/raid1/www/Hosts/bankrupt/TCR_Public/160224.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, February 24, 2016, Vol. 20, No. 55
Headlines
99 CENTS ONLY: Bank Debt Trades at 39% Off
AFFIRMATIVE INSURANCE: Receiver Wants Rehabilitation to Proceed
BUDD COMPANY: Stay Modified as to 123 Asbestos Claimants
BUDD COMPANY: UAW May Litigate Merits of TKNA Deal, Court Rules
CAESARS ENTERTAINMENT: Bank Debt Trades at 13% Off
CAESARS ENTERTAINMENT: Bid for Plan Mediator Denied as Unnecessary
CAESARS ENTERTAINMENT: Granted More Time to Propose Ch. 11 Plan
CANBRIAM ENERGY: Moody's Raises CFR to B2, Outlook Stable
COUDERT BROTHERS: Orrick Says China Sale Claims Will Fail at Trial
DEMCO INC: U.S. Trustee to Hold 341 Meeting on March 30
DEWEY & LEBOEUF: Warren Gets Deferred Prosecution on Eve of Trial
DEX MEDIA: Bank Debt Trades at 53% Off
DIOCESE OF DULUTH: Child Sexual Abuse Victims Choose Mediator
EAST COAST BROKERS: Trustee May Sell Centerstate Banks Shares
EL PASO: AP Services Defends Request for Fee Payments
ENERGY FUTURE: "Cunningham" Appeal Withdrawn from Mediation
EPICOR SOFTWARE: Bank Debt Trades at 5% Off
FENDER MUSICAL: S&P Raises CCR to 'B+', Outlook Stable
FIVE S PLUS: Sale-Based Plan Opposed by UST, TrustLand
FIVE S PLUS: TrustLand Seeks Chapter 7 Conversion
FORTESCUE METALS: Bank Debt Trades at 31% Off
FREEDOM COMMUNICATIONS: Seeks Approval of AFCO Premium Finance Deal
FUHU INC.: Court Approves $2-Mil. Loan from Buyer
FUHU INC.: Court Approves Cash Collateral Use
GEORGIA TRANSIT: GE Capital Granted $1.1MM in Judgment
GETTY IMAGES: Bank Debt Trades at 35% Off
GREAT HEARTS: Fitch Affirms 'BB' Rating on Veritas Project Bonds
HAIMIL REALTY: Owes Over $2.6MM to Dominion Financial, Court Rules
HEBREW HOSPITAL: Can't Tap McCullough Due to Conflict, Panel Says
HEBREW HOSPITAL: Panel Says Accountant Not Necessary
HORSEHEAD HOLDING: Macquarie Bank Seeks Adequate Protection
IMAGE MAKERS: Case Summary & 4 Unsecured Creditors
INFORMATICA CORP: Bank Debt Trades at 5% Off
INTERPARK INVESTORS: U.S. Trustee to Hold 341 Meeting on March 15
J. CREW: Bank Debt Trades at 32% Off
JUPITER RESOURCES: Moody's Lowers CFR to Caa1, Outlook Stable
KADLUBEK FAMILY: Court Refuses to Lift Stay for Pineda Suit
LEAPFROG ENTERPRISES: Posts Net Loss, Admits Going Concern Doubt
LPL HOLDINGS: S&P Revises Outlook to Neg. & Affirms 'BB-' ICR
MALLINCKRODT GROUP: Bank Debt Trades at 3% Off
MEG ENERGY: Bank Debt Trades at 24% Off
METALDYNE CORP: Bank Debt Trades at 4% Off
MICHAEL KING FOUNDATION: Files List of Top Unsecured Creditors
MICHAEL KING FOUNDATION: U.S. Trustee to Hold Meeting on March 4
MICHAEL KING FOUNDATION: U.S. Trustee Unable to Form Committee
MICRO FOCUS: Bank Debt Trades at 2% Off
MID-STATES SUPPLY: $20M DIP Loan Has Interim Approval
MOBERLY, MO: S&P Hikes Issuer Credit Rating to BB-, Outlook Stable
MULTIPLAN INC: Bank Debt Trades at 2% Off
NATHAN'S FAMOUS: Moody's Raises CFR to B3, Outlook Stable
NEIMAN MARCUS: Bank Debt Trades at 13% Off
NEW ENTERPRISE: S&P Hikes Issue-Level Rating on Secured Debt to B-
NW VALLEY: Parties Move Disclosure Statement Hearing to April 22
OSAGE EXPLORATION: EDC to Buy Assets for $5 Million
OSAGE EXPLORATION: Proposes EDC-Led Auction on March 24
OSAGE EXPLORATION: Weatherford et al Have Issues with Apollo Loan
OSUM PRODUCTION: Moody's Lowers CFR to Caa2, Outlook Negative
OUTER HARBOR: $3.5-Mil. DIP Facility Approved in Interim
PEABODY ENERGY: Bank Debt Trades at 57% Off
PETSMART INC: Bank Debt Trades at 3% Off
PHARMACEUTICAL ALTERNATIVES: Summary Judgment Favoring MMO Affirmed
PREFERRED PROPPANTS: Moody's Lowers CFR to Caa3, Outlook Negative
PREMIER GOLF: Says Cajon's $16MM Claim Should Be Reduced
RCS CAPITAL: Hearing Today on Bid to Hire Zolfo Cooper
RCS CAPITAL: Hires Young Conaway as Bankruptcy Co-counsel
RED DOOR LOUNGE: Court Approves Employment of Patten's Law Firm
REDONDO CONSTRUCTION: 1st Cir. Vacates Judgment in PRHTA Suit
REXNORD: Bank Debt Trades at 5% Off
ROBERT SPENLINHAUER: Bid to Stay Trustee Appointment Denied
RONALD WILLIAM DEMASI: $205K State Court Judgment Nondischargeable
SAMUEL L. WYLY: IRS Blasts Arguments in $2.2-Bil. IRS Fight
SANDRIDGE ENERGY: Skips $21.7M Interest Payments on 2023 Notes
SAVVAS GIANASMIDIS: Wins Summary Judgment Bid
SEABOARD REALTY: Del. Judge Rejects Dechert Role in Chapter 11
SEADRILL LTD: Bank Debt Trades at 61% Off
SECOND CHANCE: Judge Needs More from Feds in Body Armor FCA Suits
SEPCO CORPORATION: "McSwain" Asbestos Suit Stayed
SPIN HOLDCO: S&P Affirms 'B' CCR & Revises Outlook to Negative
ST. JAMES NURSING: Case Summary & 20 Largest Unsecured Creditors
STEVE GLEN KRUSE: US Trustee Wins Bid to Dismiss Ch. 7 Case
TAYLOR, MI: Fitch Raises LGTOs Ratings to 'BB+'
TEINE ENERGY: Moody's Confirms B2 CFR, Outlook Stable
TRAVELPORT INC: Bank Debt Trades at 4% Off
TRILOGY INTERNATIONAL: S&P Lowers Corp. Credit Rating to 'CCC-'
TXU CORP: Bank Debt Trades at 70% Off
ULTRA PETROLEUM: Moody's Lowers CFR to Ca, Outlook Negative
UNITED NATIONAL: Case Summary & 20 Largest Unsecured Creditors
VALEANT PHARMACEUTICALS: Bank Debt Trades at 4% Off
VANTAGE DRILLING: Bank Debt Trades at 83% Off
VARIANT HOLDING: Creditors Object to DIP Financing
VICKY WRIGHT: Chapter 7 Trustee's Bid to Compromise Granted
VIVID SEATS: S&P Affirms Prelim. 'B' CCR, Outlook Remains Stable
YBA NINETEEN: Court Junks Appeal from Sale of Property to Indymac
ZLOOP INC: U.S. Trustee Asks Court to Convert Ch. 11 Cases
[*] Continuing Low Oil Prices to Strain Canadian Banks, Moody's Say
[*] Fitch Says Canadian Banks Vulnerable to Oil Slump
[*] Fitch: Weak Demand, Low Prices May Hit Thermal Project Ratings
[*] Kaufman Dolowich Adds Ex-Becker & Poliakoff Litigation Pro
[] 175 Oil Producers at Risk of Filing in 2016, Says Deloitte
*********
99 CENTS ONLY: Bank Debt Trades at 39% Off
------------------------------------------
Participations in a syndicated loan under which 99 Cents Only
Stores is a borrower traded in the secondary market at 61.00
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.08 percentage points from the
previous week. 99 Cents pays 350 basis points above LIBOR to
borrow under the $614 million facility. The bank loan matures on
Jan. 13, 2019 and carries Moody's Caa1 rating and Standard & Poor's
B- rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
AFFIRMATIVE INSURANCE: Receiver Wants Rehabilitation to Proceed
---------------------------------------------------------------
James J. Donelon, Commissioner of Insurance of the State of
Louisiana as court-appointed rehabilitator, and Wayne Johnson, as
court-appointed Receiver for the Affirmative Casualty Insurance
Company and its wholly-owned subsidiary, Affirmative Direct
Insurance Company, jointly ask the U.S. Bankruptcy Court to enter
an order finding and holding that the automatic stay in effect in
the Chapter 11 Cases does not stay the use or disposition of the
sole property of the Debtors or the continuation of the Louisiana
Rehabilitation Case in the Louisiana Court, or any action taken in
the Louisiana Rehabilitation Case that is not an act or action
against the Debtors, their property, or property of their
bankruptcy estates.
According to the Louisiana Rehabilitator and Louisiana Receiver,
their authority to administer the rehabilitation estates of the
Debtors that were bestowed on them under a Permanent Order of
Rehabilitation, has been disrupted, if not wholly suspended, to the
detriment of policyholders, creditors, and the public because of
the Bankruptcy Notice, which listed the names of ACIC and ADIC as
the Debtors that was filed with the Louisiana Court. In fact, the
Louisiana Court did not enter the proposed order granting the RRC
Employment Motion to approve the payment to Risk & Regulatory
Consulting, LLC of certain fees and expenses incurred in connection
with the Louisiana Rehabilitation Case, they added.
The Rehabilitator and Receiver relate that notwithstanding the
Louisiana Rehabilitator's explanation that ACIC and ADIC are
domestic insurance company and may not be a debtor under chapter 7
or 11 Cases and that proceedings against or involving them are not
subject to Code, the Louisiana Court instructed the Attorney
General to provide the Louisiana Court with some assurance that the
continuation of the Louisiana Rehabilitation Case would not violate
the Code since it is concerned that the Bankruptcy Notice has been
filed in the record in the Louisiana Rehabilitation Case either to
itself impose a stay of any and all proceedings in the Louisiana
Rehabilitation Case or, at minimum, to give notice that the
Louisiana Rehabilitation Case had been stayed in its entirety under
Code.
James J. Donelon and Wayne Johnson are represented by:
Mark Minuti, Esq.
Teresa K. D. Currier, Esq.
SAUL EWING LLP
222 Delaware Avenue, Suite 1200
P.O. Box 1266
Wilmington, DE 19899
Telephone: (302) 421-6840 / 6826
Facsimile: (302) 421-5873 / 5861
Email: mminuti@saul.com
tcurrier@saul.com
-- and --
Faye B. Feinstein, Esq.
Christopher Combest, Esq.
QUARLES & BRADY LLP
300 North LaSalle Street, Suite 4000
Chicago, Illinois 60654
Telephone: (312) 715-5000
Facsimile: (312) 715-5155
Email: faye.feinstein@quarles.com
christopher.combest@quarles.com
About Affirmative Insurance
Affirmative Insurance Holdings, Inc., Affirmative Management
Services, Inc., Affirmative Services, Inc., Affirmative
Underwriting Services, Inc., Affirmative Insurance Services, Inc.,
Affirmative General Agency, Inc., Affirmative Insurance Group, Inc.
and Affirmative, L.L.C. sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Proposed Lead Case No. 15-12136) on Oct. 14, 2015.
The petition was signed by Michael J. McClure as chief executive
officer.
The Debtors have engaged McDermott Will & Emery LLP as general
bankruptcy counsel, Polsinelli PC as local Delaware counsel, Faegre
Baker Daniels LLP as special regulatory counsel, BDO USA LLP as
financial consultant and Rust Consulting/Omni Bankruptcy as notice
and claims agent.
The Debtors disclosed total assets of $25.20 million and total
debts of $91.26 million as of Aug. 31, 2015.
Founded in June 1998, Affirmative provides non-standard personal
automobile insurance policies for individual consumers in targeted
geographic markets. NSPAI policies provide coverage to drivers who
find it difficult to obtain insurance from standard automobile
insurance companies due to their lack of prior insurance, age,
driving record, limited financial resources, or other factors.
On October 30, 2015, the Office of the U.S. Trustee appointed five
creditors to the official committee of unsecured creditors.
BUDD COMPANY: Stay Modified as to 123 Asbestos Claimants
--------------------------------------------------------
Judge Jack B. Schmetterer of the United States Bankruptcy Court for
the Northern District of Illinois, Eastern Division, issued a
memorandum opinion on the motion filed by the Asbestos Committee to
modify the automatic stay as to the asbestos claimants.
The Budd Company, Inc., used asbestos in some of its production and
processes while in operation. It reported that 2,213 asbestos
claims have been filed in its bankruptcy case. There remain 123
claims as to which the only issue raised is whether claimants can
establish liability, which issue cannot be tried in the bankruptcy
court.
The Asbestos Committee filed a motion to modify the automatic stay.
Budd objected, arguing that stay relief should await plan
confirmation. Budd's proposed Chapter 11 plan provided that
liability issues will pass through the bankruptcy and be tried in
non-bankruptcy courts having jurisdiction. Judge Schmetterer,
however, found no reason to delay modifying the stay now as to
those 123 claimants so that they might make some progress in their
actions.
Judge Schmetterer held that neither Budd nor its estate will be
greatly prejudiced if the stay is lifted to allow asbestos
claimants to which Budd's only objection is as to liability to
proceed in state or federal court without further delay.
Judge Schmetterer also found that hardship imposed on some of
Budd's asbestos claimants significantly outweighs any hardship
imposed on the debtor if the stay is lifted as to these claimants.
The case is In re: The Budd Company, Inc., Chapter 11, Debtor, Case
No. 14 B 11873 (Bankr. N.D. Ill.).
A full-text copy of Judge Schmetterer's February 10, 2016 memoradum
opinion is available at http://is.gd/AKBKQCfrom Leagle.com.
The Budd Company, Inc. is represented by:
Allison R Bach, Esq.
Adam D Grant, Esq.
Theodore Bruno Sylwestrzak, Esq.
DICKINSON WRIGHT PLLC
500 Woodward Avenue, Suite 4000
Detroit MI 48226-3425
Tel: (313)223-3500
Fax: (313)223-3598
Email: abach@dickinsonwright.com
agrant@dickinsonwright.com
tsylwestrzak@dickinsonwright.com
-- and --
Daniel Deitrich Quick, Esq.
DICKINSON WRIGHT PLLC
2600 W. Big Beaver Rd., Suite 300
Troy MI 48084-3312
Tel: (248)433-7200
Fax: (248)433-7274
Email: dquick@dickinsonwright.com
-- and --
Brian Bastian, Esq.
Erin Durba, Esq.
Irena M Goldstein, Esq.
Steven H Holinstat, Esq.
Brandon Levitan, Esq.
Jeff J Marwil, Esq.
Mervis T Mervis, Esq.
Lee Popkin, Esq.
Marc E Rosenthal, Esq.
Jeremy T Stillings, Esq.
PROSKAUER ROSE LLP
Eleven Times Square
(Eighth Avenue & 41st Street)
New York, NY 10036-8299
Tel: (212)969-3000
Fax: (212)969-2900
Email: igoldstein@proskauer.com
sholinstat@proskauer.com
blevitan@proskauer.com
jmarwil@proskauer.com
mmervis@proskauer.com
lpopkin@proskauer.com
mrosenthal@proskauer.com
jstillings@proskauer.com
-- and --
Catherine L Steege, Esq.
JENNER & BLOCK LLP
353 N. Clark Street
Chicago, IL 60654-3456
Tel: (312)222-9350
Fax: (312)527-0484
Email: csteege@jenner.com
Diana G. Adams, Independent Fee Examiner, is represented by:
Margaret M Anderson, Esq.
Ryan T Schultz, Esq.
FOX, SWIBEL, LEVIN & CARROLL, LLP
200 W. Madison Street, Suite 3000
Chicago, IL 60606
Tel: (312)224-1200
Fax: (312)224-1201
Email: panderson@fslc.com
rschultz@fslc.com
Patrick S Layng, U.S. Trustee, is represented by:
Kathryn Gleason, Esq.
OFFICE OF THE U.S. TRUSTEE, REGION 11
219 S. Dearbon Street
Room 873 Chicago, IL 60604
Tel: (312)886-5785
Fax: (312)886-5794
Committee of Asbestos Personal Injury Claimants, Creditor
Committee, is represented by:
Joseph D Frank, Esq.
Frances Gecker, Esq.
Reed A Heiligman, Esq.
FRANKGECKER LLP
325 N. LaSalle St., Suite 625
Chicago, IL 60654
Tel: (312)276-1400
Fax: (312)276-0035
Email: jfrank@fgllp.com
fgecker@fgllp.com
rheiligman@fgllp.com
About The Budd Company
The Budd Company, Inc., a former supplier to the automotive
industry, filed for chapter 11 bankruptcy protection (Bankr. N.D.
Ill. Case No. 14-11873) on March 31, 2014, with a deal to settle
potential claims against its parent, ThyssenKrupp AG.
The company -- which ceased manufacturing operations in 2006 and
does not have any current employees, facilities or customers --
has obligations consisting largely of medical and other benefits
to approximately 10,000 former employees.
Liabilities amount to approximately $1 billion with assets of
approximately $400 million. Most of the debt consists largely of
medical and other benefits to approximately 10,000 former
employees.
The Debtor disclosed $387,555,681 in assets and $1,107,350,034 in
liabilities as of the Chapter 11 filing.
The Hon. Jack B. Schmetterer oversees the case. The Debtor has
tapped Proskauer Rose LLP as Chapter 11 counsel, Dickinson Wright
PLLC as special counsel, Epiq Bankruptcy Solutions, LLC as
noticing, claims and balloting agent, and Conway MacKenzie
Management Services, LLC's Charles M. Moore as CRO.
The U.S. Trustee appointed five individuals to serve on the
Committee of Executive & Administrative Retirees. The Segal
Company (Eastern States), Inc. serves as the Committee's actuarial
consultant. The Committee retained Solic Capital Advisors, LLC as
its financial advisor.
Reed Heiligman, Esq., at FrankGecker LLP, in Chicago, Illinois,
represents the ad hoc committee of asbestos personal injury
claimants.
BUDD COMPANY: UAW May Litigate Merits of TKNA Deal, Court Rules
---------------------------------------------------------------
The Budd Company, Inc., asks the United States Bankruptcy Court for
the Northern District of Illinois, Eastern Division, to preclude
The International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America from litigating the
merits of the Settlement Agreement with ThyssenKrupp North America,
Inc., during the scheduled evidentiary hearing on the Debtor's
motion to modify the UAW Retiree Benefits.
The Debtor entered into a settlement with TKNA to monetize and fix
the amount of its variable asset for the benefit of the UAW
Retirees.
According to the Debtor, the "how much issue" is one that can be
resolved in the confirmation process because the relief sought by
the 1114 Motion is contingent upon approval of the TKNA Settlement
Agreement and the Plan. Further, the Debtor pointed out that the
UAW will have ample opportunity during the confirmation process to
argue that the TKNA Settlement Agreement does not satisfy the Rule
9019 standards; that the Plan should not be confirmed; and that it
would be an utter waste of the Estate's resources and the Court’s
time to permit the UAW to use the hearing on the 1114 Motion as a
means of prosecuting a sub rosa objection to the TKNA Settlement
Agreement and Plan.
The UAW argued that the Debtor's Motion in Limine is nothing but an
improper ploy to deny the Union's due process right to rebut the
arguments of the Debtor at the imminent trial and that it
completely ignores the simple fact that evidence may be relevant
for more than one purpose, or in more than one proceeding, that is,
to both the 1114 Application process as well as the approval of the
New TKNA Settlement. However, the Debtor has sewn the 1114 relief
it seeks and the New TKNA Settlement together so as to prevent the
UAW from offering evidence about the New TKNA Settlement when
addressing 1114 would completely taint the Trial, deny the UAW’s
due process rights and be clear reversible error, the UAW further
argued.
* * *
Judge Jack B. Schmetterer denied the Debtor's Motion in Limine
without prejudice.
The Budd Company, Inc., is represented by:
Jeff J. Marwil, Esq.
Jeremy T. Stillings, Esq.
Brandon W. Levitan, Esq.
PROSKAUER ROSE LLP
70 W. Madison St.
Chicago, Illinois 60602-4342
Telephone: (312) 962-3550
Facsimile: (312) 962-3551
Email: jmarwil@proskauer.com
jstillings@proskauer.com
blevitan@proskauer.com
International Union, United Automobile, Aerospace and Agricultural
Implement Workers of America is represented by:
Lawrence B. Friedman, Esq.
James L. Bromley, Esq.
David E. Wagner, Esq.
CLEARY GOTTLIEB STEEN & HAMILTON LLP
One Liberty Plaza
New York, New York 10006
Telephone: (212) 225-2000
Facsimile: (212) 225-3999
Email: lfriedman@cgsh.com
jbromley@cgsh.com
dwagner@cgsh.com
-- and --
Scott R. Clar, Esq.
CRANE, HEYMAN, SIMON, WELCH & CLAR
135 South LaSalle Street, Suite 3705
Chicago, Illinois 60603
Telephone: (312) 641-6777
Facsimile: (312) 641-7114
Email: sclar@craneheyman.com
About The Budd Company
The Budd Company, Inc., a former supplier to the automotive
industry, filed for chapter 11 bankruptcy protection (Bankr. N.D.
Ill. Case No. 14-11873) on March 31, 2014, with a deal to settle
potential claims against its parent, ThyssenKrupp AG.
The company -- which ceased manufacturing operations in 2006 and
does not have any current employees, facilities or customers -- has
obligations consisting largely of medical and other benefits to
approximately 10,000 former employees.
Liabilities amount to approximately $1 billion with assets of
approximately $400 million. Most of the debt consists largely of
medical and other benefits to approximately 10,000 former
employees.
The Debtor disclosed $387,555,681 in assets and $1,107,350,034 in
liabilities as of the Chapter 11 filing.
The Hon. Jack B. Schmetterer oversees the case. The Debtor has
tapped Proskauer Rose LLP as Chapter 11 counsel, Dickinson Wright
PLLC as special counsel, Epiq Bankruptcy Solutions, LLC as
noticing, claims and balloting agent, and Conway MacKenzie
Management Services, LLC's Charles M. Moore as CRO.
The U.S. Trustee appointed five individuals to serve on the
Committee of Executive & Administrative Retirees. The Segal
Company (Eastern States), Inc. serves as the Committee's actuarial
consultant. The Committee retained Solic Capital Advisors, LLC as
its financial advisor.
Reed Heiligman, Esq., at FrankGecker LLP, in Chicago, Illinois,
represents the ad hoc committee of asbestos personal injury
claimants.
CAESARS ENTERTAINMENT: Bank Debt Trades at 13% Off
--------------------------------------------------
Participations in a syndicated loan under which Caesars
Entertainment Inc. is a borrower traded in the secondary market at
87.48 cents-on-the-dollar during the week ended Friday, Feb. 5,
2016, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents a decrease of 0.35 percentage points from
the previous week. Caesars Entertainment pays 600 basis points
above LIBOR to borrow under the $2.5 billion facility. The bank
loan matures on Sept. 24, 2020 and carries Moody's B2 rating and
Standard & Poor's CCC+ rating. The loan is one of the biggest
gainers and losers among 247 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Feb. 5.
CAESARS ENTERTAINMENT: Bid for Plan Mediator Denied as Unnecessary
------------------------------------------------------------------
Judge A. Benjamin Goldgar on Feb. 17, 2016, entered an order
denying as "unnecessary" a motion by Caesars Entertainment
Operating Co. for the appointment of a mediator to mediate issues
related to Caesars' bankruptcy-exit plan.
On Feb. 3, Caesars Entertainment filed with the U.S. Bankruptcy
Court for the Northern District of Illinois a motion for entry of
an order appointing a sitting bankruptcy judge to mediate issues
related to a Chapter 11 plan of reorganization.
The Debtors said they have proposed a Chapter 11 plan that has wide
support from all of the Debtors' key stakeholders. The Debtors'
junior stakeholders, however, have asserted that the settlement and
recoveries contemplated by the proposed plan do not adequately
reflect the strength of the estates' claims against Caesars
Entertainment Corp. (CEC), its affiliates, and its directors and
officers.
The Court-appointed Examiner -- appointed at the request of the
Debtors, among others -- has spent the past ten months evaluating
the scope and merit of those very same estate claims, and the
report is expected to be issued by the end of February. The
Debtors anticipate updating the currently filed plan and disclosure
statement in light of the Examiner's report. At the same time, the
Debtors intend to proceed with asking the Court to set a disclosure
statement hearing and schedule a proposed timeline and process for
the solicitation and confirmation of the proposed chapter 11 plan.
The Debtors have been and are currently in active discussions with
key stakeholders about their proposed plan, and these discussions
recently have intensified in anticipation of the Examiner's report.
But given the complexity of the issues presented in these cases,
the Debtors say it is possible that discussions among the various
stakeholders will continue past the disclosure statement hearing
and into and through the plan solicitation and confirmation
process.
Thus, the Debtors believe it is prudent and in the best interests
of their estates to seek the appointment of a sitting bankruptcy
judge (to the extent that the relevant parties are previously
unable to agree on a mediator) to, if necessary, facilitate
discussions, negotiations, and resolution among the key
stakeholders of plan issues after the Examiner's report is filed
and parties have had an adequate opportunity to evaluate it.
Responses
Key constituents in the Chapter 11 cases supported the Debtors' bid
for a mediator provided that certain conditions are set.
The Ad Hoc Bank Lender Committee said it does not oppose a mediated
attempt at concluding these cases by reaching a consensus on a plan
of reorganization. The Ad Hoc Bank Lender Lender Committee
believes that, for the mediation to be truly effective, the
mediator should be a current, sitting judge of the U.S. Bankruptcy
Court or the U.S. District Court and there should be a real
deadline placed upon the length of the mediation process.
CEC said that if the relevant key stakeholders in the Debtors'
chapter 11 cases are unable to resolve their disputes over issues
relating to the Debtors' chapter 11 plan of reorganization, and
mediation can facilitate a resolution, then CEC is willing to
participate in the mediation process to eliminate remaining
impediments to a chapter 11 plan of reorganization that will
satisfy, and benefit, all parties. CEC agrees with the Debtors
that for any mediation to be successful (a) the Examiner's report
must first be filed and the relevant key stakeholders who would
participate in any mediation have adequate time to evaluate it, and
(b) the mediation must run on a parallel path with the Debtors'
moving forward with a disclosure statement hearing and plan
confirmation. Mediation should not delay the plan process.
The Ad Hoc Committee of First Lien Noteholders and UMB Bank, N.A.,
solely in its capacity as successor indenture trustee for the
Debtors' first lien Notes also filed a statement in support of the
Mediation Motion.
The statutory unsecured claimholders' committee of CEOC et al.,
said it supports mediation provided that it is on a level playing
field. "And now, the Debtors and their owners want to stay
unsecured noteholders from establishing their claims against CEC,
while they sprint to confirmation before creditors can procure
derivative standing to sue and negotiate at arms' length with CEC
and its Affiliates -- all while the Debtors want to mediate in one
room while creditors are stayed, and confirm in another room," the
UCC points out.
To establish mediation on a level playing field that creditors can
trust, the UCC urges the Court to impose these conditions:
* Sunlight First. Mediation should not commence until (a) the
process for resolving disputes related to assertions of
confidentiality and privilege set forth in the Court's Amended
Order Temporarily Authorizing The Filing of Redacted Versions of
the Examiner's Report and Certain Documents and Related Procedures,
dated February 1, 2016, has concluded and (b) the Examiner has
filed the final version of his final report on the public docket.
* The Debtors Should Not Be Advantaged and Creditors
Disadvantaged. The Debtors' proposed chapter 11 plan embeds a
settlement of certain controversial transactions and releases all
of their owners and affiliates from all liability. A confirmation
hearing based on that plan presupposes the creditors are not
granted derivative standing to sue and negotiate at arms' length
with the Debtors' owners. Therefore, the Court should not schedule
a disclosure statement hearing prior to a fair opportunity for the
UCC to move for derivative standing.
* The Debtors' Owner Should Not Be Advantaged at the Expense of
the Unsecured Noteholders. The Debtors' proposed "parallel path"
sets the table for them to proceed to confirmation to, among other
things, discharge unsecured noteholders' claims against CEC, while
at the same time the unsecured noteholders are stayed from
establishing their claims (or potentially establishing they have no
claims). Just as the UCC should be able to negotiate at arms'
length with CEC and its affiliates by being granted derivative
standing, the unsecured noteholders should not be stayed from
establishing their claims while the Debtors barrel ahead.
Otherwise, unsecured noteholders will be disadvantaged in their
negotiations with CEC. Additionally, the Ad Hoc Group of 5.75% and
6.50% Senior Unsecured Notes should be allowed to participate in
the mediation.
The Ad Hoc Group of holders of 5.75% and 6.50% Notes welcomes the
prospect of a mediation process generally, but objects to the
Debtors' proposal to limit access to the process to the parties the
Debtors have chosen to identify as so-called "relevant key
stakeholders," which includes the Law Debenture Trust Company of
New York, solely in its capacity as indenture trustee for the
Debtors' 5.75% and 6.5% senior unsecured notes, but not the Ad Hoc
Group of 5.75% and 6.50% Notes.
Consistent with their modus operandi throughout this case, the
Debtors are attempting to exclude the parties that are litigating
to enforce their CEC guarantee rights, while at the same time
asserting that they are seeking a consensual resolution of the
case. By including the indenture trustee that participated in the
very acts that led to the underlying guarantee litigation, the
Debtors appear to be suggesting a mediation process whereby only
parties that already agree with the Debtors are invited to
participate, the Ad Hoc Group of 5.75% and 6.50% Notes avers.
* * *
Counsel to the Ad Hoc Group of 5.75% and 6.50% Notes:
DRINKER BIDDLE & REATH LLP
Timothy R. Casey, Esq.
191 N. Wacker Drive, Ste. 3700
Chicago, IL 60606
Tel: (312) 569-1201
Fax: (312) 569-3201
E-mail: timothy.casey@dbr.com
- and -
James H. Millar, Esq.
Kristin K. Going, Esq.
1177 Avenue of the Americas
41st Floor
New York, NY 10036
Tel: (212) 248-3140
Fax: (212) 248-3141
E-mail: james.millar@dbr.com
kristin.going@dbr.com
Attorneys for the Statutory Unsecured Claimholders' Committee:
Martin J. Bienenstock, Esq.
Judy G.Z. Liu, Esq.
Philip M. Abelson, Esq.
Vincent Indelicato, Esq.
PROSKAUER ROSE LLP
Eleven Times Square
New York, NY 10036
Tel: (212) 969-3000
Fax: (212) 969-2900
- and -
Jeff J. Marwil, Esq.
Mark K. Thomas, Esq.
Paul V. Possinger, Esq.
Brandon W. Levitan, Esq.
PROSKAUER ROSE LLP
70 W. Madison St.
Chicago, IL 60602-4342
Tel: (312) 962-3550
Fax: (312) 962-3551
Counsel to 1L Notes Committee:
Mark A. Berkoff, Esq.
Robert Radasevich, Esq.
Nicholas M. Miller, Esq.
NEAL, GERBER & EISENBERG LLP
Two North LaSalle Street, Suite 1700
Chicago, IL 60602-3801
Ph: (312) 269-8000
- and -
Kenneth H. Eckstein, Esq.
Daniel M. Eggermann, Esq.
David Blabey, Esq.
KRAMER LEVIN NAFTALIS & FRANKEL LLP
1177 Avenue of the Americas
New York, NY 10036
Ph: (212) 715-9100
Counsel to 1L Notes Trustee:
Peter A. Siddiqui, Esq.
KATTEN MUCHIN ROSENMAN LLP
525 West Monroe Street
Chicago, IL 60661-3693
Tel: (312) 902-5200
- and -
Craig A. Barbarosh, Esq.
David A. Crichlow, Esq.
Karen B. Dine, Esq.
KATTEN MUCHIN ROSENMAN LLP
575 Madison Avenue
New York, NY 10022-2585
Ph: (212) 940-8800
Counsel to Caesars Entertainment Corporation:
Charles B. Sklarsky, Esq.
Angela Allen, Esq.
JENNER & BLOCK LLP
353 N. Clark Street
Chicago, IL 60654-3456
Tel: 312-222-9350
Fax: 312-527-0484
- and -
Lewis R. Clayton, Esq.
Michael E. Gertzman, Esq.
Jeffrey D. Saferstein, Esq.
Jonathan H. Hurwitz, Esq.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 Avenue of the Americas
New York, NY 10019
Tel.: 212-373-3000
Fax: 212-757-3990
Counsel to the Ad Hoc Committee of First Lien Bank Lenders:
Brian L. Shaw, Esq.
SHAW FISHMAN GLANTZ & TOWBIN LLC
321 N. Clark Street, Suite 800
Chicago, IL 60654
Telephone: (312) 541-0151
- and -
STROOCK & STROOCK & LAVAN LLP
Kristopher M. Hansen, Esq.
Kenneth Pasquale, Esq.
Jonathan D. Canfield, Esq.
180 Maiden Lane
New York, New York 10038
Telephone: (212) 806-5400
Counsel to the Debtors:
James H.M. Sprayregen, P.C.
David R. Seligman, P.C.
David J. Zott, P.C.
Jeffrey J. Zeiger, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle
Chicago, IL 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
- and -
Paul M. Basta, P.C.
Nicole L. Greenblatt, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, NY 10022-4611
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.,
is one of the world's largest casino companies. Caesars casino
resorts operate under the Caesars, Bally's, Flamingo, Grand
Casinos, Hilton and Paris brand names. The Company has its
corporate headquarters in Las Vegas. Harrah's announced its
re-branding to Caesar's in mid-November 2010.
