/raid1/www/Hosts/bankrupt/TCR_Public/151209.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, December 9, 2015, Vol. 19, No. 343
Headlines
ALBERT JACOBS: Case Summary & 6 Largest Unsecured Creditors
ALPHA NATURAL: Wants Approval of $7.4-Mil. KEIP for Insiders
AMC ENTERTAINMENT: Moody's Rates Proposed Secured Loans 'Ba1'
AMC ENTERTAINMENT: S&P Assigns 'BB' Rating on $1.03BB Senior Loans
AMERICAN MEDIA: S&P Raises CCR to 'CCC+', Outlook Negative
ASPECT SOFTWARE: Moody's Lowers CFR to Caa2, Outlook Negative
ATLANTIC & PACIFIC: To Sell Old Tappan Assets to Estevez Markets
BANNING LEWIS: Abatement of Appeal Extended Until Feb. 15
BINDER & BINDER: Dec. 21 Hearing on Creditors' Plan Disclosures
BLUE SUN: $4.76MM Horton Credit Bid Underpins Liquidating Plan
BLUE SUN: Committee Objects to Horton Sale, Disclosure Statement
BLUE SUN: Nodaway, FCS Object to Approval of Disclosure Statement
BOOMERANG TUBE: Says Chapter 11 Exit May Now Cost $40 Million
BTB CORP: Exit Plan Proposes to Pay Off Unsecureds in 5 Years
CACHE INC: Has Until Feb. 1 to Propose Chapter 11 Plan
CALVERT DEVELOPMENT: Case Summary & Top Unsecured Creditor
CENVEO INC: S&P Lowers CCR to 'CCC+' on High 2017 Debt Maturities
DDMG ESTATE: DIP Lenders Extend Forbearance Period to Dec. 18
DEFENSE HOLDINGS: Voluntary Chapter 11 Case Summary
DIOCESE OF DULUTH: Case Summary & 18 Largest Unsecured Creditors
ENCLAVE AT BOYNTON: US Trustee Yet to Appoint Creditors' Committee
ENERGY & EXPLORATION: Case Summary & 13 Top Unsecured Creditors
ENERGY & EXPLORATION: Files for Chapter 11 to Reorganize
ENERGY & EXPLORATION: Says It's Business as Usual While in Ch. 11
ENLINK MIDSTREAM: S&P Rates Convertible Preferred Units 'BB'
FJK PROPERTIES: US Trustee Yet to Appoint Creditors' Committee
FRAC SPECIALISTS: Plan Promises 20% Recovery for Unsecureds
FREESCALE SEMICONDUCTOR: S&P Raised Then Withdrew CCR
FUHU INC: Case Summary & 20 Largest Unsecured Creditors
FUHU INC: In Chapter 11 with Deal to Sell to Mattel for $9.5M
GRAHAM GULF: Creditors' Meeting Adjourned to Dec. 15
GT ADVANCED: Dec. 2 Auction of ASF Furnaces Cancelled
GWE TEMPE: Case Summary & 20 Largest Unsecured Creditors
HACIENDAS GRANDES: Case Summary & Largest Unsecured Creditor
HASTINGS INSURANCE: S&P Affirms Then Withdraws 'B-' ICR
HUTCHESON MEDICAL: Ch. 11 Trustee Seeks to Use Sale Proceeds
HUTCHESON MEDICAL: County Wants Operations to Continue til Dec. 21
JW RESOURCES: $375K Straight Creek Settlement Approved
JW RESOURCES: Court Approves SCE&G Settlement
JW RESOURCES: Court Authorizes Auction Sale of Mobile Equipment
JW RESOURCES: Wants to Extend Plan Filing Deadline to January 2016
KINDRED HEALTHCARE: Moody's Affirms B1 CFR, Outlook Negative
LA FRONTERA: S&P Puts 'B+' Rating on Watch Neg on Expected Sale
MF GLOBAL: CFTC Bashes EX-Chief Executive's Bid to Stay Suit
MICHAEL GLYN BROWN: 5th Circ. Dismisses Spouse's Appeal
NITON FUND: Chapter 15 Case Summary
OFFSHORE GROUP: Court Directs Joint Administration of Cases
OFFSHORE GROUP: Obtains Interim Approval to Use Cash Collateral
OFFSHORE GROUP: Plan Confirmation Hearing Set for Jan. 14
QUIKSILVER INC: A&G Realty Approved as Real Estate Advisor
QUIRKY INC: Says Objections to $4.7M Asset Sale Are Meritless
ROLLING HILLS: Voluntary Chapter 11 Case Summary
SANTA MARIA DECOR: Case Summary & 19 Largest Unsecured Creditors
SINOLA LLC: Voluntary Chapter 11 Case Summary
SOUTHERN REGIONAL: PwC Approved as Committee's Financial Advisor
SOUTHERN REGIONAL: Scroggins & Williamson Okayed as Counsel
SOUTHERN REGIONAL: Stroudwater OK'd to Provide Valuation Services
STOLLINGS TRUCKING: Case Summary & 20 Largest Unsecured Creditors
TRANS COASTAL: Simmons Hanly Okayed to Handle Damage Claims
TRIBUNE PUBLISHING: S&P Lowers CCR to 'B' on Weak Credit Metrics
UNIVERSAL MARKETING: Trustee's Summary Judgment Bid Denied
USF HOLDINGS: S&P Retains 'B+' Rating on 1st Lien Loan Due 2021
USS PARENT: S&P Affirms 'B' CCR on $50MM Incremental Loan
VIBE MICRO: Racketeering Suit Against Snell & Wilmer Tossed
WALTER ENERGY: Obtains Creditor Protection Under CCAA
WALTER ENERGY: Seeks to Reject CBAs, Terminate Retiree Benefits
ZLOOP INC: Keen-Summit Selling 183,000 Sq. Ft. Nevada Warehouse
[*] Jenner & Block's Catherine Steege Named as Bankruptcy MVP
[*] Lei Lei Wang Ekvall Bags OCBF's 2015 Hon. Peter M. Elliot Award
[*] Mid-Continent Casualty Wants Insurer's $63M Claim Thrown Out
[*] Moody's: Credit Conditions Deteriorating for North American Cos
*********
ALBERT JACOBS: Case Summary & 6 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Albert Jacobs LLP
19034 North 95th Way
Scottsdale, AZ 85255
Case No.: 15-15429
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Debtor's Counsel: John R. Clemency, Esq.
GALLAGHER & KENNEDY, P.A.
2575 East Camelback Road, Suite 1100
Phoenix, AZ 85016
Tel: 602-530-8040
Email: john.clemency@gknet.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Albert L. Jacobs, Jr., partner.
A list of the Debtor's six largest unsecured creditors is available
for free at http://bankrupt.com/misc/azb15-15429.pdf
ALPHA NATURAL: Wants Approval of $7.4-Mil. KEIP for Insiders
------------------------------------------------------------
Alpha Natural Resources, Inc., and its affiliated debtors ask the
U.S. Bankruptcy Court for the Eastern District of Virginia,
Richmond Division, for the approval of their Key Employee Incentive
Plan ("KEIP") for certain insider employees for 2016.
There are 17 KEIP Participants, consisting of eight Executive
Insiders and nine Non-Executive Insiders. The Executive Insiders
are the current named executive officers of Debtor ANR and the
membership of the Debtors' senior management committee. The
Non-Executive Insiders are senior managers of the Debtors who
perform a variety of critical functions with regard to the
generation of revenue to and the operation of the Debtors'
business, including domestic and international sales management,
operational management, real property management and legal counsel.
The Debtors relate that these specific skills, along with the KEIP
Participants' familiarity and understanding of the operations,
customer and supplier relationships and infrastructure of the
Debtors' operations are vital, not only to the day-to-day operation
of their businesses, but also to the ability of the Debtors to
effectuate a successful restructuring.
The Debtors tell the Court that the KEIP is comprised of two
consecutive three-month performance periods, with the first
performance period starting on Jan. 1, 2016 and ending on
March 31, 2016, and the second performance period starting on April
1, 2016 and ending on June 30, 2016. The Debtors further tell the
Court that each KEIP Participant is assigned a target incentive
opportunity expressed as a percentage of such KEIP Participant's
base salary. The Debtors relate that if target performance goals
are achieved across all performance metrics for a performance
period, then each KEIP Participant will earn a target payout for
that performance period. The Debtors further relate that the KEIP
also provides for lesser payouts if threshold performance goals are
achieved and greater payouts if maximum performance goals are
achieved. The Debtors contend that if no threshold performance
goals are achieved across all metrics for a given performance
period, then no incentive awards would be earned and paid to KEIP
Participants for such performance period. The Debtors further
contend that the aggregate cost of the KEIP to the Debtors will be
approximately $7.4 million if target performance goals are achieved
across all metrics for both Performance Periods. The Debtors note
that the cost of the KEIP may surpass this amount only if achieved
performances exceed target performances with the maximum aggregate
cost at $14.8 million if achieved performance meets or exceeds
maximum performance goals across all metrics for both Performance
Periods.
The Debtors contend that their senior management has worked
tirelessly both prior to and since the Petition Date to maximize
the value of these estates for the benefit of their creditors. The
Debtors further contend that at the same time: (a) substantial
portions of senior management's compensation, which was provided in
the form of the Debtors' equity, diminished significantly as the
value of the equity plummeted; (b) actual compensation earned by
senior management in prior years in the form of deferred
compensation is now relegated to general unsecured claim status;
(c) existing retention agreements that had been put in place long
before the filing of these cases are no longer viable; (d) the
Debtors' senior managers justifiably perceive uncertainty with
respect to their potential continued employment with the Debtors;
and (e) the pressure on senior management of maintaining the
viability and value of the Debtors' businesses in the face of the
well documented industry challenges and regulatory demands only
continues to increase.
Alpha Natural Resources is represented by:
David G. Heiman, Esq.
Clark E. Black, Esq.
Thomas A. Wilson, Esq.
JONES DAY
North Point
901 Lakeside Avenue
Cleveland, OH 44114
Telephone: (216)586-3939
Facsimile: (216)579-0212
E-mail: dgheiman@jonesday.com
tawilson@jonesday.com
- and -
Tyler P. Brown, Esq.
J.R. Smith, Esq.
Henry P. (Toby) Long, Esq.
Justin F. Paget, Esq.
HUNTON & WILLIAMS LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, VA 23219
Telephone: (804)788-8200
Facsimile: (804)788-8218
E-mail: tpbrown@hunton.com
jrsmith@hunton.com
hlong@hunton.com
jpaget@hunton.com
About Alpha Natural Resources
Alpha Natural -- http://www.alphanr.com/-- is a coal supplier,
ranked second largest among publicly traded U.S. coal producers as
measured by 2014 consolidated revenues of $4.3 billion.
Alpha Natural Resources, Inc. (Bankr. E.D. Va. Case No. 15-33896)
and its affiliates filed separate Chapter 11 bankruptcy petitions
on Aug. 3, 2015, listing $9.9 billion in total assets as of June
30, 2015, and $7.3 billion in total liabilities as of June 30,
2015. The petition was signed by Richard H. Verheij, executive
vice president, general counsel and corporate secretary.
Judge Kevin R. Huennekens presides over the case.
David G. Heiman, Esq., Carl E. Black, Esq., and Thomas A. Wilson,
Esq., at Jones Day serve as the Debtors' general counsel.
Tyler P. Brown, Esq., J.R. Smith, Esq., Henry P. (Toby) Long, III,
Esq., and Justin F. Paget, Esq., serve as the Debtors' local
counsel. Rothschild Group is the Debtors' financial advisor.
Alvarez & Marshal Holdings, LLC, is the Debtors' investment
banker. Kurtzman Carson Consultants, LLC, is the Debtors' claims
and noticing agent.
The U.S. Trustee for Region 4 appointed seven creditors of Alpha
Natural Resources Inc. to serve on the official committee of
unsecured creditors. Dennis F. Dunne, Esq., Evan R. Fleck, Esq.,
and Eric K. Stodola, Esq., at Milbank, Tweed, Hadley & McCloy LLP;
and William A. Gray, Esq., W. Ashley Burgess, Esq., and Roy M.
Terry, Jr., Esq. at Sands Anderson PC, represent the Committee.
AMC ENTERTAINMENT: Moody's Rates Proposed Secured Loans 'Ba1'
-------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to the proposed
senior secured credit facilities of AMC Entertainment Inc., a
wholly owned subsidiary of AMC Entertainment Holdings, Inc. The
credit facilities will consist of a $150 million revolving credit
facility and $881 million term loan, with proceeds used to
refinance the existing secured credit facilities, retire the
remaining 9.75% senior subordinated notes, and fund general
corporate expenses. AMC's B1 Corporate Family Rating and B2 senior
subordinated rating remain unchanged.
A summary of action follows:
Assignments:
Issuer: AMC Entertainment Inc.
Senior Secured Bank Credit Facility (Local Currency), Assigned
Ba1, LGD2
RATINGS RATIONALE
The transaction extends the revolving credit facility from 2018 to
2020 with a five-year tenure and extends the seven year term loan
maturity to 2022, from 2020. The transaction increases total debt
by approximately $106 million. The effect on (Moody's adjusted)
debt/EBITDA leverage is de minimis, rising to 4.7x from 4.6x.
AMC's B1 corporate family rating incorporates the company's liberal
use of operating cash flow and the constraints imposed by a mature
industry experiencing a secular decline in attendance.
Additionally, the company is challenged by a dependence on a
limited number of movie studios, an unpredictable box office
result, and emerging competitive threats. Despite these
challenges, the company is one of the four largest operators in the
US with a 17% North America market share that has remained steady
over the last five years. In addition to size and scale, the
company benefits from barriers to entry into the first-run window
for theatrical distribution, pricing power, high margins, and good
liquidity.
AMC Entertainment Inc., headquartered in Leawood, Kansas, operates
348 theatres with 4,937 screens primarily in major metropolitan
markets in the United States. Its revenue for the last twelve
months ended Sept. 30, 2015, was approximately $2.9 billion. Dalian
Wanda Group Co., Ltd. owns approximately 78% of AMC Entertainment
Holdings, Inc. (Holdings), the parent of AMC.
The principal methodology used in this rating was Business and
Consumer Service Industry published in December 2014.
AMC ENTERTAINMENT: S&P Assigns 'BB' Rating on $1.03BB Senior Loans
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' issue-level
rating and '1' recovery rating to AMC Entertainment Inc.'s
refinanced and upsized $1.03 billion senior secured credit
facility, which consists of a $150 million revolver due 2020 and an
$881 million term loan B due 2022. The '1' recovery rating
indicates S&P's expectation for very high recovery (90%-100%) of
principal in the event of a payment default.
The company will use the proceeds to repay its existing $906
million senior secured credit facility, to retire its remaining
9.75% senior subordinated notes, and for general corporate
purposes. The issue-level rating is two notches above S&P's
corporate credit rating on AMC.
Pro forma for the debt offering, AMC's adjusted leverage remains
virtually unchanged at 4.9x as of Sept. 30, 2015. S&P expects
AMC's leverage to decline to the mid- to high-4x area in 2015 and
2016 -- in line with S&P's "aggressive" financial risk profile
assessment -- due to EBITDA growth from continued operating
performance improvements and stronger box office performance.
S&P assesses AMC's business risk profile as "fair," reflecting the
company's position as one of the largest motion picture exhibitors
in the U.S., with a leading presence in most major markets across
the country. AMC's size and breadth is tempered by the movie
exhibition industry's maturity and volatility.
S&P's stable rating outlook on AMC is based on S&P's expectation
that the company will continue to improve its operating margins and
maintain "adequate" liquidity while keeping leverage below 5x over
the next two to three years, despite volatility in box office
performance.
RATINGS LIST
AMC Entertainment Inc.
Corporate Credit Rating B+/Stable/--
New Ratings
AMC Entertainment Inc.
Senior Secured
$150 million revolver due 2020 BB
Recovery Rating 1
$881 million term loan B due 2022 BB
Recovery Rating 1
AMERICAN MEDIA: S&P Raises CCR to 'CCC+', Outlook Negative
----------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
corporate credit rating on Boca Raton, Fla.-based American Media
Inc. to 'CCC+' from 'CCC'. The rating outlook is negative.
At the same time, S&P raised its issue-level rating on American
Media's 11.5% first-lien notes due 2017 to 'CCC+' from 'CCC'. The
'4'recovery rating is unchanged, indicating S&P's expectation for
meaningful recovery (30%-50%; upper half of the range) of principal
in the event of a payment default or bankruptcy.
The upgrades follow S&P's review of American Media's liquidity and
capital structure after company announced its fiscal third quarter
(ended Sept. 30, 2015) results. "The company's operating
performance has been significantly impacted since the May 2014
bankruptcy of its second-largest newsstand distributor Source
Interlink Distribution LLC," said Standard & Poor's credit analyst
Scott Zari. While it is becoming apparent that newsstand
circulation revenue will never fully recover to pre-disruption
levels and will continue to face secular pressure, S&P believes
American Media's operating performance has stabilized, leading to
widening covenant cushions and improving discretionary cash flow.
The company's adjusted EBITDA margin increased roughly 600 basis
points year-over-year to 20.6% as of the 12 months ended Sept. 30,
2015, reflecting the recovery from the distribution disruption and
cost reduction initiatives the company undertook in fiscal 2015.
The improved EBITDA margin, combined with a lower interest payment
due to debt reduction, has also led to improved cash flow and
interest coverage metrics.
"The negative rating outlook on American Media reflects the risk
that the company will not be able to refinance its unsustainable
capital structure before its first-lien notes mature in December
2017," said Mr. Zari. "The outlook also reflects our expectation
that the company's operating performance will remain weak and
growth in digital revenue streams will not sufficiently offset the
decline in print circulation."
S&P would lower the rating on American Media if it becomes clear
that the company will be unable to refinance its first-lien notes
or that it will engage in a distressed exchange to address its
impending debt maturities. S&P could also lower the rating if
available liquidity drops below $10 million or if the company fails
to extend its revolver before the end of fiscal year 2016.
S&P could raise the rating if American Media is able to refinance
its capital structure, and S&P believes that the company's new
capital structure will be sustainable. This would likely require a
scenario where S&P expects adjusted leverage to decline below 5x,
maturities are sufficiently extended, and discretionary cash flow
is consistently above $20 million annually.
ASPECT SOFTWARE: Moody's Lowers CFR to Caa2, Outlook Negative
-------------------------------------------------------------
Moody's Investors Service downgraded Aspect Software, Inc.'s
corporate family rating to Caa2 from B3. Moody's also downgraded
the 1st lien debt facilities to B3 from B1 and second lien notes to
Caa3 from Caa2. The downgrade was driven by challenges the company
is facing in offsetting declines in its legacy product lines, high
debt levels and upcoming debt maturities. The ratings outlook is
negative.
Ratings Rationale
Aspect's revolving credit facility matures in February 2016 and its
term loan matures in May 2016. Though Aspect has made significant
strides in offsetting declines in its legacy Signature lines,
overall revenues and EBITDA continue to decline. Results have been
exacerbated by unfavorable foreign exchange movements and the shift
from upfront license sales to spread-over-time subscription sales.
The company has grown its next generation unified IP contact center
lines and its broad cloud offerings, and overall revenues and
EBITDA are expected to return to growth over time. Given the
uncertainty over that timing however, the high debt levels and
imminent maturities, the ratings have been downgraded. The ratings
reflect the risk that a default under Moody's definition,
potentially through a distressed exchange, is possible over the
next year given imminent debt maturities and very high leverage.
The Caa2 corporate family rating reflects Aspect's very high debt
load, near term debt maturities and weak free cash flow at a time
when the company faces challenges in turning around its revenues in
the evolving contact center software market. Debt/EBITDA is
approximately 8x based on LTM Sept. 30, 2015 results. Although
Aspect is a leader in many segments of the contact center software
market, the company has had difficulty in offsetting declines in
its legacy Signature business with its next generation products.
And though the company continues to make strategic acquisitions and
develop new products to bolster its suite of contact center
offerings, restructuring and integration costs have hampered the
company's cash flow. In addition, upcoming revolver and term loan
maturities significantly limit the company's liquidity.
Though Aspect's longstanding leadership position in the contact
center industry is a key ratings consideration, the business is
evolving and it is unclear if the landscape will favor Aspect's
full suite hardware and software competitors. Aspect remains
particularly exposed to being displaced from its legacy installed
base as customers consider contact center purchases as part of
enterprise wide unified communications build-outs rather than
stand-alone decisions - a shift that benefits some of Aspect's key
competitors.
The ratings could be downgraded further if the company is unable to
refinance its near term maturities or cash flow deteriorates
further. Extensions of the maturity dates on the existing debt
could also result in an assignment of a limited default. The
ratings could be upgraded if existing debt is refinanced, free cash
flow is expected to be positive and leverage is expected to be
under 7.5x.
Liquidity is weak based on the near term debt maturities, limited
cash balances and uncertainty over near term cash flow. The
company's revolver was fully drawn as of Sept. 30, 2015.
These ratings were affected:
Downgrades:
Issuer: Aspect Software, Inc.
Probability of Default Rating, Downgraded to Caa2-PD from B3-PD
Corporate Family Rating, Downgraded to Caa2 from B3
1st Lien Senior Secured Bank Credit Facility, Downgraded to B3
(LGD 2) from B1 (LGD 2)
2nd Lien Notes due 2017, Downgraded to Caa3 (LGD 5) from Caa2
(LGD 5)
Outlook Actions:
Issuer: Aspect Software, Inc.
Outlook, Negative
The principal methodology used in these ratings was Global Software
Industry published in October 2012.
Aspect is provider of contact center software solutions and
services. The company, headquartered in Phoenix, AZ had revenue of
$421 million for the twelve months ended Sept. 30, 2015.
ATLANTIC & PACIFIC: To Sell Old Tappan Assets to Estevez Markets
----------------------------------------------------------------
Great Atlantic & Pacific Tea Company Inc. received court approval
for a deal that would allow the company to sell some of its assets
to Estevez Markets Inc.
Estevez Markets made a $350,000 cash offer to purchase the assets
used in operating the company's store located at 216 Old Tappan
Road, Old Tappan, New Jersey. It will also assume certain
liabilities of the company as part of the deal.
The companies signed the deal following a two-day auction held in
October where Estevez Markets emerged as the winning bidder.
Estevez Markets beat out rival bidder Key Food Stores Co-Operative
Inc.
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern
District of New York approved the sale.
The unions affected by the sale did not object to the deal and have
waived their rights to assert any claim against Great Atlantic or
the buyer, according to court filings.
About The Great Atlantic & Pacific Tea Company, Inc.
Based in Montvale, New Jersey, The Great Atlantic & Pacific Tea
Company, Inc., and its affiliates are one of the nation's oldest
leading supermarket and food retailers, operating approximately 300
supermarkets, beer, wine, and liquor stores, combination food and
drug stores, and limited assortment food stores across six
Northeastern states. The primary retail operations consist of
supermarkets operated under a variety of well known trade names, or
"banners," including A&P, Waldbaum's, SuperFresh, Pathmark, Food
Basics, The Food Emporium, Best Cellars, and A&P Liquors. The
Company employs approximately 28,500 employees, over 90% of whom
are members of one of twelve local unions whose members are
employed by the Debtors under the authority of 35 separate
collective bargaining agreements.
Then with 429 stores, A&P and its affiliates filed Chapter 11
petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010, and
in 2012 emerged from Chapter 11 bankruptcy as a privately held
company with 320 supermarkets.
On July, 19, 2015, with 300 stores, A&P and 20 affiliated debtors
each filed a Chapter 11 petition (Bankr. S.D.N.Y.) after reaching
deals for the going concern sales of 120 stores. The Debtors are
seeking joint administration under Case No. 15-23007.
The Debtor disclosed total assets of $601,441,108 and total
liabilities of $1,984,459,086 as of the Petition Date.
The Debtors tapped Weil, Gotshal & Manges LLP as counsel, Evercore
Group L.L.C., as investment banker, FTI Consulting, Inc., as
financial advisor, Hilco Real Estate, LLC, as real estate advisor,
and Prime Clerk LLC, as claims and noticing agent.
The U.S. Trustee for Region 2 appointed seven creditors to serve on
the official committee of unsecured creditors. Pachulski Stang
Ziehl & Jones LLP serves as its counsel, and Zolfo Cooper, LLC, as
serves as its financial advisors and bankruptcy consultants.
BANNING LEWIS: Abatement of Appeal Extended Until Feb. 15
---------------------------------------------------------
Judge Robert E. Blackburn of the United States District Court for
the District of Colorado granted the joint motion filed by the
parties to extend the abatement of the appeal until February 15,
2016, to permit the parties to continue to pursue a settlement
discussions.
Judge Blackburn had previously stayed and closed the case
administratively until December 1, 2015, to permit the parties to
pursue settlement discussions.
The case is In re: BANNING LEWIS RANCH COMPANY, LLC., Debtor. THE
BANNING LEWIS RANCH COMPANY, LLC; BLH NO. 1, LLC; BLH NO. 2, LLC;
BANNING LEWIS HOLDINGS, LLC, Appellants, v. CITY OF COLORADO
SPRINGS, COLORADO; COLORADO SPRINGS UTILITIES, Appellees, CIVIL
ACTION NO. 15-CV-01442-REB (D. Colo.).
A full-text copy of Judge Blackburn's November 24, 2015 order is
available at http://is.gd/Xbe1Yvfrom Leagle.com.
The Banning Lewis Ranch Company, LLC, BLH NO. 1, LLC, BLH No. 2,
LLC and Banning Lewis Holdings, LLC are represented by:
Christina Finzel Gomez, Esq.
Risa Lynn Wolf-Smith, Esq.
HOLLAND & HART, LLP
555 Seventeenth Street Suite 3200
Denver, CO 80202-3979
Tel: (303) 295-8000
Fax: (303) 295-8261
Email: cgomez@hollandhart.com
rwolf@hollandhart.com
City of Colorado Springs, Colorado and Colorado Springs Utilities
are represented by:
Edward Charles Dolan, Esq.
