blue Coat has limited margin for
execution missteps over the next 12 to 24 months because of its
elevated leverage.
At the same time, Blue Coat's B3 CFR is supported by its leading
position in the niche Secure Web Gateway appliances market and its
recurring services revenues that are expected to grow faster than
the product revenues and now comprise about 52% of its total
revenues. Blue Coat has a large and diverse installed base of
Secure Web Gateway customers that account for majority of its new
product sales and a significant portion of its services revenue.
Although Moody's expects Blue Coat's revenue growth to accelerate
to about 7% to 8% over the next 12 to 24 months, total debt to
EBITDA (Moody's adjusted) will remain high and decline to about 7x
by fiscal year ending in April 2017. High debt service costs will
also limit free cash flow to about 3% to 4% of total debt over this
period. Moody's expects Blue Coat to maintain good liquidity.
The stable ratings outlook reflects Moody's expectations of good
revenue growth and deleveraging toward 7x over the next 12 to 18
months.
Moody's could raise Blue Coat's ratings if revenue growth remains
in the high single digit percentages, total debt to EBITDA (Moody's
adjusted) declines and could be sustained below 6.5x, and free cash
flow increases to the mid-to-high single digit percentages of total
debt.
Blue Coat's ratings could be downgraded if liquidity deteriorates
or revenue and operating cash flow growth declines to the low
single digit percentages for an extended period of time as a result
of intensifying competition or execution challenges. Moody's could
downgrade Blue Coat's ratings if total debt-to-EBITDA (Moody's
adjusted) is unlikely to be sustained below 7.5x and free cash flow
declines to the low single digit percentages of total debt on other
than a temporary basis.
Moody's has taken the following rating actions:
Assigned:
Issuer: Project Barbour Holdings Corporation
-- Corporate Family Rating - B3
-- Probability of Default Rating - B3-PD
-- $100 million Senior Secured First Lien Revolving Credit
Facility due 2020 - Assigned B1 (LGD3)
-- $1,050 million Senior Secured First Lien Term Loan due 2022
- Assigned B1 (LGD3)
-- $570 million Senior Notes due 2023 - Assigned Caa2 (LGD5)
-- Outlook:Stable
The following ratings will be withdrawn at the close of the
acquisition:
Issuer: Blue Coat Systems, Inc.
-- Corporate Family Rating - B2
-- Probability of Default Rating - B2-PD
-- $40 million Senior Secured Revolving Credit Facility - B1
(LGD3)
-- $750 million Senior Secured Term Loan due 2019 - B1 (LGD3)
-- $330 million Senior Secured Second Lien Term Loan due 2020 -
Caa1 (LGD5)
-- Outlook: Negative
Headquartered in Sunnyvale, CA, Blue Coat Systems, Inc., is a
leading provider of Internet security and wide area network
acceleration solutions. Blue Coat reported $613 million in revenues
under U.S. GAAP for the twelve months ended January 2015.
The principal methodology used in these ratings was Global Software
Industry published in October 2012. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
PROJECT BARBOUR: S&P Assigns 'B' Corp. Credit Rating & Neg. Outlook
-------------------------------------------------------------------
Project Barbour Holdings Corp., the holding company for Blue Coat
Systems Inc., a U.S. provider of network security products, will be
acquired by Bain Capital. Project Barbour Holdings Corp. will be
renamed Blue Coat Holdings Inc. on completion of the transaction.
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Sunnyvale, Calif.-based Project Barbour Holdings
Corp. The outlook is negative.
S&P said, "At the same time, we assigned our 'B' issue-level rating
and '3' recovery rating to the company's $1.050 billion first-lien
term loan due 2022 and $100 million revolver due 2020. The '3'
recovery rating indicates our expectation for substantial (50%-70%,
high end of the range) recovery in the event of
payment default. We also assigned our 'CCC+' issue-level rating and
'6' recovery rating to the company's $570 million senior secured
notes due 2023. The '6' recovery rating indicates our expectation
for negligible (0%-10%) recovery in the event of payment default."
"Our rating on Project Barbour Holdings Corp. reflects our view of
the company's business risk profile as 'weak' and financial risk
profile as 'highly leveraged,'" said Standard & Poor's credit
analyst Kenneth Fleming.
The company's "weak" business risk profile reflects its relatively
narrow product focus and the competitive industry. Project Barbour
Holdings Corp. is a niche participant in the global market for
enterprise security with significantly fewer resources than its
major competitors. The company's high level of recurring revenue,
consistent profitability, growing addressable market, and
significant customer switching costs partly offset these factors.
The financial risk assessment incorporates adjusted pro forma
leverage of about 7.5x at fiscal year end April 2016.
The negative outlook reflects the substantial increase in funded
debt and interest expense under the new capital structure and high
ongoing leverage. S&P expects the company to grow revenue and
EBITDA strongly in fiscal 2016 and delever using FOCF.
"We could revise the outlook to stable if the company can
demonstrate sustained revenue and EBITDA growth and adjusted
leverage in the mid-7x area. We expect the company to generate and
FOCF above $50 million (mostly used to repay debt by the end of
fiscal 2016)," said S&P.
"We could downgrade the company if the company's financial
performance does not improve as expected, leverage remains above
the mid-7x area, and free operating cash flow becomes constrained."
PROTOM INTERNATIONAL: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
ProTom International, Inc. 15-32065
dba ProTom International I, Inc.
1100 Parker Square, Suite 230
Flower Mound, TX 75028-7459
ProTom International, LLC 15-32066
1100 Parker Square, Suite 230
Flower Mound, TX 75028-7459
Chapter 11 Petition Date: May 12, 2015
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Hon. Barbara J. Houser [15-32065]
Hon. Stacey G. Jernigan [15-32066]
Debtors' Counsel: Kenneth Stohner, Jr., Esq.
JACKSON WALKER, LLP
901 Main Street, Suite 6000
Dallas, TX 75202-3797
Tel: (214) 953-5904
Fax: (214) 953-5822
Email: kstohner@jw.com
Debtors' LAIN, FAULKNER & CO., P.C.
Accountants:
Debtors' KEYBANC CAPITAL MARKETS
Investment
Advisor:
Estimated Estimated
Assets Liabilities
----------- -----------
ProTom International, Inc. $10MM-$50MM $10MM-$50MM
ProTom International, LLC $0-$50,000 $0-$50,000
The petition was signed by Stephen L. Spotts, CEO.
List of ProTom International, Inc.'s 20 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
McLaren Healthcare Trade Debt $12,498,808
G-3235 Beecher Road Suite B
Flint, MI 48532-3615
Forte Automation Systems, Inc. Trade Debt $652,269
8155 Burden Road
Machesney Park, IL 61115
AccSys Technology, Inc. Trade Debt $362,197
ATTN: Accounts Payable
1177 Quarry Lane
Pleasanton, CA 94566
Elavon Trade Debt $152,781
2 Concourse Parkway
Suite 800
Atlanta, GA 30328
Internal Revenue Service Taxes $106,081
Massachusetts Institute of Trade Debt $90,595
Technology
Pyramid Technical Consultants, Inc. Trade Debt $67,812
Buckley Systems Trade Debt $57,440
Stak Design Trade Debt $55,528
Accelerated, LLC Trade Debt $41,440
East Coast Metrology, LLC Trade Debt $38,850
401 Edgewater LLC Trade Debt $24,730
Blue Cross & Blue Shield of Alabama Trade Debt $21,534
ASTRO Trade Debt $17,850
Applied Power Quality Trade Debt $16,897
Solutions, LLC
ClearCube Technology, Inc. Trade Debt $14,595
Jay Flanz, Ph. D. Trade Debt $13,875
LAURUS Systems, Inc. Trade Debt $12,572
Anixter, Inc. Trade Debt $12,378
Parker Hannifin Corp, Filt & Trade Debt $10,738
Sep. Div.
PROTOM INTERNATIONAL: In Ch. 11 to Quickly Sell Assets
------------------------------------------------------
ProTom International Inc., which provides compact accelerators used
in proton therapy for cancer patients, has sought bankruptcy
protection to promptly sell its assets.
Although no buyer is under contract, the Debtors have filed with
the U.S. Bankruptcy Court for the Northern District of Texas
proposed procedures for selling substantially all assets as a going
concern.
The procedures propose:
-- a July 10, 2015 deadline for submitting initial bids for the
assets;
-- a July 14, 2015 auction if multiple qualified bids are
submitted for the assets; and
-- a sale hearing not more than 3 business days following the
auction.
The Debtors say they do not have the liquidity to finance a lengthy
Chapter 11 case. Accordingly, the Debtors are seeking approval of
bid procedures and a sale to the highest bidder at the current time
in order to avert any liquidity crisis.
The bids submitted must include a deposit and must provide for a
closing date that's no later than July 28, 2015.
Michaelson Capital Partners LLC will have the right, but not the
obligation, pursuant to Sec. 363(k) of the Bankruptcy Code to
credit bid up to the full amount of its secured claim.
The Debtors will be represented by James T. Lilly of KeyBanc
Capital Markets, Inc., and the Debtor's CEO, Stephen L. Spotts for
all purposes in evaluating bids and in making decisions in the
course of the auction process. KeyBanc has been assisting the
Debtors in marketing its assets for sale.
The Debtors have prepared a form of asset purchase agreement to be
used for the purchase of substantially all of the Debtors' assets
through payment in cash.
Assets and Liabilities
ProTom's liabilities consist of $10 million in senior secured debt
to Michaelson, $2 million in vendor or trade debt and approximately
$12 million in overpayments by McLaren Health Care Corporation.
The debt to Michaelson is secured by substantially all of the
assets of the Company.
ProTom's assets consist primarily of:
-- Its rights to sell and market in the U.S. the ZAO system and
technology, which are the principal components of the Company's
Radiance 330 Proton Therapy System;
-- The clearance for patient treatment in a commercial operation
(FDA 510(K)) from the U.S. Food and Drug Administration of the
Radiance 330;
-- The patents and intellectual property developed by the
Company for the design, assembly and operation of the Radiance
330;
-- Uncompleted projects for the installation of Radiance 330:
* A purchase agreement with McLaren Health Care Corporation
for the installation of the Radiance 330, under which McLaren has
advanced funds in excess of the contract payments called for under
the agreement;
* A purchase agreement with Atlantic Health Systems, Inc.,
for installation in a multi-room proton therapy to be built by AHS
in central New Jersey, pursuant to which ASH has made payments
aggregating $5 million; and
*A purchase agreement with The General Hospital Corporation
for the installation of the Radiance 330 at a single-room proton
therapy center at Mass General; and
-- various personal property and equipment.
Road to Bankruptcy
As a pioneer in developing the Radiance 330, there were unforeseen
problems, events and vendor failures which resulted in costs and
expenses for the McLaren project that were greater than originally
projected. As a result, there was a delay in other contracts and
negative impact on the ability of the Company to raise new equity.
McLaren in March 2010 signed a deal for the purchase and
installation of the Radiance 330. The Radiance 330 has been
installed at McLaren but is not yet ready for patient treatment.
McClaren had advanced funds in excess of the contract payments
called for under the purchase agreement. McLaren in 2011 received
35% of the fully-diluted equity of ProTom as consideration for
funds it provided for the development of Radiance 330. On March
31, 2015, however, (i) two officers of McLaren who sat on the
Company's board of directors resigned, (ii) the two McLaren
directors reneged on a verbal commitment to fund an additional $5
million to $10 million to ProTom as new equity or debt, (iii) and
McLaren sent a notice of termination of the purchase agreement.
The Company disputes McLaren's right to terminate.
As a result, ProTom failed to meet certain financial covenants
under the Michaelson loan documents, and Michaelson declared a
default on April 1, 2015. As a result of such declaration,
Michaelson initiated actions resulting in the sweeping of the
Company's depository account at Regions Bank causing the transfer
of $4.6 million from the Company's depository account to an account
under Michaelson's control on April 13, 2015. Michaelson
subsequently provided limited funding to the Company for certain
operating expenses and payroll.
Michaelson has agreed to provide DIP financing to the Company to
enable the Company to conduct a Sec. 363 sale of its assets. The
Company believes this approach provides the best opportunity to
realize value for all creditors and equity holders and provide for
the completion of the McLaren Project, MGH Project and AHS
Project.
First Day Motions
The Debtors on the Petition Date filed motions to:
-- access DIP financing;
-- sell substantially all assets;
-- jointly administer their Chapter 11 cases;
-- pay prepetition wages and benefits; and
-- maintain their bank accounts.
