/raid1/www/Hosts/bankrupt/TCR_Public/150731.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, July 31, 2015, Vol. 19, No. 212
Headlines
ALION SCIENCE: S&P Puts 'B-' CCR on CreditWatch Positive
ALLEGHENY TECHNOLOGIES: Moody's Cuts Corp. Family Rating to Ba2
ALLY FINANCIAL: Reports Second Quarter 2015 Financial Results
ALVION PROPERTIES: Court to Decide on Farmers State Bid Next Month
ARCHDIOCESE OF ST. PAUL: Judge Chides Bankruptcy Lawyers on Fees
ASPEN GROUP: Posts $4.2 Million Net Loss for Fiscal 2015
BOREAL WATER: Hires Patrick Heyn as New Accountant
BOULDER BRANDS: S&P Lowers CCR to 'B', Outlook Stable
CANCER GENETICS: Registers 650,000 Shares Under Incentive Plan
CHASSIX HOLDINGS: Emerges From Ch. 11 With $300M in New Financing
CLIFFS NATURAL: S&P Raises Rating on Sr. Unsecured Notes to 'B'
CONNEAUT LAKE: Reorganization Plan Expected to Be Filed Today
CRAIGHEAD COUNTY: Aug. 11 Hearing on Bid to Sell Arkansas Property
DEB STORES: Court Granted Until Dec. 23 to Remove Lawsuits
ENERGY FUTURE: Challenge Deadline Extended to Sept. 10
ENERGY FUTURE: Dec. 14 Asbestos Proofs of Claim Bar Date Set
ENERGY XXI: Fitch Lowers Longterm Issuer Default Rating to 'CCC'
ESCO MARINE: Court Approves Barron & Newburger as Panel's Counsel
ESCO MARINE: Hires Chatsworth Securities as Investment Bankers
ESCO MARINE: Unique Strategies Okayed as Panel's Financial Advisor
EXTERRAN ENERGY: Moody's Withdraws 'Ba3' Corporate Family Rating
F-SQUARED INVESTMENT: Has Court OK to Employ BMC as Claims Agent
FONTANA PFA SUCCESSOR: Moody's Hikes TABs Rating From Ba1
FRONTIER STAR: Files for Chapter 11 Bankruptcy Protection
FRONTIER STAR: Section 341 Meeting Scheduled for Sept. 1
GARDNER DENVER: Moody's Affirms 'B2' Corporate Family Rating
GLOBAL HEALTHCARE: S&P Assigns 'B' CCR, Outlook Stable
GREEN MOUNTAIN: CFSC Seeks Adequate Protection for Heavy Equipment
GREEN MOUNTAIN: Hires Nelson Mullins as Bankruptcy Counsel
GREEN WORLD: Voluntary Chapter 11 Case Summary
GTA REALTY: Hires Madison Tax as Accountants
HALIFAX REGIONAL: Fitch Raises Rating on $12.4MM Bonds to 'BB+'
HARSCO CORP: Fitch Lowers Issuer Default Rating to 'BB+'
HILL-ROM HOLDINGS: Moody's Lowers Bank Debt Rating to (P)Ba2
KALOBIOS PHARMACEUTICALS: Regains NASDAQ Listing Compliance
KC MERGERSUB: S&P Assigns 'B' Corp. Credit Rating
KEEN EQUITIES: Greene Family to Seek Determination of Claim Amount
KEMET CORP: Reports Preliminary Fiscal 2016 First Quarter Results
KENNEDY-WILSON HOLDINGS: S&P Revises Ratings Outlook to Positive
LBM BORROWER: Moody's Assigns 'B3' Corporate Family Rating
LONESTAR GEOPHYSICAL: Amends Schedules of Assets and Liabiities
M/I HOMES INC: S&P Affirms 'B' CCR & Revises Outlook to Positive
MEGA RV: U.S. Trustee Withdraws Bid to Dismiss or Convert Case
MIG LLC: Exclusive Plan Filing Date Extended to Aug. 28
MILAGRO OIL: Authorized to Employ Prime Clerk as Claims Agent
MILES APPLIANCE: Voluntary Chapter 11 Case Summary
NAVIENT CORP: Moody's Assigns 'Ba3' Corporate Family Rating
NELNET INC: Moody's Affirms 'Ba1' Corporate Family Rating
NEW YORK LIGHT: Court Approves JC Jones as Financial Advisor
NEW YORK LIGHT: Has Final Approval to Pay $300K Critical Vendors
PALM DRIVE HEALTH: S&P Puts 'BB' LT Rating on CreditWatch Negative
PARTY CITY: S&P Assigns 'B' Rating on $1.34BB Term Loan B
PHD GROUP: S&P Assigns 'B-' Corp. Credit Rating, Outlook Stable
PRESSURE BIOSCIENCES: Closes $2.2M Tranche of Private Placement
PROLAMPAC INTERMEDIATE: Moody's Assigns B2 Corporate Family Rating
RELATIVITY MEDIA: Files for Ch 11; To Sell Bulk of Film, TV Units
RIVER CITY: Amends Schedules of Assets and Liabilities
RIVER CITY: Has Until Oct. 26 to File Chapter 11 Plan
SIGNAL INT'L: Obtains Court Authority to Hire KCC as Claims Agent
SIRIUS INT'L: Moody's Affirms 'Ba2(hyb)' Preference Shares Rating
SITEL WORLDWIDE: S&P Raises CCR to 'B', Outlook Stable
SOUTHSIDE BAPTIST: Case Summary & 13 Largest Unsecured Creditors
SPX FLOW: Moody's Assigns 'Ba2' Corporate Family Rating
SPX FLOW: S&P Assigns 'BB' Corp. Credit Rating, Outlook Stable
STANDARD REGISTER: Has Until Oct. 8 to File Liquidating Plan
SULLIVAN INTERNATIONAL: Court OKs King & Ballow as Special Counsel
SUN BANCORP: Reports 2nd Quarter Income of $2.8 Million
SUPERVALU INC: Fitch Affirms 'B' Issuer Default Rating
SWIFT TRANSPORTATION: Moody's Rates New $1.2BB Secured Loans 'Ba1'
TOLLENAAR HOLSTEINS: Seeks Authority to Surcharge Collateral
TRUMP ENTERTAINMENT: Exclusivity Extended Through Feb. 2016
VERINT SYSTEMS: Moody's Affirms 'Ba3' Corporate Family Rating
VERITEQ CORP: Effects 1-for-10,000 Reverse Stock Split
WESTMORELAND RESOURCE: Posts $6.4 Million Net Loss for Q2
Z'TEJAS SCOTTSDALE: Has Interim OK to Tap $320K DIP Loan
ZOGENIX INC: Cancels Sales Agreement with Cantor Fitzgerald
[*] Reich Brothers Expands Decommissioning Capabilities
[*] Small Business Owners Believe Disability to Lead to Bankruptcy
[*] The Deal Announces Results of Q2 2015 Bankruptcy League Tables
[^] BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and Consumer
*********
ALION SCIENCE: S&P Puts 'B-' CCR on CreditWatch Positive
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Standard & Poor's Ratings Services said it placed its ratings on
Alion Science and Technology Corp., including the 'B-' corporate
credit rating, on CreditWatch with positive implications.
At the same time, S&P assigned the company's proposed $40 million
revolver (expected to be undrawn at the close of the transaction)
S&P's 'BB-' issue-level rating with a '1' recovery rating,
indicating its expectation for a very high recovery (90% to 100%)
in the event of a default. S&P also assigned the company's $300
million first-lien term loan B a 'B' issue-level rating with a '3'
recovery rating, indicating its expectation for a meaningful
recovery (50% to 70%; upper end of the range) in the event of a
payment default.
"The CreditWatch placement follows Alion's announcement that it has
agreed to be acquired by Veritas Capital for $715 million," said
Standard & Poor's credit analyst Peter Bourdon.
Financing for the proposed transaction includes a $300 million
first-lien term loan B, $140 million of unsecured mezzanine notes,
and $300 million of equity capital from Veritas. Alion's
last-12-months revenue grew about 12% as of March 31, 2015 due to
several new contract wins and execution on its existing base of
contracts. Following the close of the deal, Alion's leverage will
be in the mid-6x area and significantly down from its fiscal
year-end 2014 leverage level of 9.4x. S&P expects to raise the
corporate credit rating to 'B' upon close of the transaction, which
S&P expects to occur in August 2015.
S&P will resolve its CreditWatch at the close of the transaction,
which S&P expects to be in late August.
ALLEGHENY TECHNOLOGIES: Moody's Cuts Corp. Family Rating to Ba2
---------------------------------------------------------------
Moody's Investors Service downgraded Allegheny Technologies Inc's
(ATI) Corporate Family Rating (CFR) and Probability of Default
rating to Ba2 from Ba1 and to Ba2-PD from Ba1-PD respectively. The
senior unsecured note ratings of ATI and Allegheny Ludlum
Corporation (guaranteed by ATI) were downgraded to Ba2 from Ba1.
The SGL-2 speculative grade liquidity rating was affirmed. The
outlook is stable.
Downgrades:
Issuer: Allegheny Technologies Incorporated
Corporate Family Rating, Downgraded to Ba2 from Ba1
Probability of Default Rating, Downgraded to Ba2-PD from Ba1-PD
Senior Unsecured Regular Bond/Debenture (Local Currency),
Downgraded to Ba2, LGD4 from Ba1, LGD4
Issuer: Allegheny Ludlum Corporation
Senior Unsecured Regular Bond/Debenture (Local Currency),
Downgraded to Ba2, LGD4 from Ba1, LGD4
Affirmations:
Issuer: Allegheny Technologies Incorporated
Speculative Grade Liquidity Rating, Affirmed SGL-2
Outlook Actions:
Issuer: Allegheny Ludlum Corporation
Outlook, Remains Stable
Issuer: Allegheny Technologies Incorporated
Outlook, Remains Stable
RATINGS RATIONALE
The downgrade reflects the contraction evidenced in ATI's
performance in the quarter ended June 30, 2015 reflecting the
impact of the significant drop in oil prices, slowing sales to the
aerospace industry as restocking seen in the first quarter of 2015
slowed, and compression in prices on the stainless steel business
driven by high import levels and declining raw material prices,
particularly for nickel. Performance was also negatively impacted
by start-up and qualification costs on the new hot rolling and
processing facility (HRPF) and the Rowley titanium sponge facility.
In addition, the component failure on the HRPF in late May 2015
will delay the realization of expected benefits from this strategic
investment to 2016, although the company still anticipates a
$150/200 million profit benefit from the HRPF over the longer
term.
With the significant drop in oil prices, drilling activity has
slowed considerably with the rig count in the US for the week ended
July 24, 2015 down about 53% while Canada is down about 49% from
the comparable 2014 period. Given expectations for oil prices to
remain at relatively low levels for the balance of 2015 and 2016
(Moody's estimates WTI at $55/barrel and $60/barrel for 2015 and
2016 respectively -- See Moody's Global Oil and Natural Gas
Industry Sector Comment, July 10, 2015) we expect performance in
this part of ATI's business to remain pressured well into 2016.
Similarly, the flat rolled segment is likely to remain challenged
on continued weak prices and the delayed benefit from the HRPF
facility. While ATI remains well positioned to benefit from the
strong build rates in the aerospace industry this is expected to
result in performance improvement only in the 2016/2017 time frame.
As a result of the current headwinds facing most segments of the
company's business, the time frame for ATI to improve its debt
protection metrics and reduce leverage is now extended to 2016.
Based upon the second quarter performance, we estimate
EBIT/interest is roughly 1.2x and that leverage, as evidenced by
the debt/EBITDA ratio, including Moody's standard adjustments, has
increased to roughly 6.4x at June 30, 2015 from 5.9x at March 31,
2015. Leverage is anticipated to remain elevated through 2015 and
2016.
ATI's Ba2 CFR reflects the company's position as a leading producer
of specialty titanium and titanium alloys, nickel-based alloys and
super alloys and its technological capabilities, which provide the
company with the ability to fulfill customers' unique product
requests. Through its ATI Ladish subsidiary, the company also has
capabilities in forging, casting and machining, particularly to the
aerospace industry. In addition, the company's increasing global
reach provides greater diversity to its customer base and earnings
generation. The rating also considers the company's strong LTA
(long-term agreements) position with major aerospace companies,
which will allow for improving performance as build rates increase
both for aircraft and engines.
Other factors captured in the rating include the volatility of the
company's end markets and its relatively moderate size.
The Ba2 rating on the senior unsecured instruments under Moody's
loss given default methodology reflects the predominance of
unsecured debt in the capital structure relative to the $400
million secured revolving credit facility.
The SGL -2 speculative grade liquidity rating reflects the
company's $250.9 million cash position at June 30, 2015 and
availability under its $400 million secured (receivables and
inventory) revolving credit facility expiring May 31, 2018. The
company is in the process of replacing this with an asset-based
lending facility (ABL), which would have no financial maintenance
covenants. Given ATI's liquidity availability, minimal debt
maturity profile, and reduced capital expenditures (now estimated
at $250 million in 2015 versus the prior estimate of $290 million),
the company is expected to be able to cover requirements within its
overall liquidity profile although free cash flow could be modestly
negative.
The stable outlook reflects our expectations that that downward
earnings pressure will ease over the next several quarters and that
earnings and cash flow generation will slowly improve over the next
twelve to eighteen months as deliveries to the aerospace industry
increase and the HRPF begins to achieve the desired cost
improvements. The outlook also reflects ATI's good contract
position and customer relationships, which will lead to improving
performance as requirements for the company's products increases
over this time frame. The stable outlook also takes into
consideration the company's good liquidity position.
Given the expectation for only a gradual improvement in financial
metrics, a rating upgrade is unlikely over the next twelve to
eighteen months. However, the ratings could be positively impacted
should debt/EBITDA be sustainable at no more than 3.5x,
EBIT/interest reach and be sustained above 4x and (operating cash
flow less dividends)/debt reach and be sustained at 20%. The
outlook or ratings could be negatively impacted should the company
not evidence sequential quarterly improvement such that leverage,
as measured by the debt/EBITDA ratio does not trend towards 4x and
EBIT/interest remains less than 3x.
Headquartered in Pittsburgh, Pennsylvania, ATI is a diversified
producer and distributor of components and specialty metals such as
titanium and titanium alloys, nickel-based alloys and stainless and
specialty steel alloys. For the twelve months ended June 30, 2015
the company generated revenues of $4.3 billion.
ALLY FINANCIAL: Reports Second Quarter 2015 Financial Results
-------------------------------------------------------------
Ally Financial Inc. reported net income of $182 million, which
included a $155 million pre-tax charge for the extinguishment of
legacy, high-cost debt. This compares to net income of $576
million in the prior quarter and $323 million for the second
quarter of 2014. A generally accepted accounting principles (GAAP)
loss of $2.22 per common share in the second quarter of 2015 was
primarily driven by the redemption of $1.3 billion of Series G
preferred securities during the quarter.
The company reported core pre-tax income of $435 million, excluding
repositioning items, in the second quarter of 2015, compared to
$490 million in the prior quarter and $417 million in the
comparable prior year period. Adjusted earnings per diluted common
share for the quarter were $0.46, compared to $0.52 in the previous
quarter and $0.42 in the prior year period.
Driving results this quarter was improved net financing revenue,
which totaled $927 million in the second quarter of 2015, up from
$912 million in the second quarter of 2014, led by strong retail
auto loan growth and lower cost of funds, which more than offset a
decline in net lease revenue. The reduction in cost of funds also
increased net interest margin, excluding original issue discount
(OID), by 11 basis points to 2.58 percent, quarter-over-quarter.
Provision expense of $140 million was up from $63 million in the
second quarter of 2014, due to strong consumer auto loan growth and
the reduction of mortgage reserves in the prior period. Expenses
declined by $84 million, or more than 10 percent year-over-year,
driven by lower controllable expenses and weather losses.
Consumer auto originations remained strong at $10.8 billion for the
quarter, increasing 10 percent from the previous quarter and
relatively flat compared to the same period last year, driven by
continued gains in the Growth and Chrysler channels. Excluding GM
lease and subvented originations, consumer auto originations
increased 36 percent year-over-year. Originations from Growth
dealers grew 58 percent compared to the prior year period.
"In the second quarter, Ally made notable and continued progress in
its efforts to diversify and expand its business, while also
driving shareholder value," said Ally chief executive officer
Jeffrey Brown. "Auto originations were strong totaling $10.8
billion, which was on par with year-ago levels, despite the
reduction in leasing. This was driven by steady increases in
Growth channel originations, as well as Chrysler originations which
were up 37 percent year-over-year. These are clear proof-points
that our business model and value proposition are winning across
nameplates and throughout the marketplace."
He continued, "Retail deposits continued to grow at a steady clip,
increasing 13 percent year-over-year, with the business adding
nearly 35,000 new deposit customers in the quarter. Combined with
Ally's ongoing efforts to eliminate costly, legacy debt and
streamline its capital structure, the company made noteworthy
progress in further lowering its cost of funds."
"Looking to the second half of the year, Ally remains on track to
achieve its financial targets, and we will continue our efforts to
explore additional products and services that would drive growth
for the company and add value to our customers. Ally has a
distinctive approach in the marketplace, and we believe there is
opportunity to build upon our approximately 5.5 million customer
relationships," Brown concluded.
Ally's total equity was $14.3 billion at June 30, 2015, down
compared to the end of the prior quarter, as a result of the
partial redemption of Series G and a Series A tender that were
executed in the quarter. The company's capital ratios for the
quarter reflect these efforts and are normalizing to be in line
with operating level expectations going forward. Ally's
preliminary second quarter 2015 Basel III Common Equity Tier 1
ratio was 9.3 percent on a fully phased-in basis, and Ally's
preliminary Tier 1 capital ratio was 11.7 percent on a fully
phased-in basis.
Ally's consolidated cash and cash equivalents decreased to $5.9
billion as of June 30, 2015, from $7.7 billion at March 31, 2015,
primarily as a result of the Series G redemption in April 2015.
Included in this quarter's balance are $2.8 billion at Ally Bank
and $1.3 billion at the Insurance business.
Ally continued to execute a diverse funding strategy during the
second quarter of 2015. This strategy included strong growth in
deposits, which represent approximately 45 percent of Ally's
funding portfolio, and completion of new term U.S. auto
securitizations, which totaled approximately $2.0 billion for the
quarter. The company also issued $1.4 billion of unsecured debt
during the quarter.
A copy of the press release is available for free at:
http://is.gd/WPiFj1
About Ally Financial
Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/--
is one of the world's largest automotive financial services
companies. The Company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3 percent stake. Private equity firm Cerberus
Capital Management LP keeps 14.9 percent, while General Motors Co.
owns 6.7 percent.
* * *
As reported by the TCR on Dec. 16, 2013, Standard & Poor's Ratings
Services said it raised its issuer credit rating on Ally Financial
Inc. to 'BB' from 'B+'. "The upgrade reflects the company's
release from potential legal and financial liabilities stemming
from its ownership of ResCap," said Standard & Poor's credit
analyst Tom Connell.
In the April 3, 2014, edition of the TCR, Fitch Ratings has
upgraded Ally Financial Inc.'s long-term Issuer Default Rating
(IDR) and senior unsecured debt rating to 'BB+' from 'BB'.
The rating upgrade reflects increased clarity around Ally's
ownership structure given Ally's recent announcement that it has
launched an initial public offering those shares of its common
stock held by the U.S. Treasury (the Treasury).
As reported by the TCR on July 16, 2014, Moody's Investors Service
affirmed the 'Ba3' corporate family and 'B1' senior unsecured
ratings of Ally Financial, Inc. and revised the outlook for the
ratings to positive from stable. Moody's affirmed Ally's ratings
and revised its rating outlook to positive based on the company's
progress toward sustained improvements in profitability and
repayment of government assistance received during the financial
crisis.
ALVION PROPERTIES: Court to Decide on Farmers State Bid Next Month
------------------------------------------------------------------
A bankruptcy court overseeing the Chapter 11 case of Alvion
Properties Inc. will hear next month the request of Farmers State
Bank of Alto Bank to declare the property owned by the company a
"single asset real estate."
The U.S. Bankruptcy Court for the Southern District of Illinois is
set to hold a hearing on August 25 to consider the motion filed by
Farmers State Bank earlier this month.
Alvion owns a piece of land located in Scott County, Virginia. The
company used the property as collateral for the $1 million loan it
obtained from the bank.
As of May 14, the company owes the bank $804,307, plus interest,
court filings show.
Alvion on July 23 objected to Farmers State Bank's motion to have
its property declared a single asset real estate, saying it owns
two separate properties. The company pointed out that it also owns
"3,219 acres of mineral rights" aside from the mineral rights it
owns on the Scott County property.
Meanwhile, the bank drew support from a group of creditors led by
Berkeley Law and Technology Group, LLP. The creditors are
represented by Texas-based The Coffman Law Firm.
If the court ruled in favor of the bank, Alvion's bankruptcy case
would be subject to the time frame established by section 362(d)(3)
of the Bankruptcy Code.
The provision requires a debtor that owns a single building or
piece of land to promptly file a restructuring plan that can be
confirmed within a reasonable time.
About Alvion Properties
Alvion Properties, Inc. filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Ill. Case No. 15-40462) on May 14, 2015. Karnes
Medley, as president, signed the petition. The Debtor disclosed
total assets of $1 billion and total debts of $2.7 million in its
petition.
Antonik Law Offices serves as the Debtor's counsel.
The case was initially assigned to Judge Laura K. Grandy. On May
20, 2015, the case was reassigned to Judge Kenneth J. Meyers.
On June 18, 2015, the U.S. trustee overseeing the Debtor's case
announced that it was unable to form a committee to represent the
Debtor's unsecured creditors. The Justice Department's bankruptcy
watchdog said it "has not received sufficient indications of
willingness" from the Debtor's unsecured creditors.
The Court has yet to set a general bar date for filing proofs of
claim. The deadline for governmental units to file claims is Nov.
10, 2015.
ARCHDIOCESE OF ST. PAUL: Judge Chides Bankruptcy Lawyers on Fees
----------------------------------------------------------------
Tom Corrigan, writing for The Wall Street Journal, reported that
U.S. Bankruptcy Judge Robert Kressel in Minneapolis criticized
legal fees and other expenses that have accrued over the course of
the Archdiocese of St. Paul and Minneapolis's bankruptcy case.
According to the report, though he ultimately approved the bill,
Judge Kressel said he was "stunned" and "frankly a little angry"
over the legal fees and other expenses, which court papers show
were approaching $1.8 million as of May 31. That includes the
archdiocese's professionals and those hired by a victims group,
whose fees the archdiocese is obligated to cover.
About Archdiocese of St. Paul
The Archdiocese of Saint Paul and Minneapolis was originally
established by the Vatican in 1850 and serves a geographical area
consisting of 12 greater Twin Cities metro-area counties in
Minnesota, including Ramsey, Hennepin, Anoka, Carver, Chisago,
Dakota, Goodhue, Le Sueur, Rice, Scott, Washington, and Wright
counties. There are 187 parishes and approximately 825,000
Catholic individuals in the region. These individuals and
parishes
are served by 3999 priests and 173 deacons.
The Archdiocese of St. Paul and Minneapolis filed for Chapter 11
protection (Bankr. D. Minn. Case No. 15-30125) in Minnesota on
Jan.
16, 2015, saying it has large and growing liabilities related to
child sexual abuse and that its pension obligations are
underfunded.
The Debtor disclosed $45,203,010 in assets and $15,890,460 in
liabilities as of the Chapter 11 filing.
The Debtor has tapped Briggs and Morgan, P.A., as Chapter 11
counsel; BGA Management LLC d/b/a Alliance Management as financial
advisor; Lindquist & Vennum LLP as attorney.
Eleven other dioceses have commenced Chapter 11 bankruptcy cases
in
the United States to settle claims from current and former
parishioners who say they were sexually molested by priests.
U.S. Trustee for Region 12 appointed five creditors to serve on
the
official committee of unsecured creditors.
The U.S. Trustee appointed five creditors to serve on the
Committee
of Parish Creditors. Ginny Dwyer appointed as the acting
chairperson of the committee until such time as the members can
meet and officially elect their own person.
* * *
The Debtor's exclusive period for filing a Chapter 11 plan and
disclosure statement ends on Nov. 30, 2015.
ASPEN GROUP: Posts $4.2 Million Net Loss for Fiscal 2015
--------------------------------------------------------
Aspen Group, Inc. filed with the Securities and Exchange Commission
its annual report on Form 10-K disclosing a net loss of $4.2
million on $5.2 million of revenues for the year ended
April 30, 2015, compared to a net loss of $5.3 million on $3.9
million of revenues for the year ended April 30, 2014.
As of April 30, 2015, the Company had $5.9 million in total assets,
$3.3 million in total liabilities and $2.6 million in total
stockholders' equity.
"Since Aspen announced its debtless education solution last year,
already over 1,000 degree-seeking students are paying their tuition
utilizing a monthly payment method - that's more than 45% of the
total degree-seeking students that were active in a course in the
last 90 days," said Aspen Group Chairman and CEO Michael Mathews.
"As a result of our enrollment records this past quarter, and
because our students are overwhelmingly adopting monthly payment
methods, we expect our top line year-over-year growth rate to
accelerate to 45% - 48% in our upcoming first fiscal quarter ending
July 31, 2015," continued Mathews.
Aspen Group expects revenues for the first fiscal quarter ending
July 31, 2015, to be in the range of $1.7 million to $1.73 million,
which would represent a year-over-year growth rate of 45% - 48%.
A copy of the Form 10-K is available for free at:
http://is.gd/bHj5kE
About Aspen Group
Denver, Colo.-based Aspen Group, Inc., was founded in Colorado in
1987 as the International School of Information Management. On
Sept. 30, 2004, it was acquired by Higher Education Management
Group, Inc., and changed its name to Aspen University Inc. On
May 13, 2011, the Company formed in Colorado a subsidiary, Aspen
University Marketing, LLC, which is currently inactive. On
March 13, 2012, the Company was recapitalized in a reverse merger.
Aspen's mission is to become an institution of choice for adult
learners by offering cost-effective, comprehensive, and relevant
online education. Approximately 88 percent of the Company's
degree-seeking students (as of June 30, 2012) were enrolled in
graduate degree programs (Master or Doctorate degree program).
Since 1993, the Company has been nationally accredited by the
Distance Education and Training Council, a national accrediting
agency recognized by the U.S. Department of Education.
BOREAL WATER: Hires Patrick Heyn as New Accountant
--------------------------------------------------
Boreal Water Collection, Inc., disclosed with the Securities and
Exchange Commission that its former registered independent public
accountant (for the fiscal year ending Dec. 31, 2014), Terry L.
Johnson, declined to stand for re-election.
During the past two years the accountant's report on the financial
statements did not contain an adverse opinion or a disclaimer of
opinion and was not qualified or modified as to uncertainty, audit
scope or accounting principles. The Company's Board of Directors
(consisting of one director, Mrs. Francine Lavoie) accepted the
declination not to stand for re-election. The Company said that
during the preceding two fiscal years there were no disagreements
with Mr. Johnson on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
disclosure.
The Company engaged Patrick D. Heyn, CPA, of Atlantis, Florida, as
the Company's new registered independent public accountant for the
fiscal year ending Dec. 31, 2015. During the fiscal years ended
Dec., 31, 2014, and Dec. 31, 2013, and prior to July 24, 2015, the
Company did not consult with Mr. Heyn.
About Boreal Water
Kiamesha Lake, N.Y.-based Boreal Water Collection, Inc., is a
personalized bottled water company specializing in premium custom
bottled water.
Boreal Water reported a net loss of $886,000 on $2.41 million of
sales for the year ended Dec. 31, 2014, compared with net income of
$613,000 on $2.15 million of sales for the year ended Dec. 31,
2013.
As of March 31, 2015, the Company had $3 million in total assets,
$2.68 million in total liabilities, and $314,000 in total
stockholders' equity.