HOGAN & HARTSON
Columbia Square
555 Thirteenth Street, NW
Washington, DC 20004
Tel: (202) 637-5600
Fax: (202) 637-5910
Email: edward.dolan@hoganlovells.com
-- and --
Peter A. Cal, Esq.
SHERMAN & HOWARD, L.L.C.
633 Seventeenth Street Suite 3000
Denver, CO 80202
Tel: (303) 297-2900
Fax: (303) 298-0940
Email: pcal@shermanhoward.com
About Banning Lewis
The Banning Lewis Ranch Co. was the owner of the undeveloped
portion of a 21,000-acre ranch in Colorado Springs, Colo. The
Banning Lewis Ranch was a master-planned community in Colorado
Springs, Colorado. The first section built, the 350-acre Northtree
Village, opened in September 2007 and was to have 1,000 homes
priced from the high $100,000s to the mid-$300,000s.
The Banning Lewis Ranch filed for Chapter 11 bankruptcy protection
from creditors (Bankr. D. Del. Case No. 10-13445) on Oct. 28, 2010.
It estimated assets of $50 million to $100 million and debts of
$100 million to $500 million in its Chapter 11 petition.
An affiliate, The Banning Lewis Ranch Development I & II, LLC, also
filed for Chapter 11 (Bankr. D. Del. Case No. 10-13446).
Kevin Scott Mann, Esq., at Cross & Simon, LLC, serves as counsel to
the Debtors. Edward A. Phillips of Eisner Amper LLP has been
retained as the Company's chief restructuring officer.
BINDER & BINDER: Dec. 21 Hearing on Creditors' Plan Disclosures
---------------------------------------------------------------
Stellus Capital Investment Corporation and the Official Committee
of Unsecured Creditors have proposed a Joint Plan of Liquidation
for Binder & Binder - The National Social Security Disability
Advocates (NY), LLC, et al.
A hearing to consider entry of an order approving the disclosure
statement for the Plan will be held on Dec. 21, 2015 at 10:00 a.m.
Objections are due Dec. 17, 2015.
The Plan generally provides for the controlled and orderly
Wind-Down of the Debtors' Estates and businesses over a three-year
period.
Under the Plan, holders of Administrative Claims, Stellus
Alternative DIP Facility Claims, Professional Fee Claims Priority
Tax Claims, and Priority Non-Tax Claims are unimpaired. Holders of
the First DIP Lender Secured Claims are slated to have a 100%
recovery but will receive different treatment depending on whether
the class accepts the Plan: (i) if the class accept the Plan, the
holders will receive a new secured term note, providing for a cash
pay interest rate of 4.0% per annum; scheduled amortization
payments in an amount to be determined; and a maturity date of
three years from the Effective Date; and if the class rejects the
Plan, they will receive a term note providing for an interest rate
to be determined by the Bankruptcy Court pursuant to Section
1129(b) of the Bankruptcy Code. Holders of general unsecured
claims are slated to recover only 20% and each holder will be
entitled to elect on its respective ballot either "GUC Option A"
and "GUC Option B". Each holder of an equity interest in SSDI will
receive its pro rata share of any remaining assets after all
allowed claims have been satisfied in full.
The Plan contemplates, among other things:
(i) the appointment on the Effective Date of SSDI Holdings, Inc.
(a Debtor) as Plan Administrator, and the appointment by the Plan
Administrator of the Wind-Down Team, for the purpose of overseeing
the orderly Wind-Down of the Debtors' estates and maximizing
Distributions to holders of Allowed General Unsecured Claims;
(ii) in furtherance of the Wind-Down, the continued prosecution
of existing SSA/VA Cases and, in connection therewith, the
anticipated continuation of certain of the Debtors' existing
employee and commercial relationships for purposes of servicing the
existing SSA/VA Cases through the Wind-Down;
(iii) separate and apart from the continued prosecution of the
existing SSA/VA Cases, the liquidation of the other Estate Assets
of the Debtors, in the manner as determined by the Plan
Administrator, subject in certain instances to the approval of a
majority of the Plan Trust Board, to maximize Distributions to the
holders of Allowed Claims;
(iv) the preservation of all Causes of Action of the Debtors'
Estates (other than those specifically released under the Plan)
and, subject to approval of the Plan Trust Board with respect to
any material Causes of Action, the prosecution of such Causes of
Action for the benefit of the holders of Allowed General Unsecured
Claims; and
(v) distribution of the proceeds of the foregoing in accordance
with the Plan.
The Plan also provides for the appointment on the Effective Date of
a Committee Representative, for the purpose of overseeing the
implementation of the Plan for the collective benefit of the
holders of Allowed General Unsecured Claims.
A copy of the Joint Disclosure Statement dated Nov. 23, 2015, is
available for free at:
http://bankrupt.com/misc/Binder_B_397_Creditors_DS.pdf
In a joint statement filed Nov. 18, 2015, Stellus and the Committee
said that in addition to working to prepare a disclosure statement
for filing on Nov. 23, they are either actively involved in, or
intend in the near future to engage in, discussions with (i) the
Debtors' CRO, regarding the CRO's potential assistance with a
cooperative and smooth transition (in the event that the Joint Plan
is confirmed), (ii) the Debtors' officers, directors, and
professionals, as well as Charles Binder, Harry Binder and the
other members of the Debtors' Board, with respect to potential
releases and going-forward cooperation (in the event that the Joint
Plan is confirmed), and (iii) the Debtors' union representative,
with respect to a potential consensual extension of the existing
union contract that is presently due to expire in December 2015 (in
light of the multi-year wind-down contemplated under the Joint
Plan).
A copy of the Joint Statement is available for free at:
http://bankrupt.com/misc/Binder_B_390_Creditors_JS.pdf
Counsel to Stellus Capital:
MOORE & VAN ALLEN, PLLC
Stephen E. Gruendel, Esq.
Zachary H. Smith, Esq.
100 North Tryon Street, Suite 4700
Charlotte, NC 28202-4003
Telephone: (704) 331-1000
Counsel to the Creditors Committee:
KLESTADT WINTERS JURELLER SOUTHARD & STEVENS, LLP
Tracy L. Klestadt, Esq.
Sean C. Southard, Esq.
Fred Stevens, Esq.
Joseph C. Corneau, Esq.
200 West 41st Street, 17th Floor
New York, NY 10036-7203
Telephone: (212) 972-3000
About Binder & Binder
Founded in 1979 by brothers Harry and Charles Binder, Binder &
Binder is the nation's largest provider of social security
disability and veterans' benefits advocacy services, with
operating scale and efficiencies unrivaled by its competitors in
the highly fragmented advocacy market. The Company has more than
950 employees in 35 offices across the United States. In 2010,
H.I.G. Capital, LLC, acquired a controlling equity interest in
the Company. Since 1979, the Company has handled over 300,000
disability cases under programs operated by the SSA and the VA.
Binder & Binder - The National Social Security Disability
Advocates (NY), LLC, et al., sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 14-23728) in White
Plains, New York on Dec.18, 2014. The cases are assigned to
Judge Robert D. Drain.
The Debtors have tapped Kenneth A. Rosen, Cassandra Porter, Esq.,
and Nicholas B. Vislocky, Esq., at Lowenstein Sandler as counsel.
The Debtors have engaged Development Specialists, Inc., as
financial advisor, and BMC Group Inc. as claims and notice agent.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors in the Debtors' cases. The Committee is now comprised
of (i) United Service Workers Union, Local 455 IUJAT & Related
Funds, (ii) T&G Industries, Inc., (iii) WB Mason Co., and (iv)
Teaktronics, Inc.
* * *
The Debtors originally arranged from existing lenders DIP financing
of $26 million, which provided for the payment in full, or roll-up,
of the $23 million of prepetition indebtedness and an additional
commitment of up to $3 million to fund the Debtors' operations
during the Chapter 11 cases. On Jan. 26, 2015, the Initial DIP
Lenders issued a notice that events of default had occurred.
In March 2015, the Debtors won approval to obtain a new $6 million
term loan from Stellus Capital Investment Corporation secured by a
first-priority priming lien on all of the Debtors' assets.
BLUE SUN: $4.76MM Horton Credit Bid Underpins Liquidating Plan
--------------------------------------------------------------
Blue Sun St. Joe Refining, LLC, et al., filed a Joint Plan of
Liquidation that will be funded from what's left of the estates
after the $4.76 million credit-bid sale of most of the assets to
Joann Horton Family Limited Partnership.
The Debtors have filed a motion seeking conditional approval of the
Disclosure Statement and setting:
-- a Dec. 28, 2015 deadline for objections to confirmation of the
Plan and final approval of the Disclosure Statement;
-- a Dec. 28, 2015 deadline for returning ballots;
-- a Jan. 5, 2016 deadline for written declarations in support of
confirmation of the Plan;
-- a final hearing to consider approval of the Disclosure
Statement and initial confirmation hearing on Jan. 8, 2016, or a
soon thereafter.
Sale of the Assets
The Debtors have determined that the only viable exit for the
Chapter 11 cases was through a sale of their assets. During
September and October 2015, MCA Financial Group, Ltd., with input
from the Debtors, researched and identified 76 potential interested
parties (which included 20 private equity firms). MCA continues to
follow up with potential interested parties in an effort to
encourage competitive bidding.
Pursuant to the Asset Purchase Agreement, dated Nov. 11 2015, and
subject to court approval and higher and better offers, the Debtors
have agreed to sell substantially all of their remaining assets,
excluding estate claims and causes of action, to Joann Horton
Family Limited Partnership for $4,760,000. Horton FLP is expected
to satisfy its payment obligation by credit bidding amounts it is
owed under the DIP Facility and Horton FLP's $3.0 million secured
loan to the Debtors.
On Nov. 11, 2015, the Debtors filed a motion seeking approval of
sale and bid procedures to govern the sale process, including a
break-up fee and an expense reimbursement to Horton FLP, as the
proposed stalking horse bidder, and to provide for the submission
of any competing bids for substantially all the Debtors' assets.
The Debtors have proposed a Jan. 6, 2016 auction and a Jan. 8 sale
hearing.
To the extent approved by the Bankruptcy Court, the sale may occur
before or after the Confirmation Date, but will be completed before
the Effective Date of the Plan.
Treatment of Claims
Under the terms of the Plan, the Debtors intend to complete the
sale of most of the assets to Horton or the highest bidder,
transfer avoidance actions to a liquidating trust and paying all
administrative expense and unsecured claims from any recovery from
those avoidance actions.
Pursuant to the Plan, Allowed Priority Non-Tax Claims will be paid
by the applicable Liquidating Trust in full on the Effective Date
of the Plan out of the applicable Dividend Fund in the event there
are sufficient funds in the applicable Dividend Fund to pay such
Allowed Priority Non-Tax Claims in full in the sole and absolute
discretion of the Liquidating Trustee. To the extent there are not
sufficient funds in the applicable Dividend Fund to pay Priority
Non-Tax Claims in full on the Effective Date, the Liquidating Trust
shall pay such Claims with interest at the rate of 2.0% per annum
from the Effective Date to such date or dates as it is determined
by the Liquidating Trustee that sufficient cash is available to
make such payments.
The holders of Allowed Secured Claims will be satisfied through:
(a) abandonment or transfer of all right, title and interest
of the applicable Debtor and its Estate in the Assets in which a
secured creditor has a Lien (as of the Petition Date and/or
thereafter) to the secured creditor, or
(b) before or after the Effective Date, the sale and/or other
disposition of the Asset in which the secured creditor has a Lien
(as of the Petition Date and/or thereafter).
The transfer of the proceeds of a Sold Asset will occur on the
later of the Effective Date of the Plan or within five Business
Days of the sale of the Asset, in full or partial satisfaction of
the Creditor's Allowed Secured Claim.
Each holder of an Allowed Unsecured Claim will receive its Pro Rata
share of the applicable Dividend Fund established for the
particular class of Unsecured Claims.
Holders of Equity Security Interest in the Debtors will not retain
an interest in the Debtors. No distribution will be made in
respect of Equity Security Interests.
A copy of the Disclosure Statement filed Nov. 12, 2015, is
available for free at:
http://bankrupt.com/misc/Blue_Sun_158_DS.pdf
Attorneys for Debtors:
GALLAGHER & KENNEDY, P.A.
John R. Clemency, Esq.
Todd A. Burgess, Esq.
2575 East Camelback Road
Phoenix, Arizona 85016-9225
Telephone: (602) 530-8000
Facsimile: (602) 530-8500
E-mail: john.clemency@gknet.com
todd.burgess@gknet.com
Local Counsel for the Debtors:
LENTZ CLARK DEINES, PA
Jeffrey A. Deines, Esq.
Shane J. McCall, Esq.
9260 Glenwood
Overland Park, KS 66212
Tel: (913) 648-0600
Fax: (913) 648-0664
E-mail: jdeines@lcdlaw.com
smccall@lcdlaw.com
About Blue Sun St. Joe
Originally founded in 2001 as SunFuels, Inc., privately-held Blue
Sun Energy Inc. introduced biodiesel into the existing petroleum
fuels pool by focusing on an integrated approach to addressing
market needs. In 2004, Blue Sun Energy developed the proprietary
Fusion(TM) brand of biodiesel fuel. Early in 2012, Blue Sun
Biodiesel also established a downstream terminal presence for
biodiesel blending in Knoxville, TN. In 2012, Blue Sun St. Joe
Refining began operating the St. Joe refinery to produce
high-quality biodiesel for wholesale distribution.
Blue Sun St. Joe Refining, LLC, and its three affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.
Mo., Case No. 15-42231) on July 31, 2015. The cases are assigned
to Judge Arthur B. Federman.
The Debtors engaged as bankruptcy counsel Jeffrey A. Deines, Esq.,
at Lentz Clark Deines PA, in Overland Park, Kansas; and Todd A.
Burgess, Esq., John R. Clemency, Esq., and Lindsi M. Weber, Esq.,
at Gallagher & Kennedy, P.A., in Phoenix, Arizona. MCA Financial
Group, Ltd. serves as their financial advisors.
The Official Committee of Unsecured Creditors retained Stinson
Leonard Street LLP as its counsel.
BLUE SUN: Committee Objects to Horton Sale, Disclosure Statement
----------------------------------------------------------------
In its objection to the disclosure statement explaining Blue Sun
St. Joe Refining, LLC, et al.'s proposed Joint Plan of Liquidation,
the Official Committee of Unsecured Creditors points out that the
Plan proposes to sell the Debtors' assets to Horton FLP for a
credit bid, pay the remaining creditors nothing, and leave all
creditors -- including unsecured creditors -- with liquidating
trusts that will pay a portion of any trust recovery of undisclosed
estate claims and avoidance actions of unknown value.
The Committee strongly disagrees with the Debtors' proposed course
of action and the Committee will offer objections to confirmation
of the sale at the appropriate time. In addition, the Committee
avers that the Disclosure Statement fails to meet the statutory
requirements of Sec. 1125 of the Bankruptcy Code and accordingly,
approval of the Disclosure Statement must be denied.
According to the Committee, the Disclosure Statement:
* reveals almost nothing about the Debtors' sales and marketing
efforts and is silent as to the experience of the Debtors'
financial advisor and its officers and directors to market and sell
the Debtors' assets;
* provides little information describing the assets to be sold
to the Horton FLP, their potential value, or the reason for
selecting Horton FLP as the stalking horse bidder;
* offers no discussion about the intent of the Debtors to sell
the assets to Horton FLP rather than conducting a concerted effort
to identify the highest and best bid for the assets;
* contains no analysis of the estate claims and avoidance
actions assigned under the Plan to the liquidating trusts or how
the Committee's Challenge Action against Horton FLP will affect the
Plan and the sale process;
* fails to discuss the interaction both before and after the
Commencement Date between the Debtors and Horton FLP including an
analysis of collusion under Sec. 363(n) of the Bankruptcy Code;
and
* provides no analysis of the recovery a creditor should expect,
when to expect it, or what risks exist that could reduce the
recovery.
In addition, the Committee contends that the Disclosure Statement
contains the following deficiencies in describing the sale of its
assets to the Horton FLP:
a. fails to disclose why Washburn hoped Horton FLP would get the
Debtors' assets.
b. fails to disclose whether any of the Debtors' officers or
directors have arranged any side deals with any potential or actual
bidders.
c. fails to disclose whether the Debtors have any knowledge of
any side deals being negotiated by Horton FLP with any potential or
actual bidders.
d. fails to disclose who runs the new company if Horton FLP is
the high bidder for the assets.
e. fails to disclose which of the Debtors' officers, directors or
employees will run or work at the Horton FLP's newly-formed
company.
f. Fails to disclose the discussions between Horton and some of
the Debtors' officers and directors about sharing equity in the
newly-formed company.
Counsel for the Committee:
STINSON LEONARD STREET LLP
Nicholas J. Zluticky, Esq.
Mark A. Shaiken, Esq.
Paul M. Hoffmann, Esq.
1201 Walnut, Suite 2900
Kansas City, MO 64106
Telephone: (816) 842-8600
Facsimile: (816) 691-3495
E-mail: mark.shaiken@stinsonleonard.com
paul.hoffmann@stinsonleonard.com
nicholas.zluticky@stinsonleonard.com
About Blue Sun St. Joe
Originally founded in 2001 as SunFuels, Inc., privately-held Blue
Sun Energy Inc. introduced biodiesel into the existing petroleum
fuels pool by focusing on an integrated approach to addressing
market needs. In 2004, Blue Sun Energy developed the proprietary
Fusion(TM) brand of biodiesel fuel. Early in 2012, Blue Sun
Biodiesel also established a downstream terminal presence for
biodiesel blending in Knoxville, TN. In 2012, Blue Sun St. Joe
Refining began operating the St. Joe refinery to produce
high-quality biodiesel for wholesale distribution.
Blue Sun St. Joe Refining, LLC, and its three affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.
Mo., Case No. 15-42231) on July 31, 2015. The cases are assigned
to Judge Arthur B. Federman.
The Debtors engaged as bankruptcy counsel Jeffrey A. Deines, Esq.,
at Lentz Clark Deines PA, in Overland Park, Kansas; and Todd A.
Burgess, Esq., John R. Clemency, Esq., and Lindsi M. Weber, Esq.,
at Gallagher & Kennedy, P.A., in Phoenix, Arizona. MCA Financial
Group, Ltd. serves as their financial advisors.
The Official Committee of Unsecured Creditors retained Stinson
Leonard Street LLP as its counsel.
BLUE SUN: Nodaway, FCS Object to Approval of Disclosure Statement
-----------------------------------------------------------------
Lenders Nodaway Valley Bank and FCS Financial FLCA have filed
objections to the disclosure statement explaining Blue Sun St. Joe
Refining, LLC, et al.'s proposed Joint Plan of Liquidation.
The Lenders say the Disclosure Statement should not be approved
because:
(1) it fails to contain information necessary to enable creditors
to make an informed decision regarding the Plan, and
(2) the Plan is unconfirmable on its face.
According to the Lenders, the Disclosure Statement contains
insufficient and inaccurate disclosures and does not enable
creditors to make an informed decision regarding the Plan in that:
(1) The Disclosure Statement fails to disclose how administrative
expenses will be paid. The Debtors acknowledged at the recent
depositions that they are delinquent in payment of their own
professionals. The proposed budget through the end of December
2015 indicates that the Debtors will continue to lose substantial
money and borrow significantly more money from the Horton FLP. The
purported Plan is to liquidate substantially all assets of the
Debtors in a credit bid sale to the Horton FLP. There will be no
profit or funds left with the estate to pay the administrative
expenses.
(2) The Debtors provide no liquidation analysis to satisfy the
requirements of the "best interests test" under 11 U.S.C. Sec.
1129(a)(7)(A)(ii).
(3) The Disclosure Statement contains numerous misstatements
and/or loaded statements that are subject to very contentious
disputes at this point. In particular, the Debtors make numerous
references in the Disclosure Statement to the purported
misrepresentations by Terra regarding the "nameplate capacity" of
the St. Joe Plant as 30 MMgpy. On information and belief, these
are allegations that Terra vigorously disputes.
(4) The Disclosure Statement fails to explain how proposed sale
and what assets will remain for creditors of separate Debtors'
estates. The Plan does not provide for substantive consolidation,
yet the only financial disclosures made in the Disclosure Statement
are the consolidated budget for the Debtors. It is impossible for
a creditor of Blue Sun St. Joe (for example) to evaluate how the
budget or Plan will impact its ability to get paid anything under
the terms of the Plan.
The Lenders also aver that the Disclosure Statement should not be
approved because the Plan is unconfirmable. The Plan proposed in
this case is entirely based on the sale of substantially all assets
of the Debtors to the Horton FLP. The Lenders object to the
proposed sale and assert that the sale should not go forward. If
the proposed sale fails, so will the Plan, the Lenders tell the
Court.
Attorneys for lenders Nodaway Valley Bank and FCS Financial:
THOMPSON COBURN LLP
David A. Warfield, Esq.
One US Bank Plaza, Suite 2700
St. Louis, MO 63102
Tel: (314) 552-6079
Fax: (314) 552-7079
E-mail: dwarfield@thompsoncoburn.com
About Blue Sun St. Joe
Originally founded in 2001 as SunFuels, Inc., privately-held Blue
Sun Energy Inc. introduced biodiesel into the existing petroleum
fuels pool by focusing on an integrated approach to addressing
market needs. In 2004, Blue Sun Energy developed the proprietary
Fusion(TM) brand of biodiesel fuel. Early in 2012, Blue Sun
Biodiesel also established a downstream terminal presence for
biodiesel blending in Knoxville, TN. In 2012, Blue Sun St. Joe
Refining began operating the St. Joe refinery to produce
high-quality biodiesel for wholesale distribution.
Blue Sun St. Joe Refining, LLC, and its three affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.
Mo., Case No. 15-42231) on July 31, 2015. The cases are assigned
to Judge Arthur B. Federman.
The Debtors engaged as bankruptcy counsel Jeffrey A. Deines, Esq.,
at Lentz Clark Deines PA, in Overland Park, Kansas; and Todd A.
Burgess, Esq., John R. Clemency, Esq., and Lindsi M. Weber, Esq.,
at Gallagher & Kennedy, P.A., in Phoenix, Arizona. MCA Financial
Group, Ltd. serves as their financial advisors.
The Official Committee of Unsecured Creditors retained Stinson
Leonard Street LLP as its counsel.
BOOMERANG TUBE: Says Chapter 11 Exit May Now Cost $40 Million
-------------------------------------------------------------
Matt Chiappardi at Bankruptcy Law360 reported that Boomerang Tube
LLC and its lenders told a Delaware bankruptcy judge on Nov. 30,
2015, that exiting Chapter 11 might cost roughly $40 million and at
least two weeks were needed to continue hammering out an
alternative after the court rejected the oil and gas pipe maker's
reorganization plan last month.
During a hearing in Wilmington, Williams Austin Jowers of King &
Spalding LLP, attorney for secured lender administrator Cortland
Capital Market Services LLC, told the court that the forecast for
Boomerang looked "grim."
About Boomerang Tube
Boomerang Tube, LLC, is a manufacturer of welded Oil Country
Tubular Goods ("OCTG") in the United States. OCTG are used by
drillers in exploration and production of oil and natural gas and
consist of drill pipe, casing and tubing. Boomerang has corporate
offices in Chesterfield, Missouri and manufacturing facilities in
Liberty, Texas, strategically located near major steel production
centers and end-user markets. With a 487,000 square foot plant
that houses two mills and heat treat lines and a contingent 119
acres, these facilities constitute the second largest alloy OCTG
mill in North America. Access Tubulars, LLC, owns 81% of the
equity interests in Boomerang.
Boomerang Tube and its subsidiaries BTCSP LLC and BT Financing
sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
15-11247) on June 9, 2015, with a deal with lenders on a balance
sheet restructuring that would convert $214 million of debt to
100% of the common stock of the reorganized company.
The cases are assigned to Judge Mary F. Walrath.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP, as
attorneys; Lazard Freres & Co. LLC, as financial advisor; and
Donlin, Recano & Co., Inc., as claims and noticing agent.
* * *
Boomerang Tube secured approval of its Amended Disclosure
Statement in support of its Prearranged Chapter 11 Plan.
Judge Mary F. Walrath on Sept. 21, 2015, began the hearing to
consider confirmation of the Debtors' Amended Joint Prearranged
Chapter 11 Plan filed Sept. 4, 2015. The Debtors anticipate that
the confirmation hearing will take multiple days over a few weeks,
given the Court's and parties' calendars.
BTB CORP: Exit Plan Proposes to Pay Off Unsecureds in 5 Years
-------------------------------------------------------------
BTB Corporation has filed with the U.S. Bankruptcy Court for the
District of Puerto Rico a proposed Chapter 11 Plan that offers to
pay non-insider unsecured creditors in full within 5 years.
Judge Mildred Caban Flores will convene a hearing to consider
approval of the explanatory Disclosure Statement on Jan. 20, 2016,
at 9:00 a.m. Objections to the form and content of the Disclosure
Statement are due not less than 14 days prior to the hearing.
According to the Disclosure Statement, the Debtor proposes to make
payments to creditors through the Plan primarily consisting of:
1. Payment of all administrative expenses on the later of the
Effective Date or as soon as feasible after the date any such claim
becomes an allowed Administrative Claim.
2. Payment of 100% of allowed priority tax claims in the amount
of $2,910 to be on the Effective Date.
3. Secured creditor Banco Santander will be paid in full from
the payment of the accounts receivables that were foreclosed
pre-petition and the sale of the inventory. The Debtor will
continue to make monthly interest payments on the outstanding
balance of the line of credit computed at the contractually agreed
rate of 3.75% over the 30-day LIBOR. Also, as part of the
agreement with the bank, Petroleum Products Supply, LLC, will make
payments directly to the bank in order to cover the mortgage
payments over the premises, which are owned by Debtor's subsidiary
and guaranteed by Debtor. Debtor's affiliates will continue to make
payments under their lines of credit to the bank and Debtor will
continue to guarantee these lines of credit. Lastly, Debtor will
continue to support the bank in the collection of the receivables
that were foreclosed by the bank prepetition. All of the
aforementioned will be subject of a stipulation and/or a plan
supplement to be executed within the next 30 days.
