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T R O U B L E D C O M P A N Y R E P O R T E R
Friday, January 8, 2016, Vol. 20, No. 8
Headlines
33 PECK SLIP: Court Enters Plan Confirmation Order
33 PECK SLIP: Has Deal With Cornerstone Lenders on Protections
ALCO CORP: Court Issues Final Decree Closing Ch. 11 Case
ALLIED SYSTEMS: Court Enters Plan Confirmation Order
ALLY FINANCIAL: Comments on Notice by Lion Point
ALPHA NATURAL: Court Approves Consent Order with W.Va. DEP
ALPHA NATURAL: Discloses 42% Equity Stake in Rice Energy
ALPINE PCS: Says Federal Regulator Wrongly Resold Its Licenses
ALROSE ALLEGRIA: IRS Wants Chap. 11 Case Converted Chap. 7
ALROSE ALLEGRIA: Owes $383K in Employment Tax, IRS Says
AMERICAN APPAREL: Court Enters Plan Scheduling Order
AMERICAN EAGLE ENERGY: Cancels Registration of Common Shares
ARAMID ENTERTAINMENT: To Seek Plan Confirmation Feb. 4
ATWOOD OCEANICS: S&P Affirms 'BB' CCR & Revises Outlook to Neg.
BERNARD L. MADOFF: Trustee, Vizcaya Partners Reach $25M Accord
BPZ RESOURCES: Bid for Admin. Claims Payment Due Feb. 1
BPZ RESOURCES: Halts Filing SEC Reports Following Bankruptcy Exit
BRANTLEY LAND: Court Set to Hear State Bank Settlement
BRANTLEY LAND: Jan. 14 Hearing on Bid for Continued Cash Use
BRANTLEY LAND: Jan. 14 Hearing on Bid to Dismiss Chapter 11 Case
BRIAND PROPERTIES: Case Summary & 4 Largest Unsecured Creditors
CARAUSTAR INDUSTRIES: S&P Affirms B+ CCR, Outlook Revised to Stable
CAVITATION TECHNOLOGIES: Deficit, et al., Raise Going Concern Doubt
CHESAPEAKE ENERGY: S&P Assigns 'BB-' Rating on $2.425BB Sr. Notes
CLIFFS NATURAL: Moody's Lowers CFR to Caa1, Outlook Negative
CNT HOLDINGS III: S&P Assigns 'B' CCR, Outlook Negative
CNT HOLDINGS: Moody's Assigns B2 CFR, Outlook Stable
CORNHUSKER RBM: Court Awards $8.7K Judgment vs. Molecular Imaging
COUDERT BROTHERS: 2nd Cir. Remands Statek Suit Against DSI
DORAL FINANCIAL: Jan. 14 Hearing on Bid for Exclusivity Extensions
ENTERGY RHODE: S&P Assigns 'BB' Ratings on $375-Mil. Loans
F-SQUARED INVESTMENT: Verdolino's Jalbert to Serve as Plan Trustee
FORCEFIELD ENERGY: Admits Going Concern Doubt Amid Losses, et al.
FOUR OAKS: Lisa Herring Named Chief Operating Officer
FREEDOM MORTGAGE: Fitch Assigns 'B+' IDR, Outlook Stable
FUHU INC: Golfer Greg Norman Duels Mattel for Tablet Maker
GENERAL STEEL: Receives Noncompliance Notice From NYSE
GENERAL STEEL: To Divest Steel Manufacturing Business
GT ADVANCED: TXT Suit Precluded by Res Judicata, Judge Rules
HOVENSA LLC: To Seek Confirmation of Plan on Jan. 19
JEVIC TRANSPORTATION: States Ask Top Court to Back Truckers Claims
JOHN HUDSON FARMS: Files for Chapter 11 Bankruptcy Protection
KALOBIOS PHARMACEUTICALS: Gets Court Permission to Pay Workers
LEHMAN BROTHERS: Court Junks Spanish Broadcasting's $55MM Claim
LOCAL CORP: Sells Assets to Media.Net for $3.12 Million
LUVU BRANDS: Posts Net Loss in Q3 of 2015, Has Going Concern Doubt
MAGNUM HUNTER: Natural Gas Decline Below $1.65 Could Upend Plan
MEDASSETS INC: Moody's Assigns 'B3' Corporate Family Rating
MEDASSETS INC: S&P Lowers CCR to 'B', Off CreditWatch Negative
METROPOLITAN AUTOMOTIVE: Case Summary & 20 Top Unsecured Creditors
MF GLOBAL: Former NJ Gov. Jon Corzine, CFTC Duel Over Collapse
MISS ANN: Court Allows Shipyard's Claim for $46K
MOLYCORP INC: Bids Said to Trump Miner's Own Price Tag
MONAKER GROUP: Has 5.4M Common Shares Outstanding as of Jan. 5
NATIONAL CINEMEDIA: Names Andrew England CEO and Director
NET DATA: Case Management Conference Set for Jan. 27
NEW YORK CRANE: Case Summary & 9 Largest Unsecured Creditors
NEW YORK CRANE: Files for Chapter 11 Amid Litigations
NEWARK WATERSHED: Ex-Official Pled Guilty to Kickback Scheme
OAK ROCK: Court Grants Bid to Dismiss Suit Against EisnerAmper
OMEGA HEALTHCARE: Fitch Assigns 'BB+' Rating on Subordinated Debt
ONE WORLD: Has Going Concern Doubt Amid Losses, Capital Deficit
OW BUNKER: Martin Energy's Bid for Judgment Premature, Judge Says
PATRIOT COAL: Peabody Energy, Union Agree on Retiree Benefits
PETCO HOLDINGS: S&P Affirms 'B' CCR, Off CreditWatch Negative
PINNACLE FOODS: Moody's Confirms 'Ba2' Sr. Secured Debt Rating
PINNACLE FOODS: S&P Affirms 'BB-' CCR, Outlook Remains Stable
PREMIER WELLNESS: Case Summary & 20 Largest Unsecured Creditors
QUIKSILVER INC: Judge Robert D. Drain Appointed as Mediator
RCS CAPITAL: Moody's Lowers Corporate Family Rating to Caa3
RCS CAPITAL: S&P Lowers ICR to 'D' on Missed Interest Payment
RECYCLE SOLUTIONS: Seeks to Sell Georgia Property for $450K
RELATIVITY MEDIA: Creditors Committee Backs Chapter 11 Plan
RESIDENTIAL CAPITAL: Objection to Claim No. 3503 Sustained
SANITARY AND IMPROVEMENT: Chapter 9 Voluntary Case Summary
SEARS HOLDINGS: ESL Partners Reports 57.2% Stake as of Jan. 4
SOUNDVIEW ELITE: Gets Approval to Settle Patterson Claims
SPECTRASCIENCE INC: $3.6M in Bonds Remain in Default
SPECTRASCIENCE INC: Bye HJ Associates, Hello Haynie & Co.
SPRINGS INDUSTRIES: Moody's Rates $90MM Sr. Secured Term Loan 'B2'
STAR AUTO PARTS: Case Summary & 20 Largest Unsecured Creditors
STERLING MIDCO: Moody's Affirms 'B2' CFR, Outlook Revised to Neg.
STERLING MIDCO: S&P Affirms 'B' Rating on $329MM 1st Lien Loan
SWIFT ENERGY: Has Court's Okay to Obtain $15 Million Loan
TRACK GROUP: Appoints Karen Macleod to Board of Directors
VG LIFE: Cites Uncertainties Raising Going Concern Doubt
WET SEAL: Professional Fee Claims Due Jan. 30
WINE AND CANVAS: Case Summary & 20 Largest Unsecured Creditors
WISHGARD LLC: Denial of William Rice's Wage Claims Affirmed
Z TRIM: Accumulated Deficit Raises Going Concern Doubt
[*] Moody's: Rising LSI Indicates More Defaults to Come in 2016
[*] Paul Fleming Joins Dechert's Restructuring Group in London
[*] Toledo, Ohio Bankruptcy Filings Drop 11% in 2015
[^] BOOK REVIEW: BOARD GAMES - Changing Shape of Corporate Power
*********
33 PECK SLIP: Court Enters Plan Confirmation Order
--------------------------------------------------
Judge James L. Garrity, Jr., in December 2015 entered an order
confirming the Joint Liquidating Plan dated Oct. 16, 2015, filed by
33 Peck Slip Acquisition LLC, et al.
The hearing to consider confirmation of the Plan was held Nov. 30,
2015.
Objections to the October 16 Plan were filed with the Bankruptcy
Court by:
-- The New York City Department of Finance;
-- Local 966, IBT;
-- Cornerstone Lenders; UBS Lenders;
-- William T. Obeid; and
-- Oracle.
The Debtor provided proposed modifications to the October 16
Plan to address the Objections, including all additional
modifications that were proposed at or prior to the Confirmation
Hearing.
At or prior to the Confirmation Hearing, each of the parties that
filed an Objection withdrew its Objection, or its Objection was
consensually resolved by the provisions of the Court's Confirmation
Order.
On Dec. 2, 2015, the Debtors filed their First Amended Joint
Liquidating Plan Dated Dec. 2, 2015.
A copy of the order confirming the Plan is available for free at:
http://bankrupt.com/misc/33_Peck_Slip_200_Plan_Conf_Order.pdf
The Chapter 11 Plan
33 Peck Slip Acquisition LLC, et al., have proposed a full-payment
plan that will be funded from the sales of 4 New York City hotel
properties.
The Debtors have prepared a joint plan, which provides for the sale
of each of the Debtors' real estate assets and the distribution of
the sale proceeds to the applicable Debtor's creditors and
members.
All creditor classes will either receive payment in full on the
effective date of the Plan or will retain unaltered the legal,
equitable, and contractual rights, and all member classes will
retain their interests. Because the Plan does not propose to
impair any class of claims or interests, the Debtors won't be
soliciting votes on the Plan.
The distribution to creditors will be funded from the proceeds of
the sale of the Debtors' real estate assets:
* 33 Peck has entered into an agreement to sell its real
property located at 33 Peck Slip, New York, NY, to
Morning View Hotels - New York Seaport, LLC for $37,300,000.
* 36 West has entered into an agreement to sell its real
property located at 36 West 38th Street, New York, NY,
to Hansji Corporation for $25,500,000. Subsequently, Hanji
elected to terminate the agreement. The Debtors expect that
a new agreement with a new buyer will be filed with the
Bankruptcy Court prior to the Confirmation Hearing.
* 37 West has entered into an agreement to sell its real
property located at 37 West 24th Street, New York, NY, to
Bridgeton Acquisitions LLC for $57,000,000.
* 52 West has entered into an agreement to sell its real
property located at 52 West 13th Street, New York, NY,
to Bridgeton Acquisitions LLC for $78,000,000.
Each of the sales, subject to higher and better bids, will be
consummated in connection with the Plan.
A copy of the Debtors' First Amended Joint Liquidating Plan filed
Dec. 2, 2015, is available for free at:
http://bankrupt.com/misc/33_Peck_Slip_195_Am_Plan.pdf
About 33 Peck
Owners of four New York City hotel properties, namely 33 Peck Slip
Acquisition LLC, Gemini 37 West 24th Street MT, LLC, 36 West 38th
Street LLC and 52 West 13th P, LLC, have sought Chapter 11
bankruptcy protection, intending to auction off their assets in
connection with a Chapter 11 plan. The Debtors are affiliated with
Gemini Real Estate Advisors.
As of the bankruptcy filing, the Debtors owned:
* the Best Western Seaport Hotel, at 33 Peck Slip in the South
Street Seaport Historic District on the Lower Manhattan waterfront
in New York City, New York;
* the Wyndham Flatiron Hotel, at 37 West 24th Street in the
Flatiron district of New York City, New York;
* the Jade Greenwich Village Hotel at 52 West 13th Street in
Greenwich Village in Lower Manhattan in New York City, New York;
and
* the Bryant Park Development Site, a development lot that is
approved for development as a 114-room boutique hotel at 34-36 West
38th Street in the Bryant Park district of New York City, New
York.
33 Peck Slip Acquisition LLC, et al., sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case Nos. 15-12479 to 15-12482) on
Sept. 3, 2015.
The Debtors reported total assets of $205.8 million and total
liabilities of $135.6 million.
The Debtors tapped Robins Kaplan LLP as attorneys; and Robert
Douglas as real estate advisor.
* * *
The Court's Oct. 19, 2015 Bar Date Order provides that the last
date to file a proof of claim in the Chapter 11 cases was Dec. 16,
2015, and the last date for governmental units to file proofs of
claim is March 1, 2016.
33 PECK SLIP: Has Deal With Cornerstone Lenders on Protections
--------------------------------------------------------------
33 Peck Slip Acquisition LLC, et al., won approval from Judge James
L. Garrity, Jr., a stipulation signed with SBNP SIA Mortgage I LLC
and CEMF I USB LLC regarding the claim reserves and
post-confirmation lender protections under the Debtors' Plan.
The Debtors' First Amended Joint Liquidating Plan Dated Dec. 2,
2015 provides, inter alia, that the claims of the Secured Mortgage
Lenders will be paid in full and shall be unimpaired.
The Final Cash Collateral Orders in the Chapter 11 Cases specify
those amounts or components of the claims of the Secured Mortgage
Lenders that have been confirmed or validated by the Debtors from a
review of their books and records and the Loan Documents for each
respective mortgage loan by each Secured Mortgage Lender.
The Debtors and the Secured Mortgage Lenders are desirous of
achieving a resolution of the Cornerstone Protective Objections to
the Debtors' Plan and the UBS Reservation of Rights under the
Debtors' Plan that seek further assurances, clarification and
specified treatment of the disputed or unconfirmed portion(s) of
the Secured Mortgage Lenders' claims -- Residual Claims -- so that
the Cornerstone Lenders and the UBS Lenders stipulate and agree
that their claims are unimpaired under the Plan and the
Confirmation Order and that sufficient proceeds from the sale and
closing of each Debtor's real property (to which the liens of the
Cornerstone Lenders and/or the UBS Lenders will attach) are
reserved and held in trust by each respective Estate to satisfy
such Residual Claims when resolved either by agreement of the
Parties or by final order of the Bankruptcy Court.
Pursuant to the Stipulation, the parties agree that:
1. Subject to adjustment (up or down) in accordance with the
procedures set forth, each respective Debtor will reserve, at
closing, from the respective proceeds from the Sale of its assets,
in a distinct and segregated reserve account, held for each
respective Secured Mortgage Lender and the Estate, those amounts
reflected in Schedules A and B filed together with the stipulation
so as to satisfy those Residual Claims upon written agreement of
the Parties or a final Order of the Bankruptcy Court. The
Schedules reflect claimed amounts or estimates of the components of
the Residual Claims. No amount may be withdrawn from a Reserve
Account without either an Order from the Bankruptcy Court or the
written agreement of the Estate and the Secured Mortgage Lender for
whose benefit the Account is maintained.
2. The Parties will confer, in good faith, prior to any closing
of the Sale of each Debtor's assets, in an effort to reconcile
their issues or disputes relating to the Residual Claims and/or any
adjustments (up or down) to the amounts to be held in the Reserve
Accounts. Any dispute regarding the amounts to be included on
Schedules A and B as reserved for the Secured Mortgage Lenders from
the Sale of any of the Debtor's assets will be determined by motion
to the Bankruptcy Court upon shortened 7 days' notice to the
Debtors and the Secured Mortgage Lenders prior to or after the
closing of any Sale.
3. The Parties agree that, in the absence of an agreement among
the Parties regarding the amount of the Residual Claims to be paid
to each of the Secured Mortgage Lenders, each Secured Mortgage
Lender will move, within 45 days after the closing of a Sale of the
Debtor' assets, for a determination by the Bankruptcy Court for the
final allowance and payment of all or a portion of the Residual
Claims. Each Party agrees to be bound by such ruling of the
Bankruptcy Court as a Final Resolution, without any further appeal,
which right of appeal each Party expressly and knowingly waives and
relinquishes in the interests of fairness and finality.
The Debtors' attorneys:
Howard J. Weg, Esq.
Scott F. Gautier, Esq.
ROBINS KAPLAN LLP
2049 Century Park East, Suite 3400
Los Angeles, CA 90067-3208
Tel: (310) 522-0130
Fax: (310) 229-5800
- and -
David B. Shemano, Esq.
ROBINS KAPLAN LLP
601 Lexington Avenue, Suite 3400
New York, NY 10022-4611
Tel: (212) 980-7400
Fax: (212) 980-7499
Counsel for SBNP I BOA LLC and CEMF I USB LLC
Joshua W. Cohen, Esq.
DAY PITNEY LLP
One Audubon Street
New Haven, CT 06511
Tel: (203) 752-5000
Fax: (203) 752-5001
- and -
James J. Tancredi, Esq.
DAY PITNEY LLP
242 Trumbull Street
Hartford, CT 06103
Tel: (860) 275-0100
Fax: (860) 275-0343
Counsel for 33 Peck Slip Hotel Capital and 36 West 38th Street
Hotel Capital LLC:
Gilbert R. Saydah Jr. Esq.
Robert D. Bickford, Esq.
KELLEY DRYE & WARREN LLP
101 Park Avenue
New York, NY 10178
Tel: (212) 808-7800
Fax: (212) 808-7897
About 33 Peck
Owners of four New York City hotel properties, namely 33 Peck Slip
Acquisition LLC, Gemini 37 West 24th Street MT, LLC, 36 West 38th
Street LLC and 52 West 13th P, LLC, have sought Chapter 11
bankruptcy protection, intending to auction off their assets in
connection with a Chapter 11 plan. The Debtors are affiliated with
Gemini Real Estate Advisors.
As of the bankruptcy filing, the Debtors owned:
* the Best Western Seaport Hotel, at 33 Peck Slip in the South
Street Seaport Historic District on the Lower Manhattan waterfront
in New York City, New York;
* the Wyndham Flatiron Hotel, at 37 West 24th Street in the
Flatiron district of New York City, New York;
* the Jade Greenwich Village Hotel at 52 West 13th Street in
Greenwich Village in Lower Manhattan in New York City, New York;
and
* the Bryant Park Development Site, a development lot that is
approved for development as a 114-room boutique hotel at 34-36 West
38th Street in the Bryant Park district of New York City, New
York.
33 Peck Slip Acquisition LLC, et al., sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case Nos. 15-12479 to 15-12482) on
Sept. 3, 2015.
The Debtors reported total assets of $205.8 million and total
liabilities of $135.6 million.
The Debtors tapped Robins Kaplan LLP as attorneys; and Robert
Douglas as real estate advisor.
* * *
The Court's Oct. 19, 2015 Bar Date Order provides that the last
date to file a proof of claim in the Chapter 11 cases was Dec. 16,
2015, and the last date for governmental units to file proofs of
claim is March 1, 2016.
The Debtors on Dec. 8, 2015 won confirmation of a liquidating plan
that will pay off creditors from proceeds of the sale of their
assets.
ALCO CORP: Court Issues Final Decree Closing Ch. 11 Case
--------------------------------------------------------
The Hon. Mildred Caban Flores of the U.S. Bankruptcy Court for the
District of Puerto Rico entered a final decree closing the Chapter
11 case of Alco Corporation.
The order stated that the Post Confirmation Modification Plan under
Chapter 11 of the Bankruptcy Code was filed by the Debtor on Jan.
20, 2015, and the Court confirmed the Plan on Feb. 18, 2015.
The Court has been determined that:
1. the transfer or other disposition of all or substantially all
of the property dealt with by the Plan pursuant to the provisions
of the Plan has occurred;
2. the Debtor or the successor to the Debtor has assumed the
operation of the business and management of all or substantially
all of the property dealt with by the Plan;
3. the deposit required by the plan has been distributed;
4. the payments under the plan have commenced;
5. all contested matters and adversary proceedings have been
resolved; and
6. the estate of the debtor has been fully administered.
About Alco Corporation
Alco Corporation in Dorado, Puerto Rico, filed for Chapter 11
bankruptcy (Bankr. D.P.R. Case No. 12-00139) on Jan. 12, 2012.
Carmen D. Conde Torres, Esq., and C. Conde & Associates
represent the Debtor in its restructuring effort. Alco tapped
Jimenez Vasquez & Associates, PSC, as accountants. The Debtor
scheduled $11.2 million in assets and $7.76 million in debts.
The petition was signed by Alfonso Rodriguez, president.
Bankruptcy Judge Mildred Caban Flores in Puerto Rico issued an
opinion and order on March 11, 2013, confirming the Amended
Chapter 11 Plan of Reorganization filed by Alco Corporation. The
Plan considers the full payment of all administrative, secured
creditors and priority claims and a 50% dividend to the general
unsecured creditors on monthly installments within 5 years from
the effective date.
ALLIED SYSTEMS: Court Enters Plan Confirmation Order
----------------------------------------------------
Judge Christopher S. Sontchi entered Findings of Fact, Conclusions
of Law, and Order confirming the First Amended Joint Chapter 11
Plan of Reorganization of ASHINC Corporation, formerly Allied
Systems Holdings Inc., et al.
The Plan Order was entered in December 2015, about three and a half
years since Allied entered Chapter 11 bankruptcy.
On Sept. 10, 2015, the Bankruptcy Court held an initial
confirmation hearing, wherein it (i) sustained the Retiree
Committee's objections to confirmation of the Plan, (ii) sustained
the U.S. Trustee's objection the breadth of the exculpation
provisions set forth in the Plan, and (iii) overruled all other
objections to the Plan.
The Official Committee of Retirees objected to the Plan Proponents'
proposal to modify retirees' benefits and seek to confirm their
Plan without complying with Section 1129(a)(13) of the Bankruptcy
Code. The U.S. Trustee claimed that the Plan's exculpation
provision is impermissible and otherwise overbroad.
Following a continued hearing on Dec. 7, 2015, Judge Sontchi
confirmed the Plan. According to the order,
* The Retiree Benefit Plans have been modified and cancelled in
accordance with the terms of the 1114 Order. On the Effective
Date, the Debtors will make the payments to or for the benefit of
the participants or beneficiaries of the Retiree Benefit Plans, as
provided in the 1114 Order. Accordingly, the Plan satisfies the
requirements of section 1129(a)(13) of the Bankruptcy Code.
* All release, exculpation, and injunction provisions in the
Plan, including, without limitation, those contained in Article X
of the Plan, are approved.
A copy of the Plan Confirmation Order is available for free at:
http://bankrupt.com/misc/Allied_S_3383_Plan_Conf_Order.pdf
At the Dec. 7 hearing, the judge also approved the Debtors' amended
and restated motion to modify (A) the medical benefits being
provided to certain of the Debtors' retirees and/or their spouses
and dependents, and (B) certain death benefits for beneficiaries of
certain retirees to conform to the terms of the 1114 Medical
Benefits Proposal and 1114 Death Benefits Proposal. A copy of the
order is available for free at:
http://bankrupt.com/misc/Allied_S_3382_Ord_Ret_Benefits.pdf
Trustee Appointed
The judge approved the appointment of Catherine E. Youngman as the
Litigation Trustee. The Litigation Trustee will serve as the
initial Plan Administrator. On the Effective Date, the Litigation
Trustee, and not the Reorganized Debtors, will be the Estates’
representative in accordance with Section 1123 of the Bankruptcy
Code. The appointment of (i) Jeffrey Buller, (ii) Samuel Goldfarb,
and (iii) Brad Berliner as the initial three members of the
Litigation Oversight Committee was also approved.
The Debtors' Plan
The Plan proposes to distribute all remaining cash on the Effective
Date pursuant to the priority scheme of the Bankruptcy Code, issue
new common stock to the first lien lender, and litigate the estate
claims.
Catherine Nownes-Whitaker, an employee of Rust Consulting/Omni
Bankruptcy, filed a declaration with the Court stating that an
overwhelming majority of holders of claims entitled to vote on the
Plan voted to accept the Plan. The 100% of holders of Class 2 -
First Lien Lender Claims and 96.97% of holders of Class 5 - General
Unsecured Claims voted to accept the Plan.
A full-text copy of the First Amended Plan dated Sept. 9, 2015, is
available at http://bankrupt.com/misc/ASHplan0909.pdf
Full-text copies of Plan Exhibits filed Sept. 8, 2015, are
available at http://bankrupt.com/misc/ASHplansupp0908.pdf
About Allied Systems Holdings
BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and
Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary
petitions for Allied Systems Holdings Inc. and Allied Systems Ltd.
(Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012.
The signatories of the involuntary petitions assert claims of at
least $52.8 million for loan defaults by the two companies.
Allied Systems, through its subsidiaries, provides logistics,
distribution, and transportation services for the automotive
industry in North America.
Allied Holdings Inc. first filed for chapter 11 protection (Bankr.
N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005.
Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the
Debtors in the 2005 case. Allied won confirmation of a
reorganization plan and emerged from bankruptcy in May 2007 with
$265 million in first-lien debt and $50 million in second-lien
debt.
The petitioning creditors said Allied defaulted on payments of
$57.4 million on the first lien debt and $9.6 million on the
second. They hold $47.9 million, or about 20% of the first-lien
debt, and about $5 million, or 17%, of the second-lien obligation.
They are represented by Adam G. Landis, Esq., and Kerri K.
Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris,
Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP.
Allied Systems Holdings Inc. formally put itself and 18
subsidiaries into bankruptcy reorganization June 10, 2012,
following the filing of the involuntary Chapter 11 petition.
The Company is being advised by Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., and Jeffrey W. Kelley, Esq., at
Troutman Sanders, Gowling Lafleur Henderson.
The bankruptcy court process does not include captive insurance
company Haul Insurance Limited or any of the Company's Mexican or
Bermudan subsidiaries. The Company also announced that it intends
to seek foreign recognition of its Chapter 11 cases in Canada.
An official committee of unsecured creditors has been appointed in
the case. The Committee consists of Pension Benefit Guaranty
Corporation, Central States Pension Fund, Teamsters National
Automobile Transporters Industry Negotiating Committee, and
General Motors LLC. The Committee is represented by Sidley Austin
LLP.
In January 2014, the U.S. Trustee for Region 3 appointed a three-
member Official Committee of Retirees.
Yucaipa Cos. has 55% of the senior debt and took the position it
had the right to control actions the indenture trustee would take
on behalf of debt holders. The state court ruled in March 2013
that the loan documents didn't allow Yucaipa to vote.
In March 2013, the bankruptcy court gave the official creditors'
committee authority to sue Yucaipa. The suit includes claims that
the debt held by Yucaipa should be treated as equity or
subordinated so everyone else is paid before the Los Angeles-based
owner. The judge allowed Black Diamond to participate in the
lawsuit against Yucaipa and Allied directors.
Yucaipa American Alliance Fund I, L.P., Yucaipa American Alliance
(Parallel) Fund I, L.P., Yucaipa American Alliance Fund II, L.P.,
Yucaipa American Alliance (Parallel) Fund II, L.P., represented by
Michael R. Nestor, Esq., and Edmund L. Morton, Esq., at Young
Conaway Stargatt & Taylor, LLP; and Robert A. Klyman, Esq., at
Gibson, Dunn & Crutcher LLP.
First Lien Agent, Black Diamond Commercial Finance, L.L.C.,
represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq.,
at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., Robert J.
Ward, Esq., and David M. Hillman, Esq., at Schulte Roth & Zabel
LLP.
Allied Systems Holdings, Inc., has changed its name to ASHINC
Corporation.
* * *
ASHINC Corporation, f/k/a Allied Systems Holdings, Inc., and its
debtor affiliates filed with the U.S. Bankruptcy Court for the
District of Delaware a joint Chapter 11 plan of reorganization,
co-proposed by the Committee and the first lien agents.
The Plan provides that certain of the Debtors' assets, the
Litigation Trust Assets, will vest in the Allied Litigation Trust,
and the remainder of the Debtors' assets, including the proceeds
from the sale of substantially all of the Debtors' assets, will
either revest in the Reorganized Debtors or be distributed to the
Debtors' creditors.
ALLY FINANCIAL: Comments on Notice by Lion Point
------------------------------------------------
Ally Financial Inc. received a notice of nomination from Lion Point
Capital proposing two candidates to stand for election to Ally's
Board of Directors at the Company's 2016 annual meeting, which is
currently scheduled for May 3, 2016. Ally's Board of Directors
will carefully consider and evaluate Lion Point's nominations and
will communicate its views to stockholders in due course.
The Lion Point nominations have no impact on Ally's operations,
which continue in the normal course. Ally remains squarely focused
on serving the needs of its customers and delivering the
competitive products and services they have come to expect from the
company.
Lion Point is a hedge fund formed in 2014, which has advised Ally
that it holds less than 1 percent of Ally's common stock. On the
evening of Dec. 23, 2015, Lion Point sent Ally a letter outlining
various demands, including that Ally's board create a Strategic
Alternatives Committee. Such demand was repeated in a precatory
proposal contained in the notice delivered Jan. 4, 2016.
Ally's Compensation, Nominating and Governance Committee and its
full board previously concluded that Ally stockholder value would
not be enhanced by the creation of such a committee, that Ally's
business and financial fundamentals and prospects are strong, and
that it would be a highly disadvantageous time in the business,
market and regulatory cycle to pursue a sale transaction. Ally
said the formation of such a committee would be widely regarded as
a decision to pursue a sale of the company.
According to Ally, Lion Point's actions are particularly
disappointing given Ally's engagement with the hedge fund over the
last few months. Lion Point advised Ally of its Hart-Scott-Rodino
filing on Nov. 12, 2015, and commented that it was "precautionary"
and that Lion Point did not intend to engage in an activist role. A
few days later, members of Ally's senior management and the board
had a phone call with Lion Point, at its request. Lion Point's
next communication with the company was in the demand letter, sent
just before Christmas, in which it insisted on a positive response
to its proposals in less than two weeks, failing which it planned
to nominate directors.
The Compensation, Nominating and Governance Committee of the board
and the full board each met immediately after Christmas to discuss
Lion Point's demands. Ally representatives subsequently held
further discussions with the Lion Point representatives in which
the adverse consequences of publicly establishing a Strategic
Alternatives Committee were explained.
Ally Chairman Franklin W. Hobbs stated: "Our board is committed to
open dialogue with our stockholders. We believe, however, that our
primary duty as directors is to assess the best path for Ally and
all its stockholders. Although we are troubled by Lion Point's
tactics, our fundamental disagreement is with Lion Point's clear
agenda to force a sale of Ally. Such a course of action would be
contrary to the best interests of stockholders and our obligations
to all stockholders do not permit us to adopt such a course to
avoid a proxy contest."
Ally said it has a highly qualified board of experienced
professionals with extensive expertise in banking, consumer finance
and the financial sector more generally. The board is committed to
good corporate governance, with all directors other than the CEO
being independent. Under the leadership of the Board of Directors
and the current management team, Ally has implemented substantial
improvements to its operational and business strategies, delivered
improved and consistent profitability, strengthened the company's
financial profile and further deepened and strengthened customer
relationships. Among other achievements, Ally has:
* Generated auto originations in excess of $40 billion in 2015,
surpassing original target
* Steadily grew bank deposits in excess of $7 billion from more
than 1 million customers in 2015
* Achieved a core return on tangible common equity (ROTCE)
above its targeted 9 percent in two of the last three
quarters
* Increased core income[1] 10.8 percent to $1.4 billion year-
to-date through the third quarter, and increased net income
5.4 percent to approximately $1 billion during the same
period
* Successfully redeemed $2.6 billion of Series G preferred
securities
* Achieved an adjusted efficiency ratio in the mid-40 percent
range
The Board of Directors welcomes the views of its stockholders and
will consider suggestions from all stockholders. It will not,
however, undertake any actions that it believes would jeopardize
the company's ability to deliver long-term value for all
stockholders.
About Ally Financial
Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/--
is one of the world's largest automotive financial services
companies. The Company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3 percent stake. Private equity firm Cerberus
Capital Management LP keeps 14.9 percent, while General Motors Co.
owns 6.7 percent.
As of Sept. 30, 2015, the Company had $156 billion in total assets,
$142 billion in total liabilities, and $14.6 billion in total
equity.
* * *
As reported by the TCR on Dec. 16, 2013, Standard & Poor's Ratings
Services said it raised its issuer credit rating on Ally Financial
Inc. to 'BB' from 'B+'. "The upgrade reflects the company's
release from potential legal and financial liabilities stemming
from its ownership of ResCap," said Standard & Poor's credit
analyst Tom Connell.
In the April 3, 2014, edition of the TCR, Fitch Ratings has
upgraded Ally Financial Inc.'s long-term Issuer Default Rating
(IDR) and senior unsecured debt rating to 'BB+' from 'BB'.
The rating upgrade reflects increased clarity around Ally's
ownership structure given Ally's recent announcement that it has
launched an initial public offering those shares of its common
stock held by the U.S. Treasury (the Treasury).
As reported by the TCR on July 16, 2014, Moody's Investors Service
affirmed the 'Ba3' corporate family and 'B1' senior unsecured
ratings of Ally Financial, Inc. and revised the outlook for the
ratings to positive from stable. Moody's affirmed Ally's ratings
and revised its rating outlook to positive based on the company's
progress toward sustained improvements in profitability and
repayment of government assistance received during the financial
crisis.
ALPHA NATURAL: Court Approves Consent Order with W.Va. DEP
----------------------------------------------------------
Alpha Natural Resources, Inc., on December 7, 2015, asked the U.S.
Bankruptcy Court for the Eastern District of Virginia to enter an
order approving the Debtors' entry into a consent order
memorializing the terms of the Debtors' resolution of certain
issues with the West Virginia Department of Environmental
Protection regarding the Debtors' reclamation bonding of their
surface coal mining operations in the State of West Virginia.
On December 17, the Bankruptcy Court granted Debtors' motion, and
on December 22, the Bankruptcy Court entered an order approving the
Debtors' entry into the Consent Order.
Under the consent order, Alpha Natural agreed to reduce its
self-bonding obligations and continue reclaiming mining operations
in the state. It will provide $39 million in financial commitments
to back its remaining self-bonded obligations. Alpha Natural has
more than 500 mining permits for its operations in West Virginia.
A copy of the Consent Order by and between Alpha Natural Resources,
Inc. (on behalf of itself and certain of its subsidiaries) and the
West Virginia Department of Environmental Protection, dated
December 7, 2015, is available at http://is.gd/wbbISp
About Alpha Natural
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 cases.
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 to serve on an official committee of unsecured
creditors.
ALPHA NATURAL: Discloses 42% Equity Stake in Rice Energy
--------------------------------------------------------
Alpha Natural Resources, Inc., on behalf of itself and its indirect
wholly owned subsidiary, Foundation PA Coal Company, LLC, filed
with the Securities and Exchange Commission a Schedule 13D/A
(Amendment No. 6) to disclose that the Alpha Entities may be deemed
to beneficially own 58,322,756 shares of Common Stock of Rice
Energy, Inc., which constitutes approximately 42.8% of the
outstanding Common Stock of Rice Energy.
Alpha said Foundation directly holds 4,016,146 shares of the Rice
Energy Common Stock. Because of Alpha's relationship to
Foundation, Alpha is deemed to beneficially own 4,016,146 shares of
Common Stock of Rice Energy.
Alpha also disclosed that Foundation has sold 2,392,839 shares of
the Common Stock through open-market transactions.
In 2010, Foundation entered into a 50/50 joint venture with Rice
Drilling C LLC, a wholly owned subsidiary of Rice Drilling B LLC,
in order to develop a portion of Alpha's Marcellus Shale natural
gas holdings in southwest Pennsylvania. On December 6, 2013,
Foundation, Rice Drilling C LLC and Rice Energy entered into a
transaction agreement. Pursuant to the Transaction Agreement,
Foundation agreed to transfer its 50% interest in the Alpha Shale
JV to Rice Energy in exchange for total consideration of $300
million, consisting of $100 million of cash and the issuance by
Rice Energy to Foundation of 9,523,810 shares of Common Stock
concurrently with, and contingent upon, the consummation of Rice
Energy's initial public offering.