Terry L. Johnson, CPA, in Casselberry, Florida, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2014. The accounting firm noted that the
Company has incurred a deficit of approximately $3.6 million and
has used approximately $800,000 of cash due to its operating
activities in the two years ended Dec. 31, 2014. The Company may
not have adequate readily available resources to fund operations
through Dec. 31, 2015. This raises substantial doubt about the
Company's ability to continue as a going concern.
BOULDER BRANDS: S&P Lowers CCR to 'B', Outlook Stable
-----------------------------------------------------
Standard & Poor's Ratings Services lowered the corporate credit
rating on Boulder, Colo.-based Boulder Brands Inc. to 'B' from
'B+'. The outlook is stable.
At the same time, S&P lowered the issue-level ratings on the
company's existing first-lien term loan to 'B' from 'B+'. The
recovery rating on the first-lien term loan remains '3'. The '3'
recovery rating reflects S&P's expectation for meaningful recovery
(50% to 70%) at the lower half of the range in the event of a
payment default.
"The downgrade reflects our expectation that leverage will be
sustained over 5x for the next 12 to 18 months due to
weaker-than-expected operating performance and credit protection
measures because of announced restructuring and strategic
realignment costs, a slowdown in growth in the company's
gluten-free products, and weakness in the spreads segment," said
Standard & Poor's credit analyst Bea Chiem.
The stable outlook reflects S&P's view that the company's debt
levels and credit protection measures will not materially decline
from S&P's forecast, despite its expectation of lower top-line
growth and some EBITDA contraction. S&P expects the company to
sustain its current debt levels and maintain adequate liquidity
during the next 12 to 24 months.
CANCER GENETICS: Registers 650,000 Shares Under Incentive Plan
--------------------------------------------------------------
Cancer Genetics, Inc. filed a Form S-8 registration statement with
the Securities and Exchange Commission to register 650,000 shares
of common stock issuable under the Company's Amended and Restated
2011 Equity Incentive Plan. The proposed maximum aggregate
offering price is $6.9 million. A copy of the regulatory filing is
available at http://is.gd/Vum3UW
About Cancer Genetics
Rutherford, N.J.-based Cancer Genetics, Inc., is an early-stage
diagnostics company focused on developing and commercializing
proprietary genomic tests and services to improve and personalize
the diagnosis, prognosis and response to treatment (theranosis) of
cancer.
Cancer Genetics reported a net loss of $16.6 million in 2014, a net
loss of $12.4 million in 2013 and a net loss of $6.66 million in
2012.
As of March 31, 2015, the Company had $43.19 million in total
assets, $12.22 million in total liabilities and $30.97 million in
total stockholders' equity.
CHASSIX HOLDINGS: Emerges From Ch. 11 With $300M in New Financing
-----------------------------------------------------------------
Chassix Holdings, Inc., has successfully completed its prearranged
restructuring and recapitalization and emerged from Chapter 11
bankruptcy protection.
Through its prearranged Chapter 11 plan, Chassix substantially
reduced its outstanding debt obligations, secured approximately
$300 million in new exit financing, including $150 million from
certain of the Company's prepetition noteholders, and secured
significant long-term new business commitments and support from its
largest customers. The Company believes this has created a strong
foundation for long-term success.
"Today marks the completion of a restructuring and recapitalization
that allows Chassix to move forward with a solid financial
foundation from which we expect to be able to operate successfully
and grow," said Mark Allan, Chief Executive Officer of Chassix.
"We now have the financial flexibility to continue executing on our
ongoing operational improvements and production enhancements so
that we can better meet the significant demand for our products.
On behalf of the management team, I would like to extend my
gratitude to our employees for their hard work and dedication and
to our customers, suppliers, lenders, sponsor, board members and
advisors for their support during this process."
Chassix also announced a newly constituted Board of Directors,
effective in conjunction with the Company's emergence from Chapter
11, comprised of Fred Bentley, Jonathan F. Foster, Richard E.
Newsted, Randal Klein, and Michael Kreger.
Mr. Bentley currently serves on the board of directors of Dexter
Axle Company, GT Technologies and Sea Star Solutions. Previously,
Mr. Bentley served as President and Chief Executive Officer of
Maxion Wheels.
Mr. Foster is the Founder and Managing Director of Current Capital.
Mr. Foster currently serves on the board of directors of five
public companies -- Berry Plastics Corporation, Chemtura
Corporation, Lear Corporation, Masonite Corporation and Sabine Oil
& Gas Corporation.
Mr. Newsted currently serves on the board of directors of NIBCO,
Inc., Dayco, LLC, Titan Outdoors Holdings, LLC, Pacific Crane
Maintenance Company, LLC, OHH Acquisition Corporation, Rotech
Healthcare Inc., United States Steel Canada, Inc., The Greeley
Company, Mirabela Nickel Limited, AVI-SPL Holdings, Inc., GT
Advanced Technologies Inc., and Univita Health, Inc.
Mr. Klein is a Portfolio Manager at Avenue Capital Group. Mr.
Klein currently is a Director, Chairman of the Finance Committee,
Chairman of the Strategic Review Committee and Member of the Risk
Committee for MagnaChip Semiconductor Corporation, and an Official
Board Observer for QCE Finance LLC.
Mr. Kreger is a Vice President in the opportunities funds of
Oaktree Capital Management, L.P. Mr. Kreger is currently a member
of the board of directors of Tribune Media Company and a member of
the board of directors and audit committee of Aleris Corporation.
Mr. Allan said, "Our newly constituted Board includes a diverse
group of individuals with a range of experience and expertise that
will bring fresh perspective to Chassix. We look forward to
benefitting from their guidance as we embark on our new
beginning."
As previously announced, Chassix's prearranged Chapter 11 plan was
confirmed by the U.S. Bankruptcy Court for the Southern District of
New York on July 9, 2015.
Weil, Gotshal & Manges LLP served as legal counsel and Lazard
served as financial advisor to Chassix. FTI Consulting, Inc.
provided interim management services to Chassix.
About Chassix Holdings
Chassix is a global manufacturer and supplier of aluminum and iron
chassis sub-frame components and powertrain products with both
casting and machining capabilities. Based in Southfield, Michigan,
Chassix and its subsidiaries operate 23 manufacturing facilities
across six countries, providing safety critical automotive
components, having content on approximately 64% of the largest
platforms in North America. Their product mix maintains an even
balance among trucks, minivans and SUVs, as well as small and
medium size cars and cross-over vehicles.
For the twelve months ended Dec. 31, 2014, the Debtors generated
$1.37 billion in revenue on a consolidated basis. As of Dec. 31,
2014, the Debtors had $833 million in assets and $784 million in
liabilities on a consolidated basis.
Chassix Holdings, Inc., et al., sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 15-10578) in Manhattan on March 12,
2015, with a Chapter 11 plan that was negotiated with lenders and
customers.
Chassix, Inc., disclosed $5,880,354 in assets and $624,719,658 in
liabilities as of the Chapter 11 filing. Its parent, Chassix
Holdings, Inc., disclosed $0 assets and $165,571,125 in liabilities
in its schedules.
The Debtors have tapped Weil, Gotshal & Manges LLP, as attorneys;
Lazard Freres & Co, LLC, as investment banker; FTI Consulting,
Inc., to provide an interim CFO and additional restructuring
services; and Prime Clerk LLC, as claims and noticing agent.
The Official Committee of Unsecured Creditors appointed in the case
has retained Akin Gump Strauss Hauer & Feld LLP as counsel; Teneo
Securities LLC as financial advisor; and Kurtzman Carson
Consultants LLC as information and noticing agent.
CLIFFS NATURAL: S&P Raises Rating on Sr. Unsecured Notes to 'B'
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
issue-level rating on Cleveland–based iron ore producer Cliffs
Natural Resources Inc.'s senior unsecured notes to 'B' from 'CCC+'.
S&P also revised the recovery rating on the notes to '4' from '6'.
The '4' recovery rating indicates average recovery (50% to 70%;
upper half of the range) in the event of a payment default. The
'B' corporate credit rating and stable rating outlook on the
company remain unchanged.
RECOVERY ANALYSIS
Key analytical factors
-- In the first quarter of 2015, S&P rated Cliffs' debt with
the expectation that the company would issue $500 million
and $1.25 billion of first- and second-lien debt,
respectively.
-- The company revised the transaction and $540 million and
$544 million of first- and second-lien debt, respectively,
was issued.
-- Considering the lower level of secured debt (and smaller
associated repayments of senior unsecured debt), as well as
the transition to a new $550 million asset-based lending
facility, S&P is revising the recovery rating on the senior
unsecured debt to '4' from '6', which raises the issue-level
rating to 'B' from 'CCC+'.
-- S&P continues to assess recovery prospects for Cliffs'
secured and unsecured debt on the basis of a reorganization
value of about $2.5 billion.
Simulated default assumptions
-- Year of default: 2018
-- EBITDA at emergence: $500 million
-- Implied enterprise value (EV) multiple: 5x
-- Gross EV: $2.50 billion
Simplified waterfall
-- Estimated stressed valuation (after 7% admin. costs):
$2.33 billion
-- Value allocation: U.S., 90%; foreign, 10%; and unencumbered
principal properties, 0%
-- Priority secured claims (asset-based lending facility
$280 million, equipment loans $70 million, and capital
leases $80 million): $430 million
-- Remaining value to cover other debt: $1.77 billion
(remaining U.S. value $1.67 billion and unpledged foreign
value $110 million)
-----------------------------------------------------------
-- Estimated first-lien note claims: $530 million
--Recovery expectations: > 100%
--First-lien recovery rating: '1'
--Senior secured issue rating: 'BB-'
Remaining value to cover other debt: $1.24 billion
-----------------------------------------------------------
-- Estimated second-lien note claims: $410 million
--Recovery expectations: > 100%
--Second-lien recovery rating: '1'
--Senior secured issue rating: 'BB-'
Remaining value to cover senior unsecured debt: $890 million
(remaining value $830 million and available pledged foreign
value $60 million)
-----------------------------------------------------------
Estimated senior unsecured note claims: $2.03 billion
--Recovery expectations: 30%-50% (upper half of the range)
--Senior unsecured notes recovery rating: '4'
--Senior unsecured notes issue rating: 'B'
Note: Estimated claim amounts include about six months' accrued but
unpaid interest.
Ratings List
Cliffs Natural Resources Inc.
Corporate credit rating B/Stable/--
Upgraded; Recovery Ratings Revised
To From
Cliffs Natural Resources Inc.
Senior unsecured notes B CCC+
Recovery rating 4H 6
Affirmed
Cliffs Natural Resources Inc.
First-lien debt BB-
Recovery rating 1
Second-lien debt BB-
Recovery rating 1
CONNEAUT LAKE: Reorganization Plan Expected to Be Filed Today
-------------------------------------------------------------
Keith Gushard at the Meadville Tribune reports that a Chapter 11
reorganization plan is expected to be filed for Conneaut Lake Park
today, July 31, 2015.
Meadville Tribune relates that Mark Turner, the executive director
of Trustees, the nonprofit corporation that oversees operations of
the Park, said that any bankruptcy plan will be subject to review
by both the Park's creditors and the bankruptcy court and all of
them will have to approve the plan for it to move forward.
Citing Mr. Turner, Meadville Tribune states that a hearing for the
Bankruptcy Court to consider the approval of the plan could be held
in September.
About Conneaut Lake Park
Conneaut Lake Park is a summer amusement resort, located in
Conneaut Lake, Pennsylvania.
Trustees of Conneaut Lake Park, Inc., filed a Chapter 11 bankruptcy
petition (Bankr. W.D. Pa. Case No. 14-11277) in Erie, Pennsylvania,
on Dec. 4, 2014. The case is assigned to Judge Thomas P. Agresti.
The Debtor tapped George T. Snyder, Esq., at Stonecipher Law Firm,
in Pittsburgh, as counsel. The Debtor estimated assets and debt of
$1 million to $10 million.
Trustees of Conneaut Lake Park filed for bankruptcy protection less
than 20 hours before the Crawford County amusement park was
scheduled to go to sheriff's sale for almost $930,000 in back taxes
and related fees.
CRAIGHEAD COUNTY: Aug. 11 Hearing on Bid to Sell Arkansas Property
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Arkansas will
convene a hearing on Aug. 11, 2015, at 10:00 a.m., to consider
Craighead County Fair Association's motion to sell property, and
the objection filed creditor Focus Bank.
As reported in the Troubled Company Reporter on July 22, 2015, the
Debtor is requesting authorization to sell real estate consisting
of an 11.74-acre tract at the southeast corner of Fairpark
Boulevard and Parkwood Road in Jonesboro, Craighead County,
Arkansas, to Blackburn Properties of Texas, LTD., for $3,999,104.
James F. Dowden, Esq., in Little Rock, Arkansas, told the Court
that at the Petition Date and for months before that, the Debtor
had been negotiating for the sale of the real estate to Blackburn.
On Dec. 18, 2014, a motion for sale of real estate was filed and an
order granting the motion was entered on Jan. 16, 2015.
The closing of the sale, however, has been delayed as the buyer
continues to negotiate with tenants for the property and it is
their desire to have these negotiations complete, or near complete
at the time of closing, Mr. Dowden related. Accordingly, the buyer
has requested an extension of the examination period and an
amendment to the Earnest Money Contract has been agreed to by the
parties.
The amendment provides that the buyer may also extend the
examination period for an additional 3 30-day periods upon the
deposit of an additional $5,000 for each 30-day extension with the
Title Company.
Mr. Dowden said the property is not vital to the Debtor's
reorganization other than it will reduce secured debts by
approximately $3,999,104 and that the sale is fair and reasonable,
and in the best interest of the Creditors and the estate.
Focus Bank, as the only creditor who is secured by the Old
Fairground, objects to the Motion seeking to amend the escrow
agreement to reduce additional escrow from $10,000 to $5,000 per
30-day extension. The bank asserted that there is no legal or
factual basis its collateral to be tied up for an amount of half of
the previously negotiated extension payments. The bank objected to
the amendment following any further due diligence periods which
would conflict with the terms of the Plan and requests that if any
additional due diligence periods are granted, that such periods be
limited to 60 days from the effective date of the Plan on order to
allow closing to occur within the 90-day period required by the
Plan.
About Craighead County Fair
Craighead County Fair Association is an Arkansas nonprofit
corporation formed in 1988, with its principal place of business in
Jonesboro, Arkansas. The Debtor operates the annual Northeast
Arkansas District Fair and leases portions of its real property
throughout the year.
Craighead County Fair Association filed a bare-bones Chapter 11
bankruptcy petition (Bankr. E.D. Ark. Case No. 14-15490) in
Jonesboro, Arkansas, on Oct. 13, 2014. The case is assigned to
Judge Audrey R. Evans.
The Debtor disclosed $26.7 million in assets and $9.83 million in
liabilities as of the Petition Date.
The U.S. trustee wasn't able to form a committee of unsecured
creditors due to "lack of interest" of creditors to serve on the
panel.
DEB STORES: Court Granted Until Dec. 23 to Remove Lawsuits
----------------------------------------------------------
The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District
of Delaware, in a second order, has given DEB Stores Holding LLC
until Dec. 23, 2015, to file notices of removal of lawsuits
involving the company and its affiliates.
About DEB Stores
Headquartered in Philadelphia, Pennsylvania, Deb Stores is a
mall-based retailer in the juniors "fast-fashion" specialty sector
that operates under the name "DEB" and offers moderately priced,
fashionable, coordinated women's sportswear, dresses, coats,
lingerie, accessories and shoes for junior and plus sizes. The
company, founded by Philip Rounick and Emma Weiner, opened its
first store under the name JOY Hosiery in Philadelphia,
Pennsylvania in 1932. As of Sept. 30, 2014, the company operated
a total of 295 retail store locations (primarily in the East and
Midwest, especially Pennsylvania, Ohio and Michigan) as well as an
e-commerce channel.
On June 26, 2011, Deb Stores' predecessors -- DSI Holdings Inc.
and its subsidiaries -- sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 11-11941) and closed the sale of the assets
three months later to Ableco Finance, LLC, the agent for the first
lien lenders.
Deb Stores Holding LLC and eight affiliated companies commenced
Chapter 11 bankruptcy cases in Delaware on Dec. 4, 2014. The
Debtors are seeking to have their cases jointly administered, with
pleadings maintained on the case docket for Deb Stores Holding
(Case No. 14-12676). The cases are assigned to Judge Mary F.
Walrath.
Laura Davis Jones, Esq., Colin R. Robinson, Esq., at and Peter J.
Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington,
Delaware, serve as counsel to the Debtors. Epiq Bankruptcy
Solutions, LLC, is the claims and noticing agent.
As of Dec. 31, 2014, the Debtors' most recent audited consolidated
financial statements reflected assets totaling $90.5 million and
liabilities totaling $120.1 million.
The Official Committee of Unsecured Creditors tapped Cooley LLP as
its lead counsel; Drinker Biddle & Reath LLP as its co-counsel;
and Zolfo Cooper, LLC as its bankruptcy consultants and financial
advisors.
ENERGY FUTURE: Challenge Deadline Extended to Sept. 10
------------------------------------------------------
Judge Christopher S. Sontchi of the United States Bankruptcy Court
for the District of Delaware approved a stipulation extending until
Sept. 10, 2015, the deadline by which the First Lien Noteholders
and the TCEH First Lien Ad Hoc Committee must challenge the
stipulations and admissions contained in the Final Cash Collateral
Order issued in Energy Future Holdings Corp., et al.'s Chapter 11
cases.
Texas Competitive Electronic Holdings Company LLC, et al., are
represented by:
Mark D. Collins, Esq.
Daniel J. DeFranceschi, Esq.
Jason M. Madron, Esq.
Richards, Layton & Finger, P.A.
920 North King Street
Wilmington, Delaware 19801
Tel: 302 651-7700
Fax: 302 651-7701
Email: collins@rlf.com
defranceschi@rlf.com
madron@rlf.com
-- and --
Edward O. Sassower, P.C.
Stephen E. Hessler,
Brian E. Schartz, Esq.
601 Lexington Avenue
New York, New York 10022
Tel.: 212 446-4800
Fax: 212 446-4900
Email: richard.cieri@kirkland.com
Edward.sassover@kirkland.com
Stephen. hessler@kirkland.com
Brian.schartz@kirkland.com
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor, an
80 percent-owned entity within the EFH group, is the largest
regulated transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
On April 29, 2014, Energy Future Holdings and 70 affiliated
companies sought Chapter 11 bankruptcy protection (Bankr. D. Del.
Lead Case No. 14-10979) after reaching a deal with some key
financial stakeholders to keep its businesses operating while
reducing its roughly $40 billion in debt.
The Debtors' cases have been assigned to Judge Christopher
S.Sontchi (CSS). The Debtors are seeking to have their cases
jointly administered for procedural purposes.
As of Dec. 31, 2013, EFH Corp. reported assets of $36.4 billion in
book value and liabilities of $49.7 billion. The Debtors have $42
billion of funded indebtedness.
EFH's legal advisor for the Chapter 11 proceedings is Kirkland &
Ellis LLP, its financial advisor is Evercore Partners and its
restructuring advisor is Alvarez & Marsal. The TCEH first lien
lenders supporting the restructuring agreement are represented by
Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and
Millstein & Co., LLC, as financial advisor.
The EFIH unsecured creditors supporting the restructuring agreement
are represented by Akin Gump Strauss Hauer & Feld LLP, as legal
advisor, and Centerview Partners, as financial advisor. The EFH
equity holders supporting the restructuring agreement are
represented by Wachtell, Lipton, Rosen & Katz, as legal advisor,
and Blackstone Advisory Partners LP, as financial advisor. Epiq
Systems is the claims agent.
Wilmington Savings Fund Society, FSB, the successor trustee for the
second-lien noteholders owed about $1.6 billion, is represented by
Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A.
Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq.,
Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey,
Esq., and Howard L. Siegel, Esq.
An Official Committee of Unsecured Creditors has been appointed in
the case. The Committee represents the interests of the unsecured
creditors of ONLY of Energy Future Competitive Holdings Company
LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings
Company LLC; and EFH Corporate Services Company, and of no other
debtors. The Committee has selected Morrison & Foerster LLP and
Polsinelli PC for representation in this high-profile energy
restructuring. The lawyers working on the case are James M. Peck,
Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at
Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K.
Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at
Polsinelli PC.
ENERGY FUTURE: Dec. 14 Asbestos Proofs of Claim Bar Date Set
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware established
Dec. 14, 2015, at 5:00 p.m., as the deadline for individual or
entity to file asbestos proofs of claim against Energy Future
Holdings Corp., et al.
All proofs of claim must be submitted to:
if by first-class mail:
Energy Future Holdings Claim Processing Center
c/o Epiq Bankruptcy Solutions, LLC
P.O. Box 4420
Beaverton, OR 97076-4420
If by hand delivery or overnight mail:
Energy Future Holdings Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
10300 SW Allen Blvd
Beaverton, OR 97005
The Debtors, in reply to the objection of the EFH Official
Committee to the Debtors' bar date motion, stated that the Court
must overrule the objection and enter the revised asbestos bar date
order, set the asbestos bar date and authorize the Debtors to
implement the revised notice plan.
The Debtors noted that although the Debtors do not believe the
original notice plan was inadequate or deficient, the Debtors have
incorporated many of the EFH Committee's proposed changes in an
effort to reach a consensual resolution of issues relating to the
asbestos bar date notice plan.
The Debtors have made these revisions:
a. Revised Asbestos Bar Date Order: The Debtors have revised the
Asbestos Bar Date Order to, among other things, limit the relief
sought pursuant to Bankruptcy Rule 3003(c)(2) and the scope of the
Asbestos Bar Date Order.
b. Revised Notice Plan: The Revised Notice Plan provides for new
primary, secondary, and tertiary target audiences, as recommended
in the Kinsella Declaration, and has added certain new forms of
media to increase the reach and frequency to its target audiences.
c. Revised Proof of Claim Form: The Revised Notice Plan provides
that Official Form 10 will only be required to be completed by
Known Asbestos Claimants and claimants with manifested Asbestos
Claims.
d. Revised Publication Notice: The Publication Notice has been
revised to, among other things, explain asbestos-related illnesses,
simplify the language, and incorporate the "call to action"
headline suggested in Exhibit 4 of the Kinsella Declaration.
e. Revised Asbestos Bar Date Notice: The Asbestos Bar Date
Notice has been revised to, among other things, incorporate a
frequently asked questions format, simplify the language, and
remove language that highlights the burdens and expenses of filing
an Asbestos Claim.
f. Revised Cover Letter: With the exception of incorporating the
Employee or Contractor's personalized work history, the Revised
Notice Plan adopts the cover letter proposed in Exhibit 5 of the
Kinsella Declaration that will be sent to Employees and
Contractors.
g. Revised Envelope: The envelope used in the Revised Notice
Plan includes a plain language call to action.
h. Revised Internet Banner Advertisements: The Internet Banner
Advertisements have been revised to include a plain-language call
to action and to incorporate the use of moving text to attract
attention.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80 percent-owned entity within the EFH group, is the largest
regulated transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
On April 29, 2014, Energy Future Holdings and 70 affiliated
companies sought Chapter 11 bankruptcy protection (Bankr. D. Del.
Lead Case No. 14-10979) after reaching a deal with some key
financial stakeholders to keep its businesses operating while
reducing its roughly $40 billion in debt.
The Debtors' cases have been assigned to Judge Christopher S.
Sontchi (CSS). The Debtors are seeking to have their cases
jointly administered for procedural purposes.
As of Dec. 31, 2013, EFH Corp. reported assets of $36.4 billion in
book value and liabilities of $49.7 billion. The Debtors have $42
billion of funded indebtedness.
EFH's legal advisor for the Chapter 11 proceedings is Kirkland &
Ellis LLP, its financial advisor is Evercore Partners and its
restructuring advisor is Alvarez & Marsal. The TCEH first lien
lenders supporting the restructuring agreement are represented by
Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor,
and Millstein & Co., LLC, as financial advisor.
The EFIH unsecured creditors supporting the restructuring
agreement are represented by Akin Gump Strauss Hauer & Feld LLP,
as legal advisor, and Centerview Partners, as financial advisor.
The EFH equity holders supporting the restructuring agreement are
represented by Wachtell, Lipton, Rosen & Katz, as legal advisor,
and Blackstone Advisory Partners LP, as financial advisor. Epiq
Systems is the claims agent.
Wilmington Savings Fund Society, FSB, the successor trustee for
the second-lien noteholders owed about $1.6 billion, is
represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and
Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S.
Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq.,
Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq.
An Official Committee of Unsecured Creditors has been appointed in
the case. The Committee represents the interests of the unsecured
creditors of ONLY of Energy Future Competitive Holdings Company
LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings
Company LLC; and EFH Corporate Services Company, and of no other
debtors. The Committee has selected Morrison & Foerster LLP and
Polsinelli PC for representation in this high-profile energy
restructuring. The lawyers working on the case are James M. Peck,
Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at
Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K.
Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at
Polsinelli PC.
ENERGY XXI: Fitch Lowers Longterm Issuer Default Rating to 'CCC'
----------------------------------------------------------------
Fitch Ratings has downgraded Energy XXI's ratings as:
Energy XXI Gulf Coast Inc.
-- Long-term Issuer Default Rating (IDR) to 'CCC' from 'B';
-- Senior secured first lien revolver to 'B/RR1' from 'BB/RR1';
-- Senior secured second lien notes to 'B/RR1' from 'BB/RR1';
-- Senior unsecured notes to 'CCC-/RR5' from 'B-/RR5'.
Energy XXI LTD
-- Long-term IDR to 'CCC' from 'B-';
-- Convertible notes to 'CC/RR6' from 'CCC/RR6';
-- Convertible perpetual preferred to 'CC/RR6' from 'CCC/RR6'.
KEY RATING DRIVERS
Key drivers for the downgrade are: in Fitch's view, inadequate
hedge coverage for calendar 2016; higher interest costs per unit
which have increased estimated EXXI cash breakevens; weaker cash
flow forecasts and credit metrics following changes to Fitch's oil
& natural gas price decks; and heightened refinancing risk for near
term maturities, including the company's $750 million 9.25% 2017
notes.
DECREASED FORWARD HEDGE COVER
A key factor in Fitch's previous rating commentary was that
maintenance of the rating was contingent on the company's ability
to lock in 2016 production at economic prices. This has not
materialized to date, and weakness in the forward curve could
continue to limit the opportunity for the company to hedge at
meaningful levels in the near term.
After monetizing in-the-money hedges for approximately $102 million
in proceeds over the nine months ending March 31, 2015, EXXI
currently has 14 mbbl/d of calendar 2016 oil production volumes
hedged (approximately 18% of oil volumes assuming flat production),
with downside protection via WTI puts at $51.43/bbl. As of June 30,
2014, EXXI had approximately 65% of next 12 months oil production
economically hedged, provided a higher degree of certainty around
near term cash flow. The current hedge book generates very little
cash flow protection at Fitch's base case price deck and highlights
the potential for increased volatility in cash flow measures in the
near term.
Fitch estimates total fiscal year (FY) 2016 hedge contribution of
$30 million, or approximately 6% of FYE16 EBITDA including hedges.
This is primarily due to the contribution from approximately 6.5
mbbl/d of collars with floors at $75/bbl and $80/bbl for WTI and
LLS, respectively, in the balance of calendar 2015 (EXXI fiscal
year end is June 30).
HIGHER UNIT COSTS FOLLOWING SECOND LIEN ISSUANCE
At Fitch's base case oil price EXXI is set up for significantly
lower cash netbacks per barrel driven by lower revenues and higher
interest costs per unit of production. Based on updated
projections, Fitch estimates that the full-cycle cash breakeven for
EXXI has increased to approximately $75/bbl, from $65/bbl in
December 2014, driven largely by the higher interest costs from the
second-lien financing in March 2015. Increases in interest costs
are modestly offset by expected decreases in service costs. Taken
together, these estimates decrease our degree of confidence in the
ability of the company to economically produce its reserve base in
the near term.
