/raid1/www/Hosts/bankrupt/TCR_Public/160505.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, May 5, 2016, Vol. 20, No. 126
Headlines
1111 MYRTLE AVENUE: Case Reassigned to Judge Vyskocil
1111 MYRTLE AVENUE: Court Extends Plan Exclusivity to June 27
A.L. EASTMOND: Stalking Horse Pact for Bronx Property Approved
AERCAP HOLDINGS: Moody's Raises CFR to Ba1, Outlook Stable
AEROPOSTALE INC: Case Summary & 20 Largest Unsecured Creditors
AEROPOSTALE INC: Supplier's Actions Blamed for Downfall
AEROPOSTALE INC: To Close 100+ Stores After Ch. 11 Filing
ALERE INC: Secured Loans Amendment No Impact on Moody's Ratings
ALEXZA PHARMACEUTICALS: Amends 2015 Annual Report
ALEXZA PHARMACEUTICALS: Continues to Engage in Acquisition Talks
ALEXZA PHARMACEUTICALS: Grupo Ferrer Holds 10.9% Equity Stake
ANCHOR GLASS: Moody's Raises CFR to B1, Outlook Stable
ANCHOR GLASS: S&P Lowers Rating on 1st-Lien Term Loan to 'BB-'
ATNA RESOURCES: Kendall Assets Not De Minimis, Committee Says
AURORA GAS: Involuntary Chapter 11 Case Summary
B&L EQUIPMENT: Court OKs FIFC Premium Finance Agreement
BH SUTTON: Two More Unsecured Creditors Appointed to Committee
BIOMED REALTY: Moody's Withdraws Ba1 Issuer Rating
BROOKFIELD RESIDENTIAL: S&P Lowers CCR to 'B'; Outlook Stable
BUCKSPORT GENERATION: Court OKs Continued Borrowing Under DIP Loan
BUFFETS LLC: Judge to Hold Final Hearing on DIP Loan on May 27
C COMPANY GENERAL: Proposes to Auction Off 5 Vehicles
C COMPANY GENERAL: Selling 2013 Ford F150 Crew Cab for $19,000
CAESARS ENTERTAINMENT: Parent Won't Get Shield as Talks Continue
CALIFORNIA STATEWIDE: S&P Hikes 2012A Bonds Rating From BB+
CANEJAS S.E.: Further Hearing on Use of Cash Collateral May 10
CAPITOL LAKES: Court Rejects Banks' Bid to Terminate Exclusivity
CLIFFS NATURAL: Agrees to Settle Shareholder Derivative Actions
COLUMBUS REGIONAL: Fitch Affirms 'BB+' Rating on 2008/2010 Bonds
CROWN MEDIA: Amends 2015 Annual Report
CROWN MEDIA: Common Stock Delisted from NASDAQ
CTI BIOPHARMA: May Issue 18 Million Shares Under Plan
CTI BIOPHARMA: Reports Results of Annual Meeting of Shareholders
DDMG ESTATE: U.S. Trustee Demands Filing of Ch. 11 Plan
DIFFUSION PHARMACEUTICALS: Amends 2015 Annual Report
DOVER DOWNS: Stockholders Re-Elect Two Directors
DRAFTDAY FANTASY: Agrees to Acquire Rant Inc. for $5 Million
DREAMWORKS ANIMATION: S&P Puts 'B-' CCR on CreditWatch Positive
EFRON DORADO: Asks Court to Extend Plan Exclusivity to Aug. 15
ENDLESS POSSIBILITIES: Court Extends Plan Exclusivity to July 5
ENERGY & EXPLORATION: Crady Jewett Represents Spartan, Texas CES
ENERGY & EXPLORATION: Lenders Object to Trustee's Fee Review Bid
ENERGY FUTURE: Regulators to Decide Whether to Review Oncor Deal
FOREST PARK SOUTHLAKE: No Auction Prior to Sale Hearing
FOREST PARK SOUTHLAKE: Seeks to Sell Hospital Assets for $9-Mil.
FREESEAS INC: Delays Filing of 2015 Annual Report
GAMING & LEISURE: Moody's Assigns Ba1 Rating on $825MM Loan
GAS-MART, INC: Court OKs Initial Wind Down Budget Through June 30
GEO. V. HAMILTON: Wants to Get Premium Financing With Flatiron
HANESBRANDS INC: Moody's Affirms Ba1 CFR, Outlook Stable
HARRINGTON MACHINE: Proposes Auction Sale of Excess Equipment
HHH CHOICES: Affiliate Gets Approval to Hire Cushman as Appraiser
HHH CHOICES: Affiliate Gets OK to Hire Griffin as Special Counsel
HHH CHOICES: Committee Gets Approval to Hire Duane Morris
INT'L MANUFACTURING: Bank's Bid to Withdraw Reference Denied
ION GEOPHYSICAL: Moody's Affirms Caa2 CFR, Outlook Stable
ION GEOPHYSICAL: S&P Lowers Corporate Credit Rating to 'SD'
IRON MOUNTAIN: S&P Raises CCR to 'BB-', Outlook Stable
JODY KEENER: Appeal From Plan Order Dismissed
KENDALL LAKE TOWERS: U.S. Trustee Forms 3-Member Committee
KITRINOR METALS: Delays Financial Filings, Applies for MCTO
KNS INC: U.S. Trustee Unable to Appoint Creditors' Committee
KOSMOS ENERGY: Fitch Puts 'B' LT IDR on Rating Watch Negative
LEO MOTORS: Lowers Ownership in Leo Korea to 49.9%
LIFE CARE: June 2 Auction to Start w/ $25.4MM Bid from LCS Glenmoor
LONG BEACH MEDICAL: Seeks Approval to Distribute Sale Proceeds
LUCA INTERNATIONAL: Bid to Dismiss Shelley You Appeal Denied
MACON CHARTER: Voluntary Chapter 11 Case Summary
MANNINGTON MILLS: S&P Revises Outlook to Neg. & Affirms 'BB-' CCR
MD AMERICA: S&P Affirms 'CCC' Issue-Level Rating
MERRIMACK PHARMACEUTICALS: Incurs $38.6 Million Net Loss in Q1
MGM RESORTS: S&P Assigns 'BB' Rating on $1.5BB Sr. Credit Facility
MICHAEL KING: Schedules $114.7 in Assets, $10.1 in Debt
MIDSTATES PETROLEUM: Moody's Lowers PDR to D-PD on Ch. 11 Filing
MODERN SHOE: Files for Bankruptcy, to Sell Assets to Bright Star
MODERN SHOE: Seeks Joint Administration of Cases
MODERN SHOE: To Reject License Agreement with Brand Matter
MODERN SHOE: Wants 35-Day Extension to File Schedules
MUHAMMAD A. AMJAD: Selling Property to Son for $860,000
MUSCLEPHARM CORP: Amends 2015 Annual Report
NAKED BRAND: BDO USA Expresses Going Concern Doubt
NATIONAL CINEMEDIA: May Issue 4.4 Million Shares Under Plan
NEW YORK LIGHT: Court Extends Plan Exclusivity Thru Hearing Date
NEWBURY COMMON: Court Extends Plan Exclusivity to Sept. 8
NGL ENERGY: Fitch Affirms 'B+' IDR, Outlook Revised to Stable
NORANDA ALUMINUM: Approval for Modified Severance Program Sought
NORANDA ALUMINUM: Wants Approval of KEIP, KERP and 2015 ICP
NORFE GROUP: Asks Court to Extend Plan Exclusivity to Aug. 15
PACIFIC EXPLORATION: Fitch Lowers Issuer Default Ratings to 'D'
PACIFIC SUNWEAR: Bid Procedures Fail to Protect Landlords' Rights
PALACE ENTERTAINMENT: Moody's Affirms B3 CFR, Outlook Stable
PAN AMERICAN: Moody's Raises CFR to B1, Outlook Stable
PARAGON OFFSHORE: U.S. Trustee to Hold 341 Meeting Today
PERPETUAL ENERGY: S&P Lowers Corporate Credit Rating to 'SD'
PETER HENZE: Attorney Directed to Turn Over $7K to Trustee
PHOENIX MANUFACTURING: Voluntary Chapter 11 Case Summary
PIONEER ENERGY: Incurs $27.7 Million Net Loss in First Quarter
PIONEER HEALTH: Asks Court to Extend Use of Cash Collateral
PLYMOUTH EDUCATIONAL: S&P Affirms 'B-' Rating on 2005 Revenue Bonds
PTC INC: Moody's Assigns Ba2 CFR, Outlook Stable
PTC INC: S&P Assigns 'BB' Corp. Credit Rating, Outlook Stable
REED EQUIPMENT: Case Summary & Unsecured Creditor
RESIDENTIAL CAPITAL: Liquidating Trust Looking for New Manager
RESPONSE BIOMEDICAL: Amends 2015 Annual Report
RICEBRAN TECHNOLOGIES: LF-RB Management Reports 9.1% Equity Stake
SANDRIDGE ENERGY: Amends 2015 Annual Report
SEBRING MANAGEMENT: Court Extends Plan Exclusivity to May 19
SEMLER SCIENTIFIC: Reports 2016 First Quarter Financial Results
SHEEHAN PIPE LINE: Proposes June 16 Auction for Equipment
SMILE BRANDS: Moody's Lowers CFR to Caa3, Outlook Stable
SOUTHERN CALIFORNIA LOGISTICS: Moody's Hikes Bonds Rating to B3
SPANISH BROADCASTING: Alex Meruelo Holds 6.12% of CL-A Shares
SPECTRUM BRANDS: Fitch Raises IDR to 'BB'; Outlook Stable
SPI ENERGY: Charles Chan Resigns as Independent Director
SPI ENERGY: Files Form 12b-25 with SEC
SPORTS AUTHORITY: Anticipates Buyer for "Major Portions" of Stores
SUNEDISON INC: Appaloosa Management Calls for Probe
TENET HEALTHCARE: Incurs $59 Million Net Loss in First Quarter
TRACY JOHN CLEMENT: U.S. Trustee Forms 2-Member Committee
TRANS-LUX CORP: Amends 2015 Annual Report
TRANSTAR HOLDING: Moody's Puts B3 CFR on Review for Downgrade
TRINSEO SA: S&P Raises CCR to 'B+', Outlook Stable
U.S. STEEL: Moody's Lowers CFR to B3 & Rates New Notes Due 2021 B1
U.S. STEEL: S&P Affirms 'B' CCR & Rates New $500MM Notes 'BB-'
UCI HOLDINGS: Terminates Registration of Senior Notes
ULTRA PETROLEUM: Moody's Lowers PDR to D-PD, Outlook Remains Neg.
UNITED RENTALS: Moody's Assigns B1 Rating on New $750MM Note
USA DISCOUNTERS: Submits Eighth Revised Budget
VECTOR GROUP: S&P Retains 'BB-' Rating on Notes Following Upsize
VENCORE INC: Moody's Affirms B3 CFR & Changes Outlook to Positive
VIKING CRUISES: S&P Lowers CCR to 'B', Outlook Stable
VUZIX CORP: Edward Kay Named as Director
WANK ADAMS: Asks Court to Extend Solicitation Period to June 28
WEST CORP: Reports First Quarter 2016 Results
WHITE STAR: S&P Lowers CCR to 'SD' on Distressed Exchanges
WIDEOPENWEST FINANCE: Moody's Affirms B2 CFR, Outlook Stable
WILLISTON ND S&P Cuts Rating on 2010 Tax Revenue Bonds to BB-
WINDSOR FINANCIAL: Bellevue Square No Longer Member of Committee
WPCS INTERNATIONAL: Appoints Sebastian Giordano CEO
ZLOOP INC: Has Non-Binding Term Sheet With Dynamic Recycling
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
1111 MYRTLE AVENUE: Case Reassigned to Judge Vyskocil
-----------------------------------------------------
The Chapter 11 case of 1111 Myrtle Avenue Group LLC has been
reassigned to Judge Mary Kay Vyskocil on April 19 for
administration, according to a filing with the U.S. Bankruptcy
Court for the Southern District of New York.
The company's bankruptcy case was initially assigned to Judge
Shelley Chapman.
About 1111 Myrtle Avenue Group
1111 Myrtle Avenue Group LLC owns a commercial property located at
1103-1111 Myrtle Avenue, Brooklyn, New York. The property is
leased to two tenants: (a) the United States of America occupies
most of the commercial space as a Social Security office, pursuant
to a lease coming up for renewal, and (b) Eagle 99 Cents Store
Inc., which runs a retail store, occupies the remainder of the
premises. The Property is subject to a first mortgage lien
securing a loan in the principal amount of $6,283,545 received from
United International Bank ("UIB").
1111 Myrtle Avenue Group LLC filed a Chapter 11 bankruptcy petition
(Bankr. S.D.N.Y. Case No. 15-12454) on Sept. 1, 2015, after Myrtle
Property Holdings LLC backed out of a deal to buy the Debtor's
property.
The petition was signed by Aaron C. Ambalu as manager.
The Debtor disclosed total assets of $29.6 million and total
liabilities of $6.23 million. The secured creditor is United
International Bank, which is owed $6.18 million on a first
mortgage.
The Debtor won approval to hire Goldberg Weprin Finkel Goldstein
LLP as counsel.
1111 MYRTLE AVENUE: Court Extends Plan Exclusivity to June 27
-------------------------------------------------------------
Bankruptcy Judge Mary Kay Vyskocil granted the request of 1111
Myrtle Avenue Group LLC, for a second extension of the Debtor's
exclusive periods to file and confirm a plan pursuant to section
1121(d)(1) of the Bankruptcy Code. The exclusive period during
which only the Debtor may file a plan of reorganization is further
extended from March 29, 2016 for an additional 90 days to June 27,
2016; and the concomitant exclusive period during which only the
Debtor may solicit acceptances or rejections to that plan as may be
filed is further extended from May 26, 2016 to August 24, 2016.
About 1111 Myrtle Avenue Group
1111 Myrtle Avenue Group LLC owns a commercial property located at
1103-1111 Myrtle Avenue, Brooklyn, New York. The property is
leased to two tenants: (a) the United States of America occupies
most of the commercial space as a Social Security office, pursuant
to a lease coming up for renewal, and (b) Eagle 99 Cents Store
Inc., which runs a retail store, occupies the remainder of the
premises. The Property is subject to a first mortgage lien
securing a loan in the principal amount of $6,283,545 received
from
United International Bank ("UIB").
1111 Myrtle Avenue Group LLC filed a Chapter 11 bankruptcy
petition
(Bankr. S.D.N.Y. Case No. 15-12454) on Sept. 1, 2015, after Myrtle
Property Holdings LLC backed out of a deal to buy the Debtor's
property.
The petition was signed by Aaron C. Ambalu as manager. Judge
Shelley C. Chapman is assigned to the case.
The Debtor disclosed total assets of $29.6 million and total
liabilities of $6.23 million. The secured creditor is United
International Bank, which is owed $6.18 million on a first
mortgage.
The Debtor won approval to hire Goldberg Weprin Finkel Goldstein
LLP as counsel.
A.L. EASTMOND: Stalking Horse Pact for Bronx Property Approved
--------------------------------------------------------------
A.L. Eastmond & Sons, Inc., and its affiliated debtors sought and
obtained from Judge Sean H. Lane of the U.S. Bankruptcy Court for
the Southern District of New York, approval of the Sale Agreement
between the Debtors and stalking horse bidder AFP Seventy Eight
Corp, the break-up fee and expense reimbursement for the Stalking
Horse Bidder, and the Debtors' bid procedures.
The Sale Agreement is in connection with the Debtors' sale of
property located at 1200 Oak Point Avenue, a/k/a 448 Tiffany
Street, Hunts Point, Bronx, New York and 437 Casanova Street, Hunts
Point, Bronx, New York, subject to higher and better offers as may
emerge at an auction for the sale of the Property.
The Debtors relate that they received and evaluated multiple offers
for the purchase of the Property, culminating in an offer by the
Stalking Horse Bidder with no contingencies in the amount of
$7,000,000.
The Property constitutes collateral of the Debtors' prepetition
secured lender, CCHP, LLC pursuant to the Prepetition Secured
Credit Agreement by and between the Debtors and Sovereign Bank,
which was ultimately assigned to the Secured Lender, and the
executed by the Debtors in favor of Sovereign Bank, which was also
ultimately assigned to the Secured Lender.
The Debtors sought to sell the Property free and clear of all
liens, claims and encumbrances and will utilize the proceeds of the
sale to repay the Secured Lender in Part.
The Bid Procedures contain, among others, these relevant terms:
(a) Bid Deadline: May 5, 2016 at 5:00 p.m.
(b) Deposit: 10% of the Potential Bidders bid, or at least
$732,500 in immediately available funds.
(c) Auction Date: May 12, 2016 at 10:00 a.m.
(d) Minimum Overbid: $7,325,000. Any subsequent bid shall at
least be $100,000 greater than the Minimum Overbid. Thereafter,
bidding shall continue in minimum increments of at least $50,000
higher than the previous Qualified Bid.
(e) Break-up Fee: If the Property is sold to a Purchaser other
than the Stalking Horse Bidder following the Auction conducted in
accordance with the Bid Procedures and the Bid Procedures Order,
then, the Stalking Horse Bidder will be entitled to receive (i) a
sum equal to 2.5% of the purchase price, i.e., $175,000 ("Break-up
Fee"), (ii) plus any actual costs and expenses up to a maximum of
$50,000 that the Stalking Horse Bidder can demonstrate were
incurred by the Stalking Horse Bidder in connection with entering
into the Sale Agreement.
(f) Sale Objection Deadline: May 12, 2016 by 5:00 p.m.
(g) Sale Hearing: May 19, 2016 at 11:00 a.m.
"The Sale Agreement provides for certain benchmarks and deadlines
for completion. Therefore, the Debtors are required to comply with
the deadlines in the Sale Agreement, including (i) entry of the Bid
Procedures Order within 21 days after the date of filing of this
Motion, or April 18, 2016, (ii) entry of the Sale Order within 60
days after execution of the Sale Agreement, or May 27, 2016, and
(iii) closing of the Sale within 21 days after entry of the Sale
Order, but no later than June 30, 2016 (subject to a grace period),
with time being of the essence of the Sale Agreement as to the
parties' obligation to close on such date. To ensure compliance
with these deadlines, it is critical that the Bid Procedures
Hearing take place on April 11, 2016, the Sale Hearing take place
on or about May 19, 2016, and the date of confirmation of the
Debtors' chapter 11 plan of reorganization occur on or about June
16, 2016," the Debtors averred.
A.L. Eastmond & Sons, Inc., and its affiliated debtors are
represented by:
Tracy L. Klestadt, Esq.
Stephanie R. Sweeney, Esq.
KLESTADT WINTERS JURELLER
SOUTHARD & STEVENS, LLP
200 West 41st Street, 17th Floor
New York, NY 10036
Telephone: (212)972-3000
Facsimile: (212)972-2245
E-mail: tklestadt@klestadt.com
ssweeney@klestadt.com
About A.L. Eastmond & Sons
A.L. Eastmond & Sons, Inc., Easco Boiler Corp. and Eastmond & Sons
Boiler Repair & Welding Service, Inc. filed Chapter 11 bankruptcy
petitions (Bankr. S.D.N.Y. Lead Case No. 15-13214) on Dec. 1,
2015.
The petitions were signed by Arlington Leon Eastmond, Jr., as
president. The Debtors have engaged Klestadt Winters Jureller
Southard & Stevens, LLP as counsel. The Debtors listed total
assets of $34.59 million and total liabilities of $40.79 million.
Judge Sean H. Lane has been assigned the case.
The Debtors have provided products and services in over 15,000
locations throughout the tristate area and beyond, including
Yankee Stadium, the Trump Towers, Kings County Supreme Court, New
York Botanical Garden/Bronx Zoo, Queens County Civil Court, North
Shore University, Detroit School District, the Garfield Park Field
House in Chicago, Illinois, and the National Geographic Building in
Washington, D.C., to name a few.
AERCAP HOLDINGS: Moody's Raises CFR to Ba1, Outlook Stable
----------------------------------------------------------
Moody's Investors Service upgraded the corporate family and senior
unsecured ratings of AerCap Holdings N.V. to Ba1 from Ba2. The
ratings of AerCap's subsidiaries were also upgraded. The outlook
for the ratings is stable. This concludes the review of AerCap's
ratings initiated on March 3, 2016.
RATINGS RATIONALE
Moody's upgraded AerCap's ratings to reflect the company's reduced
leverage, strengthened liquidity, and solid 2015 operating
performance that exceeded Moody's expectations. During 2015,
AerCap completed the integration of International Lease Finance
Corporation, a large aircraft leasing company that it acquired in
May 2014.
AerCap reduced leverage to 3.6x debt/tangible common equity
(adjusted to net $1.5 billion of cash liquidity against debt) at
year-end 2015, down from 4.2x at year-end 2014, but higher than the
3.4x Moody's anticipated. AerCap reduced leverage by its own
measure to 2.9x, within its target range of 2.7x - 3.0x. AerCap's
measure nets all unrestricted cash against debt and provides 50%
equity credit to the company's trust-preferred and subordinated
debt securities -- adjustments that Moody's does not incorporate
into its calculation. Moody's expects that AerCap will be able to
maintain the current leverage level based upon anticipated earnings
and capital formation, which considers share repurchases under the
company's $400 million authorization and financing for upcoming
aircraft purchase commitments.
AerCap has strengthened its liquidity profile by accessing new
funding, increasing and extending liquidity facilities and
extending debt maturities. The company had $9.2 billion of
liquidity at year end 2015, which together with solid operating
cash flow and $700 million of recently arranged aircraft
acquisition funding, provides the company ample resources to manage
upcoming debt maturities, capital expenditures and operating
requirements. The company's ratio of liquidity sources to debt
service and capital expenditures measured 1.6x at Dec. 31, above
its 1.2x target, and liquidity sources currently provide more than
18 months of liquidity runway. Moody's expects that the company
has the flexibility to maintain adequate liquidity as its new
aircraft deliveries ramp up materially in 2017 and 2018, based on
strong debt capital market access, predictable operating cash flow,
aircraft sales opportunities, and the ability to revise share
repurchases and moderate sale-leaseback volumes.
AerCap's strong profitability reflects a net finance margin that
compares favorably to industry peers, owing to high average yields
and a cost of funds lower than peer average. Earnings have also
been aided by gains from the sale of a higher than anticipated
number of older aircraft from the company's fleet, though this
source of income is less predictable than the firm's rental income.
AerCap's solid operating performance will likely continue, given
the contracted nature of a high percentage of its revenues, its
success keeping aircraft utilization high, and its record of
renewing maturing leases and committing new aircraft to leases well
in advance of delivery from manufacturers.
Moody's could upgrade AerCap's ratings if the company further
improves fleet composition, extends its track record of strong
profitability and cash flow, and effectively manages exposure
concentrations. An upgrade would also be contingent on AerCap
demonstrating flexibility in managing its liquidity in the face of
increasing uses of cash, including debt maturities and aircraft
deliveries. Lower leverage would strengthen AerCap's case for a
rating upgrade.
Ratings changes include:
AerCap Holdings N.V.:
Corporate Family: to Ba1 from Ba2
AerCap Ireland Capital Limited:
Senior unsecured shelf: to (P)Ba1 from (P)Ba2
Backed senior unsecured: to Ba1 from Ba2
International Lease Finance Corporation:
Senior unsecured: to Ba1 from Ba2
Senior unsecured shelf: to (P)Ba1 from (P)Ba2
Senior secured: to Baa3 from Ba1
Preferred stock: to Ba3(hyb) from B1(hyb)
Delos Finance SARL:
Backed senior secured bank credit facility: to Baa3 from Ba1
Flying Fortress Inc.:
Backed senior secured bank credit facility: to Baa3 from Ba1
ILFC E-Capital Trust I:
Backed preferred stock: to Ba3(hyb) from B1(hyb)
ILFC E-Capital Trust II:
Backed preferred stock: to Ba3(hyb) from B1(hyb)
AerCap is a major commercial aircraft leasing company listed on the
New York Stock Exchange (AER). The company reported total assets
of $43.9 billion and annual net earnings of $1.2 billion at Dec.
31, 2015.
The principal methodology used in these ratings was Finance
Companies published in October 2015.
AEROPOSTALE INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
Aeropostale, Inc. 16-11275
dba Aeropostale
112 West 34th Street, 22nd Floor
New York, NY 10120
Aeropostale Procurement Company, Inc. 16-11276
Aeropostale West, Inc. 16-11277
Jimmy'Z Surf Co., LLC 16-11278
Aero GC Management LLC 16-11279
Aeropostale Licensing, Inc. 16-11280
GoJane LLC 16-11281
P.S. from Aeropostale, Inc. 16-11282
Aeropostale Puerto Rico, Inc. 16-11283
Aeropostale Canada Corp. 16-11284
Aeropostale Holdings, Inc. 16-11285
Type of Business: Retailer of casual apparel and accessories
Chapter 11 Petition Date: May 4, 2016
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. Sean H. Lane
Debtors' Counsel: Ray C. Schrock, P.C.
Jacqueline Marcus, Esq.
Garrett A. Fail, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153
Tel: (212) 310-8000
Fax: (212) 310-8007
Email: garrett.fail@weil.com
ray.schrock@weil.com
jacqueline.marcus@weil.com
Debtors' FTI CONSULTING, INC.
Restructuring Three Times Square
Advisor: 9th Floor
New York, NY 10036
Tel: 212.247.1010
Fax: 212.841.9350
Debtors' STIFEL, NICOLAUS & COMPANY, INC.
Investment - and -
Banker: MILLER BUCKFIRE & COMPANY LLC
787 Seventh Avenue, New York,
New York 10019
Debtors' RCS REAL ESTATE ADVISORS
Real Estate 460 W 34th St #3
Advisor: New York, NY 10001
Debtors' PRIME CLERK LLC
Claims and 830 Third Ave
Noticing New York,New York 10022
Agent:
Debtors' STIKEMAN ELLIOT LLP
Canadian 5300 Commerce Court West
Counsel: 199 Bay Street, Toronto, ON M5L 1B9
Debtors' TOGUT, SEGAL & SEGAL LLP
Conflicts One Penn Plaza
Counsel: Suite 3335, New York, NY 10119
Total Assets: $354.38 million as of January 30, 2016
Total Debts: $390.02 million as of January 30, 2016
The petition was signed by Marc G. Schuback, Senior vice president,
general counsel and secretary.
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
LF Sourcing Millwork LLC Trade Debt $14,287,208
350 Fifth Ave., 9th Floor
New York, NY 10118
Carlos Camacho
Tel: (212) 827-3352
Fax: (212) 290-5350
Email: carlos@loyaltexusa.com
Hansae CO LTD Trade Debt $1,287,408
(Yeouido-Dong,5F) 29
Eunhaenh-Ro
Yeongdeungpo-Gu
Seoul, South Korea 150-739
Mr. Lee Yong Baek
Tel: (82) 2-3779-0779
Fax: (82) 2-3779-5599
Email: myjeong@hansae.com
LF Sourcing (MWK) - SAT Trade Debt $1,110,049
Legal Name: LI & Fung SAE-A
1359 Broadway,18th Floor
New York, NY 10018
Carlos Camacho
Tel: (212) 827-3352
Fax: (212) 290-5350
Email: carlos@loyaltexusa.com
LF Sourcing (MWK) - GES Trade Debt $762,144
Legal Name: LI & Fung - GES
1359 Broadway, 18th Floor
New York, NY 10001
Carlos Camacho
Tel: (212) 827-3352
Fax: (212) 290-5350
Email: carlos@loyaltexusa.com
Apparel MFG DV Jeanjer LLC Trade Debt $640,904
1400 Broadway, 14th Floor
New York, NY 10018
Eddie Ben Aderet
Tel: (646) 383-8200
Fax: (212) 768-3096
Email: ebenaderet@jordache.com
Bethany Mota Marketing $500,000
c/o Gettleson Witzer & O'Conner
1600 Ventura Blvd., Suite 900
Encino, CA 91436
Randy O'Conner
Tel: (310) 288-9978
Fax: (310) 288-9977
Email: roconner@getwitz.com
Taubman Trade Debt $479,487
Taubman Auburn Hills
200 E. Long Lake Road, Suite 300
Bloomfield Hills, MI 48404-2324
Tel: (248) 258-6800
Email: mmainville@taubman.com
Bbase IDG Ltd Trade Debt $450,425
2505 The Centrium
60 Wyndham Street
Central Hong Kong,
Hong Kong
Emma Chung
Tel: (852) 3167-7808
Fax: (212) 206-1497
Email: emma.chung@bbase.com.hk
General Growth Trade Debt $424,208
Legal Name: General
Growth Properties
110 North Wacker Drive
Chicago, IL 60606
Kevin Berry
Tel: (312) 960-5000
Fax: (312) 960-5722
Email: kevin.berry@ggp.com
KOEX LLC Trade Debt $351,757
2525 Ponce De Leon Blvd., Suite 300
Coral Gables, FL 33134
Tel: (305) 910-9851
Fax: (786) 513-7997
Email: i.legorgeu@koex.es
American Express Professional $343,000
200 Vesey Street Services
New York, NY 10285
Patti DeVore
Tel: (845) 942-0807
Fax: (800) 542-0779
Email: patricia.a.devore@aexp.com
Tote Fashion Int'l LTD Trade Debt $287,625
RM 228 2/F Secure House
68 How Ming Street
Kwun Tong, HK
Keven Li
Tel: (886) 935 246007
Email: keven@totefashion.com.tw
Katten, Muchin, Rosenman, LLP Professional $279,677
575 Madison Avenue Services
New York, NY 10022-2585
Tel: (212) 940-8800
Fax: (212) 940-8776
Email: chris.diangelo@kattenlaw.com
Aptos Inc. Professional $216,024
Legal Name: Aptos Inc. Services
FKA Epicor RSG (US), Inc.
15 Governor Drive
Newburgh, NY 12550
Jane Webb
Tel: (514) 428-2163
Email: jwebb@aptos.com
Titanium Marketing Trade Debt $206,673
425 Fifth Ave., Suite 601
New York, NY 10016
Tel: (212) 889-8888
Email: salesattmi@gmail.com
Flexfit LLC Trade Debt $200,517
350 Karin Lane
Hicksville, NY 11801
Tel: (516) 932-8800
Fax: (516) 932-6221
Email: johnj@flexfit.com
Vornado Trade Debt $192,979
Legal Name: Vornado
Realty Trust
888 Seventh Ave.
New York, NY 10019
Tel: (212) 894-7000
Fax: (212) 587-0600
Email: molguin@vno.com
UPS Trade Debt $182,359
55 Glenlake Parkway NE
Atlanta, GA 30328
Jeffrey Hardgrove
Tel: (201) 306-8755
Fax: (404) 828-6777
Email: jeffhardgrove@ups.com
Mia's Fashion MFG CO INC Trade Debt $179,506
12623 Cisneros Lane
Santa Fe Springs, CA 90670
Suhna Lee
Tel: (562) 906-1060 ext. 112
Fax: (562) 906-1061
Email: suhna@miasfashion.com
Westfield Trade Debt $176,918
2049 Century Park East
41st Floor
Century City, CA 90067
Tel: (310) 478-1267
Fax: (310) 478-1267
Email: leasing@westfield.com
AEROPOSTALE INC: Supplier's Actions Blamed for Downfall
-------------------------------------------------------
David J. Dick, Chief Financial Officer of Aeropostale, Inc., tells
the Bankruptcy Court that prior to the commencement of the chapter
11 cases the Debtors had already begun to implement their
publicly-announced comprehensive strategic review and restructuring
of their retail operations and store profile. The Debtors' efforts
had started to generate significant positive results, when one of
their largest suppliers, Sycamore Partners LLC's portfolio company,
TSAM (Delaware) LLC (d/b/a MGF Sourcing US LLC), took precipitous
and unauthorized action to force the Debtors into cash in advance
terms when the Debtors had availability well in excess of $100
million under their revolving credit facility. These actions not
only jeopardized the Debtors' ongoing efforts, but also imperiled
the Debtors' survival as a going concern.
In 2015, the Debtors sourced approximately 80% of their merchandise
from their top five merchandise suppliers. Although the Debtors
design the products sold in their stores and on-line retail
operations, the Debtors' merchandise suppliers manufacture the
products. The Debtors' top two merchandise suppliers are an
affiliate of Li & Fung Limited and MGF. For 2016, MGF is planned
to be the Debtors' second largest merchandise supplier, supplying
approximately 30% of the goods in 2016.
Sycamore is also an affiliate of Aero Investors LLC, the Debtors'
largest secured creditor.
As of the Commencement Date, the Debtors had outstanding funded
debt obligations in the aggregate amount of approximately $223
million which is comprised of:
(i) approximately $73 million in borrowings under an asset
based revolving credit facility with Bank of America, N.A. as
administrative agent and collateral agent, in an amount up to $215
million, and
(ii) a $100 million "Tranche A" term loan and a $50 million
"Tranche B" term loan with Aero Investors as administrative agent
and collateral agent .
The Debtors have granted security interests and liens on all or
substantially all of their assets to secure the Prepetition Debt
Obligations.
As of the Commencement Date, the Debtors estimate that
approximately $23 million of merchandise trade debt is due and
outstanding, of which $2.5 million relates to goods provided to the
Debtors in the 20 days prior to the Commencement Date. They also
estimate that they will accrue approximately $200-225 million in
lease-related expenses in fiscal year 2016.
"It has become increasingly clear to me over the course of the last
several weeks since Sycamore and MGF first demanded cash in advance
terms -- before manufacturing or supplying any merchandise -- that
Sycamore was using its leverage over MGF to precipitate the filing
of these chapter 11 cases," Mr. Dick says. "MGF's demands
systematically caused a cash drain on the Debtors' enterprise
through onerous and unreasonable terms and deprived the Debtors of
critical merchandise. Why Sycamore was determined to cause a
precipitous chapter 11 filing immediately is not yet known with
certainty."
Mr. Dick relates that between April 1, 2016 and April 8, 2016, due
to an immediate need for inventory, the Debtors made preferential
payments to MGF of approximately $15.8 million in order to induce
MGF to ship goods that were past due. MGF delivered some, but not
all, of the outstanding inventory of the Debtors.
The Debtors engaged in settlement discussions with Sycamore and MGF
on April 8, 2016. Subsequently, on April 20, 2016, MGF delivered a
second notice of default
under the parties' Sourcing Agreement to the Debtors again
asserting that the Debtors' refusal to accept delivery or pay for
orders under the terms set forth in MGF's previous communications
constituted a material breach of the terms and conditions of the
Sourcing Agreement. Under extreme duress due to their critical
needs for inventory, on April 22, 2016, the Debtors made an
additional preferential payment to MGF of approximately $10.1
million and MGF delivered additional merchandise.
According to Mr. Dick, the significant delays by MGF and L&F in
shipping product to the Debtors resulted in less product being
available in the Debtors' stores for the peak spring break and
Easter break sales period. The actions of MGF caused a disruption
in the Debtors' supply chain and a corresponding negative impact on
the Debtors' liquidity.
"I would estimate, based on historical performance, that the
Debtors' lost in excess of $5 million in sales due to these
delays," he said. "If MGF continues to delay delivery of product
to the Debtors, the Debtors may suffer further losses in sales."
He also notes that MGF's actions placed the Debtors at risk of
violating the $70 million minimum liquidity covenant in the
Prepetition Term Loan Agreement, which was provided by a different
affiliate of Sycamore. A default under the Prepetition Term Loan
Agreement would have triggered a cross-default under the
Prepetition ABL Agreement, and defaults under both agreements would
have jeopardized the Debtors' ability to obtain inventory for their
stores and otherwise operate their businesses. To restore access
to inventory, which is the lifeblood of any retail business, and to
otherwise maintain the ability to operate their businesses, the
Debtors
commenced the Chapter 11 Cases.
He adds that, with $240 million of annual distribution supply
effectively cut off from terms, the Debtors were forced to consider
every alternative to give the Debtors the best chance to survive.
And despite overwhelming odds, the Debtors have secured a viable
path through an expedited chapter 11 case in Bankruptcy Court with
a fresh source of financing. In short, the Debtors have structured
a dual path exit from chapter 11 in which they have an option to
pursue a standalone chapter 11 plan with their new financing source
while simultaneously pursuing ongoing M&A efforts for the
enterprise. Likewise, the Debtors also will utilize all available
tools in chapter 11 to right size the business and resolve their
ongoing dispute with Sycamore.
Mr. Dick outlines the Debtors' path toward exit from chapter 11,
which milestones form part of the Debtors' DIP financing package:
(A) Plan Milestones:
-- Negotiate with key landlords and continue pre-filing
M&A process during the first 60 days of the Chapter
11 Cases;
-- File a plan and disclosure statement no later than
60 days after the Commencement Date;
* The Debtors' chapter 11 plan may be a plan for
either a standalone enterprise or consummated via
an M&A transaction;
-- Obtain entry of an order approving the disclosure
statement no later than 95 days after the
Commencement Date;
-- Commence a confirmation hearing no later than
130 days after the Commencement Date; and
-- Obtain entry of an order confirming a plan of
reorganization no later than 140 days after the
Commencement Date.
(B) Sale Milestones:
-- File motion to approve bid procedures, establish
the date of an auction, and file a form of
stalking horse sale and purchase agreement no
later than 75 days after the Commencement Date;
-- Court approval of a stalking horse sale and
purchase agreement and bid procedures no later
than 105 days after the Commencement Date
-- Conduct an auction no later than 141 days after
the Commencement Date;
-- Obtain entry of an order approving a sale of the
Debtors' assets no later than 143 days after the
Commencement Date; and
-- Consummation of a sale no later than 145 days
after the Commencement Date.
"Speed is critical to maximizing recoveries for all creditors and
preserving jobs of as many of the Debtors' 14,500 employees as
possible," Mr. Dick tells the Court. "The Debtors intend to
proceed towards confirmation of a plan of reorganization on the
foregoing aggressive, but realistic, timeframe. In accordance with
the milestones above, a plan of reorganization may involve either a
stand-alone reorganization of the Debtors' operations premised on a
smaller footprint of profitable stores or a sale to a third-party
buyer to be consummated pursuant to a plan. As an initial step
along either path, the Debtors are seeking approval of procedures
to
effectuate the immediate closing of 154 stores."
Aeropostale has secured a commitment for $160 million in
debtor-in-possession financing provided by Crystal Financial LLC,
which, combined with operating cash flow, will allow Aeropostale to
meet its go-forward financial commitments. The DIP Facility was
procured after a robust marketing and negotiating process lead by
the Debtors' investment banker, Stifel, Nicolaus & Co., Inc. and
Miller Buckfire & Company LLC.
AEROPOSTALE INC: To Close 100+ Stores After Ch. 11 Filing
---------------------------------------------------------
Matt Jarzemsky, writing for Dow Jones' Daily Bankruptcy Review,
reported that Aeropostale Inc. is preparing to file for bankruptcy
protection this week and close more than 100 stores, according to
people familiar with the matter, as the teen-apparel retailer
contends with mounting losses and falling sales.
The report related that New York-based Aeropostale plans to seek
chapter 11 protection in the next few days before May rent payments
are due, the people said. It is in advanced talks with specialty
lender Crystal Financial LLC on a loan to finance its operations in
bankruptcy, they added, the report further related.
According to the report, the company, which had 21,000 employees as
of January 2015, has posted losses in its last three fiscal years
amid a steep decline in sales. Its market value currently stands
at about $2.9 million, DBR said, citing FactSet. Adding to
Aeropostale's woes, clothing manufacturer MGF Sourcing earlier this
year tightened the retailer's payment terms, demanding it pay
upfront rather than in a span of about 60 days, the report said,
citing people familiar with the matter.
As previously reported by The Troubled Company Reporter,
Aeropostale is relying on law firm Weil Gotshal & Manges LLP and
financial adviser FTI Consulting Inc. Aeropostale said in March
that it was also working with Stifel Financial Corp. to explore
strategic alternatives, including the possibility of selling the
chain or restructuring it. The report noted that Aeropostale is
seeking ways to fix the company after years of tumbling sales and
red ink, including a wider-than-expected loss in the fourth
quarter. The New York-based retailer has suffered from changing
tastes among teen shoppers and a shift of apparel spending online,
the report pointed out.
In March, the chain said Sycamore's MGF Sourcing unit was holding
up orders and violating a supplier agreement, putting the retailer
at risk of losing millions of dollars, the report said.
ALERE INC: Secured Loans Amendment No Impact on Moody's Ratings
---------------------------------------------------------------
Moody's Investors Service commented that Alere Inc.'s (B2 RUR Up)
receipt of an amendment and waiver related to its senior secured
credit facilities is a positive development. There are no changes
to Moody's ratings, including the B2 Corporate Family Rating, B2-PD
Probability of Default Rating, Ba3 senior secured rating, B3 senior
unsecured rating, or Caa1 senior subordinated rating at this time.
These ratings remain on review for upgrade on the pending
acquisition by Abbott Laboratories (A2 RUR Down). On April 28, in
Abbott's call to discuss its acquisition of St. Jude Medical (Baa2
RUR Down), management stated that its financing plan contemplates
the completion of both the St. Jude and Alere acquisitions.
ALEXZA PHARMACEUTICALS: Amends 2015 Annual Report
-------------------------------------------------
Alexza Pharmaceuticals, Inc., filed with the Securities and
Exchange Commission an amended annual report on Form 10-K/A for the
year ended Dec. 31, 2015, for the purpose of including Part III of
the report, which describes the Company's:
(a) Directors, Executive Officers and Corporate Governance;
(b) Executive Compensation;
(c) Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters;
(d) Certain Relationships and Related Transactions and Director
Independence; and
(e) Principal Accountant Fees and Services.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/4Enxtp
About Alexza Pharmaceuticals, Inc.
Alexza Pharmaceuticals is focused on the research, development, and
commercialization of novel, proprietary products for the acute
treatment of central nervous system conditions. Alexza's products
and development pipeline are based on the Staccato(R) system, a
hand-held inhaler designed to deliver a pure drug aerosol to the
deep lung, providing rapid systemic delivery and therapeutic onset,
in a simple, non-invasive manner. Active pipeline product
candidates include AZ-002 (Staccato alprazolam) for the management
of epilepsy in patients with acute repetitive seizures and AZ-007
(Staccato zaleplon) for the treatment of patients with middle of
the night insomnia.
Alexza reported a net loss of $21.31 million on $5.02 million of
total revenues for the year ended Dec. 31, 2015, compared to a net
loss of $36.73 million on $5.56 million of total revenues for the
year ended Dec. 31, 2014. As of Dec. 31, 2015, Alexza had $14.73
million in total assets, $86.38 million in total liabilities and a
total stockholders' deficit of $71.65 million.
OUM & CO. LLP, in San Francisco, California, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2015, citing that the Company has recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
ALEXZA PHARMACEUTICALS: Continues to Engage in Acquisition Talks
----------------------------------------------------------------
Alexza Pharmaceuticals, Inc., previously entered into a non-binding
Letter of Intent with Grupo Ferrer Internacional, S.A. with respect
to Ferrer's proposed acquisition of all outstanding shares of
Alexza's common stock.
In a regulatory filing with the Securities and Exchange Commission,
Alexza said that while it and Ferrer are continuing and expect to
continue to engage in discussions concerning a potential
acquisition of all outstanding shares of Alexza's common stock by
Ferrer, on the basis of such discussions as have been conducted to
date and Ferrer's related due diligence, Alexza expects that any
offer Ferrer may make in connection with a potential transaction
will reflect lower amounts, for both the upfront payment and the
payments under the contingent value rights, than those specified in
the Letter of Intent, and that the triggering events in respect of
the contingent value rights specified in the Letter of Intent will
be adjusted.
As stated previously, the Letter of Intent does not constitute a
binding agreement to consummate any transaction and it entitles
Alexza and Ferrer to terminate discussions at any time in each sole
discretion. There can be no assurance that any transaction will be
agreed to or consummated.
About Alexza Pharmaceuticals, Inc.
Alexza Pharmaceuticals is focused on the research, development, and
commercialization of novel, proprietary products for the acute
treatment of central nervous system conditions. Alexza's products
and development pipeline are based on the Staccato(R) system, a
hand-held inhaler designed to deliver a pure drug aerosol to the
deep lung, providing rapid systemic delivery and therapeutic onset,
in a simple, non-invasive manner. Active pipeline product
candidates include AZ-002 (Staccato alprazolam) for the management
of epilepsy in patients with acute repetitive seizures and AZ-007
(Staccato zaleplon) for the treatment of patients with middle of
the night insomnia.
Alexza reported a net loss of $21.31 million on $5.02 million of
total revenues for the year ended Dec. 31, 2015, compared to a net
loss of $36.73 million on $5.56 million of total revenues for the
year ended Dec. 31, 2014. As of Dec. 31, 2015, Alexza had $14.73
million in total assets, $86.38 million in total liabilities and a
total stockholders' deficit of $71.65 million.
OUM & CO. LLP, in San Francisco, California, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2015, citing that the Company has recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
ALEXZA PHARMACEUTICALS: Grupo Ferrer Holds 10.9% Equity Stake
-------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Grupo Ferrer Internacional, S.A. and Sergio
Ferrer-Salat disclosed that as of April 29, 2016, they beneficially
own
2,366,935 shares of common stock of Alexza Pharmaceuticals, Inc.,
representing 10.9 percent of the shaers outstanding. A copy of the
regulatory filing is available for free at:
http://is.gd/DEdHxw
About Alexza Pharmaceuticals, Inc.
Alexza Pharmaceuticals is focused on the research, development, and
commercialization of novel, proprietary products for the acute
treatment of central nervous system conditions. Alexza's products
and development pipeline are based on the Staccato(R) system, a
hand-held inhaler designed to deliver a pure drug aerosol to the
deep lung, providing rapid systemic delivery and therapeutic onset,
in a simple, non-invasive manner. Active pipeline product
candidates include AZ-002 (Staccato alprazolam) for the management
of epilepsy in patients with acute repetitive seizures and AZ-007
(Staccato zaleplon) for the treatment of patients with middle of
the night insomnia.
Alexza reported a net loss of $21.31 million on $5.02 million of
total revenues for the year ended Dec. 31, 2015, compared to a net
loss of $36.73 million on $5.56 million of total revenues for the
year ended Dec. 31, 2014. As of Dec. 31, 2015, Alexza had $14.73
million in total assets, $86.38 million in total liabilities and a
total stockholders' deficit of $71.65 million.
OUM & CO. LLP, in San Francisco, California, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2015, citing that the Company has recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
ANCHOR GLASS: Moody's Raises CFR to B1, Outlook Stable
------------------------------------------------------
Moody's Investors Service upgraded Anchor Glass Container
Corporation's Corporate Family Rating to B1 from B2, and
Probability of Default rating to B2-PD from B3-PD. Additional
instrument ratings are detailed below. Additionally, the company
has increased its first lien Senior Secured Term Loan due July 2022
by $110 million. The proceeds will be used to pay a shareholder
dividend and related fees and expenses. Terms and conditions are
expected to be identical to the existing first lien Senior Secured
Term Loan. The ratings outlook is stable.
Moody's took these actions:
Anchor Glass Container Corporation:
-- Upgraded Corporate family rating to B1 from B2
-- Upgraded Probability of default rating to B2-PD from B3-PD
-- Upgraded $575 million 1st Lien Senior Secured Term Loan due
July 2022 ($545 million proforma outstanding), to B2 (LGD3)
from B3 (LGD3)
The ratings outlook is stable.
The ratings are subject to the receipt and review of the final
documentation.
RATINGS RATIONALE
The upgrade of the corporate family rating reflects the projected
benefits from higher margin contracts ramping up through 2016, the
small percentage of contracts up for renewal through the end of
2017 and management's commitment to dedicating all free cash flow
to debt reduction. The contract renewals and new business the
company secured are a significant improvement over Anchor's profile
at the last rating action in June 2015 and a primary driver of the
upgrade. Anchor has won new, higher margin business over the last
year and is exiting some lower margin lines. Additionally, the
company has successfully renegotiated many contracts over the last
year leaving little business up for renewal through the end of 2017
and successfully completed various efficiency initiatives. While
proforma credit metrics are expected to deteriorate as a result of
the debt financed dividend, they will remain within the rating
triggers required for an upgrade and are expected to improve over
the next 12 months.
The B1 Corporate Family Rating reflects the high concentration of
sales, mature nature of the industry in the US and negative volume
trends in mass beer. The rating also reflects the company's
financial aggressiveness. Approximately 38% of the company's sales
come from two customers, 79% from the top ten customers and
approximately 46% from beer (23% from mass-market beer and 23% from
craft beer). The majority of the company's revenue is generated in
the mature US market with no exposure to faster growing and more
profitable emerging markets. Volumes have decreased in mass beer
for the last two years and are projected to continue to be
sluggish. The rating is also constrained by the company's
relatively small size compared to its rated competitors and margins
and free cash flow to debt that have been historically below its
primary rated competitor.
Strengths in the company's profile include a high percentage of
business under long-term contracts with full cost-pass through
provisions, long standing relationships with its top customers and
several blue-chip customers. Anchor has 98% of business under
long-term contract with cost pass-through provisions. The company
has an average relationship of 20 years with its top customers.
Anchor has won some new, higher margin business over the past 12
months and exited some lower margin business. The US glass
packaging industry is consolidated in the US with only three major
players and it is costly to ship glass packaging more than 200-300
miles.
The stable outlooks reflects an anticipation of additional volumes
from recent new business wins, benefits from cost cutting
initiatives and the dedication of free cash flow to debt
reduction.
The ratings could be downgraded if there is deterioration in the
credit metrics, a decline in the operating and competitive
environment, and/or the pursuit of aggressive financial policies.
The ratings could also be downgraded if there is a deterioration in
liquidity. Specifically, the ratings could be downgraded if funds
from operations to debt declines below 15%, debt to EBITDA rises
above 4.8 times, and/or EBITDA to interest expense declines below
4.5 times.
The ratings could be upgraded if there is evidence of a sustainable
improvement in credit metrics, relative to peers, within the
context of a stable operating and competitive environment.
Anchor's small size relative to peers may also constrain any
upgrade. Specifically, the ratings could be upgraded if funds from
operations to debt remains above 20%, debt to EBITDA declines to
below 4.0 times, and/or EBITDA to interest expense increases to
above 5.5 times.
The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass, and Plastic Containers published in
September 2015.
Headquartered in Tampa, Florida, Anchor Glass Container Corporation
is a North American manufacturer of premium glass packaging
products, serving the beer, liquor, food, beverage, ready-to-drink
and consumer end-markets. The company operates six manufacturing
facilities located in Florida, Georgia, Indiana, Minnesota, New
York and Oklahoma, in addition to an engineering and spare parts
facility in Illinois and a mold manufacturing facility in Ohio.
For the 12 months ended Dec. 31, 2015, Anchor generated
approximately $641 million in revenue. Anchor is a portfolio
company of KPS Capital Partners.
ANCHOR GLASS: S&P Lowers Rating on 1st-Lien Term Loan to 'BB-'
--------------------------------------------------------------
S&P Global Ratings revised its recovery rating on U.S. glass
packaging producer Anchor Glass Container Corp.'s first-lien term
loan to '3' from '2'. The '3' recovery rating indicates S&P's
expectation of meaningful (50%-70%; upper half of the range)
recovery for lenders in the event of a payment default.
At the same time, S&P lowered its issue-level rating on the
first-lien term loan to 'BB-' from 'BB' in accordance with S&P's
notching criteria for a '3' recovery rating.
These revisions follow Anchor Glass' announcement that it is
upsizing its proposed incremental first-lien term loan by $110
million, increasing the aggregate amount to $545 million. S&P
expects that Anchor Glass will use the proceeds from this loan to
fund a dividend to its shareholders and pay transaction-related
fees and expenses. The company's existing unrated $100 million
asset-based lending (ABL) revolving credit facility will remain in
place.
All of S&P's other ratings on Anchor Glass are unchanged. S&P
assess the company's business risk profile as fair and its
financial risk profile as aggressive, which is consistent with
S&P's expectation that the company will not increase its leverage
above 5x based on management's commitment and historical track
record. Pro forma for the transaction, S&P estimates that Anchor's
leverage will be roughly 4.3x, which in line with S&P's
expectations for the current ratings.
RECOVERY ANALYSIS
Key analytical factors
-- S&P has reviewed its recovery analysis for Anchor Glass in
light of the proposed incremental debt issuance.
-- S&P revised its recovery rating on the company's first-lien
term loan to '3' from '2' and lowered S&P's issue-level
rating on the loan to 'BB-' from 'BB', in accordance with
S&P's notching criteria.
-- The '3' recovery rating indicates S&P's expectation of
meaningful recovery (50%-70%; upper half of the range) in
the event of a payment default.
-- S&P continues to value the company on a going-concern basis
using a 5.5x multiple of our estimated emergence EBITDA.