A copy of the Schedule 13D/A is available at http://is.gd/qjOvLt
About Alpha Natural
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 cases.
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 to serve on an official committee of unsecured
creditors.
ALPINE PCS: Says Federal Regulator Wrongly Resold Its Licenses
--------------------------------------------------------------
Daniel Wilson at Bankruptcy Law360 reported that bankrupt wireless
company Alpine PCS Inc. hit the Federal Communications Commission
with a $21 million suit on Jan. 4, 2016, in the Federal Claims
Court, alleging the regulator wrongly found it in default of two
wireless spectrum purchase deals without following the required
processes.
Despite indicating that it would work with Alpine to try to
restructure the installment payment deals when the company ran into
financial difficulties, as required by the contracts, the FCC
instead unilaterally declared the company in default and resold the
licenses.
About Alpine PCS, Inc.
Gaylord, Michigan-based Alpine PCS, Inc., doing business as Firefly
Wireless, and Firefly PCS and its affiliates filed for Chapter 11
protection (Bankr. D. Col. Lead Case No. 08-00543) on Aug. 12,
2008. Lawrence A. Katz, Esq., at Venable, LLP represents the
Debtors in their restructuring effort. Alpine PCS estimated assets
and debt at $10 million to $50 million.
ALROSE ALLEGRIA: IRS Wants Chap. 11 Case Converted Chap. 7
----------------------------------------------------------
The United States of America, on behalf of the Internal Revenue
Service, asks the United States Bankruptcy Court for the Southern
District of New York to convert the Chapter 11 case of Alrose
Allegria LLC to one under Chapter 7 of the Bankruptcy on the basis
that the Debtor has ceased paying postpetition federal taxes during
the pendency of its Chapter 11 case, and the Debtor's
administrative insolvency and inability to confirm a plan, among
other issues, give rise to several other circumstances constituting
cause for conversion.
The United States of America is represented by:
PREET BHARARA
United States Attorney for the Southern District of New
York
By:
SAMUEL DOLINGER
Assistant United States Attorney
86 Chambers Street, 3rd Floor
New York, NY 10007
Phone: (212) 637-2677
Fax: (212) 637-2702
Email: samuel.dolinger@usdoj.gov
About Alrose Allegria
Alrose Allegria LLC sought Chapter 11 protection (Bankr. S.D.N.Y.
Case No. 15-11760) in Manhattan on July 2, 2015, estimating $10
million to $50 million in assets and $1 million to $10 million in
debt. Allen Rosenberg, managing member of Alrose Allegria and
president of the Alrose Group, signed the bankruptcy petition.
The Debtor tapped Richard J. Bernard, Esq., at Foley & Lardner
LLP,
in New York, as counsel.
According to the docket, the Debtor's Chapter 11 plan and
disclosure statement are due Oct. 30, 2015. The initial case
conference was set for Aug. 3, 2015.
In July 2011, another unit of the Alrose Group, Alrose King David
LLC filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y.
Case No. 11-75361) in Brooklyn. Alrose King David LLC was a
special entity established by the Alrose Group to own the
143-room,
beachfront hotel property called the Allegria Hotel & Spa in Long
Beach, Long Island. Alrose King David won approval of its
reorganization plan in March 2012.
ALROSE ALLEGRIA: Owes $383K in Employment Tax, IRS Says
-------------------------------------------------------
The Internal Revenue Service asks the U.S. Bankruptcy Court to
direct Alrose Allegria LLC to pay payroll taxes for the third
quarter of 2015 that the Debtor has failed to pay.
Michael P. Rodkey, Bankruptcy Specialist in Insolvency Group 4 of
the Internal Revenue Service
and assigned the responsibility of overseeing certain IRS files,
including the file of the Debtor, filed a declaration stating that
from July 15, 2015, through September 16, 2015, the Debtor made
weekly federal
payroll tax deposits.
According to Mr. Rodkey, the Debtor ceased making weekly federal
tax deposits after September 16, 2015, and has made no additional
payments of federal payroll taxes to date.
Mr. Rodkey filed a request for payment of Internal Revenue Taxes
for payroll taxes from the 3rd Quarter of 2015 that Debtor has
failed to pay. That claim reflects that a total of $113.725.53 in
taxes, penalties, and interest is now due and owing. Additionally,
as of Nov. 24, 2015, the Debtor owes $270,100.05 in payroll taxes
for the 4th Quarter of 2015 for a total projected postpetition
employment tax liability to date of $383,825.58.
The United States of America is represented by:
PREET BHARARA
United States Attorney for the Southern District of New
York
By:
SAMUEL DOLINGER
Assistant United States Attorney
86 Chambers Street, 3rd Floor
New York, NY 10007
Phone: (212) 637-2677
Fax: (212) 637-2702
Email: samuel.dolinger@usdoj.gov
About Alrose Allegria
Alrose Allegria LLC sought Chapter 11 protection (Bankr. S.D.N.Y.
Case No. 15-11760) in Manhattan on July 2, 2015, estimating $10
million to $50 million in assets and $1 million to $10 million in
debt. Allen Rosenberg, managing member of Alrose Allegria and
president of the Alrose Group, signed the bankruptcy petition.
The Debtor tapped Richard J. Bernard, Esq., at Foley & Lardner
LLP,
in New York, as counsel.
According to the docket, the Debtor's Chapter 11 plan and
disclosure statement are due Oct. 30, 2015. The initial case
conference was set for Aug. 3, 2015.
In July 2011, another unit of the Alrose Group, Alrose King David
LLC filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y.
Case No. 11-75361) in Brooklyn. Alrose King David LLC was a
special entity established by the Alrose Group to own the
143-room,
beachfront hotel property called the Allegria Hotel & Spa in Long
Beach, Long Island. Alrose King David won approval of its
reorganization plan in March 2012.
AMERICAN APPAREL: Court Enters Plan Scheduling Order
----------------------------------------------------
To promote the efficient and expeditious disposition of the hearing
on the confirmation of the Joint Plan of Reorganization of American
Apparel, Inc., et al., Judge Brendan L. Shannon on Dec. 29, 2015,
entered a scheduling order providing that:
1. The Debtors, the Official Committee of Unsecured Creditors
and any parties seeking to offer or examine any witnesses or
participate in discovery with respect to the Plan Confirmation
Hearing will identify the witnesses, including any experts, they
may call to testify at the Plan Confirmation Hearing on or before
5:00 p.m. on Jan. 8, 2016.
2. The Parties will serve any expert reports and any discovery
materials on a rolling basis.
3. The Parties will take depositions of the proposed fact
witnesses and expert witnesses on Jan. 11 and 12, 2016.
4. The Parties will exchange deposition designations, and trial
exhibit lists, on or before 5:00 p.m. on Jan. 13, 2016.
5. The Parties will exchange (1) deposition
counter-designations, (2) objections to trial exhibits, and (3)
final witness lists on or before 5:00 p.m. on Jan. 15, 2016.
6. The Plan Confirmation Hearing will commence on Jan. 20, 2016
at 10:00 a.m., as previously ordered by the Court, and be
continued, if necessary, on subsequent dates ordered by the Court.
The Scheduling Order was proposed by the Debtors. According to the
Debtors, the Official Committee of Unsecured Creditors and the
Committee of Lead Lenders have reviewed the Scheduling Order and
have not expressed any objection to the Scheduling Order.
The Chapter 11 Plan
A hearing to consider confirmation of American Apparel, Inc., et
al.'s Joint Plan of Reorganization will be held before Judge
Brendan L. Shannon of the U.S. Bankruptcy Court for the District of
Delaware on Jan. 20, 2016 at 10:00 a.m. (prevailing Eastern Time).
The Plan will allow the Debtors to strengthen their balance sheet
by converting over $200 million of Prepetition indebtedness into
Reorganized American Apparel Equity Interests and enabling the
Debtors to obtain a material infusion of new equity and debt
capital upon emergence that will permit the Debtors to exit
bankruptcy protection expeditiously and with sufficient liquidity
to implement their business plan. In addition, the Plan will
provide distributions to general unsecured creditors in the form
of units in a litigation trust and, to each class of general
unsecured creditors that accepts the Plan, a portion of a $1
million cash payment.
The GUC Payment will be divided as follows:
-- $10,000 for GUCs against American Apparel, Inc.
-- $517,000 for GUCs against American Apparel (USA), LLC
-- $470,000 for GUCs against American Apparel Retail, Inc.
-- $1,000 for GUCs against American Apparel Dyeing & Finishing
-- $1,000 for GUCs against KCL Knitting, LLC
-- $1,000 for GUCs against Fresh Air Freight, Inc.
Parties who support the Plan include 100% of the lenders under the
Prepetition ABL Facility, holders of over 95% in amount of the
Prepetition Notes, and lenders under the Lion Credit Facility and
the UK Loan.
A full-text copy of the Disclosure Statement dated Nov. 20, 2015,
is available at http://bankrupt.com/misc/AAds1120.pdf
About American Apparel
American Apparel, Inc., American Apparel (USA), LLC, American
Apparel Retail, Inc., American Apparel Dyeing & Finishing, Inc.,
KCL Knitting, LLC and Fresh Air Freight, Inc. sought Chapter 11
bankruptcy protection (Bankr. D. Del. Proposed Lead Case No.
15-12055) on Oct. 5, 2015. The petition was signed by Hassan
Natha as chief financial officer.
The Debtors reported total assets of $199,360,934 and total
liabilities of $397,576,744.
The Debtors and their non-debtor affiliates operate a vertically
integrated manufacturing, distribution, and retail business
focused
on branded fashion-basic apparel, employing approximately 8,500
employees across six manufacturing facilities and approximately
230
retail stores in the United States and 17 other countries
worldwide.
The Debtors have engaged Jones Day as restructuring counsel,
Pachulski Stang Ziehl & Jones LLP as local counsel, Moelis &
Company as investment banker, FTI Consulting, Inc. as financial
advisor, DJM Real Estate as real estate consultant and Garden City
Group, LLC as claims and noticing agent.
AMERICAN EAGLE ENERGY: Cancels Registration of Common Shares
------------------------------------------------------------
American Eagle Energy Corporation filed with the Securities and
Exchange Commission in December a Form 15 document "CERTIFICATION
AND NOTICE OF TERMINATION OF REGISTRATION UNDER SECTION 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934 OR SUSPENSION OF DUTY TO FILE
REPORTS UNDER SECTIONS 13 AND 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.".
American Eagle is terminating the registration of its common stock.
American Eagle will also halt filing reports with the Commission.
About American Eagle
Littleton, Colorado-based American Eagle Energy Corporation is
engaged in the acquisition, exploration and development of oil and
gas properties. The Company is primarily focused on extracting
proved oil reserves from those properties.
American Eagle Energy Corporation and its wholly-owned subsidiary,
AMZG, Inc., filed on May 8, 2015, voluntary petitions (Bankr. D.
Colo., Case No. 15-15073). The case is assigned to Judge Howard
R.
Tallman. The Debtors are represented by Elizabeth A. Green, Esq.,
at Baker & Hostetler LLP, in Orlando, Florida.
On May 13, 2015, Judge Tallman granted the Debtors' request for
joint administration.
American Eagle Energy disclosed total assets of $21,980,687 and
total liabilities of $193,604,113 as of the Chapter 11 filing.
The U.S. Trustee for Region 6 appointed seven creditors to serve
on
the Official Committee of Unsecured Creditor. The Committee
tapped
Pachulski Stang Ziehl & Jones LLP as counsel, and Conway Mackenzie
as financial advisor.
ARAMID ENTERTAINMENT: To Seek Plan Confirmation Feb. 4
------------------------------------------------------
Judge Sean H. Lane approved in December 2015 the disclosure
statement explaining Aramid Entertainment Fund Limited, et al.'s
proposed Joint Liquidating Plan of Reorganization and set:
* A Dec. 16, 2015 record date;
* A Jan 19, 2015 5:00 p.m. (Eastern) deadline for objections
to confirmation of the Plan;
* A voting deadline of 5:00 p.m. (Eastern) on Jan. 19, 2016;
* A Jan. 28, 2016 for the Debtors' reporting on Plan voting;
* A Jan. 28, 2016 deadline for the Debtors' omnibus reply to
objections to confirmation; and
* A hearing to consider confirmation of the Plan on Feb. 4,
2016 at 11:00 a.m. (Eastern).
Objections to the adequacy of the information in the Original
Disclosure Statement were filed by (i) Eden Rock Unleveraged
Finance Master Limited, et al., which invested nearly $30 million
in AEF, and (ii) Wimbledon Financing Master Fund, Ltd., a holder of
Class B Shares.
The Debtor on Dec. 15, 2015, submitted a First Amended Disclosure
Statement, ahead of the Dec. 16 disclosure statement hearing.
The judge held that the First Amended Disclosure Statement contains
adequate information within the meaning of section 1125 of the
Bankruptcy Code regarding the First Amended Joint Liquidating Plan
of Reorganization of the Debtors.
The Liquidating Plan
The Debtors' Plan proposes the liquidation of the Debtors' assets
under Chapter 11 of the Bankruptcy Code and the distribution of the
proceeds of the Debtors' assets to the Creditors and Interest
holders in accordance with the priorities established by the
Bankruptcy Code.
Under the Plan, holders of secured claims against the Debtors are
unimpaired. Holders of unsecured claims against Aramid
Entertainment Fund estimated to total $7.5 million and holders of
unsecured claims against Aramid Liquidating Trust, Ltd. totaling $6
million are expected be paid in full in cash, without interest.
The Debtors believe that there won't be any allowed unsecured
claims against Aramid Entertainment, Inc. No property will be
distributed to holders of allowed interests.
A copy of the redlined version of the First Amended Disclosure
Statement is available for free at:
http://bankrupt.com/misc/Aramid_E_594_1st_Am_DS_RL.pdf
Counsel to Aramid Entertainment Fund, et al.:
REED SMITH LLP
James C. McCarroll, Esq.
Jordan W. Siev, Esq.
Kurt F. Gwynne, Esq.
599 Lexington Avenue
New York, NY 10022-7650
Telephone: (212) 521-5400
Facsimile: (212) 521-5450
E-mail: jmccarroll@reedsmith.com
jsiev@reedsmith.com
kgwynne@reedsmith.com
About Aramid Entertainment
Aramid Entertainment Fund Limited has been engaged in the
businesses of providing short and medium term liquidity to
producers and distributors of film, television and other media and
entertainment content by way of loans and equity investments.
On May 7, 2014, Geoffrey Varga and Jess Shakespeare of Kinetic
Partners (Cayman) Limited were appointed under Cayman law as the
joint voluntary liquidators ("JVLs") of AEF and two affiliates.
On June 13, 2014, the JVLs authorized AEF and two affiliates to
file for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead
Case No. 14-11802) in Manhattan on June 13, 2014.
AEF estimated at least $100 million in assets and between
$10 million to $50 million in liabilities.
The Debtors obtained Bankruptcy Court approval of the retention of
(i) Reed Smith LLP as bankruptcy counsel; (ii) Geoffrey Varga and
Jess Shakespeare as Crisis Managers; (iii) Irell & Manella LLP as
special litigation counsel; (iv) Maples and Calder as special
Cayman law counsel; and (v) PKF O'Connor Davies LLP as financial
advisors. The Debtors have filed an application to retain
Houlihan
Capital Advisors LLC to provide valuation services.
The Court set Nov. 10, 2014 as the general bar date for all
claims.
* * *
The Debtors requested multiple extensions of their exclusive
filing
and solicitation periods. By an order dated Oct. 22, 2015, the
Bankruptcy Court extended the Debtors' exclusive period to file a
chapter 11 plan to Dec. 13, 2015, and the Debtors' exclusive
period
to solicit acceptances thereof until Feb. 13, 2016.
ATWOOD OCEANICS: S&P Affirms 'BB' CCR & Revises Outlook to Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'BB'
corporate credit and senior unsecured debt ratings on Atwood
Oceanics Inc. and revised the outlook to negative from stable. The
recovery rating on the company's senior unsecured notes remains
'3', indicating S&P's expectation for meaningful (higher half of
the 50% to 70% range) recovery if a payment default occurs.
"The outlook revision reflects our expectation that Atwood's credit
measures will deteriorate meaningfully in 2017 and 2018 due to
depressed industry conditions, despite our anticipation of adequate
debt ratios for the rating in 2016," said Standard & Poor's credit
analyst Christine Besset.
Based on S&P's assumptions that the two drillships under
construction will be delivered at the end of 2017 and mid-2018,
respectively, and lower day-rates and utilization rates for the
rest of the fleet, S&P forecasts funds from operations (FFO) to
debt will fall below 20% in 2017 and 2018, compared with more than
30% expected at the end of fiscal 2016. S&P notes that the recent
delay in the deliveries of the two drillships under construction
defers required capital spending, which S&P views positively.
S&P's reassessment of the company's business risk profile reflects
S&P's anticipation that Atwood's fleet of active rigs will shrink
in 2017 as S&P expects market conditions to remain depressed and
utilization rates to drop. As a result, the company's cash flow
size and asset diversity will likely worsen, with most of company's
EBITDA relying on a handful of rigs.
The negative outlook reflects S&P's expectation that Atwood's
credit measures will deteriorate in 2017 and 2018, such that FFO to
debt will fall below 20%. S&P expects that oversupply in new rigs
and low commodity prices will heighten competition and
recontracting risk over the next two years, resulting in downward
pressure on day rates and utilization levels. S&P could consider a
downgrade if the FFO–to-debt ratio remained less than 20% for a
sustained period without a clear path for improvement.
S&P could return the outlook to stable if it believes that the
company can sustain FFO to debt above 20%. This would most likely
occur if the company can successfully contract its available rigs
in 2017 and 2018 and S&P believes an industry upturn is likely in
2018.
BERNARD L. MADOFF: Trustee, Vizcaya Partners Reach $25M Accord
--------------------------------------------------------------
Jonathan Randles at Bankruptcy Law360 reported that British Virgin
Islands-based hedge fund Vizcaya Partners Ltd. and its affiliates
have agreed to pay $24.9 million to end a lawsuit over the funds'
role as a feeder fund for Bernie Madoff's bogus securities firm,
according to papers filed in New York bankruptcy court.
The settlement, which must be approved by a federal bankruptcy
judge, would end litigation in the U.S. and Gibraltar between
Vizcaya and the trustee overseeing the liquidation of Madoff's
securities firm, Bernard L. Madoff Investment Securities.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the customers
of BLMIS are in need of the protection afforded by the Securities
Investor Protection Act of 1970. The District Court's Protective
Order (i) appointed Irving H. Picard, Esq., as trustee for the
liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his
counsel, and (iii) removed the SIPA Liquidation proceeding to the
Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland,
J.). Mr. Picard has retained AlixPartners LLP as claims agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal &
Associates Florida General Partnership, Martin Rappaport
Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and
Steven Morganstern -- assert US$64 million in claims against Mr.
Madoff based on the balances contained in the last statements they
got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later
transferred to Manhattan. In June 2009, Judge Lifland approved the
consolidation of the Madoff SIPA proceedings and the bankruptcy
case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to 150
years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has commenced distributions to victims. As of the end
of May 2015, the SIPA Trustee has recovered more than $10.699
billion and has distributed approximately $7.576 billion. When
additional settlements awaiting distribution are taken into
account, the recovery in the Madoff liquidation proceeding totals
$10.734 billion.
BPZ RESOURCES: Bid for Admin. Claims Payment Due Feb. 1
-------------------------------------------------------
BPZ Resources, Inc. advises parties-in-interest that:
-- Any request for payment of an Administrative Claim (other
than a claim for Professional Fees or U.S. Trustee Fees) must, no
later than February 1, 2016, be filed with the Bankruptcy Court and
served on the Liquidating Trustee (BPZ Liquidating Trust, 606 Post
Road East #624, Westport, CT 06880). FAILURE TO FILE AND SERVE SUCH
REQUEST FOR PAYMENT OF ADMINISTRATIVE CLAIM TIMELY AND PROPERLY
SHALL RESULT IN THE ADMINISTRATIVE CLAIM BEING FOREVER BARRED AND
DISCHARGED.
-- Any Professional seeking an award by the Bankruptcy Court
of an Allowed Administrative Claim on account of Professional Fees
incurred from the Petition Date through and including the Effective
Date shall, no later than February 15, 2016, file with the
Bankruptcy Court a final application for allowance of compensation
for services rendered and reimbursement of expenses incurred
through and including the Effective Date. FAILURE TO TIMELY FILE A
FINAL FEE APPLICATION SHALL RESULT IN THE RELEVANT PROFESSIONAL FEE
CLAIM BEING FOREVER DISALLOWED AND BARRED.
About BPZ Resources
BPZ Energy -- http://www.bpzenergy.com/-- is an independent oil
and gas exploration and production company which had license
contracts covering 1.9 million net acres in offshore and onshore
Peru. BPZ Resources maintains an office in Victoria, Texas, and
through its subsidiaries maintains offices in Lima and Tumbes,
Peru, and Quito, Ecuador.
BPZ Resources sought Chapter 11 protection (Bankr. S.D. Tex. Case
No. 15-60016) in Victoria, Texas, on March 9, 2015. The case is
pending before the Honorable David R. Jones. The Debtor disclosed
total assets of $364 million and debt of $275 million.
The Debtor tapped Stroock & Stroock & Lavan LLP as bankruptcy
Counsel; Hawash Meade Gaston Neese & Cicack LLP, as local Texas
Counsel; Houlihan Lokey Capital, Inc., as investment banker;
Opportune LLP, as restructuring advisor; Baker Hostetler, as the
audit committee's special counsel; and Kurtzman Carson Consultants
as claims and noticing agent.
The Official Committee of Unsecured Creditors retained Akin Gump
Strauss Hauer & Feld LLP as legal counsel, and Blackstone Advisory
Partners L.P. as its financial advisor.
* * *
Following an auction on June 30 to July 1, 2015, the Debtor won
court approval, and later closed, the sale of its equity interests
in its non-debtor subsidiaries for $8,500,000 to Zedd Energy Holdco
Ltd. The Debtor also sold assets relating to the onshore blocks in
northwestern Peru, all equity interests in the power generation
subsidiary EENE and, subject to Ecuadorian government approval and
applicable rights of first refusal, all equity interests in SMC
Ecuador, Inc., for $750,000 million to Zorritos Peru Holdings,
Inc.
The Debtor on July 30, 2015, won approval to implement a key
employee retention plan and a key employee incentive plan and to
pay severance claims to certain critical employees.
On Sept. 7, 2015, the Debtor and the Committee filed an agreed
order extending the exclusive period to solicit acceptances of a
chapter 11 plan through Oct. 23, 2015. The Court entered the
agreed order on Sept. 8.
The Debtor filed a Plan of Liquidation on Sept. 8, 2015, and then
an Amended Plan on Sept. 25, 2015.
On Nov. 12, 2015, the Bankruptcy Court entered an order confirming
the Company's Second Amended Plan of Liquidation. As of Dec. 31,
2015, all conditions to the occurrence of the effective date set
forth in the Debtors' Plan and the Confirmation Order were
satisfied or waived in accordance therewith and the effective date
of the Plan occurred. On the same date, the Company filed a Notice
of Effective Date of the Plan with the Bankruptcy Court.
BPZ RESOURCES: Halts Filing SEC Reports Following Bankruptcy Exit
-----------------------------------------------------------------
Last week, BPZ Resources, Inc., announced that its Second Amended
Plan of Liquidation has taken effect.
The Company has filed with the U.S. Securities and Exchange
Commission a Form 15 "CERTIFICATION AND NOTICE OF TERMINATION OF
REGISTRATION UNDER SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF
1934 OR SUSPENSION OF DUTY TO FILE REPORTS UNDER SECTIONS 13 AND
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934".
Specifically, the Company cancelled the registration of its common
stock, no par value per share.
On October 1, 2015, the Company filed with the Bankruptcy Court a
Second Amended Plan of Liquidation and related amended disclosure
statement. On November 12, 2015, the Bankruptcy Court entered its
Order Finally Approving Second Amended Disclosure Statement and
Confirming Second Amended Chapter 11 Plan.
As of December 31, 2015, all conditions to the occurrence of the
effective date set forth in the Plan and the Confirmation Order
were satisfied or waived in accordance therewith and the effective
date of the Plan occurred. On the same date, the Company filed a
Notice of Effective Date of the Plan with the Bankruptcy Court.
As a result of the Plan being effective, all of the Company's
equity interests, consisting of authorized and outstanding shares
of common stock of the Company, were cancelled without
consideration and have no value.
With the filing of the Form 15, the Company said it would
immediately cease filing any further periodic or current reports
under the Exchange Act.
About BPZ Resources
BPZ Energy -- http://www.bpzenergy.com/-- is an independent oil
and gas exploration and production company which had license
contracts covering 1.9 million net acres in offshore and onshore
Peru. BPZ Resources maintains an office in Victoria, Texas, and
through its subsidiaries maintains offices in Lima and Tumbes,
Peru, and Quito, Ecuador.
BPZ Resources sought Chapter 11 protection (Bankr. S.D. Tex. Case
No. 15-60016) in Victoria, Texas, on March 9, 2015. The case is
pending before the Honorable David R. Jones. The Debtor disclosed
total assets of $364 million and debt of $275 million.
The Debtor tapped Stroock & Stroock & Lavan LLP as bankruptcy
Counsel; Hawash Meade Gaston Neese & Cicack LLP, as local Texas
Counsel; Houlihan Lokey Capital, Inc., as investment banker;
Opportune LLP, as restructuring advisor; Baker Hostetler, as the
audit committee's special counsel; and Kurtzman Carson Consultants
as claims and noticing agent.
The Official Committee of Unsecured Creditors retained Akin Gump
Strauss Hauer & Feld LLP as legal counsel, and Blackstone Advisory
Partners L.P. as its financial advisor.
* * *
Following an auction on June 30 to July 1, 2015, the Debtor won
court approval, and later closed, the sale of its equity interests
in its non-debtor subsidiaries for $8,500,000 to Zedd Energy Holdco
Ltd. The Debtor also sold assets relating to the onshore blocks in
northwestern Peru, all equity interests in the power generation
subsidiary EENE and, subject to Ecuadorian government approval and
applicable rights of first refusal, all equity interests in SMC
Ecuador, Inc., for $750,000 million to Zorritos Peru Holdings,
Inc.
The Debtor on July 30, 2015, won approval to implement a key
employee retention plan and a key employee incentive plan and to
pay severance claims to certain critical employees.
On Sept. 7, 2015, the Debtor and the Committee filed an agreed
order extending the exclusive period to solicit acceptances of a
chapter 11 plan through Oct. 23, 2015. The Court entered the
agreed order on Sept. 8.
The Debtor filed a Plan of Liquidation on Sept. 8, 2015, and then
an Amended Plan on Sept. 25, 2015.
BRANTLEY LAND: Court Set to Hear State Bank Settlement
------------------------------------------------------
A U.S. bankruptcy court is set to hear a motion filed by Brantley
Land and Timber Company LLC to approve a settlement agreement with
State Bank and Trust Co.
The U.S. Bankruptcy Court for the Southern District of Georgia will
take up the motion at a hearing on Jan. 14.
Under the agreement, State Bank will receive payment in the amount
of $250,000 from the real estate developer. In exchange, the bank
agreed to have its claim against Brantley converted to a general
unsecured claim, and surrender all of its collateral to the
developer.
State Bank also agreed to withdraw its motion filed in November
last year in which it asked for the dismissal of Brantley's
bankruptcy case, according to court filings.
A copy of the settlement agreement is available for free at
http://is.gd/Kn7yZb
Brantley in 2007 borrowed $10 million from Security Bank of North
Fulton, predecessor-in-interest to State Bank. The company used
certain properties in Brantley County, Georgia, as collateral for
the loan.
In 2010, State Bank acquired the loan documents by assignment from
the Federal Deposit Insurance Corp. as receiver for Security Bank.
The following year, State Bank obtained a judgment in Fulton County
Superior Court against the developer and its principals in the
amount of $9.67 million, plus interest and attorney fees.
About Brantley Land
Brantley Land & Timber Company, LLC, is a real estate development
company which originally held over 1,000 lots in a development
located in Brantley County, Georgia.
In July, 2011, State Bank & Trust Company obtained a judgment in
Fulton County Superior Court against Brantley Land and its
principals for an amount, including interest and fees, currently in
excess of ten million dollars, and the Superior Court also
appointed receiver Jerry Harper to take control of Debtor, based at
least in part on the misappropriation of funds by two of Brantley
Land's principals.
Brantley Land filed a Chapter 11 bankruptcy petition (Bankr. S.D.
Ga. Case No. 15-20584) in Brunswick, Georgia, on July 16, 2015.
Jerry W. Harper, receiver, signed the petition. The Debtor, under
the control of the receiver, tapped McCallar Law Firm as counsel.
Following the Chapter 11 filing, the Court appointed R. Michael
Souther as Chapter 11 Trustee.
BRANTLEY LAND: Jan. 14 Hearing on Bid for Continued Cash Use
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Georgia has
continued until Jan. 14, 2016, at 10:30 a.m., the hearing to
consider Brantley Land & Timber Company, LLC's request for
authority to use cash collateral held by State Bank & Trust
Company.
As reported by the Troubled Company Reporter on Nov. 24, 2015,
secured creditor SB&T said in a filing that it is withdrawing its
consent to the Debtor's use of cash collateral.
Douglas D. Ford, Esq., at Quirk & Quirk, LLC, noted that the
Debtor's real estate development is subject to a first-position
deed to secure debt granted to SB&T; the debt secured by the
first-position deed is in excess of $10,000,000. Mr. Ford avered
that there is not enough equity in the Debtor's remaining interest
in the real estate development and the cash collateral to secure
the debt to SB&T.
Mr. Ford also noted that the budget attached to Debtor's cash
collateral motion estimates the monthly professional fees to be
$4,500 per month; however, the attorney and accountant for the
Chapter 11 Trustee have submitted bills of roughly $35,000 per
month.
SB&T's interest in its cash collateral is not being adequately
protected in this matter, Mr. Ford told the Court.
Accordingly, SB&T objected, and withdraws its previous consent, to
the Debtor's the motion for an order authorizing the use of cash
collateral.
About Brantley Land
Brantley Land & Timber Company, LLC, is a real estate development
company which originally held over 1,000 lots in a development
located in Brantley County, Georgia.
In July, 2011, State Bank & Trust Company obtained a judgment in
Fulton County Superior Court against Brantley Land and its
principals for an amount, including interest and fees, currently
in
excess of ten million dollars, and the Superior Court also
appointed receiver Jerry Harper to take control of Debtor, based
at
least in part on the misappropriation of funds by two of Brantley
Land's principals.
Brantley Land filed a Chapter 11 bankruptcy petition (Bankr. S.D.
Ga. Case No. 15-20584) in Brunswick, Georgia, on July 16, 2015.
The Debtor, which is controlled by the receiver, tapped McCallar
Law Firm as counsel.
The U.S. Trustee for Region 21 is not attempting to form a
committee of unsecured creditors in the Chapter 11 case of the
Debtor, at this time.
BRANTLEY LAND: Jan. 14 Hearing on Bid to Dismiss Chapter 11 Case
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Georgia has
continued until Jan. 14, 2016, at 10:30 a.m., the hearing to
consider State Bank and Trust Company's motion to dismiss the
bankruptcy case of Brantley Land & Timber Company, LLC, or, in the
alternative, for relief from stay.
As reported by the Troubled Company Reporter on Nov. 20, 2015,
State Bank alleged that there is no useful bankruptcy purpose
served by the Chapter 11 case.
SB&T asserted that the Debtor now owns no lots in a development of
over twelve hundred, that SB&T's assigned mortgage payments are
diminishing, and that SB&T's remaining cash collateral is being
rapidly consumed by professional fees.
In the alternative, SB&T asked the Court to modify the automatic
stay regarding SB&T's remaining security interests in the real
estate development property securing its loan. Additionally, there
is no available equity in SB&T's collateral and the bank is not
adequately protected.
SB&T also asked the Court for permission to file an amended
unsecured claim in the bankruptcy case.
About Brantley Land
Brantley Land & Timber Company, LLC, a real estate developer in
Brantley County, Georgia, has filed a Chapter 11 bankruptcy
petition (Bankr. S.D. Ga. Case No. 15-20584) in Brunswick,
Georgia, on July 16, 2015.
The Debtor, which is controlled by the receiver, tapped McCallar
Law Firm as counsel.
The U.S. Trustee for Region 21 is not attempting to form a
committee of unsecured creditors in the Chapter 11 case of the
Debtor, at this time.
BRIAND PROPERTIES: Case Summary & 4 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Briand Properties, LLC
545 S. Second Street
San Jose, CA 95112
Case No.: 16-50041
Chapter 11 Petition Date: January 6, 2016
Court: United States Bankruptcy Court
Northern District of California (San Jose)
Judge: Hon. Dennis Montali
Debtor's Counsel: Stanley A. Zlotoff, Esq.
LAW OFFICES OF STANLEY A. ZLOTOFF
300 S 1st St. #215
San Jose, CA 95113
Tel: (408)287-5087
Email: zlotofflaw@gmail.com
Total Assets: $4.50 million
Total Liabilities: $1.64 million
The petition was signed by Michael Dorian, managing member.
A list of the Debtor's four largest unsecured creditors is
available for free at http://bankrupt.com/misc/canb16-50041.pdf
CARAUSTAR INDUSTRIES: S&P Affirms B+ CCR, Outlook Revised to Stable
-------------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its rating
outlook on Austell, Ga.-based Caraustar Industries Inc. to stable
from negative. S&P also affirmed its 'B+' corporate credit rating
on the company and its 'B+' issue-level rating on its first-lien
term loan. The recovery rating on the term loan is '3', indicating
S&P's expectation for meaningful (50% to 70%; low end of the range)
recovery to debtholders in the event of default.
"The outlook revision reflects the company's progress toward
integrating its acquired operations and its profitability and
leverage improving faster than our previous forecast, pro forma for
the Newark Group acquisition," said Standard & Poor's credit
analyst Christopher Andrews. "With our concerns regarding
integration risk and elevated debt leverage largely mitigated, we
feel the negative outlook is no longer appropriate."
The stable outlook reflects the company's recent performance as it
integrates its 2015 acquisitions, which has been more favorable
than S&P's prior expectations, and its forecast for a continued
reduction of leverage, driven by EBITDA growth and gradually paying
down secured debt. S&P expects the company to operate with
leverage of 4x to 5x on a run-rate basis, but also consider the
possibility that future acquisition opportunities or debt-financed
dividends could temporarily push leverage over 5x.
Given S&P's current forecast and its expectation that the company
will reduce leverage to the mid-4x area during its fiscal 2016, a
negative rating action within the next 12 months would require a
decline in profitability, potentially from increased input costs,
or taking on substantial additional debt to fund acquisitions or
dividends to owners, which S&P believes would cause debt to EBITDA
to remain above 6x for a sustained period. S&P currently views
these scenarios as unlikely.
S&P views an upgrade as highly unlikely over the next 12 months
given Caraustar's financial sponsor ownership, which limits S&P's
financial risk assessment to "highly leveraged" under its criteria.
Were the sponsor to reduce its ownership stake to below 40%, this
may change S&P's view of the company's financial risk profile.