EXXI Gulf Coast's issuance of $1.45 billion of 11% second-lien
notes will add approximately $160 million per year in interest
payments. Assuming production is roughly flat at 59 thousand
barrels of oil equivalent (mboe) per day in FY2016 (last nine
months average is 58.8 mboe per day), this leads to interest costs
of $18.4/boe, up substantially from $8.5/boe as of FY14.
NEAR TERM LIQUIDITY ADEQUATE
EXXI executed several liquidity-enhancing transactions in the first
half of 2015. In June, EXXI entered into an agreement to sell its
Grand Isle offshore oil gathering system to CorEnergy
Infrastructure Trust for $245 million. On July 1, the company
announced the sale of its East Bay field for $21 million to a
private buyer. As previously stated, in March, the company sold
$1.45 billion of second lien notes at an 11% coupon. Pro forma for
these transactions, total liquidity is estimated at between $900
million and $1 billion, including $125 million available on the
first-lien revolving credit facility.
While Fitch believes near term liquidity will be adequate,
particularly in a lower capex environment, recent changes to our
price deck, an elevated leverage forecast, and higher interest
burden from the second-lien notes (72% of expected base case 2016FY
EBITDA) have introduced longer term concerns about the viability of
the capital structure.
UPDATED RECOVERY ANALYSIS
EXXI Gulf Coast recoveries are estimated as outstanding
('RR1'--100%) at the first and second-lien secured level but below
average ('RR5'--13%) at the unsecured level. Recoveries at the
senior unsecured level have declined since the last review, driven
partially by the upsized issuance of $1.45 billion second-lien
secured debt given their priority status over the unsecured notes.
The current 13% estimated recovery contrasts to a 25% estimated
recovery for unsecured creditors cited in the last review. EXXI
LTD debt and preferred stock is structurally subordinated to the
assets at EXXI Gulf Coast, and receives no recovery value in our
analysis ('RR6' --0%).
Lower recovery estimates are also influenced by reduced value
estimates for oil and gas reserves. Recovery values are based on
estimated liquidation values of proved (1P) reserves. Fitch begins
with a standard value of $12.50/boe for an average producer based
on our long term price deck ($70/bbl oil, $3.75/mcf natural gas).
Fitch makes adjustments for location and quality, oil & gas mix, as
well as adjustments related to the recent decline in commodity
prices.
REVISED FINANCIAL COVENANTS
Under EXXI's amended first-lien credit agreement, EXXI Gulf Coast
is required to maintain first-lien net leverage of below 1.25x and
a maximum secured net leverage ratio of no more than 3.75x. Fitch
does not expect these financial covenants to restrict the company's
financial flexibility in the near term, given base case EBITDA
projections and the company's significant cash balances following
asset sales and second-lien financing.
However, the amended agreement includes a clause whereby first-lien
debt accelerates to a date 210 days prior to the maturity of EXXI
Gulf Coast's $750 million in notes due December 2017. Further
capital market access and refinancing opportunities for EXXI could
be limited and on more punitive terms.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- WTI oil prices of $50/bbl in 2015, $60/bbl in 2016,
increasing to $70/bbl in 2018;
-- Lower service costs in FY16 driven by contract
renegotiations and other cost savings;
-- No additional hedge positions beyond the values reported on
June 10, 2015.
RATING SENSITIVITIES
Negative: Future developments that may lead to negative rating
actions include:
-- An inability to successfully refinance senior notes due
2017;
-- A material decline in production that compounds the revenue
effects of lower oil and gas prices;
-- Failure to maintain liquidity of $200 million during the
current downcycle;
-- Continued weak forward oil prices, leading to an inability
to meaningfully hedge 2016 oil volumes.
Positive: Future developments that may lead to positive rating
actions include:
-- Improvements in full-cycle cost structure through lower
lease operating expenses, FD&A, or other cost reductions;
-- Positive free cash flow generation and subsequent debt
reduction;
-- Meaningful amounts of hedging leading to greater visibility
on near term cash flow.
ESCO MARINE: Court Approves Barron & Newburger as Panel's Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of ESCO Marine, Inc.
sought and obtained permission from the Hon. Richard S. Schmidt of
the U.S. Bankruptcy Court for the Southern District of Texas to
retain Barron & Newburger, PC as counsel to the Committee.
The Committee requires Barron & Newburger 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 with respect to
the Debtor's retention of professionals and advisors with
respect to the Debtor's business and this Case;
(c) 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;
(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 representing 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 this
Case or to the formulation of a plan;
(f) assist, advise and represent the Committee in connection
with any sale of the Debtor's assets;
(g) assist, advise and represent the Committee in its analysis
of and any objection to any disclosure statement;
(h) assist, advise and represent the Committee in its
participation in the negotiation, formulation, or objection
to any plan of liquidation or reorganization;
(i) 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;
(j) assist, advise and represent the Committee in the
evaluation of claims and on any litigation matters,
including avoidance actions; and
(k) provide such other services to the Committee as may be
necessary in this Case.
Barron & Newburger will be paid at these hourly rates:
Barbara Barron $495
Stephen Sather $495
Attorneys $175-$495
Support Staff $20-$100
Barron & Newburger will also be reimbursed for reasonable
out-of-pocket expenses incurred.
When both Ms. Barron and Mr. Sather participate in the same meeting
or hearing and a possible duplication of effort may be perceived,
they will each charge a reduced rate of $325 per hour so that their
combined rate is comparable to that charged by professionals of the
same experience in this District.
Stephen Sather 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.
Barron & Newburger can be reached at:
Stephen W. Sather, Esq.
BARRON & NEWBURGER, P.C.
1212 Guadalupe Street, Ste 104
Austin, TX 78701
Tel: (512) 476-9103
Fax: (512) 476-9253
About ESCO Marine
ESCO Marine, Inc., and four affiliates sought Chapter 11 Bankruptcy
protection in Corpus Christi, Texas (Bankr. S.D. Tex.) on March 7,
2015.
ESCO Marine disclosed $28.8 million in assets and $35.5 million in
debt as of Jan. 31, 2015.
The cases are assigned to Judge Richard S. Schmidt. The Debtors
filed an emergency motion seeking joint administration of their
Chapter 11 cases, requesting to designate as the "main case" the
proceedings of ESCO Marine, Inc., Case No. 15-20107.
ESCO Metals, LLC, ESCO Shredding, LLC, Texas Best Recycling, LLC,
and Texas Best Equipment LLC are affiliates of ESCO Marine. ESCO
Marine is the operating parent company.
The Debtors have tapped Roderick Glen Ayers, Jr., Esq., at Langley
Banack Inc., in San Antonio, as counsel.
On May 29, 2015, CC Distributors Inc., K2 Castings Inc., and Time
Insurance Agency were appointed to serve on the official committee
of unsecured creditors in the case. The Committee is represented
by Barbara M. Barron, Esq., and Stephen W. Sather, Esq., at Barron
& Newburger, P.C.
Callidus Capital Corporation, the pre-bankruptcy secured lender, is
represented by Shelby A. Jordan, Esq., and Nathaniel Peter Holzer,
Esq., at Jordan, Hyden, Womble, Culbreth & Holzer, P.C.; and
Michael C. Hammer, Esq., at Dickinson Wright PLLC.
ESCO MARINE: Hires Chatsworth Securities as Investment Bankers
--------------------------------------------------------------
ESCO Marine, Inc., et al., seek authorization from the Hon. Richard
S. Schmidt of the U.S. Bankruptcy Court for the Southern District
of Texas to employ Chatsworth Securities, LLC as investment
bankers, nunc pro tunc to May 26, 2015.
The Debtors require Chatsworth Securities to:
(a) review and analyze the Debtors' assets and the operating
and financial strategies of the Debtor;
(b) setup and maintain data room;
(c) develop a list of potential sponsors and buyers for the
Debtor, contact such potential sponsors or buyers regarding
their interest in pursuing a Transaction, provide
information about the Debtor to potential sponsors and
buyers for the Debtor, review and analyze proposals for
potential transactions from third parties to the Debtor,
and assist as requested in all tasks described in any sale
procedures orders entered in the Case, including
negotiation with any stalking horse bidders or other
bidders and conduction any auctions;
(d) identify and initiate potential transactions;
(e) assist or participate in negotiations with the parties in
interest, including without limitation, any current or
prospective creditors of, holders of equity in, or
claimants against the Debtor, parties to contracts or
leases with the Debtor, and their respective
representatives in connection with a Transaction; and
(f) participate in hearings before the Bankruptcy Court and
provide relevant testimony with respect to the matters
described herein and issues arising in connection with any
proposed plans of reorganization or rearrangement; and if
requested by the Debtor, advise the Debtor with respect to,
and attend meetings of creditor groups and other interested
parties, as necessary;
(g) provide the Debtor and others, as appropriate, on a weekly
basis, an updated contact list.
Chatsworth Securities will be compensated as follows:
-- a non-refundable monthly retainer of $25,000, for a period of
5 months, with the first month payable upon signing of the
Engagement Letter, and
-- upon consummation of a Transaction, a "Transaction Fee" equal
to the greater of $400,000 "Financial Advisory Fee" or"
-- 3.0% of the Transaction value up to $20 million, plus
-- 4.0% of the Transaction Value, as defined below in excess of
$20 million up to $32 million, plus
-- 5.50% of Transaction Value, as defined below, in excess of
$32 million;
-- the aforementioned retainer of $125,000 will be credited, on
a dollar for dollar basis, against the Transaction Fee, but
in no event will the Transaction Fee be less than $400,000 at
close.
-- in the event the counterparty to the Transaction was referred
to the Transaction by a party other than the Financial
Advisor, the Transaction Fee will be reduced by 1.25% of the
Transaction Value.
-- in the event of a credit bid or providing a stalking horse
that provides the highest offer by Callidus Capital
Corporation related to a Transaction, the party credit
bidding shall be required to pay the Financial Advisor in
cash on the effective date of Transaction confirmation. A fee
of $250,000 with the retainers being deducted from the
Financial Advisory Fee based on the final Credit Bid amount
for the Company. Thus, any bid procedures approved by the
Bankruptcy Court must include a provision requiring any
credit bidder to bring sufficient cash to any Transaction to
pay respective fees of the Investment Bankers, and to pay
such fees at any closing of such Transaction.
Ralph DiFiore, senior managing director of Chatsworth Securities,
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 Official Committee of Unsecured Creditors filed a limited
objection to the Debtors' employment of Chatsworth Securities. The
Committee objects to the reporting requirements included in the
services to be provided by Chatsworth.
The Committee requested that the Debtor be required at the hearing
of the Application to provide the information not included in its
Application to employ Chatsworth and that any Order entered
approving this investment banker include provisions to address the
objections raised by the Committee.
Chatsworth Securities can be reached at:
Ralph R. DiFiore
CHATSWORTH SECURITIES LLC
95 E Putnam Avenue
Greenwich, CT 06830
Tel: (203) 413-9980
E-mail: RD@chatsworthgroup.com
The Committee is represented by:
Barbara M. Barron, Esq.
BARRON & NEWBURGER, P.C.
1212 Guadalupe Street, Ste 104
Austin, TX 78701
Tel: (512) 476-9103
Fax: (512) 476-9253
About ESCO Marine
ESCO Marine, Inc., and four affiliates sought Chapter 11 Bankruptcy
protection in Corpus Christi, Texas (Bankr. S.D. Tex.) on March 7,
2015.
ESCO Marine disclosed $28.8 million in assets and $35.5 million in
debt as of Jan. 31, 2015.
The cases are assigned to Judge Richard S. Schmidt. The Debtors
filed an emergency motion seeking joint administration of their
Chapter 11 cases, requesting to designate as the "main case" the
proceedings of ESCO Marine, Inc., Case No. 15-20107.
ESCO Metals, LLC, ESCO Shredding, LLC, Texas Best Recycling, LLC,
and Texas Best Equipment LLC are affiliates of ESCO Marine. ESCO
Marine is the operating parent company.
The Debtors have tapped Roderick Glen Ayers, Jr., Esq., at Langley
Banack Inc., in San Antonio, as counsel.
On May 29, 2015, CC Distributors Inc., K2 Castings Inc., and Time
Insurance Agency were appointed to serve on the official committee
of unsecured creditors in the case. The Committee is represented
by Barbara M. Barron, Esq., and Stephen W. Sather, Esq., at BARRON
& NEWBURGER, P.C.
Callidus Capital Corporation, the pre-bankruptcy secured lender, is
represented by Shelby A. Jordan, Esq., and Nathaniel Peter Holzer,
Esq., at Jordan, Hyden, Womble, Culbreth & Holzer, P.C.; and
Michael C. Hammer, Esq., at Dickinson Wright PLLC.
ESCO MARINE: Unique Strategies Okayed as Panel's Financial Advisor
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of ESCO Marine, Inc.
sought and obtained permission from the Hon. Richard S. Schmidt of
the U.S. Bankruptcy Court for the Southern District of Texas to
retain Unique Strategies, Inc. as financial advisor to the
Committee.
The Committee requires Unique Strategies to:
(a) assist in the review of financial related disclosures
required by the Court, including the Schedules of Assets
and Liabilities, the Statement of Financial Affairs and
Monthly Operating Reports;
(b) assist in the preparation of analyses required to assess
any proposed Debtor-In Possession ("DIP") financing or use
of cash collateral;
(c) assist with the assessment and monitoring of the Debtor's
short term cash flow, liquidity, and operating results;
(d) assist with the review of the Debtor's analysis of core
business assets and the potential disposition or
liquidation of core and non-core assets;
(e) assist with the review of the Debtor's cost/benefit
analysis with respect to the assumption or rejection of
various executory contracts and leases;
(f) assist with the review of the Debtor's identification of
potential cost savings, including overhead and operating
expense reductions and efficiency improvements, if Debtor
seeks to once again begin operations;
(g) assist in the review and monitoring of any material asset
sales, including, but not limited to an assessment of the
adequacy of the marketing process, completeness of any
buyer lists, review and quantifications of any bids;
(h) assist with review of any tax issues associated with, but
not limited to, claims/stock trading, preservation of net
operating losses, refunds due to the Debtor, plans of
reorganization, and asset sales;
(i) assist in the review of the claims reconciliation and
estimation process;
(j) assist in the review of other financial information
prepared by the Debtor, including, but not limited to, cash
flow projections and budgets, business plans, cash receipts
and disbursement analysis, asset and liability analysis,
and the economic analysis of proposed transactions for
which Court approval is sought;
(k) attend at meetings and assist in discussions with the
Debtor, potential investors, banks, other secured lenders,
the Committee and any other official committees organized
in these chapter 11 proceedings, the U.S. Trustee, other
parties in interest and professionals hired by the same, as
requested;
(l) assist in the review and prepare of information and
analysis necessary for the confirmation of a plan and
related disclosure statement in these Chapter 11
proceedings;
(m) assist in the evaluation and analysis of debt
re-characterization and avoidance actions, including
fraudulent conveyances and preferential transfers;
(n) assist in the prosecution of Committee responses/objections
to the Debtor's motions, including attendance at
depositions and provision of expert reports/testimony on
case issues as required by the Committee; and
(o) render such other general business consulting or such other
assistance as the Committee or its counsel may deem
necessary that are consistent with the role of a financial
advisor and not duplicative of services provided by other
professionals in this proceeding.
Unique Strategies will be paid at these hourly rates:
Dan Bensimon $300
Beth Whatley $200
Associate Analysts $100
Unique Strategies will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Dan Bensimon, principal of Unique Strategies, 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.
Unique Strategies can be reached at:
Dan Bensimon
UNIQUE STRATEGIES, INC.
7028 Cielo Azul Pass
Austin, TX 78732
About ESCO Marine
ESCO Marine, Inc., and four affiliates sought Chapter 11 Bankruptcy
protection in Corpus Christi, Texas (Bankr. S.D. Tex.) on March 7,
2015.
ESCO Marine disclosed $28.8 million in assets and $35.5 million in
debt as of Jan. 31, 2015.
The cases are assigned to Judge Richard S. Schmidt. The Debtors
filed an emergency motion seeking joint administration of their
Chapter 11 cases, requesting to designate as the "main case" the
proceedings of ESCO Marine, Inc., Case No. 15-20107.
ESCO Metals, LLC, ESCO Shredding, LLC, Texas Best Recycling, LLC,
and Texas Best Equipment LLC are affiliates of ESCO Marine. ESCO
Marine is the operating parent company.
The Debtors have tapped Roderick Glen Ayers, Jr., Esq., at Langley
Banack Inc., in San Antonio, as counsel.
On May 29, 2015, CC Distributors Inc., K2 Castings Inc., and Time
Insurance Agency were appointed to serve on the official committee
of unsecured creditors in the case. The Committee is represented
by Barbara M. Barron, Esq., and Stephen W. Sather, Esq., at Barron
& Newburger, P.C.
Callidus Capital Corporation, the pre-bankruptcy secured lender, is
represented by Shelby A. Jordan, Esq., and Nathaniel Peter Holzer,
Esq., at Jordan, Hyden, Womble, Culbreth & Holzer, P.C.; and
Michael C. Hammer, Esq., at Dickinson Wright PLLC.
EXTERRAN ENERGY: Moody's Withdraws 'Ba3' Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service has withdrawn all of the ratings assigned
to Exterran Energy Solutions L.P., including the B1 rating on
Exterran Energy's proposed $400 million of senior unsecured notes.
Other ratings withdrawn include the Ba3 Corporate Family Rating,
the Ba3-PD Probability of Default Rating, and the Speculative
Liquidity Rating of SGL-2. The stable outlook was also withdrawn.
The withdrawal of the ratings follows Exterran Energy's
announcement that due to adverse market conditions, the company has
elected to postpone the offering of the proposed notes.
Exterran Energy Solutions L.P., is a wholly-owned subsidiary of
Exterran Corporation, a to-be-publicly listed international
compression services and global fabrication company based in
Houston, Texas. Exterran Corporation is a proposed spin-off of
Exterran Holdings, Inc.'s (Ba2 stable) international services and
US-based fabrication businesses serving the global market.
Exterran Energy Solutions LP
Withdrawals:
Probability of Default Rating, Withdrawn, previously
rated Ba3-PD
Speculative Grade Liquidity Rating, Withdrawn, previously
rated SGL-2
Corporate Family Rating, Withdrawn , previously rated Ba3
Senior Unsecured Regular Bond/Debenture (Local Currency),
Withdrawn , previously rated B1(LGD5)
Outlook Actions:
Outlook, Changed To Rating Withdrawn From Stable
F-SQUARED INVESTMENT: Has Court OK to Employ BMC as Claims Agent
----------------------------------------------------------------
Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for
the District of Delaware authorized F-Squared Investment
Management, LLC, et al., to employ BMC Group, Inc., as claims and
noticing agent.
Although the Debtors have yet to file their schedules of assets
and
liabilities, they anticipate that there will be in excess of 200
creditors listed thereon. In view of the number of anticipated
claimants and the complexity of the Debtors' business, the Debtors
submit that the appointment of a claims and noticing agent is both
necessary and in the best interests of the Debtors' estates and
their creditors.
The firm will charge the Debtors at these rates:
* Noticing Management
- Data Entry/Call Center/Admin Support $25/45/65 per hour
- Analysts $85 per hour
- Consultant $100 per hour
- Director $125 per hour
- Principal $200 per hour WAIVED
* Information Management
- Electronic claims & balloting submission No per item charge
- Manual claim entry $2.50 per claim
- b-Linx Database & Systems Access $0.085 per
record/per month
- Live Operator Call Center $45 per hour
- Public Case Website Hosting $250/month WAIVED
* Print Mail and Noticing Services
- Certified Electronic Noticing Service $40 per 1000
- Certified Fax Noticing Service $0.15 per image
Prior to the Petition Date, the Debtors provided BMC a retainer of
$10,000.
About F-Squared Investment
Headquartered in Wellesley, MA, F-Squared Investments, Inc. --
http://www.f-squaredinvestments.com-- is a privately owned
investment manager. The firm primarily provides its services to
other investment advisers. It also caters to individuals, high net
worth individuals, and pension and profit sharing plans. The firm
provides index management services. It manages separate
client-focused equity, fixed income, and multi-asset portfolios.
The firm invests in the public equity, fixed income, and
alternative investment markets across the globe. It makes all its
investments through exchange-traded funds. The firm invests in
small-cap stocks of companies across diversified sectors.
F-Squared Investment Management, LLC and eight of its affiliates
filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No.
15-11469) on July 8, 2015. The petition was signed by Laura Dagan
as president and chief executive officer. The cases are assigned
to Laurie Selber Silverstein.
Richards, Layton & Finger, P.A. serves as the Debtors' counsel.
Gennari Aronson, LLP represents the Debtors as special corporate
counsel. Grail Advisory Partners LLC (d/b/a PL Advisors) and
Managed Account Services, LLC act as the Debtors' financial
advisors and investment bankers. Stillwater Advisory Group LLC is
the Debtors' crisis managers and restructuring advisors. BMC
Group, Inc. acts as the Debtors' claims and noticing agent.
FONTANA PFA SUCCESSOR: Moody's Hikes TABs Rating From Ba1
---------------------------------------------------------
Moody's Investor's Service has upgraded to A2 from Ba1 the
Successor Agency to the City of Fontana's Public Financing
Authority (North Fontana Redevelopment Project) Senior Lien Tax
Allocation Revenue Bonds, Series 2003A and 2003B and Subordinate
Lien Tax Allocation Revenue Bonds, Series 2005A.
"On June 24, 2015, in connection with the release of our Tax
Increment Debt methodology, we placed the ratings for nearly all
California tax allocation bonds (TABs) on review for upgrade,
including this successor agency's (SA) TABs. This rating action
completes our review for this SA."
SUMMARY RATING RATIONALE
The upgrade to A2 on the series 2003A and 2003B senior lien
obligations and series 2005A subordinate lien obligations takes
into account the sizeable project area of the North Fontana
Redevelopment Project encompassing the northern and most
economically active portion of the City, an extremely high ratio of
incremental assessed value relative to the total assessed value at
close to 100%, steady additions to incremental values over the past
five years and robust debt service coverage on a combined basis for
both the senior and subordinate obligations. Both the senior and
subordinate revenue bonds are secured by loan payments that are
ultimately secured solely by net increment revenues of the North
Fontana Redevelopment Project Area.
Moody's said, "The rating factors in the successor agencies'
successful adaptation to post dissolution processes and
administrative procedures and our expectation that this trend will
continue. The rating also incorporates our generally positive
assessment of the implementation of redevelopment agency
dissolution legislation by most successor agencies over the last
three years, leading to timely payment of debt service on
California TABs."
In 2012, state legislation dissolved all California redevelopment
agencies, replacing them with "successor agencies" to serve as
fiduciary agents. The dissolution effectively changed the flow of
funds and processes around the payment of debt service on TABs. Tax
increment revenue is placed in trust with the county auditor, who
makes semi-annual distributions of funds sufficient to pay debt
service on tax allocation bonds and other "enforceable
obligations."
Moody's said, "As our administrative concerns related to the
payment of debt service have lessened, we are now placing greater
weight on some of the positive features of the dissolution
legislation including the closed lien status of the bonds and
continued distribution of TAB revenues associated with the
successor agency's administrative costs."
OUTLOOK
Outlooks are generally not applicable for local government credits
of this size.
WHAT COULD MAKE THE RATING GO UP
-- Sizable increase in incremental AV of the project area
above pre-recessionary levels, leading to greater debt
service coverage
-- Increased diversification among top ten taxpayers
WHAT COULD MAKE THE RATING GO DOWN
-- Future declines in AV
-- Erosion of debt service coverage
-- Additional state administrative or legislative
changes that create uncertainty as to the timely
payment of debt service
OBLIGOR PROFILE
The SA is a separate legal entity from the City of Fontana. The SA
is responsible for winding down the operations of the former RDA,
making payments on state approved "Enforceable Obligations" and
liquidating any unencumbered assets to be distributed to other
local taxing entities.
LEGAL SECURITY
The legal security for the loan agreement consists of tax increment
revenue net of any senior pass-throughs.
While not legally pledged, the dissolution laws permit the TABs to
be paid from all available monies in the Redevelopment Property Tax
Trust Fund, after payment of senior pass through payments and
certain administrative charges. This includes any excess housing
set aside tax increment revenues.
FRONTIER STAR: Files for Chapter 11 Bankruptcy Protection
---------------------------------------------------------
Russ Wiles at The Republic reports that Frontier Star LLC and
Frontier Star CJ LLC filed for Chapter 11 bankruptcy protection on
July 27, 2015, listing more than $10 million apiece in debts.
According to the filings, both Debtors listed more than 200
creditors, but none of the other creditors is owed more than
$16,400.
Frontier Star CJ listed CKE Carl's Jr. Restaurants LLC as its
largest creditor, owed at $1.52 million, while Frontier Star LLC
disclosed its largest creditor to be CKE Hardee's Restaurants, owed
at nearly $985,000, suggesting that the Debtors were having trouble
making franchisee or royalty payments, The Republic relates, citing
bankruptcy expert Adam Stein-Sapir of Pioneer Funding Group LLC.
The Republic says that the filings didn't reveal how many Carl's
Jr. or Hardee's restaurants in Arizona are affected.
Guadalupe, Arizona-based Frontier Star LLC and Frontier Star CJ LLC
are owned by three grandchildren of Carl Karcher, who founded the
fast-food chain. The grandchildren include the LeVecke siblings
Carl, Margaret and Jason, who is listed as chief executive
officer/manager of both companies. The LeVecke siblings had more
than 130 Carl's Jr. and Hardee's franchises in seven states and
Puerto Vallarta, Mexico, as of late 2013, according to an Arizona
Republic article that announced the grand opening of a new
sports-themed Carl's Jr. restaurant in Glendale.
FRONTIER STAR: Section 341 Meeting Scheduled for Sept. 1
--------------------------------------------------------
A meeting of creditors in the bankruptcy cases of Frontier Star,
LLC and Frontier Star CJ, LLC will be held on Sept. 1, 2015, 9:00
a.m. at US Trustee Meeting Room, 230 N. First Avenue, Suite 102, in
Phoenix, Arizona.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Frontier Star, LLC and Frontier Star CJ, LLC filed Chapter 11
bankruptcy petitions (Bankr. D. Ariz. Lead Case No. 15-09383) on
July 27, 2015. The petitions were signed by Jason LeVecke as
CEO/manager. The Debtors estimated assets and liabilities of at
least $10 million. The Cavanagh Law Firm represents the Debtors as
counsel.
GARDNER DENVER: Moody's Affirms 'B2' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has affirmed the debt ratings of Gardner
Denver, Inc., including the B2 corporate family rating, the B1
senior secured ratings, and the Caa1 senior unsecured bond rating,
but changed the rating outlook to negative from stable.
Issuer: Gardner Denver, Inc.
Outlook changed:
Rating Outlook, to Negative from Stable
Ratings affirmed:
Corporate Family Rating, B2
Probability of Default, B2-PD
$400 million senior secured revolving credit facility due 2018,
B1 (LGD3)
$1.9 billion US Dollar denominated senior secured term loan due
2020, B1 (LGD3)
$421 million (outstanding) Euro denominated senior secured term
loan due 2020, B1 (LGD3)
$575 million senior unsecured notes due 2021, Caa1 (LGD6)
RATINGS RATIONALE
The negative outlook reflects Moody's concerns about Gardner
Denver's significant exposure to up-stream energy (estimated at
about 25% of sales) and our expectations that lower volumes and
pricing pressure in these markets will lead to a meaningful
weakening of credit metrics over the next 12 to 18 months.
The B2 corporate family rating (CFR) reflects Gardner Denver's
aggressive financial policy and its exposure to cyclical end
markets which makes the company vulnerable to earnings and cash
flow volatility. The rating recognizes the company's relatively
large scale (FY 2014 sales of $2.5 billion), its sizable
aftermarket business (35% of sales) and its diversity by end-market
and geography; all of which help temper some of the cyclicality of
its segments. Nevertheless, Gardner Denver's concentration in
upstream energy markets is expected to result in a meaningful
weakening of financial metrics over the next 12 to 15 months as the
lower oil price environment creates significant earnings
pressures.