4. Payment of the non-dischargeable debt owed to the United
States under the same terms and conditions of the settlement
agreement reached with the United States.
5. Payment of in full, plus an annual interest rate of 4%, of
allowed unsecured claims of more than $3,000 in 60 equal monthly
installments.
6. Payment in full of allowed unsecured claims of less than
$3,000 on or before the Effective Date.
7. Unliquidated and contingent claims will not receive any
distribution from Debtor but will retain their rights to continue
their claims against Debtor's insurance company and if any of the
objections to said claims is unsuccessful, said claim shall be
deemed as a general unsecured claim.
8. All unsecured claims of Debtor's insiders will not receive
any dividend under the Plan but will be considered as new equity
value and shall receive common shares of the Debtor in the same
proportion.
9. All equity interests in Debtor will be cancelled and equity
holders will receive no distribution. However, as aforementioned,
new common shares of the Debtor will be issued to the insiders
holding unsecured claims in the same proportion of their claims.
The Plan is to be funded by the Lease and Sub-Lease agreement
reached with Petroleum Products Supply, LLC, which will produce
$150,000 per month for a period of five years.
According to the Debtor, a Chapter 7 liquidation of the Debtor's
assets would produce 100% distribution to non-contingent unsecured
creditors but without interest and after the successful sale of all
assets.
A copy of the Disclosure Statement filed Nov. 20, 2015, is
available for free at:
http://bankrupt.com/misc/BTB_Corp_211_DS.pdf
About BTB Corporation
BTB Corporation was organized in 2003 to be engaged in bitumen
supply activities and the rendering of any other services which may
be complementary to such activities. Debtor initiated operations
from a leased terminal and storage facility located in Penuelas,
Puerto Rico.
In 2007, BTB acquired 100% of the stock of The Placco Company of
Puerto Rico, Inc., ("PLACCO"), a corporation organized under the
laws of Puerto Rico on May 10, 1988 primarily to manufacture,
produce, process and sell bitumen and other related or similar
products. PLACCO became a wholly owned subsidiary of BTB, and is
the owner of the bitumen terminal leased by BTB from where BTB
operates its business in Guaynabo, Puerto Rico.
In 2012, the current majority shareholders acquired BTB from IOTC
Asphalt, LLC, retaining Mr. Juan Vazquez as President of the
Company.
BTB Corporation sought Chapter 11 protection (Bankr. D.P.R. Case
No. 15-03681) in Old San Juan, Puerto Rico, on May 17, 2015.
Samuel Lizardi signed the petition as interim president. The
Debtor disclosed total assets of $16.5 million and total
liabilities of $13.2 million.
BTB said it sought bankruptcy protection as it is unable to meet
obligations as they mature, and creditors are threatening suit and
have threatened to undertake steps to obtain possession of its
assets.
The Debtor tapped Alexis Fuentes Hernandez, Esq., at Fuentes Law
Offices, LLC, as its counsel.
CACHE INC: Has Until Feb. 1 to Propose Chapter 11 Plan
------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware, in a second order, extended Cache Inc., et
al.'s exclusive periods to file a chapter 11 plan until Feb. 1,
2016, and solicit acceptances for that plan until April 1, 2016.
AS reported in the Troubled Company Reporter on Oct. 12, 2015, the
Debtors explained that they believe it is in the best interests of
the estates and creditors for the Debtors to preserve the
exclusivity periods pending a decision from the Court on the
dismissal motion. The Debtors are seeking approval of the
dismissal motion to provide for an end to these chapter 11 cases,
but the Debtors filed the Extension Motion out of an abundance of
caution to preserve the Debtors' rights pending a determination on
the Dismissal Motion. The Debtors are in the process of winding
down the remaining issues in these cases that need to be
addressed.
In addition, the Debtors negotiated and implemented the settlement
memorialized in the Final DIP Order that will provide up to
$950,000 for the payment of allowed 503(b)(9) claims and stub rent
claims. The Debtors are in the process of winding down the
remaining issues in these cases that need to be addressed. In
light of the posture of these chapter 11 cases, the Debtors believe
it is in the best interests of the estates and creditors for the
Debtors to preserve the Exclusivity Periods pending a decision from
the Court on the dismissal motion. The Debtors are seeking
approval of the dismissal motion to provide for an end to these
chapter 11 cases, but the Debtors filed the extension motion out of
an abundance of caution to preserve their rights pending a
determination on the dismissal motion.
About CACHE, Inc.
Cache, Inc., operates 236 women's apparel specialty stores under
the trade name "Cache." On Dec. 4, 2014, New York-based Cache
announced that it has received an inquiry from a third party
regarding a potential sale of the Company.
Cache, Inc., and its two affiliates sought protection under
Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case No. 15-10172) on
Feb. 4, 2015. The case is assigned to Judge Mary F. Walrath.
The Debtors are represented by Laura Davis Jones, Esq., Peter J.
Keane, Esq., and Colin R. Robinson, Esq., at Pachulski Stang Ziehl
& Jones LLP, in Wilmington, Delaware. The Debtors' restructuring
advisors is FTI Consulting Inc., while their investment banker and
financial advisor is Janney Montgomery Scott LLC. Thompson Hine
represents the Debtors in corporate and securities matter, while
Jackson Lewis P.C. represents the Debtors in employment matters.
The Debtors' communications services provider is Epiq Systems,
Inc., while their noticing and claims management services provider
is Kurtzman Carson Consultants. A&G Realty Partners, LLC, serves
as the Debtors' real estate consultants.
The Debtors had total assets of $53.7 million and total liabilities
of $51.1 million as of Sept. 27, 2014. In its schedules, the
Debtor disclosed $38,793,006 in assets and $84,113,066 in
liabilities.
The U.S. Trustee for Region 3 has appointed seven members to the
Official Committee of Unsecured Creditors in the Debtors' case.
CALVERT DEVELOPMENT: Case Summary & Top Unsecured Creditor
----------------------------------------------------------
Debtor: Calvert Development, L.L.C.
3013 Courtside Road
Bowie, MD 20721
Case No.: 15-26871
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Judge: Hon. Wendelin I. Lipp
Debtor's Counsel: Richard M. McGill, Esq.
MCGILL & WOOLERY
PO Box 358
5303 West Court Dr.
Upper Marlboro, MD 20773
Tel: (301) 627-5222
Email: mcgillrm@aol.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael D. Clarke, managing member.
The Debtor listed the State of Maryland as its largest unsecured
creditor holding a claim of $300.
A copy of the petition is available for free at:
http://bankrupt.com/misc/mdb15-26871.pdf
CENVEO INC: S&P Lowers CCR to 'CCC+' on High 2017 Debt Maturities
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Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Stamford, Conn.-based diversified
printing company Cenveo Inc. to 'CCC+' from 'B-'. The rating
outlook is negative.
At the same time, S&P lowered its issue-level rating on the
company's senior secured notes to 'B-' from 'B'. The '2' recovery
rating is unchanged, indicating S&P's expectation for substantial
recovery (70%-90%; lower half of the range) of principal in the
event of a payment default.
S&P also lowered its issue-level rating on the company's senior
unsecured notes to 'CCC-' from 'CCC'. The '6' recovery rating is
unchanged, indicating S&P's expectation for negligible recovery
(0%-10%) of principal in the event of a payment default.
"The downgrades reflect our view that Cenveo is vulnerable to
nonpayment and dependent on favorable business, financial, and
economic conditions to meet its May 2017 debt maturities," said
Standard & Poor's credit analyst Khaled Lahlo. "We also believe
that the company's capital structure is unsustainable." Leverage,
adjusted for leases, pension, and accrued interest was excessive at
9.2x for the 12 months ended Sept. 28, 2015. Cenveo's debt
balances included $199.7 million 11.5% senior unsecured notes and
$83.3 million 7% senior convertible notes both due May 15, 2017,
and $165.1 million under the asset-based lending (ABL) revolving
credit facility due Feb. 13, 2017. If the company redeems or
refinances most of its 11.5% notes before Jan. 14, 2017, it can,
subject to certain conditions and at its discretion, extend the ABL
credit facility's maturity date to Nov. 2, 2017.
On Nov. 18, 2015, Cenveo announced that it had reclassified its
packaging business' assets, liabilities, operations, and cash flows
as discontinued operations, and that it would ultimately reach an
agreement with one of the strategic parties in the near term. S&P
expects the company to use the net proceeds from the asset sale
will to repay debt.
The negative rating outlook reflects Cenveo's high debt leverage,
sizable 2017 debt maturities, and the risk that the company could
default over the next 12-18 months if it does not refinance its
2017 maturities.
S&P could lower its rating on Cenveo to 'CCC' or lower over the
next six months if the company does not make meaningful progress in
refinancing its 2017 debt maturities or if its operating
performance deteriorates. S&P could also lower the rating if it
believes the company will default on a payment, announce a
distressed exchange, or engage in a subpar debt repurchase.
S&P views an upgrade as unlikely over the next 12 months. An
upgrade would require Cenveo to refinance its 2017 debt maturities,
make meaningful debt repayments, and improve its credit metrics
through deleveraging.
DDMG ESTATE: DIP Lenders Extend Forbearance Period to Dec. 18
-------------------------------------------------------------
Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware has approved the Twenty-Fifth Amendment to the
Court's Final DIP Order.
The Twenty-Fifth Amendment contains these terms:
(1) The expiration of the Remedies Notice Period and the
termination of the automatic stay to allow the DIP Agent to
exercise any and all default remedies, the DIP Agent and the DIP
Lenders shall forebear from exercising their remedies under the
Final DIP Order, DIP Term Sheet Documentation and applicable
bankruptcy law and non-bankruptcy law through and until the earlier
of (i) Dec. 18, 2015 or (ii) the occurrence of a Termination Event,
other than the occurrence of the Maturity Date ("Forbearance
Period").
(2) During the Forbearance Period, the Debtors may incur
indebtedness and use Cash Collateral in accordance with the terms
and conditions of the Final DIP Order and the First through
Twenty-Fourth Amendments, which will remain in full force and
effect, except as specifically amended or modified by the Court's
order.
(3) The Approved Budget, for the period from Nov. 13, 2015 to
Dec. 18, 2015, will be replaced with the Approved Budget for the
period from Nov. 20, 2015 to Dec. 18, 2015, and attached to
Twenty-Fifth Amendment as Exhibit A.
DDMG Estate and its affiliated debtors are represented by:
Debra I. Grassgreen, Esq.
Robert J. Feinstein, Esq.
Collin R. Robinson, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705 (Courier 19801)
Telephone: (302)652-4100
Facsimile: (302)652-4400
E-mail: dgrassgreen@pszjlaw.com
rfeinstein@pszjlaw.com
crobinson@pszjlaw.com
About DDMG Estate
Port St. Lucie, Florida-based Digital Domain Media Group, Inc.
--http://www.digitaldomain.com/-- engaged in the creation of
original content animation feature films, and development of
computer-generated imagery for feature films and trans-media
advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11,
2012, to sell its business for $15 million to Searchlight Capital
Partners LP, subject to higher and better offers. The Company
disclosed assets of $205 million and liabilities totaling $214
million.
The Debtors also have sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of
British Columbia, Vancouver Registry.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent. An official committee of unsecured
creditors appointed in the case is represented by lawyers at
Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP.
At a bankruptcy auction, the principal part of the business was
purchased by a joint venture between Galloping Horse America LLC,
an affiliate of Beijing Galloping Horse Co., and an affiliate of
Reliance Capital Ltd., based in Mumbai. The $36.7 million total
value of the contact includes $3.6 million to cure defaults on
contracts and $2.9 million in reimbursement of payroll costs. As
the result of a settlement negotiated by the unsecured creditors'
committee with secured lenders, there will be some recovery for the
committee's constituency.
DEFENSE HOLDINGS: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Defense Holdings, Inc.
9105B Owens Drive, Suite 201
Manassas Park, VA 20111-4842
Case No.: 15-14317
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Debtor's Counsel: Kermit A. Rosenberg, Esq.
BAILEY & EHRENBERG PLLC
1015 18th Street, NW, Suite 204
Washington, DC 20036
Tel: (202) 350-4670
Fax: (202) 318-7071
Email: krosenberg@becounsel.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Richard J. Martin, president and CEO.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
DIOCESE OF DULUTH: Case Summary & 18 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Diocese of Duluth
2830 East Fourth Street
Duluth, MN 55812
Case No.: 15-50792
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
District of Minnesota (Duluth)
Judge: Hon. Robert J Kressel
Debtor's Bruce A Anderson, Esq.
Lead ELSAESSER JARZABEK ANDERSON ELLIOTT &
Counsel: MACDONALD, CHTD.
123 S 3RD Ave Ste 24
Sandpoint, ID 83864
Tel: 208-263-8517
- and -
J Ford Elsaesser, Esq.
ELSAESSER JARZABEK ANDERSON ELLIOTT &
MACDONALD, CHTD.
123 S 3RD Ave Ste 24
Sandpoint, ID 83864
Tel: 208-263-8517
Debtor's Phillip Kunkel, Esq.
Local GRAY, PLANT, MOOTY, MOOTY & BENNETT, P.A
Counsel: 1010 West Street Germain, Suite 600
St Cloud, MN 56301
Tel: 320-252-4414
Fax: 320-252-4482
Email: phillip.kunkel@gpmlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Rev. James Bissonette, vicar general.
A list of the Debtor's 18 largest unsecured creditors is available
for free at http://bankrupt.com/misc/mnb15-50792.pdf
ENCLAVE AT BOYNTON: US Trustee Yet to Appoint Creditors' Committee
------------------------------------------------------------------
Three months after Enclave at Boynton Waters Properties LLC filed
for Chapter 11 protection, the U.S. trustee overseeing its case is
yet to appoint a committee that will represent the company's
unsecured creditors.
In a filing with the U.S. Bankruptcy Court for the Southern
District of Florida, the Justice Department's bankruptcy watchdog
announced that "until further notice," it will not appoint an
unsecured creditors' committee in Enclave at Boynton's bankruptcy
case.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
About Enclave at Boynton
Enclave at Boynton Waters Properties, LLC, et al., filed Chapter 11
bankruptcy petitions (Bankr. S.D. Fla. Case Nos. 15-26141,
15-26143,
15-26148, 15-26152, 15-26155, 15-26156, 15-26162 and 15-26165) on
Sept. 8, 2015. The petitions were signed by John B. Kennelly as
manager. Erik P. Kimball is assigned to the first-filed case
(15-26141).
The Debtors own various parcels of real property that constitute
the collateral of the same secured lender, BI Boca Boynton
Portfolio, LLC.
ENERGY & EXPLORATION: Case Summary & 13 Top Unsecured Creditors
---------------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
Energy & Exploration Partners, Inc. 15-44931
420 Throckmorton Street, Suite 1200
Fort Worth, TX 76102
Energy & Exploration Partners, LLC 15-44932
Energy & Exploration Partners 15-44934
Operating GP, LLC
Type of Business: Exploration and Production Companies
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
Northern District of Texas (Ft. Worth)
Judge: Hon. Russell F. Nelms
Debtors' Counsel: William A. (Trey) Wood, III, Esq.
BRACEWELL & GIULIANI, LLP
711 Louisiana, Ste. 2300
Houston, TX 77002
Tel: (713) 223-2300
Fax: (713) 221-1212
Email: trey.wood@bgllp.com
Debtors' EVERCORE GROUP LLC
Financial
Advisor:
Debtors' AP SERVICES, LLC
Restructuring
Advisor:
Debtors' ERNST & YOUNG
Tax Advisor:
Debtors' HEIN & ASSOCIATES
Independent
Auditor:
Debtors' PRIME CLERK LLC
Notice, Claims,
and Balloting
Agent:
Estimated Assets: $500 million to $1 billion
Estimated Debts: $1 billion to $10 billion
The petition was signed by John R. Castellano, interim chief
financial officer.
List of Debtor's 13 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
US Bank National Association Bond Debt $388,812,500
13737 Noel Road, Suite 800
Dallas, TX 75240
Attn: Israel Lugo
Tel: (972) 581-1623
Fax: (972) 581-1660
Email: israel.lugo@usbank.com
Chesapeake Exploration, L.L.C. Promissory Note $23,357,524
6100 North Western Avenue
Oklahoma City, OK 73118
Attn: Douglas J. Jacobson
Tel: (405) 935-9233
Fax: (405) 849-9233
Email: doug.jacobson@chk.com
RR Donnelley Trade Debt $316,203
3500 Maple Avenue, Suite 800
Dallas, TX 75373
Attn: Lee Anne Sexton
Tel: (214) 443-1162
Fax: (312) 326-8001
Email: leeanne.sexton@rrd.com
Faulk Barchus, PLLC Trade Debt $12,393
Ernst & Young LLP Trade Debt $4,000
Petrobeacon Technology Ltd Trade Debt $3,776
AT Solutions, Inc. Trade Debt $3,346
Dowell Pham Harrison, LLP Trade Debt $1,590
Intralinks, Inc. Trade Debt $1,421
Air Conditioning Innovative Trade debt $807
Solutions, Inc.
The Whitney Smith Company, Inc. Trade Debt $760
Platinum Parking Trade Debt $730
EnerCom, Inc. Trade Debt $93
ENERGY & EXPLORATION: Files for Chapter 11 to Reorganize
--------------------------------------------------------
Fort Worth, Texas-based exploration and production companies Energy
& Exploration Partners, Inc. and two of its affiliates sought for
Chapter 11 bankruptcy protection due to a confluence of factors,
including a decline in the prices of crude oil and natural gas, two
flooding events and the commencement of an involuntary proceeding
against its affiliate Energy & Exploration Partners Operating, LP.
The Debtors estimated assets in the range of $500 million to $1
billion and liabilities of $1 billion to $10 billion. Substantially
all of the Debtors' outstanding debt was incurred in connection
with the Ft. Trinidad acquisition, including the retirement of all
prior funded debt.
"Like many other E&P companies, the Debtors' operations have been
significantly impacted by the dramatic decline in global oil
prices, the continued low price of natural gas, and general
uncertainty and dislocation in the energy markets," said John R.
Castellano, managing director of AP Services LLC, the Debtors'
restructuring advisor. Mr. Castellano added the depression in oil
prices left the Debtors unable to raise cash or identify capital
resources such as bank funding or private investment, or to access
the public debt and equity markets for necessary funds to support
their business plans.
The Debtors disclosed that during the second half of 2015, they
were stymied by significant weather activity in North and East
Texas, including two historic 100-year flooding events, which
negatively impacted their operations and revenue margins.
Specifically, the flooding of the Trinity River caused many of the
Debtors' leasehold sites to be inaccessible by road in May and June
due to high water and to shut down temporarily until the water
level receded in early July. Given the storm remediation efforts
continued into July, the Debtors experienced lower than expected
production for the second quarter and a portion of the third
quarter of 2015, and increased operating expenses.
The Debtors said the commencement of the Involuntary Proceeding
against Energy & Exploration Partners Operating, LP caused
substantial
disruption to their operations. The Involuntary Proceeding was
initiated by Baker Hughes Oilfield Operations, Inc., Cactus Pipe &
Supply, LLC and Schlumberger Technology Corporation and their
related affiliates on Nov. 25, 2015. The Debtors filed an answer
to the Involuntary Proceeding seeking to convert the involuntary
into a voluntary Chapter 11 case.
As of Sept. 30, 2015, the Debtors had total estimated proved
reserves of 30,117 MBoe, 12,657 MBoe were developed and 17,460 MBoe
were undeveloped. Prior to the decline in oil prices, for the year
ending Dec. 31, 2014, the Debtors generated gross revenue of
approximately $262 million and net income of approximately $95.6
million, ending the year with approximately $62 million of cash on
their balance sheet, Court document shows.
As of the Petition Date, the Debtors' primary liabilities consist
of (a) first lien secured indebtedness in the form of a senior
credit facility at ENXP LLC; (b) convertible notes at ENXP, Inc.;
(c) a promissory note payable to Chesapeake Exploration L.L.C. at
ENXP, Inc.; (d) trade debt; (e) royalty obligations; (f) severance
obligations and (g) hedging arrangements with BP Energy Company and
Cargill, Incorporated, acting through its Cargill Risk Management
Business Unit. As of Dec. 1, 2015, the Debtors estimate that they
owe approximately $27.3 million to their vendors.
The Debtors' most valuable assets are their leasehold interests in
the oil and gas region of East Texas. The Debtors intends to
reorganize around these assets and to get additional capital for
their continued development in accordance with their business
plan.
The 2014 Ft. Trinidad Acquisition
In July 2014, the Debtors completed the purchase of approximately
18,300 net acres in the Ft. Trinidad field in the East Texas Basin
from TreadStone Energy Partners, LLC, including interests in 45
gross (43.5 net) producing wells and 10 gross (9.8 net) wells
waiting on completion, a three-well salt water disposal system and
approximately 30 square miles of 3D seismic data, for a purchase
price of approximately $700 million in cash, after post-closing
adjustments.
In connection with the Ft. Trinidad Acquisition, ENXP LLC entered
into a $775 million senior secured term loan agreement, dated as of
July 22, 2014, among itself, ENXP, Inc., as guarantor, Credit
Suisse AG, Cayman Islands Branch, as administrative agent and
collateral agent and the other lenders. As of the Petition Date,
there was approximately $765.3 million in aggregate principal
amount outstanding under the Prepetition First Lien Facility.
Also as part of the Ft Trinidad Acquisition, on July 22, 2014 ENXP,
Inc. issued $375 million in principal amount of 8.00% convertible
subordinated notes due 2019.
DIP Commitment
Prior to the Petition Date, the Debtors obtained a commitment from
a group holding approximately 42% of the Prepetition First Lien
Facility and a majority of the Debtors' Convertible Notes starting
in August 2015 (the "Crossholder Group") to provide the Debtors
with up to $135 million of new capital to fund operations, and to
pay ordinary course expenses and the costs of administering these
Chapter 11 cases.
First Day Motions
To minimize the adverse effects of the commencement of these
Chapter 11 cases on their businesses and to ensure that their
restructuring goals can be implemented with limited disruption to
operations, the Debtors have requested relief in "first day"
motions and applications. The Debtors seek, among other things,
Court permission to use existing cash management system, pay
critical vendor claims, honor prepetition and postpetition royalty
obligations, prohibit utility providers from discontinuing
services, pay certain taxes and fees, and pay employee
compensation. A copy of the declaration in support of the First
Day Motions is available at:
http://bankrupt.com/misc/2_ENERGY_Declaration.pdf
About Energy & Exploration
Energy & Exploration Partners, Inc., Energy & Exploration Partners,
LLC and Energy & Exploration Partners Operating GP, LLC filed
Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Proposed Lead
Case No. 15-44931) on Dec. 7, 2015. John R. Castellano signed the
petition as interim chief financial officer. Judge Russell F.
Nelms has been assigned the case.
The Debtors own approximately 61,323 net acres in Texas and
Wyoming. In Texas, the Debtors' operations are located throughout
Madison, Grimes, Leon, Houston and Walker Counties, where the
Debtors are pursuing opportunities in the Buda-Rose stacked
comingled play, the Woodbine sandstone, the Eagle Ford shale and
other stacked formations in the region.
The Debtors have engaged Bracewell & Giuliani, LLP as counsel,
Evercore Group LLC as financial advisor, AP Services, LLC as
restructuring advisor, Ernst & Young as tax advisor, Hein &
Associates as independent auditor and Prime Clerk LLC as notice,
claims and balloting agent.
As of the Petition Date, the Debtors employ approximately 59 people
across their various operations.
ENERGY & EXPLORATION: Says It's Business as Usual While in Ch. 11
-----------------------------------------------------------------
Energy and Exploration Partners, Inc., on Dec. 7 disclosed that
after careful consideration it filed a voluntary petition under
Chapter 11 of the U.S. Bankruptcy Code in order to deleverage its
balance sheet and achieve a viable capital structure for building
long-term value. To fund its operations during the restructuring
process, the Company secured commitments for up to $135 million of
new Debtor-In-Possession financing from a group of its existing
senior lenders, subject to court approval. This filing also
converts the previously announced involuntary petition for ENXP
Operating, LP filed by certain vendors into a voluntary petition.
ENXP believes the Chapter 11 process provides it the greatest
flexibility to continue its operations during the current period of
depressed prices for oil and natural gas and adverse operating
conditions.
"We have taken this difficult, but necessary step in order to
provide adequate time to complete ongoing discussions and processes
with our lenders to restructure our balance sheet and create a
strong financial foundation for the future," said Hunt Pettit,
Energy & Exploration Partners' Founder and Chief Executive Officer.
"We appreciate the confidence our lenders continue to place in the
Company, as demonstrated by their commitment to provide a
significant level of additional capital while we work to finalize a
restructuring to align our balance sheet with the realities of the
current commodity price environment. We continue to manage our
operations without interruption, and have taken measures to reduce
costs without affecting our ability to operate our business safely
and efficiently."
Energy & Exploration Partners has been and continues to work
closely with its suppliers and business partners to ensure its
business continues uninterrupted. The Company fully expects to
continue producing oil and gas and maintain adequate staff.
In conjunction with the filings, the Company requested customary
relief to support its royalty owners, partners, and employees
during the process. As part of this relief, the Company asked the
Court for permission to continue employee programs and mineral
interest owner payments without interruption. The Company remains
in ongoing, productive dialogue with its creditors and other
stakeholders regarding the terms of the restructuring.
Prior to this voluntary filing, the Company initiated a reduction
in staffing to match its personnel levels with its expected
activity levels in the current commodity price environment.
Several senior executives also resigned to pursue other interests.