CAVITATION TECHNOLOGIES: Deficit, et al., Raise Going Concern Doubt
-------------------------------------------------------------------
Cavitation Technologies, Inc., had a working capital deficiency of
$1,056,139 and a stockholders' deficit of $924,946 as of Sept. 30,
2015.
"These factors, among others, raise substantial doubt about the
company's ability to continue as a going concern," said Igor
Gorodnitsky, president and member of board of directors, N.
Voloshin, chief financial officer, and Jim Fuller, audit committee
chairman (and an independent financial expert) of the company in a
regulatory filing with the U.S. Securities and Exchange Commission
on November 19, 2015.
The officers related, "Furthermore, the company has been dependent
on certain of its funding from a technology agreement which expired
in May 2015. Our independent auditors, in their report on our
audited financial statements for the fiscal year ended June 30,
2015 expressed substantial doubt about our ability to continue as a
going concern.
"Management's plan is to generate income from operations by
continuing to license our technology globally through our strategic
partner, the Desmet Ballestra Group (Desmet). The company and
Desmet are currently in negotiations for a new agreement to provide
us monthly advances of $50,000 to be applied against future sales.
We will also attempt to raise additional debt and/or equity
financing to fund operations and to provide additional working
capital. However, there is no assurance that such agreement with
Desmet will be finalized and such financing will be consummated or
obtained in sufficient amounts necessary to meet the company's
needs, that the company will be able to achieve profitable
operations or that the company will be able to meet its future
contractual obligations. Should management fail to obtain such
financing, the company may curtail its operations."
At September 30, 2015, the company had total assets of $1,443,941
and total stockholders' deficit of $924,946.
For the three months ended Sept. 30, 2015, the company posted net
income of $150,609 as compared to a net loss of $518,653 for the
same period in 2014.
A full-text copy of the company's quarterly report is available for
free at: http://tinyurl.com/hf45bqn
Cavitation Technologies, Inc. (CTi), based in Chatsworth,
California, develops, patents and commercializes technology that
may be used in liquid processing applications. CTi's Nano
Reactor(R) is a critical component of its Nano Neutralization(R)
System that the company claims to be commercial proven to reduce
operating costs and increase yields in refining vegetable oils.
CHESAPEAKE ENERGY: S&P Assigns 'BB-' Rating on $2.425BB Sr. Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'BB-'
issue-level rating to Oklahoma City-based Chesapeake Energy Corp.'s
$2.425 billion 8% senior secured second-lien notes due 2022. The
recovery on the notes is '1', indicating S&P's expectation of very
high (90% to 100%) recovery if a payment default occurs. S&P
notes, however, that the junior lien basket under the company's
$4.0 billion credit facility could allow Chesapeake to issue up to
an additional $1.575 billion of junior-lien debt. A material
issuance of additional permitted second-lien debt could result in a
one-notch downgrade based on S&P's Sept. 30, 2015 recovery PV-10
value of about $7.65 billion after administrative costs.
The 'B' corporate credit rating on Chesapeake Energy reflects S&P's
assessments of the company's "fair" business risk, "highly
leveraged" financial risk, and "adequate" liquidity. The ratings
incorporate the company's very high costs related to gathering,
transporting, and marketing that largely offset Chesapeake's
otherwise low operating costs. The negative impact on
profitability offsets the benefits of Chesapeake's large and
geographically diverse resource base of onshore U.S. unconventional
natural gas and liquids assets. S&P expects Chesapeake's financial
risk profile to remain "highly leveraged".
RATINGS LIST
Chesapeake Energy Corp
Corporate credit rating B/Negative/--
New Ratings
$2.425 bil sr secd 2nd-lien notes due 2022 BB-
Recovery rating 1
CLIFFS NATURAL: Moody's Lowers CFR to Caa1, Outlook Negative
------------------------------------------------------------
Moody's Investors Service downgrade Cliffs Natural Resources Inc.
Corporate Family Rating and Probability of Default Rating to Caa1
and Caa1-PD from B1 and B1-PD respectively. At the same time
Moody's downgraded the senior secured 1st lien notes to B1 from
Ba2, the senior secured 2nd lien notes to B3 from B1 and the senior
unsecured notes to Caa2 from B3. The rating for senior unsecured
debt issuances under the company's shelf registration was
downgraded to (P) Caa2 from (P)B3. The speculative grade liquidity
rating was lowered to SGL-3 from SGL-2. The outlook is negative.
This concludes the review for downgrade initiated on Nov. 16,
2015.
The downgrade reflects the deterioration in the company's debt
protection metrics and increase in leverage as a result of
continued downward movement in iron ore prices and weak
fundamentals in the US steel industry, which are resulting in lower
shipment levels. With the reduction in realized iron ore prices in
the company's US iron ore operations (USIO), although realizations
are higher than the seaborne market, and roughly breakeven nature
of the Asia Pacific iron ore operations (APIO), EBIT/interest for
the twelve months ended Sept. 30, 2015 has contracted to roughly
0.75x while leverage, as measured by the debt/EBITDA ratio, has
increased to around 7.5x. Given Moody's expectations for reduced
shipments in 2016 and for seaborne iron ore prices (62%Fe) to
average $40/ton with a stress case assumption of $30/ton, leverage
in 2016 is expected to increase significantly, well into the double
digits with interest coverage remaining well below 1x. Based upon
the company's disclosures as to realized revenues-per-ton at
various IODEX prices over the October - December 2015 time frame,
we would not anticipate a material difference as we look at 2016
ranges.
Although Cliffs USIO business has a good contract base and its
price realizations are not directly correlated to price movement in
the seaborne market, the company's capital structure continues to
reflect the debt levels associated with a larger company and prior
to the write downs associated with its Canadian operations and the
restructuring of these operations under the Canadian Companies'
Creditors Arrangement Act (CCAA). Given current operating
conditions in the US steel industry, Moody's sees no catalyst for
improvement and believe Cliffs' remains exposed to possible further
reduction in shipment levels. While the company has achieved cost
reductions in both its USIO and APIO segments from actions taken as
well as lower fuel costs and the benefit to the APIO operations of
the depreciating Australian dollar, the magnitude of price decrease
continues to be a material driver in weaker earnings performance.
Downgrades:
Issuer: Cliffs Natural Resources Inc.
Corporate Family Rating, Downgraded to Caa1 from B1
Probability of Default Rating, Downgraded to Caa1-PD from B1-PD
Speculative Grade Liquidity Rating, Lowered to SGL-3 from SGL-2
Senior Unsecured Shelf, Downgraded to (P)Caa2 from (P)B3
Senior Secured 2nd Lien Notes, Downgraded to B3 (LGD3) from B1
(LGD3)
Senior Secured 1st Lien Notes, Downgraded to B1 (LGD2) from Ba2
(LGD2)
Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2
(LGD5) from B3 (LGD5)
Outlook Actions:
Issuer: Cliffs Natural Resources Inc.
Outlook, Changed To Negative From Rating Under Review
RATINGS RATIONALE
The Caa1 CFR reflects the contract nature of Cliffs US iron ore
operations, which allow the company to achieve a realized price in
excess of the seaborne prices. The rating also considers the
company's material presence as a domestic iron ore producer and its
symbiotic relationship with the US steel mills, which cannot
economically source their iron ore requirements from overseas
producers. The rating also considers the need to renegotiate the
contracts with ArcelorMittal, which have expiry dates in December
of 2016 and January of 2017. In 2014, ArcelorMittal accounted for
approximately 40% of USIO revenues.
The SGL-3 speculative grade liquidity rating reflects our
expectation for increased cash consumption on lower earnings and
cash flow generation, as well as higher seasonal working capital
requirements in the first several months of 2016. Liquidity is
supported by $270 million in cash at Sept. 30, 2015, and a
$550 million asset backed credit facility (ABL), which expires the
earlier of March 30, 2020 or a date that is 60 days prior to the
maturity of existing debt as defined in the ABL. The facility
contains a 1:1 fixed charge coverage requirement should
availability be less than the greater of $75 million or 10% of the
aggregate facility. At Sept. 30, 2015, there were no borrowings
under the ABL and $187.3 million in letters of credit issued. Given
the level of receivables and inventory, the full commitment was not
available and borrowing availability at September 30, 2015 was
$255.6 million.
The negative outlook incorporates the weakness in the iron ore
markets and expected continued volatility and pressure to the
downside as well as the poor fundamentals in the US steel industry,
the offtake market for Cliffs' iron ore. The outlook also reflects
the need to renegotiate material offtake contracts within the next
year.
The rating could be downgraded should performance not show an
improving trend or should liquidity contract. Specifically, should
debt/EBITDA continue below 7.5x, (CFO-dividends)/debt be less than
5%, and EBIT/interest not improve to at least 1x, the rating could
be downgraded.
Should the company be able to achieve and sustain leverage, as
measured by the debt/EBITDA ratio of no more than 5.5x,
(CFO-dividends)/debt of at least 10% and EBIT/interest of at least
1.5x, an upgrade could be considered.
The principal methodology used in these ratings was Global Mining
Industry published in August 2014.
Headquartered in Cleveland, Ohio, Cliffs is the largest iron ore
producer in North America with approximately 25.5 million equity
tons of annual capacity. In addition, the company participates in
the international seaborne iron ore markets through its subsidiary
in Australia. Cliffs' operations at Bloom Lake are being
restructured under the Canadian Companies' Creditors Arrangement
Act CCAA) and in May 2015, its Wabush iron ore operations in
Canada, which had been permanently closed, were included in the
CCAA filing. For the twelve months ended Sept. 30, 2015, the
company had revenues of $2.4 billion (which includes revenues in
the fourth quarter of 2014 from the Canadian and Coal segments,
subsequently classified as discontinued operations). In December
2015, Cliffs' remaining coal operations - the Pinnacle Mine and the
Oak Grove Mine were sold to Seneca Coal Resources, LLC. The
transaction was valued at roughly $268 million based upon the
assumption of all liabilities by Seneca Coal. Cliffs' revenues for
the nine months ended Sept. 30, 2015 were $1.5 billion.
CNT HOLDINGS III: S&P Assigns 'B' CCR, Outlook Negative
-------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to CNT Holdings III Corp. The outlook is negative.
At the same time, S&P assigned a 'B' issue-level rating to the
company's $580 million first-lien credit facility and a recovery
rating of '3', indicating S&P's expectation for meaningful recovery
for lenders in the event of a payment default at the low end of the
50% to 70% range. The facility consists of a
$80 million revolver maturing in 2021 and a $500 million first-lien
term loan due in 2023.
"The company will use proceeds from the term loan, along with $210
million of privately placed second-lien senior secured notes (not
rated) and equity contribution, to fund the acquisition," said
credit analyst Adam Melvin. "We expect the $80 million revolver to
be undrawn at close of the transaction."
The negative outlook reflects S&P's view of high leverage in the
low-7x area, which S&P does not expect to diminish until 2017.
S&P could consider a negative rating action if competitive
pressures in the optical industry or strategic shifts under the new
owners hurt the company's operating metrics, causing leverage to
remain more than 7x on sustained basis or interest coverage
declines below 2x. This could result from gross margin dropping
150 basis points (bps) from 2016 estimates caused by a decline in
customer acquisition from competitive pressures from other industry
participants, especially other online companies, independent
doctors, and larger mass retailers like Wal-Mart and Costco. S&P
calculates that if S&P adjusted-EBITDA from projected December 2015
levels marginally increases while maintaining constant debt would
likely result in debt leverage at 7.0x. In addition, a debt
financed dividend to shareholders may also lead to a downgrade.
S&P could revise the outlook to stable if the company exceeds our
expectations, such that leverage declines below 6x. Longer term,
an upgrade would be predicated on leverage below 5x. In this
scenario, 1-800 Contacts substantially benefits from its B2B
relationships and other commercial partnerships coupled with
further growth and additional upside in its online channel. S&P
will also consider the likelihood of debt remaining lower, given
1-800 Contacts' ownership by private equity and the possibility of
a dividend recapitalization. However, because of owner AEA's focus
on organic growth and reinvestment of cash flows, this is unlikely
over the near term.
CNT HOLDINGS: Moody's Assigns B2 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating and
a B2-PD Probability of Default Rating to CNT Holdings III Corp.
("CNT", acquirer of 1-800 Contacts, Inc.), as well as a B1 rating
to the company's proposed first lien senior secured credit
facilities consisting of a $500 million first lien term loan due
2023 and an $80 million revolving credit facility expiring 2021.
The rating outlook is stable. Proceeds of the transaction, along
with $210 million of 2nd lien notes due 2024 (unrated) and
contributed equity, will be used to finance the purchase of a
majority share in the company by AEA Investors from Thomas H. Lee
Partners, L.P, the company's current majority shareholder.
The transaction will increase the company's debt by approximately
$160 million, resulting in pro forma debt-to-EBITDA leverage in the
low 7 times range, which is high for the B2 rating category.
However, the rating reflects Moody's expectation for continued
strong operating performance and good liquidity, resulting in
leverage in the mid-to-low 6 times range over the next 12-24
months. The rating also incorporates Moody's expectation that
credit metrics will migrate to levels more in line with the B2
rating through modest debt repayment, EBITDA growth, and no
distributions to shareholders over the rating horizon. According
to Moody's Analyst Dan Altieri, "the company has been successful at
expanding the business, and its distribution and logistics know-how
will continue to provide a competitive advantage."
Moody's took these rating actions on CNT Holdings III Corp.:
Corporate family rating, assigned a B2;
Probability of default rating, assigned a B2-PD;
Proposed $500 million first lien term loan due 2023, assigned a
B1 (LGD3);
Proposed $80 million first lien revolving credit facility
expiring 2021, assigned a B1 (LGD3);
Outlook, Assigned Stable Outlook
The existing ratings at Leonardo Acquisition Corp., including the
B2 CFR, remain unchanged and will be withdrawn upon closing of the
transaction.
All ratings are subject to the execution of the transaction as
currently proposed and Moody's review of final documentation. The
instrument ratings are subject to change if the proposed capital
structure is modified.
RATINGS RATIONALE
The B2 Corporate Family Rating reflects 1-800 Contacts' high debt
load resulting from the proposed acquisition by AEA, which will
result credit metrics that are weak for the B2 rating category.
However Moody's expects EBITDA growth and modest debt repayment
will reduce leverage over the next 12-24 months and sustain credit
metrics more in line with the rating. Supporting the rating is
1-800 Contacts' good liquidity profile, which is aided by solid
operating margins and minimal capital investment requirements, as
well as a reportedly formidable market position within an
attractive industry segment with growth potential that has
historically displayed stable product demand and meaningful
barriers to entry.
1-800 Contacts' liquidity profile is good, aided by solid operating
margins and limited capital expenditure requirements. Moody's
expects the company to generate free cash flow (CFO-Capex) of over
$20 million over the next 12-18 months which should be more than
sufficient to cover the required annual term loan amortization of
$5 million. The proposed transaction also includes an $80 million
revolver expected to expire in 2021 which Moody's anticipates will
remain largely undrawn, in line with historical revolver usage.
The term loan and the 2nd lien notes do not contain any financial
maintenance covenants, however the revolver is expected to contain
a springing first lien net leverage ratio set at 6.75 times which
is only tested if revolver outstandings exceed 30% of the total
commitment. Moody's does not expect the covenant to be tested but
anticipates sufficient cushion if it were tested.
The B1 rating assigned to the credit facilities is one notch above
the B2 CFR, reflecting their senior position in the capital
structure relative to the unrated $210 million second lien notes,
and to other junior claims including trade payables and leases. The
facilities are secured by a first priority lien on substantially
all the assets of the company and its material domestic
subsidiaries, and are guaranteed by material domestic
subsidiaries.
The stable outlook reflects Moody's expectation that continued
solid operating performance over the next 12-24 months combined
with modest debt repayment will result in an improvement to credit
metrics more in line with the company's B2 rating. Moody's
anticipates leverage in the mid-to-low 6 times range over the next
12-24 months with interest coverage (EBIT / Interest) in the
low-to-mid 1 times range, and does not expect any distributions to
shareholders over the period.
Given the company's weak positioning at the B2 rating category, an
upgrade is unlikely in the near term. However, over the longer
term ratings could be upgraded if debt/EBITDA is sustained below
5.5 times with interest coverage (EBIT/interest) sustained above
2.0. An upgrade would also require the company maintain its good
liquidity profile and exercise prudent financial policies.
Ratings could be downgraded if leverage and interest coverage were
to weaken or remain at or near current levels as a result of weaker
than anticipated operating performance or aggressive financial
policies. Debt/EBITDA sustained above 7 times or EBIT/interest
sustained below 1.0 time, would likely result in a downgrade.
Meaningful liquidity deterioration would also lead to downward
rating pressure.
The principal methodology used in these ratings was Retail Industry
published in October 2015.
CNT is the acquisition vehicle created to consummate the purchase
of the majority share of 1-800 CONTACTS, Inc. by AEA Investors from
Thomas H. Lee Partners. 1-800 CONTACTS is a direct marketer and
online retailer/distributor of replacement contact lenses in the
United States with LTM revenues over $560 million through Sept. 30,
2015.
CORNHUSKER RBM: Court Awards $8.7K Judgment vs. Molecular Imaging
-----------------------------------------------------------------
Judge Jack Schmetterer of the United States Bankruptcy Court for
the Northern District of Illinois, Eastern Division, awarded
judgment against Molecular Imaging Chicago, LLC in the amount of
$8,725.
On June 26, 2015, Joji Takada, not individually, but solely as
Chapter 7 Trustee for the bankruptcy estate of Diagnostic P.E.T.
Network, LLC, sought to avoid and recover $8,725.00 in payments
made by the debtor to Molecular Imaging Chicago within 90 days
prior to the date of filing of the bankruptcy petition. The
payments were made on account of antecedent debts to Molecular
Imaging Chicago.
Judge Schmetterer found that the payments constituted transfers as
defined by Section 101(54) of the Bankruptcy Code and are avoidable
by the Trustee, pursuant to Section 547(b). The judge also
concluded that, pursuant to Section 550(a)(1), the Trustee may
recover the value of the property avoided.
The case is In re: CORNHUSKER RBM, LLC, et al., Chapter 7, Debtors.
Joji Takada, not individually, but as Chapter 7 Trustee of the
bankruptcy estate of Diagnostic P.E.T. Network, LLC Plaintiff, v.
Molecular Imaging Chicago, LLC Defendant, Case No. 13 B 26443
(Jointly Administered), Adversary No. 15 A 00446 (Bankr. N.D.
Ill.).
A full-text copy of Judge Schmetterer's December 14, 2015 findings
of fact and conclusions of law is available at http://is.gd/ZlyLla
from Leagle.com.
Joji Takada, as Chapter 7 Trustee of the bankruptcy estate of
Diagnostic P.E.T. Network, LLC is represented by:
Daniel P. Dawson, Esq.
NISEN & ELLIOTT, LLC
200 West Adams Street Suite 2500
Chicago, IL 60606
Tel: (312)346-7800
Email: ddawson@nisen.com
Cornhusker RBM, LLC, sought protection under Chapter 11 of the
Bankruptcy Code on June 23, 2013 (Bankr. N.D. Ill., Case No.
13-26443). The case is assigned to Judge Jack B. Schmetterer.
The
Debtors' counsel are Paul M. Bauch, Esq., Kenneth A. Michaels,
Jr.,
Esq., and Carolina Y. Sales, Esq., at Bauch & Michaels LLC, in
Chicago, Illinois.
COUDERT BROTHERS: 2nd Cir. Remands Statek Suit Against DSI
----------------------------------------------------------
This case returns to United States Court of Appeals for the Second
Circuit after its previous remand in Statek Corp. v. Development
Specialists, Inc. ("Coudert I"), which in part vacated the
bankruptcy court's denial of a motion to reconsider an order
disallowing a claim.
Statek Corp. appeals from a September 19, 2014 order of the United
States District Court for the Southern District of New York, which
affirmed orders of the United States Bankruptcy Court for the
Southern District of New York dated August 23, 2013, and October
25, 2013, that again, on remand, denied reconsideration.
In denying Statek's latest motions for reconsideration, the
bankruptcy court's decisions relied on a prior alternative holding
-- that Statek's argument was a new argument not proper for a
motion for reconsideration -- which the Second Circuit did not
explicitly address in Coudert I.
Statek now challenges the bankruptcy court's decisions on the
ground that they do not comply with the court's mandate in Coudert
I.
In a Decision dated December 29, 2015, which is available at
http://is.gd/4II7KQfrom Leagle.com, the Second Circuit reversed
the district court's order affirming the August 23, 2013 and
October 25, 2013 orders of the bankruptcy court.
The Second Circuit remanded the case to the district court with
directions to remand to the bankruptcy court with instructions to:
(1) reverse its orders denying reconsideration, (2) vacate the
Claim Disallowance Order, (3) reinstate Statek's claim, and (4)
permit further proceedings in a manner consistent with this
opinion.
The appeals case is STATEK CORPORATION, Appellant, v. DEVELOPMENT
SPECIALISTS, INC., Plan Administrator for Coudert Brothers LLP,
Appellee, Docket No. 14-3688-bk, relating to IN RE: COUDERT
BROTHERS LLP, Debtor (2d. Cir.).
Appellant is represented by Anthony W. Clark Thomas, Esq.
--anthony.clark@skadden.com -- Skadden, Arps, Slate, Meagher & Flom
LLP
Appellee, Development Specialists, Inc. is represented by David S.
Tannenbaum, Esq. -- dtannenbaum@sterntannenbaum.com -- Stern
Tannenbaum & Bell LLP
About Coudert Brothers
Coudert Brothers LLP was an international law firm specializing in
complex cross-border transactions and dispute resolution. The
firm had operations in Australia and China. Coudert filed for
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 06-12226) on
Sept. 22, 2006. John E. Jureller, Jr., Esq., and Tracy L.
Klestadt, Esq., at Klestadt & Winters, LLP, represented the Debtor
in its restructuring efforts. Brian F. Moore, Esq., and David J.
Adler, Esq., at McCarter & English, LLP, represented the Official
Committee of Unsecured Creditors. Coudert scheduled total assets
of $30.0 million and total debts of $18.3 million as of the
Petition Date. The Bankruptcy Court in August 2008 signed an order
confirming Coudert's chapter 11 plan. The Plan contemplated on
paying 39% to unsecured creditors with $26 million in claims.
Coudert has been succeeded by Development Specialists, Inc. in its
capacity as Plan Administrator under the confirmed chapter 11
plan.
DORAL FINANCIAL: Jan. 14 Hearing on Bid for Exclusivity Extensions
------------------------------------------------------------------
BankruptcyData reported that Doral Financial filed with the
Bankruptcy Court a motion to extend the exclusive period during
which the Company can file a Chapter 11 plan and solicit
acceptances thereof until Feb. 29, 2016, and May 9, respectively.
The motion explains, "The Second Extension enabled the Debtor to
continue to evaluate its financial options with a full
understanding of the amount and nature of claims filed against it
and to liquidate valuable assets for distribution to creditors.
Since the Second Extension, the Debtor has (a) obtained court
approval of and consummated the sale of a substantial portion of
the Debtor's performing and non-performing loan and real
estate-owned asset portfolio; (b) sought court approval of bidding
procedures for a public auction of Doral Financial Plaza, through a
chapter 11 filing of its wholly-owned subsidiary, Doral Properties,
and continued to work with the property manager for Doral
Properties to market and pursue the sale of Doral Financial Plaza;
and (c) continued to consensually resolve disputes and potential
disputes with parties in interest....Most notably, the Debtor and
the UCC have continued to investigate the large potential tax asset
under Puerto Rico law and explore available options to unlock its
value, which will likely be a key component of its chapter 11
plan….While the Debtor has continued to make substantial progress
in the case, including with respect to the liquidation of its
assets, the Debtor requires additional time to finalize the
liquidation of certain remaining assets, including Doral Financial
Plaza, and to complete negotiations regarding a chapter 11 plan
that will best maximize value for creditors."
The Court scheduled a Jan. 14 hearing to consider the motion.
About Doral Financial
Doral Financial Corporation is a holding company whose primary
operating asset was equity in Doral Bank. DFC maintains offices
in New York City, Coral Gables, Florida and San Juan, Puerto Rico.
DFC has three wholly-owned subsidiaries: (i) Doral Properties,
Inc., (ii) Doral Insurance Agency, LLC ("Doral Insurance"), and
(iii) Doral Recovery, Inc.
On Feb. 27, 2015, regulators placed Doral Bank into receivership
and named the Federal Deposit Insurance Corp. as receiver. Doral
Bank served customers through 26 branches located in New York,
Florida, and Puerto Rico.
DFC sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
15-10573) in Manhattan on March 11, 2015. The case is assigned to
Judge Shelley C. Chapman.
DFC estimated $50 million to $100 million in assets and $100
million to $500 million in debt as of the bankruptcy filing.
The Debtor tapped Ropes & Gray LLP as counsel.
The U.S. trustee overseeing the Chapter 11 case of Doral Financial
Corp. appointed five creditors of the company to serve on the
official committee of unsecured creditors. The Committee is
represented by Brian D. Pfeiffer, Esq., and Taejin Kim, Esq., at
Schulte Roth & Zabel LLP.
On Nov. 25, 2015, Doral Properties filed a voluntary petition with
the Court for relief under Chapter 11 of the Bankruptcy Code.
ENTERGY RHODE: S&P Assigns 'BB' Ratings on $375-Mil. Loans
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating and '1'
recovery ratings to Entergy Rhode Island State Energy L.P.'s $325
million senior secured term loan B due 2022 and $50 million senior
secured revolving credit facility due 2020. The outlook is stable.
The term loan will be repaid through the minimal 1% mandatory
amortization that is typical of a term loan B and a 75% excess cash
flow sweep that is subject to increase based on a target debt
balance. The '1' recovery rating indicates S&P's expectation of
very high (90% to 100%) recovery of principal if a payment default
occurs.
S&P has reviewed the documentation and has found it consistent with
its published criteria on project financings and limited purpose
entities. Ratings have been finalized after documentation review,
which includes, among others, a nonconsolidation opinion between
the project and the sponsor funds.
The entity that initially issued the debt is Entergy Rhode Island
Energy Center L.P. This entity will undergo a name change to Rhode
Island State Energy Center L.P. (RISEC). RISEC is a limited
purpose, bankruptcy-remote entity that owns a 583-MW natural
gas-fired power plant in Johnston, R.I. S&P's 'BB' rating
primarily reflects the project's merchant exposure to ISO-NE
SEMA/RI energy and capacity markets, and the limitation of being a
single asset. These risks are partially offset by Entergy Rhode
Island's strong positioning in the ISO-NE SEMA/RI and operating
track record since it reached commercial operations in November
2002.
There are minor differences in the closing terms compared with the
preliminary rating outcome of 'BB'. A few differences include a
modest increase in pricing, which is 25 basis points higher than
assumed in S&P's preliminary ratings analysis (L+475 bps). There
is a revision in the swap assumptions (1.70% swap rate but debt is
now 75% swapped compared with 50%) and a semi-annual sweep starting
Dec. 31, 2016 (per credit agreement). S&P do not view any of these
changes as material, and they do not affect its rating
conclusions.
"The stable outlook reflects our expectation that Entergy Rhode
Island will continue its strong operational performance, and take
advantage of its positioning in the constrained ISO-NE SEMA/RI
region to pay down a significant portion of the debt during the
term loan," said Standard & Poor's credit analyst Aneesh Prabhu.
S&P would lower the rating if financial performance falls below its
base case expectations, such that DSCRs fall below 1.5x. This
could be the result of operational issues at the plant, or an
unexpected downturn in the SEMA/RI capacity and energy markets.
A rating upgrade would likely require DSCRs closer to 2.5x. This
would require continued sound operational performance along with
greater than expected energy margins and capacity revenue.
F-SQUARED INVESTMENT: Verdolino's Jalbert to Serve as Plan Trustee
------------------------------------------------------------------
F-Squared Investments, Inc., et al., on Dec. 28, 2015, filed
certain documents in advance of the hearing on confirmation of
their Joint Plan of Liquidation. Included in the Plan Supplement
documents are:
* a Liquidation Trust Agreement, which includes (i) the
identity of the Liquidating Trustee, (ii) the identities of
the members of the Liquidating Trust Committee, and (ii) the
material terms of the Liquidating Trustee's compensation;
and
* a Schedule of Rejected Insurance Policies.
According to the Liquidation Trust Agreement, Craig R. Jalbert of
Verdolino & Lowey, P.C., will serve as trustee. To be known as the
"F2 Liquidating Trust", the liquidating trust's purpose is
liquidating and distributing the Debtors' assets to creditors in
accordance with their respective entitlements, if any, under the
Plan. A supervisory committee will be created on the Plan's
Effective Date comprised of these members:
(i) Nathan Eigerman;
(ii) Cantella & Co.; and
(iii) Grove Street Advisors.
The term of the Liquidating Trust will end no later than the fifth
anniversary of the Effective Date.
Mr. Jalbert's firm will charge at these hourly rates:
Hourly Rate
-----------
Principals $435
Managers $245 to $390
Staff $125 to $375
Bookkeepers $110 to $210
Clerical $85
The Liquidating Trustee can be reached at:
VERDOLINO & LOWEY, P.C.
c/o Craig R. Jalbert, CIRA
124 Washington Street, Suite 101
Foxboro, MA 02035
Tel: (508) 543-1720
Fax: (508) 543-4114
A full-text copy of the Plan Supplement is available for free at:
http://bankrupt.com/misc/F-Squared_457_Plan_Supplement.pdf
Jan. 14 Hearing on Plan
Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for
the District of Delaware on Dec. 7, 2015, approved the disclosure
statement explaining F-Squared Investment Management, LLC, et al.'s
Joint Plan of Liquidation and scheduled the confirmation hearing
for Jan. 14, 2016, at 10:00 a.m.
The Plan, which is co-proposed by the Official Committee of
Unsecured Creditors, provides that holders of Class 3 - General
Unsecured Claims are estimated to recover 6.0% to 11.9% of the
total allowed claim amount.
A full-text copy of the Disclosure Statement dated Dec. 7, 2015, is
available at http://bankrupt.com/misc/FSIds1207.pdf
The Debtors are represented by:
Russell C. Silberglied, Esq.
Zachary I. Shapiro, Esq.
Rachel L. Biblo, Esq.
RICHARDS, LAYTON & FINGER, P.A.
920 N. King Street
Wilmington, DE 19801
Tel: 302-651-7700
Fax: 302-651-7701
E-mail: silberglied@rlf.com
shapiro@rlf.com
biblo@rlf.com
About F-Squared Investments
Headquartered in Wellesley, MA, F-Squared Investments, Inc.
-- http://www.f-squaredinvestments.com/-- is a privately owned
investment manager. The firm primarily provides its services to
other investment advisers. It also caters to individuals, high net
worth individuals, and pension and profit sharing plans. The firm
provides index management services. It manages separate
client-focused equity, fixed income, and multi-asset portfolios.
The firm invests in the public equity, fixed income, and
alternative investment markets across the globe. It makes all its
investments through exchange-traded funds. The firm invests in
small-cap stocks of companies across diversified sectors.
F-Squared Investment Management, LLC and eight of its affiliates
filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No.
15-11469) on July 8, 2015. The petitions were signed by Laura
Dagan, the president and CEO. The cases are assigned to Laurie
Selber Silverstein.
Richards, Layton & Finger, P.A., serves as the Debtors' counsel.
Gennari Aronson, LLP, is the special corporate counsel. Grail
Advisory Partners LLC (d/b/a PL Advisors) and Managed Account
Services, LLC act as the Debtors' financial advisors and investment
bankers. Stillwater Advisory Group LLC is the Debtors' crisis
managers and restructuring advisors. BMC Group, Inc. acts as the
Debtors' claims and noticing agent.
The Official Committee of Unsecured Creditors retained Brown
Rudnick LLP and The Rosner Law Group LLC as attorneys.
FORCEFIELD ENERGY: Admits Going Concern Doubt Amid Losses, et al.
-----------------------------------------------------------------
ForceField Energy Inc. has substantial doubt about its ability to
continue as a going concern, according to David Natan, chief
executive officer, and Jason Williams, chief accounting and
financial officer of the company in a
regulatory filing with the U.S. Securities and Exchange Commission
on November 19, 2015.
During the three month period ended September 30, 2015, the company
recorded a net loss of $381,597, or ($0.02) per basic and diluted
share, as compared to a net loss of $1,242,890, or ($0.08) per
basic and diluted share during the corresponding period in the
prior year.
Messrs. Natan and Williams elaborated: "The company has generated
significant operating losses which have been funded primarily from
debt and equity financings. In addition, the company is in default
of, or past due on, numerous payments related to principal and
interest due on notes payable, vendor payables and other accrued
liabilities. The company is addressing its delinquencies on a
case-by-case basis; however, it can offer no assurance that the
cooperation it has received thus far will continue.
"The continuing operations of the company and the recoverability of
the carrying value of assets are dependent upon the ability of the
company to obtain necessary financing to fund its working capital
requirements, and upon achieving future profitable operations.
"There can be no assurance that new capital will be available as
necessary to meet the company's working capital requirements or, if
the capital is available, that it will be on terms acceptable to
the company. If the company is unable to obtain financing in the
amounts and on terms deemed acceptable, the business and future
success may be adversely affected and the company may cease
operations.
"These factors raise substantial doubt regarding its ability to
continue as a going concern."
At September 30, 2015, the company had total assets of $8,004,173,
total liabilities of $6,322,761, and total equity of $1,681,412.
A full-text copy of the company's quarterly report is available for
free at: http://tinyurl.com/j6hc4ya
ForceField Energy Inc. is a New York-based contractor that
distributes and installs light emitting diode (LED) and traditional
lighting products for indoor and outdoor commercial applications.
In May 2015, the company closed its offices in Costa Rica and
Mexico and completed the winding down its operations in those
locations in July 2015.
FOUR OAKS: Lisa Herring Named Chief Operating Officer
-----------------------------------------------------
Four Oaks Fincorp, Inc., the holding company for Four Oaks Bank &
Trust Company, announced that on Dec. 21, 2015, the Board of
Directors of the Company approved the appointment of Lisa S.
Herring to the position of chief operating officer of the Company
and the Bank, effective Jan. 4, 2016. Ms. Herring has been with
the Bank since 2002 in a number of roles, including most recently
serving as the Bank's executive vice president and chief risk
officer since July 2009. Ms. Herring will also retain her role as
chief risk officer.
"Lisa has been vital to numerous strategic initiatives and
operational improvements at the Bank over many years and will play
an increasingly important role in the Bank's future," said David
Rupp, president and chief executive officer of the Company and the
Bank.
Additionally, on Dec. 21, 2015, Ayden R. Lee, Jr., who has been
serving as the executive chairman of the Company since June of 2015
after a thirty-five year tenure as an executive of the Company and
the Bank, notified the Board of his intention to retire from his
position effective Dec. 31, 2015. Mr. Lee will continue to serve
as Chairman of the Board of Directors of the Company.
"We extend our immense gratitude to Ayden for his lifetime of
dedication and service to the Bank," said Mr. Rupp in connection
with Mr. Lee's retirement. "We wish him the best during his
retirement from the day-to-day operations of the Bank, and we are
so pleased that he will continue to provide direction, wisdom and
counsel from his position as Chairman of the Board of Directors,"
added Mr. Rupp.
With $714.5 million in total assets as of Sept. 30, 2015, the
Company, through its wholly-owned subsidiary, Four Oaks Bank &
Trust Company, offers a broad range of financial services through
its sixteen offices in Four Oaks, Clayton, Smithfield, Garner,
Benson, Fuquay-Varina, Wallace, Holly Springs, Harrells, Zebulon,
Dunn, Raleigh (LPO), Apex (LPO), and Southern Pines (LPO), North
Carolina. Four Oaks Fincorp, Inc. trades through its market makers
under the symbol of FOFN.