In January 2015, Caesars Entertainment and subsidiary Caesars
Entertainment Operating Company, Inc., announced that holders of
more than 60% of claims in respect of CEOC's 11.25% senior secured
notes due 2017, CEOC's 8.5% senior secured notes due 2020 and
CEOC's 9% senior secured notes due 2020 have signed the Amended
and Restated Restructuring Support and Forbearance Agreement,
dated as of Dec. 31, 2014, among Caesars Entertainment, CEOC and
the Consenting Creditors. As a result, The RSA became effective
pursuant to its terms as of Jan. 9, 2015.
Appaloosa Investment Limited, et al., owed $41 million on account
of 10% second lien notes in the company, filed an involuntary
Chapter 11 bankruptcy petition against CEOC (Bankr. D. Del. Case
No. 15-10047) on Jan. 12, 2015. The bondholders are represented
by Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor
LLP.
CEOC and 172 other affiliates -- operators of 38 gaming and resort
properties in 14 U.S. states and 5 countries -- filed Chapter 11
bankruptcy petitions (Bank. N.D. Ill. Lead Case No. 15-01145) on
Jan. 15, 2015. CEOC disclosed total assets of $12.3 billion and
total debt of $19.8 billion as of Sept. 30, 2014.
Delaware Bankruptcy Judge Kevin Gross entered a ruling that the
bankruptcy proceedings will proceed in the U.S. Bankruptcy Court
for the Northern District of Illinois.
Kirkland & Ellis serves as the Debtors' counsel. AlixPartners is
the Debtors' restructuring advisors. Prime Clerk LLC acts as the
Debtors' notice and claims agent. Judge Benjamin Goldgar presides
over the cases.
The U.S. Trustee has appointed seven noteholders to serve in the
Official Committee of Second Priority Noteholders and nine members
to serve in the Official Unsecured Creditors' Committee.
The U.S. Trustee appointed Richard S. Davis as Chapter 11 examiner.
CAESARS ENTERTAINMENT: Granted More Time to Propose Ch. 11 Plan
---------------------------------------------------------------
Jessica Corso at Bankruptcy Law360 reported that the bankrupt
operating unit of Caesars Entertainment Corp will be given an
additional four months in which to propose a Chapter 11
restructuring plan, with an Illinois federal judge noting that the
case was at a critical juncture but refusing to appoint a mediator
to help hash out a resolution with dueling creditor groups.
Caesars Entertainment Operating Co. had previously been given until
March 15 to submit a plan, but U.S. Bankruptcy Judge A. Benjamin
Goldgar agreed on Feb. 16, to push that date back, according to the
report.
Caesars moved to keep control of its Chapter 11 case until the
summer, saying it needs more time to rally support from its
financial stakeholders for a restructuring plan. Caesars asked for
an extension through July 15 of the exclusive period during which
it can file a Chapter 11 plan of reorganization.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.,
is one of the world's largest casino companies. Caesars casino
resorts operate under the Caesars, Bally's, Flamingo, Grand
Casinos, Hilton and Paris brand names. The Company has its
corporate headquarters in Las Vegas. Harrah's announced its
re-branding to Caesar's in mid-November 2010.
In January 2015, Caesars Entertainment and subsidiary Caesars
Entertainment Operating Company, Inc., announced that holders of
more than 60% of claims in respect of CEOC's 11.25% senior secured
notes due 2017, CEOC's 8.5% senior secured notes due 2020 and
CEOC's 9% senior secured notes due 2020 have signed the Amended
and Restated Restructuring Support and Forbearance Agreement,
dated as of Dec. 31, 2014, among Caesars Entertainment, CEOC and
the Consenting Creditors. As a result, The RSA became effective
pursuant to its terms as of Jan. 9, 2015.
Appaloosa Investment Limited, et al., owed $41 million on account
of 10% second lien notes in the company, filed an involuntary
Chapter 11 bankruptcy petition against CEOC (Bankr. D. Del. Case
No. 15-10047) on Jan. 12, 2015. The bondholders are represented
by Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor
LLP.
CEOC and 172 other affiliates -- operators of 38 gaming and resort
properties in 14 U.S. states and 5 countries -- filed Chapter 11
bankruptcy petitions (Bank. N.D. Ill. Lead Case No. 15-01145) on
Jan. 15, 2015. CEOC disclosed total assets of $12.3 billion and
total debt of $19.8 billion as of Sept. 30, 2014.
Delaware Bankruptcy Judge Kevin Gross entered a ruling that the
bankruptcy proceedings will proceed in the U.S. Bankruptcy Court
for the Northern District of Illinois.
Kirkland & Ellis serves as the Debtors' counsel. AlixPartners is
the Debtors' restructuring advisors. Prime Clerk LLC acts as the
Debtors' notice and claims agent. Judge Benjamin Goldgar presides
over the cases.
The U.S. Trustee has appointed seven noteholders to serve in the
Official Committee of Second Priority Noteholders and nine members
to serve in the Official Unsecured Creditors' Committee.
The U.S. Trustee appointed Richard S. Davis as Chapter 11
examiner.
* * *
The Troubled Company Reporter, on April 27, 2015, reported that
Fitch Ratings has affirmed and withdrawn the Issuer Default
Ratings (IDR) and issue ratings of Caesars Entertainment Operating
Company (CEOC). These actions follow CEOC's Chapter 11 filing on
Jan. 15, 2015. Accordingly, Fitch will no longer provide ratings
or analytical coverage for CEOC.
In addition, Fitch has affirmed the IDR and issue rating of
Chester Downs and Marina LLC (Chester Downs) and the ratings have
been simultaneously withdrawn for business reason.
CANBRIAM ENERGY: Moody's Raises CFR to B2, Outlook Stable
---------------------------------------------------------
Moody's Investors Service upgraded Canbriam Energy Inc.'s Corporate
Family Rating (CFR) to B2 from B3, Probability of Default Rating to
B2-PD from B3-PD, and senior unsecured notes rating to B3 from
Caa1. The rating outlook is stable. The Speculative Grade
Liquidity Rating was withdrawn. This action resolves the review
for downgrade that was initiated on Jan. 21, 2016.
"The upgrade to B2 reflects the company's strong execution on its
growth capital spending, rising cash flows despite the fall in
commodity prices, and improving leverage metrics," commented Paresh
Chari, Moody's Analyst.
Upgrades:
Issuer: Canbriam Energy Inc
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Corporate Family Rating, Upgraded to B2 from B3
Senior Unsecured Regular Bond/Debenture (Foreign Currency)
Nov. 15, 2019, Upgraded to B3(LGD4) from Caa1(LGD4)
Outlook Actions:
Issuer: Canbriam Energy Inc
Outlook, Changed To Stable From Rating Under Review
Withdrawals:
Issuer: Canbriam Energy Inc
Speculative Grade Liquidity Rating, Withdrawn , previously rated
SGL-2
RATINGS RATIONALE
Canbriam's B2 Corporate Family Rating reflects the company's small,
albeit favorable, acreage position in the Montney in northwest
British Columbia, which provides visible production and cash flow
growth potential. The rating also considers Canbriam's very low
cost structure, low maintenance capital expenditures and strong
expected leverage metrics (debt to EBITDA 3.5x; retained cash flow
to debt 20%) and interest coverage (2.5x) in 2017.
Moody's expects Canbriam's liquidity to be adequate through 2016.
At Sept. 30, 2015, and pro forma for the October 2015 equity
issuance, Canbriam had about C$120 million in cash and full
availability under its C$250 million borrowing base revolver, which
terms out in April 2016 and matures one year later. Moody's
expects about C$145 million of negative free cash flow from
September 30, 2015 to Dec. 31, 2016, which will be funded with cash
and revolver drawings. Moody's expects Canbriam to remain in
compliance with its two financial covenants through this period.
Alternate liquidity is limited as assets are pledged as collateral
to the secured revolving credit facility, although the company's
owned midstream assets could provide an alternate source of
liquidity, if needed.
In accordance with Moody's Loss Given Default (LGD) Methodology,
the US$350 million senior unsecured notes are rated B3, one notch
below the B2 CFR, due to the priority ranking of the C$250 million
secured borrowing base revolving credit facility.
The stable outlook reflects our expectation that production will be
around 30,000 boe/d in 2016 and leverage will remain adequate.
The rating could be upgraded to B1 if retained cash flow to debt is
likely to remain above 20% and EBITDA to interest is above 4x.
The rating could be downgraded to B3 if retained cash flow to debt
falls below 10%, EBITDA to interest falls below 2.5x, or if
liquidity worsens.
Canbriam Energy Inc. is a private Calgary, Alberta-based
independent exploration and production company producing roughly
16,000 boe/d (production figures are net of royalties).
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011.
COUDERT BROTHERS: Orrick Says China Sale Claims Will Fail at Trial
------------------------------------------------------------------
Matt Chiappardi at Bankruptcy Law360 reported that Orrick
Herrington & Sutcliffe LLP told a New York federal judge on Feb.
11, 2016, that the claims from defunct law firm Coudert Brothers
LLP's Chapter 11 plan administrator stemming from the bygone firm's
sale of its Chinese assets to Orrick are so weak that there's no
need for a trial. In a trial memorandum before the New York
federal court, Orrick argued that plan administrator Development
Specialists Inc. falls short of carrying its burden to prove that
Coudert didn't receive equivalent value in its sale.
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.
DEMCO INC: U.S. Trustee to Hold 341 Meeting on March 30
-------------------------------------------------------
The Office of the U.S. Trustee is set to hold a meeting of
creditors of Demco Inc. on March 30, 2016, at 1:00 p.m.
The meeting will take place at the Office of the U.S. Trustee,
Olympic Towers, in Buffalo, New York, according to a filing with
the U.S. Bankruptcy Court for the Western District of New York.
The court overseeing the bankruptcy case of a company schedules the
meeting of creditors usually about 30 days after the bankruptcy
petition is filed. The meeting is called the "341 meeting" after
the section of the Bankruptcy Code that requires it.
A representative of the company is required to appear at the
meeting and answer questions under oath. The meeting is presided
over by the U.S. trustee, the Justice Department's bankruptcy
watchdog.
About Demco Inc.
Demco, Inc., aka Decommissioning & Environmental Management
Company, is a specialty trade contractor based in West Seneca, New
York, which provides demolition services, nuclear work,
environmental clean-up, disaster response and a variety of other
services throughout the United States and, on a project-by-project
basis, internationally. Some of Demco's better known demolition
projects in the past have included the Rocky Flats Nuclear Power
Plant, Yankee Stadium, the Orange Bowl, Buffalo Memorial
Auditorium, and the Sunflower Army Ammunition Plant.
Demco filed for Chapter 11 protection (Bankr. W.D.N.Y. Case No.
12-12465) on Aug. 6, 2012. Bankruptcy Judge Michael J. Kaplan
presides over the case. Daniel F. Brown, Esq., at Andreozzi,
Bluestein, Fickess, Muhlbauer Weber, Brown, LLP, represents the
Debtor in its restructuring effort. Freed Maxick CPAs, P.C. serves
as its accountants, and Horizons Consulting, LLC, serves as its tax
consultants. The petition was signed by Michael J. Morin,
controller.
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed three
creditors to serve on the Official Committee of Unsecured
Creditors. The Committee retained Amigone, Sanchez & Mattrey, LLP
as its counsel.
First Niagara Bank, the cash collateral lender, is represented by
William F. Savino, Esq., at Damon Morey.
DEWEY & LEBOEUF: Warren Gets Deferred Prosecution on Eve of Trial
-----------------------------------------------------------------
Jonathan Randles at Bankruptcy law360 reported that former Dewey &
LeBoeuf LLP client relations manager Zachary Warren has reached a
deferred prosecution deal just weeks before the trial over his
alleged role in the defunct firm's collapse was set to begin.
Former Dewey client manager Zachary Warren, 31, who was charged as
a low-level co-conspirator in the firm's purported fraud scheme,
reached a deal with Manhattan District Attorney Cyrus R. Vance.
About Dewey & LeBoeuf
Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 12-12321) to complete the wind-down of its operations.
The firm had struggled with high debt and partner defections.
Dewey disclosed debt of $245 million and assets of $193 million in
its chapter 11 filing late evening on May 29, 2012.
Dewey & LeBoeuf LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
At its peak, Dewey employed about 2,000 people with 1,300 lawyers
in 25 offices across the globe. When it filed for bankruptcy,
only 150 employees were left to complete the wind-down of the
business.
Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate. The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.
The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
$6 million. The Pension Benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
Judge Martin Glenn oversees the case. Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent. The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.
JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP. JPMorgan, as Collateral Agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors. The Noteholders hired
Bingham McCutchen LLP as counsel.
The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners. The creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
FTI Consulting, Inc. was appointed secured lender trustee for the
Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was named
Dewey's liquidation trustee. Scott E. Ratner, Esq., Frank A.
Oswald, Esq., David A. Paul, Esq., Steven S. Flores, Esq., at
Togut, Segal & Segal LLP, serve as counsel to the Liquidation
Trustee.
Dewey's liquidating Chapter 11 plan was approved by the bankruptcy
court in February 2013 and implemented in March. The plan created
a trust to collect and distribute remaining assets. The firm
estimated that midpoint recoveries for secured and unsecured
creditors under the plan would be 58.4 percent and 9.1 percent,
respectively.
DEX MEDIA: Bank Debt Trades at 53% Off
--------------------------------------
Participations in a syndicated loan under which Dex Media East LLC
is a borrower traded in the secondary market at 46.70
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 4.30 percentage points from the
previous week. Dex Media pays 250 basis points above LIBOR to
borrow under the $950 million facility. The bank loan matures on
Oct. 24, 2016 and carries Moody's and Standard & Poor's did not
give any rating. The loan is one of the biggest gainers and losers
among 247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
DIOCESE OF DULUTH: Child Sexual Abuse Victims Choose Mediator
-------------------------------------------------------------
Dan Romano at WDAY.com reported that the Diocese of Duluth and
attorneys representing child sexual abuse victims have agreed to
enter mediation for victim claims. Judge Robert Kressel encouraged
the Diocese and all parties involved to work with a mediator.
Gregg Zive, a federal judge with experience in diocesan bankruptcy
cases, is expected to approved as mediator by Judge Kressel.
"He's a federal bankruptcy judge out of Nevada, and he has mediated
a number of cases like this in Catholic abuse cases across the
country where the diocese or religious organization was in
bankruptcy. He's been very successful at that," said Mike Finnegan,
attorney from Jeff Anderson & Associates, the law firm representing
a number of the victims in this case.
According to the WDAY report, a diocese official testified that, as
of November, the church maintained net assets of more than $5
million and total liabilities of over $12 million.
Representatives for the victims are worried the Diocese is hiding
funds.
"In all of the cases, one of the things that we will be doing is
scrutinizing the Diocese's assets, but also separate from that, the
Diocese also had insurance going back years and years. So, there
are a number of insurers that will probably be involved in this
case as well," said Finnegan.
Mediation is expected to begin May 1 in Minneapolis if neither side
objects to the appointment of Zire as mediator.
About Diocese Of Duluth
The Diocese of Duluth sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Minn. Case No. 15-50792) on Dec. 7,
2015. The case is assigned to Judge Robert J Kressel.
The Debtor's lead counsel is Bruce A Anderson, Esq., and J Ford
Elsaesser, Esq., at Elsaesser Jarzabek Anderson Elliott &
MacDonald, CHTD., in Sandpoint, Idaho. The Debtor's local counsel
is Phillip Kunkel, Esq., at Gray, Plant, Mooty, Mooty & Bennett,
P.A., in St Cloud, Minnesota.
EAST COAST BROKERS: Trustee May Sell Centerstate Banks Shares
-------------------------------------------------------------
Judge K. Rodney May granted the motion of the Chapter 11 trustee of
East Coast Brokers & Packers Inc., et al., to sell 8,400 Shares of
Centerstate Banks, Inc. The Trustee is authorized to open an
account with NBC Securities and to subsequently sell 8,400 shares
of CenterState Banks, Inc. evidenced by Certificate No. CSB 4024.
About East Coast Brokers
East Coast Brokers & Packers, Inc., along with related entities,
sought Chapter 11 protection (Bankr. M.D. Fla. Lead Case No.
13-02894) in Tampa, Florida, on March 6, 2013. East Coast Brokers
& Packers disclosed $12,663,307 in assets and $75,181,975 in
liabilities as of the Chapter 11 filing.
The debtor-affiliates are Batista J. Madonia, Sr. and Evelyn M.
Madonia (Case No. 13-02895); Circle M Ranch, Inc., Case No.
13-02896); Ruskin Vegetable Corporation, Case No. 13-02897);
Oakwood Place, Inc. (Case No. 13-2898); Byrd Foods of Virginia,
Inc. (Case No. 13-03069); Eastern Shore Properties, Inc. (Case No.
13-03070); and Stellaro Bay, Inc. (Case No. 13-3071).
Scott A. Stichter, Esq., and Susan H. Sharp, Esq., at Stichter,
Riedel, Blain & Prosser, P.A., in Tampa, serve as counsel to the
Debtors. Steven M. Berman, Esq., and Hugo S. deBeaubien, Esq., at
Shumaker, Loop, & Kendrick, LLP, in Tampa, are the Debtors'
special counsel.
In June 2013, the bankruptcy court approved the appointment of
Gerard A. McHale, Jr., to serve as Chapter 11 trustee. MLIC Asset
Holdings LLC and MLIC CB Holdings LLC asked the Bankruptcy Court
to appoint a Chapter 11 trustee, or, in the alternative, dismiss
the Debtors' Chapter 11 cases. According to the MLIC entities,
the Debtors, among other things had mishandled the potential rents
from employees, failed to pay taxes, failed to maintain insurance,
has inadequate security regarding the Debtors' personal and real
property, and delayed the filing of schedules and reports required
under the Bankruptcy Code.
The Trustee tapped Berger Singerman, LLP as counsel to the Trustee
and Gerard A. McHale, Jr., P.A. as Financial Advisor to the
Trustee. Additionally, after conferring with the Office of the
United States Trustee and in reviewing the professionals retained
by the Debtors, the Trustee filed a motion seeking the continued
employment of the following professionals: (a) Fowler White Boggs,
P.A., solely as Special Tax Counsel to the Trustee; and (b) Wilcox
& Savage, P.C., as Special Real Estate Counsel to the Trustee,
which was granted by the Bankruptcy Court.
EL PASO: AP Services Defends Request for Fee Payments
-----------------------------------------------------
AP Services LLC, financial adviser of El Paso Children's Hospital
Corp., defended the firm's request for payment of its fees, saying
it is "reasonable" and the firm complied with the court-approved
procedures for filing fee applications.
"APS has fully complied with those procedures with respect to the
submission of this monthly fee request," the firm said in a filing
it made in U.S. Bankruptcy Court for the Western District of
Texas.
APS made the statement following an objection from El Paso County,
which criticized the firm for not complying with local bankruptcy
rules.
The firm seeks payment of monthly compensation of an amount equal
to 80% of the fees due and 100% of the expenses incurred during the
period October 1 to 31, 2015, court filings show.
AP Services was hired as financial adviser by El Paso Children's
Hospital Corp., which operates a not-for-profit children's
hospital.
El Paso officially emerged from Chapter 11 protection a month after
Judge H. Christopher Mott approved the company's restructuring plan
on Dec. 11 last year. Judge Mott approved the outline of the plan
on Oct. 28.
The restructuring plan, which took effect on Jan. 8, provided for
full payment of all allowed claims except as otherwise agreed by
creditors holding those claims.
The source of payments under the plan includes funds held by El
Paso; property to be vested in the reorganized company; funds
advanced by the University Medical Center of El Paso; and future
operating revenues of the reorganized company.
The restructuring plan grouped claims against and interest in the
company into seven classes.
Class 1 consists of priority non-tax claims to be paid in full
through quarterly cash payments.
Class 2 consists of secured claims, including UMC's $15 million
claim. The UMC claim will be subordinated to payment of all other
claims, according to the restructuring plan.
Claims of general unsecured creditors and former or current
patients are classified in Classes 5 and 3, respectively.
Texas Tech University Health Science Centers' unsecured claim is
classified in Class 4. This claim is related to El Paso's cure of
pre-bankruptcy amounts owed under its agreements with Texas Tech in
the total amount of $9.86 million.
Class 6 consists of the general unsecured claim of El Paso
Children's Physicians' Group in the amount of $2.07 million, which
is disallowed.
Meanwhile, Class 7 consists of UMC's $33 million general unsecured
claim on account of El Paso's remaining outstanding obligations
under certain transactions.
Creditors entitled to vote accepted the restructuring plan,
according to court filings. A copy of the court-approved plan is
available for free at
About El Paso Children's Hospital
El Paso Children's Hospital Corporation operates the El Paso
Children's Hospital, the only not-for-profit children's hospital in
the El Paso region. The hospital opened its doors in February
2012, features 122 private pediatric rooms, and is located at the
campus of El Paso County Hospital District dba University Medical
Center of El Paso ("UMC").
The Company sought Chapter 11 protection (Bankr. W.D. Tex. Case No.
15-30784) on May 19, 2015, following disputes with UMC. The Debtor
has continued its operations throughout its bankruptcy case.
The case is assigned to Judge H. Christopher Mott.
The Debtor disclosed $34,907,119 in assets and $14,934,578 in
liabilities as of the Chapter 11 filing.
The Debtor tapped Jackson Walker LLP as counsel, and AP Services,
LLC ("AlixPartners"), as financial advisors. Mark Herbers of
AlixPartners was appointed as the Debtor's Chief Executive and
Restructuring Officer.
A patient care ombudsman was appointed in this case on June 12,
2015, pursuant to which Ms. Suzanne Koenig was appointed as the
patient care ombudsman for the Debtor.
A Committee of Unsecured Creditors was formed on Sept. 1, 2015.
The Committee tapped Brinkman Portillo Ronk, APC as its counsel,
and Singer & Levick P.C. as its co-counsel.
ENERGY FUTURE: "Cunningham" Appeal Withdrawn from Mediation
-----------------------------------------------------------
Appellants Michael Cunningham, et al., filed class proofs of claim
and sought to certify a class to protect the claims of persons
exposed to asbestos from four of Debtors/Appellees Energy Future
Holdings Corp., et al., asbestos-containing products who in the
future may fall ill from asbestos-related illnesses
post-confirmation ("Unmanifested Asbestos Claimants"), and who did
not filed individual proofs of claim prior to the court-imposed bar
date.
Their appeal is from a Bankruptcy Court order confirming the
Debtors' reorganization plan which discharges claims of the
Unmanifested Asbestos Claimants who did not filed proofs of claims,
but reinstated claims for which a timely proof of claim was filed.
Prior to the confirmation, Appellants sought class certification
and filed their class proofs of claim in an attempt to preserve the
claims of the Unmanifested Asbestos Claimants in the class. They
note that the confirmation order is the subject of a separate
appeal pending in this court. Appellants argue in support of
mediation that the appellant relief sought is to protect the due
process rights of members of the class and to prevent their claims
from being discharge without constitutionally adequate notice. They
contend that the Appellants did not receive notice and learned of
the situation by accident.
Appellees feel that there was no middle ground available, based on
the Appellants' position on settlement, noting that the Bankruptcy
Court established a December 14, 2015 bar date for all
asbestos-related claims, including those not manifested, that is
individuals who have not suffered any physical injury, approved the
Debtors' notice plan for such claims and confirmed a plan of
reorganization discharging any untimely-filed claims. They view
Appellants' motion for class certification, which is the subject of
this appeal, to be an attempt to overturn the Bankruptcy Court's
asbestos bar date and allow any unmanifested claimant to bring suit
against the Debtors for pre-petition asbestos exposure, whether
they filed a timely claim.
Appellees are not agreeable to that proposal or any other proposal
that circumvents the bar date and notice plan for such claims or
prevents the discharge of untimely claim. They view the requested
relief by Appellants as all-or-nothing.
In a Recommendation dated February 3, 2016, which is available at
http://is.gd/X9L5Qrfrom Leagle.com, Judge Mary Pat Thynge of the
United States District Court for the District of Delaware
recommended that the matter be withdrawn from the mandatory
referral for mediation and proceed through the appellate process of
the Court.
The civil proceeding is MICHAEL CUNNINGHAM, et al. Appellants, v.
ENERGY FUTURE HOLDINGS CORP, et al. Appellees, C. A. No.
15-1218-RGA (D. Del.).
The case is IN RE: ENERGY FUTURE HOLDINGS CORP., et al., Debtors,
Bankruptcy Case No. 14-10979 (Bankr. D. Del.).
Michael Cunningham, Appellant, is represented by Daniel K. Hogan,
Esq. -- The Hogan Firm.
Joe Arabie, Appellant, is represented by Daniel K. Hogan, The Hogan
Firm.
Michelle Ziegelbaum, Appellant, is represented by Daniel K. Hogan,
The Hogan Firm.
Energy Future Holdings Corp., et al., Appellees, are represented by
Mark David Collins, Esq. -- collins@rlf.com -- Richards, Layton &
Finger, PA, Daniel J. DeFranceschi, Esq. -- defranceschi@rlf.com
-- Richards, Layton & Finger, PA & Jason Michael Madron, Esq. --
madron@rlf.com Richards, Layton & Finger, PA.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a Portfolio
of competitive and regulated energy businesses in Texas.
Oncor, an 80 percent-owned entity within the EFH group, is the
largest regulated transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
On April 29, 2014, Energy Future Holdings and 70 affiliated
companies sought Chapter 11 bankruptcy protection (Bankr. D. Del.
Lead Case No. 14-10979) after reaching a deal with some key
financial stakeholders to keep its businesses operating while
reducing its roughly $40 billion in debt.
The Debtors' cases have been assigned to Judge Christopher S.
Sontchi (CSS). The Debtors are seeking to have their cases
Jointly administered for procedural purposes.
As of Dec. 31, 2013, EFH Corp. reported assets of $36.4 billion in
book value and liabilities of $49.7 billion. The Debtors have $42
billion of funded indebtedness.
EFH's legal advisor for the Chapter 11 proceedings is Kirkland &
Ellis LLP, its financial advisor is Evercore Partners and its
restructuring advisor is Alvarez & Marsal. The TCEH first lien
lenders supporting the restructuring agreement are represented by
Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor,
and Millstein & Co., LLC, as financial advisor.
The EFIH unsecured creditors supporting the restructuring
Agreement are represented by Akin Gump Strauss Hauer & Feld LLP,
as
legal advisor, and Centerview Partners, as financial advisor. The
EFH equity holders supporting the restructuring agreement are
represented by Wachtell, Lipton, Rosen & Katz, as legal advisor,
and Blackstone Advisory Partners LP, as financial advisor. Epiq
Systems is the claims agent.
Wilmington Savings Fund Society, FSB, the successor trustee for
the second-lien noteholders owed about $1.6 billion, is
represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and
Gregory A.
Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq.,
Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey,
Esq., and Howard L. Siegel, Esq.
An Official Committee of Unsecured Creditors has been appointed in
the case. The Committee represents the interests of the unsecured
creditors of ONLY of Energy Future Competitive Holdings Company
LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings
Company LLC; and EFH Corporate Services Company, and of no other
debtors. The Committee has selected Morrison & Foerster LLP and
Polsinelli PC for representation in this high-profile energy
restructuring. The lawyers working on the case are James M. Peck,
Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at
Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K.
Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at
Polsinelli PC.
EPICOR SOFTWARE: Bank Debt Trades at 5% Off
-------------------------------------------
Participations in a syndicated loan under which Epicor Software
Corp is a borrower traded in the secondary market at 95.00
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.10 percentage points from the
previous week. Epicor Software pays 375 basis points above LIBOR
to borrow under the $1.4 billion facility. The bank loan matures on
May 25, 2022 and carries Moody's B2 rating and Standard & Poor's B
rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
FENDER MUSICAL: S&P Raises CCR to 'B+', Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Scottsdale, Ariz.-based Fender Musical Instruments Corp.
to 'B+' from 'B'. The outlook is stable.
S&P also raised the rating on Fender's senior secured term loan due
2019 to 'BB' from 'BB-'. The recovery rating is unchanged at '1',
indicating the prospect of very high recovery (90% to 100%) in the
event of a payment default.
S&P estimates the company's pro forma adjusted debt was
approximately $150 million at fiscal year-end 2015.
"The upgrade reflects the company's paying down $42 million on its
term loan and revolver," said Standard & Poor's credit analyst
Stephanie Harter. "Although the company did not meet our forecast
for EBITDA because of underperformance at its Japanese operations,
and it incurred one-time charges associated with the closure of the
KMC Music wholesale business and charges associated with its
direct-to-market strategy in Japan, we believe the Japan disruption
was a one-time event that should not continue to weigh on earnings.
We expect normalized purchase patterns will resume in 2016."
The rating outlook is stable. Standard & Poor's expects Fender's
credit measures to remain near or below 4x and for funds from
operations-to-total debt to improve closer to 20% over the next
year as sales in Japan recover and the company's one-time charges
taper off.
S&P could lower the rating if there were any material disruptions
to operations, or if company adopts more-aggressive financial
policies, including any material debt-financed acquisitions or
dividends, and/or if leverage were to increase to well over 5x,
possibly from some margin erosion if raw material costs were to
increase. S&P currently estimates EBITDA would need to decline
more than 30% for this to occur, assuming constant debt levels.
While unlikely within the next 12 months, S&P could raise the
ratings if the company can further diversify its business and
successfully cycle through its business transitions.
FIVE S PLUS: Sale-Based Plan Opposed by UST, TrustLand
------------------------------------------------------
Five S Plus, LLC, filed a Chapter 11 plan that promises to pay
creditors in full from the sale of part of its 5,000-acre River
Rouge Plantation in Louisiana.
However, management of the Debtor may lose control of the estate
and the sale process, if the judge sustains the objections of the
U.S. Trustee and the secured creditor of the Debtor.
Five S Plus' property consists of both recreation hunting land and
production farming land. Efforts to market and sell the property
began in 2014 but the Debtor failed to reach a deal with a buyer.
Management has continued to market the property during the course
of the bankruptcy case. In October 2014, the Debtor received
another offer on the property. The Debtor is negotiations with a
potential buyer.
The proposed Chapter 11 Plan designates three classes of claims:
-- the secured claim of Trustland Mortgage (Class 1),
-- unsecured claims (Class 2), and
-- equity (Class 3).
The Debtor will continue to aggressively market a significant
portion of the real estate to pay all creditors in full. After the
effective date of the order confirming the plan, Aaron Slayter,
Jr., will continue to manage the Debtor.
A copy of the First Amended Disclosure Statement is available for
free at:
http://bankrupt.com/misc/Five_S_Plus_74_1st_Am_DS.pdf
Classes 1 and 2 are impaired under the Plan and were entitled to
vote. According to the voting report, Trustland voted to reject
the Plan. The three unsecured creditors who voted on the Plan
accepted the Plan.
The Court on Dec. 3, 2015, approved the Disclosure Statement and
set a hearing to consider confirmation of the Plan. The hearing
was initially set for Jan. 20 but was continued to February to give
the Debtor time to amend the Plan.
Henry G. Hobbs, Jr., Acting United States Trustee for Region 5,
objects to confirmation of the Debtor's Plan of Reorganization
unless and until it is modified to be compliant with 11 U.S.C. Sec.
1127(a)(7) and provide creditors binding assurances that they will
receive as much or more of a distribution than they would in a
Chapter 7 liquidation.
"[The] Debtor has no binding offer to buy its real estate at an
amount sufficient to pay all creditors in full. There is no
provision in the Plan protecting creditors if Debtor cannot sell
their real estate at an amount sufficient to pay all creditors. It
appears that all creditors, and particularly the unsecured
creditors, would be better off in a Chapter 7 liquidation than
under the Plan as it stands now. A Chapter 7 trustee, in addition
to marketing Debtor's real estate, could potentially pursue actions
pursuant to Section 547 to recover the amounts Debtor paid
immediately prior to the bankruptcy to other entities owned by the
Debtor's owners," the U.S. Trustee said in his objection.
In its objection, TrustLand, the senior secured creditor asserting
in excess of $3,206,000, pointed out that during the hearings on
approval of the Disclosure Statement and the supplemental motion by
the Debtor to retain a broker, it was disclosed that the Debtor had
received no offers for purchase of the property and the Debtor had
not obtained any written brokerage agreements to present to
creditors or the court. Further, it notes that the Debtor has
proposed no marketing plan for the sale of the property and has
simply stated that the Debtor would like one year to market and
sell the property. TrustLand submits that the absence of any offer
to purchase and the attempted marketing efforts of the Debtor pre-
and post- petition indicate that the property may not be readily
and easily marketable and further that a plan of liquidation is not
feasible.
"The efforts of the Debtor to liquidate the properties
post-petition were no different than those taken pre-petition and
after over two years of informal marketing, no offers have been
received or accepted by the Debtor for the sale of the properties,"
TrustLand said in its objection to the Plan.
Attorneys for TrustLand Mortgage:
WHEELIS & ROZANSKI
Stephen D. Wheelis, Esq.
Richard A. Rozanski, Esq.
2312 S MacArthur Dr
Alexandria, LA 71301
Tel: 318-445-5600
E-mail: steve@wheelis-rozanski.com
richard@wheelis-rozanski.com
Henry G. Hobbs, Jr., Acting United States Trustee, is represented
by:
Richard H. Drew
Trial Attorney, Office of US Trustee
300 Fannin Street, Suite 3196
Shreveport, LA 71101
Tel: (318) 676-3456
Direct: (318) 676-3484
Fax: (318) 676-3212
About Five S Plus
Five S Plus -- http://www.fivesplus.com/-- owns the River Rouge
Plantation, a 5,000-acre property located on the banks of the Red
River, stretching from Boyce to Colfax, Louisiana. From then until
now, the property has been used for cattle to graze, farming, and
recreation. This property, formerly called Mead Plantation, or
Meadland, dates back to the early 1800s, when it was owned by
Joshua R. Mead and his family. The land changed hands several
times, and in 2003, the farm was purchased by the Slayter family,
owners of Five S Plus cattle company.
Five S Plus, LLC, doing business as River Rouge Plantation of
Louisiana, commenced a Chapter 11 bankruptcy case (Bankr. W.D. La.
Case No. 15-80398) on April 10, 2015, in Alexandria, Louisiana,
without stating a reason. Aaron L. Slayter, Jr., signed the
petition as managing member.
The Debtor estimated $10 million to $50 million in total assets
and
$1 million to $10 million in debt. The formal schedules of assets
and liabilities, as well as the statement of financial affairs,
are
due April 24, 2015. The Debtor's Chapter 11 plan and disclosure
statement are due Aug. 10, 2015.
The case is assigned to Judge Henley A. Hunter.
Laramie Henry, Esq., serves as counsel to the Debtor.