Those include Executive Vice President Business Operations &
Development Robert Karpman, Executive Vice President of
Acquisitions and Divestitures David Patty, Chief Operating Officer
John Richards, Chief Accounting Officer Jim Howe and Chief
Financial Officer Brian Nelson. The Company welcomes John
Castellano of AlixPartners, LLP as Interim Chief Financial Officer.
The other roles will be covered by existing personnel during the
restructuring process.
Commenting on the departures, Hunt Pettit said: "On behalf of the
Company and all of its stakeholders, I would like to thank these
gentlemen for their leadership and tireless work. I appreciate
their contributions, and wish them the very best in their future
endeavors."
Energy & Exploration Partners' legal advisor is Bracewell &
Giuliani LLP and the Company has engaged AlixPartners, LLP as its
restructuring advisor. Evercore has been retained as the Company's
investment banker.
About Energy & Exploration Partners
Energy and Exploration Partners, Inc. -- http://www.enxp.com/-- is
an independent exploration and production operator based in Fort
Worth, Texas, focused on the acquisition, exploration and
development of conventional and unconventional oil and gas
resources. Its current operations are focused on the stacked
formations in the East Texas Basin.
ENLINK MIDSTREAM: S&P Rates Convertible Preferred Units 'BB'
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BBB' corporate
credit and senior unsecured ratings on EnLink Midstream Partners
L.P. and revised the outlook to negative from stable. The outlook
revision follows the outlook revision on Devon Energy Corp., which
controls EnLink's general partner. At the same time, S&P assigned
its 'BB' issue-level ratings to EnLink's proposed convertible
preferred units.
"We believe the announced Tall Oak acquisition is neutral for
EnLink's credit quality. Though the acquisition further improves
EnLink's scale and allows the partnership to further solidify its
footprint in the Oklahoma area, these benefits are offset by higher
adjusted leverage for the next 12 to 24 months. Devon, the
majority owner of EnLink's general partner (GP), has also announced
a transaction to acquire Felix Energy, Tall Oak's largest customer.
This jointly pursued acquisition continues to reflect the level of
strategic importance of EnLink to Devon. Included in the $1.55
billion purchase price is a $500 million installment payment to the
sellers and would be paid within the next 12 months with an option
to pay $250 million within 24 months. We expect EnLink to finance
the initial $1.05 billion purchase price by means of a $750 million
convertible preferred issuance, $250 million of EnLink Midstream
LLC units, and the remainder on the partnership's revolving credit
facility," S&P said.
The partnership's pro forma credit profile will benefit from
increased scale as S&P forecasts the acquisition of Tall Oak to add
incremental EBITDA from 2015 levels largely dependent on Devon's
drilling program in the acreage dedication.
"The negative rating outlook reflects that of Devon, which controls
the general partnership," said Standard & Poor's credit analyst
Mike Llanos. Devon's negative outlook reflects S&P's expectation
that credit measures will be weak for the rating over the next
year. A rating action at Devon would lead to a rating change on
EnLink. On a stand-alone basis S&P expects EnLink to maintain
adequate liquidity while maintaining adjusted debt leverage in the
4.5x to 5x range over the next two years.
S&P would lower the ratings if it lowered its rating on Devon. This
could occur if S&P no longer expects FFO to debt to improve to
above 45% in 2017 or if the company pursued a more aggressive
financial policy. S&P could also lower the ratings if EnLink
sustains adjusted leverage above 5x.
S&P could revise EnLink's outlook to stable if S&P revised Devon's
outlook to stable. This could occur if Devon can improve its FFO
to debt above 45% on a sustainable basis. An improvement in
Enlink's stand-alone credit profile would not impact Enlink's final
rating due to the rating linkage between the two.
FJK PROPERTIES: US Trustee Yet to Appoint Creditors' Committee
--------------------------------------------------------------
More than six months after FJK Properties Inc. filed for Chapter 11
protection, the U.S. trustee overseeing its case is yet to appoint
a committee that will represent the company's unsecured creditors.
In a filing with the U.S. Bankruptcy Court for the Southern
District of Florida, the Justice Department's bankruptcy watchdog
announced that "until further notice," it will not appoint an
unsecured creditors' committee in FJK Properties' bankruptcy case.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
About FJK Properties
FJK Properties Inc. filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Fla. Case No. 15-19494) on May 26, 2015. The Debtor tapped
Robert C. Furr and the law firm Furr and Cohen, P.A., as its
counsel. Hon. Paul G. Hyman, Jr., is assigned to the case.
FRAC SPECIALISTS: Plan Promises 20% Recovery for Unsecureds
-----------------------------------------------------------
Frac Specialists, LLC, has filed with the bankruptcy court a
Chapter 11 plan that promises an estimated recovery of 20% for
holders of unsecured claims estimated to total $19.9 million.
The Joint Plan of Reorganization proposed by Frac Specialists and
its affiliated debtors provides that:
* Capital One, holder of a secured claim of $4,950,000 will
receive the full amount of the allowed claim in one cash payment.
* A. Certain of equipment lessors will receive on the initial
distribution date payment in cash on that will provide them with a
70% to 80% recovery on account of their secured claims and won't
receive any recovery for their deficiency claims. Specifically,
Bank of the West, with a secured claim estimated at $1,515,000,
will receive $1,200,000 cash; CIT Equipment Finance ($7,775,000
claim) will receive $5,500,000; and MB Financial Bank ($2,130,000
claim) will receive $1,500,000.
B. Other equipment lessors will receive monthly payments until
paid in full in three years. EH National Company ($1,492,000
claim), and People's Capital and Leasing Corp ($3,315,000 claim),
Prime Alliance Bank ($855,000 claim), Signature Business Leasing,
LLC ($2,600,000 claim), and Summit ($532,000 claim) will receive
new promissory notes providing (1) interest only payments at 5% for
seven months, (2) for months 8 through 35, equal monthly payments
calculated to amortize the principal balance of such note, with
accrued interest, by the fifth anniversary of the Initial
Distribution Date; and (3) on or before the third anniversary of
the Initial Distribution Date, will receive the entire unpaid
principal balance, together with any unpaid accrued interest. EH,
et al.'s deficiency claims will be paid at the same percentage as
general unsecured creditors in lump sum at note maturity.
* Holders of general unsecured claims estimated at $19,859,530
will each receive the lesser of (a) cash equal to 20% of the amount
of such allowed general unsecured claim or (b) cash equal to such
holder's pro rata share of $3 million. The general unsecured
creditors have an estimated recovery of 20%.
* Holders of equipment lessor deficiency claims estimated at
$5,510,498 will receive on or before the third anniversary of the
Effective Date cash equal to the percentage of recovery received by
holders of allowed general unsecured claims multiplied by the
amount of the allowed equipment lessor deficiency claim. The
estimated recovery is 20%.
* All interests will be extinguished and all holders of the
interests will not receive or retain any property on account of
such interests under the Plan.
A copy of the Disclosure Statement filed Nov. 20, 2015, is
available for free at:
http://bankrupt.com/misc/Frac_Specialists_367_DS.pdf
About Frac Specialists
Frac Specialists, LLC, Cement Specialists, LLC, and Acid
Specialists, LLC, are oilfield service providers serving the
exploration and production industry within the Permian Basin.
Noble Natural Resources, LLC, Javier Urias and Alex Hinojos
collectively own 100% of the membership interests in the
Companies.
The Companies sought Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Lead Case No. 15-41974), on May 17, 2015. Larry P. Noble
signed the petitions as manager.
On May 27, 2015, the Court directed the joint administration of
the cases. The Debtors disclosed $61,675,313 in assets and
$57,982,488 in liabilities.
Judge Michael Lynn presides over the cases. The Debtors tapped
Lynda L. Lankford, Esq., and Jeff P. Prostok, Esq., at Forshey &
Prostok, LLP, as their counsel.
The U.S. Trustee appointed five creditors to serve on an
official committee of unsecured creditors. The Committee is
represented by Mark E. Andrews, Esq., and Aaron M. Kaufman, Esq.,
at Dykema Cox Smith.
FREESCALE SEMICONDUCTOR: S&P Raised Then Withdrew CCR
-----------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Austin, Tex.-based Freescale Semiconductor Inc. to
'BBB-' from 'B' following its acquisition by NXP B.V. The outlook
is stable.
S&P also raised its issue-level rating on Freescale's senior
secured credit facilities, which consist of its $2.7 billion
first-lien term loan due 2020, $800 million first-lien term loan
due 2021, and $400 million revolving credit facility due 2019; and
its $500 million 5% senior notes due 2021 and $960 million 6%
senior notes due 2020 to 'BBB-' from 'B'. The senior notes have
been assumed by NXP at transaction close.
At the same time, Standard & Poor's removed all ratings from
CreditWatch, where S&P placed them with positive implications on
March 2, 2015.
S&P subsequently withdrew its 'BBB-' corporate credit rating on
Freescale and S&P's issue-level ratings on the company's senior
secured credit facilities following its acquisition by NXP and the
repayment of the outstanding first-lien term loans.
"The rating action follows the announcement that Freescale has been
acquired by NXP and the outstanding first-lien term loans have been
fully repaid," said Standard & Poor's credit analyst David Tsui.
FUHU INC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
Fuhu, Inc. 15-12465
aka Fuhu, Inc., a California Corpration
aka Nabi
909 N. Sepulveda Blvd., Suite 540
El Segundo, CA 90245
Fuhu Holdings, Inc. 15-12466
Type of Business: Maker of the nabi tablets just for children.
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Hon. Christopher S. Sontchi
Debtor's Counsel: Colin R. Robinson, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
Wilmington, DE 19801
Tel: 302-778-6426
Fax: 302-562-4400
Email: crobinson@pszjlaw.com
- and -
Michael Seidl, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 N. Market Street, 17th Street
PO Box 8705
Wilmington, DE 19899-8405
Tel: 302 652-4100
Fax: 302-652-4400
Email: mseidl@pszjlaw.com
Estimated Assets: $10 million to $50 million
Estimated Debts: $100 million to $500 million
The petition was signed by James Mitchell, chief executive
officer.
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Foxconn CMMSG Trade Debt $46,170,433
Hon Hai Precision Industry Co Ltd
No. 2 Zihyou St., Tucheng Dist.
New Taipei City 236, Taiwan
sfwang@emea. foxconn. com
Tel: 886 (2) 2268-3466
Fax: 886 (2) 2268-6216
D&H Distributing Co Lawsuit $42,429,956
2525 N. 7th Street P.O. Box 5967
Harrisburg PA 17110-0967
mschwab@dandh.com
Tel: 717-255-7886
Fax: 717-731-1909
Richard Macias
Creim Macias Koenig & Frey LLP
c/o D&H Distributing Co
633 W Fifth Street 51st Floor
Los Angeles, CA 90071
rmacias@cmkllp.com
Tel: (213) 614-1944
Fax: (213) 614-1961
Fusing International, Inc. Trade Debt $14,945,467
500 S Kreamer Blvd, Suite 100
Brea, CA 92821
howardlin@foxconn. com
Tel: 866-473-3932
Morgan Stanley Debt $11,571,717
1585 Broadway, Floor 39
New York, NY 10036
siobhan.monahan@morganstanley. com
Tel: 212-761-6538
Wistron Corporation Lawsuit $6,397,440
PO Box 370307
El Paso, TX 79937
rolland than@wistron.com
Tel: 972-906-7810
Fax: 972-906-7815
Viacom Ad Sales Trade Debt $2,200,000
PO Box 13683
Newark, NJ 07188-0683
amy.morales@viacom.com
Tel: 212-654-1527
Fax: 212-325-6684
Disney Consumer Products, Inc. Trade Debt $1,562,407
500 S. Buena Vista Street
Burbank, CA 91521
Max. Caine@disney.com
Tel: 818-560-2841
Fax: 818-843-1566
Keen High Holding (HK) Limited Trade Debt $1,519,211
Unit 13, 7/F Technology Park,
18 On Lai St.
Shatin NT Hong Kong
arthur@keenhi.com
Tel: (86) 755-88309222
Fax: (86) 755-88309519
Arima Communications Corporation Trade debt $1,423,732
12F-1 No58 Ruihu Street Neihu Dist
Taipei 114 Taiwan
johnwang@arimacomm.tom.tw
Tel: 886 (2) 8227-7755 x 3400
24-7 Intouch Trade Debt $1,043,268
240 Kennedy Street
Winnipeg, MB R3C 1T1
gfettes @24-7 intouch.com
Tel: 204-318-3033
Fax: 800-395-7809
Power-All Networks Related Party $900,000
1/F Harbour View 1 Podium, 12 Science
Park East Ave. Hong Kong Science Park
Shatin, New Territories Hong Kong
stevehui@p owerallnetworks.com
Fax: 852-2111-8156
Steptoe & Johnson Legal $768,418
1001 Page Mill Road Building 4
Palo Alto, CA 94304
sdutta@steptoe.com
Tel: 650-687-9510
Fax: 650-687-9484
Mazarine Enterprises Inc. Trade Debt $746,731
909 N Sepulveda Blvd Suite 650
El Segundo, CA 90245
alisonc@nabicares.com
Tel: 714-875-7727
Fuhu Taiwan Intercompany $704,615
8F NO 1 Songgao Rd
Xunyi District
Taipei 11073 Taiwan
jenny.tsai@fuhu.com
Tel: 886 (2) 2722-9900 x 101
Fax: 886 (2) 2722-9996
Trend Power Limited Trade Debt $671,068
Flat 1, 9F, Kwai Cheong Ctr
Kwai Chung Hong Kong
Ivan@trendpawer.me
Tel: 852-2625-5779
Fax: 852-2422-3200
O'Melveny & Myers LLP Legal $623,131
400 South Hope Street, 14"'Floor
Los Angeles, CA 90071
Tel:213-430-6400
Fax:213-430-6407
Kerr & Wagstaffe, LLP Legal $573,447
101 Missiona St., 18th Floor
San Francisco, CA 94105
labar@kerrwagstaffe.com
Tel: 415-371-8500
Fax: 415-371-0500
TargetCW Lawsuit $458,612
9475 Chesapeake Drive
San Diego, CA 92123
info@targetcw.com
Tel: 858-810-3000
Fax: 858-810-3001
Amazon Web Services, Inc. Trade Debt $454,552
PO BOX 84023
Seattle, WA 98124-8423
aws-receivables-
supp ort@emai l.amazon. com
Tel: 206-266-4064
Fax: 206-266-7010
R+L Global Logistics Trade Debt $407,557
PO Box 405939
Atlanta, GA 30384
edith. carvaj al@rlglobal. com
Tel: 866-416-4792
Fax: 859-689-9404
FUHU INC: In Chapter 11 with Deal to Sell to Mattel for $9.5M
-------------------------------------------------------------
Fuhu, Inc., and Fuhu Holdings, Inc., sought for Chapter 11
bankruptcy protection in Delaware with the goal of selling
substantially all of their assets to Mattel, Inc. for $9.5 million.
The sale will be subject to higher and better bids and approval of
the Court. The Debtors expect to continue their operations in the
ordinary course pending the outcome of the sale process.
The maker of nabi tablets for children cited a dispute with Hon Hai
Precision Industry Co., Ltd and Fusing International, Inc.
("collectively "Foxconn"), its sole manufacturer that resulted in a
significant loss of sales during the holiday season of 2014.
The Debtors related that in late 2014, Foxconn failed to timely
deliver the nabi tablets for the 2014 holiday season which late
delivery and missed holiday season resulted in a significant
oversupply of product in the first calendar quarter of 2015.
Fuhu returned approximately $90 million worth of inventory to
Foxconn, and agreed to purchase the inventory back as necessary to
meet supply. Foxconn has since ceased manufacturing of the nabi
tablets.
James Mitchell, chief executive officer of the Debtors, said
despite efforts by Fuhu to reach a resolution which would allow the
Company to fulfill the pending purchase orders for their retailers
and online stores, Foxconn suddenly ceased all negotiations and
communications with Fuhu's management and counsel after releasing
only limited product. He added that Foxconn's actions during this
period caused significant damage to the Company and significantly
limited Fuhu's revenue.
In late October, after negotiations with Foxconn ultimately ceased,
Fuhu informed its secured lender, Tennenbaum, of its critical
situation. According to Mr. Mitchell, although seemingly willing
to work with Fuhu, Tennenbaum almost immediately issued a Notice of
Default and exercised its rights under a Deposit Account Control
Agreement, sweeping more than $4.5 million from Fuhu's bank
accounts and leaving Fuhu will little funds and no inventory to
continue to operate its business.
Tennenbaum issued several other default notices dated November 16
and November 24.
Fuhu had retained experienced financial consultants, restructuring
counsel and an investment banker to begin to market the company for
sale.
The Mattel Loan and Sale Transaction
Mattel, Inc. made a loan of $300,000 to the Debtors on or about
Dec. 4, 2015, to provide funding necessary to permit the
Debtors to complete their preparations for the commencement of
these cases, including the documentation of the sale of the
Debtors' assets. The Purchaser's pre-petition loan is secured by
substantially all of the Debtors' assets and was perfected by the
filing of financing statements in applicable Delaware and
California filing offices on or about Dec. 4, 2015.
As of the Petition Date, the Debtors entered into a Teem Sheet for
the Acquisition of the Assets of the Fuhu Entities, with Mattel for
the sale of substantially all of the Debtors' assets for
$9,500,000, subject to certain adjustments and the assumption of
certain liabilities. The Term Sheet is subject to definitive
documentation in the form of an asset purchase agreement.
The Debtors and the Purchaser contemplate entering into that
agreement shortly after the Petition Date and filing it with the
Court.
Secured Credit Facilities
Obsidian Agency Services, Inc., as Agent for Tennenbaum Special
Situations Fund IX, LLC and Tennenbaum Special Situations IX-O,
L.P., holds a first-priority security interest in substantially all
of the assets of the Debtors other than accounts receivable, as
well as a second-priority security interest in the Debtors'
accounts receivable, under a Credit Agreement dated May 27, 2015,
as amended, and a Guaranty and Collateral Agreement of the same
date. As of Nov. 25, 2015, Tennenbaum asserted that it
was owed approximately $6.5 million by the Debtors.
LSQ Funding Group, L.C. factored certain of the Debtors' accounts
receivable under a Factoring and Security Agreement dated
April 21, 2015. Although LSQ factored only a limited subset of the
receivables, it holds afirst-priority security interest in all of
the Debtors' receivables. As of the Petition Date, the outstanding
amount owed to LSQ on account of factored receivables was
approximately $1.3 million.
Concurrently with the bankruptcy petition, the Debtors filed
various motions seeking, among other things, authority to use cash
collateral, utilize existing cash management system, pay employee
compensation, and pay critical vendor claims.
About Fuhu
Fuhu, Inc. and Fuhu Holdings, Inc. filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Proposed Lead Case No. 15-12465) on
Dec. 7, 2015. The petition was signed by James Mitchell as chief
executive officer. The Debtors estimated assets in the range of
$10 million to $50 million and liabilities of $100 million to $500
million. Pachulski Stang Ziehl & Jones LLP represents the Debtors
as counsel. Judge Christopher S. Sontchi presides over the case.
Fuhu is headquartered in El Segundo, California, and employs
approximately 115 employees and retains one independent contractor
who work in various areas including marketing, sales, operations,
creative, technology, development and management.
Court document indicates that between 2010 and 2013, Fuhu's revenue
grew to more than $195 million in 2013. Fuhu's array of nabi
tablets are sold in more than 10,000 retail outlets, including
Target, Best Buy, Costco Wholesale, Toys R'Us and Walmart stores.
Fuhu Moldings owns significant intellectual property assets of the
Debtors, including trademarks and copyrights.
GRAHAM GULF: Creditors' Meeting Adjourned to Dec. 15
----------------------------------------------------
The meeting of creditors of Graham Gulf Inc. has been adjourned to
Dec. 15, 2015, at 2:00 p.m., according to a filing with the U.S.
Bankruptcy Court for the Southern District of Alabama.
The meeting will take place at 113 St. Joseph Street, Courtroom 2C,
Mobile, Alabama.
The court overseeing the bankruptcy case of a company schedules the
meeting of creditors usually about 30 days after the bankruptcy
petition is filed. The meeting is called the "341 meeting" after
the section of the Bankruptcy Code that requires it.
A representative of the company is required to appear at the
meeting and answer questions under oath. The meeting is presided
over by the U.S. trustee, the Justice Department's bankruptcy
watchdog.
About Graham Gulf
Founded in 1996, Graham Gulf, Inc. operates 11 fast supply vessels
designed specifically for providing a more efficient and
cost-effective support for field production operations and remote
drilling location services.
Graham Gulf filed Chapter 11 bankruptcy petition (Bankr. S.D. Ala.
Case No. 15-03065) on Sept. 18, 2015. The petition was signed by
Janson Graham, the president and owner. The Debtor estimated
assets and liabilities in the range of $10 million to $50 million.
Helmsing, Leach, Herlong, Newman & Rouse PC serves as the Debtor's
counsel.
GT ADVANCED: Dec. 2 Auction of ASF Furnaces Cancelled
-----------------------------------------------------
GT Advanced Technologies Inc. and its affiliated debtors inform the
U.S. Bankruptcy Court for the District of New Hampshire that the
auction of the Debtors' advanced sapphire furnaces ("ASF")
scheduled for Dec. 2, 2015 had been cancelled.
The Court had previously approved the Debtors' proposed bidding
procedures for the auction. The ASF Furnaces that were to be sold
during the auction are:
(1) new ASF Furnaces located in Hong Kong, China, which have
been crated;
(2) new ASF Furnaces located in Hong Kong, China, which have
been crated, but which are missing Hex Manifolds kits that the
buyer will need to acquire separately;
(3) new ASF Furnaces located in the facility in Mesa, Arizona,
which have been crated;
(4) used ASF Furnaces located in the Mesa Facility, which have
been de-installed and crated; and
(5) used ASF Furnaces located in the Mesa Facility, which are
currently installed and not crated.
Under the previously approved amended settlement agreement among
the Debtors, other than GT Advanced Technologies Limited, Apple
Inc., and Apple's affiliate Platypus Development LLC, provided that
in the event the auction does not take place on or prior to Dec. 2,
2015, all ASF Furnaces located at the Mesa Facility other than the
retained furnaces will be deemed excess furnaces and title to such
ASF Furnaces will immediately and automatically for no
consideration and without need for further court order, transfer to
Apple, free and clear of all liens, claims, encumbrances and
interests.
GT Advanced Technologies is represented by:
Luc A. Despins, Esq.
Andrew V. Tenzer, Esq.
James T. Grogan, Esq.
G. Alexander Bongartz, Esq.
PAUL HASTINGS LLP
Park Avenue Tower
75 East 55th Street, First Floor
New York, NY 10022
Telephone: (212)318-6000
Facsimile: (212)319-4090
E-mail: lucdespins@paulhastings.com
andrewtenzer@paulhastings.com
jamesgrogan@paulhastings.com
alexbongartz@paulhastings.com
- and -
Daniel W. Sklar, Esq.
Holly J. Barcroft, Esq.
NIXON PEABODY LLP
900 Elm Street
Manchester, NH 03101-2031
Telephone: (603)628-4000
Facsimile: (603)628-4040
E-mail: dsklar@nixonpeabody.com
hbarcroft@nixonpeabody.com
About GT Advanced Technologies
Headquartered in Merrimack, New Hampshire, GT Advanced Technologies
Inc. -- http://www.gtat.com/-- produces materials and equipment
for the electronics industry. On Nov. 4, 2013, GTAT announced a
multi-year supply deal with Apple Inc. to produce sapphire glass
material for use in consumer electronics products.
Under the deal, Apple would provide GTAT with a prepayment of
approximately $578 million paid in four installments and, starting
in 2015, GTAT would reimburse Apple for the prepayment over a
five-year period.
GT is a publicly held corporation whose stock was traded on NASDAQ
under the ticker symbol "GTAT." GTAT was de-listed from the NASDAQ
stock exchange in October 2014.
As of June 28, 2014, the GTAT Group's unaudited and consolidated
financial statements reflected assets totaling $1.5 billion and
liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had
$85 million in cash, $84 million of which is unencumbered.
On Oct. 6, 2014, GT Advanced Technologies and eight affiliates
filed voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code (Bankr. D.N.H. Lead Case No. 4-11916). GT
says that it has sought bankruptcy protection due to a severe
liquidity crisis brought about by its issues with Apple.
The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as
attorneys and Kurtzman Carson Consultants LLC as claims and
noticing agent.
The U.S. Trustee has named seven members to the Official Committee
of Unsecured Creditors. The Committee' professionals are Kelley
Drye as its bankruptcy counsel; Devine, Millimet & Branch,
Professional Association as local counsel; EisnerAmper LLP as
financial advisors; and Houlihan Lokey Capital, Inc. as investment
banker.
GTAT has reached a settlement with Apple. The settlement gives
Apple an approved claim for $439 million secured by more than 2,000
sapphire furnaces that GT Advanced owns and has four years to sell,
with proceeds going to Apple. In addition, Apple gets
royalty-free, non-exclusive licenses for GTAT's technology.
The bankruptcy case is assigned to Judge Henry J. Boroff.
GWE TEMPE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: GWE Tempe, LLC
5000 Arizona Mills Circle #669
Tempe, AZ 85282
Case No.: 15-15453
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Debtor's Counsel: Philip G. Mitchell, Esq.
THE CAVANAGH LAW FIRM
1850 N Central Ave Ste 2400
Phoenix, AZ 85004
Tel: 602-322-4000
Fax: 602-322-4105
Email: Philip.Mitchell@azbar.org
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Paul Le Blanc, chief financial officer.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/azb15-15453.pdf
HACIENDAS GRANDES: Case Summary & Largest Unsecured Creditor
------------------------------------------------------------
Debtor: Haciendas Grandes Development LLC
13337 South Street, Ste. 770
Cerritos, CA 90703
Case No.: 15-28573
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Debtor's Counsel: Michael A Rivera, Esq.