About Four Oaks
Four Oaks Fincorp, Inc., through its wholly-owned subsidiary, Four
Oaks Bank & Trust Company, offers a broad range of financial
services through its sixteen offices in Four Oaks, Clayton,
Smithfield, Garner, Benson, Fuquay-Varina, Wallace, Holly Springs,
Harrells, Zebulon, Dunn, Raleigh (LPO), Apex (LPO) and Southern
Pines (LPO), North Carolina. Four Oaks Fincorp, Inc. trades
through its market makers under the symbol of FOFN.
Four Oaks Fincorp reported a net loss of $4.18 million in 2014, a
net loss of $350,000 in 2013, a net loss of $6.96 million in 2012
and a net loss of $9.09 million in 2011.
As of Sept. 30, 2015, the Company had $714.50 million in total
assets, $654.28 million in total liabilities and $60.21 million in
total shareholders' equity.
FREEDOM MORTGAGE: Fitch Assigns 'B+' IDR, Outlook Stable
--------------------------------------------------------
Fitch Ratings has assigned a first-time long-term Issuer Default
Rating of 'B+' to Freedom Mortgage Corporation. The Rating Outlook
is Stable.
KEY RATING DRIVERS
IDR
The IDR and Stable Rating Outlook are supported by Freedom's strong
franchise, established position and historical track record as a
prime nonbank mortgage company. Further supporting the rating
action is an experienced management team with extensive industry
background, a sufficiently robust and integrated technology
platform, good asset quality in its prime servicing portfolio,
sufficient liquidity and reserves in place to absorb a reasonable
level of loan repurchase demands by investors, and appropriate
EBITDA coverage of interest expenses.
The highly cyclical nature of the mortgage origination business and
the capital intensive and volatile nature of the mortgage servicing
business represent primary rating constraints for nonbank mortgage
companies, including Freedom, in Fitch's opinion. Furthermore, the
mortgage business is subject to intensive regulatory and
legislative scrutiny, which further increases business risk. These
industry constraints typically limit ratings assigned to nonbank
mortgage companies to below investment grade levels. Fitch notes
that Freedom's retained-servicing business model serves as a
natural hedge to the cyclicality of the mortgage origination
business and the company's robust operational and regulatory
framework help to mitigate some of these pressures.
Rating constraints specific to Freedom include elevated key man
risk related to its founder and Chief Executive Officer, Stanley
Middleman, who sets the tone, vision and strategy for the company.
Additionally, elevated leverage levels, reliance on short-term
wholesale funding, and the predominately secured funding profile of
the company further constrain ratings. Fitch notes that there is
also potential execution risk associated with anticipated business
growth and expansion of mortgage origination channels.
Freedom has generated relatively consistent returns on average
equity (ROAE), and overall margins have improved as the company has
grown in scale. Between 2009 and Sept. 30, 2015, Fitch calculates
that Freedom generated an average ROAE of 39.5%, which was
bolstered by growth in its origination platform. Fitch views
Freedom's multi-channel approach as well positioned relative to
peers, as it can provide a more sustainable business model through
various economic and interest rate environments. With expected
increases in interest rates driving modestly lower levels of
refinancing activity and new purchase growth, offset by improved
valuations on the servicing portfolio boosting reported earnings,
Fitch expects Freedom's profitability metrics to remain stable over
the medium-term time horizon.
Asset quality performance of Freedom's servicing portfolio is
considered to be good, as the dollar amount of nonperforming and
real estate owned loans has remained relatively flat over the last
several years. Additionally, overall delinquency rates have
declined, which is in part due to recent loan origination growth
(growth in the denominator of delinquency ratio calculations).
Fitch expects asset quality performance to remain stable over time.
The company is not subject to material risks associated with
holding a mortgage loan portfolio because the loans are generally
sold to investors within 90 days of origination. However, as a
mortgage originator and servicer, Freedom has exposure to possible
losses on loans in the servicing portfolio and may be required to
repurchase these loans or indemnify investors under certain
warranty provisions. Freedom began to significantly build up its
reserves following its acquisition of the origination platform of
Irwin Financial Corporation (Irwin) in 2006 and expects to continue
to build up reserves for new loan production going forward. Fitch
believes Freedom's current reserves against repurchase and
indemnification exposure are sufficient, relative to the assigned
rating.
In 2013, Freedom entered into excess servicing rights sale
agreements with related party and publicly traded REIT, Cherry Hill
Mortgage Investment Corporation (CHMI). Pursuant to these
agreements, Freedom retains all ancillary income associated with
servicing the loans as well as the remaining portion of the excess
cash flow after a base servicing fee. Freedom also retains all the
servicing and advancing functions associated with the portfolio.
Fitch notes that these agreements are similar arrangements
undertaken by other nonbank mortgage companies in order to monetize
a portion of the value of their servicing portfolio and to reduce
the volatility associated with the mortgage servicing rights (MSR)
assets. These transactions were accounted for as financings for
accounting purposes, and as such are included in Fitch's leverage
calculations.
Fitch evaluates Freedom's leverage primarily on the basis of
debt-to-tangible equity and debt-to-EBITDA, which were 4.0x and
7.4x, respectively, as of Sept. 30, 2015. Freedom's leverage has
remained relatively consistent over time, averaging 4.4x and 7.8x,
respectively over the last several years. Leverage on the basis of
debt to Fitch Core Capital, which excludes MSRs and intangible
assets from equity, was high but consistent with other nonbank
mortgage companies.
Fitch views Freedom as having sufficient liquidity given available
balance sheet cash, availability under its various funding
facilities, and appropriate interest coverage ratios. As a
function of its business model, Freedom is predominately funded
through short-term secured financing facilities, backed by
loans-held-for-sale and MSRs. Fitch views this reliance on
wholesale funding sources as a rating constraint, but consistent
with its peers.
An increase in the percentage of unsecured debt in Freedom's
overall funding profile would be viewed favorably by Fitch, as it
could increase balance sheet flexibility in times of stress. That
said, unless Freedom were to issue a material amount of unsecured
funding, the rating of an unsecured debt issuance would likely be
notched down from Freedom's IDR reflecting weaker recovery
prospects given the preponderance of secured funding. Depending on
the specific recovery prospects for the unsecured debt, if issued,
it could be rated multiple notches below the IDR.
RATING SENSITIVITIES
IDR
Positive rating momentum for Freedom's IDR could be influenced by a
formalized succession plan, demonstrated execution on growth
aspirations, an increase in the percentage of unsecured funding,
reduced reliance on short-term funding, and lower overall leverage.
Improved governance, such as independent Board of Director
membership and reduced related-party transactions, would also be
viewed favorably.
Freedom's IDR could be negatively impacted by the departure of
Mr. Middleman without appropriate succession plans being in place,
rapid growth that is not accompanied by commensurate growth in
common equity, as well as appropriate staffing and resource levels
to support planned growth. Additional negative drivers to the
rating include a material decrease in asset quality, particularly
if it results in increased repurchased or advance obligations and a
material increase in leverage. To the extent that the company is
subject to material regulatory scrutiny or fines, this could also
negatively impact ratings.
Although not currently contemplated by Freedom, should the company
utilize leveraged third-party vehicles to finance interests in its
servicing rights, such as servicing advances, Fitch could elect to
include this debt in Freedom's consolidated leverage ratio
calculations. To the extent that this has a material impact on
Fitch's assessment of Freedom's leverage, this could also adversely
impact the rating.
Founded in 1990 and based in Mount Laurel, NJ, Freedom is a
leading, private, full-service, nonbank mortgage company engaged in
origination, servicing, selling and securitizing residential
mortgage loans. During the first nine-months of 2015, the company
was a top-10 mortgage originator by volume, according to Inside
Mortgage Finance. As of Sept. 30, 2015, Freedom had total assets
of approximately $4 billion.
Fitch has assigned this rating:
Freedom Mortgage Corporation
-- Long-term IDR of 'B+'.
The Rating Outlook is Stable.
FUHU INC: Golfer Greg Norman Duels Mattel for Tablet Maker
----------------------------------------------------------
Steven Church, writing for Bloomberg Brief - Distress & Bankruptcy,
reported that a private-equity firm founded by golfer Greg Norman
won court permission to supplant toy giant Mattel Inc. as the lead
bidder in a bankruptcy auction for children's tablet maker Fuhu
Inc.
According to the report, the judge overseeing Fuhu's case said he
will approve rules for an auction in January in which an affiliate
of Norman's fund will make the opening bid of $10 million --
$500,000 more than Mattel had said it would pay when El Segundo,
California-based Fuhu filed for bankruptcy in December. The report
related that the ruling sets up a potential shootout between an
affiliate of the Australian golfer's Great White Shark Enterprises
and El Segundo-based Mattel, maker of Barbie dolls and Hot Wheels
cars.
"The two parties who are most interested in the assets are probably
already at the table," U.S. Bankruptcy Judge Christopher Sontchi
said in federal court in
Wilmington, Delaware.
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.
GENERAL STEEL: Receives Noncompliance Notice From NYSE
------------------------------------------------------
General Steel Holdings, Inc., announced that the New York Stock
Exchange, Inc. has notified the Company that it has fallen below
the NYSE's continued listing standard set forth in Section 802.01C
of the Listed Company Manual that requires a minimum average
closing price of $1.00 per share of the Company's common stock over
a consecutive 30-trading-day period.
In a notification letter dated Jan. 4, 2016, the NYSE notified the
Company that as of Dec. 30, 2015, the average closing price of the
Company over a consecutive 30-day trading period of $0.97. Under
the NYSE regulations, the Company has a cure period of six months
from receipt of the NYSE's notice to achieve compliance with the
continued listing standard of Section 802.01C. The Company can
regain compliance at any time during the six-month cure period if
on the last trading day of any calendar month during the cure
period, the Company has a closing share price and an average
closing share price of at least $1.00 over the 30 trading-day
period ending on the last trading day of that month.
The Company will provide the NYSE with the required response within
10 business days of its receipt of the NYSE Notice, stating its
intent to cure this deficiency. Subject to compliance with the
NYSE's other continued listing standards and ongoing oversight, the
Company's common stock will continue to be listed and traded on the
NYSE during the six-month cure period, under the symbol "GSI", but
will continue to be assigned a ".BC" indicator. The Company's
business operations and United States Securities and Exchange
Commission reporting requirements are not affected by the receipt
of the NYSE's notice. The Company intends to actively monitor the
closing price of its common stock during the cure period and will
evaluate all available options to resolve this non-compliance and
regain compliance with the pricing standard.
About General Steel Holdings
General Steel Holdings, Inc., headquartered in Beijing, China,
produces a variety of steel products including rebar, high-speed
wire and spiral-weld pipe. General Steel --
http://www.gshi-steel.com/-- has operations in China's Shaanxi and
Guangdong provinces, Inner Mongolia Autonomous Region and Tianjin
municipality with seven million metric tons of crude steel
production capacity under management.
General Steel reported a net loss of $78.3 million on $1.9 billion
of sales for the year ended Dec. 31, 2014, compared with a net loss
of $42.6 million on $2 billion of sales for the year ended Dec. 31,
2013.
As of March 31, 2015, the Company had $2.5 billion in total assets,
$3.14 billion in total liabilities and a $637 million total
deficiency.
Friedman LLP, in New York, issued a "going concern" qualification
on the consolidated financial statements for the year ended
Dec. 31, 2014, citing that the Company has an accumulated deficit,
has incurred a gross loss from operations, and has a working
capital deficiency at Dec. 31, 2014. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
GENERAL STEEL: To Divest Steel Manufacturing Business
-----------------------------------------------------
General Steel Holdings, Inc., has signed a series of restructuring
agreements on Dec. 30, 2015, to effect the sale of its steel
manufacturing business.
Due to persistently depressed market trends for the steel business
in China, the Company's steel manufacturing business had repeatedly
suffered heavy net losses in recent years, and as the depressed
market is expected to prolong in 2016 it is estimated that the
steel manufacturing business will continue to further deplete the
Company's working capital. The Company and its Board, as
previously announced, had thoroughly evaluated strategic
alternatives and been exploring optimal solutions for the divesture
of its steel manufacturing business.
On Dec. 30, 2015, the Board approved the Company's entering into an
agreement to sell its wholly-owned General Steel (China) Co., Ltd.
and its entire equity interest in Shaanxi Longmen Iron and Steel
Co., Ltd. for $1 million to an affiliate of Victory Energy Resource
Limited, a HK registered company indirectly-owned by Henry Yu, the
Company's Chairman. Comparatively, the net equity of the assets
and liabilities included in the transaction was negatively valued
by a third party.
Through the transaction, the Company expects to receive a net
working capital injection of $1 million, and realize a reversal of
equity deficiency of approximately $1.6 billion, benefiting from a
large reduction in total liabilities. The transaction will also
save the Company from incurring future losses and obligations from
steel manufacturing.
After the sale, the Company plans to focus on accelerating its
cleantech business via its 84.5% equity ownership in Catalon
Chemical Corp. ("Catalon"), which develops and manufactures De-NOx
honeycomb catalysts and industrial ceramics. The Company will also
own 32% of Tianwu Tongyong (Tianjin) International Trading Co.,
Ltd, which mainly sources overseas iron ore for steel mills, and
99% of Maoming Hengda Iron and Steel Co., Ltd, which holds valuable
land assets worth an estimated RMB 250 million.
"The timely divesture of the steel manufacturing business is
necessary for General Steel in order to preserve liquid assets that
will enable the Company to survive and to focus on the promising
cleantech business," commented Ms. Yunshan Li, chief executive
officer of General Steel. "We are thankful to Chairman Yu with his
generous offer to acquire our steel manufacturing business which
will alleviate the Company from incurring further losses that would
potentially consume all of our remaining working capital.
Following the transaction, we expect our balance sheet will be much
stronger due to a lower debt burden and higher equity. We also
expect to be able to liquidate the land assets in Maoming that
could potentially provide as much as $30-40 million cash gain."
"As we concentrate our efforts on where we can have the greatest
growth and return on investments, we are fully committed to
accelerating our cleantech business. With the air pollution
getting worse throughout China, the government in December launched
a new policy to curb emissions from coal in its next five-year
plan. The new policy will offer additional subsidies for power
plants that can meet ultra-low emission requirements, including
minimum oxygen content and concentration level of smoke dust,
sulfur dioxide, and NOx emission. We anticipate our De-NOx
honeycomb catalysts business will contribute to our growth and
profitability in 2016." Ms. Li concluded.
About General Steel Holdings
General Steel Holdings, Inc., headquartered in Beijing, China,
produces a variety of steel products including rebar, high-speed
wire and spiral-weld pipe. General Steel --
http://www.gshi-steel.com/-- has operations in China's Shaanxi and
Guangdong provinces, Inner Mongolia Autonomous Region and Tianjin
municipality with seven million metric tons of crude steel
production capacity under management.
General Steel reported a net loss of $78.3 million on $1.9 billion
of sales for the year ended Dec. 31, 2014, compared with a net loss
of $42.6 million on $2 billion of sales for the year ended Dec. 31,
2013.
As of March 31, 2015, the Company had $2.5 billion in total assets,
$3.14 billion in total liabilities and a $637 million total
deficiency.
Friedman LLP, in New York, issued a "going concern" qualification
on the consolidated financial statements for the year ended
Dec. 31, 2014, citing that the Company has an accumulated deficit,
has incurred a gross loss from operations, and has a working
capital deficiency at Dec. 31, 2014. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
GT ADVANCED: TXT Suit Precluded by Res Judicata, Judge Rules
------------------------------------------------------------
Pending before the United States Bankruptcy Court for the District
of New Hampshire is a complaint filed by Tera Xtal Technology
Corporation against GT Advanced Technologies Limited.
In its Complaint, TXT asks the Bankruptcy Court to rule that its
claim against GTAT Ltd. arising from a monetary award issued in
prepetition arbitration proceedings is not merely a general
unsecured claim in the bankruptcy case. TXT instead would have the
Court determine either that GTAT Ltd. holds a sum of money in trust
for TXT's benefit, which should be immediately returned to TXT, or,
in the alternative, that TXT has a lien on certain of the Debtors'
assets. GTAT Ltd. has moved to dismiss the adversary proceeding on
grounds that the arbitration bars the relief sought in the
Complaint under principles of res judicata.
In a Memorandum dated December 29, 2015, which is available at
http://is.gd/cdweL0from Leagle.com, U.S. Bankruptcy Judge Henry J.
Boroff finds and rules that each count of the Complaint is
precluded by the res judicata effect of the Tribunal's Decision and
Final Award and, granted the Motion to Dismiss.
The adversary proceeding is available at TERA XTAL TECHNOLOGY CORP.
and CITIGROUP FINANCIAL PRODUCTS INC., Plaintiffs, v. GT ADVANCED
TECHNOLOGIES LIMITED, Defendant, Adversary Proceeding No.
15-01007-HJB (Bankr. D.N.H.).
The case is In re: GT ADVANCED TECHNOLOGIES, INC., et al., Chapter
11 Debtors, Case No. 14-11916-HJB, Jointly Administered (Bankr.
D.N.H.).
Tera Xtal Technology Corp., Plaintiff, is represented by Robert J.
Keach, Esq. -- Robert J. Keach, rkeach@bernsteinshur.com --
Berstein, Shur, Sawyer & Nelson, Jennifer Rood, Esq. -- Bernstein
Shur.
GT Advanced Technologies Limited, Defendant, is represented by
Holly Barcroft, Esq. -- hbarcroft@nixonpeabody.com -- Nixon Peabody
LLP, G. Alexander Bongartz, Esq. -- alexbongartz@paulhastings.com
-- Paul Hastings LLP, James T. Grogan, III, Esq. --
jamesgrogan@paulhastings.com -- Paul Hastings LLP, Daniel W. Sklar,
Esq. -- dsklar@nixonpeabody.com -- Nixon Peabody LLP.
About GT Advanced
Headquartered in Merrimack, New Hampshire, GT Advanced
Technologies Inc. -- http://www.gtat.com/-- produces materials and
equipment for the electronics industry. On Nov. 4, 2013, GTAT
announced a multiyear supply deal with Apple Inc. to produce
sapphire glass material for use in consumer electronics products.
Under the deal, Apple would provide GTAT with a prepayment of
approximately $578 million paid in four installments and, starting
in 2015, GTAT would reimburse Apple for the prepayment over a
five-year period.
GT is a publicly held corporation whose stock was traded on NASDAQ
under the ticker symbol "GTAT." GTAT was de-listed from the
NASDAQ stock exchange in October 2014.
As of June 28, 2014, the GTAT Group's unaudited and consolidated
financial statements reflected assets totaling $1.5 billion and
liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had
$85 million in cash, $84 million of which is unencumbered.
On Oct. 6, 2014, GT Advanced Technologies and eight affiliates
filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code (Bankr. D.N.H. Lead Case No.
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.
HOVENSA LLC: To Seek Confirmation of Plan on Jan. 19
----------------------------------------------------
Hovensa, L.L.C., which has agreed to sell most of its assets to
Limetree Bay Holdings, LLC for $220 million, will seek confirmation
of its liquidating plan on Jan. 19, 2016, at 10:00 a.m. (prevailing
Eastern Time).
The Honorable Mary F. Walrath on Dec. 17, 2015, entered an order
conditionally approving the Disclosure Statement and setting these
dates in connection with the confirmation of the Plan:
Event Date
----- ----
Voting Record Date 12/17/2015
Solicitation Commencement 12/18/2015
Solicitation Deadline 12/21/2015
Deadline to Send Notice to Assume Contracts 12/24/2015
Disclosure Statement Objection Deadline 01/08/2016
Plan Objection Deadline 01/08/2016
Deadline for Objections to Assumption of Contracts 01/08/2016
Deadline for Filing Bankruptcy Rule 3018 Motions 01/08/2016
Plan Supplement Date 01/11/2016
Voting Deadline 01/12/2016
Deadline to File Voting Report 01/13/2016
Deadline to File Confirmation Brief 01/13/2016
The combined hearing to consider final approval of the Disclosure
Statement and confirmation of the Plan is on Jan. 19, 2016, at
10:00 a.m. (prevailing Eastern Time), according to the order.
Lee J. Rohn, Esq., who claimed to represent virtually 98% of the
tort litigants, opposed a voting deadline and a plan hearing on the
first week of January, and instead proposed a voting deadline on
the second week.
The Liquidating Plan
Hovensa, L.L.C., filed a liquidating plan that contemplates
allocating $30 million of the sale proceeds for holders of allowed
non-priority general unsecured claims.
The projected recoveries under the Plan are:
Projected Estimated
Class Claim/Interest Plan Treatment Allowed Amount Recovery
---- ------------- -------------- -------------- --------
1 Other Priority Claims Unimpaired $22,000 100%
2 Other Secured Claims Unimpaired $0 100%
3 GVI Claims Impaired Undetermined N/A
4 Tort Claims Impaired $26,440,000 49%
5 Other Non-Govt. and
Non-Tort General
Unsecured Claims Impaired $30,935,000 49%
6 Other Governmental
General Unsecured
Claims Impaired $3,500,000 49%
7 Interests Impaired N/A 0%
The Debtor said that in a Chapter 7 liquidation, all holders of
unclassified claims and claims in Classes 1, 2, 3, 4, 5, and 6
would receive no recovery.
On the Petition Date, the Debtor disclosed a deal to sell its crude
oil and product storage and terminalling business to Limetree Bay
Holdings, LLC, an affiliate of ArcLight Capital
Partners, LLC, for $184 million, absent higher and better offers.
The Debtor received a rival offer from Buckeye Partners, L.P. for
$198.6 million by the Nov. 5 bid deadline, as well as nine bids
from parties interested in purchasing and liquidating the Debtor's
refinery assets, and proposals from Capswell Energy Co. and Monarch
Energy Partners, Inc.
Following an auction on Nov. 10, 11 and 16, Limetree submitted a
final bid of $220 million, including $100 million in cash, and
Buckeye submitted a final bid of $365 million, which includes $345
million in cash. The Debtor, however, selected Limetree Bay as the
winning bidder due to the greater conditionality in the Buckeye
bid.
Limetree Bay's final offer provides:
i. purchase price of $220 million consisting of: (a) $100
million of cash to the Government of the Virgin Islands (the "GVI")
in satisfaction of certain of its claims and as a concession fee,
(b) $90 million to the Debtor's estate, and (c) up to $30 million
of reimbursement of post-closing wind-down costs and expenses;
ii. an agreement to provide the Debtor with free power after the
closing to the extent that the minimum turndown amount of power
exceeds the power generation load used by Limetree Bay to operate
its business, and the first $15 million of additional power for
which the Debtor would have otherwise paid free of charge under a
power supply services agreement to be entered into at closing; and
iii. an agreement with the Governor on a concession agreement to
be taken to the Legislature, which agreement contains additional
payments and other financial consideration to be paid by Limetree
Bay to the GVI.
In an effort to obtain the Committee's support for a sale
transaction to Limetree Bay, the parties agreed that HOVIC or one
of its affiliates will assume the Debtor's ongoing pension
obligations, which will materially reduce the amount of the
Debtor's projected unsecured claims pool, in exchange for the
Committee's support for estate releases.
In advance of the Nov. 30 sale hearing, the Debtor, the JV Parties,
and the Committee engaged in further negotiations over the form of
order approving the sale. Ultimately, the sale order was further
revised to include a paragraph that requires $30 million of the
sale proceeds to be placed in a separate interest bearing account
for the sole benefit of holders of allowed non-priority general
unsecured claims other than: (1) claims held by HOVIC or PDV-VI;
(2) any claims of the GVI; and (3) any claim of any governmental
entity, unless otherwise agreed in writing by the Committee, the
Debtor, and any liquidating trustee, as appropriate.
On Dec. 1, 2015, the Bankruptcy Court entered the Sale Order.
The Purchase Agreement provides for the Debtor's estate to receive
approximately $90 million from the sale proceeds. Pursuant to the
Sale Order, the Debtor is required to repay in full in cash to the
DIP Lenders all accrued but unpaid DIP Obligations upon the
Closing. In addition, based upon the Debtor's claims estimates,
the sale proceeds will permit the Debtor to cover its remaining
pre-closing administrative obligations and make the best possible
distribution to unsecured creditors under the circumstances.
In addition, the Sale Order and the Purchase Agreement provide
that, at the Closing, Limetree Bay will pay the USVI Government the
USVI Concession Fee in the amount of $100 million. In addition to
this fee, the GVI also will receive several monetary and
non-monetary benefits directly from Limetree Bay pursuant to a
separate agreement reached among the Governor and Limetree Bay
dated Nov. 9, 2015. On Dec. 1, 2015, the Governor held a press
conference to announce the terms of the Operating Agreement, which
includes among other things:
* $220 million in an upfront payment to the GVI;
* A commitment from Limetree Bay to operate the oil storage
facility for at least 25 years and up to 40 years;
* A commitment from Limetree Bay to employ a minimum of 80
full-time workers, at least 80% of whom must be long-term USVI
residents;
* An agreement from Limetree Bay to potentially restart the
refinery and dismantle any part that is not being used;
* A donation of 330 acres of land and 130 units of housing along
with a vocational school and a community center to the GVI; and
* Payment of $150,000 annually as rent for the submerged lands
that are part of the Debtor's property, which is an increase from
the current $1 per year rent.
The Governor also stated that he believes the Operating Agreement
represents a total value to the GVI and the people of the USVI of
more than $800 million. The Governor also announced that he called
the 31st Legislature of the Virgin Islands of the United States
into special session to be held on Dec. 17, 2015 to consider
approval of the Operating Agreement.
* * *
On Dec. 9, 2015, the Debtor filed draft forms of the Disclosure
Statement the Plan of Liquidation. On Dec. 16, 2015, the Debtor
filed revised versions of the Disclosure Statement and the Plan.
On Dec. 17, 2015, the Debtor filed a solicitation version of the
Disclosure Statement following the Court's conditional approval of
the Disclosure Statement.
A copy of the solicitation version of the Disclosure Statement
filed Dec. 17, 2015, is available for free at:
http://bankrupt.com/misc/Hovensa_LLC_467_DS.pdf
The Debtors' attorneys:
Richard H. Dollison
LAW OFFICES OF RICHARD H. DOLLISON, P.C.
48 Dronningens Gade, Suite 2C
St. Thomas, U.S. Virgin Islands 00802
Telephone: (340) 774-7044
Facsimile: (340) 774-7045
- and -
Lorenzo Marinuzzi, Esq.
Jennifer L. Marines, Esq.
Samantha Martinm Esq.
Daniel J. Harris, Esq.
MORRISON & FOERSTER LLP
250 West 55th Street
New York, NY 10019
Telephone: (212) 468-8000
Facsimile: (212) 468-7900
About Hovensa
Hovensa, L.L.C, owns an oil refinery and an oil storage facility
business, both located on the island of St. Croix, U.S. Virgin
Islands, and both of which are currently idled. The refinery and
storage facilities span approximately 2,000 acres of land located
on the south shore of St. Croix, including approximately 300 acres
of undeveloped land to the east of the refinery and storage.
Hovensa currently maintains its headquarters at 1 Estate Hope,
Christiansted, St. Croix, USVI.
Hovensa was formed in June 1998 and, through a series of agreements
dated October 30, 1998, became a joint venture between Hess Oil
Virgin Islands Corporation ("HOVIC"), a subsidiary of Hess
Corporation (f/k/a Amerada Hess Corporation), and PDVSA V.I., Inc.
("PDV-VI" and together with HOVIC, the "JV Parties"), a subsidiary
of Petroleos de Venezuela, S.A. ("PDVSA"), the national oil company
of Venezuela.
Hovensa L.L.C. filed a Chapter 11 bankruptcy petition in the U.S.
Bankruptcy Court for the District of the Virgin Islands (Bankr. D.
V.I. Case No. 15-10003) on Sept. 15, 2015, with a deal to sell most
of the assets. Judge Mary F. Walrath is assigned to the case.
The Debtor estimated assets of $100 million to $500 million, and
liabilities of more than $1 billion.
The Debtors tapped Morrison & Foerster LLP as bankruptcy counsel;
The Law Offices of Richard H. Dollison as local bankruptcy counsel;
Alvarez & Marsal North America, LLC to provide Thomas E. Hill as
chief restructuring officer; Lazard Freres & Co. LLC as investment
banker; White & Case LLP as special mergers and acquisitions
counsel; and Prime Clerk LLC as claims and noticing agent and as
administrative agent.
The Official Committee of Unsecured Creditors tapped Dentons US LLP
counsel; Hamm Eckard, LLP as its local/co-counsel; and Berkeley
Research Group, LLC as its financial advisor.
The Debtor's owners, HOVIC and PDV-VI, have agreed to provide DIP
financing in an amount not to exceed $40 million. The DIP facility
requires the Debtors to achieve certain milestones, including
closing of the sale by Dec. 31, 2015.
JEVIC TRANSPORTATION: States Ask Top Court to Back Truckers Claims
------------------------------------------------------------------
Patrick Boyle at Bankruptcy Law360 reported that 19 states have
joined 1,200 fired truckers in asking the U.S. Supreme Court to
overturn the Third Circuit's dismissal of the truckers' $12.4
million in claims against their former employer, saying the
decision sows confusion about which creditors get priority in
bankruptcy settlements.
The amicus brief filed Dec. 17 by Illinois, Alaska, Arizona and 16
other states says the bankruptcy settlement for Jevic
Transportation Inc. turns the settlement priority scheme
established by the federal Bankruptcy Code on its head by providing
payments to certain creditors.
About Jevic Transportation
Based in Delanco, New Jersey, Jevic Transportation Inc. --
http://www.jevic.com/-- provided trucking services. Two
affiliates -- Jevic Holding Corp. and Creek Road Properties -- have
no assets or operations. Jevic et al. sought Chapter 11 protection
(Bankr. D. Del. Case No. 08-11008) on May 20, 2008. Domenic E.
Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr Harrison
Harvey Branzburg & Ellers, in Wilmington, Del., represent the
Debtors. The U.S. Trustee for Region 3 appointed five creditors to
serve on an Official Committee of Unsecured Creditors. Robert J.
Feinstein, Esq., Bruce Grohsgal, Esq., and Maria A. Bove, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Del., represent
the Official Committee of Unsecured Creditors.
Before filing for bankruptcy, the Debtors initiated an orderly
wind-down process. As a part of the wind-down process, the
Debtors ceased substantially all of their business and
terminated roughly 90% of their employees. The Debtors continue
to manage the wind-down process in an attempt to deliver all
freight in their system and to retrieve their assets.
When the Debtors sought protection from their creditors, they
estimated assets and debts between $50 million and $100 million.
At Oct. 31, 2010, the Debtor had total assets of $425,000, total
liabilities of $12.2 million, and a stockholders' deficit of
$11.8 million.
JOHN HUDSON FARMS: Files for Chapter 11 Bankruptcy Protection
-------------------------------------------------------------
John Hudson Farms, Inc., filed for Chapter 11 bankruptcy protection
(Bankr. E.D.N.C. Case No. 15-07000) on Dec. 31, 2015, estimating
assets between $1 million and $10 million and liabilities between
$10 million and $50 million. The petition was signed by Phillip L.
Hudson, secretary.
Trawick H Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., serves as
the Company's bankruptcy counsel.
Court documents show that the Company started experiencing
financial troubles "as a result of a series of poor crop yields in
2011 and 2012." The Company, according to court filings, "was
unable to recoup sufficient proceeds to satisfy its obligations"
and has since "downsized its operations by way of a voluntary
liquidation of equipment and real property in an effort to generate
income for creditors."
John Hudson Farms is headquartered in Newton Grove, North Carolina.
Founded in 1965, it specializes in the growing of crops like soy
beans, sweet potatoes, strawberries and tobacco and offers its
fresh produce at roadside stands in Newton Grove, Clinton, and Hope
Mills and sells them to mills and warehouses.
KALOBIOS PHARMACEUTICALS: Gets Court Permission to Pay Workers
--------------------------------------------------------------
Matt Chiappardi at Bankruptcy Law360 reported that a Delaware
bankruptcy judge has given troubled pharmaceutical company KaloBios
emergency permission to pay its employees, but barred any of that
money going to fired CEO Martin Shkreli, who was charged with
securities fraud two weeks before the company hit Chapter 11. In
an emergency order on Dec. 30, U.S. Bankruptcy Judge Laurie Selber
Silverstein gave KaloBios Pharmaceuticals Inc., which filed for
court protection a day earlier listing nearly $2 million in debt,
permission to meet its payroll.
About KaloBios Pharmaceuticals
Based in South San Francisco, Calif., KaloBios Pharmaceuticals,
Inc., is a company biopharmaceutical company focused on the
development of monoclonal antibody therapeutics.
The Company's balance sheet at March 31, 2015, showed $32.0 million
in total assets, $15.9 million in total liabilities, and a
stockholders' deficit of $16.1 million.
KaloBios Pharmaceuticals (Nasdaq: KBIO) on Dec. 29, 2015, filed a
voluntary petition for bankruptcy protection under Chapter 11 of
Title 11 of the United States Bankruptcy Code. The filing was made
in the U.S. Bankruptcy Court for the District of Delaware (Case No.
15-12628).
The Company is represented by Eric D. Schwartz of Morris, Nichols,
Arsht & Tunnell.
LEHMAN BROTHERS: Court Junks Spanish Broadcasting's $55MM Claim
---------------------------------------------------------------
Lehman Brothers Holdings Inc., as Plan Administrator under the
Modified Third Amended Joint Chapter 11 Plan of Lehman Brothers
Holdings Inc. and its Affiliated Debtors, filed a motion for
summary judgment regarding Claim No. 67707 filed by Spanish
Broadcasting System, Inc.
Spanish Broadcasting filed the claim against Lehman Commercial
Paper Inc. on November 3, 2011. The Claim amends proof of claim
number 15941, filed on September 18, 2009. The Claim arises from a
Credit Agreement, dated as of June 10, 2005, among Spanish
Broadcasting, as borrower; LCPI, as lender and administrative
agent; and certain other lenders. By the Claim, Spanish
Broadcasting seeks damages of $55,462,228 allegedly arising from
the failure of LCPI, as lender under the Credit Agreement, to fund
$10 million pursuant to a draw request made by Spanish Broadcasting
on October 3, 2008. On July 10, 2012, LBHI, as Plan Administrator,
objected to the Claim via its Three Hundred Twenty-Eighth Omnibus
Objection to Claims (No Liability Claims).
On February 13, 2013, at a "Sufficiency Hearing" on the Claim, the
Honorable James M. Peck, declined to disallow the Claim.
Thereafter, pursuant to a Claims Litigation Schedule with Respect
to Claim No. 67707 Filed by Spanish Broadcasting System, Inc. and
the Objection Interposed by Lehman Brothers Holdings Inc., as
amended, the parties engaged in a discovery process. At an April
27, 2015 discovery conference before the Court, LBHI proposed that
it should be permitted to file a summary judgment motion on the
issue of whether section 10.12(e) of the Credit Agreement, which
comprised a waiver by Spanish Broadcasting of "any special,
exemplary, punitive or consequential damages," survived termination
of the Credit Agreement pursuant to that certain payoff letter,
dated February 7, 2012 between LCPI and Spanish Broadcasting. The
parties subsequently exchanged discovery with respect to the
negotiation of the Payoff Letter, and, on May 22, 2015, the Court
entered a Stipulated Order Regarding Briefing Schedule Regarding
Claim 67707 of Spanish Broadcasting System, Inc., thereby granting
LBHI's request to file the Motion.