Moody's believes Gardner Denver has a good liquidity profile. The
company has cash balances of about $173 million (as of March 2015)
as well as relatively modest levels of scheduled amortization on
term debt (1% per annum or about $23 million). Moody's expects the
company to generate positive free cash flow in the low
single-digits as a percentage of debt during 2015. External
liquidity is provided by a $400 million revolving credit facility
due 2018. Borrowings under the revolver are expected to be limited
and will be primarily be used to support modest working capital
needs.
Ratings could be lowered if Gardner Denver's energy end-markets
remain under pressure such that Debt-to-EBITDA were consistently
above 7.0x, or if the company's cash flow profile were to weaken
with free cash flow-to-debt approaching zero, or if the company's
liquidity profile were to deteriorate with Gardner Denver becoming
increasingly reliant on its revolving credit facility.
A ratings upgrade is unlikely in the near-term given the headwinds
that Gardner Denver is facing in its energy end-markets. An upward
rating action would be driven by expectations of Debt-to-EBITDA
sustained below 5.25x, free cash flow-to-debt consistently
approaching 5%, a sustained stabilization in energy end-markets and
a strong liquidity profile.
Milwaukee, WI headquartered Gardner Denver, Inc. ("Gardner
Denver"), is a global manufacturer of compressors, pumps and
blowers used in energy, general industrial, medical, and other
markets. Funds affiliated with Kohlberg Kravis Roberts & Co. L.P.
("KKR") purchased the company in July 2013. For the twelve months
ended December 2014, the company generated revenue of almost $2.6
billion.
GLOBAL HEALTHCARE: S&P Assigns 'B' CCR, Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Louisville, Colo.-based Global Healthcare Exchange
LLC (GHX). The outlook is stable. At the same time, S&P assigned
a 'B' issue-level rating and '3' recovery rating to GHX's proposed
senior secured credit facility. The '3' recovery rating reflects
S&P's expectation of meaningful (50% to 70%, on the low end of the
range) recovery in the event of payment default.
Global Healthcare Exchange LLC (GHX) is a leading electronic
exchange of medical and surgical products between manufacturers and
suppliers in the U.S., Canada, and Europe with a high degree of
recurring revenue and customer retention. "Despite these
strengths, the company has a narrow operating focus, competition
from other--significantly larger--health care IT and IT-related
companies such as IBM and Oracle, and exposure to the uncertain
nature of contract renewals [the renewals, and their terms, may be
susceptible to customer concerns with changes in technology or the
supply chain process]," said Standard & Poor's credit analyst
Michael Berrian. S&P assess business risk as "weak".
The stable outlook reflects S&P's expectation that low-single-digit
revenue growth and stable margins will result in continued free
cash flow generation, despite our expectation that high leverage
will persist over the next one to two years.
S&P could lower the rating if competitive threats result in an
unexpected shortfall in contract renewals and contract price
pressures that result in margin contraction. Such an occurrence
could result in cash outflows and change S&P's perception of GHX's
business and lead S&P to revise downward its business risk
assessment.
S&P could raise the rating if reported leverage declines to less
than 5x and it believes the company's financial policy is committed
to maintaining reported leverage at that level. This could lead
S&P to assess GHX as having credit protection measures that are
more consistent with 'B+' rated peers instead of 'B' rated peers.
Although S&P considers this scenario less likely, it could raise
the rating if it develops increasing confidence in the uniqueness
of the service that GHX provides to its customers, together with an
improvement in credit measures. This would be evidenced by renewal
of a majority of supplier and provider contracts that are due to
expire over the next one to two years. The high renewal rate would
contribute to S&P's perception regarding the strength and
commitment of its customers and could lead S&P to revise its
assessment of business risk.
GREEN MOUNTAIN: CFSC Seeks Adequate Protection for Heavy Equipment
------------------------------------------------------------------
Caterpillar Financial Services Corporation asks the U.S. Bankruptcy
Court for the Northern District of Georgia, Atlanta Division, to
direct Green Mountain Management, LLC, to provide additional
adequate protection for three of CFSC's heavy equipment.
Ron C. Bingham, II, Esq., at Baker, Donelson, Bearman, Caldwell &
Berkowitz, P.C., in Atlanta, Georgia, tells the Court that CFSC's
heavy equipment -- 950H Caterpillar Wheel Loader, a Caterpillar 725
Articulated Truck and a Caterpillar 980K Wheel Loader -- secured
three installment sale contracts between Thompson Tractor Co., Inc.
and the Debtor and that Thompson assigned to CFSC all of Thompson's
interest in and rights and remedies under the Security Agreements.
Mr. Bingham further tells the Court that as of the Petition date,
the total amounts outstanding, including principal, accrued
interest and late charges under the Security Agreements total
$452,074.
Mr. Bingham asserts that CFSC is entitled to relief from the
automatic stay for lack of adequate protection, as the Collateral
are declining in value as they are used daily in the Debtor's
business operations. He further asserts that if the Court does not
grant relief from the automatic stay, CFSC requests the Court to
compel the Debtor to provide adequate protection to CFSC with
respect to the Collateral, in an amount to be determined at hearing
or by agreement between the parties, if possible.
Caterpillar Financial Services Corporation is represented by:
Ron C. Bingham, II, Esq.
BAKER, DONELSON, BEARMAN,
CALDWELL & BERKOWITZ, P.C.
3414 Peachtree Road, NE
Monarch Plaza, Suite 1600
Atlanta, Georgia 30326
Telephone: (404)443-6721
Facsimile: (404)238-9779
Email: rbingham@bakerdonelson.com
About Green Mountain
Green Mountain Management, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Ga. Case No. 14-64287) on July 25, 2014. The
petition was signed by Daniel B. Cowart, sole member of Georgia
Flattop Partners, LLC, and chairman of Green Mountain Management,
LLC. The Debtor estimated $10 million to $50 million in assets and
debt. Georgia Flattop Partners, LLC is the managing member and
holders of 93% of the stock.
The case is assigned to Judge Barbara Ellis-Monro.
No official committee of unsecured creditors has been appointed,
and UMB Bank, n.a.'s request for the appointment of a trustee was
resolved consensually pursuant to this Court's order entered on
Nov. 20, 2014.
On May 29, 2015, the Debtor filed an application to employ Nelson
Mullins Riley & Scarborough LLP as its bankruptcy counsel.
The filing came after the Debtor notified Alston & Bird LLP that
Green Mountain Aggregates LLC, Dan Cowart, Dan Cowart Inc. and the
Debtor intended to pursue claims against the law firm.
Alston & Bird was hired by the Debtor in 2014 to be its bankruptcy
counsel. On June 1, 2015, the firm withdrew as its counsel. On
June 2, 2015, Judge Ellis-Monro authorized the Debtor to hire
Atlanta-based Nelson Mullins to be its new bankruptcy counsel.
GREEN MOUNTAIN: Hires Nelson Mullins as Bankruptcy Counsel
----------------------------------------------------------
Green Mountain Management, LLC and Georgia Flattop Partners LLC
seek authorization from the U.S. Bankruptcy Court for the Northern
District of Georgia to employ Nelson Mullins Riley & Scarborough,
LLC as bankruptcy counsel, retroactive to May 21, 2015.
The Debtors require Nelson Mullins to:
(a) assist Debtors in the preparation of its schedules,
statement of affairs, and the periodic financial reports
required by the Bankruptcy Code, the Bankruptcy Rules, or
any order of this Court;
(b) assist Debtors in consultations, negotiations, and all
other dealings with creditors, equity security holders, and
other parties-in-interest concerning the administration of
this case;
(c) prepare pleadings, conduct investigations, and making court
appearances incidental to the administration of Debtors'
estates;
(d) advise Debtors of their rights, duties, and obligations
under the Bankruptcy Code, Bankruptcy Rules, Local Rules of
Practice for the United States Bankruptcy Court for the
Northern District of Georgia, and Orders of this Court;
(e) assist Debtors in the development and formulation of plans
and other means to maximize value of their estates,
including the preparation of plans, disclosure statements,
and any related documents for submission to this Court and
to Debtors' creditors, equity holders, and other parties in
interest;
(f) advise and assist Debtors with respect to litigation;
(g) render corporate and other legal advice and perform all
those legal services necessary and proper to the
functioning of Debtors during the pendency of this case;
and
(h) take any and all necessary actions in the interest of
Debtors and their estates incident to the proper
representation of Debtors in the administration of this
case.
Nelson Mullins will be paid at these hourly rates:
Richard B. Herzog, Jr. $570
Gregory M. Taube $430
Byron Starcher $340
Nelson Mullins will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Richard B. Herzog, partner of Nelson Mullins, 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.
Nelson Mullins can be reached at:
Richard B. Herzog, Jr., Esq.
NELSON MULLINS RILEY &
SCARBOROUGH LLP
201 17th St., N.W., Ste. 1700
Atlanta, GA 30363
Tel: (404) 322-6000
Fax: (404) 322-6050
E-mail: richard.herzog@nelsonmullins.com
About Green Mountain
Green Mountain Management, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Ga. Case No. 14-64287) on July 25, 2014. The
petition was signed by Daniel B. Cowart, sole member of Georgia
Flattop Partners, LLC, and chairman of Green Mountain Management,
LLC. The Debtor estimated $10 million to $50 million in assets and
debt. Georgia Flattop Partners, LLC is the managing member and
holders of 93% of the stock.
The case is assigned to Judge Barbara Ellis-Monro.
No official committee of unsecured creditors has been appointed,
and UMB Bank, n.a.'s request for the appointment of a trustee was
resolved consensually pursuant to this Court's order entered on
Nov. 20, 2014.
On May 29, 2015, the Debtor filed an application to employ Nelson
Mullins Riley & Scarborough LLP as its bankruptcy counsel.
The filing came after the Debtor notified Alston & Bird LLP that
Green Mountain Aggregates LLC, Dan Cowart, Dan Cowart Inc. and the
Debtor intended to pursue claims against the law firm.
Alston & Bird was hired by the Debtor in 2014 to be its bankruptcy
counsel. On June 1, 2015, the firm withdrew as its counsel. On
June 2, 2015, Judge Ellis-Monro authorized the Debtor to hire
Atlanta-based Nelson Mullins to be its new bankruptcy counsel.
GREEN WORLD: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Green World Council Bluffs, LLC
920 Cooper Street, Unit 302
Venice, FL 34285
Case No.: 15-07764
Nature of Business: Real Estate
Chapter 11 Petition Date: July 29, 2015
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Debtor's Counsel: Walter Sowa, III, Esq.
THE LAW OFFICE OF WALTER SOWA, III, PL
435 12th Street West, Suite 206
Bradenton, FL 34205
Tel: 941-840-0820
Email: walter@sowalegal.com
Total Assets: $1.3 million
Total Liabilities: $591,079
The petition was signed by Michael Kim, managing member.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
GTA REALTY: Hires Madison Tax as Accountants
--------------------------------------------
GTA Realty II, LLC seeks permission from the U.S. Bankruptcy Court
for the Southern District of New York to employ Madison Tax Group,
Inc. as tax accountants.
The professional services Madison Tax will be required to render
include, but are not limited to general accounting and tax return
preparation.
Madison Tax hourly rates are $350 per hour for Audra Wright $150
for paraprofessional staff, $350 per year for individual tax return
preparation and $1,500 per year for tax preparation of corporate
tax returns.
Madison Tax will also be reimbursed for reasonable out-of-pocket
expenses incurred.
The agreed retainer for tax planning purposes is $50,000 payable at
the close of the sale of the Bleeker Street property.
Audra Wright, principal of Madison Tax, 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.
Madison Tax can be reached at:
Audra Wright
MADISON TAX GROUP, INC.
244 Madison Ave., Ste. 252
New York, NY 10016
Tel: (888) 829-5060
Fax: (888) 275-5269
About GTA Realty II
GTA Realty II, LLC, sought bankruptcy protection (Bankr. S.D.N.Y.
Case No. 14-12840) in Manhattan on Oct. 8, 2014.
In its schedules of assets and liabilities, the Debtor disclosed
$18 million in total assets and $7.26 million in liabilities. The
Debtor owns real property at 184 Prince Street, New York, valued
at $6 million and a property at 287 Bleeker Street, New York,
valued at $12 million. U.S. Bank National Association, owed $5.3
million, holds a first mortgage on the property.
The case is assigned to Judge Robert E. Gerber.
The Debtor is represented by Mark A. Frankel, Esq., at Backenroth
Frankel & Krinsky, LLP, in New York.
The Debtor has tapped Backenroth Frankel & Krinsky, LLP as
counsel.
The U.S. Trustee for Region 2 appointed three creditors to serve
on the official committee of unsecured creditors.
HALIFAX REGIONAL: Fitch Raises Rating on $12.4MM Bonds to 'BB+'
---------------------------------------------------------------
Fitch Ratings has upgraded the rating on North Carolina Medical
Care Commission bonds issued on behalf of Halifax Regional Medical
Center (HRMC) as:
-- $12.4 million hospital revenue bonds series 1998, to 'BB+'
from 'BB'.
HRMC has an additional $6.2 million in series 2011 direct placement
bonds which Fitch does not rate.
The Rating Outlook remains Positive.
SECURITY
The bonds are secured by a pledge of gross receipts, a negative
mortgage lien, and a debt service reserve.
KEY RATING DRIVERS
BETTER PROFITABILITY: The upgrade and maintenance of a Positive
Outlook reflects improved operating profitability which is likely
to be sustained. Through the eight-month interim period ended May
31, 2015 HRMC generated a 3.9% operating and 9.8% operating EBITDA
margin, continuing a trend of better operating performance in 2013
and 2014.
RELATIONSHIP WITH NOVANT: Though the proposed merger was called
off, HRMC will maintain its management agreement with Novant Health
(revs rated 'AA-'/Outlook Stable by Fitch) which has been extended
to March 1, 2017. Thus far the agreement has helped HRMC implement
cost-savings initiatives, and support its strategic planning
efforts.
LOW DEBT BURDEN: HRMC maintains a light debt burden, allowing for
healthy debt service coverage against somewhat volatile operating
performance. MADS equates to 2.4% of fiscal 2014 revenues which
HRMC covered at a solid 3.3x.
HEALTHY BALANCE SHEET: HRMC's unrestricted liquidity increased over
25% in 2014 over prior year, and another 4% at the eight-month
interim period ended May 31, 2015. With 112.3 days of cash on
hand (DCOH) and 124.5% cash to debt, HRMC's liquidity metrics are
strong for the rating category and provides a solid financial
cushion against HRMC's small revenues size.
MIXED SERVICE AREA CHARACTERISTICS: While HRMC's long-standing
position as a sole community hospital and market share leader is a
significant credit strength, the service area's overall
socioeconomic profile is generally unfavorable. HRMC is exposed to
a high level of government/self-pay revenues, equal to 71% of its
gross revenues through May 2015.
RATING SENSITIVITIES
SUSTAINED FINANCIAL PERFORMANCE: Fitch expects the management
agreement with Novant will be extended beyond 2017. Sustained
improvement in operating performance consistent with 2014 and YTD
2015 will likely trigger an upgrade.
CREDIT PROFILE
HRMC is a 204 licensed-bed community medical center providing
primary and secondary care services. The medical center is located
in Roanoke Rapids, approximately 75 miles northeast of Raleigh.
The system also includes a medical group and a foundation. In
fiscal 2014 (Sept. 30 year-end) HRMC had $88 million in total
operating revenue.
Fitch uses the consolidated financial data in its analysis. The
obligated group includes the medical center, which makes up
substantially all assets and 94.9% of total revenues in fiscal 2014
(Sept 30).
OPERATING PROFILE
Despite not consummating a merger with Novant Health as expected in
2014, HRMC renewed its management services agreement with Novant
through February 2017. Fitch believes the management agreement
with Novant has resulted in improved financial performance through
strong expense control and improved operating efficiency. In
fiscal 2014 and through the eight months ended May 31, HRMC
generated operating margins of 1.3% and 3.9%, respectively.
Operating EBITDA margins have improved to 7.9% and 9.8% in 2014 and
through the interim period, respectively, following operating
EBITDA margins averaging 4.5% in the prior three years. Overall,
the affiliation with Novant is viewed positively, as it should
support HRMC's strategic and operational initiatives going forward.
Fitch remains concerned regarding HRMC's payor mix and flat revenue
trends, though it notes that insurance exchange enrollment (in
early 2014) has been largely positive in reducing bad debt expense
and increasing some clinical volume. Overall however, HRMC's gross
patient revenue mix is constrained, with over 70% government pay
and another 7% self-pay as of March 31, 2015. In addition, the
nearly $3.5 million in state supplemental payments HRMC receives
are not certain beyond 2016.
DEBT PROFILE
Total debt equaled $20.4 million at fiscal 2014, including $1.6
million in capital leases and notes payable. HRMC's debt profile
is manageable and conservative, with 100% fixed rate debt and no
swaps/derivatives. Including approximately $500,000 in capital
lease payments, maximum annual debt service equals $2.1 million. By
HRMC's calculation, which is based on indenture definitions and
reflects the obligated group, debt service coverage as of Sept. 30,
2014 audit was 3.99x. Routine capital near $3-5 million should be
supported by operating cash flow, with no additional debt plans.
DISCLOSURE
Disclosure to Fitch has been adequate including annual (within 120
days) and quarterly disclosure, although only audited annual
disclosure is required in the bond documents. HRMC does provide
quarterly disclosure upon request to other third parties. Fitch
notes that quarterly disclosure includes a balance sheet and income
statements; however, a statement of cash flows and management
discussion and analysis is not provided.
HARSCO CORP: Fitch Lowers Issuer Default Rating to 'BB+'
--------------------------------------------------------
Fitch Ratings has downgraded the ratings, including the long-term
Issuer Default Rating, for Harsco Corporation (NYSE: HSC) to 'BB+'
from 'BBB-'. The Rating Outlook is Stable. Fitch's actions affect
$1.3 billion of total debt, including the revolving credit facility
(RCF).
The ratings and outlook reflect Fitch's expectations for sustained
negative annual free cash flow (FCF) higher total leverage (total
debt to operating EBITDA) through the intermediate-term as Harsco
continues its turnaround.
Fitch expects weaker than previously forecasted revenue growth and
profitability resulting in negative FCF in 2015 and through the
forecast period, versus Fitch's previous expectations for positive
FCF in 2015 and annual FCF exceeding $50 million the forecast
period. Fitch expects Harsco may support negative FCF with
increased borrowings under the RCF, given nearly all of the
company's cash is located overseas.
Fitch expects total leverage will exceed 2.5x through the through
the forecast period, given expectations for negative annual FCF.
For 2015, Fitch estimates total leverage of 3.2x and the completion
of restructuring and resumption or revenue growth should drive
total leverage below 3x by 2016.
Nonetheless, Harsco's turnaround should drive structurally higher
profit margins beyond 2015. Harsco's restructuring plan, Project
Orion, is on track with the company having completed 75% of
organizational changes and addressed 50% of all under-performing
sites. As a result, Fitch forecasts roughly 300 basis points of
operating EBITDA margin expansion through the intermediate-term,
despite near-term macroeconomic and currency related headwinds.
By segment, Fitch expects lower revenues from Metals, driven by
foreign exchange headwinds, lower steel output in aggregate and
lower metals prices. Profit margins will remain pressured by
temporary costs but Fitch anticipates lower capital spending will
support cash flow for the segment.
Fitch expects lower short-term revenues for Industrial, given
pressured capital spending in oil markets. However, a growing
backlog and anticipation for capital spending returning to
normalized levels, in addition to new products, will drive low- to
mid-single-digit growth over the intermediate term. Restructuring
actions should support profit margins in the Industrial segment,
although investments in new products may constrain cash flow
growth.
Fitch expects the Rail segment to improve beginning in the second
half of 2015, driven by a solid backlog. The company also points
to significant international contracts coming up for bid to support
intermediate-term growth, given Harsco's leading market positions.
Lower customer advances may constrain cash flow for the segment
through the intermediate term.
Fitch expects $34 million of pension contribution in 2015 after
making a $36 million contribution in 2014. Harsco's net pension
obligations increased to $351 million at the end of 2014, up from
$238 million at the end of 2013. The increase was attributed to
lower discount rates and the adoption of new mortality tables.
Qualified U.S. and U.K. plans were 72% and 75% funded,
respectively, at the end of 2014.
KEY RATING DRIVERS
Rating concerns include:
-- Fitch's expectations for negative annual FCF through the
intermediate term, driven by weak operating performance in
Metals and lower demand in the Industrial segment. Fitch
expects operating performance in Metals will strengthen as
the company achieves costs savings from its ongoing
restructuring and efficiency initiatives;
-- Expectations for sustained higher total leverage over at
least 2.5x, despite Harsco's historically conservative
financial policies, given lower profitability and negative
FCF;
-- Subdued top-line growth prospects in Metals over the
intermediate term, given low global steel production, sales
declines from exiting underperforming contracts and weak
commodity prices for both Metals and Industrial.
The ratings are supported by:
-- Fitch's expectations for the company's operating performance
to strengthen with an improving sales mix from re-pricing or
exiting underperforming contracts and increased efficiencies
following the completion of the turnaround in Metals;
-- Strong market positions in core growth end markets,
including resource recovery and environmental services.
-- Fitch's expectations for faster growing non-Metals
businesses, Industrial and Rail, which should represent
roughly 35% of total revenues but more than 65% of projected
contribution margin, to strengthen Harsco's operating
profile over time.
RATING SENSITIVITIES
Negative rating actions could occur if Fitch expects:
-- Total leverage will remain above 3x through the intermediate
term, driven by structurally weaker profitability; or
-- Negative revenue growth and less than forecasted profit
margin expansion in 2016-2017, indicating insufficient
restructuring at the Metals business or weaker than
anticipated operating trends in Industrial and Rail.
Positive rating actions are unlikely in the absence of Fitch's
expectations for:
-- Sustained positive revenue growth through the cycle in the
Metals segment and solid long-term growth in Industrial and
Rail; and
-- Harsco's commitment to maintaining total leverage closer to
2x by moderating borrowings with consistent positive annual
FCF through the cycle.
KEY ASSUMPTIONS
-- Metals segment returns to positive revenue growth in 2017
and reduces negative revenue growth to mid-single digits in
2016;
-- Longer-term revenue growth for Rail and Infrastructure are
+3% although Fitch anticipates stronger Rail growth in 2015
and 2016;
-- Harsco achieves targeted cost savings of $35 million to $40
million in 2016, resulting in profit margin expansion
despite negative revenue growth through 2016;
-- Capital spending is 9% of revenues in 2016-2017, while
customer advances are flat at lower levels;
-- Dividends are flat while the company makes no share
repurchases through the forecast period.
As of March 31, 2015, total liquidity was sufficient and consisted
of:
-- $67 million in cash and cash equivalents (all but $3 million
of which was located outside the U.S.);
-- $353 million available under the $500 million senior
unsecured RCF expiring in 2017.
Fitch expects liquidity will support negative annual FCF through
the intermediate term. Fitch believes Harsco could use cash for
smaller acquisitions but share repurchases will be minimal through
the completion of restructuring.
Total debt was $920 million at March 31, 2015 and included:
-- $147 million of borrowings under the RCF;
-- $250 million of senior notes maturing on Oct. 15, 2015;
-- $450 million of senior notes due 2018;
-- $70 million of other borrowings.
Fitch has assigned 'RR4' Recovery Ratings for Harsco's senior
unsecured RCF and senior unsecured notes. Fitch assumes persistent
operating weakness rather than onerous debt service would drive the
company to reorganization. Fitch believes this weakness would
involve exiting incremental metals contracts and reduced
competitiveness of new products in industrial markets. Fitch
assumes a reorganization operating EBITDA of $175 million and a
reorganization multiple of 4x, resulting in a reorganization value
yielding RR4 recovery ratings on the senior unsecured debt.
Fitch has downgraded these ratings for Harsco:
Harsco Corporation
-- IDR to 'BB+' from 'BBB-';
-- Senior unsecured RCF to 'BB+/RR4' from 'BBB-';
-- Senior unsecured debt to 'BB+/RR4' from 'BBB-'.
Fitch also has withdrawn the rating on the previously offered
$250 million senior notes.
The Rating Outlook is Stable.
HILL-ROM HOLDINGS: Moody's Lowers Bank Debt Rating to (P)Ba2
------------------------------------------------------------
Moody's Investors Service downgraded the ratings on Hill-Rom
Holdings, Inc.'s proposed senior secured bank credit facilities to
(P)Ba2 from (P)Ba1. This action results from the company's decision
to the upsize its proposed term loan B to $800 million from $725
million, and reduce the size of the unsecured debt offering by $75
million. All other ratings remain unchanged.
Moody's took the following rating action on Hill-Rom:
Senior secured term loan A downgraded to (P)Ba2 (LGD 3) from (P)Ba1
(LGD 3)
Senior secured term loan B downgraded to (P)Ba2 (LGD 3) from (P)Ba1
(LGD 3)
Senior secured revolving credit facility downgraded to (P)Ba2 (LGD
3) from (P)Ba1 (LGD 3)
These changes increase the proportion of senior secured debt in the
capital structure and reduce the junior capital support provided by
the unsecured debt. In accordance with Moody's loss given default
framework, these changes result in the senior secured bank credit
facilities now being rated at the same level as its expected Ba2
corporate family rating, as they represent the bulk of the debt in
the company's capital structure.
The proceeds of this offering will largely be used to fund a
portion of the acquisition of Welch Allyn Holdings, Inc. ("Welch
Allyn"), which Hill-Rom anticipates will close before September 30,
2015.
Hill-Rom's Baa3 senior unsecured rating remains under review for
downgrade. Moody's expects to assign a Ba2 Corporate Family Rating
("CFR") upon closing of the acquisition.
Hill-Rom Holdings, Inc. is primarily a manufacturer and provider of
patient support systems (e.g., hospital beds and therapeutic
surfaces), mobility solutions, hospital furniture and certain
surgical and respiratory products. Revenue, pro-forma for the Welch
Allyn acquisition, is approximately $2.6 billion for the last
twelve months ended March 31, 2015.
KALOBIOS PHARMACEUTICALS: Regains NASDAQ Listing Compliance
-----------------------------------------------------------
KaloBios Pharmaceuticals, Inc., a monoclonal antibody company
focused on developing innovative therapies to benefit patients with
diseases of unmet medical need, with a focus on oncology, on
July 29 disclosed that it received a formal determination letter
from The NASDAQ Stock Market LLC notifying the company that it is
now compliant with the minimum bid price requirement for continued
listing on the NASDAQ Global Market and is no longer subject to
delisting. The NASDAQ staff has determined that for the 10
consecutive business days from July 14, 2015, to July 27, 2015, the
closing bid price of the company's common stock has been at $1.00
per share or greater.
As previously disclosed, the company had received a letter from
NASDAQ earlier this year, indicating that KaloBios did not comply
with the $1.00 minimum closing bid price requirement for its common
stock for continued listing on the NASDAQ Capital Market. NASDAQ
granted the company a compliance period of 180 calendar days, or
until August 19, 2015, to regain compliance with the listing rule.
Because the company has regained compliance, the matter is now
closed.
About KaloBios Pharmaceuticals
Based in South San Francisco, Calif., KaloBios Pharmaceuticals,
Inc., is a company biopharmaceutical company focused on the
development of monoclonal antibody therapeutics.
The Company reported a net loss of $38 million on $nil in revenue
for the year ended Dec. 31, 2014, compared with a net loss of $42.0
million on $44 of revenues in 2013.
Following the 2014 results, Ernst & Young LLP expressed substantial
doubt about the Company's ability to continue as a going concern,
citing that the Company has recurring losses from operations.
KC MERGERSUB: S&P Assigns 'B' Corp. Credit Rating
-------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B'
corporate credit rating to KC Mergersub Inc., the new indirect
parent company of Portland, Ore.-based early childhood education
provider Knowledge Universe Education LLC. The rating outlook is
stable.