-- S&P estimates that, by emergence, the company would be able
to improve its EBITDA to about $75 million.
Simulated default assumptions
-- Year of default: 2020
-- EBITDA at emergence: $75 million
-- EBITDA multiple: 5.5x
Simplified waterfall
-- Gross enterprise value at default: $413 million
-- Administrative costs: $21 million
-- Net enterprise value: $392 million
-- ABL borrowings: $31 million
-- Value available to first-lien debt claims: $361 million
-- First-lien term loan outstanding: $563 million
-- Recovery expectation: 50%-70% (upper half of the range)
Note: All debt amounts include six months of prepetition interest.
RATINGS LIST
Anchor Glass Container Corp.
Corporate Credit Rating BB-/Stable/--
Downgraded; Recovery Rating Revised
To From
Anchor Glass Container Corp.
$575 Mil. First-Lien Term Loan BB- BB
Recovery Rating 3H 2H
ATNA RESOURCES: Kendall Assets Not De Minimis, Committee Says
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of Atna Resources,
Inc., and its affiliates objects to the notice of proposed sale of
the Kendall property.
The Committee takes the view that the Kendall asset sale is not
within the spirit of the De Minimis asset sales motion as it does
involve over 300 acres of Debtor CR Kendall's property with a
ten-year lease commitment by that Debtor for shop building and work
yard. The offered price may fall within the range contemplated by
the De Minimis asset motion, but this asset itself and lease does
not, the Committee asserts.
Accordingly, the Committee recommends that notice should be given
to all creditors and parties in interest, especially since there is
a postpetition lease obligation for 10 years being signed as part
of the transaction, while the Committee is agreeable to a reduced
notice period and an expedited approval process.
The Committee also expresses concern that CR Kendall is unable,
postpetition, to pay the utility and personal property taxes on the
shop building it is retaining, and thus, requests for proper cash
flow projections that demonstrate CR Kendal can make the payments
over the 10 year term of the lease.
The Creditors' Committee is represented by:
Michael J. Guyerson, Esq.
Christian C. Onsager, Esq.
Gabrielle Palmer, Esq.
ONSAGER | GUYERSON | FLETCHER | JOHNSON
1801 Broadway, Suite 900
Denver, Colorado 80202
Telephone: (303) 512-1123
Fax: (303) 512-1129
Email: consager@OGFJ-law.com
mguyerson@OGFJ-law.com
gpalmer@OGFJ-law.com
About Atna Resources
Headquartered in Lakewood, Colorado, Atna Resources Ltd. --
http://www.atna.com/-- is engaged in all phases of the mining
business, including exploration, preparation of pre-feasibility and
feasibility studies, permitting, construction and development,
operation and final closure of mining properties.
The Company owns or controls various properties with gold
resources. The Company's production property includes Briggs Mine
California and Pinson Mine Property, Nevada. The Company's
development properties include Mag Pit at Pinson; Columbia Project,
Montana and Briggs Satellite Projects, California. Its exploration
properties include Sand Creek Uranium Joint Arrangement, Wyoming;
Blue Bird Prospect, Montana and Canadian Properties, Yukon and
British Columbia. Its Closure Property is Kendall, Montana. The
Briggs mine is located on approximately 156 unpatented claims,
including approximately 15 mill site claims, covering over 2,890
acres. The Company's Pinson Mine Property is located in Humboldt
County, Nevada, over 30 miles east of Winnemucca.
Atna Resources, Inc. and its direct and indirect subsidiaries filed
Chapter 11 bankruptcy petitions (Bankr. D. Colo. Proposed Lead Case
No. 15-22848) on Nov. 18, 2015. The petitions were signed by
Rodney D. Gloss as vice president & chief financial officer.
Atna also sought ancillary relief in Canada pursuant to the
Companies' Creditors Arrangement Act in the Supreme Court of
British Columbia in Vancouver, Canada.
In its Chapter 11 petition, Atna estimated assets in the range of
$10 million to $50 million and liabilities of $50 million to $100
million.
Squire Patton Boggs (US) LLP serves as counsel to the Debtors.
On Dec. 14, 2015, the Office of the United States Trustee for the
District of Colorado appointed a statutory committee of unsecured
creditors in the Chapter 11 Cases. The Committee tapped Onsager
Guyerson Fletcher Johnson as attorneys.
AURORA GAS: Involuntary Chapter 11 Case Summary
-----------------------------------------------
Alleged Debtor: Aurora Gas LLC
4645 Sweetwater Blvd, Ste 200
Sugarland, TX 77479
Case Number: 16-00130
Involuntary Chapter 11 Petition Date: May 3, 2016
Court: United States Bankruptcy Court
District of Alaska (Anchorage)
Petitioners' Counsel: Erik LeRoy, Esq.
ERIK LEROY P.C.
500 L Street, Suite 302
Anchorage, AK 99501
Tel: (907) 277-2006
Email: erik@alaskanbankruptcy.com
Petitioners Nature of Claim Claim Amount
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Aurora Well Service, LLC $132,335
1400 W. Benson Blvd, Ste 410
Anchorage, AK 99503
Shirleyville Enterprises, LLC $112,959
1400 W Benson Blvd, Ste 410
Anchorage, AK 99503
Tanks A Lot, Inc. $143,825
7723 Hwy 182E
Morgan City, LA 70380
B&L EQUIPMENT: Court OKs FIFC Premium Finance Agreement
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B&L Equipment Rentals, Inc. sought for and obtained from Judge Rene
Lastreto II, of the Eastern District of California, authorization
to enter into an Insurance Premium Finance Agreement with First
Insurance Funding Corporation ("FIFC").
The Debtor related that it had a Commercial Umbrella Liability
Insurance policy through Lexington Insurance Company ("Lexington")
and a General Liability Insurance policy and Worker's Compensation
Insurance policy through Zurich American Insurance Company
("Zurich") when it filed its Chapter 11 case. The Debtor further
related that the time has come for the Debto to renew its
Commercial Umbrella Liability Insurance, General Liability
Insurance and Worker's Compensation Insurance policies and pay the
premiums required for the insurance coverage.
The Debtor determined that it is in its best interest and the best
interest of the Chapter 11 estate for the Debtor to borrow money
needed to pay the premiums required for insurance coverage and not
reduce the cash on hand needed to pay other ordinary and necessary
business expenses.
FIFC will provide the Debtor with financing needed to renew the
Debtor's insurance policies pursuant to a Premium Finance
Agreement. Under the Premium Finance Agreement the total premium
amount is $511,478 and the total amount to be financed is
$409,182.40. The Debtor will be obligated to pay a total of
$416,911 to FIFC after paying a down payment of $102,295. The
money borrowed from FIFC will be paid through payments of $41,691
per month, beginning on March 22, 2016.
Judge Lastreto authorized the Debtor to grant a security interest
and first priority lien against the financed policies and any
additional premiums under the financed polices including all return
premiums, dividend payments, and loss payments which reduce
unearned premiums in favor of FIFC as collateral to secure
repayment of debt under the Premium Finance Agreement.
B&L Equipment Rentals, Inc., is represented by:
Leonard K. Welsh, Esq.
LAW OFFICES OF LEONARD K. WELSH
4550 California Avenue, Second Floor
Bakersfield, CA 93309
Telephone: (661)328-5328
E-mail: lwelsh@lkwelshlaw.com
About B&L Equipment Rentals
B&L Equipment Rentals, Inc. filed a Chapter 11 bankruptcy petition
(Bankr. E.D. Calif. Case No. 15-14685) on Nov. 30, 2015. The
petition was signed by Lawrence F. Jenkins as president. The
Debtor listed total assets of $17.14 million and total debts of
$5.02 million. The Law Office of Leonard K. Welsh represents the
Debtor as counsel. The case has been assigned to Judge Rene
Lastreto II.
Proofs of claim are due by April 5, 2016.
BH SUTTON: Two More Unsecured Creditors Appointed to Committee
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The U.S. trustee for Region 2 on May 3 appointed two more creditors
of BH Sutton Mezz LLC to serve on the official committee of
unsecured creditors.
The two unsecured creditors are:
(1) Adam Hakim
9 Dawson Ct.
W. Harrison, NY 10604
Telephone: (917) 340-1694
Email: adamh0319@gmail.com
(2) Jones Lang LaSalle Americas, Inc.
330 Madison Ave.
New York, NY 10017
Attn: Keith Kurland, Executive Vice President
Telephone: (212) 812-6519
Email: keith.kurland@am.jll.com
The bankruptcy watchdog had earlier appointed Pembrooke & Ives
Luxurious Interiors LLC, Desimone Consulting Engineering Group LLC
and S.M. Berger Architecture P.C. to the Creditors' Committee.
About BH Sutton
New York City-based BH Sutton Mezz LLC filed for Chapter 11
protection (Bankr. S.D. NY Case No. 16-10455) on Feb. 26, 2016.
The petition was signed by Herman Carlinsky, president. The Hon.
Sean H. Lane presides over the case. Joseph S. Maniscalco, Esq.,
at Lamonica Herbst & Maniscalco, LLP represents the Debtor in its
restructuring effort. The Debtor estimated assets at $100 million
to $500 million and debts at $10 million to $50 million.
BIOMED REALTY: Moody's Withdraws Ba1 Issuer Rating
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Moody's Investors Service has withdrawn BioMed Realty Trust, Inc.'s
Ba1 issuer rating, its shelves and the BioMed Realty, L.P. shelves.
There are no remaining ratings for any of the BioMed entities.
These ratings have been withdrawn:
BioMed Realty Trust, Inc. -- Issuer rating at Ba1; senior
unsecured shelf at (P)Ba1; subordinate shelf at (P)Ba2;
preferred stock shelf at (P)Ba2; Outlook, Negative.
BioMed Realty, L.P. -- Senior unsecured shelf at (P)Ba1;
subordinate shelf at (P)Ba2; Outlook, Negative.
RATINGS RATIONALE
Moody's has withdrawn the ratings for its own business reasons.
BROOKFIELD RESIDENTIAL: S&P Lowers CCR to 'B'; Outlook Stable
-------------------------------------------------------------
S&P Global Ratings said it lowered its corporate credit rating on
Calgary-based Brookfield Residential Properties Inc. to 'B' from
'B+'. The outlook is stable.
At the same time, S&P lowered its issue-level rating on the
company's senior unsecured debt to 'B+' from 'BB-'. The recovery
rating on the senior unsecured debt is '2', indicating S&P's
expectation for substantial (70% to 90%; high end of the range)
recovery to debtholders in the event of default.
"The stable outlook reflects our expectation for the company to
achieve growth in land sale and home sale volume in 2016 and 2017,
but for leverage to remain above 5x," said S&P Global Ratings
credit analyst Christopher Andrews. "We also assume the company
will maintain adequate liquidity through the peak building season
from its access to revolving facilities."
S&P' could take a negative rating action if conditions in the
company's Alberta markets worsen or overall land sale volume
materially undercuts S&P's expectations, such that debt to EBITDA
is sustained above 8x and EBITDA interest coverage below 1.5x, or
if S&P feels liquidity has become constrained. In addition, a
rating action could result from weaker conditions in Alberta or the
company's other markets causing S&P to reassess its view of its
business risk profile as weak.
S&P views a positive rating action as unlikely over the next 12
months. However, given the volatile and transaction-based nature
of the company's land and lot sales, S&P may consider a positive
outlook if volume and margins outperform its forecast such that S&P
believes the company will return to below 5x leverage on a much
shorter timeline than it currently expects.
BUCKSPORT GENERATION: Court OKs Continued Borrowing Under DIP Loan
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Bucksport Generation LLC sought for and obtained from Judge Peter
G. Cary of the U.S. Bankruptcy Court for the District of Maine,
continuing authorization to borrow from its existing Debtor In
Possession Financing with Aim Development (USA) LLC, as well as
authorization to continue using cash collateral.
Judge Cary authorized the Debtor to borrow the amounts indicated on
the Budget, through the week ending May 1, 2016.
The Debtor was previously authorized to obtain a $10,000,000
secured line of credit with AIM Development (USA) LLC, by virtue of
the Court's Final DIP Order.
The Debtor related that since entry of the Final DIP Order, it has
negotiated a new natural gas transmission contract with Bangor Gas
which significantly reduces its overhead but also compromises
ratemaking, collateral and contractual issues between those
parties. The Debtor further related that it has filed an adversary
complaint against General Electric International, Inc. ("GE").
The Debtor averred that both the Bangor Gas settlement and the GE
litigation represent significant steps toward reorganization and
the Debtor plans to file a plan and disclosure statement in the
near future. The Debtor required authority to take additional
advances under the DIP Loan and to use Cash Collateral to fund its
operations while it finalizes its restructuring plan and works
toward confirmation.
The Debtor told the Court that AIM continues to consent to the
Debtor's use of Cash Collateral. The Debtor further told the Court
that AIM continues to hold first and second priority security
interests in all of the Debtor's assets, except for the Bangor Gas
Collateral, in which AIM's second and third priority security
interests are junior to the Bangor Gas Lien.
Bucksport Generation LLC is represented by:
Robert J. Keach, Esq.
D. Sam Anderson, Esq.
Jessica Lewis, Esq.
BERNSTEIN, SHUR, SAWYER & NELSON, P.A.
100 Middle Street
P.O. Box 9729
Portland, ME 04104-5029
Telephone: (207)774-1200
E-mail: rkeach@bernsteinshur.com
sanderson@bernsteinshur.com
jlewis@bernsteinshur.com
About Bucksport Generation
Bucksport Generation LLC, an energy plant operator, filed Chapter
11 bankruptcy petition (Bankr. D. Maine Case No. 15-10802) on
Nov. 3, 2015. The petition was signed by Kyle E. Nenninger as
project manager. The Debtor estimates both assets and liabilities
in the range of $10 million to $50 million.
The Debtor has engaged Bernstein, Shur, Sawyer & Nelson, P.A. as
counsel.
Judge Peter G Cary is assigned to the case.
BUFFETS LLC: Judge to Hold Final Hearing on DIP Loan on May 27
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A U.S. bankruptcy judge will consider final approval of Buffets
LLC's request to get a loan from Alamo CRG, LLC at a court hearing
scheduled for May 27.
Judge Ronald King of the U.S. Bankruptcy Court for the Western
District of Texas will also consider at the hearing the company's
bid to use the lender's cash collateral.
Buffets has requested to borrow $2 million from Alamo and use to
support its operations during its bankruptcy case.
On March 10 and 28, Judge King issued interim orders that granted
Alamo liens on assets that were used as collateral for the loan.
On April 15, the bankruptcy judge issued another interim order,
which allowed Buffets to use the cash collateral until the final
hearing.
About Buffets LLC
Buffets LLC, et al., are one of the largest operators of
buffet-style restaurants in the U.S. The buffet restaurants,
located in 25 states, principally operate under the names Old
Country Buffet(R), Country Buffet(R), HomeTown(R) Buffet, Ryan's(R)
and Fire Mountain(R). These locations primarily offer self-service
buffets with entrees, sides, and desserts for an all-inclusive
price. In addition, Buffets owns and operates an 10-unit full
service, casual dining chain under the name Tahoe Joe's Famous
Steakhouse(R).
Buffets Holdings, Inc., filed for Chapter 11 relief in January 2008
and won confirmation of a reorganization plan in April 2009. In
January 2012, Buffets again sought Chapter 11 protection and
emerged from bankruptcy in July 2012.
In Aug. 19, 2015, Alamo Ovation, LLC acquired Buffets Restaurants
Holdings, Inc., and as a result of the merger, Buffets operated
over 300 restaurants in 35 states.
Down to 150 restaurants in 25 states after closing unprofitable
locations, Buffets LLC and its affiliated entities sought Chapter
11 protection (Bankr. W.D. Tex. Case No. Lead Case No. 16-50557) in
San Antonio, Texas, on March 7, 2016. The cases are assigned to
Judge Ronald B. King.
The Debtors have tapped Akerman, LLP as counsel, Bridgepoint
Consulting, LLC as financial advisor and Donlin, Recano & Company
as claims and noticing agent.
C COMPANY GENERAL: Proposes to Auction Off 5 Vehicles
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C Company General Contractors, LLC, on May 3, 2016, filed a motion
asking the U.S. Bankruptcy Court for the District of North Dakota
for approval to sell 5 vehicles (a 2012 Chevrolet Crew Cab, two
2011 Dodge 2500 Crew Cab Cummins, a 2014 Dodge 2500 Crew Cab Hemi,
and a 2012 Dodge 5500 Crew Cab Cummins) by auction on June 18,
2016. The auction will be conducted by Don Mauseth, at 2204 5th
Ave. N., Moorhead, MN. The Debtor seeks approval to Mr. Mauseth
his fees and expenses; it is estimated that the fees will be 8% of
the gross sale price, he will receive a buyer's premium of 5% from
the buyer, not to exceed $5000, and expenses of transportation of
the vehicles and expenses in detailing the vehicles readying them
for sale. The sale proceeds will be distributed to First
International Bank until his lien has been paid in full.
About C Company
C Company General Contractors, LLC sought protection under Chapter
11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the
District of North Dakota (Fargo) (Case No. 15-30554) on Dec. 23,
2015. The Debtor is represented by Kip M. Kaler, Esq., at Kaler
Doeling, PLLP. The case is assigned to Judge Shon Hastings. The
Debtor estimated assets of $0 to $50,000 and debt of $1 million to
$10 million.
C COMPANY GENERAL: Selling 2013 Ford F150 Crew Cab for $19,000
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C Company General Contractors, LLC, on May 3, 2016, filed a motion
asking the U.S. Bankruptcy Court for the District of North Dakota
for approval to sell (i) a 2013 Ford F150 Crew Cab 4x4 pickup to
Seekins Ford Lincoln for the sum of $19,000 and (i) a Mirage
trailer to Lauren Jasa McCright for the sum of $750. The vehicle
had an estimated value of $17,300 and the trailer had a value of
$750 in the Debtor's bankruptcy schedules.
About C Company
C Company General Contractors, LLC sought protection under Chapter
11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the
District of North Dakota (Fargo) (Case No. 15-30554) on Dec. 23,
2015. The Debtor is represented by Kip M. Kaler, Esq., at Kaler
Doeling, PLLP. The case is assigned to Judge Shon Hastings. The
Debtor estimated assets of $0 to $50,000 and debt of $1 million to
$10 million.
CAESARS ENTERTAINMENT: Parent Won't Get Shield as Talks Continue
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Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review,
reported that Caesars Entertainment Corp. won't get a break from
lawsuits seeking to force it to honor billions of dollars in debt
guarantees, but a bankruptcy judge didn't shut the door on
revisiting the issue if the litigation heats up.
According to the report, the casino company's bankrupt operating
unit declined to ask a Chicago bankruptcy judge to extend the
injunction protecting its parent, which isn't in bankruptcy, from
litigation brought by the unit's bondholders. The lawsuits, which
accuse Caesars Entertainment of looting its operating unit of
valuable assets at creditors' expense, are pending in a New York
federal court, the report related.
"There are no immediate trial dates, and there is no emergency that
necessitates the relief," said Jeffrey Zeiger, a lawyer for the
operating unit, though the unit may ask again later, the report
further related.
Caesars Entertainment, which disputes the looting allegations,
would have preferred a brief extension of the litigation shield,
lawyer Thomas Kreller told the judge, the report added. Mr.
Kreller cited "the added distraction" of having the lawsuits hang
over the company's head while it participates in ongoing
restructuring talks with the unit and creditors, the report said.
But the bankruptcy judge, A. Benjamin Goldgar, told Mr. Kreller
that because Caesars Entertainment isn't a debtor over which he has
jurisdiction, "you don't really have any right to ask me for this,"
the report added.
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.
CALIFORNIA STATEWIDE: S&P Hikes 2012A Bonds Rating From BB+
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Standard & Poor's Ratings Services raised its long-term rating to
'BBB-' from 'BB+' on the California Statewide Communities
Development Authority's school revenue bonds, series 2012A, issued
for Alliance for College-Ready Public Schools' (Alliance) 46th and
Main Project. The outlook is stable. The rating applies only to
the series 2012A bonds and not to Alliance as an organization.
"The rating action reflects our view of such factors as Alliance's
diverse and increasing enrollment and revenue base, robust
liquidity, track record of positive operations, and improved state
funding environment," said Standard & Poor's credit analyst Debra
Boyd.
The stable outlook reflects S&P's view that Alliance will continue
to attract sufficient students to generate an operating surplus on
a full-accrual basis and maintain liquidity and coverage levels at
levels commensurate with the rating.
CANEJAS S.E.: Further Hearing on Use of Cash Collateral May 10
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Canejas S.E. asked the U.S. Bankruptcy Court for the District of
Puerto Rico, for an interim order authorizing the Debtor to use
cash collateral. The Debtor also asked the Court to schedule a
hearing to consider the permanent use of cash collateral in the
Debtor's ordinary course of business.
The Debtor related that its main business is the lease of a
commercial real estate property located at Metro Office Park, Calle
1 #2, Guaynabo, Puerto Rico. It further related that prior to the
filing of the bankruptcy petition, the Debtor obtained a credit
facility in the principal amount of $9,379,303 with Westernbank
Puerto Rico, now Banco Popular de Puerto Rico ("BPPR"), which are
secured with liens over the real estate property. The Debtor added
that it also executed an assignment of rents as an additional
collateral in favor of Westernbank, now BPPR.
The Debtor contended that as of April 1, 2016, the total amount of
outstanding indebtedness to BPPR is $8,314,046. It further
contended that the monthly payments on the credit facility are
$49,320, including principal and interest at the rate of 4.75%.
The Debtor told the Court that it is currently leasing its real
estate property to various tenants. The Debtor further told the
Court that majority of these tenants make direct deposits of rents
to the Debtor's accounts at BPPR, and requested the Court's
permission to maintain the accounts open for the sole purpose of
receiving the rent deposits to avoid any disruption in the receipts
of rents.
Diego Chevere, the Debtor's Managing Partner, averred that the
Debtor receives a total monthly rent of $88,525. He further
averred that the Debtor needs to keep its expenses current during
the interim period in order to avoid any disruption to the
operations and move forward in the bankruptcy process.
The Debtor submitted an Interim Budget with a total cash outlay of
$103,354. The Debtor also submitted a six-month budget beginning
on May 2016 and ending on October 2016, which provided for a total
monthly cash outlay of $105,754, for each of the six months.
The Debtor requested the Court for authorization to use the cash
collateral in order to be able to continue operations, maintain the
real estate property and leases, to preserve the opportunity to
reorganize, pay the employees, taxes, bankruptcy professionals and
other related expenses.
The Court granted the Debtor's Motion for use of cash collateral,
on the condition that no oppositions will be filed by May 2, 2016
at 10:00 a.m. The Court ruled that should an objection be filed, a
hearing on the matter will be conducted on May 10, 2016 at 9:00
a.m.
Canejas S.E. is represented by:
Carmen D. Conde Torres, Esq.
Luisa S. Valle Castro, Esq.
C.CONDE & ASSOC.
254 San José Street, 5th Floor
Old San Juan, PR 00901
Telephone: (787)729-2900
Facsimile: (787)729-2203
E-mail: ls.valle@condelaw.com
About Canejas S.E.
Canejas, S.E., a single asset real estate, filed a Chapter 11
bankruptcy petition (Bankr. D. P.R. Case No. 16-02644) on April 4,
2016. The petition was signed by Diego Chevere as managing
partner. The Debtor listed total assets of $11.1 million and
total debts of $8.55 million. C. Conde & Assoc. represents the
Debtor as counsel. Judge Mildred Caban Flores is assigned to the
case.
CAPITOL LAKES: Court Rejects Banks' Bid to Terminate Exclusivity
----------------------------------------------------------------
Bankruptcy Judge Hon. Robert D. Martin denied the request of
Santander Bank, N.A. and KBC Bank, N.V. to terminate the periods
within which debtor Capitol Lakes Inc., has the exclusive right to
file and solicit acceptances of a Chapter 11 plan.
Santander Bank and KBC Bank, which filed the request in March, told
the Court that they filed the request to speed the proper
resolution of a case "that should never have been filed." The
Banks contend that the Chapter 11 Case was not commenced because
residents of the Debtor's continuing care retirement community were
at risk, the Debtor was facing imminent financial collapse or the
Banks were taking -- or even threatening -- remedial action.
Rather, this case was commenced for the sole purpose of making
money for Pacific Retirement Services, Inc. ("PRS"), the owner of
the Debtor. In doing so, the Debtor has created the very
uncertainty for Residents and creditors that the Debtor claims it
is trying to ameliorate.
The Banks also informed the Court that they have a bankruptcy-exit
Plan for the Debtor complete and ready to be filed upon entry of an
order granting their Motion to terminate exclusivity. The Banks
said they are prepared to share the draft Creditor Plan with the
Debtor and with the Committee but did not attached the draft to
their Motion in compliance with Section 1121(b) of the Bankruptcy
Code. The Banks offered to deliver the Creditor Plan to the Court
for in camera review at its request.
The Banks said the Debtor's Plan is a bad faith effort to benefit
PRS to the detriment of Residents and creditors and is
unconfirmable as a matter of law. The Banks argued that the
Debtor's Plan:
(i) impairs Residents;
(ii) impairs unsecured creditors; and
(iii) wipes out over $20 million in claims held by the Banks
who, just a few years ago, provided over $50 million to permit the
Debtor to renovate its facility to become the first class
continuing care retirement community that it is today.
Simultaneously, and for the sole benefit of PRS, the Debtor's
Plan:
a. abandons a management contract with PRS that would entitle
the Debtor to PRS's management services at a 50% discount for the
foreseeable future and proposes a new management contract with PRS,
the terms of which have not been disclosed and will not be
disclosed until shortly before the confirmation hearing; and
b. permits PRS to retain its interest in the Debtor in
exchange for a token capital contribution of $250,000.
The Banks said their own Plan will leave Residents and unsecured
creditors unimpaired.
"The Creditor Plan does the only thing that needs to be done in
this case -- adjust the Debtor's payments to the Banks to fit its
expected financial performance over the next five years. The
Creditor Plan proposes that the Debtor take advantage of its
contractual rights with PRS and assume the Management Agreement as
it is written, thus entitling the Debtor to PRS's management
services at a significant discount. The Creditor Plan even proposes
to allow PRS to keep its membership interest in the Debtor. In
other words, the Banks are prepared to propose a plan that leaves
every creditor, and even the sole equity holder, in exactly the
same position they were before this case was filed. The only
creditors that are impaired under the Creditor Plan are the Banks,"
the Banks said.
More specifically, the Creditor Plan will:
(i) Pay general unsecured creditors in full on the effective
date rather than over time.
(ii) Have the Debtor assume its Residency Agreements as-is,
without requiring the modifications being imposed on the Residents
by the Debtor.
(iii) Preserve PRS's membership interest in the Debtor, and
assume the Management Agreement with PRS3.
(iv) Extend the Banks' debt for five years at a reduced rate of
interest and eliminate principal payments during four of those
years, so that the Debtor can build cash and solidify its financial
footing.
Local Counsel to Santander Bank, N.A. and KBC Bank, N.V.:
Daniel J. McGarry, Esq.
Iana Vladimirova, Esq.
WHYTE HIRSCHBOECK DUDEK S.C.
33 E. Main St., Suite 300
Madison, WI 53701-1379
Telephone: (608) 234-6046
Facsimile: (608) 258-7138
E-mail: dmcgarry@whdlaw.com
ivladimirova@whdlaw.com
Lead counsel for KBC Bank, N.V.:
Vincent J. Marriott, Esq.
Brent Weisenberg, Esq.
BALLARD SPAHR LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103
Tel: (215) 864-8236
E-mail: marriott@ballardspahr.com
weisenbergb@ballardspahr.com
Lead counsel for Santander Bank, N.A.:
John R. Weiss, Esq.
DUANE MORRIS LLP
190 South LaSalle Street, Suite 3700
Chicago, IL 60603-3433
Tel: (312) 499-0148
E-mail: jrweiss@duanemorris.com
About Capitol Lakes
Capitol Lakes Inc. owns and operates a continuing care retirement
community ("CCRC") located in Madison, Wisconsin. The CCRC is
comprised of: (i) an urban high rise containing 105 independent
living units (the "Heights"), (ii) an apartment building
containing
52 additional independent living units (the "Main Gate"), (iii) an
assisted living residential facility containing 43 assisted living
units (the "Terraces"), of which 39 are single occupancy and 4 are
available for double occupancy, (iv) a skilled nursing facility
with 85 active skilled nursing beds licensed by the Wisconsin
Department of Health and Family Services and certified to
participate in the Medicare and Medicaid programs (the "Health
Center"), all located on a site of approximately 3.814 acres of
land owned by Capitol Lakes located in the heart of downtown
Madison, Wisconsin.
On Jan. 20, 2016, Capitol Lakes filed a Chapter 11 bankruptcy
petition (Bankr. W.D. Wisc. Case No. 16-10158). The case is
assigned to Judge Robert D. Martin.
As of Dec. 31, 2015, on a book value basis, Capitol Lakes has
$57.6
million in assets and $104.2 million in liabilities.
The Debtor has tapped DLA Piper LLP as its legal counsel, and Cain
Brothers & Company LLC as its financial advisor.
The Office of the U.S. Trustee appointed seven creditors to the
official committee of unsecured creditors. They are Margaret
Barker, John Burkhalter, Geri Dickson, Sally Drew, Patrick J.
Holzem, Judith Snyderman and M. Crawford Young. Murphy Desmond
S.C. represents the committee.
CLIFFS NATURAL: Agrees to Settle Shareholder Derivative Actions
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Cliffs Natural Resources Inc., on April 20, 2016, entered into a
Stipulation and Agreement of Settlement with the plaintiffs and
individual defendants in the purported shareholder derivative
actions captioned Black v. Carrabba, et al., No. CV-14-827803,
Asmussen v. Carrabba, et al., No. CV-14-829259, Williams v.
Carrabba, et al., No. CV-14-829499, currently pending in the Court
of Common Pleas of Cuyahoga County, Ohio under the consolidated
caption In re Cliffs Natural Resources Inc. Shareholder Derivative
Litigation, Lead Case No. CV-14-827803. Under the terms of the
proposed settlement provided for in the Stipulation, the Company
will implement corporate governance measures that have been
developed to address and prevent or reduce the potential for a
recurrence of the alleged wrongdoing that is the subject of the
Actions. The measures include, but are not limited to, initiation
and/or formalization of certain corporate governance structural
elements, certain continuing education concepts, formal adoption
and publication of a charter for the Strategy Committee of the
Board, and enhancement and/or clarification of duties and
responsibilities of the Company's Board of Directors and its
committees.
The Stipulation is subject to the approval by the Court. If the
Court gives its approval to the Stipulation, the Actions will be
dismissed with prejudice.
A copy of the Notice of Proposed Settlement is available for free
at http://is.gd/xlb4el
About Cliffs Natural Resources
Cliffs Natural Resources Inc. --
http://www.cliffsnaturalresources.com/-- is a mining and natural
resources company. The Company is a major supplier of iron ore
pellets to the U.S. steel industry from its mines and pellet plants
located in Michigan and Minnesota. Cliffs also produces
low-volatile metallurgical coal in the U.S. from its mines located
in West Virginia and Alabama. Additionally, Cliffs operates an
iron ore mining complex in Western Australia and owns two
non-operating iron ore mines in Eastern Canada. Driven by the core
values of social, environmental and capital stewardship, Cliffs'
employees endeavor to provide all stakeholders operating and
financial transparency.
On Jan. 27, 2015, Bloom Lake General Partner Limited and certain of
its affiliates, including Cliffs Quebec Iron Mining ULC commenced
restructuring proceedings in Montreal, Quebec, under the Companies'
Creditors Arrangement Act (Canada). The initial CCAA order will
address the Bloom Lake Group's immediate liquidity issues and
permit the Bloom Lake Group to preserve and protect its assets for
the benefit of all stakeholders while restructuring and sale
options are explored.
Cliffs Natural reported a net loss attributable to Cliffs common
shareholders of $788 million on $2.01 billion of revenues for the
year ended Dec. 31, 2015, compared to a net loss attributable to
Cliffs common shareholders of $7.27 billion on $3.37 billion of
revenues for the year ended Dec. 31, 2014.
As of Dec. 31, 2015, Cliffs had $2.13 billion in total assets,
$3.94 billion in total liabilities and a total deficit of $1.81
billion.
* * *
As reported by the TCR on April 19, 2016, Standard & Poor's Ratings
Services said it raised its corporate credit rating on
Cleveland-based Cliffs Natural Resources Inc. to 'CCC+' from 'SD'.
Cliffs Natural carries a 'Ca' corporate family rating from Moody's
Investors Service.
COLUMBUS REGIONAL: Fitch Affirms 'BB+' Rating on 2008/2010 Bonds
----------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' rating on these bonds issued
by the Medical Center Hospital Authority on behalf of Columbus
Regional Healthcare System (dba Columbus Regional Health, CRH):
-- $102.7 million series 2008*;
-- $167.5 million series 2010*.
*The bonds are insured by Assured Guaranty, whose Insurer Financial
Strength (IFS) is not rated by Fitch.
The Rating Outlook is Stable.
CRH also has an additional $22.4 million bank loan which is on
parity with the outstanding bonds and not rated.
SECURITY
The bonds are secured by a pledge of net revenues, a funded debt
service reserve for both the 2010 and 2008 bonds, and a leasehold
agreement on certain obligated group property.
KEY RATING DRIVERS
SHARP IMPROVEMENT IN PROFITABILITY: For the nine-months ended March
31, 2016, CRH has generated sharp improvement in operating
profitability with operating and operating EBITDA margins of 2.2%
and 11.9%, respectively, compared to a negative 8.9% operating
margin and a 2.2% operating EBITDA margin in fiscal 2015. The
improvement in performance reflects cost savings from initiatives
implemented in the second half of fiscal 2015, which extracted
approximately $46.7 million of expenses on an annualized basis.
HIGHLY COMPETITIVE MARKET: CRH operates in a very competitive
market place, which is characterized by a modest demographic
profile, a dominant managed-care payor, and a large competitor; all
factors which Fitch believes constrain CRH's operating flexibility.
From 2012 - 2014, CRH experienced erosion in inpatient market
share in the primary service area, from 58% to 45%. Moreover,
CRH's main competitor, St Francis Hospital was acquired by
LifePoint Health, Inc. (Senior Notes rated 'BB/RR4'/Outlook Stable)
in January 2016 which may further increase competition for patients
in the market.
LIGHT LIQUIDITY METRICS: At March 31, 2016, CRH had unrestricted
cash and investments of $150.0 million, which is unchanged from
fiscal year end (FYE) 2015 and equates to 138 days cash on hand, a
5.7x cushion ratio and 50% cash to debt.
ELEVATED DEBT BURDEN: Several of CRH's debt metrics are elevated
relative to Fitch's 'BBB' category medians. MADS of 5.9% of
annualized FY 2016 revenues and debt to capitalization of 71.6% at
March 31, are elevated relative to Fitch's below investment grade
medians. However, the improved interim profitability has resulted
in improved coverage of maximum annual debt service (MADS) by
EBITDA of 2.2x through the nine month interim period.
RATING SENSITIVITIES
SUSTAINED IMPROVEMENT: Columbus Regional Health (CRH) is developing
a longer-term clinical efficiency improvement plan which has an
opportunity target of $23.7 million and is expected to be realized
in fiscal 2017 and 2018. Sustainment of CRH's improved operating
performance resulting in debt service coverage above 2.0x could
lead to a positive rating action.
ON-GOING CAPITAL NEEDS: Capital spending is expected to increase to
$25 - $30 million annually with strategic projects at its Northside
and Midtown campuses, a portion of which may be funded with debt.
Fitch believes CRH's debt capacity is limited unless it can sustain
recent improved operating profitability.
SECURED NECESSARY WAIVERS: CRH received waivers from the bond
insurer and the bank for covenant violations under the bond and
bank documents. Additionally, CRH will need to refinance/ extend
its $22.4 million taxable bank note which matures in September
2016. Compliance with operating covenants and successful
refinancing/extending the taxable bank note would be required
before an upward movement in the rating.
CREDIT PROFILE
CRH is a health care system with a total of 732 licensed beds and
$430.9 million of operating revenues (fiscal 2015) located in
Columbus, GA. The system includes 632-bed Midtown Medical Center,
100-bed Northside Medical Center, the John B. Amos cancer center, a
foundation, a medical group, and other various subsidiaries and
services. The obligated group represents 96.9% of total assets and
99.7% of total operating revenues.
IMPORVED INTERIM PROFITABILITY
Through the nine-month interim period, CRH has generated sharply
improved operating profitability relative to fiscal 2015 and the
2014 interim period. Through March 31st, CRH generated operating
income of $7.1 million on total revenues of $323.8 million, or a
2.2% operating margin which is much improved from the prior year
period's $21.7 million loss from operations on total revenues of
$328.6 million. Management attributes the improved results to its
successful cost containment initiatives which reduced expenses by
$46.7 million on an annualized basis. The cost reductions were
focused in salaries and benefits ($18.2 million), purchased
services, supplies and pharmacy ($8.3 million) and other areas.
Further, CRH has engaged a management consultant focused on
clinical process improvement which has identified over $23 million
of performance improvement opportunities. Generating and
sustaining the identified cost savings and efficiencies would be a
key factor in upward movement in the rating.
Fitch notes that CRH receives material supplemental funding
revenues. From 2012 - 2014, CRH received annual supplemental
funding revenues of between $37.1 million and $39 million. In
fiscal 2015, supplemental funding revenues were $41.9 million.
Major funding programs are Medicare and Medicaid disproportionate
share hospital (DSH) payments ($24.3 million in FY 2015) and the
Muscogee County Indigent Care Program (ICP) which is sourced from a
non-repealable tax levy of mills ($13.4 million in FY 2015). While
funding levels have increased slightly over the last few years and
are not expected to change in the near term, it inherently makes
the corporation vulnerable to changes in state and federal
programs.
WAIVERS SECURED
In fiscal 2015, CRH violated its debt service coverage and debt to
capitalization covenants. CRH secured waivers from both the bond
insurer and the bank lender. Fitch expects that CRH will be in
compliance with its debt service coverage ratio going forward;
however, CRH may continue to miss its debt to capitalization
requirement of 65%. CRH's debt to capitalization ratio has been
negatively impacted due to increased pension liabilities and the
write down of goodwill related to the closure of Doctor's Hospital.
CRH expects to obtain waivers from the bank and the bond insurer
related to any additional missed covenants. The $22.8 million bank
note matures in September 2016. Fitch expects CRH to successfully
extend or refinance the debt.
LIGHT LIQUIDITY
Liquidity has declined from FYE 2014 despite the sale of a medical
office building in fiscal 2015, which generated $34.5 million in
cash. Unrestricted cash and investments at March 31, 2016 was $150
million, which remains unchanged from FYE 2015 and $166 million at
FYE 2014.
Growth in unrestricted cash and investments has been constrained in
the nine-month interim period due to a $2.7 million swap
termination payment, $10 million related to the settlement of a
'qui tam' lawsuit in October 2015 and repayment of a $6.2 million
draw under its bank line of credit.
The qui tam settlement totals $29 million, with $10 million paid in
fiscal 2016 and an additional $3 million a year to be paid over the
next five years. The remaining $4 million is variable depending on
certain performance metrics.
HIGHLY COMETITIVE MARKET
CRH operates in a very competitive market place, which is
characterized by a modest demographic profile, a dominant
managed-care payor, and a large competitor; all factors which Fitch
believes constrain CRH's operating flexibility. Household income
and the unemployment rate in Columbus lag both the state and
national average. The weak demographic profile of CRH's service
area is reflected in a payor mix that is composed of 77% Medicare,
Medicaid and self-pay payors.
Furthermore, the market is highly competitive. St Francis Hospital
and CRH had near equal inpatient market share positions in 2014.
However, from 2012 - 2014, CRH has experienced erosion in inpatient
market share in the primary service area from 58% to 45%. While
CRH maintains leading market positions in women's and children's
and oncology, St Francis has strong market positions in
cardiovascular, orthopedics and neurosciences. CRH's main
competitor, St Francis Hospital was acquired by LifePoint Health in
January 2016 which may further increase competition for patients in
the market. Finally, the commercial payor market is dominated by
Blue Cross/Blue Shield which has a 70% market share in Georgia and
limits both CRH's and St Francis' negotiating leverage.
Over the longer term, CRH is expected to develop its Northside
campus, which benefits from a service area with healthy demographic
indicators and expands CRH's geographic reach. This should
alleviate some of CRH's exposure to Medicaid, which is a high
[20.9%] of fiscal 2015 gross revenues.
DEBT PROFILE
As of March 31, 2016, CRH had $307.9 million in total debt,
including all notes and capital leases. The $270.2 million in
bonded debt is fixed rate, while the $22.8 million in bank notes
are variable rate, with a Sept. 1 2016 renewal date. Maximum
annual debt service (MADS) per the indenture and bank calculation
is equal to $25 million, which includes approximately $4.5 million
in notes payable and capital leases. CRH has a $10 million line of
credit for cash flow needs, which had no draws outstanding as of
March 31st, compared to $6.6 million outstanding at FYE 2015.
CROWN MEDIA: Amends 2015 Annual Report
--------------------------------------
Crown Media Holdings, Inc., filed with the Securities and Exchange
Commission an amended annual report on Form 10-K/A for the fiscal
year ended Dec. 31, 2015, to replace in its entirety the
information provided in Part III of the Original Filing, which was
previously expected to be incorporated by reference from the
Company's 2016 Annual Meeting Proxy Statement.
Part III contains information about:
* Directors, Executive Officers and Corporate Governance
* Executive Compensation
* Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
* Certain Relationships and Related Transactions, and Director
Independence
* Principal Accountant Fees and Services
A full-text copy of the Form 10-K/A is available for free at:
http://is.gd/sxTbky
About Crown Media
Crown Media Holdings, Inc., is the corporate parent for the
portfolio of cable networks and related businesses under Crown
Media Family Networks. The company currently operates and
distributes Hallmark Channel in both high definition (HD) and
standard definition (SD) to 86 million subscribers in the U.S.
Hallmark Channel is the nation's leading destination for quality
family programming with an ambitious slate of TV movies and
specials; original scripted series, including Cedar Cove, When
Calls the Heart, and Signed, Sealed, Delivered; as well as some of
television's most beloved sitcoms and series. Hallmark Channel's
sibling network, Hallmark Movie Channel, is available in 54
million homes in HD and SD. One of America's fastest-growing cable
networks, Hallmark Movie Channel provides family-friendly original
movies with a mix of original films, classic theatrical releases,
and presentations from the acclaimed Hallmark Hall of Fame
library. In addition, Crown Media Family Networks includes the
online offerings of http://www.HallmarkChannel.com/and
http://www.HallmarkMovieChannel.com/
Crown Media reported net income of $86.1 million on $479 million of
net total revenue for the year ended Dec. 31, 2015, compared to net
income of $94.5 million on $416 million of net total revenue for
the year ended Dec. 31, 2014. As of Dec. 31, 2015, Crown Media had
$1.08 billion in total assets, $509 million in total liabilities
and $580 million in total stockholders' equity.
Bankruptcy Warning
"If our operating performance declines, we may in the future need
to seek waivers from the required lenders under our 2015 Credit
Agreement to avoid being in default. We cannot assure that such
waivers will be granted or that we will otherwise be able to avoid
a default. If we are unable to generate sufficient cash flow and
are otherwise unable to obtain funds necessary to meet required
payments of principal, premium, if any, or interest on such
indebtedness, or if we otherwise fail to comply with the various
covenants, including financial and operating covenants, in the
instruments governing our indebtedness, including our 2015 Credit
Agreement, we could be in default under the terms of the agreements
governing such indebtedness. In the event of such default, the
holders of such indebtedness could elect to declare all of the
funds borrowed thereunder to be due and payable, together with any
accrued and unpaid interest, the lenders under our 2015 Credit
Agreement could elect to terminate their commitments, cease making
further loans, foreclose on our assets pledged to such lenders to
secure our obligations under the 2015 Credit Agreement, in each
case, which could force us into voluntary or involuntary bankruptcy
or cause us to discontinue operations or seek a purchaser of our
business or assets. In addition, a default under our 2015 Credit
Agreement would trigger a cross default under our other agreements
and could trigger a cross default under any agreements governing
our future indebtedness," the Company stated in its annual report
for the year ended Dec. 31, 2015.
* * *
As reported by the TCR on July 3, 2015, Standard & Poor's Ratings
Services said that it raised its corporate credit rating on Crown
Media Holdings Inc. to 'BB-' from 'B+'. "The upgrade reflects
Crown Media's improved financial risk profile," said Standard &
Poor's credit analyst Naveen Sarma.
As reported by the TCR on July 2, 2014, Moody's Investors Service
upgraded the Corporate Family Rating (CFR) of Crown Media
Holdings, Inc. to B1 from B2, its Probability of Default Rating to
B1-PD from B2-PD, and instrument ratings. The outlook is stable.
The upgrade incorporates evidence of traction with the original
programming strategy and better than expected performance, which,
combined with debt reduction, improved the credit profile.
CROWN MEDIA: Common Stock Delisted from NASDAQ
----------------------------------------------
The NASDAQ Stock Market LLC filed with the Securities and Exchange
Commission a Form 25 to remove from listing or registration shares
of Class A common stock of Crown Media Holdings Inc.
About Crown Media
Crown Media Holdings, Inc., is the corporate parent for the
portfolio of cable networks and related businesses under Crown
Media Family Networks. The company currently operates and
distributes Hallmark Channel in both high definition (HD) and
standard definition (SD) to 86 million subscribers in the U.S.
Hallmark Channel is the nation's leading destination for quality
family programming with an ambitious slate of TV movies and
specials; original scripted series, including Cedar Cove, When
Calls the Heart, and Signed, Sealed, Delivered; as well as some of
television's most beloved sitcoms and series. Hallmark Channel's
sibling network, Hallmark Movie Channel, is available in 54
million homes in HD and SD. One of America's fastest-growing cable
networks, Hallmark Movie Channel provides family-friendly original
movies with a mix of original films, classic theatrical releases,
and presentations from the acclaimed Hallmark Hall of Fame
library. In addition, Crown Media Family Networks includes the
online offerings of http://www.HallmarkChannel.com/and
http://www.HallmarkMovieChannel.com/
Crown Media reported net income of $86.1 million on $479 million of
net total revenue for the year ended Dec. 31, 2015, compared to net
income of $94.5 million on $416 million of net total revenue for
the year ended Dec. 31, 2014. As of Dec. 31, 2015, Crown Media had
$1.08 billion in total assets, $509 million in total liabilities
and $580 million in total stockholders' equity.
Bankruptcy Warning
"If our operating performance declines, we may in the future need
to seek waivers from the required lenders under our 2015 Credit
Agreement to avoid being in default. We cannot assure that such
waivers will be granted or that we will otherwise be able to avoid
a default. If we are unable to generate sufficient cash flow and
are otherwise unable to obtain funds necessary to meet required
payments of principal, premium, if any, or interest on such
indebtedness, or if we otherwise fail to comply with the various
covenants, including financial and operating covenants, in the
instruments governing our indebtedness, including our 2015 Credit
Agreement, we could be in default under the terms of the agreements
governing such indebtedness. In the event of such default, the
holders of such indebtedness could elect to declare all of the
funds borrowed thereunder to be due and payable, together with any
accrued and unpaid interest, the lenders under our 2015 Credit
Agreement could elect to terminate their commitments, cease making
further loans, foreclose on our assets pledged to such lenders to
secure our obligations under the 2015 Credit Agreement, in each
case, which could force us into voluntary or involuntary bankruptcy
or cause us to discontinue operations or seek a purchaser of our
business or assets. In addition, a default under our 2015 Credit
Agreement would trigger a cross default under our other agreements
and could trigger a cross default under any agreements governing
our future indebtedness," the Company stated in its annual report
for the year ended Dec. 31, 2015.
* * *
As reported by the TCR on July 3, 2015, Standard & Poor's Ratings
Services said that it raised its corporate credit rating on Crown
Media Holdings Inc. to 'BB-' from 'B+'. "The upgrade reflects
Crown Media's improved financial risk profile," said Standard &
Poor's credit analyst Naveen Sarma.
As reported by the TCR on July 2, 2014, Moody's Investors Service
upgraded the Corporate Family Rating (CFR) of Crown Media
Holdings, Inc. to B1 from B2, its Probability of Default Rating to
B1-PD from B2-PD, and instrument ratings. The outlook is stable.
The upgrade incorporates evidence of traction with the original
programming strategy and better than expected performance, which,
combined with debt reduction, improved the credit profile.
CTI BIOPHARMA: May Issue 18 Million Shares Under Plan
-----------------------------------------------------
CTI Biopharma Corp. filed with the Securities and Exchange
Commission a Form S-8 registration statement to register 18,000,000
additional shares of Common Stock authorized for issuance under the
Company's 2015 Equity Incentive Plan, as amended and restated. At
the 2016 Annual Meeting of Shareholders of the Company held on
April 29, 2016, the Company's shareholders approved an amendment to
the Plan to increase the number of shares available for issuance
under the Plan by such number of shares. A copy of the Form S-8
prospectus is available for free at:
http://is.gd/44w2ZH
About CTI BioPharma
CTI BioPharma Corp. (NASDAQ and MTA: CTIC) --
http://www.ctibiopharma.com/-- formerly known as Cell
Therapeutics, Inc., is a biopharmaceutical company focused on
the acquisition, development and commercialization of novel
targeted therapies covering a spectrum of blood-related cancers
that offer a unique benefit to patients and healthcare providers.
The Company has a commercial presence in Europe and a late-stage
development pipeline, including pacritinib, CTI's lead product
candidate that is currently being studied in a Phase 3 program for
the treatment of patients with myelofibrosis. CTI BioPharma is
headquartered in Seattle, Washington, with offices in London and
Milan under the name CTI Life Sciences Limited.
CTI Biopharma reported a net loss attributable to common
shareholders of $122.62 million on $16.11 million of total revenues
for the year ended Dec. 31, 2015, compared to a net loss
attributable to common shareholders of $95.99 million on $60.07
million of total revenues for the year ended Dec. 31, 2014.
As of Dec. 31, 2015, the Company had $144.33 million in total
assets, $96.91 million in total liabilities and $47.41 million in
total shareholders' equity.
The Company's independent registered public accounting firm
included an explanatory paragraph in its reports on its
consolidated financial statements for each of the years ended
Dec. 31, 2007, through Dec. 31, 2011, and for the year ended
Dec. 31, 2014, regarding their substantial doubt as to the
Company's ability to continue as a going concern. The Company said
that although its independent registered public accounting firm
removed this going concern explanatory paragraph in its report on
our Dec. 31, 2015, consolidated financial statements, the Company
expects to continue to need to raise additional financing to fund
its operations and satisfy obligations as they become due.
According to the Company, the inclusion of a going concern
explanatory paragraph in future years may negatively impact the
trading price of its common stock and make it more difficult, time
consuming or expensive to obtain necessary financing, and the
Company cannot guarantee that it will not receive such an
explanatory paragraph in the future.
CTI BIOPHARMA: Reports Results of Annual Meeting of Shareholders
----------------------------------------------------------------
CTI BioPharma Corp. announced results from its annual meeting of
shareholders held on Friday, April 29, 2016.
At the Annual Meeting, shareholders elected James A. Bianco, M.D.,
Richard L. Love, Philip M. Nudelman, Ph.D., Matthew D. Perry, Jack
W. Singer, M.D., Frederick W. Telling, Ph.D. and Reed V. Tuckson,
M.D., F.A.C.P. to serve on CTI BioPharma's Board of Directors for
the ensuing year. In addition, the shareholders (i) approved an
amendment to CTI BioPharma's amended and restated articles of
incorporation to increase the total number of authorized shares and
the total number of authorized shares of common stock, (ii)
approved an amendment and restatement of CTI BioPharma's 2015
Equity Incentive Plan, (iii) ratified the selection of Marcum LLP
as CTI BioPharma's independent auditors for the year ending
December 31, 2016 and (iv) approved, by non-binding advisory vote,
the compensation of CTI BioPharma's named executive officers.
CTI BioPharma has filed with the Secretary of State of the State of
Washington an amendment to CTI BioPharma's articles of
incorporation to reflect an increase in authorized shares and
authorized shares of common stock.
CTI BioPharma has filed a Current Report on Form 8-K with the U.S.
Securities and Exchange Commission regarding its results from the
Annual Meeting, a copy of which is available for free at:
http://is.gd/tjHKRu
About CTI BioPharma
CTI BioPharma Corp. (NASDAQ and MTA: CTIC) --
http://www.ctibiopharma.com/-- formerly known as Cell
Therapeutics, Inc., is a biopharmaceutical company focused on
the acquisition, development and commercialization of novel
targeted therapies covering a spectrum of blood-related cancers
that offer a unique benefit to patients and healthcare providers.