In accordance with the terms of the parties' agreement, LBHI filed
the Motion together with a Memorandum of Law of Lehman Brothers
Holdings Inc. in Support of Motion for Summary Judgment Pursuant to
Rule 7056 of the Federal Rules of Bankruptcy Procedure Regarding
Claim 67707 on June 26, 2014. Spanish Broadcasting filed its
Memorandum of Law in Opposition to Motion by Lehman Brothers
Holdings Inc. for Summary Judgment regarding Claim 67707 filed by
Spanish Broadcasting System, Inc. on July 23, 2015. LBHI filed a
Reply Memorandum of Law in Further Support of Motion for Summary
Judgment.
In a Memorandum Decision dated December 29, 2015, which is
available at http://is.gd/ZUgWZKfrom Leagle.com, Judge Shelley C.
Chapman of the United States Bankruptcy Court for the Southern
District of New York grants the Motion.
To the extent not already withdrawn, and with the exception of the
Fee Damages, the Claim is disallowed in its entirety and expunged
from the claims register. Judge Chapman directed LBHI to settle an
order consistent with his Memorandum Decision.
The case is In re: LEHMAN BROTHERS HOLDINGS INC., et al., Debtors,
Case No. 08-13555 (SCC)(Bankr. S.D.N.Y.).
Lehman Brothers Holdings Inc., Debtor, represented by Adam M.
Bialek, Esq. -- abialek@wmd-law.com -- Wollmuth Maher & Deutsch
LLP, Jerrold Lyle Bregman, JBREGMAN@EBG-LAW.COM -- Ezra Brutzkus
Gubner LLP, David S. Cohen, Esq. -- dcohen2@milbank.com -- Milbank,
Tweed, Hadley & McCloy LLP, Todd G. Cosenza, Esq. --
tcosenza@willkie.com -- Willkie Farr & Gallagher LLP, William F.
Dahill, Esq. -- wdahill@wmd-law.com -- Wollmuth Maher & Deutsch
LLP, Brijesh P. Dave, Lehman Brothers Holdings, Inc., Joshua
Dorchak, Esq. -- joshua.dorchak@morganlewis.com -- Morgan, Lewis &
Bockius LLP, Sarah Efronson, Esq. -- sefronson@jonesday.com --
Jones Day, Garrett A. Fail, Esq. -- garrett.fail@weil.com -- Weil,
Gotshal & Manges LLP, Lynn P. Harrison, III, Esq. -- Curtis,
Mallet-Prevost, Colt & Mosle, LLP, Diane Harvey, Esq. --
diane.harvey@weil.com -- Weil Gotshal & Manges LLP, Jonathan S.
Henes, Kirkland & Ellis LLP, William J. Hine, Esq. --
whine@jonesday.com -- Jones Day, I-Heng Hsu, Esq. -- Jones Day,
Thomas T. Janover, Esq. -- tjanover@kramerlevin.com -- Kramer Levin
Naftalis & Frankel LLP, James N. Lawlor, Esq. --
jlawlor@wmd-law.com -- Wollmuth Maher & Deutsch, LLP, Robert J.
Lemons, Esq. -- robert.lemons@weil.com -- Weil Gotshal & Manges,
LLP, Jacqueline Marcus, Esq. -- jacqueline marcus@weil.com -- Weil
Gotshal & Manges, LLP, Arthur J. Margulies, Esq. -- Jones Day,
Harvey R. Miller, Esq. -- harvey.miller@weil.com -- Weil, Gotshal &
Manges, LLP, Ralph I. Miller, Esq. -- ralph.miller@weil.com --
Weil, Gotshal & Manges, LLP, Thomas M. Mullaney, Paul B. O'Neill,
Esq. -- poneill@kramerlevin.com -- Kramer Levin Naftalis & Frankel
LLP, Steven J. Reisman, Esq. -- sreisman@curtis.com -- Curtis,
Mallet-Prevost, Colt & Mosle LLP, Michael A. Rollin, Esq. --
mrollin@rbf.law -- Rollin Braswell Fisher LLC, Benjamin Rosenblum,
Esq. -- brosenblum@jonesday.com -- Jones Day, Andrew J. Rossman,
Esq. -- andrewrossman@quinnemanuel.com -- Quinn Emanuel Urquhart &
Sullivan, LLP, Shai Waisman, Esq. -- shai.waisman@weil.com -- Weil,
Gotshal & Manges, LLP, Jane Rue Wittstein, Esq. --
jruewittstein@jonesday.com -- Jones Day.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than
150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC
sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as
counsel to the Official Committee of Unsecured Creditors.
Houlihan
Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee
for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
As of Oct. 2, 2014, Lehman's total distributions to unsecured
creditors have amounted to $92.0 billion. As of Sept. 30, 2014,
the brokerage trustee has substantially completed customer claims
distributions, distributing more than $106 billion to 111,000
customers.
LOCAL CORP: Sells Assets to Media.Net for $3.12 Million
-------------------------------------------------------
Local Corp., a local advertising technology company, has sold most
of its assets to Media.Net Advertising FZ-LLC.
Media.Net, a company organized in the Dubai Internet City Free Zone
of the United Arab Emirates, made a $3.12 million offer for the
assets, which include those used in Local Corp.'s Krillion and
nQuery businesses.
The company's offer was selected as the winning bid at a
court-supervised auction held in November last year, according to
court filings.
The deal had earlier drawn flak from Google Inc. and several other
companies that have existing contracts with Local Corp. Most of
them demanded the company to pay in full the amounts outstanding
under their contracts before they are assigned to the buyer.
Meanwhile, Local Corp.'s official committee of unsecured creditors
had criticized some aspects of the deal such as the escrow
provision and the release of substantial claims.
The sale was approved by Judge Scott Clarkson of the U.S.
Bankruptcy Court for the Central District of California., who
oversees Local Corp.'s Chapter 11 case.
In the same order, Judge Clarkson also approved Local Corp.'s three
separate agreements with TradeIn.com, Greentree Recycling and Wet
Seal.
The company will get more than $26,000 from the sale of its office
equipment under the agreements, according to court filings.
About Local Corporation
Local Corporation, a publicly traded Delaware corporation (NASDAQ
symbol LOCM), is in the business of providing search results to
consumers who are searching online for local businesses, products
and services. Founded in 1999, the Irvine, California-based
company went public in 2004 and has been one of the fastest growing
online local media businesses for a number of years, and for the
past four years it has been listed by Deloitte on its Technology
Fast 500. The Company's search results are provided through the
Company's flagship Local.com Web site and through other proprietary
Web sites, and they are also delivered to a network of over 1,600
other Web sites that rely on search syndication services to provide
local search results to their own users. The Company generates
revenue from ad units placed alongside its search results, which
include pay-per-click, pay-per-call, and display ad units.
The Company reported a net loss of $5.50 million on $83.1 million
of revenue for the year ended Dec. 31, 2014, compared with a net
loss of $10.4 million on $94.4 million of revenue in the prior
year. The Company's balance sheet at March 31, 2015, showed $36.8
million in total assets, $25.7 million in total liabilities, and
stockholders' equity of $11.2 million.
Local Corp. filed a Chapter 11 bankruptcy petition (Bankr. C.D.
Cal. Case No. 15-13153) in Santa Ana, California, on June 23,
2015.
The Debtor disclosed $16,141,222 in assets and $29,519,418 in
liabilities as of the Chapter 11 filing.
The case is assigned to Judge Scott C. Clarkson. The Debtor tapped
Winthrop Couchot as counsel.
Robins Kaplan LLP represents as counsel to the Official Committee
of Unsecured Creditors.
LUVU BRANDS: Posts Net Loss in Q3 of 2015, Has Going Concern Doubt
------------------------------------------------------------------
Luvu Brands, Inc., posted a net loss of $222,235 for the three
months ended September 30, 2015, compared to a net loss of $84,324
for the three months ended September 30, 2014.
Louis S. Friedman, president and chief executive officer, and
Ronald P. Scott, chief financial officer and secretary of the
company, in a regulatory filing with the U.S. Securities and
Exchange Commission dated November 19, 2015, emphasized, "We
incurred a net loss of $222,235 for the three months ended
September 30, 2015 and a net loss of $473,746 for the year ended
June 30, 2015. As of September 30, 2015, we have an accumulated
deficit of $9,119,722 and a working capital deficit of $1,938,975.
"This raises substantial doubt about our ability to continue as a
going concern."
Messrs. Friedman and Scott told the SEC, "In view of these matters,
realization of a major portion of the assets in the accompanying
balance sheet is dependent upon continued operations of the
company, which in turn is dependent upon our ability to meet our
financing requirements, and the success of our future operations.
"Management believes that actions presently being taken to revise
our operating and financial requirements provide the opportunity
for the company to continue as a going concern.
"These actions include an ongoing initiative to increase sales,
gross profits and our gross profit margin. To that end, we hired
additional sales people and continued to make improvements to our
e-commerce sites during fiscal 2015. We also installed new
equipment during fiscal 2015 to increase the efficiency and
capacity of our foam repurposing operation. At the end of fiscal
2015 we ordered new equipment to increase our fabric cutting
capacity; this equipment was delivered and installed during the
first quarter of fiscal 2016. These actions should yield higher
sales at a lower cost of goods sold. We also plan to continue to
manage discretionary expense levels to be better aligned with
current and expected revenue levels. We estimate that the
operational and strategic growth plans we have identified will
require approximately $200,000 of funding, of which we estimate
will be provided by debt financing and, to a lesser extent, cash
flow from operations as well as cash on hand."
At September 30, 2015, the company had total assets of $3,539,481,
total liabilities of $6,076,438, and total stockholders' deficit of
$2,536,957.
A full-text copy of the company's quarterly report is available for
free at: http://tinyurl.com/h9off2j
Luvu Brands, Inc., formerly known as Liberator, Inc., is a
U.S.-based manufacturer that has built several brands in the
wellness, lifestyle and casual furniture and seating categories.
Its brands are headquartered in Atlanta in a 140,000 square foot
manufacturing facility.
MAGNUM HUNTER: Natural Gas Decline Below $1.65 Could Upend Plan
---------------------------------------------------------------
Philip Brendel and Julia Winters, writing for Bloomberg Brief -
Distress & Bankruptcy, reported that Magnum Hunter Resources'
proposed debtor-in-possession financing has an unusual default
provision that's out of the company's hands.
According to the report, if natural gas trades below $1.65 per
million British thermal units for 15 days in a row on the New York
Mercantile Exchange, that would be classed as an event of default.
The report related that DIP investors likely sought this clause so
they could negotiate a better deal if energy prices take another
step down.
Second-lien lenders will get 63 percent of their interest as
adequate protection because they agreed to treat that percentage of
their claim as secured on a settlement-only basis, the report
further related.
About Magnum Hunter
Irving, Texas-based MHRC, an oil and gas company that primarily
engaged, through its subsidiaries, in the acquisition, development,
and production of oil and natural gas reserves in the United
States, said these macroeconomic factors, coupled with the their
substantial debt obligations and natural gas gathering and
transportation costs, strained their ability to sustain the weight
of their capital structure and devote the capital necessary to
maintain and grow their businesses. The Debtors' total number of
drilling rigs in operation in the United States is just 38 percent
of the number of rigs that were in operation just one year ago,
Court filing indicates.
Magnum Hunter Resources Corporation and 19 of its affiliates filed
Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case
No. 15-12533) on Dec. 15, 2015. The petition was signed by Gary
C.
Evans as chairman and chief executive officer.
The Debtors have engaged Kirkland & Ellis, LLP as their general
counsel, Pachulski Stang Ziehl & Jones LLP as local counsel, PJT
Partners, LP as investment banker, Alvarez & Marsal North America,
LLC, as restructuring advisor, and Prime Clerk, LLC as notice,
claims and balloting agent.
MEDASSETS INC: Moody's Assigns 'B3' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating
(CFR) and B3-PD Probability of Default Rating to MedAssets, Inc.
(New). At the same time, Moody's assigned B2 (LGD 3) ratings to the
company's proposed first lien senior secured credit facilities,
including a $1,130 million first lien senior secured term loan and
a $100 million revolving credit facility. Moody's also assigned a
Caa2 (LGD 5) rating to the company's proposed $500 million senior
secured second lien term loan. The proceeds from the senior secured
term loans, along with a contribution of common equity, will fund
the leveraged buyout of the company by Pamplona Capital Management,
refinance existing debt, and pay transaction fees and expenses. The
rating outlook is stable.
Moody's assigned the following ratings:
Issuer: MedAssets, Inc. (New):
Corporate Family Rating, B3
Probability of Default Rating, B3-PD
Senior secured revolving credit facility, B2 (LGD 3)
Senior secured first lien term loan, B2 (LGD 3)
Senior secured second lien term loan, Caa2 (LGD 5)
The rating outlook is stable.
All ratings are subject to review of final documentation. Moody's
anticipates all of the corporate and instrument ratings at
MedAssets, Inc. (the predecessor) will be withdrawn upon completion
of the proposed transaction and repayment of existing debt.
RATINGS RATIONALE
"The B3 Corporate Family Rating reflects the very high financial
leverage resulting from the sizeable amount of debt that will be
used to fund the leveraged buyout of the company," stated Moody's
Assistant Vice President, Daniel Gonçalves. "However, the
company's credit profile benefits from its strong market position
and favorable business fundamentals within the RCM and SCM
businesses," continued Gonçalves.
On a pro forma basis for the LBO financing and recent contract
losses, MedAssets' adjusted debt to EBITDA is in the high 7-times
range on a Moody's adjusted basis for the twelve months ended
September 30, 2015. The rating also reflects the company's small
absolute revenue size, its historically aggressive acquisition
strategy, and intensely competitive market in which MedAssets'
operates characterized by innovation and the frequent introduction
of new product and service offerings, including those by other
larger players, to remain successful. However, the rating is
supported by the company's relatively large and geographically
diverse customer base and good liquidity characteristics, with
positive free cash flow and an undrawn $100 million revolving
credit facility at the close of the transaction.
The stable outlook incorporates Moody's expectation that the
company will exhibit steady organic revenue and earnings growth
such that leverage declines from the currently very high levels,
supported by the company's focus on cost reduction initiatives.
While not expected over the near-term due to the company's very
high financial leverage, the ratings could be upgraded if credit
metrics improve due to top-line growth and realization of savings
cost reduction initiatives. Among these include free cash flow to
debt and debt to EBITDA sustained above the 5% and below the 6.0
times range, respectively.
The ratings could be downgraded if top-line pressure accelerates,
substantial deleveraging does not occur, or if operating margins,
cash flow, or sources of liquidity deteriorate. In addition, the
ratings could be lowered if the company engages in material
debt-financed shareholder initiatives or acquisitions.
Based in Alpharetta, Georgia, MedAssets, Inc. provides supply and
cost management services and a variety of financial software and
revenue service solutions primarily to U.S. hospitals and health
systems. MedAssets' customer base includes about 4,500 acute care
hospitals and over 123,000 ancillary (non-acute care) provider
locations. On a pro forma basis for the loss of the Tenet supply
chain solutions business, MedAssets generated net revenue of
roughly $720 million for the twelve months ended September 30,
2015.
MEDASSETS INC: S&P Lowers CCR to 'B', Off CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered all its ratings on
MedAssets Inc., including the corporate credit rating to 'B' from
'BB-', and removed the ratings from CreditWatch, where they were
placed with negative implications on Nov. 5, 2015. The rating
outlook is stable.
At the same time, S&P assigned a 'B' issue-level rating to the
proposed $1,230 million first-lien credit facility, which consists
of a $100 million revolving credit facility due 2021 and an $1,130
million term loan due 2022. The recovery rating is '3', indicating
S&P's expectation for meaningful (50% to 70%; at the low end of the
range) recovery for lenders in the event of a payment default.
Also, S&P assigned a 'CCC+' issue-level rating to the proposed $500
million second-lien term loan due 2023. The recovery rating is
'6', indicating S&P's expectation for negligible (0% to 10%)
recovery for lenders in the event of a payment default. Pamploma
Capital will use proceeds of the new debt to fund the acquisition
of MedAssets.
The borrowers of the facilities will initially be Magnitude
Acquisition Corp., but the surviving entity following the
acquisition will be MedAssets Inc.
S&P will withdraw the rating on the existing issue-level ratings
once these issues are repaid.
"Our downgrade on MedAssets is based on the acquisition of the
company by Pamplona Capital in an LBO, which will cause leverage to
rise materially," said Standard & Poor's credit analyst Tulip Lim.
S&P expects leverage will now remain around 7x over the next couple
of years, in contrast to its previous expectation that leverage
would remain between 3.5x to 4x. Despite high leverage, S&P
expects the company will generate moderate discretionary cash
flow.
MedAssets provides cost, revenue, and process management solutions
to the health care industry, providing services through its Spend
and Clinical Resource Management (SCM) segment, which includes a
group purchasing organization (GPO), and through its revenue cycle
management (RCM) segment. The GPO market is consolidated, and
MedAssets along with the other top four competitors together
control about 85% of the market. S&P views the industry as
relatively stable because the GPO industry is characterized by
relatively long (three to five year) contract terms and about 80%
of revenues are recurring. In contrast, MedAssets has only a 5%
market share in the highly fragmented RCM business. Overall, the
company's EBITDA margins are strong compared with other health care
service companies, supporting S&P's assessment of a "fair" business
risk profile.
The stable rating outlook reflects S&P's expectation that despite
the projected modest revenue growth starting in 2017, stable
margins, and S&P's expectation that MedAssets will generate
moderate discretionary cash flow, S&P expects that the company will
sustain leverage well above the mid-5x area over the next few
years.
If the company's interest coverage drops below 1.7x with limited
prospects for improvement, S&P could lower the rating. S&P
estimates this could result from a mid-single-digit decline in
revenue and about 250 basis points in EBITDA margin contraction.
Such a scenario could materialize if intensifying competitive
pressure lead to contract losses. Alternatively, if LIBOR rises to
300 basis points, interest coverage could drop to this level.
Lastly, if the SCM business is sold, but cash flow generation or
interest coverage is low, S&P could also lower the rating.
S&P could raise its corporate credit rating if the company's
long-term business strategy became clearer and the risk of a
material spin-off were reduced. In addition, S&P would also have
to be convinced that the company would sustain leverage around the
mid-5x area. S&P views this scenario as unlikely over the near
term given high leverage and sponsor ownership. It would likely
require debt reduction of $350 million or more.
METROPOLITAN AUTOMOTIVE: Case Summary & 20 Top Unsecured Creditors
------------------------------------------------------------------
Debtor: Metropolitan Automotive Warehouse, Inc.
A California corporation
535 Tennis Court Lane
San Bernardino, CA 92408
Case No.: 16-10096
Chapter 11 Petition Date: January 6, 2016
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Hon. Wayne E. Johnson
Debtor's Counsel: Garrick A Hollander, Esq.
WINTHROP COUCHOT PROFESSIONAL CORPORATION
660 Newport Center Dr Ste 400
Newport Beach, CA 92660
Tel: 949-720-4150
Fax: 949-720-4111
Email: ghollander@winthropcouchot.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $50 million to $100 million
The petition was signed by Ron Turner, president.
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Advanced Innovative Trade Debt $1,697,883
2830 N. Oak Grove Ave.
Springfield, MO 65803
Airtex Products LP Trade Debt $1,575,708
PO Box 60198
Saint Louis, MO
63160
Cardone Industries Trade Debt $2,386,092
PO Box 827267
Philadelphia, PA
19182
Centric Parts Industry Trade Debt $1,498,406
14528 Bonnell St.
City of Industry, CA
91746-3010
Dayco Products, LLC Trade Debt $3,955,313
PO Box 847331
Dallas, TX 75284
Denso Products & Services Trade Debt $2,122,155
PO Box 601009
Pasadena, CA 91189
East Penn Mfg. Co,. Inc. Trade Debt $2,339,017
102 Deka Road
Lyon Station, PA
19536-0147
Federal Mongul Corp. Trade Debt $7,490,862
PO Box 636438
Cincinnati, OH
45263-6438
Four Seasons Trade Debt $1,878,820
88207 Expedite Way
Chicago, IL
60695-0001
GMB North America Trade Debt $924,295
100 errod Blvd.
Dayton, NJ 08810
IAP West Inc. Trade Debt $1,512,117
20036 Via Baron
Compton, CA 90220
KYB Americas Corp. Trade Debt $1,107,254
7868 Solution Center
Chicago, IL 60677
Monroe Auto Equip. Co. Trade Debt $2,935,878
P.O. Box 98990
Chicago, IL 60693
Motorcar Parts of America Trade Debt $4,204,320
2929 California St.
Torrance, CA 90503
R&R, Inc. (Dorman Products) Trade Debt $9,676,142
PO Box 8500 S-4565
Philadelphia, PA
19178
Robert Bosch LLC Trade Debt $1,585,750
Sales
PO Box 95092
Chicago, IL
60694-5092
Schaeffler Group USA, Inc. Trade Debt $1,315,261
15290 Collections
Ctr Dr.
Chicago, IL 60693
Spectra Premium Inds. Trade Debt $1,563,502
8774 S. State Rd., #109
Knightstown, IN
46148
Standard Motor Products Trade Debt $4,633,012
93307 Network Place
Chicago, IL
60673-1933
WIX Filtration Corp. Trade Debt $1,175,294
1 Wix Way
Gastonia, NC 28053
MF GLOBAL: Former NJ Gov. Jon Corzine, CFTC Duel Over Collapse
--------------------------------------------------------------
Peg Brickley at The Wall Street Journal reported that former New
Jersey Gov. Jon Corzine and the U.S. Commodity Futures Trading
Commission are still sparring in federal court over who is to blame
for the collapse mf MF Global Holdings Ltd., more than four years
ago.
The brokerage firm collapsed in 2011 revealing a shortfall of more
than $1 billion in customer accounts. In an exchange of court
papers, lawyers for the CFTC and for Mr. Corzine argued whether Mr.
Corzine is liable as the person in control when the brokerage
tapped customer accounts to support its own proprietary
operations.
Sued by the CFTC, Mr. Corzine says he is entitled to a pretrial
ruling that the regulator has no case against him.
According to Mr. Corzine's lawyers, he never directed, authorized
or encouraged the use of funds in segregated accounts, and wasn't
even aware of the transgression until Oct. 30, 2011.
In response to Mr. Corzine's lawyers' statement, CFTC lawyers say
they have an open-and-shut case against Mr. Corzine, based in part
on his own testimony, which allegedly "demonstrates that he used
his power to shape policies and make direct determinations
regarding the use of funds in customer accounts to satisfy the
firm's liquidity needs."
Mr. Corzine's lawyers responded with a letter that argues he wasn't
in control of the funds in the account, as transfers had to be
approved by finance, treasury and operations personnel. As MF
Global's chief executive, he had a general level of control, but
not the type of grip that would entitle the CFTC to summary
judgment in the suit, Mr. Corzine's lawyers contend.
About MG 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.
MISS ANN: Court Allows Shipyard's Claim for $46K
------------------------------------------------
Judge Robert G. Mayer of the United States Bankruptcy Court for the
Eastern District of Virginia, Alexandria Division, allowed
Chesapeake Marine Railway, LLC's proof of claim in the amount of
$46,801.94 plus any appropriate environmental fee that may be
determined.
On January 4, 2011, Miss Ann Charters, LLC, obtained an estimate
from the Chesapeake Marine Railway, LLC, which is known as the
Chesapeake Boat Works, to haul out the Miss Ann, have the Coast
Guard inspect it, and return it to the water. The Miss Ann is a
classic 126-foot fan tail motor yacht built in 1926 by Pusey and
Jones. The estimate was $6,102.75.
The Miss Ann was put into the shipyard on January 30, 2011; was
hauled out and first inspected by the Coast Guard on February 4,
2011; and was re-launched on March 24, 2011. However, the debtor
ordered the work stopped before all of the Coast Guard required
repairs were completed. The shipyard filed a proof of claim for
$124,213.88 to which the debtor objected.
Judge Mayer found that the January 4, 2011, estimate was not a
fixed price contract to make all required repairs. The judge found
that there was no comprehensive agreement as to the scope of work
to be performed or the cost of the work, but that various work was
authorized from time to time. Judge Mayer, however, found that the
shipyard exceeded the scope of the authorized work, and that the
time expended and the fees charged were excessive.
The adversary proceeding is MISS ANN CHARTERS, LLC, Plaintiff, v.
CHESAPEAKE MARINE RAILWAY, LLC, Defendant, Case No. 12-10717-RGM
(Bankr. E.D. Va.), relating to In re: MISS ANN CHARTERS, LLC,
Chapter 11 Debtor.
A full-text copy of Judge Mayer's December 16, 2015 memorandum
opinion is available at http://is.gd/Z0JQlcfrom Leagle.com.
Miss Ann Charters, LLC is represented by:
Thomas J. Stanton, Esq.
STANTON LAW, P.C.
221 S Fayette St
Alexandria, VA 22314-3519
Tel: (703)299-4445
Judy A. Robbins, II, U.S. Trustee is represented by:
Jack Frankel, Esq.
OFFICE OF THE U.S. TRUSTEE
115 South Union Street, Plaza Level Suite 210
Alexandria, VA 22314
Tel: (703)557-7176
Fax: (703)557-7279
Miss Ann Charters, LLC, sought protection under Chapter 11 of the
Bankruptcy Code on Feb. 6, 2012, (Bankr. E.D. Va., Case No.
12-10717). The Debtor's counsel is Thomas J. Stanton, Esq., at
Stanton & Associates, P.C., in Alexandria, Virginia. The petition
was signed by Frank Schroff, member-manager.
MOLYCORP INC: Bids Said to Trump Miner's Own Price Tag
------------------------------------------------------
Jodi Xu Klein, writing for Bloomberg Brief - Distress & Bankruptcy,
reported that Molycorp Inc., the bankrupt rare-earths miner,
received bids for assets that exceed the company's own estimate of
its value, people with knowledge of the matter said.
According to the report, Aluminum Corp. of China Ltd., a
U.S.-traded mining company based in Beijing that's also known as
Chalco, offered to pay more than $700 million for Molycorp's
non-U.S. assets, said the people. Shenghe Resources Holdings Co.,
a rare-earths miner and processor based in Chengdu, China, and
lithium miner Galaxy Resources Ltd., based in West Perth,
Australia, also made offers that exceeded the company's appraised
value range, which tops out at $443 million, the people said, the
report related. U.S. private equity firm Carlyle Group LP also has
held talks about a possible bid, the people said, the report
further related.
The Bloomberg report, citing the people, said, the overseas bidders
are willing to offer higher prices because they expect to gain
value from the cost savings of combining two similar businesses.
Molycorp said in a Dec. 24 court filing that its assets are worth
between $391 million and $443 million based on projected future
cash flow, the report added.
About Molycorp, Inc.
Molycorp Inc. -- http://www.molycorp.com/-- is a global rare
earths and rare metals producer. Molycorp owns several prominent
rare earth processing facilities around the world. It has a
workforce of 2,530 employees at locations on three continents.
Molycorp's Mountain Pass Rare Earth Facility in San Bernardino
County, California, is home to one of the world's largest and
richest deposits of rare earths.
Molycorp has corporate offices in the United States, Canada and
China. CEO Geoffrey R. Bedford, and other senior management
members are located in Molycorp's corporate offices in Toronto,
Canada. Other senior manageemnt members are located at its U.S.
corporate headquarters in Greendwood Village, Colorado.
Molycorp reported a net loss of $623 million in 2014, a net loss
of $377 million in 2013 and a net loss of $475 million in 2012.
As of March 31, 2015, the Company had $2.49 billion in total
assets, $1.78 billion in total liabilities and $709 million in
total stockholders' equity.
Molycorp and its North American subsidiaries, together with
certain of its non-operating subsidiaries outside of North
America, filed Chapter 11 voluntary petitions in Delaware (Bankr.
D. Del. Lead Case No. 15-11357) on June 25, 2015, after reaching
agreement with a group of lenders on a financial restructuring.
The Chapter 11 cases of Molycorp and 20 affiliated debts are
pending before Judge Christopher S. Sontchi.
The agreement provides for a financial restructuring of the
Company's $1.7 billion in debt and provides up to $225 million in
gross proceeds in new financing to support operations while the
Company completes negotiations with creditors.
The Company's operations outside of North America, with the
exception of non-operating companies in Luxembourg and Barbados,
are excluded from the filings. Molycorp Rare Metals (Oklahoma),
LLC, with operations in Quapaw, Oklahoma, also is excluded from
the filings as it is not 100% owned by the Company.
Molycorp is being advised by the investment banking firm of Miller
Buckfire & Co. and is receiving financial advice from
AlixPartners, LLP. Jones Day and Young, Conaway, Stargatt &
Taylor
LLP act as legal counsel to the Company in this process. Prime
Clerk serves as claims and noticing agent.
Secured creditor Oaktree Capital Management L.P., consented to the
use of cash collateral and to extend postpetition financing.
On July 8, 2015, the U.S. trustee overseeing the Chapter 11 case
of Molycorp Inc. appointed eight creditors of the company to serve
on the official committee of unsecured creditors.
MONAKER GROUP: Has 5.4M Common Shares Outstanding as of Jan. 5
--------------------------------------------------------------
Monaker Group, Inc., closed a program pursuant to which it entered
into various exchange agreements with certain holders of the
Company's preferred stock pursuant to which the Company exchanged
an aggregate of 138,000 shares of its Series B Preferred Stock,
238,000 shares of its Series C Preferred Stock and 661,100 shares
of its Series D Preferred Stock for an aggregate of 2,078,200
shares of its common stock, par value $.00001 per share.
In addition, on Nov. 30, 2015, the Company issued 384,561 shares of
Common Stock as consideration for a merger.
As of Jan. 5, 2016, after taking into account the issuance of the
shares, the Company had 5,422,389 shares of Common Stock
outstanding.
About Monaker Group
Monaker Group, Inc., formerly known as Next 1 Interactive, Inc., is
a digital media marketing company focusing on lifestyle enrichment
for consumers in the travel, home and employment sectors. Core to
its marketing services are key elements including proprietary
video-centered technology and established partnerships that enhance
its reach. Video is quickly becoming consumer's preferred method
of searching and educating themselves prior to purchases.
Monaker's video creation technology and film libraries combine to
create lifestyle video offerings that can be shared both to its
customers and through trusted distribution systems of its major
partners. The end result is better engagement with consumers who
gain in-depth information on related products and services helping
to both inform and fulfill purchases. Unlike traditional marketing
companies that simply charge for advertising creation, Monaker
holds licenses and/or expertise in the travel, real estate and
employment sectors allowing it to capture fees at the point of
purchase while the majority of transactions are handled by
Monaker's partners. This should allow the company to capture
greater revenues while eliminating much of the typical overhead
associated with fulfillment. Monaker core holdings include
Maupintour, NameYourFee.com, RealBiz Media Group - helping it to
deliver marketing solutions to consumers at home, work and play.
Next 1 Interactive reported a net loss of $50,500 on $1.1 million
of total revenue for the year ended Feb. 28, 2015, compared with a
net loss of $18.3 million on $1.5 million of total revenues for the
year ended Feb. 28, 2014.
As of Aug. 31, 2015, the Company had $6.90 million in total assets,
$9.88 million in total liabilities and a $2.98 million total
stockholders' deficit.
D'Arelli Pruzansky, P.A., in Boca Raton, Florida, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Feb. 28, 2015, citing that the Company has incurred
an operating loss of $5.44 million and net cash used in operations
of $2.62 million for the year ended Feb. 28, 2015, and the Company
had an accumulated deficit of $86.1 million and a working capital
deficit of $12.8 million at Feb. 28, 2015. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
NATIONAL CINEMEDIA: Names Andrew England CEO and Director
---------------------------------------------------------
National CineMedia, Inc., the managing member and owner of 44% of
National CineMedia, LLC (NCM LLC), the operator of the largest
in-theatre digital media network in North America, announced that
the Company's Board of Directors has appointed Andrew J. England,
former executive vice president and chief marketing officer of
MillerCoors, LLC., as chief executive officer and director,
effective Jan. 4, 2016. Mr. England's annual salary will be
$750,000.
Concurrently, Scott N. Schneider, the Company's lead director, has
been appointed Chairman of the Board and current Chairman, CEO and
President Kurt C. Hall will retire and serve as an advisor to the
Board and CEO in a 24-month consulting role.
Mr. England is a highly accomplished executive with more than 25
years of experience in consumer-facing businesses. During his
nearly 10-year tenure at MillerCoors, a $7.5 billion net revenue
U.S. joint venture of Molson Coors Brewing Company and SAB Miller
PLC, England built new brand architecture, led a 200-person
marketing department, revamped the go-to-market strategy for
classic brands such as Coors Light and Miller Lite, broadened the
Company's reach in social and digital media, and created
sponsorship deals with major sports franchises that allowed
MillerCoors to compete effectively in a rapidly fragmenting media
marketplace. Specifically, England architected bold company
strategies that led Coors Light to #2 share brand in its category,
overtaking Budweiser. He also significantly increased innovation
resources that resulted in substantially increased higher-end share
in multiple new brands (including the very successful launch of
Redd's Apple Ale), and drove multiple strategic plans that exceeded
EBITA goals every year. In addition, England's success operating
through a three-tier system and driving growth through distributor
networks will be particularly relevant as NCM continues to expand
its theatre circuit network.
"The Board conducted an extensive and strategic search process to
identify the right person to build on NCM's past success and take
advantage of the unprecedented growth opportunities that lie ahead
for the Company -- Andy is that person," said Scott N. Schneider,
Chairman of the NCM board. "Andy is a proven leader with
significant media and marketing expertise and a deep understanding
of the changes that are taking place in the media marketplace and
the opportunities they present for NCM. Throughout his career, he
has demonstrated an impressive ability to grow brand share, set
innovative strategies and drive profitable growth. I am confident
that under his leadership, NCM will continue to improve its value
proposition to marketers and enhance its market position to drive
value for our shareholders, employees and affiliated theatres."
"I'm excited to join one of the strongest millennial networks in
the country at a time when the entire video landscape is shifting
and brands are seeking stronger and more secure video solutions,"
said England. "NCM is one of America's premier 18-49 video
networks and is highly regarded as the largest cinema digital
distribution network with a strong and expanding theatre circuit
and advertising client relationship base. I look forward to working
with NCM's exceptionally talented team and our theatre circuit
network partners to build upon the Company's strong foundation and
accelerate its success for years to come."
Schneider added, "On behalf of NCM and the Board of Directors, I
want to thank Kurt for his many years of dedication and
contributions to the Company as one of its original founders. We
wish him well in his future endeavors and look forward to
benefitting from his expertise as a consultant to the Company."
About Andrew J. England
From 2010 to 2015, England served as executive vice president and
chief marketing officer of MillerCoors, LLC. As Chairman of the
Strategy Committee and Co-Chair of the Operating Committee, he led
strategic development and managed the Company's marketing, strategy
and planning functions. He built digital and entertainment
marketing capabilities for the Company that led to multiple new
platforms through partnerships with Facebook, Twitter, Google,
Yahoo!, Yelp, Twentieth Century Fox, etc. He also delivered
critical new sponsorship deals with multiple colleges and sports
teams across the NFL, MLB, NBA, MLS and NHL.
From 2008 to 2010, England served as the first chief marketing
officer of the newly formed MillerCoors. He was responsible for
the profitable growth of the business, which he delivered through
growing the Company's share in the beer category, creating a new
marketing department and substantially over-delivering planned
marketing synergies.