RIVERA LAW CORPORATION
7840 Firestone Blvd Ste 105
Downey, CA 90241
Tel: 562-869-0480
Fax: 562-869-0485
Email: michael@riveralaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jose Molina, manager.
The Debtor listed John Krempasky as its largest unsecured creditor
holding a claim of $40,910.
A copy of the petition is available for free at:
http://bankrupt.com/misc/cacb15-28573.pdf
HASTINGS INSURANCE: S&P Affirms Then Withdraws 'B-' ICR
-------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B-' issuer
credit rating on Jersey-based intermediate holding company Hastings
Insurance Group (Finance) PLC (HIGF).
S&P subsequently withdrew the rating on HIGF at its request. The
outlook was stable at the time of the withdrawal.
The rating affirmation is based on S&P's view that HIGF's group
consolidated capital and earnings position remains weak. As of
Dec. 31 2014, the group's total equity was GBP305 million, from
which S&P deducts GBP470 million for goodwill and GBP120 million
for intangible assets. This results in negative net assets under
S&P's criteria. However, the group's operating companies,
Advantage Insurance Company and broker Hastings Insurance Services
Ltd., are well capitalized on a regulatory basis.
In S&P's opinion, HIGF's business risk profile benefited from a
good operating performance and continued rapid premium growth in a
fiercely competitive market. However, the insurer's competitive
position is restricted by its narrow product focus on motor
insurance -- approximately 88% -- and its lack of geographic
diversity.
HUTCHESON MEDICAL: Ch. 11 Trustee Seeks to Use Sale Proceeds
------------------------------------------------------------
Ronald Glass, Chapter 11 Trustee for Hutcheson Medical Center,
Inc., and Hutcheson Medical Division, Inc., asks the United States
Bankruptcy Court for the Northern District Georgia, Rome Division,
to schedule an emergency hearing to consider his request for use of
cash collateral.
The Chapter 11 Trustee proposes to use the Sale Proceeds from the
sale of the Chickamauga Clinic in connection with the
Disproportionate Share Hospital Payment system. As a provider of
indigent care in the Northwest Georgia area, the Debtors
participate in DSH, whereby federal funds are used to make payments
to help subsidize the uncompensated cost of hospital care provided
to Medicaid and uninsured patients. The Trustee has received
confirmation that he is eligible to make a DSH intergovernmental
transfer to the Authority in the amount of $369,333 on or before
December 3, 2015.
The time-sensitive intergovernmental transfer will yield a DSH
payment of approximately $1,138,159 to the Debtors' estates, the
Chapter 11 Trustee tells the Court. The Trustee has been informed
that the DSH payment would be received within 5 – 10 business
days of the intergovernmental transfer.
If the Trustee does not make the intergovernmental transfer on or
before December 3, 2015, the Debtors will lose the ability to
participate in the DSH program and the Debtors' estates will forego
the opportunity to generate up to $768,826 in extra DSH funds to
which they are entitled due to past indigent care provided.
Pending a final hearing, the Chapter 11 Trustee requires immediate
use of cash collateral to meet the obligations of the DSH program.
It is essential that the Chapter 11 Trustee make the
intergovernmental transfer on or before December 3, 2015, to
participate in the DSH payment. Without immediate use of cash
collateral, the Chapter 11 Trustee says he will forego the ability
to participate in the DSH program, thereby worsening the Debtors'
estates. Accordingly, if interim relief is not granted, the
Debtors' estates will be immediately and irreparably jeopardized to
the detriment of the Debtors, creditors, and other parties in
interest.
Ronald Glass, Special Counsel for Chapter 11 Trustee is represented
by:
J. Robert Williamson, Esq.
J. Hayden Kepner, Jr. , Esq.
Ashley Reynolds Ray, Esq.
SCROGGINS & WILLIAMSON, P.C.
1500 Candler Building
127 Peachtree Street, NE
Atlanta, Georgia 30303
Phone: (404) 893-3880
Fax: (404) 893-3886
Email: rwilliamson@swlawfirm.com
hkepner@swlawfirm.com
aray@swlawfirm.com
About Hutcheson Medical Center
Hutcheson Medical Center, Inc., operates the 179-bed hospital and
related ancillary facilities, including, without limitation, a
skilled nursing home and an ambulatory surgery center, located in
Ft. Oglethorpe, Georgia, known as Hutcheson Medical Center. HMC
leases the land and buildings that comprise the Medical Center
from
The Hospital Authority of Walker, Dade and Catoosa Counties.
HMC and Hutcheson Medical Division, Inc., sought Chapter 11
bankruptcy protection (Bankr. N.D. Ga. Case No. 14-42863 and
14-42864) in Rome, Georgia, on Nov. 20, 2014. The cases are
jointly administered under Case No. 14-42863.
The cases have been assigned to the Honorable Paul W. Bonapfel.
The Debtors are represented by Ashley Reynolds Ray, Esq., and J.
Robert Williamson, Esq., at Scroggins and Williamson, in Atlanta,
Georgia.
HMC disclosed $32.8 million in assets and $52.9 million in
liabilities as of the Chapter 11 filing.
HUTCHESON MEDICAL: County Wants Operations to Continue til Dec. 21
------------------------------------------------------------------
Walker County asks the United States Bankruptcy Court for the
Northern District of Georgia, Rome Division, to require Ronald
Glass, Chapter 11 Trustee for Hutcheson Medical Center, Inc., and
Hutcheson Medical Division, Inc., to continue to accept patients
and keep the hospital operating until at least December 21, 2015.
Walker County asks that no layoffs occur, that hospital operations
continue, and that no further actions to interrupt or change the
current operating procedures of the hospital are implemented up and
through December 21, 2015. It further requests that the Court
accept one of the two bids made on the hospital.
Walker County is represented by:
Stuart F. James, Esq.
JAMES, JAMES & JOYNER
735 Broad Street, Suite 908
Chattanooga, TN 37402
Phone: (423) 756-3646
Fax: (423) 756-3647
About Hutcheson Medical Center
Hutcheson Medical Center, Inc., operates the 179-bed hospital and
related ancillary facilities, including, without limitation, a
skilled nursing home and an ambulatory surgery center, located in
Ft. Oglethorpe, Georgia, known as Hutcheson Medical Center. HMC
leases the land and buildings that comprise the Medical Center
from The Hospital Authority of Walker, Dade and Catoosa Counties.
HMC and Hutcheson Medical Division, Inc., sought Chapter 11
bankruptcy protection (Bankr. N.D. Ga. Case No. 14-42863 and
14-42864) in Rome, Georgia, on Nov. 20, 2014. The cases are
jointly administered under Case No. 14-42863.
The cases have been assigned to the Honorable Paul W. Bonapfel.
The Debtors are represented by Ashley Reynolds Ray, Esq., and J.
Robert Williamson, Esq., at Scroggins and Williamson, in Atlanta,
Georgia.
The Debtors' Chapter 11 Plan and Disclosure Statement are due
March 20, 2015.
HMC disclosed $32.8 million in assets and $52.9 million in
liabilities as of the Chapter 11 filing.
No request has been made for the appointment of a trustee or
examiner.
JW RESOURCES: $375K Straight Creek Settlement Approved
------------------------------------------------------
JW Resources, Inc., and its affiliated debtors sought and obtained
from Judge Gregory R. Schaaf of the U.S. Bankruptcy Court for the
Eastern District of Kentucky approval of the Settlement of Rights
to Escrowed Funds that they had entered into with Straight Creek
Coal Mining, Inc., and Wells Fargo Bank, National Association.
Xinergy Corp. and Straight Creek entered into an Escrow Agreement
and established an escrow account, in connection with the Straight
Creek Acquisition, the terms of which, were outlined in the Asset
Purchase Agreement executed by Xinergy Corp. and Straight Creek,
SCRB Properties an SCRB Processing. Straight Creek deposited
$3,000,000 into the Escrow Account, one purpose of which was to
reimburse Straight Creek, SCRB Properties and SCRB Processing for
costs associated with the construction of a decant pipe located at
the Bloss Branch Slurry Impoundment in Gardner, Clay County,
Kentucky ("Bloss Branch Decant Pipe Project").
The Escrow Agreement provided that the Escrow Agent would release
funds held in the Escrow Account on the sixth day following receipt
of a Reimbursement Notice from Straight Creek. The Escrow
Agreement also provided that if Xinergy disagreed with the request
for reimbursement, then Xinergy would be required to deliver a
Reimbursement Dispute Notice to the Escrow Agent within five
calendar days of receipt of the Reimbursement Notice. The Escrow
Agreement additionally provided that if the parties could not
resolve a reimbursement dispute, an independent engineer would
determine whether the proposed use of the funds requested was
commercially and economically reasonable to accomplish the Bloss
Branch Decant Pipe Project within 30 days of receipt of a
Reimbursement Dispute Notice. The decision of the independent
engineer would be final and binding and the parties would be
required to equally share the fees and expenses related to
retaining the independent engineer.
Straight Creek negotiated with the Xinergy Debtors to reduce the
amount in the Escrow Account to approximately $495,000. This
amount was to be held specifically for the reimbursement of costs
incurred by Straight Creek in connection with the Bloss Branch
Decant Pipe Project. Pursuant to the negotiations, the balance of
the Escrow Account in excess of $495,000 was distributed to
Xinergy. It was also agreed that the Escrow Agreement's
termination date would be modified to June 2, 2015. On that date,
the remaining funds in the Escrow Account were to be distributed.
The Debtors related that Straight Creek delivered a Reimbursement
Notice to the Escrow Agent and that the Reimbursement Notice
provided an estimate for the cost of delayed work on the Bloss
Branch Decant Pipe Project and sought reimbursement in the
approximate amount of $475,542. The Debtors further related that
three days later, on April 6, 2015, Xinergy delivered a
Reimbursement Dispute Notice to the Escrow Agent because of its
concerns regarding whether the Straight Creek's cost estimate was
commercially and reasonably necessary for the construction of the
Bloss Branch Decant Pipe Project. The Debtors told the Court that
the parties engaged in arms’ length and good faith negotiations
to come to an agreement and resolve their dispute. They further
told the Court that under the terms of the Settlement, the parties
will divide the proceeds remaining in the Escrow Account as
follows: $375,000 paid to Straight Creek and any remaining amount,
approximately $120,000, paid to the Xinergy Debtors. The Debtors
added that following the release of these funds from the Escrow
Account, the Escrow Account will be empty, and the account can be
closed.
JW Resources is represented by:
Ronald E. Gold, Esq.
Douglas L. Lutz, Esq.
Paige L. Ellerman, Esq.
FROST BROWN TODD LLC
3300 Great American Tower
301 East Fourth Street
Cincinnati, OH 45202
Telephone: (513)651-6800
Facsimile: (513)651-6981
E-mail: rgold@fbtlaw.com
dlutz@fbtlaw.com
pellerman@fbtlaw.com
- and -
Adam R. Kegley, Esq.
FROST BROWN TODD LLC
250 West Main Street, Suite 2800
Lexington, KY 40507
Telephone: (859)231-0000
Facsimile: (859)231-0011
E-mail: akegley@fbtlaw.com
About JW Resources
JW Resources Inc. and its subsidiaries are U.S. producers of
thermal coal with mineral reserves, mining operations and coal
properties located in the Central Appalachian ("CAPP") regions
of Kentucky. JW acquired the thermal coal mining operations of
Xinergy in eastern Kentucky for $47.2 million in February 2013.
JW's business operations comprise what is known as the "Straight
Creek" operations located in Bell, Leslie and Harlan Counties,
Kentucky, and the "Red Bird" operations located in Bell, Leslie,
Knox, and Clay Counties, Kentucky. JW Resources is the parent and
sole shareholder of SCRB Properties, Inc., Straight Creek Coal
Mining, Inc. and SCRB Processing, Inc.
JW Resources and its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. E.D. Ky. Lead Case No. 15-60831) in London,
Kentucky on June 30, 2015.
The Debtors tapped Frost Brown Todd LLC as counsel, and Energy
Ventures Analysis, Inc., as sale advisor.
JW Resources estimated $1 million to $10 million in assets and
$50 million to $100 million in debt. Straight Creek estimated
$10 million to $50 million in assets and $50 million to $100
million in debt.
JW RESOURCES: Court Approves SCE&G Settlement
---------------------------------------------
JW Resources, Inc., and its affiliated debtors sought and obtained
from Judge Gregory R. Schaaf of the U.S. Bankruptcy Court for the
Eastern District of Kentucky, approval of the settlement between
Straight Creek Coal Mining, Inc., and South Carolina Electric & Gas
Company ("SCE&G").
Straight Creek and SCE&G entered into a Contract for Sale of Coal
dated April 23, 2013, and that Pursuant to the Agreement, Straight
Creek agreed to sell and SCE&G agreed to purchase a total of
864,000 tons of coal in 2014 and 2015, or 432,000 tons of coal each
year. SCE&G agreed to pay Straight Creek $71.75 per ton pursuant
to the Agreement and that the Agreement will terminate on Dec. 31,
2015.
The Debtors told the Court that the Agreement contains an ipso
facto clause which states that either Party may terminate the
Contract by providing written notice of termination to the other
Party in the event the other Party commences any bankruptcy or
similar proceeding. The Debtors further told the Court that SCE&G
sent a letter to Straight Creek, by which, among other things,
SCE&G reserved its alleged right to terminate the Agreement
pursuant to the ipso facto clause on the basis that the Agreement
is a forward contract or swap agreement subject to the safe harbor
provisions of Sections 556 or 560 of the Bankruptcy Code. The
Debtor related that SCE&G contended that it may terminate the
Agreement pursuant to the ipso facto clause. The Debtors further
related that they disputed the assertion that the Agreement is
either a forward contract or swap agreement and further disputed
SCE&G's alleged right to terminate the Agreement pursuant to the
ipso facto clause. The Debtors contended that in order to resolve
their dispute, Straight Creek and SCE&G have negotiated an
amendment to the Agreement ("Proposed Amendment").
The Proposed Amendment contained these principal terms, among
others:
(1) Prior to the closing of the Mining Operations Assets Sale,
Straight Creek will sell and SCE&G will purchase one train, i.e.
train #C335, (approximately 12,500 tons) of coal at a price equal
to $71.75 per ton.
(2) Following the closing of the Mining Operations Assets
Sale, the Agreement, as amended by the Proposed Amendment, will be
assigned to the Purchaser.
(3) So long as the Purchaser demonstrates to SCE&G's
reasonable satisfaction that it has coal of the quality and
quantity to meet the requirements of the Agreement, the Purchaser
will sell and SCE&G will purchase approximately 112,475 tons of
coal at a price equal to $61.75 per ton.
(4) If the closing of the Mining Operations Assets Sale,
including assumption and assignment of the Agreement, does not
occur on or before 5:00 p.m. (ET) on Oct. 15, 2015, then the
Agreement will automatically terminate.
The Official Committee of Unsecured Creditors objected to the
Debtors' Motion. It alleged that there was no information in the
record regarding the value being transferred through the Proposed
Amendment and the Debtors have failed to disclose the value that
will be transferred to insiders of the Debtors through the Proposed
Amendment.
SCE&G told the Court that the only way the Debtors' estates could
derive value from the Contract is if it is assumed and assigned to
a third party which would be able to deliver the coal called for
thereunder. It added that because the Contract may be terminated
by SCE&G pursuant to the Ipso Facto Clause, the Debtor can only
assume and assign the Contract with SCE&G's consent, and SCE&G will
only consent to assignment upon the terms reflected in the Proposed
Amendment. SCE&G concluded that approval of the settlement will
result in the best recovery for the Debtors' creditors.
Judge Schaaf found that the relief requested in the Debtors' Motion
was in the best interest of the Debtors, their estates and
creditors, is fair and equitable, and is a reasonable exercise of
the Debtors' business judgment.
JW Resources is represented by:
Ronald E. Gold, Esq.
Douglas L. Lutz, Esq.
Paige L. Ellerman, Esq.
FROST BROWN TODD LLC
3300 Great American Tower
301 East Fourth Street
Cincinnati, OH 45202
Telephone: (513)651-6800
Facsimile: (513)651-6981
E-mail: rgold@fbtlaw.com
dlutz@fbtlaw.com
pellerman@fbtlaw.com
- and -
Adam R. Kegley, Esq.
FROST BROWN TODD LLC
250 West Main Street, Suite 2800
Lexington, KY 40507
Telephone: (859)231-0000
Facsimile: (859)231-0011
E-mail: akegley@fbtlaw.com
The Official Committee of Unsecured Creditors of JW Resources,
Inc., et. al., is represented by:
T. Kent Barber, Esq.
BARBER LAW PLLC
3168 Arrowhead Drive
Lexington, KY 40503
Telephone: (859)296-4372
E-mail: kbarber@barberlawky.com
- and -
Thomas R. Schuck, Esq.
W. Timothy Miller, Esq.
Casey Cantrell Swartz, Esq.
TAFT, STETTINIUS & HOLLISTER, LLP
425 Walnut Street, Suite 1800
Cincinnati, OH 45202
Telephone: (513)357-9452
Facsimile: (513)381-0205
E-mail: schuck@taftlaw.com
miller@taftlaw.com
cswartz@taftlaw.com
South Carolina Electric & Gas Company is represented by:
John W. Ames, Esq.
C.R. Bowles, Jr., Esq.
James R. Irving, Esq.
BINGHAM GREENEBAUM DOLL LLP
3500 National City Tower
101 S. Fifth Street
Louisville, KY 40202
Telephone: (502)587-3656
Facsimile: (502)587-3695
E-mail: james@bgdlegal.com
cbowles@bgdlegal.com
jirving@bgdlegal.com
- and -
David B. Wheeler, Esq.
MOORE & VAN ALLEN PLLC
78 Wentworth Street
Post Office Box 22828
Charleston, SC 29413-2828
Telephone: (843)579-7015
Facsimile: (843)579-8727
E-mail: davidwheeler@mvalaw.com
About JW Resources
JW Resources Inc. and its subsidiaries are U.S. producers of
thermal coal with mineral reserves, mining operations and coal
properties located in the Central Appalachian ("CAPP") regions
of Kentucky. JW acquired the thermal coal mining operations of
Xinergy in eastern Kentucky for $47.2 million in February 2013.
JW's business operations comprise what is known as the "Straight
Creek" operations located in Bell, Leslie and Harlan Counties,
Kentucky, and the "Red Bird" operations located in Bell, Leslie,
Knox, and Clay Counties, Kentucky. JW Resources is the parent and
sole shareholder of SCRB Properties, Inc., Straight Creek Coal
Mining, Inc. and SCRB Processing, Inc.
JW Resources and its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. E.D. Ky. Lead Case No. 15-60831) in London,
Kentucky on June 30, 2015.
The Debtors tapped Frost Brown Todd LLC as counsel, and Energy
Ventures Analysis, Inc., as sale advisor.
JW Resources estimated $1 million to $10 million in assets and
$50 million to $100 million in debt. Straight Creek estimated
$10 million to $50 million in assets and $50 million to $100
million in debt.
JW RESOURCES: Court Authorizes Auction Sale of Mobile Equipment
---------------------------------------------------------------
JW Resources, Inc., and its affiliated debtors sought and obtained
from Judge Gregory R. Schaaf of the U.S. Bankruptcy Court for the
Eastern District of Kentucky authorization for Ritchie Bros.
Auctioneers (America) Inc. to conduct an auction sale of the
Debtors' mobile equipment.
The Auction Procedures contain, among others, these terms:
(a) Ritchie will conduct a public Auction of the Equipment,
free and clear of any liens, claims, interests and encumbrances, on
or before Oct. 15, 2015. The Equipment will be sold "as is, where
is," with all faults, and without any representation or warranty
whatsoever. Ritchie will be granted access to the Equipment to
prepare the Equipment and conduct the Auction. Ritchie may
determine to sell the Equipment in one or several lots and in one
or a series of sales.
(b) Ritchie will guarantee the Debtors net minimum proceeds
from the sale of the Equipment of $5,000,000 ("Guarantee"). All
proceeds between the amount of the Guarantee and $5,700,000 will be
retained by Ritchie as part of its fee. All proceeds in excess of
$5,700,000 will be divided between the Debtors and Ritchie such
that the Debtors will receive 80% of any such proceeds.
(c) Ritchie will refurbish the Equipment and prepare it for
Auction. If Ritchie spends less than $225,000 to refurbish the
Equipment, the amount of proceeds received by the Debtors will be
increased on a dollar for dollar basis as set forth in the
Contract.
(d) Ritchie will be permitted to charge an administrative fee
of: (a) 2.5% on lots selling for more than $2,500 (up to a maximum
of $950) or (b) 10% on lots selling for $2,500 or less to the
purchaser(s) of the Equipment.
Judge Schaaf contended that the Auction will afford a full, fair
and reasonable opportunity for any person or entity to make a
higher or otherwise better offer to purchase the Equipment. He
further contended that the auction sale of the Equipment will
constitute the highest or otherwise best offer for the Equipment
and will provide a greater recovery for the Debtors' estates than
would be provided by any other available alternative. Judge Schaaf
authorized the Debtors to transfer the Equipment to the successful
purchaser at the Auction free and clear of all liens and other
interests.
Objection Raised
The Official Committee of Unsecured Creditors objected to the
transfer of the sale proceeds of the auction without further notice
or Court approval, as the Debtors' Proposed Order provided that the
proceeds received by the Debtors upon closing of any sale of the
Equipment would be applied first to the DIP Obligations, which
includes the payment from proceeds to Energy Ventures Analysis,
Inc. of its success fee in the amount of $200,000, prior to
satisfaction of the DIP Obligations. The Committee related that
the Proposed Order also states that auction proceeds will be
payable as set forth in the Contract to Auction, and that the
Contract to Auction provides that Ritchie will withhold "all
amounts payable to Ritchie Bros. Hereunder, including commissions,
and any advances, together with interest thereon;" and pay the
remaining amounts pursuant to the Proposed Order.
The Committee contended that it is highly inappropriate for
Ritchie, a non-fiduciary of the Debtors, to have unfettered
discretion to deduct costs and then disperse the remaining auction
proceeds without Court oversight. It further contended that the
auction proceeds should be disbursed only after further notice of
such disposition and an opportunity for parties in interest to
object.
* * *
In his order, Judge Schaaf held that upon closing of any sale of
the Equipment, the proceeds will be applied first to the DIP
Obligations, and upon satisfaction of the DIP Obligations, the
remaining proceeds will be applied to the obligations owing
pursuant to the Prepetition Credit Documents. He further held that
that if none of the Committee, any chapter 7 trustee, or any
party-in-interest with standing and requisite authority, has timely
filed the appropriate pleadings, and timely commenced the
appropriate proceeding, challenging the Prepetition Lien and Claim
Matters by no later than the Challenge Deadline and the Challenge
Deadline has expired, then $250,000 of the proceeds of the Auction
will be deposited into escrow ("Escrowed Funds") to be used for the
benefit of unsecured creditors pursuant to further orders of the
Court.
Judge Schaaf ordered the Debtors to provide the Official Committee
of Unsecured Creditor's counsel 14 days' notice of any Equipment
that is to be abandoned. He added that upon expiration o such
notice, the Debtors are authorized to abandon any Equipment that
cannot be sold at the Auction.
Judge Schaaf ordered that invoices supporting fees and expenses
being charged to the Debtors by Ritchie Bros. be submitted to
counsel for the Debtors, with copies to counsel for the DIP Agent,
counsel for the Prepetition Sponsor Agreement Agent and counsel for
the Committee. Judge Schaaf added that Ritchie Bros. will not be
required to file an application seeking compensation for services
or reimbursement of expenses with the Court.
JW Resources is represented by:
Ronald E. Gold, Esq.
Douglas L. Lutz, Esq.
Paige L. Ellerman, Esq.
FROST BROWN TODD LLC
3300 Great American Tower
301 East Fourth Street
Cincinnati, OH 45202
Telephone: (513)651-6800
Facsimile: (513)651-6981
E-mail: rgold@fbtlaw.com
dlutz@fbtlaw.com
pellerman@fbtlaw.com
- and -
Adam R. Kegley, Esq.
FROST BROWN TODD LLC
250 West Main Street, Suite 2800
Lexington, KY 40507
Telephone: (859)231-0000
Facsimile: (859)231-0011
Email: akegley@fbtlaw.com
The Official Committee of Unsecured Creditors is represented by:
T. Kent Barber, Esq.
BARBER LAW PLLC
3168 Arrowhead Drive
Lexington, KY 40503
Telephone: (859)296-4372
E-mail: kbarber@barberlawky.com
About JW Resources
JW Resources Inc. and its subsidiaries are U.S. producers of
thermal coal with mineral reserves, mining operations and coal
properties located in the Central Appalachian ("CAPP") regions
of Kentucky. JW acquired the thermal coal mining operations of
Xinergy in eastern Kentucky for $47.2 million in February 2013.
JW's business operations comprise what is known as the "Straight
Creek" operations located in Bell, Leslie and Harlan Counties,
Kentucky, and the "Red Bird" operations located in Bell, Leslie,
Knox, and Clay Counties, Kentucky. JW Resources is the parent and
sole shareholder of SCRB Properties, Inc., Straight Creek Coal
Mining, Inc. and SCRB Processing, Inc.
JW Resources and its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. E.D. Ky. Lead Case No. 15-60831) in London,
Kentucky on June 30, 2015.
The Debtors tapped Frost Brown Todd LLC as counsel, and Energy
Ventures Analysis, Inc., as sale advisor.
JW Resources estimated $1 million to $10 million in assets and
$50 million to $100 million in debt. Straight Creek estimated
$10 million to $50 million in assets and $50 million to $100
million in debt.
JW RESOURCES: Wants to Extend Plan Filing Deadline to January 2016
------------------------------------------------------------------
JW Resources Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Eastern District of Kentucky to further extend their
exclusive periods to:
a) file a Chapter 11 plan until Jan. 25, 2016; and
b) solicit acceptances of that plan until March 10, 2016.