FIVE S PLUS: TrustLand Seeks Chapter 7 Conversion
-------------------------------------------------
Trustland Mortgage, LLC, the senior secured creditor owed in excess
of $3,206,000 by debtor Five S Plus, LLC, asks the U.S. Bankruptcy
Court for the Western District of Louisiana to convert the Debtor's
bankruptcy case to one under Chapter 7 of the Bankruptcy Code.
"The Chapter 11 case has been pending since April 10, 2015 with no
confirmed plan. The Debtor has not retained any marketing agency
or realtor to sell the property and has not received any offers for
the purchase of the property which offers have been presented to
this Court or to TrustLand Mortgage," the secured creditor said in
its conversion motion filed early this month.
While the Debtor argues that there is substantial equity in the
properties exceeding the total indebtedness owed by the debtor,
TrustLand submits that the absence of any offer to purchase any of
the property at any price indicates that the property does not have
the excessive equity value attributed to the property by the
Debtor. Further the most recent operating report filed by the
Debtor attaches a balance sheet showing Debtor has total assets of
only $3,050,564. The land is valued at only $2,680,157. TrustLand
submits that the absence of any offer to purchase and the attempted
marketing efforts of the Debtor pre and post petition indicate that
the property may not be readily and easily marketable and further
that a plan of liquidation is not feasible. The Debtor requests an
additional year under the plan to attempt to liquidate the
property.
TrustLand Mortgage also pointed out that:
* The Debtor has attempted to market and sell the properties for
in excess of one year pre-petition without success and has had no
offers for any purchase of any portion of the property,
post-petition.
* During the hearings on approval of the Disclosure Statement
and the supplemental motion by the Debtor to retain a broker, it
was disclosed that the Debtor had received no offers for purchase
of the property and the debtor had not obtained any written
brokerage agreements to present to creditors or the court.
* Further, the debtor has proposed no marketing plan for the
sale of the property and has simply stated that the debtor would
like one year to market and sell the property.
* Further, it was disclosed that the debtor had transferred over
$100,000 in cash pre-petition to insider entities of the debtor.
* The hearing on confirmation of the Chapter 11 Plan was
continued on Jan. 20, 2016 to Feb. 17, 2016 to allow the Debtor
time to amend the plan. To date no amended plan has been filed.
A hearing on the Conversion Motion is scheduled for March 2, 2016,
at 9:30 a.m.
About Five S Plus
Five S Plus -- http://www.fivesplus.com/-- owns the River Rouge
Plantation, a 5,000-acre property located on the banks of the Red
River, stretching from Boyce to Colfax, Louisiana. From then until
now, the property has been used for cattle to graze, farming, and
recreation. This property, formerly called Mead Plantation, or
Meadland, dates back to the early 1800s, when it was owned by
Joshua R. Mead and his family. The land changed hands several
times, and in 2003, the farm was purchased by the Slayter family,
owners of Five S Plus cattle company.
Five S Plus, LLC, doing business as River Rouge Plantation of
Louisiana, commenced a Chapter 11 bankruptcy case (Bankr. W.D. La.
Case No. 15-80398) on April 10, 2015, in Alexandria, Louisiana,
without stating a reason. Aaron L. Slayter, Jr., signed the
petition as managing member.
The Debtor estimated $10 million to $50 million in total assets
and
$1 million to $10 million in debt. The formal schedules of assets
and liabilities, as well as the statement of financial affairs,
are
due April 24, 2015. The Debtor's Chapter 11 plan and disclosure
statement are due Aug. 10, 2015.
The case is assigned to Judge Henley A. Hunter.
Laramie Henry, Esq., serves as counsel to the Debtor.
FORTESCUE METALS: Bank Debt Trades at 31% Off
---------------------------------------------
Participations in a syndicated loan under which Fortescue Metals
Group Ltd is a borrower traded in the secondary market at 69.42
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents an increase of 1.29 percentage points from the
previous week. Fortescue Metals pays 275 basis points above LIBOR
to borrow under the $4.95 billion facility. The bank loan matures
on June 13, 2019 and carries Moody's Ba1 rating and Standard &
Poor's BB+ rating. The loan is one of the biggest gainers and
losers among 247 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Feb. 5.
FREEDOM COMMUNICATIONS: Seeks Approval of AFCO Premium Finance Deal
-------------------------------------------------------------------
Freedom Communications, Inc., and its related debtors seek
authority from the Bankruptcy Court to enter into a premium finance
agreement with AFCO Corp.
In the ordinary course of their businesses, the Debtors must
maintain various insurance policies, including workers'
compensation insurance coverage. The Debtors are a qualified
self-insurer of up to $1 million of workers' compensation
coverage.
The Debtors allege that annually, it obtain an excess workers'
compensation coverage from Safety National Casualty Corporation and
finance the Policy premium through AFCO Corp. for coverage in
excess of $1 million. The Debtors' current Policy bears a total
premium payment of $204,327. The Debtors are duty bound on the
coverage on the Policy, but did not have the ability to pay the
Premium in one lump sum, so that the Debtors must enter into the
premium finance agreement with AFCO to pay for the balance of the
insurance premium remaining after application of the Initial Down
Payment of $71,514 and payments of $19,217.44 monthly installments
over a term of seven months and in addition, the obligations under
the financing agreement will be secured by unearned premiums, the
Debtors tell the Court.
Accordingly, the Debtors assert, the proposed financing is in the
best interests of the Debtors for having such excess workers'
compensation coverage will ensure that the Debtors operations can
continue uninterrupted and the Debtors are still operating their
businesses.
The Debtors' Motion has been set for hearing on Feb. 29, 2016, at
2:00 PM.
Freedom Communications, Inc. is represented by:
William N. Lobel, Esq.
Alan J. Friedman, Esq.
Beth E. Gaschen, Esq.
LOBEL WEILAND GOLDEN FRIEDMAN LLP
650 Town Center Drive, Suite 950
Costa Mesa, California 92626
Telephone: (714) 966-1000
Facsimile: (714) 966-1002
Email: wlobel@lwgfllp.com
afriedman@lwgfllp.com
bgaschen@lwgfllp.com
About Freedom Communications
Headquartered in Santa Ana, California, Freedom Communications,
Inc., owns two daily newspapers -- The Press-Enterprise in
Riverside, Calif. and The Orange County Register in Santa Ana,
Calif.
Freedom Communications and 24 of its affiliates sought Chapter 11
bankruptcy protection in California with the intention of selling
their assets to a group of local investors led by Rich Mirman,
Freedom's chief executive officer and publisher.
Headquartered in Santa Ana, California, Freedom owns two daily
newspapers -- The Press-Enterprise in Riverside, Calif. and The
Orange County Register in Santa Ana, Calif.
Freedom Communications, Inc., et al., filed Chapter 11 bankruptcy
petitions (Bankr. C.D. Cal. Proposed Lead Case No. 15-15311) on
Nov. 1, 2015. Richard E. Mirman signed the petition as chief
executive officer. Lobel Weiland Golden Friedman LLP serves as the
Debtors' counsel.
Freedom Communications Holdings estimated both assets and
liabilities in the range of $10 million to $50 million.
FUHU INC.: Court Approves $2-Mil. Loan from Buyer
-------------------------------------------------
Fuhu, Inc. and its affiliated debtors sought and obtained from
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware final approval to obtain postpetition
financing.
The DIP Facility contains, among others, these terms:
(1) Borrowers: Fuhu, Inc., Fuhu Holdings, Inc., Fuhu Direct,
Inc., and Nabi, Inc.
(2) Postpetition Lender: GWS Fuhu, LLC
(3) Type and Amount of DIP Facility: A debtor-in-possession
loan facility extended by the Postpetition Lender pursuant to the
terms of the Interim Order and Final Order and the terms and
conditions set forth in the DIP Note in the principal amount of up
to $2,000,000, of which $2,000,000 would be borrowed on an interim
basis.
(4) Purpose/Use of Proceeds: The Debtors are authorized to use
the proceeds of the loans provided by the Postpetition Lender to
the Debtors, to fund adequate protection payments to LSQ Funding
Group, Obsidian Agency Services, Inc., as administrative agent and
collateral agent, and the lenders party thereto from time to time.
Such adequate protection payments shall be applied to the principal
balances only of LSQ and Obsidian.
(5) Interest Rate: Interest on the DIP Facility shall accrue
at six percent and shall be paid at maturity of the DIP Loan, but
interest shall accrue at 10% from and after the Termination Date.
(6) Termination Date: Usual and customary for facilities of
this nature, including, without limitation, (i) the Debtors'
failure to continue operating in the ordinary course, (ii) the
Court's granting relief from the automatic stay with respect to any
asset with a value of more than $250,000, (iii) the closing of a
sale of substantially all of the Debtors' assets, and (iv) with
respect to remedies, immediate relief from the automatic stay upon
five business days' prior written notice to Debtors.
The Debtors contended that they have an urgent and immediate need
to obtain financing under the DIP Facility to make adequate
protection payments to certain of their existing lenders so that
they can bridge their operations to the closing of a sale of their
assets to GWS Fuhu, LLC or another purchaser. The Debtors further
contended that without the proposed DIP Facility and the use of
cash collateral, the Debtors will not be able to maintain their
going-concern value or effectuate an orderly sale process that
would maximize value for all consitutents.
Judge Sontchi had previously issued an interim order, permitting
the Debtors to obtain DIP financing pending a final hearing, which
took place on January 20, 2016.
A full text copy of the Interim Order, dated January 7, 2016 is
available at http://is.gd/D8D5Wa
A full-text copy of the Final DIP Order, dated January 21, 2016, is
available at http://is.gd/rGf46n
Fuhu, Inc. and Fuhu Holdings, Inc. are represented by:
Jeffrey N. Pomerantz, Esq.
Ira Kharasch, Esq.
Michael R. Seidl, Esq.
Colin R. Robinson, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705
Telephone: (302)652-4100
Facsimile: (302)652-4400
E-mail: jpomerantz@pszjlaw.com
ikharasch@pszjlaw.com
mseidl@pszjlaw.com
crobinson@pszjlaw.com
- and -
Robert J. Miller, Esq.
BRYAN CAVE LLP
Two N. Central Ave., Suite 2200
Phoenix, AZ 85004
Telephone: (602)364-7000
Facsimile: (602)364-7070
E-mail: rjmiller@bryancave.com
- and -
Kerry A. Moynihan, Esq.
BRYAN CAVE LLP
3161 Michelson Drive, Suite 1500
Irvine, CA 92612
Telephone: (949)223-7000
Facsimile: (949)223-7100
E-mail: kerry.moynihan@bryancave.com
- and -
Brian C. Walsh, Esq.
Laura Uberti Hughes, Esq.
BRYAN CAVE LLP
One Metropolitan Square
211 N. Broadway, Suite 3600
St. Louis, MO 63102
Telephone: (314)259-2000
Facsimile: (314)259-2020
E-mail: brian.walsh@bryancave.com
laura.hughes@bryancave.com
D & H Distributing Co. is represented by:
Brett D. Fallon, Esq.
Douglas N. Candeub, Esq.
MORRIS JAMES LLP
500 Delaware Avenue, Suite 1500
Wilmington, Delaware 19801-1494
Telephone: (302)888-6800
Facsimile: (302)571-1750
E-mail: bfallon@morrisjames.com
dcandeub@morrisjames.com
About Fuhu, Inc.
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.
The Office of the U.S. Trustee appointed seven creditors to the
official committee of unsecured creditors. Cooley LLP represents
the committee.
* * *
The Debtors won approval of bidding procedures in connection with
the sale substantially all of their operating assets. The Court
approved a Jan. 15, 2016 bid deadline, a Jan. 19 auction, and a
Jan. 20 sale hearing. Absent higher and better offers, the Debtors
are under contract sell the assets to stalking horse GWS Fuhu, LLC,
for $10,000,000, subject to adjustments, plus the assumption of the
assumed liabilities, and for a minimum of $1,000,000 to be
available for satisfaction of the claims of unsecured creditors.
FUHU INC.: Court Approves Cash Collateral Use
---------------------------------------------
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware entered a final order authorizing debtors
Fuhu, Inc. and Fuhu Holdings, Inc., to use cash collateral.
Judge Sontchi ruled that the Debtors are authorized to use Cash
Collateral to the extent required to pay when due, the expenses
specifically enumerated in the Budget. These expenses include,
among others, payroll & labor payments, cost of sales and rent &
office expenditures. The Debtors may use cash collateral to pay
(a) fees owing to the U.S. Trustee, (b) fees and expenses awarded
by the Court to professionals retained in the cases by the Debtors
or the Official Committee of Unsecured Creditors, and (c)
out-of-pocket expenses of members of the Committee, solely to the
extent approved by the Court and set forth in the Budget. The
Budget provides for total expenditures amounting to $17,376,000.
A full-text copy of the Final Order, dated Jan. 7, 2016, is
available at http://is.gd/N9nbPH
The Debtors are represented by:
Jeffrey N. Pomerantz, Esq.
Ira Kharasch, Esq.
Michael R. Seidl, Esq.
Colin R. Robinson, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705
Telephone: (302)652-4100
Facsimile: (302)652-4400
E-mail: jpomerantz@pszjlaw.com
ikharasch@pszjlaw.com
mseidl@pszjlaw.com
crobinson@pszjlaw.com
- and -
Robert J. Miller, Esq.
BRYAN CAVE LLP
Two N. Central Ave., Suite 2200
Phoenix, AZ 85004
Telephone: (602)364-7000
Facsimile: (602)364-7070
E-mail: rjmiller@bryancave.com
- and -
Kerry A. Moynihan, Esq.
BRYAN CAVE LLP
3161 Michelson Drive, Suite 1500
Irvine, CA 92612
Telephone: (949)223-7000
Facsimile: (949)223-7100
E-mail: kerry.moynihan@bryancave.com
- and -
Brian C. Walsh, Esq.
Laura Uberti Hughes, Esq.
BRYAN CAVE LLP
One Metropolitan Square
211 N. Broadway, Suite 3600
St. Louis, MO 63102
Telephone: (314)259-2000
Facsimile: (314)259-2020
E-mail: brian.walsh@bryancave.com
laura.hughes@bryancave.com
D & H Distributing Co. is represented by:
Brett D. Fallon, Esq.
Douglas N. Candeub, Esq.
MORRIS JAMES LLP
500 Delaware Avenue, Suite 1500
Wilmington, Delaware 19801-1494
Telephone: (302)888-6800
Facsimile: (302)571-1750
E-mail: bfallon@morrisjames.com
dcandeub@morrisjames.com
The Official Committee of Unsecured Creditors is represented by:
Tobey M. Daluz, Esq.
Matthew G. Summers, Esq.
Leslie C. Heilman, Esq.
Jessica C. Watt, Esq.
BALLARD SPAHR LLP
919 North Market Street, 11th Floor
Wilmington, DE 19801
Telephone: (302)252-4465
Facsimile: (302)252-4466
E-mail: daluzt@ballardspahr.com
summersm@ballardspahr.com
heilmanl@ballardspahr.com
- and -
Jay R. Indyke, Esq.
Jeffrey L. Cohen, Esq.
Seth Van Aalten, Esq.
Richelle Kalnit, Esq.
COOLEY LLP
1114 Avenue of the Americas
New York, NY 10036
Telephone: (212)479-6000
Facsimile: (212)479-6275
E-mail: jindyke@cooley.com
jcohen@cooley.com
svanaalten@cooley.com
rkalnit@cooley.com
About Fuhu, Inc.
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.
The Office of the U.S. Trustee appointed seven creditors to the
official committee of unsecured creditors. Cooley LLP represents
the committee.
* * *
The Debtors won approval of bidding procedures in connection with
the sale substantially all of their operating assets. The Court
approved a Jan. 15, 2016 bid deadline, a Jan. 19 auction, and a
Jan. 20 sale hearing. Absent higher and better offers, the Debtors
are under contract sell the assets to stalking horse GWS Fuhu, LLC,
for $10,000,000, subject to adjustments, plus the assumption of the
assumed liabilities, and for a minimum of $1,000,000 to be
available for satisfaction of the claims of unsecured creditors.
GEORGIA TRANSIT: GE Capital Granted $1.1MM in Judgment
------------------------------------------------------
Judge Richard W. Story of the United States District Court for the
Northern District of Georgia, Gainesville Division, granted the
motion for summary judgment filed by GE Capital Commercial, Inc.,
and entered judgment for GE Capital in the amount of $1,086,375,
excluding attorneys' fees and costs.
GE Capital and Georgia Transit successively entered into four Loan
and Security Agreements whereby GE Capital agreed to loan money to
Georgia Transit to purchase a 2015 Kimble KF3200C 3 Axle Front
Discharge Transit Mixer, and Georgia Transit agreed to repay th
loan. Defendants Don and Jason Williams guaranteed each of the
loan agreements.
Georgia Transit eventually defaulted on the loans and filed for
Chapter 11 bankruptcy. The Williams, however, failed to perform
the guaranties on their part by failing to make payments due under
the terms of the guaranties even after notice and demand from GE
Capital.
On May 13, 2015, GE Capital sued the Williams asserting breach of
contract claims.
Judge Story found that there are no genuine issues of material fact
regarding GE Capital's breach of contract claim against the
Williams and that GE Capital is entitled to judgment as a matter of
law. The judge determined that the amount due and owing, after
acceleration and not including attorneys' fees and costs, total
$1,086,375.38. Judge Story also held that Don and Jason Williams
are obligated to pay the attorneys' fees and costs incurred by GE
Capital.
The case is GE CAPITAL COMMERCIAL, INC., Plaintiff, v. DON WILLIAMS
and JASON WILLIAMS, Defendants, Civil Action No. 2:15-CV-98-RWS
(N.D. Ga.).
A full-text copy of Judge Story's February 11, 2016 order is
available at http://is.gd/HCKbhifrom Leagle.com.
GE Capital Commercial, Inc. is represented by:
Ted William Hight, III, Esq.
THOMPSON O'BRIEN KEMP & NASUTI
40 Technology Parkway South, Suite 300
Norcross, GA 30092
Tel: (770)925-0111
Fax: (770)925-8597
Email: thight@tokn.com
Don Williams is represented by:
Jimmy C. Luke, II, Esq.
MARTIN BAGWELL LUKE, P.C.
400 Northridge Road, Suite 1225
Atlanta, GA 30350
Tel: (68)218-0345
Email: jluke@mbllawfirm.com
Jason Williams is represented by:
Theodore Wesley Robinson, Esq.
HULSEY OLIVER & MAHAR
200 E.E. Butler Parkway
Gainsville, GA 30503
Tel: (770)532-6312
Fax: (770)531-9230
GETTY IMAGES: Bank Debt Trades at 35% Off
-----------------------------------------
Participations in a syndicated loan under which Getty Images Inc.
is a borrower traded in the secondary market at 65.30
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents an increase of 2.93 percentage points from the
previous week. Getty Images pays 350 basis points above LIBOR to
borrow under the $1.9 billion facility. The bank loan matures on
Oct. 14, 2019 and carries Moody's B3 rating and Standard & Poor's
CCC+ rating. The loan is one of the biggest gainers and losers
among 247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
GREAT HEARTS: Fitch Affirms 'BB' Rating on Veritas Project Bonds
----------------------------------------------------------------
Fitch Ratings has affirmed its 'BB' rating on approximately $16.1
million of educational revenue bonds, series 2012 issued by the
Industrial Development Authority of the City of Phoenix on behalf
of Great Hearts Academies (Veritas Project).
The Rating Outlook is revised to Positive from Stable.
SECURITY
The bonds are a joint and several obligation of two charter
schools, Veritas Preparatory Academy (VPA) and Archway Classical
Veritas (ACV) (together, the schools) and are payable from all
legally available revenues. The bonds are further secured by a
first mortgage lien over the facility in which the schools are
co-located, and a cash-funded debt service reserve.
KEY RATING DRIVERS
POSITIVE OUTLOOK: The Outlook revision reflects Fitch's expectation
that the credit profile of the schools combined will continue to
improve in fiscal 2016 (particularly with inclusion of ACV which
will have completed five-years of operating history), driving
improved coverage on the series 2012 bonds.
STABLE OPERATIONS: The 'BB' rating is supported by VPA's successful
13-year operating history, favorable demand trends evidenced by a
track record of enrollment growth and robust waiting lists at both
schools, and trend of positive operating results on a combined
basis. Offsetting factors include thin balance sheet resources,
which are typical of the charter school sector and provide little
financial flexibility.
LIMITED HISTORY OF ACV: Per Fitch's charter school rating criteria,
the calculation of debt service coverage excludes ACV based on
limited four-year operating history. Maximum annual debt service
(MADS) coverage on the series 2012 bonds from VPA operations alone
increased to 1.0x in fiscal 2015, from 0.9% in fiscal 2014. MADS
coverage on a combined basis also has a limited history
(three-years) of consistent coverage of over 1.0x, though coverage
rises to 2.0x in fiscal 2015.
HIGH DEBT BURDEN: The schools' combined financial leverage remains
high as measured by a MADS burden at about 11% on a combined basis
in fiscal 2015. Debt to net income available for debt service is
high but reduced to 7x, down from 8x in the prior year.
STRONG MANAGEMENT OVERSIGHT: The schools benefit from the strong
programmatic leadership of Great Hearts Academies (GHA), whose
reputation for academic excellence drives consistently strong
student demand among its network of 22 charter schools located
throughout the Phoenix metropolitan area. This strong leadership is
expected to continue though GHA continues to reorganize its Arizona
operations.
RATING SENSITIVITIES
ACHIEVEMENT OF FINANCIAL METRICS: Veritas Preparatory Academy's
achievement of certain financial metrics based on its own
operations, principally achieving consistent MADS coverage of at
least 1.0x, together with Archway Classical Veritas' long-term
consistency in operations after five years is expected to yield
upward rating momentum of Great Hearts Academies' long-term
rating.
CHARTER RELATED CONCERNS: A limited financial cushion; substantial
reliance on enrollment-driven, per pupil funding; and charter
renewal risk are credit concerns common among all charter school
transactions that, if pressured, could negatively impact Great
Hearts Academies' rating.
CREDIT PROFILE
GHA continues to reorganize its Arizona operations. The founding
CEO of GHA will now run GHA's Texas operations effective March
2015. GHA recently appointed an interim CEO and new President to
run it Arizona operations focusing on the business side and
academic side, respectively. The revised leadership structure is in
line with GHA's effort for state and national expansion.
DEMAND SUPPORTED BY STRONG ACADEMICS
The schools continue to benefit from favorable student demand
trends, resulting from the strong academic performance among GHA's
network of schools. VPA's 13-year operating history continues to be
viewed as a credit positive, with growing enrollment and strong
academic achievement. While only in its fifth academic year, ACV
has also demonstrated enrollment growth and solid academic
performance, underscoring the demand for GHA's program offerings
and brand recognition throughout the Phoenix metropolitan area.
The schools' academic quality is also evidenced by their high
Arizona Department of Education rankings. All schools in the GHA
network, including VPA and ACV, continue to outperform state
averages on Arizona's standardized testing.
The schools maintain a positive working relationship with their
authorizer, the Arizona State Board of Charter Schools (ASBCS).
While both schools are still operating under their initial
charters, they are for terms of 15 years. ASBCS performs both
annual and five-year reviews for charter schools with 15-year
contracts. Fitch views the schools' charter terms and their
positive working relationship with ASBCS as a credit positive,
indicating a more favorable charter environment.
VPA enrolled a total of 708 students in grades 6-12 as of November
2015, which is up from 690 in November 2014 and exceeded budgeted
expectations. Management expects some incremental growth but does
not intend to grow too much beyond the current level to preserve
its academic mission, which is achievable due to current demand and
wait lists. Enrollment is capped at 750 students per its charter
providing some operating flexibility.
Demand continues to be strong for ACV as well, with 539 students
enrolled in grades K-5 as of November 2015, also exceeding budget.
ACV's charter caps enrollment at 600. Combined enrollment of 1,247
is slightly higher than the prior year and remains ahead of the
initial projection provided to Fitch of 1,140 for fall 2015. The
schools maintain robust and actively managed wait lists (136 for
VPA and 1,249 for ACV). Fitch views the schools' nearly full
enrollments and sizeable wait lists as reflective of the solid
demand for GHA's programs, which center on a rigorous classical
liberal arts curriculum.
ADEQUATE MARGINS
Typical of most charter schools, revenue diversity is very limited.
The schools are highly reliant on state per pupil funding (PPF),
which represented 79% and 69% of VPA and ACV's fiscal 2015
operating revenues, respectively. Following relatively flat funding
during fiscal years 2010-2012, PPF has steadily increased for the
fourth consecutive year in fiscal 2016.
The schools' fiscal 2015 combined operating margin was a solid
7.4%, up from 5.6% the prior fiscal year. VPA's margin has
fluctuated, averaging 2.6% (2011-2015), and was positive 6.6% in
fiscal 2015, compared to 5.2% in the prior year. Despite only four
years of audited operating history, for the last two years ACV has
generated a solid 8.8% and 6% operating margin (fiscal years 2015
and 2014, respectively) boosting aggregated performance.
Fitch views continued enrollment stability and positive operations
critical as the schools' combined balance sheet resources provide
little financial flexibility. On a combined basis, available funds
(cash and investments not restricted) totaled $2 million as of June
30, 2015. Available funds covered fiscal 2015 combined operating
expenses and debt by a low 20.4% and 12.6%, respectively, but
reflect marked improvement over the prior year and meets Fitch's
expectations for the ratings category.
MODERATING DEBT BURDEN; IMPROVED COVERAGE
The schools' financial leverage remains high as measured by pro
forma MADS coverage and burden. Debt service coverage, as
calculated by Fitch, remains weak but improved. Despite VPA's track
record of enrollment growth, strong academic performance and
recently positive operating results in the last two fiscal years,
VPA still cannot fully cover the carrying charges on the series
2012 bonds from current operations without the benefit of revenues
derived from ACV.
VPA's fiscal 2015 net income available for debt service totaled
just $1.16 million, covering MADS ($1.18 million) by 0.98x. Fitch
views MADS coverage of at or under 1x as a speculative grade credit
attributes. Fitch believes there is potential for upward rating
momentum based on improving coverage levels for VPA and ACV's
completion of its fifth year of operations in fiscal 2016.
Under Fitch's charter school rating criteria, a school having less
than five years of audited operating history is excluded from this
calculation in pooled transactions. While ACV has experienced
strong demand to date and benefits from its affiliation with VPA
and the GHA network, it has only completed four full academic years
(2012/13-2014/15). When incorporating ACV into the debt service
calculation, MADS coverage improves to an adequate 2.0x for fiscal
2015, up from 1.7x in fiscal 2014.
The schools' debt burden remains high, although leverage metrics
improved slightly from fiscal 2014 to fiscal 2015. MADS consumed a
high 11.1% of the schools' combined fiscal 2015 operating revenues.
Total debt outstanding of about $16.1 million also represented a
high 7.0x of combined net income available for debt service. High
leverage ratios are characteristic of the charter school sector.
While the broader GHA network will likely continue to grow and
expand, VPA and ACV have no more material capital or borrowing
needs. The current campus constructed in 2012 is relatively new.
Moreover, based on the improved state funding environment, modest
enrollment growth, and lack of capital plans, Fitch believes the
school's debt burden should moderate over time.
HAIMIL REALTY: Owes Over $2.6MM to Dominion Financial, Court Rules
------------------------------------------------------------------
Judge Michael E. Wiles of the United States Bankruptcy Court for
the Southern District of New York held that Haimil Realty Corp.
owes $2,608,526 to Dominion Financial Corporation as of February
16, 2016, and that the outstanding debts are secured by a mortgage
lien on the building owned by Haimil at 209 East 2nd Street in New
York City, to the extent of the value of the said property.
Dominion Financial initiated a state foreclosure action against
Haimil which was later removed to the bankruptcy court. Dominion
Financial filed a proof of claim in Haimil's case. Proceedings
with respect to the foreclosure case and the proof of claim were
consolidated.
Judge Wiles made the determination after trial was held on
September 18 and 21, 2015 to determine whether any debts are
outstanding and, if so, whether they are secured or unsecured.
The case is In re: HAIMIL REALTY CORP., Chapter 11, Debtor.
DOMINION FINANCIAL CORPORATION, Plaintiff, v. HAIMIL REALTY CORP.,
et al., Defendants, Case No. 14-11779 (MEW), Adv. Proc. No.
14-02052 (MEW) (Bankr. S.D.N.Y.).
A full-text copy of Judge Wiles' February 16, 2016 memorandum
opinion is available at http://is.gd/nXxPTifrom Leagle.com.
Dominion Financial Corporation is represented by:
Allan B. Mendelsohn, Esq.
ALLAN B. MENDELSOHN, LLP
38 New Street
Huntington, NY 11743
Haimil Realty Corp. is represented by:
Douglas Pick, Esq.,
Eric C. Zabicki, Esq.
PICK & ZABICKI LLP
369 Lexington Avenue, Suite 1200
New York, NY 10017
Tel: (212)695-6000
Fax: (212)695-6007
-- and --
Glenn Backer, Esq.
280 Madison Avenue, Suite 300
New York, NY 10016
HEBREW HOSPITAL: Can't Tap McCullough Due to Conflict, Panel Says
-----------------------------------------------------------------
McCullough Goldberger & Staudt, LLP, is not qualified to serve as
special legal counsel to Hebrew Hospital Senior Housing, Inc., the
Official Committee of Unsecured Creditors appointed in the Chapter
11 case told Bankruptcy Judge Michael E. Wiles.
The Committee argued that the services to be provided by McCullough
Goldberger should be addressed by Harter Secrest, the Debtor's lead
counsel. The Committee also pointed to a potential conflict that
precludes the firm from representing the Debtor.
The Committee explained that Charles Goldberger, an individual who
is Of Counsel to McCullough Goldberger, and a former partner,
currently sits on the Debtor's board of directors and has been a
member of the board since 1997.
"Mr. Goldberger has no financial interest since the Debtor is a
not-for-profit. The issue is his involvement, and his firm's
involvement, in the transactions that led to this point," the
Committee said.
The Committee also pointed out that Mr. Goldberger and McCullough
Goldberger were directly involved in decisions and transactions
which will be the focus of the inevitable investigation of the
Debtors' board and officers which will be conducted by the
Committee and the appropriate regulators. Mr. Goldberger has been
a member of the Debtor's board for nearly 20 years and has been
involved in all major business decisions by the Debtor over that
period of time.
The Committee believes significant meritorious claims exist against
the Debtor's current and former directors in connection with
actions taken pre-petition, and is investigating the scope and
magnitude of those claims. The claims, the Committee said, would
directly impact the financial interests of Mr. Goldberger as a
board member, and may prove to be a valuable source of recovery for
the estate.
Hebrew Hospital, which is seeking Court approval to hire the firm
as special legal counsel, said McCullough Goldberger's services
will focus primarily on real estate transactions and litigation,
commercial loan services including redemption of the bonds by which
the facility was financed, real estate tax issues, and municipal
and land use matters, certain services requiring interaction and
negotiation with the New York State Office of the Attorney
General.
The professionals, who will be primarily responsible for the firm's
representation of the Debtor, and their current hourly billing
rates, effective December 1, 2015:
Name Level Hourly Rate
---- ----- -----------
Linda B. Whitehead Partner $450
Ruth Post Associate $375
Meredith Leff Associate $350
My-Hanh Retherford Paralegal $200
The firm has obtained an initial retainer for $20,000, which was
applied to fees, expenses and charges incurred prior to the
Petition Date.
Linda B. Whitehead, Esq. -- lwhitehead@mgslawyers.com -- attests
that the firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, as modified by Section
1107(b) of the Bankruptcy Code. She disclosed that:
(a) a Board member of the Debtor is of counsel to the firm,
but has no financial interest in the Debtor;
(b) the firm has represented M&T Bank in the limited context
of commercial loan closings;
(c) otherwise, the firm has no relationship with the Debtor,
its significant creditors, or certain other parties-in-
interest; and
(d) the firm's professionals working on this matter do not
have any connection to the United States Bankruptcy
Judge presiding in this Chapter 11 Case, the United
States Trustee, the Assistant United States Trustee for
the Southern District of New York, and the attorney
assigned to this Chapter 11 Case.
About Hebrew Hospital
Hebrew Hospital Senior Housing Inc. sought for Chapter 11
bankruptcy protection (Bankr. S.D.N.Y. Case No. 15-13264) on Dec.
9, 2015. The petition was signed by Mary Frances Barrett as CEO.
Harter Secrest & Emery LLP represents the Debtor as counsel. The
Debtor has engaged RBC Capital Markets as its investment banker.
The Debtor also tapped McCullough Goldberger & Staudt, LLP as
special counsel, Getzler Henrich & Associates LLC as financial
advisor, and Abbate DeMarinis, LLP as accountant.
Judge Michael E. Wiles has been assigned the case.
In its schedules, the Debtor listed $35,894,397 in total assets and
$62,638,925 in total liabilities.
The Debtor is engaged in the sponsorship and operation of a 120
unit continuing care retirement community. CCRCs are senior adult
programs that offer independent living apartments, residential
amenities and long-term care services to senior adults. The Debtor
generates the majority of its revenue from resident entrance fees
and monthly rents.
The Office of the U.S. Trustee appointed five creditors to the
official committee of unsecured creditors. The panel members are:
(a) 1199 SEIU Benefit and Pension Funds; (b) Andrea Taber, Esq. on
behalf of Lucille and Selig Popik; (c) Richard A. Bobbe; (d) Mary
Blumenthal-Lane on behalf of Julia Blumenthal; and (e) Peter Clark
on behalf of Ann Clark. Thomas R. Califano, Esq., at DLA Piper LLP
(US) represents the committee.
Hebrew Hospital Home of Westchester, Inc. filed for Chapter 11
bankruptcy protection (Bankr. S.D.N.Y. Case No. 16-10028) on Jan.
8, 2016. On Jan. 14, Judge Wiles entered an order authorizing the
joint administration of HHH Choices Health Plan, LLC, Hebrew
Hospital Senior Housing, Inc. (aka Westchester Meadows Continuing
Care Retirement Community and Fieldstone at Westchester Meadows),
and Hebrew Hospital Homes of Westchester, Inc.
HEBREW HOSPITAL: Panel Says Accountant Not Necessary
----------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
Chapter 11 case of Hebrew Hospital Senior Housing, Inc., told a
bankruptcy judge that the Debtor doesn't need to employ Abbate
DeMarinis, LLP, as the estate's accountant.