A hearing on the first day motions is scheduled for May 14, 2015,
at 9:30 a.m.
About ProTom International
ProTom International Inc. is a medical technology focused on proton
therapy for cancer patients. The Company and affiliate ProTom
International, LLC, have the exclusive rights to sell in the U.S.
the compact accelerators developed by Russia-based ZAO Protom and
owner Vladimir E. Balakin. The ZAO system and technology were
lighter and cheaper than proton therapy systems then in operation
in the U.S. This technology has been the basis on which ProTom has
developed its Radiance 330 Proton Therapy System.
ProTom International, Inc., and ProTom International, LLC, sought
Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No.
15-32065 and 15-32066) in Dallas on May 12, 2015. The cases are
assigned to Judge Barbara J. Houser.
The Debtors tapped Jackson Walker, LLP as counsel, and Lain,
Faulkner & Co., P.C., as accountant.
ProTom Inc. estimated $10 million to $50 million in assets and
debt.
RAAM GLOBAL: Moody's Lowers Corporate Family Rating to Ca
---------------------------------------------------------
Moody's Investors Service downgraded RAAM Global Energy Company's
Probability of Default Rating to D-PD from Caa2-PD, the Corporate
Family Rating to Ca from Caa2, and the senior secured notes to C
from Caa3. Moody's will withdraw all ratings for the company in the
near future.
RAAM did not make its scheduled interest payment to the holders of
the senior secured notes on April 1, 2015 and had a thirty day
grace period, which has now expired. On May 5, 2015 it terminated
its registration with SEC and became a non-filer. Moody's believes
that RAAM did not make the interest payment by the end of the grace
period, and thus deems that a default has occurred. Moody's does
not expect to be provided financial statements going forward now
that the company no longer files financial information with the
SEC.
Moody's will withdraw the ratings because it believes it has
insufficient or otherwise inadequate information to support the
maintenance of the rating. Please refer to the Moody's Investors
Service's Policy for Withdrawal of Credit Ratings.
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
RAAM Global Energy Company, headquartered in Lexington, Kentucky,
is an independent exploration and production company.
RADIOSHACK CORP: Standard General Wins Auction of Brand
-------------------------------------------------------
Peg Brickley, writing for The Wall Street Journal, reported that
Standard General LP, the hedge fund that saved more than 1,700
RadioShack stores from liquidation, has been declared the new owner
of the RadioShack brand, with a winning auction bid of $26.2
million.
RadioShack's trademark and other intellectual property went on the
bankruptcy auction block on May 11, and Standard General walked out
the winner on the evening of May 12, with the right to use the
iconic name in its RadioShack revival, the Journal said, citing a
person present at the competition.
According to a person at the auction, Standard General's offer adds
$25.7 million worth of value to the pile RadioShack is amassing in
bankruptcy, the Journal related.
About RadioShack Corporation
Headquartered in Fort Worth, Texas, RadioShack (NYSE: RSH) --
http://www.radioshackcorporation.com/-- is a retailer of mobile
technology products and services, as well as products related to
personal and home technology and power supply needs. RadioShack's
retail network includes more than 4,300 company-operated stores in
the United States, 270 company-operated stores in Mexico, and
approximately 1,000 dealer and other outlets worldwide.
RadioShack Corporation and affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 15-10197) on Feb. 5, 2015. Judge
Kevin J. Carey presides over the case.
David G. Heiman, Esq., Greg M. Gordon, Esq., Amanda M. Suzuki,
Esq., Jonathan M. Fisher, Esq., Thomas A. Howley, Esq., and Paul M.
Green, Esq., at Jones Day serve as the Debtors' bankruptcy
counsel.
David M. Fournier, Esq., Evelyn J. Meltzer, Esq., and John H.
Schanne, II, Esq., at Pepper Hamilton LLP serve as co-counsel.
Carlin Adrianopoli at FTI Consulting, Inc., is the Debtors'
restructuring advisor. Maeva Group, LLC, is the Debtors' turnaround
advisor. Lazard Freres & Co. LLC is the Debtors' investment
banker. A&G Realty Partners is the Debtors' real estate advisor.
Prime Clerk is the Debtors' claims and noticing agent.
In their Petitions, the Debtors disclosed total assets of $1.2
billion, versus total debts of $1.3 billion.
Quinn Emanuel Urquhart & Sullivan, LLP and Cooley LLP represent the
Official Committee of Unsecured Creditors as co-counsel. Houlihan
Lokey Capital, Inc., serves as financial advisor and investment
banker.
REICHHOLD HOLDINGS: Retiree Committee Taps Stahl as Counsel
-----------------------------------------------------------
The Official Non-Union Retiree Committee of Reichhold, Inc., and
its affiliated debtors seeks permission from the U.S. Bankruptcy
Court for the District of Delaware to retain the law firm of Stahl
Cowen Crowley Addis LLC as its counsel for all matters under the
Debtors' Chapter 11 proceedings, nunc pro tunc, to April 1, 2015.
The Debtors maintain at least one health care insurance plan for
certain non-union retirees and further provide life insurance
benefits to, in excess of 500, non-union retirees.
On Jan. 30, 2015, the Debtors filed a Motion for Entry of an Order
Pursuant to 11 U.S.C. Section 1114 Appointing an Official Committee
of Retired Employees. In relevant part, the Section 1114 Motion
reflected Debtors' assertions that after the sale of their assets,
the purchaser will not assume any obligations to pay for the
retiree welfare benefits of the non-union retirees, nor do the
Debtors intend to maintain any employee benefit plans.
Acting in its capacity as legal counsel, it is expected that SCCA's
services will include, but may not be limited to:
-- Counseling the Retiree Committee with respect to the general
duties of a Committee formed pursuant to Section 1114 of the
Bankruptcy Code, advising the Retiree Committee members with
respect to their fiduciary duties, and its duty to communicate with
the retiree constituents;
-- Investigating the assets, liabilities and financial condition
of the Debtors and the Debtors non-debtor affiliates, review of the
post-bankruptcy transactions involving the Debtors and the various
orders entered by this Court;
-- Investigating the claims and/or asserted priorities of other
parties with respect to the assets of Debtors and related efforts;
-- Review of the relevant welfare plans (both current and
historical), actuarial analysis, historical benefit cost
information, and financial records of Debtors relating to the
welfare benefits at issue; and
-- Review of any and all plans of reorganization or liquidation
as they relate to any assets or equitable entitlements.
As required by the Guidelines for Reviewing Applications for
Compensation and Reimbursement of Expenses Filed Under 11 U.S.C.
Section 330 by Attorneys in Larger Chapter 11 cases, effective
November 1, 2013, SCCA responds to the questions set forth in
Section D thereof as follows:
a. SCCA did not agree to a variation of its standard or
customary billing arrangement for this engagement.
b. None of the professionals included in this engagement have
varied their rate based on the geographical location of these
chapter 11 cases;
c. SCCA did not represent the Retiree Committee prior to the
Petition Date; and
d. The Retiree Committee has approved SCCA's proposed rates and
staffing plan.
These professionals will work on various aspects of the case, and
SCCA has agreed to staff specific matters so as to avoid
duplication of efforts:
Name Title Hourly Rate
---- ----- -----------
Jon D. Cohen Partner $560
John K. Burnett Income Partner $415
Jeremy Kreger Income Partner $375
Eric Malnar Associate $355
Vivek Bajoria Paralegal $150
Jon D. Cohen, Partner at the firm, attest that SCCA is a
"disinterested person" within the meaning of 101(14) of the
Bankruptcy Code.
A hearing on the Application is slated for May 29, 2015 at 9:30
a.m. Objections are due May 18.
About Reichhold
Founded in 1927, Reichhold, with its world headquarters and
technology center in Durham, North Carolina, is one of the world's
largest manufacturer of unsaturated polyester resins and a leading
supplier of coating resins for the industrial, transportation,
building and construction, marine, consumer and graphic arts
markets. Reichhold -- http://www.Reichhold.com/-- has
manufacturing operations throughout North America, Latin America,
the Middle East, Europe and Asia.
As of June 30, 2014, the Reichhold companies had consolidated
assets of $538 million and liabilities of $631 million.
Reichhold Holdings US, Inc., Reichhold, Inc., and two U.S.
affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case
No. 14-12237) on Sept. 30, 2014.
Cole, Schotz, Meisel, Forman & Leonard, P.A. (legal advisor) and
CDG Group LLC (financial advisor) are representing Reichhold, Inc.
Latham & Watkins LLP (legal advisor) and Moelis & Company
(investment banker) are serving Reichhold Industries, Inc.
Logan & Company is the company's claims and noticing agent.
The cases are assigned to Judge Mary F. Walrath.
The U.S. Trustee for Region 3 appointed seven creditors of
Reichhold Holdings US, Inc. to serve on the official committee of
unsecured creditors.
On April 2, 2015, Reichhold disclosed that the purchase of most of
the assets of the U.S. business was completed. This transaction,
approved by the Delaware Bankruptcy Court on January 12, 2015,
allows Reichhold's U.S. businesses to successfully emerge from
bankruptcy and re-join the rest of the global Reichhold
organization. Concurrent with this purchase, Reichhold completed a
debt-for-equity exchange with a group of investors led by Black
Diamond Capital Management LLC and including J.P. Morgan Investment
Management, Inc., Third Avenue Management LLC, and Simplon Partners
LP.
On April 1, 2015, the U.S. Trustee named three non-union retirees
of Debtors to serve as the official Non-Union Retiree Committee.
Each of the Retiree Committee members is receiving retiree welfare
benefits from one or more of the Debtors.
ROADRUNNER ENTERPRISES: Engages Harris as Real Estate Broker
------------------------------------------------------------
Roadrunner Enterprises, Inc., sought and obtained approval from the
U.S. Bankruptcy Court for the Eastern District of Virginia to hire
Harris & Associates, Inc., as real estate broker.
According to the order, the Debtor is authorized to pay Harris its
proposed sales commission pursuant to its commercial agreements
with the Debtor.
As part of the estate's assets, the Debtor is the record owner of
various parcels of real property. In connection with this
bankruptcy case, the Debtor seeks to sell certain of the real
property through a variety of auctions and traditional sale methods
as, in the exercise of the Debtor's business judgment, the Debtor
believes will generate the highest return for each parcel.
In connection with these sale efforts, the Debtor requires the
assistance of competent and experienced real estate brokers for the
purpose of marketing, selling, and attaining the highest and best
offer for the real property.
The Debtor is still in the process of determining which of its real
properties it will sell through the services of Harris. The Debtor
has identified two such parcels of real property as to which the
Debtor and Harris have entered into two commercial listing
agreements.
The Debtor proposes that to the extent it identifies other real
property for sale by Harris, the Debtor will file a notice of the
respective commercial listing agreement with the Court. The Debtor
proposes serve such commercial listing agreement on the U.S.
Trustee and any lender secured by the real property. All
parties-in-interest and creditors will have 10 business days to
object to the commercial listing agreement. If an objection is
timely filed, the matter will be set for hearing. If no objection
is timely filed, then the commercial listing agreement will be
deemed approved.
The Debtor believes that Harris does not hold or represent an
interest adverse to the Debtor or its bankruptcy estate, and is a
disinterested party pursuant to the requirements of Section 327(a)
of the Bankruptcy Code.
The Debtor has requested approval to retain the services of an
auctioneer to auction certain real property and approval to retain
the services of Tyler Realty Group as a broker to sell certain real
property. The Debtor intends to market various real properties
through traditional sale methods using Tyler and Harris, and then
to auction various other real properties through the auctioneer.
The real property to be sold by Tyler and Harris will be different,
based on the different expertise of these two brokers. As such,
the Debtor does not believe there will be any duplication of
efforts by these various professionals.
About Roadrunner Enterprises
Headquartered in Chesterfield County, Virginia, Roadrunner
Enterprises Inc. owns the Roadrunner Campground and more than 70
rental properties, lots, and other real estate interests.
Roadrunner Enterprises filed for Chapter 11 bankruptcy protection
(Bank. E.D. Va. Case No. 15-30604) on Feb. 6, 2015. The petition
was signed by Carl Adenauer, president. David K. Spiro, Esq., at
Hirschler Fleischer, P.C., serves as the Debtor's counsel. Judge
Kevin R. Huennekens presides over the case. The Debtor estimated
assets and liabilities of at least $10 million.field County,
Virginia, Roadrunner
Enterprises Inc. owns the Roadrunner Campground and more than 70
rental properties, lots, and other real estate interests.