At the same time, S&P assigned its 'B' issue-level rating and '3'
recovery rating to KC Mergersub's first-lien credit facility, which
consists of a $645 million term loan due 2022 and an $80 million
revolver due 2020. The '3' recovery rating indicates S&P's
expectation for meaningful recovery (50%-70%; upper half of the
range) of principal in the event of a payment default.
S&P also assigned its 'CCC+' issue-level rating and '6' recovery
rating to the company's $200 million second-lien term loan due
2023. The '6' recovery rating indicates S&P's expectation for
negligible recovery (0%-10%) of principal in the event of payment
default.
In addition, S&P affirmed its ratings on Knowledge Universe,
including the 'B' corporate credit rating, and removed them from
CreditWatch, where S&P had placed them with negative implications
on July 10, 2015. The outlook on the corporate credit rating is
stable.
KC Mergersub will use the proceeds of the credit facilities, as
well as new equity contributions, to facilitate its acquisition of
Knowledge Universe. The first-lien credit facilities that
Knowledge Universe had issued will be repaid as part of the
transaction. S&P expects to withdraw the issue-level ratings on
Knowledge Universe's debt after the transaction closes.
"The corporate credit rating on KC Mergersub (as Knowledge
Universe) reflects the company's high debt leverage and
participation in the cyclical early-childhood education market,"
said Standard & Poor's credit analyst Scott Zari. Adjusted debt
leverage will be in the low-7x area when the transaction closes and
annual cash interest payments will roughly double. There will be
no change in the underlying business as a result of the transaction
because the operating company will remain the same. S&P expects
liquidity to remain "adequate" and assess the company's management
and governance as "fair."
"The stable rating outlook on KC Mergersub reflects our expectation
that the company's debt leverage will remain high but gradually
improve, given our forecasts that the U.S. economy and unemployment
will remain stable or improve slightly over the next few years,"
said Mr. Zari. "The outlook also reflects our expectation that the
company will be able to maintain 'adequate' liquidity and positive
discretionary cash flow, despite increased interest payments and
moderate capital spending plans."
S&P could lower the rating on the company during the next two to
three yearsif its operating performance weakens or if S&P believes
discretionary cash flow will turn negative, resulting in "less than
adequate" liquidity. This could occur if an unexpected reversal in
employment trends leads to a decrease in enrollment and
insufficient cash flow to fund the company's moderate capital
spending requirements and interest payments.
Although highly unlikely, S&P could consider an upgrade if it
concludes that the company will be able to reduce and maintain
lease-adjusted leverage below 5x and generate meaningful
discretionary cash flow. S&P would also consider management's
track record with respect to repaying debt and returning cash to
shareholders.
KEEN EQUITIES: Greene Family to Seek Determination of Claim Amount
------------------------------------------------------------------
The Greene Family notified the U.S. Bankruptcy Court for the
Eastern District of New York of their intent to file a motion
seeking (1) determination of the amount of their postpetition
secured claim and (2) vacation of the automatic stay to allow a
state court to confirm the report of a referee.
The Greene Family is represented by:
Jeffrey A. Cooper, Esq.
RABINOWITZ, LUBETKIN & TULLY, LLC
293 Eisenhower Parkway, Suite 100
Livingston, NJ 07039
Telephone: (973)597-9100
Facsimile: (973)597-9119
Email: jcooper@rltlawfirm.com
About Keen Equities, LLC
Keen Equities, LLC, filed a Chapter 11 petition (Bankr. E.D.N.Y.
Case No. 13-46782) on Nov. 12, 2013. The petition was signed by
Y.C. Rubin as manager. The Debtor disclosed total assets of $15.1
million and total liabilities of $6.84 million. Judge Nancy
Hershey Lord presides over the case. Goldberg Weprin Finkel
Goldstein LLP serves as the Debtor's counsel.
The Debtor is comprised of a New York limited liability company
consisting of 12 members/investors. The Debtor is the owner of
approximately 860 acres of vacant land (the Lake Anne property)
situated close to the Hassidic community of Kiryas Joel, in
Monroe, New York. The Lake Anne Property was purchased in 2006
with the goal of building residential homes to meet the growing
needs of the Kiryas Joel community (the project).
KEMET CORP: Reports Preliminary Fiscal 2016 First Quarter Results
-----------------------------------------------------------------
KEMET Corporation reported net loss of $37 million on $188 million
of net sales for the quarter ended June 30, 2015, compared to a net
loss of $3.5 million on $213 million of net sales for the same
period in 2014.
As of June 30, 2015, the Company had $750 million in total assets,
$619 million in total liabilities and $131 million in total
stockholders' equity.
"We entered this fiscal year focused on reaping the benefits of our
efforts to lower our cost base and generate higher operating
margins," stated Per Loof, KEMET's chief executive officer.
"Despite the ongoing currency headwinds and inventory corrections
in the distribution channel we are seeing significant improvement
in our Film and Electrolytic segment and sustained quality margins
in the Solid Capacity Group. We believe we are well positioned to
see an improved year-over-year comparison of our bottom line
financial results. NEC TOKIN continues to perform well and it
should be noted that if we were to include our share of their net
income into our Non-GAAP results as we do our GAAP results the
Non-GAAP earnings per share would increase to $0.05 cents per basic
share and $0.04 cents per diluted share this quarter," continued
Loof.
About KEMET
KEMET, based in Greenville, South Carolina, is a manufacturer and
supplier of passive electronic components, specializing in
tantalum, multilayer ceramic, film, solid aluminum, electrolytic,
and paper capacitors. KEMET's common stock is listed on the NYSE
under the symbol "KEM."
As of March 31, 2015, the Company had $753 million in total assets,
$588 million in total liabilities, and $165 million in total
stockholders' equity.
* * *
As reported by the TCR on March 26, 2013, Moody's Investors
Service downgraded KEMET Corp.'s Corporate Family Rating to 'Caa1'
from 'B2' and the Probability of Default Rating to 'Caa1-PD' from
'B2- PD' based on Moody's expectation that KEMET's liquidity will
be pressured by maturing liabilities and negative free cash flow
due to the interest burden and continued operating losses at the
Film and Electrolytic segment.
As reported by the TCR on Aug. 9, 2013, Standard & Poor's Ratings
Services lowered its corporate credit rating on KEMET to 'B-' from
'B+'. "The downgrade is based on continued top-line and margin
pressures and lagging results from the restructuring of the Film &
Electrolytic [F&E] business, which combined with cyclical weak
end-market demand, has resulted in sustained, elevated leverage
well in excess of 5x, persistent negative FOCF, and diminishing
liquidity," said Standard & Poor's credit analyst Alfred
Bonfantini.
The TCR reported in August 2014 that S&P revised its outlook on
KEMET to 'stable' from 'negative'. S&P affirmed the ratings,
including the 'B-' corporate credit rating.
KENNEDY-WILSON HOLDINGS: S&P Revises Ratings Outlook to Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its rating
outlook on Beverly Hills, Calif.-based Kennedy-Wilson Holdings Inc.
(KW) to positive from stable. At the same time, S&P affirmed its
'BB-' issuer credit and senior unsecured debt ratings on the
company.
"The outlook revision to positive reflects our expectation that KW
will continue to expand its more stable sources of revenue through
asset management fees and rental income on properties owned and,
over time, become less reliant on investment gains," said Standard
& Poor's credit analyst Igor Koyfman. "During first-quarter 2015,
KW generated operating income of $27.5 million, primarily because
of rental and other fee-based revenues."
A significant portion of the company's operating expenses relates
to the depreciation of real estate assets. The company often books
a gain on the sale of those properties, and S&P expects these
investment gains to continue, but the timing of sales and magnitude
of gains are difficult to predict.
In S&P's view, KW has successfully timed and executed its
investment strategy over the past five years--sourcing investments
and raising capital at a pace that would normally be associated
with a larger and more established firm. KW's balance sheet is
made up overwhelmingly of investments the company made since
2010--it invested heavily in the U.S. during the early period of
the most recent recovery. Recently, the company expanded
substantially in the U.K. and Ireland in areas it believes to be
early in the recovery process. In February 2014, KW established
Kennedy Wilson Europe Real Estate Plc (KWE), a company that invests
in commercial real estate (CRE) properties in Europe. KW, which
held approximately 16.2% of the company as of June 2015, acts as
KWE's external manager and provides the company with a fee-based
source of income. As of January 2015, KWE held a real estate
portfolio valued at GBP2.0 billion and produced approximately
GBP130 million of annualized net operating income.
S&P raised KW's anchor -- the starting point in assigning the
rating--to 'bb+', in line with other U.S.-based finance companies.
This reflects S&P's updated U.S. banking sector industry risk
assessment of '3' and the company's weighted-average economic risk
score of '4'. KW's higher weighted-average economic risk score,
relative to U.S.-only finance companies which S&P assess as '3', is
primarily based on the company's exposure to Ireland, which
represents approximately 15% of the total investment account.
Approximately one-quarter of the company's exposure is in the U.K.,
with the remaining exposure in the U.S.
S&P's nonbank financial institutions criteria use its Banking
Industry Country Risk Assessment economic and industry risk scores
to determine a company's anchor. S&P sets the anchor for finance
companies three notches below the anchor for banks to reflect the
typical lack of central bank access, lower regulatory oversight,
and higher competitive risk for finance companies relative to
banks.
S&P believes KW's credit quality is currently comparable to other
'BB-' rated companies, so S&P incorporates a negative one-notch
adjustment into its final rating. This primarily reflects less
predictable investment gains accounting for a large proportion of
its revenue. S&P will reassess this as the company continues to
build on its growth strategy and executes its investment
strategies.
S&P could raise the rating if KW continues to improve its business
stability by generating a higher share of its income from asset
management fees and stable rental income, rather than relying on
investment gains. Further increases in operating income at KW's
investment properties would help KW's EBITDA rise relative to its
debt and interest expense.
S&P could lower the rating if the company's investments deteriorate
significantly or if its management of liquidity or leverage
weakens. For instance, S&P could lower the rating if the company's
total leverage (including corporate debt and its share of
consolidated and unconsolidated debt held in joint ventures)
exceeds 2.75x, without a credible plan for reducing leverage.
LBM BORROWER: Moody's Assigns 'B3' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating and
a B3-PD probability of default rating to LBM Borrower, LLC ("US
LBM"), a B3 rating to the company's proposed $650 million first
lien senior secured term loan due 2022 and a Caa2 rating to
proposed $150 million second lien senior secured term loan due
2023. The rating outlook is stable.
US LBM has entered into a definitive agreement whereby Kelso &
Company ("Kelso") will acquire the company from its current owners
BlackEagle Partners. The acquisition will be funded with the
proceeds from $650 million first lien senior secured term loan due
2022, $150 million second lien senior secured term loan due 2023,
an equity contribution from Kelso and rollover equity from the
management and the existing sponsor. As a part of this transaction
the company is also putting in place a $175 million ABL revolving
credit facility due 2020 (unrated). The transaction results in pro
forma debt to EBITDA of approximately 6.5x and EBITDA less capex to
interest coverage of approximately 1.9x (taking into consideration
recent acquisitions and Moody's standard adjustments). While the
transaction increases US LBM's debt and leverage significantly, the
rating is supported by the company's growing scale and geographic
footprint, and Moody's expectations of good end market conditions
over the ratings horizon.
The following rating actions have been taken:
Issuer: LBM Borrower, LLC:
Corporate family rating, assigned a B3;
Probability of default rating, assigned a B3-PD;
Proposed $650 million first lien senior secured
term loan due 2022, assigned a B3 (LGD3);
Proposed $150 million second lien senior secured
term loan due 2023, assigned a Caa2 (LGD6);
The rating outlook is stable.
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 if the proposed capital
structure is modified.
RATINGS RATIONALE
US LBM's B3 corporate family rating reflects the company's
leveraged capital structure, its aggressive acquisition strategy,
highly cyclical residential construction end markets, thin margins
inherent to distributors, and weak free cash flow generation. The
rating incorporates acquisition integration risks as well as the
likelihood of increasing debt levels in order to fund future
acquisitions. The rating also reflects long term risks associated
with potential shareholder friendly actions given the private
equity ownership of the company. The rating is supported by the
currently favorable conditions in the homebuilding industry, from
which the company derives a meaningful proportion (63%) of its
total revenues, repair and remodeling market, accounting for 23% of
revenues, and commercial construction (12% of revenues). US LBM's
good market positions within various geographic regions it operates
in allows it to compete successfully in a fragmented industry that
predominately consists of smaller independent distributors. The
rating also derives support from the company's diverse product mix,
and growing size and scale and geographic footprint.
The B3 rating on the first lien term loan, at the same level with
the CFR, reflects the preponderance of this class of debt in the
company's capital structure. The Caa2 rating on the second lien
term loan reflects the loss absorption provided by this
instrument.
The stable outlook reflects favorable trends in the residential
construction and repair and remodeling markets, which are expected
to translate into organic growth and solid operating performance of
the company. The outlook also reflects Moody's expectation that US
LBM will successfully execute on its strategy to grow through
acquisitions and that it will maintain adequate liquidity.
The company has an adequate liquidity profile, supported by the
lack of debt maturities until 2020 and the flexibility under the
springing fixed charge coverage covenant in the ABL credit
agreement. The liquidity, however, is constrained by limited cash
balances and Moody's expectation of weak to negative free cash flow
generation. We expect approximately half of the ABL facility to be
available net of peak working capital uses, however, we note that
revolver could be used for funding of future acquisitions, which
would constrain its availability.
The ratings could be upgraded if the company successfully completes
integration of the acquired businesses, demonstrates a track record
of earnings generation through organic growth and acquisitions that
results in debt to EBITDA consistently trending towards 4.0x,
generates positive free cash flow and revenues above $2.5 billion,
and maintains a solid liquidity profile.
The ratings could be pressured downward if the company's end
markets weaken and cause revenues to decline, if debt level
increases either as a result of on-going acquisitions or a
meaningful dividend distribution without an offsetting increase in
earnings, or if the acquired businesses do not perform up to
expectations. The ratings could also be downgraded if the company's
liquidity were to deteriorate.
US LBM, headquartered in Green Bay, Wisconsin, is a lumber and
building materials distributor, with 163 operating locations across
22 states, primarily serving homebuilders, remodelers, and
specialty contractors. US LBM is being acquired by Kelso & Company
from BlackEagle Partners, which has been involved since the
company's inception in 2009. Pro forma for recent acquisitions, US
LBM generated approximately $1.9 billion in revenues as of June 30,
2015.
LONESTAR GEOPHYSICAL: Amends Schedules of Assets and Liabiities
---------------------------------------------------------------
Lonestar Geophysical Surveys, LLC, filed with the U.S. Bankruptcy
Court for the Western District of Oklahoma amended schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $21,643,793
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $7,186,640
E. Creditors Holding
Unsecured Priority
Claims $36,572
F. Creditors Holding
Unsecured Non-Priority
Claims $5,088,556
----------- -----------
Total $21,643,793 $12,311,768
The Debtor disclosed total assets of $13.5 million and total
liabilities of $13.3 million in a prior iteration of the
schedules.
With the amended summary of schedules, the Debtor also amended its
petition, list of 20 largest unsecured creditors, statement of
financial affairs, list of equity security holders, corporate
ownership statement and creditor matrix. A copy of the document is
available for free at:
http://bankrupt.com/misc/LONESTARGEOPHYSICAL_101_amended_sal.pdf
About Lonestar Geophysical
Lonestar Geophysical Surveys, LLC, which acquires seismic data and
provides services and products to the oil and gas industry, sought
bankruptcy protection (Bankr. W.D. Okla. Case No. 15-11872) on
May 18, 2015.
Judge Hon. Sarah A. Hall presides over the case. The Debtor tapped
Ross A. Plourde, Esq., at McAfee & Taft, as counsel.
According to the docket, the Debtor's Chapter 11 plan and
disclosure statement are due Sept. 15, 2015. Governmental proofs
of claim are due Nov. 16, 2015.
M/I HOMES INC: S&P Affirms 'B' CCR & Revises Outlook to Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B'
corporate credit rating on Columbus, Ohio-based M/I Homes Inc. S&P
also revised its rating outlook on the company to positive from
stable. At the same time, S&P raised its issue-level rating on the
company's senior unsecured notes to 'B+' from 'B'. The recovery
rating on the notes is '2', indicating S&P's expectation for
substantial (70% to 90%; low end of the range) recovery to
creditors in the event of payment default.
S&P's outlook revision reflects its view of the company's improving
credit quality, driven by its gradual improvement in adjusted gross
margins over time and its progress toward increasing
diversification by growing its Texas operations.
"Our outlook on M/I is positive given our view that the company's
credit measures will continue to see incremental improvement as
expanding community count drives home closing volume while U.S.
housing starts climb in a stable demand environment," said Standard
& Poor's credit analyst Christopher Andrews. "We also expect that
the company will maintain adequate liquidity while homebuilding and
land development activity increase and the company continues to
acquire land and finished lots."
It is probable that S&P would raise its rating on M/I within the
next year if the company's markets strengthen such that
forward-looking demand expectations within its markets support
growth more in line with peers or if community count growth drives
an increase in volume while maintaining its improved gross margins
such that leverage improves toward 3x to 4x, which S&P considers
consistent with a "significant" financial risk profile.
Although S&P views a downgrade as unlikely over the next 12 months,
it could revise the outlook to stable if M/I fails to deliver on
its community expansion plan or if slowing demand in its markets or
increasing costs cause margins to materially deviate from S&P's
base-case scenario.
MEGA RV: U.S. Trustee Withdraws Bid to Dismiss or Convert Case
--------------------------------------------------------------
Peter C. Anderson, U.S. Trustee for Region 16, has withdrawn its
motion to dismiss the Chapter 11 case of Mega RV Corp., or convert
the case to one under Chapter 7 of the Bankruptcy Code.
According to the U.S. Trustee, the motion was filed because the
Debtor was not in compliance with U.S. Trustee Guidelines. Since
the filing of the motion, the Debtor is now in compliance.
The U.S. Trustee had sought the dismissal or the conversion of the
case to one under Chapter 7 for these reasons:
1) the Debtor has failed to file Monthly Operating Reports for
the months of March and April 2015;
2) the Debtor has not paid the U.S. Trustee quarterly fees for
the first quarter of 2015; and
3) the Debtor's postpetition debts exceed the cash it has on
hand as of Feb. 28, 2015, by hundreds of thousands of dollars.
About Mega RV Corp.
Mega RV Corp. filed a Chapter 11 bankruptcy petition (Bankr. C.D.
Cal. Case No. 14-13770) on June 15, 2014. Judge Mark S Wallace
presides over the case. The Debtor estimated assets and
liabilities of at least $10 million. Goe & Forsythe, LLP, serves
as the Debtor's counsel. Greenberg Glusker Fields Claman &
Machtinger LLP represents the Official Committee of Unsecured
Creditors.
The U.S. Trustee for Region 16 appointed three creditors to serve
on the official committee of unsecured creditors. The Commttee
tapped to retain Greenberg Glusker Fields Claman & Machtinger LLP
as its general bankruptcy counsel.
MIG LLC: Exclusive Plan Filing Date Extended to Aug. 28
-------------------------------------------------------
Judge Kevin Gross of the U.S. Bankruptcy Court for the District of
Delaware extended MIG, LLC, and ITC Cellular, LLC's exclusive
period within which to file a plan of reorganization to Aug. 28,
2015, and their exclusive period within which to solicit
acceptances to ther plan of reorganization is extended to Oct. 27,
2015.
In support of their extension request, the Debtors' counsel, Dennis
A. Meloro, Esq., at Greenberg Traurig, LLP, in Wilmington,
Delaware, stated that while the Debtors, the Official Committee of
Unsecured Creditors and the Indenture Trustee have made significant
progress in the Chapter 11 Cases, especially in light of the recent
negotiations with Dr. George Jokhtaberidze, the Debtors believe
that more time is needed to determine and assess the various issues
presented and decide the most effective way of achieving the
appropriate resolution of the Chapter 11 Cases.
If no objection to the Second Extension is filed with the Court by
Aug. 21, then the Debtors' exclusive plan filing period is extended
to Oct. 27, and the Debtors' exclusive solicitation period is
extended to Dec. 28.
If an objection to the Second Extension is filed with the Court on
or prior to Aug. 21, then a hearing on the Second Extension will
take place on the date of the next omnibus hearing following Aug.
21, and exclusivity will be extended by operation of the Order
until the Court rules on the objection.
About MIG, LLC
Formerly operating under the name "Metromedia International Group,
Inc.," MIG LLC, owned and operated and sold dozens of companies in
diverse industries, including entertainment, photo finishing,
garden equipment and sporting goods, until the late 1990s. In 1997
and 1998, MIG consummated the sale of substantially all of its
U.S.-based entertainment assets and began focusing on expanding
into emerging communications and media businesses. By 2005, all of
MIG's operating businesses were located in the Republic of Georgia
and operated through its subsidiaries.
MIG LLC and affiliate ITC Cellular, LLC, filed for Chapter 11
bankruptcy protection on June 30, 2014. The cases are currently
jointly administered under Bankr. D. Del. Lead Case No. 14-11605.
As of the bankruptcy filing, MIG's sole valuable asset, beyond its
existing cash, is its indirect interest in Magticom Ltd. The cases
are assigned to Judge Kevin Gross. MIG LLC disclosed $15.9 million
in assets and $254 million in liabilities.
Headquartered in Tbilisi, Georgia, Magticom is the leading mobile
telephony operator in Georgia and is also the largest telephone
operator in Georgia. Magticom serves 2.4 million subscribers with
a network that covers 97% of the populated regions in Georgia
Magticom is owned by International Telcell Cellular, LLC, which is
46% owned by MIG unit ITC Cellular, 51% owned by Dr. George
Jokhtaberidze, and 3% owned by Gemstone Management Ltd.
Formerly known as MIG, Inc., MIG was a debtor in a previous case
(Bankr. D. Del. Case NO. 09-12118). It obtained approval of its
reorganization plan in November 2010.
The Debtors have tapped Greenberg Traurig LLP as counsel, Fox
Rothschild Inc. as financial advisor; Cousins Chipman and Brown,
LLP, as conflicts counsel; and Prime Clerk LLC as claims and notice
agent and administrative advisor. The Debtors have retained
Natalia Alexeeva as chief restructuring officer.
A three-member panel has been appointed in these cases to serve as
the official committee of unsecured creditors, consisting of Walter
M. Grant, Paul N. Kiel, and Lawrence P. Klamon. McKenna Long and
Aldridge LLP as its bankruptcy counsel, Cole, Schotz, Meisel,
Forman & Leonard, P.A., as its Delaware counsel.
MILAGRO OIL: Authorized to Employ Prime Clerk as Claims Agent
-------------------------------------------------------------
Judge Kevin Gross of the U.S. Bankruptcy Court for the District of
Delaware authorized Milagro Holdings, LLC, et al., to employ Prime
Clerk LLC as claims and noticing 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 the Chapter 11 cases. Local Rule
2002-1(f) provides that "[i]n all cases with more than 200
creditors or parties in interest listed on the creditor matrix,
unless the Court orders otherwise, the debtor shall file [a] motion
[to retain a claims and noticing agent] on the first day of the
case or within seven (7) days thereafter." In view of the number
of anticipated claimants and the complexity of the Debtors'
businesses, the Debtors submit that the appointment of a claims and
noticing agent is required by Local Rule 2002-1(f) and is otherwise
in the best interests of both the Debtors' estates and their
creditors.
For its claims and noticing services, Prime Clerk will charge the
Debtors at these hourly rates:
Hourly Rate
-----------
Analyst $45
Technology Consultant $100
Consultant $140
Senior Consultant $170
Director $195
For the firm's solicitation, balloting and tabulation services, the
rates are:
Hourly Rate
-----------
Solicitation Consultant $195
Director of Solicitation $210
The firm will charge $0.10 per page for printing, $0.08 per page
for fax noticing, and no charge for e-mail noticing. Hosting of
the case Web site is free of charge and on-line claim filing
services are free of charge. For data administration and
management, the firm will charge $0.10 per record per month for
data storage, maintenance and security.
Prior to the Petition Date, the Debtors provided Prime Clerk a
retainer in the amount of $45,000.
About Milagro Oil
Based in Houston, Texas, Milagro Oil & Gas, Inc., is an independent
oil and gas company primarily engaged in the acquisition,
exploration, exploitation, development, production and sale of oil
and natural gas reserves. Milagro's historic geographic focus has
been along the onshore Gulf Coast area, primarily in Texas,
Louisiana and Mississippi. Milagro has 1,200 wells in South Texas,
along the Gulf Coast and in Louisiana.
As of March 31, 2015, the book value of Milagro's total assets and
liabilities was approximately $390 million and $468 million,
respectively.
On July 15, 2015, Milagro Oil & Gas, its parent Milagro Holdings,
LLC, and four affiliated entities each filed a voluntary petition
for relief under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court for the District of Delaware.
The cases are pending before the Honorable Kevin Gross and are
jointly administered under In re Milagro Holdings, Case No.
15-11520.
The Debtors tapped (i) Porter Hedges LLP as general counsel; (ii)
Young Conaway Stargatt & Taylor, LLP, as local counsel; (iii) Zolfo
Cooper, LLC, as restructuring advisors; and (iv) Prime Clerk LLC as
claims and noticing agent.
Noteholders that are parties to the RSA have tapped (i) Akin Gump
Strauss Hauer & Feld LLP, as legal counsel, (ii) Richards, Layton &
Finger, P.A., as Delaware legal counsel, and (iii) Blackstone
Advisory Partners L.P., as financial advisor.
The first lien agent, TPG Specialty Lending, Inc., is represented
by, Schulte Roth & Zabel LLP. Equity holder ACON Funds Management
is represented by Hogan Lovells US LLP. White Oak is represented
by Locke Lord LLP.
* * *
Milagro Holdings, LLC, et al., intend to present the Disclosure
Statement explaining their Plan of Reorganization for approval at a
hearing before the Honorable Kevin Gross of the U.S. Bankruptcy
Court for the District of Delaware on September 1, 2015, at 2:00
p.m. (prevailing Eastern Time).
The Plan effects the prepetition transactions contemplated by the
Contribution Agreement and Restructuring Support Agreement.
Following the Effective Date, the Reorganized Debtor will be the
owner of the Milagro Interests, which are equity interests in White
Oak that are expected to be approximately 37.5% of the outstanding
interests in White Oak, but which are subject to final
determination in accordance with the terms of the Contribution
Agreement.
Holders of Allowed General Unsecured Claims are impaired under the
Plan, and are not entitled to any distribution on account of their
Claims. All Equity Interests in the Debtors will be cancelled and
the Holders of Equity Interests are not entitled to receive any
distribution under the Plan.
MILES APPLIANCE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Miles Appliance and Factory Discount
Furniture Center, Inc.
140 Cidero Road
Raymond, MS 39154
Case No.: 15-02339
Chapter 11 Petition Date: July 29, 2015
Court: United States Bankruptcy Court
Southern District of Mississippi
(Jackson-3 Divisional Office)
Judge: Hon. Edward Ellington
Debtor's Counsel: John D. Moore, Esq.
JOHN D. MOORE, P.A.
301 Highland Park Cv, Ste B (39157)
P. O. Box 3344
Ridgeland, MS 39158-3344
Tel: 601 853-9131
Fax: 601-853-9139
Email: john@johndmoorepa.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $0 to $50,000
The petition was signed by Linda Burleson, president.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
NAVIENT CORP: Moody's Assigns 'Ba3' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has affirmed Navient Corporation's senior
unsecured debt and shelf ratings at Ba3 and (P)Ba3, and assigned a
Ba3 corporate family rating. The outlook is stable.
RATINGS RATIONALE
Moody's estimates that a large percentage of Navient's $85 billion
of FFELP ABS Trusts may not be fully repaid by their final maturity
date owing to very slow loan repayment rates as a result of the
large increase in the number of borrowers on income-based repayment
plans. Moody's affirmed Navient's ratings with a stable outlook,
however, to reflect Moody's expectation that the slowdown in loan
repayments will have only a modest negative impact on Navient's
liquidity and financial strength.