The Committee pointed out in court papers filed in January that
HHSH has filed applications to retain a financial advisor,
investment banker, and law firms to provide legal counsel. In
addition, HHSH has numerous employees and management familiar with
HHSH's financial condition and resources, books and records, and
tax and other regulatory obligations.
The Committee also noted that the "services to be rendered" by
Abbate are being provided, or readily could be provided, by Getzler
Henrich & Associates LLC as financial advisor or by one of HHSH's
other professionals or internal management.
"Given the myriad other professionals and individuals retained or
employed by HHSH, and the anticipated sale track on which this case
is expected to proceed, there is simply no need for HHSH to retain
a separate accountant," the Committee said.
Hebrew Hospital anticipates that Abbate may render these services:
(a) conduct an annual audit in accordance with generally
accepted auditing standards and prepare the Debtor's
year-end certified financial statements;
(b) compile quarterly unaudited financial statement and
monitoring of the Debtor's bookkeeping system to assure
compliance with predetermined procedures;
(c) prepare and file the appropriate Annual Federal, State
and Local Income Tax Returns;
(d) prepare the federal and state cost reports for the
fiscal year in accordance with third party (federal and
state regulatory agencies) instructions;
(e) consult the Debtor on the tax effects of any proposed
transactions with other affiliated entities or
contemplated business policy changes;
(f) consult the Debtor regarding its expenses and revenues;
(g) prepare financial reports for the bankruptcy proceedings
as required;
(h) consult the Debtor in reorganization strategies and
alternatives;
(i) consult the Debtor in analyzing and objecting to claims;
(j) attend meetings and conferences regarding the items;
(k) provide other functions as requested by the Debtor or
its counsel to assist the Debtor in the Chapter 11
case.
The Debtor has selected Abbate as its accountant because of the
firm's diverse experience and extensive knowledge in the field of
bankruptcy. Additionally, Abbate was employed as the Debtor's
accounting firm prior to the filing of the Voluntary Petition and
is familiar with the Debtor's fiduciary affairs.
The firm's current applicable hourly rates for financial advisory
services are:
Level Hourly Rates
----- ------------
Partner $350 - $450
Manager $275 - $325
Seniors and Staff $175 - $250
Administrative $75 - $120
Anthony Abbate, a partner of the accounting firm of Abbate
DeMarinis LLP, attests that the firm is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code, as
modified by Section 1107(b) of the Bankruptcy Code. The Debtor
was current with Abbate for pre-petition services as of the
Petition Date.
The firm may be reached at:
Anthony Abbate
ABBATE DEMARINIS, LLP
377 Oak St. Ste 209
Garden City, NY 11530-6542
Tel: (516) 745-6600
The Committee is represented by:
Thomas R. Califano, Esq.
DLA PIPER LLP (US)
1251 Avenue of the Americas
New York, NY 10020-1104
Tel: (212) 335-4500
Fax: (212) 335-4501
About Hebrew Hospital
Hebrew Hospital Senior Housing Inc. sought for Chapter 11
bankruptcy protection (Bankr. S.D.N.Y. Case No. 15-13264) on Dec.
9, 2015. The petition was signed by Mary Frances Barrett as CEO.
Harter Secrest & Emery LLP represents the Debtor as counsel. The
Debtor has engaged RBC Capital Markets as its investment banker.
The Debtor also tapped McCullough Goldberger & Staudt, LLP as
special counsel, Getzler Henrich & Associates LLC as financial
advisor, and Abbate DeMarinis, LLP as accountant.
Judge Michael E. Wiles has been assigned the case.
In its schedules, the Debtor listed $35,894,397 in total assets and
$62,638,925 in total liabilities.
The Debtor is engaged in the sponsorship and operation of a 120
unit continuing care retirement community. CCRCs are senior adult
programs that offer independent living apartments, residential
amenities and long-term care services to senior adults. The Debtor
generates the majority of its revenue from resident entrance fees
and monthly rents.
The Office of the U.S. Trustee appointed five creditors to the
official committee of unsecured creditors. The panel members are:
(a) 1199 SEIU Benefit and Pension Funds; (b) Andrea Taber, Esq. on
behalf of Lucille and Selig Popik; (c) Richard A. Bobbe; (d) Mary
Blumenthal-Lane on behalf of Julia Blumenthal; and (e) Peter Clark
on behalf of Ann Clark. DLA Piper LLP (US) represents the
committee.
Hebrew Hospital Home of Westchester, Inc. filed for Chapter 11
bankruptcy protection (Bankr. S.D.N.Y. Case No. 16-10028) on Jan.
8, 2016. On Jan. 14, Judge Wiles entered an order authorizing the
joint administration of HHH Choices Health Plan, LLC, Hebrew
Hospital Senior Housing, Inc. (aka Westchester Meadows Continuing
Care Retirement Community and Fieldstone at Westchester Meadows),
and Hebrew Hospital Homes of Westchester, Inc.
HORSEHEAD HOLDING: Macquarie Bank Seeks Adequate Protection
-----------------------------------------------------------
Macquarie Bank Limited asks the U.S. Bankruptcy Court for the
District of Delaware to order Horsehead Holding Corp., et al., to
provide adequate protection.
Macquarie relates that debtors Horsehead Holding Corp.,
International Metals Reclamation Company, LLC ("INMETCO") and
Horsehead Metal Products, LLC ("HMP"), as borrowers, entered into a
credit agreement with Macquarie ("Macquarie Credit Agreement"),
that provided for an $80 million secured revolving credit facility
("Macquarie Credit Facility"). Macquarie further relates that to
secure the obligations under the Macquarie Credit Facility,
Horsehead Holding Corporation ("HHC"), Horsehead, non-debtor
Chestnut Ridge Railroad Corp., INMETCO and HMP pledged certain
collateral to Macquarie pursuant to a Security Agreement. Macquarie
notes that the obligations under the Macquarie Credit Facility and
other obligations owed to Macquarie are secured by, among other
things: (a) first priority liens on (i) substantially all INMETCO
assets and (ii) certain assets of Horsehead and its subsidiaries,
including, without limitation, accounts receivable, inventory,
cash, and deposit and securities accounts (collectively, the
"Collateral"), and (b) second priority liens on certain other
assets.
Macquarie tells the Court that as of the Petition Date, the
outstanding principal amount under the Macquarie Credit Facility,
together with unpaid interest, fees and expenses, was in excess of
$27 million. Macquarie further tells the Court that the Debtors owe
it at least another $5.8 million, which includes a minimum
utilization fee pursuant to the Macquarie Credit Facility,
forbearance fees pursuant to a forbearance agreement dated January
15, 2016, agreed to and executed by the Debtors and Macquarie
("Forbearance Agreement"), and accrued but unpaid legal fees and
expenses and interest thereon, which amounts will continue to
accrue and/or increase. Macquarie notes that as of the Petition
Date, the Debtors owe Macquarie at least $33 million in total.
Macquarie contends that contemporaneously with the establishment
of, and in connection with, the Macquarie Credit Facility,
Macquarie and the collateral agent for the 10.5% senior secured
notes due 2017 issued by HHC entered into an intercreditor
agreement dated as of June 30, 2015, which, among other things,
provides for the relative priority between Macquarie and the Senior
Secured Notes with respect to certain shared collateral, including
Macquarie's first priority lien on the Collateral.
Macquarie tells the Court that the Debtors filed their DIP Motion,
pursuant to which, among other things, the Debtors are seeking
authorization to: (a) use cash collateral, (b) grant adequate
protection liens to certain prepetition lenders and (c)
obtain postpetition secured financing under a credit facility in
the aggregate amount of up to $90 million. Macquarie further tells
the Court that its efforts have failed, despite having negotiated
in good faith with the Debtors and the DIP Lenders to reach
consensus on a reasonable adequate protection package. Macquarie
relates that it has filed a limited objection to the Debtors' DIP
Motion and that the Court has entered its Interim DIP Order.
Macquarie contends that on its face, the "adequate protection"
proposed for Macquarie by the Debtors in connection with the $90
million DIP Facility is inadequate and does not provide Macquarie
with the protections to which Macquarie is entitled under the
Bankruptcy Code. Macquarie further contends that by the Debtors'
own admission, Macquarie is the Debtors' senior secured lender with
valid first priority liens in Collateral of a value substantially
in excess of the amounts owed to Macquarie. Macquarie relates that
in derogation of its rights as a senior oversecured creditor, the
Debtors now propose to abrogate Macquarie's security interests in
the Collateral with illusory "replacement liens" under terms which
would, in fact, permit the Debtors to use Macquarie's Collateral to
pay down the DIP Lenders before Macquarie is repaid. Macquarie
further relates that the proposed DIP Facility further prejudices
Macquarie by denying it the interest, fees and costs which are its
legal right as an oversecured creditor. Macquarie does not object
to the Debtors' obtaining the debtor-in-possession financing they
need, but stresses that any such financing, however, must respect
and protect Macquarie's security interests in the Collateral.
Macquarie Bank Limited is represented by:
Matthew B. Lunn, Esq.
Donald J. Bowman, Jr., Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Telephone: (302)571-6600
Facsimile: (302)571-1253
E-mail: mlunn@ycst.com
dbowman@ycst.com
- and -
Mark A. Speiser, Esq.
Curtis C. Mechling, Esq.
Claude Szyfer, Esq.
Sherry J. Millman, Esq.
STROOCK & STROOCK & LAVAN LLP
180 Maiden Lane
New York, NY 10038
Telephone: (212)806-5400
Facsimile: (212)806-6006
E-mail: mspeiser@stroock.com
cmechling@stroock.com
cszyfer@stroock.com
smillman@stroock.com
About Horsehead Holding Corp.
Horsehead Holding Corp. is the parent company of Horsehead
Corporation, a U.S. producer of specialty zinc and zinc-based
products and a leading recycler of electric arc furnace dust; The
International Metals Reclamation Company, LLC ("INMETCO"), a
leading recycler of metals-bearing wastes and a leading processor
of nickel-cadmium (NiCd) batteries in North America; and Zochem
Inc., a zinc oxide producer located in Brampton, Ontario.
Horsehead, headquartered in Pittsburgh, Pa., has seven facilities
throughout the U.S. and Canada. The Debtors currently employ
approximately 730 full-time individuals.
Horsehead Holding Corp., Horsehead Corporation, Horsehead Metal
Products, LLC, The International Metals Reclamation Company, LLC,
and Zochem Inc. filed Chapter 11 bankruptcy petitions (Bankr. D.
Del. Case Nos. 16-10287 to 16-10291) on Feb. 2, 2016. The
petition
was signed by Robert D. Scherich as vice president and chief
financial officer. Judge Christopher S. Sontchi is assigned to
the
case.
The Debtors have engaged Kirkland & Ellis LLP as general counsel,
Pachulski Stang Ziehl & Jones LLP as local counsel, RAS Management
Advisors, LLC as financial advisor, Lazard Middle Market LLC as
investment banker, Epiq Bankruptcy Solutions, LLC as claims and
noticing agent and Aird & Berlis LLP as Canadian counsel.
The Debtors disclosed total assets of $1 billion and total
liabilities of $544.6 million. As of the Petition Date, the
Debtors' consolidated long-term debt obligations totaled
approximately $420.7 million.
IMAGE MAKERS: Case Summary & 4 Unsecured Creditors
--------------------------------------------------
Debtor: Image Makers Automotive Land Holdings, LLC
970 Empire Mesa Way
Henderson, NV 89011
Case No.: 16-10761
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: February 22, 2016
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Hon. Laurel E. Davis
Debtor's Counsel: Zachariah Larson, Esq.
LARSON & ZIRZOW, LLC
810 S. Casino Center Blvd. #101
Las Vegas, NV 89101
Tel: (702) 382-1170
Fax: (702) 382-1169
E-mail: carey@lzlawnv.com
zlarson@lzlawnv.com
Total Assets: $1.34 million
Total Liabilities: $1.06 million
Largest unsecured creditor: Law Office of Karen H. Ross, $14,162
The petition was signed by Carlos Aleman, president.
A list of the Debtor's four largest unsecured creditors is
available for free at http://bankrupt.com/misc/nvb16-10761.pdf
INFORMATICA CORP: Bank Debt Trades at 5% Off
--------------------------------------------
Participations in a syndicated loan under which Informatica Corp is
a borrower traded in the secondary market at 94.92
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.65 percentage points from the
previous week. Informatica Corp pays 350 basis points above LIBOR
to borrow under the $1.88 billion facility. The bank loan matures
on June 1, 2022 and carries Moody's B2 rating and Standard & Poor's
B rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
INTERPARK INVESTORS: U.S. Trustee to Hold 341 Meeting on March 15
-----------------------------------------------------------------
The Office of the U.S. Trustee is set to hold a meeting of
creditors of Interpark Investors LLC on March 15, 2016, at 1:30
p.m.
The meeting will take place at the Office of the U.S. Trustee, 8th
Floor, Room 802, 219 South Dearborn, in Chicago, Illinois.
The court overseeing the bankruptcy case of a company schedules the
meeting of creditors usually about 30 days after the bankruptcy
petition is filed. The meeting is called the "341 meeting" after
the section of the Bankruptcy Code that requires it.
A representative of the company is required to appear at the
meeting and answer questions under oath. The meeting is presided
over by the U.S. trustee, the Justice Department's bankruptcy
watchdog.
J. CREW: Bank Debt Trades at 32% Off
------------------------------------
Participations in a syndicated loan under which J. Crew is a
borrower traded in the secondary market at 67.60
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents an increase of 0.41 percentage points from the
previous week. J. Crew pays 300 basis points above LIBOR to borrow
under the $1.56 billion facility. The bank loan matures on Feb. 27,
2021 and carries Moody's B2 rating and Standard & Poor's B- rating.
The loan is one of the biggest gainers and losers among 247 widely
quoted syndicated loans with five or more bids in secondary trading
for the week ended Feb. 5.
JUPITER RESOURCES: Moody's Lowers CFR to Caa1, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service downgraded Jupiter Resources Inc.'s
Corporate Family Rating (CFR) to Caa1 from B3, Probability of
Default Rating to Caa1-PD from B3-PD and senior unsecured notes
rating to Caa2 from Caa1. The rating outlook is stable. The
Speculative Grade Liquidity Rating of SGL-3 was withdrawn. This
action resolves the review for downgrade that was initiated on Jan.
21, 2016.
"The downgrade reflects Jupiter's weak interest coverage, leveraged
full-cycle ratio and asset coverage," said Paresh Chari, Moody's
Analyst. "While Jupiter has hedged a significant portion of its
natural gas production through 2016 and 2017, protecting its cash
flow, it will continue to generate negative free cash flow over the
next two years."
Downgrades:
Issuer: Jupiter Resources Inc.
Probability of Default Rating, Downgraded to Caa1-PD from B3-PD
Corporate Family Rating, Downgraded to Caa1 from B3
Senior Unsecured Regular Bond/Debenture, Downgraded to
Caa2(LGD4) from Caa1(LGD4)
Outlook Actions:
Issuer: Jupiter Resources Inc.
Outlook, Changed To Stable From Rating Under Review
Withdrawals:
Issuer: Jupiter Resources Inc.
Speculative Grade Liquidity Rating, Withdrawn , previously rated
SGL-3
RATINGS RATIONALE
Jupiter's Caa1 Corporate Family Rating (CFR) is driven by weak
expected interest coverage (below 2.5x) and leveraged full-cycle
ratio (LFCR) in 2017. Jupiter's asset coverage is also poor with
PV10 to debt likely remaining well below 1x in 2016 and 2017.
Moody's also expects negative free cash flow in 2016 and 2017 as
the company grows production. The rating is supported by the
company's solid hedging program which leads to good leverage (debt
to EBITDA 5x; retained cash flow to debt 10%) in 2017, and its
adequate liquidity.
Moody's expects Jupiter's liquidity to be adequate through 2016. At
September 30, 2015, Jupiter had C$18 million of cash, and C$447
million available, after C$38 million of letters of credit, under
its C$525 million borrowing base revolver that matures in September
2019, but is subject to semi-annual borrowing base
redeterminations. Moody's expects negative free cash flow of about
C$70 million through 2016 to be funded through the revolver. The
company has no financial covenants. The company's alternative
liquidity is limited as all of its assets are pledged to the
borrowing base revolver.
In accordance with Moody's Loss Given Default (LGD) methodology,
the US$1.1 billion senior unsecured notes are rated one notch below
the Caa1 CFR because of the existence of the priority ranking C$525
million secured revolver.
The stable outlook reflects our expectation that Jupiter will
maintain production and its leverage metrics.
The rating could be upgraded to B3 if retained cash flow to debt
was likely to rise above 15% and EBITDA to interest trends towards
2.5x, while maintaining adequate liquidity.
The rating could be downgraded to Caa2 if EBITDA to interest falls
below 1.5x or if liquidity weakens.
Jupiter, based in Calgary, Alberta, is a privately-owned oil and
gas exploration and production company producing about 282 million
cubic feet equivalent (MMcfe) per day (47,000 barrels of oil
equivalent (boe) per day) net of royalties.
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011.
KADLUBEK FAMILY: Court Refuses to Lift Stay for Pineda Suit
-----------------------------------------------------------
Judge David T. Thuma of the United States Bankruptcy Court of the
District of New Mexico denied Pineda REO, LLC's motion for relief
from the automatic stay.
Pineda holds a promissory note evidencing the Kadlubek Family
Revocable Living Trust's (the "Trust") debt of about $1.6 million.
The note, which is secured by a first mortgage on the Trust's
strip shopping center in Albuquerque, New Mexico (the "Property"),
matured in October 2013 and remains unpaid.
Pineda filed a collection and foreclosure action in state court in
June 2014. Estimates of the Property's current value range from
about $750,000 to about $925,000, which is substantially less than
the debt to Pineda.
Pineda sought relief from the automatic stay so it can continue its
pre-petition foreclosure action on the said property.
Judge Thuma held that while Pineda carried its burden of showing
that there is no equity in the Property, the Trust met its burden
that the Property is necessary for an effective reorganization (or
in this case partial liquidation). Judge Thuma found it reasonable
to allow the Trust to try to confirm a plan that would benefit
equity by re-tenanting the Property and selling it through normal
commercial channels rather than by foreclosure.
Thus, Judge Thuma denied Pineda's motion for relief from stay,
without prejudice to revisiting the issue if the Trust cannot
confirm a plan in the reasonably near future.
The case is In re: KADLUBEK FAMILY REVOCABLE LIVING TRUST, Debtor,
No. 15-10736-t11 (Bankr. D.N.M.).
A full-text copy of Judge Thuma's February 11, 2016 memorandum
opinion is available at http://is.gd/MF2npZfrom Leagle.com.
Kadlubek Family Revocable Living Trust Dated March 1, 2002 is
represented by:
James A Askew, Esq.
Edward Alexander Mazel, Esq.
Daniel Andrew White, Esq.
ASKEW & MAZEL, LLC
320 Gold Avenue S.W., Suite 300A
Albuquerque, NM 87102
Tel: (505)433-3097
Fax: (505)717-1494
Email: jaskew@askewmazelfirm.com
edmazel@askewmazelfirm.com
dwhite@askewmazelfirm.com
-- and –-
Jacqueline Ortiz, Esq.
SUTIN THAYER & BROWNE
Two Park Square Suite 1000
6565 Americas Parkway NE
Albuquerque, NM 87110
Tel: (505)883-2500
Fax: (505)888-6565
Email: jno@sutinfirm.com
Sutin, Thayer & Browne, APC is represented by
Katharine C Downey, Esq.
SUTIN THAYER & BROWNE, A.P.C.
Two Park Square Suite 1000
6565 Americas Parkway NE
Albuquerque, NM 87110
Tel: (505)883-2500
Fax: (505)888-6565
Email: kcd@sutinfirm.com
United States Trustee is represented by:
Leonard K Martinez-Metzgar, Esq.
UNITED STATES DEPARTMENT OF JUSTICE
Albuquerque, NM 871030608
Tel: (505)248-6544
LEAPFROG ENTERPRISES: Posts Net Loss, Admits Going Concern Doubt
----------------------------------------------------------------
LeapFrog Enterprises, Inc. recorded a net loss of $44,225,000 for
the three months ended December 31, 2015, compared with a net loss
of $124,212,000 for the three months ended December 31, 2014.
LeapFrog Chief Executive Officer John Barbour and Chief Financial
Officer Raymond L. Arthur, in a regulatory filing with the U.S.
Securities and Exchange Commission on February 9, 2016, related:
"During the third fiscal quarter, we continued to face an uncertain
business environment and a number of fundamental challenges in our
business, including a continued decline in overall tablet sales and
related content, aggressive price competition and loss of shelf
space at retail. Sales of our LeapTV products and associated
content did not improve in the third quarter to the extent we
hoped, despite promotional efforts, including price reductions
intended to stimulate consumer demand. In addition, declines in
the overall tablet market overshadowed improvements in certain
product lines such as our new Epic tablet.
"We do not believe that these challenging conditions will improve
materially in the next two quarters. We continued to take steps
to reduce costs through such measures as reducing the size of our
workforce and deferring the development of certain new products.
However, we believe that available approaches to improving our
liquidity, such as making changes to vendor terms and accelerating
the collection of receivables, may not compensate for the liquidity
impact of our worse than anticipated performance during the third
quarter.
"We currently believe that liquidity available to fund our
operations should the deal close or other financing become
available during the first two quarters of fiscal 2017, when our
use of cash increases as we build inventories and experience
seasonal declines in revenue, may be insufficient to permit us to
continue normal operations, and there is substantial doubt about
our ability to continue as a going concern.
"In addition to steps taken to change our business structure and
operations, we have been working with a financial advisor to assist
us in exploring strategic alternatives, including a potential sale
or raising additional capital. On February 5, 2016, we entered
into an Agreement and Plan of Merger with VTech Holdings, Ltd. and
Bonita Merger Sub., L.L.C. If the transaction described in the
Agreement and Plan of Merger or another transaction providing the
company with substantial liquidity is not completed, the company
will likely face significant difficulties in generating sufficient
liquidity to continue normal operations over the first two quarters
of Fiscal 2017."
At December 31, 2015, the company had total assets of $185,467,000,
total liabilities of $79,014,000 and total stockholders' equity of
$106,453,000.
A full-text copy of the company's quarterly report is available for
free at: http://tinyurl.com/h8o4ry4
Emeryville, California-based LeapFrog Enterprises, Inc. is a
developer of educational entertainment for children. The company's
product portfolio consists of multimedia learning and reading,
platforms and related content and learning toys. It has also
developed learning platforms, including the LeapPad family of
learning tablets, the LeapTV educational video game system, the
Leapster family of handheld learning game systems, and the
LeapReader reading and writing systems.
LPL HOLDINGS: S&P Revises Outlook to Neg. & Affirms 'BB-' ICR
-------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its rating
outlook on LPL Holdings Inc. to negative from stable. S&P also
affirmed its 'BB-' issuer credit rating and senior secured debt
ratings on LPL.
"The negative outlook reflects our view that LPL's adjusted debt to
adjusted EBITDA could rise above 4.0x in the coming quarters, from
a reported 3.8x as of Dec. 31, 2015," said Standard & Poor's credit
analyst Trevor Martin. While S&P primarily focuses on capital
levels in its analysis of broker-dealers, LPL's leverage is
important because the terms of its debt limit the company to 5.0x
debt to adjusted EBITDA.
The rise in leverage was primarily due to the company's debt
issuance in the fourth quarter of 2015 (which was issued primarily
to repurchase shares) and a 9% decline in EBITDA compared with the
third quarter. Further, S&P believes performance and the covenant
leverage is likely to continue to face headwinds from weaker and
more volatile equity markets, which depress asset-based fees.
Additionally, the company's leverage covenant is based on
performance over rolling 12 months, and two strong quarters (the
first and second quarters of 2015) will be rolling off soon. In
each of those quarters, the company produced about $135 million of
adjusted EBITDA, relative to just $100 million in the fourth
quarter of 2015 (although the covenant EBITDA differs slightly from
the reported adjusted EBITDA).
The company's sales commissions declined from slower alternative
investment sales, which have been steadily falling over the past
several quarters. S&P views part of the decline as structural,
reflecting heightened regulatory scrutiny. LPL's performance,
however, should benefit from a rise in short-term interest rates.
Increased cash balances and the December fed funds rate hike
increased gross profit by $3 million in the quarter, and S&P
expects the benefit to be significantly greater in a full quarter.
The company would benefit from any additional fed funds rate hike,
but S&P expects a slower pace to any further rate hikes than we did
previously.
Despite the proximity to the company's leverage covenant, it does
have ample on-balance-sheet liquidity ($512 million of unrestricted
cash as of year-end 2015). The company can only net $300 million
from its debt for the purposes of its leverage calculation, but S&P
do recognizes the company has some flexibility afforded by the
excess cash, which could be used to pay down debt and improve its
leverage ratio.
The negative outlook primarily reflects S&P's view that leverage
could rise well above 4.0x in 2016, putting the company closer to
the 5.0x allowed by the terms of its debt. S&P expects the
headwinds due to volatile markets to continue while increased rates
only partially offset the decline.
S&P may lower its issuer credit rating in the event that EBITDA
does not rebound significantly from the weak fourth quarter and S&P
believes that debt to EBITDA will remain above 4.0x. S&P could
also downgrade the company if the company does not maintain a
modicum (about $200 million) of liquidity on its balance sheet or
if the company's gross stable funding ratio or liquidity coverage
metric were to fall below 100%.
S&P may consider revising the outlook to stable if EBITDA improves
faster than S&P anticipates and it believes that debt to adjusted
EBITDA will remain below 4.0x, leaving the company ample cushion to
its covenant calculation.
The firm's aggressive financial management limits its upside
potential at this time. In the longer term, S&P could raise its
ratings if the company were to commit to maintaining strong
liquidity and building capital.
MALLINCKRODT GROUP: Bank Debt Trades at 3% Off
----------------------------------------------
Participations in a syndicated loan under which Mallinckrodt Group
Inc. is a borrower traded in the secondary market at 96.85
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents an increase of 0.50 percentage points from the
previous week. Mallinckrodt Group Inc. pays 275 basis points above
LIBOR to borrow under the $1.30 billion facility. The bank loan
matures on Feb. 25, 2021 and carries Moody's Ba1 rating and
Standard & Poor's BB+ rating. The loan is one of the biggest
gainers and losers among 247 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Feb. 5.
MEG ENERGY: Bank Debt Trades at 24% Off
---------------------------------------
Participations in a syndicated loan under which MEG Energy Corp is
a borrower traded in the secondary market at 75.80
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.70 percentage points from the
previous week. MEG Energy pays 275 basis points above LIBOR to
borrow under the $1.29 billion facility. The bank loan matures on
March 16, 2020 and carries Moody's B3 rating and Standard & Poor's
BB+ rating. The loan is one of the biggest gainers and losers
among 247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
METALDYNE CORP: Bank Debt Trades at 4% Off
------------------------------------------
Participations in a syndicated loan under which Metaldyne Corp is a
borrower traded in the secondary market at 95.54
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.69 percentage points from the
previous week. Metaldyne Corp pays 275 basis points above LIBOR to
borrow under the $1.07 billion facility. The bank loan matures on
Oct. 5, 2021 and carries Moody's Ba3 rating and Standard & Poor's
BB+ rating. The loan is one of the biggest gainers and losers
among 247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
MICHAEL KING FOUNDATION: Files List of Top Unsecured Creditors
--------------------------------------------------------------
The Michael King Smith Foundation disclosed in a filing with the
U.S. Bankruptcy Court for the District of Oregon its five largest
unsecured creditors. They are:
Creditors Nature of Claim Claim Amount
--------- --------------- ------------
Century Aviation Services Rendered $20,052
3908 Airport Way
East Wenatchee, WA 98802
Karen Barrow
centuryaviation@aol.com
509-884-0332
K&L Gates Services Rendered $9,876
1 SW Columbia Street
Suite 1900
Portland, OR 97258
Brendan McDonnell
Managing Partner
brendan,mcdonnell@klgates.com
503-226-5710
Colin Powers Services Rendered $2,607
PO Box 1812
La Pine, OR 97739
Colin Powers
cjpowers7005@yahoo.com
(541) 536-3040
Miller Nash Services Rendered $1,504
111 SW Fifth Avenue
Suite 3400
Portland, OR 97204
Kieran J. Curley,
Managing Partner
kieran.curley@millernash.com
503-205-2428
Group Mackenzie, Inc. Services Rendered $352
1515 SE Water Avenue
Suite 100
Portland, OR 97214
Mark Hettum
mhettum@mcknze.com
503-224-9560
About Michael King
The Michael King Smith Foundation filed a Chapter 11 bankruptcy
petition (Bankr. D. Ore. Case No. 16-30233) on Jan. 26, 2016. The
petition was signed by Lisa Anderson as trustee. The Debtor
estimated assets in the range of $100 million to $500 million and
liabilities of $1 million to $10 million. Motschenbacher &
Blattner, LLP serves as the Debtor's counsel. Judge Randall L.
Dunn is assigned to the case.
The Debtor is a tax exempt business trust that was established on
Nov. 15, 2006. The Debtor owns real and personal property located
in McMinnville, Oregon. The Debtor's assets include the real
property and improvements that comprise a portion of the
Evergreen Aviation and Space Museum located in McMinnville, Oregon.
The Debtor's assets are primarily leased or on loan to the
Evergreen Aviation and Space Museum.
MICHAEL KING FOUNDATION: U.S. Trustee to Hold Meeting on March 4
----------------------------------------------------------------
The Office of the U.S. Trustee is set to hold a meeting of
creditors of The Michael King Smith Foundation on March 4, 2016, at
10:30 a.m.
The meeting will take place at the U.S. Trustee's Office, Room 223,
Portland, Oregon.
The court overseeing the bankruptcy case of a company schedules the
meeting of creditors usually about 30 days after the bankruptcy
petition is filed. The meeting is called the "341 meeting" after
the section of the Bankruptcy Code that requires it.
A representative of the company is required to appear at the
meeting and answer questions under oath. The meeting is presided
over by the U.S. trustee, the Justice Department's bankruptcy
watchdog.
About Michael King
The Michael King Smith Foundation filed a Chapter 11 bankruptcy
petition (Bankr. D. Ore. Case No. 16-30233) on Jan. 26, 2016. The
petition was signed by Lisa Anderson as trustee. The Debtor
estimated assets in the range of $100 million to $500 million and
liabilities of $1 million to $10 million. Motschenbacher &
Blattner, LLP serves as the Debtor's counsel. Judge Randall L.
Dunn is assigned to the case.
The Debtor is a tax exempt business trust that was established on
Nov. 15, 2006. The Debtor owns real and personal property located
in McMinnville, Oregon. The Debtor's assets include the real
property and improvements that comprise a portion of the Evergreen
Aviation and Space Museum located in McMinnville, Oregon. The
Debtor's assets are primarily leased or on loan to the Evergreen
Aviation and Space Museum.
MICHAEL KING FOUNDATION: U.S. Trustee Unable to Form Committee
--------------------------------------------------------------
The Office of the U.S. Trustee said it wasn't able to form a
committee of unsecured creditors in the Chapter 11 case of The
Michael King Smith Foundation.
The Justice Department's bankruptcy watchdog said that the number
of creditors willing to serve is not sufficient to form an
unsecured creditors' committee.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
About Michael King
The Michael King Smith Foundation filed a Chapter 11 bankruptcy
petition (Bankr. D. Ore. Case No. 16-30233) on Jan. 26, 2016. The
petition was signed by Lisa Anderson as trustee. The Debtor
estimated assets in the range of $100 million to $500 million and
liabilities of $1 million to $10 million. Motschenbacher &
Blattner, LLP serves as the Debtor's counsel. Judge Randall L.
Dunn is assigned to the case.
The Debtor is a tax exempt business trust that was established on
Nov. 15, 2006. The Debtor owns real and personal property located
in McMinnville, Oregon. The Debtor's assets include the real
property and improvements that comprise a portion of the Evergreen
Aviation and Space Museum located in McMinnville, Oregon. The
Debtor's assets are primarily leased or on loan to the Evergreen
Aviation and Space Museum.
MICRO FOCUS: Bank Debt Trades at 2% Off
---------------------------------------
Participations in a syndicated loan under which Micro Focus
International Plc is a borrower traded in the secondary market at
97.98 cents-on-the-dollar during the week ended Friday, Feb. 5,
2016, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents a decrease of 0.65 percentage points from
the previous week. Micro Focus pays 425 basis points above LIBOR
to borrow under the $1.35 billion facility. The bank loan matures
on Sept. 17, 2021 and carries Moody's B1 rating and Standard &
Poor's BB- rating. The loan is one of the biggest gainers and
losers among 247 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Feb. 5.
MID-STATES SUPPLY: $20M DIP Loan Has Interim Approval
-----------------------------------------------------
Judge Cynthia A. Norton of the U.S. Bankruptcy Court for the
Western District of Missouri, entered an interim order authorizing
Mid-States Supply Company, Inc., to obtain secured credit from
existing lender Wells Fargo Bank, National Association. A final
hearing on the Debtor's motion to obtain up to $20 million of the
DIP financing is slated for Feb. 26, 2016, at 10:30 a.m.
Pursuant to a Fourth Amendment to Financing Agreement, which amends
the Credit Agreement, Wells Fargo Bank, National Association
("Lender") has agreed to provide the Debtor a committed
postpetition revolving line of credit of up to $20,000,000 ("DIP
Facility").
The DIP Facility Termination Date means the earliest of (i) April
24, 206, (ii) the closing of a sale of all or substantially all of
the assets of the Debtor pursuant to a sale under section 363 of
the Bankruptcy Code, (iii) the date on which the Debtor’s plan of
reorganization becomes effective, or (iv) the occurrence of an
Event of Default.
Wells Fargo is the prepetition secured creditor of the Debtor.
Wells Fargo is the holder of a claim as of Feb. 7, 2016, against
the Debtor in the approximate sum of $23,473,700 consisting of line
of credit borrowings of $22,162,069, term loan borrowings of
$616,667, purchasing card indebtedness of approximately $1,600,
accrued interest and unused line fees of $689,015, reimbursement
obligations for outstanding letters of credit of $4,350, plus all
other costs, fees and obligations incurred by Lender prior to the
Petition Date ("Prepetition Indebtedness").
The Lender is granted super-priority administrative expense claims
for all postpetition financing provided by the Lender payable from,
and having recourse to, all of the prepetition and postpetition
property of the Debtor's estate and all proceeds thereof.
Judge Norton acknowledged that it is necessary for the Debtor to
obtain postpetition financing for a period of time and in an amount
which would allow the Debtor to continue to operate as a going
concern, to pay employees, and to preserve the value of its assets.