Roadrunner Enterprises filed for Chapter 11 bankruptcy protection
(Bank. E.D. Va. Case No. 15-30604) on Feb. 6, 2015. The petition
was signed by Carl Adenauer, president. David K. Spiro, Esq., at
Hirschler Fleischer, P.C., serves as the Debtor's counsel. Judge
Kevin R. Huennekens presides over the case. The Debtor estimated
assets and liabilities of at least $10 million.
ROSETTA RESOURCES: S&P Puts Ratings on Watch Pos. Over Noble Deal
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'BB-' corporate credit rating, on Houston-based exploration and
production (E&P) company Rosetta Resources Inc. on CreditWatch with
positive implications. The CreditWatch placement reflects a strong
likelihood of an upgrade at the close of its acquisition by Noble
Energy Inc.
Rosetta Resources Inc. is being acquired by Noble Energy Inc. for
about $2.1 billion in Noble stock, plus the assumption of Rosetta's
debt of $1.8 billion as of March 31, 2015.
"We expect to resolve the CreditWatch around the time of the
acquisition's closing, which the companies expect to occur in the
third quarter of 2015," said Standard & Poor's credit analyst
Michael Tsai.
The placement of Rosetta Resources on CreditWatch Positive reflects
the potential for an upgrade following the close of its acquisition
by Noble Energy Inc.
"We expect to raise the corporate credit rating on Rosetta
following its acquisition by investment-grade Noble Energy.
Additionally, we will review the debt ratings in light of the
resulting capital structure, although we do expect to raise the
ratings on Rosetta's senior unsecured debt. We expect to
resolve the CreditWatch listing around the close of the
transaction, which the companies expect to occur during the third
quarter of 2015," S&P said.
SABINE PASS: Amends Q1 Form 10-Q for Additional Information
-----------------------------------------------------------
Sabine Pass LNG, L.P. has amended its quarterly report on Form
10-Q for the period ended March 31, 2015, to disclose recently
provided information pursuant to Section 219 of the Iran Threat
Reduction and Syria Human Rights Act of 2012. Other than this
additional compliance disclosure, no part of the original filing
was amended.
Compliance Disclosure
"Pursuant to Section 13(r) of the Securities Exchange Act of 1934,
as amended, if during the quarter ended March 31, 2015, we or any
of our affiliates had engaged in certain transactions with Iran or
with persons or entities designated under certain executive orders,
we would be required to disclose information regarding such
transactions in our Quarterly Report on Form 10-Q as required under
Section 219 of the Iran Threat Reduction and Syria Human Rights Act
of 2012. During the quarter ended March 31, 2015, we did not
engage in any transactions with Iran or with persons or entities
related to Iran.
Blackstone CQP Holdco LP, an affiliate of The Blackstone Group
L.P., is a holder of approximately 29% of the outstanding equity
interests of Cheniere Energy Partners, L.P. and has three
representatives on the Board of Directors of Cheniere Partners'
general partner. Accordingly, Blackstone Group may be deemed an
"affiliate" of Cheniere Partners, as that term is defined in
Exchange Act Rule 12b-2. Blackstone Group has included in its
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2015 disclosures pursuant to ITRA regarding one of its
portfolio companies that may be deemed to be an affiliate of
Blackstone Group. Because of the broad definition of "affiliate"
in Exchange Act Rule 12b-2, this portfolio company of Blackstone
Group, through Blackstone Group's ownership of Cheniere Partners,
may also be deemed to be an affiliate of ours. We have not
independently verified the disclosure described in the following
paragraph.
Blackstone Group has reported that Travelport Limited has engaged
in the following activities: as part of its global business in the
travel industry, Travelport provides certain passenger travel
related Travel Commerce Platform and Technology Services to Iran
Air. Travelport also provides certain airline Technology Services
to Iran Air Tours. The gross revenues and net profits attributable
to such activities by Travelport during the quarter ended March 31,
2015 were reported by Travelport's parent company, Travelport
Worldwide Limited, to be approximately $157,000 and $109,000,
respectively. Blackstone Group has reported that Travelport
intends to continue these business activities with Iran Air and
Iran Air Tours as such activities are either exempt from applicable
sanctions prohibitions or specifically licensed by the Office of
Foreign Assets Control.
About Sabine Pass
Sabine Pass LNG, L.P. owns, develops and operates an LNG receiving
and regasification terminal in western Cameron Parish, Louisiana.
Based in Houston, the Company's LNG terminal includes existing
infrastructure of five LNG storage tanks with 16.9 Bcfe capacity,
two docks that can hold vessels up to 265,000 cubic meters, and
vaporizers with capacity of 4.0 Bcf/d.
As of March 31, 2015, the Company had $1.63 billion in total
assets, $2.23 billion in total liabilities and a $602.38 million
partners' deficit.
SAN JUAN RESORT: Has Deal With Banco Popular on Cash Use
--------------------------------------------------------
San Juan Resort Owner, Inc. asks the Bankruptcy Court to approve a
stipulation entered into by the Debtor and Banco Popular de Puerto
Rico for the use of cash collateral and adequate protection to the
bank.
The Debtor explains that it requires the use of the Cash Collateral
to pay present operating and administrative expenses in order to
preserve its going concern value pending the consummation of the
transactions detailed in its Sale Motion. The Debtor and BPPR have
negotiated and agreed upon the terms of adequate protection that
will entitle the Debtor to use BPPR's Cash Collateral on a
consensual basis.
An objection to the request was filed by Boutique Hotels, Inc.
(BHI). It argues that the stipulation does not include a budget in
order to detail the amount of cash collateral the Debtor seeks to
use. Further, there are concerns regarding the necessity of the
Debtor to use the cash collateral when the Debtor does not operate
the business. The Debtor has failed to show what operating
expenses, if any. Moreover, the Debtor and BPPR did not disclose
the amount of the rent that the Debtor is receiving on a monthly
basis and the operating costs the Debtor seeks to pay these
proceeds and how the rent owed will be paid.
San Juan Resort Owner, Inc. is represented by:
William M. Vidal Carvajal, Esq.
WILLIAM M. VIDAL CARVAJAL, PSC
MCS Plaza, Suite 801
255 Avenue Ponce de Leon Avenue
Hato Rey, PR 00918
Tel: 787 764-6867
Fax: 787 764-6491
Email: William.m.vidal@gmail.com
Banco Popular de Puerto Rico is represented by:
Luis C. Marini, Esq.
Myrna L. Ruiz-Olmo, Esq.
O'NEILL & BORGES LLC
American International Plaza
250 Munoz Rivera Avenue, Suite 800
San Juan, PR 00918-1813
Tel: 787 764-8181
Fax: 787 753-8944
Email: luis.marini@oneillborges.com
myrna.ruiz@oneillborges.com
Boutique Hotels, Inc. is represented by:
Carmen D. Conde-Torres, Esq.
Luisa S. Valle Castro, Esq.
C. CONDE AND ASSOCIATION
254 San Jose Street, 5th Floor
Old San Juan, PR 00901
Tel: 787-729-2900
Fax: 787-729-2203
Email: ls.valle@condelaw.com
condecarmen@microjuris.com
BPPR is one of the Debtor's creditors. The Debtor entered into
various credit facilities with Banco Popular de Puerto Rico. The
Debtor owed BPPR $17,898,437.58.
The Debtor executed the mortgages and security agreements and
granted first priority perfected security interests to BPPR over
substantially all of the Debtor's assets, including a 96-room
boutique-style beachfront hotel, located in the Condado sector of
San Juan, Puerto Rico, known as San Juan Beach Hotel.
About San Juan Resort Owners, Inc.
San Juan Resort Owners Inc. sought Chapter 11 bankruptcy
protection (Bankr. D.P.R. Case No. 15-01627) in Old San Juan,
Puerto Rico on March 5, 2015. The petition was signed by Luis A.
Carreras Perez as president. The Debtor is represented by William
M. Vidal, Esq., at William Vidal Carvajal Law Offices in San Juan,
Puerto Rico.
The Debtor disclosed total assets of $12.7 million and total
liabilities and $32.9 million as of the bankruptcy filing. The
Debtor owns a parcel of land of 1,637 square meters, with
commercial property known as the San Juan Beach Hotel, a 96-room
hotel. The hotel is located at 1045, Ashford Avenue, Condado, San
Juan, Puerto Rico. The company claims the property is worth $11
million based on appraised value. Banco Popular de Puerto Rico is
owed $17.5 million, of which $6.56 million is unsecured.
SCIENTIFIC GAMES: Files March 31 Quarterly Report
-------------------------------------------------
Scientific Games Corporation filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $86.4 million on $659 million of total revenue for the three
months ended March 31, 2015, compared to a net loss of $45 million
on $388 million of total revenue for the same period in 2014.
As of March 31, 2015, the Company had $9.7 billion in total assets,
$9.89 billion in total liabilities and a $189 million total
stockholders' deficit.
As of March 31, 2015, the Company had $151 million of cash and cash
equivalents and $362 million of availability under its revolving
credit facility, compared to $172 million of cash and cash
equivalents and availability of $342 million under its revolving
credit facility as of Dec. 31, 2014.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/bMcZe8
About Scientific Games
Scientific Games Corporation is a developer of technology-based
products and services and associated content for worldwide gaming
and lottery markets. The Company's portfolio includes instant and
draw-based lottery games; electronic gaming machines and game
content; server-based lottery and gaming systems; sports betting
technology; loyalty and rewards programs; and social, mobile and
interactive content and services. Visit
http://www.scientificgames.com/
Scientific Games reported a net loss of $234 million in 2014, a net
loss of $30.2 million in 2013 and a net loss of $62.6 million for
2012.
* * *
The TCR reported on May 21, 2014, that Moody's Investors Service
downgraded Scientific Games Corporation's ("SGC") Corporate Family
Rating to 'B1'. The downgrade reflects Moody's view that slower
than expected growth in SGC's Gaming and Instant Products segments
will cause Moody's adjusted leverage to exceed 6.0 times by the
end of 2014.
As reported by the TCR on Aug. 5, 2014, Standard & Poor's Ratings
Services lowered its corporate credit rating to 'B+' from 'BB-' on
Scientific Games Corp.
"The downgrade and CreditWatch placement follow Scientific Games'
announcement that it has agreed to acquire Bally Technologies for
$5.1 billion, including the refinancing of about $1.8 billion in
net debt at Bally," said Standard & Poor's credit analyst Ariel
Silverberg.
SIMPLY WHEELZ: Resolves Bid for Taylor Ford to Turnover Vehicles
----------------------------------------------------------------
U.S. Bankruptcy Judge Edward Ellington dismissed the motion of
Simply Wheelz LLC to compel turnover of property of the estate.
According to the Court, it has been advised that Taylor Ford, Inc.,
turned over the vehicles to the Debtor, and that Taylor Ford
remitted to the Debtor the amount of $2,000 for expenses and other
costs incurred by the Debtor in connection with the return of the
vehicles. In this relation, the Court finds the matters have been
fully and finally resolved.
About Simply Wheelz
Simply Wheelz LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Miss. Case No. 13-03332) on Nov. 5,
2013. The case is assigned to Judge Edward Ellingon. The Debtor
disclosed $414 million in assets and $322 million in liabilities as
of the Chapter 11 filing.
The Debtor is represented by Stephen W. Rosenblatt, Esq.,
Christopher R. Maddux, Esq., J. Mitchell Carrington, Esq., and
Thomas M. Hewitt, Esq., at Butler Snow LLP of Ridgeland,
Mississippi. Simply Wheelz tapped EPIQ Bankruptcy Solutions LLC
as noticing and claims agent, and Capstone Advisory Group, LLC, as
financial advisor.
As reported by the Troubled Company Reporter on Jan. 7, 2014, the
Bankruptcy Court has approved the sale of substantially all of the
Debtors' assets to The Catalyst Group, Inc., in exchange for the
$46 million loan that is financing the Chapter 11 reorganization.
SOLAR POWER: Enters Into Redomicile Merger With Unit
----------------------------------------------------
Solar Power, Inc., SPI Energy Co., Ltd., a wholly owned subsidiary
of the Company, and SPI Merger Sub, Inc., a wholly owned subsidiary
of SPI Energy, entered into a definitive agreement and plan of
merger and reorganization, according to a Form 8-K filed with the
Securities and Exchange Commission.