The largest potential negative impact on the company's liquidity
profile relates to the refinancing risk that it faces on its $16
billion of unsecured debt. Of the $16 billion, $9 billion matures
over the next four years, a large percentage of which Moody's
expects will need to be refinanced. Navient will need to carefully
manage this refinancing and maintain the flexibility to handle
changes in market access or pricing for its senior unsecured
obligations.
Another challenge to its liquidity profile could result from the
company purchasing loans from the trusts to lessen the likelihood
of an ABS bond default, even though the ABS bonds are non-recourse
and the company's corporate debt does not have any cross-default
provisions with the securitization trusts. Over the last several
months, the company has repurchased more than $400 million of loans
from the ABS trusts, and it has another $12 billion of undrawn,
committed liquidity to finance loan purchases. However, Moody's
expects that the company would only undertake loan purchases if it
had certainty regarding the permanent financing of those loans,
thus mitigating the liquidity risk.
A rating upgrade is unlikely at this time, but positive credit
developments would include a material decrease in financial
leverage.
A downgrade is possible if the company's financial flexibility
declines, for example, if unencumbered assets fall below $4
billion. The ratings could also be downgraded if 1) the financial
performance of the company deteriorates or 2) the value of the
investment portfolio declines because of a large increase in
prepayment speeds on the FFELP portfolio or rising delinquencies
and defaults on the private student loan portfolio, for example.
NELNET INC: Moody's Affirms 'Ba1' Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service affirmed Nelnet, Inc.'s Ba1 Corporate
Family Rating (CFR) and Ba2 (hyb) subordinated debt rating. The
outlook is stable.
RATINGS RATIONALE
Moody's estimates that a number of Nelnet's $21 billion of FFELP
ABS Trusts may not be fully repaid by their final maturity date
owing to very slow loan repayment rates as a result of the large
increase in the number of borrowers on income-based repayment
plans. Moody's affirmed Nelnet's ratings with a stable outlook,
however, to reflect Moody's expectation that the slowdown in loan
repayments will have a minimal negative impact on Nelnet's
liquidity and financial strength.
A potential challenge to Nelnet's liquidity profile could result
from the company purchasing loans from the trusts to lessen the
likelihood of an ABS bond default, even though the ABS bonds are
non-recourse and the company's corporate debt does not have any
cross-default provisions with the securitization trusts. To date,
the company has not repurchased loans from the ABS trusts. It
currently has $800 million of undrawn, committed liquidity to
finance loan purchases. Moody's expects that the company would only
undertake loan purchases if it had certainty regarding the
permanent financing of those loans, thus mitigating the liquidity
risk.
After the financial crisis, the company significantly reduced its
leverage and almost entirely funds its business with
securitizations and cash generated from operations. Currently, the
company only has $60 million of corporate debt in the form of
subordinated debt which matures in 2036, presenting the company
with minimal challenges to its liquidity profile.
While a rating upgrade is unlikely at this time, positive credit
developments include continued progress in building the scope and
prominence of its fee-based businesses, in combination with
appropriate business line and customer diversity, could place
upward pressure on the ratings.
The rating could be downgraded if the financial performance of the
company deteriorates or if the value of the investment portfolio
declines due for example to increasing prepayment speeds on the
FFELP portfolio.
Moody's also attached a hybrid indicator (hyb) to the rating of
$200 million 7.4% Subordinated Debentures due 29 September 2036
(CUSIP: 64031NAB4) issued Nelnet, Inc. in accordance with our
Rating Symbols and Definitions published in August 2014. A "(hyb)"
indicator was previously not appended to the rating of this
security due to an internal administrative error.
NEW YORK LIGHT: Court Approves JC Jones as Financial Advisor
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
authorized New York Light Energy, LLC, et al., to employ JC Jones &
Associates, LLC, as financial advisor, nunc pro tunc to the
Petition Date.
JC Jones will, among other things:
1. provide support for reporting financial information to Court,
creditors, and other interested parties, including but not limited
to required filings and requested information;
2. assist the Debtors, the Debtors' professionals and other
parties-in-interest in the preparation of any documents to be filed
with the court or executed in connection with the Debtors' Chapter
11 cases; and
3. provide a skilled financial person, if requested, to
temporarily support the Debtors' financial reporting requirements
and provide on-going support for the financial department.
In the event the services of JC Jones are required for unusual or
extraordinary matters beyond the scope or intent of the
application, the Debtors will make an additional application for
such authorization.
JC Jones was paid a retainer of $50,000 in connection with its
prepetition services. After application of the retainer to its
prepetition fees, JC Jones continues to hold a retainer in the
amount of $25,929. Accordingly, JC Jones does not hold any claim
against the Debtors for services rendered prior to the Petition
Date.
To the best of the Debtors' knowledge, JC Jones is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About New York Light Energy
Founded in 2009 and based in Latham, New York, New York Light
Energy, LLC, designs and installs medium-scale solar arrays in New
York State and Massachusetts. The Company has installed solar
arrays on more than 180 industrial, commercial, municipal, and
residential sites, with a total of over 15 megawatts of capacity to
date.
NYLE and its affiliates commenced Chapter 11 bankruptcy cases
(Bankr. N.D.N.Y. Lead Case No. 15-11121) in Albany, New York, on
May 27, 2015.
The Debtors tapped Bond, Schoeneck & King, PLLC, as counsel.
Judge Robert E. Littlefield Jr. is assigned to the cases.
The Bankruptcy Court set Nov. 23, 2015, as the last day for
creditors to file proofs of claim.
NEW YORK LIGHT: Has Final Approval to Pay $300K Critical Vendors
----------------------------------------------------------------
The Hon. Robert E. Littlefield, Jr. of the U.S. Bankruptcy Court
for the Northern District of New York authorized, on a final basis,
New York Light Energy, LLC, et al., to pay certain
prepetition claims of critical vendors, shippers, freight carriers
and warehousemen up to the amount of $300,000, in consultation with
M&T Bank.
All objections to the motion were overruled and disallowed on the
merits.
About New York Light Energy
Founded in 2009 and based in Latham, New York, New York Light
Energy, LLC, designs and installs medium-scale solar arrays in New
York State and Massachusetts. The Company has installed solar
arrays on more than 180 industrial, commercial, municipal, and
residential sites, with a total of over 15 megawatts of capacity to
date.
NYLE and its affiliates commenced Chapter 11 bankruptcy cases
(Bankr. N.D.N.Y. Lead Case No. 15-11121) in Albany, New York, on
May 27, 2015.
The Debtors tapped Bond, Schoeneck & King, PLLC, as counsel.
Judge Robert E. Littlefield Jr. is assigned to the cases.
The Bankruptcy Court set Nov. 23, 2015, as the last day for
creditors to file proofs of claim.
PALM DRIVE HEALTH: S&P Puts 'BB' LT Rating on CreditWatch Negative
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' long-term rating
on Palm Drive Health Care District, Calif.'s parcel tax revenue
debt on CreditWatch with negative implications.
"This action follows repeated attempts by Standard & Poor's to
obtain timely information of satisfactory quality to maintain our
rating on the securities in accordance with our applicable criteria
and policies," said Standard & Poor's credit analyst Misty Newland.
Failure to receive the requested information by Aug. 12, 2015, will
likely result in S&P's withdrawal of the affected rating, preceded,
in accordance with S&P's policies, by any change to the rating that
it considers appropriate given available information.
PARTY CITY: S&P Assigns 'B' Rating on $1.34BB Term Loan B
---------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B' issue-level
rating to Elmsford, N.Y.-based Party City Holdings Inc.'s new $1.34
billion term loan B. The recovery rating is '4', indicating S&P's
expectations for average recovery at the high end of the 30% to 50%
range.
On July 24, 2015, S&P affirmed its 'B' corporate credit rating on
Party City. The outlook is positive. S&P also affirmed the 'CCC+'
issue-level rating on the remaining $350 million senior notes. The
recovery rating is '6', reflecting S&P's expectation for negligible
(0% to 10%) recovery.
"We view the proposed refinancing transaction as neutral to the
credit rating.
"The proposed transaction will result in a modest increase in
incremental debt, but we expect meaningful debt pay down over the
next few years," said credit analyst Andrew Bove. "This
transaction will also reduce annual cash interest expense modestly.
As a result, we continue to project steady improvement in credit
metrics over the next 12 to 24 months."
The positive outlook reflects the company's improved credit metrics
following its successful IPO in April and subsequent holdco debt
repayment, as well as S&P's expectation for credit metrics to
improve further over the next 12 to 24 months driven by continued
profit growth and meaningful debt reduction.
S&P could revise the outlook to stable if operating performance is
meaningfully below S&P's expectations. Under this scenario, sales
would grow in the low-single digits and gross margin would contract
by 50 bps, leading to leverage remaining in the mid-to high-5.0x
area and FFO/debt in the 10% range.
S&P could also take a negative rating action if financial policy
becomes more aggressive, resulting in higher debt levels and weaker
credit metrics.
S&P could consider a positive rating action if the company reduces
debt and commits to leverage below 5.0x on a sustained basis while
maintaining adequate liquidity. This could happen if revenues
increase in the mid- to high-single-digits coupled with about a
50-bps increase in gross margin driven by a good Halloween season.
S&P could take a positive rating action sometime early next year if
the company maintains good operating performance and continues to
pay down debt. Under this scenario, S&P would also believe the
risk of the company releveraging becomes less likely.
PHD GROUP: S&P Assigns 'B-' Corp. Credit Rating, Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to PHD Group Holdings LLC, parent company of
Portillo's Holdings LLC. The outlook is stable.
On July 22, 2015, S&P affirmed its 'B-' issue-level ratings on the
company's revolver and first-lien term loan. The recovery ratings
remain '3', indicating S&P's expectation for meaningful recovery of
principal in the event of a payment default at the lower end of the
50% to 70% range. S&P also affirmed its 'CCC' issue-level rating
on the company's second-lien facility. The recovery rating remains
'6', indicating S&P's expectation for negligible (0% to 10%)
recovery in the event of a payment default.
"The ratings reflect Portillo's position as a niche player in the
fast casual hot dog space, with the company's latest annual
earnings and new store openings in line with our expectations for
the fiscal 2014 period ended December 31," said credit analyst Diya
Iyer. "We believe strong average unit volumes offset the company's
small footprint with 38 restaurants at fiscal year-end, mostly in
the Chicago metro area. Overall, Portillo's continues to report
solid operating performance this year, with continued increases in
same-store-sales and strong average unit volumes."
The stable outlook on PHD Group Holdings LLC incorporates S&P's
expectation that performance will continue to improve in the coming
year because of positive same-store sales, unit expansion, and only
modest margin erosion, with potential for steady deleveraging in
the next three years should the sponsor's growth plans materialize.
However, S&P believes execution risk is a major factor that could
derail this untested expansion strategy into new geographies.
S&P could lower the rating if performance falls significantly below
S&P's projections because of flat sales and margin contraction,
because of factors such as elevated beef prices. Under this
scenario, revenue growth would slow down and gross margin would
shrink more than 100 basis points (bps), accompanied by tightened
liquidity and cash flow and interest coverage near 2.0x. S&P could
also lower its rating if financial sponsors utilize additional debt
to fund a dividend or sizable acquisition in the next year.
To consider an upgrade, Portillo's would need to deliver
performance ahead of S&P's expectations, with revenue growth in the
15% to 20% range and gross margin expansion of more than 100 bps.
At that time, leverage would be in the high-5.0x area and interest
coverage would be in the low-4.0x area with FFO/debt in the
mid-teens percent area.
PRESSURE BIOSCIENCES: Closes $2.2M Tranche of Private Placement
---------------------------------------------------------------
Pressure BioSciences, Inc. has closed on gross proceeds of
$2,180,000 from the initial tranche of a $5 million Private
Placement. Of the amount invested, $1,520,000 was received in cash
and $660,000 was from the conversion of principal and interest on
outstanding promissory notes. One or more additional tranches in
the Private Placement may close on or before Aug. 7, 2015.
Pursuant to the Subscription Agreement, the Company will issue
Senior Secured Convertible Debentures with a fixed conversion price
of $0.28 per restricted common share, and Common Stock Purchase
Warrants exercisable into a total of 3,892,857 shares of restricted
common stock at an exercise price of $0.40 per share. The Company
is under no obligation to file a registration statement to register
the shares underlying the Debentures and Warrants.
The Company netted $1,340,000 in cash after taking into account
fees related to the Offering and the value of the notes that
converted into the Offering.
Mr. Richard T. Schumacher, president and CEO of PBI, commented:
"The priorities for the use of funds raised in the initial tranche
are (i) to increase the number of personnel in our marketing and
sales department, to continue building the installed base of
instruments and utilization of consumables, and (ii) to retire a
significant portion of the variable priced convertible debt we took
on to help facilitate growth while additional equity capital was
being raised. It is expected that cash received from any
additional closings that might occur in the near future will be
used to pay off any remaining variable priced convertible debt."
On July 23, 2015, the Company filed an Articles of Amendment to the
Articles of Organization with the Commonwealth of Massachusetts in
order to effectuate an increase in the authorized common stock of
the Company from an aggregate of 65,000,000 shares to 100,000,000
shares, par value of $0.01 per share. The amendment will not
affect the number of the Company's issued and outstanding preferred
shares.
About Pressure Biosciences
Pressure BioSciences, Inc., headquartered in South Easton,
Massachusetts, holds 14 United States and 10 foreign patents
covering multiple applications of pressure cycling technology in
the life sciences field.
Pressure Biosciences reported a net loss applicable to common
shareholders of $6.25 million on $1.37 million of revenue for the
year ended Dec. 31, 2014, compared to a net loss applicable to
common shareholders of $5.24 million on $1.5 million of total
revenue for the year ended Dec. 31, 2013.
As of March 31, 2015, the Company had $1.5 million in total assets,
$4.72 million in total liabilities and a $3.22 million total
stockholders' deficit.
Marcum LLP, in Boston, Massachusetts, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2014, noting that the Company has had recurring net
losses and continues to experience negative cash flows from
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern, the auditors
said.
PROLAMPAC INTERMEDIATE: Moody's Assigns B2 Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service assigned first time ratings to Prolampac
Intermediate Inc. ("The Combined Company"), including a B2
corporate family rating and a B2-PD probability of default rating.
Instrument ratings are detailed below. The rating outlook is
stable. Proceeds from the new debt raised will be used to fund the
acquisition of Ampac Holdings, transition Prolamina to an
alternative Wellspring Fund where the two companies will be merged,
and pay fees and expenses associated with the transaction.
The transaction is supported by $560 million of funded debt and an
equity investment by Wellspring. The equity investment is pure
common stock and not expected to have a dividend, PIK or accrete.
The transaction is expected to close in August 2015.
Moody's took the following actions:
Prolampac Intermediate Inc.
-- Assigned corporate family rating, B2
-- Assigned probability of default rating, B2-PD
-- Assigned $400 million senior secured 1st lien term due 2022,
B1 (LGD3)
-- Assigned $50 million senior secured revolving credit facility
due 2020, B1 (LGD3)
-- Assigned $110 million senior secured 2nd lien term loan due
2023, Caa1 (LGD5)
The rating outlook is stable.
The ratings are subject to the receipt and review of the final
documentation.
RATINGS RATIONALE
The B2 corporate family rating reflects the high proforma leverage,
high percentage of commodity products and high percentage of
non-contracted business. The rating also reflects the risks
inherent in the fragmented and competitive industry in which the
company operates and the integration risk for the recent
acquisition of Ampac. Approximately 60% of the company's business
is not under contract with raw material pass-through provisions.
Additionally, lags are lengthy on the raw material cost
pass-throughs for the business that is contracted and costs other
than raw materials are not passed through. The company has some
exposure to cyclical end markets.
Strengths in the combined company's competitive profile include a
high percentage of sales in relatively more stable end markets,
long term relationships with customers and a continued focus on
producing innovative products. Strengths in the company's profile
also include a significant percentage of business under long term
contracts with raw material cost pass-throughs. The company has
maintained long standing relationships with its customers including
some well-known, blue chip names. The rating is also supported by
the company's pledge to direct all free cash flow to debt reduction
over the rating horizon.
The rating could be downgraded if there is deterioration in the
credit metrics, liquidity or the operating and competitive
environment. Additional debt financed acquisitions, excessive
acquisitions (regardless of financing) and/or a move to an
aggressive financial profile could also prompt a downgrade.
Specifically, the rating could be downgraded if total adjusted debt
to EBITDA rises above 6.5 times, EBIT to gross interest coverage
declines below 1.25 times, the EBIT margin declines below the
mid-single digits, and/or free cash flow to debt declines below the
positive low-single digits.
The ratings could be upgraded if the company sustainably improves
credit metrics within the context of a stable operating and
competitive environment. An upgrade would also be dependent upon
the maintenance of good liquidity and conservative financial and
acquisition policies. The ratings could be upgraded if adjusted
total debt to EBITDA moves below 5.5 times, free cash flow to debt
rises to the positive high single digit range, the EBIT margin
improves to the high single digit range, and EBIT to gross interest
coverage moves above 2.0 times.
Prolampac Intermediate Inc. is a supplier of flexible plastic
packaging products serving customers in the food, retail,
healthcare and industrial end markets. The two merged entities that
formed the combined company were headquartered in Westfield,
Massachusetts and Cincinnati, Ohio . The company has 11
manufacturing facilities in the United States, 3 in Europe and 2 in
Southeast Asia. Approximately 86% of sales are generated in the US,
11% in Europe and 3% in Southeast Asia. Their primary raw materials
are resin (PET, LDPE, polypropylene), paper, foil, film and fabric.
Pro forma net sales for the 12 months ended June 30, 2015 totaled
approximately $680 million. The combined company is a portfolio
company of Wellspring Capital Management.
RELATIVITY MEDIA: Files for Ch 11; To Sell Bulk of Film, TV Units
-----------------------------------------------------------------
Film studio Relativity Media LLC filed for bankruptcy protection on
July 30 and proposes to sell itself.
Ryan Lattanzio, writing for Thompson on Hollywood, reports that
Relativity Media will be put on sale with hopes of closing a deal
by early October 2015. The Company is also seeking $45 million in
financing to cover the cost of the Chapter 11 procedure, the report
adds.
Thompson on Hollywood states that a court hearing is expected to be
held on July 31, 2015.
James Rainey and Brent Lang at Variety.com relates that petitions
were filed with the U.S. Bankruptcy Court for the Southern District
of New York were filed on behalf of parent Relativity Media and 144
other subsidiaries and holding companies, most of them LLCs formed
for the production of individual films. The Company, says Variety,
estimates between $500 million and $1 billion in liabilities, and
between $100 million and $500 million in assets.
According to Thompson on Hollywood, the Company is reportedly
selling a bulk of its film and TV units, but it wants to keep its
Relativity Sports, Relativity EuropaCorp Distribution and
Relativity Education. The report adds that the Company will hold
onto the comedy "Masterminds" and Halle Berry-starred "Kidnap," and
still wants to shoot "The Crow" remake this fall.
Citing observers, Variety states that the Company appeared to have
insufficient cash flow to continue anything close to normal
operations while reorganizing itself. The Company, according to
Variety, announced that RM Bidder will take control of the bulk of
its assets, which will be auctioned off under the supervision of
Blackstone Group and financial services firm FTI Consulting, which
has been overseeing the Company's troubled cash balances for
several weeks. Senior lenders like Anchorage Capital and Falcon
Investments will get the bulk of the proceeds from the proposed
auction, the report says.
Variety reports that it could be difficult for Ryan Kavanaugh to
remain as CEO, given the depth of the financial chasm the Company
faced -- $320 million in loans that could not be repaid, and tens
of millions in bills from unsecured creditors. A lawsuit was also
filed by a film financing firm against him this month for alleged
fraud and misdirection of funds intended to be used for the release
and promotion of the Company's film slate, Variety relates.
According to the report, Mr. Kavanaugh vehemently denied that
allegation.
Thompson on Hollywood recalls that the Company let go of 75 workers
on July 29, 2015, and extricated "Jane Got a Gun" from its slate.
Variety.com adds that the Company's fashion operation,
M3/Relativity, was closed down this week and that its workers were
part of those laid off on Wednesday.
Relativity Media is an indie film distributor founded in 2004 by
Ryan Kavanaugh. It is one of Hollywood's mini-major film studios,
which produces, acquires and distributes films, and has divisions
in television, sports, music and fashion.
RIVER CITY: Amends Schedules of Assets and Liabilities
------------------------------------------------------
River City Renaissance, LC, filed with the U.S. Bankruptcy Court
amended schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $27,187,000
B. Personal Property $166,274
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $28,950,703
E. Creditors Holding
Unsecured Priority
Claims $209,326
F. Creditors Holding
Unsecured Non-Priority
Claims $46,001
----------- -----------
Total $27,353,274 $29,206,030
The Debtor disclosed total assets of $27,353,274 and total
liabilities of $29,186,824 in a prior iteration of the schedules.
A copy of the amended schedules is available for free at:
http://bankrupt.com/misc/RiverCityRenaissance_671_amendedSAL.pdf
About River City Renaissance
Richmond, Virginia-based, River City Renaissance, LC, and River
City Renaissance III, LC, sought Chapter 11 protection (Bankr. E.D.
Va. Case Nos. 14-34080 and 14-34081) in Richmond, Virginia, on July
30, 2014.
The Debtors filed the chapter 11 cases in order to pursue an
orderly liquidation of their real property assets, which are
comprised of 29 residential apartment buildings in the City of
Richmond, in lieu of scheduled foreclosure sales.
The cases are assigned to Judge Keith L. Phillips. The Debtors
tapped Spotts Fain PC, as counsel.
RIVER CITY: Has Until Oct. 26 to File Chapter 11 Plan
-----------------------------------------------------
Keith L. Phillips of the U.S. Bankruptcy Court for the Eastern
District of Virginia granted River City Renaissance, LC, and River
City Renaissance III, LC's third request for an extension of their
exclusive periods to file a chapter 11 plan until Oct. 26, 2015,
and solicit acceptances for that plan until Dec. 23.
About River City
Richmond, Virginia-based, River City Renaissance, LC, and River
City Renaissance III, LC, sought Chapter 11 protection (Bankr. E.D.
Va. Case Nos. 14-34080 and 14-34081) in Richmond, Virginia, on July
30, 2014.
The Debtors filed the chapter 11 cases in order to pursue an
orderly liquidation of their real property assets, which are
comprised of 29 residential apartment buildings in the City of
Richmond, in lieu of scheduled foreclosure sales.
The cases are assigned to Judge Keith L. Phillips. The Debtors
tapped Spotts Fain PC, as counsel.
River City Renaissance LC disclosed $27.3 million in assets and
$29.2 million in liabilities as of the Chapter 11 filing.
Renaissance III estimated less than $10 million in assets and
debts.
SIGNAL INT'L: Obtains Court Authority to Hire KCC as Claims Agent
-----------------------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District
of Delaware authorized Signal International, Inc., et al., to
employ Kurtzman Carson Consultants LLC as claims and noticing
agent.
The Debtors tapped KCC as claims and noticing agent to assume full
responsibility for the distribution of notices and the maintenance,
processing, and docketing of proofs of claim filed in the Chapter
11 cases.
The Debtors anticipate that more than 13,000 entities will be
noticed during the course of the Chapter 11 cases. In view of the
number of anticipated claimants and the complexity of the Debtors'
business, the Debtors submit that KCC's appointment as the claims
and noticing agent is both necessary and in the best interests of
the Debtors' estates and their creditors.
Prior to the Petition Date, the Debtors provided KCC a retainer in
the amount of $25,000.
About Signal International
Signal International Inc. -- http://www.signalint.com/-- primarily
engages in the business of offshore drilling rig overhaul, repair,
upgrade, and conversion, as well as new shipbuilding construction.
Additionally, Signal provides services to the general marine and
heavy fabrication markets for barges, power plants, and modular
construction.
Signal International, LLC ("SI LLC"), was organized on Dec. 6,
2002, as a limited liability company after acquiring the assets of
the Offshore Division of Friede Goldman Halter from bankruptcy. SI
Inc. was incorporated on Oct. 12, 2007, and began operations
with offshore fabrication and repair in Mississippi. Today,
Signal's corporate headquarters are in Mobile, Alabama, with
operations in Alabama and Mississippi, and a sales office in
Texas.
On Oct. 3, 2014, Signal International Texas, L.P., sold
substantially all of its assets to Westport Orange Shipyard, LLC,
in a partially seller-financed transaction for a total purchase
price of $35,900,000. As part of the transaction, Westport
provided a down payment of $7,000,000 and delivered a promissory
note in the principal amount of $28,900,000 to SI Texas due on or
before Oct. 3, 2019 (the "Texas Note").
On July 12, 2015, SI Inc. and its direct and indirect wholly owned
subsidiaries, including SI LLC, commenced cases under chapter 11 of
title 11 of the United States Code (Bankr. D. Del. Lead Case No.
15-11498).
The Debtors tapped Young Conaway Stargatt & Taylor LLP as
bankruptcy counsel, Hogan Lovells US LLP as general corporate
counsel, GGG Partners, LLC, as financial and restructuring
advisors, and Kurtzman Carson Consultants LLC as claims and
noticing agent.
Signal International Inc. estimated $10 million to $50 million in
assets and $50 million to $100 million in debt.
SIRIUS INT'L: Moody's Affirms 'Ba2(hyb)' Preference Shares Rating
-----------------------------------------------------------------
Moody's Investors Service has affirmed the A3 insurance financial
strength (IFS) ratings of Sirius International Insurance
Corporation (Sirius International) and Sirius America Insurance
Company (Sirius America) and the Baa3 senior debt rating of Sirius
International Group, Ltd. (Sirius Group). The outlook for the
ratings is stable.
On July 27, 2015, Sirius Group's ultimate parent company, White
Mountains Insurance Group Ltd. (White Mountains, NYSE: WTM,
unrated) announced that it had signed a definitive agreement to
sell 100% of its ownership stake in Sirius International Insurance
Group, Ltd. (Sirius) to CM International Holding PTE Ltd., the
Singapore-based investment arm of China Minsheng Investment Corp.,
Ltd. ("CMI", unrated). CMI is a Shanghai-domiciled investment
company founded in May 2014. Its strategy includes investing in
financial services and industrial businesses. At December 31, 2014,
CMI had over $6 billion of shareholders' equity. The purchase price
will be 127.3% of Sirius's closing date tangible common
shareholder's equity plus $10 million -- or approximately $2.2
billion based upon Sirius' December 31, 2014 tangible common
shareholder's equity. The transaction is expected to close within
six months, and is subject to regulatory approval and other
customary closing conditions.
RATINGS RATIONALE
Moody's stated that the planned sale to CMI exposes Sirius Group to
new risks and uncertainties given CMI's limited operating history
and its lack of meaningful expertise in the (re)insurance industry.
The rating agency added, the lack of visibility about CMI's
influence over Sirius Group's strategy, including how it will
manage its investment portfolio, is a risk factor that will play
out over time.
However, Moody's noted that Sirius Group's rating is currently well
positioned at A3 and that its credit profile can absorb some
uncertainty about the strategic direction it will take under CMI's
ownership. Additionally, Moody's believes that the credit-sensitive
nature of the reinsurance business creates meaningful incentives
for CMI to preserve Sirius Group's credit profile.
Sirius Group's Baa3 senior debt rating and the A3 IFS ratings of
its primary operating subsidiaries, reflect the group's strong
capitalization and sound underwriting discipline, good
profitability, high-quality investment portfolio, and long-standing
presence in the US and European broker and, increasingly, direct
insurance markets. These strengths are tempered by very competitive
reinsurance markets, particularly for broker-placed business,
volatility associated with property catastrophe exposures, and the
potential for adverse loss reserve development on legacy and
purchased run-off liabilities, including asbestos & environmental
(A&E) exposures at Sirius America.