The Interim Order also approves the milestones set in the Credit
Agreement, which include:
* By no later than March 11, 2016, the Debtor shall have entered
into a definitive asset purchase agreement with a prospective
purchaser in form and substance satisfactory Lender;
* By no later than February 16, 2016, the Debtor shall file a
motion with the Bankruptcy Court seeking authorization to sell
substantially all of its assets and seeking approval of bidding and
sale procedures therefor (which motion shall be in form and
substance satisfactory to Lender);
* By no later than April 11, 2016, a sale hearing shall be held
and a sale order entered by the Bankruptcy Court approving such
sale under Section 363 of the Bankruptcy Code (in form and
substance acceptable to Lender); and
* By no later than April 15, 2016, the sale of substantially all
of Debtor's assets shall be consummated.
A full text of copy of the Court's Interim DIP Order dated Feb. 9,
2016, is available at http://is.gd/gCOfMl
Cameron International's Objection
Cameron International Corporation has complained of the several
aggressive deadlines relating to the proposed sale. Cameron
objected to the deadlines for the reason that the United States
Trustee has not yet formed an Official Committee of Unsecured
Creditors and may not be able to do so for another week or more.
Cameron contends that the timetable deprives unsecured creditors of
any meaningful opportunity to assert their rights in connection
with the contemplated sale.
Cameron also notes that it has not been provided with any
information regarding Wells Fargo's alleged liens and security
interests, nor has there been sufficient time to perform an
analysis of those liens and security interests. As a result, no
determination of the extent, validity, or priority of the parties'
alleged pre-petition liens should be made at this time, Cameron
said in its objection.
Cameron International Corporation is represented by:
Marcus A. Helt, Esq.
Michael S. Haynes, Esq.
GARDERE WYNNE SEWELL LLP
1601 Elm Street, Suite 3000
Dallas, TX 75201-4761
Telephone: (214)999-3000
Facsimile: (214)999-4667
E-mail: mhelt@gardere.com
mhaynes@gardere.com
Mid-States Supply Company, Inc. is represented by:
Scott J. Goldstein, Esq.
Lisa A. Epps, Esq.
Eric L. Johnson, Esq.
SPENCER FANE LLP
1000 Walnut Street, Suite 1400
Kansas City, MO 64106
Telephone: (816)474-8100
Facsimile: (816)474-3216
E-mail: sgoldstein@spencerfane.com
lepps@spencerfane.com
ejohnson@spencerfane.com
About Mid-States Supply Company
Founded and headquartered in Kansas City, Missouri, Mid-States
Supply Company, Inc., supplier of pipes, valves and fittings to
ethanol, pipeline and power industries in the United States, filed
a Chapter 11 bankruptcy petition (Bankr. W.D. Mo. Case No.
16-40271) on Feb. 7, 2016. The petition was signed by Stuart
Noyes
as chief restructuring officer. The Debtor estimated both assets
and liabilities in the range of $50 million to $100 million.
The Debtor has engaged Spencer Fane LLP as counsel, Winter Harbor
LLC as financial advisor, SSG Advisors, LLC and Frontier
Investment
Banc Corporation as investment bankers, Tarsus CFO Services, LLC
as
chief financial officer services provider and Epiq Bankruptcy
Solutions, LLC as claims and noticing agent.
MOBERLY, MO: S&P Hikes Issuer Credit Rating to BB-, Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its issuer credit rating
(ICR) on Moberly, Mo. two notches to 'BB-' from 'B'. S&P also
raised its rating on the city's series 2008 certificates of
participation (COPs) two notches to 'B+' from 'B-'. The outlook on
both ratings is stable.
"The upgrade reflects our opinion that the city has taken steps to
establish a better framework for avoiding future events of
nonappropriation," said Standard & Poor's credit analyst John
Sauter. It also reflects the city's continued commitment to its
existing appropriation debt.
However, the 'BB-' ICR remains limited by S&P's assessment of weak
management.
"We revised our management assessment to weak from very weak," he
added, "as we no longer consider there to be a current
unwillingness to support appropriation debt, an opinion supported
by the city's recently adopted debt and due diligence policies, as
well as by its continued support of existing appropriation debt."
The assessment will likely remain at weak for multiple years, as we
monitor the city's adherence to these policies over a more extended
period.
Triggering the previous management score of very weak was Moberly's
failure to make an appropriation in its fiscal 2012 budget for debt
service on the Moberly Industrial Development Authority series
2010A and B annual appropriation capital projects bonds and series
2010C annual appropriation recovery zone facility bonds (combined,
the series 2010 bonds). The city's failure to appropriate resulted
in a termination of the financing agreement securing the bonds.
Pursuant to the financing agreement, the city had pledged to
annually appropriate revenues from legally available funds to make
debt service payments. It also passed an ordinance stating it will
not appropriate any of its own revenues for debt service on the
series 2010 bonds.
Moberly, with an estimated population of 13,977, is in Randolph
County.
"The stable outlook reflects our expectation that Moberly will
adhere to its debt and economic development due diligence policies,
and continue to make full and timely appropriations on its existing
appropriation debt," added Mr. Sauter. S&P also anticipates that
major underlying credit factors -- notably economic, financial, and
debt-related factors -- will remain steady over the one-year
outlook period. S&P does not anticipate the rating changing in
next year.
As the city continues to show adherence to its new policies over
time, and they become more tested and engrained in Moberly's
regular operations, S&P could raise the rating, potentially by
multiple notches. S&P do not anticipate this within the next year,
though. Rating improvement would also be contingent on continued
full and timely appropriation on existing appropriation debt.
Conversely, if the city revokes its debt or economic development
due diligence policies or changes them in a way that S&P considers
less restrictive, it could lower the rating. Delayed or missed
appropriations for debt service could also cause a downgrade.
MULTIPLAN INC: Bank Debt Trades at 2% Off
-----------------------------------------
Participations in a syndicated loan under which MultiPlan Inc. is a
borrower traded in the secondary market at 97.58
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents an increase of 0.45 percentage points from the
previous week. MultiPlan Inc. pays 300 basis points above LIBOR to
borrow under the $2.2 billion facility. The bank loan matures on
March 14, 2021 and carries Moody's B1 rating and Standard & Poor's
B+ rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
NATHAN'S FAMOUS: Moody's Raises CFR to B3, Outlook Stable
---------------------------------------------------------
Moody's Investors Service upgraded the ratings of Nathan's Famous,
Inc., including its Corporate Family Rating (CFR) to B3 from Caa1,
Probability of Default Rating (PDR) to B2-PD from B3-PD and $135
million guaranteed senior secured notes to B3 from Caa1. In
addition, Moody's affirmed Nathan's SGL-3 Speculative Grade
Liquidity Rating. The outlook is stable.
"T[he] rating action reflects Nathan's steady improvement in
earnings and debt protection metrics driven by consistent growth of
its core products, premium beef hot dogs, as well as commodity
deflation related to beef." stated Bill Fahy, Moody's Senior Credit
Officer. For the LTM period ending Dec. 27, 2015, leverage on a
debt to EBITDA basis was approximately 5.4 times. "The upgrade
also reflects Moody's expectations that Nathan's continues to
benefit from its licensing agreement with John Morrell above and
beyond required minimums, that liquidity remains at least adequate
and its financial policy remains balanced" added Fahy.
Ratings upgraded are:
Corporate Family Rating to B3 from Caa1
Probability of Default Ratings to B2-PD from B3-PD
$135 million guaranteed senior secured notes to B3 (LGD 4) from
Caa1 (LGD 4)
Rating affirmed is:
Speculative Grade Liquidity Rating at SGL-3
The rating outlook is stable
RATINGS RATIONALE
The B3 CFR reflects Nathan's high level of business risk due to
product and customer concentration that includes significant
reliance on a single agreement, very modest level of revenues and
earnings and aggressive financial policy favoring shareholders. The
ratings also reflect Nathan's reasonable level of leverage and
interest coverage with debt to EBITDA of about 5.4 times and EBIT
coverage of interest expense of about 1.6 times for the LTM period
ending Dec. 27, 2015. The ratings are supported by the high level
of brand awareness of Nathan's core product, premium beef hot dogs,
the letter agreement with John Morrell and higher margin and less
volatile earnings stream from franchise and licensing revenues, and
adequate liquidity .
The stable outlook reflects Moody's view that credit metrics will
not materially deteriorate from current levels as the performance
of Nathan's restaurant operations, branded products program and
other licensing agreements modestly improve. The outlook also
incorporates our expectation that liquidity remains adequate and
supported by significant balance sheet cash.
Nathans B3 CFR is one-notch lower than its B2-PD Probability of
Default Rating, reflecting the utilization of a family recovery
rate that is lower than Moody's 50% average as well as a lower
probability of default. The lower than average family recovery
rate reflects Nathan's all bond capital structure and the
covenant-lite nature of the notes, which in Moody's view gives
lenders less of an ability to take prompt action if the company's
credit profile deteriorates, thereby providing lower-than-average
recovery values. The B3 rating on the proposed notes reflects the
fact that the $135 million of secured notes comprise the entire
debt portion of Nathan's capital structure.
Factors that could result in an upgrade include a material and
sustained improvement in credit metrics. Specifically, a higher
rating would require leverage of well under 5.25 times and EBIT
coverage of interest of over 2.0 times on a sustained basis. A
higher rating would also require maintaining at least adequate
liquidity. Factors that could result in downgrade include leverage
above 6.0 times or coverage below 1.5 times. A deterioration in
liquidity for any reason could also result in downward rating
pressure.
Nathan's is engaged in the marketing of the "Nathan's Famous" brand
and the sale of products bearing the "Nathan's Famous" trademarks
through several different channels of distribution. Annual revenues
are approximately $100 million.
The principal methodology used in these ratings was Restaurant
Industry published in September 2015.
NEIMAN MARCUS: Bank Debt Trades at 13% Off
------------------------------------------
Participations in a syndicated loan under which Neiman Marcus Group
Inc. is a borrower traded in the secondary market at 87.14
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents an increase of 0.73 percentage points from the
previous week. Neiman Marcus pays 300 basis points above LIBOR to
borrow under the $2.9 billion facility. The bank loan matures on
Oct. 16, 2020 and carries Moody's B2 rating and Standard & Poor's
did not gave any rating. The loan is one of the biggest gainers
and losers among 247 widely quoted syndicated loans with five or
more bids in secondary trading for the week ended Feb. 5.
NEW ENTERPRISE: S&P Hikes Issue-Level Rating on Secured Debt to B-
------------------------------------------------------------------
Standard & Poor's Ratings Services said it upgraded New Enterprise,
Pa.-based aggregates provider New Enterprise Stone & Lime Co. Inc.
to 'B-' from 'CCC+'. The outlook is stable.
At the same time, S&P raised its issue-level rating on the
company's senior secured debt to 'B-' from 'CCC+'. S&P also raised
its issue-level rating the company's senior unsecured debt to 'CCC'
from 'CCC-'. The '3' recovery rating on the senior secured debt is
unchanged, indicating S&P's expectation of meaningful (50%-70%;
upper half of the range) recovery in the event of a payment
default. The '6' recovery rating on the senior unsecured debt is
unchanged, indicating S&P's expectation of negligible (0%-10%)
recovery in the event of a payment default.
"The stable outlook reflects our expectation that NESL's liquidity,
including approximately $14 million in cash at the end of the third
quarter, will remain adequate over the next 12 months," said
Standard & Poor's credit analyst Ryan Gilmore. "We also expect
that NESL will maintain FFO to debt below 12% and that adjusted
debt leverage will decline from about 7.5x to less than 6x over the
next 12 months."
S&P would consider a downgrade if it no longer deemed liquidity to
be adequate, possibly as a result of a lower bidding conversion
rate, reduced borrowing-base availability, or diminished covenant
headroom. A negative rating action could also occur as a result of
a reduced likelihood of a refinancing of upcoming debt maturities
due to lower-than-expected EBITDA levels. S&P could also lower the
rating if EBITDA interest coverage were sustained below 1x, which
could occur if 2016 EBITDA fell below $80 million, all else being
equal.
It is unlikely that S&P would raise the rating in the next 12
months; however, S&P could raise the rating if the company
maintained credit measures near current levels and improved its
geographic concentration such that S&P no longer viewed NESL's
business risk assessment to be at the weaker end of its score
range. Separately, S&P could raise the rating on NESL if the
company achieved a sustainable improvement in credit measures, with
leverage approaching 5x and EBITDA interest coverage approaching
2x, which S&P believes is more in line with a 'B' rating.
NW VALLEY: Parties Move Disclosure Statement Hearing to April 22
----------------------------------------------------------------
To pave the way for ongoing negotiations, NW Valley Holdings, LLC,
has reached a stipulation with key parties to postpone:
-- the hearing on a settlement with Kyle Entity Holdings,
LLC, to March 16, 2016, and
-- the hearing on the disclosure statement explaining
NW Valley's Chapter 11 plan to April 22.
The parties to the stipulation are:
-- NW Valley Holdings, LLC;
-- U.S. Bank National Association as the Plan Administrator
for the KHI Post-Consummation Trust and the Liquidation
Trust Administrator for the KHI Liquidation Trust, which
were formed as part of Kimball Hill Inc.'s own Chapter 11
plan; and
-- Kyle Entity Holdings, LLC.
On Dec. 18, 2015, the Debtor filed its Motion to Authorize and
Approve Settlement Agreement with Kyle Entity Holdings, LLC, et al.
Pursuant to Bankruptcy Rule 9019, which was originally set for
hearing on January 20, 2016. The KEH Settlement provides that:
* KEH will return to the bankruptcy estate the Water
Deposit of $2,026,954, plus pay $100,000 for the
Remaining Real Property; and
* KEH will be entitled to an allowed general unsecured
claim in the amount of $2,150,000.
On Dec. 22, 2015, the Debtor filed its [Proposed] Disclosure
Statement to Accompany Debtor's Second Chapter 11 Plan of
Reorganization and its Motion for an order approving the adequacy
of the Disclosure Statement, which was originally set for hearing
on Feb. 11, 2016.
On Jan. 11, 2016, the Parties entered into a stipulation, which
requested that the hearings and associated briefing deadlines be
continued, scheduled for Jan. 20, 2016 be continued to Feb. 24,
2016, as well as associated briefing deadlines. The First
Stipulation was approved by order entered on Jan. 15, 2016.
Pursuant to the foregoing, the hearing on the Settlement Motion was
continued to Feb. 24, 2016, and the hearing on the Disclosure
Statement Motion was continued to March 22, 2016.
The Parties have conferred and believe that it is in the best
interests of all to again continue the hearings and related
briefing deadlines on the Motions and the Disclosure Statement so
that the Parties may have more time to discuss settlement
possibilities.
Pursuant to the Second Stipulation, the Parties have agreed that
the hearing on the Settlement Motion will be continued to March 16,
2016 at 1:30 p.m., and the hearing on the Disclosure Statement
Motion and Disclosure Statement will be continued to April 22, 2016
at 1:30 p.m. As a result of the foregoing continuances, any
oppositions to the Settlement Motion are due on March 2, 2016, and
any replies thereto are due March 9, 2016, and any oppositions to
the Disclosure Statement Motion are due on April 8, 2016, and any
replies thereto on April 15, 2016.
Chapter 11 Plan
NW Valley on April 1, 2015 filed its proposed Chapter 11 plan of
reorganization.
On May 21, 2015, the Bankruptcy convened a hearing on the First
Plan. Confirmation of the Plan was opposed by the Kimball Hill
Trusts.
On July 6, 2015, the Court rendered an oral ruling denying
confirmation of the First Plan. The Court rejected the Plan
because, among other things, (i) it failed to satisfy Sec.
1129(a)(1), because it improperly classified unsecured claims as
unimpaired, and (ii) the exculpation provisions are overly broad.
The Debtor on Dec. 22, 2015, filed its Second Plan of
Reorganization and Disclosure Statement. The Second Plan provides
that all creditors will be paid in full, and remaining cash will be
distributed to equity holders after creditors are fully paid. The
Second Plan provides that only the equity holders are impaired
under the Plan and all classes of creditors are unimpaired.
There's a pending appeal filed by the Kimball Hill Trusts on the
Bankruptcy Court's Aug. 18, 2015 order disallowing the Trusts'
proof of claim.
A copy of the Disclosure Statement for the Second Plan is available
for free at:
http://bankrupt.com/misc/NW_Valley_234_DS_2nd_Plan.pdf
About NW Valley Holdings
NW Valley Holdings LLC was organized on Feb. 12, 2014, to provide
a vehicle and a process for its managers and members, who were all
homebuilders and other property developers, to group together and
make a joint bid to acquire certain real property consisting of
1,710.86 gross acres located in the City of Las Vegas, Nevada at a
Bureau of Land Management auction, and on which they intended to
develop a master-planned community. A syndicate of lenders led by
Wachovia Bank, N.A., as administrative agent, agreed to provide
$565,000,000 to finance the acquisition and develop the property.
The great recession and financial crisis of 2007 to 2008 hit. In
September 2008, a trustee's deed upon sale was recorded, thereby
evidencing the transfer of the property for a credit bid of
$5 million to an entity called KAG Property, LLC, as successor to
Wachovia's rights under the loan. The trustee's deed excluded any
portion of the property "lying within the U.S. Highway 95/Rancho
Drive as it presently exists." The remaining real property
consists of 6 very small parcels of property directly under or
immediately adjacent to the U.S. Highway 95.
In May 2013, Wells Fargo, successor by merger to Wachovia,
sold all of its rights and interests in the loan and KAG Property
to affiliates of Kyle Partners, LLC. Kyle Agent, LLC, was named
successor administrative agent. Kyle Partners owns 89% of the
beneficial interest of any remaining amounts owing under the
credit
agreement.
KEH acquired an aggregate 90.41% of the membership interests in
the
Company. The Kimball Hill Trusts hold the remaining 9.59%.
NW Valley Holdings LLC filed a Chapter 11 bankruptcy petition
(Bank. D. Nev. Case No. 15-10116) on Jan. 10, 2015. The petition
was signed by Charles C. Reardon, senior managing director of
Asgaard Capital, LLC, as manager. The Debtor disclosed assets of
$815,000 and liabilities of $428 million. Judge August B. Landis
is assigned to the case.
On Feb. 27, 2015, the Court authorized the employment of Asgaard
Capital LLC as the Debtor's manager.
The Debtor has tapped Larson & Zirzow, LLC, as general bankruptcy
counsel. The Debtor also hired Asset Insight of Nevada as real
property appraiser to provide an appraisal of the Remaining Real
Property. The Debtor has tapped David R. Black, CPA, as its
accountant.
OSAGE EXPLORATION: EDC to Buy Assets for $5 Million
---------------------------------------------------
Osage Exploration and Development, Inc., is seeking permission from
the U.S. Bankruptcy Court for Western District of Oklahoma to
commence a sale process where U.S. Energy Development Corporation
will purchase most of the assets for $5 million, absent higher and
better offers.
The Debtor has been unable to raise sufficient capital to continue
operating and developing its assets because of the Debtor's current
capital structure and the decline in the price of crude oil and
natural gas. As a result, the Debtor has reached an agreement to
sell its assets, subject to higher and better offers, to EDC, the
stalking horse bidder.
Significant terms of the sale are:
* Purchase Price: $5,000,000.
* Purchased Assets: All assets of the Debtor used in the
operation of the business, including all oil and gas leases, oil
and gas wells, any pipeline, all real property and real estate, and
all physical facilities.
* Closing Conditions: Conditions necessary to close the
transaction require the execution of the Stalking Horse APA and
entry of an order from the Bankruptcy Court approving the Sale that
has not been stayed, modified or reversed.
* Closing Date: The closing will occur on April 1, 2016, or on
the first business day following the satisfaction of the Closing
Contingencies, or such other time and date as the Parties may agree
to in writing.
* Higher and Better Offers: The sale of the Purchased Assets
will be subject to higher and better offers through a marketing and
auction process conducted by the Debtor and the Debtor's
professionals.
* Break-up Fee: If the Bankruptcy Court does not enter a final
order approving the sale to EDC due to submission of a competing
bid, EDC will receive a break-up fee of $150,000 plus reimbursement
of expenses of up to $75,000.
A copy of the Sale Motion and the Asset Purchase Agreement is
available for free at:
http://bankrupt.com/misc/Osage_E_100_SM_APA_EDC.pdf
Counsel for the Debtor:
CROWE & DUNLEVY
John Paul K. Napier, Esq.
Mark A. Craige, Esq.
Michael R. Pacewicz, Esq.
500 Kennedy Building
321 South Boston Avenue
Tulsa, OK 74103-3313
Tel: (918) 592-9800
Fax: (918) 592-9801
E-mail: mark.craige@crowedunlevy.com
michael.pacewicz@crowedunlevy.com
- and -
John Paul K. Napier, Esq.
CROWE & DUNLEVY, P.C.
324 N. Robinson, Ste. 100
Oklahoma City, OK 73102
Tel: (405) 235-7700
Fax: (405) 239-6651
E-mail: john.napier@crowedunlevy.com
About Osage Exploration
Based in San Diego, California with production offices in Oklahoma
City, Oklahoma, and executive offices in Bogota, Colombia, Osage
Exploration and Development, Inc. (OTC BB: OEDV) --
http://www.osageexploration.com/-- is an independent exploration
and production company with interests in oil and gas wells and
prospects in the US and Colombia.
Osage Exploration filed a Chapter 11 petition (Bankr. W.D. Okla.
Case No. 16-10308) on Feb. 3, 2016, to sell its assets under 11
U.S.C. Sec. 363.
The Debtor tapped Crowe & Dunlevy as counsel.
The Debtor estimated assets and debt of $10 million to $50
million.
To facilitate an orderly sale process, Apollo Investment
Corporation has agreed to provide debtor-in-possession financing to
the Debtor.
OSAGE EXPLORATION: Proposes EDC-Led Auction on March 24
-------------------------------------------------------
Osage Exploration and Development, Inc., seeks Bankruptcy Court
approval of proposed bidding procedures in connection with the sale
of most of its assets to U.S. Energy Development Corporation for $5
million, absent higher and better offers.
The Debtor believes that it is in the best interests of its estate
and creditors to pursue a sale of the assets under sections 105,
363 and 365 of the Bankruptcy Code. The Debtor believes that
marketing for higher and better offers and conducting an auction
will enable the Debtor to maximize value for all creditors.
The Debtor proposes that any person who wishes to participate in
the bidding process should submit a bid providing for, among other
things, (a) an initial purchase price equal to no less than the sum
of $5,000,000 plus $225,000, and (b) a good faith cash deposit in
an amount not less than 10% of the competing bid amount.
A bidder that desires to make a bid will deliver written copies of
its bid by mail, facsimile, or email so as to be received no later
than March 22, at 4:00 p.m. (prevailing Central Time) and submit
such bid to (i) counsel to the Debtor, Crowe & Dunlevy, 500 Kennedy
Building, 321 South Boston Avenue, Tulsa, Oklahoma 74103, Attn:
Mark A. Craige and Michael R. Pacewicz; (ii) counsel for Apollo,
McAfee & Taft, 10th Floor, Two Leadership Sq., 211 N. Robinson,
Oklahoma City, OK 73102, Attn: Steven W. Bugg; and (iii) the United
States Trustee, 215 Dean A. McGee Ave. 4th Fl., Oklahoma City,
Oklahoma 73102, Attn: Charles Snyder.
Any person who intends to bid at the auction but who does not
submit a qualified bid by the Bid Deadline will not be permitted to
attend or participate in or bid at the Auction.
If the Debtor does not receive at least one qualified bid with
respect to the assets (other than EDC's stalking horse bid), an
auction will not be conducted and the Debtor will seek approval to
sell the Purchased Assets to EDC pursuant to the Stalking Horse
APA.
If at least one qualified bid in addition to the Stalking Horse
Bidder's qualified bid is received, the Debtor will conduct an
Auction on March 24, 2016, at 1:00 p.m. (prevailing Central Time)
at the offices of Crowe & Dunlevy, 324 North Robinson Avenue,
Oklahoma City, OK 73102, or such other time or other place to be
determined by the Debtor.
The Debtor proposes to pay a $150,000 fee to EDC, plus reasonable
documented costs incurred by EDC not to exceed $75,000, in the
event that the Purchased Assets are sold to another purchaser,
other than the Stalking Horse Bidder, for a higher price. The
payment of the Break-Up Fee is critical to the continuing
obligation of the Stalking Horse Bidder to purchase the assets.
About Osage Exploration
Based in San Diego, California with production offices in Oklahoma
City, Oklahoma, and executive offices in Bogota, Colombia, Osage
Exploration and Development, Inc. (OTC BB: OEDV) --
http://www.osageexploration.com/-- is an independent exploration
and production company with interests in oil and gas wells and
prospects in the US and Colombia.
Osage Exploration filed a Chapter 11 petition (Bankr. W.D. Okla.
Case No. 16-10308) on Feb. 3, 2016, to sell its assets under 11
U.S.C. Sec. 363.
The Debtor tapped Crowe & Dunlevy as counsel.
The Debtor estimated assets and debt of $10 million to $50
million.
To facilitate an orderly sale process, Apollo Investment
Corporation has agreed to provide debtor-in-possession financing to
the Debtor.
OSAGE EXPLORATION: Weatherford et al Have Issues with Apollo Loan
-----------------------------------------------------------------
Weatherford U.S., L.P., Weatherford Artificial Lift Systems, LLC,
and Precision Energy Services, Inc. filed an objection to the final
approval of Osage Exploration and Development, Inc.'s proposed $1.4
million financing from Apollo Investment Corporation.
Through the DIP Motion, the Debtor seeks Court approval to
subordinate approximately $2.6 million in liens held by
Weatherford, to $1.4 million in priming liens granted to Apollo, on
account of collateral valued by the Debtor at $4 million. Because
no determination of relative pre-petition lien priority has been
made, the Court must assume that Weatherford's liens are valid,
perfected, and enforceable as to the assets, Weatherford tells the
Court.
Even assuming Weatherford is adequately protected, the Debtor's
proposed budget demonstrates that the proposed DIP Facility is
unnecessary, Weatherford avers. It notes that only 5.7% of the
funds received by the Debtor will actually go to maintaining or
enhancing the value of the property. The rest will go back to
Apollo, who will receive superpriority status for having lent to
themselves, the Debtor's management, who will get bonuses for
managing a company in bankruptcy, and estate professionals.
Weatherford, through its various divisions and/or affiliates,
furnished goods, materials, supplies, machinery, equipment, and/or
labor under contract with the Debtor in connection with oil and gas
operations conducted by the Debtor for which Weatherford has not
been paid. Weatherford's lien filings secure repayment of unpaid
amounts due and owing on the Debtor's account with Weatherford in
the total amount of $3,562,939.36, exclusive of contractual
interest, attorneys' fees, and costs.
"Under Sec. 364, the Debtor has the burden to establish that the
holder of the lien to be subordinated is adequately protected.
Absent an equity cushion in the non-Everest assets, replacement
liens representing actual value, adequate protection payments in
any form, or anything else compensating Weatherford for the loss it
will necessarily experience, this is a burden the Debtor cannot
meet," Weatherford tells the Court.
Well Owners
Another group of objectors consists of non-operating working
interest owners in wells operated by the Debtor and who have
prepaid approximately $6,000,000 in trust for the sole and limited
purpose of covering their estimated proportionate costs for the
drilling and completion of the wells (the "Earmarked Pre-Payment").
The objectors -- namely, Blake Arnold Working Interest Oil & Gas
Properties, L.L.C. ("BA"), Claude C. Arnold Working Interest Oil &
Gas Properties, LLC. ("CCA"), R. Scott Thompson Enterprises, LLC
("RST"), Manor Oaks, LLC ("Manor"), CMO Energy Partners II, LP
("CMO"), CFE Partners LLC ("CFE"), Endico, Inc.("Endico") and
Sundance Energy, Inc. -- said they are not do not oppose the use of
cash collateral or utilization of the DIP Facility to pay the
reasonable and necessary expenses of administration including those
expenses that would be incurred and paid by a prudent operator.
The Objectors said they will not contest the pre-petition lien and
pre-petition claim of Apollo. The Objectors, however, wish to
preserve a claim, if any, against Apollo to the extent they can
demonstrate that Apollo was a beneficiary of the Earmarked
Pre-Payment. Any release granted to Apollo should specifically
carve out such potential claims, the Objectors say.
"There will be no recovery for unsecured creditors in this case as
a result of the asset sale. It is not clear whether Apollo seeks
to re-urge that it be granted a lien on all Avoidance Actions to
secure repayment of the DIP Facility. Objectors oppose granting
Apollo a lien on Avoidance Actions. Demanding a pledge of
avoidance actions to secure repayment of the DIP Facility, incurred
for the purpose of facilitating a sale possibility for the sole
benefit of Apollo, is overreaching," the Objectors aver.
Attorneys for objectors Blake Arnold, et al.:
Stephen J. Moriarty, Esq.
FELLERS, SNIDER, BLANKENSHIP, BAILEY & TIPPENS, P.C.
100 North Broadway Avenue, Suite 1700
Oklahoma City, OK 73102-8820
Telephone: (405) 232-0621
Facsimile: (405) 232-9659
E-mail: smoriarty@fellerssnider.com
Counsel for Weatherford:
Michael S. Haynes
GARDERE WYNNE SEWELL LLP
3000 Thanksgiving Tower
1601 Elm Street
Dallas, TX 75201-4761
Telephone: 214-999-3000
Facsimile: 214-999-4667
E-mail: mhaynes@gardere.com
- and -
W. Davidson Pardue
ANDREWS DAVIS
100 N. Broadway Ave., Suite 3300
Oklahoma City, OK 73102
Telephone: 405-272-9241
Facsimile: 405-235-8786
E-mail: wdpardue@andrewsdavis.com
$1.4M DIP Financing
Osage Exploration is seeking final approval of postpetition loans
and other extensions of credit from Apollo or one or more of its
affiliates in an amount not to exceed $1,400,000.
The DIP facility from Apollo will mature on the earlier of:
(i) April 25, 2016,
(ii) the effective date of a chapter 11 plan with respect to
the Bankruptcy Case,
(iii) the sale of all or a substantial part of the assets of
the Debtor and its subsidiaries, which, for the
avoidance of doubt, shall include any sale of any oil
and/or gas well operated by the Debtor, and
(iv) the date that the Loans shall become due and payable in
full or pursuant to the DIP Order, whether by
acceleration or otherwise.
The DIP loans will have interest rate of 8% per annum, payable in
arrears at the end of every calendar month at maturity. There is a
default rate of 2% per annum in excess of the interest rate
otherwise payable. The Debtor agrees to pay fees of 2% of the
principal amount of the DIP Facility, payable on the date of the
applicable funding and 2% of the total amount advanced under the
DIP Facility payable upon maturity.
Osage Exploration also seeks to use cash collateral. The Lender
has consented to the Debtor's use of cash collateral subject to
funding and budget limitations. Use of cash collateral will
terminate on April 25, 2016.
The parties have agreed to a 13-week budget.
The Debtor is already indebted to Apollo pursuant to a Credit
Agreement dated April 27, 2012. The Lender holds a valid,
enforceable, and allowable claim against the Debtor, as of the
Petition Date, in an aggregate amount of at least $25,000,000 of
unpaid principal, plus any and all accrued and unpaid interest,
fees, costs, expenses, charges, and other claims.
The parties agree that the Debtor will conduct a comprehensive
marketing and sale process of its assets and businesses.
Attorneys for the Debtor:
Mark A. Craige, Esq.
Michael R. Pacewicz, Esq.
CROWE & DUNLEVY
500 Kennedy Building
321 South Boston Avenue
Tulsa, OK 74103-3313
Tel: 918-592-9800
Fax: 918-592-9801
E-mail: mark.craige@crowedunlevy.com
michael.pacewicz@crowedunlevy.com
About Osage Exploration
Based in San Diego, California with production offices in Oklahoma
City, Oklahoma, and executive offices in Bogota, Colombia, Osage
Exploration and Development, Inc. (OTC BB: OEDV) --
http://www.osageexploration.com/-- is an independent exploration
and production company with interests in oil and gas wells and
prospects in the US and Colombia.
Osage Exploration filed a Chapter 11 petition (Bankr. W.D. Okla.
Case No. 16-10308) on Feb. 3, 2016, to pursue a sale of
substantially all assets.
The Debtor estimated assets and debt of $10 million to $50
million.
The Debtor tapped Crowe & Dunlevy as counsel.
OSUM PRODUCTION: Moody's Lowers CFR to Caa2, Outlook Negative
-------------------------------------------------------------
Moody's Investors Service downgraded Osum Production Corp.'s
Corporate Family Rating (CFR) to Caa2 from B3, Probability of
Default Rating to Caa2-PD from B3-PD, secured revolving credit
facility rating to B1 from Ba3, and secured term loan rating to
Caa2 from B3. The rating outlook is negative. The Speculative
Grade Liquidity Rating of SGL-2 was withdrawn. This action
resolves the review for downgrade that was initiated on Jan. 21,
2016.
"The downgrade reflects the material decline in Osum's cash flows
expected in 2016 and 2017, which will result in weak leverage and
coverage metrics," said Paresh Chari, Moody's Analyst.
Downgrades:
Issuer: Osum Production Corp.
Probability of Default Rating, Downgraded to Caa2-PD from B3-PD
Corporate Family Rating, Downgraded to Caa2 from B3
Senior Secured Priority Revolving Credit Facility, Downgraded to
B1(LGD1) from Ba3(LGD1)
Senior Secured 1st Lien Term Loan, Downgraded to Caa2(LGD4) from
B3(LGD4)
Issuer: Osum Production Corp.
Outlook, Changed To Negative From Rating Under Review
Withdrawals:
Issuer: Osum Production Corp.
Speculative Grade Liquidity Rating, Withdrawn , previously rated
SGL-2
RATINGS RATIONALE
The Caa2 Corporate Family Rating (CFR) reflects weak leverage (11x
debt to EBITDA; 2% retained cash flow to debt) and EBITDA to
interest (1.3x) expected in 2017. The rating also considers Osum's
very small size (8,000 bbls/d) and concentrated production in one
SAGD (steam assisted gravity drainage) project, Orion. The rating
is supported by Osum's good liquidity and hedge position in 2016.
Moody's expects Osum's liquidity to be good through 2016. At Sept.
30, 2015, Osum had C$58 million of cash and full availability under
its US$15 million revolving credit facility due 2019. Moody's
expects positive free cash flow of about C$10 million through 2016.