The Debtors said they have worked diligently to wind down their
remaining business obligations and to assess the best approach to
winding down their estates in the bankruptcy process, in
consultation with the Official Committee of Unsecured Creditors. A
second extension of the Exclusivity Periods is needed to permit the
Debtors and Committee to finalize their proposed plan, assess
claims and causes of action, and work with key constituents on the
best approach to maximize value for all creditors, said Paige L.
Ellerman, Esq., at Frost Brown Todd LLC, attorney for the Debtors'
bankruptcy cases.
A hearing is set for Dec. 17, 2016, at 9:00 a.m. (ET) in the U.S
Bankruptcy Court, Second Floor Courtroom, 100 East Vine Street in
Lexington, Kentucky.
About JW Resources
JW Resources Inc. and its subsidiaries are U.S. producers of
thermal coal with mineral reserves, mining operations and coal
properties located in the Central Appalachian ("CAPP") regions of
Kentucky. JW acquired the thermal coal mining operations of Xinergy
in eastern Kentucky for $47.2 million in February 2013. JW's
business operations comprise what is known as the "Straight Creek"
operations located in Bell, Leslie and Harlan Counties, Kentucky,
and the "Red Bird" operations located in Bell, Leslie, Knox, and
Clay Counties, Kentucky. JW Resources is the parent and sole
shareholder of SCRB Properties, Inc., Straight Creek Coal Mining,
Inc. and SCRB Processing, Inc.
JW Resources and its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. E.D. Ky. Lead Case No. 15-60831) in London,
Kentucky on June 30, 2015.
The Debtors tapped Frost Brown Todd LLC as counsel, and Energy
Ventures Analysis, Inc., as sale advisor.
JW Resources estimated $1 million to $10 million in assets and $50
million to $100 million in debt. Straight Creek estimated $10
million to $50 million in assets and $50 million to $100 million in
debt.
KINDRED HEALTHCARE: Moody's Affirms B1 CFR, Outlook Negative
------------------------------------------------------------
Moody's Investors Service changed the rating outlook of Kindred
Healthcare, Inc. to negative from stable. Moody's also affirmed
the company's existing ratings, including the B1 Corporate Family
Rating and B1-PD Probability of Default Rating.
The negative rating outlook reflects Moody's expectation that
Kindred will face a number of headwinds in growing EBITDA that will
constrain the company's ability to reduce its high financial
leverage. The implementation of new patient criteria rules in
Kindred's long term acute care hospitals will initially have a
negative impact on volumes and constrain revenue and EBITDA growth
in the company's largest segment. The company also faces evolving
reimbursement models in other segments of its business, including
home health and hospice services, and more restrictive covenant
requirements in the second quarter of 2016.
These ratings were affirmed:
Corporate Family Rating at B1
Probability of Default at B1-PD
Senior secured term loan at Ba2 (LGD 2)
Senior unsecured notes at B2 (LGD 5)
Speculative Grade Liquidity Rating at SGL-2
RATING RATIONALE
Kindred's B1 Corporate Family Rating reflects Moody's expectation
that financial leverage will remain high. The rating also
incorporates Moody's consideration of risks associated with a high
reliance on the Medicare program as a source of revenue and the
ongoing changes to reimbursement of post-acute care services.
Moody's also anticipates that the company will pursue acquisitions
to fill out service line offerings in certain targeted markets.
However, the rating also reflects Kindred's scale as one of the
largest post-acute care service providers by revenue and sites of
service. Kindred also has diversity by service line with a
significant presence across many sub-segments of the post-acute
care continuum.
The negative rating outlook reflects Moody's expectation that
Kindred will face challenges growing EBITDA in 2016, which will
delay the anticipated reduction in leverage to below 5.0 times.
Sustained higher leverage reduces the company's ability to absorb
negative developments related to changes in the post-acute care
reimbursement environment at the current rating level. Further,
without meaningful EBITDA growth or debt repayment, the headroom
related to compliance with a maximum leverage covenant will erode
due to a scheduled step down in June 2016.
Given the high leverage of the company, Moody's does not believe an
upgrade of the rating is likely in the near term. However, the
rating could be upgraded if the company can navigate reimbursement
headwinds and continue to grow both revenue and EBITDA and maintain
or expand EBITDA margins. The ratings could also be upgraded if
adjusted leverage is expected to be reduced and sustained below 4.5
times.
Moody's could downgrade the ratings if the company is unable to
reduce and sustain adjusted debt to EBITDA below 5.0 times or if
negative developments in Medicare reimbursement in any of the
company's subsectors are meaningfully detrimental to operating
results. The ratings could also be downgraded if liquidity
deteriorates or compliance with financial covenants becomes less
certain.
Kindred Healthcare, Inc. is a leading provider of long term acute
care hospital, inpatient rehabilitation, contract rehabilitation,
home health, and hospice services. Reported revenue for the twelve
months ended Sept. 30, 2015, was approximately
$6.5 billion.
The principal methodology used in these ratings was Global
Healthcare Service Providers published in December 2011.
LA FRONTERA: S&P Puts 'B+' Rating on Watch Neg on Expected Sale
---------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'B+' project
finance rating on La Frontera Generation LLC on CreditWatch with
negative implications. The recovery rating is '2', indicating
70%-90% recovery in case of default; the recovery is in the lower
end of that band.
The CreditWatch placement stems from the recent announcement by
NextEra Energy Resources Inc. that it intends to sell 2,988
megawatt (MW) La Frontera Generation LLC to Texas-based Luminant
Holdings, which, upon closing, will own about 16.7 gigawatts (GW)
of generation capacity in Texas, pending regulatory approvals.
Luminant and its ultimate parent company, Energy Future Holdings
Inc., entered bankruptcy during 2014 and are not presently rated;
although the companies are currently in bankruptcy, the court has
already approved this transaction. The assets will be sold for a
price of $1.59 billion, inclusive of cash and working capital; this
reflects a valuation of about $440 per kilowatts (kW) of installed
capacity.
"The CreditWatch placement reflects the possibility that La
Frontera's project rating could be lowered, potentially by several
notches, after the transaction is closed in the first quarter of
2016," said Standard & Poor's credit analyst Michael Ferguson.
"This would occur if separateness provisions were not sufficient to
delink the project from the credit quality of its new parent,
Luminant Holdings, which is unrated."
MF GLOBAL: CFTC Bashes EX-Chief Executive's Bid to Stay Suit
------------------------------------------------------------
Ed Beeson at Bankruptcy Law360 reported that the U.S. Commodity
Futures Trading Commission on Dec. 4, 2015, slammed an attempt by
ex-MF Global Holdings Ltd. chief executive Jon Corzine to pause the
regulator's civil case against him while he and others work out a
settlement to parallel litigation with the firm's former customers
and bankruptcy trustee.
Corzine along with his former subordinate at MF Global, Edith
O'Brien, on Nov. 30 sought to stay all proceedings in the
multidistrict litigation around the collapsed futures firm as they
and other individual defendants look to settle all claims.
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was one of
the world's leading brokers of commodities and listed derivatives.
MF Global provides access to more than 70 exchanges around the
world. The firm also was one of 22 primary dealers authorized to
trade U.S. government securities with the Federal Reserve Bank of
New York. MF Global's roots go back nearly 230 years to a sugar
brokerage on the banks of the Thames River in London.
On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance
USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y.
Case Nos. 11-15059 and 11-5058), after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S.
Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the
Bankruptcy Court entered an order approving the appointment of
Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC,
as Chapter 11 trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11
petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and
11-15810). On Dec. 27, the Court entered an order installing Mr.
Freeh as Chapter 11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan
LLP, as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained
Capstone Advisory Group LLC as financial advisor, while lawyers at
Proskauer Rose LLP serve as counsel.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
In April 2013, the Bankruptcy Court approved MF Global Holdings'
plan to liquidate its assets. Bloomberg News reported that the
court-approved disclosure statement initially told
creditors with $1.134 billion in unsecured claims against the
parent holding company why they could expect a recovery of 13.4%
to 39.1% from the plan. As a consequence of a settlement with
JPMorgan, supplemental materials informed unsecured creditors
their recovery was reduced to the range of 11.4% to 34.4%. Bank
lenders will have the same recovery on their $1.174 billion claim
against the holding company. As a consequence of the settlement,
the predicted recovery became 18% to 41.5% for holders of $1.19
billion in unsecured claims against the finance subsidiary,
one of the companies under the umbrella of the holding company
trustee. Previously, the predicted recovery was 14.7% to 34% on
bank lenders' claims against the finance subsidiary.
MICHAEL GLYN BROWN: 5th Circ. Dismisses Spouse's Appeal
-------------------------------------------------------
Michael Glyn Brown died during the pendency of his bankruptcy case.
The Debtor's estranged spouse, Rachel Brown, and the Debtor's
personal representative, Judy Lenox, claimed various allowances and
exemptions under the Texas Estates Code in Debtor's bankruptcy
case. The bankruptcy court ruled that neither Lenox nor Rachel was
entitled to relief under the Texas Estates Code.
In a Decision dated November 24, 2015, available at
http://is.gd/vHGf8Hfrom Leagle.com,the United States Court of
Appeals for the Fifth Circuit dismissed Rachel's appeal to the
extent she challenges the Texas Bankruptcy Court's final order
providing that "no assets from the bankruptcy estate shall be used
to pay" Rachel's claim for a probate allowance and affirmed the
bankruptcy court's order in all other respects.
The Fifth Circuit also denied the Motion to certify questions to
the Supreme Court of Texas.
The case is In the Matter of: MICHAEL GLYN BROWN, Deceased Debtor.
RACHEL BROWN, Appellant, v. RONALD J. SOMMERS, Trustee, Appellee.
MICHAEL GLYN BROWN; LIONHEART COMPANY, INCORPORATED; CASTLEMANE,
INCORPORATED; PRORENTALS, INCORPORATED; SUPERIOR VEHICLE LEASING
COMPANY, INCORPORATED; MG BROWN COMPANY, L.L.C., Debtors, JUDY
LENOX, Representative of Michael Glyn Brown; RACHEL BROWN,
Appellants, v. RONALD J. SOMMERS, Trustee, Appellee, NO. 15-20034
CONSOLIDATED WITH 15-20148 (5th Cir.).
NITON FUND: Chapter 15 Case Summary
-----------------------------------
Chapter 15 Petitioner: Matthew James Wright, Christopher Barnett
Kennedy
Chapter 15 Debtor: Niton Fund SPC
R&H Trust Co., Ltd.
West Bay Road
897, Windward 1, Regatta Officer Park
KY1-1103
Grand Cayman, Cayman Islands
Chapter 15 Case No.: 15-13252
Chapter 15 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Chapter 15 Petitioners' Counsel: Warren E. Gluck, Esq.
Barbra R. Parlin, Esq.
HOLLAND & KNIGHT LLP
31 West 52 nd Street
New York, NY 10019
Tel: 212-513-3200
Fax: 212-385-9010
warren.gluck@hklaw.com
barbra.parlinu@hklaw.com
Estimated Assets: Not Indicated
Estimated Debts: Not Indicated
OFFSHORE GROUP: Court Directs Joint Administration of Cases
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware entered an
order directing the consolidation for procedural purposes only and
the joint administration of the Chapter 11 cases of Offshore Group
Investment Limited, et al. under Lead Case No. 12422).
About Offshore Group
Offshore Group Investment Limited, et al., filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No.
15-12421) on Dec. 3, 2015. Christopher G. DeClaire signed the
petitions as authorized officer.
The Debtors have engaged Weil, Gotshal & Manges LLP as counsel;
Richards, Layton & Finger, P.A. as co-counsel; Lazard Freres & Co.
LLC as investment banker; Alvarez & Marsal North America, LLC, as
restructuring advisor; and Epiq Bankruptcy Solutions, LLC as claims
and noticing agent.
The Debtors are an international offshore drilling company
operating a fleet of modern, high-specification drilling units
around the world. The Debtors' principal business is to contract
their drilling units, related equipment, and work crews to drill
underwater oil and natural gas wells for major, national, and
independent oil and natural gas companies.
OFFSHORE GROUP: Obtains Interim Approval to Use Cash Collateral
---------------------------------------------------------------
The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware entered an order authorizing Offshore Group
Investment Limited, et al., to use cash collateral, on an interim
basis.
The Debtors told the Court they do not have available sources of
working capital and financing sufficient to carry on the operation
of their business without the use of Cash Collateral. The Debtors
said Cash Collateral will be used to fund their payments to vendors
and employees and to satisfy the other ordinary costs of operation,
including rent, taxes, and insurance.
Judge Shannon found that an immediate and critical need exists for
the Debtors to use the Cash Collateral in accordance with the
Approved Budget, for (i) working capital purposes, (ii) other
general corporate purposes of the Debtors and (iii) the
satisfaction of the costs and expenses of administering the Chapter
11 cases.
The parties having interests in the Cash Collateral are:
* Royal Bank of Canada, as Issuing Bank and administrative agent
and Wells Fargo Bank, National Association, as collateral
agent, under an Amended and Restated Credit Agreement, dated as
of March 28, 2013.
* Citibank, N.A., as administrative agent and Wells Fargo, as
collateral agent, under an Amended and Restated Term Loan
Agreement, dated as of Oct. 25, 2012.
* Citibank, as administrative agent and Wells Fargo, as
collateral agent under a Second Term Loan Agreement, dated as
of March 28, 2013.
* and Wells Fargo, as indenture trustee and collateral agent
under an Indenture, dated as of Oct. 25, 2012.
* Wells Fargo, as indenture trustee and collateral agent under an
Indenture, dated as of March 28, 2013.
The Prepetition Agents have consented to the Debtors' use of Cash
Collateral and such consent is binding on all Prepetition Secured
Parties.
The adequate protection provided to the Prepetition Secured Parties
includes:
* Valid, binding, enforceable, and perfected security interests
in and liens upon the Collateral. The Adequate
Protection Liens will be senior to the security interest and
liens under the respective Prepetition Loan Documents, shall
be subject to the Intercreditor Agreement, and will be
subordinate only to the Carve-Out.
* Allowed superpriority administrative expense claims against
the applicable Debtors pursuant to Sections 503(b), 507(a),
and 507(b) of the Bankruptcy Code, subject to the Carve-Out.
The Superpriority Claims will have priority over any and all
administrative expenses and all other claims against such
Debtors now existing or hereafter arising.
* Payment of all outstanding prepetition and postpetition
reasonable and documented fees and expenses incurred by: (i)
Milbank, Tweed, Hadley & McCloy LLP, as counsel to the Ad Hoc
Committee; (ii) Kobre & Kim (Cayman), as Cayman counsel to
the Ad Hoc Committee, (iii) PJT Partners LP, as financial
advisor to the Ad Hoc Committee, (iv) Morris, Nichols, Arsht
& Tunnell LLP, as local Delaware bankruptcy counsel to the Ad
Hoc Committee, (v) any local, maritime, or foreign counsel
retained by the Ad Hoc Committee whose services are discrete
and not duplicative of the services of any other counsel of
the Ad Hoc Committee, and (vi) Latham & Watkins LLP, as
counsel to the Revolving Credit Facility Administrative
Agent, and Young, Conaway, Stargatt & Taylor LLP, as local
counsel to the Revolving Credit Facility Administrative
Agent, and any other advisors retained by or on behalf of the
Revolving Credit Facility Administrative Agent for which the
Revolving Credit Facility Administrative Agent is entitled to
be reimbursed under the Revolving Credit Agreement.
* Continued compliance with the financial reporting required
under the Prepetition Loan Documents and certain additional
financial reporting requirements described in the Interim
Order.
* Delivery of a Budget Variance Report every three weeks to the
advisors to the Controlling Party, the Ad Hoc Committee, and
the Revolving Credit Facility Administrative Agent.
* Right to (i) access and inspect the Collateral against which
Adequate Protection Liens or Superpriority Claims are
granted, (ii) examine the Debtors' books and records, and
(iii) access the Debtors' officers and financial advisors to
discuss the Debtors' affairs, finances, and condition.
* Payment of interest to the Revolving Credit Facility
Administrative Agent at the default rate at the times
provided in the Revolving Credit Agreement.
* The ability to request additional forms of adequate
protection.
A further hearing will be held on Jan. 7, 2016, at 10:00 a.m. to
consider final approval of the Motion.
A copy of the Interim Cash Collateral Order is available at:
http://bankrupt.com/misc/44_OFFSHORE_InterimOrdCollateral.pdf
About Offshore Group
Offshore Group Investment Limited, et al., filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No.
15-12421) on Dec. 3, 2015. Christopher G. DeClaire signed the
petitions as authorized officer.
The Debtors have engaged Weil, Gotshal & Manges LLP as counsel;
Richards, Layton & Finger, P.A. as co-counsel; Lazard Freres & Co.
LLC as investment banker; Alvarez & Marsal North America, LLC, as
restructuring advisor; and Epiq Bankruptcy Solutions, LLC as claims
and noticing agent.
The Debtors are an international offshore drilling company
operating a fleet of modern, high-specification drilling units
around the world. The Debtors' principal business is to contract
their drilling units, related equipment, and work crews to drill
underwater oil and natural gas wells for major, national, and
independent oil and natural gas companies.
OFFSHORE GROUP: Plan Confirmation Hearing Set for Jan. 14
---------------------------------------------------------
Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware has scheduled a hearing to consider compliance
with disclosure and solicitation requirements and confirmation of
the the Joint Prepackaged Chapter 11 Plan of Offshore Group
Investment Limited and its affiliated on Jan. 14, 2016, at 10:30
a.m., at the request of the Debtors. Objection deadline is Jan.
7.
The Debtors told the Court that the relief sought is necessary to
the efficient administration of their Chapter 11 cases and will
assist in the expeditious confirmation of the Prepackaged Plan
while providing adequate notice to, and protecting the rights of,
all of the Debtors' creditors and Interest holders.
The Debtors engaged in extensive discussions with their secured
creditors over the past several months on the terms of a financial
restructuring. As a result of these negotiations, on Dec. 1, 2015,
holders of approximately 58% of the Secured Debt Claims and the
holders of more than two-thirds in outstanding principal amount of
the Revolving Credit Facility Claims, as well as the Revolving
Credit Facility Agent, entered into a restructuring support
agreement with the Debtors and Vantage Drilling Company, the
non-Debtor, ultimate parent company of all the Debtors. Under the
terms of the Restructuring Support Agreement, the Consenting
Debtholders and the Consenting Revolver Lenders agreed to enter
into a deleveraging transaction to (i) restructure the existing
debt and other obligations of the Debtors through the Prepackaged
Plan and (ii) petition the Grand Court of the Cayman Islands for
the official liquidation of Vantage Parent.
In accordance with the terms of the Restructuring Support
Agreement, on Dec. 2, 2015, the Debtors commenced a solicitation of
votes from all classes entitled to vote under the Bankruptcy Code.
The Debtors will complete their 29-day solicitation on
Dec. 31, 2015. Pursuant to the terms of the Restructuring
Support Agreement, the Consenting Debtholders and the Consenting
Revolver Lenders agreed to vote in favor of, and otherwise support,
the Prepackaged Plan, provided that certain conditions and
milestones are satisfied.
Under the terms of the Prepackaged Plan, holders of Allowed
Administrative Expense Claims, Fee Claims, and Priority Tax Claims
shall be paid in full in cash. Holders of Allowed Claims in Class
1 (Priority Non-Tax Claims), Class 2 (Other Secured Claims), Class
5 (General Unsecured Claims), and Class 6 (Intercompany Claims),
will be left unimpaired. Holders of Allowed Claims in Class 7
(Subordinated Claims) and holders of Interests in Class 9
(Intercompany Interests) will receive no distribution and shall be
Impaired.
The Restructuring will leave the Debtors' business intact under
OGIL and will substantially de-lever it. The Debtors' balance
sheet liabilities will be reduced from greater than $2.6 billion in
secured debt to $969 million in secured debt or $219 million in
secured debt once the New Secured Convertible PIK Notes are
converted into New Common Shares. This deleveraging will enhance
the Debtors' long-term growth prospects and competitive position
and allow the Debtors to emerge from these chapter 11 cases as a
stronger, reorganized entity better able to withstand a persistent,
depressed market for oil and natural gas.
The Rights Offering to be conducted in accordance with the
Prepackaged Plan, the Disclosure Statement, and the Rights Offering
Procedures was approved the Court.
The Backstop Agreement was also approved; provided, however, the
Backstop Premium Consideration is subject to entry of a further
order if an objection is timely filed.
Rights Offering Procedures
In connection with the Prepackaged Plan, OGIL intends to launch a
rights offering to Eligible Offerees, pursuant to which Eligible
Offerees will be entitled to receive their pro rata share of
subscription rights to acquire $75 million of new senior secured
second lien notes, on the terms and conditions set forth in the
Prepackaged Plan, at a purchase price equal to 100% of the
principal amount of such New Second Lien Notes so acquired. An
"Eligible Offeree" is a holder of an Allowed Secured Term Loan
Claim or an Allowed Secured Notes Claim as of the Rights Offering
Record Date.
The Rights Offering will be backstopped by certain of the
Consenting Debtholders. Each of the Backstop Parties, severally
and not jointly, has agreed, pursuant to the Backstop Agreement,
dated Dec. 3, 2015, among OGIL and certain holders of the Secured
Debt Claims to purchase all New Second Lien Notes that are not
purchased by other Eligible Offerees pursuant to the Rights
Offering on a pro rata basis in accordance with the percentages set
forth in the Backstop Agreement.
The Backstop Agreement is likewise integral to the Prepackaged
Plan. It ensures that capital required to fund the Prepackaged
Plan is committed prior to the commencement of the Rights Offering.
Moreover, the entry of an order approving the
Backstop Agreement and the Rights Offering Procedures within 30
calendar days from the Petition Date is a key milestone in the
Restructuring Support Agreement, and the failure to meet
such a milestone could result in the secured creditors withdrawing
their support of the Prepackaged Plan.
In exchange for the commitments offered by the Backstop Parties,
the Debtors have agreed to, among other things, pay a nonrefundable
"Backstop Premium Consideration" in an amount equal to $2.25
million, one-half of which will be paid in cash and
one-half of which will be paid in the New Second Lien Notes on the
Effective Date (except if the Backstop Agreement is terminated
under certain circumstances, then the entire Backstop Premium
Consideration will be paid in cash) and to pay or reimburse each
Backstop Party for its reasonable out-of-pocket expenses up to an
aggregate amount of $500,000. The Backstop Premium Consideration
is an integral part of the Backstop Agreement, and without approval
of the Backstop Premium Consideration, the Backstop Parties would
not have agreed to commit to purchase the Subscription Rights in
the Rights Offering.
In addition, the time within which the Debtors will file their
schedules of assets and liabilities and statements of financial
affairs is extented through Feb. 1, 2016.
About Offshore Group
Offshore Group Investment Limited, et al., filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Lead Case No. 15-12422) on
Dec. 3, 2015. Christopher G. DeClaire signed the
petitions as authorized officer.
The Debtors have engaged Weil, Gotshal & Manges LLP as counsel;
Richards, Layton & Finger, P.A. as co-counsel; Lazard Freres & Co.
LLC as investment banker; Alvarez & Marsal North America, LLC, as
restructuring advisor; and Epiq Bankruptcy Solutions, LLC as claims
and noticing agent.
The Debtors are an international offshore drilling company
operating a fleet of modern, high-specification drilling units
around the world. The Debtors' principal business is to contract
their drilling units, related equipment, and work crews to drill
underwater oil and natural gas wells for major, national, and
independent oil and natural gas companies.
QUIKSILVER INC: A&G Realty Approved as Real Estate Advisor
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Quiksilver Inc, et al., to employ A&G Realty Partners, LLC as real
estate advisor nunc pro tunc to the Petition Date.
A&G Realty is expected to, among other things:
a) consult with the Debtors to discuss the Debtors' goals,
objectives, and financial parameters in relation to the leases;
b) negotiate with the landlords of the lease properties on
behalf of the Debtors to assist the Debtors in obtaining Lease
modifications for the leases; and
c) negotiate with the landlords of the lease properties and
other third parties on behalf of the Debtors to assist the Debtors
in obtaining lease terminations, sales, or assignments for the
leases.
The Debtors will compensate A&G in accordance with these fixed
fees:
i) Monetary Lease Modifications -- For each Monetary Lease
Modification attained by A&G Realty on behalf of the Debtors, A&G
Realty will be paid the greater of $750 or 4% of the Occupancy Cost
Savings per Lease.
ii) Lease Terminations/Sales/Assignments -- For each Lease
Termination/Sale/Assignment attained by A&G Realty on behalf of the
Debtors, A&G Realty will earn and be paid 4% of the Gross Proceeds
received by the Debtors. Additionally, A&G will be paid a $100
administrative fee per lease.
iii) Lease Claim Mitigations -- For Lease Claim Mitigations
negotiated by A&G Realty on behalf of the Debtors, A&G Realty will
earn and be paid a fee of 4.5% of the Gross Proceeds per claim.
Reductions of 502(b)(6) claims will be calculated based upon the
dividend paid to unsecured creditors.
iv) Early Termination Rights -- For each acceptable Early
Termination Right obtained by A&G Realty on behalf of the Debtors,
A&G Realty will earn and be paid a fee of $2,500 per lease.
v) Non-Monetary Lease Modification -- For each acceptable
NonMonetary Lease Modification (excluding Early Termination Rights)
obtained by A&G Realty on behalf of the Debtors, A&G will earn and
be paid a fee of one thousand $1,250 per lease, regardless of the
aggregate number of NonMonetary Lease Modifications.
Additionally, the Debtors have paid A&G Realty a non-refundable
retainer fee in the amount of $25,000, which is to be applied to
the fees due under the Services Agreement.
The Debtors believe that the services A&G Realty will provide will
be complementary, rather than duplicative, of the services to be
performed by other professionals in the cases. The Debtors will
coordinate with A&G Realty and the Debtors' other professionals to
minimize unnecessary duplication of efforts among the Debtors'
professionals.