The Merger Agreement provides that the Company will merge with and
into the Merger Sub, with the Merger Sub continuing as the
surviving corporation as a wholly owned subsidiary of SPI Energy
and subsequently changing its name to Solar Power, Inc. Following
the Redomicile Merger, SPI Energy, together with its subsidiaries,
will own and continue to conduct the Company's business in
substantially the same manner as is currently being conducted by
the Company and its subsidiaries.
Upon completion of the Redomicile Merger, each share of common
stock of the Company issued and outstanding immediately prior to
the effective time of the Redomicile Merger will be converted into
the right to receive one ordinary share of SPI Energy. In lieu of
issuing SPI Energy ordinary shares, American depositary shares will
be issued with each one ADS representing four SPI Energy ordinary
shares. No fractional of an ADS will be issued.
Immediately prior to the Effective Time, all existing equity
compensation plans of the Company, as may be amended, will be
adopted and assumed by SPI Energy. Each outstanding option and
other equity award issued under the equity compensation plans of
the Company for the purchase or receipt of, or payment based on,
each share of the Company's common stock will represent the right
to purchase or receive, or receive payment based on, one ordinary
share in the capital of SPI Energy in the form of ADSs on
substantially the same terms. In addition, as part of the
Redomicile Merger, SPI Energy has agreed to assume all of the
Company's rights and obligations of any warrant, convertible
debentures or other convertible securities that may convert in the
Company's common stock. All rights to purchase or receive, or
receive payment based on, each share of the Company's common stock
arising under the Company's warrants, convertible debentures or
other convertible securities will entitle the holder thereof to
purchase or receive, or receive payment based on, as applicable,
one ordinary share of SPI Energy in the form of ADSs.
Additionally, at the Effective Time, SPI Energy will adopt and
assume the obligations of the Company under or with respect to
certain contracts or agreements as described in the Merger
Agreement. The contracts and agreements will become the
obligations of SPI Energy and will be performed in the same manner
and without interruption until the same are amended or otherwise
lawfully altered or terminated.
The consent of the holders of a majority of the outstanding shares
of the Company's common stock entitled to vote is required to
approve and adopt the Merger Agreement. The Board of Directors of
the Company believes that the Redomicile Merger, to be effected by
the Merger Agreement, is advisable and in the best interests of the
Company and its shareholders. The Company has agreed to recommend
that its shareholders vote to approve the Redomicile Merger.
Pursuant to the Merger Agreement, the Board of Directors of the
Company may exercise its discretion to terminate, including but not
limited to because shareholders owning more than 1.0% of the
outstanding shares exercise their dissenters' right to the Merger
Agreement, and therefore abandon the Redomicile Merger, at any time
prior to the Effective Time, including after the adoption of the
Merger Agreement by the Company's shareholders.
The Merger Agreement has been approved by the Boards of Directors
of each of the Company, SPI Energy and the Merger Sub. Subject to
the required approval of the Company's shareholders, requisite
regulatory approvals, the effectiveness of the registration
statement on Form F-4 to be filed by SPI Energy related to the
Redomicile Merger, and other customary closing conditions, the
Redomicile Merger is expected to be completed during the third
quarter of 2015.
In connection with the proposed Redomicile Merger, the Company will
file with the United States Securities and Exchange Commission a
registration statement on Form F-4 to register the ordinary shares
of SPI Energy to be issued to the shareholders of the Company. The
registration statement will include a consent solicitation
statement/prospectus of the Company which will be sent to the
shareholders of the Company seeking their approval of the
Redomicile Merger and related matters in addition to other matters.
ADSs issuable upon deposit of the ordinary shares registered on
the Form F-4 will be registered under a separate registration
statement on Form F-6. In addition, the Company may file other
relevant documents concerning the proposed Redomicile Merger with
the SEC.
Convertergy Share Purchase Agreement
On May 8, 2015, the Company entered into a share purchase agreement
with, inter alia, Convertergy II Holdings Limited, a British Virgin
Islands company, for the acquisition of 100% of the equity interest
in Convertergy I Holdings Limited. Pursuant to the Convertergy
Share Purchase Agreement, the Company agreed to purchase from the
Seller 100% of the equity interest in Convertergy I Holdings for an
aggregate consideration of approximately US$13.8 million. The
Company also agreed to repay a shareholder loan of approximately
US$1.5 million as well as accrued interest owed to the Seller by
Convertergy Energy Technology Co., Ltd., a subsidiary of
Convertergy I Holdings. Both the Share Transfer Price and the
Creditor's Rights Transfer Price will be settled with the Company's
shares of common stock, calculated at the average closing price of
the ten trading days immediately prior to the closing date or a
date otherwise agreed by the parties. The acquisition is subject
to customary closing conditions and other terms and conditions set
forth in the Convertergy Share Purchase Agreement.
About Solar Power
Roseville, Cal.-based Solar Power, Inc., is a global solar
energy facility developer offering its own brand of high-
quality, low-cost distributed generation and utility-scale SEF
development services. Primarily, the Company works directly with
and for developers around the world who hold large portfolios of
SEF projects for whom it serves as an engineering, procurement and
construction contractor. The Company also performs as an
independent, turnkey SEF developer for one-off distributed
generation and utility-scale SEFs.
Solar Power reported a net loss of $5.19 million in 2014, a net
loss of $32.2 million in 2013 and a net loss of $25.4 million in
2012. As of Dec. 31, 2014, the Company had $588 million in total
assets, $326 million in total liabilities, and $262 million in
total stockholders' equity.
SRP PLAZA: Has Deal With U.S. Bank to Use Cash Collateral
---------------------------------------------------------
SRP Plaza asks the Bankruptcy Court to enter interim and final
orders authorizing the Debtor to use cash collateral and provide
adequate protection.
The Debtor explains that the use of cash collateral is necessary
since the Debtor has ongoing obligations including paying
utilities, real estate taxes, insurance, and other maintenance and
operating expenses. Further, the Debtor needs to pay all items in
the Budget set forth as "Tenant Expenses" which include critical
expenses necessary to the basic maintenance and operation of the
Mission Paseo Shopping Center, and serve to preserve and protect
the Center and its value pending a Final Hearing.
The Debtor and U.S. Bank, N.A. entered a stipulation authorizing
use of cash collateral, providing adequate protection and granting
related relief. The parties conferred and negotiated the
stipulation at arm's length, in good faith, and in order to avoid
the unnecessary expense of a contested final hearing on the use of
cash collateral.
In December 2004, SRP executed a promissory note in favor of Bear
Stearns Commercial Mortgage Inc., pursuant to which it promised to
pay the Original Lender, or its assignee, the principal sum of $8.7
million, with an interest rate of 5.585% per annum. The Note is
for a 10-year term. On January 1, 2015, the entire outstanding
principal balance was allegedly due and payable in full. From an
after the event of default, the Note provides that interest will
accrue on the outstanding principal balance at a rate equal to
10.585%.
Pursuant to the Stipulation, the Debtor's right to use cash
collateral may terminate on, among other things, July 31, 2015; or
the Debtor's failure to make any adequate protection payment to
U.S. Bank.
U.S. Bank serves in its capacity as successor trustee for the
Registered Holders of Bear Stearns Commercial Mortgage Securities,
Inc., Commercial Mortgage Pass-Through Certificates, Series
2005-PWR7.
SRP Plaza, L.P. is represented by:
Zachariah Larson, Esq.
Matthew C. Zirzow, Esq.
Shara L. Larson, Esq.
LARSON & ZIRZOW, LLC
810 S. Casino Center Blvd. #101
Las Vegas, NV 89101
Tel: 702 382-1170
Fax: 702 382-1169
Email: zlarson@lzlawnv.com
mzirzow@lzlawnv.com
slarson@lzlawnv.com
U.S. Bank, National Association is represented by:
Abran E. Vigil, Esq.
BALLARD SPAHR, LLP
100 North City Parkway, Suite 1750
Las Vegas, NV 89106-4617
Tel: 702 471-7000
Fax: 702 471-7070
Email: vigila@ballardspahr.com
About SRP Plaza, L.P.
SRP Plaza, L.P., is the owner of a retail shopping center commonly
known as "Mission Paseo Shopping Center" with addresses of 6985 and
7005 West Sahara Avenue and 2555 and 2585 South Rainbow Boulevard,
Las Vegas, Nevada. SRP Plaza, L.P., a Single Asset Real Estate,
filed a Chapter 11 petition (Bankr. D. Nev. Case No. 15-12127) in
Las Vegas, Nevada, on April 16, 2015, to halt a receiver from
taking control of the property. The Debtor estimated $10 million
to $50 million worth of assets against debt
of less than $10 million.
U.S. Bank National Association, as successor trustee for the
registered holders of Bear Stearns Commercial Mortgage Securities,
Inc., Commercial Pass-Through Certificates, Series 20015-PW37,
declared an event of default under a Deed of Trust dated on Dec. 7,
2004, and recorded against the real property of SRP on Dec. 9, 2004
as Instrument No. 20041209-0003438.
On March 31, 2014, the Bank filed a complaint for appointment of a
receiver in the Eight Judicial District Court, Clark County,
Nevada, being Case No. A-15-71622 against SRP, and on April 9,
2015, filed an application for the appointment of a receiver
seeking the potential seizure of control of SRP's property, which
actions, if allowed to proceed, would cause significant and
irreparable harm to SPR, its creditors and other
parties-in-interest.
The bankruptcy case is assigned to Judge August B. Landis.
SRP Plaza is represented by Zachariah Larson, Esq., Matthew C.
Zirzow, Esq. and Shara L. Larson, Esq. at Larson & Zirzow, LLC in
Las Vegas, Nevada.
SUMMIT MATERIALS: Moody's Affirms 'B3' Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service affirmed Summit Materials, LLC's
Corporate Family Rating at B3, the Probability of Default Rating at
B3-PD, and $422 million senior secured term loan B at B2. In
addition, Moody's assigned a B2 rating to Summit's $235 million
senior secured revolver due 2020. The senior unsecured notes were
downgraded to Caa2 from Caa1. The Speculative Grade Liquidity
Rating is SGL-3 and the rating outlook is stable.
The following ratings actions were taken:
-- Corporate Family Rating, affirmed at B3;
-- Probability of Default Rating, affirmed at B3-PD;
-- Speculative Grade Liquidity affirmed at SGL-3;
-- $337 million senior unsecured notes due 2020, downgraded to
Caa2, LGD-5 from Caa1, LGD-4;
-- $422 million senior secured term loan B due 2019, affirmed
at B2, LGD-3;
-- $235 million senior secured revolving credit facility due
2020, assigned at B2, LGD- 3;
-- $150 million senior secured revolving credit facility due
2017, unchanged at B2, LGD3 to be withdrawn;
-- The rating outlook is stable.
The B3 Corporate Family Rating balances Summit's growing scale,
geographic diversity and experienced management team against the
company's acquisitive growth model, and risks associated with
execution and integration. The B3 rating also reflects Summit's
high adjusted debt leverage, the expectation that the company will
remain acquisitive and that financial leverage will fluctuate over
time. Summit has typically funded its acquisitions primarily with
debt capital, which temporarily diminishes the company's financial
flexibility until it realizes the full year benefit of EBITDA
contributions. Moody's expect Summit to fund future acquisitions
predominately with debt capital and de-leverage through EBITDA
growth, including the recently announced Lafarge assets
acquisition. These swings in debt leverage are incorporated into
the company's B3 Corporate Family Rating. The downgrades of the
unsecured notes represent the higher percentage of senior secured
debt in Summit's capital structure, reflecting the increased
revolver capacity and the reduction in unsecured notes following
Summit's initial public offering.
On April 17, 2015, Summit announced that it entered a definitive
agreement with Lafarge North America ("Lafarge NA") to purchase
Lafarge NA's Davenport, Iowa cement plant and seven cement
distribution terminals for a purchase price of $450 million plus
Summit's Bettendorf, Iowa cement terminal. The Lafarge assets
complement Summit's Continental Cement business located in
Hannibal, Missouri. The combined two-plant operation will have 2.45
million short tons of cement capacity and distribution capability
along the Mississippi River from Minneapolis, Minnesota to New
Orleans, Louisiana through eight cement distribution terminals. The
Lafarge acquisition is well-timed for Summit, in Moody's view, as
private construction markets are recovering, public construction
spending is growing modestly, and domestic cement supply is
tightening. The transaction is expected to close in July 2015 and
is subject to final regulatory approval and the closing of the
Lafarge-Holcim global merger.