Moody's expects Osum will be well in compliance with its sole
financial covenant through 2016. Alternate sources of liquidity are
somewhat limited as its assets are pledged as collateral to the
secured debt.
In accordance with Moody's Loss Given Default (LGD) Methodology,
the US$15 million super-priority revolving credit facility is rated
B1 as the US$208 million senior secured term loan provides cushion.
The senior secured term loan is rated at the Caa2 CFR as it makes
up the majority of the capital structure. The C$377 million
unsecured subordinated intercompany loan is treated as equity due
to its deeply subordinated nature.
The negative outlook reflects our expectation that Osum's leverage
metrics and EBITDA to interest will weaken in 2017.
The rating could be upgraded to Caa1 if Osum can maintain interest
coverage above 1.5x and have adequate liquidity.
The rating could be downgraded to Caa3 if liquidity worsens or if
interest coverage is likely to fall below 1x.
Osum Production Company is a Calgary, Alberta based exploration and
production company producing roughly 8,000 bbls/d (production is
net of royalties) from its Orion SAGD project in Cold Lake,
Alberta.
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011.
OUTER HARBOR: $3.5-Mil. DIP Facility Approved in Interim
--------------------------------------------------------
Outer Harbor Terminal, LLC, sought and obtained from Judge Laurie
Selber Silverstein of the U.S. Bankruptcy Court for the District of
Delaware interim approval to access postpetition financing from HHH
Oakland, Inc., and Terminal Investment Ltd..
A final hearing on the motion is scheduled for March 1, 2016 at
10:00 a.m. The deadline for the filing of objections was Feb. 23.
Prior to filing its Chapter 11 case, the Debtor negotiated a $3.5
million DIP financing ("DIP Facility"), all of which is available
on an interim basis. The DIP Facility will be secured by a first
priority lien on the Debtor's unencumbered assets and a junior lien
on the Debtor's assets that are already subject to valid, perfected
and unavoidable prepetition liens. The Debtor added that the DIP
Facility provides for superpriority administrative expense claims,
and did not contain any priming feature.
The DIP Facility, contains, among others, these terms:
(1) Borrower: Outer Harbor Terminal, LLC
(2) Lenders: HHH Oakland, Inc. and Terminal Investment Ltd.
(3) Commitment: The DIP Facility will be in the maximum
principal amount of $3.5 million. Each Lender's commitment to make
advances will not at any time exceed $1.75 million ("Maximum
Commitment"). The Maximum Commitment amount of each Lender would
be available as a debtor-in-possession multi-draw term credit
facility to, or for the benefit of the Debtor.
(4) Interest Rates: The unpaid principal amount of the
advances under the DIP Facility will accrue interest at a rate
equal to 10% per annum.
The Debtor told the Court that the proceeds of the DIP Facility
will be used to support the Debtor's wind down operations. The
Debtor further told the Court that the DIP Facility proceeds, among
other things, will be used to fund the wages, salaries and benefits
of the Debtor's employees, procure necessary goods and services,
finance the costs of the Chapter 11 Case, and meet certain other
working capital needs. The Debtor asserted that payment of such
expenses is necessary to ensure that the Debtor is able to wind
down its operations in a safe, efficient, and expeditious manner.
A full-text copy of the Court's Interim DIP Order dated February 9,
2016, is available at http://is.gd/t4VDeP
Outer Harbor Terminal is represented by:
Mark D. Collins, Esq.
Marisa A. Terranova, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, DE 19801
Telephone: (302)651-7700
Facsimile: (302)651-7701
E-mail: collins@rlf.com
terranova@rlf.com
- and -
Gregory A. Bray, Esq.
Thomas R. Keller, Esq.
Haig M. Maghakian, Esq.
MILBANK, TWEED, HADLEY & MCCLOY LLP
601 S. Figueroa Street, 30th Floor
Los Angeles, CA 90017
Telephone: (213)892-4000
Facsimile: (213)629-5063
E-mail: gbray@milbank.com
tkreller@milbank.com
hmaghakian@milbank.com
- and -
Dennis F. Dunne, Esq.
Samuel A. Khalil, Esq.
MILBANK, TWEED, HADLEY & MCCLOY LLP
28 Liberty Street
New York, NY 10005
Telephone: (212)530-5000
Facsimile: (212)530-5219
E-mail: ddunne@milbank.com
skhalil@milbank.com
About Outer Harbor Terminal
Oakland, California-based port operator Outer Harbor Terminal, LLC,
filed for Chapter 11 protection (Bankr. D. Del. Case No. 16-10283)
on Feb. 1, 2016.
The Hon. Laurie Selber Silverstein presides over the case.
Milbank, Tweed, Hadley & Mccloy LLP is the Debtor's general
counsel. Mark D. Collins, Esq., at Richards, Layton & Finger,
P.A., serves as its Delaware counsel.
The Debtor estimated assets and debts at $100 million to $500
million. The petition was signed by Heather Stack, chief financial
officer.
PEABODY ENERGY: Bank Debt Trades at 57% Off
-------------------------------------------
Participations in a syndicated loan under which Peabody Energy
Power Corp is a borrower traded in the secondary market at 43.50
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents an increase of 1.40 percentage points from the
previous week. Peabody Energy pays 325 basis points above LIBOR to
borrow under the $1.2 billion facility. The bank loan matures on
Sept. 20, 2020 and carries Moody's B3 rating and Standard & Poor's
B rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
PETSMART INC: Bank Debt Trades at 3% Off
----------------------------------------
Participations in a syndicated loan under which Petsmart Inc. is a
borrower traded in the secondary market at 96.93
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents an increase of 0.39 percentage points from the
previous week. Petsmart Inc. pays 325 basis points above LIBOR to
borrow under the $4.3 billion facility. The bank loan matures on
March 10, 2022 and carries Moody's Ba3 rating and Standard & Poor's
BB- rating. The loan is one of the biggest gainers and losers
among 247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
PHARMACEUTICAL ALTERNATIVES: Summary Judgment Favoring MMO Affirmed
-------------------------------------------------------------------
The Court of Appeals of Ohio, Fifth District, Coshocton County,
affirmed the judgment of the Coshocton County Court of Common
Pleas, which granted summary judgment in favor of Medical Mutual of
Ohio.
In 2000, MMO, a health insurance provider, entered into an
agreement with Pharmaceutical Alternatives Inc., which provided for
reimbursement to PAI for certain services and medications PAI would
provide to MMO's insureds, as well as two additional agreements
which provided for reimbursement to PAI on an in-network basis.
Elise Miller was the sole owner of PAI.
On July 11, 2006, PAI filed a lawsuit against MMO before the
Coshocton County Court of Common Pleas, Coshocton County, Ohio
("the Cardinal Litigation"). When PAI entered into bankruptcy, the
bankruptcy court issued an agreed order on September 24, 2010,
authorizing the sale to third-party creditor Cardinal Health 113
LLC ("Cardinal") of any and all rights, title and interest to
claims and litigation held by PAI against MMO free and clear of any
liens and encumbrances. Cardinal thus stepped into the shoes of
PAI in the Cardinal Litigation.
On or about March 29, 2012, PAI and Miller filed a complaint
against MMO in the Coshocton Court of Common Pleas. On June 5,
2015, the trial court granted summary judgment in favor of MMO,
finding Cardinal purchased PAI's claims against MMO from the
bankruptcy trustee, and did not transfer any of the claims back to
PAI; therefore, Cardinal is the sole owner of the claims asserted
by PAI.
Upon review of the record, the Court of Appeals of Ohio, Fifth
District, found that no genuine issue of material fact exists. The
appellate court observed that the evidence establishes Cardinal
purchased all of PAI's claims against MMO from the bankruptcy
trustee, and there is no evidence that Cardinal transferred some
claims back to PAI.
The case is ELISE MILLER, ET AL. Plaintiffs-Appellants, v. MEDICAL
MUTUAL OF OHIO, Defendant-Appellee, No. 2015CA0007 (Ohio Ct.
App.).
A full-text copy of the Ohio appellate court's February 4, 2016
opinion is available at http://is.gd/kKCBqPfrom Leagle.com.
Plaintiffs-Appellants are represented by:
Richard T. Robol, Esq.
Robert T. Robol, Esq.
ROBOL LAW OFFICE, LLC
433 West Sixth Avenue
Columbus, OH 43201
Tel: (614)282-5412
Fax: (888)308-0622
Email: rrobol@robollaw.com
rob@robollaw.com
Defendant-Appellee is represented by:
Christopher S. Williams, Esq.
Maura L. Hughes, Esq.
Kirsty McNamara, Esq.
CALFEE, HALTER & GRISWOLD LLP
The Calfee Bldg.
1405 East Sixth St.
Cleveland, OH 44114
Tel: (216)622-8200
Fax: (216)241-0816
Email: cwilliams@calfee.com
mhughes@calfee.com
kmcnamara@calfee.com
-- and –-
Steve J. Shrock, Esq.
CRITCHFIELD, CRITCHFIELD & JOHNSTON, LTD.
138 E. Jackson Street
Millersburg, OH 44654
Tel: (330)674-3055
Fax: (330)674-4469
Email: shrock@ccj.com
About Pharmaceutical Alternatives
Pharmaceutical Alternatives, Inc., filed a voluntary petition
under Chapter 11 of the Bankruptcy Code on Nov. 5, 2008 in the
U.S. Bankruptcy Court for the Southern District of Ohio. On March
18, 2009, PAI's case was converted to one under Chapter 7 of the
Bankruptcy Code and William B. Logan was appointed trustee.
PREFERRED PROPPANTS: Moody's Lowers CFR to Caa3, Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service downgraded Preferred Proppants, LLC's
Corporate Family Rating to Caa3 from Caa2, the Probability of
Default Rating (PDR) to Caa3-PD from Caa2-PD, and the $350 million
senior secured term loan rating to Caa2 from Caa1. The ratings
outlook was revised to negative.
These ratings actions were taken:
Corporate Family Rating, downgraded to Caa3 from Caa2;
Probability of Default, downgraded to Caa3-PD from Caa2-PD;
$350 million senior secured term loan, downgraded to Caa2, LGD-2
from Caa1, LGD-3;
The outlook is negative.
RATINGS RATIONALE
The ratings downgrade and negative outlook reflect Moody's
expectation that there is a risk of payment default in 2016. With
on-going weakness in the oil and natural gas industry negatively
impacting demand for proppants as well as customer
creditworthiness, Moody's expects earnings and cash flow metrics to
deteriorate further in 2016. The downgrade also incorporates our
belief that Preferred Proppants' enterprise value vis-a-vis its
total debt claims has diminished. Balance sheet debt is also
expected to increase through Preferred Proppants' employment of its
payment-in-kind ("PIK") interest feature in its 2nd Lien Notes.
Moody's believes the company's capital structure is untenable.
Preferred Proppants' Caa3 Corporate Family Rating reflects the
company's small scale, high and increasing debt leverage, end
market concentration in the cyclical oil and gas industry, and weak
free cash flow. The ratings also reflect Preferred Proppants's
capital structure. In particular, the $300 million 2nd Lien Notes
provide for a payment-in-kind ("PIK") option which offers liquidity
flexibility, but the feature increases adjusted debt-to-EBITDA.
The company has adopted the PIK feature in order to preserve
liquidity during persistent weak end market conditions. Despite
employing the PIK option, overall liquidity will diminish in 2016
such that Moody's believes Preferred is at risk for an interest
payment default. The ratings consider default risk, as well as
weakness in the oil and natural gas markets (which is impacting the
company's customer base and demand for proppant despite
proppant-intensive hydraulic fracturing techniques), Preferred's
unique resin-coated sand product, the company's high customer
concentration, and the company's private ownership by a combination
of management and private equity.
Moody's indicated that the ratings are not likely to experience
upward movement in the near-term. However, the ratings could be
returned to stable if the oil and natural gas end markets stabilize
such that drilling activity increases. The outlook could also be
stabilized if the company were to generate enough cash flow to
cover its total interest costs, or at a minimum slow the rating of
increase to its balance sheet debt. Finally, if Preferred's
liquidity would be shored up by a large cash infusion such that the
company would be able to cover its obligations over the next 18 to
24 months, the outlook could be revised to stable.
The company's ratings could face downward pressure if weakened
liquidity results in a payment default or the company's enterprise
value compared to its total debt claims weakens further.
The principal methodology used in these ratings was Building
Materials Industry published in September 2014.
PREMIER GOLF: Says Cajon's $16MM Claim Should Be Reduced
--------------------------------------------------------
Premier Golf Properties, LP, is asking the U.S. Bankruptcy Court
for the Southern District of California to reduce the $16.4 million
secured claim asserted by Cottonwood Cajon ES, LLC.
Premier describes Cajon as a predatory investor that has acquired
two other golf courses in San Diego by purchasing the underlying
debt obligations and then foreclosing. Cajon purchased the
Debtor's secured debt to Far East National Bank in February 2015.
In its first bankruptcy case, Premier in December 2013 entered into
a settlement agreement with secured creditor Far East National
Bank. FENB agreed to reduce its then-alleged almost $13.0 million
claim to $8.5 million and extend the final balance payoff of $8.5
million to March of 2016. In return, the Debtor agreed to dismiss
a lawsuit against FENB, commence monthly payments to FENB in
January of 2014 of $42,500, and pay all accumulated real property
taxes to the County of San Diego by late March of 2014. The
parties sought a dismissal of the case after reaching the
settlement.
The Debtor made each and every monthly payment to FENB until August
of 2014, at which time FENB returned the Debtor's August payment
and issued a Notice of Trustee's Sale due to the Debtor's failure
to pay all taxes due. With a looming foreclosure sale date of Feb.
24, 2015 that had not been continued, the Debtor filed a new
Chapter 11 case.
Cajon, which purchased the FENB Note, filed Claim No. 10 on May 14,
2015. Cajon asserts a claim in the amount of $16,428,632. Cajon
has claimed that that Premier defaulted on the Settlement Agreement
by failing to pay in full the delinquent real property taxes within
90 days of the execution of the Settlement.
On Oct. 12, 2015, the Debtor filed a Joint Plan of Reorganization
that proposes to obtain outside funding through a development
partner to satisfy all creditors' claims and enable the Debtor
jointly to develop its real property. To satisfy Cajon's claim,
the Plan proposes to cure all of the Debtor's defaults under the
Settlement Agreement -- if in fact the Debtor is in default and was
not excused from timely performing under the Settlement Agreement
due to FENB's prior breach -- and to pay the Cajon's claim in the
amount required by the Settlement Agreement.
As a result of the cure provisions contained in the Plan, the
Debtor says it will be required to do only the following: (1) Pay
on the Effective Date of the Plan all real estate taxes that are
due and owing; (2) pay to Cajon on the Effective Date of the Plan
all of the missed interest-only payments ($42,500 per month) called
for under the Settlement Agreement from and after August of 2014
(which is when FENB rejected the Debtor's tender of the normal
monthly payment); and (3) on the later of March 1, 2016 or the
Effective Date of the Plan, pay Cajon the $8.5 million balloon
payment that the Settlement Agreement provides is due March 1,
2016. The Debtor is entitled to a credit on account of $120,000
that it paid to Cajon during 2015 in contemplation of a new
settlement agreement that the Debtor ultimately determined not to
pursue.
Alternatively, the Debtor asserts that if for any reason it is not
entitled to cure any defaults under the Settlement Agreement, the
Debtor was excused from timely performing under the Settlement
Agreement due to FENB's prior breach. In that instance, the Debtor
will owe the same amounts because Cajon, as FENB's predecessor,
acquired the loan subject to all defenses that were available
against FENB. In addition, Cajon's claim includes more than $1
million of charges that are unclear and not substantiated. Cajon's
claim is overstated and otherwise ambiguous and unsubstantiated.
The Debtor, Edgewood Distributors & Management, Inc., R.H.
Rodriguez, Inc., and Premier Golf Property Management, Inc., insist
that Cajon's claim should be limited to the missed interest-only
payments called for under the Settlement Agreement from and after
August of 2014 (which is when the Debtor tendered a payment to FENB
and FENB refused it) until the $8.5 million balloon payment is
paid, plus the $8.5 million balloon payment, less credit for the
$120,000 that the Debtor paid to Cajon during 2015.
A copy of the Premier Gold Properties, et al.'s memorandum in
support of their assertions that Cajon's claim should be reduced is
available for free at:
http://bankrupt.com/misc/Premier_Golf_160_Cajon_Claim_Memo.pdf
Attorney for debtor Premier Golf Properties, LP:
Jack F. Fitzmaurice, Esq.
FITZMAURICE & DEMERGIAN
1061 Tierra Del Rey, Suite 204
Chula Vista, CA 91910
Tel: (619) 591-1000
Fax: (619) 591-1010
E-mail: fitz01@earthlink.net
Counsel for Edgewood Distributors & Management, Inc., R.H.
Rodriguez, Inc., and Premier Golf Property Management, Inc.:
CURRY ADVISORS
K. Todd Curry, Esq.
525 B Street, Ste. 1500
San Diego, CA 92101
Tel: (619) 238-0004
Fax: (619) 238-0006
About Premier Golf Properties
Premier Golf Properties, LP, conducts business under the name
"Cottonwood Golf Club." The golf course and related operations are
located at 3121 Willow Glen Drive in the East County area of San
Diego known as Rancho San Diego, in the southern-most part of El
Cajon. The golf course was built and commenced operations in 1962.
The property consists of a total of 283 acres, through which the
Sweetwater River meanders from east to west, and it is
approximately two miles in length.
Premier Golf Properties first sought Chapter 11 protection (Bankr.
S.D. Cal. Case No. 11-07388) on May 2, 2011. The Debtor and Far
East National Bank, in December 2013 reached a settlement pursuant
to which FENB agreed to reduce its claim to $8.5 million and extend
the final balance payoff of $8.5 million to March 2016. In April
2014, the case was dismissed pursuant to a joint motion of the
Debtor and FENB.
Premier Golf Properties again filed a Chapter 11 bankruptcy
petition (Bankr. S.D. Cal. Case No. 15-01068) on Feb. 24, 2015.
The new petition was signed by Daryl Idler, the secretary of
Premier Golf Property Management Inc, general partner.
Premier Golf Properties LP disclosed $44,363,923 in assets and
$19,228,427 in liabilities as of the Chapter 11 filing. The
secured creditor is Cottonwood Cajon ES, LLC, which purchased the
note issued to FENB.
Jack Fitzmaurice, Esq., at Fitzmaurice & Demergian, serves as
counsel in the new Chapter 11 case.
RCS CAPITAL: Hearing Today on Bid to Hire Zolfo Cooper
------------------------------------------------------
RCS Capital Corporation, et al., seek authorization from the U.S.
Bankruptcy Court for the District of Delaware to employ Zolfo
Cooper Management, LLC to provide interim management services and
designate David Orlofsky as chief restructuring officer and interim
chief financial officer, nunc pro tunc to the January 31, 2016
petition date.
Mr. Orlofsky will continue to provide interim management services
to the Debtors and serve as the Debtors' CRO and RCS Parent's CFO,
and Zolfo Cooper will assign Associate Directors to perform other
services as needed. Zolfo Cooper and Mr. Orlofsky will lead the
Debtors' restructuring efforts as directed by the Board or the
Executive Committee of the Board. Zolfo Cooper and Mr. Orlofsky
shall be authorized to make, decisions with respect to the
financial operations, cash management of the non-regulated
subsidiaries, implementation of strategic alternatives and the
restructuring of the Debtors' business in each case as approved by
the Board, and such other areas as Mr. Orlofsky may identify, in
such a manner as he deems necessary or appropriate in his sole
discretion in a manner consistent with the business judgment rule
and the provisions of applicable law, subject, however, to approval
of the Board.
Zolfo Cooper's, Mr. Orlofsky's, and the Associate Directors'
compensation shall consist of the following:
(a) Standard Hourly Rates. The billing rates for professionals
who may be assigned to this engagement in effect as of
January 1, 2016, are as follows:
Managing Directors $790-$985
Professional Staff $280-$790
Support Personnel $60-$270
(b) Expenses - Reimbursement of Mr. Orlofsky, Associate
Directors, and Zolfo Cooper's reasonable documented out-of-
pocket expenses including, but not limited to, costs of
travel, reproduction, legal counsel, any applicable
state sales or excise tax, and other direct expenses.
(c) Retainer and Advance Payments - The Debtors provided pre-
petition retainer of $200,000, and advance payments
totaling $1,625,000 under the Prior Pre-petition Services
Agreement. The advances will be reduced by any current
outstanding pre-petition fees and expenses under the Prior
Prepetition Services Agreement and Zolfo Cooper will apply
its retainer and any remaining pre-petition advance
payments to allowed fees and expenses prior to seeking
payment from the Debtors' cash flows.
(d) Confirmation Fee - A confirmation fee will be payable in
cash upon confirmation of a plan of reorganization. In the
event that a plan of reorganization is confirmed, the
Debtors shall pay, upon confirmation of the plan, a
Confirmation Fee subject to the following schedule of
timing:
120 days $1,250,000
121 to 150 days $833,000
151 to 180 days $416,000
more than 181 days $0
David Orlofsky, senior managing director of Zolfo Cooper, assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
The Bankruptcy Court will hold a hearing on the motion on February
24, 2016 at 11:30 a.m. Objections were due February 17, 2016.
Zolfo Cooper can be reached at:
David Orlofsky
ZOLFO COOPER MANAGEMENT, LLC
Grace Building
1114 Avenue of the Americas, 41st Floor
New York, NY 10036
Tel: (212) 561-4022
E-mail: dorlofsky@zolfocooper.com
About RCS Capital
New York-based RCS Capital Corporation --
http://www.rcscapital.com/-- is a full-service investment firm
focused on the individual retail investor. With operating
subsidiaries primarily focused on retail advice and until the
completion of recently announced pending sales and divestiture of
its wholesale distribution and investment banking, the company's
business aims to capitalize, grow and maximize value for the
investment programs its distributes and the independent advisors
and clients it serves.
RCS Capital Corporation and 11 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10223 to
16-10234) on Jan. 31, 2016. The petitions were signed by David
Orlofsky as chief restructuring officer. The Debtors disclosed
total assets of $1.97 billion and total debts of $1.39 billion.
The Debtors have engaged Dechert LLP as general counsel, Young
Conaway Stargatt & Taylor, LLP as Delaware counsel, Zolfo Cooper
Management, LLC as restructuring advisor, Lazard Freres & Co. LLC
as investment banker and Prime Clerk LLC as administrative advisor
and claims and noticing agent.
RCS CAPITAL: Hires Young Conaway as Bankruptcy Co-counsel
---------------------------------------------------------
RCS Capital Corporation, et al., seek authorization from the U.S.
Bankruptcy Court for the District of Delaware to employ Young
Conaway Stargatt & Taylor, LLP as bankruptcy co-counsel, nunc pro
tunc to the January 31, 2016 petition date.
The professional services that Young Conaway will render to the
Debtors include, but shall not be limited to:
-- providing legal advice with respect to the Debtors' powers
and duties as debtors in possession in the continued
operation of their business, management of their properties,
and the potential sale of their assets;
-- preparing and pursuing confirmation of a plan and approval
of a disclosure statement;
-- preparing, on behalf of the Debtors, necessary applications,
motions, answers, orders, reports, and other legal papers;
-- appearing in Court and protecting the interests of the
Debtors before the Court; and
-- performing all other legal services for the Debtors that may
be necessary and proper in these proceedings.
Young Conaway will be paid at these hourly rates:
Robert S. Brady $850
Edmon L. Morton $695
Robert F. Poppiti, Jr. $480
Ian J. Bambrick $410
Shane M. Reil $345
Beth Olivere, paralegal $210
Young Conaway will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Robert S. Brady, partner of Young Conaway, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
The Bankruptcy Court will consider approval of the firm's
employment at a hearing on February 24, 2016 at 11:30 a.m.
Objections were due February 17, 2016.
Consistent with the U.S. Trustee's Appendix B—Guidelines for
Reviewing Applications for Compensation and Reimbursement of
Expenses Filed Under 11 U.S.C. section 330 by Attorneys in Larger
Chapter 11 Cases, which became effective on November 1, 2013, Young
Conaway states as follows:
-- Young Conaway has not agreed to a variation of its standard
or customary billing arrangements for this engagement;
-- None of the Firm's professionals included in this engagement
have varied their rate based on the geographic location of
these chapter 11 cases;
-- Young Conaway was retained by the Debtors pursuant to an
engagement agreement dated as of January 7, 2016. The
billing rates and material terms of the prepetition
engagement are the same as the rates and terms described in
the Application; and
-- The Debtors have approved or will be approving a prospective
budget and staffing plan for Young Conaway's engagement for
the postpetition period as appropriate. In accordance with
the U.S. Trustee Guidelines, the budget may be amended as
necessary to reflect changed or unanticipated developments.
Young Conway can be reached at:
Robert S. Brady, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1256
About RCS Capital
New York-based RCS Capital Corporation --
http://www.rcscapital.com/-- is a full-service investment firm
focused on the individual retail investor. With operating
subsidiaries primarily focused on retail advice and until the
completion of recently announced pending sales and divestiture of
its wholesale distribution and investment banking, the company's
business aims to capitalize, grow and maximize value for the
investment programs its distributes and the independent advisors
and clients it serves.
RCS Capital Corporation and 11 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10223 to
16-10234) on Jan. 31, 2016. The petitions were signed by David
Orlofsky as chief restructuring officer. The Debtors disclosed
total assets of $1.97 billion and total debts of $1.39 billion.
The Debtors have engaged Dechert LLP as general counsel, Young
Conaway Stargatt & Taylor, LLP as Delaware counsel, Zolfo Cooper
Management, LLC as restructuring advisor, Lazard Freres & Co. LLC
as investment banker and Prime Clerk LLC as administrative advisor
and claims and noticing agent.
RED DOOR LOUNGE: Court Approves Employment of Patten's Law Firm
---------------------------------------------------------------
Judge Ralph B. Kirscher of the United States Bankruptcy Court for
the District of Montana overruled the Acting United States
Trustee's objection and approved the debtor Red Door Lounge, Inc.'s
amended application to approve the employment of its selected
attorney James A. Patten, Esq., and the Patten, Peterman, Bekkedahl
& Green law firm.
The amended application to employ Patten and his firm was filed on
December 24, 2015, disclosing Patten's hourly billing rate as
$330.00, and hourly rates for other attorneys at their customary
rates ranging from $175.00 to $330.00 per hour. Also disclosed
were hourly rates for paralegals Diane S. Kephart at $160.00; April
J. Boucher, Valerie Cox and Phyllis Dahl at $125.00; and $110.00
per hour for Leanne Beatty.
The UST, represented by attorney Neal G. Jensen, objected on the
grounds that Patten should be required to satisfy the burden of
establishing the reasonableness of his firm's billing rates for
paralegals as professionals under 11 U.S.C. Section 330(a)(1)(A).
Jensen suggested that $100 is a reasonable hourly rate for
paralegals.
Judge Kirscher found that no dispute exists about Patten's
specialized practice in bankruptcy and about Kephart's specialized
practice as an accountant justifying her $160 hourly rate. The
judge also found that the $125 and $110 hourly rates for Patten's
other paralegals are within the range of rates in the Stipulated
Statements of Fact and are less than the approved rates in the
case, In re Jore Corporation, 20 Mont. B.R. 158, which remains good
law in the district. On the other hand, Judge Kirscher found that
the UST offered no evidence supporting Jensen's argument that $100
is the preferred reasonable hourly rate for paralegals.
The case is In re RED DOOR LOUNGE, INC., Debtor, Case No.
15-61151-11 (Bankr. D. Mont.).
A full-text copy of Judge Kirscher's February 12, 2016 memorandum
of decision is available at http://is.gd/yZI2kbfrom Leagle.com.
RED DOOR LOUNGE, INC. is represented by:
James A. Patten, Esq.
The Fratt Building, Suite 300
2817 Second Avenue North
Billings, MT 59101
Tel: (406)545-0195
Fax: (406)294-9500
OFFICE OF THE U.S. TRUSTEE is represented by:
Neal G. Jensen, Esq.
UNITED STATES TRUSTEE'S OFFICE
301 Central Avenue, Suite 204
Great Falls, MT 59401
Tel: (406)761-8777
Fax: (406)761-8895
REDONDO CONSTRUCTION: 1st Cir. Vacates Judgment in PRHTA Suit
-------------------------------------------------------------
This case returns to the United States Court of Appeals for the
First Circuit following its remand in In re Redondo Construction
Corp. (Redondo III), 678 F.3d 115 (1st Cir. 2012).
The Puerto Rico Highway and Transportation Authority appeals the
district court's affirmance of the bankruptcy court's award of
prejudgment interest to Redondo Construction Corporation on its
contract claims under Article 1061 of the Puerto Rico Civil Code,
31 L.P.R.A. accruing through the payment of principal. The
Authority asserts that Redondo forfeited its claim, and that even
if such an award was warranted, the bankruptcy court used incorrect
start and end dates for accrual.
In a Decision dated February 10, 2016, which is available at
http://is.gd/tXISQifrom Leagle.com, the First Circuit vacated the
district court's judgment and remanded the case to allow for an
award of postjudgment interest and a reduction of the Article 1061
interest award to the extent their accrual periods overlap.
The case is IN RE: REDONDO CONSTRUCTION CORPORATION, Debtor. PUERTO
RICO HIGHWAY AND TRANSPORTATION AUTHORITY, Plaintiff, Appellant, v.
REDONDO CONSTRUCTION CORPORATION, Defendant, Appellee, No.
15-1397.
Héctor Benítez-Arraiza, Esq. -- Quiñones & Arbona, P.S.C. for
appellant.
Charles A. Cuprill-Hernández, Esq., -- Law Offices Charles A.
Cuprill, P.S.C., for appellee.
Redondo Construction Corporation has been in the construction
business for 30 years, and worked on many public and government
projects. Redondo filed for chapter 11 protection (Bankr. D.P.R.
Case No. 02-02887) on March 19, 2002, and the Bankruptcy Court
confirmed the Debtor's chapter 11 plan on Oct. 6, 2005.
REXNORD: Bank Debt Trades at 5% Off
-----------------------------------
Participations in a syndicated loan under which Rexnord is a
borrower traded in the secondary market at 94.78
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.68 percentage points from the
previous week. Rexnord pays 300 basis points above LIBOR to borrow
under the $19.5 billion facility. The bank loan matures on August
15, 2020 and carries Moody's B2 rating and Standard & Poor's BB-
rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
ROBERT SPENLINHAUER: Bid to Stay Trustee Appointment Denied
-----------------------------------------------------------
Approximately two years into Chapter 11 bankruptcy, the United
States Trustee, William K. Harrington, filed a motion in the
bankruptcy court to convert the case to a Chapter 7 bankruptcy or,
in the alternative, to appoint a Chapter 11 trustee alleging that
certain actions by Robert J. Spenlinhauer called into question his
ability to adequately protect his creditors' interests as he sought
reorganization.
The bankruptcy judge granted the United States Trustee's motion and
selected the second option, the appointment of a trustee. A
Chapter 11 trustee was appointed shortly thereafter.
The debtor appealed the appointment of the trustee to this Court
and moved in the bankruptcy court for a stay of the appointment
pending that appeal. The bankruptcy judge denied the motion for a
stay. Following that denial, the debtor renewed his motion for a
stay in this Court.
In an Order dated February 9, 2016, which is available at
http://is.gd/Irwul0from Leagle.com, Judge George A. O'Toole of the
United States District Court for the District of Massachusetts
denied the Debtor's Motion for Stay Pending Appeal as the Debtor
has not carried his burden.
The bankruptcy case is In re: ROBERT J. SPENLINHAUER, Debtor, Case
No. 13-17191-JNF (Bankr. D. Mass.).
The district court proceeding is ROBERT J. SPENLINHAUER, Chapter
11, Appellant, v. WILLIAM K. HARRINGTON, UNITED STATES TRUSTEE FOR
REGION 1, Appellee, Civil Action No. 15-14223-GAO (D. Mass.).
Robert J. Spenlinhauer, Appellant, is represented by Gary W.
Cruickshank, Esq.
Cooperative Bank of Cape Cod, Appellee, is represented by Alex
Michael Rodolakis, Esq. -- Fletcher Tilton, PC.
U.S. Trustee William K. Harrington, Appellee, is represented by
Eric K. Bradford, U.S. Department of Justice.
Paula Bachtell, Trustee, represented by Paula R.C. Bachtell,
Department of Justice.
Lynne Riley, represented by Lynne F. Riley, Esq. --
luo@casneredwards.com -- Casner & Edwards.
RONALD WILLIAM DEMASI: $205K State Court Judgment Nondischargeable
------------------------------------------------------------------
Appellant Ravi Kondapalli, individually and on behalf of Gulf Coast
Digestive Health Center, PL, filed an adversary complaint to
determine the non-dischargeability of Ronald William DeMasi's debt.
In particular, the adversary complaint alleged a liquidated claim
in the amount of $205,714, representing Kondapalli's half of the
state-court judgment, and an unliquidated claim for attorney fees
in the amount of at least $361,698.
DeMasi moved to dismiss the adversary complaint. The bankruptcy
court held that Kondapalli failed to state a claim. The bankruptcy
court also dismissed the complaint to the extent it sought to
determine that the unliquidated claim for attorney fees was
non-dischargeable. Kondapalli appeals that ruling.
The parties filed cross-motions for summary judgment on
Kondapalli's remaining claim under the fraud exception to
discharge. After determining that Judge Donnellan's judgment was
entitled to preclusive effect, the bankruptcy court held that the
state-court judgment was non-dischargeable due to DeMasi's fraud.
Accordingly, the bankruptcy court entered final judgment in the
adversary proceeding on a principal amount of $205,714, plus
post-judgment interest. DeMasi cross-appeals that ruling.
The appeals require the Court to determine whether a state-court
judgment and an unliquidated claim for attorney fees fall within
the fraud exception to discharge.
In an Order dated February 11, 2016, which is available at
http://is.gd/P7W5F6from Leagle.com, Judge Elizabeth A. Kovachevich
of the United States District Court for the Middle District of
Florida, Tampa Division, affirmed the bankruptcy court's
determination that the state-court judgment in the principal amount
of $205,714 plus post-judgment interest accruing thereon, is
non-dischargeable and reversed the bankruptcy court's determination
that the unliquidated claim for attorney fees does not fall within
the fraud exception. The case is remanded to the bankruptcy court
for further proceedings consistent with the Order.