Prior to joining MillerCoors, England served as chief marketing
officer of Coors Brewing Company from 2006 to 2008, a $2.7 billion
revenue division of Molson Coors Brewing Company. In this role, he
delivered successive best years ever for Coors Light, drove
double-digit volume growth for Keystone Light, and quadrupled the
size of the Blue Moon franchise.
From 2002 to 2006, he held a number of executive positions such as
the Vice President of International Marketing and Strategy, and
Vice President and General Manager of the Snacks Division at The
Hershey Company. Previously, he also held various positions with
Opentable, Inc., Nabisco Holdings Inc., and Cadbury Schweppes
P.L.C.
England served on the Board of the Association of National
Advertisers until the end of 2015 and was a Board member of the
Advertising Council Inc. from 2009 to 2015. He graduated from
Durham University with a B.S. in engineering science and earned an
MBA from the Stanford Graduate School of Business.
About Scott N. Schneider
Scott N. Schneider, former Lead Director at the Company, has been
on the Company's Board of Directors since February 2007. Schneider
has provided financial consulting and advisory services to the
communications industry since 2009. He also has over 35 years of
experience in the media, telecom and technology industries, serving
in various senior executive capacities with Century Communications
Corp. (cable television); Centennial Communications Corp. (cellular
/ wireless); Frontier Communications Corp. (wireline telephone);
and Electric Lightwave (digital bypass). In addition to having
been a member of the Board of each, Schneider also served on the
Boards of NuSkies, LLC and Bonten Media Group. Schneider also
served as Chairman of the Media Group at Diamond Castle Holdings, a
private equity firm.
About National CineMedia
National CineMedia, Inc., is the holding company of National
CineMedia, LLC. NCM LLC operates the largest digital in-theatre
network in North America, allowing NCM to distribute advertising,
Fathom entertainment programming events and corporate events under
long-term exhibitor services agreements with American Multi-Cinema
Inc., a wholly owned subsidiary of AMC Entertainment Inc.; Regal
Cinemas, Inc., a wholly owned subsidiary of Regal Entertainment
Group; and Cinemark USA, Inc., a wholly owned subsidiary of
Cinemark Holdings, Inc. NCM LLC also provides such services to
certain third-party theater circuits under "network affiliate"
agreements, which expire at various dates.
As of Oct. 1, 2015, the Company had $1 billion in total assets,
$1.23 billion in total liabilities and a $228 million total
deficit.
* * *
As reported by the TCR on March 24, 2011, Standard & Poor's
Ratings Services raised its corporate credit ratings on
Centennial, Colorado-based National CineMedia Inc. and
operating subsidiary National CineMedia LLC (which S&P analyzes on
a consolidated basis) to 'BB-' from 'B+'. "The 'BB-' corporate
credit rating reflects S&P's expectation that NCM's EBITDA growth
will enable the company to continue to de-lever over the
intermediate term despite its aggressive dividend policy," said
Standard & Poor's credit analyst Jeanne Shoesmith.
NET DATA: Case Management Conference Set for Jan. 27
----------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
will convene scheduling and case management conference on Jan. 27,
2015, at 2:00 p.m., in the Chapter 11 case of Net Data Centers,
Inc.
According to the Debtor's case docket, the Court held a scheduling
and case management conference on Oct. 15, and ordered that the
Debtor has to file a Chapter 11 plan and disclosure statement by
Dec. 21, 2015. If plan is timely filed, the Court will consider
adequacy of information in the Disclosure Statement explaining the
plan at a hearing scheduled for Jan. 27.
About Net Data Centers
Net Data Centers, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. C.D. Cal. Case No. 15-12690) on Feb. 23, 2015. Pervez
P. Delawalla, the president & CEO, signed the petition. The
Hon. Sheri Bluebond is assigned to the case. William F Govier,
Esq., at Lesnick Prince & Pappas LLP, serves as counsel to the
Debtor.
The Debtor disclosed, in its amended schedules, $9,566,908 in
assets and $13,352,373 in liabilities. In its original schedules,
the Debtor disclosed $9,110,070 in assets and $5,236,687 in
liabilities.
The U.S. trustee appointed three creditors to serve on the Official
Committee of Unsecured Creditors. The Committee is represented by
Buchalter Nemer, APC.
NEW YORK CRANE: Case Summary & 9 Largest Unsecured Creditors
------------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
New York Crane & Equipment Corp. 16-40043
58-38 47th Street
Maspeth, NY 11378
J.F. Lomma, Inc. (De.) 16-40044
48 Third Street
South Kearny, NJ 07032
J.F. Lomma, Inc. (N.J.) 16-40045
James F. Lomma 16-40048
Nature of Business: Engaged in the business of renting unmanned
cranes in New York City
Chapter 11 Petition Date: January 6, 2016
Court: United States Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Hon. Carla E. Craig
Debtors' Counsel: Kevin J Nash, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP
1501 Broadway, 22nd Floor
New York, NY 10036
Tel: (212) 301-6944
Fax: (212) 422-6836
Email: KNash@gwfglaw.com
Total Total
Assets Liabilities
---------- -----------
New York Crane & Equipment $9.8MM $22.05MM
J.F. Lomma, Inc. (De.) $9.6MM $19.20MM
The petition was signed by James F. Lomma, president.
List of New York Crane's Nine Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Favelle Favco Trade Debt $18,203
lnternal Revenue Service Tax $99,308
JLJD LLC Trade Debt $3,500,000
48 3rd St
Kearny, NJ
07032-4589
Maria Leo Tort Claims $7,565,469
Administratrix for the
estate of Donald Leo
c/o Bernadette Panzella, P.C.
114 E. 13th New Yor, NY 10003
New York State Tax $151,005
Sales Tax Section
NYS Dep't of Finance Tax $31,148
NYS Dep't of Taxation Tax $24,643
State of New Jersey Dep't Tax $1,069
of Taxation
Xhevahire Sinanaj Tort Claims $10,669,135
and Selvi Sinanovic
c/o Bernadette
Panzella, P.C
114 E 13th St
NewYork. NY 10003
List of J.F. Lomma, Inc. (De.)'s Four Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Maria Leo Tort Claims $7,963,652
Administratrix for the
estate of Donald Leo
c/o Bernadette Panzella, P.C.
114 E. 13th New York, NY
10003-5329
NJ Division of Taxation Tax $3,155
State Of Pennsylvania Tax $7,234
Xhevahire Sinanaj Tort Claims $11,230,668
and Selvi Sinanovic
c/o Bernadette
Panzella, P.C
114 E 13th St
NewYork. NY 10003
NEW YORK CRANE: Files for Chapter 11 Amid Litigations
-----------------------------------------------------
New York Crane & Equipment Corp. and three of its affiliates sought
for Chapter 11 bankruptcy protection after receiving an order
awarding wrongful death claimants verdicts totaling $96 million
damages emanating out of the 9lst Street crane collapse litigation.
The Debtors said they intend to pursue an appeal of the verdict.
According to New York Crane President James F. Lomma, the Chapter
11 case was filed to prevent a premature dismantling of the
companies until full appellate review is concluded. He added that
the Debtors intend to continue operating in the normal course of
business during this process.
New York Crane is engaged in the business of renting unmanned
cranes in New York City. On May 30, 2008, a Kodiak tower crane
owned by New York Crane, and leased to a concrete subcontractor
known as Sorbara Construction Corporation collapsed while in use at
a construction site at 333 East 9lst Street in New York City. The
crane operator employed by Sorbara, Donald Leo, and another
construction worker, Ramadan Kurtaj, died in the accident.
The accident led to a number of investigations, including a
criminal indictment by the New York District Attorney. The two
most significant lawsuits involved wrongful death actions brought
by the respective estates of Donald Leo and Ramadan Kurtaj. The
Debtors were sued under alternate tort theories including
negligence and recklessness in connection with the repair and
replacement of the weld. The Debtors contended that the collapse
was attributable to a combination of operator error and erection
crew error.
After a ten month civil trial, a jury found in favor of the
respective estates of Donald Leo and Ramadan Kurtaj, awarding $48
million in total compensatory damages and $48 million in punitive
damages on Aug. 3, 2015. The Debtors' attorneys believe there are
substantial grounds to appeal and reverse the verdict. The Debtors
intend to vigorously pursue their appellate rights and have already
prepared and filed notices of appeal which they intend to perfect
with the Appellate Division as quickly as possible.
The costs of the appeal are covered by the Debtors' excess general
liability insurers, Lexington Insurance Company and/or Zunch
Insurance Company, which are paying the legal fees for Wilson
Elser, the Debtors' trial counsel and co-proposed special appellate
counsel. Mr. Lomma also personally retained the services of
Nathaniel Z. Marmur, an appellate attorney to work on the appeal as
well.
Contemporaneously with the petition, the Debtors are moving to have
their cases jointly administered for procedural purposes.
About New York Crane
New York Crane & Equipment Corp., J.F. Lomma, Inc. (De.), J.F.
Lomma, Inc. (N.J.), and James F. Lomma filed Chapter 11 bankruptcy
petitions (Bankr. E.D.N.Y. Case Nos. 16-40043, 16-40044, 16-40045
and 16-40048, respectively. The petitions were signed by James F.
Lomma as president. New York Crane & Equipment disclosed total
assets of $9.8 million and total debts of $22.05 million. Goldberg
Weprin Finkel Goldstein LLP serves as the Debtors' counsel. Judge
Carla E. Craig presides over the cases.
NEWARK WATERSHED: Ex-Official Pled Guilty to Kickback Scheme
------------------------------------------------------------
Martin Bricketto at Bankruptcy Law360 reported that a former
high-ranking official and consultant with a defunct Newark, New
Jersey, water agency that filed for Chapter 11 protection last year
pled guilty on Jan. 5, 2016, to accepting more than $956,000 in
kickbacks in exchange for help lining up work for outside
contractors.
Donald Bernard Sr., the one-time manager of special projects with
the Newark Watershed Conservation and Development Corp., admitted
to participating in the kickback scheme with Linda Watkins
Brashear, the organization's former executive director, during a
change of plea hearing before U.S. District Judge.
About Newark Watershed
Newark, New Jersey-based Newark Watershed Conservation and
Development Corporation filed for Chapter 11 protection (Bankr.
D.N.J. Case No. 15-10019) on Jan. 2, 2015. The petition was
signed by Joseph M. Hartnett, interim executive director.
The Hon. Donald H. Steckroth presides over the case. Donald W.
Clarke, Esq., and Daniel Stolz, Esq., at Wasserman, Jurista &
Stolz, P.C., represents the Debtor in its Chapter 11 case.
The Debtor disclosed total assets of $202,489 and total
liabilities of $2.07 million.
OAK ROCK: Court Grants Bid to Dismiss Suit Against EisnerAmper
--------------------------------------------------------------
Prime Plus Acquisition Corp. and Oasis Oak Rock Investors, LLC,
filed an Amended Complaint, which contains five causes of action:
(1) negligent misrepresentation; (2) grossly negligent
misrepresentation; (3) professional malpractice; (4) gross
negligence; and (5) fraud.
Defendant EisnerAmper LLP moves to dismiss the Amended Complaint.
The Plaintiffs oppose and move, by order to show cause, to
disqualify Sidley Austin LLP from serving as EisnerAmper's
co-counsel.
In a Decision and Order dated December 10, 2015, which is available
at http://is.gd/sEIkktfrom Leagle.com, Judge Shirley Werner
Kornreich of the Supreme Court of New York County granted the
defendant's motion to dismiss and the plaintiffs' motion to
disqualify is denied as moot.
The case is PRIME PLUS ACQUISITION CORP. and OASIS OAK ROCK
INVESTORS, LLC, Plaintiffs, v. EISNERAMPER LLP, Defendant, Docket
No. 651139/2014, 2015 NY Slip Op 32336(U).
Oak Rock Financial LLC, an asset-based lender, put itself into
Chapter 11 on May 6 in U.S. Bankruptcy Court in Central Islip, New
York (Bankr. E.D.N.Y. Case No. 13-72251).
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that according to the three Israeli banks that started the
ball rolling with an involuntary Chapter 7 petition on April 29,
Bohemia, New York-based Oak Rock is a "massive fraud" that
represented having $2.5 million of additional borrowing power from
its bank lenders when in reality the loans were overdrawn by $47
million.
The report relates that the allegations of fraud were corroborated
by Oak Rock's newly appointed Chief Restructuring Officer Clifford
Zucker, from CohnReznick LLP. Mr. Zucker described the discovery
of "misconduct" by company President John Murphy, saying he
misstated collateral standing behind $90 million in secured bank
loans.
Mr. Murphy resigned. In a court filing, the banks said Mr.
Murphy, a substantial owner and "key man" for 12 years, "is now
nowhere to be found." He is the target of an FBI investigation,
according to the banks.
Oak Rock provided revolving lines of credit to dealers in consumer
goods who used advances to finance purchases by the dealers' own
customers. In addition to the bank loan, Oak Rock financed the
business by selling $62.8 million in participations in the loans
it made to customers, according to a court filing by Mr. Zucker.
Oak Rock responded to the involuntary petition by putting itself
into Chapter 11 on May 6. The banks filing the involuntary
bankruptcy petition were Israel Discount Bank, Bank Leumi USA
and Bank Hapoalim BM.
The company disclosed assets of $131.1 million and debt totaling
$99.9 million in the Chapter 11 papers.
OMEGA HEALTHCARE: Fitch Assigns 'BB+' Rating on Subordinated Debt
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BBB-' rating to the $250 million
senior unsecured term loan facility due 2022 issued by Omega
Healthcare Investors, Inc. (NYSE: OHI 'Omega'). Omega entered into
swap agreements to fix the interest rate to 3.8% based on the
current ratings. Omega intends to use the net proceeds to
refinance existing indebtedness, finance acquisitions, funding
working capital and capital expenditures or for general corporate
purposes.
KEY RATING DRIVERS
The ratings reflect the strength of the company's metrics (low
leverage, high fixed-charge coverage, stable cash flows and
exceptional liquidity due to no near-term maturities), which offset
the largest credit concern - the focus on skilled nursing and
assisted living facilities. The high percentage of government
reimbursement and the corresponding regulatory risk to operators of
these facilities may place pressure on operator earnings, and hence
their ability to make current rental payments to OHI.
KEY METRICS REMAIN APPROPRIATE FOR THE RATING
OHI has consistently maintained quarterly leverage between 3.9x and
5.1x since 2011; leverage was 4.8x at Sept. 30, 2015, pro forma for
the $575 million note redemption. Fitch views quarterly leverage
as more meaningful than trailing 12 months for OHI given the lack
of seasonality in reported earnings and timing effects of
acquisitions. Fitch expects leverage will remain between 4x - 5x
over the next 12-to-24 months. Fitch defines leverage as debt net
of readily available cash divided by recurring operating EBITDA.
Fixed-charge coverage is strong for the rating at 3.9x for the
trailing twelve months (TTM) ended Sept. 30, 2015, compared with
3.6x and 3.5x for 2014 and 2013, respectively. Fitch expects OHI's
fixed-charge coverage will continue to improve, driven by
contractual rental escalators and reduced fixed charges as the
interest savings from the refinancing is realized. Fitch defines
fixed-charge coverage as recurring operating EBITDA less
straight-line rents divided by total interest incurred.
STRONG LIQUIDITY; DEBT MATURITY STAGGERING UNDERWAY
OHI's near-term liquidity is exceptionally strong with no debt
maturities until 2017. Moreover, the $300 million term loan
maturity in 2017 can be extended to 2019 at OHI's option pushing
its window of no debt maturities out to 2019 with $900 million of
availability under its revolving credit facility. Fitch expects
OHI will consider staggering its debt maturities and extending
terms by exercising the call option on the $400 million of 2024
senior notes beginning in 2017 and issuing longer dated senior
unsecured obligations depending on the interest rate environment.
OHI's liquidity sources include its $1.25 billion revolving credit
facility due 2019, upwards of $120 million - $150 million per year
of retained free cash flow (funds available for distribution [FAD]
less dividends) assuming a 70% - 75% payout ratio, and $15 million
of cash at Sept. 30, 2015. OHI's dividends comprised 72% and 74%
of FAD in 2014 and YTD.
COMMONALITY OF TENANT REVENUE SOURCES MITIGATES OPERATOR
DIVERSIFICATION BENEFITS
Fitch views skilled nursing real estate (and by extension pure-play
REITs) as having more risk than other real estate subsectors due to
the potential for legislative or regulatory changes (including the
annual changes to reimbursement amounts by the Center for Medicare
and Medicaid Services). These unilateral actions can impact the
profitability of most tenants thus partially mitigating the
benefits of tenant and geographic diversification.
Another limiting factor on the rating (but inherent in the
strategy) is OHI's exposure to private, unrated operators which
limits the extent to which Fitch can assess their creditworthiness.
Rent coverage, as measured by earnings before interest, tax,
depreciation and amortization, rent and management fees of 1.8x at
June 30, 2015, is comparable to peers, consistent with past periods
and implies some cushion to sustain annual rental increases and/or
unforeseen changes to reimbursement rates.
FAIR CONTINGENT LIQUIDITY UNAFFECTED
The majority of OHI's assets are unencumbered. Fitch estimates
unencumbered asset coverage of unsecured debt ranges from 1.8x to
2.5x based on 2Q15 unencumbered NOI at a stressed capitalization
range of 9% - 12%.
SUBORDINATED DEBT NOTCHING
The one-notch differential between OHI's IDR and the subordinated
debt assumed as part of the CapitalSource transaction considers the
relative subordination within OHI's capital structure. The
interest is due and payable only to the extent that there is rent
being received from the tenants of the acquired properties to cover
the interest expense related to the debt, and the principal is due
only to the extent that all rent has been paid for the term of the
debt.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- SSNOI growth of 2.5% through 2016;
-- Net acquisitions of $500 million at a 9% cap rate, annually;
-- Equity issuances via the at-the-market program to partially
fund net investment activity;
-- The refinancing of higher coupon senior unsecured notes once
callable.
RATING SENSITIVITIES
Fitch does not expect management to operate the company consistent
with those metrics that could otherwise result in positive momentum
in OHI's ratings and/or Outlook:
-- Increased scale and diversification;
-- Fitch's expectation of net debt-to-recurring operating
EBITDA sustaining below 4x (leverage was 4.8x pro forma
Sept. 30, 2015);
-- Fitch's expectation of fixed-charge coverage sustaining
above 3.5x (coverage was 3.9x for TTM).
These factors may result in negative momentum in OHI's ratings
and/or Outlook:
-- Further pressure on operators through reimbursement cuts;
-- Fitch's expectation of leverage sustaining above 5.5x;
-- Fitch's expectation of fixed-charge coverage sustaining
below 2.5x.
FULL LIST OF RATING ACTIONS
Fitch rates OHI as:
Omega Healthcare Investors, Inc.
-- Long-term IDR 'BBB-';
-- Unsecured revolving credit facility 'BBB-';
-- Senior unsecured notes 'BBB-';
-- Senior unsecured term loans 'BBB-';
-- Subordinated debt 'BB+'.
ONE WORLD: Has Going Concern Doubt Amid Losses, Capital Deficit
---------------------------------------------------------------
One World Holdings, Inc., has incurred operating losses since
inception, has limited financial resources and a working capital
deficit of $17,369,061 at Sept. 30, 2015, according to Corinda
Joanne Melton, president and chief executive officer, and Dennis P.
Gauger, chief financial officer of the company in a regulatory
filing with the U.S. Securities and Exchange Commission on November
19, 2015.
"These factors raise substantial doubt about the company's ability
to continue as a going concern."
In addition, the company had an accumulated deficit of $29,453,622
and a total stockholders' deficit of $17,314,278 at September 30,
2015.
Ms. Melton and Mr. Gauger pointed out, "The working capital
deficit, accumulated deficit and total stockholders' deficit
resulted primarily from the significant derivative liability and
debt recorded at September 30, 2015. The company's ability to
continue as a going concern is dependent upon its ability to
develop additional sources of capital and, ultimately, achieve
profitable operations.
"Management's plans to address the company's continuing existence
include obtaining debt or equity funding from private or
institutional sources or obtaining loans from financial
institutions and individuals, where possible."
At Sept. 30, 2015, the company had total assets of $1,187,191,
total liabilities of $18,501,469, and a total stockholders' deficit
of $17,314,278.
The company reported net income of $6,340,466 for the three months
ended September 30, 2015, compared to a net loss of $1,567,054 for
the three months ended September 30, 2014.
A full-text copy of the company's quarterly report is available for
free at: http://tinyurl.com/zor7lgk
One World Holdings, Inc. is a Houston-based company focused on doll
design and marketing. Substantially all of the company's
operations are conducted through its subsidiary, The One World Doll
Project, Inc. (OWDPI).
OW BUNKER: Martin Energy's Bid for Judgment Premature, Judge Says
-----------------------------------------------------------------
In an Order dated December 16, 2015, which is available at
http://is.gd/s8UjOufrom Leagle.com, Judge Eldon E. Fallon of the
United States District Court for the Eastern District of Louisiana
denied Martin Energy's Motion for Judgment on the Pleadings.
In its Motion for Judgment on the Pleadings, Martin Energy notes
that O.W. Bunker and ING Bank propose competing claims to the same
putative maritime lien. Without commenting on the substance of
their claims, Martin Energy concludes its motion by arguing that
Rule 12(c) commands summary dismissal when two intervenors assert
contradictory allegations, i.e., competing claims.
ING Bank and O.W. Bunker oppose Martin Energy's motion. The
motion's opponents first contend that Martin Energy's motion is
premature, because the question of ownership rights between O.W.
Bunker and ING Bank is subsidiary to the question of whether said
maritime lien exists. Both opponents of the motion therefore argue
that this motion is not ripe, and that the Court should defer
ruling on the matter until the Court has determined whether the
putative lien held by O.W. Bunker or ING Bank is itself viable.
The motion's opponents also assert that Martin Energy presents no
grounds for judgment on the pleadings. Both ING Bank and O.W.
Bunker argue that the question of whether O.W. Bunker assigned its
lien rights to ING Bank can only be resolved by interpreting the
relevant finance documents, and that these documents are outside
the scope of a Rule 12(c) motion. Both opponents also note that
Martin Energy cites no precedent or language in the Rules of
Federal Civil Procedure which suggest that if parties file
pleadings with competing claims that otherwise satisfy the pleading
standard, all but one of those pleadings are subject to summary
dismissal.
Judge Fallon finds that Martin Energy's Motion is premature, at
best. The Court also finds that it would be ill-advised to
determine whether O.W. Bunker or ING Bank owns the putative lien
rights before the Court determines whether said rights exist.
The Court additionally finds that both O.W. Bunker and ING Bank
satisfy the standard to survive a Rule 12(c) motion for judgment on
the pleadings. Both intervenors state a claim for relief that is
plausible on its face. The Court agrees with Martin Energy that
only one of the two intervenor plaintiffs, O.W. Bunker or ING Bank,
owns the putative lien rights which premise their respective
claims. But it is uncertain from the face of the pleadings who owns
the lien rights.
The case is MARTIN ENERGY SERVICES, LLC v. M/V BOURBON PETREL, her
engines, tackle, bunkers, Etc., in rem, and BOURBON PETREL SNC AND
BOURBON OFFSHORE GREENMAR, S.A., in personam, SECTION "L" (4),
Civil Action No. 14-2986, C/w No. 15-79., 15-81.
Martin Energy Services, LLC, Plaintiff, represented by Walter P.
Maestri, Esq. -- wmaestri@deutschkerrigan.com -- Deutsch, Kerrigan
& Stiles, LLP & F. William Mahley, Esq. --
bill.mahley@strasburger.com -- Strasburger & Price, LLP.
ING Bank N.V., Intervenor Plaintiff, represented by David Boies
Sharpe, Esq. --dsharpe@lawla.com -- Lugenbuhl, Wheaton, Peck,
Rankin & Hubbard, Benjamin Warren Kadden, -- bkadden@lawla.com --
Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, Brian P. Maloney, Esq.
-- maloney@sewkis.com -- Seward & Kissel LLP, Bruce G. Paulsen,
Esq. -- paulsen@sewkis.com -- Seward & Kissel LLP & Donald L.
Cardwell, Esq. -- dcardwell@lawla.com -- Lugenbuhl, Wheaton, Peck,
Rankin & Hubbard.
Bourbon Petrel M/V, Defendant, represented by Thomas Pollard Diaz,
Esq. -- tpdiaz@liskow.com -- Liskow & Lewis, Brett D. Wise, Esq. --
bdwise@liskow.com -- Liskow & Lewis & Devin C. Reid, Esq. --
dcreid@liskow.com -- Liskow & Lewis.
Bourbon Petrel SNC, in personam, Defendant, represented by Thomas
Pollard Diaz, Liskow & Lewis, Brett D. Wise, Liskow & Lewis & Devin
C. Reid, Liskow & Lewis.
Bourbon Offshore Greenmar S.A., in personam, Defendant, represented
by Thomas Pollard Diaz, Liskow & Lewis, Brett D. Wise, Liskow &
Lewis & Devin C. Reid, Liskow & Lewis.
O.W. Bunker USA Inc., Debtor-in-Possess, represented by Aaron
Benjamin Greenbaum, Esq. -- Aaron.Greenbaum@pbgglaw.com -- Pusateri
Barrios Guillot & Greenbaum, Davis Lee Wright, Esq. --
dwright@mmwr.com -- Montgomery, McCracken, Walker & Rhoads, LLP,
Gavin H. Guillot, Esq. -- Gavin.Guillot@pbgglaw.com -- Pusateri
Barrios Guillot & Greenbaum, Salvador Joseph Pusateri, Esq. --
Salvador.Pusateri@pbgglaw.com -- Pusateri Barrios Guillot &
Greenbaum
About OW Bunker
OW Bunker AS is a global marine fuel (bunker) company founded in
Denmark. The company declared bankruptcy on Nov. 7, 2014,
following its admission that it had lost US$275 million through a
combination of fraud committed by senior executives at its
Singaporean unit.
The Danish company placed its U.S. subsidiaries -- O.W. Bunker
Holding North America Inc., O.W. Bunker North America Inc. and
O.W. Bunker USA Inc. -- in Chapter 11 bankruptcy (Bankr. D. Conn.
Case Nos. 14-51720 to 14-51722) in Bridgeport, Conn., on Nov. 13,
2014.
The U.S. cases are assigned to Judge Alan H.W. Shiff. The U.S.
Debtors have tapped Patrick M. Birney, Esq., and Michael R.
Enright, Esq., at Robinson & Cole LLP, as counsel. McCracken,
Walker & Rhoads LLP is serving as co-counsel. Alvarez & Marsal is
the financial advisor.ne fuel (bunker) company founded in
Denmark. The company declared bankruptcy on Nov. 7, 2014,
following its admission that it had lost US$275 million through a
combination of fraud committed by senior executives at its
Singaporean unit.
The Danish company placed its U.S. subsidiaries -- O.W. Bunker
Holding North America Inc., O.W. Bunker North America Inc. and
O.W. Bunker USA Inc. -- in Chapter 11 bankruptcy (Bankr. D. Conn.
Case Nos. 14-51720 to 14-51722) in Bridgeport, Conn., on Nov. 13,
2014.
The U.S. cases are assigned to Judge Alan H.W. Shiff. The U.S.
Debtors have tapped Patrick M. Birney, Esq., and Michael R.
Enright, Esq., at Robinson & Cole LLP, as counsel. McCracken,
Walker & Rhoads LLP is serving as co-counsel. Alvarez & Marsal is
the financial advisor.
PATRIOT COAL: Peabody Energy, Union Agree on Retiree Benefits
-------------------------------------------------------------
Tyrone Richardson, writing for Bloomberg Brief - Distress &
Bankruptcy, reported that Peabody Energy Corp. and the United Mine
Workers of America have reached an agreement requiring the coal
producer to pay $75 million into a health-care fund for Patriot
Coal retirees affected by the company's 2012 bankruptcy, both sides
announced Jan. 4.
According to the report, in 2013, Peabody agreed to pay about $400
million in funding for a voluntary employees' beneficiary
association to pay retiree health-care benefits for miners, but
when Patriot Coal filed for bankruptcy again in May 2015, Peabody
has argued that it wasn't obligated to fund the health-care
benefits. The multiemployer pension fund, United Mine Workers of
America 1974 Pension Plan, sued Peabody and Arch Coal Inc.,
claiming the two should be liable for at least $767
million associated with the spinoff to Patriot Coal Corp., the
report related.
The Jan. 4 agreement amends the 2013 accord for health-care
funding, the report said. Peabody has agreed to pay $7.5 million
for 10 months into the Patriot Retirees VEBA, which is subject to
bankruptcy court approval, the report added.
About Patriot Coal Corporation
Patriot Coal Corporation is a producer and marketer of coal in the
United States. Patriot and its subsidiaries control 1.4 billion
tons of proven and probable coal reserves -- including owned and
leased assets in the Central Appalachia basin (in West Virginia
and
Ohio) and Southern Illinois basin (in Kentucky and Illinois) and
their operations consist of eight active mining complexes in West
Virginia.
Patriot Coal first sought Chapter 11 protection on July 9, 2012,
and, on Dec. 18, 2013, won approval of its bankruptcy-exit plan
from the U.S. Bankruptcy Court for the Eastern District of
Missouri. The plan turned over most of the ownership of the
company to bondholders that include New York hedge fund Knighthead
Capital Management LLC. The linchpins of the plan were a global
settlement among the Debtors, the United Mine Workers of America,
and two third parties -- Peabody Energy Corporation and Arch Coal,
Inc. -- and a commitment by a consortium of creditors, led by
Knighthead, to backstop two rights offerings that funded the plan.
Patriot Coal Corporation and its subsidiaries commenced new
Chapter
11 cases (Bankr. E.D. Va. Lead Case No. 15-32450) in Richmond,
Virginia, on May 12, 2015. The cases are assigned to Judge Keith
L. Phillips.
Patriot Coal estimated more than $1 billion in assets and debt.
The Debtors tapped Kirkland & Ellis LLP as counsel; Kutak Rock
L.L.P., as co-counsel; Centerview Partners LLC as investment
bankers; Alvarez & Marsal North America, LLC, as restructuring
advisors; and Prime Clerk LLC, as claims and administrative agent.
The U.S. trustee overseeing the Chapter 11 case of Patriot Coal
Corp. appointed seven creditors of the company to serve on the
official committee of unsecured creditors. The Committee is
represented by Morrison & Foerster LLP as its counsel, and
Tavenner
& Beran, PLC, as its local counsel. Jefferies LLC
serves as its investment banker.
PETCO HOLDINGS: S&P Affirms 'B' CCR, Off CreditWatch Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on San Diego, Calif.-based pet retailer Petco
Holdings Inc. At the same time, S&P removed the rating from
CreditWatch, where it placed it with negative implications on
Nov. 23, 2015, pending S&P's review of the buyout transaction.
S&P simultaneously assigned its 'B' issue-level rating to the
company's proposed $2.5 billion senior secured first-lien
seven-year term loan. The recovery rating is '3', indicating S&P's
expectation for substantial recovery in the event of default.
S&P's recovery expectation is at the lower end of the 50% to 70%
range. Proceeds from the term loan combined with the proposed $750
million senior unsecured notes, drawdowns under the
$500 million asset-based lending (ABL) revolver and equity proceeds
from the new owners will be used to finance the acquisition of
Petco. S&P do not rate the senior unsecured notes and the ABL.
The company expects the transaction to close by first-quarter
2016.
Under the proposed acquisition, PET Acquisition Merger Sub LLC, the
acquiring entity, will merge into Petco, with Petco continuing as
the surviving entity. The borrower of the new debt is Petco Animal
Supplies Inc., a direct subsidiary of Petco.
"The affirmation reflects our assessment that credit metrics will
improve from weakened levels because of acquisition funding through
operating initiatives that contribute to earnings growth," said
credit analyst Andy Sookram. "We think profits will improve as a
result of the company's good business fundamentals that include new
store growth, expansion of its online initiatives, and continued
positive dynamics in the pet supplies industry. We believe
purchases of pet products remain relatively non-discretionary,
helping to solidify the position of specialty pet supply retailers,
such as Petco, in the industry."
The stable outlook reflects S&P's forecast that positive sales
trends will benefit profitability and enhance the company's credit
profile with leverage and debt service coverage ratios improving in
the next year from acquisition-related pro forma levels.
S&P could consider a lower rating if competitive pressures from
other players, including online retailers, hurt Petco's sales and
EBITDA leading S&P to believe the company's market position has
weakened. If this occurs, S&P could see flat to negative
same-store sales and profit margins down by about 100 bps or more
because of pricing pressures. This could result in leverage of
more than 6x and trigger a revision of its business risk profile to
"fair" or lower. Elevated leverage and weakened credit metrics
could also result from sizeable debt-financed dividends to the
owners, which would lead to a reassessment of financial policy to
"FS-6 (minus)".
It is unlikely S&P would consider a higher rating in the next year
given the substantial amount of new transaction-related debt that
hurt credit metrics. However, an upgrade would be predicated on
Petco's ability to improve its credit profile such that it sustains
a debt-to-EBITDA ratio in the low-5x area and free cash flow
exceeding $100 million annually. Such improvement to the company's
credit profile could result from better-than-expected operating
performance with EBITDA margins improving 75 bps because of
stronger same-store sales and expense leveraging. If this occurs,
S&P would revise the comparable ratings assessment to "neutral"
from "negative".
PINNACLE FOODS: Moody's Confirms 'Ba2' Sr. Secured Debt Rating
--------------------------------------------------------------
Moody's Investors Service, on Jan. 6, 2016, confirmed the Ba2
senior secured rating and affirmed all other existing ratings of
Pinnacle Foods Finance, LLC ("Pinnacle") following today's
disclosure of its proposed acquisition financing plan. These rating
actions conclude the rating review for downgrade that began on
November 24, 2015, following Pinnacle's announcement that its
parent company, Pinnacle Foods, Inc., had entered into a definitive
agreement to acquire Boulder Brands, Inc. ("Boulder", B2) for $975
million. The rating outlook is stable.
Moody's also has assigned ratings to $900 million of proposed debt
instruments that will be issued to fund a pending tender offer for
Boulder common shares that expires on January 7, 2016. The
assignments include a Ba2 rating to a $550 million senior secured
term loan and a B2 rating to $350 million of senior unsecured debt.
The transactions are expected to close in the first quarter of
2016. The assigned ratings are subject to review of the final
documentation of the proposed debt instruments.
Moody's has taken the following actions on Pinnacle Foods Finance
LLC:
Ratings confirmed:
$2.1 billion Senior Secured Bank Facility at Ba2 (LGD 3).
Ratings affirmed:
Corporate Family Rating at Ba3;
Probability of Default Rating at Ba3-PD;
$350 million Gtd Senior Unsecured Notes at B2 (LGD 6);
Speculative Grade Liquidity rating at SGL-2.
Ratings assigned:
Proposed $550 million Senior Secured Term Loan at Ba2 (LGD 3);
Proposed $350 million Senior Unsecured Debt at B2 (LGD 6).
RATING RATIONALE
Pinnacle's ratings, including its Ba3 Corporate Family Rating,
reflect the company's portfolio of mostly mature brands in frozen
and shelf-stable food categories that generate relatively stable
operating performance. The ratings also reflect the high financial
leverage that will result from the pending $975 million Boulder
acquisition, balanced against Moody's expectation that Pinnacle
will generate sufficient free cash flow to restore credit metrics
within 12 to 15 months after the closing. Moody's estimates that
Pinnacle should be able to reduce debt/EBITDA from about 5.5x at
closing to below 5.0x within 15 months. A key challenge for
Pinnacle will be to stabilize the declining sales of the Smart
Balance brand and to address various operating challenges Boulder
has faced in recent years.