The Company has a commercial presence in Europe and a late-stage
development pipeline, including pacritinib, CTI's lead product
candidate that is currently being studied in a Phase 3 program for
the treatment of patients with myelofibrosis. CTI BioPharma is
headquartered in Seattle, Washington, with offices in London and
Milan under the name CTI Life Sciences Limited.
CTI Biopharma reported a net loss attributable to common
shareholders of $122.62 million on $16.11 million of total revenues
for the year ended Dec. 31, 2015, compared to a net loss
attributable to common shareholders of $95.99 million on $60.07
million of total revenues for the year ended Dec. 31, 2014.
As of Dec. 31, 2015, the Company had $144.33 million in total
assets, $96.91 million in total liabilities and $47.41 million in
total shareholders' equity.
The Company's independent registered public accounting firm
included an explanatory paragraph in its reports on its
consolidated financial statements for each of the years ended
Dec. 31, 2007, through Dec. 31, 2011, and for the year ended
Dec. 31, 2014, regarding their substantial doubt as to the
Company's ability to continue as a going concern. The Company said
that although its independent registered public accounting firm
removed this going concern explanatory paragraph in its report on
our Dec. 31, 2015, consolidated financial statements, the Company
expects to continue to need to raise additional financing to fund
its operations and satisfy obligations as they become due.
According to the Company, the inclusion of a going concern
explanatory paragraph in future years may negatively impact the
trading price of its common stock and make it more difficult, time
consuming or expensive to obtain necessary financing, and the
Company cannot guarantee that it will not receive such an
explanatory paragraph in the future.
DDMG ESTATE: U.S. Trustee Demands Filing of Ch. 11 Plan
-------------------------------------------------------
Andrew R. Vara, United States Trustee for Region 3, asks the U.S.
Bankruptcy Court for the District of Delaware, to compel debtors
DDMG Estate f/k/a Digital Domain Media Group, et al., to file a
Chapter 11 Plan, or in the alternative, convert or dismiss the
Chapter 11 case.
Mr. Vara relates that the Debtors effectuated several Section 363
sales of various items of real and personal property of the Estate,
including patents and de minimis assets, and the Official Committee
of Unsecured Creditors has prosecuted certain causes of action and
initiated certain adversary proceedings to obtain and collect
estate assets. He further relates that to date, no Chapter 11 plan
has been filed.
"The U.S. Trustee seeks to compel the filing a Chapter 11 plan
because 1,305 days have passed since the Petition Date and no
Chapter 11 plan has been filed. In the event that the Debtors, or
the Committee, cannot commit to pursuing an actual Chapter 11 plan,
these cases should either be converted or dismissed... Given the
long passage of time, the likelihood of a viable Chapter 11 plan
wanes. The filing of a Chapter 11 plan and the initiation of the
Chapter 11 plan confirmation process will advance these cases and
will draw creditors closer to a possible distribution on their
claims. In the event that the Debtors (or the Committee) cannot
effect a Chapter 11 plan within a reasonable period of time, and it
is found and determined that the Debtors lack a reasonable
likelihood of rehabilitation and further time spent in chapter 11
will merely result in a continuing loss to or diminution of these
estates, these cases should be converted or dismissed whichever is
in the best interest of justice and will best serve creditors," Mr.
Vara argues.
The United States Trustee's Motion is scheduled for hearing on May
9, 2016 at 9:15 a.m. The deadline for the filing of objections to
the United States Trustee's Motion is set on May 2, 2016 at 4:00
p.m.
Andrew R. Vara, the U.S. Trustee for Region 3, is represented by:
Richard L. Schepacarter, Esq.
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
E-mail: Richard.Schepacarter@usdoj.gov
About Digital Domain
Port St. Lucie, Florida-based Digital Domain Media Group, Inc. --
http://www.digitaldomain.com/-- engaged in the creation of
original content animation feature films, and development of
computer-generated imagery for feature films and trans-media
advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11,
2012, to sell its business for $15 million to Searchlight Capital
Partners LP, subject to higher and better offers. The Company
disclosed assets of $205 million and liabilities totaling $214
million.
The Debtors also sought ancillary relief in Canada, pursuant to the
Companies' Creditors Arrangement Act in the Supreme Court of
British Columbia, Vancouver Registry.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent. An official committee of unsecured
creditors appointed in the case is represented by lawyers at
Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP.
At a bankruptcy auction, the principal part of the business was
purchased by a joint venture between Galloping Horse America LLC,
an affiliate of Beijing Galloping Horse Co., and an affiliate of
Reliance Capital Ltd., based in Mumbai. The $36.7 million total
value of the contact includes $3.6 million to cure defaults
on contracts and $2.9 million in reimbursement of payroll costs.
As
the result of a settlement negotiated by the unsecured creditors'
committee with secured lenders, there will be some recovery for
the committee's constituency.
DIFFUSION PHARMACEUTICALS: Amends 2015 Annual Report
----------------------------------------------------
Diffusion Pharmaceuticals Inc. filed with the Securities and
Exchange Commission an amended annual report on Form 10-K for the
year ended Dec. 31, 2015, to provide the information required by
Items 10 through 14 of Part III. This information was previously
omitted from the Original Filing in reliance on General Instruction
G(3) to Form 10-K, which permits the information in the
above-referenced items to be incorporated in the Form 10-K by
reference from a definitive proxy statement involving the election
of directors if such statement is filed no later than 120 days
after its fiscal year end.
Part III of the Annual Report describes the following:
* Directors, Executive Officers and Corporate Governance
* Executive Compensation
* Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
* Certain Relationships and Related Transactions, and Director
Independence
* Principal Accountant Fees and Services
A full-text copy of the Form 10-K/A is available for free at:
http://is.gd/3WpQ79
About Diffusion Pharmaceuticals
Diffusion Pharmaceuticals, as surviving entity in its merger with
RestorGenex, is a clinical stage biotechnology company focused on
extending the life expectancy of cancer patients by improving the
effectiveness of current standard-of-care treatments including
radiation therapy and chemotherapy. Diffusion is developing its
lead drug, trans sodium crocetinate (TSC), for use in the many
cancer types in which tumor hypoxia (oxygen deprivation) is known
to diminish the effectiveness of current treatments. TSC targets
the cancer's hypoxic micro-environment, re-oxygenating
treatment-resistant tissue and making the cancer cells more
vulnerable to the therapeutic effects of treatments such as
radiation therapy and chemotherapy, without the apparent addition
of any serious side effects. TSC has potential application in
other indications involving hypoxia, such as stroke and
neurodegenerative diseases.
Diffusion reported a net loss of $23.8 million on $0 of revenues
for the year ended Dec. 31, 2015, compared to a net loss of $14.4
million on $0 of revenues for the year ended Dec. 31, 2014.
As of Dec. 31, 2015, Diffusion had $19.9 million in total assets,
$3.47 million in total liabilities and $16.43 million in total
stockholders' equity.
Deloitte & Touche LLP, in Chicago, Illinois, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2015, citing that the Company's recurring
losses from operations and its present financial resources raise
substantial doubt about its ability to continue as a going concern.
DOVER DOWNS: Stockholders Re-Elect Two Directors
------------------------------------------------
At the annual meeting of stockholders of Dover Downs Gaming &
Entertainment, Inc., held on April 27, 2016, Patrick J. Bagley and
Timothy R. Horne were re-elected as directors. Directors whose
terms of office continued after the meeting were Denis McGlynn,
Jeffrey W. Rollins, R. Randall Rollins, Richard K. Struthers and
Henry B. Tippie.
The Company's stockholders approved, on an advisory basis, the
compensation of its named executive officers, according to a Form
8-K report filed with the Securities and Exchange Commission.
About Dover Downs
Owned by Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE),
Dover Downs Hotel & Casino(R) is a gaming and entertainment resort
destination in the Mid-Atlantic region. Gaming operations consist
of approximately 2,500 slots and a full complement of table games
including poker. The AAA-rated Four Diamond hotel is Delaware's
largest with 500 luxurious rooms/suites and amenities including a
full-service spa/salon, concert hall and 41,500 sq. ft. of multi-
use event space. Live, world-class harness racing is featured
November through April, and horse racing is simulcast year-round.
Professional football parlay betting is accepted during the
season. Additional property amenities include multiple
restaurants from fine dining to casual fare, bars/lounges and
retail shops. Visit http://www.doverdowns.com/
As of March 31, 2016, Dover Downs had $168 million in total assets,
$53.2 million in total liabiltiies and $115 million in total
stockholders' equity.
The Company's auditors, KPMG LLP, in Philadelphia, Pennsylvania,
issued a "going concern" qualification on the consolidated
financial statements for the year ended Dec. 31, 2015, citing that
the Company's credit facility expires on Sept. 30, 2016, and at
present no agreement has been reached to refinance the debt.
DRAFTDAY FANTASY: Agrees to Acquire Rant Inc. for $5 Million
------------------------------------------------------------
DraftDay Fantasy Sports Inc. has agreed to acquire Rant Inc. in a
move to become a market leader in social publishing. As a
complement to its existing Wetpaint publishing business, Rant
brings an expanded reach into sports, lifestyle, and entertainment
publishing. In their best months combined, Wetpaint and Rant have
received over 50 million monthly visitors to their properties. The
combined properties currently have approximately 15 million fans on
their Facebook pages and generate up to 300 million video views per
month. Wetpaint and Rant will have an editorial team of 30 writers
and will be able to draw upon content from more than 400
pre-screened writers.
Rant, Inc. is a leading digital publisher that publishes original
content in 13 different verticals, most notably in sports,
entertainment, pets, cars and food. Rant has delivered up to 11
monthly visits per visitor across its network, twice as much as
industry leaders Buzzfeed and Vox in some months. Adweek reported
that Rant’s flagship RantSports.com property was ranked #1 by
Quantcast for target digital ad buying for the 2015 holiday season,
indicating the power of reaching a targeted audience.
Wetpaint (Wetpaint.com) is the fastest growing entertainment news
destination for millennial women. Covering the latest in
television, music, and pop culture, Wetpaint reaches over 10
million entertainment enthusiasts on a monthly basis. Armed with
our proprietary and patented Social Distribution System
(algorithm), the Wetpaint editorial team publishes and socially
optimizes more than 60 pieces of content daily. With over 10
million followers on Facebook, Wetpaint shows up within social
feeds and drives traffic to the website.
Robert F.X. Sillerman, executive chairman and chief executive
officer, commented, "The merger of Wetpaint and Rant creates a
formidable entrant in the exploding social publishing realm. While
each enjoys unique and often unparalleled reach and access,
together they create a broad and highly relevant source of must
read content for highly desirable audiences. Leap frogging into
the upper echelon of a growing market, we fully expect this to be
the spring board for more growth and acquisitions."
Brett Rosin, Founder and CEO of Rant, Inc. stated "We are excited
to further accelerate our growth in social publishing and digital
media through the combination of Rant and Wetpaint. Rant's
audience reach across all verticals, Wetpaint's social distribution
platforms, and both teams' ability to create innovative and
engaging content will create a phenomenal opportunity for users and
advertisers alike. Our team is hungry to remain one of the fastest
growing media companies in America since 2011. The combination
with Wetpaint will provide significantly enhanced scale to continue
that growth."
DraftDay Fantasy Sports Inc. has agreed to acquire Rant for $5
million in cash and shares of DraftDay common stock equal to
between 20%-24% of the fully diluted shares outstanding. Because
the agreement is subject to a number of conditions that must be
satisfied by each of the parties, there is no assurance that the
proposed terms may not be changed or that any transaction may be
consummated.
Additional information is available for free at:
http://is.gd/yeIDsr
About DraftDay
DraftDay Fantasy Sports Inc., formerly known as Viggle Inc., offers
a high quality daily fantasy sports experience directly to
consumers and to businesses desiring turnkey solutions to new
revenue streams. DraftDay Fantasy Sports Inc. is the largest
shareholder of DraftDay Gaming Group, with a 44% stake. Sportech
owns 35%. By combining and capitalizing on the well-established
operational business assets of DraftDay and Sportech, the new
DraftDay is well-positioned to become a significant player in the
explosive fantasy sports market. DraftDay has paid out over $30
million in prizes with increased player retention and brand
loyalty. DraftDay Fantasy Sports also operates MyGuy and Viggle
Football both of which offer real-time interactive participation
with professional and college football games; Wetpaint, which
offers entertainment and celebrity news; and Choose Digital, a
digital marketplace platform that allows companies to incorporate
digital content into existing rewards and loyalty programs in
support of marketing and sales initiatives.
As of Dec. 31, 2015, Draftday had $38.81 million in total assets,
$60.08 million in total liabilities, $12.28 million in series C
convertible redeemable preferred stock, and a $33.54 million total
stockholders' deficit.
"The Company is unlikely to generate significant revenue or
earnings in the immediate or foreseeable future. The continuation
of the Company as a going concern is dependent upon the continued
financial support from its stockholders, the ability of the Company
to obtain necessary equity or debt financing to continue
development of its business and to generate revenue. Management
intends to raise additional funds through equity and/or debt
offerings until sustainable revenues are developed. There is no
assurance such equity and/or debt offerings will be successful and
therefore there is substantial doubt about the Company's ability to
continue as a going concern within one year after the financial
statements are issued," according to the Company's quarterly report
for the period ended Dec. 31, 2015.
DREAMWORKS ANIMATION: S&P Puts 'B-' CCR on CreditWatch Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its ratings,
including its 'B-' corporate credit rating, on Glendale,
Calif.–based DreamWorks Animation SKG Inc. on CreditWatch with
positive implications.
As part of the transaction, S&P expects the new parent company to
likely repay all or part of its 6.875% senior notes due 2020, given
the relatively high cost of the debt, which would likely result in
our raising the rating.
"The CreditWatch action follows Comcast's announcement that its
subsidiary, NBCU, has agreed to purchase DreamWorks for $3.8
billion in cash," said Standard & Poor's credit analyst Dylan
Singh.
The studio will become part of the Universal Filmed Entertainment
Group, which includes Universal Pictures, Fandango, and
NBCUniversal Brand Development. S&P believes the transaction,
which is expected to close by the end of 2016, could result in an
improvement in S&P's business risk and financial risk assessment.
Additionally, S&P believes that Comcast is likely to fully absorb
the business and repay all or part of its 6.875% senior notes due
2020 given the high debt cost.
The corporate credit rating on DreamWorks reflects S&P's view of
the company's vulnerable business risk profile due to its reduced
film slate, small scale, and volatile profitability. The combined
entity would have a much stronger business risk profile based on
Comcast's significant scale and diversity and the distribution
synergies for DreamWorks, along with increased support to invest in
franchise properties, and will potentially expand DreamWorks'
currently small slate of two films per year. The company's
financial risk profile of highly leveraged reflects S&P's
expectation of modestly negative free cash flow in 2016, positive
EBITDA, and adjusted leverage in the mid-5x area. S&P expects the
combined entity will have much lower leverage with pro forma
adjusted debt to EBITDA at Comcast of 2.4x, assuming the
acquisition is fully debt-financed.
"The CreditWatch placement reflects our view that upon the
completion of the transaction, Comcast would likely pay down all or
part DreamWorks' outstanding debt facilities, given the relatively
high coupon on the notes. From a business profile standpoint, we
would view the transaction positively, as it brings distribution
synergies for DreamWorks, along with increased support to invest in
franchise properties, and will potentially expand DreamWorks'
currently small slate of two films per year. We expect to resolve
the CreditWatch listing with the completion of the transaction,
when more information regarding the new capital structure becomes
available. We will also review our expectations for operating
performance, the company's strategic importance to its new parent
and its financial policy before resolving the CreditWatch listing,"
S&P said.
EFRON DORADO: Asks Court to Extend Plan Exclusivity to Aug. 15
--------------------------------------------------------------
Efron Dorado, S.E., asks the U.S. Bankruptcy Court for the District
of Puerto Rico to extend the exclusive periods during which the
Debtor may file and solicit acceptances of a plan of reorganization
by 90 days -- from May 18, 2016 through and including August 15,
2016, of the exclusive period to file the Plan and up to November
11, 2016, to seek acceptances of the Plan, without prejudice to
seek further extensions.
Although substantial work has been done to accomplish the filing of
the Plan and disclosure statement, the Debtor tells the Court that,
in order to present a feasible and consensual plan of
reorganization, it is still in the process of reconciling its
claims and considering if an administrative consolidation with its
affiliate Norfe Group, Corp., with Efron Dorado, S.E. as the
surviving entity, is necessary, as well as disposing of its
contested matters with Puerto Rico Asset Portfolio 2013-1
International, LLC.
Moreover, the Debtor is in the process of evaluating various
alternatives for financing, which will provide the feasibility to
its operations and to its Plan.
HERMANN D. BAUER ALVAREZ, Esq.-- herman@oneillborges.com and
rebeca.rodriguez@oneillborges.com -- represents creditor PR Asset
Portfolio 2013-1 International SUB I, LLC
JOSE RAUL CANCIO BIGAS -- jraulcancio@ccsllp.com and
lmercado@ccsllp.com -- represents Interested Party Dorado Cinema,
Corp.
CARMEN PRISCILLA FIGUEROA BELL -- cfigueroa@crimpr.net and
cpfbkcy@gmail.com -- represents Creditor CRIM
MONSITA LECAROZ ARRIBAS -- ustpregion21.hr.ecf@usdoj.gov
Danna Enid Planas Ocasio -- dplanas@ccsllp.com -- represents
Interested Party Dorado Cinema, Corp.
JUAN C SALICHS POU -- jsalichs@splawpr.com and
jcslawfirm@onelinkpr.net -- represents Creditor Wal-Mart Puerto
Rico, Inc.
ANGEL SOSA BAEZ -- asosa@tcmrslaw.com -- represents Stockholder
Madeleine Candelario
FERNANDO O ZAMBRANA AVILES -- zambrana@inmigracionpuertorico.com --
represents Creditor P.C.A. Consulting, Inc.
NAYUAN ZOUAIRABANI TRINIDAD -- nayuan.zouairabani@oneillborges.com,
docket_clerk@oneillborges.com; sharday.rivera@oneillborges.com;
luis.marini@oneillborges.com -- represents Creditor PR Asset
Portfolio 2013-1 International SUB I, LLC
CHARLES A. CUPRILL-HERNANDEZ and MOHAMMAD S. YASSIN --
ccuprill@cuprill.com and m.yassin@cuprill.com and
yassin.mohammad@gmail.com -- represent Debtor EFRON DORADO SE
About Efron Dorado Se
Efron Dorado Se, based in San Juan, Puerto Rico, filed for Chapter
11 bankruptcy protection (Bankr. D.P.R. Case No. 16-00283) on Jan.
20, 2016. The petition was signed by David Efron, partner.
Charles Alfred Cuprill, Esq., at Charles A Cuprill, PSC Law
Office,
serves as its bankruptcy counsel.
In its petition, the Debtor listed total assets of $33.2 million
and total debt of $15.2 million. According to the schedules, the
Debtor owns the shopping mall known as Paseo Del Plata Shopping
Center located in Dorado, Puerto Rico; a parcel of land consisting
of 80 Cuerdas, identified as Quintas De Dorado; and a parcel of
land consisting of 30 Cuerdas known as Hernandez Farm.
ENDLESS POSSIBILITIES: Court Extends Plan Exclusivity to July 5
---------------------------------------------------------------
At the behest of Endless Possibilities, LLC, Judge Arthur B.
Federman of the U.S. Bankruptcy Court for the Western District of
Missouri extended the Debtor's 120-Day Exclusivity Period for
filing a Plan of Reorganization and Disclosure Statement to July 5,
2016.
Endless Possibilities, LLC filed a Chapter 11 petition (Bankr. W.D.
Mo. Case No. 15-42927) on October 6, 2015, and is represented by:
Robert E. Arnold, III, Esq.
Arnold Law Firm LLC
525 E. Kansas City Road
Olathe, KS 66061
Tel: 913-764-8500
Fax: 913-764-8508
E-mail: rarnold@arnold-lawfirm.com
- and -
Colin N. Gotham, Esq.
Evans & Mullinix, P.A.
7225 Renner Road, Suite 200
Shawnee, KS 66217
Tel: 913-962-8700
Fax: 913-962-8701
E-mail: Cgotham@emlawkc.com
ENERGY & EXPLORATION: Crady Jewett Represents Spartan, Texas CES
----------------------------------------------------------------
Crady, Jewett & McCulley, LLP, filed with the U.S. Bankruptcy Court
for the Northern District of Texas its verified statement pursuant
to Rule 2019 of the Federal Rules of Bankruptcy Procedure, stating
that it represents multiple creditors of Energy & Exploration
Partners, Inc., et al.
The creditors, each holding a claim against one or more of the
Debtors for services and materials furnished to Debtors, are:
a. Spartan Energy Services LLC dba Spartan Flow Control
2901 Johnston Street, Suite 4001
Lafayette, Louisiana 70503
b. Texas CES, Inc. d/b/a Mercer Well Services
P.O. Box 1299
Gainesville, Texas 76241-1299
Crady Jewett can be reached at:
Crady, Jewett & McCulley, LLP
William R. Sudela, Esq.
E-mail: wsudela@cjmlaw.com
J. Daniel Long, Esq.
E-mail: dlong@cjmlaw.com
2727 Allen Parkway, Suite 1700
Houston, Texas 77019-2125
Tel: (713) 739-7007
Fax: (713) 739-8403
About Energy & Exploration
Energy & Exploration Partners, Inc., Energy & Exploration
Partners,
LLC and Energy & Exploration Partners Operating GP, LLC filed
Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Proposed Lead
Case No. 15-44931) on Dec. 7, 2015. John R. Castellano signed the
petition as interim chief financial officer. Judge Russell F.
Nelms has been assigned the case.
Energy & Exploration Partners, Inc. disclosed $222.74 million in
assets and $1.19 billion in liabilities in its schedules of assets
and liabilities.
The Debtors own approximately 61,323 net acres in Texas and
Wyoming. In Texas, the Debtors' operations are located throughout
Madison, Grimes, Leon, Houston and Walker Counties, where the
Debtors are pursuing opportunities in the Buda-Rose stacked
comingled play, the Woodbine sandstone, the Eagle Ford shale and
other stacked formations in the region. As of the Petition Date,
the Debtors employ approximately 59 people across their various
operations.
The Debtors have engaged Bracewell & Giuliani, LLP as counsel,
Evercore Group LLC as financial advisor, AP Services, LLC as
restructuring advisor, Ernst & Young as tax advisor, Hein &
Associates as independent auditor and Prime Clerk LLC as notice,
claims and balloting agent.
* * *
Under Energy & Exploration Partners, Inc., et al.'s First Amended
Plan of Reorganization, holders of Class 5 - General Unsecured
Claims are projected to recover 4.6% of their total allowed
claims.
The Debtors, on the Effective Date, will transfer $2,250,000 to
the Creditor Trust, which amount will be used to (a) administer
the
Credit Trust Assets for the benefit of Holders of Allowed General
Unsecured Claims and pay all Creditor Trust Expenses; and (b) to
fund distributions to Holders of Class A Interests.
ENERGY & EXPLORATION: Lenders Object to Trustee's Fee Review Bid
----------------------------------------------------------------
The postpetition lenders and the ad hoc group of term loan lenders
to Energy & Exploration Partners, Inc., et al., ask the U.S.
Bankruptcy Court for the Northern District of Texas, Fort Worth
Division, to dismiss, or, in the alternative, object to the U.S.
Trustee's Amended Motion to Review Lender's Fees, challenging
certain fees and expenses of Weil, Gotshal & Manges LLP, as counsel
to the DIP Lenders and the Ad Hoc Group.
On January 29, 2016, after over a month of complex negotiations,
the Court approved a Final DIP Order over the objection of the U.S.
Trustee. The Final DIP Order permitted the Debtors to enter into
the much needed Final DIP Facility, providing them the liquidity
necessary to avoid a potential liquidation of their assets. The
Final DIP Order included two heavily negotiated provisions -- that
this Court appropriately described as something akin to an
"origination fee" -- that provided for payment of (i) the
prepetition and postpetition fees and expenses incurred by the DIP
Lenders' professionals as part of the terms of the DIP Credit
Facility and (ii) the prepetition and postpetition fees and
expenses of the Prepetition Secured Lenders as a form of adequate
protection.
According to the Lenders, these provisions render most, if not all,
of the arguments put forward by the U.S. Trustee in the Fee Review
Motion eligible to be dismissed as either moot or pursuant to the
doctrine of res judicata.
In light of this, Weil, as counsel to the DIP Lenders and the Ad
Hoc Group, sought to reach a consensual resolution with the U.S.
Trustee of the issues raised in the Fee Review Motion. The Lenders
say attorneys at Weil did so despite having already voluntarily
reduced the amount billed to the Debtors in the disputed Invoice by
approximately 10 percent as a good faith effort to limit the impact
on the Debtors' estates. Though the intervening Final DIP Order
clearly resolved most, if not all, of the arguments made in the Fee
Review Motion, the U.S. Trustee has dismissed all requests from the
Ad Hoc Group and DIP Lenders to withdraw or even limit the scope of
the Fee Review Motion, the Lenders tell the Court. Thus, the Ad
Hoc Group and the DIP Lenders filed a Response, seeking either
dismissal of the Fee Review Motion, or in the alternative,
objecting to the Fee Review Motion and seeking payment of their
professional fees and expenses -- subject to a review by the U.S.
Trustee for reasonableness in the ordinary course -- as provided
for in the Final DIP Order.
The Lenders are represented by:
Alfredo R. Perez, Esq.
WEIL, GOTSHAL & MANGES LLP
700 Louisiana Street, Suite 1700
Houston, TX 77002-2784
Tel: (713) 546-5000
Fax: (713) 224-9511
Email: alfredo.perez@weil.com
-- and --
Matthew S. Barr, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
Email: matt.barr@weil.com
-- and --
Stephen A. Youngman, Esq.
WEIL, GOTSHAL & MANGES LLP
200 Crescent Court, Suite 300
Dallas, TX 75201
Telephone: (214) 746-7700
Facsimile: (214) 746-7777
Email: stephen.youngman@weil.com
About Energy & Exploration
Energy & Exploration Partners, Inc., Energy & Exploration
Partners,
LLC and Energy & Exploration Partners Operating GP, LLC filed
Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Proposed Lead
Case No. 15-44931) on Dec. 7, 2015. John R. Castellano Signed the
petition as interim chief financial officer. Judge Russell F.
Nelms has been assigned the case.
The Debtors own approximately 61,323 net acres in Texas and
Wyoming. In Texas, the Debtors' operations are located throughout
Madison, Grimes, Leon, Houston and Walker Counties, where the
Debtors are pursuing opportunities in the Buda-Rose stacked
comingled play, the Woodbine sandstone, the Eagle Ford shale and
other stacked formations in the region. As of the Petition Date,
the Debtors employ approximately 59 people across their various
operations.
The Debtors have engaged Bracewell & Giuliani, LLP as counsel,
Evercore Group LLC as financial advisor, AP Services, LLC as
restructuring advisor, Ernst & Young as tax advisor, Hein &
Associates as independent auditor and Prime Clerk LLC as notice,
claims and balloting agent.
* * *
Under Energy & Exploration Partners, Inc., et al.'s First Amended
Plan of Reorganization, holders of Class 5 - General Unsecured
Claims are projected to recover 4.6% of their total allowed
claims.
The Debtors, on the Effective Date, will transfer $2,250,000 to
the Creditor Trust, which amount will be used to (a) administer
the
Credit Trust Assets for the benefit of Holders of Allowed General
Unsecured Claims and pay all Creditor Trust Expenses; and (b) to
fund distributions to Holders of Class A Interests.
ENERGY FUTURE: Regulators to Decide Whether to Review Oncor Deal
----------------------------------------------------------------
Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review,
reported that Texas energy regulators will decide on May 19 whether
to review the ruling that killed the $17 billion takeover of Oncor,
a prize asset of bankrupt Energy Future Holdings Corp.
According to the report, with Oncor now up for grabs by creditors
of the Dallas Energy giant, as well as outside investors, action in
the Public Utility Commission of Texas could be the last chance to
salvage a deal that has been in the works for months. The state
PUC approved the takeover of Oncor earlier this year but added
conditions that caused investors to close their checkbooks and walk
away, the report related.
As previously reported by The Troubled Company Reporter, citing a
DBR report, Energy Future told a bankruptcy judge on April 28
investors won't go through with the planned $17 billion buyout of
its Oncor transmissions business -- an investment opportunity that
Energy Future hoped would ease its exit from chapter 11.
The Associated Press reported that the Oncor deal, which will see
Energy Futures selling its Oncor power distribution business for
about $19 billion, required financing from a group of investors in
order to close by April 30. While Oncor is considered a crown
jewel asset, the Public Utility Commission of Texas imposed
conditions for approving the deal that have discouraged the
investors, the AP said.
According to the DBR, conditions put on the deal by the Public
Utility Commission of Texas caused Energy Future creditors to walk
away from the opportunity to buy Oncor, a thriving major piece of
the Texas energy infrastructure, Energy Future lawyer Marc
Kieselstein said at a hearing in the U.S. Bankruptcy Court in
Wilmington, Del.
Mr. Kieselstein told the bankruptcy judge the company is moving
toward an alternate route for exiting bankruptcy because of talks
with investors that make it "crystal clear" the deal is dead, the
DBR related. It would also be a blow to a coalition of major
creditors who had looked to make up their losses on the big Dallas
electricity company with future profits from the Oncor, which they
hope to acquire, the DBR said.
Thomas Lauria, a bondholder lawyer and one of the chief architects
of the Oncor buyout, said investors have yet to make a formal
decision to pull out. Discussions continue, he said, and a deal is
still possible, the DBR related. However, the Oncor buyout, one
of
the largest merger-and-acquisition deals ever to grow out of a
bankruptcy case will be on life support and only swift action by
the Public Utility Commission can save it, the DBR noted.
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.
FOREST PARK SOUTHLAKE: No Auction Prior to Sale Hearing
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Forth
Worth Division, entered an order modifying Forest Park Medical
Center at Southlake, LLC's bidding procedures to, among other
things, provide that there will be no auction to held prior to the
hearing to consider the sale of its hospital assets.
Forest Park Medical Center at Southlake, LLC, is represented by:
Stephen M. Pezanosky, Esq.
Ian T. Peck, Esq.
Jarom J. Yates , Esq.
HAYNES AND BOONE, LLP
301 Commerce Street, Suite 2600
Fort Worth, TX 76102
Telephone: 817.347.6600
Facsimile: 817.347.6650
Email: stephen.pezanosky@haynesboone.com
ian.peck@haynesboone.com
jarom.yates@haynesboone.com
About Forest Park Medical Center
Forest Park Medical Center at Southlake, LLC, owns and operates a
54 private bed state-of-the-art medical facility, including 10
family suites and 6 intensive care beds, located at 421 East Texas
114 Frontage Road, Southlake, Texas, and commonly known as Forest
Park Medical Center at Southlake. The Hospital is a licensed, full
service, acute-care medical facility with an emergency room, full
service imaging and lab, twelve operating rooms and two procedure
rooms. The Hospital provides all manner of in-patient and
out-patient services and treatments, including primarily elective
scheduled out-patient surgery. The Hospital was opened in June of
2013, and since that time has performed over 15,000 surgeries and
provided non-surgical procedures, x-rays, lab work, ER, and related
services to numerous other patients.
Forest Park Medical Center at Southlake, LLC, filed a Chapter 11
bankruptcy petition (Bankr. N.D. Tex. Case No. 16-40273) on Jan.
19, 2016. Charles Nasem, the CEO, signed the petition. Judge
Russell F. Nelms has been assigned the case.
The Debtor estimated assets and liabilities in the range of $10
million to $50 million.
Haynes and Boone, LLP, serves as counsel to the Debtor.
GAHC3 Southlake TX Hospital LLC is the Debtor's largest unsecured
creditor, with more than $11.7 million in claims. A list of the
Debtor's 20 largest unsecured creditors is available at
http://is.gd/IIdEIF
FOREST PARK SOUTHLAKE: Seeks to Sell Hospital Assets for $9-Mil.
----------------------------------------------------------------
Forest Park Medical Center at Southlake, LLC, seeks authority from
the Bankruptcy Court to sell certain of their assets to an entity
that will be formed by Methodist Hospitals of Dallas, d/b/a
Methodist Health System.
The Debtor owns and operates a 54 private bed state-of-the-art
medical facility, including 10 family suites and 6 intensive care
beds, located at 421 East Texas 114 Frontage Road, Southlake,
Texas, and commonly known as Forest Park Medical Center at
Southlake.
Pursuant to the APA, the Purchaser will acquire substantially all
of the Debtor's operating assets, subject to certain adjustments,
for (a) $9,000,000, (b) the payment of all cure costs associated
with executory contracts to be assumed and assigned, and (c) the
assumption or payment of certain liabilities, including the
assumption of over $8,600,000 in secured debt relating to certain
equipment agreements. The Purchaser also expects to extend offers
of employment to the majority of the Debtor's on-site employees.
In line with the sale, the Debtor also seeks Court authority to
assume and assign certain executory contracts and unexpired leases
relating to the Hospital, especially since the Debtor has leased
the Hospital from GAHC3 Southlake Texas Hospital, LLC, until
December 31, 2034. The Purchaser and GAHC3 are also in the process
of negotiating an agreement to either amend the Lease or to enter
into a new lease agreement.
Furthermore, the Debtor asks for the Court's approval for the
payment of a breakup fee in the amount of $500,000, which is
approximately 3% of the total consideration provided to the Debtor
under the APA. According to the Debtor, the Breakup Fee was a
material condition of the Purchaser's entry into the APA.
The APA also provides that the closing is contingent on the entry
into a transition services agreement between and among the
Purchaser, FPMC Services, LLC and Vibrant Healthcare Southlake,
LLC.
The APA also contains an exclusivity provision requiring that the
auction contemplated under the Bidding Procedures be cancelled and
that the Debtor seek approval of the Sale without further marketing
the Assets for the Debtor did not receive any other letters of
intent and believes that further delay will create significant
additional expense for the estate. Further, the DIP Lender and the
majority of the doctors that conduct procedures at the hospital
have expressed support for the Sale to Purchaser.
Forest Park Medical Center at Southlake, LLC is represented by:
Stephen M. Pezanosky, Esq.
Ian T. Peck, Esq.
Jarom J. Yates, Esq.
HAYNES AND BOONE, LLP
301 Commerce Street, Suite 2600
Fort Worth, TX 76102
Telephone: 817.347.6600
Facsimile: 817.347.6650
Email: stephen.pezanosky@haynesboone.com
ian.peck@haynesboone.com
jarom.yates@haynesboone.com
About Forest Park Medical Center
Forest Park Medical Center at Southlake, LLC, owns and operates a
54 private bed state-of-the-art medical facility, including 10
family suites and 6 intensive care beds, located at 421 East Texas
114 Frontage Road, Southlake, Texas, and commonly known as Forest
Park Medical Center at Southlake. The Hospital is a licensed, full
service, acute-care medical facility with an emergency room, full
service imaging and lab, twelve operating rooms and two procedure
rooms. The Hospital provides all manner of in-patient and
out-patient services and treatments, including primarily elective
scheduled out-patient surgery. The Hospital was opened in June of
2013, and since that time has performed over 15,000 surgeries and
provided non-surgical procedures, x-rays, lab work, ER, and related
services to numerous other patients.
Forest Park Medical Center at Southlake, LLC, filed a Chapter 11
bankruptcy petition (Bankr. N.D. Tex. Case No. 16-40273) on Jan.
19, 2016. Charles Nasem, the CEO, signed the petition. Judge
Russell F. Nelms has been assigned the case.
The Debtor estimated assets and liabilities in the range of $10
million to $50 million.
Haynes and Boone, LLP, serves as counsel to the Debtor.
FREESEAS INC: Delays Filing of 2015 Annual Report
-------------------------------------------------
FreeSeas Inc. filed with the Securities and Exchange Commission a
Notification of Late Filing on Form 12b-25 with respect to its
annual report on Form 20-F for the year ended Dec. 31, 2015. The
Company said the compilation, dissemination and review of the
information required to be presented in the Form 20-F for the
relevant fiscal year has imposed time constraints that have
rendered timely filing of the Form 20-F impracticable without undue
hardship and expense to the Company. The Company undertakes the
responsibility to file such annual report no later than 15 days
after its original due date.
About FreeSeas Inc.
Headquartered in Athens, Greece, FreeSeas Inc., formerly known as
Adventure Holdings S.A., was incorporated in the Marshall Islands
on April 23, 2004, for the purpose of being the ultimate holding
company of ship-owning companies. The management of FreeSeas'
vessels is performed by Free Bulkers S.A., a Marshall Islands
company that is controlled by Ion G. Varouxakis, the Company's
Chairman, President and CEO, and one of the Company's principal
shareholders.
The Company's fleet consists of six Handysize vessels and one
Handymax vessel that carry a variety of drybulk commodities,
including iron ore, grain and coal, which are referred to as
"major bulks," as well as bauxite, phosphate, fertilizers, steel
products, cement, sugar and rice, or "minor bulks." As of
Oct. 12, 2012, the aggregate dwt of the Company's operational
fleet is approximately 197,200 dwt and the average age of its
fleet is 15 years.
Freeseas reported a net loss of $12.7 million in 2014, a net loss
of $48.7 million in 2013 and a net loss of $30.9 million in 2012.
As of June 30, 2015, the Company had $41.4 million in total assets,
$32.2 million in total liabilities and $9.22 million in total
shareholders' equity.
RBSM LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2014, citing that the Company has incurred recurring operating
losses and has a working capital deficiency. In addition, the
Company has failed to meet scheduled payment obligations under its
loan facilities and has not complied with certain covenants
included in its loan agreements. Furthermore, the vast majority of
the Company's assets are considered to be highly illiquid and if
the Company were forced to liquidate, the amount realized by the
Company could be substantially lower that the carrying value of
these assets. Also, the Company has disclosed alternative methods
of testing the carrying value of its vessels for purposes of
testing for impairment during the year ended Dec. 31, 2014.
These conditions among others raise substantial doubt about the
Company's ability to continue as a going concern.
GAMING & LEISURE: Moody's Assigns Ba1 Rating on $825MM Loan
-----------------------------------------------------------
Moody's Investors Service has assigned a Ba1 rating to the $825
million A-1 Term Loan issued by GLP Capital, L.P., the operating
subsidiary of Gaming and Leisure Properties, Inc. (GLPI). The
outlook is stable. This term loan was part of the financing used
in the REIT's acquisition of the real estate of Pinnacle
Entertainment in a deal valued at almost $5 billion.
This rating was assigned with a stable outlook:
GLP Capital, L.P. -- A-1 Term Loan at Ba1
RATINGS RATIONALE
GLPI's Ba1 rating reflects the REIT's ability to maintain solid
credit metrics pro forma for the Pinnacle transaction, which was
consummated on April 27, 2016. GLPI financed this substantial
acquisition with a mix of common equity (both direct equity issued
to Pinnacle shareholders and a large secondary offering) and
long-term, unsecured debt that is expected to bring the REIT's
leverage to 5.5x Net Debt/EBITDA pro forma. This modest leverage
level is considered reasonable for GLPI's existing rating category
given its substantial tenant concentrations and the volatility
associated with its tenants' regional gaming cash flows. Moreover,
gaming assets are a specialized asset type with limited alternative
uses under a stress scenario.
Key credit strengths supporting GLPI's rating include its lack of
secured debt and a fully unencumbered property portfolio that
enhances its financial flexibility. Moreover, the REIT's
triple-net master lease agreements with Penn National Gaming and
Pinnacle (its two principal tenant operators) offer stable cash
flows with adequate lease coverage. Each of these leases offers
rent coverage of about 1.9x, which provides good cushion
considering the volatility inherent in regional gaming.
Moody's notes that the Pinnacle transaction offers GLPI increased
size and scale and diversifies its tenant exposure from one to two
principal tenants. The REIT's asset base increases from 21
properties across 12 states to 35 properties across 14 states.
Tenant concentration remains a key credit concern for GLPI, but it
is making progress in achieving its growth and diversification
goals.
GLPI's liquidity is adequate over the near term, as the REIT will
only need to access modest amounts of capital to fund its
previously announced acquisition of The Meadows later this year.
However, it does have substantial debt maturities it will need to
address in 2018, when $550mm of bonds, a $300mm term loan and its
revolver come due.
The stable outlook reflects Moody's expectation that GLPI will
largely maintain its existing credit profile and prudently manage
its liquidity as it seeks continued growth.
An upgrade would likely reflect increased tenant diversification
with the largest tenant comprising less than 30% of total revenues.
The REIT would also need to demonstrate stable operating
performance, with ample rent coverage for each of its top tenants.
Maintenance of modest leverage, with Net Debt/EBITDA closer to 5x
and fixed charge coverage above 3x on a consistent basis would also
be needed for an upgrade.
Negative rating pressure would result should leverage rise with Net
Debt/EBITDA above 6x on a sustained basis. Fixed charge coverage
below 2.6x or deterioration in tenant credit quality would also
result in a ratings downgrade, as would any liquidity challenges
associated with refinancing upcoming maturities.
Moody's last rating action for Gaming & Leisure Properties was on
July 22, 2015, when the ratings were affirmed with a stable
outlook.
Gaming and Leisure Properties, Inc. (NYSE: GLPI) is engaged in the
business of acquiring, financing, and owning real estate property
to be leased to gaming operators in triple net lease arrangements,
pursuant to which the tenant is responsible for all facility
maintenance, insurance, taxes related to the leased properties and
business conducted on these properties.
The principal methodology used in these ratings was Global Rating
Methodology for REITs and Other Commercial Property Firms published
in July 2010.
GAS-MART, INC: Court OKs Initial Wind Down Budget Through June 30
-----------------------------------------------------------------
Judge Arthur B. Federman of the U.S. Bankruptcy Court for the
Western District of Missouri, Kansas City Division, approved the
initial wind down budget for Gas-Mart USA, Inc., for the period
April 1, 2016 through June 30, 2016, and extended the Initial Term
under his Final DIP Order from April 3, 2016 to June 30, 2016.
The Final DIP order authorized debtors Gas-Mart USA, Inc, et al.,
to borrow money from DIP Lender UMB Bank N.A. on a super priority
basis and to grant liens to the DIP Lender to secure their
post-petition indebtedness.
Under the Final DIP Order, the Initial Term expires on April 3,
2016, unless the Debtors achieved certain milestones under the
Final DIP Order.
The Debtors, the DIP Lender and the Official Committee acknowledged
that the Debtors did not meet the milestones set forth in the Final
DIP Order. They further acknowledged that the Carve-Outs under the
Final DIP Order have been fully exhausted and satisfied by the DIP
Lender, and that the Avoidance Action Carve-Out under the Final DIP
Order has been superseded by the Official Committee Stipulation.
The Debtors, the Official Committee and the DIP Lender agreed on
the further use of cash collateral pursuant to the Initial Wind
Down Budget and an extension of the Initial Term until June 30,
2016. The Initial Wind Down Budget is being funded by cash
currently on hand, the sale of remaining assets, the return of
insurance premiums, and the return of vendor deposits.
The Official Committee of Unsecured Creditors is represented by:
Shelley A. DeRousse, Esq.
Devon J. Eggert, Esq.
Elizabeth L. Janzak, Esq.
FREEBORN & PETERS LLP
311 South Wacker Drive, Suite 3000
Chicago, IL 60606-6677
Telephone: (312)360-6000
Facsimile: (312)360-6520
E-mail:sderousse@freeborn.com
deggert@freeborn.com
ejanczak@freeborn.com
UMB Bank, N.A., is represented by:
Eric L. Johnson, Esq.
Scott Goldstein, Esq.
SPENCER FANE LLP
1000 Walnut St.
Kansas City, MO 64106
Telephone: (816)478-8100
Facsimile: (816)471-6467
E-mail: ejohnson@spencerfane.com
sgoldstein@spencerfane.com
Gas-Mart USA Inc. and its affiliated debtors are represented by:
Paul M. Hoffman, Esq.
Nicholas J. Zluticky, Esq.
STINSON LEONARD STREET LLP
1201 Walnut, Suite 2900
Kansas City, MO 64106
Telephone: (816)842-8600
Facsimile: (816)691-3495
E-mail: Paul.hoffmann@stinsonleonard.com
Nicholas.zluticky@stinsonleonard.com
About Gas-Mart USA
Gas-Mart USA, Inc., Aving-Rice, LLC, Fran Transport & Oil Company,
and G&G Enterprises, LLC, sought Chapter 11 bankruptcy protection
(Bankr. W.D. Mo. Lead Case No. 15-41915) in Kansas City, Missouri,
on July 2, 2015.
Gas-Mart and Aving-Rice own and operate gasoline
station/conveniences stores ("C-Stores"). With locations in Iowa,
Illinois, Indiana, Nebraska, and Wisconsin, Gas-Mart and Aving
Rice
operate 22 and 20 stores, respectively, as of the Petition Date.
G&G owns and leases ATM's to the 42 Gas-Mart and Aving-Rice
locations as well as certain ConocoPhillips locations in the
greater Kansas City Area. Fran is a fuel hauling business located
in and serving Kansas City.
On Oct. 6, 2015, an order for relief under 11 U.S.C. Chapter 11
was
entered for the debtor Fuel Services Mart, Inc. ("FSM"). FSM
filed
as motion for an order directing that certain Orders in In re
Gas-Mart USA., et al. be made applicable to FSM.
Judge Arthur B. Federman presides over the Chapter 11 cases.
The Debtors tapped Stinson Leonard Street LLP as attorneys;
Polsinelli PC as special counsel; Brown & Ruprecht, PC as
Conflicts counsel; and Frank Wendt as special conflicts counsel.
The Debtors' Chapter 11 plan and disclosure statement are due
Oct. 30, 2015.
Gas-Mart estimated $10 million to $50 million in assets and debt.
In July 2015, Daniel Casamatta, acting U.S. trustee, appointed
seven
creditors to serve on Gas-Mart's official committee of unsecured
creditors. The committee is represented by Freeborn & Peters LLP,
in Chicago, Illinois.
GEO. V. HAMILTON: Wants to Get Premium Financing With Flatiron
--------------------------------------------------------------
Geo. V. Hamilton, Inc., asks the U.S. Bankruptcy Court for the
Western District of Pennsylvania for authorization to enter into an
insurance premium finance agreement with Flatiron Capital, a
Division of Wells, Fargo Bank, N.A.
The Debtor relates that it maintains insurance programs for its
directors and officers, errors and omissions, general liability,
property and umbrella. The Debtor avers that it currently holds a
Private Company Management Indemnity Directors & Officers and
Company, Employment Practices, Fiduciary, and Crime Package
insurance policy ("D&O Policy") with a $5,000,000 limit issued by
Westchester Fire Insurance Company, which is scheduled to expire
and terminate on April 9, 2016. It further avers that it also
currently holds an Employed Lawyers' Professional Liability
insurance policy ("Employed Lawyers' Policy") with a $5,000,000
limit issued by ACE American Insurance Company, which is scheduled
to expire and terminate on April 9, 2016.
The Debtor relates that it recently extended the Policies in the
ordinary course of business to avoid interruption in its insurance
coverage. The Debtor contends that it is not economically
advantageous for it to pay the premiums on its insurance policies
on an annualized basis. It further contends that in the ordinary
course of its business, the Debtor finances insurance premiums
through premium finance agreements.
"To extend the Policies and avoid any interruption in its insurance
coverage, it is necessary for the Debtor to enter into the
Agreement. Absent the Agreement, the Debtor will be unable to pay
the premiums for the Policies," the Debtor avers.
The Agreement requires the Debtor to make a down payment in the
amount of $30,500 and nine monthly payments, each in the amount of
$10,427. The first payment under the Agreement is due on May 9,
2016. The annual percentage rate is 6.1%. The total amount
financed under the Agreement is $91,500.00 with total payments
under the Agreement of $93,841.38.
The Agreement grants Flatiron Capital a lien on and security
interest in any and all unearned or returned premiums which may
become payable under the Policies. The Agreement also grants
Flatiron Capital a lien on and security interest in any loss
payments under the Policies, but only to the extent that such loss
payments would reduce the unearned premiums.
In the event a default by the Debtor in making the monthly payments
under the Agreement, but subject to 10 days' prior written notice
to the Debtor and the Debtor's right to cure, the Agreement allows
Flatiron Capital to cancel the insurance policies identified in the
Agreement and apply to the Debtor's account the unearned or
returned premiums, and subject to the rights of loss payees, any
loss payments which would reduce the unearned premiums.
The Debtor's Motion is scheduled for hearing on May 5, 2016 at
10:30 a.m. The deadline for the filing of objections to the
Debtor's Motion is set on April 25, 2016.
Geo. V. Hamilton, Inc., is represented by:
Paul M. Singer, Esq.
Luke A. Sizemore, Esq.
REED SMITH LLP
Reed Smith Centre
225 Fifth Avenue, Suite 1200
Pittsburgh, PA 15222
Telephone: (412)288-3131
Facsimile: (412)288-3063
E-mail: psinger@reedsmith.com
lsizemore@reedsmith.com
About Geo. V. Hamilton
Formed in 1947, Geo. V. Hamilton, Inc. is based in McKees Rocks,
Pennsylvania, its home of nearly seventy years. Hamilton is a
distributor of insulation products and an insulation contractor
serving a wide variety of industrial, energy and commercial
facilities in the Pittsburgh area and elsewhere.
Hamilton filed a Chapter 11 bankruptcy petition (Bankr. W.D. Pa
Case No. 15-23704) on Oct. 8, 2015, for the purpose of resolving
all existing and future personal injury and wrongful death claims
arising from alleged exposure to asbestos-containing product
distributed or installed by Hamilton more than 40 years ago.
Judge Gregory L. Taddonio is assigned to the case.
The petition was signed by Joseph Linehan, the Company's general
counsel.
The Debtor has engaged Reed Smith LLP as counsel and Logan &
Company, Inc., as claims and noticing agent.
HANESBRANDS INC: Moody's Affirms Ba1 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service affirmed Hanesbrands Inc.'s Ba1 Corporate
Family Rating and Ba1-PD Probability of Default Rating following
the company's announcement that it had entered into a definitive
agreement to acquire Pacific Brand Limited in a transaction valued
at approximately $800 million. The company's SGL-2 Speculative
Grade Liquidity rating ("SGL") was also affirmed. The outlook is
stable. At the same time, Moody's affirmed Hanes' senior secured
credit facilities at Baa3 and unsecured notes at Ba2. However, the
acquisition funding has not yet been determined, so the current
debt instrument ratings and LGD assessments are subject to change
depending on the final proposed debt structure.
The affirmation of Hanes' Ba1 CFR reflects the strategic benefits
of the acquisition, which will add strong market-leading brands
such as Bonds, Berlei and Sheridan, increase global scale with the
addition of the Australian and New Zealand markets, and bring
substantial cost synergy opportunities through leveraging of Hanes'
in-house manufacturing. Pacific Brands currently outsources a
significant majority of its underwear and intimate apparel from
third party manufacturers. However, the acquisition will increase
the company's lease-adjusted debt/EBITDA to around 4.4x from an
already high pre-acquisition level of 3.8x, which stems from season
working capital build and significant share-repurchases made in the
first quarter. Moody's expects the company to focus on debt
reduction, bringing leverage well below our stated downgrade
trigger of 3.75x within the next twelve months.
These ratings were affirmed:
Hanesbrands Inc.
-- Corporate Family Rating at Ba1
-- Probability of Default Rating at Ba1-PD
-- Speculative-Grade Liquidity rating at SGL-2
-- Senior Secured revolver due 2020 at Baa3 (LGD2)
-- Senior secured term loan A due 2020 at Baa3 (LGD2)
-- Senior secured term loan B due 2020 at Baa3 (LGD2)
-- Senior unsecured notes due 2020 at Ba2 (LGD5)
MFB International Holdings S.a.r.l (MFB)
-- Euro term loan due 2021 at Baa3 (LGD2)
The rating outlooks are stable for both Hanesbrands Inc. and MFB
International Holdings S.a.r.l
RATINGS RATIONALE
Hanesbrands Ba1 Corporate Family Rating reflects the company's
significant scale in the global apparel industry along with the
company's well-known brands and leading share in the inner wear
product category. Also considered is Moody's expectation that
lease-adjusted debt/EBITDA will return closer to Hanes' more
typical range of 3.0 to 3.5x through debt reduction over the next
12-18 months. Other favorable credit considerations include
Hanesbrands' double digit operating margins that are a result of
product innovation, a low cost supply chain, and the company's
ability to successfully leverage its brands. Key concerns include
Hanesbrands' significant customer concentration -- three of the
company's largest customers accounted for 43% of its 2015
revenues -- and its exposure to volatile input costs, such as
cotton, which can have a meaningful and unfavorable impact on
earnings and cash flows. The ratings also incorporate Moody's
expectation that the company will remain acquisitive over time, but
that it will pause acquisitions and share repurchases in the near
term order to quickly reduce leverage.