In the 90-day period prior to the Petition Date, A&G Realty
received from the Debtors a $25,000 prepetition retainer, $0 in
fees, and $0 on account of expense reimbursements. As of the
Petition Date, A&G Realty is holding $25,000 of the amount of the
prepetition retainer. Although A&G Realty's records indicate that
it is not owed any amounts in respect of prepetition services
provided to the Debtors, the Debtors understand that A&G Realty's
prepetition fees and expenses for the billing period preceding the
Petition Date may not have been fully accounted for as of the date
hereof.
To the best of the Debtors' knowledge, A&G Realty is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Quiksilver Inc.
Quiksilver, Inc., and its affiliates filed Chapter 11 bankruptcy
petitions (Bankr. D. Del., Case Nos. 15-11880 to 15-11890) on
Sept. 9, 2015. Andrew Bruenjes signed the petition as chief
financial officer. The Debtors disclosed total assets of $337
million and total debts of $826 million.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as the
Debtors' legal advisor, FTI Consulting, Inc. as their
restructuring advisor, and Peter J. Solomon Company as their
investment banker. Kurtzman Carson Consultants LLC acts as the
Debtors' claims and noticing agent.
The Debtors' First Amended Joint Chapter 11 Plan of Reorganization
provides that on the effective date, Reorganized Quiksilver will
issue new common stock to be distributed as follows: (a) first, 19%
to holders of Allowed Secured Notes Claims; (b) second, up to 77%
to Rights Offering Participants; and (c) third, 4% to the Backstop
Parties. As of the Effective Date, the anticipated value of the
New Quiksilver Common Stock will be approximately $276 million.
The U.S. trustee overseeing the Chapter 11 cases of Quiksilver
Inc. and its affiliates appointed seven members to the official
committee of unsecured creditors. The Committee tapped Akin Gump
Strauss Hauer & Feld LLP, and Pepper Hamilton LLP as its co-counsel
as co-counsel; Province Inc. as its financial advisor and PJT
Partners Inc. as investment banker.
QUIRKY INC: Says Objections to $4.7M Asset Sale Are Meritless
-------------------------------------------------------------
Kali Hays at Bankruptcy Law360 reported that Quirky Inc. on Dec. 3,
2015, urged a New York bankruptcy judge to deny creditor objections
to its proposed $4.7 million sale of some remaining company assets,
arguing that the creditor claims are meritless and made up of
mischaracterizations.
Creditors that have objected to the sale include Quirky's official
committee of unsecured creditors and General Electric Co., both of
which have taken issue with the company’s plans for the proceeds
of the sale and inventory included in the deal, respectively.
About Quirky, Inc.
Headquartered in New York City, Quirky designs and develops
various
products ranging from electronics, home and garden, kitchen and
organization and sells those products through big box retailers
like Target and Home Depot and online through its Web site. The
Company sold over 150 different products and a total of 4 million
units, generating over $50 million in revenue from its retail and
consulting businesses in 2014.
Quirky, Inc., Wink, Inc. and Undercurrent Acquisition, LLC filed
Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No.
15-12596) on Sept. 22, 2015, with a deal to sell their assets
related to the Wink business line as a going concern to
Flextronics
International USA Inc., for $15 million, absent higher and better
offers.
The petitions were signed by Charles Kwalwasser, the chief
administrative officer.
Judge Martin Glenn is assigned to the jointly administered cases.
Quirky estimated assets in the range of $10 million to $50 million
and liabilities of at least $50 million.
The Debtors have engaged Cooley LLP as counsel, Klestadt Winters
Jureller Southard & Stevens LLP as conflicts counsel, Centerview
Partners LLC as investment bankers, FTI Consulting, Inc., as
financial advisors, Rust Consulting/Omni Bankruptcy as claims and
noticing agent and Hilco IP Services LLC dba Hilco Streambank as
intellectual property disposition consultant to Quirky, Inc.
The U.S. Trustee for Region 2 appointed five members to the
Official Committee of Unsecured Creditors.
ROLLING HILLS: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Rolling Hills Realty, Inc
40 BRightwood Dr
Hagerstown, md 21740
Case No.: 15-26898
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Judge: Hon. Thomas J. Catliota
Debtor's Counsel: Ayodeji Badaki, Esq.
THE BADAKI LAW FIRM
223 North Prospect Street, Suite 310
Hagerstown, MD 21740
Tel: 2403294616
Fax: 8774369079
Email: admin@badakilawfirm.com
Total Assets: $1.89 million
Total Liabilities: $1.56 million
The petition was signed by Gregory L. Taylor, owner.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
A copy of the petition is available for free at:
http://bankrupt.com/misc/mdb15-26898.pdf
SANTA MARIA DECOR: Case Summary & 19 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Santa Maria Decor, Inc.
2104 S. Bradley Road
Santa Maria, CA 93455
Case No.: 15-12405
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
Central District of California (Santa Barbara)
Judge: Hon. Peter Carroll
Debtor's Counsel: Robert B Rosenstein, Esq.
ROSENSTEIN & ASSOCIATES
28600 Mercedes St Ste 100
Temecula, CA 92590
Tel: 951-296-3888
Fax: 951-296-3889
Email: robert@thetemeculalawfirm.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michelle Miller, president.
A list of the Debtor's 19 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/cacb15-12405.pdf
SINOLA LLC: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Sinola, LLC
dba Sinola Custom Homes, LLC
3611 S. Soncy Rd, Ste 8D
Amarillo, TX 79119
Case No.: 15-20319
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
Northern District of Texas (Amarillo)
Judge: Hon. Robert L. Jones
Debtor's Counsel: Bill Kinkead, Esq.
KINKEAD LAW OFFICES
6937 Bell St., Suite G
Amarillo, TX 79109
Tel: 806-353-2129
Fax: 806-353-4370
Email: bkinkead713@hotmail.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Roger L. Hunter, managing
member/president.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
SOUTHERN REGIONAL: PwC Approved as Committee's Financial Advisor
----------------------------------------------------------------
The Hon. Wendy L. Hagenau of the U.S. Bankruptcy Court for the
Northern District of Georgia authorized the Official Committee of
Unsecured Creditors in the Chapter 11 cases of Southern Regional
Health System, Inc., doing business as Southern Regional Medical
Center, et al., to retain PricewaterhouseCoopers LLP as its
financial advisors.
In a declaration in support of the application, Steven Fleming, a
principal of PwC, told the Court that PwC's compensation will
consist of:
Phase 1 - Pre Auction:
a) the review of financial information prepared by the Debtors
or its consultants as requested by the Committee including, but not
limited to, a review of Debtors' cash flow projections, Cash Flow
Budget, Asset Purchase Agreement, Data Room Materials, etc.;
b) assist the Committee in developing, evaluating, structuring
and negotiating the terms and conditions of offers received on the
sale of the Debtor's assets;
c) assistance in a sale process of the Debtors collectively or
in segments, parts or other delineations; and
d) review and analysis of proposed bids and transactions for
which the Debtors seeks Court approval.
Phase 2 - Post Auction:
a) perform a review of the Debtors' books and records and other
investigations that may be undertaken with respect to prepetition
acts, related party transactions, financial condition of the
Debtors, its management, creditors including the operation of their
businesses, and, as appropriate, avoidance actions, preferences and
fraudulent conveyances;
b) assist the Committee with the wind down of the Debtors'
estate; and
c) assisting the Committee in monitoring, assessing, and
analyzing the Debtors' liquidation of any assets not sold at the
proposed auction, including funds flow and cash management,
liquidation fees and expenses, analysis of budget to net results,
monitoring and analysis of asset based and inventory levels.
PwC will charge the Committee based on these agreed upon hourly
rates:
Personnel Hourly Billing Rate
--------- -------------------
Partner/Principal $725
Director/Senior Manager $575
Manager $475
Senior Associate $375
Associate $300
To the best of the Committee's knowledge, PwC is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Southern Regional Health System
Southern Regional Health System, Inc., owns the Southern Regional
Medical Center, a 331-licensed bed full-service hospital located in
Riverdale, Georgia. Managed by Emory Healthcare, Inc., the
hospital serves residents throughout the region south of Atlanta.
As a leader in neurologic, heart & vascular, bariatric, and women's
healthcare services, Southern Regional's medical staff is comprise
of more than 480 physicians that blend their passion for healing
with advanced technology to offer the latest procedures and
treatments.
Southern Regional and its subsidiaries sought Chapter 11 protection
(Bankr. N.D. Ga. Case No. 15-64266) on July 30, 2015, in Atlanta,
Georgia. The cases are assigned to Judge Wendy L. Hagenau.
Southern Regional Health System, Inc. disclosed total assets of
$41,996,075 and total liabilities of $42,884,499. The Debtors'
secured creditors are Gemino Healthcare Finance, LLC, and U.S.
Foods, Inc.
Gemino claims to be owed in excess of $10 million, while U.S. Foods
has a $60,000 claim.
The Debtors tapped Scroggins & Williamson, P.C., as bankruptcy
attorneys, Nelson Mulins Riley & Scarborough LLP, as outside
general counsel, and Kurtzman Carson Consultants LLC as claims
and balloting agent. GGG Partners, LLC serves as financial
advisors to the Debtors.
The Official Committee of Unsecured Creditors tapped Lamberth,
Cifelli, Ellis & Nason, P.A., and Pepper Hamilton, LLP, as
attorneys. PricewaterhouseCoopers LLP serves as its financial
advisors.
* * *
Prime Healthcare has submitted a letter of intent to purchase most
of Southern Regional's assets, and would operate the hospital after
the proposed sale. Prime has agreed to provide the Debtors with
$9.2 million of DIP financing.
SOUTHERN REGIONAL: Scroggins & Williamson Okayed as Counsel
-----------------------------------------------------------
The Hon. Wendy L. Hagenau of the U.S. Bankruptcy Court for the
Northern District of Georgia authorized Southern Regional Health
System, Inc., doing business as Southern Regional Medical Center,
et al., to employ Scroggins & Williamson, P.C., as counsel.
Scroggins & Williamson is expected to, among other things:
a) prepare pleadings and applications;
b) conduct of examinations; and
c) advise applicants of their rights, duties and obligations as
debtors-in-possession.
The Debtors agreed to compensate Scroggins & Williamson at its
ordinary rates, plus reasonable expenses. The firm has stated that
its fee rates currently range from $285 - $425 per hour for
attorneys; and from $75 - $150 per hour for paralegals. The firm
is currently holding approximately $121,985 as a retainer.
J. Robert Williamson, member of the firm, assures the Court that
the firm is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code.
About Southern Regional Health System
Southern Regional Health System, Inc., owns the Southern Regional
Medical Center, a 331-licensed bed full-service hospital located in
Riverdale, Georgia. Managed by Emory Healthcare, Inc., the
hospital serves residents throughout the region south of Atlanta.
As a leader in neurologic, heart & vascular, bariatric, and women's
healthcare services, Southern Regional's medical staff is comprise
of more than 480 physicians that blend their passion for healing
with advanced technology to offer the latest procedures and
treatments.
Southern Regional and its subsidiaries sought Chapter 11 protection
(Bankr. N.D. Ga. Case No. 15-64266) on July 30, 2015, in Atlanta,
Georgia. The cases are assigned to Judge Wendy L. Hagenau.
Southern Regional Health System, Inc. disclosed total assets of
$41,996,075 and total liabilities of $42,884,499. The Debtors'
secured creditors are Gemino Healthcare Finance, LLC, and U.S.
Foods, Inc.
Gemino claims to be owed in excess of $10 million, while U.S. Foods
has a $60,000 claim.
The Debtors tapped Scroggins & Williamson, P.C., as bankruptcy
attorneys, Nelson Mulins Riley & Scarborough LLP, as outside
general counsel, and Kurtzman Carson Consultants LLC as claims
and balloting agent. GGG Partners, LLC serves as financial
advisors to the Debtors.
The Official Committee of Unsecured Creditors tapped Lamberth,
Cifelli, Ellis & Nason, P.A., and Pepper Hamilton, LLP, as
attorneys. PricewaterhouseCoopers LLP serves as its financial
advisors.
* * *
Prime Healthcare has submitted a letter of intent to purchase most
of Southern Regional's assets, and would operate the hospital after
the proposed sale. Prime has agreed to provide the Debtors with
$9.2 million of DIP financing.
SOUTHERN REGIONAL: Stroudwater OK'd to Provide Valuation Services
-----------------------------------------------------------------
The Hon. Wendy L. Hagenau of the U.S. Bankruptcy Court for the
Northern District of Georgia authorized Southern Regional Health
System, Inc., doing business as Southern Regional Medical Center,
et al., to employ Stroudwater Associates to provide valuation
consulting services.
The Debtors are also authorized to pay Stroudwater Associates a
security retainer in the amount of $75,500, to be held against
payment of its approved fees and expenses. However, no
compensation or expense reimbursement from the estate is
authorized.
On Aug. 17, 2015, the Debtors amended their application to include
the engagement letter as an exhibit. The rest of the application
remains unchanged.
Stroudwater has performed consulting services for the Debtors
prepetition, and is familiar with the Debtors' operations and
financial condition. Stroudwater is expected to, among other
things:
a. provide institutional knowledge to potential purchasers
regarding the Debtors' operations and business;
b. assist in preparing and submitting necessary information to
the State of Georgia Attorney General to ensure compliance with the
Georgia AG's process; and
c. determine the fair market value of the Debtors and the
"Community Benefit" of any proposed sales transaction for
submission to the Georgia AG.
The Debtors noted that as a condition to its employment in the
Case, Stroudwater has agreed to waive approximately $37,000 in fees
for services rendered to Stroudwater prepetition.
Robert W. Kirsh, managing director of Stroudwater, assured the
Court that the firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
About Southern Regional Health System
Southern Regional Health System, Inc., owns the Southern Regional
Medical Center, a 331-licensed bed full-service hospital located in
Riverdale, Georgia. Managed by Emory Healthcare, Inc., the
hospital serves residents throughout the region south of Atlanta.
As a leader in neurologic, heart & vascular, bariatric, and women's
healthcare services, Southern Regional's medical staff is comprise
of more than 480 physicians that blend their passion for healing
with advanced technology to offer the latest procedures and
treatments.
Southern Regional and its subsidiaries sought Chapter 11 protection
(Bankr. N.D. Ga. Case No. 15-64266) on July 30, 2015, in Atlanta,
Georgia. The cases are assigned to Judge Wendy L. Hagenau.
Southern Regional Health System, Inc. disclosed total assets of
$41,996,075 and total liabilities of $42,884,499. The Debtors'
secured creditors are Gemino Healthcare Finance, LLC, and U.S.
Foods, Inc.
Gemino claims to be owed in excess of $10 million, while U.S. Foods
has a $60,000 claim.
The Debtors tapped Scroggins & Williamson, P.C., as bankruptcy
attorneys, Nelson Mulins Riley & Scarborough LLP, as outside
general counsel, and Kurtzman Carson Consultants LLC as claims
and balloting agent. GGG Partners, LLC serves as financial
advisors to the Debtors.
The Official Committee of Unsecured Creditors tapped Lamberth,
Cifelli, Ellis & Nason, P.A., and Pepper Hamilton, LLP, as
attorneys. PricewaterhouseCoopers LLP serves as its financial
advisors.
* * *
Prime Healthcare has submitted a letter of intent to purchase most
of Southern Regional's assets, and would operate the hospital after
the proposed sale. Prime has agreed to provide the Debtors with
$9.2 million of DIP financing.
STOLLINGS TRUCKING: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Stollings Trucking Company, Inc.
P. O. Box 328
Mount Gay, WV 25637
Case No.: 15-20624
Chapter 11 Petition Date: December 7, 2015
Court: United States Bankruptcy Court
Southern District of West Virginia (Charleston)
Judge: Hon. Frank W. Volk
Debtor's Counsel: Joseph W. Caldwell, Esq.
CALDWELL & RIFFEE
P. O. Box 4427
Charleston, WV 25364-4427
Tel: 304-925-2100
Fax: (304) 925-2193
Email: joecaldwell@frontier.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Rhonda Marcum, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/wvsb15-20624.pdf
TRANS COASTAL: Simmons Hanly Okayed to Handle Damage Claims
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of Illinois
authorized Trans Coastal Supply Company, Inc., to employ Jayne
Conroy, Esq., Paul Hanly, Esq., Andrea Bierstein, Esq., and Sarah
Burns, Esq., of the law firm of Simmons Hanly Conroy LLC as special
counsel to represent the Debtor in its damage claims against
Syngenta AG and affiliates.
As reported in the Troubled Company Reporter on Sept. 15, 2015, the
Debtor told the Court that it filed a class action lawsuit against
Syngenta in the United States District Court for the Central
District of Illinois on Sept. 12, 2014 styled as "Trans Coastal
Supply Company, Inc. v. Syngenta AG, et al". Case no.
14-CV-02221. The Judicial Panel on Multi-District Litigation has
since transferred the case to the Honorable John W. Lungstrum in
the United States District Court of Kansas for coordinated and
consolidated pretrial proceedings.
The Debtor noted the primary attorneys working on its litigation
are Jayne Conroy, Esq.; Paul Hanly, Esq.; Andrea Bierstein, Esq.;
and Sarah Burns, Esq. The contingency fees are a minimum of 35% of
any settlement or recovery plus expenses and could reach 40% of any
settlement or recovery if the matter is appealed, the Debtor
added.
The Debtor believes that the firm has no conflict of interest and
are not otherwise disqualified to be employed in the case.
About Trans Coastal
Headquartered in Decatur, Illinois, Trans Coastal Supply Company
Inc. ships grain and other agricultural products like the ethanol
byproduct distillers dried grains (DDGS) in containers to overseas
buyers.
Trans Coastal filed for Chapter 11 bankruptcy protection (Bankr.
C.D. Ill. Case No. 15-71147) on July 23, 2015. Judge Mary P.
Gorman presides over the Debtor's case. Jeffrey D. Richardson,
Esq., at Richardson & Erickson, represents the Debtor.
The Debtor estimated both assets and liabilities between
$10 million and $50 million.
TRIBUNE PUBLISHING: S&P Lowers CCR to 'B' on Weak Credit Metrics
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Chicago-based newspaper publisher
Tribune Publishing Co. to 'B' from 'B+'. The rating outlook is
stable.
At the same time, S&P lowered its issue-level rating the company's
term loan due 2021 to 'B' from 'B+'. The '3' recovery rating is
unchanged, indicating S&P's expectation for meaningful recovery
(50%-70%; upper half of the range) of principal in the event of a
payment default or bankruptcy.
S&P also lowered its issue-level rating on the company's $140
million asset-based lending (ABL) revolving credit facility due
2019 to 'BB-' from 'BB'. The '1' recovery rating is unchanged,
indicating S&P's expectation for very high recovery (90%-100%) of
principal in the event of a payment default or bankruptcy.
"The downgrades are based on Tribune's elevated leverage due to
continued top line weakness, higher-than-expected restructuring
expenses, and our view that there is greater volatility in the
company's credit metrics than we had previously expected," said
Standard & Poor's credit analyst Thomas Hartman. "We expect that
leverage will be in the 4x-5x range in 2015."
The 'B' corporate credit rating on Tribune reflects S&P's
assessment of the company's business risk profile as "vulnerable"
and its financial risk profile as "aggressive."
The stable rating outlook reflects S&P's expectation that Tribune
revenue will continue to decline due to secular pressure on print
advertising in 2016, though the company's recent cost-cutting
actions and growth in non-advertising revenue streams should result
in leverage in the mid-3x area by the end of 2016.
S&P could lower its corporate credit rating on Tribune one notch to
'B-' if S&P believes that the company's cash flow generation is
insufficient for the rating. This could occur if the trend of ad
revenue declines accelerate and digital subscriber growth does not
have a meaningful impact on circulation revenue, necessitating
ongoing restructuring charges; and if discretionary cash flow to
debt declines and is sustained below the mid-single-digit percent
area. S&P could also consider a downgrade if the company makes
debt-financed acquisitions or takes on significant pension
liabilities through acquisitions and leverage increases to the
high-4x area on a sustained basis.
S&P could raise the rating one notch to 'B+' if Tribune's operating
performance improves, and S&P expects that its adjusted leverage
will improve to below 3x. S&P could also raise the rating if it
become convinced that the company can stabilize or grow revenue,
likely through growth in digital circulation and other
non-advertising revenue streams.
UNIVERSAL MARKETING: Trustee's Summary Judgment Bid Denied
----------------------------------------------------------
Judge Eric L. Frank of the United States Bankruptcy Court for the
Eastern District of Pennsylvania denied the motion for summary
judgment filed by Charles R. Goldstein, the chapter 7 trustee for
Universal Marketing, Inc., and partly granted the motion for
summary judgment filed by Wilmington Savings Fund Society.
On August 4, 2010, the court largely granted a motion filed by
Goldstein for substantive consolidation of Universal Marketing,
Inc.'s ("UMI") estate with the estates of certain other Universal
Network entities, including Universal Delaware, Inc. ("UDI").
However, the court's order excepted WSFS, a bank that provided both
commercial credit and cash management services to UDI, from certain
aspects of the order.
Goldstein filed an adversary proceeding seeking to recover money
from WSFS based on a variety of claims. Only six of the original
ten claims pleaded in the amended complaint survived WSFS' motion
to dismiss:
Count One - in contract, for breach of the implied duty of
good faith and fair dealing;
Count Two - breach of contract;
Count Three - under 6 De. C. Section 4A-305 for failure to
execute two (2) payment orders;
Count Six - avoidance and recovery of fraudulent transfers
under 11 U.S.C Sections 544 and 550;
Count Seven - avoidance and recovery of fraudulent transfers
under 11 U.S.C. Sections 548 and 550;
Count Eight - avoidance of setoff under 11 U.S.C. Sections
553 and 550.26
WSFS maintained that Goldstein's common law claims are based on a
gross exaggeration or mischaracterization of the undisputed facts.
WSFS also asserted that no avoidable transfers occurred.
Both parties filed cross-motions for partial summary judgment on
the issue of liability.
Judge Frank held that WSFS is entitled to summary judgment on
Goldstein's contract claims (Counts One and Two), on the claim
under 6 Del. C. Section 4A (Count Three), and on the fraudulent
transfer claims (Counts Six and Seven). However, Judge Frank held
that WSFS is not entitled to summary judgment on Goldstein's setoff
claim under 11 U.S.C. Section 553(b) (Count Eight). Count Eight
will thus proceed to trial.
The case is IN RE: UNIVERSAL MARKETING, INC., Chapter 7, Debtor.
CHARLES R. GOLDSTEIN, Chapter 7 Trustee for the Estate of Universal
Marketing, Inc., Plaintiff, v. WILMINGTON SAVINGS FUND SOCIETY,
FSB, Defendant, BKY. NO. 09-15404 ELF, ADV. NO. 11-512 (Bankr. E.D.
Pa.).
A full-text copy of Judge Frank's November 24, 2015 opinion is
available at http://is.gd/4ey07mfrom Leagle.com.
Charles R. Goldstein, Chapter 7 Trustee for the Estate of Universal
Marketing, Inc., et al. is represented by:
Alan Fellheimer, Esq.
Douglas G. Leney, Esq.
Stephen M. Packman, Esq.
ARCHER & GREINER PC
One Liberty Place 32nd Floor
1650 Market Street
Philadelphia, PA 19103
Tel: (215) 963-3300
Fax: (215) 963-9999
Email: dleney@archerlaw.com
spackman@archerlaw.com
Wilmington Savings Fund Society, FSB is represented by:
Thomas E. Biron, Esq.
Josef W. Mintz, Esq
BLANK, ROME, COMISKY & MCCAULEY LLP
One Logan Square
130 North 18th Street
Philadelphia, PA 19103-6998
Tel: (215) 569-5500
Fax: (215) 569-5555
Email: biron@blankrome.com
mintz@blankrome.com
About Universal Marketing
Universal Marketing, Inc., and certain affiliates operated 36 gas
stations and convenience stores in six states in the Northeast and
Mid-Atlantic region. Universal Marketing purchased fuel products
from suppliers and sold the product to affiliated entities "within
the overall Universal 'network' as well as to certain other third
parties."
Based in Philadelphia, Pennsylvania, Universal Marketing filed for
Chapter 11 protection on July 23, 2009 (Bankr. E.D. Pa. Case No.
09-15404). In its petition, the Debtor estimated $10 million to
$50 million in both assets and debts.
The case was converted to a case under chapter 7 by order dated
Aug. 18, 2009. Charles R. Goldstein was appointed as chapter 7
trustee on Sept. 23, 2009. The court entered an order on Aug. 4,
2010, substantively consolidating the Debtor's estate with the
estate of certain non-debtor entities.
USF HOLDINGS: S&P Retains 'B+' Rating on 1st Lien Loan Due 2021
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'B+' issue-level
rating and '2' recovery rating on USF Holdings LLC's first-lien
term loan due 2021 are unchanged following the company's
announcement of a $110 million add-on. The '2' recovery rating on
the first-lien term loan indicates S&P's expectation of substantial
(70%-90%; lower half of the range) recovery in the event of a
default. S&P's 'B' corporate credit rating and stable outlook on
USF Holdings LLC are also unchanged.
The company will use the proceeds from this add-on to fund its
acquisition of Tepso Plastics Mex S.A. de C.V., as well as for
general corporate purposes.
S&P's assessment of USF's business risk profile reflects the
company's relatively small scale and narrow scope selling highly
engineered single-shot and multishot injection molded, compression
molded, and extruded components and assemblies in a fragmented
market. These risks are partially offset by the company's
technical capabilities and longstanding customer relationships.