Moody's cited the following factors that could lead to an upgrade
of Sirius Group and its subsidiaries' ratings: (i) consistent and
significantly higher profitability relative to peers, (ii)
increased scale, diversity in the product mix and a higher
proportion of primary direct business, (iii) loss reserve
development consistently at benign levels.
Conversely, the following factors could lead to a downgrade of
Sirius Group and its subsidiaries' ratings: (i) material adverse
loss reserve development, (ii) a sustained, meaningful increase in
financial leverage or decrease in earnings coverage, (iii) a 10%
decline in shareholders' equity over a 12-month period, from
underwriting losses and/or capital management activity, (iv) a
substantial increase in high risk assets, (v) a material increase
in gross underwriting leverage, and (vi) the loss of key personnel
as a result of the planned sale to CMI.
RATING OUTLOOKS
The stable ratings outlook reflects Sirius Group's strong
capitalization, including moderate operating leverage, good
profitability, and its granular reinsurance portfolio and
long-standing, local, client relationships.
The following ratings have been affirmed with a stable outlook:
Sirius International Group, Ltd. -- senior debt at Baa3,
preference shares at Ba2 (hyb);
Sirius International Insurance Corporation -- insurance
financial strength at A3; and
Sirius America Insurance Company -- insurance financial
strength at A3.
SITEL WORLDWIDE: S&P Raises CCR to 'B', Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Nashville-based SITEL Worldwide Corp. to 'B' from
'CCC+'. The outlook is stable. S&P removed the rating from
CreditWatch, where it had placed it with developing implications on
July 14, 2015.
At the same time, S&P assigned a 'B' issue-level rating to the
company's $60 million revolver due 2020 and $365 million first-lien
term loan due 2022, with a recovery rating of '3', indicating S&P's
expectation for meaningful recovery (50%-70%; upper half of the
range) of principal in the event of a payment default. S&P
assigned a 'B-' issue-level rating to the $120 million second-lien
term loan due 2023, with a recovery rating of '5', indicating its
expectation of modest recovery (10%-30%; lower half of the range)
in the event of payment default.
Proceeds will be used in part to repay existing debt. S&P will
withdraw its ratings on the existing credit facility and notes once
the transaction closes.
"The upgrade reflects SITEL's improved financial risk profile
following the acquisition by unrated French customer relationship
management company Groupe Acticall," said Standard & Poor's credit
analyst Kenneth Fleming.
Leverage will be lower and the company's liquidity position will
substantially improve. S&P expects debt to EBITDA will be around
4x following the transaction, down from around 7.5x as of
March 31, 2015. S&P's adjusted debt calculation includes a
significant adjustment for operating leases. Based on expected
stronger credit measures, S&P's assessment of the company's
financial risk profile is now "aggressive" compared with "highly
leveraged" previously.
Importantly, the new capital structure includes an unfunded $60
million revolving credit facility, which improves the company's
liquidity position. SITEL's current revolving facility was
partially drawn and will mature in January 2016. Based on the
proposed new revolver and repayment of existing debt, S&P's
assessment of SITEL's liquidity is "adequate" compared with S&P's
previous assessment of "weak."
The stable outlook reflects lower leverage and an improved
liquidity position following the acquisition by Groupe Acticall,
and S&P's expectation that the company will reduce leverage
modestly with free cash flow.
S&P could lower the rating if operational issues or the loss of
clients precludes sustained positive FOCF under the new capital
structure.
While unlikely, S&P could raise the rating if the company
demonstrates consistent operating performance and annual FOCF to
debt increases above 6%.
SOUTHSIDE BAPTIST: Case Summary & 13 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Southside Baptist Temple
dba Southside Baptist Ministries
5515 Bryce Lane
Richmond, VA 23224
Case No.: 15-33812
Chapter 11 Petition Date: July 29, 2015
Court: United States Bankruptcy Court
Eastern District of Virginia (Richmond)
Judge: Hon. Keith L. Phillips
Debtor's Counsel: Troy Savenko, Esq.
KAPLAN, VOEKLER, CUNNINGHAM & FRANK, PLC
1401 East Cary Street (23219)
P.O. Box 2470
Richmond, VA 23218-2470
Tel: 804-823-4000
Email: tsavenko@kv-legal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Dr. Lonnie S. Stinson, pastor.
A list of the Debtor's 13 largest unsecured creditors is available
for free at http://bankrupt.com/misc/vaeb15-33812.pdf
SPX FLOW: Moody's Assigns 'Ba2' Corporate Family Rating
-------------------------------------------------------
Moody's Investors Service assigned a first time Ba2 corporate
family rating to SPX Flow, Inc., the flow technology and hydraulic
technologies businesses soon to be spun-off as an independent
public company from SPX Corporation. Moody's also assigned a Ba2-PD
probability of default rating, a Ba3 rating to $600 million senior
unsecured notes and a SGL-2 speculative grade liquidity rating.
Moody's notes that the $600 million senior unsecured notes are
currently an obligation of SPX Corp. but are expected to become an
obligation of SPX Flow upon the conclusion of the spin-off. The
rating outlook is stable.
"The spin results in a smaller company than the previous SPX Corp.,
however, we believe SPX Flow is still a well-diversified global
company, with strong margins and low anticipated leverage," said
Paul Aran, Moody's Vice President -- Senior Analyst. "Although we
believe SPX Flow will have strong profitability and generate
positive free cash flow, oil and gas headwinds will pressure the
company's growth and earnings in the short term," added Aran.
Moody's assigned the following rating actions for SPX Flow, Inc.:
-- Corporate family rating, assigned Ba2
-- Probability of default rating, assigned Ba2-PD
-- Speculative liquidity rating, assigned SGL-2
-- $600 million senior unsecured notes due 2017, assigned Ba3,
LGD5
The ratings outlook is stable.
RATINGS RATIONALE
The Ba2 Corporate Family Rating ("CFR") reflects SPX Flow's global
scale, geographic footprint, and end market diversification, as
well as low anticipated leverage and commitment to maintain a
strong balance sheet. We believe the food segment will provide
predictable cash flows while the energy segment will remain under
pressure short term. The expectations for the industrial segment
will likely be somewhat muted by the slow growing economy.
The Ba3 ratings on the company's $600 million Senior Notes due
2017, reflects the Notes' position of first loss given that SPX's
unsecured notes are the most junior material obligations in the
company's capital structure. The Ba3 rating on the notes issue also
reflects the significant amount of senior secured obligations in
the company's liability structure, comprised of a $350 million
domestic revolving credit facility and $400 million Senior Secured
Term Loan.
The SGL-2 rating reflects Moody's expectation of SPX to have good
liquidity over the next 12 - 18 months. The SGL-2 is supported by
the company's modest capital expenditure, a cash position of
approximately $217 million as of December 31, 2014, the expectation
for positive free cash flow generation, and good availability under
its $350 million revolving credit facilities. The SGL-2 reflects
the expectation that SPX will remain in compliance with its
covenants over the next 12 - 18 months.
The stable outlook reflects the expectation of moderately improving
performance over the next 12 to 18 months as the company operates
as an independent public entity following the spin from SPX
Corporation.
Although not anticipated, the ratings or outlook could be
downgraded if there was a more aggressive financial policy,
deteriorating credit metrics or debt-funded acquisitions result in
Debt to EBITDA over 4 times or EBITA to Interest below 3 times on a
sustainable basis. Greater shareholder friendly actions including
large share buyback plans or a dividend that leads us to anticipate
leverage closer to the down metrics.
Given SPX's current credit metrics and Moody's expectation for
modest near-term improvement as well as the expectation that
performance will vary due to acquisitions, an upgrade in the near
term is unlikely. However, continued deleveraging and a successful
integration of future acquisitions (anticipated no sooner than
2016) with Debt to EBITDA expected to be below 3.5 times and Free
Cash Flow to Debt above 15% would provide positive ratings
traction. Nevertheless, upward ratings traction is constrained by
financing policies for acquisitions which lead to a cycle that
meaningfully leverages its balance sheet for acquisitions followed
by a deleveraging upon successful integration.
SPX Flow is a spinoff from SPX Corporation with expected annual
revenues just under $2.8 billion.
SPX Flow is comprised of three segments, food and beverage for
approximate 37% of sales, power and energy 31% sales, and the
industrial segment for 32% of sales. Although the entire segment
focuses on the flow of fluids and water, we consider it reasonably
well diversified as it serves many industries. The North America
market comprises 35% of sales, while its second largest market is
Europe at 30%. The company's large foreign exposure is anticipated
to result in higher earnings volatility as the dollar strengthens
or weakens.
SPX FLOW: S&P Assigns 'BB' Corp. Credit Rating, Outlook Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
'BB' corporate credit rating on SPX FLOW Inc. The outlook is
stable.
"In October 2014, SPX Corp. announced that its board of directors
had unanimously approved a plan to spin-off its Flow business into
a separate entity (SPX FLOW Inc.)," said Standard & Poor's credit
analyst Liley Mehta. "Upon the completion of this spin-off, which
we expect will occur in third-quarter 2015, SPX Corp. will assign
its $600 million notes due 2017 to SPX FLOW (the company has
already obtained the bondholders' consent to do so)."
The stable outlook reflects S&P's expectation that relatively
stable demand in SPX FLOW's food and beverage, and some industrial,
end markets will somewhat offset the weakness in the oil and
gas-related markets. S&P also expects that the company's EBITDA
margins will remain relatively stable. As SPX FLOW successfully
completes its separation from SPX Corp., S&P expects it to adhere
to a financial policy that supports S&P's "significant" cash flow
and leverage assessments on the company, including maintaining a
FFO-to-debt ratio of 20%-30%.
S&P could downgrade SPX FLOW if it pursues a financial policy that
is more aggressive than S&P expects, or if its operating
performance deteriorates materially from S&P's current
expectations. This could occur if it undertakes a sizeable share
repurchase program or a large debt-funded acquisition such that its
FFO-to-debt ratio falls below 20% and remains at that level.
While less likely, S&P could consider an upgrade if the company
successfully transitioned to being a stand-alone entity and adopted
a more conservative financial policy, causing its credit metrics to
improve such that they could support an "intermediate" financial
risk profile (FFO-to-debt in the 30%-45% range on a sustained
basis).
STANDARD REGISTER: Has Until Oct. 8 to File Liquidating Plan
------------------------------------------------------------
Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware extended The Standard Register Company, et
al.'s exclusive plan filing period through and including Oct. 8,
2015, and their exclusive solicitation period through and including
Dec. 7, 2015.
The Debtors sought further extension of exclusivity to give them
time to close the sale of substantially all of their assets, and,
subsequent thereto, wind down their estates. According to the
Debtors, following the closing, they intend to pursue a Chapter 11
plan of liquidation to efficiently and expeditiously conclude the
proceedings.
The Debtors said in court documents that the sale of its assets to
Taylor Corp. is expected to close by Friday, July 31.
About Standard Register
Standard Register provides market-specific insights and a
compelling portfolio of workflow, content and analytics solutions
to address the changing business landscape in healthcare, financial
services, manufacturing and retail markets. The Company has
operations in all U.S. states and Puerto Rico, and currently
employs 3,500 full-time employees and 16 part-time employees.
The Standard Register Company and 10 affiliated debtors sought
Chapter 11 protection in Delaware on March 12, 2015, with plans to
launch a sale process where its largest secured lender would serve
as stalking horse bidder in an auction.
The cases are pending before the Honorable Judge Brendan L.
Shannon and are jointly administered under Case No. 15-10541.
The Debtors have tapped Gibson, Dunn & Crutcher LLP and Young
Conaway Stargatt & Taylor LLP as counsel; McKinsey Recovery &
Transformation Services U.S., LLC, as restructuring advisors; and
Prime Clerk LLC as claims agent.
The Official Committee of Unsecured Creditors tapped Lowenstein
Sandler LLP as its counsel and Jefferies LLC as its exclusive
investment banker.
SULLIVAN INTERNATIONAL: Court OKs King & Ballow as Special Counsel
------------------------------------------------------------------
Sullivan International Group, Inc. sought and obtained permission
from the Hon. Laura S. Taylor of the U.S. Bankruptcy Court for the
Southern District of California to employ King & Ballow as special
purpose labor and employment counsel, effective as of April 28,
2015.
The Debtor anticipates that the services of King & Ballow will
include:
(a) day-to-day human resources or HR counseling;
(b) investigating and responding to any charges with outside
agencies (e.g., the EEOC, NLRB, OSHA, and DOL);
(c) drafting desired new personnel policies and forms;
(d) periodic updating of existing personnel documents, such as
handbooks, applications, and the like;
(e) strategizing on further improving risk management issues
for employment;
(f) conducting periodic EEO/harassment/other employment
training for managers;
(g) advising the Debtor on NLRB compliance and other labor and
union affairs;
(h) preparing for and negotiating collective bargaining
Agreements;
(i) advising the Debtor on WARN act compliance;
(j) strategizing with top management on labor and employment
law issues as needed; and
(k) drafting employment agreements as needed.
King & Ballow will be paid at these hourly rates:
Paul H. Duvall $320
Michael D. Oesterle $320
King & Ballow will also be reimbursed for reasonable out-of-pocket
expenses incurred.
King & Ballow's engagement will also require the payment of a
$5,000 retainer.
Paul H. Duvall, partner of King & Ballow, 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.
King & Ballow can be reached at:
Paul H. Duvall, Esq.
KING & BALLOW
6540 Lusk Blvd, Ste 250
San Diego, CA 92121
Tel: (858) 597-6000
E-mail: pduvall@kingballow.com
About Sullivan International
Sullivan International Group, Inc., an environmental engineering
provider, commenced a Chapter 11 bankruptcy case (Bankr. S.D. Cal.
Case No. 15-02281) in San Diego, California, on April 6, 2015.
Steven E. Sullivan signed the petition as chief executive officer.
The Debtor disclosed total assets of $16.27 million and total
Debts of $17.25 million. James P. Hill, Esq., at Sullivan, Hill,
Lewin, Rez & Engel, APLC, in San Diego, represents the Debtor as
counsel.
The U.S. trustee overseeing the Debtor's bankruptcy case appointed
DeNovo Constructors Inc., Tetra Tech Inc., Park Construction Co.,
Energy Solutions, Wittie Letsche & Waldo LLP, Lawson Environmental
Service, Meyer Construction Inc., Cascade Drilling LP, and McMillin
NTC 903/904 LLC to serve on the official committee of unsecured
creditors.
SUN BANCORP: Reports 2nd Quarter Income of $2.8 Million
-------------------------------------------------------
Sun Bancorp, Inc., the holding company for Sun National Bank, is
reporting net income available to common shareholders of $2.8
million on $15.3 million of net interest income for the three
months ended June 30, 2015, compared to a net loss available to
common shareholders of $24.2 million on $20.6 million of net
interest income for the same period in 2014.
For the six months ended June 30, 2015, the Company reported net
income available to common shareholders of $5.6 million on $30.5
million of net interest income compared to a net loss available to
common shareholders of $26.1 million on $42 million of net interest
income for the same period last year.
As of June 30, 2015, Sun Bancorp had $2.3 billion in total assets,
$2.1 billion in total liabilities and $252.9 million in total
shareholders' equity.
"We are generally pleased with the results of the second quarter
and even more so with the underlying trends," said Thomas M.
O'Brien, president & CEO. "The major restructuring announced at
this time last year represented an aggressive multi-pronged attack
on several legacy conditions which were creating unacceptable
operating losses year after year. In a few short quarters, we have
successfully executed on the restructuring plan as evidenced by
this quarter's results. Most impressively, operating expenses
which had been running at $32.5 million per quarter in 2013 have
been reduced by 43% to $18.4 million while capital ratios are much
improved and net interest margin has begun to rebound.
Additionally, the Company's asset quality measures which had been
deficient for many years are now among the strongest in the region.
We knew that it would be a challenge to execute on so many
initiatives while preparing to build back revenues in our new, more
narrowly focused commercial banking strategies. This renewed focus
on growth combined with our ongoing efforts to improve cost
efficiency and operate in a safe and sound manner has set the stage
for creating shareholder value."
"We began to see the results of our liquidity deployment efforts in
the second quarter," said O'Brien. "Against the backdrop of our
new relationship-based business development approach, we enjoyed
net loan growth through our commercial platform, and the Bank's
non-interest demand deposits increased each month through the
second quarter. Continued relationship-based originations and the
pending Hammonton branch sale will help us continue to further
optimize our liquidity and right size our balance sheet. While
liquidity remains elevated, we have taken a cautious approach to
its deployment in light of conflicting economic conditions."
A copy of the regulatory filing is available at:
http://is.gd/5FmVeH
About Sun Bancorp. Inc.
Sun Bancorp, Inc.is a bank holding company headquartered in Mount
Laurel, New Jersey. Its primary subsidiary is Sun National Bank, a
community bank serving customers throughout New Jersey. Sun
National Bank -- http://www.sunnationalbank.com/-- is an Equal
Housing Lender and its deposits are insured up to the legal maximum
by the Federal Deposit Insurance Corporation (FDIC).
On April 15, 2010, Sun National Bank entered into a written
agreement with the OCC which contained requirements to develop and
implement a profitability and capital plan which provides for the
maintenance of adequate capital to support the Bank's risk profile
in the current economic environment.
Sun Bancorp reported a net loss available to common shareholders of
$29.8 million in 2014, a net loss available to common shareholders
of $9.94 million in 2013, and a net loss available to common
shareholders of $50.49 million in 2012.
SUPERVALU INC: Fitch Affirms 'B' Issuer Default Rating
------------------------------------------------------
Fitch Ratings has affirmed its 'B' Issuer Default Rating (IDR) on
Supervalu Inc. (SVU), post the company's announcement that it is
exploring the potential separation of its Save-A-Lot business
through a spin-off of the business into a stand-alone, publicly
traded company. The Rating Outlook is Stable.
KEY RATING DRIVERS
SVU has reported improved operating results over the past two years
as it has cut expenses, decentralized its supermarket operations
and invested in price reductions to revive sales growth. The
affirmation takes into account these improving trends as well as
the company's positive free cash flow (FCF) and moderately high
financial leverage in the low 4x range. Should Save-A-Lot not be
spun off and continue its strong trajectory, SVU's operating and
financial profile could support a high 'B' rating.
However, a spin-off of Save-A-Lot would negatively impact SVU's
business profile by removing SVU's primary growth vehicle, which
generated $221 million of EBITDA in fiscal 2015 (27% of
consolidated EBITDA) and has significant long-term growth upside.
SVU's remaining businesses are the mature Retail Food (supermarket)
and Independent Business (wholesale grocery) segments.
These businesses generate healthy cash flow but could see modest
EBITDA pressure over time. SVU's EBITDA pro forma for a spin-off
of Save-A-Lot was $586 million in fiscal 2015. Fitch assumes that
pro forma EBITDA could drift lower over the next two years to the
$550 million-$560 million range due to soft sales and gradual
margin compression in both segments.
SVU's adjusted debt/EBITDAR was 4.0x at June 20, 2015, and Fitch
estimates it would be around 5x pro forma for a Save-A-Lot spin-off
assuming no debt is repaid. If Save-A-Lot incurs some debt in
conjunction with a spin-off and upstreams the proceeds to SVU, and
SVU uses the proceeds to pay down its debt, SVU's adjusted
financial leverage could range from 4x-5x post-spin, assuming debt
paydown that ranges from $100 million to $750 million.
Should SVU choose to sell Save-A-Lot, and broadly assuming an
EBITDA multiple of 8x-10x, the gross proceeds could range from $1.8
billion- $2.2 billion. In either a spin-off or sale, if debt
paydown is more significant and exceeds $750 million and adjusted
leverage is at or under 4x, there could be upside to the 'B'
rating.
The term loan requires the first $750 million of proceeds from a
sale of Save-A-Lot be used to pay down the term loan, as well as
50% of the proceeds in excess of $750 million up to the amount that
would cause the total secured leverage ratio to be 1.5x. Fitch
believes the company would have to obtain an amendment to the term
loan to proceed with a spin-off.
Business Trends Without a Save-A-Lot Spin-off
Save-A-Lot had healthy 5.8% identical store (ID) sales growth in
fiscal 2015, while ID sales in the retail food segment turned
positive (up 1%). Sales in the independent business were lower for
the year -- excluding the effect of the 53rd week. Consolidated
EBITDA increased to $826 million in 12 months ended June 20, 2015
from $807 million in fiscal 2015, excluding restructuring charges,
due to gross margin expansion and a reduction in losses at the
corporate segment.
On a status quo basis, Fitch expects EBITDA to be relatively stable
in the low-$800 million range over the next two years, but there
could be some longer term pressure on EBITDA from the wind-down of
the transition services agreement (TSA) with the Albertsons
entities.
Management has indicated it has plans in place to mitigate the loss
of two-thirds of the fiscal 2015 TSA revenues ($125 million)
through cost reductions and additional services revenue streams.
One such revenue stream will be from a new TSA entered into with
Haggen, Inc. (Haggen), under which SVU will provide certain
back-office services to Haggen's 164 stores. SVU will have to
develop additional cost reductions or revenue sources to mitigate
the remaining one-third, or around $65 million.
This implies there is a $65 million downside to EBITDA if SVU is
unable to mitigate these costs. A $65 million reduction in EBITDA
would push adjusted leverage back up to around 4.3x from 4.0x
currently, and SVU would still be FCF positive at around $50
million-$100 million annually at this level.
In view of its improved ID sales growth, management is accelerating
Save-A-Lot's store expansion, with plans to build 100 new stores
per year in fiscals 2016-2017, increasing to 150 new stores in
fiscal 2018. Net of store closings, this would equate to 5%-7%
annual square footage growth and will drive capex up to $300
million-$320 million in fiscal 2016 from $239 million in fiscal
2015. Fitch estimates this will constrain FCF to $100 million-$150
million annually, compared with $169 million in fiscal 2015.
Higher EBITDA and modest debt repayment led to a reduction in
adjusted debt/EBITDAR to 4.0x at June 20, 2015 from 4.1x at the end
of fiscal 2015 and 4.3x at the end of fiscal 2014. On a status quo
basis, Fitch expects FCF will be used in part for debt reduction,
but that off-balance sheet debt (8x rents) will grow as a result of
the store expansion at Save-A-Lot, leading to steady adjusted
leverage in the low 4.0x range.
RECOVERY ANALYSIS
Fitch's ratings on individual debt issues are based on the IDR and
the expected recovery in a distressed scenario. Fitch has
allocated a distressed enterprise value of $2.7 billion (after
administrative claims, and assuming Save-A-Lot is not spun off)
across the capital structure. Fitch arrives at this valuation by
multiplying an assumed post-default EBITDA of approximately $610
million by a 4.9x multiple. The post-default EBITDA assumes a 33%
decline in EBITDA at retail food and the independent business, and
flat EBITDA at Save-A-Lot. The blended multiple is based on 4.0x
for the retail food segment, 4.5x for the independent business and
6.5x for Save-A-Lot.
The $1 billion revolving ABL facility, which is assumed to be 70%
drawn, is backed by inventories, receivables and prescription
files, which Fitch collectively values at $1.2 billion. The $1.5
billion term loan is backed by real estate with a book value of
$776 million and an estimated market value of $1 billion, and a
pledge of the shares of Moran Foods, LLC (Save-A-Lot), which Fitch
values at $1.4 billion, assuming a 6.5x multiple of EBITDA (net of
allocated corporate expenses). As such, both facilities are
assumed to receive a full recovery, leading to a rating on both
facilities of 'BB/RR1'.
The senior unsecured notes are rated 'B/RR4', implying a 30%-50%
recovery in a going concern scenario. Fitch believes in a
liquidation scenario, SVU's company pension plan's underfunding of
$532 million and MEPP's underfunding of $447 million would rank
ahead of the senior unsecured notes given the unique structural
priorities available to the PBGC and pension plan fiduciaries.
Therefore, in a liquidation scenario, there would be no recovery to
the senior notes.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for SUPERVALU
include:
-- The rating case assumes that it is probable that the company
separates the Save-A-Lot business.
-- Annual revenue growth of 0% to 1%, excluding Save-A-Lot.
-- EBITDA trends towards $550 million-$560 million over the
next 24 months, versus a pro forma $586 million in fiscal
2015.
-- The company remains FCF positive.
-- Leverage is in the low 4x to 5x range.
RATING SENSITIVITIES
Future developments that may, individually or collectively, lead to
a positive rating action include more robust top-line growth and
steady to improving EBITDA, steady results in the Independent
Business and Retail food segments, effective management of the TSA
wind down, and adjusted debt/EBITDAR that is at or below 4x.
Future developments that may, individually or collectively, lead to
a negative rating action include more negative operating trends
across the business, with top line declining in the 2%-3% range,
FCF turning negative, and adjusted debt/EBITDAR that starts
trending meaningfully above the 5x range.
LIQUIDITY
SVU's liquidity is adequate, supported by a $1 billion ABL credit
facility, with a borrowing base management estimates will range
from $900 million to $1 billion. The borrowing base totaled $947
million as of Feb. 28, 2015, against which the company had no
borrowings and $76 million of letters of credit. In addition,
absent a separation of Save-A-Lot, Fitch projects FCF to be around
$100 million-$150 million annually over the next three years.
FCF would also be positive assuming a spin-off of the Save-A-Lot
business.
FULL LIST OF RATING ACTIONS
Fitch has affirmed these ratings:
SUPERVALU INC.
-- IDR at 'B';
-- $1 billion secured revolving credit facility at 'BB/RR1';
-- $1.5 billion secured term loan at 'BB/RR1';
-- Senior unsecured notes at 'B/RR4'.
The Rating Outlook is Stable.
SWIFT TRANSPORTATION: Moody's Rates New $1.2BB Secured Loans 'Ba1'
------------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to the new senior
secured credit facility of Swift Transportation Co., LLC ("Swift"),
comprising a $600 million senior secured revolving line of credit
and a $680 million senior secured Term Loan A. The new facility
replaces Swift's previous $450 million revolving line of credit and
refinances outstanding amounts under the company's Term Loan A of
$488 million and Term Loan B of $395 million. Swift's Corporate
Family Rating ("CFR") is Ba2 and the ratings outlook is stable.
RATINGS RATIONALE
The Ba2 CFR for Swift takes into account the company's position as
a leading provider of transportation services in the North American
truckload market. The rating also reflects the company's attractive
operating margins, which Moody's calculates at approximately 9%, on
an adjusted basis, in each of the last four years. With efficiency
improvements in the Central Refrigerated segment and better asset
utilization in its Intermodal segment, Moody's believes that Swift
should be able to maintain or possibly improve this level of
operating margin, despite increasing wages due to persistent driver
shortages. The competitive advantages afforded by the company's
young fleet of tractors, augmented by Swift's initiative to shorten
its tractor trade-in cycle to 36 - 48 months, are also supportive
of the Ba2 rating.
Swift will maintain a good liquidity profile in Moody's estimation
(SGL-2). Nevertheless, whilst discretionary, the aforementioned
shortening of its tractor trade-in cycle will elevate capital
expenditures significantly for some time, constraining free cash
flow relative to average historical levels of approximately $100
million annually.
The Ba1 ratings of Swift's new $600 million revolving line of
credit and $680 million Term Loan A reflect the senior position of
these instruments in Moody's Loss Given Default ("LGD") analysis.
The facility is secured by substantially all assets of the company
and is guaranteed by Swift's main operating subsidiaries. As a
result, the senior facility is rated one notch higher than the
company's Ba2 CFR.
The stable ratings outlook is predicated on Moody's expectation
that Swift is able to grow its business and maintain or improve its
operating margins in a moderately improving macro-economic
environment. Anticipating robust capital expenditures and an
adverse effect of increased cash taxes on cash flow, Moody's
expects leverage to remain at current levels in the near-term.
The ratings for Swift could be downgraded if the company's
operating margin would deteriorate to below 8.0% for a sustained
period of time, adversely affecting cash flow generation. Downward
pressure on the ratings is also warranted if debt-to-EBITDA were to
increase to more than 3.0 times or if EBIT-to-interest were to be
less than 4.0 times for a prolonged period.