The stable rating outlook reflects Moody's expectation that
Hanesbrands will materially reduce debt with free cash flow over
the next 12-18 months while sustaining high operating margins, and
that it will make progress achieving cost savings associated with
recent acquisitions.
Upward rating improvement is limited by the significant amount of
secured debt in Hanesbrands' capital structure and by the company's
current financial policy that Moody's believes targets credit
metrics at a level too high for an investment grade rating. A
higher rating would require that Hanesbrands demonstrate the
ability and willingness to maintain debt/EBITDA below 3.0 times as
well as materially reduce its reliance on secured financing.
Ratings could be lowered if the company experienced market share
losses or brand erosion that resulted in negative trends in
revenues or operating earnings. Ratings could also be lowered if
Hanesbrands were pursue additional material debt-financed
acquisitions or share repurchases before reducing leverage well
below 3.75x.
Headquartered in Winston-Salem, NC, Hanesbrands is a manufacturer
and distributor of basic apparel products under brands that
include: Hanes, Champion, Playtex, Bali, L'Eggs, Maidenform and
Just My Size. Annual revenue exceeded $5.7 billion in the latest
twelve month period ended April 2, 2016.
The principal methodology used in these ratings was Global Apparel
Companies published in May 2013.
HARRINGTON MACHINE: Proposes Auction Sale of Excess Equipment
-------------------------------------------------------------
Harrington Machine and Tool Company, Inc, on May 3, 2016, filed a
motion asking the Bankruptcy Court to approve the auction sale of
its excess equipment. The Debtor is engaged in certain
manufacturing business for which it has acquired an array of
equipment, all of which is subject to the first lien of Laurel
Capital Corporation. The Debtor, Laurel Capital Corporation, and
Hartland Machinery Co., Inc. ("auctioneer") have worked together to
identify certain equipment owned by the Debtor, which the Debtor
agrees is "excess equipment", which can be sold to reduce the
outstanding obligation owed to Laurel Capital Corporation.
Hartland has conducted a review of the Excess equipment and has
opined that the auction value of the excess equipment is between
$350,000 and $500,000 and could be between $500,000 and $650,000 if
additional equipment can be added.
About Harrington Machine
Harrington Machine and Tool Company Inc. sought Chapter 11
protection (Bankr. W.D. Pa. Case No. 16-10340) on April 12, 2016.
The case judge is Hon. Thomas P. Agresti. The Debtor tapped Daniel
P. Foster, Esq., at Foster Law Offices, as counsel. The Debtor
estimated $1 million to $10 million in assets and debt.
As of May 3, 2016, the Debtor has not filed complete Schedules and
Statement of Financial Affairs.
* * *
The Debtor has been granted the interim use of cash collateral and
the authority to pay prepetition wages to its employees by orders
of Court dated April 15, 2016
HHH CHOICES: Affiliate Gets Approval to Hire Cushman as Appraiser
-----------------------------------------------------------------
An affiliate of HHH Choices Health Plan LLC received the green
light from the U.S. Bankruptcy Court for the Southern District of
New York to hire an appraiser.
The court order allowed Hebrew Hospital Senior Housing, Inc. to
hire Cushman & Wakefield of Connecticut Inc. as its appraiser nunc
pro tunc to Feb. 24, 2016.
About HHH Choices Health Plan, LLC
Three alleged creditors owed about $1.9 million submitted an
involuntary Chapter 11 petition for HHH Choices Health Plan, LLC on
May 4, 2015 (Bankr. S.D.N.Y. Case No. 15-11158) in Manhattan.
The petitioners are The Royal Care, Inc., (allegedly owed
$772,762), Amazing Home Care Services ($1,178,752), and InterGen
Health LLC ($42,298), all claiming that they are owed by the Debtor
for certain services rendered. They all tapped Marc A. Pergament,
Esq., at Weinberg, Gross & Pergament, LLP, in Garden City, New
York, as counsel.
With the consent from the board of directors, the Debtor filed a
notice of consent to order for relief on June 1, 2015, and an order
for relief was entered on June 22, 2015.
Judge Michael E. Wiles oversees the case.
On Jan. 14, 2016, this Court entered an order administratively
consolidating the chapter 11 case of the Debtor with the chapter 11
cases of its affiliates, Hebrew Hospital Senior Housing Inc. and
Hebrew Hospital Home of Westchester, Inc. (Case Nos. 15-11158,
15-13264, and 16-10028).
HHH Choices Health Plan, LLC tapped Harter Secrest & Emery LLP as
legal counsel.
On Dec. 28, 2015, the U.S. Trustee for Region 2, appointed five
members to the Committee. The current members of the Committee
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 Julie Blumenthal; and (e)
Peter Clark on behalf of Ann Clark.
Thomas R. Califano, Esq. at DLA Piper LLP (US), represents the
Committee. The panel tapped CohnReznick LLP, as its financial
advisor.
HHH CHOICES: Affiliate Gets OK to Hire Griffin as Special Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York has
given Hebrew Hospital Senior Housing Inc. the green light to hire
Griffin, Coogan, Sulzer & Horgan, P.C. as its special legal
counsel.
Griffin Coogan will provide legal advice to HHSH, an affiliate of
HHH Choices Health Plan LLC, on matters related to real estate tax
assessment matters.
About HHH Choices Health Plan, LLC
Three alleged creditors owed about $1.9 million submitted an
involuntary Chapter 11 petition for HHH Choices Health Plan, LLC on
May 4, 2015 (Bankr. S.D.N.Y. Case No. 15-11158) in Manhattan.
The petitioners are The Royal Care, Inc., (allegedly owed
$772,762), Amazing Home Care Services ($1,178,752), and InterGen
Health LLC ($42,298), all claiming that they are owed by the Debtor
for certain services rendered. They all tapped Marc A. Pergament,
Esq., at Weinberg, Gross & Pergament, LLP, in Garden City, New
York, as counsel.
With the consent from the board of directors, the Debtor filed a
notice of consent to order for relief on June 1, 2015, and an order
for relief was entered on June 22, 2015.
Judge Michael E. Wiles oversees the case.
On Jan. 14, 2016, this Court entered an order administratively
consolidating the chapter 11 case of the Debtor with the chapter 11
cases of its affiliates, Hebrew Hospital Senior Housing Inc. and
Hebrew Hospital Home of Westchester, Inc. (Case Nos. 15-11158,
15-13264, and 16-10028).
HHH Choices Health Plan, LLC tapped Harter Secrest & Emery LLP as
legal counsel.
On Dec. 28, 2015, the U.S. Trustee for Region 2, appointed five
members to the Committee. The current members of the Committee
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 Julie Blumenthal; and (e)
Peter Clark on behalf of Ann Clark.
Thomas R. Califano, Esq. at DLA Piper LLP (US), represents the
Committee. The panel tapped CohnReznick LLP, as its financial
advisor.
HHH CHOICES: Committee Gets Approval to Hire Duane Morris
---------------------------------------------------------
The official committee of unsecured creditors of Hebrew Hospital
Home of Westchester Inc. received court approval to hire Duane
Morris LLP.
Duane Morris will serve as the committee's legal counsel in
connection with the Chapter 11 case of Hebrew Hospital, an
affiliate of HHH Choices Health Plan LLC.
Judge Michael Wiles of the U.S. Bankruptcy Court for the Southern
District of New York approved the hiring of the law firm.
About HHH Choices Health Plan, LLC
Three alleged creditors owed about $1.9 million submitted an
involuntary Chapter 11 petition for HHH Choices Health Plan, LLC on
May 4, 2015 (Bankr. S.D.N.Y. Case No. 15-11158) in Manhattan.
The petitioners are The Royal Care, Inc., (allegedly owed
$772,762), Amazing Home Care Services ($1,178,752), and InterGen
Health LLC ($42,298), all claiming that they are owed by the Debtor
for certain services rendered. They all tapped Marc A. Pergament,
Esq., at Weinberg, Gross & Pergament, LLP, in Garden City, New
York, as counsel.
With the consent from the board of directors, the Debtor filed a
notice of consent to order for relief on June 1, 2015, and an order
for relief was entered on June 22, 2015.
Judge Michael E. Wiles oversees the case.
On Jan. 14, 2016, this Court entered an order administratively
consolidating the chapter 11 case of the Debtor with the chapter 11
cases of its affiliates, Hebrew Hospital Senior Housing Inc. and
Hebrew Hospital Home of Westchester, Inc. (Case Nos. 15-11158,
15-13264, and 16-10028).
HHH Choices Health Plan, LLC tapped Harter Secrest & Emery LLP as
legal counsel.
On Dec. 28, 2015, the U.S. Trustee for Region 2, appointed five
members to the Committee. The current members of the Committee
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 Julie Blumenthal; and (e)
Peter Clark on behalf of Ann Clark.
Thomas R. Califano, Esq. at DLA Piper LLP (US), represents the
Committee. The panel tapped CohnReznick LLP, as its financial
advisor.
INT'L MANUFACTURING: Bank's Bid to Withdraw Reference Denied
------------------------------------------------------------
Plaintiff Beverly N. McFarland, the Chapter 11 Trustee of
International Manufacturing Group, Inc., filed an action against
Defendant Bridge Bank, N.A. The Defendant moves for withdrawal of
the reference pursuant to U.S.C. Section 157(d). The Plaintiff
submitted an opposition to the Defendant's motion. The Defendant
submitted a reply in support of its motion.
The issue before the Court is whether good cause exists to grant
the Defendant's motion to withdraw the bankruptcy court reference.
After careful consideration, the United States District Court for
the Eastern District of California finds that withdrawal of this
matter at this juncture would be premature and therefore denies the
Defendant's motion to withdraw the reference.
A full-text copy of U.S. District Judge Troy L. Nunley's March 31,
2016, Order is available at http://is.gd/WZZPLofrom Leagle.com.
The district court proceeding is BEVERLY N. McFARLAND, Chapter 11
Trustee, International Manufacturing Group, Inc., Plaintiff, v.
BRIDGE BANK, N.A., Defendant, No. 15-CV-00706 (E.D. Calif.),
relating to IN RE INTERNATIONAL MANUFACTURING GROUP, INC., Debtor.
Beverly N. McFarland, Plaintiff, represented by Christopher Daniel
Sullivan, Esq. -- csullivan@diamondmccarthy.com -- Diamond McCarthy
LLP & Thomas Andrew Willoughby, Esq. -- twilloughby@ffwplaw.com --
Felderstein Fitzgerald willoughby & Pascuzzi.
Bridge Bank, N.A., Defendant, represented by Jay M Ross, Esq. --
jross@hopkinscarley.com -- Hopkins and Carley & Stephen James
Kottmeier, Esq. -- sjk@hopkinscarley.com -- Hopkins & Carley.
International Manufacturing Group, Inc., Debtor, represented by
Marc Caraska, Law Office Of Marc A. Caraska.
ION GEOPHYSICAL: Moody's Affirms Caa2 CFR, Outlook Stable
---------------------------------------------------------
Moody's Investors Service affirmed ION Geophysical Corporation's
Caa2 Corporate Family Rating, and affirmed and appended its
Probability of Default Rating (PDR) at Caa2-PD/LD. Moody's also
downgraded ION's senior secured notes rating to Ca from Caa3, and
raised its Speculative Grade Liquidity Rating to SGL-3 from SGL-4.
The rating outlook was changed to stable from negative. These
rating actions follow the company's recently completed exchange
offer on a portion of its 8.125% in $175 million of face-value
notes due May 2018.
On April 28, 2016, ION announced the final results of an exchange
offer that commenced on March 28, 2016 to the holders of its 8.125%
in $175 million of second lien notes maturing in May 2018. As part
of the exchange, about $121 million of the 2018 notes, representing
69% of the original face amount, were exchanged for new higher
coupon 9.125% second lien notes maturing in 2021, and an additional
$26 million of the 2018 notes, representing 15% of the original
face amount, was tendered for $15 million in cash, representing a
significant discount to par. As part of the exchange, ION also
received consents from the exchange participants to amend the
existing notes in order to release the second priority security
interest and grant the existing notes a third priority security
interest.
The appending of the PDR with an "/LD" designation indicates
limited default, reflecting the closing of the company's exchange
offer. Moody's views the debt exchange as a distressed exchange,
which is a default under Moody's definition of default. Moody's
will remove the "/LD" designation after three business days.
Issuer: ION Geophysical Corporation
Corporate Family Rating affirmed at Caa2
Probability of Default Rating affirmed at Caa2-PD/LD
Senior Secured Notes due in 2018, downgraded to Ca (LGD 5) from
Caa3 (LGD 4)
Speculative Grade Liquidity rating raised to SGL-3 from SGL-4
Rating outlook changed to Stable from Negative
RATINGS RATIONALE
ION's Caa2 reflects its exposure to the highly volatile and
cyclical seismic sector, which is currently in the midst of a
severe sector down-turn, pressuring ION's earnings and cash flow
generation. The seismic sector is typically the first sub-sector
in the oilfield services industry to decline in a down-cycle and
the last sub-sector to benefit from an up-cycle recovery. This
exposure results in significant earnings and cash flow volatility,
and limits debt capacity and debt recovery prospects. Moody's
expects ION's revenues to face declines in 2016 due to persistently
weak industry fundamentals.
The Caa2 CFR remains supported by ION's long track record in the
seismic sector, with good product line and geographic diversity
within the seismic sector, and a high level of capital spending
flexibility. With weak sector conditions, ION has made substantial
reductions to its operating cost structure and capital spending
levels, which has helped to support a recovery to positive EBITDA
and cash flow in the second half of 2015. The company has also
modestly reduced debt levels, improved its debt maturity profile,
and has experienced a material improvement in its exposure to legal
contingencies associated with its litigation with WesternGeco (a
subsidiary of Schlumberger Ltd.).
ION's SGL-3 Speculative Grade Liquidity rating reflects an adequate
liquidity profile through early 2017. Moody's expect the company
to generate breakeven to slightly negative free cash flow during
2016, resulting on its reliance on its available cash on hand to
potentially address any additional cash needs. The company had a
fairly robust cash balance of $85 million as of year-end 2015.
Moody's has assumed that up to $22 million of ION's cash balance is
used to cash collateralize its litigation exposure with WesternGeco
and $15 million is used to fund the cash tender portion of the note
exchange. ION also has an undrawn $40 million revolving credit
facility to meet additional cash needs that matures in August 2019.
While borrowings under the revolver are subject to a monthly
borrowing base calculation ($40 million as of December 31, 2015),
drawings are only subject to a springing 1.1x fixed charge coverage
covenant that gets tested if liquidity (unrestricted domestic cash
and excess borrowing availability) falls below $4 million on any
business day or $5 million for five consecutive business days.
Moody's do not expect that this covenant to be tested through early
2017. Upcoming debt maturities include $26 million due in May
2018.
The senior secured notes due 2018 that remain outstanding following
the exchange are rated Ca. These notes are guaranteed by
essentially all material domestic subsidiaries on a senior secured
basis, but rank third in priority to ION's undrawn first priority
$40 million senior secured credit facility and ION's new second
lien $121 million notes due 2021. The notes due 2018 do not
benefit from upstream guarantees from ION's foreign subsidiaries,
which accounted for roughly 30% of ION's total tangible assets at
year end 2015. While Moody's Loss Given Default Methodology would
suggest a Caa3 rating, Moody's believes the assigned Ca rating more
appropriately reflects the limited debt recovery prospects on the
notes.
The stable rating outlook reflects an adequate liquidity profile in
the face of weak seismic sector fundamentals.
The ratings could be upgraded if ION continues to be able to
generate positive EBITDA in 2016 and maintain adequate liquidity in
order to fund its cash needs, including the remaining $27 million
in notes that mature in May 2018 and $22 million in potential legal
contingencies.
The ratings could be downgraded if ION's earnings and liquidity
profile weakens.
The principal methodology used in these ratings was Global Oilfield
Services Industry Rating Methodology published in December 2014.
ION Geophysical Corporation provides seismic services and products
to the global energy industry and is headquartered in Houston, TX.
ION GEOPHYSICAL: S&P Lowers Corporate Credit Rating to 'SD'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on ION Geophysical Corp. to 'SD' from 'CC'. S&P also
lowered the issue-level rating on the company's second-lien notes
to 'D' from 'CC'. The recovery rating is '4', indicating S&P's
expectation of average (30% to 50%, high end of the range) recovery
in the event of a default.
"The downgrade follows ION's announcement that it has closed an
exchange offer to existing holders of its 8.125% second-lien notes
due 2018 for new 9.125% second-lien notes due 2021 and shares of
common equity," said Standard & Poor's credit analyst David
Lagasse.
The company's exchange offer to holders of the 8.125% second-lien
notes includes 100% of par value and 10 shares of common stock for
those that tendered before the early tender deadline and 100% of
par value and seven shares of common stock for those that tendered
after the early tender deadline. Additionally, the company
accepted for purchase $25.9 million tendered 8.125%notes for a
purchase price of$15 million. S&P views these transactions as a
distressed exchange because the new securities' maturity extends
beyond the original promised date, and investors that tendered for
cash received less than the original promised amount. S&P expects
to review the corporate credit and issue-level ratings when it
assess the likelihood of further debt exchanges as low. S&P's
analysis will incorporate the company's liquidity position, while
still taking into account its challenging operating environment and
leverage measures.
IRON MOUNTAIN: S&P Raises CCR to 'BB-', Outlook Stable
------------------------------------------------------
S&P Global Ratings said that it raised its corporate credit rating
on Boston Mass.-based Iron Mountain Inc. to 'BB-' from 'B+'. The
rating outlook is stable.
At the same time, S&P raised its issue-level ratings on the company
and its subsidiaries' debt by one-notch, in line with the corporate
credit rating. The recovery ratings remain unchanged.
"The upgrade reflects our expectation that Iron Mountain's
acquisition of Recall Holdings Ltd. (unrated) will improve the
company's scale and geographic diversification," said S&P Global
Ratings credit analyst Jawad Hussain. "The acquisition will reduce
Iron Mountain's exposure to the more mature North American market
and increase its presence in faster growing international markets."
Pro forma for the acquisition, North America will represent about
60% of the company's revenues, down from 70%, and international
markets will represent 40%, up from 30%.
S&P's corporate credit rating on Iron Mountain also reflects S&P's
expectation that the acquisition will result in significant
synergies realized over the next two to three years. These
synergies should lead to improved operating margins and lower
lease-adjusted leverage, which S&P expects to decline to the low-5x
area by 2017 and to below 5x by 2018 from the current mid-5x area.
S&P revised its assessment of Iron Mountain's business risk profile
to satisfactory from fair. The revision is based on S&P's
assessment that the Recall acquisition will increase Iron
Mountain's exposure to faster growing international markets and
will result in substantial synergies that should drive an expansion
of operating margins.
The stable rating outlook reflects S&P's expectation that Iron
Mountain will be able to leverage its increased size, scale, and
geographic diversification to generate low- to mid-single-digit
organic revenue growth while improving its operating margins. S&P
also expects lease-adjusted leverage to moderate to the low-5x area
by 2017 and to below 5x by 2018 as the company realizes full
synergy benefits from the Recall acquisition over the next few
years.
S&P could lower its corporate credit rating on Iron Mountain if the
company isn't able to successfully integrate the Recall assets and,
as a result, it isn't able to fully realize the cost efficiencies
and benefits of its increased size and scale. This would likely
result in weaker-than-expected operating performance and
lease-adjusted leverage remaining in the mid-5x area by the end of
2017. Additionally, S&P could lower the rating if the company
undertakes any future sizeable debt-financed acquisitions that
would result in leverage remaining above 5x beyond 2018.
S&P views an upgrade as unlikely given the company's status as a
real estate investment trust, which reduces its financial
flexibility. An upgrade would incorporate indications that Iron
Mountain's financial policy will become less aggressive and likely
entail the issuance of equity reduces lease-adjusted leverage
toward the 4x area.
JODY KEENER: Appeal From Plan Order Dismissed
---------------------------------------------
Judge Edward J. McManus of the United States District Court for the
Northern District of Iowa, Cedar Rapids Division, granted Super
Wings International, Ltd.'s motion to dismiss the appeal, amongst
other reasons, because the orders of the Bankruptcy Court denying
confirmation of a Chapter 11 plan and denying the motion for
compromise are not final orders, and thus cannot be appealed from.
Judge McManus held that the Appellant offers no authority to the
contrary. An interlocutory order, such as the orders in question,
cannot be appealed from, at least not without leave, which has not
been applied for or granted, the court pointed out.
The appeals case is JODY KEENER, Appellant, v. SUPER WINGS
INTERNATIONAL, LTD., Appellee, District Court No. C 16-21-EJM (N.D.
Iowa), relating to IN RE: JODY KEENER, Debtor and Debtor in
Possession.
A full-text copy of Judge McManus's Order dated March 11, 2016, is
available at http://is.gd/tVHb4vfrom Leagle.com.
US Bankruptcy Clerk-IAND, Interested Party, Pro Se.
US Trustee, Interested Party, Pro Se.
Jody L Keener, Appellant, represented by Jeffrey D Goetz, Esq. --
goetz.jeffrey@bradshawlaw.com -- Bradshaw Fowler Proctor Fairgrave
PC, Krystal R. Mikkilineni, Esq. --
mikkilineni.krystal@bradshawlaw.com -- Bradshaw, Fowler, Proctor &
Fairgrave, Thomas M Boes, Esq. -- boes.thomas@bradshawlaw.com --
Bradshaw, Fowler, Proctor & Fairgrave, PC & Andrew P. Lesko, Esq.
-- lesko.andrew@bradshawlaw.com -- Bradshaw, Fowler, Proctor &
Fairgrave PC.
Super Wings International, Ltd, Appellee, represented by Abram V.
Carls, Esq. -- Abram@drpjlaw.com -- Day Rettig Peiffer, P.C., Eric
W Lam, Esq. -- elam@simmonsperrine.com -- Simmons Perrine Moyer
Bergman PLC & Joseph A Peiffer, Esq. -- Joep@drpjlaw.com -- Day,
Rettig, Peiffer, PC.
KENDALL LAKE TOWERS: U.S. Trustee Forms 3-Member Committee
----------------------------------------------------------
Guy Gebhardt, acting U.S. trustee for Region 21, on May 3 appointed
three creditors of Kendall Lake Towers Condominium Association,
Inc., to serve on the official committee of unsecured creditors.
The committee members are:
(1) Lisa M. Castellano, Esquire
Becker & Poliakoff, P.A.
1511 Westshore Blvd., Suite #1000
Tampa, FL 33607
Tel: 813-527-3900
Fax: 813-286-7683
Email: lcastellano@bplegal.com
(2) Andres Cuevas
York Miami Holdings, LLC, as
Assignee of Cuevas & Associates, PA
n/k/a Cuevas & Garcia, PA
7480 Bird Rd., Suite #600
Miami, FL 33155
Tel: 305-461-9500
Fax: 305-448-7300
Email: acuevas@cuevaslaw.com
(3) Santiago J. Muinos, Esq.
Muinos & Morales, PL
300 Sevilla Avenue, Suite #309
Coral Gables, FL 33134
Tel: 305-403-0641
Fax: 305-403-2099
Email: smuinos@msquaredlaw.com
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 Kendall Lake Towers
Kendall Lake Towers Condominium Association, Inc. sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla., Case No.
16-12114) on February 16, 2016. The Debtor is represented by Joel
M. Aresty, Esq., at Joel M. Aresty, PA.
KITRINOR METALS: Delays Financial Filings, Applies for MCTO
-----------------------------------------------------------
Kitrinor Metals Inc. on May 4 disclosed that it is late in filing
its annual financial statements and management discussion and
analysis ("MD&A") for the year ended December 31, 2015, on the
prescribed deadline of April 29, 2016.
The Company has made an application with the Ontario Securities
Commission under National Policy 12-203 - Cease Trade Orders for
Continuous Disclosure Defaults ("NP 12-203") requesting that a
management cease trade order be imposed in respect of this late
filing rather than an issuer cease trade order, but there is no
assurance that it will be granted. The issuance of a management
cease trade order generally does not affect the ability of persons
whom have not been directors, officers or insiders of the Company
to trade in their securities.
The Company was unable to complete the required filings due to a
lack of capital to complete its audit and the Company required
additional time to raise sufficient capital to complete its annual
financial statements, MD&A and audit. The Company confirms that
auditors have now been retained to complete the audit.
The Company is in discussions with a potential purchaser in
connection with a proposed asset sale transaction involving the
Company's various mineral properties. The Company anticipates that
the annual financial statements and MD&A will be filed on or prior
to May 31, 2016.
The Company confirms that it will satisfy the provisions of the
alternative information guidelines under NP 12-203 by issuing
bi-weekly default status reports in the form of news releases for
so long as it remains in default of the filing requirements to file
its financial statements and MD&A within the prescribed period of
time. The Company confirms that there is no other material
information relating to its affairs that has not been generally
disclosed.
Kitrinor Metals Inc. is a Canada-based exploration-stage company.
The Company is engaged in the acquisition, evaluation, exploration
and development of mineral properties in Canada. The Company has
interests in four properties, which include Culroc Property, Caley
Lake Property, Feather River Property and Bayview Property.
KNS INC: U.S. Trustee Unable to Appoint Creditors' Committee
------------------------------------------------------------
The U.S. trustee for Region 12 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of KNS, Inc.
KNS, Inc. sought protection under Chapter 11 of the Bankruptcy Code
in the U.S. Bankruptcy Court for the District of North Dakota
(Fargo) (Case No. 16-30109) on March 11, 2016. The petition was
signed by Steve Mohr, president.
The Debtor is represented by Kenneth Corey-Edstrom, Esq., at Larkin
Hoffman Daly & Lindgren Ltd. The case is assigned to Judge
Shon Hastings.
The Debtor estimated assets of $0 to $50,000 and debts of $1
million to $10 million.
KOSMOS ENERGY: Fitch Puts 'B' LT IDR on Rating Watch Negative
-------------------------------------------------------------
Fitch Ratings has placed Kosmos Energy Ltd.'s ratings, including
its Long-term Issuer Default Rating of 'B', on Rating Watch
Negative (RWN) following the confirmation of damage to its
infrastructure at the company's offshore Jubilee oilfield in Ghana.
A full list of rating actions is available at the end of this
commentary.
Fitch aims to resolve the RWN within the next six months, when
there is more clarity on the impact on Kosmos's short- and
long-term production, projected leverage and liquidity.
Tullow Oil, the Jubilee field operator, confirmed on April 8, 2016
that the floating production, storage and offloading vessel (FPSO)
turret bearing has been damaged. The company said that oil
production can continue though operating and off-take procedures
will need to be revised. In March 2016, Tullow Oil was forced to
defer two liftings that normally take place every fortnight due to
the issue. The use of a dynamically-positioned shuttle tanker and a
storage tanker has been suggested as a short-term solution,
potentially allowing partners to resume production in the next two
weeks while minimising FPSO movement around the turret. However, it
is not yet clear what the long term solution will be.
"Our base case scenario is for production at the Jubilee field,
Kosmos's only producing asset, to resume in the next several weeks
and to not fall significantly below 100 thousand barrels of oil per
day (mbpd) over the longer term. We also expect the Jubilee field
partners to come up with a long-term solution for the bearing
problem in the nearest future, and that any significant incremental
operating and capital costs associated with the required repairs
will largely be absorbed by insurance. The RWN reflects the
possibility of an alternative less favourable outcome, which we
believe is less likely but cannot be ruled out (e.g. Jubilee's
capacity falling significantly below 100mbpd or any significant
delays with the insurance reimbursement)."
Kosmos is a small but growing oil and gas exploration and
production (E&P) company focused on the offshore Atlantic margin,
with 2015 net production of 23mbpd from the offshore Jubilee field
in Ghana (B/Negative). The company has a 24.1% working interest in
the Jubilee field, which produces around 100 mbpd. In 2015 Kosmos
generated $US500m in EBITDAX (EBITDA before exploration expenses).
KEY RATING DRIVERS
Hedging Mitigates Falling Oil Prices
"We expect Kosmos's earnings to decline further in 2016 on weaker
oil prices but this will be partly offset by the company's strong
hedging position and rising production, though the latter may be
subject to revision due to the Jubilee FPSO turret bearing issue,"
Fitch said.
"The hedging should allow Kosmos to proceed with its ambitious
exploration and development programme. Kosmos has hedged 6 million
barrels in each of 2016 and 2017 at an average floor price of
$US82/bbl and $US61/bbl, respectively. At our current price deck we
expect that these oil derivative contracts will contribute around
$US280m to operating cash flow over the next two years."
"We assume that oil prices will rebound from the current level of
around $US40/bbl for Brent, as we see this level as unsustainable
in the long term. Our base case scenario is for Brent to average
$US35/bbl in 2016, gradually recover to $US45/bbl in 2017,
$US55/bbl in 2018 and $US65/bbl over the long term."
Production Set to Increase
Kosmos's small scale of operation and lack of geographic
diversification are dominant drivers of the company 'B' rating.
Kosmos intends to boost production by developing two sites in close
proximity to the Jubilee field, TEN (Tweneboa, Enyenra, Ntomme) and
possibly MTA (Mahogany, Teak, Akasa). TEN is currently greater than
85% complete and should start production in 3Q16. MTA, which would
constitute the Greater Jubilee field development plan, may be
approved later this year. The approval, however, could be delayed
until resolution of the bearing issue.
"We may consider upgrading Kosmos to 'B+' if the company
successfully brings the TEN project on stream and its overall
production sustainably exceeds 35-40mbpd."
Ghana-Ivory Coast Border Dispute
Ghana and Ivory Coast have never officially agreed on their
maritime border, and in September 2014, Ghana took legal action
under a UN convention to resolve the dispute as it could affect the
TEN project. In April 2015 the Hamburg-based International Tribunal
for the Law of the Sea ordered to suspend all new drilling in the
disputed area until the final decision is taken in 2017; however,
it allowed production from wells already drilled.
"Kosmos announced it expects TEN to proceed as planned as all the
wells required for the 'first oil' phase have been drilled. We
agree that the risks there are limited; however, we are unlikely to
give Kosmos the full credit for the project until the issue has
been resolved."
Adequate Reserves
At end-2015 Kosmos had proved oil and gas reserves of 76 million
barrels (MMboe). Its proved (1P) reserve life of nine years and
proved and probable (2P) reserve life of 17.5 years are in line
with the median for Fitch-rated speculative-grade peers (10 and 18
years, respectively). Kosmos's per-barrel profitability is strong
due to a favourable tax regime, fairly low lifting costs and
concentration on liquids. In 2015, its funds from operation (FFO)
per barrel produced amounted to $US36/bbl and $US9/bbl, with and
without derivative hedges, respectively.
Elevated Country Risk
Kosmos is exposed to high country risks, as its operations are
concentrated in Ghana. Ghana has a strong business environment
relative to other African countries, ranking 114 out of 189 in the
World Bank's 2015 Doing Business Survey. It is also safer compared
with some other parts of Africa such as the Niger Delta. However,
the country's public finances are weak.
Fitch said, "We expect that the tax regime for oil companies in
Ghana will not change over the medium term, and Kosmos's tax burden
will not materially increase. However, the possibility of tax
regime change cannot be ruled out due to Ghana's large budget
deficit. We also assume that Kosmos's operations would not
necessarily be affected by capital controls or other possible
restrictive measures, since the company's proceeds do not flow
through Ghana, and its cash assets are kept primarily outside
Ghana. We therefore do not cap Kosmos's rating at the sovereign
rating or the Country Ceiling. However, we may review this approach
if the government attempts to revise the tax regime in Ghana."
Extensive Exploration Portfolio
Kosmos's exploration success offshore Mauritania / Senegal could
help the company diversify its production base over time. In March
2016 Kosmos announced it drilled the fourth exploration well in the
region, and that its estimated gross resource estimates for the
Greater Tortue Complex increased to 20 trillion cubic feet (Tcf),
or 566 billion cubic meters (bcm), a large field by industry
standards. Potential commercialisation options include a farm out,
and a floating LNG project.
The discovery has improved Kosmos's financial flexibility as the
field can potentially be farmed down; however, depending on the
commercialisation route yet to be chosen it could increase Kosmos's
capital intensity and completion risks. It could be less of a risk
if Kosmos has by then increased and diversified its production,
e.g. by bringing TEN on stream.
Kosmos has an extensive exploration portfolio, including several
licensed blocks in offshore west Africa, Portugal, Suriname and Sao
Tome. It may help the company replenish its reserves, but success
is not guaranteed and the company's exploration budget may put a
strain on its free cash flow (FCF). A failure to translate
exploration spending into increased proved reserves over time could
negatively affect its credit position.
Manageable Mid-Cycle Leverage
Kosmos's leverage will increase over the next two years but will
remain in line with that of other 'B' rated peers, provided there
is no significant negative impact from the bearing damage. Its
operating cash flow will decrease due to lower oil prices, but this
will be partly offset by Kosmos's hedging programme. Capital
intensity will remain high in 2016 before it starts falling in
2017.
Fitch said, "We project funds from operations (FFO) adjusted net
leverage to peak at 3.75x in 2017, but to fall below 3x in 2018-19
as capex moderates and oil prices recover. We also assume Kosmos
will significantly improve its negative FCF in 2016, and to start
generating positive FCF in 2017.
"We expect Kosmos to respect its financial covenants, including
maintaining net debt to EBITDAX below 3.5x. According to our base
case projections this ratio should remain below 3x in 2016-17, and
below 2.5x in 2018-19."
KEY ASSUMPTIONS
“Fitch's key assumptions within our rating case for the issuer
include:
-- Brent oil price: $US35/bbl in 2016, $US45/bbl in 2017,
$US55/bbl in 2018 and $US65/bbl thereafter
-- Production growth: 5% yoy in 2016, 32% yoy in 2017 and 10% in
2018; output reaching 36 mbpd in 2018
-- Cash flow from hedging based on existing hedging contracts:
$US223 million in 2016 and $US57m in 2017
-- Zero dividend policy
-- Capex peaking in 2016 on TEN development and continued
exploration in Mauritania and Senegal and declining thereafter
-- Successful resolution of the Jubilee FPSO turret bearing
issue, with no significant long-term implications for field
production and any material incremental costs largely absorbed
by insurers”
RATING SENSITIVITIES
“Positive: We aim to resolve the RWN within the next six months.
We will affirm the rating at 'B' if the bearing damage does not
significantly impact the company's credit profile. This could be
evidenced by a long-term solution involving limited costs and
production shutdown, or by an adequate insurance reimbursement.”
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Unfavourable development of the Jubilee turret bearing,
leading to significantly lower production or material
additional costs
-- Net production falling below 20mbpd
-- Significant project delays and cost overruns at TEN
-- Suspension of the TEN project or a material change in fiscal
terms arising from the maritime border dispute between Ghana
and Ivory Coast
-- Deterioration in liquidity (e.g. cash and credit lines
amounting to less than 50% of short-term debt and projected
cash outflows)
-- Leverage rising above expectations (e.g. consistently above
3.5x)
-- Utilized balance under the reserve-based lending (RBL)
facility exceeding $US1.1billion resulting in worse recovery
prospects for 2nd lien creditors, including bondholders, which
will trigger a downgrade of the senior secured rating
LIQUIDITY
“At end-2015 Kosmos's liquidity comprised $US275m of cash and
cash equivalents and $US1.5billion of undrawn credit facilities,
including unutilized $US1.1billion balance under its RBL facility.
This compares well with Kosmos's cash uses. The company has no
maturities in 2016-17, and we expect its negative FCF to be below
$US400m in the next two years.”
SUMMARY OF FINANCIAL STATEMENT ADJUSTMENTS
-Fitch has adjusted the balance sheet debt by capitalizing the
annual operating lease of $US4.7m using the standard 8x multiple.
As a result the debt increased by $US37.6billion.
-EBITDA has been adjusted upward by $US184m to account for
equity-based compensation ($US75m), non-cash portion of exploration
expenses ($US95m) and the difference between cash settlement on
derivatives and the change in fair value of derivatives ($US14m).
-Cash interest has been adjusted upwards by $US52m to reflect
capitalized interest expense, which was reported as part of capital
expenditure. Capex has been reduced by the same amount.
LIST OF RATING ACTIONS:
Kosmos Energy Ltd.
Long-term foreign currency IDR of 'B': placed on RWN
Senior secured rating of 'B'/ 'RR4' (Recovery Rating): placed on
RWN
LEO MOTORS: Lowers Ownership in Leo Korea to 49.9%
--------------------------------------------------
As disclosed in a regulatory filing with the Securities and
Exchange Commission, Leo Motors Korea, Inc., a subsidiary of Leo
Motors, Inc., entered into two cash investment agreements with two
accredited investors. Pursuant to the Investment Agreements, the
Investors supplied an aggregate of 110,000,000 KRW South Korean Won
(approximately $95,765 U.S. Dollars) to Leo Korea in consideration
for the issuance of 550,000 shares of Leo Korea's common stock. As
a result of the Investment Agreements, the Company's equity
ownership percentage in Leo Korea decreased from 51.37% to 49.90%.
On April 25, 2016 the Company entered into a Management and Voting
Rights Agreement with Leo Korea. Under the terms of the Management
Agreement, Leo Korea will agree to operate at the direction of the
Company. In addition, the Board of Directors of Leo Korea shall
also vote as the Company directs in all voting matters.
About Leo Motors
Headquartered in Hanam City, Gyeonggi-do, Republic of Korea, Leo
Motors, Inc., a Nevada corporation, is currently engaged in the
research and development of multiple products, prototypes and
conceptualizations based on proprietary, patented and patent
pending electric power generation, drive train and storage
technologies.
In 2011, the Company determined its investment in Leo B&T Inc. an
investment account was impaired and recorded an expense of
$4.5 million. During the 2012 year the Company had a net non
operating income largely from the result of the forgiveness of
debt for $1.3 million.
Leo Motors reported a net loss of US$4.49 million on US$4.29
million of revenues for the year ended Dec. 31, 2015, compared to a
net loss of US$4.48 million on US$693,000 of revenues for the year
ended Dec. 31, 2014.
LIFE CARE: June 2 Auction to Start w/ $25.4MM Bid from LCS Glenmoor
-------------------------------------------------------------------
Judge Jerry A. Funk of the U.S. Bankruptcy Court for the Middle
District of Florida, Jacksonville Division, approved the bidding
procedures governing the sale of Life Care St. Johns, Inc.'s
assets.
The Court grants the Break-Up Fee of $700,000 and the Expense
Reimbursement in the amount of $150,000 to LCS Glenmoor, LLC, for
its role as Stalking Horse.
Under the Bidding Procedures, any prospective bidders may qualify
and participate in the Auction, and competing to make the highest
and best offer for all or substantially all of the Purchased
Assets. A Potential Bidder must deliver to the Debtor a written
irrevocable offer equal to or in excess of $25,400,000 together
with a Good Faith Deposit of $1,375,000 in cash prior to the Bid
Deadline of May 30, 2016 in order to participate in the Auction.
In addition, each Potential Bidder must provide the Debtor with
sufficient and adequate information to demonstrate that such
Potential Bidder has the financial wherewithal and ability to
consummate the acquisition of the Purchased Assets and the
assumption of the Assumed Contracts.
The Bidding Procedures further provides that the Stalking Horse
will be deemed the Successful Bid if no Qualified Bids are received
by the Bid Deadline, then the Auction will not occur, and the
Debtor will pursue for the approval of the Stalking Horse APA and
authorizing the sale of the Purchased Assets to LCS. But, if one or
more Qualified Bids are received by the Bid Deadline, then the
Debtor shall conduct an Auction with respect to the Purchased
Assets on June 2, 2016.
The bidding at the Auction shall begin at the Starting Bid of
$25,400,000 while subsequent bids at the Auction, including any
bids by LCS, shall be made in minimum increments of $100,000, while
LCS shall receive a credit equal to the amount of the Break-up Fee
and the Expense Reimbursement when bidding at the Auction.
The Debtor is obligated to pay to LCS from the proceeds of the sale
all amounts due to LCS, including the Break-up fee and the expense
reimbursement, if the sale closes with an entity other than LCS.
Any objection to the Sale and the proposed Cure Amounts, or the
proposed assumption and assignment of the Assumed Contracts must be
filed on or before May 30, 2016.
About Life Care St. Johns
Life Care St. Johns, Inc., doing business as Glenmoor, is a
not-for-profit organization that owns and operates a continuing
care retirement community in St. Johns County, Florida. The
company received its certificate of occupancy in 1999 and began
operations in October of 2001.
As a CCRC, Glenmoor provides "lifecare services" to its residents,
each of whom reside in a residential unit. The "lifecare" concept
recognizes that the healthcare and residency needs of elderly
residents vary along a continuum beginning with independent living
and in many cases ending with a need for full-time nursing care.
The Glenmoor community thus includes independent residential units,
an assisted living center, and a healthcare center for residents
requiring round the clock nursing care.
As disclosed in documents filed with the Court, Residency at
Glenmoor is provided pursuant to "Residence and Care Contracts"
which require prospective residents to pay an "Entrance Fee" and a
"Monthly Service Fee." The Entrance Fee is a lump sum, one-time
payment based on the type of Residential Unit occupied by the
resident, and obligates Glenmoor to provide care to the resident so
long as he or she remains a resident and pays the Monthly Service
Fee. Depending upon the type of contract selected, the Entrance
Fee may or may not be refundable. For residents with refundable
Entrance Fee contracts, the refund is to be paid from the proceeds
of the next Entrance Fee received by Glenmoor.
According to Court filings, the economic recession which began in
late 2007 had a dramatic impact on Glenmoor, with fewer residents
being able to afford the required Entrance Fees as their home
equity and investments portfolios shrank in value. With fewer new
residents entering the community than were moving out, significant
Entrance Fee refund liabilities began to accumulate, rising to
almost $8 million at their peak. The decreasing revenues
eventually led to payment and other defaults under the $59 million
in Revenue Bonds issued in 2006 to support Glenmoor and refinance
an earlier bond issue.
On July 3, 2013, Glenmoor filed its initial Chapter 11 case in the
U.S. Bankruptcy Court for the Middle District of Florida amid
defaults under the Debtor's 2006 Bonds and threats of enforcement
action by the Florida's Office of Insurance Regulation, the
government entity that governs the licensing and operations of
continuing care retirement community in Florida. A consensual Plan
of Reorganization was filed Nov. 27, 2013. Glenmoor's Plan of
Reorganization was confirmed by the Court on Feb. 28, 2014. The
Final Decree was entered on April 6, 2016.
Glenmoor filed its second voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. M.D. Fla. Case No.: 16-01347) on April
11, 2016.
The Debtor has engaged Thames Markey & Heekin, P.A., as bankruptcy
counsel; Walchle Investment Group, Inc. as sale broker; Cassidy
Turley Commercial Real Estate Services, Inc., as investment banker;
Greystone Development Company II, LP, as operations consultant;
Eddie Williams, III, Esq., as regulatory compliance counsel; Moore
Stephens Lovelace, CPA, as accountant; Globic Advisors, Inc., as
plan solicitation and tabulation agent; and American Legal Claim
Services, LLC as claims and noticing agent.
The Debtor estimated assets in the range of $10 million to $50
million and liabilities of up to $100 million.
The case is pending before the Honorable Jerry A. Funk.
LONG BEACH MEDICAL: Seeks Approval to Distribute Sale Proceeds
--------------------------------------------------------------
Long Beach Medical Center has filed a motion seeking court approval
to distribute the net proceeds from the sale of its assets to South
Nassau Communities Hospital.
The motion, if granted by the U.S. Bankruptcy Court for the Eastern
District of New York, would allow the company to pay Pension
Benefit Guaranty Corp. and two other creditors from the sale
proceeds.
LBMC is currently holding about $3.16 million in net proceeds from
the sale of its properties and those owned by Long Beach Memorial
Nursing Home Inc. in 2014. The properties were sold to South
Nassau, which made a $10.25 million cash offer.
LBMC will pay more than $1.4 million to PBGC in satisfaction of a
portion of its claims.
Meanwhile, First Central Savings Bank will receive $885,000 while
Dormitory Authority of the State of New York will receive $850,000
in full satisfaction of their claims, according to court filings.
About Long Beach Medical Center
Long Beach Medical Center, formerly Long Beach Memorial Hospital,
was a 162-bed, community-based hospital offering primary, acute,
emergency and long-term health care to residents of Long Beach, New
York. Founded in 1922, LBMC was a teaching facility for the New
York College of Osteopathic Medicine. LBMC was shut down after
superstorm Sandy devastated the hospital in October 2012.
Long Beach Memorial Nursing Home Inc, runs the The Komanoff Center
for Geriatric and Rehabilitative Medicine, a 200-bed skilled
nursing facility affiliated with LBMC. It provides services for
residents requiring long term nursing home care and short term
post-acute (sub-acute) care. Currently there are 127 residents of
Komanoff.
Long Beach Medical Center and Long Beach Memorial Nursing Home
d/b/a The Komanoff Center for Geriatric and Rehabilitative
Medicine, sought Chapter 11 bankruptcy protection (Bankr. E.D.N.Y.
Case Nos. 14-70593 and 14-70597) on Feb. 19, 2014.
Long Beach Medical Center scheduled $17,400,606 in total assets and
$84,512,298 in total liabilities.
Garfunkel Wild P.C. serves as the Debtors' counsel. GCG, Inc., is
the Debtors' claims and noticing agent. The Hon. Alan S. Trust
presides over the cases.
The U.S. Trustee has appointed three members to the official
committee of unsecured creditors. The panel retained Klestadt &
Winters, LLP, led by Sean C. Southard, Esq., as counsel.
LUCA INTERNATIONAL: Bid to Dismiss Shelley You Appeal Denied
------------------------------------------------------------
Judge Keith P. Ellison of the U.S. District Court for the Southern
District of Texas, Houston Division, denied appellee Luca
International Group LLC, et al.'s motion to dismiss the appeal
captioned Meiyu You, aka Meiyu "Shelley" You, Appellant, vs. Luca
International Group LLC, et al., Appellees, Civil Action No.
4:16-CV-431(S.D. Tex.).
About Luca International
Luca International Group LLC and Luca Operation, LLC, and their
affiliates are engaged in the exploration and production of
natural
gas, petroleum and related hydrocarbons. The primary assets are
located in Iberville and Ascension Parishes in Louisiana. These
assets include 3 operating oil and gas wells -- Belle Grove 1,
Dugas & Leblanc 1 and Jumonville 2. In addition, the assets
include a water disposal well, Acosta 1, and a shut-in-oil and gas
well, Jumonville 1. The Luca entities also own oil and gas leases
in Texas and working interests in various locations. The Luca
entities are owned by Bingqing Yang.
Luca International Group and 11 related entities sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 15-34221) in Houston,
Texas, on Aug. 6, 2015. The cases are assigned to Judge David R.
Jones.
The Debtors tapped Hoover Slovacek, LLP, as counsel, and BMC
Group,
Inc., as claims agent.
The Court authorized the Debtors to borrow $2,000,000 in
postpetition financing from Schumann/Steier Holdings, LLC.
Luca International estimated $50 million to $100 million in assets
and debt.
The petitions were signed by Loretta R. Cross, the CRO.
The U.S. Trustee appointed five members to the Committee of Equity
Security Holders.
MACON CHARTER: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Macon Charter Academy Inc.
151 Madison Street
Macon, Ga 31201
Case No.: 16-50902
Chapter 11 Petition Date: May 3, 2016
Court: United States Bankruptcy Court
Middle District of Georgia (Macon)
Judge: Hon. James P. Smith
Debtor's Counsel: Joel A.J. Callins, Esq.
THE CALLINS LAW FIRM, LLC
101 Marietta Street, Suite 1030
Atlanta, GA 30303-2720
Tel: (404) 681-5826
Fax: (866) 299-4338
E-mail: jcallins@callins.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Edward Grant Jr., chairman.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
MANNINGTON MILLS: S&P Revises Outlook to Neg. & Affirms 'BB-' CCR
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its rating
outlook on Mannington Mills Inc. to negative from stable and
affirmed its 'BB-' corporate credit rating on the company.
The issue-level ratings on the term loan remain 'BB-', with the
recovery rating unchanged at '3', indicating S&P's expectation for
meaningful (50% to 70%, upper half of the range) recovery in the
event of default.
"The negative outlook reflects weaker-than-expected operating
performance and elevated leverage due to operational difficulties
in 2015," said Standard & Poor's credit analyst Vania Dimova. "We
expect the company to improve leverage measures to below 5x over
the next 12 months as it increases sales and realizes cost benefits
from the new LVT plant."
S&P could lower the rating if renewed operational problems or
weaker-than-expected market conditions prevent the company from
lowering the leverage below 5x over the next year. S&P could also
lower the rating if Mannington pursued large debt-funded
shareholder or growth initiatives.
S&P could consider an upgrade if debt to EBITDA were maintained
below 3x and FFO to debt improved to more than 30%. S&P believes
this could occur if gross margins rose by 300 basis points or more
because of greater-than-anticipated benefits from its cost
reduction and capacity expansion plan, with no meaningful change in
financial policies.
MD AMERICA: S&P Affirms 'CCC' Issue-Level Rating
------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its 'CCC'
issue-level rating on Fort Worth-based exploration and production
(E&P) company MD America Energy LLC's (same level as the corporate
credit rating). At the same time, S&P removed the rating from
CreditWatch where it placed it with developing implications on Feb.
9, 2016. S&P simultaneously revised the recovery rating on this
debt to '3', indicating its expectation of meaningful (50% to 70%;
higher end of range) recovery in the event of a payment default,
from '4'.
The corporate credit rating on MD America remains 'CCC'. The
outlook is developing.
MD America is a wholly owned subsidiary of Meidu Holding Co. Ltd.,
a public real estate and energy entity traded on the Shanghai Stock
Exchange. Since Acquiring MDAE in December 2013, Meidu has
contributed close to $700 million of common equity to support MDAE,
including a $100 million infusion in December, which it used to
repay debt. In addition, MDAE expects to receive an additional
equity infusion from Meidu totaling $885 million in first half of
2016. Meidu is finalizing the raise of $1.3 billion on the Shanghai
Stock Exchange, but the regulatory steps necessary to make the
funds available take
several months.
The ratings on MDAE reflect S&P's assessment of the company's
vulnerable business risk, highly leveraged financial risk, and less
than adequate liquidity. These assessments reflect S&P's view of
MDAE's very small reserve base and production levels, limited
geographic diversity, and expectation of leverage in excess of 5x
in 2016 and 2017.
MDAE is one of the smallest rated E&P companies, having a pro forma
proved reserve size of about 42 million barrels of oil equivalent
(mmboe) at year-end 2015 and production of about 10,000 boe per day
(boe/d) on average in 2015. At the same time, a large percentage
of MDAE's proved reserves are in the proved undeveloped (PUD)
category (65%), raising the risk that future well performance might
not meet expectations. In addition, undeveloped reserves could be
subject to a write-down if MDAE revises its development plans.
MDAE has limited operating diversity given its strong focus on East
Texas. The company currently owns nearly 64,000 net acres in
Madison, Brazos, Leon, and Grimes counties in Texas (pro forma for
asset acquisitions in the first quarter of 2016). The company
believes that its acreage is located in the "sweet spot" of the
play, with multi-pay oil weighted formations including the Woodbine
and Eagle Ford Shale, as well as other formations. This area has
been actively producing oil and natural gas for several decades
through conventional methods, although the track record of
horizontal drilling there remains short compared with most of other
U.S. shale plays. Due to the fall in commodity prices, the company
stopped all its drilling activity in 2015 and expects production to
fall by about 30% year-over-year as a result. The company may
resume its drilling program on a limited basis in 2016 depending on
the commodity price environment, drilling commitments, strategic
rationale and adequate capital among other factors.
The outlook is developing, reflecting S&P's view that it could
either raise or lower the rating over the next 12 months depending
on the timely receipt of capital contributions from Meidu to avert
potential liquidity issues.
MERRIMACK PHARMACEUTICALS: Incurs $38.6 Million Net Loss in Q1
--------------------------------------------------------------
Merrimack Pharmaceuticals, Inc., filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $38.7 million on $21.3 million of total revenues for
the three months ended March 31, 2016, compared to a net loss of
$34.4 million on $14.8 million of total revenues for the same
period in 2015.
As of March 31, 2016, Merrimack had $192.93 million in total
assets, $410 million in total liabilities, $54,000 in
non-controlling interest, and a total stockholders' deficit of
$217.19 million.
As of March 31, 2016, the Company had unrestricted cash and cash
equivalents and marketable securities of $132.4 million.