Pinnacle's ratings will be supported by improvement in portfolio
and channel mix resulting from the Boulder acquisition.
Specifically, the addition of Boulder Brands will expand Pinnacle's
product offerings in better-for-you foods to approximately 55% of
sales from about 46%. It also will further expand Pinnacle's
distribution capabilities in natural, gluten-free and organic foods
channels.
Pinnacle's ratings could be lowered if weak operating performance,
M&A integration challenges or a future leveraged acquisition would
likely cause Pinnacle's debt/EBITDA to be sustained above 5.0
times. A rating upgrade would be considered if Moody's believes
that Pinnacle would likely reduce and sustain debt to EBITDA below
4.0 times.
Headquartered in Parsippany, New Jersey, Pinnacle Foods Finance LLC
— through its wholly-owned operating company, Pinnacle Foods
Group — manufactures and markets branded convenience food
products in the US and Canada. Key brands include Birds Eye and
Hungry-Man frozen dinners, Vlasic pickles, Wish Bone salad
dressings, Mrs. Paul's and Van de Kamp's frozen prepared sea food,
Log Cabin and Mrs. Butterworth's syrups and Duncan Hines cake
mixes. Net sales for the last twelve month period ended September
27, 2015 totaled approximately $2.6 billion.
Boulder, Colorado-based Boulder Brands, Inc. markets and
manufactures a wide array of healthy food products for sale mostly
in North America. The business consists of two segments: The
Natural segment (61% of fiscal 2014 sales) produces gluten-free
food products and healthy frozen foods under brand names such as
Udi's, Glutino and EVOL. The Balance segment (39% of sales)
produces healthy spreads as well as diabetic-friendly food products
under brands such as Smart Balance, Earth Balance and Level Life.
The company generated revenue of $508 million for the twelve months
ended September 30, 2015.
PINNACLE FOODS: S&P Affirms 'BB-' CCR, Outlook Remains Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on Pinnacle Foods Inc. The outlook remains stable.
S&P also affirmed the 'BB+' senior secured issue-level ratings on
the company's existing debt; the recovery rating on this debt
remains '1'. S&P raised the rating on the senior unsecured debt to
'B+' from 'B' and revised the recovery rating to '5' from '6'. The
'5' recovery rating indicates expectations for modest 10% to 30%
(at the upper end of the range) recovery in the event of a payment
default.
S&P assigned a 'BB+' issue-level rating to the proposed
$550 million senior secured term loan I maturing in 2023. The
recovery rating on this debt is '1', indicating S&P's expectations
for very high (90% to 100%) recovery in the event of a payment
default.
At close, S&P estimates the company to have over $3 billion of
lease- and pension-adjusted debt.
The proposed issue-level and recovery ratings are based on
preliminary terms and are subject to final review upon receipt of
final documentation. S&P will withdraw its ratings on Boulder
Brands Inc. following the close of this transaction and the
repayment of the company's existing debt.
"The increase in enterprise value pro forma for the acquisition of
Boulder Brands improves the recovery prospects for the unsecured
debt, leading to a one notch improvement in its recovery and
issue-level ratings," explained Standard & Poor's credit analyst
Amanda Cusumano. "The affirmation of the 'BB-' corporate credit
rating reflects our expectation that the company will reduce
leverage toward 5x within 12 months of closing its acquisition of
Boulder Brands."
Pinnacle will fund the acquisition with the newly raised
incremental senior secured term loan, unsecured notes, and about
$100 million of cash. Standard & Poor's estimates pro forma
leverage will be in the 5.0x to 5.5x range, which is in line with
S&P's expectations that the company would increase leverage to 5.5x
for an acquisition. Given Pinnacle's track record of effectively
integrating acquisitions and realizing synergies, S&P believes the
company will be able to deleverage quickly. S&P estimates
Boulder's lower-margin profile will improve through EBITDA
expansion from synergy realization including selling, general, and
administrative cost savings, supply chain improvements, SKU
rationalization, and reducing the number of Boulder Brand's
co-packer partners. S&P also believes it is the company's
financial policy to deleverage to below 5x and management has
demonstrated that it will apply free operating cash flow toward
debt reduction after an acquisition.
"The acquisition of Boulder Brands will provide further penetration
into the health and wellness categories and entry into the
gluten-free category, which have both been growing above the
packaged food industry averages," said Ms. Cusumano. "We expect
Pinnacle will manage Boulder Brands similar to its existing brand
portfolio. This includes providing greater brand and marketing
support behind its faster-growing categories in the natural foods
segment and improving the cash flow profile of the declining Smart
Balance brand. We also expect Pinnacle will continue to execute on
Boulder Brands' restructuring and realignment initiatives, which
will contribute to our EBITDA expansion expectations."
Pinnacle participates in the highly competitive packaged foods
industry. The company manufactures a diverse portfolio of
second-tier brands in 12 major categories, primarily in the U.S.
In S&P's view, the company competes in relatively smaller, slower
growth, niche categories than larger, global packaged food peers.
The company's key brands include Bird's Eye, Wish-Bone, Vlasic,
Duncan Hines, and Aunt Jemima. Pinnacle maintains leading market
positions in frozen vegetables, frozen skillet-ready meals,
shelf-stable pickles, table syrups, bagels, and pie/pastry fruit
fillings. The frozen vegetables and baking categories have seen
recent declines due to shifts in consumer preference toward fresh
produce and healthier alternatives. Pinnacle has been successful
at offsetting the category declines through product innovations,
including frozen skillet-ready meals with protein and flavor
offerings that cater to current consumer tastes. Last year the
company acquired Gardein, a meatless frozen food that is also sold
through nontraditional channels, and has contributed to recent
sales growth in the frozen category.
The stable outlook reflects S&P's expectation that Pinnacle will
effectively integrate the Boulder Brands acquisition, realize its
cost savings, and deleverage to below 5x within 12 months following
the acquisition.
PREMIER WELLNESS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Premier Wellness Centers LLC
10050 SW Innovation Way, Ste 201
Port Saint Lucie, FL 34987-2117
Case No.: 16-10191
Nature of Business: Health Care
Chapter 11 Petition Date: January 6, 2016
Court: United States Bankruptcy Court
Southern District of Florida (West Palm Beach)
Judge: Hon. Paul G. Hyman, Jr.
Debtor's Counsel: Malinda L Hayes, Esq.
MARKARIAN FRANK WHITE-BOYD & HAYES
2925 PGA Blvd., Suite #204
Palm Beach Gardens, FL 33410
Tel: 561-626-4700
Fax: 561-627-9479
Email: malinda@businessmindedlawfirm.com
Total Assets: $384,433
Total Liabilities: $2.56 million
The petition was signed by William Jensen, managing member.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/flsb16-10191.pdf
QUIKSILVER INC: Judge Robert D. Drain Appointed as Mediator
-----------------------------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court issued an
order approving the appointment of a mediator to the Quiksilver
case.
The order states, "The Debtors, the Committee, and Oaktree Capital
Management, LP are directed to mediation to attempt to resolve
disputes by and among the parties relating to the Plan,
specifically a) valuation issues in connection with the Plan, and
b) diminution in value issues in connection with the prepetition
collateral of certain secured noteholders, including Oaktree. Upon
consent of the parties, Judge Robert D. Drain of the U.S.
Bankruptcy Court for the Southern District of New York is appointed
as the mediator in the proceeding."
In a separate report, Matt Chiappardi at Bankruptcy Law360 said the
bankruptcy judge ordered Quiksilver into mediation with its
creditors on Jan. 4, 2016, a move to calm a brewing storm that
could see its Chapter 11 plan confirmation hearing explode into a
highly contested valuation trial.
In a brief order, Judge Brendan L. Shannon set a mediation which is
set to garner a controlling stake in the retailer in its
restructuring.
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.
RCS CAPITAL: Moody's Lowers Corporate Family Rating to Caa3
-----------------------------------------------------------
Moody's Investors Service downgraded RCS Capital Corporation's
corporate family rating to Caa3 from Caa1, and downgraded its $575
million senior secured first lien term loan and $25 million
revolving credit facility to Caa2 from Caa1. At the same time,
Moody's affirmed the Ca rating on RCS' $150 million senior secured
second lien term loan. The rating outlook is developing.
Moody's said its rating actions follow RCS's announcement that it
has agreed in principle with the majority of its first- and
second-lien debt holders to amend its capital structure in a
pre-arranged Chapter 11 bankruptcy filing.
RATINGS RATIONALE
Moody's said the downgrades reflect RCS' inability to obtain
significant fresh third party capital investment to support its
independent retail advisory franchise, with a resultant heightened
level of uncertainty surrounding the magnitude of creditor losses.
RCS' inability to attract a third party equity investor, after
several months of effort to attract such funding, is evidence of
diminished franchise value, said Moody's.
Moody's said that RCS did not provide details of the amounts by
which it expects its first and second lien debt to be written-down
as part of its restructuring, or the terms of a planned $150
million working capital investment from a group of existing
lenders. Moody's added that these and other aspects of the
restructuring are key to a better understanding of potential
creditor losses, and are subject to negotiation and execution,
since RCS expects to enter Chapter 11 in late January 2016, and to
complete its restructuring during the second quarter of 2016.
However, in combination with the inability to attract equity cited
above, this raises the level of uncertainty with regard to creditor
losses.
Moody's said the Ca rating on RCS' second lien term loan reflects
its high expected loss content given its secondary claim upon RCS'
assets and the comparatively large size of RCS' first lien term
loan.
Moody's said the developing outlook on RCS' ratings reflects a
higher likelihood of a rating change in the medium term, given the
fluidity of its plans and the competing priorities of its various
stakeholders.
What Could Change the Rating - Up
Moody's said RCS' ratings could be upgraded should the final terms
of its restructuring prove more favorable to its creditors than
currently appears to be the case.
What Could Change the Rating - Down
Moody's said RCS' ratings could be downgraded should it be
unsuccessful in executing its restructuring plan, or the terms of
the plan change in a manner that increases the likely size of
losses to creditors.
RCS CAPITAL: S&P Lowers ICR to 'D' on Missed Interest Payment
-------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
issuer credit rating on RCS Capital Corp. to 'D' from 'CCC'. S&P
also lowered its issue credit ratings on the company's first-lien
term loan and revolving credit facility to 'D' from 'CCC' and S&P's
rating on the company's second-lien term loan to 'D' from 'CC'.
"We lowered our ratings on RCS Capital to 'D' as the company
disclosed that it has entered into forbearance agreements with a
majority of first- and second-lien lenders and the holders of its
existing convertible notes," said Standard & Poor's credit analyst
Olga Roman. These include the forbearance until Jan. 29, 2016,
that allowed the company to forgo the payment of $19.4 million of
principal and interest that would otherwise have been due on
Dec. 31, 2015. "We believe the company will not make this payment
by the end of the one-month grace period because it has also
disclosed that it intends to file a voluntary petition for a
prearranged Chapter 11 bankruptcy in late January 2016," said
Ms. Roman. "We also believe that the default will be a general
default and the company will fail to pay all or substantially all
of its obligations as they come due."
According to the company's disclosure, the proposed balance sheet
restructuring contemplates a reduction of debt and the elimination
of preferred stock in excess of $500 million in the aggregate. The
restructuring will discharge and eliminate most of RCS Capital's
corporate overhead expenses and other liabilities and will
eliminate the common stock. Other than the new proposed equity
retention program for Cetera financial advisers and key employees,
substantially all of the equity of the company following the
restructuring will be owned by the current first- and second-lien
lenders.
As of Sept. 30, 2015, RCS Capital's secured debt included a $550
million senior secured first-lien term loan, a $150 million senior
secured second-lien term loan, and a $25 million senior secured
first-lien revolving credit facility. The company's total
outstanding long-term debt was $785 million. Additionally, it had
$157.2 million of 11% series B preferred stock, $116.1 million 7%
series C convertible preferred stock, and $37.5 million of 11%
series D preferred stock.
RECYCLE SOLUTIONS: Seeks to Sell Georgia Property for $450K
-----------------------------------------------------------
Recycle Solutions, Inc., seeks authority from the United States
Bankruptcy Court for the Western District of Tennessee, Western
Division, to sell a real property in Villa Rica, Georgia, to Rob
Wallace and Brian Peterson for $450,000.
An agreement between the Debtor and the Buyers calls for a seven
percent sales commission. There are outstanding liens against all
of the assets being sold in favor of Regions Bank totaling in
excess of the purchase price; the proceeds of sale will be paid to
the lienholder.
The Debtor is liquidating all collateral of Regions and therefore
believes that the asset is not necessary for an effective
reorganization. Upon information and belief, Regions approved the
sale on the terms set forth in the Buyers' Letter of Intent to
Purchase. The Debtor believes the consideration to be fair and
reasonable.
The Debtor is represented by:
Steven N. Douglass, Esq.
40 S. Main Street, Suite 2700
Memphis, TN 38103
Telephone: (901) 525-1455
Email: sdouglass@harrisshelton.com
About Recycle Solutions
Recycle Solutions, Inc., founded in 2002, is in the business of
recycling and reusing plastic, wood and packaging for film
rolls. The company is owned by James Downing (75%) and Mark
Huber (25%). Founded in 2001 by James Downing, Recycle Solutions
currently has operations in Tennessee and Georgia. It is
headquartered in Memphis, Tennessee, with at its 7.5-acre
recycling center.
Recycle Solutions sought Chapter 11 bankruptcy protection in
its home-town in Memphis (Bankr. W.D. Tenn. Case No. 14-31338) on
Nov. 4, 2014, disclosing assets of $11.5 million against
liabilities of $6.4 million.
The case is assigned to Judge George W. Emerson Jr. The
Debtor is represented by Steven N. Douglass, Esq., at Harris
Shelton Hanover Walsh, PLLC, in Memphis.
The U.S. Trustee for Region 8 appointed three creditors to serve
on the official committee of unsecured creditors. Adam B. Emerson
of
Bridgforth & Buntin, PLLC, represents the Committee as counsel.
* * *
Recycle Solutions has filed a reorganization plan that
contemplates
an orderly sale of the business as a going concern, whether in
part
or as a whole, following the effective date of the Plan.
RELATIVITY MEDIA: Creditors Committee Backs Chapter 11 Plan
-----------------------------------------------------------
Jonathan Randles at Bankruptcy Law360 reported that Relativity
Media LLC on Jan. 4, 2016, said that its unsecured creditors
committee has agreed to back the Debtor's proposed reorganization
plan, support that the media company said improves its chances of
emerging from Chapter 11 in early 2016.
Formal support from Relativity's official committee of unsecured
creditors committee comes weeks after U.S. Bankruptcy Judge Michael
Wiles gave the company the green light to begin soliciting votes
from stakeholders on its Chapter 11 plan.
A hearing on the reorganization plan is currently scheduled for
Feb. 1.
About Relativity
Relativity -- http://relativitymedia.com/-- is a next-generation
global media company engaged in multiple aspects of content
production and distribution, including movies, television, sports,
digital and music. More than just a collection of
entertainment-related businesses, Relativity is a content engine
with the ability to leverage each of these business units,
independently and together, to create content across all mediums,
giving consumers what they want, when they want it.
Relativity Studios, the Company's largest division, has produced,
distributed or structured financing for more than 200 motion
pictures, generating more than $17 billion in worldwide box-office
revenue and earning 60 Oscar nominations. Relativity's films
include Oculus, Safe Haven, Act of Valor, Immortals, Limitless,
and
The Fighter.
Relativity Media LLC and its affiliates, including Relativity
Fashion, LLC, sought protection under Chapter 11 of the Bankruptcy
Code on July 30, 2015 (Bankr. S.D.N.Y., Case No. 15-11989). The
case is assigned to Judge Michael E. Wiles.
The Debtors are represented by Craig A. Wolfe, Esq., Malani J.
Cademartori, Esq., and Blanka K. Wolfe, Esq., at Sheppard Mullin
Richter & Hampton LLP, in New York; and Richard L. Wynne, Esq.,
Bennett L. Spiegel, Esq., and Lori Sinanyan, Esq., at Jones Day,
in New York.
Brian Kushner of FTI Consulting, Inc., serves as chief
restructuring officer and crisis and turnaround manager. Luke
Schaeffer of FTI Consulting, Inc., serves as deputy CRO.
Blackstone Advisory Partners L.P. serves as the Debtors'
investment banker. The team is led by Timothy Coleman, Senior
Managing Director, CJ Brown, Senior Managing Director, Paul
Sheaffer, Vice President, and Joseph Goldschmid, Associate.
The Debtors' noticing and claims agent is Donlin, Recano &
Company, Inc.
* * *
An investor group composed of Anchorage Capital Group, L.L.C.,
Falcon Investment Advisors, LLC and Luxor Capital Group, LP on
Oct. 21, 2015, completed its purchase of the assets of Relativity
Television.
After selling their TV business, the Debtors and CEO Ryan C.
Kavanaughfiled a proposed plan of reorganization that will allow
the Debtors to reorganize their non-TV business units with a
substantially de-levered balance sheet utilizing new equity
investments and new financing. Jim Cantelupe, of Summit Trail
Advisors, LLC, has committed to work with the Debtors to raise up
to $100 million of new equity to fund the Plan.
RESIDENTIAL CAPITAL: Objection to Claim No. 3503 Sustained
----------------------------------------------------------
Judge Martin Glenn of the United States Bankruptcy Court for the
Southern District of New York sustained the ResCap Borrower Claims
Trust's objection to Claim No. 3503 filed by Billy Ray Carroll.
Carroll timely filed Claim Number 4121 against debtors Residential
Capital, LLC, and Homecomings Financial, LLC, asserting a general
secured claim in the amount of $80,000.00. The claim was later
reclassified as a general unsecured claim against Homecomings.
Carroll asserted that Homecomings failed to provide proper notice
of a foreclosure sale on a property then owned by Carroll, and that
debtor GMAC Mortgage, LLC failed to apply certain payments made by
Carroll against his account. The Trust objected to the claim,
arguing that Carroll received adequate notice of the sale under
Alabama law, and that GMACM's books and records indicated that
Carroll's payments were correctly applied to his account.
Judge Glenn held that the Trust adequately shifted the burden by
rebutting the prima facie validity of the claim and that Carroll
then failed to meet his burden to establish the viability of his
claims. The judge found that the Trust provided sufficient notice
before the sale of Carroll's property through publication of the
notice of the foreclosure sale in compliance with the requirements
of Alabama law. The Trust also produced evidence that it provided
Carroll with direct notice through notice letters. Judge Glenn
also found that the Trust has provided evidence indicating that
Carroll's payments were in fact properly reconciled with his
account.
As such, Judge Glenn sustained the objection and the claim was
disallowed and expunged.
The case is In re: RESIDENTIAL CAPITAL, LLC, et al., Chapter 11,
Debtors, Case No. 12-12020 (MG) (Jointly Administered) (Bankr.
S.D.N.Y.).
A full-text copy of Judge Glenn's December 16, 2015 memorandum
opinion and order is available at http://is.gd/2mlGG1from
Leagle.com.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally
Financial nor Ally Bank is included in the bankruptcy filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.7 billion in assets and $15.3 billion in
liabilities at March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the
public relations consultants to the Company in the Chapter 11
case. Morrison Cohen LLP is advising ResCap's independent
directors. Kurtzman Carson Consultants LLP is the claims and
notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
ResCap sold most of the businesses for a combined $4.5 billion.
The Bankruptcy Court in November 2012 approved ResCap's sale of
its mortgage servicing and origination platform assets to Ocwen
Loan Servicing, LLC and Walter Investment Management Corporation
for $3 billion; and its portfolio of roughly 50,000 whole loans
to Berkshire Hathaway for $1.5 billion.
Judge Martin Glenn in December 2013 confirmed the Joint Chapter 11
Plan co-proposed by Residential Capital and the Official Committee
of Unsecured Creditors.
SANITARY AND IMPROVEMENT: Chapter 9 Voluntary Case Summary
----------------------------------------------------------
Debtor: Sanitary and Improvement District No. 10
Washington County, Nebraska
10250 Regency Circle, Suite 300
Omaha, NE 68114
Bankruptcy Case No.: 16-80010
Chapter 9 Petition Date: January 6, 2016
Court: United States Bankruptcy Court
District of Nebraska (Omaha Office)
Debtor's Counsel: Mark James LaPuzza, Esq.
PANSING HOGAN ERNST & BACHMAN, LLP
10250 Regency Circle, Suite 300
Omaha, NE 68114
Tel: (402) 397-5500
Fax: (402) 397-4853
Email: mjlbr@pheblaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Donna M. Nissen, clerk.
SEARS HOLDINGS: ESL Partners Reports 57.2% Stake as of Jan. 4
-------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, the following reporting persons disclosed that they may
be deemed to beneficially own shares of Sears Holdings Corporation
Common Stock as of Jan. 4, 2016:
Number of Percentage
Shares of
Beneficially Outstanding
Reporting Person Owned Shares
---------------- ------------ -----------
ESL Partners, L.P. 63,813,300 57.2%
SPE I Partners, LP 150,124 0.1%
SPE Master I, LP 193,341 0.2%
RBS Partners, L.P. 64,156,765 57.5%
ESL Institutional Partners, L.P. 0 0%
RBS Investment Management, L.L.C. 0 0%
CRK Partners, LLC 0 0%
ESL Investments, Inc. 64,156,765 57.5%
Edward S. Lampert 64,156,765 54.5%
A copy of the regulatory filing is available for free at:
http://is.gd/RPO0zv
About Sears
Sears Holdings Corporation (NASDAQ: SHLD) --
http://www.searsholdings.com/-- is an integrated retailer focused
on seamlessly connecting the digital and physical shopping
experiences to serve members. Sears Holdings is home to Shop Your
Waytm, a social shopping platform offering members rewards for
shopping at Sears and Kmart as well as with other retail partners
across categories important to them.
The Company operates through its subsidiaries, including Sears,
Roebuck and Co. and Kmart Corporation, with more than 2,000 full-
line and specialty retail stores in the United States and Canada.
Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary
Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on
Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6,
2003, pursuant to the terms of an Amended Joint Plan of
Reorganization. Skadden, Arps, Slate, Meagher & Flom, LLP,
represented Kmart in its restructuring efforts. Its balance sheet
showed $16,287,000,000 in assets and $10,348,000,000 in debts when
it sought chapter 11 protection.
Kmart bought Sears, Roebuck & Co., for $11 billion to create the
third-largest U.S. retailer, behind Wal-Mart and Target, and
generate $55 billion in annual revenues. Kmart completed its
merger with Sears on March 24, 2005.
For the year ended Jan. 31, 2015, the Company reported a net loss
attributable to Holdings' shareholders of $1.68 billion compared
to a net loss attributable to Holdings' shareholders of $1.36
billion for the year ended Feb. 1, 2014.
As of Oct. 1, 2015, Sears Holdings had $12.76 billion in total
assets, $14.06 billion in total liabilities and a $1.29 billion
total deficit.
* * *
Moody's Investors Service in January 2014 downgraded Sears
Holdings Corporate Family Rating to 'Caa1' from 'B3'. The rating
outlook is stable.
The downgrade reflects the accelerating negative performance of
Sears' domestic business with comparable sales falling 7.4% for
the quarter to date ending January 6th, 2014 compared to the prior
year. The company now expects domestic Adjusted EBITDA to decline
to a range of ($80 million) to $20 million for the fourth fiscal
quarter, compared with $365 million in the year prior period. For
the full year, Sears expects domestic Adjusted EBITDA loss between
$(308) million and $(408) million, as compared to $557 million
last year. Moody's expects full year cash burn (after capital
spending, interest and pension funding) to be around $1.2 billion
in 2013 and we expect Sears' cash burn to remain well above $1
billion in 2014. "Operating performance for fiscal 2013 is
meaningfully weaker than our previous expectations, and we expect
negative trends in performance to persist into 2014" said Moody's
Vice President Scott Tuhy. He added "While Sears noted improved
engagement metrics for its "Shop Your Way" Rewards program,
Moody's remains uncertain when these improved engagement metrics
will lead to stabilization of operating performance."
As reported by the TCR on March 26, 2014, Standard & Poor's
Ratings Services affirmed its ratings on the Hoffman Estate, Ill.-
based Sears Holdings Corp., including the 'CCC+' corporate credit
rating.
Fitch Ratings had downgraded its long-term Issuer Default Ratings
(IDR) on Sears Holdings Corporation (Holdings) and its various
subsidiary entities (collectively, Sears) to 'CC' from 'CCC',
according to a TCR report dated Sept. 12, 2014.
SOUNDVIEW ELITE: Gets Approval to Settle Patterson Claims
---------------------------------------------------------
A bankruptcy judge approved a settlement of claims between
Soundview Elite Ltd.'s bankruptcy trustee and Patterson Belknap
Webb & Tyler LLP.
The order, issued by U.S. Bankruptcy Judge Robert Gerber, approved
the deal, which requires Soundview's special counsel to turn over
$100,000 of the retainer it received from the company to the
bankruptcy trustee.
Patterson Belknap was authorized to apply the balance of the
retainer in the amount of $33,228 in full satisfaction of its
requested fees and expenses.
Soundview did not receive objections to the settlement agreement,
court filings show.
About SoundView Elite Ltd.
Six mutual funds originally created by Citco Group of Cos.,
including Soundview Elite Ltd., filed petitions for Chapter 11
protection on Sept. 24, 2013, in Manhattan to avoid undergoing
bankruptcy liquidation in the Cayman Islands, where they are
incorporated.
The funds are Soundview Elite (Bankr. S.D.N.Y. Case No. 13-13098)
Soundview Premium, Ltd. (Case No. 13-13099); Soundview Star Ltd.
(Case No. 13-13101); Elite Designated (Case No. 13-13102); Premium
Designated (Case No. 13-13103); and Star Designated (Case No.
13-13104). The petitions were signed by Floyd Saunders as
corporate secretary. By order dated Oct. 16, 2013, the Court
directed that the Debtors' bankruptcy cases be procedurally
consolidated and jointly administered.
SoundView Elite Ltd. and two similarly named funds were the target
of a winding-up petitions in the Cayman Islands filed in August by
Citco, which had sold its interest in the funds' manager years
before. An investor, who was removed from the funds' board in
June, filed a different winding-up petition in August, aimed at
three funds created later to hold illiquid assets.
The Debtor disclosed $20,703,641 in assets and $16,402,671 in
liabilities as of the Chapter 11 filing. The funds said in a court
filing their total cash assets of about $20 million are held in the
U.S., where the funds are managed. Court papers list the funds'
total assets as $52.8 million, against debt totaling $28 million.
Judge Robert E. Gerber presides over the U.S. cases.
Warren J. Martin, Jr., Esq., Mark J. Politan, Esq., Terri Jane
Freedman, Esq., and Rachel A. Segall, Esq., at Porzio, Bromberg &
Newman, PC, serve as the Debtors' counsel. CohnReznick LLP serves
as financial advisor.
Peter Anderson and Matthew Wright, as Joint Official Liquidators of
the Debtors, are represented in the U.S. proceedings by John A.
Pintarelli, Esq., James J. Beha, II, Esq., William H. Hildbold,
Esq., at Morrison & Foerster LLP.
The U.S. Trustee solicited for the formation of an official
committee of unsecured creditors, but to date one has not been
formed.
In April 2014, District Judge J. Paul Oetken affirmed the
Bankruptcy Court order appointing a Chapter 11 trustee for
SoundView Elite Ltd. and its affiliated debtors, and tossed pro se
appeals filed by Alphonse Fletcher, Jr. and George E. Ladner, the
sole directors of the mutual funds.
SPECTRASCIENCE INC: $3.6M in Bonds Remain in Default
----------------------------------------------------
SpectraScience Inc. disclosed in its most recent financial report
filed with the U.S. Securities and Exchange Commission that as of
September 30, 2015, convertible debentures with a face value of
$3,660,275 held by 58 individual investors are in default. None of
these investors have served notice of default on the Convertible
Debentures held by them, the Company said.
SpectraScience filed the financial report -- its quarterly report
on Form 10-Q for the nine months ended September 30, 2015 -- in
November.
The Company disclosed $1,992,914 in total assets and $8,568,819 in
liabilities, all current, as of September 30. The Company said
total stockholders' deficit was $6,575,905.
The Company posted a net loss of $209,159 during the third quarter
ended September 30, 2015; compared to net income of $958,488 during
the same period in 2014.
As of September 30, 2015, it had a working capital deficit of
$7,923,135 and cash of $55,061, compared to a working capital
deficit of $5,732,125 and cash of $223,529 as of December 31, 2014.
In December 2011, the Company entered into an Engagement Agreement
with Laidlaw & Company (UK) Ltd., which Engagement Agreement was
amended in July 2012. Under the Engagement Agreement, Laidlaw
agreed to assist the Company in raising up to $20.0 million in
capital over a two year period from the date of the Engagement
Agreement.
Subsequent to March 31, 2013, the Company has engaged other agents
to assist the Company with raising capital and has commenced
raising capital on its own. During the nine months ended September
30, 2015, the Company raised $1,380,750, net of transaction costs
of $139,500, under these agreements. However, if the Company does
not receive additional funds in a timely manner, the Company could
be in jeopardy as a going concern.
"The Company may not be able to find alternative capital or raise
capital or debt on terms that are acceptable. Management believes
that if the events defined in the Engagement Agreements occur as
expected, or if the Company is otherwise able to raise a similar
level of funds, such proceeds will be sufficient to allow the
Company to sustain operations until it attains profitability and
positive cash flows from operations. However, the Company may incur
unknown expenses or may not be able to meet its revenue
expectations requiring it to seek additional capital. In such
event, the Company may not be able to find capital or raise capital
or debt on terms that are acceptable," the Company said.
The holders of Convertible Debentures control the conversion of the
Convertible Debentures and certain of the Convertible Debentures
were not converted at their maturity constituting a potential
default on the matured, but unconverted, Convertible Debentures. In
the event of such default, principal, accrued interest and other
related costs are immediately due and payable in cash.
About SpectraScience
SpectraScience, Inc. (OTC QB: SCIE) is a San Diego based medical
device company that designs, develops, manufactures and markets
spectrophotometry systems capable of determining whether tissue is
normal, pre-cancerous or cancerous without physically removing
tissue from the body. The WavSTAT(TM) Optical Biopsy System uses
light to optically scan tissue and provide the physician with an
immediate analysis.
HJ Associates & Consultants LLP expressed substantial doubt about
the Company's ability to continue as a going concern, citing that
the Company has suffered recurring losses from operations and its
ability to continue as a going concern is dependent on the
Company's ability to attract investors and generate cash through
issuance of equity instruments and convertible debt.
HJ Associates resigned as the independent registered public
accounting firm for SpectraScience on January 4, 2016. The Company
engaged Haynie & Company, Salt Lake City, Utah, as its new
independent registered public accounting firm.
The Company reported a net loss of $4.49 million on $nil in revenue
for the year ended Dec. 31, 2014, compared to a net loss of $2.75
million on $240,000 of revenues in the same period in 2013.
The Company's balance sheet at Dec. 31, 2014, showed $2.21 million
in total assets, $6.59 million in total liabilities, and a
stockholders' deficit of $4.38 million.
SPECTRASCIENCE INC: Bye HJ Associates, Hello Haynie & Co.
---------------------------------------------------------
HJ Associates & Consultants, LLP, on January 4, 2016, resigned as
the independent registered public accounting firm for
SpectraScience, Inc., the Company disclosed in a Form 8-K filing
with the U.S. Securities and Exchange Commission.
On the same day, the Company engaged Haynie & Company, Salt Lake
City, Utah, as its new independent registered public accounting
firm. The change of the Company's independent registered public
accounting firm from HJ to Haynie & Company was approved
unanimously by the Company's audit committee, as appropriate.
The reports of HJ on the Company's consolidated financial
statements for the two most recent fiscal years did not contain an
adverse or disclaimer of opinion and were not qualified or modified
as to uncertainty, audit scope, or accounting principles.
During the two most recent fiscal years and through the Resignation
Date, there were (i) no disagreements between the Company and HJ on
any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures, which
disagreement, if not resolved to the satisfaction of HJ, would have
caused HJ to make reference thereto in their reports on the
consolidated financial statements for such years, and (ii) no
"reportable events" as that term is defined in Item 304(a)(1)(v) of
Regulation S-K.
During the Company's two most recent fiscal years and in the
subsequent interim period through the Resignation Date, the Company
has not consulted with Haynie & Company regarding either (i) the
application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that
might be rendered on the Company's consolidated financial
statements, and neither a written report nor oral advice was
provided to the Company that Haynie & Company concluded was an
important factor considered by the Company in reaching a decision
as to the accounting, auditing or financial reporting issue; or
(ii) any matter that was either the subject of a disagreement (as
defined in Item 304(a)(1)(iv) of Regulation S-K and the related
instructions) or a reportable event (as described in Item
304(a)(1)(v) of Regulation S-K).
About SpectraScience
SpectraScience, Inc. (OTC QB: SCIE) is a San Diego based medical
device company that designs, develops, manufactures and markets
spectrophotometry systems capable of determining whether tissue is
normal, pre-cancerous or cancerous without physically removing
tissue from the body. The WavSTAT(TM) Optical Biopsy System uses
light to optically scan tissue and provide the physician with an
immediate analysis.
HJ Associates & Consultants LLP expressed substantial doubt about
the Company's ability to continue as a going concern, citing that
the Company has suffered recurring losses from operations and its
ability to continue as a going concern is dependent on the
Company's ability to attract investors and generate cash through
issuance of equity instruments and convertible debt.
The Company reported a net loss of $4.49 million on $nil in
revenue
for the year ended Dec. 31, 2014, compared to a net loss of $2.75
million on $240,000 of revenues in the same period in 2013.
The Company's balance sheet at Dec. 31, 2014, showed $2.21 million
in total assets, $6.59 million in total liabilities, and a
stockholders' deficit of $4.38 million.
SPRINGS INDUSTRIES: Moody's Rates $90MM Sr. Secured Term Loan 'B2'
------------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to a $90 million
senior secured term loan issued by Springs Industries, Inc. Net
proceeds will be used to finance the acquisition of Sunsetter
Products Limited Partnership, a manufacturer and distributor of
retractable residential outdoor awnings and outdoor solar shades.
"The acquisition is credit positive because it enhances the
company's product offering and growth potential," said Kevin
Cassidy, Senior Credit Officer at Moody's Investors Service.
Despite the operational benefits, the acquisition does not affect
Springs' B2 Corporate Family Rating (CFR) or its stable rating
outlook given the company's modest scale with pro forma revenues of
approximately $900 million, and Moody's expectation for
debt-to-EBITDA leverage to remain between 5 times and 5.5 times in
2016. The transaction is consistent with Springs' strategy of
growing through strategic acquisitions as it has done recently with
its acquisitions of Mechoshade in April 2015, Carra in October 2014
and Horizon Window Fashions in December 2013.
Rating assigned:
$90 million term loan due June 2021 at B2 (LGD 4)
RATING RATIONALE
Springs' B2 Corporate Family Rating (CFR) reflects its good market
position built on its operating experience, a broad product
portfolio within the window covering industry, and long-standing
customer relationships. These strengths are tempered by its modest
scale, lack of product diversity beyond window coverings, high
customer concentration, high leverage in a cyclical industry, and
event risk related to private equity ownership. Moody's projects
that Springs will generate mid to high single digit annual EBITDA
growth over the next two years as it benefits from a recovery in
the housing market, new business such as Costco's Shop-at-Home
program, and the capacity addition and more normalized operations
at its new facility in Reynosa, Mexico. Springs debt-to-EBITDA
leverage (about 5.5 times pro forma for the Sunsetter and
Mechoshade Systems acquisition) will decline to around 5 times by
the end of 2016 absent additional acquisitions or debt-funded
shareholder distributions.