An upgrade of the ratings for Swift could be considered if the
company is able to sustainably improve its operating margins and
ability to generate free cash flow, while maintaining adequate
investments in its fleet. Debt-to-EBITDA of 2.0 times or less and
(Retained Cash Flow-capex)-to-debt of at least 6.5% would be
supportive of an upward movement in the ratings.
Assignments:
Issuer: Swift Transportation Co., LLC
Senior Secured Bank Credit Facility (Local Currency), Assigned Ba1
(LGD3)
Swift Transportation Co., LLC, headquartered in Phoenix, Arizona,
is one of the largest providers of truckload transportation
services in North America, with line-haul, dedicated,
temperature-controlled and intermodal freight services. The company
generated revenues of $4.3 billion in the last 12 months ended
March 2015.
TOLLENAAR HOLSTEINS: Seeks Authority to Surcharge Collateral
------------------------------------------------------------
Russell K. Burbank, the duly appointed Chapter 11 Trustee of
Tollenaar Holsteins, et al., asks the United States Bankruptcy
Court for Eastern District of California, Sacramento Division, for
authority to surcharge the collateral of Hartford Insurance Company
and Bank of the West.
The Trustee asserted that the surcharge of Hartford's collateral is
sought to pay or reimburse the estates for administrative expenses
paid or incurred by the Trustee solely to preserve and protect the
value of Hartford's secured interest in certain property and
equipment of the estates. The Trustee also seeks the authority to
net the approved surcharge amount against funds any sums owed to
Hartford pursuant to its loan to the estates approved by the Court
on May 6, 2015.
With respect to Bank of the West, the Trustee proposes to surcharge
its collateral for past expenditures budgeted and paid during the
Trustee's tenure and prospectively for the balance of the Trustee's
and his professional's fees and expenses incurred by and during the
Trustee’s tenure as Chapter 11 Trustee.
A hearing for the Motion will be on August 18, 2015 at 11:00 a.m.
Chapter 11 Trustee is represented by:
Richard A. Lapping, Esq.
Law Office of Richard A. Lapping
540 Pacific Avenue
San Francisco, California 94133
Tel.: 415 399-1015
Fax: 415 399-1038
Email: Richard@LappingLegal.com
About Tollenaar Holsteins
Tollenaar Holsteins and its affiliates Friendly Pastures, LLC, and
T Bar M Ranch, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Cal. Case No. 15-20840) on Feb. 4,
2015. The case is assigned to Judge Christopher D. Jaime.
The Debtors' counsel is Jason E. Rios, Esq., at Felderstein
Fitzgerald Willoughby & Pascuzzi LLP, in Sacramento, California.
The cases of Tollenaar Holsteins, Friendly Pastures, LLC, and T Bar
M Rancg, LLC, are jointly administered under the lead case of
Tollenaar Holsteins, Case No. 15-20840.
Russell K. Burbank was appointed as the Chapter 11 trustee for the
Debtor.
TRUMP ENTERTAINMENT: Exclusivity Extended Through Feb. 2016
-----------------------------------------------------------
Judge Kevin Gross of the U.S. Bankruptcy Court for the District of
Delaware extended Trump Entertainment Resorts, Inc., et al.'s
exclusive plan filing period through and including Dec. 3, 2015,
and their exclusive solicitation period through and including Feb.
3, 2016.
The Debtors sought further extension of their exclusive periods to
allow them to maintain the Exclusive Periods in the unlikely event
that the Plan of Reorganization does not become effective.
On March 12, 2015, the Court entered an order confirming the
Debtors' Third Amended Joint Plan of Reorganization. The Effective
Date has not yet occurred, as certain conditions precedent to the
occurrence of the Effective Date, including the CBA Order having
become a Final Order, have not yet been met. Although the Debtors
believe that these conditions precedent will ultimately be met, out
of an abundance of caution, the Debtors sought an extension of
their exclusive periods.
About Trump Entertainment Resorts
Trump Entertainment Resorts Inc., owner of the Atlantic City
Boardwalk casinos that bear the name of Donald Trump, returned to
Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on Sept.
9, 2014, with plans to shutter its casinos.
TER and its affiliated debtors own and operate two casino hotels
located in Atlantic City, New Jersey. TER said it will close the
Trump Taj Mahal Casino Resort by Sept. 16, 2014, and, absent union
concessions, the Trump Plaza Hotel and Casino by Nov. 13, 2104.
The Debtors have sought an order authorizing the joint
administration of their Chapter 11 cases and the consolidation
thereof for procedural purposes only. Judge Kevin Gross presides
over the Chapter 11 cases.
The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as
counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan
Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as
noticing and claims agent.
TER estimated $100 million to $500 million in assets as of the
bankruptcy filing.
The Debtors as of Sept. 9, 2014, owe $285.6 million in principal
plus accrued but unpaid interest of $6.6 million under a first lien
debt issued under their 2010 bankruptcy-exit plan. The Debtors
also have trade debt in the amount of $13.5 million.
* * *
Judge Kevin Gross of the U.S. Bankruptcy Court for the District of
Delaware on March 12, 2015, confirmed Trump Entertainment Resorts,
Inc., et al.'s Third Amended Joint Plan of Reorganization and
Disclosure Statement pursuant to Section 1129 of the Bankruptcy
Code.
The Debtors filed on January 5, 2015, the Plan and accompanying
Disclosure Statement to, among other things, provide that holders
of General Unsecured Claims will receive Distribution Trust
Interests, which will include $1 million in cash and the proceeds,
if any, of certain avoidance actions. Under the revised plan,
holders of general unsecured claims are estimated to recover 0.47%
to 0.43% of their total allowed claim amount. The Amended Plan
also includes language reflecting the recently-approved $20
million loan from Carl Icahn.
A full-text copy of the Findings of Fact is available for free at:
http://bankrupt.com/misc/TRUMPENTERTAINMENT_Plan_Findings.pdf
VERINT SYSTEMS: Moody's Affirms 'Ba3' Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service, revised Verint Systems Inc.'s ratings
outlook to positive from stable and affirmed the company's Ba3
corporate family rating and Ba2 ratings on its senior secured debt.
The outlook revision is driven by the expectation of organic
revenue, EBITDA and cash flow growth and conservative financial
policies.
RATINGS RATIONALE
Verint's Ba3 rating reflects the moderately high leverage level
(approximately 4.3x at LTM April 30, 2015, including purchase
accounting adjustments) which is offset by very strong free cash
flow to debt metrics (approximately 20% at LTM April 30, 2015). The
ratings also consider by strong market positions in the workforce
optimization software industry and video and communications
security systems industries. These strong positions are bolstered
by Verint's expertise in software that analyzes unstructured data
(i.e. conversations, email, chat, video etc.) and their development
of analytic software tools for specific industries. Verint is
acquisitive however and the ratings reflect the expectation the
company will continue to use a combination of cash and occasionally
debt for future acquisitions. The ratings are supported by the
company's good near term liquidity driven by its strong cash
position, and strong levels of free cash flow.
The ratings could be upgraded if the company can grow organically
and maintain leverage under 4x and free cash flow to debt close to
or above 20%. Though the positive outlook accommodates a modest
amount of acquisitions, large debt financed acquisitions could
cause the outlook to return to stable or if large enough, could
cause negative ratings pressure. The ratings could be downgraded if
leverage exceeds 4.5x or free cash flow to debt is less than 15% on
other than a temporary basis. The ratings could be lowered if
revenue, EBITDA and free cash flow were to deteriorate,
particularly if driven by a change in market position.
Liquidity as reflected in the SGL-1 rating is very good based on
cash balances and short term investments of $390 million as of
April 2015, an expectation of free cash flow of over $175 million
over the next year and an undrawn $300 million revolver.
The following ratings were affected:
Affirmations:
Issuer: Verint Systems Inc.
-- Corporate Family Rating, Affirmed Ba3
-- Probability of Default Rating, Affirmed Ba3-PD
-- Speculative Grade Liquidity Rating, Affirmed SGL-1
-- Senior Secured Bank Credit Facilities, Affirmed Ba2 (LGD2)
Outlook Actions:
Issuer: Verint Systems Inc.
-- Outlook, Changed To Positive From Stable
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 US, Canada and EMEA published in June 2009.
Verint Systems Inc., headquartered in Melville, NY, is a leading
provider of analytic software and related products for the
workforce optimization and customer engagement software industry,
and video intelligence, communications and cyber security systems
industries. Verint had revenues of $1.1 billion for the twelve
months ended April 30, 2015.
VERITEQ CORP: Effects 1-for-10,000 Reverse Stock Split
------------------------------------------------------
VeriTeQ Corporation announced that its Board of Directors and FINRA
have approved a reverse split of the Company's common stock at a
ratio of 1-for-10,000, commencing at the open of trading on July
29, 2015.
The Company's ticker symbol will be VTEQD for 20 trading days to
designate that it is trading on a post-reverse split basis.
VeriTeQ's post-split common stock will trade under the new CUSIP
Number 923449 300. As a result of the reverse stock split, each
10,000 pre-split shares of common stock outstanding will
automatically combine into one new share of common stock without
any action on the part of the respective holders, and the number of
outstanding common shares will be reduced from approximately 4.4
billion shares to approximately 446,000 shares. The reverse stock
split will also apply to common stock issuable upon the conversion
of outstanding notes payable and convertible preferred stock, and
upon the exercise of outstanding warrants and stock options.
The Company's transfer agent, VStock Transfer, LLC, will provide
instructions to stockholders regarding the process for exchanging
shares. No fractional shares will be issued as a result of the
reverse stock split, and stockholders who otherwise would be
entitled to a fractional share will receive, in lieu thereof, a
cash payment which will equal the product obtained by multiplying
(a) the fraction to which the stockholder would otherwise be
entitled; by (b) the per share closing sales price of the Company's
common stock on the effective date of the reverse stock split.
The reverse stock split was previously approved by the Company's
Board of Directors and ratified by the Company's stockholders on
May 26, 2015.
About VeriTeQ
VeriTeQ (formerly known as Digital Angel Corporation) develops
innovative, proprietary RFID technologies for implantable medical
device identification, and dosimeter technologies for use in
radiation therapy treatment. VeriTeQ --
http://www.veriteqcorp.com/-- offers the world's first FDA
cleared RFID microchip technology that can be used to identify
implantable medical devices, in vivo, on demand, at the point of
care. VeriTeQ's dosimeters provide patient safety mechanisms
while measuring and recording the dose of radiation delivered to a
patient in real time.
Veriteq reported a net loss of $3.91 million on $151,000 of sales
for the year ended Dec. 31, 2014, compared to a net loss of $18.2
million on $18,000 of sales for the year ended Dec. 31, 2013.
As of March 31, 2015, the Company had $1.66 million in total
assets, $9 million in total liabilties, $1.84 million in series D
preferred stock, and a $9.18 million total stockholders' deficit.
EisnerAmper 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
recurring net losses, and at Dec. 31, 2014, had negative working
capital and a stockholders' deficit. These events and conditions
raise substantial doubt about the Company's ability to continue as
a going concern.
WESTMORELAND RESOURCE: Posts $6.4 Million Net Loss for Q2
---------------------------------------------------------
Westmoreland Resource Partners, LP (successor) filed with the
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss of $6.4 million on $59.5 million of
total revenues for the three months ended June 30, 2015. Oxford
Resource Partners, LP (predecessor) reported a net loss of $3.3
million on $82 million of total revenues for the three months ended
June 30, 2014.
Westmoreland Resource Partners, LP (successor) reported a net loss
of $16.7 million on $127.1 million of total revenues for the six
months ended June 30, 2015, compared to a net loss of $13.9 million
on $160 million of total revenues for the same period last year.
As of June 30, 2015, Westmoreland Resource had $289.9 million in
total assets, $234.7 million in total liabilities and $55.2 million
in total partners' capital.
On Dec. 31, 2014, pursuant to a Purchase Agreement dated Oct. 16,
2014, Westmoreland Coal Company acquired, for $33.5 million in
cash, 100% of the equity of its GP from (i) the holders of all of
the Company's GP's outstanding Class A Units, AIM Oxford Holdings,
LLC and C&T Coal, Inc., (ii) the holders of all of the Company's
GP's outstanding Class B Units, certain former executives of the
Company's GP, and (iii) the holders of all of the outstanding
warrants for the Company's GP's Class B Units. At the same time,
WCC also acquired, for no additional consideration, (i) 100% of the
Partnership's outstanding subordinated units from AIM and C&T,
which subordinated units were then converted to liquidation units,
and (ii) 100% of the Partnership's outstanding warrants for
subordinated units from the Warrantholders, which warrants were
then canceled by WCC.
Accordingly, the accompanying consolidated financial statements are
presented for two periods, Predecessor and Successor, which relate
to the accounting periods preceding and succeeding the completion
of the acquisition.
A copy of the Form 10-Q is available at http://is.gd/t1VPnK
About Westmoreland Resource
Oxford Resource Partners, LP, now known as Westmoreland Resource
Partners, LP, is a producer of high value steam coal, and is the
largest producer of surface mined coal in Ohio.
Westmoreland Resource reported a net loss of $28.6 million on $322
million of total revenues for the year ended Dec. 31, 2014,
compared with a net loss of $23.7 million on $347 million
of total revenues for the year ended Dec. 31, 2013.
Z'TEJAS SCOTTSDALE: Has Interim OK to Tap $320K DIP Loan
--------------------------------------------------------
Judge Paul Sala of the U.S. Bankruptcy Court for the District of
Arizona gave Z'Tejas Scottsdale, LLC, et al., interim authority to
use $320,000 of the $725,000 postpetition loan extended by
Cornbread Ventures, LP.
As previously reported by The Troubled Company Reporter,
Cornbread's DIP financing matures on the earliest to occur of (i) a
sale of substantially all assets of the Debtors, (ii) a default,
and (iii) Dec. 31, 2015. There are no milestone requirements under
the DIP financing agreement. The postpetition borrowings will bear
interest at 12% per year.
The Debtors are also given interim authority to use cash
collateral. As of the Petition Date, the Debtors have secured
obligations of (a) $5,931,552 in secured debt under a first lien
secured credit facility provided by KarpReilly Investments, LLC, as
successor to National Bank of Arizona, and (b) $663,662 that is
secured by a lien and judgment against the assets of Z'Tejas
Chandler, LLC, pursuant to a loan agreement currently held by
Cornbread Ventures.
As a condition to their consent to the relief granted in the
proposed interim order authorizing access to financing and use of
cash collateral, Cornbread and KRI are entitled to adequate
protection in the form of replacement liens.
The Final Hearing will be held on Aug. 19, 2015, at 9:00 a.m.
(Arizona time). Objections are due Aug. 12.
About Z'Tejas Scottsdale
Based in Scottsdale, Arizona, Z'Tejas Scottsdale, LLC, et al.,
operate 9 Z'Tejas, Z'Tejas Southwestern Grill and Taco Guild
restaurants within the United States. The restaurant chain was
founded in 1989 by Larry Foels and Guy Villavso. Z'Tejas boasts of
exceptional and innovative food and a unique look at each location
to provide a "non-chain feel". Five restaurants are in Arizona,
three are in Austin, Texas, and one in Costa Mesa, California. The
company has 300 full time employees and 425 part-time employees.
Z'Tejas Scottsdale and its affiliates sought Chapter 11 protection
(Bankr. D. Ariz. Lead Case No. 15-09178) in Phoenix on July 22,
2015. The cases are assigned to Judge Paul Sala.
The Debtors have tapped Nussbaum Gillis & Dinner, P.C., and
Pachulski Stang Ziehl & Jones LLP as attorneys, and Mastodon
Ventures, Inc., as investment banker.
The 11 U.S.C. Sec. 341(a) meeting of creditors is slated for Aug.
25, 2015.
Lender Cornbread Ventures, LP, is represented by:
Jordan A. Kroop, Esq.
PERKINS COIE LLP
2901 North Central Avenue, Suite 2000
Phoenix, AZ 85012
Email: jkroop@perkinscoie.com
ZOGENIX INC: Cancels Sales Agreement with Cantor Fitzgerald
-----------------------------------------------------------
Zogenix, Inc., gave notice to Cantor Fitzgerald & Co. that it was
terminating its Controlled Equity OfferingSM Sales Agreement, dated
Nov. 6, 2014, pursuant to Section 12(b) of the Cantor Agreement.
No shares were, or will be, offered or sold pursuant to the Cantor
Agreement. The termination of the Cantor Agreement will be
effective on Aug. 6, 2015.
The Company separately disclosed that it estimates that its cash
and cash equivalents were approximately $77.4 million as of
June 30, 2015. This amount is unaudited and preliminary and is
subject to completion of financial closing procedures. As a
result, this amount may differ from the amount that will be
reflected in our consolidated financial statements as of and for
the quarter ended June 30, 2015.
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.
Zogenix reported net income of $8.58 million in 2014 following a
net loss of $80.85 million in 2013.
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.
Ernst & Young LLP, in San Diego, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2014, citing that the Company's
recurring losses from operations and negative cash flows from
operating activities raise substantial doubt about its ability to
continue as a going concern.
[*] Reich Brothers Expands Decommissioning Capabilities
-------------------------------------------------------
Reich Brothers Holdings, LLC, a full-service capital asset
solutions specialist that focuses on the acquisition of distressed
and surplus industrial assets, on July 29 announced the expansion
of its offerings to include a full suite of decommissioning
services. The new division of the company will be called Reich
Brothers Decommissioning LLC.
"This division is the perfect complement to the services that Reich
Brothers currently offers," said Jonathan Reich, Co-CEO of Reich
Brothers. "Jim Hall has over 40 years of experience in the
demolition, remediation and asset recovery industry. From his
early days as a laborer through his project management experience,
he brings a unique perspective to the challenges inherent in the
demolition of complex facilities and their respective environmental
issues. His ability to manage projects to a safe, cost effective
and timely conclusion speaks volumes about his importance both to
our clients and Reich Brothers."
With offices in New York, California, Illinois, Florida and
Louisiana, Reich Brothers LLC has three divisions: asset
acquisition, decommissioning and lending. The company is unique in
its ability to acquire intact manufacturing facilities inclusive of
real estate and machinery and equipment, solve demolition,
environmental and remediation challenges and provide financing
solutions including sale lease-backs and term loans.
Mr. Reich added, "The addition of Jim and his team create a
one-of-a-kind offering that sets us apart from other industry
participants. Reich Brothers has always had the ability to
navigate asset acquisition and disposition issues and develop
sophisticated transactional structures, but through the addition of
this decommissioning expertise we are truly a full-service provider
of solutions. We are pleased to welcome Jim and his team to the
Reich Brothers group of companies."
Jim Hall, President of Reich Bros Decommissioning said, "I am
pleased to be joining such a well-respected and successful group of
professionals. Reich Brothers have a reputation in the industry
for being exceptional problem solvers with the financial capability
to configure and close complex transactions. By adding my
decommissioning expertise, we will create the first full-service
offering of its kind. It is my pleasure to work with Jonathan and
Adam Reich and their team to exceed our customers' expectations."
About Reich Brothers Holdings, LLC
Reich Brothers Holdings, LLC -- http://www.reichbros.com-- is a
specialized, hands-on provider of capital asset solutions and
focuses on the acquisition and disposition of distressed and
surplus industrial assets. The Company's suite of solutions also
includes a lending division, Reich Bros Business Solutions, which
provides term loans and sale-leasebacks customized to meet unique
financial situations. The Company's Co-CEOs have established a
long track record of successful value realization for clients and
partners alike.
About Victory Park Capital
Jonathan and Adam Reich, Co-CEOs of Reich Brothers LLC --
http://www.victoryparkcapital-- are partnered with Victory Park
Capital (VPC). VPC is a privately held registered investment
advisor dedicated to alternative investing in middle market
companies across a diversified range of industries. Founded in
2007, VPC is headquartered in Chicago and has approximately $3BN
under management.
[*] Small Business Owners Believe Disability to Lead to Bankruptcy
------------------------------------------------------------------
A majority of America's small business owners (53%) believe that a
personal long-term disability will lead to the likely bankruptcy of
their business.
InsureWell, an online disability insurance marketplace for small
businesses and professionals, polled over a hundred small
businesses nationally, finding that 19% of small business owners
believe that in the event of their long-term disability it is a
certainty that the business would enter bankruptcy.
Bill Unrue, CEO of InsureWell, said: "These findings underscore
that the majority of small businesses succeed or fail on the basis
of a single key individual, the owner. Far too many small business
owners however forego the necessary protection to insure against
their potential loss to the business due to long-term disability.
Business Overhead Expense (BOE) insurance is absolutely critical
for small business owners to protect their long-term investment and
equity in the business."
In addition to 19% citing bankruptcy as a certainty, an additional
14% stated bankruptcy to be a very high probability (above 75%
likelihood), with 20% of small business owners defining insolvency
as a strong likelihood (above 50% likelihood).
The loss of the business owner can be devastating for the many
small businesses which operate on the day-to-day leadership of the
business owner, his or her personal business relationships and
tight working capital. All business owners should have two types
of disability coverage: individual coverage to protect their
personal income, and Business Overhead Expense (BOE) insurance
which can help by paying a portion of overhead expenses, such as
the owner's salary, in the event of a business owner's disability.
BOE insurance premiums are also tax deductible, making it a sound
financial and business risk investment.
Given many small business owners sacrifice salary to build capital
within the firm, a bankruptcy can also be devastating for the
long-term financial security of a business owner's family, due to
the loss of equity when the business is closed down.
Business Overhead Expense insurance is also becoming increasingly
critical as more and more small business owners continue to work
into their late sixties and seventies, where the likelihood of a
disability is significantly higher.
About InsureWell
InsureWell.com is a consumer advocate and national online
disability insurance marketplace for individuals, small businesses
and financial intermediaries. The company leverages technology,
data analytics, and informatics to enhance the consumer digital
experience and develop next-generation technology-enabled insurance
solutions. InsureWell partners with the major insurance carriers.
[*] The Deal Announces Results of Q2 2015 Bankruptcy League Tables
------------------------------------------------------------------
The Deal announced the results of its quarterly rankings of the top
firms and professionals involved in active bankruptcy cases for the
second quarter of 2015. Collected data captures only active
bankruptcy work on ongoing U.S. and Canadian cases.
"In recent months, advisers said they saw distress, particularly in
the oil and gas sector, due to a number of factors, including
supply outpacing the increase in demand," said Kelsey Butler,
bankruptcy reporter at The Deal. "Advisers expect this to not only
continue, but to also cause a ripple effect for the rest of 2015
that will negatively impact those that supply goods."
League Table highlights:
Akin Gump Strauss Hauer & Feld LLP moved to the top spot for
bankruptcy law firms by volume with $1,070.9 billion in
liabilities, followed by Vedder Price PC with $1,031.0 billion in
liabilities. Duane Morris LLP was ranked third, up three spots
from sixth in Q1 2015, with $977.9 billion in liabilities. DLA
Piper retained its ranking of fourth with $946.0 billion in
liabilities.
Among lawyers by volume, the top five bankruptcy lawyers retained
their rankings from last quarter. Douglas Rosner (Goulston & Storrs
PC) ranked first, followed by Richard Hahn (Debevoise & Plimpton
LLP), Scott Davidson (King & Spalding LLP), Daniel Golden (Akin
Gump Strauss Hauer & Feld LLP) and Peter Gilhuly (Latham & Watkins
LLP).
For investment banks by volume, the top three banks kept their
rankings since Q2 2014. Blackstone Group LP maintained its lead
with $831.4 billion in liabilities, followed by Miller Buckfire &
Co. LLC in second place with $726.1 billion in liabilities.
Jefferies LLC was in third place with $118.3 billion in
liabilities. Solic Capital Advisors LLC remained in the fourth
spot from last quarter with $65.0 billion in liabilities.
Millstein & Co. moved up two spots to rank fifth with $69.6 billion
in liabilities.
The top three investment bankers kept their rankings from Q2 2014
by volume with Timothy Coleman (Blackstone Group LP) in the lead,
followed by Stuart Erickson (Miller Buckfire & Co. LLC) and Leon
Szlezinger (Jefferies LLC). Steven Zelin (Blackstone Group LP)
moved up one spot from last quarter to rank fourth.
The full suite of rankings is available now on The Deal, and the
full report is also available at:
http://www.thedeal.com/pdf/BLTQ22015.pdf
About The Deal's Bankruptcy League Tables
The Deal's Bankruptcy League Tables are the industry's only league
tables focused solely on active bankruptcy cases. The Bankruptcy
League Tables by volume involve only active U.S. bankruptcy cases
of debtors with liabilities of $10 million or more. The rankings
are based on the aggregation of those liability values. The table
reflects the number of active cases fitting that criteria and may
not characterize the total number of active cases. Firms and
professionals only get one credit for each active case, not each
active assignment. The Bankruptcy League Tables by number involve
U.S. and Canadian bankruptcy cases irrespective of debtor asset
size. Professionals receive credit for multiple assignments on one
case.
About The Deal
The Deal -- http://www.thedeal.com-- is a media and relationship
capital company providing over 100,000 users with business
opportunities sourced from proprietary deal news and a relationship
discovery tool. Law firms, investment banks, private equity and
hedge funds use The Deal's insight and analysis about potential and
announced transactions to find their next deal and BoardEx's
service and database for building relationships. The Deal has
offices in New York, London, Washington, D.C., Petaluma, CA and
Chennai, India.
[^] BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and Consumer
-------------------------------------------------------------------
Authors: Teresa A. Sullivan, Elizabeth Warren,
& Jay Westbrook
Publisher: Beard Books
Softcover: 370 Pages
List Price: $34.95
Review by: Susan Pannell
Order your personal copy today at
http://www.beardbooks.com/beardbooks/as_we_forgive_our_debtors.html
So you think you know the profile of the average consumer
debtor: either deadbeat slouched on a sagging sofa with a three-
day growth on his chin or a crafty lower-middle class type
opting for bankruptcy to avoid both poverty and responsible debt
repayment.
Except that it might be a single or divorced female who's the
one most likely to file for personal bankruptcy protection, and
her petition might be the last stage of a continuum of crises
that began with her job loss or divorce. Moreover, the dilemma
might be attributable in part to consumer credit industry that
has increased its profitability by relaxing its standards and
extending credit to almost anyone who can scribble his or her
name on an application.
Such are among the unexpected findings in this painstaking study
of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas
during the seven-year period from 1981 to 1987. Rather than
relying on case counts or gross data collected for a court's
administrative records, as has been done elsewhere, the authors
use data contained in the actual petitions. In so doing, they
offer a unique window into debtors' lives.
The authors conclude that people who file for bankruptcy are, as
a rule, neither impoverished families nor wily manipulators of
the system. Instead, debtors are a cross-section of America. If
one demographic segment can be isolated as particularly debt-
prone, it would be women householders, whom the authors found
often live on the edge of financial disaster. Very few debtors
(3.7 percent in the study) were repeat filers who might be
viewed as abusing the system, and most (70 percent in the study)
of Chapter 13 cases fail and become Chapter 7s. Accordingly, the
authors conclude that the economic model of behavior--which
assumes a petitioner is a "calculating maximizer" in his in his
decision to seek bankruptcy protection and his selection of
chapter to file under, a profile routinely used to justify
changes in the law--is at variance with the actual debtor
profile derived from this study.
A few stereotypes about debtors are, however, borne out. It is
less than surprising to learn, for example, that most debtors
are simply not as well-off as the average American or that while
bankrupt's mortgage debts are about average, their consumer
debts are off the charts. Petitioners seem particularly
susceptible to the siren song of credit card companies. In the
study sample, creditors were found to have made between 27
percent and 36 percent of their loans to debtors with incomes
below $12,500 (although the loans might have been made before
the debtors' income dropped so low). Of course, the vigor with
which consumer credit lenders pursue their goal of maximizing
profits has a corresponding impact on the number of bankruptcy
filings.
The book won the ABA's 1990 Silver Gavel Award. A special 1999
update by the authors is included exclusively in the Beard Book
reprint edition.
*********
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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***