The Lafarge acquisition should improve overall margins for Summit
as cement generates higher margins than its aggregates and
ready-mixed concrete businesses. Summit's margins have lagged in
relation to margins typical for its business segments, but are
growing. Moody's believe weaker margins are partially attributed to
lower-margin construction services as well as synergies not yet
realized from its recent acquisitions. EBIT margin should begin to
increase from improvements in the company's end markets and the
overall economy.
The stable outlook reflects Summits' scale, geographic
diversification and leadership position in its local markets, while
taking into account the company's debt leverage appetite and
acquisition growth strategy. The stable outlook also presumes that
the company will demonstrate organic growth over the near-term, as
evidenced by moderate increases in organic operating margins, as
well as maintain adequate liquidity to support its acquisitions and
seasonal cash flows.
Moody's indicated that the ratings could be upgraded if Summit
demonstrates healthy, organic operating performance. In addition,
the ratings could be upgraded should the company reduce adjusted
debt leverage closer to 5.5X and achieves adjusted EBIT to interest
at or above 1.5X, both on a sustainable basis and inclusive of
Moody's standard adjustments. For the year ended 2014, the
company's adjusted debt-to-EBITDA and adjusted EBIT-to-interest was
5.8x and 1.0x, respectively.
Alternatively, Moody's stated the ratings could be downgraded
should Summit's organic operating performance decline sharply due
to economic weakness or management missteps.
The principal methodology used in these ratings was Building
Materials Industry published in September 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.
Summit Materials [NYSE: SUM] is a vertically integrated
construction materials company that supplies aggregates, cement,
ready-mixed concrete and asphalt in the United States and western
Canada. Summit is a geographically diverse, aggregates-based
business of scale that offers customers a single-source provider of
construction materials and related downstream products in the
residential, nonresidential, and public infrastructure end markets.
For the year ended 2014, the company generated approximately $1.2
billion in revenue.
TRACK GROUP: Edison Initiates Analyst Coverage
----------------------------------------------
Edison Investment Research, a leading international investment
research firm, announces the initiation of full coverage of Track
Group.
Edison Investment Research published its analysis of Track Group,
which was released to the global investment community on May 6,
2015.
"The initiation of this analyst coverage maximizes Track Group's
exposure to all potential investors and intermediaries worldwide as
well as increase investor understanding of the company," said Guy
Dubois, Chairman, Track Group. "This type of coverage is
increasingly important as we expand our global footprint and
consider a potential uplisting to a regulated exchange."
The report is sponsored research by Track Group. Track Group does
not expressly or by implication warrant or assume any legal
liability or responsibility for the accuracy, completeness, or
usefulness of any information, assumption, data, forecast, estimate
or projection contained in the report, and the dissemination of the
report does not necessarily constitute or imply the Company's
endorsement or recommendation.
About Track Group
Track Group (formerly SecureAlert) -- http://www.trackgrp.com/--
is a global provider of customizable tracking solutions that
leverage real-time tracking data, best-practice monitoring, and
analytics capabilities to create complete, end-to-end solutions.
SecureAlert incurred a net loss attributable to the Company's
common stockholders of $18.9 million for the year ended Sept. 30,
2013, following a net loss attributable to the Company's common
stockholders of $19.9 million for the fiscal year ended Sept. 30,
2012.
As of March 31, 2015, SecureAlert had $58.3 million in total
assets, $38.9 million in total liabilities, and $19.3 million in
total equity.
Hansen, Barnett & Maxwell, P.C., 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 losses, negative cash
flows from operating activities, notes payable in default and has
an accumulated deficit. These conditions raise substantial doubt
about its ability to continue as a going concern.
TRANS ENERGY: Incurs $12.5 Million Net Loss in 2014
---------------------------------------------------
Trans Energy, Inc., filed with the Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$12.5 million on $27.2 million of total operating revenues for the
year ended Dec. 31, 2014, compared with a net loss of $17.7 million
on $18.4 million of total operating revenues for the year ended
Dec. 31, 2013.
As of Dec. 31, 2014, Trans Energy had $112 million in total assets,
$131 million in total liabilities, and a $19.01 million total
stockholders' deficit.
"Historically, we have satisfied our working capital needs with
operating revenues, borrowed funds and the proceeds of acreage
sales. At December 31, 2014, we have negative working capital of
$4,211,011 compared to a positive working capital of $65,897 at
December 31, 2013. This decrease in working capital is primarily
attributed to an increase in derivative assets which is offset by
an increase in accrued expenses," the Company states in the report.
A full-text copy of the Form 10-K is available at:
http://is.gd/HrePXc
About Trans Energy
St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG)
-- http://www.transenergyinc.com/-- is an independent energy
company engaged in the acquisition, exploration, development,
exploitation and production of oil and natural gas. Its operations
are presently focused in the State of West Virginia.
TRANSGENOMIC INC: Dolphin Offshore Reports 7% Stake as of April 23
------------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Dolphin Offshore Partners, L.P., Dolphin Mgmt.
Services, Inc., and Peter E. Salas disclosed that as of April 23,
2015, they beneficially own 864,098 shares of common stock of
Transgenomic, Inc., which represents 7.1 percent based upon
11,857,078 outstanding shares of Common Stock. A copy of the
regulatory filing is available for free at http://is.gd/b74Qa7
About Transgenomic
Transgenomic, Inc. -- http://www.transgenomic.com/-- is a global
biotechnology company advancing personalized medicine in
cardiology, oncology, and inherited diseases through its
proprietary molecular technologies and world-class clinical and
research services. The Company is a global leader in cardiac
genetic testing with a family of innovative products, including
its C-GAAP test, designed to detect gene mutations which indicate
cardiac disorders, or which can lead to serious adverse events.
Transgenomic has three complementary business divisions:
Transgenomic Clinical Laboratories, which specializes in molecular
diagnostics for cardiology, oncology, neurology, and mitochondrial
disorders; Transgenomic Pharmacogenomic Services, a contract
research laboratory that specializes in supporting all phases of
pre-clinical and clinical trials for oncology drugs in
development; and Transgenomic Diagnostic Tools, which produces
equipment, reagents, and other consumables that empower clinical
and research applications in molecular testing and cytogenetics.
Transgenomic believes there is significant opportunity for
continued growth across all three businesses by leveraging their
synergistic capabilities, technologies, and expertise. The
Company actively develops and acquires new technology and other
intellectual property that strengthens its leadership in
personalized medicine.
Transgenomic reported a net loss available to common stockholders
of $15.1 million in 2014, a net loss available to common
stockholders of $16.7 million in 2013 and a net loss available to
common stockholders of $8.98 million in 2012.
As of Dec. 31, 2014, Transgenomic had $30.0 million in total
assets, $23.5 million in total liabilities, and $6.55 million in
total stockholders' equity.
Ernst & Young LLP, in Hartford, Connecticut, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2014, citing that the Company has recurring
losses from operations that raise substantial doubt about its
ability to continue as a going concern.
TRIDENT GOLD: OSC Grants Temporary Management Ceased Trade Order
----------------------------------------------------------------
Trident Gold Corp. is providing this bi-weekly default status
report in accordance with National Policy 12-203 - Cease Trade
Orders for Continuous Disclosure Defaults. On April 27, 2015, the
Company announced that, for the reasons set out in the Default
Announcement, there would be a delay in the filing of the annual
audited financial statements, accompanying Management's Discussion
and Analysis for the year ended December 31, 2014.
As a result of this delay in the filing of the Required Filings,
the Ontario Securities Commission granted a temporary management
ceased trade order on May 8, 2015 against the Company's Chief
Executive Officer and Chief Financial Officer, as opposed to a
general cease trade order against the Company. The MCTO restricts
all trading in securities of the Company, whether direct or
indirect, by the Chief Executive Officer and Chief Financial
Officer of the Company until such time as the Required Filings have
been filed by the Company. The MCTO does not generally affect the
ability of shareholders who are not insiders of the Company to
trade their securities.
The Company has initiated the audit process and has provided all
requested information to its auditors. The Company is working
closely with its auditors and expects to the complete the remaining
steps in a timely manner.
Pursuant to the provisions of the alternative information
guidelines specified in Section 4.4 of NP 12-203, the Company
reports that since the Default Announcement:
-- There have been no material changes to the information
contained in the Default Announcement;
-- There have been no failures by the Company to fulfill its
stated intentions with respect to satisfying the provisions of the
alternative reporting guidelines;
-- There has not been, nor is there anticipated to be, any
specified default subsequent to the default which is the subject of
the Default Announcement; and
-- There is no other material information respecting the Company's
affairs that has not been generally disclosed.
Until the Required Filings have been filed, the Company intends to
continue to satisfy the provisions of the alternative information
guidelines specified in Section 4.4 of NP 12-203 by issuing
bi-weekly default status reports in the form of further news
releases, which will be filed on SEDAR. The Company would file, to
the extent applicable, its next default status report on or about
May 27, 2015.
Trident Gold Corp. -- http://www.tridentgoldcorp.com-- is a
Canada-based gold exploration company. The principal business of
Trident, is acquisition, exploration and development of properties
for the mining of precious metal in Colombia, South America. The
Company is primarily focused on the Marquesa Gold Project located
in the department of Antioquia. The project is a high-grade vein
target in exploration stage. Trident is the 100% owner of the
Marquesa Portfolio of semi-contiguous properties in the well- known
gold region of Antioquia in Colombia. The Marquesa project is
located near the town of Yali, 97 kilometers North East of the city
of Medellin, Department of Antioquia, Colombia. The subsidiaries
of the company are Trident Gold Corp. N.V., Ranten XXI S.L.U.
(Trident Spain),and Marquesa Gold S.A.S. (Trident Colombia).
TROCOM CONSTRUCTION: NY City Contractor Enters Bankruptcy
---------------------------------------------------------
Trocom Construction Corp., a family-run business under contract
with the City of New York for several construction projects, sought
bankruptcy protection, citing cash flow issues brought by losses on
several projects and the City's failure to timely pay amounts due.
Joseph Trovato, the president, says that the Debtor works with the
Department of Design and Construction, the Parks Department, and
the Economic Development Corp. regarding the replacement of water
mains, sewers, retaining walls and refurbishment of parks. The
Debtor services 18 ongoing construction projects throughout the New
York metropolitan area. In connection with those projects, the
Debtor's total receivables from the City agencies are estimated to
amount to $11,339,038 as of Dec. 31, 2014. In addition, the Debtor
has filed or will shortly file notices of claim against the City
seeking the payment of more than $19 million in connection with
certain construction projects.
The Debtor has a line of credit with M&T Bank, which it has drawn
down in the amount of $6,277,598 as of Dec. 31, 2014. The credit
line is secured by a blanket lien in the Debtor's assets an
guaranteed by Joseph Trovato, his mother Antoinette Trovato and two
entities owned by the Trovato family and Found Property Resources,
Inc. Because of cash flow issues, the Debtor received cash
infusions from two entities affiliated with the Trovato family, 460
Kingsland Avenue Real Estate LLC and Reveal Kingsland LLC. The
Debtor executed in favor of both 460 and Reveal a line of credit
note, each in the amount of $250,000. The line of credit notes are
secured by a blanket lien in the Debtor's assets subordinate to M&T
Bank.
The Debtor has been experiencing severe cash flow issues primarily
because of losses on several projects and the City's failure to
timely pay amounts due and owing to the Debtor. The Debtor's cash
flow problems are impacting its operations because certain
subcontractors are starting to lien projects, further exacerbating
the Debtor's cash flow situation. At this point, the Debtor has
enough assets through its receivables that are due and owing by the
City and its claims against the City, to work its way through its
financial problems. However, the Debtor will have to restructure
and reorganize its operations in order to regain its financial
footing.
First Day Motions
The Debtor on the Petition Date filed motions to:
-- use cash collateral;
-- continue its surety bond program;
-- pay certain prepetition employee obligations;
-- continue utility services;
-- maintain its prepetition insurance policies; and
-- extend the deadline to file schedules.
About Trocom Construction
Trocom Construction Corp. formed in 1969 by Salvatore Trovato.
Trocom is in the heavy construction business. Its primary customer
is the City of New York through its various agencies. The company
has 75 employees, the majority of whom are members of various
unions. Joseph Trovato is presently the president and holder of
100% of the voting shares of Trocom.
Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case
No. 15-42145) on May 7, 2015, in Brooklyn. The case is assigned to
Judge Nancy Hershey Lord.
The Debtor tapped Cullen & Dykman, LLP, as general bankruptcy
counsel.