Merrimack reiterates the following fiscal 2016 guidance:
* Receipt of $46.5 million of net milestone payments related to
ONIVYDE. This amount is made up of $36.5 million of net
substantive milestones expected to increase net income in 2016
and $10.0 million of net non-substantive milestones expected
to increase deferred revenues on Merrimack's balance sheet, as
they are included in the Baxalta proportional performance
revenue recognition model; and
* Aggregate research and development and selling, general and
administrative expenses to be in the range of $225 million to
$245 million, not including any one time payments to
PharmaEngine.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/j3fwp9
About Merrimack
Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a
biopharmaceutical company discovering, developing and preparing to
commercialize innovative medicines consisting of novel
therapeutics paired with companion diagnostics. The Company's
initial focus is in the field of oncology. The Company has five
programs in clinical development. In it most advanced program,
the Company is conducting a pivotal Phase 3 clinical trial.
Merrimack reported a net loss of $148 million on $89.3 million of
total revenues for the year ended Dec. 31, 2015, compared to a net
loss of $83.6 million on $103 million of total revenues for the
year ended Dec. 31, 2014.
MGM RESORTS: S&P Assigns 'BB' Rating on $1.5BB Sr. Credit Facility
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' issue-level
rating and '1' recovery rating to Las Vegas-based casino resort
operator MGM Resorts International's new $1.5 billion senior
secured credit facility due April 2021 (consisting of a $1.25
billion revolving credit facility and a $250 million term loan A).
The '1' recovery rating indicates S&P's expectation for very high
(90% to 100%) recovery for lenders in the event of a payment
default.
"We are affirming our 'B+' issue-level ratings on MGM Resorts' and
Mandalay Resort Group's existing senior unsecured debt and revising
our recovery rating to '3' from '4'. The '3' recovery rating
indicates our expectation for meaningful recovery (50% to 70%;
upper half of the range). The improved recovery prospects for
senior unsecured debt holders result from a lower amount of secured
and unsecured debt in MGM Resorts' capital structure following the
sale of real estate to MGM Growth Properties and the resulting
secured and unsecured debt repayment. The debt repayment was more
than sufficient to offset lower net enterprise value in our
simulated default scenario as a result of the sale of its real
estate to MGM Growth Properties and the corresponding rent expense
associated with the master lease that reduces our estimate of
EBITDA at emergence," S&P said.
RECOVERY ANALYSIS
Key Analytical Factors:
-- S&P's simulated default scenario contemplates a payment
default in 2020, reflecting a significant decline in cash
flow due to prolonged economic weakness and increased
competitive pressures, particularly in Las Vegas, where MGM
Resorts' operations are concentrated. S&P assumes that any
debt maturing between now and the year of default is
refinanced on the same terms and its maturity is extended to
at least the year of default.
-- S&P's recovery analysis is based on the operations on the
company's wholly owned domestic operations.
-- S&P's emergence EBITDA for MGM Resorts is lower than S&P's
previous valuation because of the rent payment that MGM will
make to MGP and a lower amount of owned real estate assets.
S&P values MGM using an EBITDA at emergence that is about
10% higher than S&P's estimate of fixed charges (interest,
amortization, and maintenance capital expenditures) at
default because it believes MGM's Las Vegas properties,
which are volatile in a downturn, would experience a rebound
in cash flows of at least 10% once the economy improved.
This growth in cash flow would be modestly lower than what
the company experienced in 2011 following the last downturn.
-- S&P assumes a reorganization following the bankruptcy, using
a 7x multiple to value the company, consistent with
multiples S&P uses for other diversified gaming companies.
-- S&P assumes MGM's revolving credit facility is 85% drawn at
the time of default.
-- S&P assumes administrative claims total 5% of gross
enterprise value, given the two classes of debt in MGM
Resorts' capital structure.
-- MGM's new senior secured credit facility is secured by
Bellagio and MGM Grand Las Vegas. As a result, S&P
allocates value to secured creditors based on the percentage
of property-level EBITDA these two properties represent.
S&P estimates these two properties comprise about 59% of
MGM's total property-level EBITDA after the rent expense it
pays to MGP.
-- MGM's unsecured lenders' recovery prospects are supported by
the company's unpledged assets (all operating assets aside
from Bellagio and MGM Grand Las Vegas) as well as residual
value from those two properties after satisfying secured
claims.
Simulated default assumptions:
Year of default: 2020
EBITDA at emergence: $862 million
EBITDA multiple: 7x
Simplified waterfall:
Net enterprise value (after 5% administrative costs): $5.7 billion
Valuation split in % (obligors/non-obligors): 59/41
Collateral value available to secured creditors: $3.4 billion
Senior secured debt: $1.3 billion
-- Recovery expectation: 90% to 100%
Total value available to unsecured creditors: $4.4 billion
Senior unsecured debt: $7.3 billion
-- Recovery expectation: 50% to 70% (upper half of the range)
All debt amounts included six months of prepetition interest. Value
available for unsecured creditors equals unpledged value plus
remaining enterprise value from excess collateral after repayment
of secured debt.
RATINGS LIST
MGM Resorts International
Corporate Credit Rating B+/Positive/--
Rating Affirmed; Recovery Rating Revised
To From
MGM Resorts International
Mandalay Resort Group
Senior Unsecured B+ B+
Recovery Rating 3H 4H
New Rating
MGM Resorts International
$1.25 bil. revolver
Senior Secured BB
Recovery Rating 1
$250 mil. term loan A
Senior Secured BB
Recovery Rating 1
MICHAEL KING: Schedules $114.7 in Assets, $10.1 in Debt
-------------------------------------------------------
The Michael King Smith Foundation disclosed $114,720,980 in assets
and $10,053,227 in liabilities in its schedules of assets and
liabilities:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $109,356,013
B. Personal Property $5,364,967
C. Property Claimed as Exempt
D. Creditors Holding
Secured Claims $10,018,836
E. Creditors Holding Unsecured
Priority Claims $0
F. Creditors Holding Unsecured
Non-priority Claims $34,391
-------------- --------------
TOTAL $114,720,980 $10,053,227
A copy of the company's schedules is available without charge at
http://is.gd/mbClSQ
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. 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.
MIDSTATES PETROLEUM: Moody's Lowers PDR to D-PD on Ch. 11 Filing
----------------------------------------------------------------
Moody's Investors Service downgraded Midstates Petroleum Company,
Inc.'s Probability of Default Rating to D-PD from Ca-PD.
Concurrently, Moody's affirmed Midstates' Ca Corporate Family
Rating, Caa2 second lien secured notes rating, C senior unsecured
notes rating and the SGL-4 Speculative Grade Liquidity Rating,
while downgrading its third lien secured notes rating to C from Ca.
The outlook remains negative.
These actions follow Midstates' announcement that it along with its
wholly-owned subsidiary, Midstates Petroleum Company LLC filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for
the Southern District of Texas, to facilitate a pre-arranged
restructuring of the company's consolidated balance sheet through a
reorganization plan.
Issuer: Midstates Petroleum Company Inc.
Downgrades:
Probability of Default Rating, Downgraded to D-PD from Ca-PD
Senior Secured 3rd Lien Notes, Downgraded to C (LGD 5) from Ca
(LGD 4)
Affirmations:
Speculative Grade Liquidity Rating, Affirmed SGL-4
Corporate Family Rating, Affirmed Ca
Senior Secured 2nd Lien Notes, Affirmed Caa2 (LGD 2)
Senior Unsecured Regular Bond/Debentures, Affirmed C (LGD 5)
Outlook Actions:
Issuer: Midstates Petroleum Company Inc.
Outlook, Remains Negative
RATINGS RATIONALE
The downgrade of Midstates' PDR to D-PD is a result of the
bankruptcy filing. The downgrade of Midstates' third lien secured
notes rating to C as well as the affirmation of its other ratings
reflect Moody's view of the potential overall family recovery to be
30%-40%.
Shortly following this rating action, Moody's will withdraw all
ratings for the company consistent with Moody's practice for
companies operating under the purview of the bankruptcy courts
wherein information flow typically becomes much more limited.
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011.
Midstates Petroleum Company, Inc. is an independent exploration and
production (E&P) company focused on oilfields in the Mississippian
Lime play in Oklahoma and the Anadarko Basin in Texas and western
Oklahoma. The company is headquartered in Tulsa, Oklahoma.
MODERN SHOE: Files for Bankruptcy, to Sell Assets to Bright Star
----------------------------------------------------------------
Citing unbearable royalty obligations, Modern Shoe Company LLC and
its affiliate Highline United LLC sought creditor protection in the
U.S. Bankruptcy Court for the District of Massachusetts with the
goal of selling substantially all of their assets. Given their
financial position, the specialty designers, wholesalers, and
importers of premium-segment footwear said they cannot afford to
linger long in Chapter 11.
As disclosed in Court filings, the Debtors hold several trademark
licenses through which they sell branded lines of footwear. The
licensors include Brand Matter LLC, which owns the Ellen Tracy
mark, Elie Tahari, Ltd., which owns the Elie Tahari and Tahari
marks, French Connection Limited, and Ash (HK) Limited. These
licenses require the Debtors to pay certain minimum royalties to
the Licensors regardless of the sales made using the licensed
trademarks.
According to the Debtors, they have been unable to generate enough
revenue to keep up with the increasing Guaranteed Minimum
Royalties. Last month, Brand Matter filed a suit against Modern
Shoe for the alleged failure to make the Guaranteed Minimum Royalty
payment due under the Ellen Tracy licensing agreement.
"The Debtors engaged in substantial efforts to renegotiate these
licenses and avoid a bankruptcy filing, but these efforts proved
unsuccessful," said Kimberly Bradley, president of Modern Shoe.
In addition to the Guaranteed Minimum Royalties, the Debtors said
they have experienced other financial problems caused by among
other things, the unprofitability of Highline United; two of the
Debtors largest customers -- Macy's and Lord and Taylor -- ceasing
to sell the Ellen Tracy branded apparel; and the decline of the
Ellen Tracy brand due to its lack of department store presence.
As a result of the Debtors' financial troubles, its lender,
Santander Bank, reduced their line of credit from $10 million to $2
million in the Fall of 2014 and then revoked the line of credit in
July 2015.
As of the Petition Date, the Debtors have no secured indebtedness.
Trade and other unsecured creditors are owed approximately
$28,239,920 as of the Petition Date. J.S. Macao, one of the
Affiliated Manufacturers, is the Debtors' largest unsecured
creditor holding a claim of $22,695,624.
A copy of the declaration in support of bankruptcy petition is
available for free at:
http://bankrupt.com/misc/6_MODERNSHOE_Affidavit.pdf
Asset Purchase Agreement
The Debtors are negotiating an asset purchase agreement with Bright
Star Ventures LLC -- a new company created by the Debtors' owners,
to sell their businesses to the Buyer. The Debtors intend to file
a motion to approve bidding procedures and authorize the
transactions subject of the APA.
The Debtors intend to request a period of approximately two months
to solicit further offers. They have hired Chief Restructuring
Officer, Bruce A. Erickson and his firm BErickson Group LLC to
assist them in marketing their assets and soliciting additional
offers.
DIP Financing Motion
The Debtors have also negotiated the terms of debtor-in-possession
financing from the Buyer. They intend to file a motion to obtain
financing to fund their operations between the Petition Date and
the closing of the sale of substantially all of their assets. The
Debtors anticipate that they will have sufficient liquidity to fund
their operations for an additional 30-to-45 days. Nevertheless,
the Debtors maintained, they will require approximately $2 million
in financing after that time until the closing on a sale.
About Modern Shoe
Headquartered in Hyde Park, Massachusetts, Modern Shoe Company LLC
and Highline United LLC are specialty designers, wholesalers, and
importers of premium-segment footwear. The Debtors currently
employ six designers, who design footwear for each season. The
Debtors provide the design specifications, including style, color,
and material, to third party manufacturers. The footwear is
manufactured overseas, primarily in China, by JS Macao
International, Universal Max and Ash (HK) Limited ("the Affiliate
Manufacturers"), which companies share some common ownership with
the Debtors' ultimate ownership. The Debtors also previously
manufactured handbags, but discontinued that business in November
2015.
Modern Shoe was originally founded by individual investors and a
company called Grandview International Ltd. In 2009, Grandview
acquired the interests of the individual investors and Modern Shoe
became a wholly-owned subsidiary of Grandview. Grandview has also
wholly-owned Highline since Highline's inception. Grandview is a
holding company. In addition to the Debtors, Grandview owns 100%
of the interests of two affiliated companies -- ASH Footwear
International LLC and JMC Footwear LLC -- both of which were
closed in 2015 and dissolved in early 2016. Grandview itself is
owned by a holding company known as Highline United Holdings USA,
Inc.
Each of the Debtors filed a Chapter 11 bankruptcy petition (Bankr.
D. Mass. Case Nos. 16-11658 and 16-11659) on May 2, 2016. The
petitions were signed by Kimberley Bradley as COO and CFO.
Modern Shoe estimated assets in the range of $1 million to $10
million and liabilities of up to $50 million. Highline United
estimated assets and liabilities in the range of $10 million to $50
million.
The Debtors have hired Foley Hoag LLP as counsel, Verdolino &
Lowey, P.C. as accountant and BErickson Group, LLC as restructuring
advisor.
Judge Melvin S. Hoffman has been assigned the cases.
MODERN SHOE: Seeks Joint Administration of Cases
------------------------------------------------
Modern Shoe Company LLC and Highline United LLC asked the
Bankruptcy Court to enter an order directing the joint
administration of their Chapter 11 cases for procedural purposes
only. The Debtors request that the Court maintain one file and one
docket for both of the jointly administered Chapter 11 cases under
the case of Modern Shoe, Case No. 16-11658.
"Given the interlinked commercial relationships between the
Debtors, joint administration of these chapter 11 cases will
provide significant administrative convenience without harming the
substantive rights of any party in interest," said Kenneth S.
Leonetti, Esq., at Foley Hoag LLP, counsel for the Debtors.
He added that the entry of an order directing joint administration
will reduce fees and costs by avoiding duplicative filings, allow
all parties-in-interest to monitor these Chapter 11 cases with
greater ease, relieve the Court of the burden of entering
duplicative orders and maintaining duplicative files for each
Debtor and simplify administrative supervision of these chapter 11
cases by the U.S. Trustee.
In addition, the Debtors seek authority to file the monthly
operating reports as required by the U.S. Trustee Operating
Guidelines on a consolidated basis; provided, however,
that disbursements will be listed on a debtor-by-debtor basis.
About Modern Shoe
Headquartered in Hyde Park, Massachusetts, Modern Shoe Company LLC
and Highline United LLC are specialty designers, wholesalers, and
importers of premium-segment footwear. The Debtors currently
employ six designers, who design footwear for each season. The
Debtors provide the design specifications, including style, color,
and material, to third party manufacturers. The footwear is
manufactured overseas, primarily in China, by JS Macao
International, Universal Max and Ash (HK) Limited ("the Affiliate
Manufacturers"), which companies share some common ownership with
the Debtors' ultimate ownership. The Debtors also previously
manufactured handbags, but discontinued that business in November
2015.
Modern Shoe was originally founded by individual investors and a
company called Grandview International Ltd. In 2009, Grandview
acquired the interests of the individual investors and Modern Shoe
became a wholly-owned subsidiary of Grandview. Grandview has also
wholly-owned Highline since Highline's inception. Grandview is a
holding company. In addition to the Debtors, Grandview owns 100%
of the interests of two affiliated companies -- ASH Footwear
International LLC and JMC Footwear LLC -- both of which were
closed in 2015 and dissolved in early 2016. Grandview itself is
owned by a holding company known as Highline United Holdings USA,
Inc.
Each of the Debtors filed a Chapter 11 bankruptcy petition (Bankr.
D. Mass. Case Nos. 16-11658 and 16-11659) on May 2, 2016. The
petitions were signed by Kimberley Bradley as COO and CFO.
Modern Shoe estimated assets in the range of $1 million to $10
million and liabilities of up to $50 million. Highline United
estimated assets and liabilities in the range of $10 million to $50
million.
The Debtors have hired Foley Hoag LLP as counsel, Verdolino &
Lowey, P.C. as accountant and BErickson Group, LLC as restructuring
advisor.
Judge Melvin S. Hoffman has been assigned the cases.
MODERN SHOE: To Reject License Agreement with Brand Matter
----------------------------------------------------------
Modern Shoe Company LLC and Highline United LLC seek authority from
the Bankruptcy Court to reject a license agreement with Brand
Matter, LLC, effective nunc pro tunc as of the Petition Date.
"[T]he Debtors have evaluated the License Agreement in the context
of the Bankruptcy Code, the administration of their bankruptcy
cases, and the disposition of their assets via the asset sale, and
have concluded, in their business judgment, that rejection of the
License Agreement is in the best interests of the Debtors' estates,
their creditors and other parties in interest," said Kenneth S.
Leonetti, Esq., at Foley Hoag LLP, counsel for the Debtors.
Effective July 13, 2006, Modern Shoe and L.C. Licensing, Inc.
entered into a license agreement, as amended, whereby LCI granted
Modern Shoe an exclusive license to use its licensed marks "Ellen
Tracy Collection" and "Ellen Tracy" on women's footwear in the
United States, Canada, and Mexico. Brand Matter, LLC is the
successor-in-interest to LCI. In consideration for the exclusive
license, which is limited to "women's footwear," Modern Shoe agreed
to pay certain minimum royalties to Brand Matter regardless of the
sales made using the Licensed Marks.
The Guaranteed Minimum Royalties increased from $300,000 in 2007 to
$930,000 in 2016. According to the Debtors, they have been unable
to generate sufficient sales from the Ellen Tracy business to meet
the increasing Guaranteed Minimum Royalties from the License
Agreement and the purchaser of their has no interest in the License
Agreement.
Moreover, the Debtors said, the licensor seemingly has no interest
in seeing them continue to try to sell Ellen Tracy branded
footwear, having brought a suit seeking a declaratory judgment that
the License Agreement has terminated. On or around April 21, 2016,
Brand Matter filed suit against Modern Shoe in the United States
District Court for the Southern District of New York, alleging that
Modern Shoe failed to make the Guaranteed Minimum Royalty payments
due under Licensing Agreement, seeking a declaratory judgment that
the License Agreement had terminated, and claiming $7,713,750 in
damages.
About Modern Shoe
Headquartered in Hyde Park, Massachusetts, Modern Shoe Company LLC
and Highline United LLC are specialty designers, wholesalers, and
importers of premium-segment footwear. The Debtors currently
employ six designers, who design footwear for each season. The
Debtors provide the design specifications, including style, color,
and material, to third party manufacturers. The footwear is
manufactured overseas, primarily in China, by JS Macao
International, Universal Max and Ash (HK) Limited ("the Affiliate
Manufacturers"), which companies share some common ownership with
the Debtors' ultimate ownership. The Debtors also previously
manufactured handbags, but discontinued that business in November
2015.
Modern Shoe was originally founded by individual investors and a
company called Grandview International Ltd. In 2009, Grandview
acquired the interests of the individual investors and Modern Shoe
became a wholly-owned subsidiary of Grandview. Grandview has also
wholly-owned Highline since Highline's inception. Grandview is a
holding company. In addition to the Debtors, Grandview owns 100%
of the interests of two affiliated companies -- ASH Footwear
International LLC and JMC Footwear LLC -- both of which were
closed in 2015 and dissolved in early 2016. Grandview itself is
owned by a holding company known as Highline United Holdings USA,
Inc.
Each of the Debtors filed a Chapter 11 bankruptcy petition (Bankr.
D. Mass. Case Nos. 16-11658 and 16-11659) on May 2, 2016. The
petitions were signed by Kimberley Bradley as COO and CFO.
Modern Shoe estimated assets in the range of $1 million to $10
million and liabilities of up to $50 million. Highline United
estimated assets and liabilities in the range of $10 million to $50
million.
The Debtors have hired Foley Hoag LLP as counsel, Verdolino &
Lowey, P.C. as accountant and BErickson Group, LLC as restructuring
advisor.
Judge Melvin S. Hoffman has been assigned the cases.
MODERN SHOE: Wants 35-Day Extension to File Schedules
-----------------------------------------------------
Modern Shoe Company LLC and Highline United LLC asked the
Bankruptcy Court to extend the period within which they must file
their schedules of assets and liabilities and statements of
financial affairs by 35 days, to June 6, 2016.
According to Kenneth S. Leonetti, Esq., at Foley Hoag LLP, counsel
for the Debtors, in view of the amount of work entailed in
completing the Schedules and the competing demands upon the
Debtors' employees and professionals to assist in efforts to manage
business operations during the initial postpetition period, the
Debtors will not be able to complete the Schedules within the
14-day period following the Petition Date.
"The Debtors have a relatively small management team, whose focus
has been, and will continue to be, on day-to-day operations. "While
the Debtors, with the help of their professional advisors, are
mobilizing their employees to work diligently and expeditiously on
the preparation of the Schedules, resources are limited," Mr.
Leonetti said.
The Debtors have engaged Verdolino & Lowey, P.C. to, among other
things, provide
professionals to assist in the preparation of the Schedules.
About Modern Shoe
Headquartered in Hyde Park, Massachusetts, Modern Shoe Company LLC
and Highline United LLC are specialty designers, wholesalers, and
importers of premium-segment footwear. The Debtors currently
employ six designers, who design footwear for each season. The
Debtors provide the design specifications, including style, color,
and material, to third party manufacturers. The footwear is
manufactured overseas, primarily in China, by JS Macao
International, Universal Max and Ash (HK) Limited ("the Affiliate
Manufacturers"), which companies share some common ownership with
the Debtors' ultimate ownership. The Debtors also previously
manufactured handbags, but discontinued that business in November
2015.
Modern Shoe was originally founded by individual investors and a
company called Grandview International Ltd. In 2009, Grandview
acquired the interests of the individual investors and Modern Shoe
became a wholly-owned subsidiary of Grandview. Grandview has also
wholly-owned Highline since Highline's inception. Grandview is a
holding company. In addition to the Debtors, Grandview owns 100%
of the interests of two affiliated companies -- ASH Footwear
International LLC and JMC Footwear LLC -- both of which were
closed in 2015 and dissolved in early 2016. Grandview itself is
owned by a holding company known as Highline United Holdings USA,
Inc.
Each of the Debtors filed a Chapter 11 bankruptcy petition (Bankr.
D. Mass. Case Nos. 16-11658 and 16-11659) on May 2, 2016. The
petitions were signed by Kimberley Bradley as COO and CFO.
Modern Shoe estimated assets in the range of $1 million to $10
million and liabilities of up to $50 million. Highline United
estimated assets and liabilities in the range of $10 million to $50
million.
The Debtors have hired Foley Hoag LLP as counsel, Verdolino &
Lowey, P.C. as accountant and BErickson Group, LLC as restructuring
advisor.
Judge Melvin S. Hoffman has been assigned the cases.
MUHAMMAD A. AMJAD: Selling Property to Son for $860,000
-------------------------------------------------------
Muhammad A. Amjad on May 3, 2016, filed an amended motion to sell
his residential property in Oak Brook, Illinois, to his son for
$860,000. On Nov. 6, 2015, an order was entered to determine the
value of the residential property located at 120 Saint Francis
Circle, Oak Brook, Ill., in the amount of $824,358. The Debtor
co-owns the property with his wife, Sadia Amjad. MB Financial Bank
has a secured claim by virtue of a mortgage on the property in the
amount exceeding $860,000. The parties have agreed that the Debtor
and his spouse will sell the house to Ali Amjad for $860,000, and
upon the payment thereof MB Financial will release any and all of
its security interest in the property. The buyer, Ali Amjad, the
owner's son, was scheduled to close by April 30, 2016. In
consideration of the extension of the closing deadline until June
30, 2106, MB Financial will be paid $4,000 for the month of May
2016 and June 2016.
About Muhammad A. Amjad
On Feb. 10, 2015, Muhammad A. Amjad filed a voluntary petition for
relief under Chapter 14 and converted to a Chapter 11 on June 8,
2015 (Bankr. N.D. Ill. Case No. 15-04350).
The Debtor's attorney:
Robert J. Adams
ROBERT J. ADAMS & ASSOCIATES
901 W. Jackson, Suite 2012
Chicago, IL 60607
Tel: (312) 346-0100
MUSCLEPHARM CORP: Amends 2015 Annual Report
-------------------------------------------
MusclePharm Corporation filed with the Securities and Exchange
Commission an amended annual report on Form 10-K/A for the year
ended Dec. 31, 2015, solely for the purpose of including the
information required by Part III of Form 10-K. Part III contains
information regarding the Company's directors, executive officers
and corporate governance; executive compensation; security
ownership of certain beneficial owners and management and related
stockholder matters; certain relationships and related
transactions, and director independence; and principal accounting
fees and services. A copy of the Form 10-K/A is available for free
at http://is.gd/A2HzSV
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100 percent free of banned substances. MusclePharm is sold in
over 120 countries and available in over 5,000 U.S. retail
outlets, including GNC and Vitamin Shoppe. MusclePharm products
are also sold in over 100 online stores, including
bodybuilding.com, Amazon.com and Vitacost.com.
MusclePharm Corporation reported a net loss of $13.8 million in
2014, a net loss of $17.7 million in 2013 and a net loss of $19
million in 2012.
As of Sept. 30, 2015, the Company had $62.2 million in total
assets, $67.8 million in total liabilities and a $5.54 million
total stockholders' deficit.
NAKED BRAND: BDO USA Expresses Going Concern Doubt
--------------------------------------------------
Naked Brand Group Inc. filed with the Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
US$19.06 million on US$1.38 million of net sales for the year ended
Jan. 31, 2016, compared to a net loss of US$21.07 million on
US$557,000 of net sales for the year ended Jan. 31, 2015.
As of Jan. 31, 2016, Naked Brand had US$6.88 million in total
assets, US$2.30 million in total liabilities and US$4.58 million in
total stockholders' equity.
As of Jan. 31, 2016, the Company had cash totaling US$4,780,994.
The Company believes it has sufficient capital to fund its
operations through the 4th quarter of fiscal 2017. Accordingly,
management intends to continue to raise funds from equity and debt
financings to fund its operations and objectives. However, the
Company said it cannot be certain that financing will be available
on acceptable terms or available at all. To the extent that the
Company raises additional funds by issuing debt or equity
securities or through bank financing, its existing stockholders may
experience significant dilution. If the Company is unable to raise
funds when required or on acceptable terms, it may have to
significantly scale back, or discontinue, its operations.
BDO USA, LLP, in New York, NY, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Jan. 31, 2016, noting that the Company incurred a net loss of
$19,063,399 for the year ended January 31, 2016 and the Company
expects to incur further losses in the development of its business.
This condition raises substantial doubt about the Company's
ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/Far9Wi
About Naked Brand
Naked Brand Group Inc. designs, manufactures, and sells men's
innerwear and lounge apparel products in the United States and
Canada. It offers various innerwear products, including trunks,
briefs, boxer briefs, undershirts, T-shirts, and lounge pants
under the Naked brand, as well as under the NKD sub-brand for men.
The company sells its products to consumers and retailers through
wholesale relationships and direct-to-consumer channel, which
consists of an online e-commerce store, thenakedshop.com. Naked
Brand Group Inc. is based in New York, New York.
NATIONAL CINEMEDIA: May Issue 4.4 Million Shares Under Plan
-----------------------------------------------------------
National CineMedia, Inc., filed a Form S-8 registration statement
with the Securities and Exchange Commission to register 4,400,000
shares of common stock issuable under the Company's 2016 Equity
Incentive Plan. A copy of the prospectus is available at
http://is.gd/AIqfiy
About National CineMedia
National CineMedia, Inc., is the holding company of National
CineMedia, LLC. NCM LLC operates the largest digital in-theatre
network in North America, allowing NCM to distribute advertising,
Fathom entertainment programming events and corporate events under
long-term exhibitor services agreements with American Multi-Cinema
Inc., a wholly owned subsidiary of AMC Entertainment Inc.; Regal
Cinemas, Inc., a wholly owned subsidiary of Regal Entertainment
Group; and Cinemark USA, Inc., a wholly owned subsidiary of
Cinemark Holdings, Inc. NCM LLC also provides such services to
certain third-party theater circuits under "network affiliate"
agreements, which expire at various dates.
For the year ended Dec. 31, 2015, the Company reported net income
attributable to the Company of $15.4 million on $447 million of
revenue compared to net income of $13.4 million on $394 million of
revenue for the year ended Jan. 1, 2015.
As of Dec. 31, 2015, National Cinemedia had $1.08 billion in total
assets, $1.25 billion in total liabilities and a $171.7 million
total deficit.
* * *
As reported by the TCR on March 24, 2011, Standard & Poor's
Ratings Services raised its corporate credit ratings on
Centennial, Colorado-based National CineMedia Inc. and
operating subsidiary National CineMedia LLC (which S&P analyzes on
a consolidated basis) to 'BB-' from 'B+'. "The 'BB-' corporate
credit rating reflects S&P's expectation that NCM's EBITDA growth
will enable the company to continue to de-lever over the
intermediate term despite its aggressive dividend policy," said
Standard & Poor's credit analyst Jeanne Shoesmith.
NEW YORK LIGHT: Court Extends Plan Exclusivity Thru Hearing Date
----------------------------------------------------------------
United States Bankruptcy Judge Robert E. Littlefield, Jr. entered a
bridge order extending New York Light Energy, LLC, et al.'s
exclusive period to file a chapter 11 plan or plans of
reorganization through and including the hearing date on the
Debtors' motion to extend exclusivity.
A hearing on the request is set for May 18, 2016.
As reported by the Troubled Company Reporter on May 3, 2016,
Debtors New York Light Energy, LLC, Light Energy Partners Group,
LP, Light Energy Administrative Services, LLC, Light Energy
Installers, LLC, U.S. Light Energy, LLC, and Light Energy
Management II, LLC, ask the U.S. Bankruptcy Court for the Northern
District of New York for entry of an order extending the Debtors'
exclusive periods to:
-- file a chapter 11 plan or plans of reorganization for 28
days through and including May 27, 2016, and
-- solicit acceptances of the plan or plans, for 28 days
through and including July 26, 2016.
Pursuant to the order entered on March 30, 2016, the Court
extended
the Debtors' Exclusive Filing Period the Exclusive Solicitation
Period through and including April 29, 2016 and June 28, 2016,
respectively.
The Debtors tell the Court that they have made significant
progress
in administering theses Chapter 11 Cases. However, because of the
complexity of the Debtors' businesses and debt structure and the
resulting complexity of the restructuring process, the Debtors
require additional time to complete the restructuring process
and determine the most beneficial bankruptcy exit outcome for
their
estates and creditors. They contend that an extension of their
Exclusive Periods is necessary to prevent the distraction and
additional strain on the Debtors' limited resources that would be
caused if a competing chapter 11 plan were to be filed while the
Debtors are determining the most favorable means of exiting
bankruptcy.
The Debtors relate that since the Petition Date, they have worked
diligently to stabilize their businesses and reassure creditors,
suppliers and employees. In the approximately nine months since
the Petition Date, the Debtors have dedicated significant time and
resources to, among other things, making projects eligible for
funding by non-debtor affiliate Light Energy Fund III, LP, through
its lender, Manufacturers & Traders Trust Company.
Thus far, the Debtors have purchased three parcels for the
construction of three solar projects known as the Betnr Project,
totaling approximately 1.950 MW. Customers have been secured to
purchase all of the expected electricity to be produced on the
three parcels at the Betnr Project pursuant to Net Metering
Agreements.
The Debtors' new management team and the Debtors' financial
advisors (i) have carefully analyzed the three Funds which were
created to fund the Debtors' construction of the solar arrays
which
permitted Kyocera and M&T to take advantage of investment tax
credits and (ii) discovered that the obligations of the Debtors
under the Funds were more burdensome than anticipated by the
former
management of the Debtors.
After extended negotiations with M&T, the Debtors and M&T have
concluded an agreement which was memorialized by amending and
restating loan agreements, an operating
agreement, and a master lease agreement. Pursuant to these
revisions, (i) the Debtors have been relieved of their guaranty
obligations under the 2012 Light Energy Fund I, LP ("Fund I") and
Light Energy Fund III ("Fund III"); (ii) the security interest of
M&T has terminated, (iii) the lease payments under the proposed
amended and restated master lease agreement have extended the term
and reduced the annual lease payments by approximately 25%.
During
the next ten years, the lease payments will be reduced by
approximately $2.7 million and such payments are longer guaranteed
by the Debtors. The Debtors have also executed an operations and
maintenance agreement under which M&T will pay the Debtors $1,500
per array each year, with an additional amount of $13 per kw for
arrays over 100 kw.
Furthermore, although the Debtors' developing business plan is a
work in progress and will continue to evolve, the Debtors have
kept
the members of the Committee
updated on their progress. The Committee and its advisors are
being given access to a substantial amount of financial
information, in order to help the Committee evaluate the Debtors'
businesses and plans.
The Debtors and their professionals have been engaged in
significant efforts to market opportunities for additional equity
infusion, new financing, or the possibility of a sale of the
Debtors' assets within these Chapter 11 Cases, including numerous
discussions with interested parties and the exchange of
information
relating to the Debtors' assets and financial projections, and are
in the process of finalizing a chapter 11 plan which includes a
sale of the Debtors' assets, the creation of a liquidation trust,
and a preliminary distribution to creditors. In addition, the
Debtors have continued proceedings against Kyocera International,
Inc., in order to
recover additional funds for the benefit of the Debtors' creditors
and the Debtors' estates.
A hearing on the request is set for May 18, 2016. Objections are
due May 11.
About New York Light Energy
Founded in 2009 and based in Latham, New York, New York Light
Energy, LLC, designs and installs medium-scale solar arrays in New
York State and Massachusetts. The Company has installed solar
arrays on more than 180 industrial, commercial, municipal, and
residential sites, with a total of over 15 megawatts of capacity
to
date.
NYLE and its affiliates commenced Chapter 11 bankruptcy cases
(Bankr. N.D.N.Y. Lead Case No. 15-11121) in Albany, New York, on
May 27, 2015. Judge Robert E. Littlefield Jr. is assigned to the
cases.
The Debtors tapped Bond, Schoeneck & King, PLLC, as counsel. The
Debtors hired Blackbird Asset Services LLC as liquidation agent in
connection with the sale of their excess inventory.
The U.S. Trustee for Region 2, appointed three creditors to serve
in an Official Committee of Unsecured Creditors in the Chapter 11
cases of New York Light Energy, LLC, et al. The Committee retains
Hodgson Russ LLP as its attorneys and Emerald Capital Advisors
Corp. as financial advisor.
NEWBURY COMMON: Court Extends Plan Exclusivity to Sept. 8
---------------------------------------------------------
At the behest of Newbury Common Associates, LLC, and certain of its
affiliates, the Delaware Bankruptcy Court extended the Debtors'
Exclusive Plan Filing Period through and including Sept. 8, 2016,
and the Plan Solicitation Period through and including Nov. 7,
2016.
As reported by the Troubled Company Reporter on April 28, 2016, the
Debtors said that, unless the Exclusive Periods are extended, (a)
the Original Debtors' Plan Period and Solicitation Period will
expire on April 11, 2016, and June 10, 2016, respectively, (b) the
Additional Debtors' Plan Period and Solicitation Period will expire
on June 2, 2016, and August 1, 2016, respectively, and (c) 220 Elm
II's Plan Period and Solicitation Period will expire on July 15,
2016 and September 13, 2016, respectively.
The Debtors seek to align the Exclusive Periods of the Original
Debtors, the Additional Debtors, and 220 Elm II for simplicity, in
order to reduce the administrative costs of filing separate
extension motions going forward, and to align these deadlines with
the proposed Sale timeline, all to the extent such motions are
necessary. This is the Debtors' first request for an extension of
the Exclusive Periods.
The Debtors also request that the Court extend the deadline for
filing a plan or commencing monthly payments under Section
362(d)(3) of the Bankruptcy Code to September 8, 2016, again,
which
is in alignment with the Debtors' proposed Sale timeline.
Newbury Common Associates, LLC, et al., are represented by:
Robert S. Brady, Esq.
Sean T. Greecher, Esq.
Maris J. Kandestin, Esq.
Elizabeth S. Justison, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
Email: rbrady@ycst.com
sgreecher@ycst.com
mkandestin@ycst.com
ejustison@ycst.com
About Newbury Common Associates
Newbury Common Associates, LLC, et al., comprise a corporate
enterprise that owns a diverse portfolio of high quality,
distinctive commercial, hospitality and residential properties
with
an aggregate of approximately 800,000 square feet located
primarily
in Stamford, Connecticut.
On Dec. 13, 2015, Newbury Common Associates, LLC, and 13
affiliates
each commenced a voluntary case (Bankr. D. Del. Lead Case No.
15-12507) under chapter 11 of the Bankruptcy Code, and on Dec. 14,
Tag Forest LLC commenced a Chapter 11 case (collectively,
"Original
Debtors"). On Feb. 3, 2016, Newbury Common Member Associates, LLC
and 8 affiliates commenced a voluntary case under chapter 11 of
the
Bankruptcy Code; and then on Feb. 4, 88 Hamilton Avenue
Associates,
LLC filed a Chapter 11 petition (collectively "Additional
Debtors").
Seaboard Realty, LLC, its principals or entities it manages serve
as the manager under the operating agreements for each of the
Debtors and is owned 50% by John J. DiMenna, Jr., 25% by Thomas L.
Kelly, Jr. and 25% by William A. Merritt, Jr. The Original
Debtors
other than Seaboard Residential, LLC, Tag, and Newbury Common
Associates, LLC, are holding companies whose assets are
substantially comprised of the equity of the Property Owner
Debtors. The Debtors' eight operating property are owned by the
"Property Owner Debtors", namely Century Plaza Investor
Associates,
LLC; Seaboard Hotel Associates, LLC; Seaboard Hotel LTS
Associates,
LLC; Park Square West Associates, LLC; Clocktower Close
Associates,
LLC; One Atlantic Investor Associates, LLC; 88 Hamilton Avenue
Associates, LLC; 220 Elm Street I, LLC; 300 Main Street
Associates,
LLC; and Seaboard Residential, LLC.
The Original Debtors' chapter 11 cases are being jointly
administered pursuant to an order entered Dec. 18, 2015. The
Debtors later won approval of a supplemental motion seeking joint
administration of the Additional Debtors' Chapter 11 cases with
the
cases of the Original Debtors for procedural purposes only.
As of Jan. 7, 2016, the Debtors had incurred purported aggregate
funded secured indebtedness of approximately $177.2 million in
principal, including approximately $150.4 million of
property-level
secured debt and approximately $26.8 million of purported and
allegedly unauthorized mezzanine debt.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP, and
Dechert LLP as attorneys, and Donlin Recano as claims and noticing
agent.
NGL ENERGY: Fitch Affirms 'B+' IDR, Outlook Revised to Stable
-------------------------------------------------------------
Fitch Ratings has affirmed NGL Energy Partners LP's (NGL) Long-Term
Issuer Default Rating (IDR) at 'B+'. Fitch has affirmed NGL's
senior unsecured debt at 'B-' and the Recovery Rating (RR) at
'RR6'.
The Rating Outlook has been revised to Stable from Negative.
Fitch has also affirmed NGL Energy Finance Corp.'s senior unsecured
debt rating at 'B-'/'RR6'. NGL Energy is the co-issuer for NGL's
senior unsecured notes.
KEY RATING DRIVERS
The 'B+' rating is by supported by NGL's diverse assets located
throughout the U.S. The partnership has significantly expanded in
size and scale since its IPO in 2011. NGL has significant senior
secured debt, which totalled $2.2 billion as of Dec. 31, 2015 and
is ahead of its $850 million of senior unsecured debt. Therefore,
the senior unsecured debt rating is notched down two from the IDR
to 'B-' and the Recovery Rating is 'RR6'. The 'RR6' indicates poor
recovery prospects in the event of a default at the unsecured
level.
The Stable Outlook reflects NGL's initiatives to improve its cash
flows and the balance sheet. Over the last few months, the
partnership has sold assets for approximately $450 million. Assets
sold include its general partnership and limited partnership
interest in TransMontaigne Energy Partners, LP (TransMontaigne).
NGL's growth spending for FY17 (ends March 31) is expected to be in
the range of $200 million to $300 million which is viewed as
reasonable given Fitch's expectations for liquidity. Importantly,
NGL has also reduced FY17's distributions by 39%, which should
improve the distribution coverage ratio significantly. NGL also
plans to issue $200 million of convertible preferred units and
warrants in the near term. The convertible preferred are expected
to receive 50% equity credit based on Fitch's criteria based on the
proposed terms.
While NGL's high leverage is a concern, Fitch's expects it to
decrease in FY'17 given the partnership's current initiatives.
NGL's counterparty risk is also a concern, particularly for Grand
Mesa since its exposure to smaller exploration and production
customers tends to increase counterparty risk.
Diverse Operations: NGL's assets are diverse and comprised of
liquids (approximately 20% of EBITDA excluding G&A for FY15), crude
oil logistics (15%), water solutions (27%), retail propane (21%),
and refined fuels and renewables (17%). NGL's strategy is to focus
growth spending on crude oil logistics, liquids, retail propane and
refined fuels and renewables.
Leverage: For the latest-12-months (LTM) ending Dec. 31, 2015,
NGL's adjusted leverage (defined as debt less $250 million of
TransMontaigne's debt to adjusted EBITDA) was 6.8x. Fitch expects
adjusted leverage to be in the range of 6.8-7.0x at the end of
FY16. Given Grand Mesa's in service date of Nov. 1, 2016 and
expectations for normalized weather for the propane business in
FY17, Fitch projects adjusted leverage to be in the range of
5.4x-5.8x by the end of FY17.
Distributable Cash Flow and Distribution Coverage: For the LTM
ending Dec. 31, 2015, distributable cash flow was $302 million, up
from $272 million generated during fiscal year 2015. NGL's
distribution coverage ratio was 0.99x for the LTM ending
Dec. 31, 2015, which is a decline from 1.2x for FY15. With the 39%
cut in distribution in FY17, Fitch expects the coverage ratio to be
in the range of 1.8x to 2.2x by yearend FY17.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for NGL include:
-- EBITDA for FY16 is reduced to $425 million (the midpoint of
management's recent guidance);
-- EBITDA growth occurs in FY17 due to projects coming on line,
particularly Grand Mesa;
-- Grand Mesa's contribution to EBITDA is reduced from prior
expectations and in line with NGL's guidance of $120 million
in year one (down from $160 million);
-- NGL successfully closes on $200 million of convertible
preferreds and, under the current terms, would receive 50%
equity credit as per Fitch's criteria.
RATING SENSITIVITIES
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- Leverage at or below 5.5x on a sustained basis;
-- Fee-based arrangements accounting for greater than 60% of cash
flows;
-- A demonstrated sustainable ability to access capital markets
for liquidity needs.
Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:
-- Reduced liquidity;
-- Significant increases in capital spending beyond Fitch's
expectations or further acquisition activity that have
negative consequences for the credit profile (e.g., if not
funded with a balance of debt and equity);
-- Increased adjusted leverage beyond 6.5x for a sustained period
of time;
-- Distribution coverage below 1x for a sustained period of time.
LIQUIDITY
As of Dec. 31, 2015, NGL had $25 million of cash on the balance
sheet. It also had a $2.474 billion secured bank facility (up from
$2.296 billion at the end of the prior quarter) comprised of a
$1.038 billion working capital facility (which is restricted by a
borrowing base) and a $1.436 billion expansion facility. The
working capital facility had borrowings of $604 million and letters
of credit totalling $117 million. The expansion facility had drawn
$1.317 billion leaving capacity of $119 million. NGL's bank
agreement extends through 2018.
In addition to the bank agreement having borrowing base
restrictions on the working capital revolver, financial covenants
do not allow leverage (as defined by the bank agreement) to exceed
4.75x. The bank agreement was amended in late December 2015 to
increase the maximum leverage ratio covenant from 4.25x to 4.75x.
In addition to the working capital borrowings and letters of credit
being excluded from the leverage calculation, NGL gets pro forma
EBITDA credit for acquisitions. Pro forma EBITDA credit for
material projects or acquisitions is typical for MLP bank
agreements.
NGL does not have any significant debt maturities until 2018 when
the bank agreement expires. After that, it has $400 million of
notes due in 2019.
Fitch has affirmed the following ratings:
NGL Energy Partners LP
-- Long-Term IDR at 'B+';
-- Senior unsecured debt at 'B-/RR6'.
The Rating Outlook is revised to Stable from Negative.
NGL Energy Finance Corp.
-- Senior unsecured debt at 'B-'/RR6.
NORANDA ALUMINUM: Approval for Modified Severance Program Sought
----------------------------------------------------------------
Noranda Aluminum, Inc., and its affiliated debtors ask the U.S.
Bankruptcy Court for the Eastern District of Missouri, Southeastern
Division, to approve their Modified Senior Management Severance
Program for Non-Insider Employees.
The Debtors maintained a Senior Managers Severance Plan for certain
senior and other management-level employees. The Debtors also
maintained a severance plan for salaried employees that were
ineligible to participate in the Senior Management Severance
Program.
The Debtors modified the Salaried Employee Severance Plan to
provide that eligible employees would receive severance in a
lump-sum payment equal to the lesser of (i) the severance such
employee would have received under the Salaried Employee Severance
Plan and (ii) three months' pay.
The Debtors propose to modify the Senior Management Severance Plan
and seek approval of payments thereunder, to ensure non-insider
employees eligible to participate in the Senior Management
Severance Plan are treated the same as employees who are eligible
to participate in the Modified Salaried Employee Severance Plan,
and to maintain employee morale during a challenging and uncertain
time. The Debtors seek authority to provide severance to eligible
employees who are involuntarily terminated, other than for reasons
related to misconduct, short-term reductions in force, or a refusal
of reassignment, in a lump sum payment equal to the lesser of (i)
the severance such employee would have received under the Senior
Management Severance Program and (ii) three months' pay.
The Debtors have determined in their business judgment that it is
in the best interests of their estates to implement the Modified
Senior Management Severance Program. The Debtors contend that such
program will ensure all non-insider salaried employees whose
employment may be terminated are treated equally, which the Debtors
believe will maintain employee morale during the Chapter 11 cases.
The Debtors' Motion is scheduled for hearing on May 12, 2016 at
10:00 a.m. The deadline for the submission of objections to the
Debtors' Motion is set for May 5, 2016.
Noranda Aluminum, Inc., and its affiliated debtors are represented
by:
Christopher J. Lawhorn, Esq.
Angela L. Drumm, Esq.
Colin M. Luoma, Esq.
CARMODY MACDONALD P.C.
120 S. Central Avenue, Suite 1800
St. Louis, MO 63105
Telephone: (314)854-8600
Facsimile: (314)854-8660
E-mail: cjl@carmodymacdonald.com
ald@carmodymacdonald.com
cml@carmodymacdonald.com
- and -
Alan W. Kornberg, Esq.
Aidan Synnott, Esq.
Elizabeth R. McColm, Esq.
Alexander Woolverton, Esq.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 Avenue of the Americas
New York, NY 10019
Telephone: (212)373-3000
Facsimile: (212)757-3990
E-mail: akornberg@paulweiss.com
asynnott@paulweiss.com
emccolm@paulweiss.com
awoolverton@paulweiss.com
About Noranda Aluminum
Noranda Aluminum, Inc., and 10 of its affiliates filed separate
Chapter 11 bankruptcy petitions (Bankr. E.D. Mo. Proposed Lead Case
No. 16-10083) on Feb. 8, 2016. The petitions were signed by Dale
W. Boyles, the chief financial officer. Judge Barry S. Schermer is
assigned to the cases.
The Debtors have engaged Paul, Weiss, Rifkind, Wharton & Garrison
LLP as counsel, Carmody MacDonald P.C. as local counsel, PJT
Partners, LP as investment banker, Alvarez & Marsal North America,
LLC as restructuring advisors and Prime Clerk LLC as claims,
solicitation and balloting agent.
The Debtors estimated both assets and liabilities in the range of
$1 billion to $10 billion. As of the Petition Date, the Debtors
had approximately $529.6 million in outstanding principal amount of
secured indebtedness, consisting of a revolving credit facility and
a term loan facility.
The Debtors had approximately 1,857 employees as of the Petition
Date.
NORANDA ALUMINUM: Wants Approval of KEIP, KERP and 2015 ICP
-----------------------------------------------------------
Noranda Aluminum, Inc., and its affiliated Debtors ask the U.S.
Bankruptcy Court for the Eastern District of Missouri, Southeastern
Division, to approve their Key Employee Incentive Plan ("KEIP"),
Key Employee Retention Plan ("KERP") and 2015 Incentive
Compensation Plan ("2015 ICP").
"Amid one of the most challenging business environments the
aluminum industry has faced in nearly a decade, the Debtors have
implemented numerous cost-reduction measures and have several
significant and difficult-to-achieve chapter 11 objectives. The
Debtors have determined in their business judgment to implement the
Compensation Plans to ensure that the Debtors' key employees are
properly incentivized to remain with the Debtors and to achieve
these critical goals. The Debtors believe the Compensation Plans
will incentivize the participants in such plans to ensure the
Debtors effectively and efficiently reach important case
milestones, which will benefit the Debtors' estates and all parties
in interest," the Debtors aver.
The KEIP contains, among others, the following relevant terms:
(a) Participants: The Debtors identified nineteen (19) senior
employees ("KEIP Participants") who are essential to the Debtors'
continued operations during the chapter 11 process. Of the KEIP
Participants, five are insiders and 14 are non-insiders.
(b) Participation and Payment: KEIP Tier A has a target payout
equal to 50% of such employee's base salary; KEIP Tier B has a
target payout equal to 40% of base salary; and KEIP Tier C has a
payout equal to 30% of base salary. For all KEIP Participants,
payout is capped at 200% of target. For the 14 non-insider KEIP
Participants, a payout floor of one-third of target has been set to
ensure their retention throughout these Chapter 11 Cases. The KEIP
Participants who are insiders are not guaranteed to receive any
payout under the KEIP.
(c) Total cost of KEIP:
KEIP Insiders - 5 participants
Total Plan Cost:
Threshold: $512,504
Target: $1,028,007
Maximum: $2,050,015
Average Cost per Participant:
Threshold: $102,501
Target: $205,001
Maximum: $410,003
KEIP Non- Insiders - 14 participants
Total Plan Cost:
Threshold: $521,376
Target: $1,042,751
Maximum: $2,085,502
Average Cost per Participant:
Threshold: $37,241
Target: $74,482
Maximum: $148,964
Total Plan Cost:
Threshold: $1,033,880
Target: $2,070,758
Maximum: $4,135,517
(d) Metrics designed to provide challenging targets for the
KEIP Participants: funding metrics and performance metrics. Funding
metrics are tied to cash flow and/or sale proceeds, which are
appropriate proxies for the success of an organization operating in
chapter 11. The level of achievement of the funding metrics
determines the payout available to the KEIP Participants.
Performance metrics are unique to each KEIP Participant and are
designed to incentivize participants to reach specific key
milestones by a set date, thus helping progress the Chapter 11
Cases.
The KERP contains, among others, the following relevant terms:
(a) Participants: The Debtors identified 34 employees who are
critical to the Debtors' continued operations and to successful
restructuring of the estates ("KERP Participants"). The KERP
Participants represent a cross-section of various functions within
the Debtors' businesses, including plant management, information
technology, technical support, government affairs, sales, tax and
payroll. These KERP Participants are heavily involved in both the
day-to-day support functions of the business and chapter 11-related
functions.
(b) Participation and Payment: Assuming all KERP Participants
are eligible to receive payments under the KERP, proposed payments
thereunder will be approximately $895,763, which amounts to
approximately $26,346 per KERP Participant. In determining the
amount of payments for each KERP Participants, all such
participants are divided into the following tiers: (i) KERP Tier A,
with payout equal to 30% of base salary; (ii) KERP Tier B, with
payout equal to 20% of base salary; and (iii) KERP Tier C, with
payout equal to 10% of base salary.
Selection of KERP Tier A employees is based on breadth and
depth of responsibility, as well as either (i) the effectiveness
and need for the individual's leadership in the chapter 11 or
wind-down process, as applicable, or (ii) belief that there will
likely be a continuing role for this individual after the Debtors'
emergence from chapter 11. Selection of KERP Tier B and KERP Tier
C employees is based on a critical skill set that would be
extremely difficult to replace in the short term during the
reorganization or wind-down process, as applicable, as well as the
increased workload and responsibility expected to be imposed on
such employees as a result of staff reductions. To earn the
retention payment, KERP Participants must be employed until the
earlier of (i) the Debtors' emergence from chapter 11; (ii) the
closing of a sale of the applicable unit of the Debtors' Upstream
Business pursuant to section 363 of the Bankruptcy Code, or (iii)
the date of a wind down of such business unit.
The 2015 ICP contains, among others, the following terms:
(a) Participants: All non-insider on-site salaried employees
in in the Downstream Business.
(b) Participation and Payment: The 2015 ICP payments for the
ICP Participants would total approximately $1.4 million, exclusive
of employment taxes, assuming those current employees remain
employed through the sale date. On the closing of the Downstream
Business Sale, ICP payments will be made to ICP Participants (i)
who are offered and accept employment with the purchaser, or (ii)
who are involuntarily terminated without cause in connection with
the Downstream Sale Process.