S&P believes that the company is well positioned to benefit from
the current trend in the auto sector toward using plastic in place
of metal because of the industry's emphasis on light-weighting and
fuel efficiency. Still, the company's smaller size (relative to
most of the auto suppliers that S&P rates) could limit its
maneuverability should auto production volumes become more volatile
or if raw material prices rise unexpectedly. USF's acquisition of
Tepso, a Mexico-based injected molder, is in line with our prior
expectations for the company's geographical expansion strategy and
S&P believes that the acquisition will improve the company's
competitive and strategic positioning with the original equipment
manufacturers (OEMs) and enhance the diversity of its manufacturing
base.
S&P's assessment of USF's financial risk profile is based on S&P's
belief that the company may use debt to fulfill its expansion
objectives by investing in new facilities or by undertaking
additional acquisitions. As such, S&P continues to expect that the
company's financial policies will remain aggressive given its
financial sponsor ownership.
RECOVERY ANALYSIS
Key analytical factors
S&P previously completed a recovery analysis and assigned
issue-level and recovery ratings on USF Holdings LLC's existing
first-lien term loan. The existing issue-level and recovery
ratings remain unchanged following the add-on. S&P's simulated
default scenario anticipates a default in 2018 caused by a
combination of the following factors: a sustained economic downturn
that reduces customer demand for new automobiles; intense pricing
pressure resulting from the competitive actions of other auto
suppliers and/or raw material vendors; and the potential loss of
one or more key customers. S&P expects these conditions to reduce
USF's volumes, revenues, gross margins, and net income, causing its
liquidity and operating cash flow to decline.
The other factors of S&P's default scenario include:
-- LIBOR of 275 basis points (bps);
-- The asset-based lending (ABL) revolver is 60% drawn at
default;
-- A 125 bps increase in the margin on the first-lien term loan
because of credit deterioration; and
-- All debt includes six months of accrued interest.
Simulated default assumptions:
-- Simulated year of default: 2018
-- EBITDA at emergence: $80.0 million
-- EBITDA multiple: 5.0x
Simplified waterfall:
-- Gross enterprise value: $400 million
-- Administrative expenses: $20 million
-- Net enterprise value: $380 million
-- Valuation split (obligors/nonobligors): 90%/10%
-- Priority claims: $60 million
-- Value available to first-lien debt
(collateral/noncollateral): $307 million/$13 million
-- Secured first-lien debt claims: $438 million
-- Recovery expectations: 70%-90% (lower half of the range)
RATINGS LIST
Ratings Unchanged
USF Holdings LLC
Corporate Credit Rating B/Stable/--
U.S. Farathane LLC
Senior Secured
$500 Mil. First-lien Term Loan Due 2021 B+
Recovery Rating 2L
USS PARENT: S&P Affirms 'B' CCR on $50MM Incremental Loan
---------------------------------------------------------
Standard & Poor's Ratings Services said that it has affirmed its
'B' corporate credit rating on Massachusetts-based USS Parent
Holding Corp. The outlook is stable.
At the same time, S&P affirmed its 'B' issue-level ratings on USS'
$50 million revolving facility, pro forma $225 million term loan B
(which includes the proposed $50 million incremental term loan),
and $40 million fully drawn term loan. The '3' recovery ratings on
this debt are unchanged, indicating S&P's expectation of meaningful
(50%-70%; upper half of the range) recovery in the event of
default.
The incremental term loan will be used to finance potential
acquisitions and will be fungible with the company's existing term
loan B. S&P expects that the key terms of USS' senior credit
facilities, such as the maturities, margins, and covenants will
remain unchanged; the $50 million revolving facility matures in
August 2019, while the remaining senior credit facilities will
mature in August 2021. S&P expects the company's credit metrics to
improve to approximately 5.0x by the end of fiscal-year 2016,
driven by continued growth in USS' underlying business, accretive
acquisitions, and the roll-off of various one-time costs. The
company will remain in compliance with its net leverage covenants
post financing.
"The ratings on USS Parent Holding Corp. reflect our weak
assessment of the company's business risk profile and our highly
leveraged assessment of its financial risk profile," said Standard
& Poor's credit analyst Daniel Lee.
The stable outlook on USS Parent Holding Corp. reflects S&P's
expectation that the company will be able to sustain its operating
profitability and free cash flow generation on the back of expected
positive industry growth. The company's leading positions in its
niche markets, moderate geographic diversity, and modest free cash
flow generation should help to somewhat offset the volatility in
its earnings caused by its large exposure to the cyclical
construction end markets and its narrow product offerings. S&P
also expects that USS' financial sponsor will implement financial
policies that will allow the company to maintain credit measures
that are consistent with the current ratings, specifically an
adjusted debt-to-EBITDA metric of greater than 5x.
S&P could lower its ratings on USS if debt-funded acquisitions or a
dividend recapitalization weakens its credit measures over the next
year. S&P could also lower the ratings if management actions or
unexpectedly weak earnings cause the company's adjusted
debt-to-EBITDA metric to remain above 6x without any prospect for
improvement over the next 12 months. This situation could occur if
USS' revenue growth is weak and its adjusted EBITDA margins dip
below 15%. In addition, S&P could lower the ratings if the
company's liquidity weakens to the point that would reassess it as
less than adequate, as indicated by S&P's expectation that its
liquidity sources will not be 1.2x its future uses.
Although unlikely in the near term, S&P could raise its ratings on
USS if the company were to reduce its debt such that its adjusted
debt-to-EBITDA metric fell below 5x and S&P believes that
management would being willing and committed to abide by financial
policies that will allow it to remain at that level.
VIBE MICRO: Racketeering Suit Against Snell & Wilmer Tossed
-----------------------------------------------------------
John Kennedy at Bankruptcy Law360 reported that a man accusing
Snell & Wilmer LLP of conspiring with his former business partners
to bankrupt their payment terminal company lost in Florida federal
court on Dec. 4, 2015, when the judge dismissed his racketeering
suit, calling it "mostly incoherent," but giving him 10 days to
make changes.
U.S. District Judge Donald M. Middlebrooks said that Edward Mandel
and his company, Vibe Micro Inc., had failed to support their
allegations of breach of fiduciary duties, violations of the
Racketeer Influenced and Corrupt Organizations Act.
WALTER ENERGY: Obtains Creditor Protection Under CCAA
-----------------------------------------------------
Walter Energy, Inc., on Dec. 7 disclosed that its wholly-owned
subsidiary Walter Energy Canada Holdings, Inc., the holding company
for the Company's Canadian operations and Canadian subsidiaries,
has obtained creditor protection under the Companies' Creditors
Arrangement Act (Canada) (the "CCAA") pursuant to an Initial Order
granted on December 7, 2015 by the Supreme Court of British
Columbia located in Vancouver, B.C.
The CCAA filing is intended to facilitate ongoing operations while
Walter Canada pursues a marketing process for its Canadian assets
and for its holdings in the United Kingdom, including assets owned
by United Kingdom subsidiaries of Walter Canada. Walter Canada,
Walter United Kingdom and their assets were not part of the U.S.
chapter 11 filing and are not included in the asset purchase
agreement that the Company entered into on November 5, 2015.
Under the terms of the Initial Order, KPMG will serve as the
Court-appointed Monitor of Walter Canada.
Under the CCAA proceedings, it is expected that Walter Canada's
operations will continue uninterrupted in the ordinary course of
business. Walter Canada's Canadian and UK-based mines are
currently idled as a result of market conditions. Obligations
incurred after the filing date, including obligations to employees
and key suppliers of goods and services, will be paid on an ongoing
basis.
On July 15, 2015, Walter Energy and its U.S. subsidiaries filed for
relief under chapter 11 of the U.S. Bankruptcy Code in the
Bankruptcy Court for the Northern District of Alabama. On November
5, 2015, Walter Energy entered into an asset purchase agreement
with a newly formed entity capitalized and owned by members of the
Company's senior lender group, pursuant to which the new company
will acquire substantially all of Walter Energy's Alabama assets.
Osler, Hoskin & Harcourt LLP has served as Walter Energy's and
Walter Canada's legal advisor in Canada.
About Walter Canada
Walter Canada's operations consist of three surface mines: the
Wolverine Mine, the Brule Mine and the Willow Creek Mine.
The Wolverine Mine, located approximately 15 miles south of Tumbler
Ridge, British Columbia, is an open-pit metallurgical coal mine
with a coal processing plant and a rail load-out facility capable
of handling 2.0-2.5 million metric tons per year. The mine
produces premium metallurgical coal.
The Brule Mine is an open pit metallurgical coal mine and produces
a premium low volatile pulverized coal injection (PCI) product.
Coal from Brule is transported by truck to the Willow Creek Mine
for processing and shipping.
The Willow Creek Mine is an open-pit metallurgical coal mine with a
coal processing plant and a rail load-out facility. The Willow
Creek Mine produces both metallurgical and coal used for pulverized
injection purposes. The coal reserves are comprised of an
estimated one-third metallurgical coal and two-thirds low-volatile
pulverized coal (PCI).
About Walter Energy United Kingdom
Walter Energy's UK operation consists of the Aberpergwm Mine, an
underground development mine located near the town of Neath in
South Wales. The mine produces anthracite coal, which can be sold
as a low-volatile PCI coal, and other products used for domestic
purposes.
About Walter Energy, Inc.
Walter Energy -- http://www.walterenergy.com/-- is a publicly
traded "pure-play" metallurgical coal producer for the global
steel
industry with strategic access to steel producers in Europe, Asia
and South America. The Company also produces thermal coal,
anthracite, metallurgical coke and coal bed methane gas. Walter
Energy employs approximately 2,700 employees, with operations in
the United States, Canada and the United Kingdom.
For the year ended Dec. 31, 2014, the Company reported a net loss
of $471 million following a net loss of $359 million in 2013.
Walter Energy, Inc., and its affiliates sought Chapter 11
protection (Bankr. N.D. Ala. Lead Case No. 15-02741) in
Birmingham,
Alabama on July 15, 2015, after signing a restructuring support
agreement with first-lien lenders.
Walter Energy disclosed total assets of $5.2 billion and total
debt
of $5 billion as of March 31, 2015.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison as
counsel; Bradley Arant Boult Cummings LLP, as co-counsel; Ogletree
Deakins LLP, as labor and employment counsel; Maynard, Cooper &
Gale, P.C., as special counsel; Blackstone Advisory Services,
L.P.,
as investment banker; AlixPartners, LLP, as financial advisor, and
Kurtzman Carson Consultants LLC, as claims and noticing agent.
The Bankruptcy Administrator for the Northern District of Alabama
appointed an Official Committee of Unsecured Creditors and an
Official Committee of Retirees. The Creditors Committee tapped
Morrison & Foerster LLP and Christian & Small LLP as attorneys.
The Retiree Committee retained Adams & Reese LLP and Jenner &
Block
LLP as attorneys.
The informal group of certain unaffiliated First Lien Lenders and
First Lien Noteholders (the "Steering Committee") retained Akin,
Gump, Strauss, Hauer and Feld LLP as legal advisor, and Lazard
Freres & Co. LLC as financial advisor.
WALTER ENERGY: Seeks to Reject CBAs, Terminate Retiree Benefits
---------------------------------------------------------------
Walter Energy, Inc., and its affiliated debtors ask the U.S.
Bankruptcy Court for the Northern District of Alabama, Southern
Division, for authority to reject collective bargaining agreements,
implement final labor proposals and terminate retiree benefits.
The Debtors relate that they must sell substantially all of their
assets as a going-concern pursuant to Section 363 of the Bankruptcy
Code, as they have reached the point where such sale is the only
option to avoid outright liquidation and the loss of all of their
employees' jobs. The Debtors further relate that they negotiated
with an ad hoc group ("Steering Committee") of certain unaffiliated
lenders and holders ("First Lien Creditors") of the majority in
amount of the Debtors' first lien secured obligations a
going-concern sale of substantially all of their Alabama coal
operations ("363 Sale") and other assets to proposed buyer Coal
Acquisition LLC, an entity owned by holders of first lien secured
debt pursuant to a stalking horse purchase agreement.
The Debtors request authority to reject, in their entirety, the
UMWA CBA, the June 2011 Contract between the UMWA and the BCOA, and
the USW CBA, an Agreement dated March 25, 2010 between the USW on
behalf of Local Union No. 12014 and Walter Coke.
The Debtors ask the Court for authority to implement the final
proposals that they had submitted to the Unions, pursuant to which,
any Successorship Provisions would be eliminated and upon the
closing if the 363 Sale, the CBAs and the other obligations
remaining under the CBAs would terminate. The Debtors tell the
Court that the Final Proposals include terminating Retiree Benefits
owed to approximately 3,100 retirees represented by either the UMWA
or the USW, together with approximately 100 non-Union retirees.
The Debtors further tell the Court that these Retiree Benefits
include those owed under: (i) the UMWA CBA which, as of December
31, 2014, had approximately $579.1 million in unfunded liabilities;
(ii) a CBA that does not cover any active employees with the UMWA
that, as of Dec. 31, 2014, had
$3.4 million in unfunded liabilities; (iii) the USW CBA that, as of
Dec. 31, 2014, had approximately $10.9 million and $0.5 million in
unfunded liabilities, respectively; and (iv) the medical plan for
non-Union retirees, that, as of Dec. 31, 2014, had approximately
$4.3 million in unfunded liabilities. The Debtors note that the
Final Proposals also include terminating healthcare benefits for
laid-off employees and certain other individuals, which benefits
currently costs the Debtors $800,000 per month.
The Debtors tell the Court that the Proposed Buyer will not buy the
Alabama Coal Operations burdened by the Debtors' existing
collective bargaining agreements and their retiree benefit
obligations. The Debtors further tell the Court that the Stalking
Horse APA requires as a closing condition that the Debtors obtain
relief from all successorship clauses, and similar provisions, in
the CBAs that would purport to require the CBAs be binding on the
Proposed Buyer. The Debtors add that the CBAs impose onerous
financial obligations on the Debtors' operations that market
conditions simply cannot support. The Debtors relate that despite
reaching out to dozens of parties potentially interested in their
assets and operations, the Debtors' investment bankers have not
found a single party, other than the Proposed Buyer, willing to
purchase the entirety of the Alabama Coal Operations. The Debtors
further relate that their liquidity will be exhausted by the end of
January 2016. They contend that if the Alabama Coal Operations are
to be sold as a going-concern, it must occur without delay to a
financially committed buyer with sufficient resources to invest
hundreds of millions of dollars of additional capital in the mines,
additional capital that the mines require to operate even if the
relief sought by the Debtors is granted in full. The Debtors
further contend that they must reject the CBAs to consummate the
363 Sale to the Proposed Buyer, and, after the 363 Sale closes, the
Debtors will be unable to afford the remaining obligations under
the CBAs and the Retiree Benefits. The Debtors assert that doing
so provides the best hope for the Alabama Coal Operations to be
sold as a going-concern, thereby maximizing value for all
stakeholders, including potential future jobs for the Debtors'
employees.
The Debtors' Motion is supported by the declaration of Stephen
Douglas Williams, the CEO of Coal Acquisition.
The Debtors' motion is scheduled for hearing on Dec. 15, 2015 at
9:00 a.m. The deadline for the filing of objections to the motion
is set on Dec. 9, 2015.
Walter Energy's attorneys:
Patrick Darby, Esq.
Jay Bender, Esq.
Cathleen Moore, Esq.
Jaimes Bailey, Esq.
BRADLEY ARANT BOULT CUMMINGS LLP
One Federal Place
1819 Fifth Avenue North
Birmingham, AL 35203
Telephone: (205)521-8000
E-mail: pdarby@babc.com
jbender@babc.com
ccmoore@babc.com
jbailey@babc.com
- and -
Stephen J. Shimshak, Esq.
Kelley A. Cornish, Esq.
Claudia R. Tobler, Esq.
Ann K. Young, Esq.
Michael S. Rudnick, Esq.
PAUL, WEISS, RIFKIND, WHARTON &
GARRISON LLP
1285 Avenue of the Americas
New York, NY 10019
Telephone: (212)373-3000
E-mail: sshimshak@paulweiss.com
kcornish@paulweiss.com
ctobler@paulweiss.com
ayoung@paulweiss.com
mrudnick@paulweiss.com
About Walter Energy
Walter Energy -- http://www.walterenergy.com/-- is a publicly
traded "pure-play" metallurgical coal producer for the global steel
industry with strategic access to steel producers in Europe, Asia
and South America. The Company also produces thermal coal,
anthracite, metallurgical coke and coal bed methane gas. Walter
Energy employs approximately 2,700 employees, with operations in
the United States, Canada and the United Kingdom.
For the year ended Dec. 31, 2014, the Company reported a net loss
of $471 million following a net loss of $359 million in 2013.
Walter Energy, Inc., and its affiliates sought Chapter 11
protection (Bankr. N.D. Ala. Lead Case No. 15-02741) in Birmingham,
Alabama on July 15, 2015, after signing a restructuring support
agreement with first-lien lenders.
Walter Energy disclosed total assets of $5.2 billion and total debt
of $5 billion as of March 31, 2015.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison as
counsel; Bradley Arant Boult Cummings LLP, as co-counsel; Ogletree
Deakins LLP, as labor and employment counsel; Maynard, Cooper &
Gale, P.C., as special counsel; Blackstone Advisory Services, L.P.,
as investment banker; AlixPartners, LLP, as financial advisor, and
Kurtzman Carson Consultants LLC, as claims and noticing agent.
The Bankruptcy Administrator for the Northern District of Alabama
appointed an Official Committee of Unsecured Creditors and an
Official Committee of Retirees. The Creditors Committee tapped
Morrison & Foerster LLP and Christian & Small LLP as attorneys.
The Retiree Committee retained Adams & Reese LLP and Jenner & Block
LLP as attorneys.
The informal group of certain unaffiliated First Lien Lenders and
First Lien Noteholders (the "Steering Committee") retained Akin,
Gump, Strauss, Hauer and Feld LLP as legal advisor, and Lazard
Freres & Co. LLC as financial advisor.
ZLOOP INC: Keen-Summit Selling 183,000 Sq. Ft. Nevada Warehouse
---------------------------------------------------------------
Keen-Summit Capital Partners has been engaged by ZLOOP, Inc., under
an Order from the U.S. Bankruptcy Court for the District of
Delaware to sell its 183,000 square foot property in Fernley, Nev.
Fernley, Nev., is part of the growing Reno market and the property
is located on I-80.
The property is situated on 10.94 +/- acres, has approximately
5,800 sf of office space and an additional 4,350 sf shop office
space. Fernley is a transportation hub, for both highway and rail,
providing easy access to all points making the city well located
for major manufacturing and distribution centers. Fernley has
overnight truck delivery to almost all points in the 11 western
states, which include Seattle, Portland, San Francisco, Los
Angeles, San Diego, Boise, Salt Lake City, Las Vegas and Phoenix.
This opportunity is ideal for either an investor or a user looking
to expand in the Fernley/Reno area.
Additional information about the property is available at
http://goo.gl/FOVfDcor by contacting:
Matthew Bordwin
Principal and Managing Director
Keen-Summit Capital Partners LLC
1 Huntington Quadrangle, Suite 2C04
Melville, NY 11747
Direct: 646-381-9202
Mobile: 917-929-1436
E-mail: mbordwin@keen-summit.com
- or -
Harold J. Bordwin
Principal and Managing Director
Keen-Summit Capital Partners LLC
10 East 53rd Street, 28th Floor
New York, NY 10022-5244
Direct: 646-381-9201
Mobile: 914-980-8555
E-mail: hbordwin@keen-summit.com
About ZLOOP, Inc.
ZLOOP, Inc., and two affiliates sought Chapter 11 protection
(Bankr. D. Del. Case No. 15-11660) on Aug. 9, 2015.
ZLOOP operates a proprietary, state of the art, 100% landfill free
eWaste recycling company headquartered in Hickory, North Carolina.
The Debtors tapped DLA Piper LLP as counsel.
As of the Petition Date, the Debtors' unaudited consolidated
balance sheet reflect total assets of approximately $25 million,
including the land and improvements, but excluding certain
commodity inventories that are the output of eWaste recycling, and
total liabilities of approximately $32 million.
On Sept. 2, 2015, the U.S. trustee overseeing the Debtors' Chapter
11 cases appointed Recycling Equipment Inc., E Recycling Systems
LLC and Carolina Metals Group to serve on the official committee of
unsecured creditors. The committee is represented by Cole Schotz
P.C.
[*] Jenner & Block's Catherine Steege Named as Bankruptcy MVP
-------------------------------------------------------------
Jonathan Randles at Bankruptcy Law360 reported that Jenner & Block
LLP attorney Catherine Steege delivered the winning argument for
client Wellness International in one of the most important
bankruptcy cases the U.S. Supreme Court heard this year, resolving
a question over bankruptcy court jurisdiction and earning her a
spot on Law360's 2015 list of Bankruptcy MVPs.
Ms. Steege, who is the co-chair of Jenner & Block's bankruptcy
litigation practice, is one of 10 bankruptcy attorneys recognized
this year by Law360 as an MVP for high-level work in bankruptcy.
[*] Lei Lei Wang Ekvall Bags OCBF's 2015 Hon. Peter M. Elliot Award
-------------------------------------------------------------------
Smiley Wang-Ekvall, LLP on Dec. 7 disclosed that the firm's
co-founder and partner Lei Lei Wang Ekvall was selected by the
Orange County Bankruptcy Forum (OCBF) as the recipient of the
prestigious 2015 Hon. Peter M. Elliott Award. The award is given
annually to a legal professional who demonstrates substantial
knowledge of bankruptcy law, serves as a mentor or educator within
the community, possesses the highest level of honesty, and works to
enhance and improve access to justice.
"Lei Lei is the living embodiment of the high standards of ethics,
and someone who believes in the old-fashioned ideal of a lawyer --
a counselor, an advocate, and an officer of the court," said the
Hon. Theodor C. Albert, United States Bankruptcy Judge, when
presenting the award to Ms. Wang Ekvall at the Orange County
Bankruptcy Forum's annual holiday event held on December 1.
Ms. Wang Ekvall is dedicated to improving unrepresented debtors'
access to justice. She has worked with the local bankruptcy
judges, the Orange County Bar Association, and the Public Law
Center to establish the chapter 7 pro bono debtors' clinic and the
reaffirmation clinic, both of which continue to operate in the
Santa Ana Division today. Recently, she was involved in bankruptcy
training programs to educate attorneys affiliated with Legal Aid of
Society of Orange County to enable them to provide pro bono or
low-cost bankruptcy services. She is also a member of the board of
directors of the Legal Aid Society of Orange County.
"The qualities associated with the Hon. Peter M. Elliott Award:
scholarship, leadership, integrity and service, have been
consistently demonstrated by Lei Lei throughout her career," said
Evan D. Smiley, partner at Smiley Wang-Ekvall. "We are pleased to
see her acknowledged for her significant contributions made to the
legal industry and for her leadership role in educational and pro
bono activities that benefit the community."
Ms. Wang Ekvall has served on the OCBF's board of directors for
several years, including leading the organization as president in
2004-2005. She has also taken on leadership roles as president of
the Orange County Bar Association, president of the Orange County
Asian American Bar Association, and co-chair of the Central
District of California Lawyer Representatives of the Ninth Circuit
Judicial Conference. She is currently a member of the board of
directors of the Orange County Bar Association Charitable Fund and
the Legal Aid Society of Orange County.
As a volunteer, Ms. Wang Ekvall has dedicated years of service to
develop these organizations by planning educational programs,
developing pro bono and other community programs, facilitating
bench and bar relationships, and establishing mentoring
opportunities and projects. She is a frequent speaker on the topic
of bankruptcy law and receiverships and co-authored Bankruptcy for
Businesses, published in April 2007 by Entrepreneur Media, Inc.,
and distributed by McGraw-Hill.
About Smiley Wang-Ekvall, LLP
Smiley Wang-Ekvall -- http://swelawfirm.com-- specializes in
achieving unparalleled results for its clients in the areas of
business litigation, real estate transactions, and bankruptcy and
insolvency matters. The attorneys at Smiley Wang-Ekvall focus on
consistently delivering strategic, effective and efficient
representation to their clients. The firm combines the hands-on
attention and cost-effectiveness of a small firm with the depth and
breadth of knowledge and experience of a large firm. Headquartered
in Costa Mesa and with an office in Los Angeles, Smiley Wang-Ekvall
serves clients locally, regionally and nationwide.
[*] Mid-Continent Casualty Wants Insurer's $63M Claim Thrown Out
----------------------------------------------------------------
Joe Van Acker at Bankruptcy Law360 reported that Mid-Continent
Casualty Co. asked a Texas federal judge on Dec. 3, 2015, to throw
out an architecture firm's claim that it's entitled to $63 million
owed by the insurer's bankrupt policyholder, accusing Kipp Flores
Architects LLC of attempting to parlay a "placeholder" claim into a
massive windfall.
[*] Moody's: Credit Conditions Deteriorating for North American Cos
-------------------------------------------------------------------
The sharp decline in oil prices and flagging demand in most end
markets will depress earnings and further weaken operating
conditions for North American industrial manufacturers in 2016,
says Moody's Investors Service. As a result, the rating agency
maintains its negative outlook on the industry.
Lower sales from energy producers are significantly affecting
industry aggregate sales growth and profitability, which are
leveling off, according to "Manufacturing -- North America 2016
Outlook -- Negative on Weakness in Key End Markets and Expectations
of Flat Profit Growth"
"There is little room for companies to cut costs to improve their
operating metrics," said Chris Wimmer, a Moody's Vice President and
Senior Credit Officer. "And with no growth catalysts on the
horizon, there is heightened risk that weak demand and its negative
credit implications will persist over the long term."
Growth prospects for most industrial end markets are weak over the
next 12-18 months, including the agricultural equipment, commercial
vehicle, construction, mining, and oil and gas equipment sectors.
Moody's notes that while there is some M&A activity, there are not
as many large deals as in other sectors.
"Slowing GDP is weighing on purchasing managers' sentiment as
well," added Wimmer. "We expect industry revenue to contract up to
1% in 2016."
*********
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
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Copyright 2015. All rights reserved. ISSN: 1520-9474.
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