The Debtor estimated $10 million to $50 million in assets and less
than $10 million in debt.
According to the docket, the Chapter 11 plan and disclosure
statement are due Sept. 4, 2015.
TROCOM CONSTRUCTION: Proposes to Use $427,000 of Cash Collateral
----------------------------------------------------------------
Trocom Construction Corp. asks the U.S. Bankruptcy Court for the
Eastern District of New York for approval to use cash in which M&T
Bank, 460 Kingsland Avenue Real Estate LLC and Reveal Kingsland LLC
have an interest. The Debtor asks for authorization for the
emergency use of $426,965 of cash collateral in accordance with a
proposed schedule.
Prepetition, the Debtor had a line of credit with M&T Bank, which
it has drawn down in the amount of $6,277,598 as of Dec. 31, 2014.
The credit line is secured by a blanket lien in the Debtor's assets
an guaranteed by Joseph Trovato, his mother Antoinette Trovato and
two entities owned by the Trovato family and Found Property
Resources, Inc. Because of cash flow issues, the Debtor received
cash infusions from two entities affiliated with the Trovato
family, 460 Kingsland Avenue Real Estate LLC and Reveal Kingsland
LLC. The Debtor executed in favor of both 460 and Reveal a line of
credit note, each in the amount of $250,000. The line of credit
notes are secured by a blanket lien in the Debtor's assets
subordinate to M&T Bank.
The Debtor requires the immediate use of cash collateral in order
to avoid immediate and irreparable harm to its business.
Cash collateral which may be utilized to pay expenses includes the
cash infused by 460 and Reveal, and the Debtor's receivables from
the City agencies, provided, however, that the proceeds of the
Debtor's construction contracts will first be used to pay any and
all trust fund obligations against such monies in accordance with
Article 3-A of the New York State Lien Law.
The Debtor proposes to provide adequate protection to M&T, 460 and
Reveal through the granting of postpetition liens on postpetition
collateral. The replacement liens will be subordinate only to the
payment of U.S. Trustee Fees and a $50,000 per month carve-out for
professional fees.
As additional adequate protection, the Debtor proposes to pay M&T
the monthly interest payment to which it is entitled under the
parties' loan documents, amounting to $17,569 per month.
About Trocom Construction
Trocom Construction Corp. formed in 1969 by Salvatore Trovato.
Trocom is in the heavy construction business. Its primary customer
is the City of New York through its various agencies. The company
has 75 employees, the majority of whom are members of various
unions. Joseph Trovato is presently the president and holder of
100% of the voting shares of Trocom.
Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case
No. 15-42145) on May 7, 2015, in Brooklyn. The case is assigned to
Judge Nancy Hershey Lord.
The Debtor tapped Cullen & Dykman, LLP, as general bankruptcy
counsel.
The Debtor estimated $10 million to $50 million in assets and less
than $10 million in debt.
According to the docket, the Chapter 11 plan and disclosure
statement are due Sept. 4, 2015.
TROCOM CONSTRUCTION: Wants 30-Day Extension for Schedules
---------------------------------------------------------
Trocom Construction Corp. asks the U.S. Bankruptcy Court for the
Eastern District of New York to extend by 30 days its deadline to
file schedules of assets and liabilities and statement of financial
affairs. The Debtor believes that during the next several weeks,
it will be inundated with attendant responsibilities and requests
from its surety, lender and other parties-in-interest as is
customary in any large bankruptcy case.
About Trocom Construction
Trocom Construction Corp. formed in 1969 by Salvatore Trovato.
Trocom is in the heavy construction business. Its primary customer
is the City of New York through its various agencies. The company
has 75 employees, the majority of whom are members of various
unions. Joseph Trovato is presently the president and holder of
100% of the voting shares of Trocom.
Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case
No. 15-42145) on May 7, 2015, in Brooklyn. The case is assigned to
Judge Nancy Hershey Lord.
The Debtor tapped Cullen & Dykman, LLP, as general bankruptcy
counsel.
The Debtor estimated $10 million to $50 million in assets and less
than $10 million in debt.
According to the docket, the Chapter 11 plan and disclosure
statement are due Sept. 4, 2015.
ULTIMATE NUTRITION: Has Until July 15 to Decide on Unexired Leases
------------------------------------------------------------------
The U.S. Bankruptcy Court extended until July 15, 2015, Ultimate
Nutrition, Inc., et al.'s time to assume or reject their leases of
non-residential real property with:
-- Rubino, LLC;
-- VHR Development, LLC;
-- Hartford Square Associates, LLC; and
-- KBSII City Place Tower, LLC.
The Debtors lease each of the locations where they conduct their
business. The New Britain Location is leased from Hartford Square
Associates, a non-related third party landlord. The Ultimate
Farmington Location is leased from Rubino, LLC, which entity is
owned by Brian Rubino and Elizabeth A. Rubino. The Prostar
Farmington Location is leased from VHR Development, LLC, which
entity is wholly owned by Elizabeth A. Rubino and Brian Rubino. The
Florida Location is leased from KBSII CityPlace Tower, LLC, a
non-related third party landlord.
According to the Debtors, the leases are one of the most important
assets of these estates and are absolutely essential for a
successful reorganization.
About Ultimate Nutrition
Ultimate Nutrition, Inc., develops and distributes nutritional
supplements for body building, enhanced athletic performance and
fitness. The products are sold worldwide in over 100 countries.
The business was founded in 1979 by the late Victor H. Rubino, one
of the top amateur power lifters in the United States at that
time.
The company has two facilities located in Farmington,
Connecticut, one product distribution center in New Britain,
Connecticut and a research and development center in West Palm
Beach, Florida.
Ultimate Nutrition and affiliate Prostar, Inc., sought Chapter 11
bankruptcy protection (Bankr. D. Conn. Case Nos. 14-22402 and
14-22403) on Dec. 17, 2014.
On Dec. 19, 2014, the Court entered an order directing the joint
administration of the Debtors' cases for procedural purposes.
The Debtors have tapped Pullman & Comley, in Bridgeport,
Connecticut, as counsel; LaQuerre Michaud & Company, LLC, as
accountant; and Marcum LLP, as financial advisor.
Ultimate Nutrition disclosed $20,157,424 in assets and $19,885,142
in liabilities as of the Chapter 11 filing.
The U.S. Trustee for Region 2 appointed three creditors of to serve
on the official committee of unsecured creditors. The Committee
has selected Lowenstein Sandler, LLP to serve as its counsel, and
Neubert, Pepe & Monteith, P.C. to serve as its local counsel.
GlassRatner Advisory & Capital Group LLC, serves as its financial
advisor.
ULTIMATE NUTRITION: LaQuerre Michaud Approved as Accountants
------------------------------------------------------------
Ultimate Nutrition, Inc., et al., won approval from the bankruptcy
court to appoint LaQuerre Michaud and Company LLC, as accountants.
The Court ordered that, among other things,
-- LaQuerre's professionals' maximum hourly rate will not exceed
$200, subject to periodic adjustment, approved as reasonable by the
court upon application for compensation pursuant to Bankruptcy Code
Sections 330(a) and 331; and
-- LaQuerre's maximum amount of compensation will be $75,000,
unless otherwise ordered by the Court.
To the best of the Debtors' knowledge, LaQuerre is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Ultimate Nutrition
Ultimate Nutrition, Inc., develops and distributes nutritional
supplements for body building, enhanced athletic performance and
fitness. The products are sold worldwide in over 100 countries.
The business was founded in 1979 by the late Victor H. Rubino, one
of the top amateur power lifters in the United States at that
time.
The company has two facilities located in Farmington,
Connecticut, one product distribution center in New Britain,
Connecticut and a research and development center in West Palm
Beach, Florida.
Ultimate Nutrition and affiliate Prostar, Inc., sought Chapter 11
bankruptcy protection (Bankr. D. Conn. Case Nos. 14-22402 and
14-22403) on Dec. 17, 2014.
On Dec. 19, 2014, the Court entered an order directing the joint
administration of the Debtors' cases for procedural purposes.
The Debtors have tapped Pullman & Comley, in Bridgeport,
Connecticut, as counsel; LaQuerre Michaud & Company, LLC, as
accountant; and Marcum LLP, as financial advisor.
Ultimate Nutrition disclosed $20,157,424 in assets and $19,885,142
in liabilities as of the Chapter 11 filing.
The U.S. Trustee for Region 2 appointed three creditors of to serve
on the official committee of unsecured creditors. The Committee
has selected Lowenstein Sandler, LLP to serve as its counsel, and
Neubert, Pepe & Monteith, P.C. to serve as its local counsel.
GlassRatner Advisory & Capital Group LLC, serves as its financial
advisor.
UNI-PIXEL INC: Posts $5.68 Million Net Loss in First Quarter
------------------------------------------------------------
Uni-Pixel, Inc. filed with the Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a net loss of $5.68
million on $6,750 of revenue for the three months ended March 31,
2015, compared to a net loss of $6.18 million on $0 of revenue for
the same period in 2014.
As of March 31, 2015, Uni-Pixel had $30.36 million in total assets,
$7.69 million in total liabilities and $22.67 million in total
shareholders' equity.
"During the quarter, we continued to make progress improving the
features and cost structure of our InTouch and Diamond Guard
technology as we conducted extensive due diligence and evaluation
of Atmel Corporation's XSense technology," commented Jeff
Hawthorne, UniPixel's president and CEO. "We determined that by
combining the best elements from XSense and our InTouch
technologies, we expect to substantially reduce our go-to-market
risk and provide a superior product platform, while better
addressing the largest segments of the touch market comprised of
touch sensors for mobile phones and tablets.
"We expect the application of our proprietary material science
technology to enhance XSense’s performance, functionality and
particularly cost, while XSense brings to the table existing Tier-1
customers, an established revenue stream and a customer pipeline,
superior touch sensor design and proven commercial volume
manufacturing.
"Based on the expanded market opportunity, reduced go-to-market
risk and partnership economics, we decided to focus exclusively on
applying our technology to advance the XSense product platform."
Cash and cash equivalents totaled $20.7 million at March 31, 2015,
as compared to $23.7 million at Dec. 31, 2014.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/mArUdi
About Uni-Pixel Inc.
The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.
Uni-Pixel incurred a net loss of $25.7 million in 2014, a net loss
of $15.2 million in 2013 and a net loss of $9.01 million in 2012.
VAIL RESORTS: S&P Withdraws Ratings at Issuer's Request
-------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on
Broomfield, Colo.-based Vail Resorts Inc., including our 'BB'
corporate credit rating, at the company's request.
"We are withdrawing our ratings on Vail at the company's request
following the redemption of its senior subordinated notes and 6.95%
industrial development bonds (unrated) using cash on hand and
proceeds from its new $250 million term loan facility under its
amended existing credit facility," said Standard &
Poor's credit analyst Carissa Schreck.
VERMILLION INC: Incurs $4 Million Net Loss in First Quarter
-----------------------------------------------------------
Vermillion, Inc., reported a net loss of $4.13 million on $951,000
of total revenue for the three months ended March 31, 2015,
compared to a net loss of $3.98 million on $305,000 of total
revenue for the same period a year ago.
The Company's balance sheet at March 31, 2015, showed $18.67
million in total assets, $3.48 million in total liabilities, all
current, and $15.2 million in total stockholders' equity.
Valerie Palmieri, president and CEO of Vermillion, Inc., stated,
"The first quarter marked a number of significant accomplishments
and we are on track and, in some cases, ahead of our 2015 milestone
plan. In addition to our submission of OVA2 to the FDA, we
presented strong results from a breakthrough health economics
study, gained traction in our efforts to drive positive medical
policy and initiated a ground-breaking partnership with Kaiser
Permanente."
As of March 31, 2015, cash and equivalents totaled $17.2 million.
The company used $4.5 million in cash for operations in the first
quarter of 2015 as well as $1.1 million for the repayment of
short-term debt. The company has no remaining debt as of March 31,
2015.
A full-text copy of the press release is available for free at:
http://is.gd/TBRjM8
About Vermillion
Vermillion, Inc., is dedicated to the discovery, development and
commercialization of novel high-value diagnostic tests that help
physicians diagnose, treat and improve outcomes for patients.
Vermillion, along with its prestigious scientific collaborators,
has diagnostic programs in oncology, hematology, cardiology and
women's health.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 09-11091) on March 30, 2009. Vermillion's legal
advisor in connection with its successful reorganization efforts
wass Paul, Hastings, Janofsky & Walker LLP. Vermillion emerged
from bankruptcy in January 2010. The Plan called for the Company
to pay all claims in full and equity holders to retain control of
the Company.