The case is RAVI KONDAPALLI, Appellant, v. RONALD WILLIAM DeMASI,
Appellee. RONALD WILLIAM DEMASI, Cross-Appellant, v. RAVI
KONDAPALLI, Cross-Appellee, Lead Case No. 8:15-cv-1635-EAK, Consol.
Case No. 8:15-cv-1744-EAK.
In Re Ronald William DeMasi, is represented by David Samuel Jennis,
Esq. -- Jennis & Bowen, PL.
In Re Susan J. DeMasi, represented by David Samuel Jennis, Jennis &
Bowen, PL.
Ravi Kondapalli, Appellant, represented by Heather A. DeGrave, Esq.
-- hdegrave@walterslevine.com --Walters Levine Klingensmith &
Thomison, PA, Stuart Jay Levine, Esq. -- slevine@walterslevine.com
-- Walters Levine Klingensmith & Thomison, PA & Zala L. Forizs,
Esq. -- Dogali Law Group, PA.
Ronald William DeMasi, Appellee, represented by David Samuel
Jennis, Jennis & Bowen, PL & Kathleen Louise DiSanto, Jennis &
Bowen, PL.
SAMUEL L. WYLY: IRS Blasts Arguments in $2.2-Bil. IRS Fight
-----------------------------------------------------------
Emily Field at Bankruptcy Law360 reported that the IRS on Feb. 12,
2016, told a Texas bankruptcy court judge that an argument by
business tycoon Sam Wyly and his sister-in-law that it's too late
for the agency to raise new legal theories in a $2.2 billion
dispute over alleged tax evasion schemes is misleading. Sam Wyly
and Dee Wyly, the widow of his late brother, on Feb. 11, 2016, had
told U.S. Bankruptcy Judge Barbara Houser that, at the eleventh
hour, the IRS raised the argument in its Feb. 10 post-trial reply
brief that the mitigation provisions.
About Sam Wyly
Sam Wyly is a lifelong entrepreneur and author. His first book,
1,000 Dollars & An Idea, is a biography that tells his story of
creating and building companies, including University Computing,
Michaels Arts & Crafts, Sterling Software, and Bonanza Steakhouse.
His second book, Texas Got It Right!, co-authored with his son,
Andrew, was gifted to roughly 450,000 students and teachers,
thought leaders, and readers, and continues to be a best-seller in
its Amazon category.
Samuel Wyly filed for Chapter 11 bankruptcy protection (Bankr.
N.D. Tex. Case No. 14-35043) on Oct. 19, 2014, weeks after a judge
ordered him to pay several hundred million dollars in a civil
fraud case. In September 2014, a federal judge ordered Mr. Wyly
and the estate of his deceased brother to pay more than $300
million in sanctions after they were found guilty of committing
civil fraud to hide stock sales and nab millions of dollars in
profits.
About Caroline Wyly
Caroline Wyly is the widow of business tycoon Charles Wyly. She
and her brother-in-law Sam Wyly sought Chapter 11 bankruptcy
protection as leverage to settle a looming tax bill and a $329
million claim from the Securities and Exchange Commission. Her
bankruptcy is In re Caroline D. Wyly, 14-35074, in U.S. Bankruptcy
Court, Northern District Texas (Dallas).
SANDRIDGE ENERGY: Skips $21.7M Interest Payments on 2023 Notes
--------------------------------------------------------------
SandRidge Energy, Inc. elected to exercise its grace period and
defer making approximately $21.7 million in interest payments due
February 16, 2016, on its outstanding:
-- $543.6 million principal amount of 7.5% senior notes due
2023; and
-- $46.9 million principal amount of 7.5% senior convertible
notes due 2023.
The Company said it has sufficient liquidity to make these interest
payments, but has elected to use the 30-day grace period in
connection with its ongoing discussions with stakeholders. Entry
into the grace period does not constitute an event of default under
the indenture governing the notes.
About SandRidge Energy
SandRidge Energy, Inc. (OTC PINK: SDOC) --
http://www.sandridgeenergy.com/-- is an oil and natural gas
exploration and production company headquartered in Oklahoma City,
Oklahoma, with its principal focus on developing high-return,
growth-oriented projects in the U.S. Mid-Continent and Niobrara
Shale.
SAVVAS GIANASMIDIS: Wins Summary Judgment Bid
---------------------------------------------
Savvas V. Gianasmidis filed a Motion for Summary Judgment through
which he requests entry of an order granting summary judgment with
respect to the "Judgment Creditors' Motion for the Imposition of
Sanctions Against Debtor and His Counsel". The Debtor's former
attorneys, Rosenberg & Weinberg, Herbert Weinberg, Esq., and Bill
N. Jacob, Esq., joined in the Debtor's Summary Judgment Motion.
The Judgment Creditors opposed the Motion for Summary Judgment and
filed a Motion for Sanctions, to which the Debtor opposed.
In a Memorandum dated February 11, 2016, which is available at
http://is.gd/Y240grfrom Leagle.com, Judge Joan N. Feeney of the
United States Bankruptcy Court for the District of Massachusetts
granted the Debtor's Summary Judgment Motion and denied the
Creditors' Motion for Sanctions.
The case is In re SAVVAS V. GIANASMIDIS, Chapter 11, Debtor, Case
No. 15-12119-JNF (Bankr. D. Mass.).
Savvas V. Gianasmidis, Debtor, is represented by Christopher M.
Condon, Esq. -- ccondon@murphyking.com -- Murphy & King,
Professional Corporation, Kathleen R. Cruickshank, Esq. --
kcruickshank@murphyking.com --Murphy & King P.C., Harold B. Murphy,
Esq. -- hmurphy@murphyking.com -- Murphy & King, P. C..
John Fitzgerald, Assistant U.S. Trustee, is represented by Paula
R.C. Bachtell, U.S. Department of Justice Office of the United
States Trustee.
SEABOARD REALTY: Del. Judge Rejects Dechert Role in Chapter 11
--------------------------------------------------------------
Jeff Montgomery at Bankruptcy Law360 reported that Dechert LLP lost
its place as the Debtor's attorney in a Connecticut real estate
consortium's tangled Delaware Chapter 11 case after a judge
concluded that the firm had too many real or potential conflicts
involving individuals or businesses with a stake in the proceeding.
Delaware bankruptcy Judge Laurie Selber Silverstein's ruling added
a new twist to a case already snarled in allegations of fraud,
Ponzi-like money-handling and mismanagement in the years leading up
to the filing on Dec. 14 by Seaboard Realty LLC.
About Seaboard Realty
Seaboard Realty LLC and certain of its affiliates on Dec. 13,
2015, filed petitions with the United States Bankruptcy Court for
the District of Delaware seeking protection under Chapter 11 of the
United States Bankruptcy Code.
Seaboard and its affiliates own a portfolio of first class
commercial real estate in Stamford, Connecticut, including office,
residential and hotel properties. All operations are expected to
continue as normal throughout this process.
The Chapter 11 filing includes Seaboard Realty LLC and a number of
affiliates it manages, which own the equity of subsidiaries that
directly own the properties, but does not include the
property-owning subsidiaries themselves.
Seaboard Realty LLC is owned by John DiMenna, Thomas Kelly and
William Merritt. Mr. DiMenna actively managed the Seaboard
operations as the managing member of Seaboard Realty LLC, and
managed the properties owned by its affiliates through a
property-management company owned solely by Mr. DiMenna.
The Debtors have sought and obtained an order authorizing joint
administration of their Chapter 11 cases, with all further
pleadings or other papers to be filed in the case of Newbury
Common Associates, LLC, Case No. 15-12507 (LSS).
The Debtors tapped Dechert LLP as counsel and directing
the accounting firm of Anchin, Block and Anchin as forensic
accountant.
SEADRILL LTD: Bank Debt Trades at 61% Off
-----------------------------------------
Participations in a syndicated loan under which Seadrill Ltd is a
borrower traded in the secondary market at 39.15
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents an increase of 2.35 percentage points from the
previous week. Seadrill Ltd pays 300 basis points above LIBOR to
borrow under the $2.9 billion facility. The bank loan matures on
Feb. 17, 2021 and carries Moody's B2 rating and Standard & Poor's B
rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
SECOND CHANCE: Judge Needs More from Feds in Body Armor FCA Suits
-----------------------------------------------------------------
Bryan Koenig at Bankruptcy Law360 reported that a D.C. federal
judge told the government on Feb. 11, 2016, it needs to present
more arguments if it wants to revive some allegations in two False
Claims Act suits accusing a materials supplier for a now-defunct
bulletproof vest manufacturer of hiding durability issues with the
armor. U.S. District Judge Richard W. Roberts refused to
reconsider his Sept. 4 decision tossing claims against Toyobo Co.
Ltd. on body armor the government bought from Second Chance Body
Armor Inc. before 2002, at least until the government can present
more arguments.
About Second Chance Body Armor
Based in Central Lake, Michigan, Second Chance Body Armor, Inc.
-- http://www.secondchance.com/-- was a leading producer of
bullet-resistant products, including concealable body armor.
Second Chance sold the vests to various individuals and entities,
including many law-enforcement officers and agencies. Second
Chance filed a voluntary chapter 11 petition (Bankr. W.D. Mich.
Case No. 04-12515) on Oct. 17, 2004, after recalling more than
130,000 vests made wholly of Zylon(R), but it did not recall vests
made of Zylon blended with other protective fibers. When the
Debtor filed for protection from its creditors, it estimated
assets and liabilities of $10 million to $50 million.
Stephen B. Grow, Esq., at Warner Norcross & Judd, LLP, represented
the Debtor. Daniel F. Gosch, Esq., at Dickinson Wright PLLC,
represented the Official Committee of Unsecured Creditors.
The case was converted to chapter 7 on Nov. 22, 2005, and James W.
Boyd was appointed as the Chapter 7 Trustee. Cody H. Knight,
Esq., in Kalamazoo, Michigan, represents the Chapter 7 Trustee.
Following conversion, the Debtor has been renamed SCBA Liquidation
Inc.
SEPCO CORPORATION: "McSwain" Asbestos Suit Stayed
-------------------------------------------------
Judge Martin Reidinger of the United States District Court for the
Western District of North Carolina, Asheville Division, ordered
that the case captioned MINERVA McSWAIN, individually and as
Executrix of the Estate of Buren Edward McSwain, deceased,
Plaintiffs, v. AIR & LIQUID SYSTEMS CORPORATION, et al.,
Defendants, Civil Case No. 1:15-cv-00130-MR-DLH (W.D.N.C.) be
stayed as to the defendant Sepco Corporation.
Sepco Corporation had filed a Notice of Bankruptcy and Automatic
Stay of Proceedings with the court indicating that it has filed a
voluntary bankruptcy petition under Chapter 11 of the United States
Bankruptcy Code on January 14, 2016.
A full-text copy of Judge Reidinger's February 12, 2016 order is
available at http://is.gd/q6q9MCfrom Leagle.com.
Minerva McSwain is represented by:
Daniel Ray Francis, Esq.
W. Marlowe Rary, II, Esq.
William M. Graham, Esq.
WALLACE & GRAHAM P.A.
525 N. Main Street
Salisbury, NC 28144
Tel: (704)633-5244
Air & Liquid Systems Corporation, ITT Corporation,
Aurora Pump and Carboline Company, Flowserve Corporation -
Anchor/Darling Valve Company, Grinnell LLC, J.R. Clarkson Company,
Weir Valves & Controls USA Inc., Crosby Valve, LLC are represented
by:
Tracy Edward Tomlin, Esq.
Travis Andrew Bustamante, Esq.
William M. Starr, Esq.
NELSON, MULLINS, RILEY & SCARBOROUGH, LLP
Bank of America Corporate Center, 42nd Floor
100 North Tryon Street
Charlotte, NC 28202
Tel: (704)417-3000
Fax: (704)377-4814
Email: tracy.tomlin@nelsonmullins.com
travis.bustamante@nelsonmullins.com
bill.starr@nelsonmullins.com
Airgas USA, LLC is represented by:
John T. Holden, Esq.
Joseph Lawrence Nelson, Esq.
DICKIE, MCCAMEY & CHILCOAT P.C.
2115 Rexford Road, Suite 210
Charlotte, NC 28211-5453
Tel: (800)634-8441
Fax: (888)811-7144
Email: jholden@dmclaw.com
jnelson@dmclaw.com
-- and --
Matthew Culp, Esq.
RASMUSSEN WILLIS DICKEY & MOORE, LLC
9200 Ward Parkway, Suite 400
Kansas City, MO 64114
Tel: (816)960-1611
Fax: (816)960-1699
Email: mculp@rwdmlaw.com
BW/IP Inc., Fisher Controls International, LLC., Flowserve
Corporation - Byron Jackson Pump Company are represented by:
James M. Dedman, IV, Esq.
GALLIVAN, WHITE, & BOYD, P.A.
One Morrocroft Centre
6805 Morrison Blvd., Suite 200
Charlotte, NC 28211
Tel: (704)552-1712
Fax: (704)362-4850
Email: jdedman@gwblawfirm.com
CBS Corporation, Foster Wheeler Energy Corporation, General
Electric Company, Linde LLC are represented by:
Jennifer M. Techman, Esq.
EVERT WEATHERSBY HOUFF
3455 Peachtree Road NE, Suite 1550
Atlanta, GA 30326
Tel: (678)651-1200
Fax: (678)651-1201
Email: jmtechman@ewhlaw.com
Crane Co., Crane Co. - Cochrane and Chapman Valve Co. and Crane Co.
- Chempump are represented by:
Richard A. Farrier, Jr., Esq.
Ronald Alfonso Charlot, Esq.
K&L GATES LLP
134 Meeting Street, Suite 500
Charleston, SC 29401
Tel: (843)579-5600
Fax: (843)579-5601
Email: richard.farrierjr@klgates.com
ron.charlot@klgates.com
Daniel International Corporation, Fluor Daniel Services
Corporation, Goulds Pumps, Inc. are represented by:
Charles Monroe Sprinkle, III, Esq.
Scott E. Frick, Esq.
W. David Conner, Esq.
HAYNSWORTH SINKLER BOYD, P.A.
One North Main, 2nd Floor
Greenville, SC
Tel: (864)240-3200
Fax: (864)240-3300
Email: csprinkle@hsblawfirm.com
sfrick@hsblawfirm.com
dconner@hsblawfirm.com
Goodyear Tire & Rubber Company is represented by:
Kelly B. Jones, Esq.
WOMBLE CARLYLE SANDRIDGE & RICE, PLLC
555 Fayetteville Street, Suite 1100
Raleigh, NC 27601
Tel: (919)755-2100
Fax: (919)755-2150
Email: kjones@wcsr.com
Ingersoll Rand Company, Trane U.S. Inc., United Conveyor
Corporation, Velan Valve Corporation are represented by:
Timothy Peck, Esq.
SMITH MOORE LEATHERWOOD LLP
300 N. Greene Street, Suite 1400
Greensboro NC 27401
Tel: (336)378-5200
Fax: (336)378-5400
Email: tim.peck@smithmoorelaw.com
Metropolitan Life Insurance Company is represented by:
Keith E. Coltrain, Esq.
WALL, TEMPLETON & HALDRUP, PA
1001 Wade Avenue, Suite 423
Raleigh, NC 27605
Tel: (919)865-9500
Fax: (919)865-9501
Email: keith.coltrain@walltempleton.com
Owens-Illinois, Inc. is represented by:
Robert O. Meriwether, Esq.
NELSON, MULLINS, RILEY & SCARBOROUGH, LLP
Meridian, 17th Floor
1320 Main Street
Columbia, SC 29201
Tel: (803)799-2000
Fax: (803)256-7500
Email: robert.meriwether@nelsonmullins.com
SEPCO Corporation is represented by:
Teresa E. Lazzaroni, Esq.
HAWKINS PARNELL THACKSTON & YOUNG LLP
303 Peachtree Street, NE
Suite 4000
Atlanta, GA 30308-3266
Tel: (404)614-7400
Fax: (404)614-7500
Email: tlazzaroni@hptylaw.com
The Sherwin-Williams Company is represented by:
John T. Holden, Esq.
DICKIE, MCCAMEY & CHILCOAT P.C.
2115 Rexford Road, Suite 210
Charlotte, NC 28211-5453
Tel: (800)634-8441
Fax: (888)811-7144
Email: jholden@dmclaw.com
Uniroyal, Inc. is represented by:
Charles Monroe Sprinkle, III, Esq.
Scott E. Frick, Esq.
HAYNSWORTH SINKLER BOYD, P.A.
ONE North Main, 2nd Floor
Greenville, SC
Tel: (864)240-3200
Fax: (864)240-3300
Email: csprinkle@hsblawfirm.com
sfrick@hsblawfirm.com
Fluor Enterprises, Inc. is represented by:
Charles Monroe Sprinkle, III, Esq.
HAYNSWORTH SINKLER BOYD, P.A.
ONE North Main, 2nd Floor
Greenville, SC
Tel: (864)240-3200
Fax: (864)240-3300
Email: csprinkle@hsblawfirm.com
About Sepco Corporation
Aurora, Ohio-based Sepco Corporation filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Ohio. Case No. 16-50058) on Jan. 14, 2016.
The petition was signed by Richard J. Szekelyi as chief
restructuring officer. The Debtor estimated both assets and
liabilities in the range of $10 million to $50 million. Buckley
King, LPA represents the Debtor as counsel. The case has been
assigned to Judge Alan M. Koschik.
SPIN HOLDCO: S&P Affirms 'B' CCR & Revises Outlook to Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Plainview, N.Y.-based Spin Holdco Inc. (doing
business as CSC ServiceWorks) and revised the outlook to negative
from stable.
At the same time, S&P affirmed its 'B' issue-level rating on the
company's first-lien debt, which includes the $120 million
revolving credit facility and $1.54 billion term loan. The
recovery rating is '3', reflecting S&P's expectation for meaningful
recovery (50% to 70%, at the higher end of the range) in the event
of a payment default. Reported debt outstanding as of Dec. 31,
2015, was about $1.8 billion.
"The outlook revision to negative reflects the risk that Spin
Holdco may continue to generate negative free cash flow and be
unable to realize credit measure improvement," said Standard &
Poor's credit analyst Katherine Heng. "In particular, we believe
the large-scale Mac-Gray and AIR-serv acquisitions made a few years
ago have proven difficult to integrate, and that the company could
be vulnerable to credit measure and financial covenant violations
should the operating environment deteriorate."
Standard & Poor's could lower the ratings over the next year if
Spin Holdco's liquidity deteriorates, including if the springing
financial covenant is in effect and S&P projects covenant cushion
will be sustained in the mid-single-digit area or lower, or if
credit ratios weaken meaningfully, including debt to EBITDA
approaching 8x.
S&P could revise its outlook to stable from negative over the next
year if it has greater confidence that the company can improve its
operations and generate positive free cash flow to reduce debt such
that it sustains debt to EBITDA below 7x, and if S&P believes the
company will sustain covenant cushion in the double digits. This
could happen if EBITDA increases by around 5% or if it reduces debt
by $100 million from current levels.
ST. JAMES NURSING: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: St. James Nursing & Physical Rehabilitation Center, Inc.
721 Elmwood
Troy, MI 48083
Case No.: 16-42333
Nature of Business: Health Care
Chapter 11 Petition Date: February 22, 2016
Court: United States Bankruptcy Court
Eastern District of Michigan (Detroit)
Judge: Hon. Phillip J Shefferly
Debtor's Counsel: Michael E. Baum, Esq.
SCHAFER AND WEINER, PLLC
40950 Woodward Ave., Suite 100
Bloomfield Hills, MI 48304
Tel: (248) 540-3340
E-mail: mbaum@schaferandweiner.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
Largest unsecured creditor: Rehabilitation Masters, $369,857
The petition was signed by Bradley Mali, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/mieb16-42333.pdf
STEVE GLEN KRUSE: US Trustee Wins Bid to Dismiss Ch. 7 Case
-----------------------------------------------------------
Steven Glen Kruse's bankruptcy case was originally a chapter 13
that was converted first to a chapter 11 and then to a chapter 7.
The United States Trustee filed a Motion to Dismiss. The Debtors,
Steve Glen Kruse and Camilla Lynn Redmond Kruse, object.
The U.S. Trustee asserts that dismissal under section 707(b) is
warranted for abuse as the Debtors have a sufficiently high monthly
income to support paying off creditors and, therefore, should not
receive a chapter 7 discharge; and the Debtors have engaged in
excessive consumer spending that, if reined in, would allow them to
make payments to creditors.
The U.S. Trustee has consistently said the Debtors should not be
granted relief under any chapter "unless their non-exempt assets
and their disposable income are first used to satisfy their
unsecured debts."
In a Memorandum Decision dated February 12, 2016, which is
available at http://is.gd/9Phc8zfrom Leagle.com, Judge Catherine
J. Furay of the United States Bankruptcy Court for the Western
District of Wisconsin dismissed the case.
The case is IN RE: STEVE GLEN KRUSE and CAMILLA LYNN REDMOND KRUSE,
Debtors, Case No. 14-15001-7 (Bankr. W.D. Wis.).
TAYLOR, MI: Fitch Raises LGTOs Ratings to 'BB+'
-----------------------------------------------
Fitch Ratings upgrades the following ratings on Taylor, Michigan's
(the city) general obligation bonds:
-- $2.5 million limited tax general obligations (LTGOs) series
2004 and 2005 to 'BB+' from 'BB';
-- $505,000 LTGO downtown development (DDA) bonds series 2002 to
'BB+' from 'BB';
-- $4.5 million Brownfield Redevelopment Authority (BRDA) bonds,
series 2005B and 2006 to 'BB+' from 'BB';
-- Implied unlimited tax general obligation (ULTGO) rating to
'BBB-' from 'BB+'.
The Rating Outlook is Stable.
SECURITY
The LTGO bonds are backed by the city's full faith and credit
general obligation and its ad valorem tax pledge, subject to
applicable charter, statutory and constitutional limitations.
The Downtown Development Authority (DDA) TIFA and Brownfield
Development Authority (BRDA) bonds are payable from relevant tax
increment revenues collected within the development area. The city
also pledged its full faith and credit subject to applicable
constitutional, statutory and charter limitations.
KEY RATING DRIVERS
SIGNIFICANT IMPROVEMENT IN FINANCIAL PERFORMANCE: The city's
finances have stabilized since the implementation of a deficit
elimination plan which drastically reduced expenditures and
generated sizable surpluses in fiscal 2013 through 2015. The city
projects a general fund surplus in fiscal 2016 based on current
year results, indicating a return to structurally balanced
operations.
STABILIZING TAXABLE VALUE: There were modest increases in taxable
value (TV) in 2015 and 2016, reflecting improvements in the local
economy after five years of significant declines through 2014.
Limited additional growth in the base is expected in the near term.
MINIMAL REVENUE-RAISING FLEXIBILITY: Property taxes are the city's
main revenue source and the city is currently at its property tax
cap; revenue-raising options are limited.
CONTINGENT OBLIGATIONS: The general fund is obligated to support
contingent obligations whose intended repayment source has not
materialized. While general fund support of these obligations is
expected to be needed over the life of the obligations, the subsidy
is expected to remain manageable.
LIMITED FINANCIAL FLEXIBILITY: The one-notch difference between the
LTGO and the implied ULTGO rating reflects the city's inability to
increase property taxes.
DEVELOPMENT BONDS CARRY LTGO PLEDGE: The DDA and BRDA bonds carry a
pledge of both tax increment revenues and the city's LTGO. The
ratings are based upon the LTGO rather than the pledged revenues
due to revenue shortfalls and weak legal protections, including the
lack of an additional bonds test.
RATING SENSITIVITIES
ABILITY TO MAINTAIN BUDGETARY BALANCE: The rating and Outlook are
highly sensitive to management's ability to maintain balanced
general fund operations and improved general fund liquidity without
inter-fund borrowing.
CREDIT PROFILE
Taylor is located in Wayne County, MI, approximately 18 miles
southwest of Detroit. The city has experienced a 6.2% population
loss since 2000, with 61,817 residents in 2014.
IMPROVED GENERAL FUND OPERATIONS
The city had general fund surpluses in fiscal 2013 through 2015
thanks to a deficit reduction plan which eliminated deficits
through expenditure reductions, including personnel cuts and salary
and benefit concessions. Prior to fiscal 2013, the city had rapid
declines in property tax and state revenues driven by the economic
recession. As a result, the city had several years of deficits
which depleted general fund reserves. Unassigned general fund
balance reached its lowest point in fiscal 2012 with a negative
year-end balance of $5.4 million or -11.6% of government spending;
this weak position severely limited the city's financial
flexibility.
To meet liquidity needs, the city utilized short-term loans from
its water and sewer enterprises which are repaid from property
taxes no later than Oct. 31 in each fiscal year; in fiscal 2014 and
2015, the city borrowed $7.5 million. The water and sewer
enterprise funds have remained healthy, with an $18.7 million cash
balance equivalent to over 500 days cash on hand in fiscal 2015. As
evidence of the progress in spending reductions, the city reduced
the enterprise fund loan amount to $3 million in fiscal 2016, less
than half of prior year total. Fitch views the reduced reliance on
short-term borrowing as credit positive.
Fiscal 2015 ended with a $3 million general fund surplus that
increased unassigned general fund balance to $4.1 million from
$389,000 in fiscal 2014. The surplus increased unassigned general
fund reserves to a satisfactory 12% of spending. The majority of
the surplus was driven by a $2.4 million increase in federal grants
for public safety and a $685,000 increase in other revenues
including fines and forfeitures. Taylor still faces financial
pressure because it is at its maximum property tax rate and has
limited ability to raise additional revenues. The adopted fiscal
2016 budget assumed a small property tax revenue increase due to
modest growth in taxable property values, and tax collections are
reportedly performing better than budget. However, due to the
limited ability to increase local revenues management must rely on
federal grants and recurring expenditure cuts and labor contract
savings to balance general fund operations.
Based on year-to-date results including the restoration of $2.4
million in federal public safety grants and one-time revenues from
the sale of a city-owned property and court fees, the city expects
to end fiscal 2016 with a surplus. While the spending reductions
made to date have better aligned revenues and expenditures, Fitch
believes the city may be pressured with demand for service
restoration in the coming years.
LOCAL ECONOMIC CONDITIONS REMAIN UNFAVORABLE
Taylor is located in the 'downriver' area of metropolitan Detroit
and has strong ties to the auto industry which has led to a
difficult economic climate. After several years of housing market
declines coupled with a significant amount of foreclosures,
property tax values have recently started to stabilize. Property
taxes account for just over one-half of the city's total general
fund revenue. After a 30% decline in TV from 2009 to 2014, taxable
values increased by 4.8% in 2015 and 2016. Based on the Wayne
County auditor's projections, the city expects modestly increasing
values for the next two years. Fitch believes these projections are
realistic given recent economic improvement.
Current tax collection rates have been low at approximately 91%
from 2010 through 2014; however, collections improved in 2014 and
2015 to approximately 92.5%. While it is the practice of Wayne
County to reimburse the city for all delinquencies at the end of
each fiscal year, the payment is subject to charge-backs if the
county is unable to collect the delinquent taxes or sell the
property. The top 10 taxpayers make up a moderately high 11.6% of
total TV. Some modest development activity is anticipated, but
Fitch expects the city tax base to remain sluggish over the near
term.
As of October 2015, unemployment has improved to 6.3%, which was in
line with the county (6.4%) but above the state (4.5%) and the
national (4.8%) averages. The decline in unemployment reflects 2.6%
growth in the labor force from 2012 through 2014. Taylor's wealth
levels are below state and national averages. Median household
income was 82.6% and 80% of state and national medians,
respectively, in 2014.
REDUCTION IN CONTINGENT OBLIGATIONS
The city has pledged its full faith and credit to bonds issued by
BRDA for the Midtown (Island Lakes) development project. Due to the
economic downturn and insufficient projected tax increment
revenues, the projects funded with proceeds from the series 2005
and 2006 BRDA bonds were never completed. The city recognized the
entire liability, currently $7.2 million of outstanding debt.
The city recently authorized a third party legal review which
concluded that 23.68% of the bond proceeds for development were
used for new water and sewer infrastructure. As a result, the
proportionate share of the liability related to the brownfield
redevelopment project was transferred to the city's water and sewer
funds. The water and sewer funds each recognize $1.62 million of
the liability, while the remaining $3.9 million is recognized as a
governmental activities liability.
The city has provided general fund subsidies since fiscal 2012 to
fund debt service shortfalls and made a $372,000 payment to the
BRDA bonds in fiscal 2015. Total potential general fund subsidy for
all BRDA issues appears manageable, as subsidies represent less
than 2% of fiscal 2015 general fund expenditures. The general fund
subsidy is expected to decrease in fiscal 2016 through bond
maturity or until project completion as a result of the
contribution from the water and sewer funds to pay debt service.
LARGE LONG-TERM LIABILITIES
Overall debt is manageable at $1,777 per capita and 4.2% of market
value. The city has no plans to issue additional debt, and
amortization is above average with 85% of total principal retired
within 10 years. Overall carrying costs for direct city and
contingent debt service plus pension and other post-employment
benefits (OPEB) funding are high at 34.9% of fiscal (year) total
governmental expenditures.
The city administers two defined benefit pension plans covering
nearly all police, fire, and general government employees; court
employees are covered by the state-run Municipal Employee
Retirement System (MERS). Using a more conservative 7% adjusted
rate of return%, MERS was adequately funded at 74.5% as of Dec. 31,
2014. The city-administered plans were funded at 53.2% and 57.1%,
respectively, which could lead to even higher carrying costs in
future budgets. OPEBs are funded on a pay-go basis; the unfunded
actuarial accrued liability is high at $333.1 million, equal to
12.5% of the tax base market value.
TEINE ENERGY: Moody's Confirms B2 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service confirmed Teine Energy Ltd.'s Corporate
Family Rating (CFR) at B2, Probability of Default Rating at B2-PD
and senior unsecured notes rating at B3. The rating outlook is
stable. The Speculative Grade Liquidity Rating of SGL-2 was
withdrawn. This action resolves the review for downgrade that was
initiated on Jan. 21, 2016.
"The confirmation reflects that Teine's leverage and coverage
metrics will remain solid in 2016 and 2017 despite the fall in oil
prices," said Paresh Chari, Moody's Analyst.
Outlook Actions:
Issuer: Teine Energy Ltd.
Outlook, Changed To Stable From Rating Under Review
Confirmations:
Issuer: Teine Energy Ltd.
Probability of Default Rating, Confirmed at B2-PD
Corporate Family Rating, Confirmed at B2
Senior Unsecured Regular Bond/Debenture, Confirmed at B3(LGD4)
Withdrawals:
Issuer: Teine Energy Ltd.
Speculative Grade Liquidity Rating, Withdrawn , previously rated
SGL-2
RATINGS RATIONALE
Teine's B2 Corporate Family Rating (CFR) reflects the company's
small size (11,000 boe/d) and concentration (the Viking formation
in southwestern Saskatchewan). The rating favorably recognizes the
high percentage of light oil (90%) production, and solid leverage
full-cycle ratio in 2017 (1x), margins and leverage metrics
(retained cash flow to debt 15%; debt to EBITDA 4.5x) despite a
weak commodity price environment.
Moody's expects Teine's liquidity to be adequate through 2016. At
September 30, 2015 Teine had minimal cash and C$54 million drawn
under its C$250 million borrowing base revolving credit facility,
terming out May 2016 and maturing one year later. Moody's expects
breakeven free cash flow through 2016. Moody's expects Teine will
remain in compliance with its two financial covenants through this
period, but total debt to EBITDA will tighten in the second half of
2016 limiting Teine's ability to draw under the facility. Alternate
sources of liquidity are somewhat limited as its assets are pledged
as collateral to the secured revolving credit facility.
In accordance with Moody's Loss Given Default (LGD) Methodology,
the US$350 million senior unsecured notes are rated B3, one notch
below the B2 CFR, due to the priority ranking of the C$250 million
secured borrowing base revolving credit facility in the capital
structure.
The stable outlook reflects our expectation of relatively steady
production while maintaining healthy leverage metrics and margins.
The rating could be upgraded to B1 if retained cash flow to debt
was above 20% and EBITDA to interest above 4x.
The rating could be downgraded to B3 if retained cash flow to debt
falls below 10%, if EBITDA to interest fell below 2.5x, or if
liquidity worsened.
Teine Energy Ltd. is a private Calgary, Alberta based independent
exploration and production company producing roughly 11,000 boe/d
(barrel of oil equivalent) (production is net of royalties).
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011.
TRAVELPORT INC: Bank Debt Trades at 4% Off
------------------------------------------
Participations in a syndicated loan under which Travelport Inc. is
a borrower traded in the secondary market at 96.13
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.45 percentage points from the
previous week. Travelport Inc. pays 500 basis points above LIBOR
to borrow under the $2.37 billion facility. The bank loan matures
on Aug. 4, 2021 and carries Moody's B2 rating and Standard & Poor's
B rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Feb. 5.
TRILOGY INTERNATIONAL: S&P Lowers Corp. Credit Rating to 'CCC-'
---------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Trilogy International Partners LLC to 'CCC-' from
'CCC'. At the same time, S&P lowered the rating on the company's
senior secured notes to 'C' from 'CC', which is two notches below
its corporate credit rating, reflecting the structurally
subordinated position of the holding company's debt to its
subsidiaries.
The downgrade reflects S&P's view that Trilogy's refinancing risk
has escalated and its capital structure appears unsustainable in
the next six months, reflecting a high probability of default if it
is unable to refinance its senior secured bonds before Aug. 16,
2016.
S&P's ratings on Trilogy reflect the company's small scale amid a
very competitive environment; some geographic diversity--which is
lower than before the company signed an agreement to sell its
Trilogy Dominicana subsidiary; and margins below those of its
peers. Partially offsetting factors include S&P's expectation that
the company will grow due to a larger subscriber base, a greater
proportion of postpaid customers in its portfolio, and an increase
in fixed line and data services.
S&P's ratings also incorporate its expectation of debt to EBITDA of
about 4.6x for 2015 and close to 4.0x in 2016. S&P also
anticipates free operating cash flow (FOCF) will remain negative in
2015 and 2016 because of the capital-intensive nature of the
industry.
The two-notch difference between the rating on the notes and the
corporate credit rating results from a ratio of priority debt to
consolidated assets exceeding 30%, creating a material disadvantage
for the holding company's creditors in a bankruptcy or liquidation
scenario.
The negative outlook reflects S&P's view that Trilogy may face a
liquidity crisis in the next 6 months if it is unable to refinance
its August 2016 notes maturity in a timely fashion.