The stable rating outlook reflects Moody's view that Springs will
continue to benefit from a recovery in the housing market to grow
revenue and EBITDA over the next 12 months and that the company
will maintain an adequate liquidity position to fund its growth
initiatives. Moody's projects that debt-to-EBITDA leverage will
decline to about 5 times by the end of 2016.
An upgrade is unlikely at this time but could be considered if
Springs increases its scale and product diversity and demonstrates
a commitment to lower leverage. Specifically, Springs would need to
maintain debt-to-EBITDA leverage close to 4.0 times and sustain
free cash flow to debt above 8% before Moody's would consider an
upgrade. Springs would also need to maintain a good liquidity
position given its cyclical exposure.
Pressure on Springs' earnings through market share or pricing
declines, or due to customer losses could result in a downgrade.
The ratings could also be downgraded if liquidity deteriorates or
operating weakness, acquisitions, shareholder distributions or
other actions sustain debt-to-EBITDA leverage above 6.0 times.
Springs Industries, Inc., headquartered in Middleton, Wisconsin,
designs and manufactures window coverings under the Bali, Mecho,
Horizons and Graber brands, as well as for various retailers'
private label offerings. Product lines include hard and soft window
coverings, roller shades, drapery, drapery hardware, shutters,
solar shades, and window accessory products. Springs was acquired
by Golden Gate Capital (Golden Gate) in June 2013. The company had
pro forma net revenue of approximately $900 million for the twelve
months ended October 3, 2015.
STAR AUTO PARTS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Star Auto Parts, Inc.
A California corporation
535 Tennis Court Lane
San Bernardino, CA 92402
Case No.: 16-10105
Chapter 11 Petition Date: January 6, 2016
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Hon. Wayne E. Johnson
Debtor's Counsel: Garrick A Hollander, Esq.
WINTHROP COUCHOT PROFESSIONAL CORPORATION
660 Newport Center Dr Ste 400
Newport Beach, CA 92660
Tel: 949-720-4150
Fax: 949-720-4111
Email: ghollander@winthropcouchot.com
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The petition was signed by Ron Turner, president.
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
800 Radiator Riverside Trade Debt $698
Bendpak Trade Debt $7,429
City of Banning Trade Debt $1,111
Colton Truck Supply Trade Debt $735
Comp Trade Debt $1,230
Don Gross Warehouse Trade Debt $2,271
Extra Trax, LLC Trade Debt $10,560
Factory Motor Parts Co. Trade Debt $2,286
Genera Corporation Trade Debt $5,208
Highland Auto Body Trade Debt $1,000
IAP West Trade Debt $187,788
Imperial Irrigation Dist. Trade Debt $1,006
Integrated Supply Network Trade Debt $1,520
InterAmerican Motor Corp. Trade Debt $19,908
Medco/Cal Tool Trade Debt $44,966
Prudental Overall Trade Debt $2,717
Quality Power Trade Debt $1,402
SSF Trade Debt $4,051
Team Allied Distribution Trade Debt $956
Warren Distributing Inc. Trade Debt $729
STERLING MIDCO: Moody's Affirms 'B2' CFR, Outlook Revised to Neg.
-----------------------------------------------------------------
Moody's Investors Service revised Sterling Midco Holdings, Inc.'s
rating outlook to negative from stable following the company's
announcement that it will undertake a leveraged acquisition of
TalentWise, Inc. Concurrently, Moody's affirmed the company's B2
Corporate Family Rating ("CFR"), B2-PD Probability of Default
Rating, B1 first lien credit facilities rating and Caa1 second lien
term loan rating.
On January 6, 2016, Sterling announced plans to acquire TalentWise,
a leading provider of comprehensive hiring process management
solutions. Sterling will finance this acquisition through use of
$120 million incremental first lien and $20 million second lien
term loans, and equity contributions from new and existing
shareholders.
The acquisition of TalentWise will result in a sizeable increase in
Sterling's debt. As a result, pro forma leverage will approach 8
times debt to EBITDA (Moody's adjusted, excluding synergies and
costs savings), which positions Sterling weakly in the B2 rating.
However, the B2 rating has been affirmed in consideration of
Sterling's profile for strong and stable operating margins and free
cash flow generation, which supports Moody's estimates that the
company will be able to reduce leverage substantially over the near
term to levels commensurate for the B2 rating. Nonetheless, Moody's
believes that the acquisition of TalentWise, which is the largest
acquisition that Sterling has taken since 2012 and occurring less
than one year since its LBO by Goldman, through its Broad Street
Principal Investment subsidiary, and affiliated investors,
indicates the use of aggressive financial policy to support growth,
which drives the negative rating outlook. Moreover, according to
Moody's analyst Oleg Markin, "the purchase of TalentWise will pose
significant integration challenges based on the size of the
acquired company, its short track record as a stand-alone entity,
and the significant amount of costs savings that will be required
in order to reduce leverage," which is also a factor in the
negative outlook.
Moody's took the following rating actions on Sterling Midco
Holdings, Inc.:
-- Corporate Family Rating, affirmed at B2
-- Probability of Default Rating, affirmed at B2-PD
-- $60 million senior secured revolving credit facility due 2020,
affirmed at B1 (LGD3)
-- $450 million (including $120 million add-on) first lien senior
secured term loan due 2022, affirmed at B1 (LGD3)
-- $140 million (including $20 million add-on) second lien senior
secured term loan due 2023, affirmed at Caa1 (LGD5)
-- Rating outlook changed to negative from stable
RATINGS RATIONALE
The B2 CFR is constrained by Sterling's high leverage, its modest
scale in a fragmented and competitive industry, narrow product
focus, and integration risks associated with the company's
acquisition growth strategy. The rating is supported by Sterling's
solid position in the background screening market, history of
strong earnings growth and positive free cash flow generation as
well as a good track record of successful integration of
acquisitions, which supports Moody's view that the company will be
able to reduce Moody's adjusted leverage to 6.0 times within the
next 12 to 18 months. The rating also incorporates Moody's
expectation that the company will maintain a good liquidity profile
over the next 12 months.
As the result of the TalentWise acquisition, Sterling's total debt
(including Moody's adjustments) will increase by approximately 29%,
to $626 million. Debt to EBITDA, which was approximately 5.7 times
as of September 30, 2015, will increase to nearly 8.0 times pro
forma for the transaction (including Moody's standard adjustments)
excluding synergies and future costs savings. Although leverage
will be high for the rating on close of the acquisition, Moody's
estimates that the company will be able to improve on this measure
over the next few years, with debt to EBITDA expected to approach 6
times by the end of 2016 on strong operating margins (EBITA to
revenue was over 20% as of September 30, 2015) and positive free
cash flow. However, these leverage projections assume that the
company achieves the majority of its planned synergies and cost
savings from the acquisition of TalentWise through 2016, while
continuing to experience substantial organic revenue growth in a
stable operating environment. Moreover, Moody's expects that
Sterling will continue to undertake periodic acquisitions to
augment growth, which may be funded with incremental debt. As such,
the rating could face pressure if the company encounters difficulty
in integrating TalentWise, or if Sterling accelerates the pace or
size of future acquisitions.
The negative outlook reflects concerns that the company may not
achieve planned cost savings and synergies benefits, which will be
the principal driver of anticipated deleveraging and free cash flow
growth over the next 12-18 months. The negative outlook also
considers the risk that management will continue to pursue
aggressive financial policies, including debt-funded acquisitions
or shareholder friendly activities that will delay deleveraging.
The outlook could revert back to stable if revenue growth and
realization of cost savings result in debt to EBITDA sustained
below 6.0 times and the company maintains a good liquidity
profile.
The ratings could be downgraded if profitability deteriorates from
failure to smoothly integrate TalentWise's operations, particularly
if the company cannot realize planned cost savings and synergy
benefits in a timely fashion, or if revenue growth falters. The
ratings could also be downgraded if Sterling's liquidity
deteriorates or if Moody's believes that the company is unlikely to
reduce debt to EBITDA below 6.0 times (including Moody's
adjustments).
A ratings upgrade is not likely due to high leverage and near-term
integration risks. However, over the longer term, the ratings could
be upgraded if the company achieves significant revenue and
earnings growth, while maintaining a good liquidity profile.
Demonstration of a conservative shareholder return policy as well
as a modest pace of acquisitions over such a period would be
important considerations for an upgrade. The ability to sustain
credit metrics such as debt to EBITDA of less than 3.5 times and
EBITA to interest expense in excess of 4.0 times (including Moody's
adjustments) could support higher ratings.
Sterling, through its operating subsidiary Sterling Infosystems,
Inc., provides pre- and post-employment verification services
including criminal background checks, credential verification and
employee drug testing. Adjusting for recent acquisitions, the
company generated approximately $411 million of operating revenues
during the twelve month ended September 30, 2015.
STERLING MIDCO: S&P Affirms 'B' Rating on $329MM 1st Lien Loan
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' issue-level
rating on Sterling Midco Holdings Inc.'s existing first-lien term
loan of $329 million due 2022 following its proposed $120 million
add-on. The recovery rating on the first lien is '3' (at the low
end of the 50% to 70% range), indicating that lenders could expect
meaningful recovery in the event of payment default. In addition,
S&P affirmed its 'CCC+' issue-level rating on the existing
second-lien term loan of $120 million due in 2023 following its
proposed $20 million add-on. The recovery rating on the second
lien is '6', indicating that lenders could expect negligible
recovery (0% to 10%) in the event of payment default. The company
will use the additional debt to fund the acquisition of
TalentWise.
All of S&P's existing ratings on the company, including the 'B'
corporate credit rating, remain unchanged. The outlook is stable.
Pro forma for the proposed financing, total debt outstanding is
approximately $601 million.
The rating on Sterling reflects its strengthening market position
in the highly fragmented domestic employment and background
screening industry. The company has grown the business recently
with organic growth and strategic acquisitions. S&P expects the
company's margins to improve with the current acquisition. S&P
views the acquisition of TalentWise to be a credit positive from
the business operations as the combination of the companies gives
Sterling market leading position in some of their key markets, as
well as margin improvements.
RATINGS LIST
Sterling Midco Holdings Inc.
Corporate Credit Rating B/Stable/--
$449M first lien term loan due 2022 B
Recovery rating 3L
$140M second lien term loan due 2023 CCC+
Recovery rating 6
SWIFT ENERGY: Has Court's Okay to Obtain $15 Million Loan
---------------------------------------------------------
Tom Hals at Reuters reports that the U.S. Bankruptcy Court for the
District of Delaware has granted Swift Energy Company approval to
borrow up to $15 million.
Reuters relates that the Company faces a looming deadline for
refinancing a $330 million loan, the main obstacle to its plan to
emerge from bankruptcy in about four months and shed almost $1
billion in debt.
Reuters quoted Gregory Gordon, Esq., at Jones Day, the attorney for
the Debtor, as saying, "We need to try to minimize Chapter 11 time
and expense as much as possible."
About Swift Energy
Headquartered in Houston, Texas, Swift Energy Company is an
independent energy company engaged in the exploration, development,
production and acquisition of oil and natural gas properties. Its
primary assets and operations are focused in the Eagle Ford trend
of South Texas and the onshore and inland waters of Louisiana.
Swift Energy Company and eight of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Case Nos. 15-12669 to
15-12677) on Dec. 31, 2015. The petitions were signed by Alton D.
Heckaman, Jr., the executive vice president and CFO. Judge Mary F.
Walrath has been assigned the cases.
The Debtors disclosed total assets of $1.02 billion and total debt
of $1.34 billion as of Sept. 30, 2015.
The Debtors engaged Jones Day as general counsel; Richards, Layton
& Finger, P.A., as local counsel; Lazard Freres & Co, LLC as
investment banker; Alvarez & Marsal North America LLC as financial
advisor; and Kurtzman Carson Consultants LLC as claims and noticing
agent.
TRACK GROUP: Appoints Karen Macleod to Board of Directors
---------------------------------------------------------
Track Group, Inc. disclosed the appointment of Karen Macleod,
former president of Tatum LLC, a New York-based professional
services firm owned by global talent leader, Randstad, to the
company's Board of Directors effective immediately.
"We are pleased to welcome Ms. Macleod to our Board and look
forward to benefiting from her extensive knowledge and experience,"
said Guy Dubois, Chairman and CEO of Track Group.
"Ms. Macleod's background and insight will prove invaluable to
Track Group as we continue to position the company for future
growth and success."
"This is a very exciting time for Track Group," said Macleod. "I
am honored to join the Board and look forward to working with the
other directors to build on Track Group's positive momentum.
Prior to her time with Tatum, Ms. Macleod was a co-founder of RGP,
a publicly traded, multinational professional services firm founded
as a division of Deloitte in June 1996. Ms. Macleod served in
several positions for RGP, including as a director from 1999-2009
and President, North America from 2004-2009. Prior to RGP, Ms.
Macleod held several positions in the audit department of Deloitte
between 1985-1994.
About Track Group
Track Group (formerly SecureAlert) -- http://www.trackgrp.com/--
is a global provider of customizable tracking solutions that
leverage real-time tracking data, best-practice monitoring, and
analytics capabilities to create complete, end-to-end solutions.
Track Group reported a net loss attributable to common shareholders
of $5.66 million on $20.8 million of total revenues for the fiscal
year ended Sept. 30, 2015, compared with a net loss attributable to
common shareholders of $8.76 million on $12.26 million of total
revenues for the fiscal year ended Sept. 30, 2014.
As of Sept. 30, 2015, the Company had $54.0 million in total
assets, $39.7 million in total liabilities and $14.4 million in
total equity.
VG LIFE: Cites Uncertainties Raising Going Concern Doubt
--------------------------------------------------------
VG Life Sciences Inc. noted factors and uncertainties raising
substantial doubt about its ability to continue as a going concern,
according to a November 19, 2015 regulatory filing signed by John
Tynan, chief executive officer, and David Odell, chief financial
officer of the company with the U.S. Securities and Exchange
Commission.
Messrs. Tynan and Odell continued: "As of September 30, 2015, the
company had an accumulated deficit of approximately $109.8 million
and requires substantial additional funds to continue its research
and development, to support its operations and to achieve its
business development goals, the attainment of which are not
assured. The company has been able to satisfy certain liabilities
with convertible indebtedness and common shares and enter into debt
settlement arrangements, facilitated by third party financing, with
vendors and creditors for substantial amounts of its various
financial obligations. Convertible instruments have also been
converted into equity. In March 2013 and in January 2015, the
company also entered into arrangements with related parties under
which it has and will continue to receive certain financial and
administrative support, services, and executive services through
December 31, 2015, and an unsecured revolving line of credit
expiring April 15, 2018; and has consummated related party and
unrelated convertible debenture and warrant agreements from which
it has and will receive cash. However, substantial indebtedness
remains and substantial recurring losses from operations and
additional liabilities continue to be incurred.
"These factors and uncertainties raise substantial doubt about the
company's ability to continue as a going concern.
"Management has designed plans for sales of the company's future
pharmaceutical related products. Management intends to seek
additional capital from new equity securities offerings, from debt
financing and debt restructuring to provide funds needed to
increase liquidity, fund internal growth and fully implement its
business plan. However, management can give no assurance that
these funds will be available in adequate amounts, or if available,
on terms that would be satisfactory to the company.
"The timing and amount of the company's capital requirements will
depend on a number of factors, including (i) the need for funds to
support research and development, (ii) payment requirements to
sustain patent and licensing rights, (iii) demand for new products
and services, (iv) the availability of opportunities for
international expansion through affiliations, (v) maintaining its
status as a public company and supporting shareholder and investor
relations, (vi) the need to establish and maintain current and new
business relationships, and (vii) for other general corporate
business purposes."
At September 30, 2015, the company had total assets of $1,117,162
and total stockholders' deficit of $4,344,501.
The company posted a net loss of $1,021,939 for the three months
ended September 30, 2015, compared to a net loss of $1,071,677 for
the same period in 2014.
A full-text copy of the company's quarterly report is available for
free at: http://tinyurl.com/hfas83k
VG Life Sciences Inc., based in Santa Barbara, California, is a
drug discovery and development company researching two core
technologies: Targeted Peptide Technology or TPT, which is
currently its main focus; and Metabolic Disruption Technology or
MDT, which is its secondary focus. The company's research program
in clinical stage, a MDT therapy, helps fight cancers.
WET SEAL: Professional Fee Claims Due Jan. 30
---------------------------------------------
Seal123, Inc., formerly known as The Wet Seal, Inc., advised
parties-in-interest that:
(A) All final requests for payment of Professional Fee Claims,
pursuant to sections 327, 328, 330, 331, 503(b), or 1103 of the
Bankruptcy Code, for services rendered during the period from the
Petition Date through the Plan Effective Date, must be made by
application Filed with the Bankruptcy Court and served on counsel
to the Liquidation Trustee, counsel to Buyer, counsel to the
Debtors, and counsel to the U.S. Trustee no later than 30 days
after the Effective Date, unless otherwise ordered by the
Bankruptcy Court. Objections to the applications must be Filed and
served on counsel to the Liquidation Trustee, counsel to Buyer,
counsel to the Debtors, counsel to the Creditors' Committee,
counsel to the U.S. Trustee and the requesting Professional on or
before the date that is 21 days after the date on which the
applicable application was served (or such longer period as may be
allowed by Order of the Bankruptcy Court or by agreement with the
requesting Professional).
(B) All requests for payment of a Non-Ordinary Course
Administrative Claim must be Filed with the Bankruptcy Court and
served on counsel to the Liquidation Trustee, counsel to Buyer,
counsel to the Debtors, and counsel to the U.S. Trustee no later
than 45 days after the Effective Date, or the first Business Day
following such day if the 45th day after the Effective Date is not
a Business Day.
(C) As of the Effective Date, all executory contracts and
unexpired leases of the Debtors that have not been assumed and
assigned, or rejected, prior to the Confirmation Date shall be
deemed rejected, pursuant to the Confirmation Order, as of the
Confirmation Date. Any Creditor asserting a Rejection Claim shall
File a proof of claim within 30 days of the Effective Date. Any
Rejection Claims that are not timely Filed pursuant to Section 6.1
of the Plan shall be forever disallowed and barred.
On October 30, 2015, the Bankruptcy Court for the District of
Delaware entered an order confirming the First Amended Joint Plan
of Liquidation of Seal123 and its subsidiary debtors. The Plan was
co-proposed by the Debtors and the Official Committee of Unsecured
Creditors. The Plan was originally filed with the Bankruptcy Court
on August 10, 2015 and subsequently amended on September 8, 2015.
The Plan became effective on December 31, 2015.
On the Effective Date, as a result of the effectiveness of the
Plan, all of the Company's existing equity securities, including
its existing common stock, were cancelled and the Company filed a
Certificate of Dissolution with the Secretary of State of the State
of Delaware to formally extinguish the Company's corporate
existence with the State of Delaware except for the limited purpose
of completing the wind-down contemplated by the Plan. The Company
further has undertaken to file a Certification and Notice of
Termination of Registration on Form 15 with the Securities and
Exchange Commission to terminate the registration of its securities
under Section 12(g) of Securities Exchange Act of 1934, as amended.
As a result, the Company will immediately cease filing any further
periodic reports under the 1934 Act.
Counsel for the Debtors and Debtors in Possession:
Michael R. Nestor, Esq.
Maris J. Kandestin, Esq.
Travis G. Buchanan, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Email: mnestor@ycst.com
mkandestin@ycst.com
tbuchanan@ycst.com
- and -
Lee R. Bogdanoff, Esq.
Michael L. Tuchin, Esq.
David M. Guess, Esq.
Jonathan M. Weiss, Esq.
KLEE, TUCHIN, BOGDANOFF & STERN LLP
1999 Avenue of the Stars, 39th Floor
Los Angeles, CA 90067
Tel: (310) 407-4022
Fax: (310) 407-9090
Email: lbogdanoff@ktbslaw.com
mtuchin@ktbslaw.com
dguess@ktbslaw.com
jweiss@ktbslaw.com
Counsel to the Creditors' Committee:
Jeffrey N. Pomerantz, Esq.
PACHULSKI, STANG, ZIEHL & JONES, LLP
10100 Santa Monica Blvd., 13th Floor
Los Angeles, CA 90067-4003
Tel: (310) 277-6910
Fax: (310) 201-0760
E-mail: jpomerantz@pszjlaw.com
- and -
Robert J. Feinstein, Esq.
PACHULSKI, STANG, ZIEHL & JONES, LLP
780 Third Ave., 34th Floor
New York, NY 10017-2024
Tel: (212) 561-7700
Fax: (212) 561-7777
E-mail: rfeinstein@pszjlaw.com
- and -
Bradford J. Sandler, Esq.
PACHULSKI, STANG, ZIEHL & JONES, LLP
919 North Market St., 17th Floor
Wilmington, DE 19801
Tel: (302) 652-4100
Fax: (302) 652-4400
E-mail: bsandler@pszjlaw.com
About Wet Seal
The Wet Seal, Inc., and three affiliates, The Wet Seal Retail,
Inc., Wet Seal Catalog, Inc., and Wet Seal GC, LLC, filed separate
Chapter 11 petitions (Bankr. D. Del. Case Nos. 15-10081 to
15-10084) on Jan. 15, 2015. The Debtors are a national
multi-channel retailer selling fashion apparel and accessory items
designed for female customers aged 13 to 24 years old. The Wet
Seal, Inc., disclosed $215,254,952 in assets and $60,598,968 in
liabilities as of the Chapter 11 filing.
The Hon. Christopher S. Sontchi presides over the jointly
administered cases. Maris J. Kandestin, Esq., and Michael R.
Nestor, Esq., at Young Conaway Stargatt & Taylor, LLP; Lee R.
Bogdanoff, Esq., Michael L. Tuchin, Esq., David M. Guess, Esq., and
Jonathan M. Weiss, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP;
and Paul Hastings LLP, serve as the Debtors' Chapter 11 counsel.
FTI Consulting serves as the Debtors' restructuring advisor. The
Debtors' investment banker is Houlihan Lokey. The Debtors tapped
Donlin, Recano & Co., Inc. as claims and noticing agent.
The petitions were signed by Thomas R. Hillebrandt, interim chief
financial officer.
B. Riley, the original DIP lender and plan sponsor, is represented
by Van C. Durrer, II, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP.
Versa Capital Management, LLC, and its affiliate, Mador Lending,
LLC, which was selected as the successful bidder at an auction, was
advised by Greenberg Traurig LLP, Klehr Harrison Harvey Branzburg
LLP, and KPMG LLP.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors. The Committee retained Pachulski Stang Ziehl & Jones LLP
as its counsel and Province Inc. as its financial advisor.
The Wet Seal, Inc., changed its name to "Seal123, Inc." on April
17, 2015, in accordance with the Asset Purchase Agreement with
Mador Lending, LLC, an affiliate of Versa Capital Management, LLC
as buyer.
WINE AND CANVAS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Wine and Canvas Development LLC
dba Wine and Canvas
dba Wine and Canvas of Indianapolis
3969 East 82nd Street
Indianapolis, IN 46240
Case No.: 16-00055
Chapter 11 Petition Date: January 6, 2016
Court: United States Bankruptcy Court
Southern District of Indiana (Indianapolis)
Judge: Hon. Robyn L. Moberly
Debtor's Counsel: James A. Knauer, Esq.
KROGER GARDIS & REGAS, LLP
111 Monument Circle, Suite 900
Indianapolis, IN 46204-5125
Tel: 317-692-9000
Fax: 317-264-6832
Email: jak@kgrlaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $10 million to $50 million
The petition was signed by Anthony Scott, manager.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/insb16-00055.pdf
WISHGARD LLC: Denial of William Rice's Wage Claims Affirmed
-----------------------------------------------------------
William A. Rice filed a proof of claim in the bankruptcy
proceedings of Wishgard LLC, claiming entitlement to unpaid wages
and commissions. Rice subsequently filed an application seeking
payment of postpetition commissions and salary. The filed an
Objection to Rice's Proof of Claim.
U.S. Bankruptcy Judge Judge Bohm sustained Wishgard's Objection to
Rice's Proof of Claim and denied Rice's Application for
postpetition-expenses. Judge Bohm determined that Wishgard had
paid Rice no less than $370,653 pursuant to oral
compensation-agreements entered between the parties, and that the
amount substantially exceeded the amount proven by Rice to be
owed.
In a Memorandum and Order dated December 14, 2015, which is
available at http://is.gd/Iwmyokfrom Leagle.com, Judge Cathy
Bissoon of the United States District Court for the Western
District of Pennsylvania affirmed the Memorandum Opinion of the
Bankruptcy Court.
The case is WILLIAM A. RICE, Appellant, v. WISHGARD, LLC, Appellee,
Civil Action No. 15-279 (W.D. Pa.).
WILLIAM A. RICE, Appellant, represented by Nicholas R. Pagliari,
Esq. -- npagliari@mijb.com -- MacDonald, Illig, Jones & Britton LLP
& W. Patrick Delaney, Esq. -- pdelaney@mijb.com -- MacDonald,
Illig, Jones & Britton.
WISHGARD, LLC, Appellee, represented by John W. Kettering, Esq. --
JK@Pietragallo.com -- Pietragallo Gordon Alfano Bosick & Raspanti,
LLP & Richard J. Parks, Esq. -- RJP@Pietragallo.com -- Pietragallo,
Gordon Alfano, et al.
About Wishgard LLC
Wishgard, LLC is a Pennsylvania limited liability company with its
principal place of business in Eighty Four, Pennsylvania.
Wishgard
was formed in approximately June of 2010. The members of Wishgard
are Edward "Kip" Tygard and Aaron Wishart, who possess the
majority
and minority interests in Wishgard, respectively.
Wishgard is in the business of soliciting landowners for the
purpose of acquiring oil and gas rights which Wishgard then sells
in packages to other companies for drilling on the landowners'
property. Wishgard's primary operations have been in West Virginia
and Ohio.
Wishgard's bankruptcy case was commenced on February 13, 2013, by
the filing of an involuntary petition (Bankr. W.D. Pa. 13-20613)
against Wishgard under Chapter 7 of the Bankruptcy Code. Although
the involuntary petition was contested by Wishgard, ultimately,
the
Bankruptcy Court entered an order for relief under Chapter 7 on
April 25, 2013. Shortly thereafter, Wishgard's request to convert
to a case under Chapter 11 was granted. Since that time, Wishgard
proposed a plan which was confirmed on January 30, 2014.
Z TRIM: Accumulated Deficit Raises Going Concern Doubt
------------------------------------------------------
Z Trim Holdings, Inc., had an accumulated deficit equal to
$155,329,776 as of Sept. 30, 2015.
"This factor raises substantial doubt regarding the ability of the
company to continue as a going concern," said Edward Smith, III,
chief executive officer, and Donald G. Wittmer, acting chief
financial officer of the company in a regulatory filing with the
U.S. Securities and Exchange Commission dated November 19, 2015.
"The continuation of the company as a going concern is dependent
upon the continued financial support from its shareholders, the
ability of the company to obtain necessary debt and equity
financings, and the ability of the company to improve operating
margins."
At September 30, 2015, the company had total assets of $1,491,300,
total liabilities of $4,430,550, and total stockholders' deficit of
$2,939,250.
The company incurred a net loss of $1,565,192 for the three months
ended September 30, 2015, as compared to a net loss of $1,412,960
for the three months ended September 30, 2014.
A full-text copy of the company's quarterly report is available for
free at: http://tinyurl.com/zdfmyjd
Z Trim Holdings, Inc. is an agri-tech company based in Mundelein,
Illinois. The company owns existing and has developed new products
and processes to make use of biomass for uses in the food and
industrial markets.
[*] Moody's: Rising LSI Indicates More Defaults to Come in 2016
---------------------------------------------------------------
Moody's Investors Service Liquidity Stress Index (LSI) jumped to
6.8% at the end of December 2015 from 6.4% in November, reaching
the index's highest level since February 2010 and just slightly
above its long-term average of 6.7%, forewarning of a rise in the
default rate in 2016, the rating agency says in its most recent
edition of SGL Monitor Flash.
The LSI for oil and gas increased to 19.6% in December from 19.3%
in November as low oil prices continued to weaken liquidity and
raise default risk. Among the four exploration and production
companies downgraded to SGL-4, the weakest liquidity category, were
Atlas Energy Holdings (Caa1 negative), California Resources Corp.
(Caa1 negative) and Ultra Petroleum Corp. (Caa1 negative).
Liquidity weakness is also starting to spread to select lower-rated
issuers in other sectors, though not broadly. The non-oil and gas
LSI rose to 3.6% in December from 3.0% in the prior month.
The ratio of all SGL liquidity downgrades to upgrades was 1.74 for
2015, with 141 downgrades to 81 upgrades -- the highest since 2008
when the ratio was a record 2.96. Energy has been the key driver
of liquidity downgrades, followed by metals and mining, amid
weakening commodities demand in major developing countries such as
China.
"Nevertheless, speculative-grade liquidity is much better than it
was during the depths of the last recession, and should be
supported this year by moderate economic growth and modest
maturities for the market overall," said John Puchalla, a Moody's
Senior Vice President.
Moody's forecasts the US speculative-grade default rate will climb
to 4.1% in November this year from 3.0% in November 2015.
[*] Paul Fleming Joins Dechert's Restructuring Group in London
--------------------------------------------------------------
Paul Fleming has joined Dechert LLP as a partner in London. Mr.
Fleming, who focuses his practice on restructuring matters, advises
institutional lenders, insolvency practitioners, equity investors
and management. A significant portion of his work involves
cross-border restructuring matters.
"We are so pleased to have Paul join our team," said Michael Sage
and Allan Brilliant, co-chairs of Dechert's business reorganization
and restructuring group. "His extensive experience expands our
global capabilities and will be of significant benefit to the
firm's clients."
Mr. Fleming, who is a Solicitor of the Senior Courts of England and
Wales, is ranked in Chambers UK 2016 for London (Firms):
Restructuring/Insolvency and is also recommended by The Legal 500
UK 2015 in London: Finance: Corporate Restructuring and
Insolvency.
"Dechert offers a dynamic global platform for my practice," Mr.
Fleming said. "I've been so impressed with the team's organization,
dedication and collegiality. I'm pleased to join such a
well-respected team."
Dechert's business restructuring and reorganization group
represents troubled companies, private equity funds, hedge funds,
mutual funds, creditors, and investors in distressed assets and
debt in all types of in-court and out-of-court restructurings, as
well as bankruptcy planning and litigation, distressed lending, and
distressed mergers and acquisitions.
[*] Toledo, Ohio Bankruptcy Filings Drop 11% in 2015
----------------------------------------------------
Jon Chavez at The Blade reports that bankruptcy filings in Toledo,
Ohio, has decreased 11% to 4,110 in 2015 from 2014. The Blade says
that bankruptcy cases declined 8% to 254 in December 2015.
According to The Blade, petitions filed in Toledo court tumbled in
2015 for the sixth consecutive year, hitting their lowest point
since 2006, which was the year that followed significant
restrictive changes to the nation's bankruptcy code. The Blade
states that the reason for continued drop eludes experts.
"We're all a little stumped as to why those numbers have not
started to turn around. I don't think any of us have made the
argument that it's because they're more able to pay their debt,"
The Blade quoted Thom Cafferty, Esq., a local attorney who handles
bankruptcy filings, as saying.
The Blade relates that Chapter 7 liquidation cases dropped 11% to
3,736 in 2015, and Chapter 13 repayment plan cases declined 13% to
357. Chapter 11 reorganization cases rose 59% to 17, compared with
7 cases in 2014, the report adds.
[^] BOOK REVIEW: BOARD GAMES - Changing Shape of Corporate Power
----------------------------------------------------------------
Author: Arthur Fleischer, Jr.,
Geoffrey C. Hazard, Jr., and
Miriam Z. Klipper
Publisher: Beard Books
Softcover: 248 pages
List Price: $34.95
Order your personal copy today at
http://www.amazon.com/exec/obidos/ASIN/1587981629/internetbankrupt
A ruling by the Delaware Supreme Court on January 29, 1985 was a
wake-up call to directors of U. S. corporations. On this date,
overruling a lower court decision, the Delaware Supreme Court
ruled that the nine board members of Chicago company Trans Union
Corporation were "guilty of breaching their duty to the company's
shareholders." What the board members had done was agree to sell
Trans Union without a satisfactory review of its value. The guilty
board members were ordered by the Court to pay "the difference
between the per share selling price and the 'real' market value of
the company's shares."
Needless to say, the nine Trans Union directors were shocked at
the guilt verdict and the punishment. The chairman of the board,
Jerome Van Gorkom, was a lawyer and a CPA who was also a board
member of other large, respected corporations. For the most part,
it was he who had put together the terms of the potential sale,
including setting value of the company's stock at $55.00 even
though it was trading at about $38.00 per share. News of the
possible sale immediately drove the stock up to $51.50 per share,
and was commented on favorably in a "New York Times" business
article. Still, Van Gorkom and the other directors were found
guilty of breaching their duty, and ordered by Delaware's highest
court to pay a sum to injured parties that would be financially
ruinous. This was clearly more than board members of the Trans
Union Corporation or any other corporation had ever bargained for.
It was more than board members had ever conceived was possible
without evidence of fraud or graft.
The three authors are all attorneys who have worked at the highest
levels of the legal field, business, and government. Fleischer is
the senior partner of the law firm Fried, Frank, Harris, Schriver
& Jacobson at the head of its mergers and acquisitions department.
He's also the author of the textbook "Takeover Defenses" which is
in its 6th edition. Hazard is a Professor of Law and former
reporter for the American Bar Association's special committee on
the lawyers' ethics code; while Klipper has been a New York
assistant district attorney prosecuting corporate and financial
fraud, and also a corporate attorney on Wall Street. Using the
Trans Union Corporation case as a watershed event for members of
boards of directors, the highly-experienced legal professionals
lay out the new ground rules for board members. In laying out the
circumstances and facts of a number of cases; keen, concise
analyses of these; and finding where and how board members went
wrong, the authors provide guidance for corporate directors, top
executives, and corporate and private business attorneys on
issues, processes, and decisions of critical importance to them.
Household International, Union Carbide, Gelco Corp., Revlon, SCM,
and Freuhauf are other major corporations whose merger-and-
acquisitions activities resulted in court cases that the authors
study to the benefit of readers. The Boards of Directors of these
as well as Trans Union and their positions with other companies
are listed in the appendix. Many other corporations and their
board members are also referred to in the text.
With respect to each of the cases it deals with, BOARD GAMES
outlines the business environment, identifies important
individuals, analyzes decisions, and discusses considerations
regarding laws, government regulations, and corporate practice. In
all of this, however, given the exceptional legal background of
the three authors, the book recurringly brings into the picture
the legalities applying to the activities and decisions of board
members and in many instances, court rulings on these. Passages
from court transcripts are occasionally recorded and commented on.
Elsewhere, legal terms and concepts--e. g., "gross nonattendance"-
-are defined as much as they can be. In one place, the authors
discuss six levels of responsibility for board members from
"assure proper result" through negligence up to fraud. Without
being overly technical, the authors' legal experience and guidance
is continually in the forefront. Needless to say, with this, BOARD
GAMES is a work of importance to board members and others with the
responsibility of overseeing and running corporations in the
present-day, post-Enron business environment where shareholders
and government officials are scrutinizing their behavior and
decisions.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2016. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***