Vermillion reported a net loss of $19.2 million in 2014, a net loss
of $8.81 million in 2013 and a net loss of $7.14 million in 2012.
VIGGLE INC: Reports $20.6 Million Net Loss in Third Quarter
-----------------------------------------------------------
Viggle Inc. filed with the Securities and Exchange Commission its
quarterly report on Form 10-Q disclosing a net loss of $20.6
million on $5.02 million of revenues for the three months ended
March 31, 2015, compared to a net loss of $14.1 million on $3.3
million of revenues for the same period in 2014.
For the nine months ended March 31, 2015, Viggle reported a net
loss of $60.4 million on $18.7 million of revenues compared to a
net loss of $51.8 million on $12.67 million of revenues for the
same period a year ago.
As of March 31, 2015, the Company had $70.9 million in total
assets, $54.6 million in total liabilities, $11.4 million in series
C convertible redeemable preferred stock, and $4.87 million in
total stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/mElfH0
As previously reported on the Company's Current Report on Form 8-K
filed with the SEC on May 5, 2015, John C. Small, Viggle Inc.'s
chief financial officer, will be speaking at the 16th Annual B.
Riley & Co. Investor Conference on May 12, 2015 at the Loews
Hollywood Hotel in Los Angeles at 2:30pm EDT. The webcast link is
http://www.brileywebcast.com/viewwebcasts/profile.php?ticker=VGGL.
Mr. Small's presentation is available for free at:
http://is.gd/u4SJuU
About Viggle
New York City-based Viggle Inc. is a loyalty marketing company.
The Company has developed a loyalty program for television that
gives people real rewards for checking into the television shows
they are watching on most mobile operating system. Viggle users
can redeem their points in the app's rewards catalog for items
such as movie tickets, music, or gift cards.
Viggle reported a net loss of $68.4 million on $18 million of
revenues for the year ended June 30, 2014, compared with a net
loss of $91.4 million on $13.9 million of revenues for the year
ended June 30, 2013.
BDO USA, LLP, in New York, issued a "going concern" qualification
on the consolidated financial statements for the year ended
June 30, 2014. The independent auditors noted that the Company
has suffered recurring losses from operations and at June 30,
2014, has a deficiency in working capital that raises substantial
doubt about its ability to continue as a going concern.
WALTER ENERGY: Continues Discussions with Debtholders
-----------------------------------------------------
Walter Energy, Inc., said it will be making interest payments on
May 15 under its indenture agreements with holders of its 9.5%
Senior Secured Notes due in 2019 and the 8.5% Senior Notes due in
2021.
The Company previously had exercised the 30-day payment grace
period as it worked with its debtholders to explore alternatives to
recapitalize its balance sheet in light of what has been a
challenging met coal pricing environment. The Company will
continue to engage in those discussions.
Walter Energy noted it does not have a current liquidity issue, as
it had approximately $435 million of cash and investments as of
March 31, 2015. It will continue to deliver high quality met coal
to customers and meet its other obligations as it works with its
debtholders to address the Company's capital structure.
About Walter Energy
Walter Energy -- http://www.walterenergy.com/-- is a publicly
traded "pure-play" metallurgical coal producer for the global
steel industry with strategic access to steel producers in Europe,
Asia and South America. The Company also produces thermal coal,
anthracite, metallurgical coke and coal bed methane gas. Walter
Energy employs approximately 2,700 employees, with operations in
the United States, Canada and the United Kingdom.
For the year ended Dec. 31, 2014, the Company reported a net loss
of $471 million following a net loss of $359 million in 2013.
As of Dec. 31, 2014, Walter Energy had $5.38 billion in total
assets, $5.10 billion in total liabilities, and $282 million in
stockholders' equity.
* * *
As reported by the TCR on April 21, 2015, Standard & Poor's
Ratings Services lowered its corporate credit rating on Walter
Energy Inc.
to 'D' from 'CCC+'.
"We lowered the ratings on Birmingham, Ala.-based coal miner
Walter Energy after the Company elected not to pay approximately
$62 million in aggregate interest payments on its 9.5% senior
secured notes due 2019 and its 8.5% senior notes due 2021. A
payment default has not occurred under the indentures governing the
notes, which provide a 30-day grace period. However, we consider a
default to have occurred because we do not expect a payment to be
made within the stated grace period given the company's heavy debt
burden, which we view to be unsustainable. In our opinion, the
Company has sufficient liquidity to operate over the next several
months as it works with creditors to restructure its balance sheet.
Cash and investments totaled approximately $435 million on March
31, 2015."
The TCR reported on July 10, 2014, that Moody's downgraded the
Corporate Family Rating of Walter Energy to 'Caa2' from 'Caa1'.
"The downgrade in the corporate family rating reflects the
anticipated deterioration in performance, increased cash burn and
increase in leverage, given the recent met coal benchmark
settlement of $120 per tonne for high quality coking coal and our
expectation that meaningful recovery in metallurgical coal markets
is twelve to eighteen months away."
WARNER MUSIC: Posts $18 Million Net Income in Second Quarter
------------------------------------------------------------
Warner Music Group Corp. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
attributable to the Company of $18 million on $677 million of
revenues for the three months ended March 31, 2015, compared to a
net loss attributable to the Company of $60 million on $653 million
of revenues for the same period in 2014.
For the six months ended March 31, 2015, Warner Music reported a
net loss attributable to the Company of $24 million on $1.5 billion
of revenues compared to a net loss attributable to the Company of
$97 million on $1.46 billion of revenues for the same period a year
ago.
As of March 31, 2015, the Company had $5.66 billion in total
assets, $5.39 billion in total liabilties and $276 million in total
equity.
"We experienced significant revenue growth this quarter across key
segments of our business - in particular Recorded Music, across the
U.S. and international and across digital and physical - capping
off a strong first half of our fiscal year" said Stephen Cooper,
Warner Music Group's CEO. "Notably, in this quarter we saw
continued growth in streaming revenue which surpassed download
revenue for the first time in the history of our recorded music
business. Our commitment to being at the forefront of industry
change as well as our ongoing investment in artist development is
the foundation of our continued success."
"We are proud of our team's ability to deliver a healthy financial
performance," added Eric Levin, Warner Music Group's executive vice
president and CFO. "We will continue to find opportunities for
growth while carefully watching our costs."
At March 31, 2015, the Company had $2.995 billion of debt, $218
million of cash and equivalents (net debt of $2.777 billion,
defined as total long-term debt, including the current portion,
less cash and equivalents) and $257 million of Warner Music Group
Corp. equity. This compares to $3.030 billion of debt, $157
million of cash and equivalents (net debt of $2.873 billion) and
$371 million of Warner Music Group Corp. equity at Sept. 30, 2014.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/JJqKm6
About Warner Music Group
Based in New York, Warner Music Group Corp. (NYSE: WMG)
-- http://www.wmg.com/-- was formed by a private equity
consortium of investors on Nov. 21, 2003. The Company is the
direct parent of WMG Holdings Corp., which is the direct parent of
WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's
major music-based content companies and the successor to
substantially all of the interests of the recorded music and music
publishing businesses of Time Warner Inc.
The Company classifies its business interests into two fundamental
operations: Recorded Music and Music Publishing. The Company's
Recorded Music business primarily consists of the discovery and
development of artists and the related marketing, distribution and
licensing of recorded music produced by such artists. The
Company's Music Publishing operations include Warner/Chappell, its
global Music Publishing company, headquartered in New York with
operations in over 50 countries through various subsidiaries,
affiliates and non-affiliated licensees.
In May 2011, Warner Music Group Corp. and Access Industries, the
U.S.-based industrial group, announced the execution of a
definitive merger agreement under which Access Industries will
acquire WMG in an all-cash transaction valued at $3.3 billion.
The purchase includes WMG's entire recorded music and music
publishing businesses.
On July 20, 2011, the Company notified the New York Stock
Exchange, Inc., of its intent to remove the Company's common stock
from listing on the NYSE and requested that the NYSE file with the
SEC an application on Form 25 to report the delisting of the
Company's common stock from the NYSE. On July 21, 2011, in
accordance with the Company's request, the NYSE filed the Form 25
with the SEC in order to provide notification of that delisting
and to effect the deregistration of the Company's common stock
under Section 12(b) of the Securities Exchange Act of 1934, as
amended. On August 2, 2011, the Company filed a Form 15 with the
SEC in order to provide notification of a suspension of its duty
to file reports under Section 15(d) of the Exchange Act. The
Company continues to file reports with the SEC pursuant to the
Exchange Act in accordance with certain covenants contained in the
instruments governing the Company's outstanding indebtedness.
* * *
As reported by the TCR on March 28, 2014, Standard & Poor's
Ratings Services affirmed its 'B+' corporate credit rating on
recorded music and music publishing company Warner Music Group
Corp. (WMG). S&P's rating and negative outlook reflect continued
uncertainty surrounding industry wide revenue and profitability
trends affecting WMG over the intermediate term, despite recent
signs of stabilization in the industry.
WPCS INTERNATIONAL: Issues 96,831 Common Shares
-----------------------------------------------
WPCS International Incorporated issued 96,831 shares of its common
stock, par value $0.0001 per share, in transactions that were not
registered under the Securities Act of 1933, from May 1, 2015,
through May 11, 2015, according to a Form 8-K filed with the
Securities and Exchange Commission. The issuances on May 8, 2015,
resulted in an increase in the number of shares of Common Stock
outstanding by more than 5% compared to the number of shares of
Common Stock reported outstanding in the Current Report on Form
8-K filed by the Company with the Securities and Exchange
Commission on May 1, 2015.
The Company has issued a total of 447,075 shares of Common Stock to
holders of its Series F-1 and G-1 Convertible Preferred Stock upon
the conversion of shares of Series F-1 and G-1Convertible Preferred
Stock. The shares of Common Stock issued upon the conversion of
shares of Series F-1 and G-1 Convertible Preferred Stock were
issued in reliance upon the exemption from registration in Section
3(a)(9) of the Securities Act of 1933. As of May 11, 2015, the
Company has 1,079,491 shares of Common Stock outstanding.
About WPCS International Incorporated
WPCS -- http://www.wpcs.com/-- operates in two business segments
including: (1) providing communications infrastructure contracting
services to the public services, healthcare, energy and corporate
enterprise markets worldwide; and (2) developing a Bitcoin trading
platform.
As reported by the TCR on Feb. 7, 2014, WPCS appointed Marcum LLP
as its new independent registered public accounting firm.
CohnReznick LLP resigned on Dec. 20, 2013.
WPCS International incurred a net loss attributable to common
shareholders of $11.2 million for the year ended April 30, 2014,
as compared with a net loss attributable to common shareholders of
$6.91 million for the year ended April 30, 2013.
As of Jan. 31, 2015, the Company had $14.8 million in total assets,
$14.8 million in total liabilities and a $36,000 total deficit.
Marcum LLP, in New York, NY, issued a "going concern"
qualification on the consolidated financial statements for the
year ended April 30, 2014. The independent auditing firm
noted that the Company has incurred significant losses and needs
to raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
ZOGENIX INC: Incurs $22.9 Million Net Loss in First Quarter
-----------------------------------------------------------
Zogenix, Inc. filed with the Securities and Exchange Commission its
quarterly report on Form 10-Q disclosing a net loss of $22.9
million on $4.61 million of total revenue for the three months
ended March 31, 2015, compared with a net loss of $20.9 million on
$7.38 million of total revenue for the same period a year ago.
As of March 31, 2015, the Company had $180 million in total assets,
$146 million in total liabilities, and $34.3 million in total
stockholders' equity.
"As we move forward with the continued clinical development of our
CNS-focused pipeline, we are in a strong operating position," said
Stephen J. Farr, Ph.D., president and CEO. "We are now fully
funded through multiple key inflection points, including the Phase
3 studies for ZX008 in the U.S. and Europe, the ZX008 New Drug
Application (NDA) and Marketing Authorization application (MAA)
submissions which are anticipated in late 2016, and the end of
Phase 2 meeting with the FDA for Relday."
"The Company has incurred significant net losses since inception
and has relied on its ability to fund its operations through equity
financings, debt financings, revenues from the sale of products and
proceeds from business collaborations and divestitures. As the
Company continues to incur losses, successful transition to
profitability is dependent upon achieving a level of revenues
adequate to support the Company's cost structure. This may not
occur and, unless and until it does, the Company will continue to
need to raise additional cash. These conditions raise substantial
doubt about the Company's ability to continue as a going concern,"
the Company states in the report.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/BJXOB6
About Zogenix Inc.
Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and
Emeryville, California, is a pharmaceutical company
commercializing and developing products for the treatment of
central nervous system disorders and pain.
Ernst & Young LLP, in San Diego, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that the Company's recurring losses from operations and lack of
sufficient working capital raise substantial doubt about its
ability to continue as a going concern.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Philip Charles Wilkins and Vicki Leanne Wilkins
Bankr. D. Ariz. Case No. 15-05298
Chapter 11 Petition filed April 30, 2015
In re Harjinder S. Ladhar and Debo Ladhar
Bankr. N.D. Cal. Case No. 15-51481
Chapter 11 Petition filed April 30, 2015
In re Sally A. Sargent
Bankr. N.D. Ga. Case No. 15-40978
Chapter 11 Petition filed April 30, 2015
In re Kansas Plating Inc.
Bankr. D. Kan. Case No. 15-10887
Chapter 11 Petition filed April 30, 2015
See http://bankrupt.com/misc/ksb15-10887.pdf
represented by: Edward J. Nazar, Esq.
HINKLE LAW FIRM, L.L.C.
E-mail: ebn1@hinklaw.com
In re Gentle Touch Nursing, LLC
Bankr. D. Md. Case No. 15-16269
Chapter 11 Petition filed April 30, 2015
See http://bankrupt.com/misc/mdb15-16269.pdf
Filed Pro Se
In re Golash O. Adadey
Bankr. D. Md. Case No. 15-16239
Chapter 11 Petition filed April 30, 2015
In re 1014 Blue Hills, LLC
Bankr. D. Mass. Case No. 15-11702
Chapter 11 Petition filed April 30, 2015
See http://bankrupt.com/misc/mab15-11702.pdf
represented by: Herbert Weinberg, Esq.
ROSENBERG & WEINBERG
E-mail: hweinberg@jrhwlaw.com
In re St. Germain, LLC
Bankr. D.N.J. Case No. 15-18183
Chapter 11 Petition filed April 30, 2015
See http://bankrupt.com/misc/njb15-18183.pdf
represented by: Douglas J. McGill, Esq.
WEBBER MCGILL, LLC
E-mail: dmcgill@webbermcgill.com
In re Russian Social Network, Inc.
Bankr. E.D.N.Y. Case No. 15-42016
Chapter 11 Petition filed April 30, 2015
See http://bankrupt.com/misc/nyeb15-42016.pdf
represented by: Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
E-mail: alla@kachanlaw.com
In re Samuel A. Moore and Laurie A. Moore
Bankr. W.D. Pa. Case No. 15-21568
Chapter 11 Petition filed April 30, 2015
In re Big Chief's Market, LLC
Bankr. M.D. Tenn. Case No. 15-02945
Chapter 11 Petition filed April 30, 2015
See http://bankrupt.com/misc/tnmb15-02945.pdf
represented by: Paul E. Jennings, Esq.
PAUL E. JENNINGS LAW OFFICES, P.C.
E-mail: paulejennings@bellsouth.net
In re Jamie D. Thomas and Carol C. Thomas
Bankr. E.D. Tex. Case No. 15-40772
Chapter 11 Petition filed April 30, 2015
In re CDUB, LLC
Bankr. E.D. Va. Case No. 15-11479
Chapter 11 Petition filed April 30, 2015
See http://bankrupt.com/misc/vaeb15-11479.pdf
represented by: Nathan A. Fisher, Esq.
E-mail: Fbarsad@cs.com
In re Ronald Neal Walters, Sr.
Bankr. S.D. W.Va. Case No. 15-20243
Chapter 11 Petition filed April 30, 2015
In re R.L. Box, Inc.
Bankr. N.D. Ala. Case No. 15-70635
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/alnb15-70635.pdf
represented by: C. Taylor Crockett, Esq.
C. TAYLOR CROCKETT, P.C.
E-mail: taylor@taylorcrockett.com
In re Navin Enterprises, Inc.
Bankr. M.D. Fla. Case No. 15-02032
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/flmb15-02032.pdf
represented by: Richard A. Perry, Esq.
E-mail: richardperry@richard-a-perry.com
In re Stephen C. English, D.M.D., P.A.
Bankr. M.D. Fla. Case No. 15-02038
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/flmb15-02038.pdf
represented by: Richard R. Thames, Esq.
THAMES MARKEY & HEEKIN, P.A.
E-mail: rrt@tmhlaw.net
In re Joaquin Bernard Siler
Bankr. D.D.C. Case No. 15-00246
Chapter 11 Petition filed May 1, 2015
In re Global Mobile Diagnostics Management Services Inc.
Bankr. M.D. Fla. Case No. 15-04597
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/flmb15-04597.pdf
represented by: Suzy Tate, Esq.
SUZY TATE, P.A.
E-mail: suzy@suzytate.com
In re Moulton Holding Corporation
Bankr. S.D. Fla. Case No. 15-17926
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/flsb15-17926.pdf
represented by: Susan D. Lasky, Esq.
SUSAN D. LASKY, P.A.
E-mail: ECF@suelasky.com
In re Abraham Turk
Bankr. S.D. Fla. Case No. 15-18105
Chapter 11 Petition filed May 1, 2015
In re Helan Enterprises, Inc.
Bankr. N.D. Ga. Case No. 15-20869
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/ganb15-20869.pdf
represented by: A. Keith Logue, Esq.
LOGUE LAW, P.C.
E-mail: keith@logue-law.com
In re Amani Associates, L.L.C.
Bankr. N.D. Ga. Case No. 15-58055
Chapter 11 Petition filed May 1, 2015
Filed Pro Se
In re De-Lux Bar and Grill, LLC
Bankr. N.D. Ga. Case No. 15-58101
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/ganb15-58101.pdf
represented by: A. J. Mitchell, Esq.
LAW OFFICES OF A. J. MITCHELL, LLC
E-mail: aj@ajmitchell-law.com
In re Mullis Garage & Auto Parts, LLC
Bankr. S.D. Ga. Case No. 15-30116
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/gasb15-30116.pdf
represented by: Jon A. Levis, Esq.
MERRILL & STONE, LLC
E-mail: bkymail@merrillstonehamilton.com
In re Carl W. Luxem
Bankr. D. Minn. Case No. 15-41594
Chapter 11 Petition filed May 1, 2015
In re SBTickets.com LLC
Bankr. E.D.N.Y. Case No. 15-42036
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/nyeb15-42036.pdf
Filed Pro Se
In re Brenda Lugones
Bankr. E.D.N.Y. Case No. 15-71895
Chapter 11 Petition filed May 1, 2015
In re Honesdale Woodcraft Corporation
Bankr. S.D.N.Y. Case No. 15-22629
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/nysb15-22629.pdf
represented by: Erica Feynman Aisner, Esq.
DELBELLO DONNELLAN WEINGARTEN WISE &
WIEDERKEHR, LLP
E-mail: erf@ddw-law.com
In re Life Choices Unlimited, Inc.
Bankr. S.D. Tex. Case No. 15-70223
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/txsb15-70223.pdf
represented by: Ralph Perez, Esq.
CAVADA LAW OFFICE
E-mail: ralph.perez@cavadalawoffice.com
In re Ronald C. Barshop
Bankr. W.D. Tex. Case No. 15-51058
Chapter 11 Petition filed May 1, 2015
In re Texas Billy Bob's Burgers, Inc.
Bankr. W.D. Tex. Case No. 15-51066
Chapter 11 Petition filed May 1, 2015
See http://bankrupt.com/misc/txwb15-51066.pdf
Filed Pro Se
In re Magda Dolores Costa Soto
Bankr. D.P.R. Case No. 15-03347
Chapter 11 Petition filed May 2, 2015
In re NSSI, a California Corporation
Bankr. C.D. Cal. Case No. 15-12322
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/cacb15-12322.pdf
represented by: Ian Landsberg, Esq.
ECOFF LANDSBERG, LLP
E-mail: ilandsberg@landsberg-law.com
In re MLE Partners LLC
Bankr. C.D. Cal. Case No. 15-17155
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/cacb15-17155.pdf
represented by: Travis G. Kasper, Esq.
LAW OFFICES OF TRAVIS KASPER
E-mail: Filings@Kasperlaw.com
In re Christina Lopez
Bankr. C.D. Cal. Case No. 15-17159
Chapter 11 Petition filed May 4, 2015
In re Teryl Russell Aikens and Rosalinde Maria Williams-Aikens
Bankr. M.D. Fla. Case No. 15-04645
Chapter 11 Petition filed May 4, 2015
In re MJ Investment Holdings, Inc.
Bankr. S.D. Fla. Case No. 15-18167
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/flsb15-18167.pdf
represented by: Susan D. Lasky, Esq.
SUSAN D. LASKY, P.A.
E-mail: ECF@suelasky.com
In re Downing Realty LLC
Bankr. M.D. Ga. Case No. 15-51017
Chapter 11 Petition filed May 4, 2015
Filed Pro Se
In re Aesthetic Properties, LLC
Bankr. M.D. Ga. Case No. 15-51022
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/gamb15-51022.pdf
represented by: Wesley J. Boyer, Esq.
KATZ, FLATAU, POPSON AND BOYER, LLP
E-mail: wjboyer_2000@yahoo.com
In re Terry R. Clark and Diana C. Clark
Bankr. M.D. Ga. Case No. 15-70493
Chapter 11 Petition filed May 4, 2015
In re Secure-T-Loc Of Blue Ridge, L.L.C
Bankr. N.D. Ga. Case No. 15-20923
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/ganb15-20923.pdf
represented by: Harmon T. Smith, Jr., Esq.
LAW OFFICE OF HARMON T. SMITH, JR.
E-mail: htsmithlaw@gmail.com
In re Sylvia G. Hebert
Bankr. W.D. La. Case No. 15-50536
Chapter 11 Petition filed May 4, 2015
In re Hector Orellana
Bankr. D. Mass. Case No. 15-11787
Chapter 11 Petition filed May 4, 2015
In re Furr Transmissions Inc.
Bankr. S.D. Miss. Case No. 15-01473
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/mssb15-01473.pdf
represented by: Craig M. Geno, Esq.
LAW OFFICES OF CRAIG M. GENO, PLLC
E-mail: cmgeno@cmgenolaw.com
In re Food Taste Corp
Bankr. E.D.N.Y. Case No. 15-71913
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/nysb15-71913.pdf
Filed Pro Se
In re Berko Investments LLC
Bankr. E.D. Pa. Case No. 15-13158
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/paeb15-13158.pdf
represented by: George Kotsopoulos, Esq.
LAW OFFICE OF GEORGE KOTSOPOULOS, LLC
E-mail: gkotslaw@gmail.com
In re Toms Health, Inc.
Bankr. E.D. Tex. Case No. 15-40835
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/txeb15-40835.pdf
represented by: Eric A. Liepins, Esq.
ERIC A. LIEPINS P.C.
E-mail: eric@ealpc.com
In re Abundant Spiritual Life Ministries, Inc.
Bankr. N.D. Tex. Case No. 15-31969
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/txnb15-31969.pdf
represented by: Eric A. Liepins, Esq.
ERIC A. LIEPINS P.C.
E-mail: eric@ealpc.com
In re Ibrahim Abdalla Nagim
Bankr. N.D. Tex. Case No. 15-41808
Chapter 11 Petition filed May 4, 2015
In re Geeklagos, LLC
Bankr. S.D. Tex. Case No. 15-32452
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/txsb15-32452.pdf
Filed Pro Se
In re Hugh P. Shannonhouse
Bankr. S.D. Tex. Case No. 15-32481
Chapter 11 Petition filed May 4, 2015
In re Michael D. Lesem
Bankr. S.D. Tex. Case No. 15-32491
Chapter 11 Petition filed May 4, 2015
In re Shivangi, Inc.
Bankr. W.D. Tex. Case No. 15-60381
Chapter 11 Petition filed May 4, 2015
See http://bankrupt.com/misc/txsb15-60381.pdf
represented by: John A. Montez, Esq.
MONTEZ & WILLIAMS, P.C.
E-mail: johna.montez@yahoo.com
*********
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.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
*********
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,
Editors.
Copyright 2015. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
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The TCR subscription rate is $975 for 6 months delivered via
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are $25 each. For subscription information, contact Peter A.
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*** End of Transmission ***