The Debtors' Motion is scheduled for hearing on May 12, 2016 at
10:00 a.m.
Noranda Aluminum is represented by:
Christopher J. Lawhorn, Esq.
Angela L. Drumm, Esq.
Colin M. Luoma, Esq.
CARMODY MACDONALD P.C.
120 S. Central Avenue, Suite 1800
St. Louis, MO 63105
Telephone: (314)854-8600
Facsimile: (314)854-8660
E-mail: cjl@carmodymacdonald.com
ald@carmodymacdonald.com
cml@carmodymacdonald.com
- and -
Alan W. Kornberg, Esq.
Aidan Synnott, Esq.
Elizabeth R. McColm, Esq.
Alexander Woolverton, Esq.
PAUL, WEISS, RIFKIND, WHARTON &
GARRISON LLP
1285 Avenue of the Americas
New York, NY 10019
Telephone: (212)373-3000
Facsimile: (212)757-3990
E-mail: akornberg@paulweiss.com
asynnott@paulweiss.com
emccolm@paulweiss.com
awoolverton@paulweiss.com
About Noranda Aluminum
Noranda Aluminum, Inc., and 10 of its affiliates filed separate
Chapter 11 bankruptcy petitions (Bankr. E.D. Mo. Proposed Lead Case
No. 16-10083) on Feb. 8, 2016. The petitions were signed by Dale
W. Boyles, the chief financial officer. Judge Barry S. Schermer is
assigned to the cases.
The Debtors have engaged Paul, Weiss, Rifkind, Wharton & Garrison
LLP as counsel, Carmody MacDonald P.C. as local counsel, PJT
Partners, LP as investment banker, Alvarez & Marsal North America,
LLC as restructuring advisors and Prime Clerk LLC as claims,
solicitation and balloting agent.
The Debtors estimated both assets and liabilities in the range of
$1 billion to $10 billion. As of the Petition Date, the Debtors
had approximately $529.6 million in outstanding principal amount of
secured indebtedness, consisting of a revolving credit facility and
a term loan facility.
The Debtors had approximately 1,857 employees as of the Petition
Date.
NORFE GROUP: Asks Court to Extend Plan Exclusivity to Aug. 15
-------------------------------------------------------------
Norfe Group, Corp., asks the U.S. Bankruptcy Court for the District
of Puerto Rico to extend the exclusive periods during which the
Debtor may file and solicit acceptances of a plan of reorganization
by 90 days -- from May 18, 2016, through and including August 15,
2016 of the exclusive period to file the Plan and up to November
11, 2016 to seek acceptances of the Plan, without prejudice to seek
further extensions.
Norfe Group explains that although substantial work has been done
to accomplish the filing of the Plan and disclosure statement, in
order to present a feasible and consensual plan of reorganization,
the Debtor is still in the process of reconciling its claims and
considering if an administrative consolidation with its affiliate
Efron Dorado, S.E., as the surviving entity, is necessary, as well
as disposing of its contested matters with Puerto Rico Asset
Portfolio 2013-1 International, LLC. Moreover, the Debtor is in
the process of evaluating various alternatives for financing, which
will provide the feasibility to its operations and to its Plan.
HERMANN D. BAUER ALVAREZ, Esq.-- herman@oneillborges.com and
rebeca.rodriguez@oneillborges.com -- represents creditor PR Asset
Portfolio 2013-1 International SUB I, LLC
JOSE RAUL CANCIO BIGAS -- jraulcancio@ccsllp.com and
lmercado@ccsllp.com -- represents Interested Party Dorado Cinema,
Corp.
CARMEN PRISCILLA FIGUEROA BELL -- cfigueroa@crimpr.net and
cpfbkcy@gmail.com -- represents Creditor CRIM
MONSITA LECAROZ ARRIBAS -- ustpregion21.hr.ecf@usdoj.gov
Danna Enid Planas Ocasio -- dplanas@ccsllp.com -- represents
Interested Party Dorado Cinema, Corp.
JUAN C SALICHS POU -- jsalichs@splawpr.com and
jcslawfirm@onelinkpr.net -- represents Creditor Wal-Mart Puerto
Rico, Inc.
ANGEL SOSA BAEZ -- asosa@tcmrslaw.com -- represents Stockholder
Madeleine Candelario
FERNANDO O ZAMBRANA AVILES -- zambrana@inmigracionpuertorico.com --
represents Creditor P.C.A. Consulting, Inc.
NAYUAN ZOUAIRABANI TRINIDAD -- nayuan.zouairabani@oneillborges.com,
docket_clerk@oneillborges.com; sharday.rivera@oneillborges.com;
luis.marini@oneillborges.com -- represents Creditor PR Asset
Portfolio 2013-1 International SUB I, LLC
CHARLES A. CUPRILL-HERNANDEZ and MOHAMMAD S. YASSIN --
ccuprill@cuprill.com and m.yassin@cuprill.com and
yassin.mohammad@gmail.com -- represent the Debtor.
About Norfe Group
Norfe Group Corp. filed a Chapter 11 bankruptcy petition (Bankr.
D.P.R. Case No. 16-00285) in Old San Juan, Puerto Rico, on Jan.
20,
2016. The petition was signed by David Efron, president.
The firm scheduled $17,269,436 in total assets and $31,441,591 in
total liabilities.
The Debtor tapped Charles Alfred Cuprill, Esq., at Charles A
Cuprill, PSC Law Office, as counsel. CPA Luis R. Carrasquillo &
Co., P.S.C., serves as financial consultant.
PACIFIC EXPLORATION: Fitch Lowers Issuer Default Ratings to 'D'
---------------------------------------------------------------
Fitch Ratings has downgraded Pacific Exploration and Production
Corp's foreign and local currency long-term Issuer Default Ratings
to 'D' from restricted default 'RD' following the company's filling
for a court supervised restructuring of its debt in Canada on April
27, 2016. Concurrently, Fitch has affirmed its 'C' long-term
rating on Pacific's outstanding senior unsecured debt and revised
the Recovery Rating to 'RR5' from 'RR4'.
KEY RATING DRIVERS
Debt Restructuring: Pacific is proposing to exchange approximately
USD5.3 billion of bank debt and bonds into a new USD250 million
five years senior secured note and approximately 58.2% equity
interest in the ensuing company after the restructuring. The
company expects to receive a capital injection of USD500 million
from the Catalyst Capital Group Inc. and some of its creditors as
part of the restructuring process and in exchange for equity
participation in the company after restructuring. The reduction of
the recovery rating reflects the lower than expected recovery
investors could see as a result of the successful completion of the
proposed restructuring.
KEY ASSUMPTIONS
-- Fitch's average price deck for WTI of $35/bbl for 2016,
recovering to $65/bbl in the long term;
-- Production declines on a year-over-year basis in 2016 and
2017.
RATING SENSITIVITIES
Positive: Future developments that may, individually or
collectively, lead to positive rating actions include:
-- Fitch will re-examine the company's credit profile if it
successfully restructures its debt.
FULL LIST OF RATING ACTIONS
Fitch has taken these ratings actions:
Pacific Exploration and Production Corp.
-- Foreign and local currency long-term IDRs downgraded to 'D'
from 'RD';
-- International senior unsecured bond ratings affirmed at 'C'
and Recovery Rating revised to 'RR5' from 'RR4'.
PACIFIC SUNWEAR: Bid Procedures Fail to Protect Landlords' Rights
-----------------------------------------------------------------
CambridgeSide Galleria Associates Trust, formerly known as
Riverside Galleria Associates Trust, and Palm Beach Outlets I, LLC,
joined by The Taubman Landlords, oppose Pacific Sunwear of
California, Inc.'s bidding procedures motion, complaining that the
procedures fail to include standard protections for landlords, and
guidance as to how the sale process will integrate with the
confirmation process.
Specifically, the Landlords complain that the Bid Procedures are
silent as to the following:
a. When Landlords will be provided with adequate assurance
information for Qualified Bidders?
b. When Landlords will receive notice of the Winning Bidder /
Backup Bidder at Auction?
c. When Landlords' objections to the sale of the Debtors' assets
will be due, including cure objections and adequate assurance of
performance or other sale objections?
d. When the Sale Hearing would be held, and whether Landlords
will have sufficient time following the conclusion of the Auction
to file and or address sale objection with the Debtor and/or
prospective purchaser?
Furthermore, the Landlords tell the Court that they need sufficient
time to evaluate adequate assurance information, including how the
prospective purchaser will comply with use and radius clauses, and
sufficient notice of the identity of the Winning Bidder and Back up
Bidder in order to prepare any necessary objections to the sale.
Accordingly, the Landlords request that the Court modify the Bid
Procedures providing for the necessary protections raised in issue
by the Landlords.
CambridgeSide Galleria Associates Trust and Palm Beach Outlets I,
LLC are represented by:
Elihu E. Allinson III, Esq.
SULLIVAN ∙ HAZELTINE ∙ ALLINSON LLC
901 North Market Street, Suite 1300
Wilmington, DE 19801
Telephone: (302) 428-8191
Facsimile: (302) 428-8195
Email: mailto:zallinson@sha-llc.com
-- and --
Paul W. Carey, Esq.
Gina Barbieri O’Neil, Esq.
Kate P. Foley, Esq.
MIRICK, O’CONNELL, DEMALLIE & LOUGEE, LLP
100 Front Street
Worcester, MA 01608-1477
Telephone: (508) 791-8500
Facsimile: (508-791-8502
Email: pcarey@mirickoconnell.com
goneil@mirickoconnell.com
kfoley@mirickoconnell.com
Attorneys for the Taubman Landlords:
Susan E. Kaufman, Esq.
LAW OFFICE OF SUSAN E. KAUFMAN, LLC
919 North Market Street, Suite 460
Wilmington, DE 19801
Telephone: (302) 472-7420
Facsimile: (302) 792-7420
Email: skaufman@skaufmanlaw.com
-- and --
Andrew S. Conway, Esq.
THE TAUBMAN COMPANY
200 East Long Lake Road, Suite 300
Bloomfield Hills, MI 48304
Telephone: 248- 258-7427
Email: aconway@taubman.com
About Pacific Sunwear
Founded in 1982 in Newport Beach, California as a surf shop,
Pacific Sunwear of California, Inc. operates in the teen and young
adult retail sector, selling men's and womens apparel, accessories,
and footwear. The Company went public in 1993 (NASDAQ: PSUN), and
peaked with 965 stores in 2006. At present, the Company has
approximately 593 retail locations nationwide under the names
"Pacific Sunwear" and "PacSun," which stores are principally in
mall locations. The Company has 2,000 full-time workers. Through
its ecommerce business, the Company operates an e-commerce site at
http://www.pacsun.com/
On April 7, 2016, Pacific Sunwear of California, Inc., and two
affiliated debtors each filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court
for the District of Delaware. The cases are jointly administered
under Case No. 16-10882 and are pending before the Honorable Laurie
Selber Silverstein.
The Debtors sought Chapter 11 protection with a Chapter 11 plan
that would convert debt into equity.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP, and Klee,
Tuchin, Bogdanoff & Stern LLP as attorneys; FTI Consulting, Inc.,
as financial advisor; Guggenheim Securities, LLC, as investment
banker; and Prime Clerk LLC as claims and noticing agent.
PALACE ENTERTAINMENT: Moody's Affirms B3 CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service changed Palace Entertainment Holdings,
LLC's outlook to stable from developing and affirmed the existing
B3 corporate family rating, B3-PD probability of default rating,
and B3 senior secured note rating.
The change in the outlook is due to the successful initial public
offering of the parent company Parques Reunidos Servicios Centrales
S.A.U. (PQR) which is expected to lead to the repayment of Palace's
outstanding debt in the first week of May. Once the outstanding
debt is repaid, Moody's will withdraw all the outstanding ratings
for Palace.
A summary of Moody's rating actions are:
Palace Entertainment Holdings, LLC
Corporate Family Rating affirmed at B3
Probability of Default Rating affirmed at B3-PD
$430 million senior secured note due April 2017 affirmed at B3
(LGD4)
Outlook: changed to stable from developing
RATINGS RATIONALE
Palace's B3 CFR reflects the approaching maturity date of its
outstanding debt as well as the leverage level of 5.4x as of Q1
2016 (quarter ending December 2015). The rating also includes the
modest cash flow generated after capex from the mid-sized regional
amusement/water park portfolio, exposure to cyclical discretionary
consumer spending, and event risks related to acquisitions and
ownership by PQR. Palace's total attendance (approximately 6.4
million annually excluding FEC attendance) and its parks are
smaller than rated US peers, although a long-standing management
team and ownership by PQR allows for sharing of best practices and
consolidated purchasing power. The industry is mature, heavily
seasonal, and requires significant re-investment to maintain a
competitive service offering. Attendance is exposed to competition
from a wide variety of other leisure and entertainment activities
as well as cyclical discretionary consumer spending. The company is
especially sensitive to weather conditions due to its composition
of theme parks, waterparks, animal parks, and family entertainment
centers that are impacted by rain or cooler than normal weather
during peak operating periods. Palace is financed separately from
PQR and the company's debt does not cross default to PQR's debt.
As a result, Moody's evaluates Palace separately but incorporate
into the company's ratings the risks related to its ownership by
PQR. The company achieved strong operating performance during the
2015 season which led to a reduction in leverage from 6.4x at the
end of 2014 to 5.4x as of Q1 2016.
Moody's considers Palace's liquidity position to be weak due to the
Jan. 15, 2017, maturity of its $120 million revolver (not rated by
Moody's) and the April 15, 2017 maturity of its $430 million senior
secured note, but recognize that part of PQR's IPO proceeds are
anticipated to repay outstanding debt in the near term. The
company had $23 million in cash on the balance sheet and the
revolver was undrawn with $6 million of LC's outstanding as of Q1
2016.
Palace's properties are divisible and marketable assets.
Substantially all of the wholly owned assets are pledged to the
credit facility/notes and there is a required credit facility
pay-down from 100% of net cash proceeds that are not reinvested
within one year.
The stable rating outlook reflects the expected repayment of its
debt structure in the near term.
An upgrade or downgrade of the rating is not anticipated given the
expected near term repayment of Palace's outstanding debt and the
withdrawal of the rating after repayment.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 2014.
Palace Entertainment Holdings, LLC, headquartered in Newport Beach,
CA, owns and operates 6 theme parks (46% of FY 2015 revenue), 8
waterparks (35%, an additional waterpark is operated under a
management agreement), 2 animal parks (17%), and 5 family
entertainment centers (FECs; 3%) with operations in ten states in
the US. Palace is wholly owned by Madrid-based Parques Reunidos
Servicios Centrales S.A.U. (PQR), which operates leisure parks in
Europe (and one park in Argentina). PQR is controlled by Arle
Capital Partners Limited (Arle; formerly Candover Partners Limited)
a UK-based private equity firm. Palace's revenue in the LTM
through December 2015 was $260 million.
PAN AMERICAN: Moody's Raises CFR to B1, Outlook Stable
------------------------------------------------------
Moody's Investors Service upgraded to B1 from B2 Pan American
Energy LLC's (PAE) global local currency rating and Pan American
Energy LLC, Argentine Branch's (the Branch) backed senior unsecured
ratings, and all the ratings based on the guarantee of PAE. The
outlook on the ratings is stable.
In regards to the Domestic Senior Unsecured Bank Credit Facility of
Pan American Energy LLC, Argentine Branch, Moody's has withdrawn
the rating for its own business reasons.
This concludes the ratings review on both companies initiated on
Jan. 21, 2016.
Upgrades:
Issuer: Pan American Energy LLC
Corporate Family Rating, Upgraded to B1 from B2
Issuer: Pan American Energy LLC, Argentine Branch
Senior Unsecured Medium-Term Note Program, Upgraded to (P)B1
from (P)B2
Senior Unsecured Regular Bond/Debenture 2021, Upgraded to B1
from B2
Outlook Actions:
Issuer: Pan American Energy LLC
Outlook, Changed To Stable From Rating Under Review
Issuer: Pan American Energy LLC, Argentine Branch
Outlook, Changed To Stable From Rating Under Review
Withdrawals:
Issuer: Pan American Energy LLC, Argentine Branch
Senior Unsecured Bank Credit Facility, Withdrawn, previously
rated B2
RATINGS RATIONALE
"The ratings upgrade was triggered by the rating upgrade of the
government of Argentina to B3 from Caa1, on April 15, and by
Moody's expectation that PAE will maintain a solid credit profile
for its rating category in the foreseeable future," said Nymia
Almeida, a Senior Credit Officer in Moody's. "Although PAE's
credit metrics deteriorated in 2015 mostly given low oil prices,
its credit profile continues to be more consistent with an
investment grade rating. In addition, the company has posted a
stable operating track record and continues to benefit from growing
to stable production and reserve profile. PAE has had a successful
and stable track record of reserves replacement and production
growth at competitive costs even in a high inflationary
environment. Going forward, amid lower oil prices both locally and
internationally, and absent any extraordinary investment, the
company will continue benefiting from financial flexibility.
However, uncertainties around the oil and gas policies in
Argentina, which challenge the company's cash generation in the
short to medium term, are also incorporated into its ratings."
PAE is the second largest producer and the largest crude exporter
in the country. The company has a strong market position in
Argentina and has demonstrated consistently sound financial and
operating performance relative to other peers in the region. PAE's
reserves and production profile, low cost structure and
conservative financial leverage metrics would be more consistent
with a low investment-grade rated E&P company. PAE also has a
modest asset base in Bolivia, which exports gas to Argentina. The
company has strong sponsors behind it, which provide for certain
operational advantages including technical knowledge,
administrative practices and corporate governance policies.
PAE's B1 ratings are constrained by the geographic concentration of
its reserves and production and by its exposure to uncertain
changes in government policies for the energy sector in Argentina,
which could have negative effects on PAE's ability to economically
exploit its reserves and book additional proven reserves. In
addition, the company's concentration in Argentina exposes it to
rising costs. Because of the geographic concentration of the
company's reserves and production in an economically and
politically unstable region, we generally attribute a lower value
to PAE's reserves than to those of its peers in North America.
PAE's ratings also consider the company's strong track record in
servicing its foreign currency debt obligations during past
Argentine financial crises, its healthy foreign currency liquidity
profile, and sizable exports. In addition, PAE's demonstrated
access to diversified funding sources, and strong shareholders
which operate outside of Argentina, are supportive for the rating.
PAE's liquidity has been and will continue to be necessary to
support of the company's ratings. Going forward, management
expects to meet any additional obligations with its adequate level
of cash balances and, if needed, through uncommitted bank lines in
Argentina. PAE's financial leverage in terms of debt/PD reserves
of USD 2.70/boe (as adjusted for Moody's standard adjustments) at
December 31, 2015 is conservative and well below its B-rated peers.
Moody's does not expect that PAE's leverage will increase
materially over the near to medium term.
PAE's stable outlook assumes that the Argentine government has
incentives to maintain prices at a level that makes it economically
attractive for oil companies to invest to increase production and
reduce the country´s dependence on imports of gas, which account
for 20% of its consumption.
There is limited upside for PAE's ratings. Over the longer term,
an improvement in Argentina's B3 rating and the maintenance of
conservative financial leverage and reasonable returns could result
in a ratings upgrade.
A downgrade of the Argentine government would likely lead to a
downgrade of PAE's rating, particularly if government initiatives
on setting reference prices or other actions put further pressure
on the company's operations, debt service capabilities or
liquidity.
PAE consolidates Pan American Energy LLC, Argentine Branch (the
Branch) which accounts for 83% of total production and proved
reserves. PAE guarantees a USD 500 million global notes due in
July 2021 issued by the branch. PAE is 60% owned by BP plc (A2
positive) and 40% owned by Bridas Corporation (Bridas, not rated).
Bridas is a privately owned oil and gas company owned 50% by Bridas
Energy Holdings Ltd. (not rated) and 50% by CNOOC Limited (Aa3
negative).
Pan American Energy, LLC (PAE) is a privately owned independent E&P
company. The company is mainly involved in the exploitation of oil
and natural gas reserves in Argentina. PAE ranks as Argentina's
second-largest oil and gas company by volume, accounting for about
18% of the oil market and 16% of the natural gas market, and is the
country's largest exporter of crude oil. As of Dec. 31, 2015, the
company reported proved developed reserves of 928 MMBOE, equivalent
to a 10 year reserve life, and production of 255 MBOE per day, out
of which 45% is heavy oil and 55% is gas.
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011.
PARAGON OFFSHORE: U.S. Trustee to Hold 341 Meeting Today
--------------------------------------------------------
The Office of the U.S. Trustee will continue the meeting of
creditors of Paragon Offshore plc today at 9:00 a.m. (Eastern
Time).
The meeting will take place at J. Caleb Boggs Federal Building,
Room 2112, 844 King Street, Wilmington, Delaware.
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 Paragon Offshore
Paragon Offshore plc -- http://www.paragonoffshore.com/-- is a
global provider of offshore drilling rigs. Paragon's operated
fleet includes 34 jackups, including two high specification heavy
duty/harsh environment jackups, and six floaters (four drillships
and two semisubmersibles). Paragon's primary business is
contracting its rigs, related equipment and work crews to conduct
oil and gas drilling and workover operations for its exploration
and production customers on a dayrate basis around the world.
Paragon's principal executive offices are located in Houston,
Texas. Paragon is a public limited company registered in England
and Wales and its ordinary shares have been trading on the over-
the-counter markets under the trading symbol "PGNPF" since
December 18, 2015.
Paragon Offshore Plc, et al., filed separate Chapter 11
bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10385 to 16-
10410) on Feb. 14, 2016, after reaching a deal with lenders on a
reorganization plan that would eliminate $1.1 billion in debt.
The petitions were signed by Randall D. Stilley as authorized
representative. Judge Christopher S. Sontchi is assigned to the
cases.
The Debtors reported total assets of $2.47 billion and total
debts of $2.96 billion as of Sept. 30, 2015.
The Debtors have engaged Weil, Gotshal & Manges LLP as general
counsel, Richards, Layton & Finger, P.A. as local counsel, Lazard
Freres & Co. LLC as financial advisor, Alixpartners, LLP as
restructuring advisor, and Kurtzman Carson Consultants as claims
and noticing agent.
PERPETUAL ENERGY: S&P Lowers Corporate Credit Rating to 'SD'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Calgary, Alta.-based Perpetual Energy Inc. to 'SD'
(selective default) from 'CC'. At the same time, Standard & Poor's
lowered its issue-level rating on the company's senior unsecured
notes to 'D' (default) from 'C'. The recovery rating is unchanged
at '5', indicating S&P's expectation of modest recovery (10% to
30%; in the high end of the range) in the event of a default.
"Perpetual's agreement to swap a portion of its rated public debt
for the shares it currently holds in Tourmaline Oil Corp.
constitutes a default under our rating criteria," said Standard &
Poor's credit analyst Michelle Dathorne.
The company swapped C$150 million senior notes (C$76.8 million of
the 2018 notes and C$73.2 million of the 2019 notes) for 3.1
million Tourmaline shares. Based on current market values,
Standard & Poor's estimates the total considerations offered equals
about 60% of the bonds' par value. S&P views the transaction as a
distressed exchange because investors will receive less than what
was promised on the original securities. In addition, pursuant to
its securities swap proposal, the company increased the maximum
offered swap amount to C$235 million and extended the acceptance
date to May 10, 2016.
S&P expects to review the corporate credit and issue-level ratings
when it assess the likelihood of further debt exchanges as low.
S&P's analysis will incorporate the company's new capital structure
and liquidity position, while still taking into account its
challenging operating environment.
PETER HENZE: Attorney Directed to Turn Over $7K to Trustee
----------------------------------------------------------
Chapter 11 debtors in possession Peter and Paula Henze filed their
Chapter 11 petition on September 26, 2011. They retained attorney
Craig K. Welch to represent them as debtors in possession, and the
court duly approved his employment. Before bankruptcy, the Debtors
gave Welch a retainer of $71,280.00. He deposited the retainer
into his trust account and drew upon as he did work for the
bankruptcy estate, as he was instructed by the court.
In a Memorandum dated March 11, 2016, a full-text copy of which is
available at http://is.gd/uYxHPWfrom Leagle.com., Judge Alan
Jaroslovsky of the United States Bankruptcy Court for the Northern
District of California, finds that Welch is allowed total
compensation in the amount of $47,208 in fees and $1,457 in
expenses, for a total of $48,665. Deducting this amount and the
$14,992 Welch turned over to Janina M. Hoskins as Chapter 11
trustee, from the retainer of $71,280 leaves a balance of $7,622.
Welch is directed to turn this amount over to Hoskins forthwith.
The case is In re PETER and PAULA HENZE, Debtor(s), No. 11-13543
(Bankr. N.D. Calif.).
Peter Henze, Debtor, represented by Douglas B. Provencher, Law
Offices of Provencher and Flatt, Craig K. Welch, Law Office of
Craig K. Welch.
Janina M. Hoskins, Trustee, represented by Joanne M. LaFreniere,
Law Offices of Joanne LaFreniere, Reidun Stromsheim, Stromsheim and
Assoc..
Office of the U.S. Trustee/SR, U.S. Trustee, represented by Julie
M. Glosson, Office of the United States Trustee.
PHOENIX MANUFACTURING: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Phoenix Manufacturing Partners, LLC
2350 W. Shangri La Road
Phoenix, AZ 85029
Case No.: 16-04898
Chapter 11 Petition Date: May 3, 2016
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Hon. Eddward P. Ballinger Jr.
Debtor's Counsel: Bradley Jay Stevens, Esq.
JENNINGS, STROUSS & SALMON, P.L.C.
One E Washington St #1900
Phoenix, AZ 85004-2554
Tel: 602-262-5955
Fax: 602-495-2729
E-mail: bstevens@jsslaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $10 million to $50 million
The petition was signed by Joe Yockey, president & managing
member.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
PIONEER ENERGY: Incurs $27.7 Million Net Loss in First Quarter
--------------------------------------------------------------
Pioneer Energy Services Corp. filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $27.69 million on $74.95 million of total revenues for
the three months ended March 31, 2016, compared to a net loss of
$12.01 million on $193.81 million of total revenues for the three
months ended March 31, 2015.
As of March 31, 2016, Pioneer Energy had $786.52 million in total
assets, $471.41 million in total liabilities and $315.11 million in
total shareholders' equity.
"With the continued weakness in commodity prices and dramatic
curtailment of spending by oil and gas producers, we are focused on
prudently managing our cash position and cost structure. Our
employee count is down approximately 65% from the peak in 2014 and
general and administrative expenses in the first quarter of 2016
are down approximately 40% from the fourth quarter of 2014," said
Wm. Stacy Locke, president and CEO of Pioneer Energy Services.
"We have maintained our solid cash position and reduced net debt
during this downturn. We continue to believe that we should be
able to fund most, if not all, of our capital needs in 2016 from
operating cash flow and with proceeds from the sale of some SCR
drilling rigs. We continue to diligently reduce expenses
throughout the company to better match market conditions. Our 2016
capital expenditure budget of $25 million, which is primarily for
maintenance expenditures, is designed to keep our fleet of premium
equipment highly competitive and well positioned to participate in
a market upswing.
"Other than earning not working revenues falling off, our U.S.
drilling utilization and pricing stabilized during the quarter. We
have been able to keep our two spot AC rigs working and are
confident that as other rigs come off term in 2016, we will be able
to renew those contracts as well. In April, we mobilized our most
recently completed new-build to begin work in the Permian. The
Colombia market remains weak, but as oil prices improve we believe
the Colombia market will improve as well.
"Our Production Services business took another leg down after oil
prices dipped below $30 in February. Activity levels declined
further, especially in Well Services, and pricing was further
negatively impacted. As oil prices have recovered to the mid-$40
level in late April, we are beginning to see signs of improving
demand. However, the impact of this will not be realized until
late this quarter or early next quarter. We are fortunate to be
well established with a solid customer base in some of the most
active basins."
Second Quarter 2016 Guidance
In the second quarter of 2016, drilling rig utilization is
estimated to average 40% to 43%. Drilling Services Segment margin
is estimated to be approximately $10,500 to $11,000 per day, which
includes recognition of $4.4 million of revenues from rigs earning
early termination revenue but not working. Excluding early
termination revenue, we estimate Drilling Services Segment margin
to be $8,300 to $8,800 per day in the second quarter, which assumes
the three contracted rigs in Colombia remain idle for the remainder
of the second quarter. Production Services Segment revenue in the
second quarter is estimated to be down approximately 10% to 14%
compared to the first quarter of 2016 reflecting an anticipated
decrease in customer spending. Production Services Segment margin
is estimated to be 17% to 20% of revenues in the second quarter.
Liquidity
Working capital at March 31, 2016, was $41.1 million, down from
$45.2 million at Dec. 31, 2015. The Company's cash and cash
equivalents were $18.7 million, up from $14.2 million at year-end
2015. The increase in cash and cash equivalents during the three
months ended March 31, 2016, is primarily due to $9.6 million of
cash provided by operating activities, which includes early
termination payments made on certain drilling contracts, and $0.5
million of proceeds from the sale of assets, partially offset by
$5.5 million of cash used for purchases of property and equipment.
We currently have $17.3 million in committed letters of credit and
$95 million outstanding under our $200 million revolving credit
facility.
Capital Expenditures
Cash capital expenditures in the first quarter were $5.5 million,
including capitalized interest. The $25 million of estimated 2016
cash capital expenditures is primarily for routine and maintenance
requirements, but also includes approximately $8 million of
carryover expenditures for the new drilling rigs delivered in 2015
and certain drilling equipment that was ordered in 2014, but
required a long lead time for delivery.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/KDsgX7
About Pioneer Energy
Pioneer Energy Services Corp. provides land-based drilling services
and production services to a diverse group of independent and large
oil and gas exploration and production companies in the United
States and internationally in Colombia. The Company also provides
two of its services (coiled tubing and wireline services) offshore
in the Gulf of Mexico.
Pioneer Energy reported a net loss of $155.14 million in 2015
following a net loss of $38.01 million in 2014.
* * *
As reported by the TCR on March 7, 2016, Moody's Investors Service,
on March 3, 2016, downgraded Pioneer Energy Services Corp.'s
Corporate Family Rating (CFR) to Caa3 from B2, Probability of
Default Rating (PDR) to Caa3-PD from B2-PD, and senior unsecured
notes to Ca from B3.
"The rating downgrades were driven by the material deterioration in
Pioneer Energy's credit metrics through 2015 and our expectation of
continued deterioration through 2016. The demand outlook for
drilling and oilfield services is extremely weak, as witnessed by
the steep and continued drop in the US rig count" said Sreedhar
Kona, Moody's Vice President. "The negative outlook reflects the
deteriorating fundamentals of the services sector and the
likelihood of covenant breaches"
Pioneer Energy carries a "B+" corporate credit rating from Standard
& Poor's Ratings.
PIONEER HEALTH: Asks Court to Extend Use of Cash Collateral
-----------------------------------------------------------
Pioneer Health Services, Inc., asks the U.S. Bankruptcy Court for
the Southern District of Mississippi to extend use of cash
collateral beyond current expiration date of April 30, 2016.
The Court has previously entered interim orders for use of cash
collateral and for granting of adequate protection.
Craig M. Geno, Esq., at Law Offices of Craig M. Geno, PLLC, in
Ridgeland, Mississippi -- cmgeno@cmgenolaw.com -- relates that at
recent hearings in connection with the use of cash collateral, the
Court requested the Debtor to file a budget that extends the use of
cash collateral beyond April 30, 2016, by April 15. Unfortunately,
he asserts, the Debtor was not able to fully complete a meaningful
budget by April 15, but has now completed the same.
In the meantime, Mr. Geno says, the Debtor intends to review this
budget with Capital One Commercial Banking, its asset-based working
capital lender, to determine if there is a possibility of reaching
a consensual arrangement with Capital One to provide for
postpetition debtor-in-possession financing. He discloses that
Capital One has not committed to such an arrangement, nor has the
Debtor, but it is something that the Debtor will initiate and
explore with Capital One. In the event such an arrangement is
reached, further notice will be provided accordingly.
About Pioneer Health
Pioneer Health Services, Inc. and its debtor-affiliates, including
Medicomp Inc., filing separate Chapter 11 bankruptcy petitions
(Bankr. S.D. Miss. Case No. 16-01119 to 16-01126) on March 30,
2016. The Debtors provide healthcare services to rural
communities, and own and manage rural critical access hospitals.
Judge Hon. Neil P. Olack presides over the Debtors' cases. The Law
Offices of Craig M. Geno PLLC serves as the Debtors' counsel.
Pioneer Health Services estimated $10 million to $50 million in
both assets and liabilities. The petitions were signed by Joseph
S. McNulty III, president.
PLYMOUTH EDUCATIONAL: S&P Affirms 'B-' Rating on 2005 Revenue Bonds
-------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' long-term
rating on Plymouth Educational Center Charter School, Mich.'s
series 2005 public school academy revenue and refunding bonds and
removed it from CreditWatch with negative implications. The
outlook is stable.
"In January 2016, we placed the rating on CreditWatch with negative
implications based on heightened uncertainty with regards to the
school's upcoming charter renewal. Plymouth's charter remained, at
the time, under Central Michigan University's (CMU) notice of
intent (NIR) to revoke, which had been issued in September 2014 as
a result of the high school's designation in the lowest achieving
5% in the state. Following a thorough review of the school's
corrective action plan, which included the closure of Plymouth's
high school in summer 2015, CMU lifted the NIR in March 2016 and
cited that the school had addressed each required item under the
action plan. According to management and the authorizer, we
understand that CMU will be recommending Plymouth for a two-year
charter renewal, which is expected to be approved in the next
month," S&P noted.
"In our view, these actions resolve our concerns with regards to
Plymouth's charter and support the removal of the rating from
CreditWatch with negative implications," said Standard & Poor's
credit analyst Avani Parikh. "In addition, the rating affirmation
and stable outlook reflect our view of Plymouth's stabilizing
enrollment and expected improvement in operating performance and
liquidity in fiscal 2016." In addition, S&P understands that the
school expects to be in compliance with its fund balance covenant
for fiscal 2016, with interim results shared by management
supporting these expectations.
The 2005 bonds are a general obligation of the school payable from
any legally available funds held or generated, secured by a full
faith and credit pledge.
The stable outlook reflects S&P's view of expected operational and
balance sheet improvement, with closer to 1x MADS coverage and
about 15 days' cash on hand, over the one-year outlook period. S&P
also expects enrollment will continue to stabilize, if not grow,
while the school continues its successful transition to a K-8
school.
S&P could consider a negative rating action within its outlook
period if enrollment declines from current levels, operations or
coverage remained pressured, or liquidity fails to improve as
expected. In addition, if the school fails to make progress toward
bond covenant compliance, with resulting bondholder action or
potential acceleration, S&P could lower the rating.
S&P could consider a positive rating action if Plymouth's demand
profile strengthens and financial measures demonstrate material and
sustained improvement commensurate with a higher rating.
PTC INC: Moody's Assigns Ba2 CFR, Outlook Stable
------------------------------------------------
Moody's Investors Service assigned a Ba2 Corporate Family Rating
and Ba2-PD Probability of Default Rating to PTC Inc. Concurrently,
Moody's assigned a Ba3 rating to the company's proposed $500
million senior unsecured notes due 2024. The proceeds of the new
debt financing will be used to fund the partial repayment of
existing borrowings under PTC's revolving credit facility. The
ratings outlook is stable.
Moody's assigned these ratings to PTC Inc.:
Corporate Family Rating- Ba2
Probability of Default Rating- Ba2-PD
Senior Unsecured Notes due 2024 -- Ba3 (LGD5)
Speculative Grade Liquidity Rating -- SGL-2
Outlook is Stable
RATINGS RATIONALE
The Ba2 CFR reflects the credit risks associated with PTC's
leveraged capital structure while also considering the negative
intermediate term financial impact associated with the company's
gradual transition from its traditional license driven sales model
to a subscription model with initially lower, but more predictable
revenue streams. LTM debt/EBITDA leverage, at just under 3.5x
(Moody's adjusted) as of April 2, 2016, is expected to rise
modestly over the next two years as a result of this revenue shift
and could be further exacerbated by ongoing acquisition and share
repurchase activity. Additionally, the ratings are constrained by
the uncertainties associated with PTC's exposure to the growing,
but cyclical software market which has been susceptible to economic
downturns, particularly within the company's core industrial,
aerospace, and automotive end markets. However, the risks
associated with PTC's credit profile are partially offset by the
company's strong market position and an established customer base
in the application software industry providing computer-aided
design (CAD) and product lifecycle management (PLM) products.
Additionally, ratings are supported by a meaningful equity cushion
as well as consistent cash flow generation and good liquidity.
Moody's expects PTC to generate free cash flow in excess of $200
million in FY16 (September). These cash flow generation prospects,
coupled with $368.5 million in cash on the company's balance sheet
and an estimated $230 million of revolver availability (pro forma)
as of April 2, 2016, support PTC's good liquidity position.
Following the issuance of the senior notes, the revolving credit
facility will be subject to maintenance covenants including a 4x
total leverage ratio and 3.5x minimum fixed charge coverage ratio
which S&P expects the company will be in compliance with over the
next 12-18 months.
The stable ratings outlook reflects Moody's projection for a 7% pro
forma annual revenue contraction in FY16 and a slight decline in
sales levels in the following year as the company completes the
majority of its transition from its traditional license driven
sales model to a subscription model. Moody's expects this decline
in the top line to negatively impact profitability margins, with
EBITDA contracting at a more pronounced pace during this period.
Moody's expects a recovery in PTC's financial performance in FY18
based on the assumption that much of the company's
license-to-subscription product transition will be complete.
What Could Change the Ratings - Up
The ratings could be upgraded if PTC smoothly manages the
transition of its sales model and expands revenues and EBITDA over
the intermediate term such that the company realizes meaningfully
greater scale while adjusted leverage and free cash flow/debt are
sustained under 2.5x and above 30%, respectively.
What Could Change the Ratings - Down
The ratings could be downgraded if PTC's customer retention
declines, market share erodes, or if bookings levels contract
materially. Additionally, a downgrade could be considered if
revenue declines during the transition period such that the
company's adjusted leverage rises above 4.5x or free cash flow/debt
falls below 20% on a sustained basis.
The principal methodology used in these ratings was Software
Industry published in December 2015.
PTC Inc.is a provider of CAD and PLM application software and
services used to design products, manage product information, and
improve product development processes.
PTC INC: S&P Assigns 'BB' Corp. Credit Rating, Outlook Stable
-------------------------------------------------------------
S&P Global Ratings said that it assigned its 'BB' corporate credit
rating to Needham, Mass.-based PTC Inc. The rating outlook is
stable.
S&P also assigned its 'BB-' issue-level rating and '5' recovery
rating to the company's recently announced $500 million senior
unsecured notes. The '5' recovery rating indicates S&P's
expectation for modest recovery (10%-30%; lower half of the range)
of principal in the event of a payment default.
S&P's corporate credit rating on PTC reflects the company's ongoing
transition to a subscription-based pricing model and the recent
weakness in its core computer aided design (CAD) and product
lifecycle management (PLM) markets due to softening in global
manufacturing and sales execution issues. The company's diverse
customer base, growing suite of products, and solid track record of
generating free operating cash flow offset these risks.
"The stable outlook reflects our expectation that, despite revenue
and EBITDA margin declines primarily from the shift to subscription
based pricing, PTC's diverse product offering and large customer
base will enable the company to continue to generate solid free
operating cash flow over the coming year," said S&P Global Ratings
credit analyst Dee Banson.
S&P could lower its corporate credit rating on PTC if the shift to
subscription-based pricing causes a steeper-than-expected drop in
EBITDA, or if the company pursues debt-funded acquisitions or
shareholder returns such that leverage is sustained above 3x.
Although not likely over the coming year, S&P could raise the
rating on PTC if the company shows consistent revenue growth and
improving EBITDA margins while maintaining adjusted leverage below
2x on a sustained basis.
REED EQUIPMENT: Case Summary & Unsecured Creditor
-------------------------------------------------
Debtor: Reed Equipment Leasing, LLC
P.O. Box 306
Dyer, TN 38330
Case No.: 16-10880
Chapter 11 Petition Date: May 3, 2016
Court: United States Bankruptcy Court
Western District of Tennessee (Jackson)
Judge: Hon. Jimmy L Croom
Debtor's Counsel: Steven N. Douglass, Esq.
HARRIS SHELTON HANOVER WALSH, PLLC
2700 One Commerce Square
Memphis, TN 38103
Tel: (901) 525-1455
Fax: (901) 526-4084
E-mail: snd@harrisshelton.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by John R. Reed, chief manager.
The Debtor listed the Tennessee Department of Revenue
as its largest unsecure creditor holding a claim of $69,000.
A copy of the petition is available for free at:
http://bankrupt.com/misc/tnwb16-10880.pdf
RESIDENTIAL CAPITAL: Liquidating Trust Looking for New Manager
--------------------------------------------------------------
The ResCap Liquidating Trust (the "Trust") on May 3 disclosed that
it will be commencing a process for selecting a new Liquidating
Trust Manager to replace John Dubel, who has been appointed to the
position of Chief Restructuring Officer of SunEdison, Inc. Mr.
Dubel will continue as Liquidating Trust Manager until a qualified
successor is appointed. He will remain a member of the Board of
Trustees of the Trust, a position that he has occupied since the
Trust's inception.
Mitchell Sonkin, the Chairman of the Board of Trustees, stated: "We
are very happy for John in his new role with SunEdison, and are
committed to working with John on a smooth and seamless transition,
as we work to identify a replacement. We are also gratified that
John will be remaining with us as a member of the Board, where we
expect to continue to benefit from his contributions to the Trust."
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally
Financial nor Ally Bank is included in the bankruptcy filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.7 billion in assets and $15.3 billion in
liabilities at March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the
conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
ResCap sold most of the businesses for a combined $4.5 billion.
The Bankruptcy Court in November 2012 approved ResCap's sale of its
mortgage servicing and origination platform assets to Ocwen Loan
Servicing, LLC and Walter Investment Management Corporation for $3
billion; and its portfolio of roughly 50,000 whole loans to
Berkshire Hathaway for $1.5 billion.
Judge Martin Glenn in December 2013 confirmed the Joint Chapter 11
Plan co-proposed by Residential Capital and the Official Committee
of Unsecured Creditors.
RESPONSE BIOMEDICAL: Amends 2015 Annual Report
----------------------------------------------
Response Biomedical Corp. filed with the Securities and Exchange
Commission an amended annual report on Form 10-K/A for the fiscal
year ended Dec. 31, 2015, originally filed with the Securities and
Exchange Commission on March 24, 2016, for the purpose of providing
the information required by Items 10, 11, 12, 13 and 14 of Part
III. Part III contains information regarding directors, executive
officers and corporate governance; executive compensation; security
ownership of certain beneficial owners and management and related
stockholder matters; certain relationships and related
transactions, and director independence; and principal accounting
fees and service. A copy of the amended Annual Report is available
for free at http://is.gd/KjwyHG
About Response Biomedical
Based in Vancouver, Canada, Response Biomedical Corporation
develops, manufactures and sells diagnostic tests for use with its
proprietary RAMP(R) System, a portable fluorescence immunoassay-
based diagnostic testing platform. The RAMP(R) technology
utilizes a unique method to account for sources of error inherent
in conventional lateral flow immunoassay technologies, thereby
providing the ability to quickly and accurately detect and
quantify an analyte present in a liquid sample. Consequently, an
end-user on-site or in a point-of-care setting can rapidly obtain
important diagnostic information. Response Biomedical currently
has thirteen tests available for clinical and environmental
testing applications and the Company has plans to commercialize
additional tests.
Response Biomedical reported a net loss and comprehensive loss of
C$5.99 million in 2013, a net loss and comprehensive loss of C$5.28
million in 2012 and a net loss and comprehensive loss of C$5.37
million in 2011.
As of Sept. 30, 2015, the Company had C$12.6 million in total
assets, C$13.6 million in total liabilities and a total
shareholders' deficit of C$992,000.
PricewaterhouseCoopers LLP, in Vancouver, Canada, in its report on
the consolidated financial statements for the year ended Dec. 31,
2014, noted that the company has incurred recurring losses from
operations and has an accumulated deficit at Dec. 31, 2014, which
raises substantial doubt about its ability to continue as a going
concern.
RICEBRAN TECHNOLOGIES: LF-RB Management Reports 9.1% Equity Stake
-----------------------------------------------------------------
In a Schedule 13D filed with the Securities and Exchange
Commission, LF-RB Management, LLC, et al., disclosed that as of
April 25, 2016, they beneficially own 952,207 shares of common
stock of RiceBran Technologies, Inc., representing 9.08 percent of
the shares outstanding. A copy of the regulatory filing is
available for free at http://is.gd/JT52lk
About RiceBran
Scottsdale, Ariz.-based RiceBran Technologies, a California
corporation, is a human food ingredient and animal nutrition
company focused on the procurement, bio-refining and marketing of
numerous products derived from rice bran.
RiceBran reported a net loss of $10.6 million on $39.9 million of
revenues for the year ended Dec. 31, 2015, compared to a net loss
of $26.6 million on $40.10 million of revenues for the year ended
Dec. 31, 2014.
As of Dec. 31, 2015, RiceBran had $33.63 million in total assets,
$26.29 million in total liabilities, $69,000 in temporary equity
and $7.26 million in total equity attributable to the Company's
shareholders.
The Company's auditors Marcum LLP, in New York, NY, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2015, citing that the Company has suffered
recurring losses from operations resulting in an accumulated
deficit of $251 million at December 31, 2015. This factor among
other things, raises substantial doubt about its ability to
continue as a going concern.
SANDRIDGE ENERGY: Amends 2015 Annual Report
-------------------------------------------
Sandridge Energy, Inc., filed with the Securities and Exchange
Commission an amended annual report on Form 10-K for the year ended
Dec. 31, 2015, to provide the additional information required by
Part III of Form 10-K.
Pursuant to General Instruction G(3) to Form 10-K, the Company
incorporated by reference the information required by Part III of
Form 10-K from its definitive proxy statement for the 2016 Annual
Meeting of Shareholders that the Company expected to file with the
Commission not later than 120 days after the end of the fiscal year
covered by the 2015 Form 10-K. The Company does not anticipate
filing the 2016 Proxy Statement before that date.
A full-text copy of the Form 10-K/A is available for free at:
http://is.gd/LVHBS5
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.
SandRidge Energy reported a net loss of $4.32 billion in 2015
following net income of $351.89 million in 2014.
As of Dec. 31, 2015, SandRidge had $2.99 billion in total assets,
$4.17 billion in total liabilities and a total stockholders'
deficit of $1.18 million.
* * *
The Troubled Company Reporter, on March 22, 2016, reported that
Standard & Poor's Ratings Services raised its corporate credit
rating on oil and gas exploration and production company SandRidge
Energy Inc. to 'CCC-' from 'D'. The outlook is negative.
SEBRING MANAGEMENT: Court Extends Plan Exclusivity to May 19
------------------------------------------------------------
Judge Catherine Peek McEwen granted the request of Sebring
Management FL, LLC, et al. to extend the period in which the
Debtors have the exclusive rights to file a Chapter 11 Plan and
Disclosure Statement to May 19, 2016 at 12:00 p.m. The Debtors'
exclusive rights to obtain acceptance of a Chapter 11 Plan pursuant
is extended to July 29, 2016.
As reported by the Troubled Company Reporter on April 21, 2016,
throughout this case, the Debtors have focused their attention on
issues critical to ongoing operations and viability of the
Debtors'
reorganization, along with addressing disputes between and among
the Debtors, MidMarket Capital Partners, LLC, and Drs. Alan
Shoopak
and Dennis Buchman. Among other things, the Debtors significantly
scaled back operations in Florida while marketing -- and
ultimately
selling -- their dental practices in Arizona.
The Debtors said they are in ongoing discussions with MidMarket to
reach an agreement on a joint liquidation plan for the Debtors that
would involve settlement of outstanding claims, pursuit of other
litigation claims, and additional liquidation of assets. While an
agreement appears imminent to the terms of a joint plan, the
parties would like additional time to complete their discussions
and complete drafting of the proposed joint plan.
MidMarket Capital Partners, LLC, agreed to the request for
extension.
Clearwater, Florida-based Sebring Management FL, LLC, and its three
affiliates sought protection under Chapter 11 of the Bankruptcy
Code on Aug. 23, 2015 (Bankr. M.D. Fla., Case No. 15-08589). The
Debtors' counsel is Jay B Verona, Esq., at Shumaker, Loop &
Kendrick, LLP, in Tampa, Florida.
The Debtors are represented by:
SHUMAKER, LOOP & KENDRICK, LLP
Jay B. Verona, Esq.
Seth P. Traub, Esq.
101 E. Kennedy Blvd., Suite 2800
Tampa, FL 33602
Tel: (813) 229-7600
Fax: (813) 229-1600
MidMarket Capital Partners LLC, is the agent for a group of
pre-bankruptcy secured lenders owed more than $16 million of
principal and accrued interest.
SEMLER SCIENTIFIC: Reports 2016 First Quarter Financial Results
---------------------------------------------------------------
Semler Scientific, Inc., reported a net loss of $1 million on $1.50
million of revenue for the three months ended March 31, 2016,
compared to a net loss of $1.37 million on $1.20 million of revenue
for the same period in 2015.
As of March 31, 2016, Semler had $3.42 million in total assets,
$5.08 million in total liabilities and a $1.66 million
stockholders' deficit.
"Semler reported a reduction in operating expenses and an
improvement in cash position through the issuance of promissory
notes in the first quarter of 2016," said Doug Murphy-Chutorian,
M.D., chief executive officer of Semler. "We are pursuing the
goals of profitability, positive cash flow from operations and
minimal shareholder dilution," he added.
First Quarter 2016 Highlights
The major accomplishments of 2016 to date are as follows:
1) Raised $2,360,000 of debt financing ($160,000 of which was
received in April 2016)
2) Reduced quarterly operating expenses (which include cost of
revenue) to $2,433,000 from $7,140,000 in the three months
ended December 31, 2015 and from $2,550,000 in the three
months ended March 31, 2015
3) Increased the established base of QuantaFlo installations
with large health insurance company customers
In 2016, revenue from QuantaFlo is expected to continue to grow due
to an increasing number of installations, average pricing and the
recurring revenue business model. The Company also plans to limit
WellChec business until later in the year. Because Semler does not
give financial guidance, the magnitude of these changes and
progress towards such an operating plan will be reported during the
quarterly earnings releases, and will depend on its ability to
continue to win customers for both QuantaFlo and WellChec.
"We continue to grow our QuantaFlo and vascular testing products
revenue and have reduced net operating loss," said Dr.
Murphy-Chutorian. "Our cash position has improved and is expected
to be sufficient to fund operations until achieving our goal of
profitability," he added.
A full-text copy of the press release is available for free at:
http://is.gd/oZnGPu
About Semler Scientific
Semler Scientific, Inc. provides diagnostic and testing services to
healthcare insurers and physician groups. The Portland,
Oregon-based Company develops, manufactures and markets innovative
proprietary products and services that assist healthcare providers
in evaluating and treating chronic diseases.
Semler Scientific reported a net loss attributable to common
stockholders of $8.50 million on $7 million of total revenue for
the year ended Dec. 31, 2015, compared to a net loss attributable
to common stockholders of $4.51 million on $3.63 million of total
revenue for the year ended Dec. 31, 2014.
As of Dec. 31, 2015, the Company had $3.07 million in total assets,
$4.15 million in total liabilities and a total stockholders'
deficit of $1.07 million.
BDO USA, LLP, in New York, New York, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2015, citing that the Company has negative working
capital, a deficit in stockholders' equity, recurring losses from
operations and expects continuing future losses that raise
substantial doubt about its ability to continue as a going concern.
SHEEHAN PIPE LINE: Proposes June 16 Auction for Equipment
---------------------------------------------------------
Sheehan Pipe Construction Company seeks authority from the U.S.
Bankruptcy Court to sell substantially all of its equipment to
Ritchie Bros. Auctioneers (America), Inc., for $29.5 million.
Prior to the Petition Date, the Debtor and Ritchie entered into the
Asset Purchase Agreement whereby Ritchie seeks to purchase
substantially all of the Debtor's equipment as the Stalking Horse
Bidder, for a minimum of $29.5 million, less transportation
holdback of $1,000,000, plus a revenue sharing agreement when the
equipment is sold by Ritchie through on or more public auctions
that provides upside to the Debtor, as well as for the use of the
$1.5 million Good Faith Deposit by the Debtor to protect and
preserve the Equipment and to facilitate the sale in order to
protect the Stalking Horse.
The Debtor proposes to sell the equipment through an auction. The
Debtor proposes that initial competing bid must exceed the Stalking
Horse Purchase Price by $3 million -- that is at least $32.5
million. Any competing bids must be made in increments of not less
than $500,000 over the initial overbid.