S&P could lower the ratings upon announcement of an anticipated
missed interest payment or an exchange offer or similar
restructuring that S&P views as distressed, or if a default appears
to be inevitable.
S&P could consider a positive rating action if the company
addresses the refinancing of its notes and shows a material
improvement in its liquidity position.
TXU CORP: Bank Debt Trades at 70% Off
-------------------------------------
Participations in a syndicated loan under which TXU Corp is a
borrower traded in the secondary market at 30.08
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents an increase of 0.35 percentage points from the
previous week. TXU Corp pays 450 basis points above LIBOR to
borrow under the $15.37 billion facility. The bank loan matures on
Oct. 10, 2017 and carries Moody's withdraw the ratings and Standard
& Poor's did not give any rating. The loan is one of the biggest
gainers and losers among 247 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Feb. 5.
ULTRA PETROLEUM: Moody's Lowers CFR to Ca, Outlook Negative
-----------------------------------------------------------
Moody's Investors Service downgraded Ultra Petroleum Corp.'s
Corporate Family Rating to Ca from Caa1, Probability of Default
Rating (PDR) to Ca-PD from Caa1-PD and senior unsecured notes
rating to C from Caa3. Moody's also affirmed the SGL-4 Speculative
Grade Liquidity Rating. The rating outlook is negative.
"The downgrade of Ultra's CFR to Ca follows the company's
announcement that it has hired advisors to restructure its debt and
is seeking to enter into forbearance agreements that would allow it
to suspend debt principal and interest payments," commented James
Wilkins, a Moody's Vice President.
These summarizes the ratings.
Issuer: Ultra Petroleum Corp.
Ratings Downgraded:
Corporate Family Rating -- Ca from Caa1
Probability of Default Rating -- Ca-PD from Caa1-PD
$450 mil. Sr Unsec Notes due 2018 -- C (LGD5) from Caa3 (LGD5)
$850 mil. Sr Unsec Notes due 2024 -- C (LGD5) from Caa3 (LGD5)
Ratings affirmed:
Speculative Grade Liquidity Rating -- SGL-4
Outlook:
Outlook -- Negative
RATINGS RATIONALE
Ultra's Ca CFR reflects its weak liquidity and the high probability
that the company will fail to meet its debt obligations as it seeks
to restructure its balance sheet. The company is overlevered for
the current commodity price environment. It had $3.39 billion of
balance sheet debt as of Dec. 31, 2015, compared to a year-end 2015
SEC PV-10 value of $1.9 billion (0.6x PV-10 / debt ratio) and
expected 2016 EBITDA of $300 million (debt/EBITDA of 11x).
Ultra's $1 billion unsecured revolving credit facility, which is
fully drawn, matures in October 2016 and the company has not been
able to extend the facility on similar terms. To replace the
existing unsecured revolver with a secured facility, the company
must also provide security to Ultra Resources Inc. note holders.
Efforts to extend the company's revolver have not been successful
and will be a challenge when Ultra's debt far exceeds its asset
values.
The company has hired outside advisors Kirkland & Ellis and
Rothschild to aid in restructuring its debt. In March 2016, the
company has a $62 million debt maturity of senior notes and the
next interest payment on the senior notes. The company is working
on forbearance agreements with creditors to put a pause on credit
issues.
Ultra's SGL-4 Speculative Grade Liquidity rating reflects its weak
liquidity driven by Moody's expectation the company's operating
cash flows will decline meaningfully in 2016 and it will not comply
with its financial covenants. The company is subject to financial
covenants under its revolving credit facility and Ultra Resources,
Inc.'s senior unsecured notes purchase agreement that require it to
limit leverage to 3.5x (actual was 3.4x as of
Dec. 31, 2015,) and maintain a present value of reserves to debt
ratio above 1.5x. Ultra expects its EBITDA generation to decline
to $300 million in 2016 from approximately $600 million (on an as
reported basis) in 2015, due to lower commodity prices and no
hedged volumes in 2016. The company could exceed the leverage
covenant level in the first quarter 2016. Asset sales could lower
debt balances, but Moody's does not expect the company to be
successful in reducing debt sufficiently in the near-term to
maintain compliance with its financial covenants.
Ultra does benefit from elevated cash balances, having drawn down
the $266 million of remaining availability under its revolver in
the first quarter 2016. (It had a cash balance of $4 million as of
year-end 2015.) This should be sufficient to allow the company to
operate in the near-term, if it does not make any payments to
service its debt and address debt maturities.
The negative outlook reflects the weak liquidity and high
probability the company will default on its debt obligations. The
rating could be downgraded if the company defaults on its debt
obligations or liquidity weakens. The rating could be upgraded if
the company improves its liquidity and reduces its debt to levels
that can be supported in the current commodity price environment.
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011.
Ultra Petroleum Corp., headquartered in Houston, Texas, is a
publicly traded independent exploration and production company
engaged in US natural gas and crude oil exploration, development,
and production in the Green River basin of Wyoming (Pinedale
Anticline and Jonah Field), and in the Uinta Basin where it owns
crude oil assets. Over 90% of the company's production consists of
natural gas.
UNITED NATIONAL: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: United National Machine Tool, Inc.
P.O. Box 608
Hainesport, NJ 08036
Case No.: 16-13110
Chapter 11 Petition Date: February 22, 2016
Court: United States Bankruptcy Court
District of New Jersey (Trenton)
Judge: Hon. Michael B. Kaplan
Debtor's Counsel: David A. Kasen, Esq.
KASEN & KASEN
1874 East Route 70, Suite 3
Cherry Hill, NJ 08003
Tel: (856) 424-4144
Email: dkasen@kasenlaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
Largest unsecured creditor: Funding Circle, $445,754
The petition was signed by Robert A. Donahue, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/njb16-13110.pdf
VALEANT PHARMACEUTICALS: Bank Debt Trades at 4% Off
---------------------------------------------------
Participations in a syndicated loan under which Valeant
Pharmaceuticals is a borrower traded in the secondary market at
96.39 cents-on-the-dollar during the week ended Friday, Feb. 5,
2016, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents an increase of 0.56 percentage points
from the previous week. Valeant Pharmaceuticals pays 325 basis
points above LIBOR to borrow under the $2.35 billion facility. The
bank loan matures on April 9, 2022 and carries Moody's Ba1 rating
and Standard & Poor's BB rating. The loan is one of the biggest
gainers and losers among 247 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Feb. 5.
VANTAGE DRILLING: Bank Debt Trades at 83% Off
---------------------------------------------
Participations in a syndicated loan under which Vantage Drilling Co
is a borrower traded in the secondary market at 17.00
cents-on-the-dollar during the week ended Friday, Feb. 5, 2016,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.50 percentage points from the
previous week. Vantage Drilling Co pays 400 basis points above
LIBOR to borrow under the $0.48 billion facility. The bank loan
matures on April 9, 2022 and carries Moody's WR rating and Standard
& Poor's D rating. The loan is one of the biggest gainers and
losers among 247 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Feb. 5.
VARIANT HOLDING: Creditors Object to DIP Financing
--------------------------------------------------
Arbor Realty SR, Inc., opposes Variant Holding Company, LLC's
motion for authority to obtain a debtor-in-possession financing,
complaining that the DIP Financing's primary purpose is not to
provide the desperately needed financing, but to advance an
improper sales process that would provide an exit strategy for the
Beach Point Funds from a series of improvident loans.
According to Arbor Realty, the DIP Financing Motion would create
the artificial currency that would enable the Beach Point Funds to
obtain the Oaks Property over the objection of Arbor and for the
sole benefit of the Beach Point Funds.
Jonathan B. Lyon Family Trust, The Kimberly A. Syman Family Trust,
James Korein, and John R. Cranco join in the objection to the DIP
Financing Motion to the extent that the proposed financing
unnecessarily imposes joint and several lability on each of the
Subsidiary Debtors or primes any valid security interest held by
the Objectors. The Trusts argue that any liens granted to Beach
Point should be limited to the extent that each Subsidiary Debtors
actually benefits from the financing.
Debtors Talk Back
Although the Objectors take issue with certain of the components of
the proposed DIP financing, the Debtors point out that no party
rebuts the fact that there is no other source of available
financing to fund the Debtors' continued operating losses and no
alternative source of financing has come forward on better terms
than those proposed by the Beach Point Funds. The Debtors tell the
Court that the Objectors appear to be obstructing their efforts
merely as a play for leverage in the overall resolution of these
cases.
The Debtor relate that, after consideration of the Objections, the
Beach Point Funds and the Debtors have agreed to modify the relief
sought in connection with the Final Order, where Beach Point Funds
agree that the Tranche B1 Loan will not be the obligation of Oaks,
and will not be secured by any of the assets of Oaks. Further, the
Beach Point Funds have agreed that, if Arbor proposes its own
chapter 11 plan, any administrative expense claim that the Beach
Point Funds would have as a result of advances under the Tranche B2
Loan will be capped at $1 million.
Both Arbor and the Snowdon Entities ignore the fact that the
proposed DIP Agreement was entered into in connection with the
proposed Stalking Horse Agreement, which ensures that all
non-subordinated general unsecured and administrative expense
claims incurred by the Property-Owning Debtors, pre- and
postpetition, will be satisfied in connection with the sale of the
Properties and thus, the proposed DIP financing does not run afoul
of the Arbor Stipulation or any order of the Court and there is
nothing improper about the proposed sale process, the Debtors
argue.
Proposed Counsel for the Variant Holding Company, LLC and Debtors
in Possession:
Richard M. Pachulski, Esq.
Maxim B. Litvak, Esq.
Peter J. Keane, Esq.
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, Delaware 19899-8705 (Courier 19801)
Telephone: (302) 652-4100
Facsimile: (302) 652-4400
Email: rpachulski@pszjlaw.com
mlitvak@pszj law.com
pkeane@pszjlaw.com
Arbor Realty SR, Inc. is represented by:
Derek C. Abbott, Esq.
Erin R. Fay, Esq.
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 North Market Street, 16th Floor
P.O. Box 1347
Wilmington, DE 19899-1347
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
Email: dabbott@mnat.com
efay@mnat.com
-– and –-
Lawrence P. Gottesman, Esq.
Lauren J. Pincus, Esq.
ALLEGAERT BERGER & VOGEL LLP
111 Broadway, 20th floor
New York, NY 10006
Telephone: (212) 571-0550
Facsimile: (212) 571-0555
Email: lgottesman@abv.com
lpincus@abv.com
BPC VHI, L.P., Beach Point Total Return Master Fund, L.P., and
Beach Point Distressed Master Fund, L.P. are represented by:
Mark D. Collins, Esq.
Robert J. Stearn, Jr., Esq.
Robert C. Maddox, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
Email: collins@rlf.com
stearn@rlf.com
maddox@rlf.com
-- and --
Daniel M. Petrocelli, Esq.
James M. Pearl, Esq.
Michael S. Neumeister, Esq.
O’MELVENY & MYERS LLP
1999 Avenue of the Stars
Los Angeles, California 90067
Telephone: (310) 553-6700
Facsimile: (310) 246-6779
Email: dpetrocelli@omm.com
earl@omm.com
mneumeister@omm.com
-- and --
Suzzanne S. Uhland, Esq.
O’MELVENY & MYERS LLP
Two Embarcadero Center, 28th Floor
San Francisco, California 94111
Telephone: (415) 984-8700
Facsimile: (415) 984-8701
Email: suhland@omm.com
About Variant Holding
Tucson, Arizona-based Variant Holding Company, LLC, and its direct
and indirect subsidiaries are a commercial real estate business
with direct and indirect ownership interests in 23 real property
interests in various states.
Variant Holding commenced bankruptcy proceedings under Chapter 11
of the U.S. Bankruptcy Code in Delaware (Case No. 14-12021) on Aug.
28, 2014. Variant Holding estimated $100 million to $500 million in
assets and less than $100 million in debt.
Members holding the majority of the interests in the company,
namely Conix WH Holdings, LLC, Conix Inc., Numeric Holding Company,
LLC, Walkers Dream Trust, and Variant Royalty Group, LP, signed the
resolution authorizing the bankruptcy filing.
Variant's subsidiaries filed voluntary Chapter 11 petitions on Jan.
12, 2016. Variant's property-owning subsidiaries, which own 23
apartment complexes, and which are debtors are: (1) Broadmoor
Apartments, LLC, Chesapeake Apartments, LLC, Holly Ridge
Apartments, LLC, Holly Tree Apartments, LLC, Preston Valley
Apartments, LLC, Ravenwood Hills Apartments, LLC, River Road
Terrace Apartments, LLC, and Sandridge Apartments, LLC
(collectively, the "FX3 Portfolio Debtors"); (2) 10400 Sandpiper
Apartments, LLC, 10301 Vista Apartments, LLC, Pines of Westbury,
Ltd., 201 Ashton Oaks Apartments, LLC, 13875 Cranbook Forest
Apartments, LLC, 5900 Crystal Springs Apartments, LLC, 7107 Las
Palmas Apartments, LLC, 11911 Park Texas Apartments, LLC, 1201 Oaks
of Brittany Apartments LLC, 3504 Mesa Ridge Apartments, LLC, 667
Maxey Village Apartments, LLC, 17103 Pine Forest Apartments, LLC,
7600 Royal Oaks Apartments, LLC, and 4101 Pointe Apartments, LLC
(collectively, the "H14 Portfolio Debtors"); and (3) The Oaks of
Stonecrest Apartments, LLC ("Oaks at Stonecrest")(the FX3 Portfolio
Debtors, the H14 Portfolio Debtors and Oaks at Stonecrest are
collectively referred as the "Property-Owning Debtors").
The FX3 Portfolio Debtors own 8 apartment projects in Texas,
Maryland, Virginia, and South Carolina, which properties total
1,850 housing units. The H14 Portfolio Debtors own 14 apartment
projects in Texas, which consist of a total of 5,050 housing units.
Oaks at Stonecrest owns a single apartment project in Lithonia,
Georgia, which has 280 housing units.
The Debtors have tapped Pachulski Stang Ziehl & Jones LLP, as
counsel and UpShot Services LLC as claims and noticing agent.
VICKY WRIGHT: Chapter 7 Trustee's Bid to Compromise Granted
-----------------------------------------------------------
Judge Eduardo V. Rodriguez of the United States Bankruptcy Court
for the Southern District of Texas, Brownsville Division, denied
debtor Vicky Gribble Wright's chapter 13 motion to compromise but
approved the chapter 7 motion to compromise filed by the chapter 7
trustee, William Romo.
Wright, aka Vicky L Wright, aka Vicky Wright, fdba Vicky
Wright/Borders Contractors Inc., first petitioned for chapter 7
bankruptcy on August 15, 2011. On Schedule B, regarding her
personal property interests, she listed an unspecified quantity of
stock in API Pipe & Supply, LLC ("API") where the alleged value of
her stock interest was "unknown." On January 23, 2012, Wright
received a discharge of debts pursuant to section 727.
Importantly, Wright's chapter 7 case still remains open.
On October 31, 2013, Wright filed a chapter 13 bankruptcy
petition.
On January 7, 2015, Wright and Daniel Wright filed a petition in
the County Court of Law in Hidalgo County, TX (the "State Court
Case") against API, Peggy Tomlinson; Tommy J. Tomlinson; and James
B. Tomlinson, claiming that API, by and through Peggy Tomlinson,
had issued erroneous K-1 forms for more than $300,000 by the end of
2013, leading to increased I.R.S. tax liabilities for the Wrights.
On October 15, 2015, the parties to this case entered into a
written settlement agreement resolving the dispute.
Two competing motions to approve the said settlement were entered
in the chapter 7 and chapter 13 case:
(1) a Chapter 7 Motion to Compromise Pursuant to Bank. R. 9019
filed by Romo on October 22, 2015 (the "Chapter 7 Compromise");
and
(2) an Amended Motion for Approval of Compromise Settlement
Agreement, Objection to Motion for Approval of Compromise
Settlement Agreement of Ch. 7 Trustee and Approval of Attorney's
Fees and Costs filed by Wright on November 12, 2015 (the "Chapter
13 Compromise").
Wright argued that since the State Court Case is entirely derived
from an injury personally attributable to her and Daniel Wright,
which is a cause of action that arose post-petition to the chapter
7 case, the settlement is therefore not a proceed of chapter 7
property of the estate and not a cause of action acquired by the
chapter 7 estate pre or post-petition.
Judge Rodriguez held that a portion of the settlement is property
of the chapter 13 estate. However, the judge also found that the
API interest is owned by the chapter 7 estate because Wright had
obtained ownership of 24.5% of API back in 2010 and Romo had not
abandoned such interest. Judge Rodriguez concluded that the
settlement is of a mixed nature - partially proceeds of the chapter
7 estate and partially Wright's separate interests which inure to
the chapter 13 estate.
Judge Rodriguez explained however, that where the Chapter 13
Compromise seeks to relieve the chapter 7 estate of its rightful
property, and where the Chapter 7 Compromise accurately reflects
the actual terms of the settlement, including the rightful
distribution of the chapter 7 estate of its property, the court is
fully inclined to choose the Chapter 7 Compromise over the Chapter
13 Compromise.
The case is IN RE: VICKY GRIBBLE WRIGHT; aka VICKY L WRIGHT; aka
VICKY WRIGHT; fdba VICKY WRIGHT/BORDERS CONTRACTORS INC. CHAPTER
13, CHAPTER 7. Debtor, Case Nos. 13-10472, 11-10483 (Bankr. S.D.
Tex.).
A full-text copy of Judge Rodriguez's February 11, 2016 memorandum
opinion is available at http://is.gd/s8TfoLfrom Leagle.com.
VIVID SEATS: S&P Affirms Prelim. 'B' CCR, Outlook Remains Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its
preliminary 'B' corporate credit rating on Chicago-based Vivid
Seats LLC. The rating outlook remains stable.
At the same time, S&P revised its preliminary recovery rating on
Vivid Seat's proposed $20 million first-lien senior secured
revolving credit facility and $240 million first-lien senior
secured term loan to '2' from '3. As a result, S&P raised its
preliminary issue-level rating on the debt issuances to 'B+' from
'B'. The preliminary '2' recovery rating indicates S&P's
expectation for substantial recovery (70%-90%; upper half of the
range) of principal in the event of a payment default.
On Feb. 18, 2016, Vivid Seats announced a series of revisions to
the $240 million first-lien term loan offering. The changes
include scaling back the term loan to six years from seven years
and increasing the annual amortization to 5% from 1%.
The preliminary 'B' corporate credit rating on Vivid Seats reflects
the company's highly substitutable product and services, the
somewhat low barriers to entry in the secondary ticket marketplace,
and the company's aggressive financial policy. These weaknesses
are partially offset by Vivid Seats' strong relationships with
professional ticket brokers, S&P's expectation for healthy
discretionary cash flow in 2016, and the company's adequate
liquidity.
"The stable rating outlook reflects our expectation that Vivid
Seats will enjoy good operating performance with double-digit
revenue growth in 2016 and possibly in 2017, while maintaining
adequate liquidity," said Standard & Poor's credit analyst Khaled
Lahlo. "However, we believe that adjusted debt leverage will
likely remain above 5x due to the company's financial sponsor
ownership."
S&P could lower its corporate credit rating on Vivid Seats if poor
operating performance causes the company's discretionary cash flow
to decline to a near breakeven level. This could occur if revenue
growth declines by 3% and gross margin decreases to below 70% in
2016. Additionally, S&P could lower the rating if the company's
business risk profile assessment weakens due to a significant
increase in competitive pressure (likely from a new competitor),
market share losses, or lower-than-expected return on marketing
investments.
S&P could raise the rating if the company reduces leverage to below
5x on a sustained basis and commits to a less aggressive financial
policy. S&P believes this is less likely, given the company's
private equity ownership.
YBA NINETEEN: Court Junks Appeal from Sale of Property to Indymac
-----------------------------------------------------------------
The matter before the Court is the appeal of the "Order on
Trustee's Motion for Order Approving Sale of Real Property Located
at 5955 La Jolla Corona Drive San Diego, CA 92037 to Indymac
Venture, LLC or Highest Bidder" issued by the Bankruptcy Court on
August 3, 2015.
Appellant Kamran Banayan contends that "the Bankruptcy Court failed
to apply the correct standard in determining whether IndyMac was a
good faith purchaser. . . that a lack of good faith is shown in
this case by an attempt to take grossly unfair advantage of other
bidders . . . that IndyMac demonstrated a lack of good faith by
structuring the sale to prevent overbids . . . that IndyMac should
not be entitled to the statutory protections of section 363(m) of
the Bankruptcy Code, which immunize a good faith buyer from any
appeals of a sale order after the sale is consummated and that
IndyMac pursued a court-approved sale free and clear of any lien or
interests of Banayan in Bankruptcy Court rather than proceeding
with a non-judicial foreclosure sale in order to insulate itself
from California's anti-deficiency statute."
In an Order dated February 11, 2016, which is available at
http://is.gd/EeTTY3from Leagle.com, Judge William Q. Hayes of the
United States District Court for the Southern District of
California affirmed the finding of the Bankruptcy Court that
IndyMac was a good faith purchaser and, dismissed the appeal.
The case is In Re: YBA NINETEEN, LLC, Debtor. KAMRAN BANAYAN,
Appellant, v. NANCY L. WOLF; INDYMAC VENTURE, LLC, Appellees, Civil
No. 15cv1742-WQH-RBB, Bankruptcy No. 13-00968-LA7.
YBA Nineteen, LLC, is represented by Gustavo E. Bravo, Esq. --
Smaha Law Group, John L Smaha, Esq. -- Smaha Law Group & John Paul
Teague, Esq. -- Smaha Law Group.
Kamran Banayan, Appellant, is represented by L Scott Keehn, Esq. --
info@keehnlaw.com -- Keehn Law Group, APC.
Nancy L. Wolf, Appellee,is represented by Dean T Kirby, Jr., Esq.
-- DKirby@kirbymac.com -- Kirby & McGuinn A P.C..
IndyMac Venture, LLC, Appellee, is represented by Lewis Raymond
Landau, Esq.
YBA Nineteen LLC, a California LLC, based in La Jolla, filed a
chapter 11 bankruptcy petition (Bankr. S.D. Calif. 13-00968) in
San Diego, on Jan. 31, 2013. John L. Smaha, Esq., at Smaha Law
Group, APC, serves as the Debtor's counsel. In its petition, the
Debtor scheduled assets of $4,005,849 and liabilities of
$6,910,436. The Company's list of its 10 largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/casb13-00968.pdf The petition was signed
by Kamran Banayan, manager.
ZLOOP INC: U.S. Trustee Asks Court to Convert Ch. 11 Cases
----------------------------------------------------------
Andrew R. Vara, Acting United States Trustee for Region 3, joined
by Kendall G. Mosing and ZLOOP LA, LLC, ask the Bankruptcy Court to
immediately convert the Chapter 11 cases of ZLOOP, Inc., et al., to
cases under Chapter 7 of the Bankruptcy Code, in order to liquidate
the remaining assets, to appoint an independent trustee, and to
pursue claims that exist, including claims that may exist against
the principals of the Debtors.
The U.S. Trustee alleges that before and after the filing of the
petition the Debtors have continually been unable to appropriately
manage their cases and estates. The U.S. Trustee points out that
the Debtors' Statement of Financial Affairs reveals that more money
was spent on furthering the professional racing career of Justin
Boston, noting that there are considerable disbursements within the
90 days preceding the filing to restaurants, gas stations,
convenience stores and other assorted expenses, as well as
transferring of title of certain vehicles to Boston and LaBarge,
all of which appear to be unrelated to the operation of the
Debtors' business. Justin Boston is the son of Robert Boston, the
Chairman and CEO of Zloop.
Kendall Mosing and ZLOOP LA contend that, contrary to the Debtors'
promise of their "intention to file a plan and proposal to pay all
creditors 100-cent dollars" at the filing of the petition, the only
"creditors" who might still enjoy the prospect of "100-cent dollar"
are the professionals in these cases while other creditors face
long odds to receive any return on their claims considering that
the Debtors' slow track liquidation strategy has cost an inordinate
professional fees each month. The creditors point out that the
estates have been grossly mismanaged.
The Debtors' decision to drift along in Chapter 11 with no prospect
for reorganization must be stopped in order to conserve assets for
the benefit of creditors, and thus, conversion of these Chapter 11
cases to cases under Chapter 7 will provide a swift and efficient
means for the determination of claims against the Debtors and a
means for prompt and efficient distribution of the proceeds
generated by the sale of the estate assets, the creditors assert.
Andrew R. Vara, Acting United States Trustee for Region 3, is
represented by:
David L. Buchbinder, Esq.
David Gerardi, Esq.
U.S. Department of Justice, Office of the United States
Trustee
J. Caleb Boggs Federal Building
844 King Street, Suite 2207, Lockbox 35
Wilmington, DE 19801
Telephone: (302) 573-6491
Facsimile: (302) 573-6497
Kendall G. Mosing and ZLOOP LA, LLC are represented by:
Paul N. Heath, Esq.
Marcos A. Ramos, Esq.
Robert C. Maddox, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square, 920 North King Street
Wilmington, Delaware 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
Email: heath@rlf.com
ramos@rlf.com
maddox@rlf.com
-- and --
Charles M. Kreamer, Sr., Esq.
James H. Gibson, Esq.
ALLEN & GOOCH
2000 Kaliste Saloom Road, Suite 400
Lafayette, Louisiana 70508
Telephone: (337) 291-1300
Facsimile: (337) 291-1305
Email: CharlesKreamer@allengooch.com
JimGibson@allengooch.com
-- and --
David S. Rubin, Esq.
KANTROW SPAHT WEAVER AND BLITZER
445 North Boulevard, Suite 300
Baton Rouge, Louisiana 70802
Telephone: (225) 383-4703
Facsimile: (225) 343-0630
Email: david@kswb.com
About ZLOOP, Inc.
ZLOOP, Inc., and two affiliates sought Chapter 11 protection
(Bankr. D. Del. Case No. 15-11660) on Aug. 9, 2015.
ZLOOP operates a proprietary, state of the art, 100% landfill free
eWaste recycling company headquartered in Hickory, North Carolina.
The Debtors tapped DLA Piper LLP as counsel.
As of the Petition Date, the Debtors' unaudited consolidated
balance sheet reflect total assets of approximately $25 million,
including the land and improvements, but excluding certain
commodity inventories that are the output of eWaste recycling, and
total liabilities of approximately $32 million.
On Sept. 2, 2015, the U.S. trustee overseeing the Debtors' Chapter
11 cases appointed Recycling Equipment Inc., E Recycling Systems
LLC and Carolina Metals Group to serve on the official committee of
unsecured creditors. The committee is represented by Cole Schotz
P.C.
[*] Continuing Low Oil Prices to Strain Canadian Banks, Moody's Say
-------------------------------------------------------------------
Falling oil prices will continue to strain the profitability of
Canada's largest banks, but their capital is expected to remain
unimpaired under the moderate distress scenario modeled by Moody's
Investors Service. However, the ratings agency said that under its
severe stress scenario, some banks might be required to take
capital conservation measures, cut dividends or raise additional
equity.
In a new report, Moody's published the results of its most recent
stress testing of the biggest Canadian banks including:
Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal,
Canadian Imperial Bank of Commerce, Royal Bank of Canada and
National Bank of Canada. The report follows Moody's Jan. 21, 2016,
announcement that it had sharply reduced its oil price
assumptions.
"The deterioration in oil prices will increase financial stress on
Canada's oil producers, drillers and service companies that support
them, as well as on consumers in the country's oil-producing
provinces," said Moody's Senior Vice President David Beattie.
"Correspondingly, banks' losses in their oil-related corporate and
consumer portfolios are expected to increase, and their capital
markets income are expected to decline."
Canadian Imperial Bank of Commerce (CIBC) and Bank of Nova Scotia
(BNS) were negative outliers in the stress testing results. Moody's
said that the results for CIBC reflected the banks' primarily
domestic nature of its operations, a considerable oil and gas
concentration in its corporate loan book as well as high reliance
on earnings coming from capital markets activities. Moody's
analysts said BNS' negative results were attributable to the banks'
higher stress losses from its oil and gas loan book (relative to
CET1) compared with peers and segment mix of its corporate loans
which is skewed toward oilfield services, the subsector with the
lowest assumed median rating.
Moody's said that Toronto-Dominion Bank (TD) was a positive outlier
of its stress testing, supported by the banks' relatively small oil
and gas corporate loan book as well as a comparatively low
concentration of retail operations in oil-producing provinces and
low reliance on capital markets earnings.
[*] Fitch Says Canadian Banks Vulnerable to Oil Slump
-----------------------------------------------------
Canadian Banks fared relatively well through the 2008-2009
financial crisis and have enjoyed a prolonged period of stability;
however, they are likely at an inflection point due to
macroeconomic challenges, says Fitch Ratings. Canada's
commodity-reliant economy will be facing challenges that pose new
risks to Canada's major banks if oil prices remain 'lower for
longer' and/or this creates a macroeconomic shock to the economy.
'So far Canadian Banks have been resilient and the oil slump has
appeared manageable but as falling commodity prices permeate the
broader economy, banks will begin to feel pressures beyond direct
energy loan exposure,' said Doriana Gamboa, Senior Director, Fitch
Ratings.
Oil production and allied sectors account for 10% of GDP and the
decline in prices has a significant impact on the broader economy
and unemployment. Fitch views Canadian banks' direct exposures to
energy companies as manageable. However, there may be heightened
weakness in areas such as oil field services or other commercial
loans tied to energy production.
'Due to the stable Canadian economy over the last few decades,
Canadian banks have taken little to no loan provisions over the
years. As we move into an uncertain and 'lower for longer' oil
price period, Fitch expects to see weakness in loan growth and a
rise in provisions for credit losses,' added Gamboa.
As the impact of the oil decline trickles through to other parts of
the economy, potentially leading to a rise in unemployment, banks
could face credit issues in their retail lending portfolios given
high consumer indebtedness. Household indebtedness is high at 165%
of disposable income; however, low interest rates have minimized
the debt service burden to date. Residential loans, which have been
a growth area for Canadian banks as housing prices have
skyrocketed, account for most consumer debt.
Fitch views housing markets nationally as overvalued in real terms
by approximately 20%. A housing market correction would negatively
impact banks in Fitch's view; however, a sizeable amount of this
exposure is guaranteed by the Canadian Mortgage Housing Corporation
(CMCH), a Crown corporation of the Government of Canada.
Bank profits will be challenging moving forward in 2016 and
Canadian banks will likely report modest loan growth, higher credit
costs and continued net interest margin pressures. As Canadian
banking market shares are mature and relative stable, and as the
Canadian economy has started to slow, many of the banks have
started to expand into new markets and growth areas such as wealth
management and capital markets businesses. This could, however,
increase some of the banks' risk profiles and potentially drive
negative rating changes.
On Jan. 25, 2016, Fitch completed a peer review of the seven large
Canadian financial institutions in its portfolio. Fitch affirmed
with a Stable Outlook the ratings of Bank of Montreal (BMO), Bank
of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CIBC),
Caisse Centrale DesJardins (DESJ), National Bank of Canada (NBC),
Royal Bank of Canada (RBC), and Toronto-Dominion Bank (TD),
reflecting our view that Canadian banks' have proven solid
operating performance over multiple economic cycles and global
shocks. In addition, the Rating Outlook for RBC was revised to
Negative from Stable.
[*] Fitch: Weak Demand, Low Prices May Hit Thermal Project Ratings
------------------------------------------------------------------
While thermal project performance is largely stabilized by
contracts, ratings may be pressured by market dynamics including
slow demand growth, low electricity prices, and growing
environmental compliance costs, according to a new Fitch Ratings
report.
"Merchant generators face increased pressure due to environmental
regulation and weak demand, while geothermal, biomass and waste to
energy projects face greater supply risks," said Greg Remec, Senior
Director. "The natural gas industry's slow response to low oil
prices creates uncertainty for the electricity market."
Key factors affecting thermal power projects include:
-- Fixed price tolling agreements mitigate fuel price risk,
and market-based heat rate penalities are minimized in a
low natural gas price environment.
-- Power purchase agreements typically provide protection
against environmental legislation and pass through the
associated costs to counterparties.
-- Poor fundamental backdrop in Europe, with weak demand
and growth of renewables shifting down merit order.
[*] Kaufman Dolowich Adds Ex-Becker & Poliakoff Litigation Pro
--------------------------------------------------------------
Wayne M. Alder, who has more than 25 years of experience as a
business litigator, has joined Kaufman Dolowich & Voluck LLP as a
Partner in its Boca Raton, Florida office.
Ms. Alder's practice focuses on litigation matters and general
representation of companies, individuals and municipalities related
to professional liability cases, including medical, legal and other
professional malpractice matters. He also handles the defense of
directors and officers against trustees in bankruptcy as well as
matters related to marine and shipyard liability, product liability
and environmental claims, personal injury and insurance coverage
disputes.
Mr. Alder comes to Kaufman Dolowich & Voluck from the West Palm
Beach, Florida office of Becker & Poliakoff, where he was a
shareholder concentrating on corporate transactions, insurance
litigation and defense.
Mr. Alder earned his B.A. from Hartwick College and his J.D. from
Seton Hall University School of Law. He is admitted to practice in
Florida and is a member of the Professional Liability Underwriting
Society and the American Society for Healthcare Risk Management.
Kaufman Dolowich & Voluck LLP serves the insurance and business
communities in a number of key practice areas. Its litigators and
legal practitioners place clients first, think like business
people, and provide viable and innovative solutions that offer
clients the best resolution possible. Headquartered in Woodbury,
New York (Long Island), KDV serves its global clientele with
additional offices in New York City, New Jersey, Pennsylvania, San
Francisco, Los Angeles, Florida and Chicago
[] 175 Oil Producers at Risk of Filing in 2016, Says Deloitte
-------------------------------------------------------------
Ernest Scheyder at Reuters reported that roughly a third of oil
producers are at high risk of slipping into bankruptcy this year as
low commodity prices crimp their access to cash and ability to cut
debt, according to a study by Deloitte, the auditing and consulting
firm.
The study, based on a review of more than 500 publicly traded oil
and natural gas exploration and production companies across the
globe, highlights the deep unease permeating the energy sector as
crude prices sit near their lowest levels in more than a decade,
eroding margins, forcing budget cuts and thousands of layoffs.
The roughly 175 companies at risk of bankruptcy have more than $150
billion in debt, with the slipping value of secondary stock
offerings and asset sales further hindering their ability to
generate cash, Deloitte said in the report, released on Feb. 16,
2016.
A copy of Deloitte's report is available for free at
https://goo.gl/4DfVfI
*********
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 ***