In the event that Stalking Horse is successful in purchasing the
Equipment, its Good Faith Deposit will be credited against the
Purchase Price due at Closing together with interest at 5% per
annum from the date of usage by the Debtor until repaid. The
Stalking Horse will be paid from the overbid proceeds an amount
equal to the Good Faith Deposit amount utilized by the Debtor, up
to $1,500,000, together with interest calculated at 5% per annum if
the Equipment is sold to a Qualified Bidder outbids the Stalking
Horse.
A Break-up Fee in the amount of 3% of the $29.5 million Purchase
Price ($885,000) will be paid to the Stalking Horse in the event
the Equipment is sold to another buyer for an amount equal to or
greater than $32.5 million at the Sale.
The Court has scheduled a hearing on May 17, 2016, to consider the
Debtor's Bidding Procedures Motion. Likewise, an Auction will be
held on June 16 for the Sale of the Debtor's Equipment and a sale
hearing will be conducted on June 17.
Proposed Attorneys for the Debtor:
Gary M. McDonald, Esq.
Chad J. Kutmas, Esq.
Mary E. Kindelt, Esq.
McDONALD, McCANN, METCALF & CARWILE, LLP
First Place Tower
15 E. Fifth Street, Suite 1400
Tulsa, OK 74103
Telephone: (918) 430-3700
Facsimile: (918) 430-3770
Email: gmcdonald@mmmsk.com
ckutmas@mmmsk.com
mkindelt@mmmsk.com
About Sheehan Pipe Line
Sheehan Pipe Line Construction Company, a contractor that
constructs pipelines in various states across the country, filed a
voluntary petition for relief under Chapter 11 of the U.S.
Bankruptcy Code (Case No. 16-10678) on April 15, 2016, listing
total assets of $90.2 million and total debt of $68.4 million. The
petition was signed by Robert A. Riess, Sr., as president and CEO.
McDonald, McCann & Metcalf & Carwile, LLP, serves as counsel to the
Debtor. The case is pending before Judge Terrence L. Michael.
SMILE BRANDS: Moody's Lowers CFR to Caa3, Outlook Stable
--------------------------------------------------------
Moody's Investors Service downgraded Smile Brands Group Inc.'s
Corporate Family Rating to Caa3 from Caa2 and its Probability of
Default Rating to Caa3-PD from Caa2-PD. At the same time, Moody's
downgraded Smile Brands' senior secured bank credit facilities'
rating to Caa2 (LGD 3) from Caa1 (LGD 3). The rating outlook is
stable.
The rating action reflects Moody's view that despite Smile Brands'
receipt of a credit facility waiver and amendment from its lenders,
as well as a $30 million equity infusion from its sponsor, the
company's capital structure is unsustainable. In addition to the
tightening of the company's financial maintenance covenant levels
in the first quarter of 2017, the amendment and waiver include
commitments for certain strategic initiatives such as pursuing
alternative financing, commencing and consummating a transfer of
interest and/or sale of assets to pay off its existing debt by Dec.
31, 2016. The absence of a significant improvement in leverage
would lead to covenant breaches, requiring the company to seek a
further waiver or amendment. Further, given the very high leverage
in excess of 10 times debt to EBITDA, there is a high likelihood of
debt impairment.
Following is a summary of Moody's rating actions.
Ratings downgraded:
Smile Brands Group Inc.:
Corporate Family Rating, to Caa3 from Caa2
Probability of Default Rating, to Caa3-PD from Caa2-PD
Senior secured credit facilities, to Caa2 (LGD 3) from Caa1
(LGD 3)
The rating outlook is stable.
RATINGS RATIONALE
Smile Brands' Caa3 Corporate Family Rating reflects the company's
relatively small size, competitive challenges within certain key
markets, and the challenges the company faces in improving its
operating performance. The rating also reflects Moody's
expectation that while the company's earnings erosion will
stabilize due to cost cutting initiatives, financial leverage will
likely remain very high, and interest coverage and free cash flow
weak. This creates a high degree of uncertainty whether the
company can sustain its existing capital structure. The ratings
are supported by Smile Brands' position as one of the largest
dental service organizations (DSO) in the United States,
maintaining leading competitive positions across many of its
primary markets.
The stable outlook reflects Moody's view that the company benefits
from solid sponsor support, including liquidity provided by the
recent sponsor equity infusion, balanced by Moody's concerns that
Smile Brands will face challenges in materially improving operating
performance while remaining in compliance with affirmative and
financial covenants, as well as the potential for material loss to
senior secured creditors.
The ratings could be downgraded if liquidity weakens, if the
likelihood of an event of default or debt restructuring increases,
or if Moody's expectations of ultimate recovery under the company's
senior secured credit facilities diminishes.
Given the pressures facing the company, Moody's does not foresee an
upgrade of the rating over the near-term. An upgrade would require
sustainable improvement in the company's operating performance, a
strengthened liquidity position, and increased assurance that the
company will remain in compliance with both affirmative and
financial covenant requirements over the next 12 to 18 months.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 2014.
Headquartered in Irvine, California, Smile Brands Group Inc. is a
leading U.S. dental service organization. Through its owned
subsidiaries and affiliated professional corporations (PCs), the
company provides comprehensive business support services,
non-clinical personnel, facilities and equipment to dentists.
Dentists are at-will employees of the PCs, where the PCs own the
medical records, patient lists, and operating records. Smile
Brands' is primarily owned by financial sponsor Welsh, Carson,
Anderson & Stowe, and generates annual revenues of over $470
million.
SOUTHERN CALIFORNIA LOGISTICS: Moody's Hikes Bonds Rating to B3
---------------------------------------------------------------
Moody's Investors Service has upgraded to B3 from Caa2 the Southern
California Logistics Airport Authority's (SCLAA) Subordinate Tax
Allocation Revenue Bonds (Southern California Logistics Airport
Project), Series 2007 and 2008A in the par amount outstanding of
$58 million. Moody's has also affirmed the Ba1 rating on the $37
million outstanding of Series 2007 Housing Set-Aside tax allocation
bonds.
The subordinate bonds are secured solely by allocated incremental
revenues from the sub-areas of Victor Valley Economic Development
Authority's (VVEDA) Project Area, net of housing set-asides, debt
service on senior lien bonds, and other senior pass-throughs.
The upgrade to B3 primarily reflects our change in calculation for
recovery (97%) given that the state reversed its prior decision set
in May 2015 of denying VVEDA's requested allocation of tax
increment revenues for curing past defaults or replenishing the
debt service reserves. Given this revision, the forecasted loss to
investors for the Series 2007 and 2008A subordinate bonds will be
lower than our previous estimate during our last rating review in
July 2015. The upgrade also incorporates VVEDA's large tax base
and continued moderate growth.
Moody's ratings represent expected loss, encompassing both default
probability and bondholders' likely post-default recovery. When a
security is in default, then placement of the rating will largely
depend on the expected recovery to bondholders. Ratings of
defaulted bonds with expected recoveries of 95% to 99% will
typically be in the B range.
Moody's B3 represents an expected recovery of 95% to 97%.
Conservative growth rate assumptions with full recovery of past
defaults results in a projected recovery rate of 97% on a present
value basis. Recovery rate assumptions will be periodically
reviewed and updated, reflecting both state funding decisions and
changes in assessed values.
The affirmation of the Ba1 on the Series 2007 bonds (housing set
aside) reflects adequate coverage levels and a track record of
timely debt service payment that we anticipate will continue. While
assessed valuation is currently trending upward, it's at a moderate
rate and tax base volatility, as measured by the ratio of
incremental to total project area AV, is likely to remain much
higher than average for the foreseeable future.
The ratings for both the housing and non-housing bonds also take
into account the combined project area's high tax payer
concentration and below average resident wealth levels.
Rating Outlook
Outlooks are usually not assigned to local government credits with
this amount of debt outstanding.
Factors that Could Lead to an Upgrade
High growth in the tax base generating excess revenues to cure past
defaults at a rate faster than Moody's current projections
Issuance of refunding bonds resulting in lower annual debt service
over the life of the bonds and materially higher debt service
coverage.
Factors that Could Lead to a Downgrade
Declines in the tax base resulting in recovery assumptions that are
consistent with lower rating levels.
Inability or restrictions on SCLAA's ability to access tax
increment due to additional legislative changes
Legal Security
The subordinate bonds are secured by allocated incremental revenues
from the sub-areas of Victor Valley Economic Development
Authority's (VVEDA) Project Area, net of housing set-asides, debt
service on senior lien bonds, and other senior pass-throughs. The
rating affects approximately $51 million in subordinate bonds.
The Series 2007 housing TABs (Ba1/no outlook) are legally secured
by the 20% housing set aside of tax increment receipts.
Use of Proceeds
Not applicable
Obligor Profile
SCLAA, the issuer of the bonds, is a Joint Exercise of Powers
Authority that is comprised of the City of Victorville and the
Victorville Water District. VVEDA delegated all of its
redevelopment authority with respect to the airport to SCLAA.
Methodology
The principal methodology used in this rating was Tax Increment
Debt published in June 2015.
SPANISH BROADCASTING: Alex Meruelo Holds 6.12% of CL-A Shares
-------------------------------------------------------------
In a Schedule 13D filed with the Securities and Exchange
Commission, Alex Meruelo Living Trust, Meruelo Investment Partners
LLC and Alex Meruelo disclosed that as of April 22, 2016, they
beneficially own 255,048 shares of Class A common stock of Spanish
Broadcasting System, Inc., representing 6.12 percent of the shares
outstanding. A copy of the regulatory filing is available for free
at http://is.gd/tlTdRT
About Spanish Broadcasting
Headquartered in Coconut Grove, Florida, Spanish Broadcasting
operates 21 radio stations targeting the Hispanic audience. The
Company also owns and operates Mega TV, a television operation
with over-the-air, cable and satellite distribution and affiliates
throughout the U.S. and Puerto Rico. Its revenue for the twelve
months ended Sept. 30, 2010, was approximately $140 million.
Spanish Broadcasting reported a net loss of $26.95 million on
$146.89 million of net revenue for the year ended Dec. 31, 2015,
compared to a net loss of $19.95 million on $146.28 million of net
revenue for the year ended Dec. 31, 2014. As of Dec. 31, 2015,
Spanish Broadcasting had $451.74 million in total assets, $550.29
million in total liabilities and a total stockholders' deficit of
$98.54 million.
* * *
In November 2010, Moody's Investors Service upgraded the corporate
family and probability of default ratings for Spanish Broadcasting
System, Inc., to 'Caa1' from 'Caa3' based on improved free cash
flow prospects due to better than anticipated cost cutting and the
expiration of an unprofitable interest rate swap agreement.
Moody's said Spanish Broadcasting's 'Caa1' corporate family rating
incorporates its weak capital structure, operational pressure in
the still cyclically weak economic climate, generally narrow
growth prospects (though Spanish language is the strongest growth
prospect) given the maturity and competitive pressures in the
radio industry, and the June 2012 maturity of its term loan
magnify this challenge.
In July 2010, Standard & Poor's Ratings Services raised its
corporate credit rating on Miami, Fla.-based Spanish Broadcasting
System Inc. to 'B-' from 'CCC+', based on continued improvement in
the company's liquidity position. The rating outlook is stable.
"The rating action reflects S&P's expectation that, despite very
high leverage, SBS will have adequate liquidity over the
intermediate term to meet debt maturities, potential swap
settlements, and operating needs until its term loan matures on
June 11, 2012," said Standard & Poor's credit analyst Michael
Altberg.
SPECTRUM BRANDS: Fitch Raises IDR to 'BB'; Outlook Stable
---------------------------------------------------------
Fitch Ratings has upgraded the Long-Term Issuer Default Rating on
Spectrum Brands, Inc. to 'BB' from 'BB-'. The Rating Outlook is
Stable.
The upgrade reflects Spectrum's success in building a
well-diversified portfolio that can deliver low-single digit
organic growth, while opportunistically onboarding new brands onto
its platform. Fitch expects Spectrum to remain acquisitive while
managing leverage towards the 4x - 4.5x range post an acquisition
over the medium term.
KEY RATING DRIVERS
Diversification and Marketing Strategy Leads to Solid Results
Spectrum's diversified product portfolio has resonated well with
retail customers and consumers due to its generally
non-discretionary nature, replacement cycles, and product
innovation. Categories such as pet care, home and garden, and home
hardware have proven to be stable growers over time. Organic
growth rates have trended around 2.5% - 3.0% over the past three
years, which in combination with margin-accretive synergies have
led to EBITDA margin growth from 15% in 2013 to 17% in 2015.
Modest sales growth, accretive acquisitions, and cost controls have
led to improving margins and ample free cash flow (FCF). Much of
the company's FCF has historically been directed toward debt
reduction post acquisitions.
Short-Term Increases in Leverage Expected Given Acquisitive
Strategy
Fitch expects adjusted leverage to trend below 4.0x over the next
12 - 18 months on EBITDA growth and debt paydown following the
debt-financed acquisition of Armored AutoGroup (AAG) in 2015. The
acquisition was designed to expand Spectrum's portfolio into auto
care through brands with leading market shares including ArmorAll
and STP. Fitch views the acquisition favorably due to the
industry's stable growth trends and the company's strong brands.
Spectrum plans to reduce leverage below 4.0x, which Fitch believes
is feasible by 2017, barring any acquisitions.
Spectrum's acquisitive posture has resulted in periodic but
temporary increases in leverage. Over the past three years
leverage has ranged from the low-4.0x range to the low-5.0x range,
with the upper end of the range occurring following a debt-financed
acquisition. Recent company acquisitions have added brands in
categories such as auto care, pet food/treats, animal repellents
and commercial locks. Spectrum has a positive track record of
integration and Fitch expects Spectrum to continue making
acquisitions over the forecast horizon. Without further
acquisitions, Spectrum's leverage could trend in the mid-high 3.0x
range beginning 2017. However, Fitch expects Spectrum will remain
acquisitive and is likely to maintain leverage in the 4x - 4.5x
over the medium term.
Corporate Governance
Spectrum is a controlled company. HRG Group Inc. (HRG, Fitch IDR
'B'/Outlook Stable) owns approximately 58% of Spectrum. HRG has
pledged a portion of its Spectrum shares as collateral for its own
debt and is also dependent on its portfolio companies for cash
flow. However, restrictive and financial covenants in Spectrum's
debt facilities, as well as HRG's focus on maintaining moderate
debt levels at its portfolio companies, mitigate concerns.
KEY ASSUMPTIONS
-- Sales are expected to grow 7% - 9% in fiscal 2016 (ends
September) on low-single digit organic growth and full-year
inclusion of the AAG acquisition. Organic sales growth is
expected to track in the low-single digit range beginning
2017.
-- EBITDA growth is expected to modestly outpace sales growth
over the forecast horizon, due to positive mix shifts,
fixed-cost leverage, and ongoing cost structure reductions.
-- Free cash flow after dividends (FCF) is projected to be
$300 million to $400 million annually and is expected to be
used for debt paydown in fiscal 2016 to meet Spectrum's
target of reducing adjusted debt/EBITDAR at or below 4.0x.
-- Spectrum could issue debt to fund an acquisition. Fitch's
expectation would be that the company uses FCF to reduce
leverage to the 4.0x - 4.5x range 24 - 36 months following
an acquisition.
RATING SENSITIVITIES
A negative rating action could occur given these:
-- Spectrum sustained leverage above 4.5x, due to either low-
single digit sales declines on weak execution or margin
erosion due to increased promotions to defend market share;
-- The company effects a sizable acquisition of a weak brand
with turnaround execution risk, violating the company's
posture of acquiring brands with top market shares;
-- Spectrum executes an outsized, debt-financed transaction
which reduced confidence in the company's ability to return
leverage below 4.5x over the following 24 - 36 months;
-- Spectrum's debt covenants change to allow higher restricted
payments, increasing risk of cash flow leakage to majority
owner HRG.
Given Spectrum's acquisitive posture, an upgrade is unlikely due to
the risk of a leveraging transaction. However, Fitch would view
positively a commitment to sustain leverage below the 4.0x level.
LIQUIDITY AND DEBT STRUCTURE
As of Jan. 3, 2016, Spectrum had $148 million in cash and $245
million availability on its revolving credit facility. Spectrum's
FCF was in the $280 million range in 2015, down slightly from $300
million in 2014 due to the acquisitions of AAG and Tell. Fitch
expects FCF to be near $300 million in FY2016, trending toward the
$400 million range by FY2018, bolstered by the AAG acquisition.
Spectrum has been recording residual U.S. and foreign taxes on
undistributed foreign earnings since 2012 in order to accelerate
paydown of U.S. debt, as well as fund distributions to
shareholders, etc. As a result, Fitch views much of Spectrum's
cash balance as unrestricted and available to reduce debt.
Spectrum refinanced its capital structure in June 2015 with a $1.45
billion term loan, EUR300 million term loan, and CAD75 million term
loan. Additionally, the company launched a new five-year $500
million senior secured cash flow revolver. The cash flow revolver
replaced the $400 million asset based lending (ABL) facility,
providing additional liquidity and financial flexibility. A
portion of the proceeds was also used to retire the $300 million
6.75% senior unsecured notes due 2020.
Spectrum's leverage increased to the mid-6x range in December 2012
after purchasing Stanley Black & Decker, Inc.'s Hardware & Home
Improvement Group (HHI) for $1.4 billion; however, the company has
continued to delever through debt paydown and EBITDA expansion.
Similarly, leverage increased from the low-4x range in 2014 to the
low-5x range in 2015 though Spectrum is expected to delever in
2016. Fitch expects leverage to decrease to 4.0x over the next
12 - 18 months absent further acquisitions.
Fitch has assigned recovery ratings (RRs) to the various debt
tranches in accordance with criteria, which allows for the
assignment of recovery ratings for issuers with IDRs in the 'BB'
category. Given the distance to default, recovery ratings in the
'BB' category are not computed by bespoke analysis. Instead, they
serve as a label to reflect an estimate of the risk of these
instruments relative to other instruments in the entity's capital
structure. Fitch assigned an 'RR1' to first lien secured debt,
notching up two from the IDR and indicating outstanding recovery
prospects (91% - 100%) given default. Unsecured debt will
typically achieve average recovery, and thus was assigned an 'RR4',
or 31% - 50% recovery.
FULL LIST OF RATING ACTIONS
Fitch has upgraded Spectrum as:
Spectrum Brands, Inc.
-- Long-Term IDR to 'BB' from 'BB-';
-- $500 million senior secured revolver to 'BBB-/RR1' from
'BB+/RR1';
-- $1,450 million, EUR300 million, and CAD75 million senior
secured term loans to 'BBB-/RR1' from 'BB+/RR1';
-- $2.34 billion unsecured notes to 'BB/RR4' from 'BB-/RR4'.
The Rating Outlook is Stable.
These ratings were withdrawn as no debt is currently issued by
these entities:
Spectrum Brands Canada, Inc.
-- Long-Term IDR at 'BB-'.
Spectrum Brands Europe GmbH.
-- Long-Term IDR at 'BB-'.
SPI ENERGY: Charles Chan Resigns as Independent Director
--------------------------------------------------------
SPI Energy Co., Ltd., announced that Charles Sheung Wai Chan
resigned as an independent director on the Board of Directors,
chairman of the Audit Committee and member of the Compensation
Committee of the Company for personal reasons, effective
immediately on April 29, 2016. Mr. Chan advised the Company that
his resignation was not the result of any disagreement with the
Company on any matter relating to the Company's operations,
policies or practices.
About SPI Energy Co., Ltd.
SPI Energy Co., Ltd., (As successor in interest to Solar Power,
Inc.), is a global provider of photovoltaic (PV) solutions for
business, residential, government and utility customers and
investors. SPI Energy focuses on the downstream PV market
including the development, financing, installation, operation and
sale of utility-scale and residential solar power projects in
China, Japan, Europe and North America. The Company operates an
innovative online energy e-commerce and investment platform,
http://www.solarbao.com/,which enables individual and
institutional investors to purchase innovative PV-based investment
and other products; as well as http://www.solartao.com/, a B2B
e-commerce platform offering a range of PV products for both
upstream and downstream suppliers and customers. The Company has
its operating headquarters in Shanghai and maintains global
operations in Asia, Europe, North America and Australia.
Solar Power reported a net loss of $5.19 million in 2014, a net
loss of $32.2 million in 2013 and a net loss of $25.4 million in
2012. As of Sept. 30, 2015, the Company had $727 million in total
assets, $431 million in total liabilities and $296 million in total
equity.
SPI ENERGY: Files Form 12b-25 with SEC
--------------------------------------
SPI Energy Co., Ltd., announced that it has filed a Form 12b-25,
Notification of Late Filing, with the U.S. Securities and Exchange
Commission. The Company was unable to file its Annual Report on
Form 20-F for the year ended Dec. 31, 2015, on or prior to the
filing deadline without unreasonable effort or expense, because the
Company requires additional time to complete the audit process
related to its Form 20-F. The Company said it is working
diligently to complete the audit process and intends to file the
Form 20-F as soon as reasonably practicable.
About SPI Energy Co., Ltd.
SPI Energy Co., Ltd., (As successor in interest to Solar Power,
Inc.), is a global provider of photovoltaic (PV) solutions for
business, residential, government and utility customers and
investors. SPI Energy focuses on the downstream PV market
including the development, financing, installation, operation and
sale of utility-scale and residential solar power projects in
China, Japan, Europe and North America. The Company operates an
innovative online energy e-commerce and investment platform,
http://www.solarbao.com/,which enables individual and
institutional investors to purchase innovative PV-based investment
and other products; as well as http://www.solartao.com/, a B2B
e-commerce platform offering a range of PV products for both
upstream and downstream suppliers and customers. The Company has
its operating headquarters in Shanghai and maintains global
operations in Asia, Europe, North America and Australia.
Solar Power reported a net loss of $5.19 million in 2014, a net
loss of $32.2 million in 2013 and a net loss of $25.4 million in
2012. As of Sept. 30, 2015, the Company had $727 million in total
assets, $431 million in total liabilities and $296 million in total
equity.
SPORTS AUTHORITY: Anticipates Buyer for "Major Portions" of Stores
------------------------------------------------------------------
Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review,
reported that no lead bidder has stepped forward to rescue Sports
Authority from bankruptcy, but the distressed athletic-gear
retailer expects "substantial parties" to make offers for all "or
at least major portions" of its operations, company lawyer Robert
Klyman told a judge on May 3.
"Contrary to rumors and certain press reports, the debtors are not
liquidating today," Mr. Klyman said at a hearing in the U.S.
Bankruptcy Court in Wilmington, Del., the report related.
According to the report, Mr. Klyman said an April 28 date passed
without an offer from a potential stalking horse, or bidder willing
to make a committed offer that would set a floor price for the
auction; however, he said, the level of interest in Sports
Authority "remains high."
Bids can come in up to days before the bankruptcy auction of Sports
Authority's major assets, court papers say, the report further
related. Lawyers have said the sporting-goods chain is likely to
attract offers from various quarters, including combination bids
that involve liquidators as well as buyers who would preserve some
of the operation, the report added.
About Sports Authority Holdings
Sports Authority Holdings, et al., are sporting goods retailers
with roots dating back to 1928. The Debtors currently operate 464
stores and five distribution centers across 40 U.S. states and
Puerto Rico. The Debtors offer a broad selection of goods from a
wide array of household and specialty brands, including Adidas,
Asics, Brooks, Columbia, FitBit, Hanesbrands, Icon Health and
Fitness, Nike, The North Face, and Under Armour, in addition to
their own private label brands. The Debtors employ 13,000 people.
Sports Authority and six of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10527 to
16-10533) on March 2, 2016. The petitions were signed by Michael
E.
Foss as chairman & chief executive officer.
The Debtors have engaged Gibson, Dunn & Crutcher LLP as general
counsel, Young Conaway Stargatt & Taylor, LLP as co-counsel,
Rothschild Inc. as investment banker, FTI Consulting, Inc., as
financial advisor and Kurtzman Carson Consultants LLC as notice,
claims, solicitation, balloting and tabulation agent.
Andrew Vara, Acting U.S. trustee for Region 3, appointed seven
creditors of Sports Authority Holdings Inc. to serve on the
official committee of unsecured creditors.
SUNEDISON INC: Appaloosa Management Calls for Probe
---------------------------------------------------
Peg Brickley and Tom Corrigan, writing for Dow Jones' Daily
Bankruptcy Review, reported that David Tepper's Appaloosa
Management LP is calling for an independent bankruptcy probe of
SunEdison Inc., the solar-power project developer that filed for
chapter 11 protection amid failed deals and federal probes.
According to the report, Appaloosa is a shareholder of TerraForm
Power Inc., one of two companies spawned by SunEdison as part of
the financial engineering that fueled its growth. Beginning last
year, SunEdison's finances began declining almost as swiftly as
they had grown, as investors lost confidence it would be able to
cover a mounting pile of debt with profits from alternative energy
projects, the report related.
Appaloosa helped push SunEdison down the path to bankruptcy with
Delaware court action over a $1.9 billion merger with Vivint Solar
Inc. that involved TerraForm Power, the report further related.
The deal was scrapped earlier this year after banks balked at
providing the funding, the report said.
Litigation continues, with Appaloosa seeking permission to unseal
papers from the Delaware case, the report noted. Bankruptcy
creditors would like to know what the hedge fund found out about
SunEdison's activities last year, when it was seeking to save the
Vivint deal, lawyers for the hedge fund contend, the report added.
About SunEdison, Inc.
SunEdison, Inc., is a developer and seller of photovoltaic energy
solutions, an owner and operator of clean power generation assets,
and a global leader in the development, manufacture and sale of
silicon wafers to the semiconductor industry.
On April 21, 2016, SunEdison, Inc., and 25 of its affiliates each
filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case Nos.
16-10991 to 16-11017). Martin H. Truong signed the petitions as
senior vice president, general counsel and secretary.
The Debtors disclosed total assets of $20.71 billion and total
debts of $16.14 billion as of Sept. 30, 2015.
The Debtors have hired Skadden, Arps, Slate, Meagher & Flom LLP as
counsel, Togut, Segal & Segal LLP as conflicts counsel, Rotschild
Inc. as investment banker and financial advisor, McKinsey Recovery
& Transformation Services U.S., LLC, as restructuring advisors and
Prime Clerk LLC as claims and noticing agent.
TENET HEALTHCARE: Incurs $59 Million Net Loss in First Quarter
--------------------------------------------------------------
Tenet Healthcare Corporation filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing
a net loss attributable to the Company's common shareholders of $59
million on $5.04 billion of net operating revenues for the three
months ended March 31, 2016, compared to net income available to
the Company's common shareholders of $47 million on $4.42 billion
of net operating revenues for the three months ended March 31,
2015.
As of March 31, 2016, Tenet had $23.76 billion in total assets,
$20.45 billion in total liabilities, $2.38 billion in redeemable
noncontrolling interests in equity of consolidated subsidiaries and
$926 million in total equity.
"I am delighted with Tenet's very strong start to 2016. Our
hospitals and outpatient centers generated strong growth, and the
benefits of our diversified strategy are becoming increasingly
evident," said Trevor Fetter, chairman and chief executive officer.
"Adjusted EBITDA was ahead of our Outlook range for the first
quarter, putting us on a solid path to deliver our 2016 Outlook."
Cash and cash equivalents were $728 million at March 31, 2016,
compared to $356 million at Dec. 31, 2015. Tenet's cash and debt
balances as of March 31, 2016 reflect the $575 million in cash
proceeds that the company received from the sale of our
Atlanta-area hospitals which was completed on March 31, 2016. The
company had no outstanding borrowings on its $1 billion credit line
as of March 31, 2016.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/IF4TZF
About Tenet
Tenet Healthcare Corporation -- http://www.tenethealth.com/-- is
a national, diversified healthcare services company with 110,000
employees united around a common mission: to help people live
happier, healthier lives. The company operates 80 hospitals, 214
outpatient centers, six health plans and Conifer Health Solutions,
a leading provider of healthcare business process services in the
areas of revenue cycle management, value based care and patient
communications.
Tenet Healthcare reported a net loss attributable to the Company's
common shareholders of $140 million on $18.63 billion of net
operating revenues for the year ended Dec. 31, 2015, compared to
net income available to the Company's common shareholders of $12
million on $16.60 billion of net operating revenues for the year
ended Dec. 31, 2014.
* * *
Tenet carries a 'B' IDR from Fitch Ratings, 'B' corporate credit
rating from Standard & Poor's Ratings Services and 'B1' Corporate
Family Rating from Moody's Investors Service.
TRACY JOHN CLEMENT: U.S. Trustee Forms 2-Member Committee
---------------------------------------------------------
The U.S. trustee for Region 12 on May 3 appointed two creditors of
Tracy John Clement to serve on the official committee of unsecured
creditors.
The committee members are:
(1) SEMA Equipment Inc.
1210 1/2 7th ST NW Suite 220
Rochester, MN 55901
Email: twozney@semaequip.com
Contact Person: Tom Wozney
Phone: 507-289-2887
(2) Tri-State AgCorp
3180 US 75 Ave
Hull, IA 51239
Email: tristate@hickorytech.net
Contact Person: Brad Van Grootheest
Phone: 712-439-2108
Mr. Wozney was designated as acting chairperson of the committee
pending selection of a permanent chairperson, according to a court
filing.
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 Tracy John Clement
Tracy John Clement sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Minn. Case No. 16-31189) on April 11,
2016. The Debtor is represented by James C. Brand, Esq., at
Fredrikson & Byron PA.
TRANS-LUX CORP: Amends 2015 Annual Report
-----------------------------------------
Trans-Lux Corporation filed with the Securities and Exchange
Commission an amended annual report on Form 10-K/A for the fiscal
year ended Dec. 31, 2015, solely for the limited purpose of
amending Part III, Items 10 - 14 to reflect the inclusion of the
information required by Form 10-K. The Original Filing
contemplated the incorporation by reference of such information
from the Corporation's definitive proxy statement relating to the
Corporation's 2016 Annual Meeting of Shareholders. The
Corporation's definitive proxy statement will not be filed within
the requisite 120 days after the Corporation's 2015 fiscal year
end, and accordingly, the Corporation is including the information
required by Part III, Items 10 - 14 of Form 10-K through this
Amendment as contemplated by instruction G (3) to Form 10-K.
Part III contains information regarding directors, executive
officers and corporate governance; executive compensation; security
ownership of certain beneficial owners and management and related
stockholder matters; certain relationships and related
transactions, and director independence; and principal accounting
fees and service.
A full-text copy of the Form 10-K/A is available for free at:
http://is.gd/QhudL7
About Trans-Lux Corporation
Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a
designer and manufacturer of digital signage display solutions for
the financial, sports and entertainment, gaming and leasing
markets.
Trans-Lux Corporation reported a net loss of $1.74 million on
$23.56 million of total revenues for the year ended Dec. 31, 2015,
compared to a net loss of $4.62 million on $24.35 million of total
revenues for the year ended Dec. 31, 2014.
As of Dec. 31, 2015, Trans-Lux had $12.99 million in total assets,
$13.14 million in total liabilities and a $156,000 total
stockholders' deficit.
Marcum LLP, in Hartford, CT, issued a "going concern" qualification
on the consolidated financial statements for the year ended Dec.
31, 2015, noting that the Company has suffered recurring losses
from operations and has a significant working capital deficiency
that raise substantial doubt about its ability to continue as a
going concern. Further, the Company is in default of the indenture
agreements governing its outstanding 9 1/2% subordinated debentures
which were due in 2012 and its 8 1/4% limited convertible senior
subordinated notes which were due in 2012 so that the trustees or
holders of 25% of the outstanding Debentures and Notes have the
right to demand payment immediately. Additionally, the Company has
a significant amount due to their pension plan over the next 12
months.
TRANSTAR HOLDING: Moody's Puts B3 CFR on Review for Downgrade
-------------------------------------------------------------
Moody's Investors Service placed Transtar Holding Company's B3
Corporate Family Rating, B3-PD Probability of Default Rating, B2
first lien senior secured credit facility rating, and Caa2 second
lien senior secured term loan rating on review for downgrade.
RATINGS RATIONALE
The review for downgrade was triggered by the company's weakened
near-term liquidity profile, uncertain growth prospects given
ongoing challenges with the 2014 ETX acquisition, and the company's
execution of a forbearance agreement with its lenders following
certain technical defaults under its loan agreement.
In the third quarter of 2015, Transtar's revenue declined by 4.3%
but management's adjusted EBITDA declined by over 30% (on a year
over year basis). As a wholesale distributor and manufacturer, the
company has an inherently high fixed cost structure, which
heightens its sensitivity to fluctuations in unit sales volumes.
Moody's estimates that Transtar's debt-to-EBITDA leverage increased
to around 8.1 times as of the twelve months ended
Sept. 30, 2015. As a result, the company's cushion under its total
leverage ratio covenant provided by its loan agreement was just
under 1%. Moody's believes that while Transtar continues to
command a significant scale in the highly fragmented automotive
driveline parts and components industry, the segment remains very
competitive and the company will continue to struggle to win back
its customers in the near term.
Moody's review for downgrade will focus on 1) management's longer
term plan for reversing the company's negative earnings trend to
achieve and sustain positive free cash flow and adequate covenant
cushion, 2) the company's 4Q 2015 performance as reflected in its
forthcoming fiscal 2015 audited financial statements, 3) the
company's ability to obtain a permanent waiver and amendment under
its loan agreement, with terms and conditions that will be deemed
favorable, and 4) Transtar's plan to address the expiration of its
revolver and upcoming debt maturities. Should the company be
unable to make meaningful progress with its lenders or if the
amendment process results in a balance sheet restructuring (such as
a distressed exchange), Transtar's ratings could be downgraded by
more than one notch.
Moody's placed these ratings of Transtar Holding Company on review
for downgrade:
-- Corporate Family Rating at B3
-- Probability of Default Rating at B3-PD
-- $50 million first lien senior secured revolving credit
facility due 2017 at B2 (LGD3)
-- $370 million first lien senior secured term loan due 2018 at
B2 (LGD3)
-- $170 million second lien senior secured term loan due 2019
at Caa2 (LGD5)
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in December 2015.
Transtar Holding Company is a distributor of automotive aftermarket
driveline replacement parts, kits and components sold to the
transmission repair and remanufacturing market. The company also
supplies autobody refinishing products to professional aftermarket
automotive refinishers and autobody repair shops. Net revenue for
the twelve month period ended September 2015 was more than $550
million. The company has been majority-owned by affiliates of
Friedman Fleischer & Lowe, LLC ("FFL") since 2010.
TRINSEO SA: S&P Raises CCR to 'B+', Outlook Stable
--------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on Berwyn, Pa.-based Trinseo S.A. to 'B+' from 'B'.
The outlook is stable.
At the same time, S&P raised its issue-level rating on the
company's senior secured debt to 'BB' from 'BB-'. The recovery
rating on senior secured debt is '1', indicating S&P's expectation
of very high (90% to 100%) recovery in the event of a payment
default. S&P also raised the recovery rating on the senior
unsecured debt to '4' from '5', indicating its expectation of
average (lower end of the 30% to 50% range) recovery in the event
of a payment default. As a result of the corporate credit rating
upgrade and revised recovery rating, S&P has raised the senior
unsecured issue-level ratings to 'B+' from 'B-'.
"The rating action reflects our view that Trinseo will be able to
sustain solid, albeit more normalized, profitability in 2016," said
Standard & Poor's credit analyst Michael McConnell.
The stable outlook on Trinseo S.A. reflects S&P's expectation that
over the next 12 months credit metrics will come down modestly but
remain at a level consistent with the ratings. S&P's base case
scenario assumes an EBITDA margin decline of 200 basis points from
2015 record highs. This takes into account a drop to more
normalized levels from top cycle profits in 2015, assuming
styrene-to-benzene spreads decline to more normalized levels. S&P
also expects modest improvements in the Performance Materials
segment in 2016. S&P forecasts an adjusted FFO to debt of about
15% to 20% in 2016, a level it considers appropriate at the
ratings.
S&P could lower ratings if the ratio of FFO to total debt were to
drop below 12% in the next 12 months, without prospects for
improvement. Although unlikely, this could happen if EBITDA
margins drop by more than 600 basis points as a result of
volatility in styrene markets causing margins to move toward
pre-2015 levels on a sustained basis. S&P would lower ratings if
liquidity weakens, or the company's ability to comply with
covenants comes into question. S&P could also lower ratings if
changes in financial policies, such as a significant increase in
debt to fund acquisitions or shareholder rewards, brought the ratio
of FFO to debt to below 12%.
S&P would consider an upgrade if the company maintains strong
EBITDA margins from favorable market conditions, and if the company
utilizes free cash flow to lower debt within the next 12 months,
such that the ratio of FFO to total debt exceeded 20% on a
sustainable basis. Given the volatility in Trinseo's business, S&P
would need to determine that any future level of leverage is
sustainable through a weak cycle before contemplating a positive
rating action. Before considering a higher rating, S&P would
expect to see the private equity ownership of the company to come
down moderately from current levels.
U.S. STEEL: Moody's Lowers CFR to B3 & Rates New Notes Due 2021 B1
------------------------------------------------------------------
Moody's Investors Service downgraded United States Steel
Corporation's (U.S. Steel) Corporate Family Rating to B3 and its
Probability of Default rating to B3-PD from B1 and B1-PD
respectively. At the same time Moody's downgraded the senior
unsecured notes rating to Caa1 from B2 and the industrial revenue
bond ratings, guaranteed by U.S. Steel, to Caa1 from B2. The
speculative grade liquidity rating remains unchanged at SGL-2. This
concludes the review for downgrade initiated on March 31, 2016.
In addition, Moody's assigned a B1 rating to U.S. Steel's proposed
debt offering of senior secured notes due 2021 and a (P) Caa1 to
the company's senior unsecured shelf. Proceeds from the proposed
secured note offering will be used to repay near-term debt and for
general corporate purposes. The outlook is negative.
The downgrade reflects the significant deterioration in U.S.
Steel's performance and debt protection metrics and expectations
that continued weak performance will be evidenced given the
challenging conditions facing the US steel industry, particularly
for flat-rolled and tubular products. For the year ended Dec. 31,
2015, U.S. Steel's adjusted EBITDA declined approximately 95% to
$105.5 million from 2014 levels. For the twelve months ended
Dec. 31, 2015, coverage and leverage as evidenced by its
EBIT/interest coverage ratio and debt/EBITDA ratio was -1.7x and
44.6x.
In addition, given the persistent challenges in the energy markets
and U.S. Steel's exposure to the OCTG (Oil Country Tubular Goods)
market, performance in 2016 is expected to continue to result in
losses. Given industry fundamentals, Moody's expects the time
horizon for a recovery in the OCTG market to be extended as
oversupply continues in the global oil markets, drilling activity
continues extremely weak, and demand growth remains tepid.
Further, the timing of an oil price recovery remains uncertain but
we believe the time frame will be protracted. In addition, Moody's
expects material reductions in E&P capital spending in 2016.
Downgrades:
Issuer: United States Steel Corporation
Probability of Default Rating, Downgraded to B3-PD from B1-PD
Corporate Family Rating, Downgraded to B3 from B1
Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1
(LGD4) from B2 (LGD4)
Issuer: Allegheny County Industrial Dev. Auth., PA
Senior Unsecured Revenue Bonds, Downgraded to Caa1 (LGD4) from
B2 (LGD4)
Issuer: Bucks County Industrial Development Auth., PA
Senior Unsecured Revenue Bonds, Downgraded to Caa1 (LGD4) from
B2 (LGD4)
Issuer: Gulf Coast Waste Disposal Authority, TX
Senior Unsecured Revenue Bonds, Downgraded to Caa1 (LGD4) from
B2 (LGD4)
Issuer: Indiana Finance Authority
Senior Unsecured Revenue Bonds, Downgraded to Caa1 (LGD4) from
B2 (LGD4)
Issuer: Lorain County Port Authority, OH
Senior Unsecured Revenue Bonds, Downgraded to Caa1 (LGD4) from
B2 (LGD4)
Issuer: Ohio Water Development Authority
Senior Unsecured Revenue Bonds, Downgraded to Caa1 (LGD4) from
B2 (LGD4)
Issuer: Southwestern Illinois Development Authority
Senior Unsecured Revenue Bonds, Downgraded to Caa1 (LGD4) from
B2 (LGD4)
Assignments:
Issuer: United States Steel Corporation
Senior Secured Regular Bond/Debenture, Assigned B1 (LGD2)
Senior Unsecured Shelf, Assigned (P)Caa1
Outlook Actions:
Issuer: United States Steel Corporation
Outlook, Changed To Negative From Rating Under Review
RATINGS RATIONALE
The B3 CFR considers U.S. Steel's elevated leverage, low interest
coverage and weak operating margins. The rating also reflects our
expectation that the steel and oil & gas industry fundamentals will
remain weak and volatile in the near term and weigh on U.S. Steel's
operating performance. Although prices for hot-rolled coil have
moved up materially in recent weeks and import levels have slowed,
Moody's believes that some of the improvement is not sustainable
and the second half of 2016 could see some slippage. In addition,
the company's performance in the first half of 2016 will be
negatively impacted by contracts renewed in the back end of 2015
when prices were lower.
The rating also considers U.S. Steel's relatively high costs as a
percentage of sales given the less than optimal fixed cost
absorption capability on reduced production and shipment levels as
well as its material exposure to the OCTG market. The company's
rating favorably considers its position as a leading North American
flat-rolled steel producer whose footprint is further enhanced by
its diversification in Central Europe. The rating also benefits
from the company's strong liquidity profile.
The SGL-2 speculative grade liquidity rating reflects the company's
solid cash position of $775 million at Dec. 31, 2015, and full
availability under its $1.5 billion asset based revolving credit
facility. The facility requires the company to maintain a 1:1
fixed charge coverage ratio should availability be less than $150
million. The fixed charge coverage ratio is not expected to be
tested and working capital release is anticipated as inventory
levels are worked down. U.S. Steel also has a EUR200 million
unsecured credit facility at its USSK subsidiary in Europe, which
expires July 15, 2019 and other smaller facilities at USSK.
The negative outlook captures the potential for industry conditions
to weaken in the second half of 2016 and the company not be able to
improve its performance notwithstanding capacity curtailments and
continued success with its Carnegie Way program. Given the
company's $4.7 billion in adjusted debt at year-end 2015, it would
need to generate around $900 to $950 million in EBITDA in 2016 for
any rating uplift.
Given U.S. Steel's metrics and the anticipated slow improvement, an
upgrade is unlikely in the next twelve to eighteen months.
The ratings could be further downgraded if performance over the
near term does not show improving trends such that EBIT/interest
tracks toward 1.5x and leverage moderates closer to 5.5x. Ratings
could also be downgraded should liquidity contract meaningfully or
if market conditions reverse or deteriorate further from current.
Headquartered in Pittsburgh, Pennsylvania, United States Steel
Corporation is the second largest flat-rolled steel producer in
North America in terms of production capacity. The company
manufactures and sells a wide variety of steel sheet, tubular, and
tin products across a broad array of industries, including service
centers, transportation, appliance, construction, containers, and
oil, gas and petrochemicals. Through its major production
operations in North America and Central Europe, U.S. Steel has a
combined annual raw steel capacity of approximately 22 million
tons. Revenues for the twelve months ended December 31, 2015 were
$11.6 billion down from $17.5 billion for the twelve months ended
Dec. 31, 2014.
The principal methodology used in these ratings was Global Steel
Industry published in October 2012.
U.S. STEEL: S&P Affirms 'B' CCR & Rates New $500MM Notes 'BB-'
--------------------------------------------------------------
S&P Global Ratings said it affirmed its 'B' corporate credit rating
on Pittsburgh-based steel company U. S. Steel Corp. The outlook is
negative.
At the same time, S&P assigned its 'BB-' issue-level rating and '1'
recovery rating to the company's proposed $500 million senior
secured notes, with proceeds earmarked to retire near-term debt
maturities. The '1' recovery rating indicates very high (90%-100%)
recovery in the event of a default. S&P also affirmed the 'B'
issue-level rating on the company's senior unsecured notes. The
recovery rating on the notes remains '4', indicating S&P's
expectation of average (30%-50%; upper half of range) recovery in
the event of a default.
"The negative outlook on United States Steel Corp. reflects our
view that lower volumes and energy market weakness will negatively
affect operational performance, weakening financial results over
the next 12 months, or lead to a lower business risk profile
assessment," said S&P Global Ratings credit analyst William Ferara.
"We expect this weakness to result in strained key credit metrics,
including adjusted EBITDA interest coverage of about 1.5x, debt to
EBITDA of about 8.5x, and minimal free operating cash flow in 2016.
While we expect the company's liquidity position to remain
exceptional, we recognize that its cash balance could decline
slightly in 2016, reducing a key source of liquidity unless the
recent improvement in steel market conditions is sustained."
S&P could lower the rating if steel prices remain under pressure
whether due to a deterioration in end-market demand or a
continuation of elevated import levels. Under such a scenario, S&P
would expect 2016 adjusted EBITDA interest coverage to be below 1x
and debt leverage to materially exceed 10x, which could lead to a
lower rating. Potentially favorable rulings on the trade cases and
subsequent impact on steel prices could be more visible as 2016
progresses and will be a key determining factor for S&P's credit
rating on the company. S&P could also lower the rating if the
company's liquidity position were characterized as adequate or
less, which could occur if S&P expects the ratio of the company's
liquidity sources to uses to be less than 1.2x over the next 12
months or its qualitative liquidity factors hampers its
quantitative liquidity considerations.
S&P could revise the outlook to stable if there is an improvement
in the long-term fundamentals for the steel sector, resulting in
credit metrics that are consistent with the current rating. For
instance, to revise the outlook to stable S&P would expect credit
metrics, including adjusted EBITDA interest coverage, to be
sustained above 1.5x and debt to EBITDA sustained below 7x.
UCI HOLDINGS: Terminates Registration of Senior Notes
-----------------------------------------------------
UCI Holdings Limited voluntarily fileD a Form 15F with the United
States Securities and Exchange Commission to terminate the
registration of the Company's 8.625% Senior Notes under the
Securities Exchange Act of 1934, as amended, and its reporting
obligations under the Exchange Act.
Subject to any objection from the SEC, the termination will be
effective 90 days after the filing of Form 15F with the SEC, or
within such shorter period as the SEC may determine. Upon the
filing of the Form 15F, the Company's reporting obligations under
the Exchange Act will be immediately suspended pursuant to the
rules of the SEC.
For more information, contact Joseph Doyle at (847) 482-2409.
About UCI Holdings
UCI Holdings claims to be a leading supplier to the light and
heavy-duty vehicle aftermarket for replacement parts, supplying a
broad range of filtration, fuel delivery systems, vehicle
electronics and cooling systems products. The Company believes,
based on management estimates, that it maintains a leading market
position in each of its four product lines, including the number
one market position by revenue in both fuel delivery systems and
cooling systems in the North American light vehicle aftermarket. In
the year ended Dec. 31, 2014, approximately 78% of the Company's
net sales, including approximately 10% related to the OES channel,
were generated from sales to a diverse group of aftermarket
customers, including some of the largest and fastest growing
companies in its industry. The Company has developed a global and
low-cost manufacturing, sourcing and distribution platform and we
sell into multiple sales channels, including retailers, wholesale
distributors, dealers and the heavy-duty vehicle market. The
Company's principal end-markets include light vehicles, commercial
vehicles and construction, mining, agricultural, marine and other
industrial equipment.
UCI Holdings reported a net loss of $36.24 million in 2014
following a net loss of $12.24 million in 2013.
ULTRA PETROLEUM: Moody's Lowers PDR to D-PD, Outlook Remains Neg.
-----------------------------------------------------------------
Moody's Investors Service changed Ultra Petroleum Corp.'s
Probability of Default Rating to D-PD from Ca-PD/LD following the
company's filing voluntary petitions in the United States
Bankruptcy Court for the Southern District of Texas, Houston
Division, seeking relief under the provisions of Chapter 11 of the
United States Bankruptcy Code. Concurrently, Moody's affirmed
Ultra's Ca Corporate Family Rating (CFR), C senior unsecured notes
rating and the SGL-4 Speculative Grade Liquidity Rating. The
outlook remains negative.
Moody's will withdraw all of Ultra's ratings and outlook in the
near future.
This summarizes the ratings.
Issuer: Ultra Petroleum Corp.
Ratings downgraded:
Probability of Default Rating -- D-PD from Ca-PD/LD
Ratings affirmed:
Corporate Family Rating -- Ca
$450 mil. Sr. Unsec. Notes due 2018 -- C (LGD 5)
$850 mil. Sr. Unsec. Notes due 2024 -- C (LGD 5)
Speculative Grade Liquidity Rating -- SGL-4
Outlook: Negative
RATINGS RATIONALE
Ultra's bankruptcy filing has resulted in the company's PDR being
downgraded to D-PD. Ultra's other ratings were affirmed since the
previously assigned Ca CFR already incorporated Moody's view of the
potential recoveries for each security.
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 an
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 RENTALS: Moody's Assigns B1 Rating on New $750MM Note
------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to United Rentals
(North America), Inc.'s (URI) new $750 million senior unsecured
note issuance and affirmed the company's Corporate Family Rating
(CFR) and Probability of Default Rating (PDR) at Ba3 and Ba3-PD,
respectively. Concurrently, Moody's also affirmed the ratings on
URI's second lien notes due 2023 at Ba1, the senior unsecured debt
at B1, and the SGL-2 Speculative Grade Liquidity Rating. The
ratings outlook remains stable.
RATINGS RATIONALE
Proceeds from the transaction will be used to call the $300 million
8.25% senior unsecured notes due 2021 with the remainder to
partially call the 7.375% senior unsecured notes due 2020 and pay
related fees and expenses. The ratings on the 8.25% senior secured
notes due 2021 will be withdrawn upon closing of the transaction.
United Rentals' Ba3 CFR is constrained by the cyclical nature of
its business (and the view that business is slowing), extensive use
of its balance sheet to fund capital investments, share
repurchases, and acquisitions. However, Moody's believes the
company remains well positioned in the Ba3 rating category and is
supported by its positions as one of the largest rental equipment
rental companies in North America, notable improvement in recent
years' interest coverage, debt / EBITDA metrics, and its diverse
industry segment exposure and limited exposure to the weak oil and
gas market. These strengths are reflected in URI's credit metrics
which are strong at the Ba3 rating category, with debt / EBITDA at
2.8 times and EBITDA / Interest at 5.1 times, respectively, at
December 31, 2015 (inclusive of Moody's standard accounting
adjustments for operating leases). Although Moody's believes that
2016 will likely prove to be a more challenging year than 2015, the
company's ability to sell used equipment and flex its capital
expenditures creates financial flexibility to better manage through
the current cycle.
The SGL-2 Speculative Grade Liquidity Rating reflects a good
liquidity profile supported by strong free cash flow generation
($897 million during 2015), ample revolver availability, and about
$180 million cash balances at Dec. 31, 2015. The recent
refinancing, once closed, alleviates some of the closer 2020 bond
maturities and eliminates the 2021 maturities in URI's capital
structure.
The ratings and/or outlook could be upgraded if the company were
expected to maintain positive free cash flow to debt after net
capital expenditures and other uses so as to allow for continued
deleveraging--specifically, debt to EBITDA anticipated below 3
times and EBIT to interest trending to be above 2.75 times on a
sustainable basis (all numbers on a Moody's adjusted basis). United
Rentals' anticipated allocation of free cash flow will be an
important consideration in a rating upgrade given its history of
share repurchases and acquisitions. Positive traction could be
limited by future return of cash to shareholders via stock
repurchases depending on its impact on leverage.
The ratings could be adversely affected if debt to EBITDA were
expected to increase above 3.75 times and deteriorate further, EBIT
to interest to decrease below 1.5 times, and/or the company's
liquidity profile to weaken. Ratings could also be adversely
impacted if sales and margins contracted thereby resulting in a
lower return on its expanded fleet. Increased shareholder friendly
actions or a debt financed acquisition that resulted in higher
leverage could also pressure the rating.
Moody's affirmed these ratings:
Issuer: United Rentals (North America), Inc.
Corporate Family Rating, Ba3;
Probability of Default Rating, Ba3-PD;
Speculative Grade Liquidity Rating, SGL-2;
Senior Unsecured Regular Bond/Debenture Jun 15, 2023, B1 (LGD5
from LGD4);
Senior Unsecured Regular Bond/Debenture Nov 15, 2024, B1 (LGD5
from LGD4);
Senior Unsecured Regular Bond/Debenture Jun 15, 2023, B1 (LGD5
from LGD4);
Senior Unsecured Regular Bond/Debenture Jul 15, 2025, B1 (LGD5
from LGD4);
Senior Secured Regular Bond/Debenture Jul 15, 2023, Ba1 (LGD2);
Senior Unsecured Shelf, Affirmed (P)B1
Senior Subordinated Shelf, Affirmed (P)B2
The outlook is stable.
Issuer: RSC Holdings III, LLC
Senior Unsecured Regular Bond/Debenture Feb 1, 2021, B1 (LGD5
from LGD4).
Issuer: UR Financing Escrow Corporation
Senior Unsecured Regular Bond/Debenture May 15, 2020, B1 (LGD5
from LGD4);
Senior Unsecured Regular Bond/Debenture Apr 15, 2022, B1 (LGD5
from LGD4).
Moody's assigned these ratings:
Issuer: United Rentals (North America), Inc.
$750 Million Senior Unsecured Regular Bond/Debenture due 2026,
B1 (LGD5)
The principal methodology used in these ratings was Equipment and
Transportation Rental Industry published in December 2014.
United Rentals, headquartered in Stamford, CT, is an equipment
rental company with a fleet of approximately 430,000 units and
about 900 rental locations across the US and Canada. The company
operates in two business segments. Its General Rentals segment
provides construction, industrial and homeowner equipment; its
Trench Safety, Power & HVAC, and Pump Solutions segment provides
equipment for underground construction, temporary power, climate
control and disaster recovery, and pumps largely for the oil and
gas sector. While the primary source of revenue is from renting
equipment, the company also sells equipment and related parts and
services. Revenues generated during the last twelve months ending
March 31, 2016, were approximately $5.8 billion.
USA DISCOUNTERS: Submits Eighth Revised Budget
----------------------------------------------
USA Discounters, Ltd., submitted to the U.S. Bankruptcy Court for
the District of Delaware, its eighth revised cash collateral
budget.
The revised budget is for a period of 13 weeks, ending July 2,
2016. The revised budget provides for the payment of operating
expenses and non-operating expenses. It provides for the payment
of expenses in the total projected amount of $8,778,000 for the
13-week period.
A full-text copy of the Notice with the Eighth Revised Budget,
dated April 11, 2016, is available at http://is.gd/ce0sNM
USA Discounters, Ltd., is represented by:
Laura Davis Jones, Esq.
James E. O'Neil, Esq.
Colin R. Robinson, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705 (Courier 19801)
Telephone: (302)652-4100
Facsimile: (302)652-4400
E-mail: ljones@pszjlaw.com
joneil@pszjlaw.com
crobinson@pszjlaw.com
- and -
Lee R. Bogdanoff, Esq.
Michael L. Tuchin, Esq.
Whitman L. Holt, Esq.
Sasha M. Gurvitz, Esq.
KLEE, TUCHIN, BOGDANOFF & STERN LLP
1999 Avenue of the Stars, 39th Floor
Los Angeles, CA 90067
Telephone: (310)407-4023
Facsimile: (310)407-9090
E-mail: lbogdanoff@kbtslaw.com
mtuchin@ktbslaw.com
wholt@ktbslaw.com
sgurvitz@ktbslaw.com
About USA Discounters
USA Discounters, Ltd., was founded in May 1991. in the City of
Norfolk, Virginia, under the name USA Furniture Discounters, Ltd.
It sold goods through two groups of stores -- one group of
specialty retail stores operating under the "USA Living" brand,
typically in standalone locations, and seven additional retail
stores operating under the "Fletcher's Jewelers" brand, typically
in major shopping malls.
USA Discounters, Ltd., and two affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 15-11755) on
Aug. 24, 2015, to wind down the business.
The Debtors tapped Pachulski Stang Ziehl & Jones LLP and Klee,
Tuchin, Bogdanoff & Stern LLP as attorneys, and Kurtzman Carson
Consultants, LLC, as claims and noticing agent.
USA Discounters Ltd. disclosed total assets of $97,490,455 plus an
undetermined amount and total liabilities of $63,011,206 plus an
undetermined amount.
The Official Committee of Unsecured Creditors is represented by
Kelly Drye & Warren LLP as lead counsel, Khler Harrison Harvey
Branzburg LLP as its Delaware co-counsel. FTI Consulting, Inc.,
serves as its financial advisor.
VECTOR GROUP: S&P Retains 'BB-' Rating on Notes Following Upsize
----------------------------------------------------------------
S&P Global Ratings said that its 'BB-' issue-level rating on
Florida-based Vector Group Ltd.'s existing senior secured notes is
unchanged following its upsize to $800 million with a proposed $200
million add-on. The recovery rating remains '1', indicating S&P's
belief that lenders could expect very high (90%-100%) recovery in
the event of payment default or bankruptcy. S&P expects the
company to use the proceeds from this transaction for opportunistic
real estate investments and the long-term maintenance of its
dividend. The ratings are subject to change, and assumes the
transaction closes on substantially the terms presented to us.
All of S&P's other existing ratings on the company, including the
'B' corporate credit rating, remain unchanged. The outlook is
stable. Pro forma for the proposed transaction, total debt
outstanding is about $1.3 billion.
S&P's ratings on Vector reflect its participation in the intensely
competitive and declining discount cigarette industry, its weaker
scale and brand equity compared to that of its larger competitors,
and inherent legal and regulatory risk. In S&P's view, Vector's
brands, such as Pyramid and Eagle 20's, command substantially less
brand equity than the market leaders, which include Philip Morris'
Marlboro brand, and RAI's Camel, Pall Mall, and Newport brands.
Additionally, Vector lacks the scale of those manufacturers.
S&P's ratings also consider the strong profitability, high barriers
to entry, and fairly recession-resistant nature of the tobacco
industry, as well as Vector's 1.93% master settlement agreement
exemption, which provides a modest cost advantage over the larger
players. S&P expects credit metrics will remain weak, and
discretionary cash flow will remain negative due the company's
aggressive dividend policy. At the same time, S&P expects cash
flow will remain relatively steady, driven by the stability of the
tobacco business, which S&P believes is the foundation of the
company's credit profile.
RATINGS LIST
Vector Group Ltd.
Corporate credit rating B/Stable/--
Ratings unchanged
Vector Group Ltd.
Senior secured BB-
Recovery rating 1
VENCORE INC: Moody's Affirms B3 CFR & Changes Outlook to Positive
-----------------------------------------------------------------
Moody's Investors Service has changed the rating outlook of
Vencore, Inc. to Positive from Negative and concurrently affirmed
all ratings, including the B3 Corporate Family Rating.
RATINGS RATIONALE
The change in rating outlook to Positive reflects an improved US
defense budgetary outlook combined with the steady backlog level
and good operating performance that Vencore achieved in 2015.
Previously, a less certain US defense spending outlook combined
with high financial leverage and low free cash flow generation were
shortcomings that contributed to the Negative rating outlook. The
good performance of 2015 has raised free cash flow and lessened the
degree of financial leverage. If continued, the better performance
will probably lead to upward rating momentum. Vencore achieved 5%
organic revenue growth, over 10% EBITDA margin, and $43 million of
free cash flow in 2015. Growth within the company's (typically
higher margin) intelligence community-based contracts occurred and
indirect costs were well controlled. The free cash flow generation
expanded Vencore's cash balance, improving liquidity. The added
cash also provides opportunity for debt reduction and/or internally
funded acquisition activity.
Since the May 2014 acquisition of QinetiQ, Vencore has kept
QinetiQ's anticipated revenue decline within the range that had
been targeted while integrating the business and undertaking cost
reduction initiatives that would improve future price
competitiveness. New business development activity-- whereby
proposals offering the combined capabilities of Vencore and
QinetiQ—has begun. Success of the expanded marketing effort will
be important to the future backlog level but, because of the
prolonged acquisition cycle time within defense contracting,
assessing progress will probably not be possible until early next
year.
The B3 CFR has been affirmed and reflects credit metrics on par
with the rating and a still-challenging environment for defense
services contractors as the federal government continues to
emphasis competitive bids. Moody's anticipates that Vencore's
margins will probably decline as it aims to win new contracts
beyond the intelligence community. On a Moody's adjusted basis,
debt/EBITDA of 6.7x and free cash flow/debt of 5% for 2015 suit the
rating level. The rating also considers that acquisition activity
could result in re-leveraging for Vencore, as occurred with the
QinetiQ transaction.
Upward rating momentum would depend on expectation of at least
steady EBITDA and free cash flow across 2016 or significant backlog
gain. The deployment of accumulated cash toward a creditor
friendly purpose, such as fully funding an acquisition or debt
prepayment, would probably be viewed as favorable for the rating.
Debt/EBITDA closer to 6x and free cash flow/debt in the high single
digit percentage range would likely accompany an upgrade.
Downward rating pressure would follow debt/EBITDA above 7.5x, free
cash flow/debt in the low single digit percentage range, or
significant weakening in the company's liquidity position.
Affirmations:
Issuer: Vencore, Inc.
Corporate Family Rating, Affirmed at B3
Probability of Default Rating, Affirmed at B3-PD
50 Million Senior Secured Revolving Credit Facility due 2019,
Affirmed at Ba3 (LGD2)
$378 Million Senior Secured First Lien Term Loan due 2019,
Affirmed at Ba3 (LGD2)
$115 Million Senior Secured Second Lien Term Loan due 2020,
Affirmed at B3 (LGD4)
Outlook Actions:
Issuer: Vencore, Inc.
Outlook, Changed to Positive from Negative
Vencore, Inc. provides advanced systems engineering and integration
("SE&I") services to U.S. government intelligence agencies, as well
as training, logistics and life-cycle management capabilities
across the US Department of Defense. Revenues were about $1.2
billion for 2015. The company is majority-owned by entities of
Veritas Capital.
The principal methodology used in these ratings was Global
Aerospace and Defense Industry published in April 2014.
VIKING CRUISES: S&P Lowers CCR to 'B', Outlook Stable
-----------------------------------------------------
S&P Global Ratings said that it lowered its corporate credit rating
on Viking Cruises Ltd. to 'B' from 'B+'. The rating outlook is
stable.
At the same time, S&P lowered its issue-level rating on Viking's
$525 million senior unsecured notes due 2022 and $250 million
senior unsecured notes due 2025 to 'B' from 'B+' in conjunction
with the lower corporate credit rating. The recovery rating
remains '4', indicating S&P's expectation for average recovery
(30%-50%; lower half of the range) of principal for lenders in the
event of a payment default.
"The downgrade reflects our expectation that Viking's adjusted debt
to EBITDA will increase to the high-6x area by the end of 2016,
which is above the 6x threshold we had set for a downgrade," said
S&P Global Ratings credit analyst Ariel Silverberg. "Our leverage
expectation stems from our forecast that EBITDA will decline in the
low- to mid-single-digit percent area in 2016 as the company
increases its debt balances to finance the delivery of six river
ships and one ocean ship."
S&P expects that Viking will need to continue to engage in price
discounting in order to support occupancy in the river segment.
Despite the relatively flat capacity S&P expects for 2016, S&P is
also forecasting lower occupancy in the river segment in 2016. S&P
believes price discounting and lower occupancy in the river segment
reflects a maturing market combined with meaningful capacity
increases over the past few years. S&P also believes that recent
geopolitical events may be causing customers to delay purchasing
river cruises or seek other leisure alternatives. The declining
revenue and EBITDA in the river segment will likely offset revenue
and EBITDA growth from Viking's ocean segment resulting from
increased capacity.
S&P's 'B' corporate credit rating reflects its assessment of
Viking's business risk profile as fair and its financial risk
profile as highly leveraged.
The stable outlook reflects S&P's expectation that, notwithstanding
its high leverage and our forecast for EBITDA to decline modestly
in 2016, Viking will maintain good EBITDA coverage of interest, in
the high-2x area, and adequate liquidity through 2017.
S&P could lower its corporate credit rating on Viking if S&P
believes the company would maintain EBITDA coverage of interest
below 2x, or if Viking's liquidity position becomes impaired. This
would most likely result if EBITDA was 20%-25% lower than S&P
expects, since the company has committed ship orders and related
financing through 2017.
S&P could raise the rating if it believed Viking would be able to
sustain adjusted debt to EBITDA below 6x and if S&P believed the
current price discounting in the river segment would subside, since
that would reflect greater equilibrium of supply and demand in the
market.
VUZIX CORP: Edward Kay Named as Director
----------------------------------------
Edward Kay was elected to the board of directors of Vuzix
Corporation on April 29, 2016. Mr. Kay will also serve on the
nominating, audit, and compensation committees of the Company's
board of directors, as disclosed in a Form 8-K report filed with
the Securities and Exchange Commission.
About Vuzix Corporation
Vuzix -- http://www.vuzix.com/-- is a supplier of Video Eyewear
products in the consumer, commercial and entertainment markets.
The Company's products, personal display devices that offer users
a portable high quality viewing experience, provide solutions for
mobility, wearable displays and virtual and augmented reality.
Vuzix holds 33 patents and 15 additional patents pending and
numerous IP licenses in the Video Eyewear field. Founded in 1997,
Vuzix is a public company with offices in Rochester, NY, Oxford,
UK and Tokyo, Japan.
Vuzix Corporation reported a net loss attributable to common
stockholders of $14.94 million on $2.74 million of total
sales for the year ended Dec. 31, 2015, compared to a net loss
attributable to common stockholders of $7.86 million on $3.03
million of total sales for the year ended Dec. 31, 2014.
As of Dec. 31, 2015, Vuzix had $19.56 million in total assets,
$3.46 million in total liabilities and $16.09 million in total
stockholders' equity.
WANK ADAMS: Asks Court to Extend Solicitation Period to June 28
---------------------------------------------------------------
Wank Adams Slavin Associates LLP a/k/a WASA Studio, asks the U.S.
Bankruptcy Court for the Southern District of New York to extend
the exclusive period within which it may solicit acceptances to the
Plan of Reorganization dated February 29, 2016, as may be modified
or amended, through and including June 28, 2016.
The Debtor's exclusive period to solicit acceptances was set to
expire April 29, 2016, absent an extension.
A hearing on the request is set for May 19, 2016 at 10:00 a.m.
The Debtor, which maintains its offices at 740 Broadway, New York,
NY 10003, is a New York limited liability partnership that provided
integrated architectural, engineering, and design services to
clients in the governmental, institutional, health care, and
private development sectors. The Debtor's principal assets consist
of its accounts receivable generated from its pre-Petition Date
performance of services. To date, the Debtor has collected in
excess of $1.0 million of the accounts receivable and anticipates
that it will collect an additional $400,000. The Debtor
anticipates that if it is successful in its arbitration with XIN
Development Management East, LLC, all creditors will be paid in
full.
The Debtor's business suffered as a result of the slow recovery
from the recession, which resulted in a reduced project workload
and significant delays in the collection of receivables. The
Debtor has also been named as a defendant in two breach of contract
actions brought by former clients seeking aggregate damages of at
least $11 million. These clients owe the Debtor $1.23 million and
$1.59 million, respectively, for services rendered.
For the six-month period ended June 30, 2015, the Debtor had net
sales on a cash basis of approximately $2.43 million and generated
a net loss from operations of
$231,000. As of June 30, 2015, its books and records reflect
assets totaling approximately $5.29 million and liabilities
totaling approximately $3.24 million. Shortly prior to the
Petition Date, the Debtor terminated most of its employees and has
been in the process of winding up its affairs and collecting its
accounts receivable.
As of the Petition Date, the Debtor owed Citibank N.A.
approximately $1.4 million, of which approximately $1.05 million is
on account of amounts due under a line of
credit and $357,000 is on account of a term loan. To secure the
Debtor's obligations under the line of credit and the term loan,
the Debtor granted to Citibank and Citibank held a duly perfected
first priority security interest in and lien upon substantially all
of the Debtor's property of every kind, including, but
not limited to, its accounts receivable.
The Debtor's obligations under the line of credit and the term loan
also are individually guarantied by Harry Spring, who is the
Debtor's sole partner, and Pamela Jerome and Jack Esterson, who
voluntarily withdrew as partners in March 2015.
The Debtor, since the Petition Date, has collected in excess of
$1.0 million in payment for services it rendered to its clients
prior to the Petition Date most of which was remitted to Citibank
and applied in reduction of its secured claim, which, as of March
1, 2016, was approximately $783,000.
On February 29, 2016, the Debtor filed the Plan and related
disclosure statement. The Plan, as filed, provides that Citibank
shall be paid, before any other classified creditor, out of and
from the proceeds of collections of accounts receivable that
collateralize Citibank's claim, as and when received by the Debtor,
until the claim has been fully paid. Thereafter, other classified
claims entitled to priority will be paid in the order of their
priority, after which general unsecured creditors will be paid.
On March 11, 2016, Citibank transferred all of its right, title,
and interest in and to its claim, as that term is defined in
section 101(5) of the Bankruptcy Code, to
Harry Spring Consulting LLC, as set forth in the Transfer of Claim
Other than for Security Before Proof Filed dated March 11.
The Debtor tells the Court that it must file an amended plan of
reorganization and related disclosure statement to reflect
Citibank's transfer of its claim to HS Consulting. The Debtor is
awaiting comments from counsel to HS Consulting and believes that
it is more efficient use of its resources to seek to approve a
disclosure statement and plan that reflect those comments.
The Debtor believes that it will be able to confirm the Plan as
amended because it provides all creditors with the maximum and most
cost efficient distribution of the Debtor’s assets. The Debtor
anticipates that HS Consulting, as the holder of Citibank's secured
claim, will vote in favor of an amended Plan and that other
creditors holding unsecured claims and priority wage claims will do
so, as well.
Wank Adams Slavin Associates LLP filed a Chapter 11 petition
(Bankr. S.D.N.Y. Case No. 15-11952) on July 27, 2015. The petition
was signed by Harry Spring, senior managing partner.
The Debtor is represented by:
Nancy L. Kourland, Esq.
ROSEN & ASSOCIATES, P.C.
747 Third Avenue
New York, NY 10017-2803
Tel: (212) 223-1100
E-mail: nkourland@rosenpc.com
WEST CORP: Reports First Quarter 2016 Results
---------------------------------------------
West Corporation reported net income of $44.6 million on $570.8
million of revenue for the three months ended March 31, 2016,
compared to net income of $80.50 million on $565.49 million of
revenue for the same period in 2015.
As of March 31, 2016, West Corp had $3.52 billion in total assets,
$4.05 billion in total liabilities and a total stockholders'
deficit of $536.21 million.
"Growth in our core services along with expense management led to
better than expected results this quarter," said Tom Barker,
chairman and chief executive officer. "One of the highlights of
the first quarter was announcing a significant long-term agreement
with AT&T in our Safety Services segment. We expect this
partnership to drive faster adoption of next generation 9-1-1
across the country over the next several years."
At March 31, 2016, West Corporation had cash and cash equivalents
totaling $133.3 million and working capital of $231.2 million.
Interest expense and other financing charges were $39.0 million
during the three months ended March 31, 2016, compared to $39.5
million during the comparable period of the prior year.
The Company's net debt to pro forma adjusted EBITDA ratio, as
calculated pursuant to the Company's senior secured term debt
facilities4, was 4.72x at March 31, 2016.
Cash flows from operations were $60.1 million for the first quarter
of 2016 compared to $58.4 million in the same period of 2015. Free
cash flow increased 7.3 percent to $23.7 million in the first
quarter of 2016 compared to $22.1 million in the first quarter of
2015. This growth was driven by an increase in cash flows from
operating activities which was positively impacted by net
improvements in working capital partially offset by a decrease in
income from continuing operations, higher days sales outstanding
and the funding of one additional payroll in the first quarter of
2016 compared to the first quarter of 2015.
"West Corporation started 2016 with another strong quarter of free
cash flow," said Jan Madsen, chief financial officer. "We deployed
the cash the Company generated last quarter to make West more
valuable. In the first quarter, we paid down $30.9 million in debt
and we invested $22.0 million to buy back stock and $9.3 million
for the acquisition of Synrevoice."
During the first quarter of 2016, the Company invested $36.4
million, or 6.4 percent of revenue, in capital expenditures,
primarily for software, computer equipment and to support the AT&T
ESInet partnership.
AT&T Partnership
During the first quarter, the Company announced a long-term
agreement with AT&T to deploy a standardized, scalable nationwide
architecture designed to support IP communications for public
safety answering points (AT&T ESInet). This platform will be the
next generation 9-1-1 offering for AT&T's 21-state footprint and
elsewhere in the U.S.
Revenue expected in 2016 from this agreement is included in the
Company's guidance which was provided with its fourth quarter
results in February.
Acquisition
On March 14, 2016, the Company acquired substantially all of the
assets of Synrevoice Technologies, Inc., a leading provider of K-12
notifications in Canada. Synrevoice serves approximately three
million K-12 students in Canada and approximately 1.2 million
students in the U.S. Synrevoice will be combined with the Company's
SchoolMessenger solutions in the Education group of its Interactive
Services operating segment. The purchase price was approximately
$9.3 million and was funded with cash on hand.
Share Repurchase Program
During the first quarter of 2016, the Company's Board of Directors
approved a share repurchase program under which the Company may
repurchase up to an aggregate of $75 million of its outstanding
common stock. Purchases under the program may be made from time to
time through open market purchases, block transactions or privately
negotiated transactions. The Company expects to fund the program
using its cash on hand and cash generated from operations. The
program may be suspended or discontinued at any time without prior
notice.
During the first quarter of 2016, the Company repurchased one
million shares of common stock for an aggregate purchase price of
approximately $22.0 million, funded with cash on hand.
A full-text copy of the press release is available for free at:
http://is.gd/5cw6WA
About West Corporation
Omaha, Neb.-based West Corporation is a global provider of
communication and network infrastructure solutions. West helps
manage or support essential enterprise communications with services
that include conferencing and collaboration, public safety
services, IP communications, interactive services such as automated
notifications, large-scale agent services and telecom services.
West Corporation reported net income of $242 million on $2.28
billion of revenue for the year ended Dec. 31, 2015, compared to
net income of $158 million on $2.21 billion of revenue for the year
ended Dec. 31, 2014.
* * *
As reported by the TCR on June 21, 2013, Standard & Poor's Ratings
Services raised its corporate credit rating on West Corp. to 'BB-'
from 'B+'. The upgrade reflects Standard & Poor's view that lower
debt leverage and a less aggressive financial policy will
strengthen the company's financial profile.
In the April 4, 2013, edition of the TCR, Moody's Investor Service
upgraded West Corporation's Corporate Family Rating to 'B1' from
'B2'. "The CFR upgrade to B1 reflects West's shift to a more
conservative capital structure and financial policies as a publicly
owned company," stated Moody's analyst Suzanne Wingo.
WHITE STAR: S&P Lowers CCR to 'SD' on Distressed Exchanges
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Oklahoma-City-based oil and gas exploration and
production company White Star Petroleum LLC (formerly American
Energy - Woodford LLC) to 'SD' from 'CCC'.
At the same time, S&P lowered its issue-level rating on the
company's 12% second-lien notes due 2020 to 'D' from 'CCC-'. The
recovery rating on this debt remains '5', reflecting S&P's estimate
of 10% to 30% (higher end of the range) recovery to creditors in
the event of a payment default. S&P's issue-level rating on the
company's unsecured notes remains 'CC' and the recovery rating
remains '6'. The '6' recovery reflects S&P's estimate of
negligible (0% to 10%) recovery to creditors in the event of a
payment default.
"The downgrade follows the company's disclosure that year to date
in 2016 it has repurchased $148 million in face value of its 12%
second-lien notes for $19.4 million in cash, via several separate
open market transactions," said Standard & Poor's credit analyst
Carin Dehne-Kiley. "We view these well below par repurchases as
distressed exchanges, given our belief that there was a realistic
possibility of default prior to the transactions," she added.
S&P expects to reevaluate the company's corporate credit rating
under its new capital structure once S&P believes additional debt
exchanges are unlikely.
WIDEOPENWEST FINANCE: Moody's Affirms B2 CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service has affirmed WideOpenWest Finance, LLC's
("WOW") B2 Corporate Family Rating and changed the outlook to
stable from negative. These actions are the result of a
stabilization of WOW's operating results, improved liquidity and an
improvement in EBITDA from cost reduction. The company has
announced a refinance transaction that will raise additional term
loan debt from its existing senior secured credit facility due 2019
to repay a similar term loan due 2017. This leverage neutral
refinance will improve liquidity by removing approximately $400
million of near term maturities. In July 2015, WOW extended the
maturity date on $180 million of its $200 million senior secured
revolver from 2017 to 2020 and Moody's has assigned a Ba3 (LGD3)
rating to this facility. The new maturity profile of both the
revolver and term loan debt improves liquidity and results in no
material near term maturities before April of 2019. Also, the
recent equity cash injection of$160 million by Crestview Partners
and $5 million from Avista Capital Partners provides enough
liquidity to fund the company's aggressive capital spending program
for the next 12-18 months. The refinance transactions and the
equity raise both support the company's SGL-2 speculative grade
liquidity rating. Coincident with today's rating action, Moody's
has also affirmed the company's Ba3 senior secured rating, Caa1
senior unsecured and subordinated ratings, B2-PD Probability of
Default Rating. The stable outlook reflects WOW's improved credit
profile, with expectations for gross leverage to fall to 6x
(Moody's adjusted) over the next 12-18 months.
A summary of the action follows:
Issuer: WideOpenWest Finance, LLC
Assignments:
Senior Secured 1st Lien Revolving Credit Facility due 2020,
Assigned Ba3 (LGD3)
Affirmations:
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured Term Loan B, Affirmed Ba3 (LGD3)
Senior Secured 1st Lien Revovling Credit Facility due 2017,
Affirmed Ba3 (LGD3)
Senior Unsecured Regular Bond/Debenture, Affirmed Caa1 (LGD5)
Senior Subordinated Regular Bond/Debenture, Affirmed Caa1 (LGD6)
Unchanged:
Speculative Grade Liquidity Rating, unchanged at SGL-2
Outlook Actions:
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
WOW's strong network assets, scale and profitability support its B2
corporate family rating (CFR). As a result of management's focus
on cost reduction, WOW's gross leverage has fallen from around 7x
(Moody's adjusted) at year-end 2014 to around 6.5x as of year-end
2015. Free cash flow has also improved but remains negative due to
high capex associated with the company's edge-out expansion plans.
Moody's expects WOW to continue to optimize its cost structure and
reduce leverage towards 6x over the next 18 months. EBITDA growth
for 2015 was in the high single digit range, but revenue growth has
been only modest due to video subscriber loss and competitive
pressure. However, the company has achieved a return to broadband
subscriber growth after a few quarters of weakness.
WOW's operating statistics showed some weakness during 2015 and
unlike most of its peers, WOW lost 16,000 high-speed data
subscribers during the year. The trajectory improved in the second
half of the year and into the first quarter of 2016. As the US
cable industry grapples with a changing video distribution model,
high content costs and weak video subscriber trends, the HSD
product is critically important for cable companies' future market
share. The maturity of the core video product limits growth
potential, but Moody's believes the high speed data product and the
commercial business offer EBITDA growth, supported by a high
quality network in most of the company's footprint. A reduction in
both the fixed cost base and cash spent to achieve synergies
creates the potential for increasing free cash flow and lower
leverage over the next several years.
Moody's would consider an upgrade if gross leverage were sustained
at around 5 times debt-to-EBITDA, free cash flow as a percentage of
debt grew to the mid to high single digits; and the company
improved its competitive position. Moody's could lower the ratings
if liquidity were to become strained, leverage were to rise above
6.5x or the company's subscriber trends and/or competitive position
weakened. All credit metrics are measured on a Moody's adjusted
basis.
The principal methodology used in these ratings was Global Pay
Television - Cable and Direct-to-Home Satellite Operators published
in April 2013.
With its headquarters in Englewood, Colorado, WideOpenWest Finance,
LLC ("WOW") provides residential and commercial video, high speed
data, and telephony services to Midwestern and Southeastern markets
in the United States. The company reported 547,500 video, 712,000
high speed data, and 297,000 phone subscribers as of Dec. 30, 2015.
Avista Capital Partners owns 60% of the company and Crestview
Partners owns 35%, and its annual revenue is approximately $1.2
billion.
WILLISTON ND S&P Cuts Rating on 2010 Tax Revenue Bonds to BB-
-------------------------------------------------------------
Standard & Poor's Ratings Service has lowered its rating on
Williston, N.D.'s series 2010 sales tax revenue bonds six notches,
to 'BB-' from 'A-', as well as its ratings on the city's series
2011B, 2013A, and 2013B sales tax revenue bonds six notches, to
'BB' from 'A'. The outlook is negative.
"The downgrade reflects our view of the precipitous decline in
sales and use tax receipts that the city has reported since oil
production peaked in the region in late 2014," said Standard &
Poor's credit analyst Scott Nees, "which in turn has resulted in
substantially weaker coverage of pledged sales tax revenues over
debt service on its various sales tax revenue bonds." The city's
1% sales and use tax receipts—a portion of which secures its
revenue bonds—has declined for five consecutive quarters, a trend
that appears to have worsened considerably in the first part of
2016. If the declines S&P is seeing in the first four months of
2016 continue into the second and third quarters, S&P believes the
city could need to tap its debt service reserve (DSR) funds or use
revenues other than those formally pledged as security on its bonds
to cover debt service, and this could happen within the next year.
The negative outlook reflects S&P's view of the potential for
coverage levels to continue to decline, potentially leading to
further deterioration in credit quality.
Williston, in northwestern North Dakota, is the seat of Williams
County and is a regional center and hub city for the Bakken Shale
region.
"The negative outlook reflects our view that there is a
one-in-three chance that we could lower our 'BB-' and 'BB' ratings
further in the next year if sales tax receipts continue to decline
in a way that suggests to us that Williston will face major,
ongoing challenges meeting its annual debt service using pledged
revenues," added Mr. Nees. If sales tax receipts fall such that
annual debt service coverage (DSC) ratios fall significantly under
1x or if S&P believes the city will otherwise experience difficulty
meeting its debt service on its revenue bonds when due, S&P will
likely lower the rating. S&P could revise the outlook back to
stable if the overall trend of sales tax receipts stabilizes, with
annual DSC in excess of 1x.
WINDSOR FINANCIAL: Bellevue Square No Longer Member of Committee
----------------------------------------------------------------
Bellevue Square LLC is no longer a member of Windsor Financial
Group LLC's official committee of unsecured creditors, according to
a May 3 filing made by the U.S. trustee for Region 2 in the U.S.
Bankruptcy Court for the Southern District of New York.
The remaining committee members are:
(1) Hambleton Group Construction Co., Inc.
PO Box 11430
San Juan, PR 00922
Contact: John Hambleton
Telephone: (787) 781-8186
(2) H.C. Pody Company
946 Simons Avenue
Bensalem, PA 19020
Contact: Hugh Pody
Telephone: (215) 639-2027
About Windsor Financial Group
Windsor Financial Group LLC owned and operated ASICS retail stores
in the United States through a license agreement with ASICS America
Corporation. It opened 13 ASICS retail stores -- including ASICS's
North American flagship store in Times Square -- expanding ASICS's
brand and presence in the United States.
On June 24, 2015, ASICS terminated Windsor's retail operating
agreement due to breach, including for failure to pay for
merchandise it purchased for resale.
On July 28, 2015, ASICS filed a complaint against Windsor in the
California District Court, Civil Action No. 8:15-cv-01194-JVS-JVM,
for injunctive relief and damages for the Debtor's breach of the
MRA, trademark infringement and unfair competition. ASICS seeks
damages of no less than $5,753,096.
Windsor Financial Group filed a Chapter 11 bankruptcy petition
(Bankr. S.D.N.Y. Case No. 16-10097) on Jan. 15, 2016, intending to
use the chapter 11 process to sue ASICS for its misconduct and
fraud in the hopes of using those litigation proceeds to provide a
distribution to creditors and equity.
Armando Ruiz, the CEO, signed the bankruptcy petition.
The Debtor estimated both assets and liabilities in the range of
$10 million to $50 million.
Lowenstein Sandler LLP serves as the Debtor's counsel.
WPCS INTERNATIONAL: Appoints Sebastian Giordano CEO
---------------------------------------------------
WPCS International Incorporated announced that it has appointed
Sebastian Giordano, 58, as chief executive officer of the Company,
removing the "Interim" label from his title.
Speaking on behalf of the Board of Directors, Mr. Charles Benton
stated, "Since assuming the Interim CEO role in August 2013,
Sebastian has demonstrated outstanding leadership skills in
crafting and executing a thorough and successful restructuring of
WPCS under very challenging circumstances. He now has the Company
positioned to implement an exciting growth strategy that the Board
fully supports. With the new fiscal year starting on May 1st, the
Board believes this was the right time to take such action."
Giordano added, "While I continue to be humbled and honored by the
Board's ongoing support, righting the ship was a total team effort;
a team that fully expects to deliver strong results in fiscal 2017
and beyond."
About WPCS International Incorporated
WPCS -- http://www.wpcs.com/-- operates in two business segments
including: (1) providing communications infrastructure contracting
services to the public services, healthcare, energy and corporate
enterprise markets worldwide; and (2) developing a Bitcoin trading
platform.
WPCS reported a net loss attributable to the Company's common
shareholders of $11.3 million on $24.4 million of revenue for the
year ended April 30, 2015, compared with a net loss attributable to
the Company's common shareholders of $11.2 million on $15.7 million
of revenue for the year ended April 30, 2014.
As of Jan. 31, 2016, WPCS had $6.94 million in total assets, $4.13
million in total liabilities and $2.81 million in total equity.
ZLOOP INC: Has Non-Binding Term Sheet With Dynamic Recycling
------------------------------------------------------------
ZLOOP, Inc., on May 3, 2016, filed a motion to seek approval of
proposed bidding procedures in connection with the sale of the
Hickory Assets and proposed bid protections for prospective
stalking horse bidder Dynamic Recycling Inc.
The Debtors own certain real property commonly known as 816 13th
Avenue, comprising 3 parcels, and 838 14th Street NE, Hickory, NC,
and all fixtures, improvements and equipment located in the
property.
The Debtors on April 26 filed a motion seeking approval of proposed
bidding procedures where 3 J's of Hickory, LLC, would purchase the
assets, absent higher and better offers.
This time, the Debtors tell the Court in the May 3 filing, they
have entered into a term sheet for Dynamic Recycling to act as
stalking horse bidder for the Hickory Assets. The Debtors and
Dynamic continue to negotiate towards a binding asset purchase
agreement and intend that the Stalking Horse Agreement will be
completed and executed prior to any hearing on the Bidding
Procedures Order and will be filed as an exhibit in advance of the
hearing to consider entry of the bidding procedures.
In order to ensure that they will receive the maximum value for the
Hickory assets, the Debtors propose to test the fairness and
reasonableness of the consideration through an auction process.
The Debtors ask the Court to enter an order establishing a deadline
for bids, and setting an auction if one or more qualified bid is
received in addition to the stalking horse bid of Dynamics. In the
event that Dynamics is outbid, the Debtors propose to pay Dynamics
a break-up fee of 3% of the purchase price, plus reimbursement of
reasonable out of pocket expenses of up to $75,000.
The Debtors proposed a May 16, 2016 hearing on the Bidding
Procedures. Objections would be due May 9, 2016, at 4:00 p.m.
About ZLOOP, Inc.
ZLOOP operates a proprietary, state of the art, 100% landfill free
eWaste recycling company headquartered in Hickory, North Carolina.
Founded in 2012, the Company offers eWaste recycling and data
destruction services through its facility in Hickory, NC.
ZLOOP, Inc., and two affiliates sought Chapter 11 protection
(Bankr. D. Del. Case No. 15-11660) on Aug. 9, 2015.
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.
* * *
Zloop, Inc., et al., filed with the U.S. Bankruptcy Court for the
District of Delaware a Joint Chapter 11 Plan of Liquidation and
accompanying disclosure statement, which contemplate the sale of
substantially all of the Debtors' assets, before, on or following
the Effective Date.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Ronald Leon
Bankr. C.D. Cal. Case No. 16-15122
Chapter 11 Petition filed April 20, 2016
Represented by: Jeffrey S Shinbrot, Esq.
THE SHINBROT FIRM
E-mail: jeffrey@shinbrotfirm.com
In re Glynder Lucas Striggs
Bankr. C.D. Cal. Case No. 16-15136
Chapter 11 Petition filed April 20, 2016
Represented by: Onyinye N Anyama, Esq.
ANYAMA LAW FIRM
E-mail: onyi@anyamalaw.com
In re Marty Marciano Boone and Ronda Boone
Bankr. E.D. Cal. Case No. 16-22487
Chapter 11 Petition filed April 20, 2016
Filed Pro Se
In re Asad U Qamar and Humeraa Qamar
Bankr. M.D. Fla. Case No. 16-01490
Chapter 11 Petition filed April 20, 2016
See http://bankrupt.com/misc/flmb16-01490.pdf
represented by: Aaron A Wernick, Esq.
FURR & COHEN, PA
E-mail: awernick@furrcohen.com
In re Dan Thomas Lounsbury, Jr.
Bankr. S.D. Fla. Case No. 16-15653
Chapter 11 Petition filed April 20, 2016
Represented by: Joe M. Grant, Esq.
MARSHALL SOCARRAS GRANT, P.L.
E-mail: jgrant@msglaw.com
In re Robert Jeffrey Leitner
Bankr. S.D. Fla. Case No. 16-15654
Chapter 11 Petition filed April 20, 2016
Represented by: Joe M. Grant, Esq.
MARSHALL SOCARRAS GRANT, P.L.
E-mail: jgrant@msglaw.com
In re Mudea's Soul Food
Bankr. N.D. Ga. Case No. 16-56866
Chapter 11 Petition filed April 20, 2016
Filed Pro Se
In re TC Express LLC
Bankr. N.D. Miss. Case No. 16-11374
Chapter 11 Petition filed April 20, 2016
See http://bankrupt.com/misc/msnb16-11374.pdf
represented by: Gwendolyn Baptist-Hewlett, Esq.
THE BAPTIST LAW FIRM PLLC
E-mail: sdonaldson78@gmail.com
In re Cislyn Crisp
Bankr. S.D.N.Y. Case No. 16-10974
Chapter 11 Petition filed April 20, 2016
represented by: Arlene Gordon-Oliver, Esq.
E-mail: ago@gordonoliverlaw.com
In re Simply Gourmet, Inc.
Bankr. W.D.N.Y. Case No. 16-10798
Chapter 11 Petition filed April 20, 2016
Filed Pro Se
In re Formaation, LLC
Bankr. N.D. Okla. Case No. 16-10716
Chapter 11 Petition filed April 20, 2016
See http://bankrupt.com/misc/oknb16-10716.pdf
Filed Pro Se
In re David Lee Horner
Bankr. E.D. Tenn. Case No. 16-31244
Chapter 11 Petition filed April 20, 2016
Represented by: Keith L Edmiston, Esq.
EDMISTON FOSTER
E-mail: edmistonfoster@outlook.com
In re C & D Produce Outlet, Inc.
Bankr. S.D. Fla. Case No. 16-15760
Chapter 11 Petition filed April 21, 2016
See http://bankrupt.com/misc/flsb16-15760.pdf
represented by: Craig I Kelley, Esq.
KELLEY & FULTON, PL
E-mail: craig@kelleylawoffice.com
In re C & D Produce Outlet - South, Inc.
Bankr. S.D. Fla. Case No. 16-15764
Chapter 11 Petition filed April 21, 2016
See http://bankrupt.com/misc/flsb16-15764.pdf
represented by: Craig I Kelley, Esq.
KELLEY & FULTON, PL
E-mail: craig@kelleylawoffice.com
In re Efrain Perez
Bankr. D. Mass. Case No. 16-11469
Chapter 11 Petition filed April 21, 2016
Represented by: John A. Ullian, Esq.
LAW OFFICES OF ULLIAN & ASSOC.
E-mail: john@ullianlaw.com
In re Catina S. Keares
Bankr. E.D. Pa. Case No. 16-12831
Chapter 11 Petition filed April 21, 2016
Represented by: David M. Klauder, Esq.
BIELLI & KLAUDER, LLC
E-mail: dklauder@bk-legal.com
In re Lehigh Valley Properties, Inc.
Bankr. E.D. Pa. Case No. 16-12834
Chapter 11 Petition filed April 21, 2016
See http://bankrupt.com/misc/paeb16-12834.pdf
represented by: Ian J. Musselman, Esq.
LAW OFFICE OF IAN J. MUSSELMAN
E-mail: ian.j.musselman@gmail.com
In re James Quezada and Simona Quezada
Bankr. W.D. Tex. Case No. 16-10467
Chapter 11 Petition filed April 21, 2016
Represented by: Michael V. Baumer, Esq.
E-mail: baumerlaw@baumerlaw.com
In re Robert Barry Elhard and Deborah K Elhard
Bankr. W.D. Wash. Case No. 16-41725
Chapter 11 Petition filed April 21, 2016
Represented by: Dallas W Jolley Jr, Esq.
E-mail: dallas@jolleylaw.com
In re Brian Jay Buenviaje
Bankr. C.D. Cal. Case No. 16-15189
Chapter 11 Petition filed April 21, 2016
Represented by: Onyinye N Anyama, Esq.
ANYAMA LAW FIRM
E-mail: onyi@anyamalaw.com
In re Rosalinda T Buenviaje
Bankr. C.D. Cal. Case No. 16-15191
Chapter 11 Petition filed April 21, 2016
Represented by: Onyinye N Anyama, Esq.
ANYAMA LAW FIRM
E-mail: onyi@anyamalaw.com
In re Kristine Lynn Heicke
Bankr. C.D. Cal. Case No. 16-15233
Chapter 11 Petition filed April 22, 2016
Represented by: Daniel King, Esq.
GENESIS LAW GROUP
E-mail: dking@TheGenesisLaw.com
In re Titan Medical Enterprises Inc.
Bankr. C.D. Cal. Case No. 16-15284
Chapter 11 Petition filed April 22, 2016
See http://bankrupt.com/misc/cacb16-15284.pdf
represented by: Michael Y. Lo, Esq.
LAW OFFICE OF MICHAEL Y LO
E-mail: bklolaw@gmail.com
In re Ronald Howland, D.M.D., P.A.
Bankr. M.D. Fla. Case No. 16-01520
Chapter 11 Petition filed April 22, 2016
See http://bankrupt.com/misc/flmb16-01520.pdf
represented by: Richard R Thames, Esq.
THAMES MARKEY & HEEKIN, P.A.
E-mail: rrt@tmhlaw.net
In re ESB 1836 Incorporated
Bankr. N.D. Ill. Case No. 16-13848
Chapter 11 Petition filed April 22, 2016
See http://bankrupt.com/misc/ilnb16-13848.pdf
represented by: Robert Glantz, Esq.
MIDWEST BANKRUPTCY ATTORNEYS LLC
E-mail: rwglantz@midwestbankruptcyattorneys.com
In re Century Auto Body, LLP
Bankr. D. Nev. Case No. 16-12210
Chapter 11 Petition filed April 22, 2016
See http://bankrupt.com/misc/nvb16-12210.pdf
represented by: Alan R Smith, Esq.
THE LAW OFFICES OF ALAN R. SMITH
E-mail: mail@asmithlaw.com
In re Libreria Nacional, Inc.
Bankr. D.P.R. Case No. 16-03199
Chapter 11 Petition filed April 22, 2016
See http://bankrupt.com/misc/prb16-03199.pdf
represented by: Paul James Hammer, Esq.
ESTRELLA, LLC
E-mail: phammer@estrellallc.com
In re El Machego Corp.
Bankr. D.P.R. Case No. 16-03204
Chapter 11 Petition filed April 22, 2016
See http://bankrupt.com/misc/prb16-03204.pdf
represented by: Alexis Fuentes Hernandez, Esq.
FUENTES LAW OFFICES, LLC
E-mail: alex@fuentes-law.com
In re Trambolinis Corp.
Bankr. D.P.R. Case No. 16-03205
Chapter 11 Petition filed April 22, 2016
See http://bankrupt.com/misc/prb16-03205.pdf
represented by: Alexis Fuentes Hernandez, Esq.
FUENTES LAW OFFICES, LLC
E-mail: alex@fuentes-law.com
In re Mancheguinos Inc.
Bankr. D.P.R. Case No. 16-03206
Chapter 11 Petition filed April 22, 2016
See http://bankrupt.com/misc/prb16-03206.pdf
represented by: Alexis Fuentes Hernandez, Esq.
FUENTES LAW OFFICES, LLC
E-mail: alex@fuentes-law.com
In re Curtis C. Magleby,
Bankr. C.D. Cal. Case No. 16-15322
Chapter 11 Petition filed April 24, 2016
Represented by: Alan F Broidy, Esq.
E-mail: alan@broidylaw.com
In re Davenport Company
Bankr. N.D. Cal. Case No. 16-41101
Chapter 11 Petition filed April 24, 2016
See http://bankrupt.com/misc/canb16-41101.pdf
represented by: Claude Dawson Ames, Esq.
LAW OFFICES OF CLAUDE D. AMES
E-mail: claudeames@aol.com
In re Penny Lynn Peterso
Bankr. D. Ariz. Case No. 16-04468
Chapter 11 Petition filed April 25, 2016
Filed Pro Se
In re Elizabeth Haunani Reed
Bankr. C.D. Cal. Case No. 16-11238
Chapter 11 Petition filed April 25, 2016
Filed Pro Se
In re Blackrock International Holdings, Inc.
Bankr. M.D. Fla. Case No. 16-02695
Chapter 11 Petition filed April 25, 2016
See http://bankrupt.com/misc/flmb16-02695.pdf
represented by: Jeffrey Ainsworth, Esq.
BRANSONLAW PLLC
E-mail: jeff@bransonlaw.com
In re Robin C. Macchia
Bankr. D. Mass. Case No. 16-11513
Chapter 11 Petition filed April 25, 2016
represented by: Neil D. Warrenbrand, Esq.
LAW OFFICES OF NEIL D. WARRENBRAND
E-mail: neil@warrenbrandlaw.com
In re Carolyn J Johnson
Bankr. N.D. Miss. Case No. 16-11415
Chapter 11 Petition filed April 25, 2016
represented by: Craig M. Geno, Esq.
LAW OFFICES OF CRAIG M. GENO, PLLC
E-mail: cmgeno@cmgenolaw.com
In re Mercure Volt
Bankr. D.N.J. Case No. 16-17907
Chapter 11 Petition filed April 25, 2016
Filed Pro Se
In re Henry A Jackson
Bankr. D.N.J. Case No. 16-17936
Chapter 11 Petition filed April 25, 2016
Represented by: Scott Eric Kaplan, Esq.
SCOTT E. KAPLAN, LLC
E-mail: scott@sekaplanlaw.com
In re Ardra Verrett Fleming
Bankr. C.D. Cal. Case No. 16-15457
Chapter 11 Petition filed April 26, 2016
Represented by: Onyinye N Anyama, Esq.
ANYAMA LAW FIRM
E-mail: onyi@anyamalaw.com
In re 1712 Carnegie Way LLC
Bankr. E.D. Cal. Case No. 16-22634
Chapter 11 Petition filed April 26, 2016
See http://bankrupt.com/misc/caeb16-22634.pdf
represented by: Tory M. Pankopf, Esq.
T M PANKOPF PLLC
E-mail: tory@pankopfuslaw.com
In re Asharfun Nisha Hafiz
Bankr. N.D. Cal. Case No. 16-41111
Chapter 11 Petition filed April 26, 2016
Filed Pro Se
In re Caridad Dominguez
Bankr. D. Mass. Case No. 16-11529
Chapter 11 Petition filed April 26, 2016
represented by: John A. Ullian, Esq.
LAW OFFICES OF ULLIAN & ASSOC.
E-mail: john@ullianlaw.com
In re Isaac's Automotive, Inc.
Bankr. S.D. Miss. Case No. 16-50695
Chapter 11 Petition filed April 26, 2016
See http://bankrupt.com/misc/mssb16-50695.pdf
represented by: David L. Lord, Esq.
DAVID L. LORD AND ASSOCIATES, P.A.
E-mail: lordlawfirm@bellsouth.net
In re Douglas L Johnson
Bankr. D.N.D. Case No. 16-30199
Chapter 11 Petition filed April 26, 2016
Represented by: David J Smith, Esq.
SMITH BAKKE PORSBORG SCHWEIGERT & ARMSTR
E-mail: dsmith@smithbakke.com
In re Young S Min
Bankr. D.N.J. Case No. 16-17979
Chapter 11 Petition filed April 26, 2016
Represented by: David G. Beslow, Esq.
GOLDMAN & BESLOW, LLC
E-mail: yrodriguez@goldmanlaw.org
In re Juroma Properties, LLC
Bankr. D.N.J. Case No. 16-17985
Chapter 11 Petition filed April 26, 2016
See http://bankrupt.com/misc/njb16-17985.pdf
represented by: David L. Stevens, Esq.
SCURA, WIGFIELD, HEYER & STEVENS
E-mail: dstevens@scuramealey.com
In re Princeton Center for the Arts & Education, Inc.
Bankr. D.N.J. Case No. 16-18013
Chapter 11 Petition filed April 26, 2016
See http://bankrupt.com/misc/njb16-18013.pdf
represented by: Brian W. Hofmeister, Esq.
LAW FIRM OF BRIAN W. HOFMEISTER
E-mail: bwh@hofmeisterfirm.com
In re Scott Harris Kronenberg
Bankr. S.D.N.Y. Case No. 16-22577
Chapter 11 Petition filed April 26, 2016
represented by: H. Bruce Bronson, Jr., Esq.
BRONSON LAW OFFICES, P.C.
E-mail: ecf@bronsonlaw.net
In re Daniel F Franco and Leticia Perez Franco
Bankr. N.D. Tex. Case No. 16-60051
Chapter 11 Petition filed April 26, 2016
Represented by: Ronald M. Mapel, Esq.
E-mail: mapel@suddenlinkmail.com
In re Desert Ecstasy, Inc.
Bankr. W.D. Tex. Case No. 16-30653
Chapter 11 Petition filed April 26, 2016
See http://bankrupt.com/misc/txwb16-30653.pdf
represented by: Carlos A. Miranda III, Esq.
MIRANDA & MALDONADO, P.C.
E-mail: cmiranda@mirandafirm.com
In re Antonios D. Milas
Bankr. E.D. Pa. Case No. 16-12953
Chapter 11 Petition filed April 27, 2016
Represented by: Douglas R. Lally, Esq.
E-mail: drlally@hotmail.com
In re Klaus Holdings, Inc.
Bankr. N.D. Tex. Case No. 16-20134
Chapter 11 Petition filed April 27, 2016
See http://bankrupt.com/misc/txnb16-20134.pdf
represented by: Bill Kinkead, Esq.
KINKEAD LAW OFFICES
E-mail: bkinkead713@hotmail.com
In re Alain Azoulay
Bankr. C.D. Cal. Case No. 16-11790
Chapter 11 Petition filed April 27, 2016
Represented by: Dana M Douglas, Esq.
E-mail: dmddouglas@hotmail.com
In re Ernest George Altmann
Bankr. E.D. Cal. Case No. 16-90363
Chapter 11 Petition filed April 27, 2016
See http://bankrupt.com/misc/caeb16-90363.pdf
Filed Pro Se
In re Success Is Yours, Inc.
Bankr. D. Md. Case No. 16-15775
Chapter 11 Petition filed April 27, 2016
See http://bankrupt.com/misc/mdb16-15775.pdf
represented by: John Douglas Burns, Esq.
THE BURNS LAWFIRM, LLC
E-mail: ecf@burnsbankruptcyfirm.com
In re Florida Real Estate, LLC
Bankr. E.D. Pa. Case No. 16-12958
Chapter 11 Petition filed April 27, 2016
See http://bankrupt.com/misc/paeb16-12958.pdf
represented by: David A. Scholl, Esq.
LAW OFFICE OF DAVID A. SCHOLL
E-mail: judgescholl@gmail.com
In re Asociacion De Propietarios Condominio Radio Centro
Bankr. D.P.R. Case No. 16-03291
Chapter 11 Petition filed April 27, 2016
See http://bankrupt.com/misc/prb16-03291.pdf
represented by: Gloria Justiniano Irizarry, Esq.
JUSTINIANO'S LAW OFFICE
E-mail: justinianolaw@gmail.com
In re James Trent Blankenship and Wendi Deann Blankenship
Bankr. W.D. Tenn. Case No. 16-10839
Chapter 11 Petition filed April 27, 2016
Represented by: Robert Campbell Hillyer, Esq.
BUTLER SNOW LLP
E-mail: cam.hillyer@butlersnow.com
In re Lupine, LLC
Bankr. N.D. Tex. Case No. 16-41661
Chapter 11 Petition filed April 27, 2016
See http://bankrupt.com/misc/txnb16-41661.pdf
represented by: Areya Holder, Esq.
HOLDER LAW
E-mail: areya@holderlawpc.com
In re Ben Singer LLC
Bankr. W.D. Va. Case No. 16-60848
Chapter 11 Petition filed April 27, 2016
See http://bankrupt.com/misc/vawb16-60848.pdf
represented by: Andrew S Goldstein, Esq.
MAGEE GOLDSTEIN LASKY & SAYERS, P.C.
E-mail: agoldstein@mglspc.com
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 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 ***